UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended: ~~September~~ June 30, ~~2013~~ 2014

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

For the transition period from __________ to __________

Commission File No. 000-54562

IGLUE, INC.

(Exact name of registrant as specified in its charter)

Nevada		731602395
(State or other jurisdiction of incorporation)		(IRS Employer Identification No.)

Soroksari ut 94-96

1095 Budapest, Hungary

(Address of principal executive offices)

+36-1-456-6061

(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 past 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§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 o

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

Large accelerated filer	o	Accelerated filer	o

Non-accelerated filer	o	Smaller reporting company	x

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

As of ~~November~~August 14, ~~2013~~2014 there were 11,919,370 shares outstanding of the registrant’s common stock.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION
		Page
Item 1.	Financial Statements.	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	27
Item 4.	Controls and Procedures.	2728
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings.	2829
Item 1A.	Risk Factors.	2829
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	28
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds.	29
Item 3.	Defaults Upon Senior Securities.	29
Item 3	Defaults Upon Senior Securities.	30
Item 4.	Mine Safety Disclosures.	2930
Item 5.	Other Information.	2930
Item 6.	Exhibits.	3031
Signatures		3132

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

iGlue, Inc. (formerly Hardwired Interactive, Inc.)

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEET

Amounts in USD

				September 30, 2013			December 31, 2012
		June 30, 2014	December 31, 2013
ASSETS
Current Assets
Cash		$951	$3,636	$	~~559~~		$	~~565~~
Other receivables	3	22,483	326,023		~~28,700~~			~~33,778~~
Total Current Assets		23,434	29,659		~~29,259~~			~~34,343~~
Intangible assets, net	4	426	4673		~~761~~			~~1,116~~
Fixed assets, net	5	323	5515		~~639~~			~~2,685~~
Total Non-Current Assets		749	1,188		~~1,400~~			~~3,801~~
Total Assets		24,183	30,847		~~30,659~~			~~38,144~~
LIABILITIES
Current Liabilities
Accounts payable and accrued expenses	6	107,589	6109,457	$	~~97,346~~		$	~~72,704~~
Note payable	7	750,000	7750,000		~~750,000~~			~~750,000~~
Other liabilities	8	281,283	8237,290		~~211,462~~			~~144,203~~
Total Current Liabilities		1,138,872	1,096,747		~~1,058,808~~			~~966,907~~
Stockholders’ Deficit
Common stock, $0.11 par value; 11,919,370 and 11,919,370 shares issued and outstanding	9	1,311,131	91,311,131		~~1,311,131~~			~~1,311,131~~
Preferred stock, $0.001 par value 1,000,000 Series A issued and outstanding		1,000	1,000		~~1,000~~			~~1,000~~
Preferred stock, $0.001 par value 886,000 Series B issued and outstanding								—
Unearned compensation		-	(96,000)		~~(588,000~~	)		~~(2,064,000~~	)
Additional Paid-In Capital Deficit accumulated during development stage Other Comprehensive Income	9	9,661,926 (12,205,900) 117,154	9,661,926 (12,058,008) 114,051		~~9,661,926 (11,529,103)~~			~~9,661,926 (9,953,281)~~
					114,897			114,461
Total Stockholders’ Deficit		(1,114,689)	(1,065,900)
Total Stockholders’ Deficit					(1,028,149	)		(928,763	)
Total liabilities and stockholders’ deficit		24,183	30,847
Total liabilities and stockholders’ deficit					30,659			38,144

August 14, 2014

iGlue, Inc. (formerly Hardwired Interactive, Inc.)

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF OPERATIONS

Amounts in USD

	Notes	~~Notes~~For the three months ended June 30, 2014		For the three months ended June 30, 2013	For the ~~three~~six months ended ~~September~~June 30, ~~2013~~2014		For the six months ended June 30, 2013	~~For the three months ended September 30, 2012~~		For the Period from September 19, 2007 (date of inception) to June 30, 2014	~~For the nine months ended September 30, 2013~~			~~For the nine months ended September 30, 2012~~			~~For the Period from September 19, 2007 (date of inception) to September 30, 2013~~
Net Sales		$-		$-	$-	—	$-	$	—	$ -	$	—		$	—		$	—
Research and development	10	0	10	0	0	0	0		~~84,054~~	2,051,802		0			~~810,158~~			~~2,051,802~~
General administration	11	51,330	11	503,255	103,262	~~499,963~~	1,008,536		~~621,559~~	9,128,585		~~1,508,499~~			~~6,077,842~~			~~8,520,533~~
Operating expenses		51,330		503,255	103,262	~~499,963~~	1,008,536		~~705,613~~	11,180,387		~~1,508,499~~			~~6,888,000~~			~~10,572,335~~
Loss from operations		(51,330)		(503,255)	(103,262)	~~(499,963~~	(1,008,536)		~~(705,613~~	(11,180,387)		~~(1,508,499~~	)		~~(6,888,000~~	)		~~(10,572,335~~	)
Interest expenses and exchange gains	12	(22,438)	12	(22,442)	(44,630)	~~(22,685~~	(44,638)		~~(22,413~~	(265,513)		~~(67,323~~	)		~~(67,606~~	)		~~(196,768~~	)
Net loss		(73,768)		(525,697)	(147,892)	~~(522,648~~	(1,053,174)		~~(728,026~~	(11,445,900)		~~(1,575,822~~	)		~~(6,955,606~~	)		~~(10,769,103~~	)
Other comprehensive income		708		(2,030)	3,103	~~(1,143~~	)1,579		~~15,274~~	117,154		~~436~~			~~46,020~~			~~114,897~~
Total comprehensive loss		(73,060)		(527,727)	(144,789)	~~(523,791~~	(1,051,595)		~~(712,752~~	(11,328,746)		~~(1,575,386~~	)		~~(6,909,586~~	)		~~(10,654,206~~	)
Basic loss per share Weighted average number of shares outstanding – Basic and diluted		(0.01) 11,919,370		(0.04) 11,919,370	(0.01) 11,919,370	~~(0.04) 11,919,370~~	(0.09) 11,919,370		~~(0.06) 11,955,370~~			~~(0.13) 11,919,370~~			~~(0.60) 11,491,634~~

~~November~~August 1415, ~~2013~~2014

iGlue, Inc. (formerly Hardwired Interactive, Inc.)

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF STOCKHOLDERS’ DEFICIT AND COMPREHENSIVE INCOME

Amounts in USD

	Stocks Amount		Capital receivable	Accumulated Deficit During Developmental Stage	~~Capital~~Additional ~~receivable~~Paid In Capital	Other Comprehensive Income	Total	Comprehensive Income/ (Loss)	~~Accumulated Deficit During Developmental Stage~~			~~Additional Paid In Capital~~		~~Other Comprehensive Income~~			~~Total~~			~~Comprehensive Income/ (Loss)~~
Issuance of common stock	$17,306	~~17,306~~					$17,306										$	~~17,306~~
Currency Translation Adjustment						$(200)	(200)	(200)						$	~~(200~~	)		~~(200~~	)		~~(200~~	)
Net loss for the period				$(47,733)			(47,733)	(47,733)	$	~~(47,733~~	)							~~(47,733~~	)		~~(47,733~~	)
Balance at December 31, 2007	$17,306	~~17,306~~	$-	$(47,733)	$-	—$(200)	$(30,627)	$(47,933)	$	~~(47,733~~	)	$	—	$	~~(200~~	)	$	~~(30,627~~	)	$	~~(47,933~~	)
Currency Translation Adjustment						24,653	24,653	24,653							~~24,653~~			~~24,653~~			~~24,653~~
Net loss for the period				(231,501)			(231,501)	(231,501)		~~(231,501~~	)							~~(231,501~~	)		~~(231,501~~	)
Balance at December 31, 2008	$17,306	~~17,306~~	$-	$(279,234)	$-	—$24,453	$(237,475)	$(206,848)	$	~~(279,234~~	)	$	—	$	~~24,453~~		$	~~(237,475~~	)	$	~~(206,848~~	)
Issuance of common stock	$2,643	~~2,643~~			251,057		$253,700						~~251,057~~				$	~~253,700~~
Currency Translation Adjustment						$(15,742)	(15,742)	(15,742)						$	~~(15,742~~	)		~~(15,742~~	)		~~(15,742~~	)
Net loss for the period				$(253,511)			(253,511)	(253,511)	$	~~(253,511~~	)							~~(253,511~~	)		~~(253,511~~	)
Balance at December 31, 2009	$19,949	~~19,949~~	$-	$(532,745)	$251,057	—$8,711	$(253,028)	$(269,253)	$	~~(532,745~~	)	$	~~251,057~~	$	~~8,711~~		$	~~(253,028~~	)	$	~~(269,253~~	)

iGlue, Inc.

