UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2010

COMMISSION FILE NUMBER 000-52363

YOUBLAST GLOBAL, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	74-2820999
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

81 Greene Street, 4 th Floor New York, New York	10012
(Address of principal executive offices)	(Zip code)

Issuer's telephone number: (212) 343-9200

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files. Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer o

Non-accelerated filer o	Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS

DURING THE PRECEDING FIVE YEARS

Indicate by check mark whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes o No o

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: As of November 15, 2010 there were 35,225,044 outstanding shares of the Registrant's Common Stock, $.003 par value.

YOUBLAST GLOBAL, INC.

TABLE OF CONTENTS

	Page
PART I - FINANCIAL INFORMATION

Item 1. Financial Statements	3

Consolidated Balance Sheets as of September 30, 2010 (unaudited) and December 31, 2009	3

Consolidated Statements of Operations for the three and nine months ended September 30, 2010 and 2009 (unaudited) and for the period from inception (January 18, 2005) through September 30, 2010 (unaudited)	4

Consolidated Statements of Changes in Stockholders’ Equity (Deficiency) for the nine months ended September 30, 2010 (unaudited) and for the period from inception (January 18, 2005) through September 30, 2010 (unaudited)	5

Consolidated Statements of Cash Flows for the nine months ended September 30, 2010 and 2009 (unaudited) and for the period from inception (January 18, 2005) through September 30, 2010 (unaudited)	7

Notes to Consolidated Financial Statements (unaudited)	9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	30

Item 3. Quantitative and Qualitative Disclosures About Market Risk	38

Item 4T. Controls and Procedures	38

PART II - OTHER INFORMATION

Item 1. Legal Proceedings	39

Item 1A. Risk Factors	39

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	39

Item 3. Defaults Upon Senior Securities	39

Item 4. (Removed and Reserved)	39

Item 5. Other Information	39

Item 6. Exhibits	39

SIGNATURES	40

YOUBLAST GLOBAL, INC.

PART I Financial Information

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS.

YouBlast Global, Inc. and Subsidiary
(formerly Sahara Media Holdings, Inc.)
(a development stage enterprise)
Consolidated Balance Sheets

	September 30, 2010			December 31, 2009
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	-		$	316,317
Accounts receivable		19,701			-
Deferred financing costs		22,336			-
Prepaid expenses and other		9,400			49,539
Available-for-sale security		-			295,500
Total current assets		51,437			661,356

Property and equipment, net		19,892			24,601
Intangible assets, net		3,339,481			3,267,345
Security deposits		46,200			46,200
Investment at cost		67,000			45,000
Deposits		-			20,000

Total assets	$	3,524,010		$	4,064,502

Liabilities and stockholders' equity (deficiency)
Current liabilities:
Accounts payable and accrued expenses	$	616,276		$	1,400,852
Notes payable, net of discount		1,107,116			-
Notes payable, related party		261,000			-
Advances, related party		122,381			-
Share liability		1,695,204			1,376,250
Total current liabilities		3,801,977			2,777,102

Commitments and contingencies		-			-

Stockholders' equity (deficiency)
Preferred stock, $0.0001 par value; 10,000,000
shares authorized; no shares issued or outstanding		-			-
Common stock, $0.003 par value; 50,000,000 shares authorized;
36,391,709 shares issued and 35,391,709 shares outstanding
at September 30, 2010; 31,066,710 shares issued and 30,066,710
outstanding at December 31, 2009		109,175			93,200
Additional paid-in capital		14,357,311			11,939,664
Accumulated other comprehensive loss		-			(4,500	)
Deficit accumulated during the development stage		(14,741,453	)		(10,737,964	)
		(274,967	)		1,290,400
Less: Treasury stock - (1,000,0000 common shares) at cost		(3,000	)		(3,000	)
Total stockholders' equity (deficiency)		(277,967	)		1,287,400

Total liabilities and stockholders' equity (deficiency)	$	3,524,010		$	4,064,502

See accompanying notes to financial statements.

YouBlast Global, Inc. and Subsidiary
(formerly Sahara Media Holdings, Inc.)
(a development stage company)
Consolidated Statements of Operations (Unaudited)

													Period from inception
	Three Months Ended						Nine Months Ended						(January 18, 2005)
	September 30,						September 30,						through September 30,
	2010			2009			2010			2009			2010

Revenue	$	22,027		$	35,205		$	53,626		$	38,785		$	128,023

Costs and expenses:
Product development		199,666			364,641			904,546			932,678			3,152,246
Selling and marketing		623			69,790			40,273			347,374			629,993
General and administrative		348,443			923,859			1,881,968			2,845,768			9,700,268

Loss from operations		(526,705	)		(1,323,085	)		(2,773,161	)		(4,087,035	)		(13,354,484	)

Interest income		-			10,049			2,028			18,785			60,008
Loss on sale of available-for-sale security		-			-			(6,005	)		-			(10,010	)
Amortization - deferred financing costs		(726,438	)		-			(903,647	)		-			(903,647	)
Amortization - debt discount		(231,102	)		-			(238,988	)		-			(238,988	)
Interest expense- related party		(3,600	)		-			(4,142	)		-			(100,877	)
Interest expense		(45,912	)		-			(79,574	)		-			(193,455	)

Net loss	$	(1,533,757	)	$	(1,313,036	)	$	(4,003,489	)	$	(4,068,250	)	$	(14,741,453	)

Basic and diluted loss per share	$	(0.04	)	$	(0.04	)	$	(0.12	)	$	(0.13	)


Weighted average common shares
- basic and diluted		35,391,709			31,028,710			34,664,475			30,997,940

See accompanying notes to financial statements.

YouBlast Global, Inc. and Subsidiary

(formerly Sahara Media Holdings, Inc.)

(a development stage company)

Consolidated Statements of Changes in Stockholders' Equity (Deficiency)

For the Period from Date of Inception (January 18, 2005)

through September 30, 2010 (Unaudited)


										Accumulated		Deficit
										Other		Accumulated							Total
							Additional			Comprehensive		During the							Stockholders'
	Common Stock						Paid-in			Income		Development			Treasury Stock				Equity
	Shares			Amount			Capital			(Loss)		Stage			Shares		Amount		(Deficiency)
Balance at January 18, 2005		-		$	-		$	-		$	-	$	-			-	$	-	$	-

Issuance of common stock to founder net of cancellation		1,147,500			12			194,368												194,380
Issuance of common stock to director		120,000			1			119												120
Issuance of common stock to investors		499,800			5			495												500
Issuance of common stock to investor		15,000			-			-												-

Net loss													(405,269	)						(405,269	)

Balance at December 31, 2005		1,782,300			18			194,982			-		(405,269	)		-		-		(210,269	)

Issuance of common stock to consultant		30,000			-			-												-

Net loss													(826,402	)						(826,402	)

Balance at December 31, 2006		1,812,300			18			194,982			-		(1,231,671	)		-		-		(1,036,671	)

Issuance of common stock on exercise of warrant		164,800			2			-												2

Net loss													(728,729	)						(728,729	)

Balance at December 31, 2007		1,977,100			20			194,982					(1,960,400	)		-		-		(1,765,398	)
											-

Issuance of common stock to founder to settle note
payable and advances to related parties		13,363,390			134			1,303,709												1,303,843
Cancellation of common stock on settlement		(1,147,500	)		(11	)		-												(11	)
Issuance of common stock to founder		100,000			1			524,999												525,000
Issuance of common stock to a director to settle note
payable to a related party and accrued interest		452,000			5			139,237												139,242
Issuance of common stock to a consultant to settle
accrued consulting fees to a related party		210,000			2			142,418												142,420
Cancellation of common stock on settlement		(30,000	)		-			-												-
Cancellation of common stock		(312,300	)		(3	)		-												(3	)
Issuance of common stock to a consultant to settle
accrued consulting fees to a related party		5,500			-			8,197												8,197
Issuance of common stock to settle accrued charges on note payable		724,000			7			11,993												12,000
Cancellation of common stock on settlement of accrued charges		(164,800	)		(2	)		-												(2	)
Issuance of common stock to settle note payable and accrued interest		140,000			1			111,392												111,393
Issuance of common stock to settle accrued consulting fees		480,000			5			25,782												25,787
Issuance of common stock to settle note payable and accrued interest		19,610			-			19,610												19,610
Issuance of common stock to an investor		100,000			1			49,999												50,000
Issuance of common stock to consultant		200,000			2			3,998												4,000
Issuance of common stock to settle note payable and accrued interest		31,000			-			-												-
Issuance of common stock		27,000			-			25,000												25,000
Issuance of common stock to an investor		100,000			1			49,999												50,000
Issuance of common stock to founder's company as consideration for consulting services		400,000			4			(4	)											-
Issuance of common stock to a related party as additional consideration for purchase of database		1,425,000			14			1,781,236												1,781,250
Issuance of common stock to a stockholder as
consideration for a bridge loan		50,000			150			62,350												62,500
Par value of common shares under plan of merger		818,000			2,454			(2,454	)											-
Cancellation of common shares under plan of merger		(18,150,000	)		(181	)		181												-
Issuance of common shares and recapitalization under plan of merger		18,150,000			54,450			(54,450	)											-

See accompanying notes to financial statements.

YouBlast Global, Inc. and Subsidiary

(formerly Sahara Media Holdings, Inc.)

(a development stage company)

Consolidated Statements of Changes in Stockholders' Equity (Deficiency)

For the Period from Date of Inception (January 18, 2005)

through September 30, 2010 (Unaudited)


								Accumulated			Deficit
								Other			Accumulated								Total
					Additional			Comprehensive			During the								Stockholders'
	Common Stock				Paid-in			Income			Development			Treasury Stock					Equity
	Shares		Amount		Capital			(Loss)			Stage			Shares		Amount			(Deficiency)

Issuance of common stock to investors net of issuance costs
of $2,370,478 for private placement		6,526,159		19,578		5,768,310														5,787,888
Issuance of common stock as additional consideration for bridge loan		500,000		1,350		(1,350	)													-
Issuance of common stock as additional consideration for
for private placement brokerage		3,000,000		9,000		(9,000	)													-
Issuance of common stock to consultant for services		100,000		300		(300	)													-
Issuance of common stock to consultant for services
related to private placement		50,000		150		(150	)													-
Issuance of common stock as additional consideration
for legal services related to private placement		250,000		750		(750	)													-
Issuance of common stock to investors net of issuance costs of $242,897 for private
placement		1,417,883		4,254		1,525,102														1,529,356
Stock based compensation for warrants issued to consultant		-		-		10,815														10,815

Net loss									-			(2,034,056	)							(2,034,056	)

Balance at December 31, 2008		30,812,042		92,436		11,690,851			-			(3,994,456	)		-		-			7,788,831

Components of comprehensive loss, net of tax:
Net Loss												(6,743,508	)							(6,743,508	)
Unrealized holding loss on available-for-sale security									(4,500	)										(4,500	)
Total comprehensive loss																				(6,748,008	)

Issuance of common stock to consultants
for services accrued in share liability		66,668		200		199,800														200,000
Issuance of common stock to consultant for services		150,000		450		(450	)													-
Stock based compensation for warrants issued to consultants		-		-		30,547														30,547
Issuance of common stock to related party for services		25,000		75		8,675														8,750
Issuance of common stock per settlement agreement		13,000		39		7,241														7,280
Receipt of common stock for settlement under escrow share agreement						3,000									1,000,000		(3,000	)		-


Balance at December 31, 2009		31,066,710		93,200		11,939,664			(4,500	)		(10,737,964	)		1,000,000		(3,000	)		1,287,400

Components of comprehensive loss, net of tax:
Net Loss												(4,003,489	)							(4,003,489	)
Reclassification adjustment for loss included in net loss									4,500											4,500
Total comprehensive loss																				(3,998,989	)
Issuance of common stock to employees and directors for services accrued		3,244,999		9,735		1,547,865														1,557,600
Issuance of common stock to consultants for services accrued		105,000		315		48,935														49,250
Issuance of common stock to related party for services accrued in
share liability		75,000		225		26,025														26,250
Issuance of common stock as additional consideration for bridge loan		200,000		600		49,400														50,000
Issuance of common stock for cash and
as additional consideration for bridge loans		1,500,000		4,500		370,500														375,000
Common stock issuable for cash and
as additional consideration for bridge loans		200,000		600		49,400														50,000
Debt discount from warrants issued with bridge loan		-		-		314,872														314,872
Stock based compensation for warrants issued to consultant		-		-		10,650														10,650


Balance at September 30, 2010 (Unaudited)		36,391,709	$	109,175	$	14,357,311		$	-		$	(14,741,453	)		1,000,000	$	(3,000	)	$	(277,967	)

See accompanying notes to financial statements.


							Period from
							inception
							(January 18, 2005)
	Nine Months Ended						through
	September 30,						September 30,
	2010			2009			2010

Cash flows from operating activities:
Net loss	$	(4,003,489	)	$	(4,068,250	)	$	(14,741,453	)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization expense		425,089			336,523			1,251,156
Stock-based compensation		421,850			-			1,557,600
Stock-based consulting expense		23,150			26,089			117,292
Share liability		83,221			1,072,500			1,659,471
Loss on sale of available-for-sale security		6,005			-			10,010
Amortization of deferred financing costs		903,647			-			903,647
Amortization of debt discount		238,988			-			259,988
Issuance of stock as additional consideration for bridge loan		-			-			62,500
Changes in assets and liabilities:
Accounts receivable		(19,701	)		(8,750	)		(19,701	)
Prepaid expenses and other		40,139			(26,586	)		(9,400	)
Security deposits		-			(9,000	)		(46,200	)
Accounts payable and accrued expenses		383,162			(54,194	)		748,092
Accrued expenses, related parties		-			-			235,193
Accrued salary, related parties		-			-			525,000
Subscription liability		-			-			406,000

Net cash used in operating activities		(1,497,939	)		(2,731,668	)		(7,080,805	)

Cash flows from investing activities:
Proceeds from sale of available-for-sale security		293,995			-			489,990
Capitalization of website development costs		(492,516	)		(37,220	)		(1,242,270	)
Acquisition of intangible asset		-			-			(111,403	)
Acquisition of intangible assets - related party		-			-			(825,000	)
Acquisition of trademark intangibles		-			-			(618,673	)
Acquisition of property and equipment		-			(4,124	)		(31,933	)
Purchase of available-for-sale security		-			(500,000	)		(500,000	)
Purchase of non-marketible security		(22,000	)		-			(67,000	)
Deposits on acquisition agreements		20,000			-			-
Cash in escrow		-			40,000			-

Net cash (used in) provided by investing activities		(200,521	)		(501,344	)		(2,906,289	)

Cash flows from financing activities:
Proceeds from notes payable		1,183,000			-			1,499,331
Payments for financing costs		(206,000	)		-			(206,000	)
Issuance of common stock, net of issuance costs		17,000			-			7,703,886
Payment made to restricted cash		-			(500,311	)		(500,311	)
Proceeds from restricted cash		-			500,311			500,311
Proceeds from notes payable, related parties		376,000			-			977,734
Payments on notes payable, related parties		(115,000	)		-			(115,000	)
Advances, related parties		122,381						122,381
Cash overdraft		4,762						4,762

Net cash provided by financing activities		1,382,143			-			9,987,094

Net decrease in cash and cash equivalents		(316,317	)		(3,233,012	)		-

Cash and cash equivalents, beginning of periods		316,317			4,437,465			-

Cash and cash equivalents, end of periods	$	-		$	1,204,453		$	-

See accompanying notes to financial statements.


