U.S. Securities and Exchange Commission

Washington, D.C. 20549

Form 10-Q

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

For the quarterly period ended: ~~September~~December 3031, 2014

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

Commission File No. ~~333-190431~~333190431

PULSE EVOLUTION CORPORATION

(Exact name of registrant as specified in its charter)

Nevada	471336692	~~47-1336692~~
(State or Other Jurisdiction of Incorporation or Organization)		(IRS Employer Identification Number)
(State or Other Jurisdiction of	(IRS Employer
Incorporation or Organization)	Identification Number)

10521 SW Village Center Drive, Suite 201

Port St. Lucie, FL

(Address of principal executive offices)

(772) ~~545-4100~~5454100

(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 whether the Issuer (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 [ X]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation ~~S-T~~ST (§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 [ ] No No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a ~~non-accelerated~~nonaccelerated filer, or a smaller reporting company. See the definitions of the “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule ~~12b-2~~12b2 of the Exchange Act. (Check one):

Large accelerated Filer [ ] Accelerated Filer [ ] ~~Non-accelerated~~Nonaccelerated Filer [ ] (Do not check if a smaller reporting company) Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule ~~12b-2~~12b2 of the Exchange Act). Yes [ ] No [X]

APPLICABLE ONLY TO CORPORATE ISSUERS:

As of ~~November~~August 1420, ~~2014~~2015 the registrant had ~~137~~135,~~191~~434,~~342~~069 shares issued and outstanding shares of common stock.

PULSE EVOLUTION CORPORATION.

TABLE OF CONTENTS

PART I FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	~~Financial Statements (unaudited)~~	F-1	~~F-1~~
		a) Condensed Consolidated Balance Sheets as of September 30, 2014 and June 30, 2014		F-1
	a) Condensed Consolidated Balance Sheets as of December 31, 2014 and June 30, 2014		F-1
		b) Condensed Consolidated Statement of Operations for the Three Months Ended September 30, 2014		F-2
	b) Condensed Consolidated Statement of Operations for the Three and Six Months Ended December 31, 2014 and the Period from October 10, 2013 through December 31, 2013		F-2
		c) Condensed Consolidated Statement of Cash Flows for the Three Months Ended September 30, 2014		F-3
	c) Condensed Consolidated Statement of Cash Flows for the Three and Six Months Ended December 31, 2014 and the Period from October 10, 2013 through December 31, 2013		F-3
		d) Notes to Condensed Consolidated Financial Statements		F-4
	Notes to Condensed Consolidated Financial Statements		F-4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~	4	4
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	~~Quantitative and Qualitative Disclosure About Market Risk~~	9	8
Item 4.	Controls and Procedures	~~Controls and Procedures~~	9	8
PART II OTHER INFORMATION
Item 1.	Legal Proceedings	~~Legal Proceedings~~	10	9
Item 1A.	Risk Factors	~~Risk Factors~~	10	9
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	~~Unregistered Sales of Equity Securities and Use of Proceeds~~	10	9
Item 3.	Defaults Upon Senior Securities	~~Defaults Upon Senior Securities~~	11	10
Item 4.	Mine Safety Disclosures	~~Mine Safety Disclosures~~	11	10
Item 5.	Other Information	~~Other Information~~	11	10
Item 6.	Exhibits	~~Exhibits~~	12	11

A CAUTIONARY NOTE REGARDING ~~FORWARD-LOOKING~~FORWARDLOOKING STATEMENTS

This Quarterly Report on Form ~~10-Q~~10Q contains “~~forward-looking~~forwardlooking statements,” as defined in the United States Private Securities Litigation Reform Act of 1995. In some cases, you can identify ~~forward-looking~~forwardlooking statements by terminology such as “may”, “will”, “should”, “could”, “expects”, “plans”, “intends”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of such terms and other comparable terminology. These ~~forward-looking~~forwardlooking statements include, without limitation, statements about our market opportunity, our strategies, competition, expected activities and expenditures as we pursue our business plan, and the adequacy of our available cash resources. Although we believe that the expectations reflected in the ~~forward-looking~~forwardlooking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Actual results may differ materially from the predictions discussed in these ~~forward-looking~~forwardlooking statements. The economic environment within which we operate could materially affect our actual results. Additional factors that could materially affect these ~~forward-looking~~forwardlooking statements and/or predictions are discussed in greater detail under Item 1A – “Risk Factors” of our Annual Report on Form ~~10-K~~10K filed with the Securities and Exchange Commission (“SEC”) on October 10, 2014 and other reports we file with the SEC.

We caution that the factors described herein and other factors could cause our actual results of operations and financial condition to differ materially from those expressed in any ~~forward-looking~~forwardlooking statements we make and that investors should not place undue ~~reliance~~ reliance on any such ~~forward-looking~~forwardlooking statements. Further, any ~~forward-looking~~forwardlooking statement speaks only as of the date on which such ~~statement~~ statement is made, and we undertake no obligation to update any ~~forward-looking~~forwardlooking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New factors emerge from time to time, and it is not possible for us to predict all of such factors. Further, we cannot assess the impact of each such factor on our results of operations or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any ~~forward-looking~~forwardlooking statements.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

PULSE EVOLUTION CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	September 30, 2014			June 30, 2014
	December 31, 2014			June 30, 2014
Assets
Current assets:
Cash	$	~~263~~4,~~432~~854		$	1,539,719
Prepaid legal fees		6447,~~675~~288			134,675
Prepaid deposits and other assets		~~111~~548,~~857~~855			66,856
Total current assets		~~439~~600,~~964~~997			1,741,250
Property and equipment, net		2338,~~199~~618			22,886
Intangible and other assets		1,432,967			3,167
Intangible assets and other assets		1,829,050			3,167
Total assets	$	12,~~896~~468,~~130~~665		$	1,767,303
Liabilities and Shareholders’ Equity
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	~~654~~926,~~845~~491		$	341,055
Accrued expenses		~~375~~611,~~104~~831			676,520
Total current liabilities		1,029,949			1,017,575
Related party note payable		300,000			-
Total current liabilities		1,838,322			1,017,575
Commitments and Contingencies
Redeemable common stock, $0.001 par value, 2,800,000 and 0 issued and outstanding at December 31, 2014 and June 30, 2014, respectively		1,000,000			-
Shareholders’ equity:
Preferred stock, 100,000,000 shares authorized at par value of $0.001 per share, no shares issued or outstanding at September 30, 2014		-			-
Preferred stock, 100,000,000 shares authorized at par value of $0.001 per share, no shares issued and outstanding at December 31, 2014		-			-
Common stock, 300,000,000 shares authorized at par value of $0.001 per share, 116,632,690 and 109,627,349 issued and outstanding at September 30, 2014 and June 30, 2014, respectively.		116,633			109,627
Common stock, 300,000,000 shares authorized at par value of $0.001 per share, 135,434,440 and 109,627,349 issued and outstanding at December 31, 2014 and June 30, 2014, respectively		135,435			109,627
Subscription receivable		(1,253	)		(153,276	)
Additional paid-in capital		12,558,150			9,116,789
Additional paid in capital		14,756,183			9,116,789
Accumulated deficit		(1114,~~432~~976,~~150~~602	)		(8,465,066	)
Total equity before non-controlling interests		1,241,380			608,074
Total Pulse Evolution Corporation equity		(86,237	)		608,074
Non-controlling interests		(375,199	)		141,654
Noncontrolling interests		(283,420	)		141,654
Total shareholders’ equity		866,181			749,728
Total liabilities and equity	$	2,468,665		$	1,767,303
Total liabilities and shareholders’ equity	$	1,896,130		$	1,767,303

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

F-1

PULSE EVOLUTION CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(Unaudited)

	Three Months Ended September 30, 2014
	Three Months Ended December 31, 2014			Period from October 10, 2013 (inception) through December 31, 2013			Six Months Ended December 31, 2014			Period from October 10, 2013 (inception) through December 31, 2013
Statement of Operations:
Statement of Operations
Revenues	$	~~88,151~~-		$	-		$	88,151		$	-
Costs and expenses		3,~~572~~452,~~088~~673			219,209			7,024,761			219,209
Net operating loss		(3,~~483~~452,~~937~~673	)		(219,209	)		(6,936,610	)		(219,209	)
Loss before income taxes		(3,~~483~~452,~~937~~673	)		(219,209	)		(6,936,610	)		(219,209	)
Income tax expense		-			-			-			-
Net loss before non-controlling interests		(3,~~483~~452,~~937~~673	)		(219,209	)		(6,936,610	)		(219,209	)
Net loss attributable to non-controlling interests		~~516~~160,~~853~~300			-			425,074			-
Net loss attributable to common shareholders	$	(23,~~967~~292,~~084~~373	)		(219,209	)		(6,511,536	)		(219,209	)
Basic and Diluted loss per share attributable to Pulse Evolution Corporation common shareholders	$	(0.03	)	$	(0.00	)	$	(0.05	)	$	(0.00	)
Weighted average number of common shares outstanding:
Basic and Diluted		~~113~~129,~~490~~948,~~252~~852			86,718,357			121,534,413			86,718,357

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

F-2

PULSE EVOLUTION ~~CORPORATION~~CORPORATIONAND ~~AND~~ SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

	Three Months Ended
	Six Months Ended			Period from October 10, 2013 (inception) through
	September 30, 2014
	December 31, 2014			December 31, 2013
Cash flows from operating activities:
Cash flows from operating activities
Net loss before non-controlling interests	$	(3,483,937	)
Net loss	$	(6,936,610	)	$	(219,209	)
Adjustments to reconcile net loss before non-controlling interests to net cash used in operating activities:
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization of property and equipment and intangible assets		50,261
Depreciation and amortization		151,972			-
Stock-based compensation		368,305
Share-based compensation expense		488,552			-
Changes in operating assets and liabilities:					-
Prepaids and retainers		24,999
Prepaid legal fees		87,387			-
Other assets		(3,000	)
Prepaid deposits and other assets		18,918			(4,700	)
Accounts payable		304,479
Purchase of licensing rights		(1,000,000	)		(701,489	)
Accrued expenses		155,237
Accounts payable		1,032,778			69,985
Net cash used in operating activities		(2,583,656	)
Accrued expenses		(14,689	)		86,535
Cash flows from investing activities:
Net cash used by operating activities		(6,171,692	)		(768,878	)
Purchases of property and equipment		(1,374	)
Cash flows from investing activities:
Purchase of licensing rights		(1,000,000	)
Purchase of property and equipment		(18,504	)		-
Net cash used in investing activities		(1,001,374	)
Net cash used in investing activities:		(18,504	)		-
Cash flows from financing activities:
Net proceeds from sales of common stock		24,~~308~~405,~~743~~331			3,210,648
Net cash provided by financing activities		2,308,743
Net proceeds from loan		250,000			-
Net decrease in cash and cash equivalents		(1,276,287	)
Net cash provided by investing activities:		4,655,331			3,210,648
Cash and cash equivalents at beginning of period		1,539,719
Net increase (decrease) in cash and cash equivalents		(1,534,865	)		2,441,770
Cash and cash equivalents at end of period	$	263,432
Cash and cash equivalents, beginning of period		1,539,719			-
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash and cash equivalents, end of period	$	4,854		$	2,441,770
Non-cash investing and financing activities:
Supplement cash flow information:
Payment of payable in common stock	$	456,653		$	-
Exchange warrant option issued to acquire licensing rights	$	476,000		$	-
Issuance of redeemable common stock for licensing rights	$	1,000,000		$	-

