UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended August 31, 2012

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For transition period from to

Commission File No.: 000-54491

BUILDABLOCK CORP.

(Exact name of registrant as specified in its charter)

Florida (State or Other Jurisdiction of Incorporation or Organization)		22-3914075 (I.R.S. Employer Identification No.)
382 NE 191^st Street, #83251, Miami, FL (Address of principal executive offices)		33179-3899 (Zip Code)

(855) 946-5255

(Registrant’s telephone number, including area code)

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 ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 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, a non-accelerated filer, or a “smaller reporting company.” See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ¨

Accelerated filer ¨

Non-accelerated filer ¨
(Do not check if a smaller reporting
company)

Smaller reporting company x

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

As of September 28, 2012, 23,937,979 shares of common stock, par value $0.00001 per share, of the registrant were outstanding.

SAFE HARBOR STATEMENT

This Quarterly Report on Form 10-Q (the “Report”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Discussions containing such forward-looking statements may be found in Items 2 and 3 of Part I of this Report, as well as within this Report generally. The words “believes,” “anticipates,” “thinks,” “expects,” “estimates,” “plans,” “intends,” and similar expressions are intended to identify forward-looking statements. In addition, any statements which refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. We undertake no obligation to publicly disclose any revisions to these forward-looking statements to reflect events or circumstances occurring subsequent to filing this Report with the Securities and Exchange Commission (the “SEC”). These forward-looking statements are subject to risks and uncertainties, including, without limitation, those discussed in this section and Items 2 and 3 of Part I, as well as in Part II, Item 1A, “Risk Factors” of this Report, and in Part I, Item 1A, “Risk Factors” and in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended November 30, 2011. In addition, new risks emerge from time to time and it is not possible for management to predict all such risk factors or to assess the impact of such risk factors on our business. Accordingly, future results may differ materially from historical results or from those discussed or implied by these forward-looking statements. Given these risks and uncertainties, the reader should not place undue reliance on these forward-looking statements. These risks and uncertainties include, but are not limited to:

•

our ability to commercialize the Buildablock Platform;

•

our ability to establish critical strategic partnerships;

•

our ability to achieve adoption of the Buildablock Platform by consumers and merchants;

•

our ability to generate revenues and achieve profitable operations;

•

our ability to raise additional financing required to fund our operations;

•

competition;

•

our dependence on the use of social media as a tool for commercial transactions;

•

risks associated with protecting our proprietary rights;

•

the outcome of future litigation;

•

costs associated with and compliance with securities laws and regulations;

•

dependence on our information systems; and

•

retention of key personnel.

BUILDABLOCK CORP.

INDEX

		Page
PART I. FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Financial Statements (Unaudited)	4
	Condensed Consolidated Balance Sheets as of August 31, 2012 (unaudited) and November 30, 2011	4
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Nine and Three Months Ended August 31, 2012 and August 31, 2011 (unaudited) and period May 1, 2012 through August 31, 2012 (development stage)	5
	Consolidated Statement of Changes in Stockholders’ Equity (Deficit) for the years ended November 30, 2011 and 2010 and Nine Months Ended August 31, 2012 (unaudited)	6
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended August 31, 2012 and 2011 (unaudited) and period May 1, 2012 through August 31, 2012 (development stage)	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	25

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3.	Defaults Upon Senior Securities	29
Item 4.	Mine Safety Disclosures	30
Item 5.	Other Information	30
Item 6.	Exhibits.	30

SIGNATURES		31

PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

BUILDABLOCK CORP.
(FORMERLY HIPSO MULTIMEDIA, INC.)
(A DEVELOPMENT STAGE COMPANY)

CONDENSED CONSOLIDATED BALANCE SHEETS

AUGUST 31, 2012 (UNAUDITED) AND NOVEMBER 30, 2011

	IN US$
	August 31,			November 30,
	2012			2011
	(unaudited)

ASSETS

CURRENT ASSETS
Cash	$	777,692		$	-
Current assets held under discontinued operations		-			35,181
Total Current Assets		777,692			35,181

OTHER ASSETS
Intellectual property		10,000			-

Total Assets	$	787,692		$	35,181

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES
Cash overdraft	$	-		$	301
Accounts payable		103,348			38
Accrued expenses		60,380			60,380
Current liabilities held under discontinued operations		-			2,550,328
Total Current Liabilities		163,728			2,611,047

TOTAL LIABILITIES		163,728			2,611,047

STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, par value $0.00001, 100,000,000 shares authorized, 23,937,979 and 8,559,721 issued and outstanding at August 31, 2012 and November 30, 2011, respectively		239			86
Additional paid-in capital		2,357,129			1,551,368
Additional paid-in capital - options and warrants		1,075,539			145,512
Subscription receivable		(76,927	)		-
Accumulated deficit		(1,884,979	)		(4,150,676	)
Deficit accumulated during the development stage		(658,246	)		-
Accumulated other comprehensive income (loss)		(188,791	)		(122,156	)
Total Stockholders' Equity (Deficit)		623,964			(2,575,866	)

Total Liabilities and Stockholders' Equity (Deficit)	$	787,692		$	35,181

See accompanying notes to condensed consolidated financial statements.

BUILDABLOCK CORP.

(FORMERLY HIPSO MULTIMEDIA, INC.)
(A DEVELOPMENT STAGE COMPANY)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
FOR THE NINE AND THREE MONTHS ENDED AUGUST 31, 2012 AND 2011 (UNAUDITED)

AND PERIOD MAY 1, 2012 THROUGH AUGUST 31, 2012 (DEVELOPMENT STAGE)

IN US$

													Period
	For the nine months ended						For the three months ended						May 1, 2012
	August 31,			August 31,			August 31,			August 31,			through
	2012			2011			2012			2011			August 31, 2012
	(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)

REVENUE	$	-		$	-		$	-		$	-		$	-

COSTS AND EXPENSES
Cost of sales		-			-			-			-			-
Depreciation and amortization		-			-			-			-			-
Research and development		257,568			-			164,768			-			257,568
Administrative expenses		737,606			166,655			284,891			28,525			400,678
Total Costs and Expenses		995,174			166,655			449,659			28,525			658,246

OPERATING LOSS		(995,174	)		(166,655	)		(449,659	)		(28,525	)		(658,246	)

NON-OPERATING INCOME (EXPENSE)
Interest expense		-			-			-			-			-
Total Non-Operating Expense		-			-			-			-			-

NET LOSS FROM CONTINUING OPERATIONS		(995,174	)		(166,655	)		(449,659	)		(28,525	)		(658,246	)

DISCONTINUED OPERATIONS
Gain (loss) on disposal of subsidiary		2,648,735			-			-			-			-
Gain (loss) from discontinued operations		(46,110	)		(538,069	)		-			(192,103	)		-

NET GAIN (LOSS) FROM DISCONTINUED OPERATIONS		2,602,625			(538,069	)		-			(192,103	)		-

NET INCOME (LOSS)	$	1,607,451		$	(704,724	)	$	(449,659	)	$	(220,628	)	$	(658,246	)

NET INCOME PER COMMON SHARE (BASIC)
From continuing operations	$	(0.06	)	$	(0.02	)	$	(0.02	)	$	(0.00	)
From discontinued operations		0.17			(0.06	)		-			(0.02	)

	$	0.10		$	(0.08	)	$	(0.02	)	$	(0.03	)

Weighted average shares outstanding (BASIC)		15,741,046			8,341,477			23,982,979			8,532,139

NET INCOME PER COMMON SHARE (DILUTED)
From continuing operations	$	(0.04	)	$	(0.02	)	$	(0.02	)	$	(0.00	)
From discontinued operations		0.12			(0.06	)		-			(0.02	)

	$	0.07		$	(0.08	)	$	(0.02	)	$	(0.03	)

Weighted average shares outstanding (DILUTED)		22,467,328			8,341,477			23,982,979			8,532,139

OTHER COMPREHENSIVE LOSS - CONTINUING OPERATIONS
Comprehensive loss - beginning of period	$	(995,174	)	$	(166,655	)	$	(449,659	)	$	(28,525	)
Cumulative translation adjustments		(66,635	)		(109,907	)		3			(10,235	)

Comprehensive loss - end of period	$	(1,061,809	)	$	(276,562	)	$	(449,656	)	$	(38,760	)

See accompanying notes to condensed consolidated financial statements.

BUILDABLOCK CORP.

(FORMERLY HIPSO MULTIMEDIA, INC.)