					Period from
					inception
					(January 18, 2005)
	Nine Months Ended				through
	September 30,				September 30,
	2010		2009		2010

Supplementary information:
Cash paid for:
Interest	$	-	$	-	$	-
Income Taxes	$	-	$	-	$	-



Supplemental disclosures of cash flow information:

Noncash Investing Activities

Issuance of common shares to acquire intangible asset	$	-	$	-	$	1,781,250


Noncash Financing Activities

Issuance (receipt) of common shares to settle:
Share liability	$	26,250	$	200,000	$	226,250
Deferred financing costs		458,000		-		458,000
Accounts payable and accrued expenses		1,172,500		-		1,353,823
Escrow agreement - in treasury		-		-		(3,000	)
Notes payable and accrued interest, related parties		-		-		601,734
Note payable and accrued interest		-		-		337,331
Advances, accrued expenses and other, related party		-		-		1,156,660
		1,656,750		200,000		4,130,798

Debt discount from warrants issued with bridge loan		314,872		-		314,872
Unrealized loss on available-for-sale security - realized in period		4,500		-		-

Total Noncash Financing Activities	$	1,976,122	$	200,000	$	4,445,670

See accompanying notes to financial statements.

YouBlast Global, Inc. and Subsidiary

(formerly Sahara Media Holdings, Inc.)

(A Development Stage Company)

Notes to Consolidated Financial Statements

For the Nine Months ended September 30, 2010 and 2009

[Unaudited]

1. Nature of Business

YouBlast Global, Inc. is a Delaware corporation organized on September 26, 1997 under the name Keystone Entertainment, Inc. On September 26, 2008, the corporate name was changed to Sahara Media Holdings, Inc. On April 26, 2010, the corporate name was changed to YouBlast Global, Inc.

YouBlast Global, Inc. is a development-stage company and is the parent company of Sahara Media, Inc., a Delaware corporation formed in January 2005 (“Sahara”), also a development-stage company located in New York City (collectively YouBlast Global, Inc. and Sahara are referred to as the “Company”). Since its formation, Sahara has concentrated on the development of its business strategy. Sahara purchased the “Honey” trademark from the former publisher of Honey Magazine for the class of paper goods and printed matter (which relates to printed publications). Sahara re-launched Honey as an online magazine along with Hivespot, a social network, targeting the 18-34 urban female demographic in March 2009. Hivespot has served as the beta version of the YouBlast social network which is in development and is expected to launch in the first quarter of 2011. YouBlast is a one-stop-shop for Internet users and businesses to create a rich website with easy to use publishing, analytics and e-commerce tools. The Company expects that the primary components of the business will be:

·	Marketing services to advertisers and publishers, such as display advertising and search advertising, on the Company’s social publishing network, YouBlast.com, and across its affiliate web properties, such as Honeymag.com;

·	Web publishing services to users, such as single-click publishing tools, click to CDN streaming tools, advanced web and file analytics and single click e-commerce tools; and

·	Enterprise solutions for companies seeking to sub-license and custom-brand YouBlast products and services on a broader scale.

On July 1, 2010, the Company appointed Jeffrey D. Forster as President and Chief Executive Officer (“CEO”) of the Company. Following the expiration of Mr. Forster’s initial employment agreement on September 30, 2010, the Company and Mr. Forster wished to continue their relationship and therefore entered into an Executive Employment Agreement dated October 19, 2010. This Executive Employment Agreement provides for Mr. Forster to serve as President and CEO of the Company for a term through June 30, 2012. On October 22, 2010, Philmore Anderson, IV’s employment agreement was amended to change his position from President and CEO to Executive Chairman, and to extend the term of his employment from February 18, 2012 to October 22, 2012. Mr. Forster and Mr. Anderson both also serve as directors of the Company (see Note 12 and Note 13).

As part of the Company’s strategic plans, it routinely considers and seeks to complete acquisitions with companies that are compatible with and/or complementary to the Company, including its technology and products.

2. Basis of Presentation

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statement presentation and in accordance with the instructions to Form 10-Q. Accordingly, they do not include all the information and notes necessary for complete financial statement presentation. In the opinion of management, the consolidated financial statements contain all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of the consolidated financial position as of September 30, 2010, and the consolidated results of operations for the three and nine months ended September 30, 2010, and 2009 and cash flows for the nine months ended September 30, 2010 and 2009, and the period from inception (January 18, 2005) through September 30, 2010. Interim results are not necessarily indicative of the results to be expected for a full year. Reference is made to the consolidated financial statements of the Company contained in its Annual Report on Form 10-K for the year ended December 31, 2009.

The accompanying consolidated financial statements have been prepared on a basis which assumes that the Company will continue as a going concern and which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company has had minimal revenues since inception, incurred losses from operations since its inception and has a deficit accumulated during the development stage period (January 18, 2005 through September 30, 2010) amounting to approximately $14.7 million. In addition, the current economic environment, which is characterized by tight credit markets, investor uncertainty about how to invest funds and low investor confidence, has introduced additional risk and difficulty to the Company’s challenge to secure additional financing to fund its working capital requirements. There can be no assurance that the Company will be profitable in the future or will be able to secure sufficient funding. If the Company is not profitable and cannot obtain sufficient capital to fund operations, the Company may have to cease operations. These circumstances raise uncertainty about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Management’s plan with regards to this condition primarily includes executing upon its revised business plan, which includes the launch of the YouBlast social network in the first quarter of 2011. In addition, the Company’s direct sales ad team signed its first advertising client in the second half of 2009. Direct sales generated approximately $35,000 and $53,000 in revenues in the fourth quarter of 2009 and the nine months ended September 2010, respectively. Additionally, the Company is presently working to raise capital through debt and equity financings. There can be no assurance that such revenues will reach anticipated amounts or that the Company will be able to raise additional capital to execute its strategy.

3. Summary of Significant Accounting Policies

Additional significant accounting policies followed by the Company are set forth in Note 2 to the Company’s audited consolidated financial statements included in Form 10-K for the year ended December 31, 2009.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Sahara Media, Inc. All significant intercompany accounts and transactions have been eliminated.

Use of Estimates

The preparation of the consolidated financial statements in accordance with GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates. The significant estimates and assumptions made by the Company include the lives assigned to its finite tangible and intangible assets and the tests for impairment of these long-lived assets, the valuation allowances for deferred tax assets and the assumptions utilized in the valuation of share-based payment agreements.

Accounts Receivable

An allowance for doubtful accounts is provided against accounts receivable for amounts management believes may be uncollectible. Management determines the adequacy of this allowance by regularly reviewing the composition of its accounts receivable aging and evaluating individual customer receivables, considering the customer’s financial condition, credit history and current economic circumstance. Based on these evaluations management deems no allowance for doubtful accounts to be necessary at this time.

Intangible Assets

The intangible assets, initially recorded at cost, are considered to approximate fair value at the time of purchase. Amortization is provided for on a straight-line basis over seven years, the estimated useful lives of the assets. The Company evaluates the recoverability of its intangible assets periodically and takes into account events or circumstances that warrant revised estimates of their useful lives or indicate that impairments exist. Management believes, based on an independent valuation as of December 31, 2009 and no impairment events or conditions being identified to date in 2010, that there is no impairment of the Company’s intangible assets as of September 30, 2010.

Revenue Recognition

Revenue is recognized when all of the following criteria are met: (1) persuasive evidence that an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the seller’s price to the buyer is fixed and determinable; and (4) collectibility is reasonably assured.

Income Taxes

The Company accounts for income taxes using the asset and liability method. Deferred taxes are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. Valuation allowances are provided , based upon the weight of available evidence, if it is more likely than not that some or all of the deferred tax assets will not be realized.

The Company and Sahara file standalone U.S. federal and state corporate income tax returns. The Company does not believe it has any material uncertain tax as of September 30, 2010. With few exceptions, the Company and Sahara are no longer subject to U.S. federal and state income tax examinations by tax authorities for tax periods before 2006. The Company recognizes interest and penalties accrued related to unrecognized tax benefits, if any, in its income tax provision. The Company had no interest or penalties accrued at September 30, 2010 or December 31, 2009.

Loss Per Share

Basic loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. The dilutive effect of the outstanding stock warrants is computed using the treasury stock method. For the nine months ended September 30, 2010 and 2009, diluted loss per share does not include the effect of 14,244,034 and 10,394,034 stock warrants outstanding, respectively, as their effect would be anti-dilutive.

Equity-based Compensation

The Company accounts for equity based compensation transactions with employees under the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic No. 718, “Compensation, Stock Compensation” (“Topic No. 718”). Topic No. 718 requires the recognition of the fair value of equity-based compensation in net earnings. The fair value of common stock issued for compensation is measured at the market price on date of grant. The fair value of the Company’s equity instruments, other than common stock, is estimated using the Black-Scholes option valuation model. This model requires the input of highly subjective assumptions and elections including expected stock price volatility and the estimated life of each award. In addition, the calculation of equity-based compensation costs requires that the Company estimate the number of awards that will be forfeited during the vesting period. The fair value of equity-based awards granted to employees is amortized over the vesting period of the award and the Company elected to use the straight-line method for awards granted after the adoption of Topic No. 718.

The Company accounts for equity based transactions with non-employees under the provisions of ASC Topic No. 505-50, “Equity-Based Payments to Non-Employees” (“Topic No. 505-50”). Topic No. 505-50 establishes that equity-based payment transactions with non-employees shall be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. When the equity instrument is utilized for measurement the fair value of (i) common stock issued for payments to non-employees is measured at the market price on the date of grant; (ii) equity instruments, other than common stock, is estimated using the Black-Scholes option valuation model. In general, the Company recognizes an asset or expense in the same manner as if it is to receive cash for the goods or services instead of paying with or using the equity instrument.

Investments

The Company accounts for its investment in fixed income security, as an available-for-sale security. The difference between cost and fair value, representing unrealized holding gains or losses, net of the related tax effect, if any, is recorded, until realized, as a separate component of stockholders’ equity.

The Company accounts for its investment in convertible debenture at cost because it determined that a quoted market price is not available for this security. The Company has neither obtained nor developed a valuation model necessary to estimate fair value of this security, and the cost of obtaining an independent valuation would be excessive considering the materiality of the instrument to the Company’s consolidated financial statements. Management determined in accordance with paragraphs 50-16 through 50-19 of ASC Topic No. 825-10 “Financial Instruments” it is not practicable to estimate fair value of its investment in convertible debenture at this time and accounts for the investment at cost.

Deferred Financing Costs

Amounts incurred for costs associated with financing are amortized to expense over the life of the notes using the effective interest method. The unamortized portion of the deferred costs is charged to operations upon the conversion of the notes or any portion thereof.

Reclassifications

Certain general and administrative expenses totaling approximately $43,000 and $97,000 in the three and nine months ended September 30, 2009, respectively, have been reclassified to product development to conform to the September 30, 2010 presentation.

Subsequent Events

The Company evaluated subsequent events, which are events or transactions that occurred after September 30, 2010 through the issuance of the accompanying consolidated financial statements.

Recent Accounting Pronouncements

In January 2010, the FASB issued, and the Company adopted, ASC Update No. 2010-05 “Escrowed Share Arrangements and the Presumption of Compensation” (“ASCU No. 2010-05”). ASCU No. 2010-05 codifies the SEC staff’s views on escrowed share arrangements which historically has been that the release of such shares to certain shareholders based on performance criteria is presumed to be compensatory. When evaluating whether the presumption of compensation has been overcome, the substance of the arrangement should be considered, including whether the transaction was entered into for a reason unrelated to employment, such as to facilitate a financing transaction. In general, in financing transactions the escrowed shares should be reflected as a discount in the allocation of proceeds. In debt financings the discounts are to be amortized using the effective interest method, while discounts on equity financings are not generally amortized. As it relates to future financings, the adoption of this update may have a material effect on the Company’s consolidated financial statements.

In January 2010, the FASB issued ASC Update No. 2010-06 “Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements” which updated guidance to amend the disclosure requirements related to recurring and nonrecurring fair value measurements. This update requires new disclosures on significant transfers of assets and liabilities between Level 1 and Level 2 of the fair value hierarchy (including the reasons for these transfers) and the reasons for any transfers in or out of Level 3. This update also requires a reconciliation of recurring Level 3 measurements about purchases, sales, issuances and settlements on a gross basis. In addition to these new disclosure requirements, this update clarifies certain existing disclosure requirements. For example, this update clarifies that reporting entities are required to provide fair value measurement disclosures for each class of assets and liabilities rather than each major category of assets and liabilities. This update also clarifies the requirement for entities to disclose information about both the valuation techniques and inputs used in estimating Level 2 and Level 3 fair value measurements. This update will become effective for the Company with the interim and annual reporting period beginning January 1, 2010, except for the requirement to provide the Level 3 activity of purchases, sales, issuances, and settlements on a gross basis, which will become effective for the Company with the interim and annual reporting period beginning January 1, 2011. The Company will not be required to provide the amended disclosures for any previous periods presented for comparative purposes. Other than requiring additional disclosures, adoption of this update will not have a material effect on the Company's consolidated financial statements.

4.	Prepaid Expenses

In August 2009, the Company made an advance to an unrelated party of $35,000. The advance was non-interest bearing until the maturity date, which was November 15, 2009. This advance was made in connection with the Company’s receipt of free services for the use of the unrelated party's facilities. The Company accounted for the substance of this transaction as a cash for services event. In the first quarter of 2010 and in fiscal 2009, the Company expensed $10,000 and $13,750, respectively, for these services. In the second quarter of 2010 the Company expensed the balance in prepaid expense of $11,250 since collection became doubtful.

5.	Intangible Assets

	September 30,		December 31,
	2010		2009
	[Unaudited]

Magazine trademark	$	618,673	$	618,673
List/email database		2,717,653		2,717,653
Website development costs		1,242,269		749,754
Total intangibles		4,578,595		4,086,080
Less: accumulated amortization		1,239,114		818,735
Intangibles, net	$	3,339,481	$	3,267,345

In the nine months ended September 30, 2010, the Company incurred $492,516 in website development costs. As of September 30, 2010, there are website development costs in progress of $655,049 and additional costs of approximately $50,000 are estimated to complete the project. The Company intends to amortize the capitalized website costs over an estimated useful life of seven years, beginning when the project has been completed and placed into service, which is expected to be in the first quarter of 2011. Such amortization is not included in the estimated future amortization table below. Amortization expense for the nine months ended September 30, 2010 and 2009, and for the period from inception (January 18, 2005) through September 30, 2010 amounted to approximately $420,000, $332,000 and $1,239,000, respectively.