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF STOCKHOLDERS’ DEFICIT AND COMPREHENSIVE INCOME

Amounts in USD

	Stocks Amount		Capital receivable	Accumulated Deficit During Developmental Stage	~~Capital~~Additional ~~receivable~~Paid In Capital	Other Comprehensive Income	Total	Comprehensive Income/ (Loss)	~~Accumulated Deficit During Developmental Stage~~			~~Additional Paid In Capital~~			~~Other Comprehensive Income~~			~~Total~~			~~Comprehensive Income/ (Loss)~~
Balance at December 31, 2009	$19,949	~~19,949~~	$-	$(532,745)	$251,057	—$8,711	$(253,028)	$(269,253)	$	~~(532,745~~	)	$	~~251,057~~		$	~~8,711~~		$	~~(253,028~~	)	$	~~(269,253~~	)
Issuance of common stock	$2,678	~~2,678~~	(666)		594,483	~~(666~~	)$596,495						~~594,483~~					$	~~596,495~~
Currency Translation Adjustment						$66,173	66,173	66,173							$	~~66,173~~			~~66,173~~			~~66,173~~
Net loss for the period				$(363,030)			(363,030)	(363,030)	$	~~(363,030~~	)								~~(363,030~~	)		~~(363,030~~	)
Balance at December 31, 2010	$22,627	~~22,627~~	$(666)	$(895,775)	$845,540	~~(666~~$74,884	)$46,610	$(296,857)	$	~~(895,775~~	)	$	~~845,540~~		$	~~74,884~~		$	~~46,610~~		$	~~(296,857~~	)
Recapitalisation under reverse merger	$128,655	~~128,655~~			$(128,655)		-					$	~~(128,655~~	)					—
Preferred stock series A	$1,000	~~1,000~~			$(1,000)							$	~~(1,000~~	)
Preferred stock series B	$	886										$	(886	)
Prefferd stock series B	$886				$(886)
Payment of advance on stock issue			$666		$609,241	~~666~~	609,907					$	~~609,241~~						~~609,907~~
Issue of convertible note for reverse merger (see Note 7)				(760,000)			(760,000)			~~(760,000~~	)								~~(760,000~~	)
Currency Translation Adjustment						$(7,395)	(7,395)	(7,395)							$	~~(7,395~~	)		~~(7,395~~	)		~~(7,395~~	)
Net loss for the period				$(632,584)			$(632,584)	$(632,584)	$	~~(632,584~~	)							$	~~(632,584~~	)	$	~~(632,584~~	)
Balance at December 31, 2011	$153,168	~~153,168~~	-	$(2,288,359)	$1,324,240	—$67,489	(743,462)	$(639,979)	$	~~(2,288,359~~	)	$	~~1,324,240~~		$	~~67,489~~			~~(743,462~~	)	$	~~(639,979~~	)

iGlue, Inc.

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF STOCKHOLDERS’ DEFICIT AND COMPREHENSIVE INCOME

Amounts in USD

	Stocks Amount		Accumulated Deficit During Developmental Stage	Additional Paid In Capital	~~Accumulated~~Unearned ~~Deficit During Developmental Stage~~Compensation	Other Comprehensive Income	Total	Comprehensive Income/ (Loss)	~~Additional Paid In Capital~~			~~Unearned Compensation~~			~~Other Comprehensive Income~~		~~Total~~			~~Comprehensive Income/ (Loss)~~
Balance at December 31, 2011	$153,168	~~153,168~~	$(2,288,359)	$1,324,240	$-	(2$67,~~288,359~~489	(743,462)	$(639,979)	$	~~1,324,240~~		$	—		$	~~67,489~~		~~(743,462~~	)	$	~~(639,979~~	)
Private placement of shares at $1 per share	12,790	~~12,790~~		103,485			116,275			~~103,485~~								~~116,275~~
Share based payment at $8 per share	13,420	~~13,420~~		962,580	(976,000)		-			~~962,580~~			~~(976,000~~	)				—
Share based payment at $9.25 per share	89,210	~~89,210~~		7,412,540	(7,501,750)		-			~~7,412,540~~			~~(7,501,750~~	)				—
Private placement of shares at $2 per share	1,245	~~1,245~~		21,379			22,624			~~21,379~~								~~22,624~~
Share based payment at $4 per share	22,000	~~22,000~~		858,000	(880,000)		-			~~858,000~~			~~(880,000~~	)				—
Issue of shares for advance payments	46,584	~~46,584~~		(46,584)			-			~~(46,584~~	)							—
Stock split	973,714	~~973,714~~		(973,714)			-			~~(973,714~~	)							—
Amortization of share based compensation					7,293,750		7,293,750						~~7,293,750~~					~~7,293,750~~
Net loss for the period			(7,664,922)			~~(7,664,922~~	(7,664,922)	(7,664,922)										~~(7,664,922~~	)		~~(7,664,922~~	)
Currency Translation Adjustment						46,972	46,972	46,972								~~46,972~~		~~46,972~~			~~46,972~~
Balance at December 31, 2012	1,312,131	~~1,312,131~~	(9,953,281)	9,661,926	(2,064,000)	(9114,~~953,281~~461	(928,763)	(7,617,950)		~~9,661,926~~			~~(2,064,000~~	)		~~114,461~~		~~(928,763~~	)		~~(7,617,950~~	)

iGlue, Inc.

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF STOCKHOLDERS’ DEFICIT AND COMPREHENSIVE INCOME

Amounts in USD

	Stocks Amount				Accumulated Deficit During Developmental Stage				Additional Paid In Capital		Unearned Compensation			Other Comprehensive Income		Total
	Common and Preferred Stocks		Accumulated Deficit During Developmental Stage	Additional Paid In Capital	Unearned Compensation	Other Comprehensive Income	Total	Comprehensive Income/ (Loss)
Balance at December 31, 2012	1,312,131	~~1,312,131~~	(9,953,281)	9,661,926	(2,064,000)	(9114,~~953,281~~461	(928,763)	(7,617,950)		~~9,661,926~~		~~(2,064,000~~	)		~~114,461~~		~~(928,763~~	)
Amortization of share based compensation					1,968,000		1,968,000					~~1,476,000~~					~~1,476,000~~
Net loss for the period			(2,104,727)			~~(1,575,822~~	(2,104,727)	(2,104,727)									~~(1,575,822~~	)
Currency Translation Adjustment						(410)	(410)	(410)							~~436~~		~~436~~
Balance at September 30, 2013		1,312,131				(11,529,103	)			9,661,926		(588,000	)		114,897		(1,028,149	)
Balance at December 31, 2013	1,312,131		(12,058,008)	9,661,926	(96,000)	114,051	(1,065,900)	(2,105,137)
Amortization of share based compensation					96,000		96,000
Net loss for the period			(147,892)				(147,892)	(147,892)
Currency Translation Adjustment						3,103	3,103	3,103
Balance at June 30, 2014	1,312,131		(12,205,900)	9,661,926	-	117,154	(1,114,689)	(144,789)

iGlue, Inc. (formerly Hardwired Interactive, Inc.)