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE YEARS ENDED NOVEMBER 30, 2011 AND 2010 AND NINE MONTHS ENDED AUGUST 31, 2012
(UNAUDITED)

												Additional
									Additional			Paid-in					Retained			Deficit Accumulated			Accumulated Other
	Preferred Stock				Common Stock				Paid-in			Capital-Options		Subscription			Earnings			During the			Comprehensive
	Shares		Amount		Shares		Amount		Capital			and Warrants		Receivable			(Deficit)			Development Stage			Income (Loss)			Total
Balance November 30, 2009		-	$	-		7,150,439	$	71	$	668,793		$	-	$	-		$	(2,138,376	)	$	-		$	(61,301	)	$	(1,530,813	)
Shares issued for cash		-		-		376,782		4		192,766			145,512		-			-			-			-			338,282
Shares issued for services		-		-		212,500		2		178,398			-		-			-			-			-			178,400
Exercise of stock options		-		-		85,000		1		42,999			-		-			-			-			-			43,000
Fair value of options granted		-		-		-		-		36,000			-		-			-			-			-			36,000
Fair value of rent contributed by major shareholder		-		-		-		-		40,860			-		-			-			-			-			40,860
Conversion of liability to paid in capital - related party		-		-		-		-		40,000			-		-			-			-			-			40,000
Net loss for the year ended November 30, 2010		-		-		-		-		-			-		-			(1,151,835	)		-			(48,207	)		(1,200,042	)
Balance November 30, 2010		-		-		7,824,721		78		1,199,816			145,512		-			(3,290,211	)		-			(109,508	)		(2,054,313	)
Shares issued for conversion of loan payable to shareholders		-		-		381,250		4		121,996			-		-			-			-			-			122,000
Shares issued for services, net of shares cancelled for services		-		-		174,583		2		93,698			-		-			-			-			-			93,700
Shares issued for cash		-		-		179,167		2		94,998			-		-			-			-			-			95,000
Fair value of rent contributed by major shareholder		-		-		-		-		40,860			-		-			-			-			-			40,860
Net loss for the year ended November 30, 2011		-		-		-		-		-			-		-			(860,465	)		-			(12,648	)		(873,113	)
Balance November 30, 2011		-		-		8,559,721		86		1,551,368			145,512		-			(4,150,676	)		-			(122,156	)		(2,575,866	)
Shares issued for services		-		-		195,763		2		75,458			-		-			-			-			-			75,460
Fair value of rent contributed by major shareholder		-		-		-		-		10,215			-		-			-			-			-			10,215
Net income for the five months ended April 30, 2012		-		-		-		-		-			-		-			2,265,697			-			(66,638	)		2,199,059
Balance April 30, 2012		-		-		8,755,484		88		1,637,041			145,512		-			(1,884,979	)		-			(188,794	)		(291,132	)
Shares issued for services and accounts payable		-		-		480,000		4		119,996			-		-			-			-			-			120,000
Shares issued for cash		-		-		5,947,000		59		590,181			896,510		(85,655	)		-			-			-			1,401,095
Shares issued for intellectual property		-		-		8,755,484		88		9,912			-		-			-			-			-			10,000
Fractional shares issued		-		-		11		-		(1	)		-		-			-			-			-			(1	)
Net loss for the period May 1, 2012 through May 31, 2012 (development stage)		-		-		-		-		-			-		-			-			(208,587	)		-			(208,587	)
Balance May 31, 2012		-		-		23,937,979		239		2,357,129			1,042,022		(85,655	)		(1,884,979	)		(208,587	)		(188,794	)		1,031,375
Cash received for shares issued		-		-		-		-		-			-		8,728			-			-			-			8,728
Fair value of options granted		-		-		-		-		-			33,517		-			-			-			-			33,517
Net loss for the period June 1, 2012 through August 31, 2012 (development stage)		-		-		-		-		-			-		-			-			(449,659	)		3			(449,656	)
Balance August 31, 2012		-	$	-		23,937,979	$	239	$	2,357,129		$	1,075,539	$	(76,927	)	$	(1,884,979	)	$	(658,246	)	$	(188,791	)	$	623,964

See accompanying notes to condensed consolidated financial statements.

BUILDABLOCK CORP.
(FORMERLY HIPSO MULTIMEDIA, INC.)
(A DEVELOPMENT STAGE COMPANY)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED AUGUST 31, 2012 AND 2011 (UNAUDITED)
AND PERIOD MAY 1, 2012 THROUGH AUGUST 31, 2012 (DEVELOPMENT STAGE)

	IN US$
							Period
	For the nine months ended						May 1, 2012
	August 31,			August 31,			through
	2012			2011			August 31, 2012
	(unaudited)			(unaudited)			(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES - CONTINUING OPERATIONS:
Net income (loss)	$	(995,174	)	$	(166,655	)	$	(658,246	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization		-			-			-
Stock based compensation and shares issued for services		192,476			88,270			-
Contributed expenses by management		30,645			20,430			-
Changes in operating assets and liabilities:
Accounts payable and accrued expenses		99,912			-			145,558
Net cash used in operating activities		(672,141	)		(57,955	)		(512,688	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in cash overdraft		(102	)		-			(196,370	)
Cash received for common stock		1,486,750			50,000			1,486,750
Net cash provided by financing activities		1,486,648			50,000			1,290,380

DISCONTINUED OPERATIONS
Operating activities		(40,765	)		(243,250	)		-
Investing activities		-			-			-
Financing activities		23			239,218			-
		(40,742	)		(4,032	)		-


EFFECT OF EXCHANGE RATE ON CASH		3,927			(691	)		-

INCREASE (DECREASE) IN CASH		777,692			(12,678	)		777,692
CASH, BEGINNING OF YEAR		-			13,005			-
CASH, END OF PERIOD	$	777,692		$	327		$	777,692

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest	$	-		$	-		$	-

NONCASH OPERATING AND FINANCING ACTIVITIES
Conversion of notes payable - related parties for equity	$	-		$	122,000		$	-
Common shares issued for intellectual property	$	10,000		$	-		$	-

See accompanying notes to condensed consolidated financial statements.

BUILDABLOCK CORP.
(FORMERLY HIPSO MULTIMEDIA, INC.)
(A DEVELOPMENT STAGE COMPANY)

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE NINE MONTHS ENDED AUGUST 31, 2012 AND 2011

NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION

The unaudited condensed consolidated financial statements included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The condensed consolidated financial statements and notes are presented as permitted on Form 10-Q and do not contain information included in the Company’s annual consolidated statements and notes. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these condensed consolidated financial statements be read in conjunction with the November 30, 2011 audited financial statements and the accompanying notes thereto. While management believes the procedures followed in preparing these condensed consolidated financial statements are reasonable, the accuracy of the amounts are in some respects dependent upon the facts that will exist, and procedures that will be accomplished by the Company later in the year.

These condensed consolidated unaudited financial statements reflect all adjustments, including normal recurring adjustments which, in the opinion of management, are necessary to present fairly the consolidated operations and cash flows for the periods presented.

Buildablock Corp. (the “Company”) formerly HIPSO Multimedia, Inc., a Florida corporation, was incorporated in April 2005. As described in Note 7, the Company entered into an Asset Purchase Agreement on November 30, 2011 providing for the acquisition of intellectual property rights comprised of an Internet and mobile service platform whose purpose is to empower or capitalize on the growth of the neighborhood, local economy (the “Buildablock Assets”). The Buildablock Assets are in the development stage. In addition to Buildablock’s social networking library, the service is enriched by its new “DealWink” engine, a new e-commerce platform that combines the power of group buying, couponing, and price aggregation, among other things, to drive both value to its customers and opportunity to the retailer. Effective March 7, 2012, the Company completed the acquisition of the Buildablock Assets. In connection with the completion of the acquisition, the Company effected a reverse stock split of the Company’s outstanding shares of common stock, par value $0.00001, on a one-for-eight (1:8) basis (which occurred on March 7, 2012) and issued an aggregate of 8,755,484 shares of common stock effective March 7, 2012, representing 50% of the Company’s outstanding shares after giving effect to the one-for-eight reverse stock split and issuance of the shares. The Buildablock Assets were valued at $10,000. Upon the closing of the transaction, Messrs. Gary Oberman and Bartek Bulzak were elected to the Company’s Board of Directors, Mr. Oberman was appointed President and Chief Executive Officer and Mr. Bulzak was appointed Chief Technology Officer. Effective February 24, 2012, the name of the Company was changed to Buildablock Corp.

On June 5, 2012, the Company formed a Canadian subsidiary, Buildablock Canada Inc. (“Buildablock Canada”). Since inception, Buildablock Canada has had little activity. The Company anticipates that Buildablock Canada will engage in research and development activities.

Effective July 1, 2009, the Company adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 105-10, Generally Accepted Accounting Principles – Overall (“ASC 105-10”). ASC 105-10 establishes the FASB Accounting Standards Codification (the “Codification”) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with U.S. GAAP. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative U.S. GAAP for SEC registrants. All guidance contained in the Codification carries an equal level of authority. The Codification superseded all existing non-SEC accounting and reporting standards. All other non-grandfathered, non-SEC accounting literature not included in the Codification is non-authoritative. The FASB will not issue new standards in the form of Statements, FASB Positions or Emerging Issue Task Force Abstracts. Instead, it will issue Accounting Standards Updates (“ASUs”). The FASB will not consider ASUs as authoritative in their own right. ASUs will serve only to update the Codification, provide background information about the guidance and provide the bases for conclusions on the change(s) in the Codification. References made to FASB guidance throughout this document have been updated for the Codification.

