UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

þANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, ~~2011~~2012 or oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 333-147932

VIDAROO CORPORATION

(Exact name of registrant as specified in its charter)

Nevada	26-1358844
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

8 N. Highland Ave, Winter Garden FL 34787

(Address of principal executive offices)

(321) 293-3360

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: ~~Common Stock, $.001 Par Value Per Share~~

Common Stock, $.001 Par Value Per Share

Indicate by check mark whether the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x

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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. 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 (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

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 by Rule 12b-2 of the Exchange Act) Yes o No x

As of September 1519, ~~2011~~2012, the aggregate market value of the issued and outstanding common stock held by non-affiliates of the registrant, based upon the closing price of the common stock as quoted on the OTC Markets of $0.~~0101~~015 was approximately $~~296~~444,~~940~~913. For purposes of the above statement only, all directors, executive officers and 10% shareholders are assumed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for any other purpose.

Number of shares of common stock outstanding as of September 1519, ~~2011~~2012 was 6667,~~191~~437,~~185~~365.

DOCUMENTS INCORPORATED BY REFERENCE – None

Table of Contents

FORM 10-K

FOR THE FISCAL YEAR ENDED JUNE 30, ~~2011~~2012

INDEX

		Page
	PART I
Item 1	Business		4
Item 1A	Risk Factors		8
Item 1B	Unresolved Staff Comments		108
Item 2	Properties		108
Item 3	Legal Proceedings		108
Item 4	Submission of Matters to a Vote of Security Holders		108
	PART II
Item 5	Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities		119
Item 6	Selected Financial Data		119
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations		119
Item 7A	Quantitative and Qualitative Disclosures About Market Risk		141
Item 8	Financial Statements and Supplementary Data		1412
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		1412
Item 9A	Controls and Procedures		1412
Item 9B	Other Information		1513
	PART III
Item 10	Directors, Executive Officers, and Corporate Governance		1614
Item 11	Executive Compensation		1715
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		1816
Item 13	Certain Relationships and Related Transactions		1917
Item 14	Principal Accountant Fees and Services		1917
	PART IV
Item 15	Exhibits and Financial Statement Schedules		1917
	Signatures		2018

Table of Contents

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

In this annual report, references to "Vidaroo Corporation” and its consolidated subsidiaries," "E360, LLC, Media Evolutions, Inc. d/b/a Vidaroo Productions," ~~"the~~Vidaroo ~~Entity~~Licensing," ~~"we~~LLC," ~~"us~~Vidaroo Intellectual Property," Inc., and ~~"our"~~Vidaroo ~~refer~~Support toServices, ~~Vidaroo~~LLC ~~Corporation~~are ~~and~~collectively ~~its~~referred ~~consolidated~~to ~~subsidiaries,~~herein ~~E360~~as “we”, ~~LLC~~“our” ~~and~~or ~~Media~~“us”. Where ~~Evolutions~~necessary, ~~Inc~~we have referred to certain of our subsidiaries by their individual name.

Except for the historical information contained herein, some of the statements in this Report contain forward-looking statements that involve risks and uncertainties. These statements are found in the sections entitled "Business," "Management's Discussion and Analysis of Financial Condition and Results of Operation," and "Risk Factors." They include statements concerning: our business strategy; expectations of market and customer response; liquidity and capital expenditures; future sources of revenues; expansion of our proposed product line; and trends in industry activity generally. You ~~In some cases, you~~ can identify forward-looking statements by words such as "may," "will," "should," "shall," "expect," "plan," "could," "anticipate," "intend," "believe," "estimate," "predict," "potential," "goal," or "continue" or similar terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including, but not limited to, the risks outlined under "Risk Factors," that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. For example, assumptions that could cause actual results to vary materially from future results include, but are not limited to: our ability to successfully develop and market our products to customers; our ability to successfully fund our operations and expansions plans through equity financing or other means; our ability to generate customer demand for our products in our target markets; the development of our target markets and market opportunities; our ability to manufacture suitable products at competitive cost; market pricing for our products and for competing products; the extent of increasing competition; technological developments in our target markets and the development of alternate, competing technologies in them; and sales of shares by existing shareholders. Although we believe that the expectations reflected in the forward looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Unless we are required to do so under federal securities laws or other applicable laws, we do not intend to update or revise any forward-looking statements.

Table of Contents

PART I

ITEM 1. BUSINESS

Organization

~~Vidaroo~~We ~~Corporation (the “Entity”) is~~ are a Nevada Corporation with operating subsidiaries, E360, LLC (E360); ~~and~~ Media Evolutions, Inc. d/b/a Vidaroo Productions (MEV); Vidaroo Licensing, LLC; Vidaroo Intellectual Property, Inc.; and Vidaroo Support Services, LLC. ~~The~~We ~~Entity~~were ~~was~~incorporated ~~formed~~in Nevada on May 1, 2007 (operating as Gen2Media Corporation through April 26, 2010) ~~under the laws of the State of Nevada~~ for the purpose of acquiring a majority interest in E360. E360 is a Florida Limited Liability Company ~~organized~~that was ~~under~~formed ~~the~~in ~~laws~~Florida ofon ~~the~~July ~~State~~21, 2006. We have a management agreement with MEV that provides us with control of ~~Florida~~MEV’s ~~and~~operations. MEV was ~~formed~~incorporated in Florida on ~~July~~August 218, ~~2006~~2005. During bythe ~~filing~~year ~~Articles~~ended ofJune ~~Organization~~30, ~~with~~2012, Vidaroo established the ~~Secretary~~wholly ofowned ~~State~~subsidiaries ofVidaroo Licensing, LLC, Vidaroo Intellectual Property, Inc., and Vidaroo Support Services. These subsidiaries were formed to support the ~~State~~operations of ~~Florida~~the Entity and to expand potential capital related activities. Vidaroo Licensing, LLC is the exclusive sales agent for the sale of our Online Video Platform and has aresponsibility ~~management~~for ~~agreement~~the costs associated with ~~MEV~~delivering ~~that~~media ~~provides~~over the content delivery network. Vidaroo ~~with~~Intellectual ~~control~~Property, Inc. is responsible for the continued development and ongoing maintenance of ~~MEV’s~~the ~~operations~~software code for the Online Video Platform. ~~MEV~~Vidaroo ~~was~~Support ~~formed~~Services, onLLC ~~August~~is 8,responsible ~~2005~~for asmaintaining athe ~~Florida~~infrastructure ~~Corporation~~to support the operations of the operating subsidiaries.

We have never undergone a bankruptcy, receivership or similar proceedings, nor have there been any material reclassification, merger consolidation or sale of significant amount of assets not in the ordinary course of business.

Overview

~~Vidaroo~~We isare a video technology company~~. The~~ ~~Entity~~that licenses its Online Video Platform, and performs professional video production. Our Online Video Platform (“OVP”) is licensed under a Software-as-a-Service (“SaaS”) model. The SaaS model allows us to generate monthly recurring revenue that is potentially scalable and stable. The OVP’s design and implementation was production ready in January 2010. The OVP has been further developed in 2011 to include automation of the sign-up and account management functions as well as an automated affiliate portal. This functionality allows both users and our representatives to use or promote the OVP independent of personal contact with us..

~~Vidaroo’s~~Production ~~Online~~services ~~Video~~are ~~Platform~~performed ~~(“OVP”)~~both ~~is licensed~~ under aour ~~Software-as-a-Service (~~name, “~~SaaS~~Vidaroo”) ~~model. The~~and ~~SaaS~~under ~~model allows~~ the ~~Company~~trade toname ~~generate~~of ~~monthly~~our ~~recurring~~subsidiary, ~~revenue that is scalable and stable~~MEV. ~~The~~Our ~~OVP’s~~capabilities ~~design~~include creation and ~~implementation~~support ~~was~~of ~~production~~video ~~ready~~imagery infor ~~January~~the ~~2010. The~~entertainment ~~OVP~~business, ~~has~~as ~~been~~well ~~further~~as ~~developed~~providing insupport ~~2011~~of tovideo ~~include~~production ~~automation~~for oftraditional ~~the~~media ~~sign-up~~ and ~~account~~corporate ~~management~~presentations, ~~functions~~and asin-house ~~well~~content ~~as an automated affiliate portal~~production. ~~This~~ We ~~functionality~~support ~~allows~~our ~~both~~ability ~~users~~to ~~and~~deliver ~~representatives~~our production ofengagements ~~the~~through ~~Entity~~our toprofessional ~~use~~production orstudio ~~promote~~and ~~the~~custom ~~OVP~~turnkey ~~independent~~digital ofplayback ~~personal contact with Vidaroo~~system.

Production services are performed both as Vidaroo and under the trade name of our subsidiary, MEV. Our capabilities include creation and support of video imagery for top line names in the entertainment business. In addition, we provide support of video production for traditional media and corporate presentations, and in-house production of content. Vidaroo supports its ability to deliver its production engagements through its professional production studio and its custom turnkey digital playback system.

Vidaroo Platform

The Vidaroo platform as a whole is a series of web -based applications including the OVP, a centralized user console and an umbrella application for management of the platform. The OVP is divided into two editions, “Publisher”, ~~and “Enterprise”. Publisher is~~ our flagship product., and “Enterprise”. Accounts across both Publisher and Enterprise are “invite based” and allow for an unlimited number of users with varying permissions per account. The centralized user account allows for individual users to accept an account invite along with moving about different accounts on a single sign on

Publisher: Divided into a series of modules, Publisher is designed for simplicity, extensibility and ease of use. SaaS plans are modeled around the access to a given module and individual functionality within.

Enterprise: An ideal solution for large publishing companies, Enterprise allows management of multiple content destinations. Enterprise is designed to manage catalog content and syndicated channels across multiple Publishers.

The Vidaroo Platform is licensed in one of two programs.

On Demand: Volume based recurring subscription with fees ranging from $49 to $299 a month. On Demand is designed to be completely self -service including sign up, training and support. On Demand was released in the fourth quarter of the year ended June 30, 2011, continues to be delivered currently and was available throughout the year ended June 30, 2012.

Enterprise: Recurring Enterprise licenses are one to two year contracts ranging from $~~1,000~~599 to over $10,000 a month. Enterprise licensing supports the business models of video publishers with content destination sites drawing significant monthly website traffic. Enterprise licenses ~~have~~are ~~historically been~~ supported by the business development efforts of ~~the~~our ~~Entity’s~~ management.

Business Strengths

Vidaroo believes the following represent the Company’s business strengths and will be the principal factors in the Company’s business success:

~~Scalabale~~Table ~~and stable business model: Management has selected a model for licensing~~ of its OVP that is well accepted in the software industry and generates recurring SaaS revenue on a monthly basis (Salesforce.com has exceeded $1 billion in annual revenue). Further, the Company has targeted a delivery mechanism that is growing beyond video’s traditional parameters of media distribution. The broad applicability of its product is compelling to an audience that continues to see megatrend growth.Contents

Business Strengths

We believe the following factors represent our business strengths, which are subject to our being adequately financed, trends and uncertainties listed on page 7 and material risk factors discussed in our Cautionary Note Regarding Forward Looking Statements section on page 10.

Scalable and stable business model: Management has selected a model for licensing of its OVP that is well accepted in the software industry and generates recurring SaaS revenue on a monthly basis. While generating recurring revenue from new clients is more difficult than periodic revenues, the benefit of the predictability and stability of recurring revenue is more powerful than revenue generated on an episodic basis. Further, we have targeted a delivery mechanism that is growing beyond video’s traditional parameters of media distribution. The broad applicability of its product is compelling to an audience that continues to see megatrend growth.

Best Practices in Software Development processes: The software development process uses an iterative framework for project management called SCRUM. SCRUM promotes agility through transparency, time boxing for releases and focused roles for increased productivity. These principles allow for updates to be released on an average of every 2 to 3 weeks.

Leverage Video Production: The historical experience and reputation achieved in high-end professional production allows the team to continue to secure high-end professional performance engagements and leverage that experience to grow into corporate video production. These capabilities also allow the company to extend services to clients utilizing our OVP.

Efficient Infrastructure: Vidaroo has focused considerable time and expense on building an infrastructure that enables ~~the Company~~ us to operate efficiently and manage rapid growth. The operation of our video platform and related services allows for turnkey delivery of our services to our client base, creating a strong environment for high margin business.

Product Capabilities

The following is a brief description of certain key elements of our software.

Video Management: Upload through both the browser and FTP. Video uploaded is automatically encoded and moved to the primary content delivery network (“CDN"). The assets module provides multiple ways of browsing videos across an account including by tags and real time sorting. The user interface is highly scalable with current Publishers managing from hundreds to literally tens of thousands of videos from a single account. By default a thumbnail is derived during the upload process but can be easily changed using a dynamic interface by selecting any frame within the video or uploading a custom thumbnail.

Live Streaming: Fully integrated live streaming capabilities provide for complete ease in broadcasting a live event across one or more destinations. Live Event is structured around a unique concept called Context Oriented Syndication (“COS”). COS allows for a publisher to select multiple Channels or Players for syndicating a live event in real time. Essentially during the broadcast new Consumers enter the Live Event while existing Consumers are prompted with a dialog indicating the start of the broadcast. COS is highly flexible allowing for contextual change before and during a broadcast. The Channels context allows for archiving to the beginning or end of a given channel. Once the broadcast is complete, the broadcast is made instantly available. During a broadcast, all player functionality remains consistent including the ability to use social features such as auto posting to social destinations like Facebook where other users can then watch the broadcast directly from the destination along with using the same built in social tools to push elsewhere creating for a viral effect. The application of COS provides for powerful syndication with a very short amount of setup time.

Content Delivery & Syndication: Channels of content are organized into a series of Players. The entire process of creating Players is fully dynamic supporting an unlimited number of instances. Players can be embedded across one or more destinations. The process of embedding a Player on a website is as simple as copying and pasting a single line of code into the source of the website. One of the most powerful fundamental concepts built in at the core of ~~Vidaroo’s~~our OVP is the ability to syndicate changes directly through Publisher without the need of modifying the code implemented at the destination. This reduces cost of publishing video by allowing for changes to be syndicated across many destinations by simply make a change in the backend. This concept is true for all aspects of the player including the content lineup, advertising and theme skinning.

Player Functionality: One of the most powerful aspects of the front-end player is the ability to theme it in an unlimited number of ways. There are a series of default themes to choose from in Publisher ranging from very small to very large. Custom themes are arranged into a series of components that define the type of functionality the user can interact with. Components include channel browsing, video regions (16:9 and 4:3), social capabilities, content linking, embedding, advertising and more.

Social Destinations: Users can post the player automatically by choosing from a number of third-party destinations including Facebook, Twitter, ~~Myspace~~MySpace, Wordpress and others. Depending on the type of social destination, the player is either embedded inline directly on the site for sites like Facebook or in cases like Twitter the player is linked to. In all cases, everything syndicates with the player including advertising and content selection. Users also have an option to simply grab a link (URL to the player) or embed to implement manually on another destination. With distribution comes the ability to regulate whether or not a video can be embedded elsewhere, allowing control over the visibility of individual videos.