Estimated amortization expense for the next five years and thereafter is as follows:

Twelve months ended
September 30, (Unaudited)
2011	$	561,000
2012		497,000
2013		472,000
2014		472,000
2015		472,000
Thereafter		210,000
	$	2,684,000

6.	Property and Equipment

	September 30,		December 31,
	2010		2009
	[Unaudited]

Office furniture and equipment	$	31,933	$	31,933
Less accumulated depreciation		12,041		7,332

Property and equipment, net	$	19,892	$	24,601

Depreciation expense for the nine months ended September, 2010 and 2009, and for the period from inception (January 18, 2005) through September 30, 2010 amounted to approximately $4,700, $4,400 and $12,000, respectively.

7.	Investments

Available-for-sale security

In August 2009, the Company purchased a corporate bond with a face amount of $500,000, at par, and classified this investment as an available-for–sale security, which matures in August 2024.

In December 2009, an investment in corporate bonds with a face amount of $200,000 was sold for $199,128, which included accrued interest of $3,133. The Company realized a loss on the sale of $4,005. As of December 31, 2009, the estimated market value of the investment in corporate bonds, with a face value of $300,000, was $295,500 and an unrealized loss of $4,500 has been recorded as accumulated comprehensive loss in stockholders’ equity at December 31, 2009.

In January 2010, the investment in corporate bonds with a face amount of $300,000, the balance of the available-for-sale security, was sold for $301,395, which included accrued interest of $7,400. The Company realized a loss on the sale of $6,005. As a result of the sale, unrealized loss of $4,500 was reclassified from accumulated comprehensive loss in stockholders’ equity.

Investment at cost

In October 2009, the Company purchased a convertible debenture from Soundblaze Media, LLC (“Soundblaze”)with a face amount of $45,000. The debenture is non-interest bearing and is redeemable by the issuer two years and one day after closing, on or around October 5, 2011 (the “Maturity Date”). If the debenture is not redeemed by the issuer on or before the maturity date, the Company has the right to convert the debenture into an approximate 1% equity interest in the issuer.

Effective April 29, 2010, the Company increased its investment in Soundblaze by $22,000 for an aggregate investment of $67,000. As a result, the conversion right of the debenture increased to an approximate 2% equity interest in the issuer.

Debenture

On March 24, 2010, the Company entered into a Purchase Agreement (‘Purchase Agreement”) with the John Thomas Bridge and Opportunity Fund (“JTBO”) and other potential investors (collectively the “Investor”), whereby the Company agreed to sell and the Investor agreed to purchase (i) a debenture in the principal amount of a minimum of $490,000 and a maximum of up to $980,000, bearing interest at the rate of 16% per annum, and (ii) a minimum of 1,000,000 shares and a maximum of up to 2,000,000 shares of Company common stock issued for a minimum of $10,000 and a maximum of up to $20,000 of consideration, as defined in the debenture (the “March 2010 Debenture”) and stock purchase agreement (the “Stock Purchase Agreement”).

On March 24, 2010, JTBO purchased a March 2010 Debenture in the principal amount of $490,000, bearing interest at 16%. The March 2010 Debenture, originally due on September 30, 2010, was amended and is due on December 31, 2010 (see Note 13). The Company may extend the March 2010 Debenture’s maturity date by three month periods if by the maturity date the Company notifies JTBO and delivers to JTBO 1,000,000 shares of the Company’s common stock as consideration for the extension. Upon the closing by the Company of one or more financings in which the Company receives gross proceeds of less than $1,500,000 the Company shall pay an amount equal to 50% of the proceeds of such financing to reduce the principal amount of the March 2010 Debenture. In addition, pursuant to the Stock Purchase Agreement, JTBO purchased 1,000,000 shares of common stock with a fair market value of $250,000 for consideration of $10,000. The excess of the fair market value over proceeds received of $240,000 is accounted for as share-based financing costs. The Company also agreed to issue JTBO 200,000 shares of the Company’s common stock with a fair market value of $50,000 in connection with the closing of the financing. The Company incurred financing costs of $417,500 ($290,000 of which is share-based) in connection with the sale of the debenture and common stock. Amortization of deferred financing costs amounted to $417,500 in the nine months ended September 30, 2010.

On April 13 and 14, 2010, pursuant to the Purchase Agreement, three investors purchased debentures in the principal amounts of $245,000, $58,800 and $39,200 bearing interest at 16%. These debentures, originally due on October 13 and 14, 2010, respectively, were amended and are due on April 14, 2011 (see Note 13). The Company may extend these debentures’ maturity dates by three month periods, as defined in the agreement. Upon the closing by the Company of one or more financings in which the Company receives gross proceeds of less than $1,500,000 the Company shall pay an amount equal to 50% of the proceeds of such financing to reduce the principal amount of the debentures. In addition, pursuant to the Stock Purchase Agreement, the investors purchased 500,000, 120,000 and 80,000 shares of common for consideration of $5,000, $1,200 and $800, respectively. The excess of the fair market value of the common stock over the proceeds received of $168,000 is accounted for as deferred share-based financing. Amortization of deferred financing costs amounted to $154,182 in the nine months ended September 30, 2010.

On June 7, 2010, the Company entered into a second Securities Purchase Agreement (the “June 2010 Purchase Agreement”) with JTBO, whereby the Company agreed to sell, and JTBO agreed to purchase, in two tranches, up to $250,000 in principal amount of debentures (the “June 2010 Debentures”) for an aggregate purchase price of $250,000. In connection with the purchase of the June 2010 Debentures, the Company has agreed to issue to JTBO five year warrants (the “June 2010 Warrants”) to purchase up to 2,000,000 shares of its common stock at an exercise price of $0.50 per share. The June 2010 Debentures pay interest at a rate of 16% per annum, payable in cash. The Company may extend the June 2010 Debentures’ maturity date by three month periods if by the maturity date, the company notifies the June 2010 Debenture holder and delivers to the June 2010 Debenture holder $25,000 for the extension. Upon the closing by the Company of one or more financings in which the Company receives gross proceeds of not less than $1,500,000 the Company shall pay an amount equal to 50% of the proceeds of such financing to reduce the principal amount of the June 2010 Debentures.

Pursuant to the June 2010 Purchase Agreement, on June 7, 2010, the Company sold to JTBO a June 2010 Debenture in the principal amount of $100,000, and issued JTBO a June 2010 Warrant to purchase 800,000 shares of its Common Stock, for gross proceeds of $100,000. Pursuant to the June 2010 Purchase Agreement, JTBO purchased a second June 2010 Debenture with a face value of $150,000 on June 30, 2010, for a purchase price of $150,000. At the closing of the purchase of the second June 2010 Debenture, the Company issued to JTBO a June 2010 Warrant to purchase 1,200,000 shares of its Common Stock. The June 2010 Debentures, originally maturing September 30, 2010, were amended and are due on December 31, 2010 (see Note 13). The Company valued the 2,000,000 June 2010 Warrants using the Black-Scholes pricing model. The value assigned to the warrants of $168,855 is recorded as debt discount and additional paid-in capital. The debt discount is being amortized over the respective terms of the debentures. In the nine months ended September 30, 2010, amortization of debt discount amounted to $168,855. The Company incurred $55,500 in financing costs in the sale of the June 2010 Debentures which are deferred and amortized over the respective terms of the debentures. Amortization of deferred financing costs amounted to $55,500 in the nine months ended September 30, 2010.

In conjunction with the June 2010 Purchase Agreement, the Company and JTBO also entered into a Registration Rights Agreement, pursuant to which the JTBO was granted piggy-back registration rights with respect to the shares issuable upon conversion of the Debenture or upon exercise of the Warrant (unless such shares may be sold pursuant to Rule 144) promulgated under the Securities Act of 1933, as amended.

In conjunction with the June 2010 Purchase Agreement, the Company and JTBO also entered into a Royalty Agreement (the “Royalty Agreement”) pursuant to which the Company will pay JTBO 25% of the Net Revenue received by the Company and generated by its YouBlast social network in an amount not to exceed $250,000. The Agreement will terminate on the sooner of the payment by the Company of $250,000 pursuant to the Royalty Agreement or by mutual agreement of JTBO and the Company. As used in the Royalty Agreement, “Net Revenue” means the total gross sales price and/or monetary equivalent of any other consideration actually received by the Company, less discounts, rebates, refunds or reserves applicable thereto.

On August 10, 2010, the Company entered into a Securities Purchase Agreement (the “August 2010 Purchase Agreement”) with the John Thomas Bridge & Opportunity Fund II, L.P. (“JTBOII)”, whereby the Company agreed to sell, and JTBOII agreed to purchase, in one or more tranches, up to $250,000 in principal amount of debentures (the “August 2010 Debentures”) for an aggregate purchase price of $250,000. The August 2010 Debentures pay interest at a rate of 16% per annum, payable in cash and, originally due on October 30, 2010, were amended and are due on December 31, 2010 (see Note 13). Pursuant to the August 2010 Purchase Agreement, for each $50,000 of August 2010 Debentures that JTBOII purchases, the Company agreed to issue JTBOII a warrant to purchase 400,000 shares of Company common stock.

Pursuant to the August 2010 Purchase Agreement, on August 10, 2010, the Company sold to JTBOII an August 2010 Debenture in the principal amount of $100,000, and issued to JTBOII a warrant to purchase 800,000 shares of its Common Stock, at $.50 per share, for gross proceeds of $100,000. As set forth in the August 2010 Purchase Agreement, the Fund had agreed to purchase up to $150,000 of additional Debentures by August 31, 2010, provided the Company has complied with the conditions and agreements set forth in the Purchase Agreement. The Company valued the 800,000 warrants using the BlackScholes pricing model. The value assigned to the warrant of $63,973 is recorded as debt discount and additional paid-in capital. The debt discount is being amortized over the term of the debenture. In the nine months ended September 30, 2010, amortization of debt discount amounted to $40,279. The Company incurred $23,000 in financing costs in the sale of the August 2010 Debenture which are deferred and amortized over the term of the debenture. Amortization of deferred financing costs amounted to $14,481 in the nine months ended September 30, 2010.

On April 14, 2010, the Company borrowed $65,000 from its Executive Chairman (former CEO) for working capital purposes. The promissory note bears interest at 9% per annum and is secured by certain assets of the Company. Principal and all accrued and unpaid interest to the date of repayment will be paid through the issuance of shares of the Company’s common stock at a rate of $0.50 per share. The entire unpaid portion of the note, together with all accrued interest through the date of payment may be declared immediately due and payable by the Executive Chairman (former CEO) upon the attaining of certain capital funding by the Company, as defined in the agreement. As disclosed above, such funding was subsequently attained and the promissory note was paid in April 2010.

The entire unpaid portion of the note, together with all accrued interest through the date of payment may be declared immediately due and payable by the Executive Chairman (former CEO) upon the attaining of certain capital funding by the Company, as defined in the agreement.

On July 2, 2010, the Company made a payment of $50,000 on the $100,000 promissory note with its Executive Chairman (former CEO). Subsequently in July 2010, the Executive Chairman then loaned the Company an additional $36,000, resulting in a balance of $86,000 due under the promissory note as of September 30, 2010.

On September 2, 2010, the Company issued a 16% debenture, originally due November 1, 2010, and as amended, due December 31, 2010 (the “September 2010 Debenture”) (see Note 13), to its Executive Chairman (former CEO) in the aggregate principal amount of $175,000 and issued a five year warrant to purchase up to 1,000,000 shares of the Company’s common stock at an exercise price of $0.50 per share. The Company valued the 1,000,000 warrant using the Black-Scholes pricing model. The value assigned to the warrant of $82,044 is recorded as debt discount and additional paid-in capital. The debt discount is being amortized over the term of the September 2010 Debenture. In the nine months ended September 30, 2010, amortization of debt discount amounted to $29,854.

Pursuant to the September 2010 Debenture, on September 2, 2010, and September 28, 2010, the Company incurred indebtedness of $126,656 and $48,344, respectively. The September 2010 Debenture is unsecured and subordinate to all other indebtedness of the Company. The September 2010 Debenture holder may not seek recourse against any shareholder, director or officer of the Company (or any successor to the Company) for the Company’s failure to repay the September 2010 Debenture. The September 2010 Debenture bears interest at a rate of 16% per annum, payable in cash and is due on November 1, 2010, unless such date is extended or accelerated.

The September 2010 Debenture contains customary events of default, as defined in the September 2010 Debenture, which among others includes the immediate payment of principal and unpaid interest, the issuance of 1,000,000 shares of the Company’s common stock, and the option to convert all or a portion of the outstanding balance into shares of the Company’s common stock. If an event of default occurs under the September 2010 Debenture the exercise price of the warrant is reduced from $0.50 per share to $0.01 per share.

Pursuant to the terms of the debentures sold to JTBO, JTBOII, the three individual investors and the Company’s Executive Chairman (collectively the “Debentures”), upon the occurrence of an equity or debt financing of less than $1,500,000, the Company must use fifty percent of the financing proceeds to repay each Debentures. The Company concluded that its current liquidity and capital resource requirements preclude early payment of the Debentures and subsequent to September 30, 2010, the Company entered into new agreements with the Debenture holders whereby it sold to JTBOII new debentures in the amounts of $50,000 and $65,000 and modified the terms of the Debentures (see Note 13). The new agreements, among other terms as defined in the agreements, extended the maturity date of the Executive Chairman’s, JTBO’s and JTBOII’s Debentures to December 31, 2010, or such earlier date that the Company receives funding, as defined in the agreements, and waived any defaults existing under their Debentures as of the date of the new agreements. In consideration for these modifications the Company agreed to issue to JTBO and JTBOII a number of shares of common stock equal to 10% of the total issued and outstanding shares of Company common stock on a fully diluted basis. The number of common shares required to be issued to JTBO and JTBOII, 5,913,231 shares in the aggregate, will be allocated to JTBO and JTBOII pro rata based on the balances of their Debentures. These common shares are subject to anti-dilution protection, as defined in the agreements. The new agreements with the three individuals, among other terms as defined in the agreements, extended their Debentures for a period of six months from their original due date to April 14, 2011and provided for the issuance of an aggregate of 700,000 shares of common stock to the three individuals. The Company determined that these modifications are not considered a debt extinguishment and accounted for the transaction using the guidance of FASB ASC Topic No. 470-50 “Modifications and Extinguishments”. The total number of common shares required to be issued, 6,613,231 shares, are valued at $1,983,969 as of September 2, 2010, the effective date of the modification. The amount is accounted for as deferred financing costs and is being amortized over the extended terms of the debenture agreements using the effective interest method. The Company recorded amortization in the amount of $261,983 for the period September 2, 2010, through September 30, 2010, as share liability.

