APPlife Digital Solutions Inc

APPlife Digital Solutions, Inc. operates primarily as an aftermarket automotive parts ecommerce business, specializing in online sales of suspension lift systems and related automotive accessories through its ecommerce platform, serving customers across the United States with a wide selection of products for Jeep, truck, and SUV owners ¹. The Company's main operating subsidiary, Sugar Auto Parts, Inc., was formed on January 6, 2025, as a Nevada corporation ², and the Company itself was formed March 5, 2018, in Nevada ³. The Company has a limited operating history, operations, and revenues and will need to raise capital to implement its planned operations ⁴. The Company generates all its revenue from its ecommerce platform serving U.S. customers, and there are no current plans to develop operations outside the United States ⁵. All executive and management functions are based in the U.S., with no employees or contractors located internationally ⁶.

The Company directly competes for buyers to use its web sites over current ecommerce sites as well as sellers that utilize major marketplaces such as Amazon and eBay ⁷. The Company believes its specialty ecommerce website offers substantial value-added content including installation guides, install videos, high impact photos, order customization and live chat with a technical expert ⁸. The Company believes that its automotive parts marketplace Sugar Auto Parts, with no known large challengers presently in the space outside of "all things to all people" online marketplaces like Amazon and eBay, has the opportunity to quickly be branded when launched as the auto parts industry premier marketplace just as sites like Etsy, Wayfair, Uber and Chewy have been able to successfully do in their industries ⁹. The Company faces intense competition from large, well-capitalized e-commerce marketplaces such as Amazon and eBay, automotive parts retailers, and original-equipment manufacturers, many of which have substantially greater resources, brand recognition and scale than the Company does ¹⁰.

The Company's sources of revenue are expected to come from product purchases and, in the future, may include advertising and sponsorships ¹¹. Revenue is primarily generated from the sale of automotive lift kits and accessories through its online platform, with revenue from product sales recognized at a point in time, typically upon shipment or delivery when control of the goods passes to the customer ¹². The Company's auto parts ecommerce platform is its primary ecommerce website, offering a comprehensive catalog of suspension lift kits and related accessories for Jeep, truck, and SUV owners, allowing customers to browse, compare, and purchase products online, with a focus on providing quality aftermarket parts and a user-friendly shopping experience ¹³. The Company's marketing strategy focuses on digital advertising, search engine optimization, and targeted promotions aimed at automotive enthusiasts and professional installers, with the goal of differentiating through product specialization, competitive pricing, and customer service, although limited financial resources have constrained marketing efforts and impacted growth ¹⁴.

The Company's business model is focused on expanding its ecommerce operations, strengthening its product offerings, and pursuing strategic acquisitions that align with its vision for growth ¹⁵. The Company seeks acquisition targets that fit its vision and areas of interest, are currently generating revenue with room for growth, and have strong management teams that will remain in place post-acquisition ¹⁶. Capital raised will be allocated to marketing, acquisitions, and revenue generation initiatives ¹⁷. The Company is committed to building value through operational efficiency, targeted marketing, and strategic partnerships ¹⁸.

During fiscal 2026, the Company's Sugar Auto Parts marketplace advanced from beta to a soft launch, the Company expanded its product catalog and installer network, and it surpassed cumulative revenue milestones since inception ¹⁹. As a result of financing constraints, the Company reduced paid-media spending during portions of the year ²⁰. As of June 30, 2026, the Company impaired $2,697,728 in goodwill associated with the AP4L acquisition ²¹. On May 22, 2026, the Board of Directors approved a 1-for-250 reverse stock split of the Company's outstanding common stock, which became effective June 12, 2026 following processing by FINRA, and in connection with the reverse split, the Company filed a Certificate of Change with the Nevada Secretary of State reducing its authorized common stock from 5,000,000,000 shares to 20,000,000 shares ²². During fiscal year 2026, the Company financed its operations principally through the issuance of convertible and promissory notes and an equity line of credit ²³. In April 2026, the Company's Chief Executive Officer made his personal credit card available to its Sugar Auto Parts subsidiary under a six-month credit facility agreement, in exchange for a monthly fee and an inducement share issuance, and that facility is in default ²⁴. In May 2026, the Company approved a one-year consulting agreement with Colby Hill, the son of its Chief Executive Officer, providing for cash compensation of $3,000 per month and 360 shares of Series B Preferred Stock ²⁵. The Company also acknowledged an outstanding obligation of approximately $150,000 owed to Applife Holdings, owned by Matthew Reid, a director ²⁶.