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

F-3

PULSE EVOLUTION CORPORATION

Notes to the Condensed Consolidated Financial Statements

~~September~~December 3031, 2014

(Unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

Pulse Evolution Corporation was incorporated on May 31, 2013, under the laws of the State of Nevada under the name QurApps, Inc., ~~During~~initially ~~fiscal~~announcing ~~2014,~~plans ~~the~~to ~~Company~~develop ~~was~~software ~~planning~~applications onfor ~~developing a~~ mobile ~~software~~devices. ~~food~~In ~~recipe~~anticipation ~~app~~of ~~until~~a ~~the~~change ~~Company’s~~of ~~controlling~~control ~~shareholder~~transaction, which ~~sold~~closed ~~his interest in the Company~~ on May 15, 2014~~. In anticipation of this change of control~~, the Company changed its name to Pulse Evolution Corporation effective May 8, 2014.

The Company is ~~in the early stages of becoming~~ a ~~creatively~~recognized ~~driven,~~pioneer ~~digital production~~ and ~~intellectual~~leading ~~property~~developer ~~company that expects to produce specialized, high-impact applications~~ of ~~computer~~hyper-~~generated~~realistic ~~human~~digital ~~likeness~~humans for ~~utilization~~holographic inlive ~~entertainment~~performances, ~~life sciences,~~virtual ~~education~~reality, augmented reality and ~~telecommunication~~artificial intelligence. Founded by ~~leading~~the producers of ~~photorealistic digital humans,~~ the ~~Company plans to develop “virtual humans” for live and holographic concerts, advertising, feature films, branded content, medical applications and training. The Company~~world’s ~~business~~most ~~model is focused on participation in intellectual property through the development, production and ownership of entertainment properties featuring~~ globally recognized ~~animated virtual performers and through multi-year revenue-share~~ ~~relationships~~digital ~~with living celebrities and late celebrity estates. In May 2014~~humans, the Company signed a letter of intent to exchange at least a majority of its unissued shares of common stock for 100% of the outstanding common stock of Pulse Entertainment Corporation, a related party (“Pulse Entertainment”). Pulse Entertainment is ~~engaged~~initially infocused ~~the~~on ~~business~~ the ~~Company~~development ~~plans to pursue. In late 2013, Pulse Entertainment entered into a multi-year agreement with the estate~~ of ~~Michael Jackson to produce a photo~~computer-~~realistic~~ generated digital ~~likeness~~humans offor ~~the late celebrity and to participate in a share of revenues that could be realized through performances of the ‘Virtual Michael Jackson’ in diverse~~ entertainment and media applications~~. In August 2014~~, ~~the~~such ~~Company~~as ~~entered into~~live aand ~~multi-year~~holographic ~~agreement~~concerts, ~~with~~virtual ~~ABG EPE IP~~reality, ~~LLC (“ABG”)~~advertising, ~~the~~feature ~~principal~~films ~~owner of rights related to the estate of the late celebrity Elvis Presley to produce a photo-realistic digital likeness of the late celebrity~~ and tobranded ~~participate in a share of revenues that could be realized through performances of the ‘Virtual Elvis Presley’ in diverse entertainment and media applications~~content. In this ~~October 2014~~regard, the Company ~~entered~~is ~~into~~principally afocused ~~multi-year~~on ~~agreement~~generating ~~with~~revenues ~~the~~from ~~estate~~key ofagreements ~~the~~with ~~late celebrity Marilyn Monroe to produce a photo-realistic digital likeness of~~ the ~~late~~leading celebrity ~~and to participate in a share of revenues that could~~estates ~~be realized through performances~~ of ~~the~~Michael ~~‘Virtual~~Jackson, ~~Marilyn~~Elvis ~~Monroe’~~Presley ~~in diverse entertainment~~ and ~~media~~Marilyn ~~applications~~Monroe.

The Company believes that digital humans will be ubiquitous in society, culture and industry. They will not only perform on stage or in film, as has already been witnessed, but they will also represent us individually as digital likeness avatars, in realistic and fantasy form, appearing on our behalf, and interacting in electronic and mobile communication, social media, video games and virtual reality. The Company believes digital humans will ultimately provide a relatable human interface for artificial intelligence applications, ‘thinking’ machine systems that, through the technology, will appear as realistic communicating humans through mobile devices, digital signage, classrooms and through lightweight wearable augmented reality glasses and virtual reality headsets.

Beyond the Company’s immediate focus on entertainment, the Company is devoting significant resources to developing the role of digital humans in virtual reality and in artificial intelligence. In the first quarter of our fiscal year 2016, the Company entered into a contract services relationship, developing digital humans and content, for a leading virtual reality industry company. Though there are no plans to pursue a business model of contract services, the project has enabled the Company to further develop its proprietary human animation technologies and efficiently enter into the high-growth virtual reality industry. The Company has also recently consummated its first joint venture with an artificial intelligence company. Pursuant to the terms of this agreement, SpaceBoy, a leading Japan-based artificial intelligence company, made a direct equity investment into Company common stock, while also providing the Company with an opportunity to build ‘thinking’ digital humans based on SpaceBoy’s ‘AI Inside’ technology. It is the Company’s goal to be the ‘face’ of artificial intelligence, to provide a human form to interactive artificially intelligent computer beings. The Company believes the experience and vision of our leadership team, combined with existing and growing business relationships, have positioned the Company to be a leading pioneer in the worlds of virtual reality and artificial intelligence.

The Company’s media and entertainment business model is focused on participation in intellectual property through the development, production and ownership of entertainment properties featuring globally recognized animated virtual performers and through multiyear revenueshare relationships with living celebrities and late celebrity estates. In late 2013, Pulse Entertainment Corporation (“Pulse Entertainment”), now a wholly-owned subsidiary of the Company, entered into a multiyear agreement with the estate of Michael Jackson to produce a photorealistic digital likeness of the late celebrity and to participate in a share of revenues that could be realized through performances of the ‘Virtual Michael Jackson’ in diverse entertainment and media applications. In August 2014, the Company entered into a multiyear agreement with ABG EPE IP, LLC (“ABG”), the principal owner of rights related to the estate of the late celebrity Elvis Presley to produce a photorealistic digital likeness of the late celebrity and to participate in a share of revenues that could be realized through performances of the ‘Virtual Elvis Presley’ in diverse entertainment and media applications. In October 2014, the Company entered into a multiyear agreement with the estate of the late celebrity Marilyn Monroe to produce a photorealistic digital likeness of the late celebrity and to participate in a share of revenues that could be realized through performances of the ‘Virtual Marilyn Monroe’ in diverse entertainment and media applications.

F-4

Acquisition of Pulse Entertainment

~~The~~In May 2014, the Company signed a letter of intent to exchange at least a majority of its unissued shares of common stock for 100% of the outstanding common stock of Pulse Entertainment Corporation, a related party. The Company entered into a share exchange agreement on September 26, 2014 (the “Share Exchange Agreement”) with Pulse Entertainment in which the Company agreed to issue up to 58,362,708 shares of its unregistered common stock, $0.001 par value (the “Common Stock”) to the shareholders of Pulse Entertainment holding 21,535,252 shares of its issued and outstanding common stock (the “Share Exchange”), such shares representing 100% of the issued and outstanding common stock of Pulse Entertainment. Upon closing of the transaction, Pulse Entertainment will become a subsidiary of the Company and the total shares of common stock outstanding are expected to be 146,280,014. On September 30, 2014, the Company completed the initial closing under the Share Exchange Agreement pursuant to which it agreed to issue 35,827,309 shares of its unregistered Common Stock, net of cancellations, to the shareholders of Pulse Entertainment in exchange for 17,466,383 shares of its common stock. During the three months ended December 31, 2014, the Company exchanged additional shares under the Share Exchange Agreement pursuant to which it agreed to issue 15,135,973 shares of its unregistered Common Stock, net of cancellations, to the shareholders of Pulse Entertainment in exchange for 2,732,869 shares of its common stock. As part of the Share Exchange, certain of the Company’s shareholders who are also shareholders of Pulse Entertainment canceled 60,910,113 shares of the Company’s common stock previously issued to them in connection with the Share Exchange. Upon completion of the initial closing, Pulse Entertainment became a subsidiary of the Company in which the Company ~~owns~~owned ana 8193.18% interest at December 31, 2014. The remaining 41,~~068~~336,~~869~~000 shares of Pulse Entertainment common stock ~~may~~were be exchanged in June 2015 and July 2015 by the Pulse Entertainment Shareholders pursuant to the Share Exchange Agreement for 227,~~535,~~399,426 shares of the Company’s unregistered common stock. In the event these shares are exchanged, Pulse Entertainment will become a wholly owned subsidiary of the Company.

Recapitalization

The Company’s acquisition of Pulse Entertainment was accounted for as a recapitalization of Pulse Entertainment since the shareholders of Pulse Entertainment obtained voting and managing control of the Company. Pulse Entertainment was the acquirer for financial reporting purposes and Pulse Evolution was the acquired company. Consequently, the consolidated financial statements after completion of the acquisition include the assets and liabilities of both Pulse Evolution and Pulse Entertainment, the historical operations of Pulse Entertainment and their consolidated operations from the September 30, 2014 closing date of the acquisition. Pulse Entertainment retroactively applied its recapitalization pursuant to the terms of the Share Exchange Agreement for all periods presented in the accompanying consolidated financial statements for the three and six months ended December 31, 2014 and for the period from October 10, 2013 through December 31, 2013.

