Overview

APPlife Digital Solutions, Inc. (the “Company” or “Applife”) was formed in March 2018 in Nevada. The Company’s main operating subsidiary, Sugar Auto Parts, Inc. (“SAP”), is a Nevada corporation formed in January 2025 by Mammoth Crest Capital, LLC. Applife is headquartered in Santa Barbara, California and operates primarily as an aftermarket automotive parts e-commerce business, specializing in online sales of suspension lift systems and related accessories.

Reverse Merger with Sugar Auto Parts, Inc.

On June 13, 2025, SAP became a wholly-owned subsidiary of Applife through a reverse merger.

Plan of Operation

Applife operates with a streamlined executive team and relies on independent contractors and professional service providers for various business functions. The company’s business model focuses on expanding its e-commerce operations, strengthening product offerings, and pursuing strategic acquisitions. Applife is committed to building value through operational efficiency, targeted marketing, and strategic partnerships.

Results of Operations

Metric	For the Period from January 6, 2025 to June 30, 2025
Revenue	$315,130
Cost of Goods Sold	$(270,891)
Operating Expenses	$246,137
Other Expenses	$(195,865)
Net Loss	$(997,763)

Revenue

For the period from inception to June 30, 2025, Applife generated $315,130 in revenue. Costs of sales were $270,891, resulting in a gross margin of $44,239.

Operating Loss

Applife reported an operating loss of $246,137, primarily due to cost of goods sold, payments to contractors, and other operating expenses, including marketing and advertising.

Other Income/Expense

Applife incurred $195,865 in total other expenses, consisting mainly of $803,589 in interest expense, partially offset by a $7,724 gain on extinguishment of debt.

Net Loss

Applife reported a net loss of $997,763 for the period ended June 30, 2025.

Going Concern

Applife has an accumulated deficit of $3,621,781, a working capital deficiency of $2,556,084, and a stockholder’s deficiency of $811,778, raising substantial doubt about its ability to continue as a going concern. The company anticipates seeking additional equity and debt financing to fund future operations.

Liquidity and Capital Resources

Applife had $111,397 in cash as of June 30, 2025. The company expects expenses to continue increasing as it develops its business operations. Applife does not have significant credit, bank financing, or other external sources of liquidity, and its operations have not been a source of liquidity. The company will need to obtain additional capital, potentially through the sale of equity or debt securities, to expand operations and become profitable.

Working Capital Deficit

Metric	June 30, 2025
Current Assets	$134,733
Current Liabilities	$2,690,817
Working Capital (Deficit)	$(2,556,084)

Applife’s current liabilities of $2,690,817 include $802,589 in warrant liabilities related to convertible notes payable.

Cash Flows

Metric	For the Period from January 6, 2025 to June 30, 2025
Net Cash Used in Operating Activities	$(159,964)
Net Cash Used in Investing Activities	$(185,000)
Net Cash Provided by Financing Activities	$456,361
Net Decrease in Cash	$111,397

The company’s cash flows were primarily used for operating activities, including the net loss, and investing activities, such as the purchase of AP4L and the Applife reverse merger. Financing activities, including the issuance of promissory notes, provided net cash of $456,361.

Critical Accounting Policies and Estimates

Applife’s critical accounting policies and estimates include revenue recognition, stock-based compensation, and the determination of the fair value of the conversion feature of convertible notes. The company also discusses its accounting for business combinations.

Seasonality

Applife does not expect its sales to be significantly impacted by seasonal demands.

Risks

Applife is susceptible to general economic conditions, natural catastrophic events, and public health crises, such as the COVID-19 pandemic, which could adversely affect its operating results and financial condition.