The Company recorded $83,716 ($4,142 related party), $-0- and $294,332 ($100,877 related party) of interest expense for the nine months ended September 30, 2010 and 2009, and the period from inception (January 18, 2005) through September 30, 2010, respectively.

Deferred financing costs are being amortized over the terms of the debentures using the effective interest method. Amortization amounted to $903,647 in the nine months ended September 30, 2010.

9. Stockholders’ Equity

The Company’s Certificate of Incorporation authorizes the issuance of up to 50,000,000 shares of common stock with a par value of $0.003 per share and 10,000,000 shares of preferred stock with a par value of $0.0001 per share (see Note 13).

On June 1, 2008, the Board of Directors approved a thousand-for-one stock split of the Corporation’s common stock in the form of a stock dividend. The Board of Directors adopted a resolution to effect a 1 for 30 reverse split of common shares effective September 8, 2008. Stockholders’ equity and common stock activity for all periods presented have been restated to give retroactive recognition to the stock split and reverse split. In addition, all references in the consolidated financial statements and notes to the consolidated financial statements about the Company’s common stock have been restated to give retroactive recognition to the stock split.

On September 17, 2008, Mac Filmworks, Inc. (formerly “MFI”, now known as YouBlast Global, Inc.) (the “Company”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Sahara Media Acquisitions, Inc. a Delaware corporation. Pursuant to the Merger Agreement, Sahara Media Acquisitions, Inc. merged into Sahara, such that Sahara became a wholly-owned subsidiary of MFI (thereby forming the Company). Pursuant to the Merger Agreement, the Company issued 18,150,000 shares of their common stock to the shareholders of Sahara (the “Acquisition Shares”) (subject to the placement of 5,000,000 Acquisition Shares in escrow pursuant to the Escrow Agreement (defined below)), representing approximately 58.9% of the Company’s aggregate issued and outstanding common stock following the closing of the Merger and the Private Placement (defined below), and the outstanding shares of common stock of Sahara were transferred to the Company and cancelled.

In connection with the Merger, the Company entered into a series of identical subscription agreements (the “Subscription Agreements”) with accredited investors (the “Investors”), pursuant to which, concurrent with the closing of the Merger on the Closing Date, the Company issued and sold units, with each unit consisting of 100,000 shares of common stock and five-year warrants to purchase 100,000 shares of common stock with an exercise price of $2.50 per share, for a purchase price of $125,000 per unit (the “Private Placement”). Pursuant to the Private Placement, the Company issued and sold to the Investors an aggregate of 6,526,159 shares of common stock (the “Common Shares”) and five-year warrants to purchase 6,526,159 shares of common stock (the “Investor Warrants”), for an aggregate purchase price of $8,158,366. The Investor Warrants may not be exercised to the extent such exercise would cause the holder of the warrant, together with its affiliates, to beneficially own a number of shares of common stock which would exceed 4.99% of the Company's then outstanding shares of common stock following such exercise. Pursuant to the Subscription Agreements, the Company filed a registration statement registering the Common Shares and the shares of common stock underlying the Investor Warrants, subject to the SEC’s declaration of effectiveness. The SEC declared the registration statement effective on September 22, 2009.

Additionally, in September 2008, the Company issued 2,550,000 warrants with exercise prices ranging from $1.10 to $1.50 per share with a value of $2,068,205, a cost of raising capital that has been recorded as an offset to additional paid-in capital (see Marathon Advisors below).

Common stock issuances

In 2005, Sahara issued 634,800 shares of common stock as founder shares. Additionally Sahara issued 1,147,500 shares to one of the founders in settlement of $194,380 of advances made.

On January 7, 2006, Sahara issued to a consultant, 30,000 shares in settlement for services rendered.

On June 10, 2008, Sahara issued common shares, as follows:

·	19,610 shares, valued at $1.00 per share, to settle a $19,610 note payable, including accrued interest of $1,610.

·	724,000 shares, valued at $0.02 per share, to settle accrued interest payable of $12,000. In connection with this transaction, 164,800 previously issued shares were cancelled.

·	480,000 shares, valued at $0.05 per share, to settle $25,787 of accrued consulting fees. In addition, warrants for a 5% per-money interest in the Company were cancelled.

·	27,000 shares, valued at $0.93 per share, to settle a note payable of $25,000.

·	452,000 shares, valued at $0.31 per share, to a director, a related party, to settle a note payable of $139,242 including accrued interest of $14,242.

·	100,000 shares, valued at $5.25 per share, to the founder and chief executive officer, a related party, in exchange for $525,000 of accrued salary.

·	210,000 shares, valued at $0.44 per share, to a consultant, a related party, in exchange for accrued consulting fees of $142,420. In connection with this transaction, 30,000 previously issued shares were cancelled.

·	5,500 shares valued at $1.49 per share to a consultant in settlement of accrued consulting fees of $8,197.

On June 12, 2008, Sahara issued 140,000 common shares, valued at $0.80 per share, to settle a note payable of $111,393 including accrued interest of $11,393.

On June 15, 2008, Sahara issued 100,000 common shares to an investor at $.50 per share for $50,000.

On June 16, 2008, Sahara issued 200,000 common shares, valued at $.02 per share, to settle $4,000 of accrued consulting fees. In addition, warrants for a 5% pre-money interest in the Company were cancelled.

On June 17, 2008, Sahara issued 13,363,390 common shares, valued at $0.10 per share, to Sahara Entertainment, LLC, a related party, to settle a note payable and advances aggregating $1,303,843 in the amount of $462,074 including accrued interest of $61,074 and assumption of liabilities on behalf of the Company amounting to $841,769. In connection with this transaction 1,147,500 previously issued shares were cancelled.

Additionally, on June 17, 2008, Sahara issued 31,000 common shares in exchange for fees.

On July 31, 2008, Sahara issued 100,000 common shares to an investor at $0.50 per share for $50,000.

On July 31, 2008, Sahara issued 400,000 common shares, valued at $0.50 per share, to Sahara Entertainment, LLC, a related party, as payment for consulting relating to the Company’s financing. The Company recorded $200,000 as an offset to additional paid-in capital as this issuance related to costs of raising capital.

Cheryl Keeling

On September 3, 2008, Sahara issued 50,000 common shares, valued at $1.25 per share, to Cheryl Keeling, as additional consideration for a $100,000 bridge loan made on the same date. The loan was repaid upon the closing of the Merger and Private Placement on September 17, 2008.

BPA Associates, LLC

On September 17, 2008, pursuant to a Purchase Agreement dated July 1, 2008, between Sahara and BPA Associates LLC (“BPA”) a related party, the Company issued 1,425,000 common shares, valued at $1.25 per share, to BPA, as additional consideration for the purchase of their database. The Company’s consideration for this purchase is as follows: $50,000 in cash which was paid on July 1, 2008 in consideration of BPA pledging the database in connection with the sale by the Company of a $500,000 debenture to an Investor, $775,000 in cash and 1,425,000 common shares on consummation of the reorganization.

The Company recorded $2,606,250 as an intangible asset which is comprised of the $1,781,250 value of the common shares plus $825,000 of cash paid.

Reverse Split

The Company completed a 1 for 30 reverse stock split of its common shares, pursuant to which MFI’s issued and outstanding shares of common shares, was reduced to 818,000 (prior to the Merger and the Private Placement).

Shares issued to investors in the private placement

On September 17, 2008, the Company issued 6,526,159 shares of common stock and five-year warrants to purchase 6,526,159 shares of common stock with an exercise price of $2.50 per share in a private placement for an aggregate amount of $8,158,366. The Company recorded $19,578 to the par value of the common shares and $5,768,310, net of $2,370,478 in placement costs, to additional paid-in capital. The raise costs were allocated as follows: John Thomas Financial (“JTF”) $65,000, MFI $25,000, Aubrey Consultants for a finders fee $20,000, JTF for legal fees of $13,000, placement legal fees of $187,000, JTF 10% fee of $992,996, JTF non-accountable expenses of $67,482, JTF success fee of $400,000, JTF finders fee of $200,000 and JTF for indemnification fee of $400,000.

The warrants were valued using the Black-Scholes pricing model with the following weighted average assumptions: 0% dividend yield; risk free interest of 2.52%: volatility of 94.80%; and an expected life of 5 years. The warrants vest immediately and are exercisable on a cashless basis, which represents stock settled stock appreciation rights.

On October 8, 2008, the Company issued an aggregate of 1,413,883 shares of common stock and five-year warrants to purchase 1,413,883 shares of common stock with an exercise price of $2.50 per share to accredited investors, for an aggregate amount of $1,767,253. JTF acted as the exclusive placement agent for the private placement.

On October 20, 2008, the Company issued 4,000 shares of common stock and five-year warrants to purchase 4,000 shares of common stock with an exercise price of $2.50 per share to an accredited investor for a purchase price of $5,000. JTF acted as the exclusive placement agent for the private placement.

The Company received $1,529,356 from the October 2008 transactions net of raise costs of approximately $243,000.

The stock warrants issued in October 2008 were valued using the Black-Scholes pricing model using the following weighted average assumptions: dividend yield of 0%; risk free interest rate of 2.70%; volatility of 94.80%; and an expected life of 5 years. The warrants vest immediately and are exercisable on a cashless basis, which represents stock settled stock appreciation rights.

Shares held in Escrow

The Company entered into a securities escrow agreement (the “Securities Escrow Agreement”) with Sahara, the shareholders of Sahara named in the escrow agreement (the “Sahara Escrow Shareholders”), and the Company’s corporate counsel, as escrow agent. Pursuant to the Securities Escrow Agreement, the Sahara Escrow Shareholders agreed to place 5,000,000 of the Acquisition Shares (the “Escrow Shares”) into an escrow account. The Escrow Shares will be released to the Sahara Escrow Shareholders, or returned to the Company for cancellation if not released, based upon the achievement of certain performance thresholds as set forth below:

(a)

If the Company launches the online magazine Honeymag.com six months after the Closing Date (the “First Performance Threshold”), 20% of the Escrow Shares will be released to the Escrow Shareholders. Honeymag.com was launched March 5, 2009. Therefore the First Performance Threshold was met and 20% of the Escrow Shares were released to the Escrow Shareholders.

(b)

If the Company launches the social network Hivespot.com seven months after the closing date (the “Second Performance Threshold”), 20% of the Escrow Shares will be released to the Sahara Escrow Shareholders. Hivespot.com was launched March 5, 2009. Therefore the Second Performance Threshold was met and 20% of the Escrow Shares were released to the Escrow Shareholders.

(c)

In the event that, from the period from the launch of the online magazine Honeymag.com, until nine months after the Closing Date, the average number of monthly viewed impressions of the Company’s online magazine Honeymag.com is at least 300,000 (the “Third Performance Threshold”), 20% of the Escrow Shares will be released to the Sahara Escrow Shareholders. The Third Performance Threshold was met and 20% of the Escrow Shares were released to the Escrow Shareholders.

(d)

In the event that the Company’s social networking site Hivespot.com has at least 200,000 pre-registered users on September 30, 2009 (the “Fourth Performance Threshold”), 20% of the Escrow Shares will be released to Sahara Escrow Shareholders. The Fourth Performance Threshold was met and 20% of the Escrow Shares were released to the Escrow Shareholders.

(e)

In the event that the Company either has revenue of at least $1,000,000 for the year ending. December 31, 2009, or accounts receivable of at least $1,000,000 as of December 31, 2009, as disclosed in the Company’s audited financial statements included in the Company’s Form 10-K for the year ending December 31, 2009 filed with the SEC (the “Fifth Performance Threshold”), 20% of the Escrow Shares will be released to the Sahara Escrow Shareholders. The Fifth Performance Threshold was not met and 20% of the Escrow Shares were effectively returned to the Company as treasury stock on December 29, 2009.

John Thomas Bridge and Opportunity Fund

On September 17, 2008, the Company issued 500,000 common shares, valued at $1.25 per share, and five year warrants, with a fair value of $439,128 to purchase 500,000 shares of common stock at an exercise price of $1.50 per share to the John Thomas Bridge and Opportunity Fund (“JTBO”), as additional consideration to complete the equity financing. The warrants vest immediately and are exercisable on a cashless basis, which represents stock settled stock appreciation rights.

The Company entered into a Securities Purchase Agreement, also dated July 1, 2008, pursuant to which the Company issued a 12% Senior Secured Debenture (“Debenture”) in the principal amount of $500,000, bearing interest at the rate of 12% per annum, $80,000, of which, such proceeds were subsequently released to third parties to pay fees with the balance of $420,000 remitted to the Company. The Debenture was subsequently paid with proceeds received in the private placement.

The Securities Purchase Agreement secured certain U.S. trademark registrations for all of the Company’s publications, and all of the Company’s databases as collateral security for the prompt payment in full when due. In addition, for consideration of a $50,000 payment, a Security Agreement with BPA Associates, under common ownership, was executed whereby BPA agreed to secure the payment on the Debenture with certain assets of the Company, including the database which contains information vital to the business of the Company.

John Thomas Financial, Inc.

On September 17, 2008, the Company issued 3,000,000 common shares, valued at $1.25 per share, and five year warrants to purchase 1,000,000 common shares with a fair value of $904,018 at an exercise price of $1.30 per share to John Thomas Financial, Inc. as additional consideration for private placement services. The warrants vested immediately and are exercisable on a cashless basis, which represents stock settled stock appreciation rights.

Marathon Advisors

On September 17, 2008, the Company issued 100,000 common shares, valued at $1.25 per share, and five-year warrants, to purchase 300,000 common shares with a fair value of $263,054 at an exercise price of $1.10, to Marathon Advisors (“Marathon”), to complete the equity financing. The warrants are exercisable on a cashless basis, which represents stock settled stock appreciation rights. The warrants vest over a three year period on the anniversary of the issuance date and are recognized pro-rata over the vesting period, as required for non-employees.

The Company recorded $128,017 as a capital raising cost as an offset to additional paid-in capital.

Effective December 31, 2008, the contract with Marathon was terminated. Per the termination agreement, 200,000 of the original warrants were cancelled. The Company recorded approximately $11,000, $26,000, and $53,000 of equity based compensation for the nine months ended September 30, 2010 and 2009, and for the period from inception (January 18, 2005) through September 30, 2010, relating to the remaining 100,000 warrants.

Aurelian Investments, LLC

In connection with a consulting agreement entered into with Aurelian Investments, LLC (“Aurelian”) on August 13, 2008, the Company was required to issue a total of 200,000 common shares and five-year warrants to purchase 200,000 common shares with an exercise price of $1.50 per share for services rendered by Aurelian in connection with the Recapitalization that was consummated on September 17, 2008 (the “Recapitalization”). Fifty thousand of the 200,000 common shares were issued on September 17, 2008 (date of Recapitalization) and such shares were properly reflected in the financial statements since that time at $1.25 per share. The remaining 150,000 shares and warrants to purchase 150,000 shares of common stock were issued through the nine months ended September 30, 2010.

