UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

o QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March~~June 3130, 2011

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission file number 333-148883

SPECTRUMDNA, INC.

(Exact name of Registrant as Specified in its Charter)

Delaware	~~20-4880377~~	20-4880377
(State or other jurisdiction	~~(IRS Employer Identification No.)~~	(IRS Employer
of incorporation or organization)		Identification No.)
1781 Sidewinder Drive, Suite 201
2 Davis Drive, PO Box 13169 Research Triangle Park, NC		27709-3169
P.O. Box 682798
(Address of principal executive offices)		(Zip Code)
Park City, Utah	84068
(Address of principal executive offices)	(Zip Code)

(~~435~~919) ~~658~~408-~~1349~~7003

(Registrant’s Telephone Number, Including Area Code)

Not applicable

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.

Yes o No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark 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 o No o

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

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).

Yes ~~o No~~ x No o

State the number of shares outstanding of each of the Issuer’s classes of common stock, as of the latest practicable date: $0.001 par value per share: 6959,~~896~~281,237 outstanding as of ~~May~~February 1312, ~~2011~~2013.

SPECTRUMDNA, INC.

TABLE OF CONTENTS

		~~Page~~	Page
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements.	3		3-13
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	20		14, 15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	27		15
Item 4.	Controls and Procedures.	27		16, 17
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings.	29		18
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	29		18
Item 3.	Default upon Senior Securities.	29		18
Item 4.	[Removed and Reserved.]	29		18
Item 5.	Other Information.	29		18
Item 6.	Exhibits.	29		18
SIGNATURES		30		19

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

SPECTRUMDNA, INC.

Index to Condensed Consolidated Financial Statements

As of June 30, 2011, and For ~~The~~the ~~Three~~Six Month ~~Period~~Periods Ended ~~March~~June 3130, 2011 and 2010

	~~Page~~	Page
Condensed Consolidated Balance Sheets	4		4
Condensed Consolidated Statements of Operations	5		5
Condensed Consolidated Statements of Stockholders’ Equity	6
Condensed Consolidated Statements of Stockholders’ Equity (Deficit)			6
Condensed Consolidated Statements of Cash Flows	7		7
Notes to Condensed Consolidated Financial Statements	9		8-13

SPECTRUMDNA, INC.

SpectrumDNA, Inc.

Condensed Consolidated Balance Sheets

ASSETS

	June 30,			December 31,
	2011			2010
	(Unaudited)
ASSETS
CURRENT ASSETS
Cash	$	271		$	195,876
Receivables associated with assets held for sale, net of allowance
for doubtful accounts of $-0- and $7,206, respectively		27,360			2,200
Prepaid expenses associated with assets held for sale		-			311,336
Prepaid expenses and other assets		4,854			17,354
Total current assets		32,485			526,766

OTHER ASSETS
Assets held for sale, discontinued operations		558			7,485
Total other assets		558			7,485

TOTAL ASSETS	$	33,043		$	534,251

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable	$	86,663		$	56,864
Accounts payable - related parties		3,309			261
Liabilities associated with assets held for sale		18,138			77,937
Notes payable		2,284			15,828
Total current liabilities		110,394			150,890

STOCKHOLDERS’ EQUITY (DEFICIT):
Preferred stock- $0.001 par value, 10,000,000 shares authorized,		-			-
-0- shares issued and outstanding
Common stock- $0.001 par value, 250,000,000 shares authorized,
69,896,237 and 69,058,237 shares issued and outstanding, respectively		69,896			69,058
Additional paid-in capital		9,597,433			9,359,475
Accumulated deficit		(9,744,680	)		(9,045,172	)
Total stockholders’ equity (deficit)		(77,351	)		383,361
Total liabilities and stockholders' equity (deficit)	$	33,043		$	534,251

	March 31,			December 31,
	2011			2010
	(Unaudited)
CURRENT ASSETS
Cash	$	63,863		$	195,876
Accounts receivable, net		66,606			2,200
Prepaid consulting services		186,667			189,780
Prepaid expenses and other assets		15,880			24,021
Total Current Assets		333,016			411,877
PROPERTY AND EQUIPMENT, NET		6,647			6,445
OTHER ASSETS
Intangible assets, net		671			1,040
Prepaid consulting services, long term		62,222			108,889
Security deposit		1,000			6,000
Total Other Assets		63,893			115,929
TOTAL ASSETS	$	403,556		$	534,251
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	105,494		$	73,851
Accounts payable - related parties		1,480			261
Accrued expenses		49,200			49,200
Deferred revenue		12,100			11,750
Notes payable		9,090			15,828
Total Current Liabilities		177,364			150,890
Total Liabilities		177,364			150,890
STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par value, 10,000,000 shares authorized,
-0- shares issued and outstanding		-			-
Common stock, $0.001 par value, 250,000,000 shares authorized,		69,058			69,058
69,058,237 and 69,058,237 shares issued and outstanding, respectively
Additional paid-in capital		9,444,580			9,359,475
Accumulated deficit		(9,287,446	)		(9,045,172	)
Total Stockholders' Equity		226,192			383,361
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY	$	403,556		$	534,251

The accompanying notes are an integral part of these condensed consolidated financial statements

The accompanying notes are an integral part of these condensed consolidated financial statements.

SPECTRUMDNA, INC.

Condensed Consolidated Statements of Operations

SpectrumDNA, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

	For the Three			For the Three
	For the Three Months Ended						For the Six Months Ended
	Months Ended			Months Ended
	June 30,						June 30,
	March 31,			March 31,
	2011			2010			2011			2010
	2011			2010
				(Restated)						(Restated)
				(Restated)
REVENUE	$	-		$	-		$	-		$	-
REVENUES, net	$	117,599		$	26,000
OPERATING EXPENSES
COST OF SALES		370			1,402
General and administrative		38,372			27,171			87,242			82,809
GROSS PROFIT		117,229			24,598
Salaries and wages		79,350			273,138			164,455			505,082
OPERATING EXPENSES
Depreciation and amortization expense		1,721			3,126			3,089			5,938
General and administrative		129,444			209,707
Total Operating Expenses		119,443			303,435			254,786			593,829
Salaries and wages		219,476			389,547
OPERATING LOSS		(119,443	)		(303,435	)		(254,786	)		(593,829	)
Product development expenses		9,278			11,498
OTHER INCOME (EXPENSES)
Depreciation expense		998			1,412
Interest income		17			722			122			1,082
Total Operating Expenses		359,196			612,164
Interest expense		(208	)		(228	)		(344	)		(3,067	)
OPERATING LOSS		(241,967	)		(587,566	)
Interest expense - beneficial conversion
OTHER INCOME (EXPENSES)
feature		-			-			-			(47,232	)
Interest income		104			360
Other income (expenses)		(275	)		-			(275	)		-
Interest expense		(136	)		(2,839	)
Total Other Income (Expenses)		(466	)		494			(497	)		(49,217	)
Interest expense - beneficial conversion feature		-			(47,232	)
LOSS FROM CONTINUING OPERATIONS
Other income / (expense)		(275	)		5,100
BEFORE INCOME TAXES		(119,909	)		(302,941	)		(255,283	)		(643,046	)
Total Other Income / (Expenses)		(307	)		(44,611	)
INCOME TAX EXPENSE		-			-			-			-
NET LOSS BEFORE INCOME TAXES		(242,274	)		(632,177	)
LOSS FROM CONTINUING OPERATIONS		(119,909	)		(302,941	)		(255,283	)		(643,046	)
INCOME TAX EXPENSE		-			-
LOSS FROM DISCONTINUED
NET LOSS	$	(242,274	)	$	(632,177	)
OPERATIONS		(337,189	)		(242,392	)		(444,225	)		(534,465	)
BASIC AND FULLY DILUTED LOSS PER SHARE	$	(0.00	)	$	(0.01	)
NET LOSS	$	(457,098	)	$	(545,333	)	$	(699,508	)	$	(1,177,511	)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING		69,058,237			63,963,670
NET LOSS PER COMMON SHARE
Loss from continuing operations	$	(0.002	)	$	(0.004	)	$	(0.004	)	$	(0.010	)
Loss from discontinued operations		(0.005	)		(0.004	)		(0.006	)		(0.008	)
NET LOSS PER COMMON SHARE - Basic
and diluted	$	(0.007	)	$	(0.008	)	$	(0.010	)	$	(0.018	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING -
Basic and diluted		69,601,556			69,058,237			69,331,397			66,525,027

The accompanying notes are an integral part of these condensed consolidated financial statements.

SPECTRUMDNA, INC.

Condensed Consolidated Statements of Stockholders' Equity (Deficit)

~~SpectrumDNA~~ For the Period January 1, ~~Inc.~~2011 through June 30, 2011

Condensed Consolidated Statements of Stockholders' Equity

	Common Stock				Additional Paid-In		Accumulated
	Shares		Amount		Capital		Deficit			Total

Balance, December 31, 2010		69,058,237		69,058		9,359,475		(9,045,172	)		383,361

Stock based compensation (unaudited)		-		-		164,455		-			164,455
Common shares issued for services
rendered at $0.03 per share (unaudited)		838,000		838		24,303		-			25,141
Contribution of deferred compensation by
former related parties (unaudited)		-		-		49,200		-			49,200
Net loss for the six months ended
June 30, 2011 (unaudited)		-		-		-		(699,508	)		(699,508	)

Balance, June 30, 2011 (unaudited)		69,896,237	$	69,896	$	9,597,433	$	(9,744,680	)	$	(77,351	)

~~For~~ The ~~the~~accompanying ~~period~~notes ~~January~~are 1,an ~~2010~~integral ~~through~~part ~~March~~of ~~31,~~these ~~2011~~condensed consolidated financial statements

	Preferred Stock				Common Stock				Additional Paid-In		Accumulated			Total Stockholders'
	Shares		Amount		Shares		Amount		Capital		Deficit			Equity
Balance, December 31, 2009		-	$	-		52,747,237	$	52,747	$	7,145,683	$	(7,078,273	)	$	120,157
Common shares issued for cash at $0.10 per share		-		-		15,150,000		15,150		1,365,700		-			1,380,850
Common shares issued for conversion of convertible promissory notes at $0.10 per share		-		-		661,000		661		65,439		-			66,100
Common shares issued for pre-paid services at an average of $0.14 per share		-		-		500,000		500		68,500		-			69,000
Stock based compensation		-		-		-		-		714,153		-			714,153
Net loss for the year ended December 31, 2010		-		-		-		-		-		(1,966,899	)		(1,966,899	)
Balance, December 31, 2010		-		-		69,058,237		69,058		9,359,475		(9,045,172	)		383,361
Stock based compensation (unaudited)		-		-		-		-		85,105		-			85,105
Net loss for the three months ended March 31, 2011 (unaudited)		-		-		-		-		-		(242,274	)		(242,274	)
Balance, March 31, 2011 (unaudited)		-	$	-		69,058,237	$	69,058	$	9,444,580	$	(9,287,446	)	$	226,192

The accompanying notes are an integral part of these condensed consolidated financial statements.