Analytics: Robust analytics were built from the ground up to be accessed in real time. All reports include the ability to filter on date range along with a graphical view for day-to-day visibility and a Data Table ~~view for drilling deeper into a report. Publisher includes a series~~ of reports for accessing video impressions across all contexts and video impressions within Channels. In all cases, video impressions get very granular including the ability to view individual percentage breakdown of where users are dropping off within a given video. The analytics system was built to be highly scalable and allow for flexibility in report generation as the software continues to mature.Contents

~~Advertising~~Analytics: ~~Publisher~~Robust ~~includes~~analytics awere ~~fully integrated ad server~~ built from the ground up to ~~support~~be ~~all~~accessed ~~aspects~~in ofreal ~~syndication and video integration~~time. ~~Scheduling~~All isreports ~~made~~include ~~easy by targeting campaigns either at~~ the ~~channel~~ability ~~level~~to orfilter aton ~~the~~date ~~player~~range ~~level~~along ~~allowing~~with ~~for~~a ~~cascading~~graphical ~~inheritance.~~view ~~A campaign allows~~ for ~~the binding of either in~~day-~~stream~~to-day visibility and~~/or~~ ~~banner~~a ~~advertising.~~Data ~~The~~Table ~~workflow~~view for ~~setting~~drilling updeeper ~~campaigns~~into ~~has~~a ~~been optimized for both speed and reuse~~report. ~~Campaigns~~Publisher ~~support~~includes a ~~rule~~series ~~based~~of ~~pattern~~reports ~~that~~for ~~makes~~accessing ~~campaign~~video ~~syndication~~impressions across all ~~aspects~~contexts ofand ~~the~~video ~~platform~~impressions awithin ~~reality~~Channels. ByIn ~~default~~all acases, ~~campaign~~video ~~inherits~~impressions aget ~~default~~very detailed adincluding ~~policy but can be overwritten directly through~~ the ~~backend~~ability ~~for~~to ~~creating~~view ~~advanced~~individual adpercentage ~~policy~~breakdown ~~rules.~~of ~~We’ve~~where ~~found that most~~ users are ~~happy~~dropping ~~with~~off ~~our~~within ~~default~~a ~~IAB~~given ~~modeled Ad Policy~~video. AdThe ~~Policies~~analytics ~~allow~~system ~~for~~was ~~the~~built ~~setting~~to ofbe ~~the~~highly ~~most~~scalable ~~granular~~and adallow ~~settings including rotational settings~~ for ~~pre/mid/post~~flexibility ~~roll video, overlay duration~~ in ~~seconds~~report ~~and~~generation ~~even~~as ~~placement visibility. While we support a number of third party integrations, one of Publisher’s strong advantages over other OVPs is~~ the ~~ability~~software continues to ~~schedule any ad placement directly through the backend without any use of third-party systems~~mature. ~~Banner advertising is made even more powerful when integrated into a player theme allowing for syndicated brand based player theming.~~

Advertising: Publisher includes a fully integrated ad server built from the ground up to support all aspects of syndication and video integration. Scheduling is made easy by targeting campaigns either at the channel level or at the player level allowing for cascading inheritance. A campaign allows for the binding of either in-stream and/or banner advertising. The workflow for setting up campaigns has been optimized for both speed and reuse. Campaigns support a rule-based pattern that makes campaign syndication across all aspects of the platform a reality. By default a campaign inherits a default ad policy but can be overwritten directly through the backend for creating advanced ad policy rules. We’ve found that most users are happy with our default IAB modeled Ad Policy. Ad Policies allow for the setting of the most granular ad settings including rotational settings for pre/mid/post roll video, overlay duration in seconds and even placement visibility. While we support a number of third party integrations, one of Publisher’s strong advantages over other OVPs is the ability to schedule any ad placement directly through the backend without any use of third-party systems. Banner advertising is made even more powerful when integrated into a player theme allowing for syndicated brand based player theming.

Our Technology

Software & Intellectual Property: Our software as a whole is built using enterprise concepts, patterns and principles for rapid application development. Nearly the entire platform has been built using open source technologies, which provides for quick to market and low scale out costs. Intellectual Property (“IP”) is divided into a series of modules and libraries using advanced development patterns that promote reuse and extensibility across the platform. The architecture is built using strict ~~Mode~~Model-View-Controller (“MVC”) pattern that separates the representation of information from the user’s interaction with it and encourages segmentation and further reuse.

Infrastructure: Our infrastructure is built to be completely on demand, highly scalable and cost effective. This is accomplished through the combination of cloud computing and the use of Content Delivery Networks. A primary objective is to allow the infrastructure to respond to demand by automatically scaling without outage.

Cloud Computing: ~~Vidaroo~~We take ~~heavily takes~~ advantage of cloud based infrastructure that houses applications, API’s and queue applications used for automation. The load balance arrays are designed to auto scale based on demand allowing for unforeseen fluctuations in demand. This includes cost savings by shutting down instances no longer needed. Our current database scale strategy includes a combination of vertical and horizontal scale using MySQL replication environment. In addition, we have a data warehouse that holds over a billion entries used for real time analytics.

Content Delivery Network: Our media is delivered using a combination strategy using multiple CDN. Video is streamed using RTMP from a peered CDN, which allows for nearly unlimited scale. Our cache and assets is delivered from a high availability CDN. We serve a significant amount of video a month affording us the ability to provide very competitive tiered pricing to our Enterprise customers along with making a margin. In addition, cost savings is passed down to lower cost SaaS plans creating for highly competitive plans. The management and delivery of media within our OVP is fully abstracted allowing for integration of multiple CDNs and reduced liability by not being tied directly to a given vendor.

Production Services

We offer full production services that are utilized both for our own content, and for clients that request our services. Our production services range from full -scale digital video imagery for high -end professional entertainment content to support for a full array of video products, dependent upon the need of the client and scope of project. Digital video imagery engagements include the use of our custom turnkey digital playback system, production of video graphics and the synchronization of video and audio outputs delivered in the most complex of entertainment venues. Our production services also include the delivery of daily internet programming and other video content produced in our in-house professional studio in Orlando, Florida. Examples of our work include production of a daily web show for the Tribune Company and use of our playback system for Star Wars in Concert. These are in addition to live production work done in ~~the most~~ complex performance venues, ~~which includes~~ including work for the Blacked Eyed Peas, Avicii, Live 8, and concerts for names from Mary J. Blige to Britney Spears.

~~The~~Table ~~combination~~ of the Company’s production services and its software Platform gives it a competitive advantage over other providers because it is a “one stop shop” which can produce, package and deliver the content (using its own proprietary media player) in a customized fashion to the client and end users, digitally via the internet, which is a cost effective and efficient means of delivering this type of content to the market. For example our client Emmis Communications utilizes our OVP and has turned to us on multiple occasions to support their production needs.Contents

The combination of our production services and software Platform gives us a potential competitive advantage over other providers because it is a “one stop shop” which can produce, package and deliver the content (using its own proprietary media player) in a customized fashion to the client and end users, digitally via the internet, which is a cost effective and efficient means of delivering this type of content to the market. For example our client Emmis Communications utilizes our OVP and has turned to us on multiple occasions to support their production needs.

Sales and Growth Strategy

As previously indicated, the OVP is licensed under a SaaS model.

In 2010, we launched our initial marketing interface (http://vidaroo.com/). In 2011, the marketing interface was updated to significantly expand the scope and breadth of collateral materials included. This initiative is aimed at building ~~the~~our Vidaroo brand name for the purpose of generating sales through our SaaS model. In 2012, we have continued to build our library of promotional and support assets on our site designed to aid the Entity’s goal of being able to scale delivery to a greater number of clients.

In the ~~fourth~~fiscal ~~quarter of the~~ year ended June 30, 2011, on demand account sign-up directly through vidaroo.com was released. On demand plans all include a free 30 day trial and range in price from $49-$299 per month. Automation is a key strategy in scaling SaaS revenue. Account creation, billing, support and training are primary focuses in providing automated and on demand solutions to keep support staff to a minimum while providing a superior experience. In addition to the automation created for account sign-up and management, ~~Vidaroo’s~~our affiliate program has been automated as well. The affiliate portal allows for automated promotion of the OVP by ~~Vidaroo’s~~ our affiliates as well as online monitoring of results and earned commissions. The goal of these two initiatives is to drive volume, growing and diversify our recurring revenue. During 2012, we have performed vertical online advertising initiatives to grow our on demand account signups and our affiliate program. We will attempt to continue these initiatives as well as perform broader industry and brand awareness programs in 2013.

Both through our on demand and affiliate programs, ~~The~~we ~~Company has~~ have already experienced interest across certain verticals such as websites for radio stations, traditional and online TV networks, the faith based community, law firms, governmental entities, sports activities, online retailers, healthcare companies, and manufacturers, amongst others.

~~Vidaroo’s~~ Our production capabilities continue to receive demand from the largest names in the entertainment business. Our proprietary digital playback system allows for the application of graphical video imagery synchronized with audio presentation. Our digital playback system combined with our technical knowledge of video production requirements continues to bring a high -end outcome that professional entertainers demand. Management also expects that the growth of video message delivery will impact the desire of corporate presenters to strive for a more professional presentation thus creating higher demand for professional corporate production. Sales and growth are expected to be realized through the historical channels, which is highly dependent on past customer lists, reputation and solicitation performed by the management team.

Industry and Market Overview

The ~~internet~~distribution of online video has ~~matured~~grown ~~into~~substantially in the ~~communications~~past ~~medium~~few ~~and~~years. ~~platform~~The ~~that~~growth experienced to date is ~~integral~~expected to continue and expand over the ~~fabric~~next few years. The number of ~~our~~ways ~~day-~~to~~-day~~ ~~life.~~distribute Itvideo has ~~revolutionized~~also ~~the~~grown ~~way~~with ~~people~~the ~~and~~proliferation ~~businesses~~of ~~communicate~~social ~~while~~networks, ~~fundamentally~~viral ~~shifting~~distribution ~~the~~methodologies ~~economy,~~and ~~driving~~devices iton ~~towards~~which ato ~~virtual~~view ~~marketplace~~online ~~with~~video. aThese ~~global~~choices ~~reach. As~~have ~~the~~driven ~~internet~~growth ~~has~~as ~~matured,~~well ~~the~~as ~~presentation~~challenges ofin ~~online~~delivering professional video. Economic ~~has~~and ~~grown~~other ~~substantially.~~factors ~~The~~indicate ~~pervasiveness~~that ofOnline ~~online~~Video ~~video~~distribution ~~marks~~should ancontinue ~~important~~to ~~moment~~grow in the ~~evolution~~foreseeable offuture ~~America’s~~as ~~communication~~indicated ~~habits.~~in ~~Online~~the ~~video~~“Cisco ~~has~~Visual ~~become~~Networking ~~more~~Index: ~~deeply~~Forecast ~~integrated~~and ~~into~~Methodology, ~~daily~~2011-2016” ~~life~~published on May 30, 2012.

~~The~~Organizations ~~proliferation~~that ofdevelop ~~online~~and/or ~~video~~distribute ~~has~~proprietary ~~created~~content aare ~~megatrend~~increasingly infaced ~~the~~with ~~video~~decisions ~~delivery~~regarding ~~marketplace beyond traditional video delivery choices. This growth has expanded~~ the ~~population~~distribution ~~looking~~methodologies toof ~~deliver~~that ~~messaging via video substantially~~content. While ~~video~~there ~~delivery~~are ~~has~~solutions ~~historically~~that ~~been~~offer ~~transmitted~~free ~~via television or other specialized methodologies~~distribution, ~~the~~owners ~~growth~~ of ~~internet~~proprietary ~~transmission~~content ~~has~~have ~~allowed~~a ~~more~~greater ~~businesses~~challenge ~~and~~in ~~individuals~~controlling toand ~~consider~~monetizing ~~video~~their ~~delivery~~content aswhen ~~the~~making ~~medium~~such ofa ~~choice~~selection. ~~This~~ Professional ~~paradigm~~organizations ~~shift~~are ~~has~~expected ~~also~~to ~~increased~~select ~~the~~a ~~marketplace~~methodology ~~demand~~that ~~for~~allows ~~vehicles~~them tocontrol ~~deliver~~over ~~video~~the insyndication ~~a managed~~ and ~~methodical~~distribution ~~manner. While~~of ~~the~~content ~~presentation~~as ofwell ~~online~~as ~~video~~managing ~~has~~tools ~~grown~~to ~~substantially,~~track sometrics. ~~have~~While the ~~number~~industry ~~and~~is ~~types~~expected ~~of choices~~ to ~~obtain~~continue ~~video~~expanding ~~online~~use ~~substantially~~of ~~increasing~~professional ~~competition~~distribution inplatforms, the ~~online~~number ~~video~~of ~~marketplace.~~providers Weand ~~expect~~alternatives ~~this growth trend~~ to ~~continue~~provide tosuch ~~increase~~services ~~the~~is ~~use~~also ofexpected ~~online~~to ~~video by businesses and consumers~~increase.

The production of professional quality video is a mature industry. Production providers range from large movie houses to small support organizations. While the technology used to produce video has increased its output, top line video production continues to remain a very competitive industry. Entertainers and publishers have a wide range of production providers to choose from and have the ability to be highly selective in the organizations they choose to support their artistic endeavors.

Trends and Uncertainties

The following represents current market and industry trends and relevant uncertainties:

Online video proliferation is expected to continue to grow, which may be accompanied by additional competitors vying for our targeted customer audience. Accordingly, while there is an opportunity for us to grow our current business, there is also the risk that we may be unable to compete with an increasing number of competitors.

·	As online video grows, more organizations may develop in-house solutions: accordingly if in house growth of these initiatives occurs, it may potentially impair the overall growth of the number organizations outsourcing these needs to an online platform provider, such as us.

·	Growth in the number and types of ways content owners wishing to distribute proprietary video content may strain our resources or otherwise negatively affect our revenues as a result of our possible inability to stay current or in front of industry standards or to otherwise compete effectively.

·	Advancements in video production equipment has decreased the cost of video production and editing, which may diminish the barriers to entry for video producers and editors competing with our current video production offerings.

·	While there is currently limited regulatory parameters for online video distribution, future legislation or regulations may adversely impact the industry’s growth.

Research and Development

Costs associated with establishing the technological feasibility of our software are considered Research and Development. We incurred $273,000 and $320,000 in the years ended June 30, 2012 and 2011, respectively.

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Concentrations of Revenue

During the years ended June 30, 2012 and 2011, we had two customers that accounted for 45% and 63% of our revenue, respectively. Should either or both of these customers decide that they no will longer purchase our products or use our services and we are unable to replace them with new customers, our revenues will be negatively impacted.

Patents and Trademarks

We have trademarked the name Vidaroo and received approval from the US Patent and Trademark Office for use of that name on September 4, 2012. We currently do not have any patents pending nor do we have immediate plans to file any patents.

Regulatory Matters

We do not require governmental approval for our products or services and we are not aware of any existing or probable regulations that may impact our business.

Environmental Matters

Because our business does not involve the emission of any toxic substances, either directly or indirectly, we have no costs or compliance with state, federal or local environmental laws

Employees

As of June 30, ~~2011~~2012, we have 1513 full-time employees. which include 4 Executive Officers, 4 members of the software development team, 2 video production personnel, 2 operational support professionals and 1 office manager. We consider our relationship with our employees to be good.

Dividends

We have not declared any cash dividends on our common stock since our inception and do not anticipate paying such dividends in the foreseeable future. We plan to retain any future earnings for use in our business. Any decisions as to future payments of dividends will depend on our earnings and financial position and such other facts, as the Board of Directors deems relevant.

Subsequent Events

~~Effective~~Subsequent ~~August~~to 3June 30, ~~2011~~2012, ~~the~~we ~~Entity~~finalized ~~authorized~~agreements ~~the~~with ~~addition~~holders of ~~100~~an additional $65,000~~,000~~ ~~shares~~ of ~~both~~Promissory ~~Common~~notes ~~and~~payable ~~Preferred~~plus ~~Stock~~accrued tointerest ~~its~~into ~~capital structure. Subsequent to this modification~~1, ~~the Entity has 200~~650,~~000,000~~693 shares of ~~Common~~Preferred ~~Shares~~Stock and ~~100~~575,~~000,000~~161 ofwarrants ~~Preferred~~to ~~shares~~purchase ~~authorized~~our atCommon aStock ~~par~~exercisable ~~value~~at of $0.~~001~~10.