Because Pulse Entertainment is the acquirer for financial reporting purposes, no comparative prior year data is presented for the period from October 10, 2013 through December 31, 2013 due to Pulse Entertainment’s incorporation occurring on October 10, 2013 in the state of Delaware.

F-45

Liquidity

The Company has been highly dependent on raising capital to fund its ~~start-up~~startup and growth strategies. To date, the Company has raised capital from the sales of its common stock without restrictive covenants from institutional investors and strategic partners (See Note 8 - Capitalization). On September 30, 2014, the Company and Pulse Entertainment completed an initial closing under the terms of a share exchange agreement they entered into whereby Pulse Entertainment became a subsidiary of the Company. As of December 31, 2014, the Company owns 93.8% of Pulse Entertainment.

The Company’s core business is the acquisition from estates and other rights holders of certain intellectual property rights to create virtual celebrities, and the right to present, and license to others to present, those virtual performers in live, and a variety of ~~live-virtual~~livevirtual and commercial formats.

In execution of its business plan, the Company has considered various models for executing its business plan. Originally, the Company intended to focus on providing virtual performers for appearances and collecting royalties when the Company has an ownership interest in the intellectual property rights for the virtual performer (the “Talent Model”). Under the Talent Model, the Company would permit other producers to create performances that make use of virtual performers created by the Company. In addition to being available for performances in entertainment productions, the virtual performers would also be available for diverse other appearances, such as television commercials, print advertising campaigns, short-form content and downloadable apps. Under the Talent Model, the Company is positioned to earn revenues from its virtual performers, and through its revenue share agreements with celebrity estates, in a manner that is consistent with how the ‘actual’ celebrities would earn revenues through their direct performances and appearances.

The Company has also considered a traditional visual effects services model, principally in response to requests by third-parties that would like to build computer generated, digital humans depicting actual historical figures, living celebrities and fictional fantasy characters. To the extent the Company has available human resources, whether between production contracts or otherwise, the Company believes such services projects represent an opportunity to generate additional high-margin revenue, based on our human animation specialization, and also the opportunity to see additional benefits of the services work as ‘funded research and development’. Additionally, certain of these projects also have the potential to strengthen the Company’s reputation as a leader in the field of human animation.

Subsequently, the Company decided to explore and develop opportunities to act as a producer of events (the “Producer Model”), thereby enabling the company to exert significant creative and technological control over the performance productions, and to capture significantly greater portions of the realizable economic value created by the virtual performance.

Under both models, the Company expects to generate revenues and/or positive operating ~~cash-flow~~cashflow on all digital construction, animation, and production services that it provides, plus royalties and performance fees when the work involves intellectual property rights held by the Company. Under both models, the Company has significant discretion to determine to what extent the creative and production resources, which are primarily labor costs, are engaged on an ~~as-needed~~asneeded basis for each project or production (“Contract Staffing”), and to what extent the Company carries a concentration of creative and production resources ~~in-house~~inhouse (“~~In-House~~InHouse Staffing”).

While execution of the Producer Model enables the Company to capture more of the value created by the virtual performers, it also requires the Company to raise significant amounts of production capital, which is similar to project financed equity or ~~non-recourse~~nonrecourse debt into production subsidiaries. Executing this model with ~~In-house~~Inhouse Staffing gives the Company certain strategic advantages and flexibility in the development of new concepts and application of new technologies, yet it also requires a higher employee headcount and the related operating overhead.

The Company’s ability to fund its operations and meet its obligations on a timely basis is dependent on its ability to match the available financial resources to its operating model (Talent vs. Producer) and its execution strategy (Contract Staffing vs. ~~In-House~~InHouse Staffing). The decisions the Company makes with regard to operating model and execution strategy drive the capital and liquidity requirements.

~~The Company is currently operating under the Producer Model with significant In~~F-House Staffing resources. Consequently, the Company is heavily reliant upon raising equity capital to finance our operations, meet our working capital requirements and finance productions. To the extent that full development of the Company’s growth opportunities also requires forming strategic alliances, we are prepared to do so. 6

~~If,~~The ~~however, the~~ Company is ~~unable~~currently tooperating ~~successfully~~under ~~raise~~the ~~sufficient~~Producer ~~additional~~Model ~~capital~~with ~~and~~significant ~~generate~~InHouse ~~cash~~Staffing ~~flow~~resources. ~~from operations~~Consequently, the Company is ~~would~~heavily ~~likely~~reliant ~~have~~upon raising equity capital to ~~reduce~~finance ~~its~~our ~~dependence~~operations, onmeet ~~In-House~~our ~~Staffing~~working capital requirements and ~~limit~~finance ~~many,~~productions. To ifthe ~~not~~extent ~~all,~~that full development of the ~~its~~Company’s ~~activities~~growth asopportunities aalso requires forming strategic alliances, the ~~producer.~~Company is prepared to do so.

~~NOTE~~If, 2.however, ~~SUMMARY~~the OFCompany ~~SIGNIFICANT~~is ~~ACCOUNTING~~unable ~~POLICIES~~to successfully raise sufficient additional capital and generate cash flow from operations, the Company would likely have to curtail its activities as a production company, reduce its dependence on InHouse Staffing resources and downsize the scale of its operations in a manner consistent with the Talent Model.

Basis of Presentation and Consolidation

These unaudited condensed consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, these financial statements contain all adjustments, consisting of normal recurring adjustments, necessary to present fairly the financial position, results of operations and cash flows for the periods presented. The results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the full year. These financial statements should be read in conjunction with the financial statements included in Form 8-K filed with the SEC on October 10, 2014.

The accompanying condensed consolidated financial statements include the accounts of Pulse Evolution Corporation, its ~~majority-owned~~majorityowned subsidiary Pulse Entertainment Corporation and its ~~wholly-owned~~whollyowned subsidiary The Kopp Initiative, LLC. All significant intercompany accounts and transactions have been eliminated in consolidation.

The Company retroactively applied its recapitalization per the Share Exchange Agreement for all periods presented in the accompanying unaudited condensed consolidated financial statements.

Reclassifications

The accompanying condensed consolidated financial statements include certain reclassifications of amounts in the June 30, 2014 financial statements in order to conform to the ~~September~~December 3031, 2014 presentation.

Prepaid and Other Assets

The Company had paid a launch fee of $1,000,000 for the multiyear agreement with ABG, as described in Note 4 Intangibles and Other Assets. In April 2015 this agreement was amended to reduce the launch fee to $500,000 and use the remaining payment made by the Company to fund the $500,000 service contract when expenses are incurred. The Company reclassified $500,000 of the launch fee to prepaid expenses as of December 31, 2014.

Revenue Recognition

WeThe ~~have~~Company has entered into a production services agreement with the estate of a deceased celebrity that provide revenues based on ~~certain~~ certain production services. Revenue is recognized on a ~~straight-line~~straightline basis over each contract period, as defined in each agreement. As As the production services are rendered, revenue is recognized.

F-57

~~Stock-based~~Stockbased Compensation

~~ASC~~Accounting Standard Codification (“ASC”) 718, “~~Compensation-Stock~~CompensationStock Compensation” requires recognition in the financial statements of the cost of employee services received in exchange for an award of equity instruments over the period the employee is required to perform the services in exchange for the award (presumptively the vesting period). WeThe ~~measure~~Company measures the cost of employee services received in exchange for an award based on the ~~grant-date~~grantdate fair value of the award. WeThe ~~account~~Company accounts for nonemployee ~~non-employee~~sharebased ~~share-based~~ awards based upon ASC ~~505-50~~50550, “~~Equity-Based~~ EquityBased Payments to ~~Non-Employees~~NonEmployees.” ASC ~~505-50~~50550 requires the costs of goods and services received in exchange for an award of equity instruments to be recognized using the fair value of the goods and services or the fair value of the equity award, whichever is more reliably measurable. The fair value of the equity award is determined on the measurement date, which is the earlier of the date that a performance commitment is reached or the date that performance is complete. Generally, ~~our~~the Company’s awards do not entail performance commitments. When an award vests over time such that performance occurs over multiple reporting periods, wethe ~~estimate~~Company estimates the fair value of the award as of the end of each reporting period and recognize an appropriate portion of the cost based on the fair value on that date. When the award vests, wethe ~~adjust~~Company adjusts the cost previously recognized so that the cost ultimately recognized is equivalent to the fair value on the vesting date, which is presumed to be the date performance is complete.

Income Taxes

The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred income taxes are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to be applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date.

Foreign Currency Translation

The Company has adopted the US dollar as its functional and reporting currency because most of its transactions are denominated in US currency.

Fair Value of Financial Instruments

The Company determines the fair value of its financial instruments using the Black-Scholes option pricing model and utilized the following assumptions for determination of the fair value of its financial instrument as of September 30, 2014:

Fair value of exchange warrants option	September 30, 2014			June 30, 2014
Number of shares		2,800,000
Fair value of option	$	476,000			-
Term in years		1.61			-
Risk-free interest rate		0.34	%		-
Volatility		76.63	%		-
Dividend rate		0.00	%		-

Earnings per Share

Basic earnings per share are computed based upon the ~~weighted-average~~weightedaverage number of shares outstanding, including nominal issuances of common share equivalents, for each period presented. ~~Fully-diluted~~Fullydiluted, earnings per share is computed based upon the ~~weighted-average~~weightedaverage number of shares and dilutive share equivalents outstanding for each period presented. Due to the Company’s net losses for the three and six months ended ~~September~~December 3031, 2014, the inclusion of dilutive common share equivalents in the calculation of diluted ~~earnings~~ earnings per share would be ~~anti-dilutive~~antidilutive. Thus, the common share equivalents have been excluded from the computation of diluted ~~earnings~~ earnings per share for the three and six months ended ~~September~~December 3031, 2014. These common stock equivalents include ~~exchange~~ warrants for shares of of the Company’s common stock and rights to exchange shares of Pulse Entertainment Corporation common stock for shares of ~~the~~ the Company’s common stock.