For the year ended June 30, 2026, the Company had revenues of $2,297,200, compared to revenues of $315,130 for the period January 6, 2025 to June 30, 2025 ²⁷. Costs of sales were $1,796,910 and $270,891, respectively, which were approximately 78% and 86% of revenue ²⁸. Gross margin was $500,290 and $44,239, respectively ²⁹. Operating expenses were $4,878,869 and $246,137, respectively, primarily attributable to payments to contractors, employees and other operating expenses, including marketing and advertising and impairment of goodwill in the amount of $2,697,728 ³⁰. The Company reported a net loss of $4,673,550 and $997,763 for the year ended June 30, 2026 and period January 6, 2025 to June 30, 2025 ³¹. The Company has an accumulated deficit of $8,295,331 as of June 30, 2026, a working capital deficiency of approximately $4,012,622 and a stockholder's deficiency of $5,258,043 as of June 30, 2026 ³². The Company's cash balance was $21,725 on June 30, 2026 ³³.

The Company anticipates additional equity and debt financing to fund operations in the future ³⁴. The Company expects its expenses will continue to increase with the exception of the impairment of goodwill during the foreseeable future as a result of increased operations and the development of its business operations ³⁵. The Company is dependent on the proceeds raised in the convertible notes from related and non-related parties of which generated $663,320 in cash, as well as the ELOC entered into during the year ended June 30, 2026 to continue to fund its operations and implement its business plan ³⁶. If the Company is unable to raise sufficient capital, it will be required to delay or forego some portion of its business plan, which would have a material adverse effect on its anticipated results from operations and consolidated financial condition ³⁷. The Company will need to obtain additional capital in order to expand operations and become profitable ³⁸. In order to obtain additional capital beyond the current ELOC, the Company may need to sell additional shares of its common stock or borrow funds from private lenders ³⁹.

The Company's business model is focused on expanding its ecommerce operations, strengthening its product offerings, and pursuing strategic acquisitions that align with its vision for growth . The Company will continue to explore new opportunities to invest in projects and partnerships that can enhance its market position and revenue streams ⁴⁰. Capital raised will be allocated to marketing, acquisitions, and revenue generation initiatives . The Company seeks acquisition targets that fit its vision and areas of interest, are currently generating revenue with room for growth, and have strong management teams that will remain in place post-acquisition . The Company's marketing strategy focuses on digital advertising, search engine optimization, and targeted promotions aimed at automotive enthusiasts and professional installers .

The Company's Sugar Auto Parts marketplace advanced from beta to a soft launch during fiscal 2026, the Company expanded its product catalog and installer network, and it surpassed cumulative revenue milestones since inception . The Company believes that its automotive parts marketplace Sugar Auto Parts, with no known large challengers presently in the space outside of "all things to all people" online marketplaces like Amazon and eBay, has the opportunity to quickly be branded when launched as the auto parts industry premier marketplace . The Company's sources of revenue are expected to come from product purchases and, in the future, may include advertising and sponsorships .

The Company expects its expenses will continue to increase with the exception of the impairment of goodwill during the foreseeable future as a result of increased operations and the development of its business operations . Costs of sales were $1,796,910 and $270,891 for the year ended June 30, 2026 and period January 6, 2025 to June 30, 2025, respectively, which were approximately 78% and 86% of revenue . Gross margin was $500,290 and $44,239, respectively .

The Company operates with a streamlined executive team led by Michael Hill and Barrett Evans, with all management and business operations based in the United States ⁴¹. The Company relies on its executive leadership and a network of independent contractors and professional service providers for business management, accounting, legal, and investor relations functions ⁴². All executive and management functions are located in Nevada and California, and there are no employees or contractors located internationally ⁴³. The Company does not currently have a large full-time staff ⁴⁴. The Company currently pays $1,500 per month for use of its physical space ⁴⁵. The Company has no current plans to occupy other or additional office space ⁴⁶.

The Company anticipates additional equity and debt financings to fund operations in the future . The Company is dependent on the proceeds raised in the convertible notes from related and non-related parties of which generated $663,320 in cash, as well as the ELOC entered into during the year ended June 30, 2026 to continue to fund its operations and implement its business plan . The Company will need to obtain additional capital in order to expand operations and become profitable . In order to obtain additional capital beyond the current ELOC, the Company may need to sell additional shares of its common stock or borrow funds from private lenders . The Company has not paid dividends during the three most recently completed fiscal years and has no current plans to pay dividends on its common stock ⁴⁷. The Company currently intends to retain all earnings, if any, for use in its business ⁴⁸.

The Company is in default under the convertible promissory note issued to Labrys Fund II, L.P. on August 1, 2025, which went into default on January 30, 2026 when the Company failed to make a required amortization payment ⁴⁹. The Company is in default under the two convertible promissory notes issued to C/M Capital Master Fund, LP on November 20, 2025 in the original principal amounts of $150,000 and $225,000, which matured on August 20, 2026 and were not repaid ⁵⁰. The Company is in default under the credit card facility provided to its subsidiary by its Chief Executive Officer, which has been in default since April 22, 2026 ⁵¹. The Company does not have sufficient cash to repay these obligations ⁵². The Company's defaults may also prevent it from satisfying the conditions to selling shares to C/M Capital Master Fund, LP under its equity line of credit, which require, among other things, that no default or event of default exist under its indebtedness ⁵³. If the Company's lenders exercise their remedies, it may be forced to curtail or cease operations or to seek protection under the bankruptcy laws ⁵⁴.