ITEM 1A. RISK FACTORS

~~You~~Smaller ~~should~~reporting ~~carefully~~companies ~~consider~~are ~~the~~not ~~following~~required ~~risk~~to ~~factors~~provide ~~and~~risk ~~the other information included herein as well as the information included in other reports and filings made with the SEC before investing in our common stock. The following~~ factors, asunder ~~well~~Item ~~as other factors affecting our operating results and financial condition, could cause our actual future results and financial condition to differ materially from those projected~~1A. ~~The trading price of our common stock could decline due to any of these risks, and you may lose part or all of your investment.~~

Risks Related to Our Business and Industry

Our independent auditor has expressed doubt about our ability to continue as a going concern, which may hinder our ability to obtain future financing.

Our independent auditor expressed doubt about our ability to continue as a going concern. As a result of the going concern qualification, we may find it much more difficult to obtain financing in the future, if required. Further, any financing we do obtain may be on less favorable terms. Moreover, if the Entity should fail to continue as a going concern, there is a risk of total loss of any monies invested in the Entity, and it is also possible that, in such event, our shares would be of little or no value.

We face significant competition from other online video platform providers

We face formidable competition in every aspect of our business, and particularly from other companies that seek to deliver and distribute video on the internet. Our competitors have longer operating histories and more established relationships with customers and end users. They can use their experience and resources against us in a variety of competitive ways, including by making acquisitions, investing more aggressively in research and development and competing more aggressively business from online video publishers. If our competitors are successful in providing similar or better products, we may not experience growth in the number of subscribers utilizing our OVP and could potentially lose our current client base to competing organizations. Any such developments could negatively affect our current revenues or potential for growth.

We are dependent upon our managers for operating the Entity.

The Entity is dependent upon the services of its management to determine and implement the overall focus and strategy of the Entity. Furthermore, the Entity is dependent upon the managers to oversee the operations of Vidaroo. The managers have little or no experience establishing strategy or providing oversight to manage an online video distribution website or licensing business. Thus, there can be no assurance that the managers’ experience will be sufficient to successfully achieve the business objectives of the Entity. All decisions regarding the management of the Entity’s affairs will be made exclusively by the officers and directors of the Entity. In the event these persons are ineffective, the Entity’s business and results of operation would likely be adversely affected.

Our inability to attain and protect intellectual property rights could reduce the value of our products, services and brand.

Potential trademarks, trade secrets, copyrights and other intellectual property rights may be important assets for us. Various events outside of our control pose a threat to our ability to attain or protect intellectual property rights as well as to our products and services. For example, effective intellectual property protection may not be available in every country in which our products and services are distributed or made available through the internet. Also, the efforts we have taken to protect our proprietary rights may not be sufficient or effective. Any significant impairment of our ability to attain or protect our intellectual property rights could harm our business or our ability to compete. Also, protecting intellectual property rights is costly and time consuming. Any increase in the unauthorized use of our future intellectual property could make it more expensive to do business and harm our operating results.

Our operating results may fluctuate, which makes our results difficult to predict and could cause our results to fall short of expectations.

Our operating results may fluctuate as a result of a number of factors, many outside of our control. As a result, comparing our operating results on a period-to-period basis may not be meaningful, and you should not rely on our past results as an indication of our future performance. Our quarterly, year-to-date and annual expenses as a percentage of our revenues may differ significantly from our historical or projected rates. Our operating results in future quarters may fall below expectations. Any of these events could cause our stock price to fall. Each of the risk factors listed in Item 1A, Risk Factors, and the following factors may affect our operating results:

• Our ability to continue to provide production services that are desirable by our current client roster. • Our ability to sell monthly subscriptions to our Software. • The amount and timing of operating costs and capital expenditures related to the maintenance and expansion of our businesses, operations and infrastructure. • Our focus on long-term goals over short-term results. • The results of our investments in risky projects. • Our ability to keep our online video platform operational at a reasonable cost and without service interruptions. • Our ability to generate revenue from services in which we have invested considerable time and resources.

We have no certainty as to the availability and terms of future financing.

We expect that we will be required to seek additional financing in the future. We cannot be sure that such financing will be available or available on attractive terms, or that such financing would not result in a substantial dilution of a shareholders’ interest in the Entity. If we cannot obtain financing when we need or on terms that are commercially reasonable to us, we will not be able to pursue our business plan as we currently anticipate.

We rely on future efforts to successfully develop and market new and existing products.

We cannot be sure our products will continue to be commercially viable. Likewise, we have no assurances that we will be able to expand upon our current product offerings such that any such expansion will result in ongoing revenues to the Entity.

Shareholders will have limited or no input on any investment or management decisions.

The officers and directors of the Entity control a significant portion of the stock of the Entity, and the Entity will be managed by the officers and by the board. Very few matters will be submitted to Shareholder vote, and if so submitted, the officers will significant influence over the outcome of that vote.

Risks Related to common stock ownership in Vidaroo

Our shares are subject to the U.S. “Penny Stock” Rules and investors who purchase our shares may have difficulty re-selling their shares as the liquidity of the market for our shares may be adversely affected by the impact of the “Penny Stock” Rules.

Our stock is subject to U.S. “Penny Stock” rules, which may make the stock more difficult to trade on the open market. Our common shares are not currently traded on the OTCBB, but it is the Entity’s plan that the common shares be quoted on the OTCBB. A “penny stock” is generally defined by regulations of the U.S. Securities and Exchange Commission (“SEC”) as an equity security with a market price of less than US $5.00 per share. However, an equity security with a market price under US $5.00 will not be considered a penny stock if it fits within any of the following exceptions:

(i) the equity security is listed on NASDAQ or a national securities exchange;

(ii) the issuer of the equity security has been in continuous operation for less than three years, and either has (a) net tangible assets of at least US $5,000,000, or (b) average annual revenue of at least US $6,000,000; or

(iii) the issuer of the equity security has been in continuous operation for more than three years, and has net tangible assets of at least US $2,000,000.

Our common stock does not currently fit into any of the above exceptions.

If an investor buys or sells a penny stock, SEC regulations require that the investor receive, prior to the transaction, a disclosure explaining the penny stock market and associated risks. Furthermore, trading in our common stock will be subject to Rule 15g-9 of the Exchange Act, which relates to non-NASDAQ and non-exchange listed securities. Under this rule, broker/dealers who recommend our securities to persons other than established customers and accredited investors must make a special written suitability determination for the purchaser and receive the purchaser’s written agreement to a transaction prior to sale. Securities are exempt from this rule if their market price is at least $5.00 per share.

Since our common stock is currently deemed to fall under penny stock regulations, it may tend to reduce market liquidity of our common stock, because such regulations limit the broker/dealers’ ability to trade, and a purchaser’s ability to sell, the stock in the secondary market.

The low price of our common stock has a negative effect on the amount and percentage of transaction costs paid by individual shareholders. The low price of our common stock also limits our ability to raise additional capital by issuing additional shares. There are several reasons for these effects. First, the internal policies of certain institutional investors prohibit the purchase of low-priced stocks. Second, many brokerage houses do not permit low-priced stocks to be used as collateral for margin accounts or to be purchased on margin. Third, some brokerage house policies and practices tend to discourage individual brokers from dealing in low-priced stocks. Finally, broker’s commissions on low-priced stocks usually represent a higher percentage of the stock price than commissions on higher priced stocks. As a result, the Entity’s shareholders may pay transaction costs that are a higher percentage of their total share value than if our share price were substantially higher.

For more information about penny stocks, please visit http://www.sec.gov/answers/penny.htm

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 2. PROPERTIES

~~The~~We currently ~~Entity~~lease ~~currently~~approximately ~~leases~~3,800 square feet of office space at 8 N. Highland Ave., Winter Garden, FL 34787. ~~The Entity~~ We currently ~~pays~~pay monthly rent of $3,312 per month pursuant to a 37 -month lease, effective August 1, 2011. The ~~Entity~~lease ~~also~~expires ison ~~leasing~~August 31, 2014. We also lease warehouse space for which itwe ~~pays~~pay a nominal amount ~~per month~~ on a month -to -month basis.

ITEM 3. LEGAL PROCEEDINGS

InFrom ~~August,~~time ~~2010~~to time, ~~the~~we ~~Entity~~may ~~was~~be ~~served with~~ a ~~complaint~~defendant ~~alleging~~and ~~that~~plaintiff ~~its subsidiary E360 unlawfully solicited the sales of securities~~ in ~~connection~~various ~~with~~legal anproceedings ~~investment~~arising in ~~that company. The complaint also attempts to join Vidaroo Corporation to~~ the ~~claim. The~~normal ~~Entity~~course ~~does~~of ~~not~~our ~~believe that there was unlawful activity and accordingly is vigorously defending said complaint~~business.

In August, ~~2011~~2010, we were served with a ~~judgment~~complaint inalleging ~~favor~~that ofour subsidiary, ~~the~~E360, ~~Entity’s~~unlawfully ~~former~~solicited ~~lessor~~the ~~was~~sales ~~granted~~of securities in ~~the~~connection ~~amount~~with ofan ~~$151,924~~investment in that company. The ~~Entity~~complaint ~~does~~also ~~not~~attempts ~~dispute~~to ~~that~~join ~~the~~us ~~premises~~to ~~were~~the ~~vacated~~claim. During ~~prior~~the toyear ~~lease~~ended ~~termination~~June ~~but~~30, ~~has~~2012, ~~contested~~we settled the ~~amount~~matter by issuing 900,000 shares of ~~damages~~our ~~awarded~~Common toStock in exchange for 3% of the ~~plaintiff~~outstanding interest in ~~this case~~E360.

In August, 2011, a judgment in favor of our former lessor was granted in the amount of $151,924. The Entity does not dispute that the premises were vacated prior to lease termination and is currently in settlement discussions. This case was originally filed by Sand Lake West Business Park, Inc. on May 25, 2011 in the Circuit Court of the Ninth Judicial Circuit in and for Orange County, Florida.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS

No matters were submitted to a vote of our security holders during the year ended June 30, 2011.

~~Subsequent~~During tothe year ended June 30, ~~2011~~2012, ~~the~~our security ~~Entity’s~~holders ~~securityholders~~ voted to: 1. Expand the number of shares of authorized common stock from 100,000,000 to 200,000,000 shares; 2. Create a class of preferred stock with 100,000,000 shares authorized; and 3. Re-elect the members of the Board of Directors.

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PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

~~The~~Our ~~Entity’s~~ stock began trading in October, 2008 as an over the counter (“OTC”) security. In April 2010, we changed our name to Vidaroo Corporation, and our common stock currently trades as an OTC security under the trading symbol "VIDA". ~~The Entity’s~~ Our common stock is traded on the OTCQB marketplace, which identifies companies that are current in their reporting obligations to the SEC.

The following table sets forth the high and low bid prices for each quarter within the last two fiscal years.

	Fiscal 2011
	High bid		Low Bid
First quarter	$	0.128	$	0.04
Second quarter		0.12		0.035
Third quarter		0.045		0.015
Fourth quarter		0.036		0.02

	Fiscal 2012
	High bid		Low Bid
First quarter	$	0.03	$	0.001
Second quarter		0.029		0.004
Third quarter		0.029		0.01
Fourth quarter		0.025		0.012

Holders

As of June 30, ~~2011~~2012, the approximate number of our stockholders of record ~~of the Common Stock of the Entity~~ was 2,~~587~~510.

Dividends

We have never declared or paid cash dividends on our common stock. We currently anticipate that we will retain all future earnings to fund the operation of our business and do not anticipate paying dividends on our common stock in the foreseeable future.

Recent Issuances of Common Stock

During the year ended June 30, 2102, the Entity issued a total of 1,246,180 shares of common stock. 900,000 shares were issued to acquire the 3% interest previously not owned in E360 valued at $16,200; and 346,180 shares were issued as stock based compensation for employees valued at $56,648.

During the year ended June 30, 2011, the Entity issued a total of 1,055,153 shares of common stock. 430,153 were issued as Stock based compensation for employees valued at $61,870; and 625,000 were issued for professional services for consideration valued at $57,000.

~~During~~COMMENT the year ended June 30, 2010, the Entity issued a total of 6,960,841 shares of common stock. 3,029,038 shares were issued in satisfaction of options and warrants exercised, for consideration of $149,143; 2,434,465 were issued as Stock based compensation for employees valued at $887,795; 900,000 were issued directly to investors for consideration of $180,000; 539,338 were issued for professional services for consideration valued at $378,694; and 58,000 valued at $8,932 were issued in conjunction with the extension of the terms of Convertible Promissory Notes Payable.10

ITEM 6. SELECTED FINANCIAL DATA

Not Applicable

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

Forward Looking Statements

Please see page i of this Annual Report for “Information Regarding Forward Looking Statements” appearing throughout this Annual Report.

Introduction

The following discussion should be read in conjunction with the financial statements and notes thereto. Our fiscal year ends June 30. This document contains certain forward-looking statements including, among others, anticipated trends in our financial condition and results of operations and our business strategy. (See Part I, Item 1A, "Risk Factors "). These forward-looking statements are based largely on our current expectations and are subject to a number of risks and uncertainties. Actual results could differ materially from these forward-looking statements. Important factors to consider in evaluating such forward-looking statements include (i) changes in external factors or in our internal planning process which might impact trends in our results of operations; (ii) unanticipated working capital or other cash requirements; (iii) changes in our business strategy or an inability to execute our strategy due to unanticipated changes in the industries in which we operate; and (iv) various competitive market factors that may prevent us from competing successfully in the marketplace.

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Overview

~~Vidaroo~~We is are a video technology company. ~~The~~We ~~Entity~~license ~~licenses its~~ our Online Video Platform, and ~~performs~~perform professional video production.

~~Vidaroo’s~~ Our Online Video Platform (“OVP”) is licensed under a Software-as-a-Service (“SaaS”) model. The SaaS model allows ~~the~~us ~~Company~~ to generate monthly recurring revenue that is scalable and stable. The OVP’s design and implementation was production ready in January 2010. The OVP has been further developed in 2011 to include automation of the sign-up and account management functions as well as an automated affiliate portal. This functionality allows both users and representatives of the Entity to use or promote the OVP independent of personal contact with Vidaroo.

Production services are performed both as “Vidaroo” and under the trade name of our subsidiary, MEV. Our capabilities include creation and support of video imagery for top line names in the entertainment business. In addition, we provide support of video production for traditional media and corporate presentations, and in-house production of content. ~~Vidaroo~~We ~~supports~~support ~~its~~our ability to deliver ~~its~~ our production engagements through ~~its~~ our professional production studio and ~~its~~ custom turnkey digital playback system.

Entity History

Vidaroo Corporation (the “Entity”) is a Nevada Corporation with operating subsidiaries, E360, LLC (E360) and Media Evolutions, Inc. (MEV). The Entity was formed on May 1, 2007 (operating as Gen2Media Corporation through April 26, 2010) under the laws of the State of Nevada for the purpose of acquiring a majority interest in E360. E360 is a Limited Liability Company organized under the laws of the State of Florida and was formed on July 21, 2006 by filing Articles of Organization with the Secretary of State of the State of Florida. Vidaroo has a management agreement with MEV that provides Vidaroo with control of MEV’s operations. MEV was formed on August 8, 2005 as a Florida Corporation.

Critical Accounting Policies

The Securities and Exchange Commission ("SEC") defines "critical accounting policies" as those that require application of management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Not all of the accounting policies require management to make difficult, subjective or complex judgments or estimates. However, the following policies could be deemed to be critical within the SEC definition.

Revenue Recognition

Revenue is generated from monthly subscription fees from subscribers to the OVP. Revenue is recognized ratably over the contract period for each subscriber. Revenue is also generated for services rendered in connection with the production of video content. ~~During the fiscal year,~~ Revenue ~~was also generated from advertising on the Vidaroo network of websites; As of June 30, 2011, the Entity no longer pursues advertising as a source of future revenue. Revenue~~ is recognized when services are rendered or advertising has been delivered in accordance with the terms of the agreement provided that the collection of the associated receivable is reasonably assured and there are no remaining significant obligations.