SPECTRUMDNA, INC.

Condensed Consolidated Statements of Cash Flows

SpectrumDNA, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	For the Three			For the Three
	For the Six			For the Six
	Months Ended			Months Ended
	March 31,			March 31,
	June 30,			June 30,
	2011			2010
				(Restated)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(~~242~~699,~~274~~508	)	$	(~~632~~1,177,511	)
Adjustments to reconcile net loss to net used by operating activities:
Adjustments to reconcile net loss to net cash
Depreciation and amortization		1,368			2,810
used in operating activities:
Stock options and warrants granted for services rendered		85,105			231,944
Depreciation and amortization		3,089			5,938
Prepaid consulting services		49,780			56,506
Common stock issued for services rendered		25,141			505,082
Accretion of remaining discount on convertible promissory notes		-			47,232
Stock options and warrants issued for services rendered		164,455			69,000
Changes in operating assets and liabilities
Accretion of remaining discount on convertible promissory notes		-			47,231
(Increase) / decrease in accounts receivable		(64,406	)		5,750
Changes in operating assets and liabilities:
(Increase) / decrease in prepaid expenses and other		8,141			(11,327	)
Accounts receivable - associated with assets held for sale		(25,160	)		(9,500	)
(Increase) / decrease in security deposit		5,000			-
Prepaid expenses associated with assets held for sale		311,336			45,354
Increase / (decrease) in accounts payable and accrued expenses		32,862			(179,211	)
Prepaid expenses		12,500			14,784
Increase / (decrease) in unearned revenue		350			-
Accounts payable and accrued liabilities		29,799			(169,177	)
Net Cash Used in Operating Activities		(124,074	)		(478,473	)
Accounts payable - related party		3,048			-
Liabilities - Associated with assets held for sale		(10,601	)		(38,470	)
Net cash (used in) operating activities		(185,901	)		(707,269	)
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for fixed assets		(1,200	)		(4,426	)
Additions to fixed assets		(1,200	)		(8,128	)
Net Cash Used in Investing Activities		(1,200	)		(4,426	)
Net proceeds from sale of fixed assets		5,040			-
CASH FLOWS FROM FINANCING ACTIVITIES
Net cash provided by (used in) investing activities		3,840			(8,128	)
Cash received from issuance of common stock, net of stock offering costs		-			1,380,850
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments made on notes payable		(6,739	)		(7,115	)
Issuance of common stock, net of stock offering costs		-			1,380,850
Cash paid for repayment of convertible promissory notes		-			(44,859	)
Payments made on notes payable		(13,544	)		(14,310	)
Net Cash (Used) / Provided by Financing Activities		(6,739	)		1,328,876
Repayment of convertible promissory notes		-			(38,758	)
NET INCREASE / (DECREASE) IN CASH		(132,013	)		845,977
Net cash provided by (used in) financing activities		(13,544	)		1,327,782
CASH AT BEGINNING OF PERIOD		195,876			10,302
NET INCREASE (DECREASE) IN CASH		(195,605	)		612,385
CASH AT END OF PERIOD	$	63,863		$	856,279
CASH AT BEGINNING OF PERIOD		195,876			10,303
CASH AT END OF PERIOD	$	271		$	622,688
SUPPLEMENTAL DISCLOSURES FOR CASH FLOW INFORMATION:
CASH PAID FOR:
Interest	$	204		$	5,545
Income taxes	$	-		$	-
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Common stock issued for prepaid consulting services	$	25,141		$	69,000
Common stock issued for payment of convertible promissory
notes and interest	$	-		$	66,100
Cancellation of deferred compensation	$	49,200		$	-

The accompanying notes are an integral part of these condensed consolidated financial statements.

SpectrumDNA, Inc.

Condensed Consolidated Statements of Cash Flows (Continued)

(Unaudited)

	For the Three Months Ended March 31, 2011		For the Three Months Ended March 31, 2010
			(Restated)
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
CASH PAID FOR:
Interest	$	136	$	5,455
Income Taxes	$	-	$	-
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Common stock issued for prepaid consulting services	$	-	$	69,000
Common stock issued for payment of convertible promissory notes and interest	$	-	$	61,000

The accompanying notes are an integral part of these condensed consolidated financial statements.

SPECTRUMDNA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(~~unaudited~~Unaudited)

NOTE 1 - BASIS OF PRESENTATION AND USE OF ESTIMATES

The interim financial statements of SpectrumDNA, Inc. (“we,” “us,” “our,” “Spectrum” or the “Company”) are unaudited and contain all adjustments (consisting primarily of normal recurring accruals) necessary for a fair statement of the results for the interim periods presented. Results for interim periods are not necessarily indicative of results to be expected for a full year or for previously reported periods due in part, but not limited to, the timing of acquisitions, product demand, market competition, and our ability to obtain additional capital. In the opinion of management, all adjustments which are necessary for a fair presentation of the results for the interim period have been included. You should read these condensed consolidated unaudited interim financial statements in conjunction with the audited consolidated financial statements and notes thereto included in Spectrum’s Annual Report on Form 10-K for the year ended December 31, 2010.

NOTE 2 - ~~GOING~~DISCONTINUED ~~CONCERN~~OPERATIONS

~~The~~During ~~Company~~the ~~prepares~~quarter ~~its~~ended ~~financial~~June ~~statements~~30, ~~using~~2012, ~~accounting~~the ~~principles~~Company ~~generally~~discontinued ~~accepted~~its inAddictionary ~~the~~and ~~United~~PlanetTagger ~~States~~product oflines. ~~America~~Addictionary ~~generally~~was ~~applicable to~~ a ~~going~~social ~~concern,~~word ~~which~~play ~~contemplates~~engine. ~~the~~PlanetTagger ~~realization~~was ofa ~~assets~~location-enabled ~~and~~integrated ~~liquidation~~social ofmedia ~~liabilities~~platform. inThe ~~the~~Company ~~normal~~has ~~course~~reclassified ofall ~~business. Accordingly,~~amounts ~~the~~presented ~~consolidated~~in these financial statements ~~do not include any adjustments related~~ to reflect the ~~recoverability~~impact of ~~assets~~the ordiscontinuance ~~classification~~ of ~~liabilities~~operations. ~~that~~The ~~might~~Company berealized ~~necessary should we be unable to continue as~~ a ~~going~~loss ~~concern. At~~of ~~March 31~~$337,189 ~~2011,~~during ~~the~~this ~~Company’s~~quarter ~~current~~that ~~assets~~was ~~exceeded~~related itto ~~current~~the ~~liabilities~~discontinued operations. ~~However,~~ itThe ~~has~~assets ~~incurred~~(receivables) ~~substantial~~related ~~losses~~to inthe ~~this~~discontinued ~~quarter~~operations ~~and~~have ~~prior~~been ~~fiscal~~written ~~years~~down ~~resulting~~to ina annet ~~accumulated~~realizable ~~deficit~~value of $927,~~287,446~~918 ~~at March 31, 2011. The Company has recorded negative cash flows from operations in this quarter~~ and ~~prior~~the ~~fiscal~~liabilities ~~years. The~~associated ~~preceding circumstances combine~~ to ~~raise~~the ~~substantial~~sale ~~doubt~~of ~~about~~these ~~the~~assets ~~Company’s~~are ~~ability~~recorded toat ~~continue~~$18,138 as aof ~~going~~June ~~concern~~30, 2011.

Management’s plan to continue as a going concern includes significant cost cutting measures implemented in November of 2008 and again in October of 2010 to improve earnings potential. Given the stabilization of its cost structure, the Company is currently focused on the execution of its business operation strategy to continue to increase its revenues from the sales of its products and services.

	At June 30,			At December 31,
	2011			2010

Receivables associated with assets held for sale, net	$	27,360		$	2,200
Computer equipment		-			26,411
Software		-			8,393
Patents, trademarks, and domain names		7,182			7,083
Product development costs		194,323			194,423
Less: Accumulated depreciation and amortization		(200,947	)		(228,825	)
Total assets held for sale - Discontinued operations	$	27,918		$	9,685

Total liabilities associated with assets held for sale -
Discontinued operations	$	18,138		$	77,937

~~NOTE~~The 3following -tables ~~NET~~present ~~LOSS~~the ~~PER~~revenues ~~SHARE~~and OFexpenses ~~COMMON~~related ~~STOCK~~to the above projects for the three month and six month periods ended June 30, 2011, and June 30, 2010. Prior period income statement amounts applicable to the above projects have been reclassified and included under income (loss) from discontinued operations.

The Company computes net loss per share of common stock in accordance with ASC 260, Earnings per Share. Under the provisions of ASC 260, basic net income (loss) per share is computed using the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon the exercise of stock options and warrants and the conversion of convertible promissory notes. The dilutive effect of these instruments is reflected in diluted earnings per share by application of the treasury stock method. As of March 31, 2011 and 2010, the number of shares underlying these instruments is as follows:

	Three Months Ended,			Three Months Ended,
	June 30, 2011			June 30, 2010

REVENUE	$	97,910		$	39,500
OPERATING EXPENSES
General and administrative		288,141			72,156
Salaries and wages		132,075			174,933
Product development costs		15,732			34,803
Total Operating Expenses		435,948			281,892
OPERATING LOSS		(338,038	)		(242,392	)
OTHER INCOME (EXPENSES)
Gain on sale of equipment		849			-
Total Other Income (Expenses)		849			-
LOSS FROM DISCONTINUED OPERATIONS	$	(337,189	)	$	(242,392	)

	2011		2010
Shares of common stock underlying stock options		14,293,008		15,264,551
Shares of common stock underlying warrants		18,208,586		18,208,586
Total shares		32,501,594		33,473,137

SPECTRUMDNA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(~~unaudited~~Unaudited)

NOTE 32 - ~~NET~~DISCONTINUED ~~LOSS~~OPERATIONS ~~PER SHARE OF COMMON STOCK~~ (~~CONTINUED~~Continued)

For the three months ended March 31, 2011 and 2010, potential common shares of 32,501,594 and 33,473,137 resulting from the aforementioned instruments, respectively, were considered but not included in the calculation of diluted loss per share as their effect would be anti-dilutive.