A significant portion of automotive parts and accessories are manufactured or sourced abroad ⁵⁵. Changes in U.S. trade policy, including the imposition of tariffs, and disruptions in global supply chains, could increase the Company's product costs, reduce its margins, cause inventory shortages, and reduce consumer demand, any of which could materially and adversely affect its results of operations ⁵⁶. The Company has identified material weaknesses in its internal control over financial reporting, including insufficient written documentation of internal control policies and insufficient accounting resources ⁵⁷. Management has concluded that the Company's disclosure controls and procedures and its internal control over financial reporting were not effective as of June 30, 2026 due to material weaknesses ⁵⁸.

There is substantial doubt about the Company's ability to continue as a going concern, as the Company has an accumulated deficit of $8,295,331 as of June 30, 2026, a working capital deficiency of approximately $4,012,622 and a stockholder's deficiency of $5,258,043 as of June 30, 2026 , and its independent registered public accounting firm's report contains an explanatory paragraph expressing substantial doubt about its ability to continue as a going concern ⁵⁹. The Company is in default under the convertible promissory note issued to Labrys Fund II, L.P. on August 1, 2025, which went into default on January 30, 2026 when the Company failed to make a required amortization payment , under the two convertible promissory notes issued to C/M Capital Master Fund, LP on November 20, 2025 in the original principal amounts of $150,000 and $225,000, which matured on August 20, 2026 and were not repaid , and under the credit card facility provided to its subsidiary by its Chief Executive Officer, which has been in default since April 22, 2026 ; the Company does not have sufficient cash to repay these obligations . A number of the Company's convertible notes convert at a discount (in certain cases 35%) to the lowest trading prices over a trailing period, and contain full-ratchet or other anti-dilution and reset provisions, so that as the stock price declines these notes become convertible into increasingly large numbers of shares, which may cause further downward pressure on the stock price and further dilution ⁶⁰. Effective June 12, 2026, the Company effected a 1-for-250 reverse stock split and reduced its authorized common stock to 20,000,000 shares , and given its substantial number of outstanding convertible securities and warrants, it may not have sufficient authorized and unissued shares to satisfy all conversions and exercises ⁶¹. The Company has identified material weaknesses in its internal control over financial reporting, including insufficient written documentation of internal control policies and insufficient accounting resources , and management has concluded that its disclosure controls and procedures and its internal control over financial reporting were not effective as of June 30, 2026 due to material weaknesses .

Management's message to shareholders is dominated by the Company's transition to an aftermarket automotive parts ecommerce business following the June 13, 2025 reverse merger with Sugar Auto Parts, Inc., and by an explicit acknowledgment of severe financial distress. The Company has a limited operating history, operations, and revenues and will need to raise capital to implement its planned operations . The Company anticipates additional equity and debt financing to fund operations in the future , and it expects its expenses will continue to increase with the exception of the impairment of goodwill during the foreseeable future as a result of increased operations and the development of its business operations . Management states that the Company is dependent on the proceeds raised in the convertible notes from related and non-related parties of which generated $663,320 in cash, as well as the ELOC entered into during the year ended June 30, 2026 to continue to fund its operations and implement its business plan . The Company has an accumulated deficit of $8,295,331 as of June 30, 2026, a working capital deficiency of approximately $4,012,622 and a stockholder's deficiency of $5,258,043 as of June 30, 2026 , and the Company's independent registered public accounting firm's report contains an explanatory paragraph expressing substantial doubt about its ability to continue as a going concern . Management's three emphasized strategic priorities are expanding the ecommerce operations, strengthening product offerings, and pursuing strategic acquisitions that align with its vision for growth ; the Company will continue to explore new opportunities to invest in projects and partnerships that can enhance its market position and revenue streams ; and capital raised will be allocated to marketing, acquisitions, and revenue generation initiatives . Operationally, management highlights that during fiscal 2026 the Sugar Auto Parts marketplace advanced from beta to a soft launch, the Company expanded its product catalog and installer network, and it surpassed cumulative revenue milestones since inception , while reduced paid-media spending during portions of the year resulted from financing constraints . Management also reports that the Company is in default under the convertible promissory note issued to Labrys Fund II, L.P. on August 1, 2025, which went into default on January 30, 2026 when the Company failed to make a required amortization payment , under the two convertible promissory notes issued to C/M Capital Master Fund, LP on November 20, 2025 in the original principal amounts of $150,000 and $225,000, which matured on August 20, 2026 and were not repaid , and under the credit card facility provided to its subsidiary by its Chief Executive Officer, which has been in default since April 22, 2026 , and that the Company does not have sufficient cash to repay these obligations .