Stock-Based Compensation

~~The~~We ~~Entity provides~~ provide stock based compensation to both ~~its~~our employees and vendors under certain circumstances. ~~The~~We ~~Entity~~are is required to measure the cost of employee service received in exchange for an award of equity instruments, including stock options, based on the grant-date fair value of the award and to recognize it as compensation expense over the period the employee is required to provide service in exchange for the award, usually the vesting period.

~~Long-Lived~~Financial ~~Assets~~Instruments

~~The~~We ~~Company~~report ~~evaluates~~financial ~~the~~and ~~recoverability~~non-financial ofassets ~~its~~and ~~long−lived~~liabilities ~~assets,~~that ~~including~~are ~~intangibles,~~re-measured ~~for~~and ~~possible~~reported ~~impairment~~at ~~whenever~~fair ~~events~~value orat ~~circumstances~~each ~~indicate~~reporting ~~that~~period. ~~the~~Three ~~carrying~~levels ~~amount~~ of ~~such~~inputs ~~assets~~ may ~~not~~ be ~~recoverable. If~~used ~~such review indicates that the carrying amount of long−lived assets is not recoverable, the carrying amount of such assets is reduced~~ to measure fair value:

~~Year~~● ~~Ended~~Level ~~June~~1 30- Active market provides quoted prices for identical assets or liabilities; ● Level 2 - Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable with market data; and ● Level 3 - Unobservable inputs that are supported by little or no market activity, ~~2011~~therefore ~~Compared~~requiring an entity to ~~Year~~develop ~~Ended~~its ~~June~~own ~~30,~~assumptions ~~2010~~about the assumption that market participants would use in pricing.

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of period end. We use the market approach to measure fair value for its Level 1 financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial statements which include cash, trade receivables, borrowings, related party notes payable, accounts payable and accrued liabilities are valued using Level 1 inputs and are immediately available without market risk to principal. Fair values were assumed to approximate carrying values for these financial instruments since they are short term in nature and their carrying amounts approximate fair values or they are receivable or payable on demand

Year Ended June 30, 2012 Compared to Year Ended June 30, 2011.

Revenues

Revenues increased by $~~352~~54,~~781~~864 to $1,~~665~~720,~~700~~564 or 273% for the year ended June 30, ~~2011~~2012. The year ended June 30, ~~2011~~2012 demonstrated ~~significant~~ongoing movement in ~~the~~our ~~Entity’s~~ shift to the generation of greater revenue from its SaaS model. Revenue from software licensing increased by ~~359~~33%, growing by ~~283~~$118,000 to $~~359~~479,000 ~~over~~for the year~~. Production~~ ~~revenue~~ended ~~also~~June ~~grew during the year increasing by 11% to 1~~30,~~241,000~~ 2012. ~~During~~ The ~~the~~growth ~~year,~~in ~~the~~SaaS ~~Entity terminated its efforts associated with advertising~~ revenue onwas ~~its~~experienced ~~network~~in each of ~~websites as the~~ our revenue ~~from~~producing ~~that~~programs: ~~business~~on-demand; ~~unit~~affiliate; ~~was~~and ~~either converted to software licensing or eliminated~~enterprise. ~~The~~Production ~~outcome~~revenue ~~of this transition~~ was asteady ~~reduction~~during ofthe ~~revenue~~year ~~from~~at ~~advertising by 45% to~~ $651,241,000.

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Cost of Sales

Costs of sales increased by $3749,~~910~~315 to $~~389~~438,~~254~~609 or 1113% for the year ended June 30, ~~2011~~2012. Cost of Sales consists of variable costs for incremental expenses beyond ~~the Entity’s~~ our established infrastructure. Costs associated with delivering digital video such as bandwidth, personnel and commissions of ~~approximately~~32.3% in 2012 as compared to 37.5% in 2011 were charged for software licensing. ~~These~~The decrease in these costs as a percentage of sales ~~increased~~was ~~from~~primarily ~~30%~~due into ~~2010, as~~ the ~~bandwidth~~efficient ~~costs~~nature inof the ~~prior~~scale ~~year~~associated ~~were~~with ~~partially absorbed by the advertising business that the Entity no longer operates. Additionally, the Entity also increased its bandwidth commitment in anticipation of rolling out the~~ our SaaS ~~automated~~product ~~interface in the fourth quarter.~~ offering Costs associated with the delivery of video production support include rental equipment, facility charges, personnel and third party graphics were approximately 1623% ofin ~~revenue. The~~2012 ~~percentage~~compared ~~spent~~to on16% ~~variable costs~~ in ~~production~~2011. Organizational ~~are~~incentive ~~lower~~compensation ~~than~~was the ~~27%~~primary ~~experienced~~driver ~~in 2010, as the nature~~ of the ~~work~~increase ~~performed~~as ~~was~~that ~~weighted~~accounted ~~less~~for ~~towards hardware~~$66,000 ~~which~~of ~~has~~ the ~~highest~~$84,000 ~~cost~~increase ~~components~~in ~~associated~~overall ~~with~~production ~~video~~cost ~~production~~of sales.

Operating Margin

Operating margin increased by $~~314~~5,~~871~~549 to $1,~~276~~281,~~406~~955 in the year ended June 30, ~~2011~~2012. Operating margin as a percentage of sales ~~increased~~decreased to 7675% in the year ended June 30, ~~2011~~2012 from 7377% in the year ended June 30, ~~2010~~2011. ~~The~~While ~~increase~~the inoverall ~~operating~~Operating ~~margin~~Margin ~~percentage~~ was ~~due~~fairly tostable ~~increased~~the ~~margin~~Operating ~~percentage~~Margin infrom ~~the~~software ~~production~~licensing ~~business~~grew ~~going~~substantially, ~~from~~increasing ~~73%~~by in$110,000 ~~2010~~ to ~~83%~~$322,000 induring ~~2011~~the year. The ~~production~~increase ~~services~~was ~~provided in~~ the ~~year~~result ~~ended~~of ~~June~~a ~~30,~~strong ~~2011~~efficient ~~had~~infrastructure aunderpinning ~~higher~~the ~~operating~~growth ~~margin~~in ~~percentage~~sales. This ~~due~~increased tomargin ~~the~~was ~~nature~~offset ofby ~~expenses~~a ~~incurred~~decrease toin ~~procure~~the ~~and~~Operating ~~deploy~~Margin ~~hardware~~from ~~for the~~ production services ~~required~~that byexperienced ~~our~~stable ~~clients. Operating~~revenue ~~margin~~and inincreased ~~the~~cost ~~software~~associated ~~licensing~~with ~~business~~incentive ~~increased~~compensation ~~from~~driving Operating Margin down by $~~172~~81,000 to $~~228~~956,000 induring the year ~~ended June 30, 2011~~. ~~While~~Operating ~~the~~Margin ~~aggregate~~was ~~operating~~also ~~margin~~impacted ~~increased~~ by ~~307%,~~ the ~~margin~~elimination ~~percentage~~of ~~actually~~the ~~decreased~~advertising ~~due~~model toin ~~the~~2011 ~~Entity~~that ~~committing~~had aproduced ~~greater~~Operating ~~amount~~Margin of ~~monthly~~$23,000 ~~bandwidth~~in ~~resources~~the toyear ~~support~~ended ~~the~~June ~~growth~~30, ~~in business~~2011.

Operating Expenses

Selling, General and Administrative Expenses

Selling, general and administrative expenses consist primarily of salary wages and benefits, and professional services, as well as expenses associated with occupying ~~the Entity’s~~ our physical facility. Selling, general and administrative expenses decreased by $~~310~~204,~~376~~542 to $1,~~493~~684,~~701~~017 for the year ended June 30, ~~2011~~2012. The primary driver of the decreased expenses was personnel related costs, which decreased by $~~301~~141,000, ofincluding ~~the~~a decrease ~~was~~in ~~due~~Stock based Compensation of $38,000. The other significant decreases included occupancy costs of $56,000 as the movement to ~~reduced~~the ~~use~~new facility at the end of ~~external~~the year ended June 30, 2011 provided significant savings and reduced professional services of $21,000 as we continue to focus on maintaining an efficient infrastructure. The cost savings were offset by an increase in advertising expenses of $11,000, as we began to promote our software platform through online vertical promotions.

Depreciation and Amortization

Depreciation and Amortization expense decreased by $~~141~~30,~~565~~255 to $5222,~~513~~258 for the year ended June 30, ~~2011~~2012. The primary driver in the reduction iswas the completion of amortization for ~~the~~our ~~Entity’s~~intangible ~~original~~asset ~~website~~related ~~platform~~to in the ~~year~~acquisition ~~ended June 30, 2010, accounting for $135,434~~ of ~~the~~MEV ~~change~~in 2008.

Stock based compensation

Stock based compensation decreased by $408,785 to $394,858 for the year ended June 30, 2011. The primary difference between the two years was the expense associated with accelerated vesting of Options for Mr. Micheal Morgan, in connection with his promotion and the extension of his contract with the Entity, which accounted for $403,937 of the decrease.

Interest expense

Interest expense decreased by $~~402~~46,~~333~~532 to $~~235~~189,~~794~~262 for the year ended June 30, ~~2011~~2012. The reduction is due to the ~~completion~~conversion of ~~the~~a ~~interest~~significant ~~expense~~portion ~~accretion~~of ~~related~~our tooutstanding ~~the~~indebtedness ~~Convertible~~to ~~secured~~Equity ~~promissory~~during ~~notes accounting for $342,479 and~~ the ~~reduction~~fourth inquarter ~~amortization~~ of ~~deferred~~the ~~financing~~fiscal ~~costs of $44,173~~year.

Off-Balance Sheet Arrangements

~~See Note 7 of the Consolidated Financial Statements in Item 8 for a full description of the Entity’s Convertible Secured Promissory Notes~~None. ~~As of June 30, 2011, the $600,000 face value of these notes is shown as a liability, and therefore is no longer considered an off-balance sheet arrangement as it was at June 30, 2010.~~

Liquidity and Capital Resources

At June 30, ~~2011~~2012, we had a working capital deficit of $1594,~~858,498~~403 as compared to $1,~~865~~858,~~714~~498 at June 30, ~~2010. This degradation is a direct result of the operating losses~~2011, ~~net of noncash charges and gain~~ an ~~adjustment~~improvement ~~to fair market value~~ of ~~outstanding indebtedness recognized by the Entity during the year~~$1, ~~along with increased working capital liabilities~~264,095. The ~~Entity continues to sustain operating losses and has capital requirements associated with servicing its obligations under its Convertible Secured Promissory Notes and Notes Payable. Based on our~~ debt ~~service~~restructuring ~~requirements,~~completed weduring ~~will need to either raise additional capital to repay these obligations or restructure~~ the ~~indebtedness~~year ~~with~~was the ~~counter~~primary ~~parties.~~driver ~~From~~of ~~an operational perspective,~~ the ~~Entity has maintained operations for the past year without reliance on additional capital~~improvement. ~~In order to maintain operations and accelerate growth plans, we may need to raise addtional capital.~~

13While this represents a significant improvement, we continue to experience cash flow pressure from accumulation of working capital liabilities since we began operations. Additionally, we continue to have future capital requirements associated with servicing the remaining outstanding obligations related to our Convertible Secured Promissory Notes and Notes Payable. Based on our working capital and debt service requirements, we will need to either raise additional capital or improve operational results.

Although the Entity continues to have a working capital deficit, we have maintained operations for the past two years without reliance on additional capital.

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Operating Activities

Operating activities in the year ended June 30, 2012 resulted in cash inflows of $950. This provision of cash consisted of a net income of $411,666 offset by adjustments for noncash charges and gains of $611,321 and an increase in net working capital liabilities of $200,605.

Operating activities in the year ended June 30, 2011 resulted in cash inflows of $66,568. This provision of cash consisted of a net loss of $505,642 offset by adjustments for noncash charges and gains of $143,628 and an increase in net working capital liabilities of $379,070.

Operating activities in the year ended June 30, 2010 resulted in cash outflows of $685,032. This use of cash consisted of a net loss of $2,454,344 offset by adjustments for noncash charges of $1,795,218 and working capital of $(25,906).

Investing activities

Net cash used by investing activities was $4,~~979~~207 and $114,~~026~~979 for the years ended June 30, 2011 and 2010, respectively. Investing activities were limited to small furniture and equipment purchases and changes in deposits in both years.

Financing Activities

Financing activities used $2,430 and produced $3,500 in the ~~year~~years ended June 30, 2012 and 2011, respectively. ~~These~~Activity ~~activities~~in 2012 consisted of debt repayments while 2011 included inflows of $5,000 from the issuance of debt and $1,500 ~~was~~were used for debt repayments.

Financing activities produced $704,166 in the year ended June 30, 2010. These activities included inflows of $272,949 from the proceeds of common stock issued and stock options exercised, and $484,200 from the issuance of debt, net of deferred financing fees. $52,983 was used for debt repayments.

Contractual Obligations

The following table represents the Entity’s committed obligations under its facility and equipment leases as well as purchasing commitments for infrastructure such as wireless connectivity and bandwidth requirements for the OVP.

Total

Within 1 year

1-3 years

Operating Leases

~~125~~86,~~860~~112

39,~~748~~744

8646,~~112~~368

Purchase Obligations

~~136~~119,~~524~~200

~~105~~102,~~324~~400

3116,~~200~~800

Total

~~262~~205,~~384~~312

~~145~~142,~~072~~144

~~117~~63,~~312~~168

Effect of Recently Issued Accounting Pronouncements

See Note 2 of the Consolidated Financial Statements in Item 8 for a full description of recent accounting pronouncements, including the expected dates of adoption and estimated effects on results of operations and financial condition.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Our consolidated financial statements, together with the independent registered public accounting firm's report of Patrick Rodgers, CPA, PA, begin on page F-1, immediately after the signature page.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Not applicable

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ITEM 9A(T). CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”), as of June 30, ~~2011~~2012. Disclosure controls and procedures are those controls and procedures designed to provide reasonable assurance that the information required to be disclosed in our Exchange Act filings is (1) recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission’s rules and forms, and (2) accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, ~~2011~~2012, our disclosure controls and procedures were not effective. This was due to deficiencies that existed in the design or operation of our internal control over financial reporting that adversely affected our disclosure controls and therefore may be considered “material weaknesses.”

~~Based~~Our ~~on the~~ size ~~of the Entity~~ and depth of accounting personnel assignment of tasks does not allow for proper maintenance of segregation of duties. Additionally, ~~the~~we do ~~Entity does~~ not have an audit committee to oversee the financial reporting and disclosure process.

Management’s Annual Report on Internal Control Over Financial Reporting

Management, including our Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a – 15(f). Management conducted an assessment as of June 30, ~~2011~~2012 of the effectiveness of our internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on that evaluation, management concluded that our internal control over financial reporting as of June 30, ~~2011~~2012, was not effective in the specific areas described in the “Disclosure Controls and Procedures” section above and as specifically described in the paragraphs below.

As of June 30, ~~2011~~2012, our Chief Executive Officer and Chief Financial Officer identified the following specific material weaknesses in ~~the Entity’s~~ our internal controls over its financial reporting process:

-	There is a lack of sufficient accounting staff, which results in a lack of segregation of duties necessary for a good system of internal control.

-	The Entity does not have an audit committee to oversee the financial reporting and disclosure process.

In light of the forgoing, once we have adequate funds, management plans to hire additional personnel, establish an audit committee and implement an audit committee charter for oversight of the financial reporting and disclosure process. We believe these actions will remediate the material weaknesses. However, the material weaknesses will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements should they occur. 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 control procedure may deteriorate.

This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this Annual Report.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting during the quarter ended June 30, ~~2011~~2012 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

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PART III

ITEM 10. DIRECTORS, OFFICERS AND CORPORATE GOVERNANCE.

Information with regards to the Directors and Officers of the Entity as of June 30, ~~2011~~2012 is set forth below:

Chairman of the Board and Chief Executive Officer Mark E. Argenti ~~Chief~~Production ~~Information~~President ~~Officer~~ and Director Ian McDaniel President, Chief Technology Officer and Director Micheal Morgan Chief Financial Officer, Secretary and Treasurer Thomas J. Moreland

Mark E. Argenti, age 4041, has served as Chief Executive Officer since July 9, 2009. Mr. Argenti served as Chief Creative Officer from May 17, 2007 through July 8, 2009, and has served as a Director since May 17, 2007.