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOWS

Amounts in USD

		For the period ended September 30, 2013			For the period ended September 30, 2012			Cumulative from September 19, 2007 (date of inception) to September 30, 2013
	For the period ended June 30, 2014	For the period ended June 30, 2013		Cumulative from September 19, 2007 (date of inception) to June 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	(147,892)	(1,~~575~~053,~~822~~174)	)	(11,445,900)	~~(6,955,606~~	)	$	~~(10,769,103~~	)
Adjustments to reconcile net loss to net cash used in operating activities:
Interest accrued	44,630	6744,~~323~~630		239,178	~~67,562~~			~~149,178~~
Stock based payments	96,000	1984,~~476,~~000		9,357,750	~~6,628,243~~			~~8,769,750~~
Recapitalisation under reverse merger								~~(10,000~~	)
Depreciation and amortization	378	21,~~261~~579		52,761	~~2,970~~			~~52,907~~
Changes in operating assets and liabilities:
(Increase) Decrease in other current assets	3,540	56,~~078~~962		(22,483)	~~(6,765~~	)		~~(28,700~~	)
(Decrease) Increase in accounts payable other and accrued liabilities	(2,444)	2414,~~718~~834		139,755	~~37,983~~			~~159,630~~
Net cash (used)/surplus in operating activities	(5,788)	(~~442~~1,169)	)	(1,678,939)	~~(225,613~~	)		~~(1,676,338~~	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of non-current assets	-	0-		(53,571)	~~(1,043~~	)		~~(54,307~~	)
Net cash used in investing activities	-	0-		(53,571)	~~(1,043~~	)		~~(54,307~~	)
CASH FLOWS FROM FINANCING ACTIVITIES
		-
Proceeds from stockholders		0			138,899			1,616,307
CASH FLOWS FROM FINANCING ACTIVITIES
Net cash from financing activities		0			138,899			1,616,307
Proceeds from stockholders	-	-		1,616,307
Effect of exchange rate changes on cash		436			46,020			114,897
Net cash from financing activities	-	-		1,616,307
Net (decrease) increase in cash		(6	)		(41,737	)		559
		-
Cash at beginning of period		565			42,477			—
Effect of exchange rate changes on cash	3,103	1,579		117,154
Cash at end of period		559		$	740		$	559
Net (decrease) increase in cash	(2,685)	410		951
Supplemental disclosure of cash flow information:
Cash at beginning of period	3,636	565		-
Cash paid for:
Cash at end of period	$951	$155		$951
Interest		—			—
Supplemental disclosure of cash flow information:
Taxes		—			—			—
Cash paid for:
Interest	-	-		-
Taxes	-	-		-

iGlue, Inc. (formerly Hardwired Interactive, Inc).

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1 - GENERAL INFORMATION

In4 Ltd. was incorporated in Budapest, Hungary on September 19, 2007, with the objective to develop Web 3.0 internet technologies based on natural language processing and semantic analysis The company is located at Soroksari út. 94-96, Budapest, 1095 Hungary.

Going Concern and Management’s Plan

These financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company has an accumulated deficit since inception of $1012,~~769~~205,~~103~~900. The Company has not generated any revenues to date, and its ability to continue as a going concern is contingent upon the successful completion of additional financing arrangements and its ability to achieve and maintain profitable operations. Management plans to raise equity capital to finance the operating and capital requirements of the Company. Amounts raised will be used for further development of the Company’s product, to provide financing for marketing and promotion and for other working capital purposes. While the Company is putting forth its best efforts to achieve the above plans, there is no assurance that any such activity will generate funds that will be available for operations.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

Reverse merger

On November 3, 2011, the Company entered into a securities exchange agreement with Park Slope, LLC (the “Hardwired Majority Shareholder”), In4, Ltd., and all of the shareholders of In4 Ltd. On November 11, 2011, pursuant to the terms of the Exchange Agreement, the In4 Ltd shareholders transferred and contributed all of their shares to the Company, resulting in an acquisition of all of the outstanding In4 Ltd shares. In return, the Company issued to the In4 Ltd. shareholders, their designees or assigns, an aggregate of 1,000,000 shares of Series A convertible preferred stock, par value $0.001 per share of the Company (the “Series A Preferred Stock”), and 886,000 shares of Series B convertible preferred stock, par value $0.001 per share of the Company (the “Series B Preferred Stock”, and together with the Series A Preferred Stock the “Hardwired Exchange Shares”). The foregoing issuances of the Hardwired Exchange Shares to the In4 Ltd shareholders, their designees or assigns, constituted 100% of the issued and outstanding preferred stock of In4 Ltd. as of and immediately after the consummation of the transactions contemplated by the Exchange Agreement.

Following the acquisition the former stockholders of In4 Ltd. owned a majority of the issued and outstanding common stock of iGlue, Inc. and the management of In4 Ltd. controlled the Board of Directors of iGlue, Inc. and its wholly-owned Hungarian subsidiary In4 Ltd.. Therefore the acquisition has been accounted for as a reverse merger (the “Reverse Merger”) with In4 Ltd. as the accounting acquirer of iGlue. The Company has changed its prior name of Hardwired Inc. to iGlue, Inc. The accompanying consolidated financial statements of the Company reflect the historical results of In4 Ltd., and the consolidated results of operations of iGlue, Inc. subsequent to the acquisition date. In connection with the Exchange Agreement, iGlue, Inc. adopted the fiscal year end of In4 Ltd. as December 31.

All reference to shares and per share amounts in the accompanying consolidated financial statements have been restated to reflect the aforementioned shares exchange.

iGlue, Inc. (formerly Hardwired Interactive, Inc).

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

Reverse stock split

On January 15, 2012 the Company performed a reverse stock split of 1:110, merging every 110 share to 1 resulting in a reduction of the issued and outstanding number shares from 151,282,223 to 1,375,293, with corresponding increase of par values from $0.001 to $0.11. All reference to shares and per share amounts in the accompanying consolidated financial statements have been retroactively restated to reflect the aforementioned reverse stock split.

Business

Through In4, the Company aims to build the world’s largest semantic micro-search and content organizer (curation) company based around our Award Winning iGlue software. The Company considers iGlue to be one of the first and major Web 3.0 initiatives currently under development The Company’s focus is to utilize iGlue’s natural language processing and semantic micro-search capabilities to bring value added content to words on web pages. Rather than doing a search to find more information on a given topic (word) the software brings value added multimedia information as presented in a pop-up window. Images, videos, text, geographic locations, tweets, links, etc. The Company’s strategy is to deploy iGlue across the internet as a standalone, free consumer facing product, and at the same time provide value added corporate versions based around a subscription based business model and advertising revenue sharing.

The Company intends to provide iGlue in the following versions:

free, consumer facing plug-in version;

value added semantic advertising platform;

corporate version with semantic advertising and recommendation engine built in;

The Company expects to be world leaders in semantic technology, by having iGlue to be a unique ‘system’ of several interwoven computational principles the end result of which is the world’s best Web 3.0 search content organizer and search technology.

Basis of presentation

The accompanying consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America for financial information have been condensed pursuant to such rules and regulations. In the opinion of management, the accompanying financial statements include all adjustments (consisting of normal recurring accruals) considered necessary to make the financial statements not misleading as of and for the periods ended ~~September~~June 30, ~~2013~~2014, ~~September~~June 30, ~~2012~~ 2013 and for the period from September 19, 2007 (date of inception) to ~~September~~June 30, ~~2013~~2014.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies adopted in preparation of the financial statements are set out below.

Use of Estimates:

The preparation of the financial statements in conformity with (US) GAAP requires management to make estimates, judgments and assumptions that affect amounts reported herein. Management believes that such estimates, judgments and assumptions are reasonable and appropriate. However, due to the inherent uncertainty involved, actual results may differ from those based upon management’s judgments, estimates and assumptions. Critical accounting policies requiring the use of estimates are depreciation and amortization and share-based payments

iGlue, Inc. (formerly Hardwired Interactive, Inc).