	Six Months Ended,			Six Months Ended,
	June 30, 2011			June 30, 2010

REVENUE	$	218,509		$	70,600
OPERATING EXPENSES
General and administrative		372,125			226,227
Salaries and wages		266,448			332,536
Product development costs		25,010			46,302
Total Operating Expenses		663,583			605,065
OPERATING LOSS		(445,074	)		(534,465	)
OTHER INCOME (EXPENSES)
Gain on sale of equipment		849			-
Total Other Income (Expenses)		849			-
LOSS FROM DISCONTINUED OPERATIONS	$	(444,225	)	$	(534,465	)

	2011			2010
				(Restated)
Basic and Fully Diluted earnings per share:
Loss (numerator)	$	(242,274	)	$	(632,177	)
Weighted average number of shares outstanding – basic (denominator)		69,058,237			63,963,670
Per share amount	$	(0.00	)	$	(0.01	)

NOTE 3 - RELATED PARTY TRANSACTIONS

~~NOTE~~As 4of -June ~~SHARE~~30, ~~BASED~~2011, ~~PAYMENT~~and December 31, 2010, the Company recorded accounts payable balances of $3,309 and $261, respectively. From time to time, employees of the Company procure goods or services on behalf of the Company which require reimbursement or are owed non-salaried compensation.

NOTE 4 – SHARE BASED PAYMENT

The Company follows the provisions of ASC 718, Share Based Payment which requires the grant-date fair value of all share-based payment awards that are expected to vest, including employee share options, to be recognized as employee compensation expense over the requisite service period.

During the ~~three~~six months ended ~~March~~June 3130, 2011 and ~~2009~~2010, the Company recorded $85164,~~105~~455 and $~~231~~505,~~944~~082, respectively, in compensation expense related to share-based payment awards. The Company recognizes compensation expense for share-based payment awards on the straight-line basis over the requisite service period of the entire award, unless the awards are subject to market conditions, in which case the Company recognizes compensation expense over the requisite service period of each separate vesting installment. Compensation expense related to share-based payment awards has been included in general and administrative expense for non-employees and in salaries and wages for employees. During the ~~three~~six months ended ~~March~~June 3130, ~~2011and~~2011 and 2010, the Company recorded $60114,~~359~~962 and $~~136~~284,~~027~~494, respectively, in compensation expense related to ~~shared~~share-based ~~payments~~payment awards for employees. The fair value of each option or warrant award is estimated on the date of the grant using the Black-Scholes pricing model that uses the assumptions noted in the following table. The expected term of the options or warrants granted represents the period of time that options or warrants granted are expected to be outstanding. Expected volatilities are based on historical volatility of the stock of similar companies and other factors. The risk-free interest rate for the period matching the expected term of the option or warrant is based on the U.S. Treasury yield curve in effect at the time of the grant.

Common Stock Options

During the first ~~quarter~~and second quarters of 2011, there were no material changes to common stock options from those disclosed in the audited annual consolidated financial statements for the year ended December 31, 2010, other than the cancellation of ~~250~~1,~~000~~583,333 common stock options as the ~~employee~~employees to whom the options had been granted left the Company.

SPECTRUMDNA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 4 – SHARE BASED PAYMENT (Continued)

Changes in stock options issued to employees, advisors, and board members for the periods ended June 30, 2011 and December 31, 2010 are as follows:

	Number of			Weighted Average
	Options			Exercise Price

Outstanding, December 31, 2009		13,762,075		$	0.31
Granted		7,520,000			0.12
Exercised		-			-
Cancelled		(6,739,067	)		0.23
Outstanding, December 31, 2010		14,543,008		$	0.26
Exercisable, December 31, 2010		10,020,716		$	0.30

Outstanding, December 31, 2010		14,543,008		$	0.26
Granted		-			-
Exercised		-			-
Cancelled		(1,583,333	)		0.09
Outstanding, June 30, 2011		12,959,675		$	0.28
Exercisable, June 30, 2011		11,112,278		$	0.29

The following table summarizes information about stock options granted to employees, advisors, and board members at June 30, 2011:

OPTIONS OUTSTANDING								OPTIONS EXERCISABLE
						Weighted						Weighted
						Average						Average
Range				Weighted		Remaining				Weighted		Remaining
of				Average		Contractual				Average		Contractual
Exercise		Number of		Exercise		Life		Number of		Exercise		Life
Prices		Options		Price		(in years)		Options		Price		(in years)

	0.04		1,620,000	$	0.04		5.35		1,620,000	$	0.04		5.35
	0.50		1,819,643		0.50		6.11		1,819,643		0.50		6.11
	0.55		1,620,000		0.55		6.98		1,620,000		0.55		6.98
	0.56		1,020,000		0.56		7.09		749,167		0.56		7.09
	0.46		400,000		0.46		7.26		400,000		0.46		7.26
	0.21		420,000		0.21		8.90		420,000		0.21		8.90
	0.11		1,823,365		0.11		7.68		1,406,698		0.11		7.68
	0.17		1,000,000		0.17		7.79		552,083		0.17		7.79
	0.34		250,000		0.34		7.94		250,000		0.34		7.94
	0.33		200,000		0.33		7.99		200,000		0.33		7.99
	0.19		250,000		0.19		8.29		106,771		0.19		8.29
	0.20		500,000		0.20		8.55		500,000		0.20		8.55
	0.14		156,250		0.14		8.72		156,250		0.14		8.72
	0.13		500,000		0.13		8.77		156,250		0.13		8.77
	0.09		280,416		0.09		8.93		280,416		0.09		8.93
	0.07		100,000		0.07		9.01		25,000		0.07		9.01
	0.22		200,000		0.22		9.01		200,000		0.22		9.01
	0.08		200,000		0.08		9.01		200,000		0.08		9.01
	0.05		600,000		0.05		9.26		450,000		0.05		9.26
Totals			12,959,674	$	0.28		7.33		11,112,278	$	0.29		7.21

SPECTRUMDNA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(~~unaudited~~Unaudited)

NOTE 4 -– SHARE BASED PAYMENT (~~CONTINUED~~Continued)

Common Stock Options (Continued)

~~Changes~~On inJune 30, 2008, the Board of Directors of the Company approved and adopted the 2008 Equity Incentive Plan, under which 10,000,000 stock options ~~issued~~were available in 2008. Pursuant to ~~employees~~the Plan, ~~advisors~~an additional 2,436,983 stock options were made available on January 1, 2009, another 2,637,362 were made available on January 1, 2010, and ~~board~~another ~~members~~3,452,912 ~~for~~were ~~the~~made ~~periods~~available ~~ended~~on ~~March~~January 311, 2011. Of ~~and~~the ~~December~~12,959,674 31options outstanding, ~~2010~~9,520,031 ~~are~~were asissued ~~follows:~~under the Plan.

	Number Of Options			Weighted Average Exercise Price
Outstanding, December 31, 2009		13,762,075		$	0.31
Granted		7,520,000			0.12
Exercised		-			-
Cancelled		(6,739,067	)		0.23
Outstanding, December 31, 2010		14,543,008		$	0.26
Exercisable, December 31, 2010		10,020,716		$	0.30
Outstanding, December 31, 2010		14,543,008		$	0.26
Granted		-			-
Exercised		-			-
Cancelled		(250,000	)		0.04
Outstanding, March 31, 2011		14,293,008		$	0.26
Exercisable, March 31, 2011		10,619,987		$	0.30

As of June 30, 2011, the aggregate intrinsic value of the options outstanding and exercisable was $0 and $0, respectively. As of June 30, 2010, the aggregate intrinsic value of the options outstanding and exercisable was $53,460 and $53,460, respectively. The total fair value of shares vested during the six months ended June 30, 2011 and 2010 was $7,833 and $167,604, respectively.

Warrants

In connection with the Bridge Financing and Private Offering discussed in Note 7 below, the Company granted warrants to purchase the Company’s common stock to the investors in each offering during the quarters ended December 31, 2009 and March 31, 2010. These warrants have exercise prices of $0.10 and $0.25, vested upon grant, and are exercisable for a period of five years. No warrants have been issued since the quarter ended March 31, 2010.

Changes in warrants issued to investors for the periods ended June 30, 2011 and December 31, 2010 are as follows:

	Number of		Weighted Average
	Warrants		Exercise Price

Outstanding, December 31, 2009		1,048,586	$	0.25
Granted		17,160,000		0.24
Exercised		-		-
Cancelled		-		-
Outstanding, December 31, 2010		18,208,586	$	0.24
Exercisable, December 31, 2010		18,208,586	$	0.24

	Number of		Weighted Average
	Warrants		Exercise Price

Outstanding, December 31, 2010		18,208,586	$	0.24
Granted		-		-
Exercised		-		-
Cancelled		-		-
Outstanding, June 30, 2011		18,208,586	$	0.24
Exercisable, June 30, 2011		18,208,586	$	0.24

SPECTRUMDNA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(~~unaudited~~Unaudited)

NOTE 4 -– SHARE BASED PAYMENT (~~CONTINUED~~Continued)

~~Common~~The ~~Stock~~following ~~Options~~table ~~(Continued)~~summarizes information about stock warrants granted to employees, investors, and board members as of June 30, 2011:

The following table summarizes information about stock options granted to employees, advisors, and board members at March 31, 2011:

WARRANTS OUTSTANDING								WARRANTS EXERCISABLE
						Weighted						Weighted
						Average						Average
				Weighted		Remaining				Weighted		Remaining
Range of				Average		Contractual				Average		Contractual
Exercise		Number of		Exercise		Life		Number of		Exercise		Life
Prices		Warrants		Price		(in years)		Warrants		Price		(in years)

$	0.25		17,203,586	$	0.25		3.57		17,203,586	$	0.25		3.57
	0.10		1,005,000		0.10		3.55		1,005,000		0.10		3.55
Totals			18,208,586	$	0.24		3.57		18,208,586	$	0.24		3.57

Options Outstanding								Options Exercisable
Range of Exercise Prices		Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)		Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)
$	0.04		1,620,000	$	0.04		5.59		1,620,000	$	0.04		5.59
	0.50		1,819,643		0.50		6.36		1,819,643		0.50		6.36
	0.55		1,620,000		0.55		7.23		1,620,000		0.55		7.23
	0.56		1,020,000		0.56		7.34		686,667		0.56		7.34
	0.46		400,000		0.46		7.51		400,000		0.46		7.51
	0.21		420,000		0.21		9.15		420,000		0.21		9.15
	0.11		1,823,365		0.11		7.93		1,344,198		0.11		7.93
	0.17		1,000,000		0.17		8.04		489,583		0.17		8.04
	0.34		250,000		0.34		8.19		229,167		0.34		8.19
	0.33		200,000		0.33		8.24		200,000		0.33		8.24
	0.19		250,000		0.19		8.54		91,146		0.19		8.54
	0.20		500,000		0.20		8.80		500,000		0.20		8.80
	0.14		500,000		0.14		8.97		130,208		0.14		8.97
	0.13		500,000		0.13		9.02		125,000		0.13		9.02
	0.09		1,020,000		0.09		9.18		224,583		0.09		9.18
	0.07		350,000		0.07		9.25		65,625		0.07		9.25
	0.22		200,000		0.22		9.26		200,000		0.22		9.26
	0.08		200,000		0.08		9.26		154,167		0.08		9.26
	0.05		600,000		0.05		9.51		300,000		0.05		9.51
			14,293,008	$	0.26		7.72		10,619,987	$	0.30		7.40

As of June 30, 2011, the aggregate intrinsic value of the warrants outstanding and exercisable was $0 and $0, respectively. As of June 30, 2010, the aggregate intrinsic value of the warrants outstanding and exercisable was $0 and $0, respectively. The total fair value of shares vested during the six months ended June 30, 2010 was $1,201,200. No warrants vested during the six months ended June 30, 2011.