BUILDABLOCK CORP.
(FORMERLY HIPSO MULTIMEDIA, INC.)
(A DEVELOPMENT STAGE COMPANY)

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE NINE MONTHS ENDED AUGUST 31, 2012 AND 2011

NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION (CONTINUED)

Going Concern

With the disposition of Valtech, the Company commenced operating in the development stage as it develops its purchased intellectual property. The Company has no revenues and nominal assets other than cash which was raised during May 2012 as part of a private placement.

New management has had some preliminary discussions regarding further capitalization of the Company. These plans include the raising of capital through the equity markets to fund future operations and generating adequate revenues for the new business of the Company. Even if the Company raises sufficient capital to support its operating expenses and generates revenues, there can be no assurance that the revenues will be sufficient to enable it to develop business to a level where it will generate profits and cash flows from operations. These matters raise substantial doubt about the Company’s ability to continue as a going concern. However, the accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation.

Development Stage Company

The Company is considered to be in the development stage as defined in ASC 915. The Company has devoted substantially all of its efforts to the development of its software platform.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, the Company evaluates its estimates, including, but not limited to, those related to investment tax credits, bad debts, income taxes and contingencies. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments and other short-term investments with an initial maturity of three months or less to be cash equivalents.

BUILDABLOCK CORP.
(FORMERLY HIPSO MULTIMEDIA, INC.)
(A DEVELOPMENT STAGE COMPANY)

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE NINE MONTHS ENDED AUGUST 31, 2012 AND 2011

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Comprehensive Income

The Company adopted ASC 220-10, “Reporting Comprehensive Income,” (formerly SFAS No. 130). ASC 220-10 requires the reporting of comprehensive income in addition to net income from operations.

Comprehensive income is a more inclusive financial reporting methodology that includes disclosure of information that historically has not been recognized in the calculation of net income.

Fair Value of Financial Instruments

The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of the immediate or short-term maturity of these financial instruments. For the loans payable, the carrying amount reported is based upon the incremental borrowing rates otherwise available to the Company for similar borrowings.

Currency Translation

For subsidiaries outside the United States that prepare financial statements in currencies other than the U.S. dollar, the Company translates income and expense amounts at average exchange rates for the year, translates assets and liabilities at year-end exchange rates and equity at historical rates. The Company’s functional currency is the Canadian dollar, while the Company reports its currency in the US dollar. The Company records these translation adjustments as accumulated other comprehensive income (loss). Gains and losses from foreign currency transactions are included in other income (expense) in the results of operations.

Revenue Recognition

Through April 30, 2012, the Company through Valtech received revenue from subscribers to its triple play network in which it provided digital TV, voice over internet protocol (VoIP), and high speed internet access, all via fiber optic cable. The Company billed its subscribers on a monthly basis and recognized the monthly revenue based upon the specific plan selected by the subscriber. The Company additionally provided contracted services to wire commercial buildings with fiber optic cable in order to provide for similar services. Valtech was sold on April 30, 2012. For reporting periods ended after April 30, 2012, revenues for Valtech are reported net of operating expenses as gain or loss from discontinued operations.

Buildablock is a development stage company and has not yet recorded any revenues. Buildablock plans to recognize revenue from sales when the following criteria are met: persuasive evidence of an arrangement exists; delivery has occurred; the selling price is fixed or determinable; and collectability is reasonably assured.

The Company plans to record as revenue the net amount it retains from the sale of products, excluding any applicable taxes, after remitting the payment to the merchant minus the transaction fees. Revenue will be recorded on a net basis because the Company plans to act as an agent of the merchant in the transaction.

The Company plans that the merchant will be the primary obligor in these transactions, will be subject to inventory risk, and will have latitude in establishing prices. The Company plans to perform a service by acting as the agent of the merchant which will be responsible for fulfillment, and therefore revenue is planned to be recorded on a net basis.

Accounts Receivable

The Company conducts business and extends credit based on an evaluation of the customers’ financial condition, generally without requiring collateral.

BUILDABLOCK CORP.
(FORMERLY HIPSO MULTIMEDIA, INC.)
(A DEVELOPMENT STAGE COMPANY)

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE NINE MONTHS ENDED AUGUST 31, 2012 AND 2011

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Accounts Receivable (continued)

Exposure to losses on receivables is expected to vary by customer due to the financial condition of each customer. The Company monitors exposure to credit losses and maintains allowances for anticipated losses considered necessary under the circumstances. The Company has no allowance for doubtful accounts as of August 31, 2012.

Accounts receivable are generally due within 30 days and collateral is not required. Unbilled accounts receivable represents amounts due from customers for which billing statements have not been generated and sent to the customers.

Income Taxes

The Company accounts for income taxes utilizing the liability method of accounting. Under the liability method, deferred taxes are determined based on differences between financial statement and tax bases of assets and liabilities at enacted tax rates in effect in years in which differences are expected to reverse. Valuation allowances are established, when necessary, to reduce deferred tax assets to amounts that are expected to be realized.

Advertising Costs

The Company expenses the costs associated with advertising as incurred. Advertising expenses for the nine months ended August 31, 2012 and 2011 are included in administrative expenses in the consolidated statements of operations.

Fixed Assets

Fixed assets are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets; office and computer equipment – 5 years.

When assets are retired or otherwise disposed of, the costs and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is recognized in income for the period. The cost of maintenance and repairs is charged to income as incurred; significant renewals and betterments are capitalized. Deduction is made for retirements resulting from renewals or betterments.

Impairment of Long-Lived Assets

Long-lived assets, primarily fixed assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. The Company does perform a periodic assessment of assets for impairment in the absence of such information or indicators. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or a significant adverse change that would indicate that the carrying amount of an asset or group of assets is not recoverable. For long-lived assets to be held and used, the Company recognizes an impairment loss only if its carrying amount is not recoverable through its undiscounted cash flows and measures the impairment loss based on the difference between the carrying amount and estimated fair value.

Income (Loss) Per Share of Common Stock

Basic net loss per common share is computed using the weighted average number of common shares outstanding. Diluted earnings per share (EPS) includes additional dilution from common stock equivalents, such as stock issuable pursuant to the exercise of stock options and warrants. All shares are reflected post 1:8 reverse split which occurred March 7, 2012. Common stock equivalents were not included in the computation of diluted earnings per share when the Company reported a loss because to do so would be antidilutive for periods presented.

BUILDABLOCK CORP.
(FORMERLY HIPSO MULTIMEDIA, INC.)
(A DEVELOPMENT STAGE COMPANY)

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE NINE MONTHS ENDED AUGUST 31, 2012 AND 2011

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Income (Loss) Per Share of Common Stock (continued)

The following is a reconciliation of the computation for basic and diluted EPS:

	August 31,		August 31,
	2012		2011
Net income (loss)	$	1,607,451	$	(704,724	)

Weighted-average common shares Outstanding (Basic)		15,741,046		8,341,477

Weighted-average common stock Equivalents
Stock options		440,000		6,250
Warrants		6,286,282		339,282

Weighted-average common shares Outstanding (Diluted)		22,467,328		8,687,009

Stock-Based Compensation

In 2006, the Company adopted the provisions of ASC 718-10 “Share Based Payments” for its year ended November 30, 2008. The adoption of this principle had no effect on the Company’s operations.

The Company has elected to use the modified–prospective approach method. Under that transition method, the calculated expense in 2006 is equivalent to compensation expense for all awards granted prior to, but not yet vested as of January 1, 2006, based on the grant-date fair values. Stock-based compensation expense for all awards granted after January 1, 2006 is based on the grant-date fair values. The Company recognizes these compensation costs, net of an estimated forfeiture rate, on a pro rata basis over the requisite service period of each vesting tranche of each award.

The Company considers voluntary termination behavior as well as trends of actual option forfeitures when estimating the forfeiture rate. The Company measures compensation expense for its non-employee stock-based compensation under ASC 505-50, “Accounting for Equity Instruments that are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services”. The fair value of the option issued is used to measure the transaction, as this is more reliable than the fair value of the services received. The fair value is measured at the value of the Company’s common stock on the date that the commitment for performance by the counterparty has been reached or the counterparty’s performance is complete. The fair value of the equity instrument is charged directly to expense and additional paid-in capital.

Segment Information

The Company follows the provisions of ASC 280-10, “Disclosures about Segments of an Enterprise and Related Information”. This standard requires that companies disclose operating segments based on the manner in which management disaggregates the Company in making internal operating decisions. As of August 31, 2012 and for the nine months ended August 31, 2012 and 2011, the Company operates in only one segment and in only one geographical location.

Reclassifications

The Company has reclassified certain amounts in its condensed consolidated statement of operations for the nine months ended August 31, 2011 to conform with the August 31, 2012 presentation. These reclassifications had no effect on the net loss for the nine months ended August 31, 2011.