The value ascribed to the 150,000 common shares issued subsequent to September 17, 2008 is based on the stock price as of the date of the Recapitalization ($1.25). The total value of such shares amounts to $187,500. The estimated fair value ascribed to the warrants is based upon the Black-Scholes Option Pricing Model. The weighted average assumptions were based upon data as of September 17, 2008: volatility 94.8%, dividend yield 0%, risk free interest rate 2.52%, and an expected life of 5 years. The fair value of the warrants at the date of the Recapitalization was $174,000. The balance of the warrants to purchase shares (50,000) is scheduled to be issued in 2010 and has been recorded as a component of stockholders’ equity.

Sichenzia Ross

On September 17, 2008, the Company issued 250,000 common shares (see “common share issuance"), valued at $1.25 per share, and five-year warrants with a fair value of $219,564 to purchase 250,000 shares of common stock, with an exercise price of $1.50, to its corporate counsel Sichenzia Ross for legal services. The warrants vest immediately and are exercisable on a cashless basis, which represents stock settled stock appreciation rights. The Company recorded $532,064 as capital raise costs as an offset to additional paid-in capital.

Additional Issuances

Common stock issuances

In April 2009, the Board of Directors approved, and on May 6, 2009, the Company issued, 50,000 shares of common stock, valued at $150,000, to two individuals on behalf of Investor Relations Group (“IRG”).

In April 2009, the Board of Directors approved, and on May 6, 2009, the Company issued 16,668 shares of common stock, valued at $50,000, to third parties for services rendered to the Company.

Effective December 15, 2009, the Company issued 13,000 shares of common stock, valued at $7,280 ($0.56 per share), to an individual per a settlement and release agreement between the Company and the individual regarding asserted shares owed to such individual. The amount was recorded as share-based expense in the year ended December 31, 2009.

In January 2010 and February 2010, the Board of Directors approved, and the Company issued, 3,344,999 shares and 5,000 shares of common stock, respectively, to employees (including Board members) and non-employees for services rendered in 2009. The shares were valued at $0.35 per share, $1,170,750 and $1,750, respectively, the fair value at December 31, 2009. The Company accrued a liability for the stock-based compensation to employees (and directors) and non-employees of $1,135,750 (3,244,999 shares) and $36,750 (105,000 shares), respectively, in the year ended December 31, 2009. In the first quarter of 2010, the Company incurred additional stock-based compensation to employees (and directors) of $421,850 and to non-employees of $12,500 based on the fair value of the shares of common stock at the grant date.

In February 2010, the Board of Directors approved, and the Company issued, 100,000 shares of common stock to a related party. The Company accounted for 25,000 shares (25%), valued at $8,750, as issued effective December 31, 2009. The remaining 75,000 shares (75%), valued at $26,250, which were accounted for as share liability at December 31, 2009, are accounted for as issued in the first quarter of 2010. See “Services Arrangement” in Note 12 for additional information.

Effective March 24, 2010, the Company sold 1,000,000 shares and issued 200,000 shares of common stock to JTBO pursuant to Debenture and Stock Purchase agreements (see Note 8).

Effective April 13 and 14, 2010, the Company sold 500,000, 120,000 and 80,000 shares of common stock to three debenture holders for consideration of $5,000, $1,200 and $800, respectively (see Note 8).

Warrant issuances

Warrants issued to promissory note holders

In 2006, the Company issued warrants to certain holders of promissory notes at various dates that entitle them to purchase common shares of the Company. All warrants granted vested immediately. The fair value of the warrants was estimated using the intrinsic value method. The fair value of the common stock related to these warrant issuances approximated $0.02 as determined based on services rendered by a consultant in the amount of $4,000 in exchange for 200,000 warrants in 2006. The Company has ascribed a fair value of approximately $9,000 to these warrants. These warrants were cancelled in 2008.

Aubrey Consulting – Warrants dated September 17, 2008

On September 17, 2008, the Company issued five-year warrants to purchase 500,000 common shares with an exercise price of $1.50 to Aubrey Consulting as additional consideration for a finder’s fee relating to the private placement. The Company recorded $439,000 as a capital raise cost as an offset to additional paid-in capital. The warrants vest immediately and are exercisable on a cashless basis, which represents stock settled stock appreciation rights.

JTBO – Warrants dated June 2010

Pursuant to the June 2010 Purchase Agreement, the Company issued five-year warrants to purchase 2,000,000 common shares with an exercise price of $0.50 per share to JTBO as additional consideration for the June 2010 Debenture purchased by JTBO (see Note 8). The Company recorded $168,855 as debt discount and additional paid-in capital. The warrants vest immediately.

JTBO – Warrants dated August 2010

Pursuant to the August 2010 Purchase Agreement, the Company issued five-year warrants to purchase 800,000 common shares with an exercise price of $0.50 per share to JTBO as additional consideration for the August 2010 Debenture purchased by JTBO (see Note 8). The Company recorded $63,973 as debt discount and additional paid-in capital. The warrants vest immediately.

Philmore Anderson IV (“PAIV”) – Warrants dated September 2010

Pursuant to the September 2010 Purchase Agreement, the Company issued five-year warrants to purchase 1,000,000 common shares with an exercise price of $0.50 per share to PAIV as additional consideration for the September 2010 Debenture purchased by him (see Note 8). The Company recorded $82,044 as debt discount and additional paid-in capital. The warrants vest immediately.

The 2010 warrants were valued using the Black-Scholes pricing model with the following weighted average assumptions: 0 % Dividend yield; risk free interest rate 1.66%; volatility of 75.49%; and an expected life of 5 years.

The 2008 warrants were valued using the Black-Scholes pricing model with the following weighted average assumptions: 0 % Dividend yield; risk free interest rate 2.52%; volatility of 94.8%; and an expected life of 5 years.

Warrant activity for non-employees during the period of inception (January 18, 2005) through September 30, 2010 is as follows:

						Weighted
				Weighted-		Average
	Number of			Average		Remaining	Aggregate
	Warrant			Exercise		Contractual	Intrinsic
Warrants	Shares			Price		Term (Years)	Value
Granted during 2006		200,000		$	0.01
Balance at December 31, 2006		200,000		$	0.01
Granted during 2007		--		$	--
Balance at December 31, 2007		200,000		$	0.01
Granted during 2008		10,494,034		$	2.23
Exercised during 2008		--		$	--
Forfeited/cancelled during 2008		(400,000	)	$	0.75
Outstanding, December 31, 2008		10,294,034		$	2.25
Granted during 2009		100,000		$	1.50
Exercised during 2009		--		$	--
Outstanding, December 31, 2009		10,394,034		$	2.24
Granted through September 30, 2010		3,850,000		$	0.51
Outstanding, September 30, 2010 (Unaudited)		14,244,034		$	1.77	3.49	-0-
Exercisable shares, September 30, 2010 (Unaudited)		14,210,700		$	1.78	3.48	-0-

				Weighted
				Average
				Grant-Date
Non-vested Shares	Shares			Fair Value
Granted during 2006 (none granted during 2007)		200,000		$	0.02
Non-vested December 31, 2007 and 2006		200,000		$	0.02
Granted during 2008		10,494,034		$	0.79
Vested during 2008		(10,194,034	)	$	0.79
Forfeited during 2008		(400,000	)	$	0.12
Non-vested, December 31, 2008		100,000		$	0.22
Granted during 2009		100,000		$	0.87
Vested during 2009		(133,333	)	$	0.80
Non-vested, December 31, 2009		66,667		$	0.57
Granted through September 30, 2010 (Unaudited)		3,850,000		$	0.23
Vested through September 30, 2010 (Unaudited)		(3,883,333)		$	0.23
Non-vested, September 30, 2010 (Unaudited)		33,334		$	0.57

Equity Compensation Plan

In January 1998, the Company’s board of directors approved a stock option plan under which 16,667 shares of common stock have been reserved for issuance. No options have been granted under this plan.

Share Liability

In February 2009, the Company entered into a four-month agreement for consulting services. The agreement, in addition to cash compensation of $31,950, provides for the Company issuing 20,000 shares of its common stock valued at $60,000 to the consultant. The Company recorded an amount of $60,000 as share liability, which represents the value of the pro rata shares earned per the contract. There had been no shares issued under the agreement. During the fourth quarter of 2009, through mutual agreement between the consultant and the Company, it was decided the shares would no longer be required to be issued. As a result, in the quarter ended December 31, 2009, the Company reversed the $60,000 of stock-based expense and related share liability.

In February 2009, the Company entered into a one year consulting agreement with Hanover Capital Corporation (“Hanover”). Per the agreement, the Company is obligated to issue Hanover a total of 450,000 restricted common shares valued at $3.00 per share ($1,350,000), the stock price at the effective date of the agreement, on a pro rata basis over a period of six months during the term of the agreement. As of September 30, 2010, the shares have not been issued and the Company has recorded a liability of $1,350,000 relating to the common stock required to be issued under this agreement (See Note 12).

See “Services Arrangement” in Note 11 and “Consulting Agreements” in Note 12 for additional Share Liability information.

Treasury Stock

Effective December 29, 2009, 1,000,000 shares of common stock valued at $3,000 ($0.003 per share), which were issued pursuant to the Merger Agreement, were returned to the Company as treasury stock by the Sahara Escrow Shareholders (see “Shares held in Escrow” above).

10. Income Taxes

The Company has provided a valuation allowance for the full amount of its net deferred tax assets because the Company has determined that it is more likely than not that they will not be realized.

As of December 31, 2009, the Company has federal and state net operating loss carryforwards of approximately $6,460,000 and $6,447,000, respectively, available to reduce future taxable income and which expire at various dates through 2029.

Net deferred tax assets consist of the following:

	September 30, 2010			December 31, 2009
	[Unaudited]

Net operating loss carryforwards	$	4,092,000		$	2,907,000
Amortization of intangible assets		297,000			196,000
Share-based payments		668,000			1,263,000
Net deferred tax assets		5,057,000			4,366,000
Valuation allowance		(5,057,000	)		(4,366,000	)
Net deferred tax assets	$	--		$	--

The valuation allowance increased by approximately $691,000, $1,867,000 and $5,057,000 during the nine months ended September 30, 2010 and 2009, and the period from inception (January 18, 2005) through September 30, 2010, respectively.

Under the provisions of Section 382 of the Internal Revenue Code, certain substantial changes in the Company’s ownership result in a limitation on the amount of net operating loss carry forwards which can be used in future years.

11.	Related Party Transactions

Lease Agreement

Effective December 1, 2009, the Company entered into a two year lease agreement with Sahara Entertainment, LLC (“SELLC”), an entity wholly-owned by the Company’s Chairman (former CEO). The lease term is effective from December 1, 2009 through November 30, 2011, with an option available to the Company to renew for a third year, at $84,000 per annum ($7,000 per month) (See Note 12). The agreement provides for a $15,000 security deposit, which has not been paid as of September 30, 2010. Among other terms, the lease calls for the Company to pay for certain expenses, such as utilities and maintenance, and the payment of rent related to a three month trial period due upon the lease signing, if effectuated. The Company incurred rent expense of $63,000 in the nine months ended September 30, 2010. As of September 30, 2010, in addition to the security deposit, approximately $21,000 in accrued rent expense is owed to SELLC. Pursuant to a Termination, Acknowledgment and Release Agreement, this lease will terminate upon the closing of a financing of a minimum of $2,000,000 raised from a sale of the Company’s Preferred Shares, and SELLC will waive all rights to receive and release the Company from any obligations to pay any accrued rent to which SELLC might have otherwise been entitled to under the lease. Additionally, any security deposit paid by the Company to SELLC under this lease will be returned to the Company.

Services Arrangement

The Company has an arrangement with AG Unlimited International LLC ("AG"), whereby AG manages all licensing agreements on behalf of the Company. The principal of AG became the spouse of the Company's Chairman (former CEO), during the quarter ended September 30, 2009. The terms of the contract, which was signed November 2009 but effectively began October 2008, provide a monthly fee of $10,000 until such time the contract is cancelled by either party, as well as the issuance of 100,000 shares of the Company’s common stock. The shares of common stock issuable under the agreement are non-forfeitable and were approved for issue by the Company’s Board of Directors and issued in February 2010. The value of the shares, $35,000 ($0.35 per share), is included in production cost for the year ended December 31, 2009. The Company accounted for 25,000 shares (25%),valued at $8,750, as issued effective December 31, 2009 and recorded 75,000 shares (75%), valued at $26,250,as share liability (See Note 9). Expenses (non share-based) incurred in connection with services provided by AG amounted to $60,000, $90,000 and $210,000 for the nine months ended September 30, 2010 and 2009 and for the period from inception (January 18, 2005) through September 30, 2010, respectively. Pursuant to a Termination, Acknowledgment and Release Agreement, this representative agreement will terminate upon the closing of a minimum of $2,000,000 raised from a sale of the Company’s Preferred Shares, and AG will waive all rights to receive and release the Company from any obligations to pay any accrued compensation and commissions to which AG might have otherwise been entitled to under the agreement.

Promissory Notes and Other

The Company entered into various promissory note agreements with its Chairman (former CEO) which total $261,000 (See Notes 8 and 13). Additionally as of September 30, 2010, the Company is obligated to pay its Chairman $122,381 for unpaid compensation and other amounts incurred on behalf of the Company.

12.	Commitments and Contingencies

Rent expense

In October 2008, the Company entered into a new three year lease for office space, expiring in September 2011. Monthly payments under the lease commence at $9,000 per month and increase to $9,600 per month. The lease commitment is guaranteed by an officer of the Company. In conjunction with this lease the Company has recorded a security deposit of $37,200 which was increased to $46,200 in 2009. Prior to the inception of this lease agreement, the Company leased office space on a month-to-month basis at an amount of approximately $4,000 per month.

In December 2009, the Company entered into a two year lease with a related party (See Note 11), expiring in November 2011. Payments under the lease are $7,000 per month. Pursuant to a Termination, Acknowledgment and Release Agreement, this lease will terminate upon the closing of a financing of a minimum of $2,000,000 raised from a sale of the Company’s Preferred Shares, and the related party will waive all rights to receive and release the Company from any obligations to pay any accrued rent to which the related party might have otherwise been entitled to under the lease. Additionally, any security deposit paid by the Company to the related party under this lease will be returned to the Company.

Effective April 17, 2010, the Company entered into a one year lease agreement for a satellite office in San Francisco, CA. The agreement provides for monthly rent expense of $5,800, a security deposit of $8,700 and prepayment of the first and last month rent totaling $11,600. The lease term ends April 17, 2011, unless mutually extended. The Company has mutually agreed to share the office space with FileBlaze, LLC (see “License Agreement” below). Per the agreement, FileBlaze, LLC will be responsible for the security deposit, first and last month rent prepayment and one-half of the monthly rent. The Company incurred rent expense of $8,700 related to this lease for the period ended September 30, 2010. Effective August 2010, the remaining term under the agreement has been assumed by FileBlaze, LLC.