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

Revenue Recognition:

Sales are recognized when there is evidence of a sales agreement, the delivery of the goods or services has occurred, the sales price is fixed or determinable and collectability is reasonably assured, generally upon shipment of product to customers and transfer of title under standard commercial terms. Sales are measured based on the net amount billed to a customer. Generally there are no formal customer acceptance requirements or further obligations. Customers do not have a general right of return on products shipped therefore no provisions are made for return.

Accounts Receivable and Allowance for Doubtful Accounts:

Accounts receivable are stated at historical value, which approximates fair value. The Company does not require collateral for accounts receivable. Accounts receivable are reduced by an allowance for amounts that may be uncollectible in the future. This estimated allowance is determined by considering factors such as length of time accounts are past due, historical experience of write offs, and customers’ financial condition.

Inventories:

Inventories are stated at the lower of cost, determined based on weighted average cost or market. Inventories are reduced by an allowance for excess and obsolete inventories based on management’s review of on-hand inventories compared to historical and estimated future sales and usage.

Fixed assets:

Fixed assets are stated at cost or fair value for impaired assets. Depreciation and amortization is computed principally by the straight-line method. Asset amortization charges are recorded for long lived assets. In the related periods, no asset impairment charges were accounted for.

Depreciation is recorded commencing the date the assets are placed in service and is calculated using the straight line basis over their estimated useful lives.

The estimated useful lives of the various classes of long-lived assets are approximately 3-7 years.

Pensions and Other Post-retirement Employee benefits:

In Hungary, pensions are guaranteed and paid by the state or by pension funds, therefore no pensions and other post-retirement employee benefit costs or liabilities are to be calculated and accounted by the Company.

Product warranty:

The Company accrues for warranty obligations for products sold based on management estimates, with support from sales, quality and legal functions, of the amount that eventually will be required to settle such obligations. At ~~September~~June 30, ~~2013,~~2014 the Company had no warranty obligations..

Advertising costs:

Advertising and sales promotion expenses are expensed as incurred.

iGlue, Inc. (formerly Hardwired Interactive, Inc).

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

Research and development:

In accordance with ASC 730-10-25 “Accounting for Research and Development Costs,” all research and development (“R&D”) costs are expensed when they are incurred, unless they are reimbursed under specific contracts. Assets used in R&D activity, such as machinery, equipment, facilities and patents that have alternative future use either in R&D activities or otherwise are capitalized.

Income taxes:

The Company accounts for income taxes in accordance with ASC 740-10-25, “Accounting for Income Taxes”. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

Valuation allowances are provided against deferred tax assets to the extent that it is more likely than not that the deferred tax assets will not be realized.

Comprehensive Income (Loss):

ASC 220-10-25, “Accounting for Comprehensive Income,” establishes standards for reporting and disclosure of comprehensive income and its components (including revenues, expenses, gains and losses) in a full set of general-purpose financial statements. The items of other comprehensive income that are typically required to be disclosed are foreign currency items, minimum pension liability adjustments, and unrealized gains and losses on certain investments in debt and equity securities. Accumulated other comprehensive income, at ~~September~~June 30, ~~2013~~ 2014 is $~~114~~117,~~897~~154.

Translation of Foreign Currencies:

The U.S. dollar is the functional currency for all of the Company’s businesses, except its operations in Hungary. Foreign currency denominated assets and liabilities for this unit is translated into U.S. dollars based on exchange rates prevailing at the end of each period presented, and revenues and expenses are translated at average exchange rates during the period presented. The effects of foreign exchange gains and losses arising from these translations of assets and liabilities are included as a component of equity, under other comprehensive income.

Loss per Share:

Under ASC 260-10-45, “Earnings Per Share”, basic loss per common share is computed by dividing the loss applicable to common stockholders by the weighted average number of common shares assumed to be outstanding during the period of computation. Diluted loss per common share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. 10,699,001 ~~There were~~potentially nodilutive ~~common~~shares ~~stock~~related ~~equivalents~~to orthe ~~potentially~~company’s ~~dilutive~~convertible ~~securities~~debt ~~outstanding~~have ~~during~~been excluded from the calculation ~~periods~~of ~~ended~~diluted ~~September~~earnings ~~30,~~per ~~2013~~share ~~and September~~because ~~30,~~their ~~2012,~~effect ~~respectively~~would be anti-dilutive. Accordingly, the weighted average number of common shares outstanding for the periods ended ~~September~~ June 30, ~~2013~~2014 and ~~September~~June 30, ~~2012~~2013, respectively, is the same for purposes of computing both basic and diluted net income per share for such years.

iGlue, Inc. (formerly Hardwired Interactive, Inc).

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

Business Segment:

ASC 280-10-45, “Disclosures About Segments of an Enterprise and Related Information,” establishes standards for the way public enterprises report information about operating segments in annual financial statements and requires reporting of selected information about operating segments in interim financial statements regarding products and services, geographical areas and major customers. The Company has determined that under ASC 280-10-45, there are no operating segments since substantially all business operations, assets and liabilities are in Hungarian geographic segment.

Recent Accounting Pronouncements:

~~There~~In ~~are~~June no2014, ~~recent~~the ~~accounting~~FASB ~~pronouncements~~issued Accounting Standards ~~affecting~~Update 2014-10 Development Stage Entities (Topic 915), Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation. The objective of the ~~Company~~amendments in this Update is to improve financial reporting by reducing the cost and complexity associated with the incremental reporting requirements for development stage entities. The amendments in this Update remove all incremental financial reporting requirements from U.S. GAAP for development stage entities, thereby improving financial reporting by eliminating the cost and complexity associated with providing that information The amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2014, early adaptation is permitted.

There are no other recent accounting pronouncements affecting the Company.

NOTE 3 - OTHER RECEIVABLES

	September 30, 2013		December31, 2012
	June 30, 2014		December 31, 2013
Taxes receivable	$	2822,~~700~~483	$	3326,~~778~~023
Total		2822,~~700~~483		3326,~~778~~023

NOTE 4 - INTANGIBLE ASSETS

Intangibles consisted of the followings at ~~September~~June 30, ~~2013~~2014 and December 31, ~~2012~~2013:

	September 30, 2013			December 31, 2012
	June 30, 2014			December 31, 2013
Rights and software	$	212,~~567~~979		$	12,979
Total		212,~~567~~979			12,979
Less: Accumulated amortization		(112,~~806~~553	)		(1112,~~863~~306	)
Net intangibles		~~761~~426			~~1,116~~673

iGlue, Inc. (formerly Hardwired Interactive, Inc).

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

NOTE 5 - FIXED ASSETS

Net property and equipment consisted of the followings at ~~September~~June 30, ~~2013~~2014 and December 31, ~~2012~~2013:

	September 30, 2013			December 31, 2012
	June 30, 2014			December 31, 2013
Computers and office equipments	$	3738,~~751~~761		$	38,761
Total		3738,~~751~~761			38,761
Less: Accumulated depreciation		(3738,~~112~~438	)		(3638,~~076~~246	)
Net property and equipment		~~639~~323			~~2,685~~515

NOTE 6 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

	September 30, 2013		December 31, 2012
	June 30, 2014		December 31, 2013
Accounts payable	$	5174,~~148~~214	$	3172,~~638~~053
Accrued expenses		4633,~~198~~375		4137,~~066~~404
Total		97107,~~346~~589		72109,~~704~~457

iGlue, Inc. (formerly Hardwired Interactive, Inc).

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

NOTE 7 - NOTE PAYABLE

On November 3, 2011, the Company authorized and issued a debenture to the order of Park Slope, LLC. The debenture must be paid in full by the maturity date and accrued interest on the outstanding amount of the loan at a rate of twelve percent (12%) per annum in one lump sum payable on the original maturity date of December 31, ~~2013~~2012. The Note was extended to December 31, 2014. The accrued loan interest amounts to $~~171~~239,~~863~~178 at June ~~September~~ 30, ~~2013~~2014.