BUILDABLOCK CORP.
(FORMERLY HIPSO MULTIMEDIA, INC.)
(A DEVELOPMENT STAGE COMPANY)

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE NINE MONTHS ENDED AUGUST 31, 2012 AND 2011

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Uncertainty in Income Taxes

The Company follows ASC 740-10, “Accounting for Uncertainty in Income Taxes” (“ASC 740-10”). This interpretation requires recognition and measurement of uncertain income tax positions using a “more-likely-than-not” approach. ASC 740-10 is effective for fiscal years beginning after December 15, 2006. Management has adopted ASC 740-10 for 2009, and they evaluate their tax positions on an annual basis, and has determined that as of August 31, 2012, no additional accrual for income taxes other than the federal and state provisions is considered necessary.

Fair Value Measurements

In September 2006, the FASB issued ASC 820, Fair Value Measurements. ASC 820 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosure about fair value measurements. This statement is effective for financial statements issued for fiscal years beginning after November 15, 2007. Early adoption is encouraged. The adoption of ASC 820 is not expected to have a material impact on the financial statements.

In February 2007, the FASB issued ASC 825-10, The Fair Value Option for Financial Assets and Financial Liabilities – Including an amendment of ASC 320-10, (“ASC 825-10”) which permits entities to choose to measure many financial instruments and certain other items at fair value at specified election dates. A business entity is required to report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date. This statement is expected to expand the use of fair value measurement. ASC 825-10 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years.

Recent Accounting Pronouncements

In May 2011, FASB issued Accounting Standards Update (ASU) No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. ASU 2011-04 amends and clarifies the measurement and disclosure requirements of ASC 820 resulting in common requirements for measuring fair value and for disclosing information about fair value measurements, clarification of how to apply existing fair value measurement and disclosure requirements, and changes to certain principles and requirements for measuring fair value and disclosing information about fair value measurements. The new requirements are effective for fiscal years beginning after December 15, 2011. The Company plans to adopt this amended guidance on October 1, 2012 and at this time does not anticipate that it will have a material impact on the Company’s results of operations, cash flows or financial position.

In June 2011, FASB issued ASU No. 2011-05, Presentation of Comprehensive Income, which amends the disclosure and presentation requirements of Comprehensive Income. Specifically, ASU No. 2011-05 requires that all nonowner changes in stockholders’ equity be presented either in 1) a single continuous statement of comprehensive income or 2) two separate but consecutive statements, in which the first statement presents total net income and its components, and the second statement presents total other comprehensive income and its components. These new presentation requirements, as currently set forth, are effective for the Company beginning October 1, 2012, with early adoption permitted.

The Company plans to adopt this amended guidance on October 1, 2012 and at this time does not anticipate that it will have a material impact on the Company’s results of operations, cash flows or financial position.

In September 2011, FASB issued ASU 2011-08, Testing Goodwill for Impairment, which amended goodwill impairment guidance to provide an option for entities to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. After assessing the totality of events and circumstances, if an entity determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, performance of the two-step impairment test is no longer required. This guidance is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011, with early adoption permitted. Adoption of this guidance is not expected to have any impact on the Company’s results of operations, cash flows or financial position.

BUILDABLOCK CORP.
(FORMERLY HIPSO MULTIMEDIA, INC.)
(A DEVELOPMENT STAGE COMPANY)

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE NINE MONTHS ENDED AUGUST 31, 2012 AND 2011

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recent Accounting Pronouncements (Continued)

There were other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

NOTE 3 – FIXED ASSETS

Fixed assets as of August 31, 2012 (unaudited) and November 30, 2011, reflected in assets held under discontinued operations were as follows:

		(unaudited)
	Estimated Useful	August 31,		November 30,
	Lives (Years)	2012		2011
Computer and office equipment	5	$	32,941	$	31,966

Less: accumulated depreciation			32,941		31,966
Property and equipment, net		$	0	$	0

There was $0 and $4,997 charged to operations for depreciation expense for the nine months ended August 31, 2012 and 2011, respectively, which are reflected in discontinued operations.

NOTE 4 – DEFERRED COSTS

Deferred costs as of August 31, 2012 (unaudited) and November 30, 2011, reflected in assets held under discontinued operations were as follows:

		(unaudited)
	Estimated Useful	August 31,		November 30,
	Lives (Years)	2012		2011
Deferred Costs	5	$	464,623	$	450,876

Less: accumulated amortization			464,623		450,876
Property and equipment, net		$	0	$	0

There was $0 and $71,100 charged to operations for amortization expense for the nine months ended August 31, 2012 and 2011, respectively, which are reflected in discontinued operations.

BUILDABLOCK CORP.
(FORMERLY HIPSO MULTIMEDIA, INC.)
(A DEVELOPMENT STAGE COMPANY)

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE NINE MONTHS ENDED AUGUST 31, 2012 AND 2011

NOTE 5 – RELATED PARTY LOANS

In April 2012, the related party loans with the four principal shareholders of the Company were assumed by Valtech, upon the sale back to Valtech along with the accrued interest on those loans. Currently there is a $0 balance due those shareholders. The amount outstanding prior to the sale was $1,928,319. The loans did bear interest at an annual rate of 10% for individual amounts exceeding $150,000 (CDN$). Interest expense for the nine months ended August 31, 2012 and 2011 were $35,361 and $97,401, respectively, and are reflected in operations from discontinued operations. Accrued interest on these loans prior to the sale was $329,395. The accrued interest along with the notes were sold in April 2012, and the balance is $0 as of August 31, 2012 (see Note 12).

NOTE 6 – COMMITMENTS

Office Space

The Company occupies approximately 2,500 square feet of office space owned by a company that is owned by a shareholder of the Company. The occupancy is on a month-to-month basis, without a lease and without payment of rent. The Company has occupied the space since February 1, 2008. Accordingly, a rent expense was recorded at the fair value of the applicable rent and with an offset to additional paid-in capital. The Company as of April 1, 2012, no longer utilized this space.

Service Agreement

In July 2009, the Company’s subsidiary, Valtech Communications, Inc. entered into a written agreement with Groupe Canvar Inc. (a related party through common ownership). The agreement provides for Groupe Canvar, Inc. to provide brochures, price lists, contact information and other literature relating to Valtech Communications, Inc. services to the tenants leasing the apartments or office space in the buildings owned by Groupe Canvar, Inc. In addition, the agreement provides for Valtech Communications, Inc. to install wiring in new and refurbished buildings owned by Groupe Canvar, Inc. to their server for these services. All pricing is at the same terms as those for Valtech Communications, Inc. other customers. The agreement was to expire July 2010, and was extended for another two years through July 2012. This agreement will remain with Valtech in connection with the sale of Valtech in April 2012 (see Note 12).

Financing Agreement

On June 15, 2010, the Company entered into an Engagement Agreement with DME Securities LLC (“DME”) to raise $10,000,000 in debt or equity financing on a best efforts basis. The Company was responsible to pay a 10% success fee and to issue Placement Agent Warrants upon the successful completion of any amounts raised. DME was not able to raise any funds for the Company and the Engagement Agreement terminated on May 31, 2011.

On August 18, 2010, the Company executed an equity financing commitment of up to $5,000,000 from Dutchess Capital through its Dutchess Opportunity Fund, L.P. The commitment had a 3 year term, and the Company would sell its shares of common stock to Dutchess Capital up to the total committed amount. The Company would determine, at its sole discretion, the amount and timing of any sales of these shares. The purchase price of the shares would be set at 95% of the lowest daily VWAP of the common stock of the Company during the 5 consecutive trading days immediately after the put date as defined in the term sheet. The Company has not sold any shares under this term sheet and the agreement was cancelled.

On October 12, 2010, the Company entered into an agreement with Notre-Dame Capital Inc. to raise $15,000,000 through an equity and debt financing on a best effort basis. Debentures would be offered in tranches of $50,000 and would bear interest at a rate of 8% per annum, payable quarterly in arrears, and maturing five years from the date of issuance. The principal amount of each debenture would be convertible into common shares of the Company’s stock at the option of the holder. The conversion price would be $2.00 per share for the first two years from the date of issuance, and thereafter at a price per share of $2.40 until maturity.

BUILDABLOCK CORP.
(FORMERLY HIPSO MULTIMEDIA, INC.)
(A DEVELOPMENT STAGE COMPANY)

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE NINE MONTHS ENDED AUGUST 31, 2012 AND 2011

NOTE 6 – COMMITMENTS (CONTINUED)

Financing Agreement (Continued)

In connection with the financing, Notre-Dame Capital Inc. would receive a cash fee equal to 8% of the gross proceeds raised under the offering plus 4% warrants of the raised funds. Each warrant would entitle Notre-Dame Capital Inc. to purchase one share of common stock. The warrants would be exercisable at the financing price for a period of three years after the closing of the financing. In addition to the proposed financing, Notre-Dame Capital Inc. and its affiliates would purchase 375,000 common shares of the Company from the directors of the Company. No money was raised under this proposed financing and the agreement was cancelled.

Investor Relation/Public Relation Agreements

The Company entered into an agreement with Complete Advisory Partners on April 12, 2011 to provide public relation services. The agreement is for a term of one year but the Company can terminate the services every 90 days. In accordance with the term of the agreement, the Company issued 50,000 shares of common stock as an initial payment. The Agreement with Complete Advisory Partners was cancelled and the company retained the 50,000 shares of common stock issued to it.