Rent expense was approximately $158,000, $81,000 and $506,000 for the nine months ended September 30, 2010 and 2009 and the period from inception (January 18, 2005) through September 30, 2010, respectively.

Approximate future minimum annual lease payments are as follows:

Twelve Months Ended
September 30, (Unaudited)

2011	$	115,000
2012		--
	$	115,000

Investment Banking Agreement

On March 4, 2010, as amended October 6, 2010, the Company entered into an Investment Banking, Strategic Advisory and Consulting Agreement (the “IB Agreement”) with JTF, whereby the Company engaged JTF to render such investment banking, advisory and consulting services as defined in the IB Agreement. The investment banking services, which among other possible assisted transactions, will include the offering for sale of a series of convertible preferred stock up to a maximum of $15,000,000 for which JTF will be separately compensated as defined in the IB Agreement and, will be in effect for a two year period commencing March 4, 2010. The consulting services will be for a two year period, at $10,000 per month, commencing on the closing of the $2,000,000 minimum amount of the offering, as defined in the IB Agreement. In conjunction with the amended agreement, the Company's Executive Chairman agreed to return 1,000,000 shares of the Company's Common Stock owned by him to the Treasury of the Company.

Employment Agreements

Effective July 1, 2010, the Company entered into an employment agreement with an individual to serve as the Company’s President and CEO (“Employee”). Terms of the employment agreement, which was effective from July 1, 2010, through June 30, 2012, included among other customary provisions of employment: an annual salary of $240,000; a signing bonus of 1,000,000 shares of Company common stock; 250,000 shares of Company common stock issued quarterly during the first year of the agreement and vesting October 1, 2010, January 1, 2011, April 1, 2011 and July 1, 2011; an additional 1,000,000 shares of Company common stock upon attaining certain achievements to be determined at a later date; monthly housing allowance towards the rent of an apartment in New York City in the amount of $4,500. The 2,000,000 aggregate common shares issued as a signing bonus and quarterly during the first year of the agreement, or any portion thereof, were to be returned to the Company on a prorated basis for time remaining in the term should the Employee terminate the employment agreement. The employment agreement was directly contingent on the attainment of investment funding of at least $3,250,000 achieved directly through the efforts of the Employee and/or John Thomas Financial and/or its agents or affiliates, on or before September 30, 2010. Such an investment funding was not attained on or before September 30, 2010, and this employment agreement was immediately terminated. Effective October 19, 2010, the Company commenced a new employment agreement with the same individual to continue serving as the Company’s President, CEO and as a Director (see Note 13).

Effective February 18, 2009, the Company entered into an employment agreement with its former CEO and current Executive Chairman. Terms of the agreement included: an annual salary of $300,000, $325,000 and $350,000 over its three year period; a signing bonus of $155,000; and as soon as practicable after the effective date, the Company was to grant to the CEO an option to purchase 3,000,000 shares of Company common stock at an exercise price of $2.00 per share or in another form as acceptable to the Company’s Board of Directors. As of September 30, 2010, the option has not been granted (see Note 13). The Executive Chairman may terminate his employment agreement at any time upon thirty days’ written notice. The Company may also terminate this employment agreement at any time; however, if the Company terminates this employment agreement for any reason other than for Cause (as defined therein), or if the Executive Chairman terminates his employment agreement due to a change of control of the Company, the Executive Chairman will be entitled to a severance payment equal to the greater of (a) the balance of his salary payable (and benefits to which he is entitled) for the balance of the term, and (b) an amount equal to two and one-half (2.5) times the highest cash compensation paid to him during any 12 month period prior to termination. This agreement was amended on October 22, 2010, and, among other terms, now provides for a period through October 22, 2012, and an annual salary of $60,000 (see Note 13).

Approximate future commitments under the agreements are as follows:

Twelve Months Ended
September 30, (Unaudited)

2011	$	581,000
2012		311,000
	$	892,000

License Agreement

Effective February 22, 2010, the Company entered into a license agreement with FileBlaze, LLC (“FileBlaze”) for the use of computer software and systems (“Licensed System”) to be utilized in the operation of the YouBlast social network. FileBlaze is wholly-owned by Soundblaze (see Note 7). The initial term of the agreement was for three years, with the right to renew the term for successive one year periods. The license provided for a $1 fee payable annually plus an amount equal to 15% of gross revenues earned by the Company or its affiliates in connection with the use of the Licensed System. This license agreement was terminated by its terms in November 2010 (see Note 13).

Royalty Agreement

Pursuant to the June 2010 Purchase Agreement (see Note 8), the Company and JTBO entered into a Royalty Agreement (the “Royalty Agreement”) pursuant to which the Company will pay JTBO 25% of the Net Revenue received by the Company and generated by its YouBlast social network in an amount not to exceed $250,000. The Agreement will terminate on the sooner of the payment by the Company of $250,000 pursuant to the Royalty Agreement or by mutual agreement of JTBO and the Company. As used in the Royalty Agreement, “Net Revenue” means the total gross sales price and/or monetary equivalent of any other consideration actually received by the Company, less discounts, rebates, refunds or reserves applicable thereto.

Consulting Agreements

Effective April 1, 2010, the Company entered into an agreement with Clarence N. Baker, II, a consultant, for management advisory services and for developing, creating and launching the Company’s YouBlast.com website. The agreement was in effect through June 30, 2010 and provided for compensation of $500 per day as services are rendered, not to exceed $10,400 per month. In addition, the consultant was entitled to receive shares of Company common stock as follows: 200,000 shares on June 1, 2010; 200,000 shares upon the successful launching of the YouBlast.com website; 200,000 shares upon the reaching of 1,000,000 registered users on YouBlast.com; 100,000 shares upon reaching as to be determined revenue targets. The consultant was also to be entitled to a bonus of $25,000 upon the Company’s successful completion of a capital raise of $10,000,000. In June 2010, the Company recorded a share liability and share-based expense of $59,079 for the obligation to issue 200,000 shares of common stock to the consultant, valued using the average share price for the period the agreement was in effect. This agreement expired following June 30, 2010 (see Note 13).

On April 26, 2010 the Company entered into an agreement with a consultant for management services effective May 1, 2010. The agreement is on a month-to-month basis and provides for monthly compensation of $10,417 plus the issuance of 29,167 shares of Company common stock for each month that the agreement is in affect. In May 2010, the Company recorded a share liability and share-based expense of $7,423 for the obligation to issue 29,167 shares of common stock to the consultant, valued using the average share price for the period the agreement was in effect. The shares are expected to be issued by the Company in the second half of 2010. The Company extended the cash compensation terms of the agreement into June 2010, the issuance of shares was not extended.

Significant Concentration

In the nine months ended September 30, 2010, two customers generated 56% and 33%, respectively, of revenues. In the nine months ended September 30, 2009, one customer generated 90% of revenues.

13.	Subsequent Events

Effective October 6, 2010, the Company’s Executive Chairman returned 1,000,000 shares of the Company’s Common stock to the Company’s treasury pursuant to the IB Agreement, as amended, with JTF.

Effective October 19, 2010, the Company commenced a new employment agreement with Jeffrey D. Forster to serve as the Company’s President and CEO (“CEO”). The previous agreement expired September 30, 2010 (see Note 12). Pursuant to the Employment Agreement, the term of Mr. Forster’s employment commenced on October 19, 2010 and terminates on June 30, 2012. The Company will pay Mr. Forster an aggregate base annual salary of $240,000 payable monthly. Mr. Forster has agreed to defer $10,000 per month until the Company is able to obtain financing from an independent third party. Mr. Forster will also receive shares of Common Stock, par value $0.003 per share, as follows: (i) 666,668 shares of Common Stock upon the execution of the Employment Agreement; (ii) 1,333,332 (the “Escrow Shares”) shares of Common Stock which shall vest and be issuable in equal monthly installments until June 1, 2011; and (iii) 3,000,000 (the “Milestone Shares”) shares of Common Stock if (a) prior to December 31, 2011 the Company successfully launches YouBlast Beta and (b) if prior to October 6, 2012, the Company obtains 500,000 pre-registered users of the YouBlast Product (each of (a) and (b) a “Milestone”). One half of the Milestone Shares shall be issuable upon the completion of any particular Milestone. The aforementioned terms for common share issuances effectively cancel and replace the provisions for issuances of common stock under Mr. Forster’s previous employment agreement. In addition Mr. Forster’s employment agreement contains various customary terms, as defined in the agreement.

Upon Mr. Forster’s appointment as CEO, Philmore Anderson, IV began transitioning from his previous position as President and Chief Executive Officer to his current role as the Executive Chairman of the Company and in connection therewith, the Company and Mr. Anderson, IV amended Mr. Anderson, IV’s employment agreement as described herein concurrently with the execution of Mr. Forster’s Employment Agreement. In connection with the Company’s anticipated growth, the Company decided to employ a new senior executive team with experience in positioning the Company for growth. Philmore Anderson, IV remains with the Company as the Executive Chairman and a member of the Company’s Board of Directors.

As a result of the changes noted above, the Company and Mr. Anderson, IV entered into Amendment No. 1 to Employment Agreement (the “Amendment”). The Amendment is effective as of October 22, 2010. Pursuant to the Amendment, the term of Mr. Anderson, IV’s employment agreement was extended from February 18, 2012 to October 22, 2012, and Mr. Anderson, IV’s position with the Company was changed from President and Chief Executive Officer to Executive Chairman. As a result of the change in his position, Mr. Anderson, IV’s base salary was decreased from the current amount of $325,000 to $60,000 per annum. Mr. Anderson, IV’s position as Executive Chairman is not a full time position and as such Mr. Anderson, IV is allowed to engage in other business activities so long as such activities do not impair his obligations to the Company and Mr. Anderson, IV continues to comply with his fiduciary duties owed to the Company. In all other material respects, Mr. Anderson, IV’s Employment Agreement, dated as of February 18, 2009, remains in full force and effect.

In October 2010, the Company amended its IB Agreement with JTF. (see Note 12)

On November 3, 2010, the Company increased the size of its board of directors from four directors to six directors and appointed Mr. Warren C. Lau and Mr. Joseph Scharf to fill the newly created vacant positions of the board of directors.

On November 5, 2010, and November 19, 2010, the Company issued 16% Debentures Due December 31, 2010, (the “Debentures”) in the aggregate principal amount of $50,000 and $65,000, respectively, to John Thomas Bridge & Opportunity Fund II, L.P. (“JTBOII”). JTBOII is a shareholder and debtor of the Company. The Debentures are unsecured and bear interest at a rate of 16% per annum, payable in cash, and are due on the earlier of December 31, 2010, or the third business day after the date on which the Company receives a financing of at least $2,000,000 or more, unless such date is extended or accelerated. The outstanding principal amounts may not be prepaid, except in the event that the Company receives a financing of at least $2,000,000. The Debentures contain customary events of default, such as (i) the failure to repay any principal amount and/or interest due under the Debenture, (ii) any material inaccuracy of any representation and warranty, (iii) failure to perform any covenant or agreement, (iv) bankruptcy and insolvency events, (v) certain contractual defaults and (vi) entry of certain judgments against the Company; provided, however, that any event of default that was existing and continuing prior to this Debentures shall not be the basis for an event of default under the Debentures. If any event of default occurs, all outstanding principal, together with accrued and unpaid interest, shall become immediately due and payable in cash. Additionally, upon an event of default, the interest rate shall accrue at a rate of 18% per annum. Upon a change in control of the Company (as defined in the Debenture), the JTBOII shall have the right (i) to convert the Debentures into securities of the same class and type as those being obtained by the acquirer or (ii) to require the Company to repurchase the Debenture at 125% of the outstanding principal amount plus accrued and unpaid interest.

In November, 2010, the Company and Soundblaze Media, LLC (“Soundblaze”) terminated the FileBlaze License Agreement. (see Note 12)

In November, 2010, the Company entered into new agreements with JTBO, JTBOII, the three individuals and the Executive Chairman (the “Debenture Holders”) amending all of their outstanding previous debentures. (see Note 8)

The Company’s Certificate of Incorporation authorizes the issuance of up to 50,000,000 shares of common stock with a par value of $0.003 per share. After giving effect to the shares of common stock issued as consideration for the debt modifications in November 2010, and the common shares reserved for issuance for outstanding warrants, options and under existing contracts, the required number of shares of common stock will exceed the authorized number of shares. The Company is in the process of evaluating amending its Certificate of Incorporation with the State of Delaware to increase its authorized shares of common stock.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Forward-Looking Statements and Associated Risks.

Some of the statements contained in this report on Form 10-Q that are not historical facts are "forward-looking statements" which can be identified by the use of terminology such as "estimates," "projects," "plans," "believes," "expects," "anticipates," "intends," or the negative or other variations, or by discussions of strategy that involve risks and uncertainties. We urge you to be cautious of the forward-looking statements, that such statements, which are contained in this report on Form 10-Q, reflect our current beliefs with respect to future events and involve known and unknown risks, uncertainties and other factors affecting our operations, market growth, services, products and licenses. No assurances can be given regarding the achievement of future results, as actual results may differ materially as a result of the risks we face, and actual events may differ from the assumptions underlying the statements that have been made regarding anticipated events. Factors that may cause actual results, our performance or achievements, or industry results, to differ materially from those contemplated by such forward-looking statements include without limitation:

·	Our ability to attract and retain management, and to integrate and maintain technical information and management information systems;

·	Our ability to raise capital when needed and on acceptable terms and conditions;

·	The intensity of competition; and

·	General economic conditions.

All written and oral forward-looking statements made in connection with this report that are attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Given the uncertainties that surround such statements, you are cautioned not to place undue reliance on such forward-looking statements.

Plan of Operation

We are a development-stage company located 81 Greene Street, 4th Floor, New York, New York. Since our formation, we have concentrated on the development of our business strategy

Until March 2004, Vanguarde Media Inc., an entity not affiliated with Sahara, published Honey Magazine, a publication aimed at the 18-34 urban female demographic. As a result of financial difficulties, Vanguarde Media Inc. filed for bankruptcy in November 2003 and ceased publishing Honey Magazine in 2004. In February 2005 Sahara, through the bankruptcy proceedings, purchased the “Honey” trademark for the class of paper goods and printed matter (which relates to printed publications). On March 5, 2009, we officially re-launched Honey as an online magazine along with Hivespot, a social network which serves as the beta version of our soon to be launched YouBlast social network. The online magazine Honeymag.com and Honeytv.honeymag.com are currently operating websites that we also officially launched in March 2009 and November 2009, respectively.