Prior to his appointment as CEO, Mr. Argenti directed the daily operations of Vidaroo subsidiary Media Evolutions - a company he originally co-founded with Ian McDaniel. In addition, he was instrumental in creating, developing and managing operations of E360 and oversaw all of the Entity's video production projects and studio activities. On the technology development front, Mr. Argenti, in collaboration with Mr. McDaniel, pioneered a proprietary video playback technology that continues to be used by ~~Vidaroo~~us and ~~its~~ our clients to this day; and he teamed with Ian and Entity President Mary Spio to design, develop and commercialize ~~Vidaroo's~~ our first stage online video platform as well as providing creative guidance to Mr. Morgan for the current platform’s marketing interface.

Ian McDaniel, age 3738, has served as ~~Chief Information~~ an Officer and Director since May 17, 2007.

Upon Mr. Argenti’s appointment as Chairman and CEO, Mr. McDaniel began serving as the President of ~~Vidaroo’s~~ our production services. Mr. McDaniel has served as a pioneering force in the Entertainment industry for nearly two decades, driven by his knowledge of advanced and emerging technologies that enable ‘off the hook' media production for the world's leading artists and broadcast media companies. Teamed with Mark Argenti, he co-founded Media Evolutions and has provided pre- and post-production design and editing expertise for numerous large-scale projects such as Justin Timberlake, Live from Memphis and Will Smith, Live in Concert. In addition, he has worked on shows for NBC, ABC, MTV, VH1, HBO, Showtime, Discovery Channel, History Channel and A&E.

Micheal Morgan, age 2425, has served as President and Chief Technology Officer since November 10, 2010. Prior to his appointment to President, Mr. Morgan acted as Chief Operating/Technology Officer and Director since August 14, 2009 and as VP of Development from October 2008 through the time of his appointment as an Officer and Director in 2009.

During his tenure, Mr. Morgan designed and developed ~~Vidaroo’s~~ our current online video platform. Mr. Morgan continues to serve as Director of Interactive at Magnify Agency, a creative and software development firm; co-founder and served as Vice President of ZEN3 from March 2007 to October 2008 and Vice President of Web Development at AdepTech, Inc., a technology services company from June 2004 to March 2007. During his career, he has architected systems for use in Nuclear Quality Control, Software-as-a-Service (SaaS), distributed HIPAA-based secure health care software, and e-commerce dataflow automation. He holds several industry certifications and is an active participant in industry-related and civic organizations. Mr. Morgan attended the University of Central Florida, where he focused his studies on Digital Interactive Systems.

Thomas J. Moreland, age 4445, has served as Chief Financial Officer since September 23, 2008.

Prior to joining ~~Vidaroo~~us, Mr. Moreland held several senior financial roles for public companies, including Vice President of Finance for Nasdaq-listed Priority HealthCare from January 2005 to July 2006 and AMEX-listed PainCare Holdings, Inc. from September 2006 to February 2008. In these capacities, he was largely responsible for strategic planning, operational performance and SEC reporting compliance. Additionally, he served as Controller and Chief Accounting Officer for Devereux, a national non-profit provider of behavioral health care services. He began his career working as an audit manager with international accounting firm Ernst & Young.

There are no family relationships ~~amongst~~between ~~the~~or amongst executive officers or directors ~~of the Entity~~.

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ITEM 11. EXECUTIVE COMPENSATION

This section describes the compensation program for our executive officers.

																		Change in pension value and nonqualified
																			Change in pension value and Nonqualified
Name and Principal position	~~Year ended June 30:~~	Year ended June 30:	~~Salary~~	Salary(1)		~~Bonus~~	Bonus		~~Stock awards~~	Stock awards		~~Option awards~~	Option awards		~~Non-equity incentive plan compensation~~	Non-equity incentive plan compensation		~~deferred comensation earnings~~	deferred compensation earnings		~~All other Compensation~~	All other Compensation		~~Total~~	Total
Mark E. Argenti	~~2011~~	2012		$~~78,333~~	93,750		-	-		~~51,834~~$	58,313		-$	30,901		-$	31,255		-	-		~~2,210~~$	2,121		~~132,377~~$	216,340
Chief Executive Officer	~~2010~~	2011		~~66,666~~	78,333		-	-		~~25,499~~	51,834		-	-		-	-		-	-		~~2,273~~	2,210		~~94,438~~	132,377
Thomas Moreland,	2011			120,000			-			-			-			-			-			4,193			124,193
Thomas Moreland		2012			120,000			-						30,901			-			-			4,315			155,216
Chief Financial Officer	~~2010~~	2011		~~102,379~~	120,000		-	-		~~180,000~~	-		~~120,984~~	-		-	-		-	-		~~4283~~	4,193		~~407,646~~	124,193
Ian McDaniel	~~2011~~	2012		~~78,333~~	93,750		-	-		~~23,709~~	26,673		-	30,901		-	31,255		-	-		~~7,039~~	6,755		~~109,081~~
Chief Information Officer	2010			66,666			-			11,664			-			-			-			7,208			85,538
Production President		2011			78,333			-			23,709			-			-			-			7,039			109,081
Micheal Morgan,	2011			98,750			-			-			275,627			-			-			2,210			375,587
Micheal Morgan		2012			114,375			-			-			30,901			-			-			2,121			147,397
President, Chief Technology Officer	~~2010~~	2011		~~83,183~~	98,750		-	-		~~360,000~~	-		~~392,318~~	275,627		-	-		-	-		~~2,273~~	2,210		~~837,774~~	375,587

17(1) Salary includes certain contractual payments foregone by the Officers that have been replaced by non-cash compensation in the form of Stock Options in the year ended June 30, 2012. The value of the forgone amounts included compensation for both the years ended June 30 2012 and 2011. Those values were $11,250 for Mark Argenti, $12,197 for Thomas Moreland, $11,250 for Ian McDaniel, and $14,063 for Micheal Morgan for the year ended June 30, 2012 as well as the year ended June 30, 2011.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth the number of and percent of ~~the~~our ~~Entity’s~~ common stock beneficially owned by:

·	all directors and nominees, naming them,
·	our executive officers,
·	our directors and executive officers as a group, without naming them, and
·	persons or groups known by us to own beneficially 5% or more of our Common Stock or our Preferred Stock having voting rights:

The percentages in the table have been calculated on the basis of treating as outstanding for a particular person, all shares of our capital stock outstanding on June 30, ~~2011~~2012, and all shares of our common stock issuable to that person in the event of the exercise of outstanding options and other derivative securities owned by that person which are exercisable within 60 days of June 30, ~~2011~~2012. Except as otherwise indicated, the persons listed below have sole voting and investment power with respect to all shares of our capital stock owned by them.

Name and address of owner	Title of Class	~~Capacity with Entity~~Title	Number of Shares Beneficially Owned (1)	Percentage of Class (2)
Mary Spio c/o Vidaroo Corporation, 8 N. Highland Ave Winter Garden, FL 34787	Common Stock	None(3)	12,~~159~~262,~~272~~987	169.28%
Mark Argenti c/o Vidaroo Corporation, 8 N. Highland Ave Winter Garden, FL 34787	Common Stock	Chief Executive Officer	1219,~~436~~331,~~140~~774	1615.65%
Ian McDaniel c/o Vidaroo Corporation, 8 N. Highland Ave Winter Garden, FL 34787	Common Stock	~~Chief~~Production ~~Information Officer~~President	1219,~~836~~493,~~656~~906	1715.26%
Micheal Morgan c/o Vidaroo Corporation, 8 N. Highland Ave Winter Garden, FL 34787	Common Stock	~~Chief~~President ~~Operating~~ and Chief Technology Officer	117,~~643~~455,~~328~~534	214.20%
Thomas Moreland c/o Vidaroo Corporation, 8 N. Highland Ave Winter Garden, FL 34787	Common Stock	Chief Financial Officer	18,~~155~~392,~~545~~708	16.57%
All Officers and Directors As a Group (5 persons)	Common Stock		31,790,815	39.9%
All Officers and Directors As a Group (4 persons)	Common Stock		64,673,923	51.7%

(1) This column represents the total number of votes each named stockholder is entitled to vote upon matters presented to the shareholders for a vote.

(2) Applicable percentage ownership is based on 6667,~~191~~437,~~185~~365 shares of Common Stock outstanding as of June 30, ~~2011~~2012, together with 57,576,418 securities exercisable or convertible into shares of Common Stock within 60 days of June 30, ~~2011~~2012, for each stockholder. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of Common Stock that are currently exercisable or exercisable within 60 days of June 30, ~~2011~~2012, are deemed to be beneficially owned by the person holding such securities for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.

18(3) Mary Spio was an Executive Officer from May 17, 2007 through July 23, 2010.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

The Entity has no independent directors and has had no transactions with related parties in excess of $120,000.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Principal Accountant	Year	~~Year~~	Amount billed	~~Amount billed~~
Patrick Rodgers, CPA, PA	2011	~~2010~~		19,500	~~19,500~~
		2011			19,500
	2012			19,500

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

The following documents are filed as a part of this report or incorporated herein by reference:

	(1)	Our Consolidated Financial Statements are listed on page F-1 of this Annual Report.
	(2)	Financial Statement Schedules:
		None
	(3)	Exhibits:

(3) Exhibits:

The following documents are included as exhibits to this Annual Report:

Exhibit Number	Description	~~Description~~
3.1	Articles of Incorporation of Vidaroo Corporation(1)	~~Articles of Incorporation of Vidaroo Corporation(1)~~
3.2	Articles of Incorporation of E360 LLC(1)	~~Articles of Incorporation of E360 LLC(1)~~
3.3	By-laws of Vidaroo(1)	~~By-laws of Vidaroo(1)~~
3.4	Articles of Incorporation of Media Evolutions, Inc.(4)	~~Articles of Incorporation of Media Evolutions, Inc.(4)~~
3.5	Amendment to Articles of Incorporation of Vidaroo Corporation(5)	~~Amendment to Articles of Incorporation of Vidaroo Corporation(5)~~
10.1	Employment Agreement by and between Vidaroo Corporation and Micheal Morgan dated August 14, 2009(2)	~~Employment Agreement by and between Vidaroo Corporation and Micheal Morgan dated August 14, 2009(2)~~
10.2	Mutual Termination of Employment Agreement by and between Vidaroo and Mary Spio dated July 23, 2010(3)	~~Mutual Termination of Employment Agreement by and between Vidaroo and Mary Spio dated July 23, 2010(3)~~
14.1		Code of Conduct (4)
10.3	Employment agreement amendment by and between Vidaroo Corporation and Mark Argenti dated May 16, 2012(6)
21.1		List of subsidiaries of the Entity (Filed herewith)
10.4	Employment agreement amendment by and between Vidaroo Corporation and Ian McDaniel dated May 16, 2012(6)
31.1		Certification by Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act (Filed herewith)
10.5	Employment agreement amendment by and between Vidaroo Corporation and Micheal Morgan dated May 16, 2012(6)
31.2		Certification by Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act (Filed herewith)
10.6	Employment agreement amendment by and between Vidaroo Corporation and Thomas Moreland dated May 16, 2012(6)
32.1		Certification by Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code (Filed herewith)
14.1	Code of Conduct (4)
32.2		Certification by Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code (Filed herewith)
21.1	List of subsidiaries of the Entity (Filed herewith)
31.1	Certification by Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act (Filed herewith)
31.2	Certification by Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act (Filed herewith)
32.1	Certification by Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code (Filed herewith)
32.2	Certification by Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code (Filed herewith)

EX-101.INS		XBRL Instance Document

EX-101.SCH		XBRL Taxonomy Extension Schema Document

EX-101.CAL		XBRL Taxonomy Extension Calculation Linkbase

EX-101.DEF		XBRL Taxonomy Extension Definition Linkbase

EX-101.LAB		XBRL Taxonomy Extension Labels Linkbase

EX-101.PRE		XBRL Taxonomy Extension Presentation Linkbase

(1) Incorporated by reference to the Entity’s registration statement on Form SB-2 filed with the Securities and Exchange Commission on December 7, 2007.

(2) Incorporated by reference to the Entity’s Form 8-K filed with the Securities and Exchange Commission on August 19, 2009.

(3) Incorporated by reference to the Entity’s Form 8-K filed with the Securities and Exchange Commission on July 28, 2010.

(4) Incorporated by reference to the Entity’s Form 10-K filed with the Securities and Exchange Commission on September, 28 2009.

(5) Incorporated by reference to the Entity’s Information Statement Pursuant to Section 14(c) of the Securities Exchange Act of 1934 filed with the Securities and Exchange Commission on August 4, 2011.

19(6) Incorporated by reference to the Entity’s Form 8-K filed with the Securities and Exchange Commission on May 21, 2012.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

		VIDAROO CORPORATION
September 28, 2011	By:	/s/ Mark Argenti
September 28, 2012	By:	/s/ Mark Argenti
		Mark Argenti
		Chief Executive Officer
		(Principal Executive Officer)
September 28, 2011	By:	/s/ Thomas Moreland
September 28, 2012	By:	/s/ Thomas Moreland
		Thomas Moreland
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Mark Argenti	Director, Chairman, and Chief Executive Officer	September 28, ~~2011~~2012
Mark Argenti	(Principal Executive Officer)
/s/ Thomas Moreland	Chief Financial Officer, Secretary and Treasurer	September 28, ~~2011~~2012
Thomas Moreland	(Principal Financial and Accounting Officer)
/s/ Ian McDaniel	Director, and ~~Chief~~Production ~~Information Officer~~President	September 28, ~~2011~~2012
Ian McDaniel
/s/ Micheal Morgan	Director, President and Chief Technology Officer	September 28, ~~2011~~2012
Micheal Morgan

2018

Table of Contents

VIDAROO CORPORATION AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE FISCAL YEARS ENDED JUNE 30, ~~2011~~2012 AND ~~2010~~2011

	Page
Report of Independent Registered Public Accountant		F-1
Consolidated Balance Sheets as of June 30, 2011 and 2010		F-2
Consolidated Balance Sheets as of June 30, 2012 and 2011		F-2
Consolidated Statements of Operations		F-3
Consolidated Statement of Shareholders’ Deficit		F-4
Consolidated Statements of Cash Flows		F-5
Notes to Consolidated Financial Statements		F-6

Table of Contents

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Management

Vidaroo Corporation

Winter Garden, Florida

I have audited the accompanying consolidated balance sheet of Vidaroo Corporation and Subsidiaries (the "Entity") as of June 30, ~~2011~~2012 and ~~2010~~2011 and the related consolidated statements of operations and retained earnings, shareholders’ deficit, and cash flows for the year then ended. These financial statements are the responsibility of the Entity’s management. My responsibility is to express an opinion on these financial statements based on my audit.

I conducted my audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Entity is not required to have, nor was I engaged to perform, an audit of its internal control over financial reporting. My audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Entity’s internal control over financial reporting. Accordingly, I express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion.