The Company entered into an Investor Relations Agreement with CCG Investor Relations effective July 1, 2012. The Agreement is for a term of 1 year. Consideration for the services that CCG Investor Relations will provide is in the form of 20,000 options per month under the 2012 Plan (as defined in Note 8).

Distribution Agreement

On April 11, 2011, the Company signed a long-term distribution agreement with Level Vision Electronics Ltd (“Level”). The five (5) year renewable distribution agreement with Level includes the distribution in North America of its 3-D Television screens technology, including High Definition, LCD screens and computer monitors for commercial applications. The Company was to deploy and bring to market a unique new multimedia solution to enhance the advertising market. This agreement will remain with Valtech in connection with the sale of Valtech in April 2012 (see Note 12).

NOTE 7 – ACQUISITION - BUILDABLOCK

On November 30, 2011, the Company, entered into an Asset Purchase Agreement (the “Agreement”) with 3324109 Canada Inc., a Canadian corporation owned by Gary Oberman (“GaryCo”) and 8040397 Canada Inc., a Canadian corporation, owned by Bartek Bulzak (“BulzakCo”), collectively, the “Sellers”, providing for the acquisition by the Company of the Buildablock Assets. The Sellers have conducted no other business other than the development of this platform. The intellectual property was funded 100% by the respective owners of the Sellers personally. The Agreement provides for the issuance of 4,377,742 shares of the Company’s common stock to each of GaryCo and BulzakCo, for an aggregate of 8,755,484 shares, representing 50% of the Company’s outstanding shares after giving effect to a one-for-eight reverse stock split. On March 7, 2012, the Company completed the acquisition of the Buildablock Assets and the common shares were issued at that time (see Note 12).

NOTE 8 – STOCKHOLDERS’ DEFICIT

Common Stock

As of August 31, 2012, the Company has 100,000,000 shares of common stock authorized with a par value of $.00001 per share.

The Company has 23,937,979 shares issued and outstanding as of August 31, 2012.

During the quarter ended August 31, 2012, the Company issued no shares of common stock.

BUILDABLOCK CORP.
(FORMERLY HIPSO MULTIMEDIA, INC.)
(A DEVELOPMENT STAGE COMPANY)

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE NINE MONTHS ENDED AUGUST 31, 2012 AND 2011

NOTE 8 – STOCKHOLDERS’ DEFICIT (CONTINUED)

Common Stock (Continued)

During the quarter ended May 31, 2012, the Company issued:

The Company issued 8,755,484 shares of stock for the acquisition of the Buildablock Assets valued at $10,000; 480,000 shares of common stock to settle accounts payable of $36,500 and for services of $83,500; and issued 5,947,000 shares of common stock in a private placement which included 5,947,000 warrants at a value of $1,486,750.

On March 7, 2012, the Company reverse split its common stock on a 1:8 basis. All shares will be reflected post-split starting March 7, 2012.

During the quarter ended February 29, 2012, the Company issued:

The Company issued 195,750 shares of stock for services rendered valued at $75,460 at prices per share ranging from $0.24 to $0.48 for the quarter.

During the quarter ended February 29, 2012, the Company occupied office space owned by a principal shareholder, and recorded $10,215 of rent expense as contributed capital for the space. There was an adjustment made for back rent in the amount of $20,430 as well.

During the quarter ended November 30, 2011, the Company issued:

During the quarter ended November 30, 2011, the Company occupied office space owned by a principal shareholder, and recorded $10,215 of rent expense as contributed capital for the space.

During the quarter ended August 31, 2011, the Company issued:

The Company issued 50,000 shares of stock for cash and liability for stock to be issued ($20,000 of which $15,000 was received in the six months ended May 31, 2011) and 12,500 shares of stock for services rendered ($5,000).

During the quarter ended August 31, 2011, the Company occupied office space owned by a principal shareholder, and recorded $10,215 of rent expense as contributed capital for the space.

During the quarter ended May 31, 2011, the Company issued:

The Company issued 366,250 shares of stock for cash and liability for stock to be issued ($75,000 of which $50,000 was received in the six months ended May 31, 2011) and services rendered ($124,700) at a value of $199,700.

During the quarter ended May 31, 2011, the Company occupied office space owned by a principal shareholder, and recorded $10,215 of rent expense as contributed capital for the space.

During the quarter ended February 28, 2011, the Company issued:

The Company issued 38,125 shares of common stock to three of its shareholders to convert $122,000 of loans to them.

The Company also cancelled 75,000 shares of stock to consultants at $0.48 for services to be rendered to the Company back in 2008 (see Note 6).

The Company also incurred a $50,000 liability for stock to be issued for subscriptions of cash received in the three months ended February 28, 2011 for certificates not issued.

BUILDABLOCK CORP.
(FORMERLY HIPSO MULTIMEDIA, INC.)
(A DEVELOPMENT STAGE COMPANY)

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE NINE MONTHS ENDED AUGUST 31, 2012 AND 2011

NOTE 8 – STOCKHOLDERS’ DEFICIT (CONTINUED)

Common Stock (Continued)

During the quarter ended February 28, 2011, the Company occupied office space owned by a principal shareholder, and recorded $10,215 of rent expense as contributed capital for the space.

Stock Options

The Company accounts for stock-based compensation using the fair value method. The fair value method requires the cost of employee services received for awards of equity instruments, such as stock options and restricted stock, to be recorded at the fair value on the date of the grant. The value of restricted stock awards, based upon market prices, is amortized over the requisite service period.

On July 6, 2012, the Board of Directors of the Company adopted the 2012 Equity Incentive Plan (the “2012 Plan”). The 2012 Plan provides for the grant of stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance shares and performance share units to employees, consultants and non-employee directors of the Company and its subsidiaries. The Company has reserved 2,000,000 of its shares for issuance under the 2012 Plan. During the quarter ended August 31, 2012, the Company issued 440,000 options under the 2012 Plan.

The estimated fair value of stock options and warrants on the grant date is amortized on a straight line basis over the requisite service period. During the nine months ended August 31, 2012 and 2011, stock based compensation was $33,516 and $0, respectively.

In February 2010, the Company entered into a few option agreements for the issuance of options relating to various consulting agreements. The Company is obligated to issue to consultants in one agreement 33,750 options that vest evenly over a 3-month period of time at a $0.48 exercise price. The Company who is receiving the options has agreed to reduce their invoices by the cash required to exercise the options. These options expired in February 2011.

In another agreement entered into in February 2010, the Company is obligated to issue 75,000 options evenly over a 6-month period of time at a $0.48 exercise price. The Company expensed the fair value of these options ($36,000) as of August 31, 2010 to this consultant. These options also expired February 2011.

On August 25, 2008 and October 30, 2008, the Company issued a total of 75,000 stock options to two consultants. Of these options, 62,500 vested upon issuance and the remaining options vest March 4, 2009. These options have a three-year life and are exercisable at $0.40. These options were issued in the money as the market value of the underlying shares was $1.44 and $1.12, respectively.

The fair value of these options were determined to be the intrinsic value at the date of issuance, or $32,500 ($0.13 per share) and $22,500 ($0.09 per share) on August 25, 2008 and October 30, 2008, respectively. Additionally, the Company did not receive the total required option payments of $25,000 (500,000 options at $0.05).

The Company has expensed the entire amount due to the uncertainty of the collectability of this amount. Of the 75,000 options, there were 6,250 options that remained unexercised, however expired in May 2012.

BUILDABLOCK CORP.
(FORMERLY HIPSO MULTIMEDIA, INC.)
(A DEVELOPMENT STAGE COMPANY)

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE NINE MONTHS ENDED AUGUST 31, 2012 AND 2011

NOTE 8 – STOCKHOLDERS’ DEFICIT (CONTINUED)

Stock Options (Continued)

The following is a summary of the outstanding stock options for the nine months ended August 31, 2012 and 2011:

	Options			Weighted Average Exercise Price			Weighted Average Exercise Life			Aggregate Intrinsic Value
Outstanding, November 30, 2011		6,250		$	0.48			2.015		$	2,300
Granted		440,000			0.78			7.33			201,098
Exercised		-			0.00			0.00			(-	)
Cancelled/Expired		(6,250	)		(0.48	)		(2.015	)		(2,300	)
Outstanding, August 31, 2012		440,000		$	0.78			7.33		$	201,098
Exercisable, August 31, 2012		60,000		$	0.80			5.00		$	3

	Options			Weighted Average Exercise Price			Weighted Average Exercise Life		Aggregate Intrinsic Value
Outstanding, November 30, 2010		92,500		$	0.48			3.015	$	43,700
Granted		-			-			-		-
Exercised		-			-			-		-
Cancelled		(86,250	)		(0.48	)		1.00		(41,400	)
Outstanding, August 31, 2011		6,250		$	0.48			1.755	$	2,300
Exercisable, August 31, 2011		6,250		$	0.48			1.755	$	2,300

Warrants

The Company entered into private placement agreements with various individuals through November 30, 2010 for the issuance of 339,282 shares of common stock along with 339,282 warrants. The Company received the proceeds of $314,282 for these units. The warrants expire 3 years from issuance, at an exercise price of $1.60 per share. The warrants were valued using the Black-Scholes method and were recorded as additional paid in capital – warrants of $145,512. The criteria established for the valuation of these warrants were as follows: risk free interest rate – 1.25%; dividend yield – 0%; volatility – 185%. The warrants were issued in November 2010.