YouBlast will be a one-stop-shop for Internet users and businesses to create a rich website with easy to use publishing, analytics and e-commerce tools. We expect that the primary components of our business will be:

●	Marketing services to advertisers and publishers, such as display advertising and search advertising, on our social publishing network, YouBlast.com, and across our affiliate web properties (e.g. Honeymag.com)

●	Web publishing services to users, such as single-click publishing tools, click to CDN streaming tools, advanced web and file analytics and single click e-commerce tools.

●	Enterprise solutions for companies seeking to sub-license and custom-brand YouBlast products and services on a broader scale.

We believe having active web portals will allow us to exploit the synergies of our online magazine and social networking site by driving this traffic and user base into YouBlast.com. From the launch of our websites in March 2009 through September 30, 2010, our websites have had an aggregate of approximately 3,739,821 visits and 6,559,211 page views, by 1,661,645 unique visitors, with average time on site of 2 minutes and 22 seconds, and 10,436 registered users, as measured by Google Analytics.

To increase our web traffic, we plan to link our site with other sites such as Facebook.com and Twitter.com. Linking to other websites allows us to attract web traffic from people who do not know about our site. We plan to employ celebrity brand ambassadors and influencers, who will assist us in evangelizing our online properties through popular culture circles.

As part of our strategic plans, we routinely consider and seek to complete acquisitions with companies that are compatible with and/or complementary to our Company, including our technology and products.

There are three planned revenue streams for YouBlast: Premium Service Fees, Advertising and Publishing Fees and Enterprise Licensing fees.

Premium Service Fees

YouBlast will employ a “freemium” value model for individual users, under which a limited amount of a product or service is provided for free, and additional amounts of the product or service requires payment. Any user will be able to experience YouBlast as a guest simply by clicking on a link to preview or download a YouBlast file. Setting up an account will take less than a minute, will be free-of-charge and will enable a user to securely upload, transfer or publish multiple files to their personal cloud (or Internet-based) server, up to 2 GB per file. Accounts will include 2 gigabyte (gb) of online storage, unlimited encoding, unlimited Inbox file storage from other YouBlast account holders, unlimited recipients, and unlimited file transfer bandwidth. Account holders can buy additional storage, bandwidth and plan upgrades as follows:

●	Pay for additional storage or bandwidth (monthly fee):

▪	5 gb storage/100 gb bandwidth

▪	10 gb/250 gb bandwidth

▪	20 gb/500 gb bandwidth

▪	50 gb/1 terabyte bandwidth

▪	100 gb/2.5 terabyte bandwidth

●	Pay for a plan upgrade (monthly fee):

▪	Silver (3 A la Carte Apps)

▪	Gold (ad blocker, all A la Carte Apps)

▪	Platinum (Gold, plus earn $ as a publisher)

●	A la Carte Apps

▪	Email Marketing

▪	Social Media Integration

▪	Media Streaming on 3rd Party Sites

▪	Search Engine Optimization

▪	Real-time Commenting

Enterprise Fees

Businesses can sub-license YouBlast applications which offer professionals and corporations a custom-branded solution that seamlessly integrates YouBlast apps into a company’s legacy system (e.g. database, website or other application) for broad use. Applications are priced according to type, usage, bandwidth and storage space. These applications include:

●	Email marketing, contact and list management

●	Groups and permissions Control Tools

●	Advanced Website and File Analytics

●	Mobile applications (iPhone, Blackberry, Android)

●	YouBlast social networking publisher tool (allowing users to publish their content on the Internet)

Advertising and Publishing Fees

YouBlast offers web-based marketing solutions that enable users to interact with our advertisers’ brands and YouBlast account holders to earn revenue by publishing ads to users. In addition, YouBlast offers easy-to-use tools to provide valuable analytics to our advertisers and publishers about the behavior of the users – from both a web click-through and file-click through level. YouBlast’s Advertising services include:

●	Display advertising

●	Search advertising (text links)

●	Video and Music pre- and post roll advertising

●	Email advertising

●	Brand building (campaign) services

●	Remarketing (intra-ad network services)

The Company has been focused on driving unique visitors (traffic) and impressions through organic and viral means to our sites. We believe that this methodology of ramping in these categories will allow our sites to become viable advertising mediums by the first quarter of 2011.

We will seek to reach our core target demographic by providing a social utility that is superior to any software currently in the marketplace, as our software outperforms each competitor in speed, ease-of-use and richness. Our go to market strategy is to attract users virally and directly through social media outreach (SMO), search engine optimization (SEO) and search engine marketing (SEM) tactics, while augmenting our technical capabilities to interoperate on the most popular social networks, starting with Facebook and MySpace, thus attracted their respective user bases. In these instances, YouBlast will seek to leverage the digital experience for these users by improving how large digital files are hosted, streamed, published and tracked among their network of friends and colleagues.

The social network Hivespot, which was officially launched in March 2009, has served as the Beta version of our YouBlast social network which is expected to be launched in the first quarter of 2011. The online magazine, Honeymag.com, and Honeytv.com, are currently operating websites that were officially launched in March 2009 and November 2009, respectively. We believe having active web portals will allow us to exploit the synergies of our online magazine and social networking site by driving traffic and our user base into YouBlast. Through June 30, 2010, our websites have had an aggregate of approximately 709,270 visits and 1,646,533 page views, by 471,566 unique visitors, with average time on site of 2 minutes and 19 seconds, and 10,198 registered users.

We anticipate that our primary source of revenue will be the sale of advertising on our social network YouBlast and online magazine Honeymag.com. We plan to sell advertising through our direct sales ad team. We entered into advertising and sponsorship agreements in the second half of 2009, which generated approximately $89,000 in revenues to date and are currently in negotiations with additional potential advertisers which we believe have the potential to generate significantly greater revenues. We have chosen to not renew our ad aggregator agreements with BET and GLAM Media since we believe that through our direct sales ad team we have the ability to sell higher margin ads.

To increase our web traffic, we plan to link our site to other sites such as Facebook.com and Twitter.com. Linking to other websites allows us to attract web traffic from people who did not previously know about our site. We also will employ celebrity brand ambassadors and influencers, who will assist us in evangelizing our online properties through popular culture circles.

To track this traffic on our integrated web properties we utilize Google Ad Works. Google Ad Works calculates the total number of pages (impressions) that visitors viewed on our web properties. To date, we have recorded the following monthly total impressions: April 2009 - 650,816; May 2009 - 782,648; June 2009 - 1,114,206; July 2009 - 1,729,823; August 2009 - 1,888,048; September 2009 - 1,802,203; October 2009 - 550,067; November 2009 - 693,832; December 2009 - 798,142; January 2010 - 714,095; February 2010 - 618,707; March 2010 – 673,495; April 2010 – 1,542,877; May 2010 – 1,542,871; June 2010 – 771,410. These impressions have largely been achieved through organic/viral means, which, we believe will allow us to become a viable advertising medium for brands by the first quarter of 2011.

The U.S. economy has recently experienced a contraction and it is possible that we may see further economic deterioration in the immediate future. We expect that much of our revenues will be derived from fees paid by advertisers in connection with the display of ads on web pages, including from companies whose success is dependent upon consumers' willingness to spend money on entertainment and other discretionary items. Weakening economic conditions or outlook could reduce the consumption of discretionary products and services and, thus, reduce advertising for such products and services. This may adversely affect our ad revenue, which would adversely affect our business and financial results.

Results of Operations

Since inception, we have generated de minimis revenue from advertising and the licensing of our database. In the same period, we have incurred expenses related to securing the “Honey” brand trademarks, funding the development and initial execution of a business plan, and raising capital.

The following table sets forth, for the periods indicated, certain items from the consolidated statements of operations. Comparative analysis of ratios of costs and expenses to revenues is not shown in the following narrative discussion as management believes such ratios to be uninformative due to the insignificant levels of revenues in each period.

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2010 (Unaudited)			2009 (Unaudited)			2010 (Unaudited)			2009 (Unaudited)

Revenue	$	22,027		$	35,205		$	53,626		$	38,785

Costs and expenses
Product development		199,666			364,641			904,546			932,678
Selling and marketing		623			69,790			40,273			347,374
General and administrative		348,443			923,859			1,881,968			2,845,768
Interest income		--			(10,049	)		(2,028	)		(18,785	)
Interest expense – related party		3,600			--			4,142			--
Interest expense		45,912			--			79,574			--
Loss on sale of available-for-sale security		--			--			6,005			--
Amortization – debt discount		231,102			--			238,988			--
Amortization – deferred financing costs		726,438			--			903,647			--

Net loss	$	(1,533,757	)	$	(1,313,036	)	$	(4,003,489	)	$	(4,068,250	)

Net loss per share – basic and diluted	$	(0.04	)	$	(0.04	)	$	(0.12	)	$	(0.13	)

Three Months Ended September 30, 2010 Compared to Three Months Ended September 30, 2009

Revenues for the three months ended September 30, 2010 were $22,027 compared to $35,205 for the three months ended September 30, 2009. We generated minimal revenue from on-line advertising to date. The website Honeymag.com was launched as our online magazine on March 5, 2009, on-line ads primarily accounted for the revenue in the third quarter of 2010 and sponsorship revenue in the amount of $35,000 from one customer primarily accounted for the revenues in the third quarter of 2009.

Product development expenses for the three months ended September 30, 2010 were $199,666, compared to $364,641 for the three months ended September 30, 2009, a decrease of $164,975. The decrease is primarily attributable to decreases in payroll of $70,000, licensing costs of $30,000, network costs of $43,000 and production consultant costs of $22,000. We incurred significantly lower costs during the 2010 period as we negotiated to raise capital to continue the process of developing our new YouBlast social network in accordance with our strategic plan to generate revenues.

Selling and marketing expense for the three months ended September 30, 2010 were $623, compared to $69,790 for the three months ended September 30, 2009, a decrease of $69,167. We implemented expense reduction procedures in 2010 in an effort to preserve our operating capital which resulted in a reduction of selling and marketing payroll of $25,000 and marketing and advertising costs of $44,000.

General and administrative expenses for the three months ended September 30, 2010 were $348,443, compared to $923,859 for the three months ended September 30, 2009 a decrease of $575,416. The decrease is primarily attributable to decreases in share-based consulting fees of $340,000, professional fees of $67,000, business consulting fees of $133,000 and travel and entertainment costs of $38,000. Share-based consulting fees of in 2009 were primarily related to a contract which is no longer in effect in 2010.

Interest expense, amortization of deferred financing costs and amortization of debt discount amounted to $49,512, $726,438 and $231,102, respectively in the three months ended September 30, 2010, related to the financing received in 2010. There was no such outstanding debt in the comparative 2009 period.

As a result of the foregoing, the net loss for the three months ended September 30, 2010 was $1,533,757, compared to a net loss of $1,313,036 for the three months ended September 30, 2009.

Nine Months Ended September 30, 2010 Compared to Nine Months Ended September 30, 2009

Revenues for the nine months ended September 30, 2010 were $53,626 compared to $38,785 for the nine months ended September 30, 2009. Although we generated minimal revenue from on-line advertising to date, we did recognize revenue from one customer in the amount of $30,000 in the first quarter of 2010 and we recognized sponsorship revenue in the amount of $35,000 from one customer in the third quarter of 2009. The website Honeymag.com was launched as our online magazine on March 5, 2009, on-line ads primarily accounted for the revenues in the nine months of 2010.

Product development expenses for the nine months ended September 30, 2010 were $904,546, compared to $932,678 for the nine months ended September 30, 2009, a decrease of $28,132. The decrease is primarily attributable to increased network costs of $39,000, additional amortization expenses of $88,000 and increased edit and creative costs of $26,000 which were offset by a reduction in payroll and related costs of $146,000 and licensing costs of $30,000. We incurred these additional costs as we developed content for our existing online magazine and social network, which were launched in March 2009, and continued the process of developing our new YouBlast social network in accordance with our strategic plan to generate revenues. Payroll costs decreased as we outsourced a significant portion of the product development function to outside consultants.

Selling and marketing expense for the nine months ended September 30, 2010 were $40,273, compared to $347,374 for the mime months ended September 30, 2009, a decrease of $307,101. We implemented expense reduction procedures in an effort to preserve our operating capital which resulted in a reduction of selling and marketing payroll of $78,000 and marketing and advertising costs of $229,000.

General and administrative expenses for the nine months ended September 30, 2010 were $1,881,968, compared to $2,845,768 for the nine months ended September 30, 2009 a decrease of $963,800. The decrease is primarily attributable to decreases in share-based consulting fees of $886,000, payroll and related costs of $196,000, business consulting of $165,000, travel and entertainment of $52,000, public relations of $47,000 and professional fees of $92,000. Share-based consulting fees of $900,000 in 2009 were primarily related to a contract which is no longer in affect in 2010. The decreases in payroll and related costs, business consulting, travel and entertainment, public relations and professional fees are a result of both our implementation of expense reduction procedures and expenses related to certain SEC filings in 2009 that are not incurred in 2010. The decreases are offset by increases in share-based compensation of $425,000, which primarily resulted from the increase in value of shares issued in 2010 for bonuses accrued in 2009, and rent of $77,000 incurred under new lease agreements.

Interest expense, amortization of deferred financing costs and amortization of debt discount amounted to $83,716, $903,647 and $238,988, respectively in the nine months ended September 30, 2010, related to the financing received in 2010. There was no such outstanding debt in the nine months ended September 30, 2009. Additionally, we realized a loss on the sale of our investment in corporate bonds in the amount of $6,005 in the nine months ended September 30, 2010.

As a result of the foregoing, the net loss for the nine months ended September 30, 2010 was $4,003,489, compared to a net loss of $4,068,250 for the nine months ended September 30, 2009.

Liquidity and Capital Resources

The accompanying consolidated financial statements have been prepared on a basis which assumes that the Company will continue as a going concern and which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company has had minimal revenues since inception, incurred losses from operations since its inception and has a deficit accumulated during the development stage amounting to approximately $14.7 million as of September 30, 2010. There can be no assurance that the Company will be profitable in the future. If the Company is not profitable and cannot obtain sufficient capital to fund operations, the Company may have to cease operations. These circumstances raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

As of September 30, 2010, we have no cash or cash equivalents available. As of December 31, 2009, we had cash and cash equivalents available of $316,317 and an available-for-sale investment of $295,500. Operations and the net cash used in investing activities net of the cash provided by financing activities, as described below, resulted in the decrease in cash and cash equivalents from December 31, 2009 to September 30, 2010.

During the nine months ended September 30, 2010, we utilized approximately $1,498,000 in cash for operating activities, which was primarily a result of our net loss of approximately $4,003,000 as adjusted for the non-cash deductions for depreciation and amortization of intangibles of $425,000, amortization of financing costs and debt discount of $1,143,000 and share based expenses of $528,000 in the nine month period. Additionally, accounts payable and accrued expenses increased $383,000.