The potential dilutive securities outstanding that were excluded from the computation of diluted net loss per share for the ~~following~~three ~~periods~~and six months ended December 31, 2014, because their inclusion would have had an ~~anti-dilutive~~antidilutive effect, are summarized as follows:

	Three Months Ended September 30, 2014
	Three Months Ended		Six Months Ended
Share exchange right of subsidiary shareholders		22,535,399
	December 31, 2014		December 31, 2014
Exchange warrants option		2,800,000
Share exchange right of subsidiary shareholders		7,399,426		22,535,399
Total		25,335,399
Unvested restricted stock		1,152,000		1,152,000
Warrants		2,800,000		2,800,000
Total		11,351,426		26,487,399

F-68

Recent Accounting Pronouncements

On May 28, 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. ~~2014-09~~201409 (ASU ~~2014-09~~201409), Revenue from Contracts with Customers. ASU ~~2014-09~~201409 will eliminate transaction- and ~~industry-specific~~industryspecific revenue recognition guidance under ~~current~~ current U.S. GAAP and replace it with a principle based approach for determining revenue recognition. ASU ~~2014-09~~201409 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU ~~2014-09~~201409 is effective for reporting periods beginning after December 15, 2016, and early adoption is not permitted. ~~Entities~~ Entities can transition to the standard either retrospectively or as a ~~cumulative-effect~~cumulativeeffect adjustment as of the date of adoption. ~~Management~~ Management is currently evaluating the impact, if any, on adopting ASU ~~2014-09~~201409 on our results of operations or financial condition.

~~NOTE~~In 3August 2014, the FABS issued ASU No. ~~PROPERTY~~2014-15, &Disclosure ~~EQUIPMENT~~of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”). ASU 2014-15 will explicitly require management to assess an entity’s ability to continue as a going concern, and to provide related footnote disclosure in certain circumstances. The new standard will be effective for all entities in the first annual period ending after December 15, 2016. Earlier adoption is permitted. The Company is currently evaluating the impact of the adoption of ASU 2014-15.

~~Property~~NOTE ~~and~~2. ~~equipment~~PROPERTY as& ~~of September 30, 2014 and June 30, 2014 consist of the following:~~EQUIPMENT

	September 30, 2014			June 30, 2014
Computers and other equipment	$	11,179		$	9,805
Furniture and fixtures		14,061			14,061
Total property and equipment, cost		25,240			23,866
Less accumulated depreciation		(2,041	)		(980	)
Total property and equipment, net	$	23,199		$	22,886

Property and equipment as of December 31, 2014 and June 30, 2014 consist of the following:

The range of estimated useful lives for property and equipment at September 30, 2014, and June 30, 2014 was five to seven years.

	December 31, 2014			June 30, 2014
Computers and other equipment	$	28,309		$	9,805
Furniture and fixtures		14,061			14,061
Total property and equipment, cost		42,370			23,866
Less accumulated depreciation		(3,752	)		(980	)
Total property and equipment, net	$	38,618		$	22,886

~~Depreciation~~The ~~expense~~range onof estimated useful lives for property and equipment ~~totaled~~at $1December 31,~~061~~ ~~for~~2014, ~~the~~and ~~three~~June ~~months ended September~~ 30, 2014 was five to seven years.

~~NOTE~~Depreciation 4.expense ~~INTANGIBLE~~on &property ~~OTHER~~and ~~ASSETS~~equipment totaled $1,711 and $2,772 for the three and six months ended December 31, 2014, respectively.

InNOTE ~~August 2014, the Company entered into a multi-year agreement with ABG to develop for ABG, entertainment projects to utilize a realistic computer-generated image of Elvis Presley~~3. ~~The~~INTANGIBLE ~~likeness~~AND ~~will~~OTHER be used to create entertainment and branding revenue opportunities for us, generated from holographic performances in live shows and commercials. The initial fee paid has been capitalized and is being amortized over the length of the agreement. At September 30, 2014, forty-eight months remain unamortized on the agreement.ASSETS

~~Included~~In inAugust ~~other~~2014, ~~assets~~the isCompany entered into a ~~receivable~~multiyear agreement with ABG to develop for ABG, entertainment projects to utilize a realistic computergenerated image of ~~approximately~~Elvis $6Presley. The likeness will be used to create entertainment and branding revenue opportunities for the Company,~~200~~ ~~due~~generated from ~~two~~holographic ~~affiliated~~performances ~~entities~~in ~~controlled~~live byshows ~~the~~and ~~Executive~~commercials. ~~Chairman~~There was a launch fee valued at $500,000 ofpaid for in cash and an additional warrant issued. The warrant was valued based on the ~~Board~~fair ofvalue at the ~~Company~~time of issuance.

~~NOTE~~The 5.Company ~~ACCRUED~~determines ~~LIABILITIES~~the fair value of its financial instruments using the BlackScholes option pricing model and utilized the following assumptions for determination of the fair value of its financial instrument as of December 31, 2014:

Accrued liabilities as of September 30, 2014 and June 30, 2014 consist of the following:

Fair value of exchange warrants option	December 31, 2014			June 30, 2014
Number of shares		2,800,000
Fair value of option	$	476,000			-
Term in years		1.61			-
Riskfree interest rate		3.4	%		-
Volatility		76.63	%		-
Dividend rate		0.00	%		-

	September 30, 2014		June 30, 2014
Payroll and payroll related liabilities	$	276,650	$	132,732
Due to advisor		-		456,653
Other accrued expenses		98,454		87,135
Total accrued expenses	$	375,104	$	676,520

F-9

~~NOTE~~The 6initial value has been capitalized and is being amortized over the length of the agreement. ~~NON-CONTROLLING~~At ~~INTERESTS~~December 31, 2014, fiftyfive months remain unamortized on the agreement. The net value of the intangible asset is $876,800 at December 31, 2014.

~~Changes~~In inOctober 2014, the ~~non-controlling~~Company ~~interest~~entered ~~amounts~~into a multiyear agreement with the Estate of ~~our~~Marilyn ~~subsidiaries~~Monroe, LLC (“the Monroe Estate”) to develop for the ~~three~~Monroe ~~months~~Estate ~~ended~~entertainment ~~September~~projects 30to utilize a realistic computergenerated image of Marilyn Monroe. The likeness will be used to create entertainment and branding revenue opportunities for the Company, generated from holographic performances in live shows and commercials. The Monroe Estate holds the likeness, appearance, and publicity rights of Marilyn Monroe. Under the terms of the agreement, the Company issued 2,800,000 shares of common stock to the Monroe Estate. The initial value has been capitalized and is being amortized over the length of the agreement. At December 31, 2014, ~~were~~fifty-seven asmonths ~~follows:~~remain unamortized on the agreement. The net value of the intangible asset is $950,000 at December 31, 2014.

Balance at June 30, 2014	$	141,654
Net loss attributable to non-controlling interests		(516,853	)
Balance at September 30, 2014	$	(375,199	)

Additionally, the Company’s agreement with the Monroe Estate included a provision where the Company was to cause the 2,800,000 shares issued to be registered by a specified date. If this did not occur, the Company would be liable to the Monroe Estate for $1,000,000 in order to pay them back for the shares issued. The shares are redeemable at the option of the Monroe Estate and the date to register had passed as of April 1, 2015. Since these shares are redeemable at the option of the holder, they have been classified outside of permanent equity. Also see the Subsequent Events Note 11.

~~During~~NOTE ~~the three months ended September 30, 2014, the Company’s subsidiary Pulse Entertainment realized a net loss of $3,483,937~~4. ~~Pursuant~~ toACCRUED the requirements under FASB ASC Topic 810, Consolidation, the Company allocates Pulse Entertainment’s earnings to non-controlling interests based on the percentage of common stock of Pulse Entertainment not owned by the Company. Intercompany transactions are eliminated in consolidation but impact the net earnings of each of the respective entities and as such affect amounts allocated to non-controlling interests. During the three months ended September 30, 2014, $2,734,674 of Pulse Entertainment’s net loss was allocated to accumulated deficit representing the Company’s proportionate holdings in Pulse Entertainment’s common stock outstanding of 81.1% and the remaining 18.9% of Pulse Entertainment’s net loss, amounting to $516,853, was allocated to non-controlling interests.LIABILITIES

~~F-7~~Accrued liabilities as of December 31, 2014 and June 30, 2014 consist of the following:

NOTE 7. COMMITMENTS AND CONTINGENCIES

	December 31, 2014		June 30, 2014
Payroll and payroll related liabilities	$	474,359	$	132,732
Due to advisor		-		456,653
Stock grant accrual		41,440		-
Other accrued expenses		96,032		87,135
Total accrued expenses	$	611,831	$	676,520

NOTE 5. NONCONTROLLING INTERESTS

Changes in the noncontrolling interest amounts of our subsidiaries for the three and six months ended December 31, 2014 were as follows:

Balance at June 30, 2014	$	141,654
Net loss attributable to noncontrolling interests		(516,853	)
Balance at September 30, 2014		(375,199	)
Adjust for share exchange		252,079
Net loss attributable to noncontrolling interests		(160,300	)
Balance at December 31, 2014	$	(283,420	)

During the three and six months ended December 31, 2014, the Company’s subsidiary Pulse Entertainment realized a net loss of $2,585,484, and $5,320,158 respectively. Pursuant to the requirements under FASB ASC Topic 810, Consolidation, the Company allocates Pulse Entertainment’s earnings to noncontrolling interests based on the percentage of common stock of Pulse Entertainment not owned by the Company. Intercompany transactions are eliminated in consolidation but impact the net earnings of each of the respective entities and as such affect amounts allocated to noncontrolling interests. During the three and six months ended December 31, 2014, $2,585,484, and $5,320,158, respectively, of Pulse Entertainment’s net loss was allocated to accumulated deficit representing the Company’s proportionate holdings in Pulse Entertainment’s common stock outstanding. During the three months ended December 31, 2014, the Company completed additional closings under the Share Exchange Agreement pursuant to which it agreed to issue 15,135,973 shares of its unregistered Common Stock, net of cancellations, to the shareholders of Pulse Entertainment in exchange for 2,732,869 shares of its common stock. As part of the Share Exchange, certain of the Company’s shareholders who are also shareholders of Pulse Entertainment canceled 60,910,113 shares of the Company’s common stock previously issued to them in connection with the Share Exchange. Upon completion of the initial closing, Pulse Entertainment became a subsidiary of the Company in which the Company owned a 93.8% interest at December 31, 2014. There was an increase of $252,079 to the allocation of Pulse Entertainment’s net loss after the share exchanges that occurred during the three months ended December 31, 2014. The Pulse Entertainment’s net loss allocated to non-controlling interests were $329,850 and $160,300 for the three and six months ended December 31, 2014, respectively.