The Company entered into private placement agreements with various individuals for the issuance of 5,947,000 shares of common stock along with 5,947,000 warrants. The Company received the proceeds of $1,486,750 for these units. The warrants expire August 31, 2013 and have an exercise price of $0.50 per share. The warrants were valued using the Black-Scholes method and were recorded as additional paid in capital – warrants of $896,510. The criteria established for the valuation of these warrants were as follows: risk free interest rate – 0.75%; dividend yield – 0%; volatility – 235%. The warrants were issued in May 2012.

Common Stock Purchase

Warrants

Number of
Warrants
Outstanding
and
Exercisable

Date Warrants are

Exercisable

Exercise

Price

Date Warrants Expire

Investors from April 5, 2010 offering

339,282

May to September 2010

1.60

May to September 2013

Investors from May 2012 offering

5,947,000

May 2012

0.50

August 2013

6,286,282

BUILDABLOCK CORP.
(FORMERLY HIPSO MULTIMEDIA, INC.)
(A DEVELOPMENT STAGE COMPANY)

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE NINE MONTHS ENDED AUGUST 31, 2012 AND 2011

NOTE 9 – PROVISION FOR INCOME TAXES

Deferred income taxes are determined using the liability method for the temporary differences between the financial reporting basis and income tax basis of the Company’s assets and liabilities. Deferred income taxes are measured based on the tax rates expected to be in effect when the temporary differences are included in the Company’s tax return. Deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases.

At August 31, 2012, deferred tax assets consist of the following:

Net operating losses	$	1,765,266
Valuation allowance		(1,765,266	)
	$	-

At August 31, 2012, the Company had a net operating loss carryforward in the approximate amount of $5,191,960, available to offset future taxable income through 2032. The Company established valuation allowances equal to the full amount of the deferred tax assets due to the uncertainty of the utilization of the operating losses in future periods.

A reconciliation of the Company’s effective tax rate as a percentage of income before taxes and federal statutory rate for the periods ended August 31, 2012 and 2011 is summarized as follows:

	2012			2011
Federal statutory rate		(34.0	)%		(34.0	)%
State income taxes, net of federal benefits		3.3			3.3
Valuation allowance		30.7			30.7
		0	%		0	%

NOTE 10 – FAIR VALUE MEASUREMENTS

On January 1, 2008, the Company adopted ASC 820. ASC 820 defines fair value, provides a consistent framework for measuring fair value under generally accepted accounting principles and expands fair value financial statement disclosure requirements. ASC 820’s valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect our market assumptions. ASC 820 classifies these inputs into the following hierarchy:

Level 1 inputs: Quoted prices for identical instruments in active markets.

Level 2 inputs: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3 inputs: Instruments with primarily unobservable value drivers.

NOTE 11 – CONCENTRATION OF CREDIT RISK

On August 31, 2011, $6,372, or 76% of the Company’s accounts receivable was with three customers. In addition, there was one customer who represented approximately 66% of the revenue for the nine months ended August 31, 2011. This customer is considered a major customer of the Company.

BUILDABLOCK CORP.
(FORMERLY HIPSO MULTIMEDIA, INC.)
(A DEVELOPMENT STAGE COMPANY)

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE NINE MONTHS ENDED AUGUST 31, 2012 AND 2011

NOTE 12 – SALE OF VALTECH/DISPOSITION OF SUBSIDIARY

Effective March 7, 2012, the Company completed the acquisition of the Buildablock Assets. In connection with the completion of the acquisition, the Company effected a reverse stock split of the Company’s outstanding shares of common stock, par value $0.00001, on a one-for-eight (1:8) basis (which occurred on March 7, 2012) and issued an aggregate of 8,755,484 shares of common stock effective March 7, 2012, representing 50% of the Company’s outstanding shares after giving effect to the one-for-eight reverse stock split and issuance of the shares. The Buildablock Assets were valued at $10,000. Upon the closing of the transaction, Messrs. Gary Oberman and Bartek Bulzak were elected to the Company’s Board of Directors, Mr. Oberman was appointed President and Chief Executive Officer and Mr. Bulzak was appointed Chief Technology Officer. Effective upon the closing of the transaction, Mr. René Arbic resigned as President and Chief Executive Officer of the Company. In addition, Mr. Arbic has agreed to resign from the Board within one year of the closing of the transaction.

In addition on April 13, 2012, the Board of Directors approved the sale of Valtech back to some or all of the original shareholders of Valtech for $1.00. This sale occurred on April 30, 2012.

As a result of this sale, the Company on April 13, 2012, became a development stage company, as it continues the development of its social networking platform under the “Buildablock” name.

As a result of this transaction, the Company’s financial statements have been prepared with the results of operations and cash flows of this disposed entity shown as discontinued operations. All historical statements have been restated in accordance with GAAP. Summarized financial information for discontinued operations for the periods ended August 31, 2012 and 2011 are as follows:

Balance Sheet at March 31, 2012:

Cash	$	127
Accounts receivable		26,228
Accounts payable and accrued expenses		(765,298	)
Loans payable		(1,909,492	)
Common stock		(300	)

Gain on disposition of Valtech	$	2,648,735

Results of operations – August 31, 2012

Revenues	$	10,600
Cost of revenues		(9,100	)
General and administrative		(12,640	)
Interest expense		(34,970	)

Loss from discontinued operations	$	(46,110	)

Results of operations – August 31, 2011

Revenues	$	123,491
Cost of revenues		(247,743	)
General and administrative		(316,416	)
Interest expense		(97,401	)

Loss from discontinued operations	$	(538,069	)

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

The following is intended to update the information contained in the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2011 and presumes that readers have access to, and will have read, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in such Annual Report on Form 10-K.

Overview

In June 2008, we acquired our former wholly-owned subsidiary, Valtech Communications Inc. (“Valtech”) in a reverse merger transaction, issuing 40 million restricted shares to the prior Valtech shareholders. Valtech offers low-cost, highly reliable triple-play service of Digital Phone, Digital Voice, High-Speed Internet and Digital TV backed by fast, friendly and live customer service (“Telecommunication Services”).

The Company entered into an Asset Purchase Agreement on November 30, 2011 providing for the acquisition of intellectual property rights comprised of an Internet and mobile service platform whose purpose is to empower or capitalize on the growth of the neighborhood, local economy (the “Buildablock Assets”). The Buildablock Assets are in the development stage. In addition to Buildablock’s social networking library, the service is enriched by its new “DealWink” engine, a new e-commerce platform that combines the power of group buying, couponing, and price aggregation, among other things, to drive both value to its customers and opportunity to the retailer. Effective March 7, 2012, the Company completed the acquisition of the Buildablock Assets. In connection with the completion of the acquisition, the Company effected a reverse stock split of the Company’s outstanding shares of common stock, par value $0.00001, on a one-for-eight (1:8) basis (which occurred on March 7, 2012) and issued an aggregate of 8,755,484 shares of common stock effective March 7, 2012, representing 50% of the Company’s outstanding shares after giving effect to the one-for-eight reverse stock split and issuance of the shares. The Buildablock Assets were valued at $10,000. Upon the closing of the transaction, Messrs. Gary Oberman and Bartek Bulzak were elected to the Company’s Board of Directors, Mr. Oberman was appointed President and Chief Executive Officer and Mr. Bulzak was appointed Chief Technology Officer. Effective February 24, 2012, the name of the Company was changed to Buildablock Corp.

In addition, on April 13, 2012, the Board of Directors approved the sale of Valtech back to some or all of the original shareholders of Valtech for $1.00. This sale occurred on April 30, 2012.

As a result, the Company principally will focus on the development of its social networking platform under the “Buildablock” name.

There are a number of technological and commercial objectives that we must meet in order to achieve commercial feasibility of the Buildablock platform. These include, without limitation:

establishing technical feasibility and completing development of our Internet service platform;

establishing critical strategic partnerships to promote the use of our platform;

successfully marketing our platform;

establishing rapid visibility and adoption by our consumer base and acceptance by merchants;

demonstrating added value and reward that will ultimately change the behavior of our user base;

responding to competitive developments; and

attracting, retaining and motivating qualified personnel.

In the Company’s third quarter ended August 31, 2012, the Company undertook various initiatives to realize the commercial feasibility of the Buildablock platform, including:

appointing Mr. Jonathan Wener and Mr. Sheldon Leibner, two well-known business leaders, as members of its Advisory Board;

commencing its marketing plan targeting the Montreal area to introduce both shoppers and retailers to the Company’s consumer-driven, volume purchasing e-commerce model; and

launching a test version of its consumer purchasing website on September 21, 2012 that integrates all of the platform’s processes and will provide key technical and user feedback to the Company for final system readiness.