OnNOTE ~~June~~5 ~~30,~~- ~~2008,~~EQUITY the Board of Directors of the Company approved and adopted the 2008 Equity Incentive Plan, under which 10,000,000 stock options were available in 2008. Pursuant to the Plan, an additional 2,436,983 were made available on January 1, 2009, another 2,637,362 were made available on January 1, 2010, and another 3,452,912 were made available on January 1, 2011. Of the 14,293,008 options outstanding, 10,853,365 were issued under the Plan.TRANSACTIONS

AsThe ofCompany ~~March~~issued 31838,000 ~~2011,~~shares ~~the aggregate intrinsic value~~ of ~~the~~common ~~options~~stock ~~outstanding~~as ~~and~~consideration ~~exercisable~~for ~~was~~services $0rendered ~~and~~by ~~$0,~~the ~~respectively. As~~Company’s oflegal ~~March~~counsel ~~31,~~(during 2010, ~~the~~and ~~aggregate~~2011) ~~intrinsic~~at a value of ~~the~~$.03 ~~options~~per ~~outstanding~~share ~~and~~during ~~exercisable~~the ~~was~~six ~~$102,060~~month ~~and~~period ~~102~~ended June 30,~~060,~~ ~~respectively~~2011. ~~The~~ ~~total~~Also ~~fair~~during ~~value~~this ofperiod, ~~shares~~the ~~vested~~Company ~~during~~cancelled ~~the~~$49,200 ~~three~~in ~~months~~deferred ~~ended~~compensation ~~March~~that ~~31,~~was ~~2011~~contributed ~~and~~by ~~2010~~former related parties. This amount was ~~$12,428~~closed ~~and~~to ~~$91,058,~~additional ~~respectively~~paid in capital.

NOTE 6 - GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. During the six months ended June 30, 2011, the Company incurred net losses of $699,508. In addition, at the quarter ended June 30, 2011 and year ended December 31, 2010, the Company had accumulated deficits of $9,744,680 and $9,045,172, respectively. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

The Company's continuation as a going concern is contingent upon its ability to obtain financing and to generate revenues and cash flow to meet its obligations on a timely basis. As the result of the discontinuance of the

Addictionary and PlanetTagger product lines, the Company's intends to refocus its business. The Company has appointed a new Board of Directors and Management team to direct this effort.

The Company has been able to generate working capital in the past through private placements and issuing promissory notes. It is the Company’s belief that these avenues will remain available. However, no assurance can be made that these efforts will be successful.

NOTE 7 - RESTATEMENT

On February 9, 2011, the Company dismissed its previous independent accountant, Chisholm, Bierwolf, Nilson, and Morrill LLC and subsequently retained HJ & Associates, LLC (“HJ & Associates) to conduct the audit of its financial statements for the year ended December 31, 2010 and a re-audit of its financial statements for the year ended December 31, 2009, during which we made certain adjustments.

SPECTRUMDNA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(~~unaudited~~Unaudited)

NOTE 47 -– ~~SHARE~~RESTATEMENT ~~BASED PAYMENT~~ (~~CONTINUED~~Continued)

~~Warrants~~The table below highlights the material balance sheet items that were affected by these restatements:

In connection with the Bridge Financing and Private Offering discussed in Note 6 below, the Company granted warrants to purchase the Company’s common stock to the investors in each offering during the quarters ended December 31, 2009 and March 31, 2010. These warrants have exercise prices of $0.10 and $0.25, vested upon grant, and are exercisable for a period of five years. No warrants have been issued since the quarter ended March 31, 2010.

	For the Six Months Ended June 30, 2010 (As Originally Filed)			Changes Attributable to Restatement			For the Six Months Ended June 30, 2010 (Restated)			Changes Attributable to Discontinued Operations			For the Six Months Ended June 30, 2010 (As Filed Herein)

General and administrative	$	305,699		$	223,859		$	529,558		$	(446,749	)	$	82,809
Salaries and wages		837,618			(220,588	)		617,030			(111,948	)		505,082
Financing costs		2,876,803			(2,876,803	)		-			-			-
Interest expense - beneficial
conversion feature		28,397			18,835			47,232			-			47,232
Gain on conversion		25,000			(25,000	)		-			-			-
Loss from discontinued operations		-			-			-			558,697			558,697
Net Loss		(4,007,208	)		2,829,698			(1,177,510	)		-			(1,177,510	)
Basic and Fully Diluted
Loss per Share	$	(0.06	)	$	0.04		$	(0.02	)	$	-		$	(0.02	)

~~Changes~~During inthe ~~warrants~~six ~~issued~~months toended ~~investors~~June ~~for~~30, 2010, these adjustments resulted in the ~~periods~~variances ~~ended~~highlighted ~~March~~in ~~31,~~the ~~2011~~table immediately above and ~~December~~are ~~31,~~related ~~2010~~to ~~are~~the asfollowing ~~follows~~accounts:

	Number Of Warrants		Weighted Average Exercise Price
Outstanding, December 31, 2009		1,048,586	$	0.25
Granted		17,160,000		0.24
Exercised		-		-
Cancelled		-		-
Outstanding, December 31, 2010		18,208,586	$	0.24
Exercisable, December 31, 2010		18,208,586	$	0.24
Outstanding, December 31, 2010		18,208,586	$	0.24
Granted		-		-
Exercised		-		-
Cancelled		-		-
Outstanding, March 31, 2011		18,208,586	$	0.24
Exercisable, March 31, 2011		18,208,586	$	0.24

·	Associated with a prepaid consulting agreement, to properly recognize consulting expenses in the first two quarters of 2010, general and administrative expenses increased by $3,272.

·	The reclassification of $220,588 related to certain stock-based compensation resulting in a decrease in Salaries and Wages and an increase in General and Administrative.

·	The reclassification of $2,876,803 in financing costs associated with the value of the warrants granted as part of Private Offering resulting in a decrease in financing cost expense and a corresponding decrease in additional paid in capital.

·	The increase in interest expense related to the beneficial conversion feature of the convertible promissory notes of $18,835 and the elimination of the $25,000 gain on conversion of the convertible promissory notes.

NOTE 8 - SUBSEQUENT EVENTS

Management has evaluated events and transactions that occurred after the balance sheet date for potential recognition and disclosure through February 12, 2013, the date on which the financial statements were available to be issued.

In April of 2012, the Company entered into an agreement with its President and CEO, James Bannister, whereby Mr. Bannister returned 30,615,000 shares of common stock and warrants to acquire 148,586 shares of common stock in consideration for the transfer to Mr. Bannister of certain intellectual property owned by the Company. As additional compensation, the Company paid Mr. Bannister $7,500 in cash. Details of this transaction, along with related schedules and exhibits, are specified in an 8-K report filed with the SEC on April 16, 2012. The Company also raised $50,000 through the issuance of 20,000,000 units (one share of common stock and one warrant) to three investors. Details of this equity transaction are enumerated in the 8-K filed on April 16, 2012.

The Company recommenced development stage status during the third quarter of fiscal 2012, ending September 30, 2012.

SPECTRUMDNA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 4 - SHARE BASED PAYMENT (CONTINUED)

Warrants (Continued)

The following table summarizes information about stock warrants granted to employees, investors, and board members as of March 31, 2011:

Warrants Outstanding								Warrants Exercisable
Range of Exercise Prices		Number of Warrants		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)		Number of Warrants		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)
$	0.25		17,203,586	$	0.25		3.82		17,203,586	$	0.25		3.82
	0.10		1,005,000		0.10		3.80		1,005,000		0.10		3.80
			18,208,586	$	0.24		3.82		18,208,586	$	0.24		3.82

As of March 31, 2011, the aggregate intrinsic value of the warrants outstanding and exercisable was $0 and $0, respectively. As of March 31, 2010, the aggregate intrinsic value of the warrants outstanding and exercisable was $0 and $0, respectively. The weighted-average grant-date fair value of options granted for the period ended March 31, 2010 was $0.17. No warrants were granted during the period ended March 31, 2011. The total fair value of shares vested during the three months ended March 31, 2010 was $1,716,000. No warranted vested during the three months ended March 31, 2011.

NOTE 5 - CONSULTING AGREEMENTS

On July 31, 2009, the Company entered into a Consulting Agreement (the “Agreement”) with HFP Capital Markets LLC (“HFP”) pursuant to which HFP will provide certain consulting services to the Company including but not limited to assistance in securing future investment in the Company, assistance with certain corporate finance and investment banking activities, assistance with new business development, sales and marketing opportunities, and such other services as set forth therein. The term of the Agreement is three years, although the Company may terminate upon thirty days written notice for any reason or no reason at all, but no sooner than six months from the full execution of the Agreement. As compensation for these consulting services, the Company issued to HFP and or its designees 4,000,000 shares of the Company’s restricted common stock which vested and became issuable to HFP or its designees 120 days from the full execution of the Agreement, or November 28, 2009. As such, the shares issued were recorded as a prepaid consulting services asset. The shares were valued at $0.14 per share for a total prepayment for these fees of $560,000. At March 31, 2011, $311,111 had been amortized as consulting expense, with the remaining asset to be amortized over the remaining life of the agreement.

On January 15, 2010, the Company entered into a one-year consulting agreement for services. In full consideration for this agreement, the Company paid $50,000 to the consultant and issued a total of 500,000 shares of Common Stock and options to acquire an additional 500,000 shares at $0.20 per share. The shares were valued at an average of $0.14 per share for a total prepayment for these fees of $69,000. From the beginning of the term through March 31, 2011, $69,000 had been amortized to consulting expense, representing the total value of the contract.

SPECTRUMDNA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 6 - PRIVATE FINANCING TRANSACTIONS

During September 2009, the Company commenced a private offering (the “Private Offering”) of equity securities consisting of shares of common stock and common stock purchase warrants on a best efforts $1,500,000 minimum and $2,000,000 maximum basis. The securities were offered to accredited investors only. The securities had not been registered under the Securities Act of 1933, as amended (the “Act”) and were offered in reliance upon the exemption from registration set forth in Section 4(2) and Regulation D, promulgated under the Act. Such securities may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. On December 8, 2009, the minimum for the offering was reduced to $1,000,000 and the offering period was extended to January 13, 2010. During the first quarter of 2010, the offering period was extended two additional times.