As such note payable was issued immediately prior to the reverse merger, such issuance was recorded as additional compensation by the Company prior to the reverse merger. Accordingly, such compensation is reflected in the accompanying consolidated balance sheet as the accumulated deficit of the Company, and will not be reflected in the Statement of operations, as such compensation expense was structured as an expense prior to the recapitalization.

At any time between the original issue date and the maturity date (December 31, ~~2013~~2012) unless previously repaid by the Company, this Debenture shall be convertible into shares of common stock of the Company, par value $0.001 per share, at the option of the holder, in whole or in part. The holder shall effect conversions by delivering to the Company the form of Notice of Conversion specifying therein the amount of the loan plus interest to be converted. The date which the Company receives the Notice of Conversion shall be the conversion date.

On any conversion date, the loan, or any portion thereof, is convertible into shares of the Company’s common stock at a conversion price equal to the average of the immediately preceding three closing bid prices prior to receipt by the Company of the Notice of Conversion to the Company.

iGlue, Inc. (formerly Hardwired Interactive, Inc).

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

NOTE 8 - OTHER LIABILITIES

	September 30, 2013		December 31, 2012
	June 30, 2014		December 31, 2013
Liabilities to employees	$	—3,546	$	383,~~848~~611
Accrued loan interest		~~171~~239,~~863~~178		~~104~~194,548
Other		3938,~~599~~559		~~807~~39,131
Total		~~211~~281,~~462~~283		~~144~~237,~~203~~290

NOTE 9 - STOCKHOLDERS’ EQUITY

The proceeds of the following placements related to 2012:

On June 13, 2012, pursuant to a private placement under Regulation S of the Securities Act of 1933, as amended, the Company sold 21,100 shares of its common stock at $1.00 per share to one unaffiliated private investor for the aggregate amount of $21,100.

On June 11, 2012, pursuant to a private placement under Regulation S of the Securities Act of 1933, as amended, the Company sold 43,300 shares of its common stock at $1.00 per share to one unaffiliated private investor for the aggregate amount of $43,300.

On April 4, 2012, pursuant to a private placement under Regulation S of the Securities Act of 1933, as amended, the Company sold 11,312 shares of its common stock at $2.00 per share to one unaffiliated private investor for the aggregate amount of $22,624.

On April 1, 2012, pursuant to a private placement under Regulation S of the Securities Act of 1933, as amended, the Company sold 22,624 shares of its common stock at $.001 per share to one unaffiliated private investor for the aggregate amount of $22,624.

During March 2012, pursuant to a private placement under Regulation S of the Securities Act of 1933, as amended, the Company sold 29,251 shares of its common stock at $1.00 per share to two unaffiliated private investors for the aggregate amount of $29,251.

The proceeds of the following placements were settled as advance in 2011:

On February 10, 2012, pursuant to a private placement under Regulation S of the Securities Act of 1933, as amended, the Company sold 104,167 shares of its common stock at $1.00 per share to one unaffiliated private investor for the aggregate amount of $104,167.

iGlue, Inc. (formerly Hardwired Interactive, Inc).

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIODS ENDED DECEMBER 31, 2012 AND DECEMBER 31, 2011

NOTE 9 - STOCKHOLDERS’ EQUITY (Continued)

On February 10, 2012, pursuant to a private placement under Regulation S of the Securities Act of 1933, as amended, the Company sold 91,138 shares of its common stock at $1.00 per share to one unaffiliated private investor for the aggregate amount of $91,138.

On February 10, 2012, pursuant to a private placement under Regulation S of the Securities Act of 1933, as amended, the Company sold 43,000 shares of its common stock at $1.00 per share to one unaffiliated private investor for aggregate proceeds of $43,000.

On February 10, 2012 pursuant to a private placement under Regulation S of the Securities Act of 1933, as amended, the Company sold 185,185 shares of its common stock at $1.00 per share to one unaffiliated private investor for the aggregate amount of $185,185.

During the year ended December 31, 2012, pursuant to a private placement under Regulation S of the Securities Act of 1933, as amended, there was a total of $138,899 received from private placements. Private placements related to proceeds from six non-affiliated individuals during the first six months of 2012. The total amount comprised of 116,275 pieces of shares sold at $1 per share and 11,312 pieces of shares sold at $2 per share.

Stock based compensations

On June 1, 2012, the Company entered into a restricted stock agreement with Mr. Peter Boros, Chief Executive Officer of the Company. As part of the agreement Mr. Boros was granted 490,000 shares of restricted common stock, of which 250,000 shares vested immediately with the rest vesting in equal installments of 40,000 shares per each closed quarter, commencing with the first quarter of September 30, 2012 and ending on December 31, 2013 or until such date, if it is prior to December 31, 2013, provided Mr. Boros remains employed by the Company.

On June 1, 2012, the Company entered into a restricted stock agreement with Mr. Viktor Rozsnyay, interim Director of In4, Ltd, our wholly owned subsidiary. As part of the agreement Mr. Rozsnyay was granted 150,000 shares of restricted common stock, all of which vested immediately.

On June 1, 2012, the Company entered into a restricted stock agreement with Mr. Daniel Kun, Jr., an advisor to the Company. As part of the agreement Mr. Kun was granted 100,000 shares of restricted common stock, all of which vested immediately

On June 1, 2012, the Company entered into a restricted stock agreement with Ms. Stella Kun, Executive Assistant to Mr. Boros and Mr. Rozsnyay. As part of the agreement Ms. Kun was granted 56,000 shares of restricted common stock, of which 8,000 shares vested immediately with the rest vesting in equal installments of 8,000 shares per each closed quarter, commencing with the first quarter of September 30, 2012 and ending on December 31, 2013 or until such date, if it is prior to December 31, 2013, provided Ms. Kun remains employed by the Company.

On February 21, 2012, the Company entered into a restricted stock agreement with Adam Meszaros, Lead Programmer of the Company. As part of the agreement Mr. Meszaros was granted 135,000 shares of restricted common stock, of which 15,000 shares vested immediately with the rest vesting in equal installments of 15,000 shares per each closed quarter, commencing with the first quarter of March 31, 2012 and ending on December 31, 2013 or until such date, if it is prior to December 31, 2013, provided Mr. Meszaros remains employed by the Company. On June 11, 2012 Mr. Meszaros submitted his immediate resignation, therefore forfeiting his unvested shares. Upon his resignation the Company cancelled 105,000 of Mr. Meszaros’ unvested shares.

iGlue, Inc. (formerly Hardwired Interactive, Inc).

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIODS ENDED DECEMBER 31, 2012 AND DECEMBER 31, 2011

NOTE 9 - STOCKHOLDERS’ EQUITY (Continued)

On February 21, 2012, the Company entered into a restricted stock agreement with Peter Garas, Lead Server Side Programmer at the Company. As part of the agreement Mr. Garas was granted 54,000 shares of restricted common stock, of which 6,000 shares vested immediately with the rest vesting in equal installments of 6,000 shares per each closed quarter, commencing with the first quarter of March 31, 2012 and ending on December 31, 2013 or until such date, if it is prior to December 31, 2013, provided Mr. Garas remains employed by the Company. On May 31, 2012 Mr. Garas submitted his immediate resignation, therefore forfeiting his unvested shares. Upon his resignation the Company cancelled 42,000 of Mr. Garas’ unvested shares.

On February 21, 2012, the Company entered into a restricted stock agreement with Janka Barkoczi, Office Manager of the Company. As part of the agreement Ms. Barkoczi was granted 27,000 shares of restricted common stock, of which 3,000 shares vested immediately with the rest vesting in equal installments of 3,000 shares per each closed quarter, commencing with the first quarter of March 31, 2012 and ending on December 31, 2013 or until such date if it is prior to December 31, 2013, provided Ms. Barkoczi remains employed by the Company. On September 11, 2012 Ms. Barkoczi submitted her immediate resignation, therefore forfeiting his unvested shares. Upon his resignation the Company cancelled 18,000 of Ms. Barkoczi’s unvested shares.