In my opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Vidaroo Corporation and Subsidiaries as of June 30, ~~2011~~2012 and ~~2010~~2011, and the results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Entity will continue as a going concern. As discussed in Note 12 to the financial statements, the Entity has suffered losses from operations and has cash needs in excess of its resources that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 12. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

	By:	/s/ Patrick Rodgers, CPA, PA
		Patrick Rodgers, CPA, PA
Orlando, Florida September 28, 2011
Orlando, Florida September 28, 2012

F-1

Table of Contents

VIDAROO CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

		June 30, 2011			June 30, 2010
	June 30, 2012			June 30, 2011
Assets
Current:
Cash and cash equivalents	$	7367,~~598~~911		$	873,~~509~~598
Accounts Receivable		89105,~~908~~876			7989,~~271~~908
Other Current Assets		95,~~565~~101			139,~~315~~565
Deferred financing costs		-			64,279
Total Current Assets		178,888			173,071
Total Current Assets		173,071			165,374
Furniture and Equipment:
Computer equipment		114,582			~~109~~114,~~295~~582
Office furniture and fixtures		14,252			14,252
		128,834			~~123~~128,~~547~~834
Less Accumulated depreciation		(84106,~~452~~711	)		(5884,~~565~~452	)
Net Furniture and Equipment		4422,~~382~~123			6444,~~982~~382
Intangibles, Net: Customer list		-			26,625
Other Assets – Deposits		4,872			665
Other Assets – Deposits		665			14,651
Total Assets	$	205,883		$	218,118
Total Assets	$	218,118		$	271,632
Liabilities and Stockholders' Deficit
Current Liabilities:
Accounts Payable	$	~~362~~534,~~355~~408		$	~~313~~362,~~967~~355
Accrued Salaries		~~246~~167,~~213~~060			~~118~~246,~~366~~213
Deferred revenue		8635,~~461~~099			4286,~~831~~461
Accrued Interest		~~183~~10,~~516~~433			66183,~~384~~516
Convertible secured promissory notes		454,731			590,000
Convertible secured promissory notes – Current portion		10,291			454,731
Promissory Notes and Notes payable		698,293			899,540
Promissory Notes and Notes payable – Current portion		16,000			698,293
Total Current Liabilities and Total Liabilities		2,031,569			2,031,088
Total Current Liabilities		773,291			2,031,569
Convertible secured promissory notes		66,690			-
Promissory Notes and Notes payable		38,121			-
Total Liabilities		878,102			2,031,569
Callable Preferred Stock, $0.001 par value; Callable at $0.10; Issued and Outstanding 33,778,173 shares at June 30, 2012 and 0 shares at June 30, 2011		515,325			-
Stockholders' (Deficit) Equity:
Common stock, $.001 par value; 100,000,000 shares authorized;
Common stock, $.001 par value; 200,000,000 shares authorized;
66,191,185 and 65,136,032 issued and outstanding at June 30, 2011 and 2010, respectively		66,191			65,137
67,437,365 and 66,191,185 issued and outstanding at June 30, 2012 and 2011, respectively		67,437			66,191
Additional paid in capital		6,~~443~~909,~~442~~490			56,~~992~~443,~~638~~442
Accumulated Deficit		(8,~~587~~176,~~957~~291	)		(8,~~082~~587,~~315~~957	)
Vidaroo Corporation and subsidiaries Stockholders’ (Deficit)		(21,~~078~~199,~~324~~364	)		(2,~~024~~078,~~540~~324	)
Noncontrolling Interest		~~264~~11,~~873~~820			~~265~~264,~~084~~873
Total Stockholders’ Deficit		(1,~~813~~187,~~451~~544	)		(1,~~759~~813,~~456)~~451	)
Total Liabilities and Stockholders’ Deficit	$	~~218~~205,~~118~~883		$	~~271~~218,~~632~~118

See accompanying notes to consolidated financial statements.

F-2

Table of Contents

VIDAROO CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

	12 Months Ended			12 Months Ended
	06/30/11			06/30/10
	06/30/12			06/30/11
REVENUES	$	1,~~665~~720,~~700~~564		$	1,~~312~~665,~~919~~700
Cost of Sales		(~~389~~438,~~294~~609	)		(~~351~~389,~~384~~294	)
Operating Margin		1,~~276~~281,~~406~~955			~~961~~1,~~535~~276,406
Selling, General and Administrative		1,~~493~~684,~~701~~017			1,~~804~~888,~~077~~559
Depreciation and Amortization		5222,~~513~~258			~~194~~52,~~078~~513
Stock based compensation		394,858			803,643
Total Operating expenses		1,706,275			1,941,072
Total Operating expenses		1,941,072			2,801,798
Operating Loss		(424,320	)		(664,666	)
Operating Loss		(664,666	)		(1,840,263	)
Interest expense		(189,262	)		(235,794	)
Interest expense		(235,794)			(638,127)
Nonoperating gains(losses):
Gain on adjustment to fair market value of outstanding indebtedness		394,607			-
Unrealized gain (loss) on adjustment to fair market value of financial instruments		(58,925	)		394,607
Net loss before Noncontrolling Interest		(505,853	)		(2,478,390	)
Realized gain on troubled debt restructuring		945,900			-
Noncontrolling Interest in Loss of Subsidiary		211			24,046
Realized gain on conversion of Noncontrolling interest		138,273			-
NET LOSS TO COMMON SHAREHOLDERS	$	(505,642	)	$	(2,454,344	)
Net income (loss) before Noncontrolling Interest		411,666			(505,853	)
BASIC AND DILUTED NET LOSS PER COMMON SHARE	$	(0.01	)	$	(0.04	)
Noncontrolling Interest in Loss of Subsidiary		-			211
WEIGHTED AVERAGE SHARES OUTSTANDING		65,896,815			62,090,864
NET INCOME (LOSS) TO COMMON SHAREHOLDERS	$	411,666		$	(505,642	)
BASIC AND DILUTED NET INCOME (LOSS) PER COMMON SHARE	$	0.01		$	(0.01	)
WEIGHTED AVERAGE SHARES OUTSTANDING		66,662,564			65,896,815

See accompanying notes to consolidated financial statements.

F-3

Table of Contents

VIDAROO CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF SHAREHOLDERS' DEFICIT/EQUITY

(UNAUDITED)

	Class A				Additional
	Common Stock				Paid-In		Accumulated			Noncontrolling
	Shares		Amount		Capital		Deficit			Interest			Total
Balance at June 30, 2009		58,175,191	$	58,175	$	4,395,036	$	(5,627,971	)	$	289,130		$	(885,630	)
Balance at June 30, 2010		65,136,032	$	65,137	$	5,992,638	$	(8,082,315	)	$	265,084		$	(1,759,456)
Common Stock and related Warrants issued under Subscription Agreement		900,000		900		179,100		-			-			180,000
Stock Based Compensation for Employees		2,434,465		2,435		885,360		-			-			887,795
Common Stock Issued for Options Exercised		3,029,038		3,029		146,114		-			-			149,143
Common Stock issued for Professional Services		539,338		540		378,154		-			-			378,694
Common Stock Issued for Extension of debt maturity		58,000		58		8,874		-			-			8,932
Net loss attributable to Noncontrolling interest		-		-		-		-			(24,046	)		(24,046	)
Net Loss		-		-		-		(2,454,344	)		-			(2,454,344	)
Balance at June 30, 2010		65,136,032		65,137		5,992,638		(8,082,315	)		265,084			(1,759,456
Stock Based Compensation for Employees		430,153		429		394,429		-			-			394,858
Common Stock issued for Professional Services		625,000		625		56,375		-			-			57,000
Net loss attributable to Noncontrolling interest		-		-		-			-		(211	)		(211	)
Net Loss		-		-		-		(505,642	)		-			(505,642	)
Balance at June 30, 2011		66,191,185	$	66,191	$	6,443,442	$	(8,587,957	)	$	264,873		$	(1,813,451)
Stock Based Compensation for Employees		346,180		346		356,867		-			-			357,213
Stock based compensation issued for Professional Services		-		-		17,295		-			-			17,295
Stock based Compensation issued relative to debt conversion		-		-		76,586		-			-			76,586
Shares issued for Noncontrolling interest		900,000		900		15,300		-			(16,200)			-
Realized gain on acquisition of Noncontrolling interest		-		-		-		-			(138,273	)		(138,273)
Unrealized gain on fair value adjustment to Noncontrolling interest		-		-		-			-		(98,580	)		(98,580	)
Net Loss		-		-		-		411,666			-			411,666
Balance at June 30, 2012		67,437,365	$	67,437	$	6,909,490	$	(8,176,291	)	$	11,820		$	(1,187,544)

See accompanying notes to consolidated financial statements.

F-4

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VIDAROO CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

	12 Months Ended			12 Months Ended
	06/30/11			06/30/10
	06/30/12			06/30/11
Cash Flows from Operating Activities:
Net loss	$	(505,642	)	$	(2,454,344	)
Net income (loss)	$	411,666		$	(505,642	)
Adjustments to reconcile net loss to net cash used
Adjustments to reconcile net income (loss) to net cash provided
by operating activities:
Depreciation		2522,~~887~~259			2225,~~265~~887
Amortization		~~26,625~~-			~~171~~26,~~813~~625
Amortization of deferred financing costs		~~64,279~~-			~~108~~64,~~452~~279
Officer salary forgiveness		2217,~~309~~160			2722,~~456~~309
Accretion of interest expense		-			342,479
Stock-based compensation and common stock issued for services to
Nonemployees		5717,~~000~~295			~~343~~57,~~155~~000
Stock-based compensation		~~394~~357,~~858~~213			~~803~~394,~~644~~858
Gain on adjustment to Fair market value of outstanding indebtedness		(394,607	)		-
Loss (Gain) on adjustment to Fair market value of financial instruments		58,925			(394,607 )
Noncontrolling interest in loss of subsidiary		(211	)		(24,046	)
Realized gain on troubled debt restructuring		(945,900)			-
Realized gain on conversion of Noncontrolling interest		(138,273)			-
Noncontrolling interest in loss of subsidiary		-			(211	)
Net changes in:
Other current assets		34,~~750~~464			(53,~~308~~750	)
Accrued Salaries		~~105~~(96,~~538~~313)			(3105,~~358~~538	)
Accounts receivable		(1015,~~637~~968	)		(2010,~~695~~637	)
Accounts payable and accrued expenses		62172,~~066~~053			~~(55~~62,~~711~~066	)
Accrued interest		~~171~~187,~~723~~731			44171,~~935~~723
Deferred revenue		43(51,~~630~~362)			1443,~~231~~630
Net Cash Used By Operating Activities		66,568			(685,032	)
Net Cash Provided By Operating Activities		950			66,568
Cash Flows from Investing Activities:
Decrease in deposits		~~308~~(4,207)			~~1,551~~308
Purchase of furniture and equipment		~~(5,287~~-	)		(125,~~577~~287	)
Net Cash Used By Investing Activities		(4,~~979~~207	)		(114,~~026~~979	)
Cash Flows from Financing Activities:
Proceeds from common stock issuance		-			272,949
Proceeds from issuance of promissory notes		-			5,000
Proceeds from issuance of promissory notes		5,000			538,000
Repayments of notes payable		(2,430	)		(1,500	)
Incurrence of deferred financing costs		-			(53,800	)
Net Cash (Used In) Provided By Financing Activities		(2,430)			3,500
Repayments of notes payable		(1,500	)		(52,983	)
Net (Decrease) Increase in Cash and Cash Equivalents		(5,687)			65,089
Net Cash Provided By Financing Activities		3,500			704,166
Cash and Cash Equivalents, Beginning		73,598			8,509
Net Increase (Decrease) in Cash and Cash Equivalents		65,089			8,108
Cash and Cash Equivalents, Ending	$	67,911		$	73,598
Cash and Cash Equivalents, Beginning		8,509			401
Cash and Cash Equivalents, Ending	$	73,598		$	8,509
Supplemental cash flow information:
Non-cash operating activities
Common Stock issued for provision of professional services	$	57,000		$	343,155
Stock base compensation incurred for provision of professional services	$	17,295		$	57,000
Gain on adjustment to Fair market value of outstanding indebtedness		394,607			-
Non-cash operating and investing activities Deposits forfeited for early lease termination		-			13,568
Non-cash operating and investing activities Deposits forfeited for early lease termination		13,568			-
Non-cash operating and financing activities:
Forgiveness of accounts payable and accrued salary in exchange for Common Stock and the exercise of options		-			155,345
Forgiveness of accrued salary in exchange for Options to purchase Common Stock		97,582			-
Non-cash investing and financing activities:
Other: Interest Paid		1,530			19,746
Common Stock issued for Deferred Financing Costs		-			29,471
Other: Interest Paid		19,746			142,261

See accompanying notes to consolidated financial statements.

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Table of Contents

NOTE 1. ORGANIZATION AND NATURE OF BUSINESS

The accompanying financial statements include Vidaroo Corporation (“Vidaroo” or the “Entity”) and its consolidated subsidiaries,: E360, LLC (“E360”); ~~and~~ Media Evolutions, Inc., d/b/a Vidaroo Productions (“MEV”); Vidaroo Licensing, LLC; Vidaroo Intellectual Property, Inc.; Vidaroo Support Services, LLC. Vidaroo was formed in May 2007 as a Nevada Corporation and was named Gen2Media until April 26, 2010. Vidaroo has a majority ownership interest in E360. Vidaroo has a management agreement with MEV that provides Vidaroo with control of MEV’s operations.

Vidaroo is a video technology company. Vidaroo has developed an online video platform (OVP) that is licensed under a Software-as-a-Service model. Vidaroo also provides video production services that are performed for clients either on location or in Vidaroo’s professional production studio.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Consolidation

The accompanying consolidated financial statements include the accounts and transactions of Vidaroo and its ~~subsidiary~~subsidiaries E360, MEV, asVidaroo ~~well~~Licensing, asLLC, ~~MEV~~Vidaroo Intellectual Property, Inc., and Vidaroo Support Services, LLC. Vidaroo has a 98% and 95% interest in E360, ~~which~~as of June 30, 2012 and 2011, respectively. Ownership was acquired by Vidaroo in a stock exchange. MEV is controlled by Vidaroo pursuant to a management agreement between the two companies ~~effective July 14, 2008~~. ~~The consolidation of MEV was treated as a purchase in the year ended June 30, 2009.~~ All significant ~~intra~~inter-entity accounts and transactions are eliminated in consolidation.

Use of Estimates

Preparing financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities as of the dates presented and the reported amounts of revenues and expenses during the reporting periods presented. Significant estimates inherent in the preparation of the accompanying consolidated financial statements include estimates of revenues and related receivables expected to be collected, valuations of intangible assets and stock-based compensation. Estimates are based on past experience and other considerations reasonable under the circumstances. Actual results may differ from these estimates.

Reclassifications

Certain reclassifications have been made to the prior year balances to conform to the current year presentation.

Revenue Recognition

Revenue is generated from monthly subscription fees from subscribers to the OVP. Revenue is recognized ratably over the contract period for each subscriber. Revenue is also generated from services rendered in connection with the production of video content. Revenue is recognized when services are rendered and has been delivered in accordance with the terms of the agreement provided that the collection of the associated receivable is reasonably assured and there are no remaining significant obligations.

Website Platform

Website platform includes capitalized costs incurred during the application and infrastructure development stage. Development of the website was completed in July 2007 and has been placed in service. Website platform has an estimated useful life of 3 years and is being amortized over 36 months on a straight-time basis. The website was fully amortized as of June 30, 2010.

Long-Lived Assets

The Company evaluates the recoverability of its long−lived assets, including intangibles, for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. If such review indicates that the carrying amount of long−lived assets is not recoverable, the carrying amount of such assets is reduced to fair value. No impairment charges were incurred during the years ended June 30, ~~2011~~2012 and ~~2010~~2011.

Computer equipment and Office furniture and fixtures are recorded at cost depreciated on a straight -line basis over their expected useful lives of 5 and 7 years, respectively.

F-6

Table of Contents

Noncontrolling Interest

Vidaroo has a 9598% ownership interest in E360. Noncontrolling interest represents the portion of E360 not owned by Vidaroo. At June 30, 2011, Vidaroo had a 95% ownership interest in E360 and acquired the additional 3% through the issuance of Vidaroo stock during the year ended June 30, 2012.

Stock-Based Compensation

The Entity provides stock based compensation to both its employees and vendors under certain circumstances. The Entity is required to measure the cost of employee service received in exchange for an award of equity instruments, including stock options, based on the grant-date fair value of the award and to recognize it as compensation expense over the period the employee is required to provide service in exchange for the award, usually the vesting period.