During the first quarter of 2010, the Company completed three closings of the Private Offering with a total of 65 accredited investors (the “Purchasers”) for the issuance and sale of securities of the Company consisting of shares of Common Stock and common stock purchase warrants (the “Purchase Warrants”). Pursuant to the Private Offering, the Company issued 15,150,000 shares of Common Stock and 15,150,000 Purchase Warrants. Gross offering proceeds totaled $1,515,000, with a total of $134,150 of stock offering costs. Each of the Purchase Warrants entitles the holder thereof to purchase, at any time beginning from the final closing through five years thereafter, one share of Common Stock at a price of $0.25 per share.

In association with the Private Offering, the Company paid placement agent commissions of $100,500 and a non-accountable expense allowance of $30,150 to the placement agent as well as fees of $3,500 to the escrow agent. In addition, the placement agent and its designees were issued an aggregate of 1,005,000 placement agent warrants (the “Placement Agent Warrants”) to purchase up to 1,005,000 warrant units (the “Warrant Units”) exercisable for five years at an exercise price of $0.10 per Warrant Unit with each Warrant Unit consisting of one share of Common Stock and one Purchase Warrant to acquire an additional share of Common Stock. The aggregate warrants considered outstanding and exercisable from the warrant units granted are 2,010,000.

On May 28, 2010, the Company filed a Form S-1 Registration Statement (the “Statement”) with the Securities and Exchange Commission relating to the aforementioned equity securities and certain other securities of the Company. On June 15, 2010, the Securities and Exchange Commission deemed the Statement effective.

On November 2, 2009, November 12, 2009, and December 14, 2009, and in connection with a private debt offering (the “Bridge Financing”), the Company raised $104,859 from five investors, including the Company’s Chief Executive Officer and Chief Operating Officer (Note 7), from the issuance of six Convertible Promissory Notes (the “Notes”) in the principal amount of $104,859 due three months from issuance bearing interest at a 90-day rate of 10%. In connection with such investments, 1,048,586 common stock purchase warrants were also granted to such investors.

In accordance with FASB ASC 470-20, the Company accounts for the proceeds from the sale of a debt instrument with detachable stock purchase warrants by allocating the proceeds based on the relative fair values of the debt instrument without the warrants and of the warrants at the time of issuance. The portion of the proceeds allocated to the detachable warrants is accounted for as additional paid-in-capital, and the remaining proceeds are allocated to the debt instrument as a debt discount. Further, an embedded beneficial conversion feature present in the debt instrument is recognized at issuance by allocating that portion of the proceeds equal to the intrinsic value of the feature to additional paid-in capital. The Company utilizes the Black-Scholes option pricing model to determine the relative fair values. Any such debt discount is accreted over the term of the instrument and expensed on the statement of operations in accordance with ASC 835.

At the time of issuance, the six notes resulted in an allocation of proceeds based on the detachable warrants of $61,025 and the beneficial conversion feature of $43,834, both of which were recorded to additional paid-in capital, and a debt discount of $104,859 to be accreted over the life of the respective Notes or 90 days. Accretion of the debt discount at December 31, 2009 was $57,628, which was charged to the Statements of Operations.

SPECTRUMDNA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 6 - PRIVATE FINANCING TRANSACTIONS (CONTINUED)

On January 11, 2010, two investors converted two Notes into 661,000 shares of the Company’s common stock resulting from the outstanding principal amount of $60,000 and accrued interest of $6,100. On January 22, 2010, two additional investors, including the Company’s Chief Executive Officer and Chief Operating Officer, were repaid the interest and principal due on three Notes for a total of $22,172 in cash resulting from the outstanding principal amount of $19,859 and accrued interest of $2,314. Finally on February 10, 2010, one investor was repaid the interest and principal due on one Note for a total of $27,667 in cash resulting from the principal amount of $25,000 and accrued interest of $2,667. Upon conversion of the Notes, the remaining debt discount was accreted and $47,232 in interest expense was charged to the statement of operations.

NOTE 7 - RELATED PARTY TRANSACTIONS

During the fourth quarter of 2009, the Chief Executive Officer and the former Chief Operating Officer invested a total of $19,859 in connection with the Bridge Financing as referenced in Note 6 above. On January 22, 2010, these individuals converted their three Notes for a total of $22,172 in cash resulting from the outstanding principal amount of $19,859 and accrued interest of $2,314.

Additionally, as of March 31, 2011, and December 31, 2010, the Company recorded accounts payable balances of $1,480 and $261, respectively. From time to time, employees of the Company procure goods or services on behalf of the Company which require reimbursement.

In the first quarter of 2011, the Company entered into an agreement with Say.so LLC, a media measurement software technology company. Say.so’s co-founder is Michael Dowling, who is a member of the Company’s Board of Directors.

Aside from the transactions disclosed above, there were no other related party transactions during the three months ended March 31, 2011.

SPECTRUMDNA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 8 - RESTATEMENT

	As of March 31, 2010 (Previous)			Cumulative Effect of Adjustments through December 31, 2009 (1)			As of March 31, 2010 (Restated)			Cumulative Effect of Adjustments through March 31, 2010
Assets
Prepaid consulting services	$	-		$	-		$	59,161		$	59,161
Prepaid consulting services, long-term		-			-			435,555			435,555
Total Assets		905,262			-			1,399,978			494,716
Stockholders’ Equity
Prepaid consulting services		(558,777	)		-			-			558,777
Additional paid-in capital		11,820,914			(66,844	)		8,877,267			(2,943,647	)
Accumulated deficit		(10,590,037	)		(48,456	)		(7,710,451	)		2,879,586
Total Stockholders’ Equity		741,159			-			1,235,875			494,716
Total Liabilities and Stockholders’ Equity	$	905,262		$	-		$	1,399,978		$	494,716

(1) Please refer to our annual report on Form 10-K for the fiscal year ended December 31, 2010

SPECTRUMDNA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 8 - RESTATEMENT (CONTINUED)

	For the three months ended March 31, 2010 (Previous)			For the three months ended March 31, 2010 (Restated)			Changes Attributable to Restatement
General and administrative	$	207,871		$	209,707		$	1,836
Financing costs		2,876,803			-			(2,876,803	)
Interest expense – beneficial conversion feature		28,397			47,232			18,835
Gain on conversion		25,000			-			(25,000	)
Net Loss		(3,463,307	)		(632,177	)		(2,831,130	)
Basic and Fully Diluted Loss per Share	$	(0.05	)	$	(0.01	)	$	0.04

During the quarter ended March 31, 2010, these adjustments resulted in the variances highlighted in the tables immediately above and are related to the following accounts:

· The adjustment of ($558,777) from a contra-equity account to a current asset account of $59,161 and an other asset account of $435,555 related to certain prepaid consulting contracts. Associated with this prepaid consulting agreement, in order to properly recognize consulting expenses in the first quarter of 2010, general and administrative expenses increased by $1,836 resulting in an increase in the accumulated deficit (Note 5).

· The reclassification $2,876,803 in financing costs associated with the value of the warrants granted as part of Private Offering resulting in a decrease in additional paid in capital and a decrease in accumulated deficit (Note 6).

· The increase in interest expense related to the beneficial conversion feature of the convertible promissory notes of $18,835 and the elimination of the $25,000 gain on conversion of the convertible promissory notes resulting in an increase in the accumulated deficit of $43,835 (Note 6).

SPECTRUMDNA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 9 - SUBSEQUENT EVENTS

On May 2, 2011, the Board of Directors approved the issuance of 838,000 shares of the Company’s common stock as consideration for services rendered by the Company’s legal counsel during 2010 and 2011.

The Company has evaluated subsequent events for the period from March 31, 2011 through the date the financial statements were issued pursuant to FASB ASC 855 and concluded that there were no events or transactions occurring during this period that required recognition or disclosure in its condensed consolidated financial statements other than that disclosed above.

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

The following information should be read in conjunction with the condensed consolidated financial statements of SpectrumDNA, Inc. and the notes thereto appearing elsewhere in this report. Statements in this Management’s Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this report that are not statements of historical or current fact constitute “forward looking statements”.

Our business and results of operations are affected by a wide variety of factors which could materially and adversely affect us and our actual results. As a result of these factors, we may experience material fluctuations in future operating results on a quarterly or annual basis, which could materially and adversely affect our business, financial condition, operating results and stock price.

Projections and Forward-Looking Statements

When used in this report, the words “may,” “will,” “expect,” “anticipate,” “continue,” “estimate,” “intend,” “plans”, and similar expressions are intended to identify forward-looking statements regarding events, conditions and financial trends which may affect our future plans of operations, business strategy, operating results and financial position. Forward looking statements in this report include without limitation statements relating to trends affecting our financial condition or results of operations, our business and growth strategies and our financing plans. Such statements are not guarantees of future performance and are subject to risks and uncertainties and actual results may differ materially from those included within the forward-looking statements as a result of various factors. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made. We undertake no obligation to publicly release the result of any revision of these forward-looking statements to reflect events or circumstances after the date they are made or to reflect the occurrence of unanticipated events.

~~Business.~~Plan of Operation

During the quarter ended June 30, 2011, the Company discontinued its Addictionary and PlanetTagger product lines, including all assets associated with the Addictionary and PlanetTagger product offering. The Company completed its sale of all related assets in April, 2012 (~~a) Organizational~~see ~~History~~8-K filed on April 16, 2012).

~~SpectrumDNA,~~As ~~Inc.~~a ~~was~~result ~~incorporated under the laws~~ of the ~~State~~discontinuance of ~~Delaware on January 16, 2008 under~~ the ~~name~~Company's ~~SpectrumDNA~~previous ~~Holdings,~~business ~~Inc. to enable its now wholly-owned subsidiary~~operations, ~~formerly~~our ~~known~~Company asis ~~SpectrumDNA,~~classified ~~Inc. (now known~~ as ~~SpectrumDNA Studios, Inc.) to implement~~ a ~~holding~~"shell" company ~~organizational~~by ~~structure. Effective~~the asSecurities ofand ~~January~~Exchange ~~22,~~Commission ~~2008,~~(SEC). weThe ~~reorganized~~term ~~into~~shell ~~a holding~~ company ~~structure~~means ~~whereby SpectrumDNA, Inc. became~~ a ~~wholly-owned subsidiary of SpectrumDNA Holdings~~Company, ~~Inc.~~other ~~pursuant~~than to an ~~Agreement~~asset-backed ~~and~~issuer ~~Plan~~as ofdefined ~~Merger~~in ~~dated~~Item as1101(b) of ~~January~~Regulation ~~18,~~AB ~~2008~~(§ ~~whereby SpectrumDNA, Inc~~229.1101(b) ~~changed~~of ~~its~~that ~~name to SpectrumDNA Studios~~chapter), ~~Inc.~~that ~~and SpectrumDNA Holdings, Inc. changed its name to SpectrumDNA, Inc.~~has:

~~SpectrumDNA Studios, Inc.~~ (~~formerly SpectrumDNA, Inc.~~1) No isor anominal ~~Delaware~~operations; ~~corporation. It was originally incorporated in the State of Utah in May 2006,~~ and on September 11, 2006 was reorganized as a Delaware corporation as a result of a merger into a newly formed Delaware corporation incorporated on September 7, 2006 which took the Utah corporation’s name and became the surviving entity of the merger. The “DNA” in the corporate name stands for “digital networked applications.”