On February 21, 2012, the Company entered into a restricted stock agreement with Eszter Ripka, Arts Director of the Company. As part of the agreement Ms. Ripka was granted 9,000 shares of restricted common stock, of which 1,000 shares vested immediately with the rest vesting in equal installments of 1,000 shares per each closed quarter, commencing with the first quarter of March 31, 2012 and ending on December 31, 2013 or until such date, if it is prior to December 31, 2013, provided Ms. Ripka remains employed by the Company. On September 11, 2012 Ms. Ripka submitted her immediate resignation, therefore forfeiting his unvested shares. Upon his resignation the Company cancelled 6,000 of Ms. Ripka’s unvested shares.

On February 21, 2012, the Company entered into a restricted stock agreement with Csaba Toth, Arts Director of the Company. As part of the agreement Mr. Toth was granted 9,000 shares of restricted common stock, of which 1,000 shares vested immediately with the rest vesting in equal installments of 1,000 shares per each closed quarter, commencing with the first quarter of March 31, 2012 and ending on December 31, 2013 or until such date, if it is prior to December 31, 2013, provided Mr. Toth remains employed by the Company. On June 20, 2012 Mr. Toth submitted his immediate resignation, therefore forfeiting his unvested shares. Upon his resignation the Company cancelled 7,000 of Mr. Toth’ unvested shares.

On February 21, 2012, the Company entered into a restricted stock agreement with Gergely Nyikos, Designer at the Company. As part of the agreement Mr. Nyikos was granted 18,000 shares of restricted common stock, of which 2,000 shares vested immediately with the rest vesting in equal installments of 2,000 shares per each closed quarter, commencing with the first quarter of March 31, 2012 and ending on December 31, 2013 or until such date, if it is prior to December 31, 2013, provided Mr. Nyikos remains employed by the Company. On September 30, 2012 Mr. Nyikos submitted her immediate resignation, therefore forfeiting his unvested shares. Upon his resignation the Company cancelled 12,000 of Mr. Nyikos’s unvested shares.

On February 21, 2012, the Company entered into a restricted stock agreement with Zoltan Annus, Project Manager of the Company. As part of the agreement Mr. Annus was granted 60,000 shares of restricted common stock, of which 6,000 shares vesting in equal installments per each closed quarter, commencing with the first quarter of March 31, 2012 and ending on September 30, 2014 or until such date, if it is prior to September 30, 2014, provided Mr. Annus remains employed by the Company.

iGlue, Inc. (formerly Hardwired Interactive, Inc).

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIODS ENDED DECEMBER 31, 2012 AND DECEMBER 31, 2011

NOTE 9 - STOCKHOLDERS’ EQUITY (Continued)

On January 30, 2012, the Company entered into a restricted stock agreement with Zoltán Budy, who is to serve as the Chief Financial Officer of the Company. As part of the agreement Mr. Budy was granted 200,000 shares of the Company’s restricted common stock of which 100,000 shares vest upon execution and 25,000 shares vest quarterly up to December 31, 2012, providing Mr. Budy remains employed by the Company.

As consideration for the above services, the Company issued an aggregate of 1,133,000 shares of the Company’s common stock. These share issuances were recorded at $9.25, $8.00 and $4.00 per share, respectively, in the total amount of $9,357,750 in accordance with measurement date principles prescribed under FAS 123 (R).

In June 2012, the Company entered into an agreement with the company of one director for consulting services. According to the agreement the professional provides consulting services to the Company in 2012. In connection with these services, the Company issued to them 15,000 shares of the Company’s common stock. As consideration for such services, the Company issued an aggregate of 15,000 shares of the Company’s common stock. These share issuances were recorded at the fair value of commitment date ($9.25 per share) in the total amount of $138,750 in accordance with measurement date principles prescribed under ASC 505-50 and ASC 718-10. The Company is amortizing the fair value of the shares over the term of the agreement to stock-based compensation expense, which amounted to $0 for the period ended ~~September~~June 30, ~~2013~~2014, respectively and $138,750 for the period from September 19, 2007 (date of inception) to ~~September~~June 30, ~~2013~~2014, in accordance with ASC 505-50 and ASC 718-10.

Warrants

On June 11, 2012, the Company issued a Common Stock Purchase Warrant to PDV Consulting, Kft (“PDV”) Under the terms of the warrant, PDV can acquire a total of 1,500,000 shares of our common stock at a per share price of $10.00. The warrant expires on June 12, 2017. The warrants were issued as part of the cost of raising equity.

The company evaluated the warrants based on essential features that would qualify the warrants as liability. Because the warrants did not include any of the qualifying features, the warrants were classified as equity. As such the Company did not capitalize these warrants because the accounting entries would not have an impact on the financial statements. Instead, the Company will expense these warrant valued at the date of issuance unless these warrants are exercised within one year after the date of issuance.

As of December 31, 2012, the Company has four common stock purchase warrants each with a term of five years after their issuance date and an exercise price of $5.00, $7.00, $9.00 and $10.00 per share, respectively. The $5.00, $7.00 and $9.00 warrants entitle the holder to purchase from the Company up to 1,000,000 warrant shares each, while the $10.00 warrant holder can acquire up to 1,500,000 shares. As of December 31, 2012 the Company has four Warrants outstanding that are exercisable for an aggregate of up to 4,500,000 shares of its common stock.

As of December 31, 2012, there were 1,000,000 shares of Series A Preferred Stock issued and outstanding held by the Company’s former President Peter Vasko. Commencing on January 1, 2013, and continuing until December 31, 2017, Mr. Vasko may convert 200,000 shares of Series A Preferred Stock per calendar year into shares of Common Stock at the conversion ratio of 3,000,000 shares of Common Stock for each 200,000 shares of Series A Preferred Stock. Mr. Vasko is entitled to vote together with the holders of the Common Stock and has 42 votes for every share of Series A Preferred Stock held by Mr. Vasko at the time Mr. Vasko may make such vote.

iGlue, Inc. (formerly Hardwired Interactive, Inc).

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIODS ENDED DECEMBER 31, 2012 AND DECEMBER 31, 2011

NOTE 9 - STOCKHOLDERS’ EQUITY (Continued)

Stock split

On January 15, 2012 the Company performed a reverse stock split detailed in Note 1 above. Additional paid in capital related to private placements made by non affiliated individuals in exchange for subsequent registration subject to the reverse stock split. The placements were made in cash and accounted for as an advance in 2011. The shares were issued in 2012 after the stock split.

The description of the Series A Preferred Stock does not purport to be complete and is qualified by reference to the full text of Exhibit 4.1 to the Form 8-K filed on November 14, 2011.

On May 17, 2009 In4 Ltd. received an investment of $550,000 dollars from one accredited, unaffiliated Hungarian investor. As part of the investment agreement In4 Ltd. stipulated an equity buyback option. This option states that the company has an option to repurchases from the investor 4% equity for HUF 132,000,000, which option expires on August 12, 2011. As all parties involved have elected to take the company public this agreement is no longer in effect and in fact has expired on August 12, 2011.

As of December 31, 2012 the Company has four common stock warrants outstanding that are exercisable for an aggregate of up to 4,500,000 shares of its common stock each with a term of five years after their issuance date. Three warrants entitle the holder to purchase from the Company up to 1,000,000 warrant shares at an exercise price of $5.00, $7.00, $9.00 each and one warrant entitles the holder to purchase up to1.500.000 warrant shares at an exercise price of $10 per share.

As of February, 2012, there were 1,000,000 shares of Series A Preferred Stock issued and outstanding held by the Chief Executive Officer and sole director, Peter Vasko. Commencing on January 1, 2013, and continuing until December 31, 2017, Mr. Vasko may convert 200,000 shares of Series A Preferred Stock per calendar year into shares of Common Stock at the conversion ratio of 3,000,000 shares of Common Stock for each 200,000 shares of Series A Preferred Stock. Mr. Vasko is entitled to vote together with the holders of the Common Stock and has 42 votes for every share of Series A Preferred Stock held by Mr. Vasko at the time Mr. Vasko may make such vote.