We expect our losses and negative cash flow to continue for the foreseeable future as a result of the development expenses we will incur. Because of the numerous risks and uncertainties associated with our development and commercialization efforts, we are unable to predict the extent of our future losses or when or if we will become profitable and it is possible we will never become profitable. To date, we have not generated any revenues from our Buildablock platform. We may never achieve market acceptance or more than nominal or modest revenues from our Buildablock platform.

In its report accompanying our audited consolidated financial statements for the year ended November 30, 2011, our independent registered public accounting firm included an explanatory paragraph stating that our sustained operating losses and capital deficits raise substantial doubt as to our ability to continue as a going concern. A “going concern” opinion could impair our ability to finance our operations through the sale of debt or equity securities. Our ability to continue as a going concern will depend, in large part, on our ability to generate positive cash flow from operations and obtain additional financing, neither of which is certain. If we are unable to achieve these goals, our business would be jeopardized and we may not be able to continue operations and may have to liquidate our assets, and it is likely that investors will lose all or a part of their investment.

The Company sold Valtech on April 30, 2012 and is now accounting for the historical revenues and costs and expenses of Valtech net as gain or (loss) from discontinued operations.

Results of Operations for the Three Months Ended August 31, 2012 and August 31, 2011

Continuing Operations:

Revenues: The Company is operating as a development stage company and did not record any revenues for the three months ended August 31, 2012 and August 31, 2011.

Cost of Sales: The Company did not record any revenues and therefore did not incur cost of sales for the three months ended August 31, 2012 and August 31, 2011.

Depreciation and Amortization: The Company did not incur any depreciation or amortization expense for the three months ended August 31, 2012 and August 31, 2011.

Research and Development: The Company incurred research and development costs of $164,768 for the three months ended August 31, 2012 and did not incur any such costs for the three months ended August 31, 2011. The increase is due to the acquisition of the Buildablock Assets on March 7, 2012 and the development of the Buildablock platform.

General and Administrative Expenses: General and administrative expenses for the three-month period ended August 31, 2012 was $284,891 compared to $28,525 for the three months ended August 31, 2011. The increase in the Company’s general and administrative expenses in 2012 was mainly due to increased costs associated with the development of the Buildablock business.

Interest Expense: The Company did not incur any interest expense for the three months ended August 31, 2012 and August 31, 2011 as the Company did not have any debt relating to continuing operations.

Discontinued Operations:

Gain (loss) from discontinued operations: The Company recorded neither a gain or loss from discontinued operations for the three months ended August 31, 2012, but recorded a loss of $192,103 for the three months ended August 31, 2011 attributable to the continuing operations of Valtech, which was subsequently sold for $1 on April 30, 2012.

Results of Operations for the Nine Months Ended August 31, 2012 and August 31, 2011

Continuing Operations:

Revenues: The Company is operating as a development stage company and did not record any revenues for the nine months ended August 31, 2012 and August 31, 2011.

Cost of Sales: The Company did not record and revenues and therefore did not incur cost of sales for the nine months ended August 31, 2012 and August 31, 2011.

Depreciation and Amortization: The Company did not incur any depreciation or amortization expense for the nine months ended August 31, 2012 and August 31, 2011.

Research and Development: The Company incurred research and development costs of $257,568 for the nine months ended August 31, 2012 and did not incur any such costs for the nine months ended August 31, 2011. The increase is due to the acquisition of the Buildablock Assets on March 7, 2012 and the development of the Buildablock platform.

General and Administrative Expenses: General and administrative expenses for the nine month period ended August 31, 2012 was $737,606 compared to $166,655 for the nine months ended August 31, 2011. The increase in the Company’s general and administrative expenses is largely due to increased costs associated with the development of the Buildablock business.

Interest Expense: The Company did not incur any interest expense for the nine months ended August 31, 2012 and August 31, 2011, as the Company did not have any debt relating to continuing operations.

Discontinued Operations:

Gain (loss) on disposal of subsidiary: The Company sold Valtech for $1 on April 30, 2012 and recorded a gain of $2,648,735 mostly due to the forgiveness of Valtech related debt.

Gain (loss) from discontinued operations: The Company recorded a loss of $46,110 for the nine months ended August 31, 2012 versus a loss of $538,069 for the nine months ended August 31, 2011. The improvement is due to the sale of the Valtech business on April 30, 2012.

Liquidity and Capital Resources

As of August 31, 2012, we had total cash resources of $777,692. During the nine months ended August 31, 2012, net cash used in operating activities was $672,141; during the nine months ended August 31, 2011, net cash used in operating activities was $57,955. The cash used for the nine months ending August 31, 2012 was primarily used for development of the Buildablock business, while cash used in the nine months ending August 31, 2011 was for the general operations of the Company other than the Valtech business.

During the nine month period ended August 31, 2012, we raised $1,486,750 from the issuance of common stock and warrants issued to fund the development of the Buildablock business; during the nine month period ended August 31, 2011, net cash provided by financing activities was $50,000 which represented proceeds from shareholder loans.

Current and Future Financing Needs

We have incurred an accumulated deficit of $2,543,225, including the deficit accumulated during the development phase of Buildablock and accumulated other comprehensive losses, through August 31, 2012. We incurred negative cash flow from operations from our previously owned Telecommunication Services business and will continue to incur negative cash flow from operations in the Buildablock business until that business becomes fully operational. We expect to spend substantial amounts in connection with implementing our new business strategy relating to the Buildablock Assets. Our continued operations will depend upon whether we are able to raise additional funds through third parties, such as equity and debt financing. However, there can be no assurance that such additional funds will be available on acceptable terms and there can be no assurance that any additional funding that we do obtain will be sufficient to adequately fund our business plan. If we are not able to obtain financing when needed, we may be unable to carry out our business plan. As a result, we may have to significantly limit our operations and our business, financial condition and results of operations would be materially

harmed. If we raise funds by selling additional shares of common stock or other securities convertible into common stock, the ownership interest of our existing stockholders will be diluted.

Off-Balance Sheet Arrangements

As of August 31, 2012, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated under the Securities Act of 1934.

Contractual Obligations and Commitments

The Company has no material contractual obligations or commitments.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to our exposures to market risks since November 30, 2011. Please refer to the 2011 Annual Report on Form 10-K for the fiscal year ended November 30, 2011 for a discussion of our exposures to market risks.

Item 4. Controls and Procedures

Our senior management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Exchange Act) designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

In accordance with Exchange Act Rules 13a-15 and 15d-15, we carried out an evaluation, with the participation of our Chief Executive Officer and Interim Chief Financial Officer, as well as other key members of our management, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Interim Chief Financial Officer concluded that our disclosure controls and procedures were effective, as of the end of the period covered by this report, to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is (i) accumulated and communicated to management, including the Chief Executive Officer and Interim Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure and (ii) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

No change occurred in our internal controls over financial reporting (as defined in Rule 13a-15(f) and Rule 15d-15(f) promulgated under the Exchange Act) during the fiscal quarter ended August 31, 2012 that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Not Applicable.

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended November 30, 2011, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be not material also may materially adversely affect our business, financial condition and/or operating results. Effective March 7, 2012, the Company completed the acquisition of the Buildablock Assets. In addition, on April 13, 2012, the Board of Directors approved the sale of Valtech back to some or all of the original shareholders of Valtech for $1.00. This sale occurred on April 30, 2012. As a result, the Company principally will focus on the development of its social networking platform under the “Buildablock” name. See Note 12 of Notes to Condensed Consolidated Financial Statements (unaudited). The following risks reflect risks associated with the Company's continuing operations, including risks related to the commercialization of the Buildablock Assets.

We cannot predict if or when we will become profitable and anticipate that our net losses and negative cash flow from operations will continue for the foreseeable future.

There are a number of technological and commercial objectives that we must meet in order to achieve commercial feasibility of the Buildablock Platform. These include, without limitation:

establishing technical feasibility and completing development of our Internet service platform;

establishing critical strategic partnerships to promote the use of our platform;

successfully marketing our platform;

establishing rapid visibility and adoption by our consumer base and acceptance by merchants;

demonstrating added value and reward that will ultimately change the behavior of our user base;

responding to competitive developments; and

attracting, retaining and motivating qualified personnel.

Our independent registered public accounting firm has expressed substantial doubt as to our ability to continue as a going concern.

not be able to continue operations and may have to liquidate our assets, and it is likely that investors will lose all or a part of their investment.

We anticipate future losses and will require additional financing, and our failure to obtain additional financing when needed could force us to delay, reduce or eliminate our commercialization efforts.