~~Cooshoo, Inc. is a Delaware corporation~~ (~~formerly a Utah corporation~~2) ~~which is a wholly-owned subsidiary of SpectrumDNA Studios, Inc. and owns and operates the Cooshoo engine which was rebranded and renamed PlanetTagger in mid-2008.~~ Either:

~~References~~(i) inNo ~~this document to "us," "we," “Spectrum,” “SpectrumDNA,” “SPXA”~~ or ~~"the~~nominal ~~Company" refer to SpectrumDNA, Inc., and its direct and indirect wholly-owned subsidiaries.~~assets;

~~Our~~(ii) ~~corporate~~Assets ~~address~~consisting issolely ~~1781~~of ~~Sidewinder~~cash ~~Drive,~~and ~~Suite~~cash ~~201,~~equivalents; ~~P.O. Box 682798, Park City, Utah 84068. Our telephone number is (435) 658-1349. The Company’s website is http://www.spectrumdna.com.~~or

20(iii) Assets consisting of any amount of cash and cash equivalents and nominal other assets.

~~Organization~~As such, we intend to seek to acquire the assets or shares of an entity actively engaged in business in exchange for our securities through a business combination transaction. While we will attempt to obtain audited financial statements of a business combination candidate, there is no assurance that such audited financial statements will be available. The Board of Directors does intend to obtain certain assurances of value of the candidate entity's assets prior to consummating such a transaction. We have no full time employees. Presently, our officers have agreed to allocate a portion of their time to our activities without compensation. However, we may compensate them in stock for services rendered at some future date. Consequently, conflicts of interest may arise with respect to the limited time commitment by such officers. In addition, our officers and directors may, in the future, become involved with other companies, which have a business purpose similar to that of ours. As a result, additional conflicts of interest may arise in the future.

~~Our~~The ~~Company~~contemplated isbusiness ~~presently~~combination ~~comprised~~or oftransaction ~~SpectrumDNA,~~could ~~Inc.,~~result in a ~~Delaware~~significant ~~corporation,~~issuance ~~with~~of ~~two wholly-owned subsidiaries, Cooshoo, Inc~~shares. ~~and~~This ~~SpectrumDNA~~issuance ~~Studios,~~of ~~Inc.,~~shares ~~also~~may ~~Delaware~~create ~~corporations~~a ~~(collectively,~~substantial ~~the~~dilution ~~Company~~to ~~or Spectrum). We use the trade names “SpectrumDNA, Inc.” or “SpectrumDNA Studios, Inc.” in~~ our ~~commercial~~present ~~operations~~stockholders.

~~(b)~~ Searching for Business ~~Overview~~Combination Candidate

~~General~~The Company is undercapitalized. Previously, the current Board has advanced funds to the Company or on behalf of the Company. Additionally, the Company may undertake a private placement of its securities in order to (1) maintain the integrity of the corporate entity, and (2) pay general and administrative expenses related to transfer agency fees, financial accounting and auditing, and legal fees associated with initiating and preserving the corporate standing as a Securities and Exchange Commission reporting company.

SpectrumDNA, Inc. is an innovation agency and digital studio focused on creating high-engagement web and mobile applications that allow marketers to empower their community members to take an active, measurable, and monetizable role in the extension of their brand. SpectrumDNA specializes in gamification, and the design and development of gamified commerce and social loyalty programs; and SpectrumDNA’s white-label applications and API/web-services platforms can be easily configured to engage and enroll the marketers’ most influential users who propagate its messaging to the masses through SpectrumDNA’s intelligent integration with popular social media sites.14

~~Our~~Form ~~product development and services methodology is based on our Chief Executive Officer James A. Banister’s book “Word~~ of ~~Mouse:~~Business The New Age of Networked Media” (Agate, 2004) which we believe predicted what The Gartner Group has now measured in its study of the social media audience demographics and culture. Banister distilled his research into a methodology called “enginetworking,” a process for creating and evolving software applications for the web and mobile wireless that address all levels of engagement, and methodology for engaging social media audiences.Combination

~~Strong~~The ~~evidence~~manner ~~exists~~in ~~that~~which the ~~history~~Company ofparticipates ~~success~~ in ~~online and mobile web is~~ a ~~history~~business ofcombination ~~“encouraging~~will ~~and~~depend ~~capturing~~upon ~~behavior”~~the ornature ~~“providing~~of ~~utility”—searching,~~the ~~dating~~transaction, ~~self-expression,~~the ~~shopping,~~respective ~~social~~needs ~~networking,~~and ~~job-seeking,~~desires ~~travel,~~of ~~with~~the ~~many~~Company ~~more behaviors left to capture-~~and~~-nurture..~~ ~~Further,~~the ~~behavioral~~management ~~motivation~~ and ~~reward~~shareholders ~~dynamics~~of ~~have~~the ~~become~~candidate ~~an increasing imperative to successful business ventures~~company, and ~~much of that is embodied in~~ the ~~movement~~relative ~~SpectrumDNA~~negotiating ~~has~~strength ~~helped~~of ~~precipitate around “gamification~~each.”

~~Strategic~~It ~~Focus~~is likely that the Company will acquire its participation in a business combination through the issuance of common stock or other securities of the Company. Although the terms of any such transaction cannot be predicted, it should be noted that in certain circumstances the criteria for determining whether or not an acquisition is a so-called "tax free" reorganization under Section 368(a)(1) of the Internal Revenue Code of 1986, as amended (the "Code"), depends upon whether the owners of the acquired business own 80% or more of the voting stock of the surviving entity. If a transaction were structured to take advantage of these provisions rather than other "tax free" provisions provided under the Code, all prior stockholders would in such circumstances retain 20% or less of the total issued and outstanding shares. Under other circumstances, depending upon the relative negotiating strength of the parties, prior stockholders may retain substantially less than 20% of the total issued and outstanding shares of the surviving entity. This could result in substantial additional dilution to the equity of those who were stockholders of the Company prior to such reorganization.

Late in the fourth quarter of 2009 and into the first half of 2010, the Company began to re-focus its efforts on differentiation, circumventing resource limitations and leveraging its assets. As part of that strategy, in June 2010, the Company entered into a value-added reseller relationship with Big Door Media, a Seattle, Washington, based organization focused on developing a virtual economy platform to help developers and digital publishers add game mechanics to their site or app. The gamification technology platforms are rapidly becoming commoditized, and SpectrumDNA has since expanded its support of competitive gamification platforms, and is now platform-independent and focused on the ultimate differentiator of gamification design technique. Foursquare and social games like Farmville and Mafia Wars have shown the power of badges and achievements to drive consumer activity. Recognition and loyalty programs are shown to positively impact marketing campaigns and evoke deep customer loyalty. Our relationship with BigDoor has allowed for the gamification of our existing products where users can receive value in the form of points, currency or badges for not only purchases but any online activity, like posting brand related content on Facebook, Twitter or the host site.

Throughout the third and fourth quarters of 2010, our business strategy became increasingly focused on providing gamification design and development services to large and small clients looking to increase customer loyalty and engagement through the use of game mechanics. The Company specializes in designing and building Social Loyalty Programs (“SLPs”) that are a cross-pollination of classic loyalty program, apps that engage the dynamic social graph, and game mechanics–techniques that encourage and capture intrinsic human behavior and match them with extrinsic rewards.

Gamified Commerce and Social Loyalty

In November 2010, Interpret, a leading entertainment, media and technology market research firm, released a report co-authored by SpectrumDNA CEO Jim Banister containing primary research that found gamers, even using the broadest definition, are more likely to be online shoppers and opinion-leaders and are more likely to buy in gamified environments.

It was the culmination of an evolutionary shift made by SpectrumDNA earlier in 2010 to focus its products and services on the rapidly emerging market for gamified commerce (“gCommerce”) and social loyalty, or any “gamified” transactional behavior. This goes beyond engagement. While gCommerce fundamentally engenders and relies on engagement, the approach is designed to get customers and users to transact as opposed to simply interact. The gCommerce process has emerged to help transaction-oriented companies leverage the rapidly coalescing landscape of web, social media and mobile, and integrate disparate social and mobile marketing and transaction-oriented activities into next-generation gamified social loyalty programs.

Interpret’s report put the spotlight on the power of the gamification paradigm showing that a gamer is 20% more likely to be an online shopper than the average non-gamer and 50% more likely to be an influencer among his or her friends. The report further found that “shopping-gamers” are 70% more likely than the general population to buy within a gamified transactional environment.

Whether Farmville on Facebook, World of Warcraft on the PC, Solitaire on the iPhone, earning frequent flyer miles through American Airlines, or shopping through social commerce services like Groupon or Gilt, customers’ and users’ online and offline experiences are already “gamified.” SpectrumDNA rapidly established a beachhead in this growth industry and authored one of the now de facto frameworks for operating in the realm of “gamification” called the “social loyalty framework” (“SLF”). The SLF comprises of three elements—API, Appify and Gamify.

API-Appify-Gamify

SpectrumDNA pioneered the concept of social loyalty, or gamified social loyalty, which is a way for individuals and institutions to use the web/mobile social graph and its myriad utilities, from Facebook to Twitter to YouTube, as a mode of “lead generation.” That is, to flip the now occurring intermediation by upstart social utilities into a feeding mechanism to owned loyalty programs that use the same mechanisms, techniques and technologies used by those upstart intermediaries. There are three elements to the social loyalty framework.

APIs, or Application Programming Interfaces, have become the foundation for the explosion of social and mobile applications. Many are free, but almost all are increasingly economical. APIs enable the creation of applications relatively independent of consumer platform-- from Facebook, to websites, to iPhone apps and beyond. They make the creation of transmedia consumer experiences viable and economical.

Apps, or Applications, are software programs with focused and themed function, for utilitarian, informational or entertainment purposes. While an app can reside at web address accessible via a web browser, an app is not a “website” or “online brochure.” While classic computer software programs (like Microsoft Word or Photoshop) are the original app, the explosion of smartphones (like iPhone, Blackberry and Android), proprietary platforms (like Facebook and Conduit), and the way websites work has affected the evolution of consumer behavior from “site centric” to “app centric.”

Gamification involves the use of game mechanics and game dynamics to motivate and reward human behavior. Even though many of the core principles of gamification are derived from modern video games, casual games and social games, gamification does not mean the creation of a game. In the context of social loyalty, it means to create “capture-and-nurture” programs that acquire and retain customers in the realm of the brand, retailer or publisher across multiple consumer touchpoints—from Facebook to smartphones to the general web.