Income Taxes

Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes resulting from temporary differences less estimated valuation allowances. Such temporary differences result from differences in the carrying value of assets and liabilities for tax and financial reporting purposes. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to realized. Income tax expense is the tax payable or refundable for the period plus or minus change during the period in deferred tax assets and liabilities and valuation allowances.

Deferred Financing Costs

The Entity recognized deferred financing costs in connection with its Promissory Notes and Convertible Secured Promissory Notes. These costs will be amortized over the term of the debt and represent fees paid to a placement agent in connection with the issuance of this debt.

Earnings per Common share

Basic earnings per common share excludes potentially dilutive securities and is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Fully diluted earnings per share is equivalent to basic earnings per share for the years ended June 30, ~~2011~~2012 and ~~2010~~2011, as the impact of including those shares would be anti-dilutive. For the years ended June 30, ~~2011~~2012 and ~~2010~~2011 the Entity had 1964,~~626~~249,~~374~~288 and 919,~~790~~626,~~875~~374 potentially dilutive common shares, respectively.

Financial Instruments

The entity reports its financial and non-financial assets and liabilities that are re-measured and reported at fair value at each reporting period. Three levels of inputs may be used to measure fair value:

	●	Level 1 - Active market provides quoted prices for identical assets or liabilities;
	●	Level 2 - Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable with market data; and
	●	Level 3 - Unobservable inputs that are supported by little or no market activity, therefore requiring an entity to develop its own assumptions about the assumption that market participants would use in pricing.

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of June 30, ~~2011~~2012. The Entity uses the market approach to measure fair value for its Level 1 financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial statements which include cash, trade receivables, borrowings, related party notes payable, accounts payable and accrued liabilities are valued using Level 1 inputs and are immediately available without market risk to principal. Fair values were assumed to approximate carrying values for these financial instruments since they are short term in nature and their carrying amounts approximate fair values or they are receivable or payable on demand.

~~F-7~~Research and Development

Based on the nature of the Entity’s software development methodology, costs incurred are considered to be connected with the establishment of technological feasibility in accordance with ASC 985-20-25 “Costs of Software to Be Sold, Leased or Marketed”. Research and Development costs incurred during the years ended June 30, 2012 and 2011 were $273,000 and $320,000, respectively.

NOTE 3. RECENT ACCOUNTING STANDARDS

InOn ~~January~~June ~~2010~~16, 2011, the FASB issued ~~Accounting~~ASU ~~Standards~~No. ~~Update 2010~~2011-0605, “~~Fair~~Presentation ~~Value~~of ~~Measurements~~Comprehensive ~~and~~Income ~~Disclosures~~ (Topic ~~820~~220),” -which ~~Improving~~requires ~~Disclosures~~companies ~~about~~to ~~Fair~~report ~~Value~~total ~~Measurements”~~net ~~(ASU 2010-06)~~income, toeach ~~require~~component ~~new~~of ~~disclosures~~comprehensive ~~related~~income, ~~to transfers into~~ and ~~out~~total ofcomprehensive ~~Levels~~income 1on ~~and~~the 2face of the ~~fair~~income ~~value~~statement, ~~hierarchy~~or ~~and~~as ~~additional~~two ~~disclosure~~consecutive ~~requirements related to Level 3 measurements~~statements. The ~~guidance~~components ~~also~~of ~~clarifies~~comprehensive ~~existing~~income ~~fair~~will ~~value~~not ~~measurement~~be ~~disclosures~~changed, ~~about~~nor does the ~~level~~ASU ofaffect ~~disaggregation~~how ~~and~~earnings ~~about~~per ~~inputs~~share ~~and~~is ~~valuation~~calculated ~~techniques~~or ~~used to measure fair value~~reported. ~~The~~ ~~additional~~These ~~disclosure~~amendments ~~requirements~~will ~~are~~be ~~effective~~reported ~~for~~retrospectively ~~the~~upon ~~first~~adoption. ~~reporting~~The ~~period~~adoption ~~beginning~~of ~~after~~the ~~December~~ASU ~~15,~~will ~~2009,~~be ~~except~~required for the ~~additional~~Company’s ~~disclosure~~March ~~requirements related to Level 3 measurements~~31, ~~which~~2012 ~~are~~Form ~~effective~~10-Q ~~for fiscal years beginning after December 15~~filing, ~~2010. The~~and ~~adoption of the additional requirements~~ is not expected to have ~~any~~a ~~financial~~material impact on the Company~~’s consolidated financial statements~~.

In ~~April~~May ~~2010~~2011, the FASB issued ASU No. 2010-13, “Compensation - Stock Compensation (Topic 718): Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades,” which addresses the classification of a share-based payment award with an ~~exercise~~accounting ~~price~~standard ~~denominated~~update ~~in the currency of a market in~~ which ~~the~~works ~~underlying equity security trades. Topic 718 is amended~~ to ~~clarify~~achieve ~~that~~common afair ~~share-based~~value ~~payment~~measurement ~~award~~and ~~with~~disclosure anrequirements ~~exercise price denominated~~ in ~~the~~GAAP ~~currency~~and ofInternational aFinancial ~~market~~Reporting inStandards. ~~which~~The aupdate ~~substantial~~both ~~portion~~clarifies of the ~~entity~~FASB’s ~~equity~~intent ~~securities~~about ~~trades~~the ~~shall~~application ~~not~~of beexisting ~~considered~~fair tovalue ~~contain a market~~guidance, ~~performance,~~and oralso ~~service~~changes ~~condition.~~certain ~~Therefore,~~principles ~~such~~regarding anmeasurement ~~award~~and ~~is not to be classified as a liability if it otherwise qualifies as equity classification~~disclosure. The ~~amendments in this~~ update ~~should~~is beeffective ~~applied~~prospectively byand ~~recording~~is aeffective ~~cumulative-effect adjustment to the opening balance of retained earnings. The cumulative-effect adjustment should be calculated~~ for ~~all~~annual ~~awards~~periods ~~outstanding as of the~~ beginning ofafter ~~the~~December ~~fiscal year in which the amendments are initially applied~~15, ~~as if the amendments had been applied consistently since the inception of the award~~2011. ~~ASU~~Early ~~No.~~application ~~2010-13~~ is ~~effective~~permitted for interim ~~and annual~~ periods beginning ~~on or~~ after December 15, ~~2010~~2011. ~~and~~The Company is ~~not~~currently ~~expected~~evaluating tothe ~~have~~effect ~~a material impact on~~ the ~~Company’s~~update ~~consolidated~~will ~~financial~~have ~~position or results of operations. The Entity adopted the pronouncement~~ on ~~January~~its ~~1, 2011 resulting in no impact to the Company’s~~ consolidated financial statements.

In ~~December~~January 2010, the FASB issued ~~ASC~~an ~~ASU~~accounting ~~2010-28,~~standard ~~“When~~update toon ~~Perform~~fair ~~Step~~value 2measurements ofand ~~the~~disclosures. ~~Goodwill~~The ~~Impairment~~update ~~Test~~requires ~~for~~more ~~Reporting~~robust ~~Units~~disclosures ~~with~~about ~~Zero~~(1) orthe ~~Negative~~different ~~Carrying~~classes ~~Amounts~~of ~~(Topic~~assets ~~350)~~and —liabilities ~~Intangibles~~measured —at ~~Goodwill~~fair ~~and~~value, ~~Other.”~~(2) ~~ASU~~the ~~2010-28~~valuation ~~amends~~techniques ~~the~~and ~~criteria~~inputs ~~for~~used, ~~performing~~(3) ~~Step~~the 2activity ofin ~~the~~Level ~~goodwill~~3 ~~impairment~~fair ~~test~~value ~~for~~measurements, ~~reporting~~and ~~units~~(4) ~~with~~the ~~zero~~transfers orbetween ~~negative~~Levels ~~carrying~~1, ~~amounts~~2, and ~~requires~~3. ~~performing~~The ~~Step~~new 2,disclosures ifand ~~qualitative~~clarifications ~~factors~~of ~~indicate~~existing ~~that~~disclosures itare iseffective ~~more~~for ~~likely~~interim ~~than~~and ~~not~~annual ~~that~~reporting ~~goodwill~~periods ~~impairment~~beginning ~~exists.~~after ~~The~~December ~~amendments~~15, to2009; ~~this~~except ~~update~~for ~~are~~the ~~effective~~disclosures ~~for~~about uspurchases, sales, issuances, and settlements in the ~~first~~roll ~~quarter~~forward of ~~2011.~~activity ~~Any~~in ~~impairment~~Level to3 befair ~~recorded~~value ~~upon~~measurements. ~~adoption~~Those ~~will~~disclosures beare ~~recognized~~effective asfor anfiscal ~~adjustment~~years tobeginning ~~our~~after ~~beginning~~December ~~retained~~15, ~~earnings.~~2010, ~~The~~and ~~Entity~~for ~~adopted~~interim ~~the~~periods ~~pronouncement~~within onthose ~~January~~fiscal 1,years. ~~2011~~The ~~resulting~~adoption inof nothis ~~impact~~update todid not have an effect on the Company’s consolidated financial statements.

~~NOTE 4. ACQUISITION~~F-7

OnTable ~~July 14, 2008, Vidaroo entered in a management agreement with MEV. MEV provides production services to some~~ of the largest names in the entertainment business. The terms of the agreement require Vidaroo to manage all the business and financial operations of MEV. In exchange for these services Vidaroo shall receive all revenues, profits and cash flows generated by MEV and shall pay all bills and obligations of MEV. Based on these terms, Vidaroo has control of MEV and therefore has treated this transaction as a purchase in the year ended June 30, 2009.Contents

~~The~~NOTE ~~acquisition has been accounted for as a purchase of MEV and accordingly, the consolidated statements of operations include the results of MEV since the date of acquisition, July 14, 2008~~4. ~~The~~RELATED ~~excess~~PARTY ~~of the purchase price over the fair value of acquired assets and liabilities assumed is allocated to an intangible asset related to MEV's customer lists.~~TRANSACTIONS

~~The statement~~During ofthe ~~operations~~year ~~includes~~ended ~~revenues~~June 30, 2012, the Entity and ~~earnings~~its ~~incurred~~Officers ~~after~~agreed ~~the~~to ~~date~~convert ofits ~~acquisition,~~outstanding ~~July~~accrued ~~14,~~payroll ~~2008.~~obligations Oninto anOptions ~~unaudited~~to ~~proforma~~purchase ~~basis~~Common Stock. The Entity awarded 18,193,775 ~~had~~Options ~~the~~to ~~acquisition~~purchase ~~occurred~~its onCommon ~~July~~Stock 1,exercisable ~~2008,~~at ~~the~~$0.05 ~~results~~in return for ~~the~~forgiveness ~~periods~~of ~~presented~~its ~~would~~outstanding ~~have~~payroll ~~been~~obligation ~~identical~~of $97,582. The number of Options to ~~those~~purchase ~~presented~~Common in ~~these~~return ~~financial~~for ~~statements~~forgiveness asof ~~there~~the ~~were~~payroll noobligation ~~transactions~~was ~~between~~done ~~July~~at 1fair ~~and~~value ~~July~~as ~~14,~~determined ~~2008.~~by using the Black-Scholes valuation methodology

~~There~~As ~~was~~of noJune ~~cash~~30, ~~consideration~~2012, ~~paid~~the ~~for~~Entity ~~this~~has ~~acquisition.~~an ~~The~~outstanding ~~purchase~~obligation ~~price~~to ofMark ~~$79,870~~Argenti ~~was~~and ~~determined~~Ian byMcDaniel ~~taking the difference between MEV's assets~~ of $831,~~966~~255 and ~~its debt of~~ $8831,~~836~~255, asrespectively offor ~~the~~incentive ~~date~~compensation ofunder ~~the~~each ~~acquisition~~individual’s employment contract.

~~F-8~~NOTE 5. DEBT

~~NOTE~~Notes ~~5. RELATED PARTY TRANSACTIONS~~Payable

~~Subsequent~~In toconnection ~~her~~with ~~departure~~the asmanagement anagreement ~~officer~~entered ofinto with MEV, Vidaroo became obligated for the ~~Entity~~repayment inof ~~July,~~certain ~~2010,~~notes ~~Ms.~~payable ~~Mary~~outstanding ~~Spio~~at ~~became~~the antime ~~independent~~of ~~affiliate~~the initiation of the ~~Entity~~management agreement. ~~This~~ These ~~designation~~notes ~~provides~~were ~~her~~guaranteed ~~the~~by ~~ability~~Mark toArgenti ~~represent~~and ~~the~~Ian ~~Entity~~McDaniel inalong with a ~~sales~~third ~~capacity~~party obligor . During June, 2010 the third party obligor exercised his right as guarantor on these loans and satisfied the original obligation. During the year ended June 30, ~~2011~~2012, MsVidaroo agreed to interest and repayment terms with the obligor. This ~~Spio~~Note ~~earned~~Payable now carries interest at 12% and will begin a repayment schedule commencing on April 1, 2013 and carry equal monthly payments of $42,~~844~~000 inuntil ~~sales~~satisfaction ~~commissions~~of inthe ~~this~~both ~~capacity.~~the principal and interest

~~NOTE~~Convertible ~~6. NOTES~~Secured ~~PAYABLE~~Promissory Notes Payable

In connection with the management agreement entered into with MEV, Vidaroo became obligated for the repayment of certain notes payable currently outstanding. These notes originally consisted of a term loan and a line of credit. The notes are secured by a personal guarantee from Richard Brock, Ian McDaniel and Mark Argenti. The term loan originated on September 20, 2005 with a face value of $100,000 and requires monthly payments of principal and interest over a five year period maturing on September 20, 2010 and bears interest at 6.75%. On June 30, 2009, MEV agreed to convert the outstanding balance on the line of credit to a term loan and repay it over a 15 month period maturing on September 20, 2010 with an interest rate of 6.5%. During June, 2010 Richard Brock exercised his right as guarantor on these loans and satisfied the obligation to the bank. This loan is currently a demand obligation due to Richard Brock. There was $40,040 outstanding at June 30, 2011 on this obligation.

NOTE 7. CONVERTIBLE SECURED PROMISSORY NOTES

During the year ended June 30, 2009 the Entity issued debt instruments in the form of promissory notes with a face value of $600,000 (the “Notes”). The Notes carry interest at 12% and are due and payable in full at the earlier of either minimum equity financing of $1 million or one year. Interest can be received monthly or accrued and paid at maturity at the option of the holder. The Notes are secured by all assets of the Entity.

The holders of the Notes have the option, but not the obligation, to convert the outstanding principal into common stock at any time under any of the following terms: A conversion price of $0.25 per share; a conversion price of 30% less than price per share obtained in the next round of financing completed by the Entity; a conversion price of 30% less than the price per share paid in the event of a sale of the Entity, or $0.13 per share in the event the Entity does not raise a minimum of $1 million in additional financing within one year of issuance.

The notes contain warrants to purchase shares valued at 20% of the face value of the note assuming a stock value of $0.25 per share and an exercise price of $0.001 per share. If the value of common stock at the time of conversion is less than $0.25, the payee shall receive additional warrants to bring the total value of warrants issued under this program to be equal to 20% of the face value of the Note. The Notes also included a beneficial conversion feature as the obligations can convert into equity for an exercise price less than the share price at the time of issuance at the option of the holder. Based on these features, the proceeds from debt were split between the value of the warrants and the debt. Further, the debt obligation must have value assigned to the beneficial conversion feature. These valuations cause the proceeds from these notes to be allocated to additional paid capital with $248,953 assigned to the value of the warrants and the remaining $351,047 assigned to the beneficial conversion feature. The face value of the debt will be accreted to interest expense over the 1-year term of the debt. During the year ended June 30, 2011 and 2010, $0 and $342,479, respectively, was accreted to interest.