F-10

NOTE 6. COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company leases office space in Florida under a non-~~cancelable~~cancellable operating ~~leases~~lease with an expiration date of March 31, 2015. ~~Monthly~~The Company negotiated a monthtomonth lease commencing on March 1, 2015. The monthly lease expense is ~~approximately~~through March 1, 2015 was approximately $12,000. ~~with~~Beginning aon ~~remaining~~March ~~obligation~~1, ~~under~~2015, the ~~lease~~negotiated ofrate ~~approximately~~is $726,000 each month.

The Company also leases office space on a ~~month-to-month~~monthtomonth basis for its production operations. Monthly lease expense is approximately $87,300. On January 1, 2015, the Company signed an operating sub-lease with an expiration date of December 31, 2015. The monthly lease expense beginning on January 1, 2015 is approximately $14,000.

Total rent expense for the three and six months ended ~~September~~December 3031, 2014 was approximately $5860,~~200~~900 and $101,671, respectively.

Advisory Agreements

The Company’s ~~majority-owned~~majorityowned subsidiary, Pulse Entertainment Corporation, entered into an Investor Introduction Agreement (“the Agreement”) with an international advisory services group (“the Advisor”) in March 2014. The Advisor is to support the Company in its fund raising process through introductions of potential investors and to assist the Company in developing its investor relations strategy. The Agreement calls for the Advisor to be paid a success fee in cash equal to six percent of all investments introduced by the Advisor. In addition the Advisor shall be entitled to shares equal to three percent of the underlying shares issued in any such transactions. As of June 30, 2014, the Advisor had earned 488,830 shares of Pulse Entertainment common stock, of which 224,869 shares of common stock were issued. A liability had been recognized by Pulse Entertainment for the portion of shares not issued as of June 30, 2014 totaling $456,653. In September 2014, the Company issued 1,461,946 shares of its common stock in payment of the liability as if Pulse Entertainment had paid the Advisor in its shares, and the Advisor immediately exchanged the shares in the company’s stock under the Share Exchange Agreement as further described in Note 9 - Capitalization below.

Pulse Entertainment entered into a business development advisory agreement (the “Business Development Agreement”) with a consulting firm (the “Consultant”) in May 2014, wherein the Consultant agreed to provide certain production and promotion services to Pulse Entertainment in exchange for consideration including cash, equity, an operating budget and production credits as specified in the Business Development Agreement. The Business Development Agreement provides for certain performance milestones and for termination by either party with 30 days’ notice. The maximum potential equity consideration is comprised of up to 200,000 stock options with an exercise price of $1.73 per share as follows:

●	100,000 options immediately upon execution of the Agreement

●	Up to 50,000 options each quarter for the following two quarters, beginning three months from the date of the Agreement, if certain performance targets are achieved.

~~Because~~The ~~Pulse Entertainment had not yet established an equity incentive plan under which the options could have been formally granted at the time the~~ Business Development Agreement was ~~executed,~~terminated ~~and~~in ~~accordingly~~September ~~had~~2014. ~~not~~As ~~reserved shares~~ of ~~common~~December ~~stock~~2014, ~~for issuance under an equity incentive plan~~125,000 ~~there~~stock ~~was~~options ~~insufficient information~~ to ~~determine~~ the ~~fair value of the option grant at the effective~~Consultant ~~date~~in ~~of the Business Development Agreement. Therefore,~~ Pulse Entertainment iswere ~~unable~~vested tobut ~~determine the fair value of the option grant on the grant date and has~~ not ~~recorded~~yet ~~a liability on its books and records~~issued.

~~The~~In ~~Business~~September ~~Development~~2014, ~~Agreement~~the ~~was~~Company ~~terminated~~entered into an exclusive financial services and advisory agreement with a consultant to assist the Company in ~~September~~its ~~2014~~capital market strategies. ~~The~~Under the terms of the agreement, the Company is ~~currently~~to inpay ~~negotiations~~the ~~with~~consultant ~~the~~three ~~consultants~~nonrefundable tomonthly ~~reach~~payments aof ~~settlement~~$30,000, inand ~~lieu~~quarterly restricted stock grants equal to onehalf of one percent of the ~~Pulse~~outstanding ~~Entertainment~~shares of common stock ~~option~~of ~~grant.~~the ~~Since~~Company each quarter to a maximum of two and onehalf percent of the ~~Company~~outstanding ~~cannot~~shares ~~reasonably~~of ~~estimate~~common orstock. ~~determine~~The agreement also calls for a ~~likely~~ten ~~outcome,~~percent nofee ~~liability~~in ~~has~~the ~~been~~event ~~recorded~~that ~~for~~a qualified financing transaction, as defined in the ~~quarter~~agreement, ~~ended~~is closed. ~~September~~The 30fee is payable equally in cash and stock. This agreement has been terminated as of December 31, 2014.

In July, the Company entered into an Investor Introduction Agreement (“the II Agreement”) with an international advisory services group (“the Advisor”). The Advisor is to support the Company in its fund raising process through introductions of potential investors and to assist the Company in developing a coherent investor relations strategy. The II Agreement calls for the Advisor to be paid a success fee in cash equal to up to eleven percent of all investments introduced by the Advisor through September 30, 2014, subsequent to that date the cash fee for any such transactions is permanently reduced to six percent. In addition the Advisor shall be entitled to shares equal to three percent of the underlying shares issued in any such transactions.F-11

In ~~September~~October 2014, the Company entered into a ~~Consulting~~consulting ~~Agreement~~agreement ~~(“AB Agreement”)~~ with a ~~member~~third ofparty ~~Art~~to ~~Story~~provide ~~LLC~~executive ~~whose managing~~leadership ~~member~~in is the ~~Executive~~formation of ~~Chairman~~a new division of the Company. ~~The~~Under ~~consultant~~the isterms toof the agreement, the consultant will provide services ~~related~~in tothe ~~story~~development ~~art~~of a ~~development~~business plan, technology planning, and fundraising. Under the term of the agreement, the consultant is to provide services for ~~one~~six ~~year~~months to and is to be paid ina monthly ~~payments~~base payment of $1210,~~500~~000, with additional amounts to be paid under certain performance conditions. If certain performance targets, as defined in the agreement, are met, the Company would create a newly formed subsidiary and the consultant would become the Chief Executive Officer of the newly developed subsidiary. Additionally, beginning upon the execution of this agreement, the consultant became a member of the Company’s advisory board and was granted 1,152,000 shares of the Company’s restricted common stock which vest quarterly in equal installments over a two year period. As of December 31, 2014 there were no shares issued related to this contract.

Contractual Commitments

The Company has entered into a ~~production-related~~productionrelated contract with ABG. Under the terms of the contract, the Company is required to make an initial payment to the third party as well as commitments to profit sharing requiring minimum future payments to the third party ratably over the next five years beginning at the end of calendar 2015. At ~~the~~December ~~three months ended September 30~~31, 2014, the future minimum ~~payments~~ payments due for future profit sharing under the contract are $4,000,000.

~~F-8~~The Company has entered into a productionrelated contract with the Estate of Marilyn Monroe. Under the terms of the contract, the Company is required to make an initial payment to the third party as well as commitments to profit sharing requiring minimum future payments to the third party ratably over the next five years beginning at the end of calendar 2015. At December 31, 2014, the future minimum payments due for future profit sharing under the contract are $2,100,000.

The Company had entered into a one year contract with the former Chief Financial Officer through April 30, 2015. His employment was terminated on January 30, 2015. Although the Company believes that no amounts are owed in connection with this contract, the Company accrued approximately $133,000 at the time of his termination, representing its estimate of the Company’s maximum total cash exposure, should the former employee elect to exercise his contractual right to dispute such amount through arbitration. As of the date of this filing, the Company has received no notice of a filing for arbitration.

F-12

Litigation

On May 29, 2014, Hologram USA, Inc., Musion Das Hologram Limited and Uwe Maass (the “Plaintiffs”) filed an amended complaint in the U.S. District Court for the District of Nevada (Case No. 2:~~14-cv-00772-GMN-NJK~~14cv00772GMNNJK). The complaint alleges that Plaintiffs own, or control, certain patents related to the projection illusion technique, historically known as “Pepper’s Ghost.” The Plaintiffs further allege that Pulse Evolution Corporation, Pulse Entertainment Corporation, John Textor, Dick Clark Productions, Inc., John Branca and John McClain, as executors of the Estate of Michael J. Jackson, MJJ Productions, Inc. Musion Events, Ltd. Musion 3D, Ltd., William James Rock and Ian Christopher O’Connell (collectively, the “Defendants”) infringed on the Plaintiffs’ patent rights by using the Plaintiffs’ projection illusion system to project the visual imagery developed and conceived by our company in connection with the a musical performance at the 2014 Billboard Music Awards in Las Vegas Nevada featuring an image of the late Michael Jackson. The Plaintiffs have not alleged that the Company’s core business, the production of visual effects or human animation imagery infringes their intellectual property rights. The complaint sought an order of the Court temporarily and permanently enjoining the Defendants from carrying out the Michael Jackson performance, a judgment for infringement, damages, attorneys’ fees and costs. The Plaintiffs’ Emergency Motion for Temporary Restraining Order filed in connection with its May 15, 2014 complaint was denied on May 16, 2014 as the Court found that the Plaintiffs’ failed to establish that they are likely to succeed on the merits of their patent infringement claims and that they are likely to suffer irreparable harm.

On ~~September~~January 179, ~~2014~~2015, the Court ~~issued~~modified athe Revised Discovery Plan and Scheduling Order ~~setting~~confirming both the discovery ~~cut-off~~cutoff date as ofDecember ~~September 28~~22, 2015, and ~~set~~ the deadline for dispositive motions as ~~October~~January 2829, ~~2015~~2016. The Court did not set a trial date. ~~The Court also did not rule on the~~ Motions to Dismiss made pursuant to FRCP Rule 12(b)(6) and 12(b)(3) filed ~~on June 24, 2014~~ by Pulse Evolution Corporation, Pulse Entertainment Corporation and John Textor. ~~The Motions to Dismiss~~ remain pending. ~~On November 4, 2014, Pulse Evolution Corporation, Pulse Entertainment Corporation and John Textor served their Initial Disclosure of Non-Infringement and Invalidity Contentions pursuant to L.R. 16.1.~~ The defendants anticipate filing a Motion for Summary Judgment as soon as is practicable.