On January 15, 2012 the Company performed a reverse stock split detailed in Note 1 above. The 886,000 preferred stock was also converted into 8,860,000 common stock.

Additional paid in capital related to private placements made by non affiliated individuals in exchange for subsequent registration subject to the reverse stock split. The placements were made in cash and accounted for as an advance.

The description of the Series A Preferred Stock does not purport to be complete and is qualified by reference to the full text of Exhibit 4.1 to the Form 8-K filed on November 14, 2011.

iGlue, Inc. (formerly Hardwired Interactive, Inc).

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

NOTE 10 - RESEARCH AND DEVELOPMENT (“R&D”)

	For the period ended September 30, 2013		For the period ended September 30, 2012
		For the period ended June 30, 2014		For the period ended June 30, 2013
Server hosting	$	—	$	—
Translations		—		—
Software development		—		~~93,347~~—
Payroll expenses		—		~~683,314~~—
Other		—		~~33,497~~—
Total		—		~~810,158~~—

NOTE 11 - GENERAL AND ADMINISTRATION

	For the period ended September 30, 2013		For the period ended September 30, 2012
	For the period ended June 30, 2014		For the period ended June 30, 2013
Material expenses	$	—	$	~~1,938~~—
Stock based compensation		196,~~476,~~000		5984,~~949,~~000
Cost of services		306,~~238~~884		~~123~~22,~~934~~957
Depreciation and amortization		~~2,261~~378		21,~~970~~579
Other expenses		—		—
Total		1103,~~508,499~~262		61,~~077~~008,~~842~~536

iGlue, Inc. (formerly Hardwired Interactive, Inc).

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

NOTE 12 - FINANCIAL EXPENSES AND GAINS, NET

	For the period ended September 30, 2013		For the period ended September 30, 2012
	For the period ended June 30, 2014		For the period ended June 30, 2013
Interest expense	$	6744,~~322~~630	$	6744,~~570~~638
Interest income		—		—
Exchange gains, net		1—		36—
Total		6744,~~323~~630		6744,~~606~~638

NOTE 13 - SUBSEQUENT EVENTS

~~Management~~No ~~has evaluated~~ subsequent events ~~up to and including November 21, 2013, which is the date the statements were available for issuance and determined there are no reportable subsequent events~~incurred.

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

This quarterly report on Form 10-Q and other reports filed by the Company from time to time with the SEC contain or may contain forward-looking statements and information that are (collectively, the “Filings”) based upon beliefs of, and information currently available to, the Company’s management as well as estimates and assumptions made by Company’s management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the Filings, the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan,” or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks contained in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2012~~2013, filed with the SEC, relating to the Company’s industry, the Company’s operations and results of operations, and any businesses that the Company may acquire. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates and actual results. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result. The following discussion should be read in conjunction with our consolidated financial statements and notes thereto appearing elsewhere in this report.

Plan of Operation

Our Company has developed an internet semantic search and content organizer application called iGlue. iGlue makes sense of search results based on context by using automatic annotation of web pages with the entities present in iGlue’s proprietary semantic database. iGlue extracts information from the annotated page and stores it, thereby automatically expanding the iGlue database.

iGlue functions by determining the specific meaning a given phrase uses. For example, “Smith” may refer to a profession or a given name, “JFK” may mean the president, the airport, or the space center. iGlue works by disambiguating between these different connotations and assigning the correct meaning to the word automatically. The iGlue system then displays relevant information such as facts, pictures, videos, geographic locations, related links, products, and advertisements about the word or entity within an appealing compact pop up window containing multimedia enhancements.

As of ~~September~~June 30, ~~2013~~2012, the Company has completed development of iGlue and has released its first version to the general public. As of ~~September 30~~December 31, ~~2013~~2012 we have removed iGlue from the public website because of server relocation and redesign of some of its functions ~~based~~ based on user feedback. We plan on relaunching the application in Q2Q1 of ~~2014~~2015, as we are participating on technical conferences to perform further development, if neccesary. Upon relaunch we will focus on international expansion and growth of our product.

Upon relaunch we plan to implement an international marketing campaign aimed at raising iGlue’s user base, increase our employee numbers for further development work, launch a mobile version of iGlue on the iPad and open a new sales and marketing office in the United States. We intend to launch the administrator interface of our advertising system and increase the size of our semantic database to 500 million entities while adding 4 more languages including Spanish, Russian, German and French.

Results of Operations

For the ~~Nine~~Three Months Ended ~~September~~June 30, ~~2013~~ 2014 Compared to the ~~Nine~~Three Months Ended ~~September~~June 30, ~~2012~~2013

	For the Nine Months Ended September 30,				September 19, 2007 (inception) through September 30,
	For the Three Months Ended June 30,				September 19, 2007 (inception) through June 30,
	2013		2012		2013
	2014		2013		2014
Net sales	$	—-		—-		—-
Gross profit	$	—-		—-		—-
General and administrative expenses	$	151,~~508,499~~330		6503,~~077,842~~255		89,~~520~~128,~~533~~585
Loss from operations	$	151,~~508,499~~330		6503,~~888,000~~255		1011,~~572~~180,~~335~~387
Interest Expenses and Exchange Gains	$	6722,~~323~~438		6722,~~606~~442		~~196~~265,~~768~~513
Net loss	$	173,~~575,822~~768		6525,~~955,606~~697		1011,~~769~~445,~~103~~900

Revenue

For the ~~nine~~three months ended ~~September~~ June 30, 2014 ~~2013~~ and ~~2012~~2013, the Company had no revenues.

Research and development

For the ~~six~~three months ended ~~September~~June 30, ~~2013~~2014 and June 30, 2013 research and development expenses were nil ~~as compared to $810,158 for the six months ended September 30, 2012~~. The Company ceased researched and development activities in 2013.

General, selling and administrative expenses

For the ~~nine~~three months ended ~~September~~ June 30, 2014 ~~2013,~~ general, selling and administrative expenses were $151,~~508,499~~330 as compared to $6503,~~077,842~~255 for the ~~nine~~three months ended ~~September~~ June 30, ~~2012~~2013. General, selling and administrative expenses are attributable to the stock based payment to employees that reduced by $444,000 from $492,000 for the period ended June 30, 2013 to $48,000 for the period ended June 30, 2014.

Liquidity and Capital Resources

The following table summarizes total current assets, liabilities and working capital at September 30, 2013 and December 31, 2012.

	September 30, 2013		December 31, 2012
Current Assets	$	29,259	$	34,343
Current Liabilities	$	1,058,808	$	966,907
Working Capital Deficit	$	1,029,549	$	932,564

AtFor ~~September 30, 2013,~~ the ~~company~~Six ~~had~~Months aEnded ~~working capital~~June ~~deficit of $(1~~30,~~029,549),~~ as2014 Compared ~~compared~~ to athe ~~working~~Six ~~capital~~Months ~~deficit~~Ended ofJune ~~$(932~~30,~~564),~~ ~~at December 31, 2012, an increase of $96,985. The increase in working capital deficit is primarily related to an increase in debt financing and operating liabilities.~~2013

Loss from operations for the nine months ended September 30, 2013 and 2012, was $1,508,499 and $6,888,000, respectively. The net loss for the nine months ended September 30, 2013 and 2012, was $1,575,822 and $6,955,606, respectively. Cash used in operating activities for the nine months ended September 30, 2013 and 2012 was primarily for legal and professional fees.

	For the Six Months Ended June 30,				September 19, 2007 (inception) through June 30,
	2014		2013		2014
Net sales	$	-		-		-
Gross profit	$	-		-		-
General and administrative expenses	$	103,262		1,008,536		9,128,585
Loss from operations	$	103,262		1,008,536		11,180,387
Interest Expenses and Exchange Gains	$	44,630		44,638		265,513
Net loss	$	147,892		1,053,174		11,445,900

Revenue

For the six months ended June 30, 2014 and 2013, the Company had no revenues.