During the year ended June 30, 2010, the Entity and the holders of the Notes agreed to extend the terms of repayment for these notes. The notes were either extended through August 1, 2010, March 31, or June 30, 2011. Under the terms of the extensions, the holders were provided with additional consideration. Those Note holders that extended through August were provided with additional shares of Common Stock and those that extended through 2011 received an increase in the interest rate from 12% to 13%. ~~Of the $590,000 outstanding as of June 30, 2011, $290,000, $95,000 and $205,000 matured on August 1, 2010, March 31 and June 30, 2011, respectively.~~

As of June 30, 2011, the Entity ~~has~~ defaulted on its obligation to pay interest and repay principal on these Notes. ~~The Entity is currently in negotiation with the Note holders to restructure this obligation.~~

~~NOTE~~During 8the year ended June 30, 2012, Vidaroo and the holders of the Convertible Secured Promissory Notes came to agreement to restructure the terms of the Notes. ~~PROMISSORY~~ Of ~~NOTES~~the $590,000 outstanding, holders of $390,000 of the Notes agreed to accept 10,499,922 shares of preferred stock plus 3,658,549 warrants to purchase Common Stock of Vidaroo at an exercise price of $0.10 in exchange for $290,000 outstanding plus accrued interest.

~~During~~Also during the ~~years~~year ended June 30, ~~2011~~2012, ~~and 2010~~ the ~~Entity~~holders ~~issued debt instruments in the form~~ of ~~promissory notes with a face value of~~ $~~538~~200,000 ~~and~~of ~~$331,500,~~the ~~respectively~~Convertible ~~(the~~Secured “Promissory Notes”) ~~and~~agreed ~~bear~~to ~~interest~~a atrepayment ~~12%.~~schedule ~~These~~starting ~~Promissory Notes were issued~~ in ~~two traunches. Traunch I had an original face value of $231~~April,~~500~~ ~~and~~2013 ~~was due~~ and ~~payable one year from issuance. Traunch I was issued during~~ the ~~fourth~~conversion ~~quarter~~ of ~~the~~accrued ~~year~~interest ~~ended~~into ~~June 30~~1,837,920 ~~2009~~shares ~~and~~of ~~therefore~~preferred ~~was~~stock ~~originally~~and ~~due during the quarter ending June 30~~640,397 ~~2010. Traunch~~warrants IIto ~~has~~purchase ashares ~~face value~~ of ~~$638,000~~common ~~and~~stock ~~was~~at ~~originally~~an ~~due~~exercise ~~and~~price ~~payable~~of ~~on December 31, 2010~~$0. ~~Interest is paid monthly~~10.

During the year ended June 30, 2010, the Entity and the Note holders agreed to extend the maturity dates on $531,500 of the Notes. In consideration for the extension of terms the Entity agreed to increase the rate of interest on the Notes to 13%. Of the $863,000 still outstanding on the Notes, $326,500, $217,000, and 319,500 were due on December 31, 2010, March 31 and June 30, 2011, respectively.F-8

AsTable of June 30, 2011, the Entity has defaulted on its obligation to pay interest and repay principal on these Notes. The Entity is currently in negotiation with the Note holders to restructure this obligation.Contents

Promissory Notes Payable

During the years ended June 30, 2011 and 2010 the Entity issued debt instruments in the form of promissory notes with a face value of $538,000 and $331,500, respectively (the “Promissory Notes”) and bear interest at 12%. These Promissory Notes were issued in two traunches. Traunch I had an original face value of $231,500 and was due and payable one year from issuance. Traunch I was issued during the fourth quarter of the year ended June 30, 2009 and therefore was originally due during the quarter ending June 30, 2010. Traunch II has a face value of $638,000 and was originally due and payable on December 31, 2010. Monthly interest payments were required.

During the year ended June 30, 2011, the Entity defaulted on its obligation to pay interest and repay principal on these Notes.

During the year ended June 30, 2012, the Entity negotiated with the holders of these notes to restructure the terms of the obligation. The Entity and certain holders of the Notes agreed to convert $760,000 of the $863,570 still outstanding plus the related accrued interest into 19,782,796 shares of Preferred Stock and 6,893,034 warrants to purchase its Common Stock exercisable at $0.10 as of June 30, 2012. Subsequent to June 30, the Entity finalized agreements with holders of an additional $65,000 of the obligation plus accrued interest into 1,650,693 shares of Preferred Stock and 575,161 warrants to purchase its Common also exercisable at $0.10.

The remaining balance of $34,000 was unable to be negotiated shall remain a short-term obligation of Vidaroo.

NOTE 6. FAIR VALUE MEASUREMENTS

The Notes Payable, Convertible Secured Promissory Notes and Promissory Notes are stated at fair value. Fair value is as follows:

	Face value		Adjustment to face value			Fair value as of June 30, 2012

Promissory Notes and Notes Payable	$	140,610	$	(86,489	)	$	54,121
Convertible Secured Promissory Notes Payable		200,000		(123,019	)		76,981
Accrued interest		38,028		(27,595	)		10,433
Total	$	378,638	$	(237,103	)	$	141,535

The Level 3 inputs used include the number of shares offered to the holders of the Notes along with fair value of the Company’s Common Stock for those Note holders that converted these debt instruments into Equity during the year ended June 30, 2012. During the years ended June 30, 2012 and 2011, the Entity recorded an unrealized (loss) gain of $(157,504) and $394,607, respectively. This gain had the effect of increasing the unrealized gain at June 30, 2011 of $394,607 to the $237,103 reported as of June 30, 2012.

Noncontrolling interest is also stated at fair value. Fair value is as follows:

		Face value				Adjustment to face value				Fair value as of June 30, 2012
Noncontrolling interest		$	110,400			$	(98,580	)		$	11,820

The Level 3 inputs used include the number of shares being offered to the holders of the Noncontrolling interest along with fair value of the Company’s Common Stock. During the years ended June 30, 2012 and 2011, the Entity recorded an unrealized gain of $98,580 and $0, respectively.

F-9

~~NOTE~~Table ~~9. CAPITAL~~of ~~STOCK~~Contents

~~The~~NOTE ~~Entity’s authorized capital stock consists of 100,000,000 shares of common stock with a par value of $0~~7.~~001. 66,191,185 shares were outstanding as of June 30, 2011.~~ ~~Subsequent~~COMMON to June 30, 2011, the Entity approved the expansion of its authorized shares. Subsequent to this revision the Entity’s authorized capital stock consists of 200,000,000 shares of Common Stock and 100,000,000 shares of Preferred Stock both with par value of $0.001.STOCK

InThe ~~connection~~Entity’s ~~with~~authorized ~~the~~common ~~acquisition~~stock ~~discussed~~consists inof ~~Note 1~~200,000,000 ~~three~~shares ~~founders~~ of ~~the~~common ~~Entity~~stock ~~received~~with a ~~total~~par value of 32$0.001. 67,~~499~~437,~~999~~365 shares ofwere ~~Class~~outstanding Aas ~~common~~of ~~stock~~June in30, ~~Vidaroo~~2012. During inthe ~~exchange~~year ~~for~~ended ~~their~~June ~~95%~~30, (92012,~~500~~ ~~member~~the ~~units)~~Entity ~~ownership~~increased ~~interest in E360. The shares are restricted until and unless~~ the ~~registration~~number of ~~said~~authorized shares ~~for~~from ~~resale~~100,000,000 ~~becomes effective and may not be sold without registration under the Securities Act or pursuant~~ to ~~an exemption from registration~~200,000,000.

During the year ended June 30, 2012, the Entity issued a total of 1,246,180 shares of Common Stock. 346,180 shares were issued for stock based compensation valued at $56,648; and 900,000 were issued for the conversion of 3% of the minority interest in E360 for consideration valued at $16,200.

~~During~~NOTE ~~the year ended June 30, 2010, the Entity issued a total of 6,960,841 shares of common stock~~8. ~~3,029,038~~CALLABLE ~~shares~~PREFERRED were issued in satisfaction of options and warrants exercised, for consideration of $149,143; 2,434,465 were issued as Stock based compensation for employees valued at $887,795; 900,000 were issued directly to investors for consideration of $180,000; 539,338 were issued for professional services for consideration valued at $378,694; and 58,000 valued at $8,932 were issued in conjunction with the extension of the terms of Convertible Promissory Notes Payable.STOCK

~~NOTE~~During ~~10.~~the ~~STOCK~~year ~~BASED~~ended ~~COMPENSATION~~June 30, 2012, the Entity amended its Articles of Incorporation to authorize the creation and issuance of 100,000,000 shares of “blank check” preferred stock (“Preferred Stock”) with a par value of $0.001.

Pursuant to authorization of the class of Preferred Stock the Entity issued 33,778,173 shares of Preferred Stock. These shares carry an annual coupon of 5% and are callable by the Entity at $0.10. The dividend is payable annually within 30 days of December 31. Should the dividend go unpaid, the Entity would be prohibited from increasing Executive compensation or paying cash bonuses under the terms of its settlement agreement with the previous holders of its Convertible Secured Promissory Notes and Promissory Notes Payable.

NOTE 9. STOCK BASED COMPENSATION

The Entity accounts for stock based compensation awards including employee stock options and warrants issued to external parties for newly issued awards as well as those modified, repurchased, or cancelled after the effective date, and to the unvested portion of awards outstanding as of the effective date. The Entity uses the Black-Scholes option-pricing model to value its stock option and warrant grants.

The estimated fair value of each option or warrant grant is determined on the date of grant using Black-Scholes option pricing model. The Black-Scholes model is dependent upon key inputs estimated by management, including the expected term of an option and the expected volatility of our common stock price over the expected term. The Entity determines the expected life based on historical experience with similar awards, giving consideration to the contractual terms, vesting schedules and post-vesting forfeitures. The risk-free interest rate is based on the yield on zero-coupon U.S. treasury securities at the time of grant for a period commensurate with the expected term. The expected volatility is calculated based on the historical experience of internet-related companies with a price volatility ranging from 42% to 117%. We estimated our volatility to be 73% to 75%.

Compensation cost arising from non-vested stock granted to employees and from non-employees stock awards is recognized as expense using the graded vesting attribution method over the vesting period. As of June 30, 2011, there was $291,208 of remaining unrecognized compensation cost related to non-vested stock; that cost is expected to be recognized over a weighted average period of 2.3 years.

During the years ended June 30, ~~2011~~2012 and ~~2010~~2011, the Entity issued shares as well as options and warrants for shares of stock in connection with the recruitment of directors, officers and employees as well as for professional service vendors and the conversion of certain debt instruments into Equity of the Entity. Based on these activities, compensation cost of $~~451~~357,~~858~~213 and $1451,~~146,799~~858 was recognized in the years ended June 30, ~~2011~~2012 and ~~2010~~2011, respectively.

F-10

~~The~~Table ~~following table summarizes the Entity’s stock options and warrants outstanding as~~ of ~~June 30, 2011 and 2010, as well as option and warrant activity during the twelve months then ended:~~Contents

	Number of Shares Outstanding Under Options and Warrants			Weighted Average Exercise Price
Balance, June 30, 2009		6,279,039			0.14
Granted		4,956,325			0.30
Exercised		(3,029,038	)		0.05
Forfeited or Expired		410,278			0.58
Balance, June 30, 2010		7,796,048		$	0.25
Granted		7,211,672			0.05
Exercised		-			-
Forfeited or expired		(189,995)			0.17
Balance, June 30, 2011		14,817,725		$	0.15
Exercisable, June 30, 2011		8,365,033		$	0.21

The following table summarizes the Entity’s stock options and warrants outstanding as of June 30, 2012 and 2011, as well as option and warrant activity during the year then ended:

	Number of Shares Outstanding Under Options and Warrants		Weighted Average Exercise Price

Balance, June 30, 2010		7,796,048		0.25
Granted		7,211,672		0.05
Forfeited or Expired		(189,995)		0.17

Balance, June 30, 2010		14,817,725	$	0.15

Granted		48,233,803		0.06
Exercised		-		-
Forfeited or expired		(435,348)		0.14

Balance, June 30, 2011		62,616,180	$	0.08
Exercisable, June 30, 2011		55,550,788	$	0..08

The following table is a summary of the Entity’s non-vested stock options

	Number of shares			Weighted-Average Grant-Date Fair Value
Non-vested balance, June 30, 2010		2,410,834		$	0.30
Non-vested balance, June 30, 2011		6,452,692		$	0.15
Granted		748,~~211~~233,~~672~~803			0.0506
Vested		(347,~~069~~540,~~814~~310	)		0.2007
Forfeited/Expired		(~~100~~80,~~000~~793	)		0.14
Non-vested balance, June 30, 2011		6,452,692		$	0.07
Non-vested balance, June 30, 2012		7,065,392		$	0.08

The weighted average fair value of options and warrants granted during the years ended June 30, ~~2011~~2012 and ~~2010~~2011 was $0.0506 and $0.3005 per share, respectively. The total intrinsic value of options exercised during the years ended June 30, ~~2011~~2012 and ~~2010~~2011, was $0 ~~and $315,020, respectively~~. The aggregate intrinsic value of the outstanding options at June 30, ~~2011~~2012 and ~~2010~~2011 was $0 ~~and $100,000, respectively~~.

NOTE 1110. INCOME TAXES

Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes resulting from temporary differences. Such temporary differences result from differences in the carrying value of assets and liabilities for tax and financial reporting purposes. The deferred tax assets and liabilities represent the future tax consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

The components of deferred tax assets are as follows:

	6/30/11			6/30/10
	6/30/12			6/30/11
Accumulated Net loss	$	8,~~587~~176,~~957~~291		$	8,~~082~~857,~~315~~957
Valuation allowance		(8,~~587~~176,~~957~~291	)		(8,~~082~~857,~~315~~957	)
Net deferred tax assets	$	-		$	-

F-11

Table of Contents

NOTE 11. CONCENTRATIONS OF REVENUE

During the year ended June 30, 2012 and 2011, we had two customers that accounted for 45% and 63% of our revenue, respectively.

NOTE 12. GOING CONCERN

The Entity became operational during the year ended June 30, 2009 and exited the development stage. The Entity began to realize substantial revenue in year ended June 30, 2009, which has grown by over ~~567~~$621,000 to $1,~~665~~720,~~700~~564 in the year ended June 30, ~~2011~~2012. Through June 30, ~~2011~~2012 the Entity has accumulated losses of $8,~~587~~176,~~957~~291. The Entity expects to generate revenues from corporate clients and partners in the way of software licensing revenue, as well as for its production services.

The Entity faces all the risks common to companies in their early stages of operations including under capitalization and uncertainty of funding sources, high initial expenditure levels, uncertain revenue streams, and difficulties in managing growth. In view of these conditions, the ability of the Entity to continue as a going concern is in substantial doubt and dependent upon achieving a profitable level of operations and on the ability of the Entity to obtain necessary financing to fund ongoing operations. The Entity’s financial statements do not reflect any adjustments that might result from the outcome of this uncertainty. The future of the Entity hereafter will depend in large part on the Entity’s ability to monetize its investment in its technology and services, and successfully raise capital from external sources to pay for planned expenditures. The Entity continues to seek other sources of financing in order to support existing operations and expand the range and scope of its business. However, there are no assurances that any such financing can be obtained on acceptable terms, if at all.

NOTE 13. SUBSEQUENT EVENTS

~~Effective~~Subsequent ~~August~~to 3,June ~~2011~~30, the Entity ~~authorized~~finalized ~~the~~agreements ~~addition~~with holders of ~~100~~an additional $65,000~~,000~~ ~~shares~~ of ~~both~~Promissory ~~Common~~notes ~~and~~payable ~~Preferred~~plus ~~Stock~~accrued tointerest ~~its~~into ~~capital structure. Subsequent to this modification~~1, ~~the Entity has 200~~650,~~000,000~~693 shares of ~~Common~~Preferred ~~Shares~~Stock and ~~100~~575,~~000,000~~161 ofwarrants ~~Preferred~~to ~~shares~~purchase ~~authorized~~our atCommon aStock ~~par~~exercisable ~~value~~at of $0.~~001~~10.

F-12

Filing Compare · VIDAROO Corp