The Company believes that its claims and defenses in this case are substantial because the visual imagery the Company develops and conceives is distinct from the Plaintiffs’ projection system allowing the Company to use a variety of projection systems in its productions. Litigation is, however, inherently unpredictable. The outcome of this lawsuit is subject to significant uncertainties and, therefore, determining the likelihood of a loss and/or the measurement of any loss is complex. Consequently, the Company is unable to estimate the range of reasonably possible loss. The Company’s assessments are based on estimates and assumptions that have been deemed reasonable by management, but the assessment process relies heavily on estimates and assumptions that may prove to be incomplete or inaccurate, and unanticipated events and circumstances may occur that might cause the Company to change those estimates and assumptions.

The Company is involved from time to time in routine litigation arising in the ordinary course of conducting its business. In the opinion of the Company’s management, no pending routine litigation will have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

NOTE 87. CAPITALIZATION

Common Stock Issued in Private Placements

For the three and six months ended ~~September~~December 3031, 2014, the Company sold 43,~~919~~471,~~356~~829 and 8,391,185, respectively, shares of its common stock at an average price of $0.45 62 and $0.52 per share for ~~aggregate, gross~~ proceeds of $2,~~225~~096,~~000~~588 and ~~aggregate net proceeds of~~ $24,~~156~~253,~~720.~~309 ~~The~~which ~~Company~~are ~~also~~net ~~received~~of ~~net proceeds~~fees of $~~152~~46,~~023~~470 and ~~from~~$114,750 anfor ~~investor~~the ~~under~~three aand ~~securities~~six ~~purchase~~months ~~agreement~~ended ~~entered~~December ~~into prior to June 30~~31, 2014, respectively.

Common Stock Issued in Share Exchange

F-13

Common Stock Issued in Payment of Subsidiary Payable

Pulse Entertainment Corporation, entered into an Investor Introduction Agreement (“the Agreement”) with an international advisory services group (“the Advisor”) in March 2014. The Advisor is to support the Company in its fund raising process through introductions of potential investors and to assist the Company in developing its investor relations strategy. The Agreement calls for the Advisor to be paid a success fee in cash equal to six percent of all investments introduced by the Advisor. In addition the Advisor shall be entitled to shares equal to three percent of the underlying shares issued in any such transactions.

As of June 30, 2014, the Advisor had earned 488,830 shares of Pulse Entertainment common stock, of which 224,869 shares of common stock were issued. A liability had been recognized by Pulse Entertainment for the portion of shares not issued as of June 30, 2014 totaling $456,653. In September 2014, the Company issued 1,461,946 shares of its common stock in payment of the liability as if Pulse Entertainment had paid the Advisor in its shares, and the Advisor immediately exchanged the shares in the company’s stock under the Share Exchange Agreement described above. ~~The~~As of December 31, 2014, the Company recorded the par value of the stock at $1,462 and additional paid in capital of $455,191.

~~For~~In ~~the three months ended~~ September ~~30,~~ 2014, the Advisor had earned 30,000 shares of the Company’s common stock under the terms of the Agreement. ~~The value of the shares was $18,600 and was recorded as a reduction to additional paid in capital.~~

F-914

Common Stock Issued to Service Providers

In determining the fair value of the services rendered by third parties, the Company uses the value of the services or the fair value of the common stock at the time the common stock was issued whichever is more readily determinable at the time the services are rendered.

In September 2014, the Company entered into an exclusive financial services and advisory agreement with a consultant to assist the Company in its capital market strategies. Under the terms of the agreement, the Company is to pay the consultant three ~~non-refundable~~nonrefundable monthly payments of $30,000, and quarterly restricted stock grants equal to ~~one-half~~onehalf of one percent of the outstanding shares of of common stock of the Company each quarter to a maximum of two and ~~one-half~~onehalf percent of the outstanding shares of common stock. ~~The~~ The fee is payable equally in cash and stock. The Company recorded stock compensation expense of $368,305 upon issuance of 594,039 shares of its common stock. The agreement also calls for a ten percent fee in the event that a qualified financing transaction, as defined in the agreement, is closed. No such qualified financing transaction was contemplated as of December 31, 2014. This agreement has been terminated as of December 31, 2014.

~~The~~In ~~agreement~~November ~~also~~2014, ~~calls~~the ~~for~~Company aissued ~~ten~~69,680 ~~percent~~shares ~~fee~~of its common stock to the Advisor in payment of the ~~event~~services ~~that~~provided aunder ~~qualified~~the Agreement. ~~financing~~As ~~transaction~~of December 31, as2014, ~~defined~~the inCompany recorded the ~~agreement,~~par ~~is closed.~~value Noof ~~such~~the ~~qualified~~stock ~~financing~~at ~~transaction~~$70 ~~was~~and ~~contemplated~~additional aspaid ofin ~~September~~capital ~~30,~~of ~~2014~~$43,132.

~~NOTE~~In 9November 2014, the Company issued 124,268 shares of its common stock to a consultant in payment of the services to the Company’s fundraising efforts. ~~INCOME~~As ~~TAXES~~of December 31, 2014, the Company recorded the par value of the stock at $124 and additional paid in capital of $76,922.

NOTE 8. INCOME TAXES

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and for income tax purposes. A deferred income tax asset is recognized if realization of such asset is more likely than not, based upon the weight of available evidence which includes historical operating performance and the Company’s forecast of future operating performance. The Company evaluates the realizability of its deferred income tax assets and a valuation allowance is provided, as necessary. During this evaluation, the Company reviews its forecasts of income in conjunction with the positive and negative evidence surrounding the realizability of its deferred income tax assets to determine if a valuation allowance is needed.

The Company files income tax returns in the U.S. federal jurisdiction, various U.S. states. Because of the Company’s history of tax losses, all income tax returns filed remain open to examination by U.S federal and state tax authorities. The Company believes that it has made adequate provision for all income tax uncertainties pertaining to these open tax years.

No federal, state and local tax benefit was recorded during the three and six months ended ~~September~~December 3031, 2014 for the Company’s ~~pretax~~ pretax loss, because the future realizability of such benefits was not considered to be more likely than not and accordingly, a full valuation allowance against the tax benefit has been recorded.

NOTE 109. RELATED- PARTY TRANSACTIONS

Pulse Entertainment Corporation entered into an Asset Transfer and Assignment Agreement (the “Transfer Agreement”) with Tradition Studios I.P. Acquisition Inc., (“Tradition”) in April 2014. The agreement is effective as of the inception date of Pulse Entertainment and included the transfer of property and equipment with a historical cost of approximately $14,000 and general liabilities with a historical cost of approximately $81,100, resulting in a transfer of net liabilities of approximately $67,000. As of the effective date of the Transfer Agreement, the Executive Chairman of Pulse Entertainment had a majority control of Pulse Entertainment and also had majority control of Tradition. The transfer of assets and liabilities was considered a common control transaction in accordance with the accounting guidance in ASC Topic ~~605-35~~60535, Business Combinations. As such, Pulse Entertainment recorded the assets and liabilities at historical cost at the time of the transfer with a charge against equity in additional paid in capital for the net liabilities at the time of transfer. The liability of $81,100 was paid in July 2014 to another entity controlled by the Executive Chairman.

In August 2014, the Company’s board of directors approved payments of director fees for fiscal year 2015. All director fees for the fiscal year 2015 totaling $100,000 were paid as of September 30, 2014.F-15

~~NOTE~~In 11August 2014, the Company’s board of directors approved payments of director fees for fiscal year 2015. ~~SUBSEQUENT~~All ~~EVENTS~~director fees for the fiscal year 2015 totaling $100,000 were paid as of December 31, 2014.

InOn ~~October~~December 10, 2014, the Company ~~sold~~entered ~~2,622,679~~into ~~shares~~a secured promissory note with a related party. The Company received cash of ~~its~~$250,000 which ~~common~~bears ~~stock~~interest at a rate of 8% a year. The note is collateralized by certain property owned by the Company. All remaining unpaid principal and accrued interest is due on January 31, 2015. The Company must also pay an ~~average~~additional ~~price~~$25,000 ofif paid before December 31, 2014 or an additional $050,000 if paid after December 31, 2014.62 ~~per~~As ~~shares~~of ~~for~~December ~~aggregate~~31, ~~gross~~2014, the Company had unpaid principal ~~proceeds~~and interest of $300,000 and $1,~~626,060~~150.

InNOTE ~~October~~10. ~~2014,~~SUBSEQUENT under the terms of the Share Exchange Agreement as more fully disclosed in Note 8 – Capitalization, the Company issued 15,135,973 shares of its unregistered common stock to shareholders of Pulse Entertainment in exchange for 2,732,869 shares of its common stock raising its ownership percentage in Pulse Entertainment to 93.8%.EVENTS

In ~~October~~March ~~2014~~2015, the Company entered into a ~~multi-year~~revenue participation rights and stock purchase agreement with a third party, Holotrack AG of Switzerland, a special purpose company organized principally by a film and entertainment distribution company in Europe. Among the ~~Estate~~principal terms of ~~Marilyn~~the ~~Monroe,~~agreement ~~LLC~~is (“the ~~Monroe~~right ~~Estate”)~~ of Holotrack AG to ~~develop~~participate ~~for~~in the ~~Monroe~~revenue ~~Estate~~generated ~~entertainment~~from ~~projects~~the toCompany’s planned ~~utilize~~live theatrical show featuring the digital likeness of Elvis Presley, effectively as a ~~realistic~~distributor, ~~computer-generated~~in ~~image~~an amount equal to 10% of ~~Marilyn~~the ~~Monroe~~Company’s participation as a producer of the Elvis show. The ~~likeness~~ ~~will~~agreement bealso ~~used~~required toHolotrack ~~create~~AG ~~entertainment~~to fund development and ~~branding~~operating ~~revenue~~expenses ~~opportunities~~of ~~for~~the usCompany of $3,720,000, ~~generated~~in six equal monthly installments of $620,000, from ~~holographic~~January ~~performances~~to June of 2015, in ~~live~~exchange ~~shows~~for 6,000,000 newly issued preferred shares and ~~commercials~~the right to exchange 12,848,184 of its affiliates’ common shares for preferred shares. ~~The~~All ~~Monroe~~such ~~Estate~~installments ~~holds~~have ~~the~~been ~~likeness~~received and Holotrack and its affiliates now hold a total of 18,848,184 ~~appearance~~preferred shares, ~~and~~the ~~publicity~~principal rights and benefits of ~~Marilyn~~which ~~Monroe.~~include ~~Under the~~a ~~terms~~priority return of capital in the ~~agreement~~event of a liquidation or sale event, weighted average anti-dilution rights and the right to appoint one individual to the Company’s board ~~issued~~of ~~2,800,000~~directors. ~~shares~~Holders of ~~common~~preferred ~~stock~~shares, who are also entitled to convert the ~~Monroe~~preferred ~~Estate~~shares ~~and~~into ~~provides~~an ~~the~~equal ~~option~~amount toof ~~put~~common ~~the~~ shares, ~~back~~are entitled to vote with the ~~Company~~common class of shareholders, on orany ~~before~~company amatters ~~certain~~requiring ~~date~~a invote of the ~~future~~shareholders, on inan ~~exchange~~“as ~~for~~if ~~cash~~converted” basis.