Research and development

For the six months ended June 30, 2014 and June 30, 2013 research and development expenses were nil . The Company ceased researched and development activities in 2013.

General, selling and administrative expenses

For the six months ended June 30, 2014 general, selling and administrative expenses were $103,262 as compared to $1,008,536 for the six months ended June 30, 2013. General, selling and administrative expenses are attributable to the stock based payment to employees that reduced by $888,000 from $984,000 for the period ended June 30, 2013 to $96,000 for the period ended June 30, 2014.

Liquidity and Capital Resources

The following table summarizes total current assets, liabilities and working capital at June 30, 2014 and December 31, 2013.

	June 30, 2014		December 31, 2013
Current Assets	$	23,434	$	29,659
Current Liabilities	$	1,138,872	$	1,096,747
Working Capital Deficit	$	1,115,438	$	1,067,088

At June 30, 2014, the company had a working capital deficit of $1,115,438, as compared to a working capital deficit of $1,067,088, at December 31, 2013, an increase of $48,350. The increase in working capital deficit is primarily related to an increase in debt financing and operating liabilities.

Loss from operations for the six months ended June 30, 2014 and 2013, was $103,262 and $1,008,536, respectively. The net loss for the six months ended June 30, 2014 and 2013, was $147,892 and $1,053,174, respectively. Cash used in operating activities for the six months ended June 30, 2014 and 2013 was primarily for legal and professional fees.

Going concern

On the Company’s Annual Report on Form 10-K, filed on April 1514, ~~2013~~2014, our auditors have expressed their substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to generate future profitable operations and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. Our management has no formal plan in place to address this concern but considers that we will be able to obtain additional funds by equity financing and/or related party advances; however there is no assurance of additional funding being available.

Our resources are currently insufficient to fund our operations and capital requirements. Management has determined that additional capital will be required in the form of equity or debt securities. In addition, if we cannot raise additional short term capital we will be forced to continue to further accrue liabilities due to our limited cash reserves. There are no assurances that management will be able to raise capital on terms acceptable to the Company. If we are unable to obtain sufficient amounts of additional capital, we may be required to reduce the scope of our planned development, which could harm our business, financial condition and operating results. If we obtain additional funds by selling any of our equity securities or by issuing common stock to pay current or future obligations, the percentage ownership of our stockholders will be reduced, stockholders may experience additional dilution, or the equity securities may have rights preferences or privileges senior to the common stock. If adequate funds are not available to us when needed on satisfactory terms, we may be required to cease operating or otherwise modify our business strategy.

Critical Accounting Policies

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements require the use of estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Our management periodically evaluates the estimates and judgments made. Management bases its estimates and judgments on historical experience and on various factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates as a result of different assumptions or conditions.

The methods, estimates, and judgment we use in applying our most critical accounting policies have a significant impact on the results we report in our financial statements. The SEC has defined “critical accounting policies” as those accounting policies that are most important to the portrayal of our financial condition and results, and require us to make our most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based upon this definition, our most critical estimates relate to the fair value of warrant liabilities. We also have other key accounting estimates and policies, but we believe that these other policies either do not generally require us to make estimates and judgments that are as difficult or as subjective, or it is less likely that they would have a material impact on our reported results of operations for a given period. For additional information see Note 2, “Summary of Significant Accounting Policies” in the notes to our reviewed financial statements appearing elsewhere in this report. Although we believe that our estimates and assumptions are reasonable, they are based upon information presently available, and actual results may differ significantly from these estimates.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We do not hold any derivative instruments and do not engage in any hedging activities.

Item 4. Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Principal Executive Officer (“PEO”) and Principal Financial Officer (“PFO”), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s PEO and PFO concluded that the Company’s disclosure controls and procedures were not effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s PEO and PFO, as appropriate, to allow timely decisions regarding required disclosure. Disclosure controls are not effective due to the material weakness in internal control over financial reporting disclosed in our annual report on Form 10-K for the year ended December 31, ~~2012~~2013.

(b) Changes in Internal Control over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting during the latest fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

Item 1A. Risk Factors.

We believe there are no changes that constitute material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2012~~2013, filed with the SEC on April ~~15 20~~14, ~~2013~~2014.

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

On April 1, 2012 pursuant to a private placement under Regulation S of the Securities Act of 1933, as amended, the Company sold 22,624 shares of its common stock at $1 per share to one unaffiliated private investor for aggregate proceeds of $22,624.

On April 4, 2012 pursuant to a private placement under Regulation S of the Securities Act of 1933, as amended, the Company sold 11,312 shares of its common stock at $2 per share to one unaffiliated private investor for aggregate proceeds of $22,624.

On June 1, 2012, the Company entered into a restricted stock agreement with Mr. Viktor Rozsnyay, interim Director of in4, Ltd, Our wholly owned subsidiary. As part of the agreement Mr. Rozsnyay was granted 150,000 shares of restricted common stock, all of which vested immediately.

On June 11, 2012 pursuant to a private placement under Regulation S of the Securities Act of 1933, as amended, the Company sold 43,300 shares of its common stock at $1 per share to one unaffiliated private investor for aggregate proceeds of $43,300.

On June 13, 2012 pursuant to a private placement under Regulation S of the Securities Act of 1933, as amended, the Company sold 21,100 shares of its common stock at $1 per share to one unaffiliated private investor for aggregate proceeds of $21,100.

In June 2012, the Company entered into an agreement with the company of one director of the Company for consulting services. Pursuant to the agreement, the professional will provide consulting services to the Company in 2012. As consideration for such services, the Company issued an aggregate of 15,000 shares of the Company’s common stock. These share issuances were recorded at the fair value of commitment date ($9.25 per share) in the total amount of $138,750 in accordance with measurement date principles prescribed under ASC 505-50 and ASC 718-10. The Company is amortizing the fair value of the shares over the term of the agreement to stock-based compensation expense, which amounted to $11,735 for the period ended ~~September~~June 30, ~~2012~~2014, respectively and $11,735 for the period from September 19, 2007 (date of inception) to ~~September~~June 30, ~~2012~~2014, in accordance with ASC 505-50 and ASC 718-10.

The foregoing securities were not registered under the Securities Act of 1933, as amended (the “Securities Act”), but qualified for exemption under Regulation S of the Securities Act. The securities were exempt from registration under Regulation S because the offer or sale occurred in an “offshore transaction.” This means that (i) the seller reasonably believed that the buyer was offshore at the time of the offer or sale, or (ii) the transaction occurred on certain “designated offshore securities markets,” which included each of the Canadian stock exchanges participating in the Committee, and the transaction was not pre-arranged with a buyer in the United States. Additionally, no “directed selling efforts” were made in the United States by the issuer, a distributor, any of their respective affiliates, or any person acting on behalf of any of the foregoing. These activities consisted of efforts reasonably expected to condition the U.S. market for the securities. Based on an analysis of the above factors, the Company has met the requirements to qualify for exemption under Regulation S of the Securities Act.

Item 3. Defaults Upon Senior Securities.

There were no defaults upon senior securities during the quarter ended ~~September~~June 30, ~~2013~~2014.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

There is no other information required to be disclosed under this item which has not been previously disclosed.

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Item 6. Exhibits.

Exhibit No.		Description
31.1		Certification of Principal Executive Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 302 of 2002*

31.2		Certification of Principal Financial Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 302 of 2002*

32.1		Certification of Principal Executive Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

32.2		Certification of Principal Financial Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

* Filed herewith

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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.

	IGLUE, INC.
	(Registrant)
Dated: November 22, 2013
Dated: August 14, 2014
	By:	/s/ Peter Boros
		Name:	Peter Boros
		Title:	Principal Executive Officer and Chief Financial Officer

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