Quick-Start APIs

SpectrumDNA’s software API and app platforms have been adapted to support the now predominant work in gamification and social loyalty. We frequently employ them to jump-start the creation of apps, and when appropriate, we intermix them with the multitude of third-party APIs to quickly and cost-effectively create individual apps or broader social loyalty programs.

Currently, our active product lines are as follows:

The Addictionary

The Addictionary is a social wordplay engine. We use it as the foundation for apps created to engage in word-related apps.

PlanetTagger

PlanetTagger is a location-enabled integrated social marketing platform offering online communities a powerful tool which centralizes their social media marketing and editorial programming and provides the community users with utility to extend the reach of the community.

OptEngage

OptEngage is a new class configurable and contextual browser application that talks to a cloud-based platform, which enables clients to deliver content and utility to their users anywhere they go on the web. SpectrumDNA clients can now program the entire Internet for their users, across all sites and platforms; and they can integrate customer data, context, location and their users’ intent to enhance their experience, driving deeper engagement, conversion and affinity for their brand or target affinity group.

Hucklemonkey

The Hucklemonkey API integrates gamification into our clients existing services or new applications. It focuses on integrating scalable, pervasive economies into already-existing services, and it’s designed for quick deployment and high engagement. Hucklemonkey allows our clients to easily pull profile, virtual economy, and achievement data and assets into their existing user experiences.

New Products

We continue to prioritize product and services development such that maximize our opportunities for annuity-based revenue streams.

Sales, Marketing and Performance

In our sales and marketing strategy, SpectrumDNA has pioneered the business of social nicheworking—providing white-label social media experiences that media entities or brand advertisers (or both) can offer to their target affinity groups. Instead of launching “yet another web destination,” SpectrumDNA partners with institutions already spending the time, money and effort to engage their target affinity group, providing them with the social media expertise they lack.

Our first Addictionary transaction of this type was signed in June 2008 with Comedy Central. During the remainder of 2008 and throughout 2009, the Company licensed the Addictionary to a number of other media companies and brands including:

· NBC Universal’s television show The Office

· E!Online, the online presence of E! Entertainment, a Comcast Networks Property

· Warner Bros. distributed syndicated talk show The Ellen DeGeneres Show

· Dictionary.com, an IAC operating unit

· The New York Post, News Corp’s daily newspaper

· FearNet Channel, another Comcast Networks Property

· Comedy Central’s television show Secret Girlfriend

· G4TV.com, the third Comcast Networks Property

A secondary sales focus is on licensing PlanetTagger. During the second half of 2009 through the first half of 2010, the Company licensed PlanetTagger to two institutions including:

· UCLA Anderson School of Management’s Entertainment and Media Management Institute

· State of Utah’s Utah Science Technology and Research initiative (USTAR)

During the second quarter of 2010, marking its entry into gCommerce and gamified loyalty space, the Company partnered Chisel Industries, a Bozeman, Montana, based marketing firm, to become the exclusive provider of digital marketing services to Vann’s Inc, a Montana-based electronics retailer, for the promotion of its new interactive, themed retail experience. In working to position the new store’s online identity, the Company and Chisel created three coordinated modes of audience engagement – a website destination, a contextual browser app called EverOn, and a mobile app for the iPhone based on PlanetTagger – the combination of which allow members of the retailer’s online social community to connect and share knowledge in a seamless user experience across platforms. Overlaying these methods of engagement, the Company implemented a gamification platform that allows these users to collect rewards worth actual currency to be used toward the purchase of gear in the boutique.

During the third quarter of 2010, the Company entered into a relationship with Fandango, the nation's leading moviegoer destination, to launch Fandango2Go, the next generation browser application that provides movie goers precisely the movie information they want, based on what they are doing as they browse the internet. Fandango2Go is an example of “contextual browsing,” in which when a user performs a search for a movie, the Fandango2Go app will launch directly into the site the user is on, delivering the most relevant content the user wants to see. Fandango2Go enables moviegoers to find movies and showtimes, watch trailers, locate theaters, and more without the need to travel to Fandango.com because the application is “aware” of the user’s context.

During the third and fourth quarters of 2010, the Company entered into an additional agreement with Vann’s to develop a point-of-sale (“POS”) application for the iPod Touch for use in its forthcoming stores as well as a marketing services contract with Vann’s to provide social media marketing services to its forthcoming stores.

Our recent focus on gamification services has yielded several new clients and an increasing number of inbound inquires. In the fourth quarter of 2010, the Company contracted with two new clients - providing gamification services to UGO.com, a division of Hearst Media, and UNWeb, a business and personal networking application and global social exchange board for the United Nations NGO’s, Micro financers, Governments, Private Sectors, Media, Academic, Associations, Institutions, and Foundations.

The Company’s momentum in the gamification space continued to build in the first quarter of 2011, and the Company entered into agreements with UGO.com (second follow-on contract); ICE.com, the online jewelry retailer; Park City Week, a local online visitor resource; Accuscore, an online source for pregame sports statistics and information; WAI Consulting, LLC, marketers of photo-sharing apps ; Audree’s World, a tween MMOG focused on social games for social good; and Say.so LLC, a media measurement software technology company.

Recent Events

Subsequent to the end of the first quarter of 2011, the Company entered into follow-on contracts with WAI Consulting, LLC and Accuscore. Further, the Company entered into a social media marketing agreement with the Egyptian Theatre, a community theatre based in Park City, UT.

In general, as we increase our sales and marketing efforts we anticipate that we will continue to incur net losses for the foreseeable future. The extent of these losses will depend, in part, on the amount of growth in our revenues from organization adoption, consumer acceptance and use of our products and the number of relationships we are able to form with advertisers and marketers to use our enginets.

Employees

As of the date hereof, the Company has seven (7) full-time employees located in Utah, Michigan, and Italy. This includes one of the founders, James A. Banister, serving as Chief Executive Officer. The remaining employees manage operations, finance, engineering and product management, market and sell our products and build software and implement effective quality assurance standards. It is expected that in the next 12 months we will seek to employ one or two additional employees to augment the product development, marketing, business development and sales efforts.

Results of Operations

For the Three Months Ended ~~March~~June 3130, 2011 Compared to the Three Months Ended ~~March~~June 3130, 2010

~~Revenues~~As ~~for~~a result of the ~~three~~discontinuation ~~months~~of operations, the Company recorded no revenues during the quarter ended ~~March~~June 3130, 2011, as well as in the quarter for the comparative prior year period. General and administrative expenses were relatively comparable ($~~117~~38,~~599~~372 for the period ended June 30, ~~compared~~2011 toand $2627,~~000~~171 for the ~~three~~period ~~months~~ ended ~~March~~June 3130, 2010). ~~The~~ ~~revenue~~However, insalaries and wages decreased significantly from $273,138 during the ~~current~~June ~~period~~30, ~~related~~2010 quarter to ~~predominantly~~$79,350 toduring ~~service~~the ~~revenue~~quarter inended ~~the~~June ~~gamification~~30, ~~space~~2011. ~~The~~All ~~increased~~product ~~revenue~~development expenses were directly related to the discontinued operations and were included in the ~~current~~loss ~~period~~from ~~compared~~discontinued tooperations for both the ~~prior~~current ~~period~~and ~~resulted~~comparative quarters ended June 30th. The Company incurred a loss from ~~the~~continuing ~~addition~~operations of ~~more~~$119,909 ~~customers~~during ~~and~~the ~~larger~~quarter ~~fees~~ended ~~for~~June 30, 2011 compared to a loss of $302,941 during the ~~services~~comparative ~~rendered~~prior year quarter. ~~Cost~~ ofThe ~~sales~~Company ~~was~~also sustained a loss of $~~370~~337,189 from discontinued operations for the quarter ended ~~March~~June 3130, 2011, compared to a restated comparable loss of $1242,~~402~~392 ~~for~~during the ~~comparable~~quarter ~~period~~ended ofJune 30, 2010. ~~Cost~~ ofNet ~~sales~~loss ~~primarily~~decreased ~~consisted~~(on ofa ~~the~~restated, ~~amortization~~discontinued ofoperational ~~product~~basis) ~~development~~from ~~expenses. As~~$545,333 ofin ~~March~~the 31quarter ended June 30, ~~2011~~2010 to $457,098 ~~these~~for ~~expenses~~the ~~have~~quarter ~~been~~ended ~~almost~~June ~~fully~~30, ~~amortized~~2011.

~~Total~~For ~~operating expenses for~~ the ~~quarter~~Six ~~ended~~Months ~~March~~Ended 31June 30, 2011 ~~were~~Compared ~~$359,196 compared~~ to ~~$612,164 for~~ the ~~comparable~~Three ~~period~~Months ofEnded ~~2010,~~June ~~a decrease of 41%. The decreased operating expenses in 2011 resulted primarily from decreases in salaries and wages ($219~~30,~~476~~ ~~in 2011 compared to $389,547 in~~ 2010) and decreases in general and administrative expenses. The Company recognized $85,105 and $231,944 in expenses pertaining to stock options granted for services rendered in 2011 and 2010, respectively.

WeAgain, ~~recognized~~as a ~~net~~result ~~loss~~of the discontinuation of ~~$242~~operations,~~274~~ ~~for~~the Company recorded no revenues during the ~~three~~six ~~months~~month period ended ~~March~~June 3130, 2011, ~~compared~~as towell afor ~~loss~~the ofcomparative prior year six month period ended June 30, 2010. General and administrative expenses were similar ($~~632~~87,~~177~~242 for the ~~comparable~~period ended June 30, 2011 and $82,809 for the period inended June 30, 2010). However, asalaries ~~decrease~~and ofwages ~~62%~~decreased significantly from $505,082 during the six months ending June 30, 2010 to $164,455 during the comparable period ended June 30, 2011. ~~This~~All ~~decreased~~product ~~net~~development ~~loss~~expenses ~~was~~were ~~primarily~~directly related to the ~~result~~discontinued ofoperations ~~increased~~and ~~revenue~~were asincluded ~~well~~in asthe ~~decreased~~loss ~~operating~~from ~~expenses~~discontinued operations for both the current and ~~interest~~comparative ~~expense~~six month periods ended June 30th. ~~Our~~ ~~basic~~The ~~and~~Company ~~diluted~~incurred ~~net~~a loss ~~per~~from ~~share~~continuing ~~was~~operations of $~~0.00~~255,283 ~~for~~during the ~~quarter~~six months ended ~~March~~June 3130, 2011, compared to a loss of $~~0.01~~643,046 ~~for~~during the ~~comparable~~comparative ~~period~~prior ofyear ~~2010~~six month period. ~~Excluding~~ ~~the~~The ~~non~~Company ~~cash~~also ~~stock-based~~sustained ~~compensation~~a ~~described~~loss ~~above~~of as$444,225 ~~well~~from asdiscontinued ~~non-cash~~operations ~~consulting~~for ~~expenses~~the ~~and~~six ~~interest~~months ~~expense~~ended ~~related~~June 30, 2011, compared to a restated comparative loss of $643,046 during the ~~Bridge~~six ~~Financing~~months ended June 30, ~~our~~2010. Net loss ~~would~~decreased ~~have~~(on ~~been~~a ~~$107~~restated,~~389~~ ~~and~~discontinued operational basis) from $~~296~~1,~~495~~177,511 for ~~2011~~the ~~and~~six month period ended June 30, 2010 to $699,508 ~~respectively~~for the same six month period ended June 30, 2011.