In the nine months ended September 30, 2010, investing activities utilized $201,000 in net cash primarily from $493,000 in payments towards capitalized website development costs as we prepared for the launch of our YouBlast social network, net of proceeds of $294,000 received from the sale of our investment in a corporate debt instrument. Financing activities provided net cash of $1,382,000 from (i) the sale of debentures and common stock; net of financing costs, of $994,000 and (ii) notes payable and advances from a related party of $383,000.

We expect that we will need to raise additional capital to execute our business plan. Our cash and cash equivalents on hand at September 30, 2010 will not be sufficient to fund our operations at their current level for the next twelve months. There can be no assurance that our cost estimates are accurate, that anticipated revenues will materialize, or that we will be successful in securing equity or debt financing to meet our need for working capital. There can be no assurance, in light of the current economic crisis, that such financing, if and when needed, will be available in amounts or on terms acceptable to us, or at all.

On March 24, 2010, JTBO purchased a March 2010 Debenture in the principal amount of $490,000, bearing interest at 16%. The March 2010 Debenture, originally due on September 30, 2010, was amended and is due on December 31, 2010. The Company may extend the March 2010 Debenture’s maturity date by three month periods if by the maturity date the Company notifies JTBO and delivers to JTBO 1,000,000 shares of the Company’s common stock as consideration for the extension. Upon the closing by the Company of one or more financings in which the Company receives gross proceeds of less than $1,500,000 the Company shall pay an amount equal to 50% of the proceeds of such financing to reduce the principal amount of the March 2010 Debenture. In addition, pursuant to the Stock Purchase Agreement, JTBO purchased 1,000,000 shares of common stock with a fair market value of $250,000 for consideration of $10,000. The excess of the fair market value over proceeds received of $240,000 is accounted for as share-based financing costs. The Company also agreed to issue JTBO 200,000 shares of the Company’s common stock with a fair market value of $50,000 in connection with the closing of the financing. The Company incurred financing costs of $417,500 ($290,000 of which is share-based) in connection with the sale of the debenture and common stock. Amortization of deferred financing costs amounted to $417,500 in the nine months ended September 30, 2010.

On April 13 and 14, 2010, pursuant to the Purchase Agreement, three investors purchased debentures in the principal amounts of $245,000, $58,800 and $39,200 bearing interest at 16%. These debentures, originally due on October 13 and 14, 2010, respectively, were amended and are due on April 14, 2011. The Company may extend these debentures’ maturity dates by three month periods, as defined in the agreement. Upon the closing by the Company of one or more financings in which the Company receives gross proceeds of less than $1,500,000 the Company shall pay an amount equal to 50% of the proceeds of such financing to reduce the principal amount of the debentures. In addition, pursuant to the Stock Purchase Agreement, the investors purchased 500,000, 120,000 and 80,000 shares of common for consideration of $5,000, $1,200 and $800, respectively. The excess of the fair market value of the common stock over the proceeds received of $168,000 is accounted for as deferred share-based financing. Amortization of deferred financing costs amounted to $154,182 in the nine months ended September 30, 2010.

Pursuant to the June 2010 Purchase Agreement, on June 7, 2010, the Company sold to JTBO a June 2010 Debenture in the principal amount of $100,000, and issued JTBO a June 2010 Warrant to purchase 800,000 shares of its Common Stock, for gross proceeds of $100,000. Pursuant to the June 2010 Purchase Agreement, JTBO purchased a second June 2010 Debenture with a face value of $150,000 on June 30, 2010, for a purchase price of $150,000. At the closing of the purchase of the second June 2010 Debenture, the Company issued to JTBO a June 2010 Warrant to purchase 1,200,000 shares of its Common Stock. The June 2010 Debentures, originally maturing September 30, 2010, were amended and are due on December 31, 2010. The Company valued the 2,000,000 June 2010 Warrants using the Black-Scholes pricing model. The value assigned to the warrants of $168,855 is recorded as debt discount and additional paid-in capital. The debt discount is being amortized over the respective terms of the debentures. In the nine months ended September 30, 2010, amortization of debt discount amounted to $168,855. The Company incurred $55,500 in financing costs in the sale of the June 2010 Debentures which are deferred and amortized over the respective terms of the debentures. Amortization of deferred financing costs amounted to $55,500 in the nine months ended September 30, 2010.

On August 10, 2010, the Company entered into a Securities Purchase Agreement (the “August 2010 Purchase Agreement”) with the John Thomas Bridge & Opportunity Fund II, L.P. (“JTBOII)”, whereby the Company agreed to sell, and JTBOII agreed to purchase, in one or more tranches, up to $250,000 in principal amount of debentures (the “August 2010 Debentures”) for an aggregate purchase price of $250,000. The August 2010 Debentures pay interest at a rate of 16% per annum, payable in cash and, originally due on October 30, 2010, were amended and are due on December 31, 2010. Pursuant to the August 2010 Purchase Agreement, for each $50,000 of August 2010 Debentures that JTBOII purchases, the Company agreed to issue JTBOII a warrant to purchase 400,000 shares of Company common stock.

Principal and all accrued and unpaid interest to the date of repayment will be paid through the issuance of shares of the Company’s common stock at a rate of $0.50 per share. The entire unpaid portion of the note, together with all accrued interest through the date of payment may be declared immediately due and payable by the Executive Chairman (former CEO) upon the attaining of certain capital funding by the Company, as defined in the agreement. As disclosed above, such funding was subsequently attained and the promissory note was paid in April 2010.

In May and June, 2010, the Company borrowed an aggregate of $100,000 from its Executive Chairman (former CEO) for working capital purposes. The promissory note bears interest at 9% per annum and is secured by certain assets of the Company. Principal and all accrued and unpaid interest to the date of repayment will be paid through the issuance of shares of the Company’s common stock at a rate of $0.50 per share. The entire unpaid portion of the note, together with all accrued interest through the date of payment may be declared immediately due and payable by the Executive Chairman (former CEO) upon the attaining of certain capital funding by the Company, as defined in the agreement.

On September 2, 2010, the Company issued a 16% debenture, originally due November 1, 2010, and as amended, due December 31, 2010 (the “September 2010 Debenture”) , to its Executive Chairman (former CEO) in the aggregate principal amount of $175,000 and issued a five year warrant to purchase up to 1,000,000 shares of the Company’s common stock at an exercise price of $0.50 per share. The Company valued the 1,000,000 warrant using the Black-Scholes pricing model. The value assigned to the warrant of $82,044 is recorded as debt discount and additional paid-in capital. The debt discount is being amortized over the term of the September 2010 Debenture. In the nine months ended September 30, 2010, amortization of debt discount amounted to $29,854.

Pursuant to the terms of the debentures sold to JTBO, JTBOII, the three individual investors and the Company’s Executive Chairman (collectively the “Debentures”), upon the occurrence of an equity or debt financing of less than $1,500,000, the Company must use fifty percent of the financing proceeds to repay each of the Debentures. The Company concluded that its current liquidity and capital resource requirements preclude early payment of the Debentures and, subsequent to September 30, 2010, the Company entered into new agreements with the Debentures holders whereby it sold to JTBOII new debentures in the amounts of $50,000 and $65,000 and also modified the terms of all outstanding Debentures with the Debenture Holders. The new agreements, among other terms as defined in the agreements, extended the maturity date of the Executive Chairman’s, JTBO’s and JTBOII’s Debentures to December 31, 2010, or such earlier date that the Company receives funding, as defined in the agreements, and waived any defaults existing under the their Debentures as of the date of the new agreements. In consideration for these modifications the Company agreed to issue to JTBO and JTBOII a number of shares of common stock equal to 10% of the total issued and outstanding shares of Company common stock on a fully diluted basis. The number of common shares required to be issued to JTBO and JTBOII, 5,913,231 shares in the aggregate, will be allocated to JTBO and JTBOII pro rata based on the balances of their Debentures. These common shares are subject to anti-dilution protection, as defined in the agreements. The new agreements with the three individuals, among other terms as defined in the agreements, extended their debentures for a period of six months from their original due date to April 2011and provided for the issuance of an aggregate of 700,000 shares of common stock to the three individuals. The Company determined that these modifications are not considered a debt extinguishment and accounted for the transaction using the guidance of FASB ASC Topic No. 470-50 “Modifications and Extinguishments”. The total number of common shares required to be issued, 6,613,231 shares, are valued at $1,983,969 as of September 2, 2010, the effective date of the modification. The amount is accounted for as deferred financing costs and is being amortized over the extended terms of the debenture agreements using the effective interest method. The Company recorded amortization in the amount of $261,983 for the period September 2, 2010, through September 30, 2010, as share liability.

Deferred financing costs are being amortized over the terms of the debentures using the effective interest method. Amortization amounted to $903,647 in the nine months ended September 30, 2010.

Recent Accounting Pronouncements

In January 2010, the Financial Accounting Standards Board ("FASB") issued, and the Company adopted, Accounting Standards Codification (“ASC”) Update No. 2010-05 “Escrowed Share Arrangements and the Presumption of Compensation” (“ASCU No. 2010-05”). ASCU No. 2010-05 codifies the SEC staff’s views on escrowed share arrangements which historically has been that the release of such shares to certain shareholders based on performance criteria is presumed to be compensatory. When evaluating whether the presumption of compensation has been overcome, the substance of the arrangement should be considered, including whether the transaction was entered into for a reason unrelated to employment, such as to facilitate a financing transaction. In general, in financing transactions the escrowed shares should be reflected as a discount in the allocation of proceeds. In debt financings the discounts are to be amortized using the effective interest method, while discounts on equity financings are not generally amortized. The Company adopted ASCU No. 2010-05 effective January 1, 2010, although it has been in compliance with the SEC staff’s views on escrowed share arrangements, as it relates to future financings, the adoption of this update may have a material effect on the Company’s consolidated financial statements.

Off Balance Sheet Arrangements

None.

Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in accordance with U.S. GAAP. The preparation of the consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures. Though we evaluate our estimates and assumptions on an ongoing basis, our actual results may differ from these estimates.

Certain of our accounting policies that we believe are the most important to the portrayal of our financial condition and results of operations and that require management’s subjective judgments are described below to facilitate a better understanding of our business activities. We base our judgments on our experience and assumptions that we believe are reasonable and applicable under the circumstances.

Revenue Recognition

Equity-Based Compensation

The Company accounts for equity based transactions with non-employees under the provisions of ASC Topic No. 505-50, “Equity-Based Payments to Non-Employees” (“Topic No. 505-50”). Topic No. 505-50 establishes that equity-based payment transactions with non-employees shall be measured at the fair value of the consideration received or the fair value of the equity instruments issued, which ever is more reliably measurable. When the equity instrument is utilized for measurement the fair value of (i) common stock issued for payments to non-employees is measured at the market price on the date of grant; (ii) equity instruments, other than common stock, is estimated using the Black-Scholes option valuation model. In general, the Company recognizes an asset or expense in the same manner as if it is to receive cash for the goods or services instead of paying with or using the equity instrument.

Intangible Assets

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not Applicable.

ITEM 4T. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed by, or under the supervision of the Chief Executive Officer and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management’s evaluation of internal control over financial reporting includes using the Committee of Sponsoring Organizations of the Treadway Commission, or COSO, framework, an integrated framework for the evaluation of internal controls issued by COSO, to identify the risks and control objectives related to the evaluation of our control environment. Based on their evaluation under the frameworks described above, our Chief Executive Officer has concluded that our internal control over financial reporting was ineffective as of September 30, 2010 because of the following material weaknesses in internal controls over financial reporting:

	·	A lack of sufficient resources and an insufficient level of monitoring and oversight, which may restrict our ability to gather, analyze and report information relative to the financial statement and income tax assertions in a timely manner.
	·	The limited size of the accounting department makes it impracticable to achieve an optimum separation of duties.
	·	The Company has not yet established an audit committee.

Remediation Plan

We are seeking ways to remediate these weaknesses, which stem from our small workforce that will not require us to hire additional personnel. The Company is in the process of seeking financing through the sale of equity securities, upon the acquisition of adequate capital the Company intends to remediate the deficiencies through the deployment of additional personnel and implementation of an audit committee.

Changes in Internal Controls

Our management, with the participation of Jeffrey Forster, our chief executive officer and principal financial officer (“CEO”), performed an evaluation as to whether any change in our internal controls over financial reporting occurred during the three months ended September 30, 2010. Based on that evaluation, our CEO concluded that no change occurred in the Company's internal controls over financial reporting during the three months ended September 30, 2010 that has materially affected, or is reasonably likely to materially affect, the Company's internal controls over financial reporting

PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

We are not subject to any pending or threatened legal proceedings, nor is our property the subject of a pending or threatened legal proceeding. None of our directors, officers or affiliates are involved in a proceeding adverse to our business or has a material interest adverse to our business.

ITEM 1A. RISK FACTORS.

No new risk factors have been identified. Reference is made to "Item 1A - Risk Factors" contained in the Company's annual report on Form 10-K for the year ended December 31, 2009.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. (REMOVED AND RESERVED).

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBTS.

Exhibit Number		Description
4.1		16% Debenture, dated August 10, 2010 (filed with the Company’s 8K on August 13, 2010, and incorporated herein by reference)
4.1		16% Debenture, dated September 2, 2010 (filed with the Company’s 8K on September 9, 2010, and incorporated herein by reference)
4.1		Amendment No. 1 to 16% Debenture, dated September 28, 2010 (filed with the Company’s 8K on October 4, 2010, and incorporated herein by reference)
4.2		Warrant to Purchase Common Stock, dated August 10, 2010 (filed with the Company’s 8K on August 13, 2010, and incorporated herein by reference)
4.2		Warrant to Purchase Common Stock, dated September 2, 2010 (filed with the Company’s 8K on September 9, 2010, and incorporated herein by reference)
10.1		Employee Agreement, entered into as of July 1, 2010 (filed with the Company’s 8K on August 13, 2010 and incorporated herein by reference)
99.1		Securities Purchase Agreement, dated August 10, 2010 (filed with the Company’s 8K on August 13, 2010 and incorporated herein by reference)
99.2		Registration Rights Agreement, dated August 10, 2010 (filed with the Company’s 8K on August 13, 2010 and incorporated herein by reference)
31.1		Certification by Chief Executive Officer and principal financial officer pursuant to Sarbanes Oxley Section 302
32.1		Certification by Chief Executive Officer and principal financial officer pursuant to 18 U.S.C. Section 1350

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	YOUBLAST GLOBAL, INC.

Date: November 22, 2010	By:	/s/ Jeffrey Forster
		Name: Jeffrey Forster
		Title: Chief Executive Officer (Principal Executive Officer, Principal Financial Officer, and Principal Accounting Officer)

YouBlast Global, Inc. and Subsidiary

(formerly Sahara Media Holdings, Inc.)

(a development stage company)

Consolidated Statements of Cash Flows (Unaudited)

YOUBLAST GLOBAL, INC. 10-Q