In ~~October~~April ~~2014~~2015, ~~the~~an ~~Company~~amendment ~~entered into a consulting agreement with a third party~~ to ~~provide~~the ~~executive~~Monroe ~~leadership~~Estate incontract ~~the~~was ~~formation of~~entered ainto ~~new~~where ~~division of~~ the Company. ~~Under~~agreed ~~the~~to ~~terms~~issue ofan ~~the~~additional ~~agreement~~1,000,000 shares to the ~~consultant~~Monroe ~~will~~Estate ~~provide~~due ~~services~~to in the ~~development~~initial ~~of a~~shares ~~business~~not ~~plan,~~being ~~technology~~registered ~~planning,~~timely ~~and~~as ~~fundraising.~~well ~~Under~~as ~~the~~an ~~term~~extension of the ~~agreement,~~deadline ~~the consultant is~~ to ~~provide services~~register ~~for~~the ~~six~~shares ~~months~~ and isan increase to ~~be paid a monthly base payment of~~ $101,~~000~~350,000 ~~with~~as ~~additional~~the ~~amounts~~amount tothe beCompany ~~paid~~would ~~under~~need ~~certain~~to ~~performance conditions.~~pay ~~If certain performance targets, as defined in~~ the ~~agreement,~~Monroe ~~are~~Estate ~~met,~~if the Company ~~would~~failed ~~create a newly formed subsidiary~~to ~~and~~meet the ~~consultant~~terms ~~would~~of ~~become~~ the ~~Chief~~amended ~~Executive~~agreement. ~~Officer~~As of ~~the~~April ~~newly developed subsidiary. Additionally~~2015, ~~beginning upon~~ the ~~execution~~ ofMonroe ~~this~~Estate ~~agreement,~~has ~~the~~been ~~consultant~~issued ~~became~~ a ~~member~~total of ~~the Company’s advisory board and was granted 1~~3,~~152~~800,000 shares ~~of the Company’s restricted common stock which vest quarterly in equal installments over a two year period~~.

~~F-10~~In April 2015, an amendment to the ABG contract was entered into with the Company to reduce the launch fee from $1,000,000 to $500,000.

In April 2015, June 2015 and July 2015, under the terms of the Share Exchange Agreement as more fully disclosed in Note 8 – Capitalization, the Company issued 7,399,426 shares of its unregistered common stock to shareholders of Pulse Entertainment in exchange for 1,336,000 shares of its common stock raising its ownership percentage in Pulse Entertainment to 100%, or wholly owned.

In July 2015, the Company entered into a stock purchase agreement with Mr. Taku Toguichi, Chairman and CEO of SpaceBoy, a Japan-based artificial intelligence company with which the Company intends to be engaged in the development of digital humans for artificial intelligence. Pursuant to the terms of this agreement, Mr. Toguichi funded $806,000 in exchange for 1,300,000 million shares of unregistered common stock.

Subsequent to December 31, 2014 through August 20, 2015, the Company has issued 1,375,000 shares in exchange for cash, 597,387 shares in exchange for service and 7,399,426 shares issued from the share exchange.

Subsequent to December 31, 2014, the Company granted share grants for services totaling 1,393,935 shares valued $0.62 per share and a vesting period up to 2 years. Additionally, the Company granted stock options for services totaling 1,402,006 with an exercise price ranging from $0.25-$0.62 per share and vesting over a two year term.

F-16

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

The following discussion and analysis of our consolidated financial condition as of ~~September~~December 3031, 2014 and June 30, 2014, and results of operations and cash flows for the three and six months ended ~~September~~December 3031, 2014 should be read in conjunction with the consolidated financial statements and other information presented in this Quarterly Report on Form 10- Q.

We have defined various periods that are covered in this report as follows:

● “fiscal 2015” — July 1, 2014 through June 30, 2015 ● “fiscal 2014” — October 10, 2013 (inception date) through June 30, 2014 ● “~~three~~six months ended ~~September~~December 3031, 2014” – July 1, 2014 through ~~September~~December 3031, 2014

Overview

Pulse Evolution Corporation (“we”, “us”, “our”, the “Company”) was incorporated on May 31, 2013 under the laws of the State of Nevada under the name QurApps, Inc. During fiscal 2014 our controlling shareholder sold his interest in our Company on May 15, 2014. In anticipation of this change of control, we changed our name to Pulse Evolution Corporation effective May 8, 2014 to better reflect our plans to produce specialized, ~~high-impact~~highimpact applications of ~~computer-generated~~ computergenerated human likeness for utilization in entertainment, life sciences, education and telecommunication.

On September 30, 2014, we completed the initial closing under the Share Exchange Agreement we entered into with Pulse Entertainment and certain of its shareholders, some of whom are officers and directors of our company, pursuant to which we agreed to issue 35,827,309 shares of our unregistered common stock, net of cancellations, to certain shareholders of Pulse Entertainment in exchange for 17,466,383 shares of its common stock (the “Share Exchange”). Upon completion of the initial closing, Pulse Entertainment became a subsidiary of our company in which we own an 81.11% interest. WeIn ~~plan~~October to2014, ~~complete~~under the ~~acquisition~~terms of anthe ~~additional~~Share 4Exchange Agreement,~~068~~ the Company issued 15,~~869~~135,973 shares of ~~Pulse~~its ~~Entertainment~~unregistered common stock ~~pursuant~~ to ~~the~~shareholders ~~Share~~of ~~Exchange~~Pulse ~~Agreement~~Entertainment byin ~~issuing~~exchange 22for 2,~~535~~732,~~399~~869 shares of ~~our~~its common stock noraising ~~later~~its ~~than~~ownership ~~December~~percentage ~~25,~~in ~~2014. Upon completion of this part of the acquisition,~~ Pulse Entertainment ~~will~~to ~~become~~93.8% ~~our~~from ~~wholly owned subsidiary~~81.1%.

We produced a ~~computer-generated~~computergenerated and animated human likeness of the late popular entertainer Michael Jackson that appeared in a live performance at the Billboard Music Awards on May 18, 2014. The virtual performance of Michael contributed to the award show’s highest television viewership in 13 years and an ~~11-year~~11year high in advertising in the demographic of viewers age 18 to 49. This production reached approximately 11 million television viewers during the initial ABC network broadcast, followed by more than 51 million online views through YouTube and Vevo and generated more than 2,400 news articles and an estimated 98 billion internet impressions for the Michael Jackson hologram and more than 300 million internet impressions estimated for our company and members of our management. Further, in August and October, 2014 respectively, we entered into ~~multi-year~~multiyear agreements with the owners of the likeness, appearance, and publicity rights of Elvis Presley and Marilyn Monroe to develop entertainment projects that utilize a realistic ~~computer-generated~~computergenerated image of these celebrities. These celebrities are among the world’s most famous talent. We plan to use the computer- generated likeness to create entertainment and branding revenue opportunities for us, generated from holographic performances in live shows and commercials.

Revenues from the estates of these three late celebrities rank them among the top earning celebrity estates in the world, with estimated aggregate earnings in 2013 in excess of $200,000,000 as stated by Forbes.com in an October 23, 2013 web article. The revenues of these estates have been derived primarily from licensing the still and motion picture images and recordings captured when the respective celebrities were alive. Further, they are based on clippings, outtakes and performances from the lives and careers of the historical celebrities. We believe that our first live presentation of the Virtual Michael Jackson performance demonstrated that we are able to ~~re-launch~~relaunch the careers of deceased celebrities. More than staging an encore to their historical careers of Michael Jackson, Elvis Presley and Marilyn Monroe, the virtual performances will be judiciously and compellingly contemporized and made relevant to whole new audiences through new performance forms and media. We are poised to create virtual celebrities that can do things and go places their historical originals never could, while remaining true to their original values, identities, personalities and preferences.

We believe that our digital likeness rights agreements and our plans for virtual performances of Michael Jackson, Elvis Presley and Marilyn Monroe provide us with the foundation for significant growth in our core business.

Plan of Operations and Liquidity

As of the date of this report, we have raised approximately $1315.8 million since our inception and are highly dependent on raising capital to fund our ~~start-up~~startup and growth strategies. Our core business is the acquisition from estates and other rights holders of certain intellectual property rights to create virtual celebrities, and the right to present, and license to others to present, those virtual performers in live, and a variety of ~~live-virtual~~ livevirtual and commercial formats.

In execution of our business plan, we have considered various execution models. Originally, we intended to focus on providing virtual performers for appearances and collecting royalties when our Company has an ownership interest in the intellectual property rights for the virtual performer (the “Talent Model”). Under the Talent Model, we would permit other producers to create performances that make use of virtual performers created by us.

Subsequently, we decided to explore and develop opportunities to act as a producer of events (the “Producer Model”), thereby enabling us to exert significant creative and technological control over the performance productions, and to capture significantly greater portions of the realizable economic value created by the virtual performance.