Liquidity and Capital Resources

As of ~~March~~June 3130, 2011, wethe Company had ~~$63,863~~current inassets ~~cash~~of $32,485 and ~~total~~current liabilities of $~~177~~110,~~364.~~394 Wewhich ~~have~~resulted ~~incurred substantial losses~~ in ~~this~~a ~~quarter~~working ~~and~~capital ~~prior~~deficiency ~~fiscal~~of ~~years~~$77,909. ~~and~~During wethe ~~have~~six ~~recorded~~month ~~negative~~period ~~cash~~ended ~~flows~~June ~~from~~30, ~~operations~~2011, inthe ~~this~~Company ~~quarter~~incurred ~~and~~a ~~prior~~net ~~fiscal~~cash ~~years. As~~outlay aof ~~result~~$185,901 asfrom ofoperating ~~March 31~~activities, ~~2011,~~and ~~management~~had ~~could~~a ~~not~~net bedecrease ~~assured~~in ~~that~~cash ~~the~~of ~~Company’s~~$195,605 ~~current~~from ~~finances~~January ~~would~~1, ~~enable~~2011, us to ~~implement~~June ~~our~~30, ~~plans~~2011, ~~and~~which ~~satisfy~~resulted ~~our~~in ~~estimated~~a ~~financial~~cash ~~needs~~balance ~~over~~of ~~the~~$271 ~~next~~as 12of ~~months~~June 30, 2011.

~~During~~Item September 2009, the Company commenced a private offering (“Private Offering”) of equity securities consisting of shares of common stock and common stock purchase warrants on a best efforts $1,500,000 minimum and $2,000,000 maximum basis3. ~~The~~Quantitative ~~securities were offered to accredited investors only. The securities have not been registered under the Securities Act of 1933, as amended (the “Act”)~~ and ~~were~~Qualitative ~~offered~~Disclosures inAbout ~~reliance~~Market upon the exemption from registration set forth in Section 4(2) and Regulation D, promulgated under the Act. Such securities may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. On December 8, 2009, the minimum for the offering was reduced to $1,000,000 and the offering period was extended to January 13, 2010. During the first quarter of 2010, the offering period was extended two additional times.Risk

On November 2, 2009, November 12, 2009, and December 14, 2009, and in connection with a private debt offering (the “Bridge Financing”), the Company raised $104,859 from five investors, including the Company’s Chief Executive Officer and Chief Operating Officer, from the issuance of six Convertible Promissory Notes (the “Notes”) in the principal amount of $104,859 due three months from issuance bearing interest at a 90-day rate of 10%. In connection with such investments, 1,048,586 common stock purchase warrants were also granted to such investors.

During the first quarter of 2010, two of the investors in the Bridge Financing converted all of the principal and interest due on their Convertible Promissory Notes into a total of 661,000 shares of Common Stock. On January 22, 2010 and February 10, 2010, the balance of the principal and interest due on the Convertible Promissory Notes issued in connection with the Bridge Financing was repaid to the other three of the investors, including the Chief Executive Officer and Chief Operating Officer, in the principal amount of $44,859 plus accrued interest of $4,981.

On July 31, 2009, the Company entered into a Consulting Agreement (the “Agreement”) with HFP Capital Markets LLC (“HFP”) pursuant to which HFP will provide certain consulting services to the Company including but not limited to assistance in securing future investment in the Company, assistance with certain corporate finance and investment banking activities, assistance with new business development, sales and marketing opportunities, and such other services as set forth therein. The term of the Agreement is three years, although the Company may terminate upon thirty days written notice for any reason or no reason at all, but no sooner than six months from the full execution of the Agreement. As compensation for these consulting services, the Company issued to HFP or its designees 4,000,000 shares of the Company’s restricted common stock which vested and became issuable to HFP or its designees 120 days from the full execution of the Agreement, or November 28, 2009. As such, the shares issued were recorded as prepaid consulting services since it is a three year agreement. The shares were valued at $0.14 per share for a total prepayment for these fees of $560,000

For the quarter ended March 31, 2011, the Company’s Net Cash Used in Operating Activities was $124,074 compared to $478,473 for the comparable period in 2010. The decrease in Net Cash Used in Operating Activities between the two periods resulted from decreases in cash-based salaries and wages, increases in accounts payable and accrued expenses, and decreases in cash based consulting fees offset by increases in accounts receivable.

For the quarter ended March 31, 2011, the Company’s Net Cash Used in Investing Activities was $1,200 compared to $4,426 for the comparable period in 2010. The decrease in Net Cash Used in Investing Activities between the two periods resulted from decreases in fixed asset purchases.

For the quarter ended March 31, 2011, Net Cash Used by Financing Activities was $6,739 compared to Net Cash Provided by Financing Activities of $1,328,876 for the comparable period in 2010. The change was due to the receipt of proceeds from issuance of common stock offset by repayment of certain convertible promissory notes in the quarter ended March 31, 2010 without comparable activity in the quarter ended March 31, 2011.

Off-Balance Sheet Arrangements

We do not have any off balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, results of operations, liquidity or capital expenditures.

Critical Accounting Policies and Estimates

Our consolidated financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. Our critical accounting policies are discussed in our annual report on Form 10-K for the fiscal year ended December 31, 2010. Certain prior period amounts have been reclassified in the condensed consolidated financial statements to conform to the current period presentation.

Recently Issued Accounting Pronouncements

The Company has evaluated recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants (“AICPA”) and the SEC, and we have not identified any that would have a material impact on the Company’s financial position, or statements.

Impact of Inflation

We do not believe that price inflation had a material adverse effect on our financial condition or results of operations during the periods presented.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

Item 4T. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including the Principal Executive Officer and Principal Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of December 31, 2010, and ~~March~~June 3130, 2011, these disclosure controls and procedures were ineffective to ensure that all information required to be disclosed by us in the reports that we file or submit under the Exchange Act is: (i) recorded, processed, summarized and reported, within the time periods specified in the Commission’s rule and forms; and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting

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

Our evaluation of internal control over financial reporting includes using the COSO framework, an integrated framework for the evaluation of internal controls issued by the Committee of Sponsoring Organizations of the Treadway Commission, to identify the risks and control objectives related to the evaluation of our control environment.

Our management conducted an evaluation of the effectiveness of our internal control over financial reporting. Based on our evaluation, management concluded that our internal control over financial reporting was ineffective as of December 31, 2010, our most recently completed fiscal year.

Material Weakness in Internal Control over Financial Reporting

A material weakness in internal control over financial reporting is defined by the Public Company Accounting Oversight Board’s Audit Standard No. 5 as a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of our financial reporting.

At December 31, 2010, management’s assessment identified the following material weaknesses in internal control over financial reporting:

1.	Inadequate segregation of duties within certain aspects of the financial reporting process.

2.	The non-cash aspects of certain debt and equity issuances were not properly and accurately accounted for.

Related mitigating procedures did not operate effectively to alleviate these deficiencies.

In light of the material weaknesses described above, we performed additional analysis and other post-closing procedures to ensure our financial statements were prepared in accordance with generally accepted accounting principles. Accordingly, we believe that the financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented.

The internal control weakness identified above with regard to the inadequate segregation of duties with certain aspects of the financial reporting process will only be completely corrected if the Company expands and has the capacity to adequately segregate the duties to mitigate the risk in financial reporting. This expansion will depend mostly on the ability of management to fully execute its business operating strategy as outlined in Item 2(b) above and generate enough income to warrant growth in personnel. With regard to the internal control deficiency identified above related to the lack of preventative measures to properly and accurately account for the recording of the non-cash aspects of certain debt and equity issuances, management has already taken steps to mitigate such risk going forward by utilizing external financial consulting services prior to the review by our principal independent accounting firm to ensure that all 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 accurately and within the time periods specified in the Commission’s rule and forms.

Changes in Internal Control over Financial Reporting

~~While~~The ~~the~~ Company did not issue any debt orinstruments and only issued a limited amount of equity instruments (838,000 common shares) during the ~~quarter~~six months ended ~~March~~June, 3130, 2011,. itThe Company has taken steps to mitigate the risk associated with the lack of preventative measures to properly and accurately account for the recording of the non-cash aspects of these issuances. This risk has been mitigated by utilizing external financial consulting services prior to the review by our principal independent accounting firm. Aside from these efforts, there were no other changes in our internal control over financial reporting that occurred during the fiscal quarter ended ~~March~~June 31, 2011 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

2817

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

As of the date of this document, we know of no legal proceedings pending or threatened or judgments entered against the Company or any of our directors or officers in his or her capacity as such.

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

During the quarter ended ~~March~~June 3130, 2011, the Company ~~did~~issued ~~not~~838,000 ~~have~~shares ~~any~~of ~~unregistered~~common ~~sales~~stock ofas ~~equity~~compensation ~~securities~~for services.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. [Removed and Reserved.]

Item 5. Other Information.

None.

Item 6. Exhibits.

31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rules 13a-14 and 15d-14 of the Exchange Act)
31.2	Certification of ~~Principal~~Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rules 13a-14 and 15d-14 of the Exchange Act)
32.1	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)
32.2	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)

101.INS **	XBRL Instance Document
101.SCH **	XBRL Taxonomy Extension Schema Document
101.CAL **	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF **	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB **	XBRL Taxonomy Extension Label Linkbase Document
101.PRE **	XBRL Taxonomy Extension Presentation Linkbase Document

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

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.

		SPECTRUMDNA, INC.
		(Registrant)
Dated: May 16, 2011	By:	/s/ James A. Banister
Dated: February 19, 2013	By:	/s/ Parrish B. Ketchmark
		James A. Banister,
		Parrish B. Ketchmark,
		President and Chief Executive Officer
		Principal Executive Officer
		(Principal Executive Officer)
Dated: February 19, 2013	By:	/s/ Terrence J. Dunne
Dated: May 16, 2011	By:	/s/ Rebecca D. Hershinger
		Terrence J. Dunne,
		Rebecca D. Hershinger,
		Principal Financial Officer
		Chief Financial Officer
		(Principal Financial Officer and
		Principal Accounting Officer)

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