We anticipate future losses and therefore will be dependent on additional financing to execute our business plan. We cannot be certain that additional funding will be available on acceptable terms, or at all. If we are unsuccessful in raising additional required funds, we may be required to significantly delay, reduce the scope of or eliminate our development programs or our commercialization efforts, or cease operating as a going concern. If we raise additional funds by issuing equity securities, substantial dilution to existing stockholders would result. If we raise additional funds by incurring debt financing, the terms of the debt may involve significant cash payment obligations as well as covenants and specific financial ratios that may restrict our ability to operate our business. If we are unable to maintain sufficient financial resources, including by raising additional funds when needed, our business, financial condition and results of operations will be materially and adversely affected and we may be unable to continue as a going concern. If we are unable to continue as a going concern, we may have to liquidate our assets and may receive less than the value at which those assets are carried on our consolidated financial statements, and it is likely that investors will lose all or a part of their investment.

We operate in a highly competitive industry with relatively low barriers to entry, and must compete successfully in order to grow our business.

We expect competition in e-commerce generally, and group buying in particular, to continue to increase because there are no significant barriers to entry. A substantial number of group buying sites that offer competitive services have emerged around the world. We also expect to compete against other Internet sites that serve niche markets and interests.

We believe that our ability to compete successfully will depend upon many factors both within and beyond our control, including the following:

•

the size and composition of our customer base and the number of merchants that accept and participate in our service;

•

the timing and market acceptance of our service;

•

selling and marketing efforts;

•

ease of use, performance, price and reliability of services offered either by us or our competitors;

•

our ability to cost-effectively manage our operations; and

•

our reputation and brand strength relative to our competitors.

Many of our current and potential competitors have longer operating histories, significantly greater financial, marketing and other resources than we do as well as established customer bases. These competitors may engage in more extensive research and development efforts, undertake more far-reaching marketing campaigns and adopt more aggressive pricing policies, which may allow them to build larger customer bases or generate revenue from their customer bases more effectively than we do. Some competitors may accept lower margins, or negative margins, to attract attention and acquire new customers, which may materially adversely affect our ability to commercialize our services.

Our business depends on the acceptance of the use of social media as a tool for commercial transactions; there is no assurance that our service will be accepted by merchants or customers.

Our business depends on the continued evolution of social media as a tool for commercial transactions. This is a new market and it is difficult to predict whether this market will continue to grow or whether it can be maintained. Our success will depend on our ability to attract a large enough number of customers and merchants that use our services. There can be no assurance that merchants or customers will accept the value of our services either initially or over any sustained period of time.

We have a rapidly evolving business model and our new service offerings could fail to attract or retain customers or generate revenue.

We have a rapidly evolving business model and are regularly exploring entry into new market segments and the introduction of new products and features with respect to which we may have limited experience. In addition, our customers may not respond favorably to our new products and services. These products and services may present new and significant technology challenges, and we may be subject to claims if customers of these offerings experience service disruptions or failures or other quality issues. If products or services we introduce, such as changes to our websites and applications, the introduction of social networking and location-based marketing elements to our websites, or entirely new lines of business that we may pursue, fail to engage customers or merchant partners, we may fail to acquire or retain customers or generate sufficient revenue or other value to justify our investment, and our business may be materially and adversely affected. Our ability to generate a customer base and revenue will depend heavily on our ability to innovate and to create successful new products and services.

Our growth prospects may suffer if the Buildablock Platform is unsuccessful.

We have not yet launched the Buildablock Platform. Our ability to generate revenue will depend, in part, on the successful operation of the Buildablock Platform. If the Buildablock Platform fails to attract subscribers, merchants or advertisers, we may fail to generate sufficient revenue, operating margin or other value to justify our investment in the development and operation of the Buildablock Platform. We may encounter technical and operational challenges operating a platform. If we are not successful with the overall monetization of the Buildablock Platform, we may not be able to generate revenue as anticipated and our financial results could be adversely affected.

If we lose the services of our Chief Executive Officer or other members of our senior management team, we may not be able to execute our business strategy.

Our success depends in a large part upon the continued service of our senior management team. In particular, our President, Chief Executive Officer and Interim Chief Financial Officer, Gary Oberman, is critical to our vision, strategic direction, culture, products and technology. We do not maintain key-man insurance for Mr. Oberman or any other member of our senior management team. The loss of our President, Chief Executive Officer and Interim Chief Financial Officer, even temporarily, or any other member of senior management would harm our business.

We may not be able to adequately protect our intellectual property rights or may be accused of infringing intellectual property rights of third parties.

We will rely on trademark, copyright and patent law, trade secret protection and confidentiality and/or license agreements with our employees and others to protect our proprietary rights. We may be unable to prevent third parties from using and registering our trademarks, or trademarks that are similar to, or diminish the value of, our trademarks in some countries.

We may not be able to discover or determine the extent of any unauthorized use of our proprietary rights. The protection of our intellectual property may require the expenditure of significant financial and managerial resources. Moreover, the steps we take to protect our intellectual property may not adequately protect our rights or prevent third parties from infringing or misappropriating our proprietary rights. The costs of supporting any litigation and disputes related to our intellectual property are likely to be considerable, and there can be no assurances that favorable outcomes will be obtained.

We may become subject to third-party claims that we infringe their proprietary rights or trademarks. Such claims, whether or not meritorious, may result in the expenditure of significant financial and managerial resources, injunctions against us or the payment of damages by us. We may need to obtain licenses from third parties who allege that we have infringed their rights, but such licenses may not be available on terms acceptable to us or at all. These risks have been amplified by the increase in third parties whose sole or primary business is to assert such claims.

Government regulation of the Internet and e-commerce is evolving, and unfavorable changes or failure by us to comply with these regulations could substantially harm our business and results of operations.

We are subject to general business regulations and laws as well as regulations and laws specifically governing the Internet and e-commerce. Existing and future regulations and laws could impede the growth of the Internet or other online services. These regulations and laws may involve taxation, tariffs, subscriber privacy, anti-spam, data protection, content,

copyrights, distribution, electronic contracts and other communications, consumer protection, the provision of online payment services and the characteristics and quality of services. It is not clear how existing laws governing issues such as property ownership, sales and other taxes, libel and personal privacy apply to the Internet as the vast majority of these laws were adopted prior to the advent of the Internet and do not contemplate or address the unique issues raised by the Internet or e-commerce. In addition, it is possible that governments of one or more countries may seek to censor content available on our websites and applications or may even attempt to completely block access to our websites. Adverse legal or regulatory developments could substantially harm our business. In particular, in the event that we are restricted, in whole or in part, from operating in one or more countries, our ability to retain or increase our customer base may be adversely affected and we may not be able to maintain or grow our revenue as anticipated.

Any reduction in the availability of Internet access, including through the use of mobile devices, could adversely affect our business.

The success of our services will depend largely on sufficient network availability for us, our customers and our merchant partners. The Internet has experienced, and is likely to continue to experience, significant growth in the number of users and amount of traffic, including a significant increase in bandwidth demands as a result of the use of smartphones and other mobile devices. The Internet infrastructure may be unable to support such demands. In addition, increasing numbers of users, increasing bandwidth requirements or problems caused by viruses, worms, malware and similar programs may harm the performance of the Internet. The backbone computers of the Internet have been the targets of such programs. These outages and delays could reduce the level of Internet usage generally as well as the level of usage of our services, which could adversely impact our business.

If we are unable to implement and maintain effective internal control over financial reporting in the future, the accuracy and timeliness of our financial reporting may be adversely affected.

If we are unable to maintain adequate internal controls for financial reporting in the future, investor confidence in the accuracy of our financial reports may be impacted or the market price of our common stock could be negatively impacted.

The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain qualified board members.

We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, and other applicable securities rules and regulations. Compliance with these rules and regulations has increased and will continue to increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources. The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and operating results.

We also expect that being a public company, subject to these rules and regulations, will make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee and compensation committee, and qualified executive officers.

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

During the quarter ended May 31, 2012, the Company completed its private placement in which it sold an aggregate of 5,947,000 shares of the Company’s common stock, par value $0.00001 per share, for aggregate gross proceeds of $1,486,750. Aggregate commissions were $148,675. The offering was made to a small group of sophisticated investors outside the United States in reliance on Section 4(2) of the Securities Act of 1933, as amended, and/or Regulation S promulgated thereunder. In connection with the issuance, the Company issued one warrant for each share issued, for an aggregate of 5,947,000 warrants. Each warrant may be exercised at any time through August 31, 2013 at an exercise price of $0.50 per share.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

None.

Item 6. Exhibits

Exhibits:

31.1	Certification of Gary Oberman, President, Chief Executive Officer and Interim Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

32.1	Certification of Gary Oberman, President, Chief Executive Officer and Interim Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**

Filed herewith.

Furnished herewith.

SIGNATURES

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

	Buildablock Corp. (Registrant)

Dated: October 15, 2012	By:	/s/ Gary Oberman
		President, Chief Executive Officer and Interim Chief Financial Officer
		(Principal Executive Officer and Principal Financial Officer)

EXHIBIT INDEX

Exhibit No.		Exhibit
31.1		Certification of Gary Oberman, President, Chief Executive Officer and Interim Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1		Certification of Gary Oberman, President, Chief Executive Officer and Interim Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**

Filed herewith.

Furnished herewith.

Buildablock Corp. 10-Q