Under both models, we expect to generate revenues and/or positive operating ~~cash-flow~~cashflow on all digital construction, animation, and production services that it provides, plus royalties when the work involves intellectual property rights held by our Company. Under both models, we have significant discretion to determine to what extent the creative and production resources, which are primarily labor costs, are engaged on an ~~as-needed~~asneeded basis for each project or production (“Contract Staffing”), and to what extent the Company carries a concentration of creative and production resources ~~in-house~~inhouse (“~~In-House~~InHouse Staffing”).

While execution of the Producer Model enables our Company to capture more of the value created by the virtual performers, it also requires that we raise significant amounts of production capital, which is similar to project financed equity or ~~non-recourse~~nonrecourse debt into production subsidiaries. Executing this model with ~~In-house~~Inhouse Staffing gives us certain strategic advantages and flexibility in the development of new concepts and application of new technologies, yet it also requires a higher employee headcount and the related operating overhead.

Our ability to fund operations and meet obligations on a timely basis is dependent on our ability to match the available financial resources to our operating model (Talent vs. Producer) and our execution strategy (Contract Staffing vs. ~~In-House~~InHouse Staffing). The decisions we make with regard to operating model and execution strategy drive our Company’s capital and liquidity requirements.

We are currently operating under the Producer Model with significant ~~In-House~~InHouse Staffing resources. Consequently, our Company is heavily reliant upon raising equity capital to finance our operations, meet our working capital requirements and finance productions. To the extent that full development of the Company’s growth opportunities also requires forming strategic alliances, we are prepared to do so.

If, however, we are unable to successfully raise sufficient additional capital and generate cash flow from operations, we would likely have to reduce our dependence on ~~In-House~~ InHouse Staffing and limit many, if not all, of our Company’s activities as a producer.

Accounting Treatment of the Merger

For financial reporting purposes, the Share Exchange represents a “reverse merger” rather than a business combination and Pulse Entertainment is deemed to be the accounting acquirer in the transaction. The Share Exchange is being accounted for as a ~~reverse-merger~~reversemerger and recapitalization effective as of September 30, 2014. Pulse Entertainment is the acquirer for financial reporting purposes and Pulse Evolution Corporation is the acquired company. Consequently, in reports we file with the SEC covering accounting periods after September 30, 2014, the assets and liabilities and the operations will reflect the historical financial statements prior to the Share Exchange will be those of Pulse Entertainment and will be recorded at the historical cost basis of Pulse Entertainment, and the consolidated financial statements after completion of the Share Exchange will include the assets and liabilities of our company and Pulse Entertainment, and the historical operations of Pulse Entertainment and the combined operations with our company from the initial closing date under the Share Exchange Agreement.

Results of Operations

~~The following~~Three ~~analysis~~Months onEnded ~~results~~December ~~of operations was based primarily on the comparative consolidated financial statements~~31, ~~footnotes~~2014 and ~~related~~Period ~~information~~From for the periods identified below and should be read in conjunction with the consolidated financial statements and the notes to those statements that are included elsewhere in this report. The results discussed below are for the three months ended September 30, 2014. We began our operations on October 10, 2013. ~~Accordingly,~~through noDecember ~~three~~31, ~~month period over period analysis is included.~~2013

The following analysis on results of operations was based primarily on the comparative consolidated financial statements, footnotes and related information for the periods identified below and should be read in conjunction with the consolidated financial statements and the notes to those statements that are included elsewhere in this report. The results discussed below are for the three months ended December 31, 2014 and the period from the date we began our operations on October 10, 2013 through December 31, 2013.

Revenues

~~Revenues~~ There were no revenues during the three months ended ~~September~~December 3031, 2014 ~~were~~and ~~$88~~period from October 10,~~151~~ 2013 through December 31, 2013.

~~Total Operating Expenses~~5

~~Total operating~~Costs ~~expenses during the three months ended September 30, 2014 were $3,572,088, primarily as a result of general~~ and ~~administrative expenses.~~Expenses

Total operating expenses during the three months ended December 31, 2014 and period from October 10, 2013 through December 31, 2013 were $3,452,673 and $219,209, respectively. The principal components of operating expenses for the three months ended December 31, 2014, are payroll and contract services of $1,877,498, professional fees of $414,822, public company costs of $511,013 and general & administrative expenses of $848,956. Significant portions of our operating expenses are devoted to the development of digital likeness assets and entertainment properties related to our revenue share agreements with the estates of Michael Jackson, Elvis Presley and Marilyn Monroe. Though it would be customary in the entertainment industry to capitalize such expenses as assets available for future use, thus far have expensed the material portions of the costs of building our principal character assets and developing our shows. We anticipate continuing this practice until such time as there is either a proven business model for the continuing performance and appearance of our digital celebrities, or upon our entering into an agreement to commence a specific theatrical production featuring one of our digital celebrities.

Net Loss

Net loss during the three months ended ~~September 30~~December 31, 2014 and period from October 10, 2013 through December 31, 2013 was $3,~~483~~452,~~937~~673 and $219,209, respectively.

Six Months Ended December 31, 2014 and Period From October 10, 2013 through December 31, 2013

The following analysis on results of operations was based primarily on the comparative consolidated financial statements, footnotes and related information for the periods identified below and should be read in conjunction with the consolidated financial statements and the notes to those statements that are included elsewhere in this report. The results discussed below are for the six months ended December 31, 2014 and the period from the date we began our operations on October 10, 2013 through December 31, 2013.

Revenues

Revenues during the six months ended December 31, 2014 and for the period from October 10, 2013 through December 31, 2013 were $88,151 and $0, respectively.

Costs and Expenses

Total operating expenses during the six months ended December 31, 2014 and period from October 10, 2013 through December 31, 2013 were $7,024,761 and $219,209, respectively. The principal components of operating expenses for the six months ended December 31, 2014, are payroll and contract services of $3,861,736, professional fees of $945,745, public company costs of $759,070 and general & administrative expenses of $1,268,755. Significant portions of our operating expenses are devoted to the development of digital likeness assets and entertainment properties related to our revenue share agreements with the estates of Michael Jackson, Elvis Presley and Marilyn Monroe. Though it would be customary in the entertainment industry to capitalize such expenses as assets available for future use, thus far we have expensed the material portions of the costs of building our principal character assets and developing our shows. We anticipate continuing this practice until such time as there is either a proven business model for the continuing performance and appearance of our digital celebrities, or upon our entering into an agreement to commence a specific theatrical production featuring one of our digital celebrities.

Net Loss

Net loss during the six months ended December 31, 2014 and period from October 10, 2013 through December 31, 2013 was $6,936,610 and $219,209, respectively.

Liquidity and Capital Resources

Liquidity

Liquidity is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements. At ~~September~~December 3031, 2014 and June 30, 2014, we had a cash balance of $~~263~~4,~~432~~854 and $1,539,719, respectively and working capital (deficit) of $(~~589~~$1,~~985~~237,325) and $723,675, respectively.

Net cash used in operating activities was $26,~~583~~171,~~656~~692 and $768,878 for the ~~three~~six months ended ~~September~~December 3031, 2014 and period from October 10, 2013 (inception) through December 31, 2013, respectively. The increase in cash used in operating activities was primarily a result of the net loss from operations before ~~non-controlling~~noncontrolling interests of $36,~~483~~936,~~937~~610 ~~offset~~and bythe ~~payments~~purchase of ~~stock-based compensation of~~ $~~368~~1,~~305~~000,000 ~~a decrease in prepaid assets~~ of ~~$24~~licensing rights,~~999~~ ~~and~~offset anby ~~increase~~the changes in ~~accounts payable and accrued expenses of~~various ~~$459,716~~other balances.

Net cash used in investing activities was $118,~~001,374~~504 and $0 for the ~~three~~six months ended ~~September~~December 3031, 2014 and period from October 10, 2013 (inception) through December 31, 2013, respectively. The increase was primarily a result of ~~$1,000,000 paid~~the ~~for~~purchase ~~acquiring~~of ~~certain~~property ~~licensing~~and ~~rights~~equipment.

Net cash provided by financing activities was ~~during~~$4,655,331 and $3,210,648 for the ~~three~~six months ended ~~September~~December 3031, 2014 and period from October 10, ~~was~~2013 $2(inception) through December 31,~~308~~ 2013,~~743~~ respectively. ~~Cash~~The ~~provided~~increase ~~by financing activities~~ was primarily a result of additional sales of our common stock, net of stock issuance costs.

Issuances of our Common Stock

As is more fully described in Note 9 to our Condensed Consolidated Financial statements contained elsewhere in this quarterly report, we have raised approximately $1315.8 million to date through the issuances of our common stock. ~~Issuances occurring after June 30, 2014 include the following:~~

Common Stock Issued in Private Placements

Beginning in July 2014, we have sold 78,~~542~~391,~~035~~ 185 shares of our common stock at an average price of $0.5152 per share for ~~aggregate~~proceeds of $4,253,309 ~~gross~~which ~~proceeds~~ are net of fees of $3114,~~851,060~~750. Of those amounts, for the three months ended ~~September~~December 3031, 2014, we have sold 43,~~919~~471,~~356~~829 shares of our common stock at an average price of $0.4562 per share for ~~aggregate, gross~~ proceeds of $2,~~225~~096,~~000~~588 which are net of fees of $46,470. Subsequent to ~~September~~December 3031, 2014, we have sold 21,~~622~~375,~~679~~000 shares of our common stock at an average price of $0.62 for aggregate gross proceeds of $1852,~~626,060.~~500 ~~The~~and ~~Company~~have sold ~~also~~6,000,000 ~~received~~shares ~~net~~of ~~proceeds~~our ofpreferred ~~$152,023~~shares ~~from~~at an ~~investor~~average ~~under~~price aof ~~securities~~$0.62 ~~purchase~~for ~~agreement~~aggregate ~~entered~~proceeds ~~into~~of ~~prior to June 30~~$3, ~~2014~~720,000.

Common Stock Issued in Share Exchange

On September 30, 2014, the Company completed the initial closing under the Share Exchange Agreement pursuant to which it agreed to issue 35,827,309 shares of its unregistered Common Stock, net of cancellations, to the shareholders of Pulse Entertainment in exchange for 17,466,383 shares of its common stock. As part of the Share Exchange, certain of the Company’s shareholders who are also shareholders of Pulse Entertainment agreed to cancel 60,910,113 shares of the Company’s common stock issuable to them in connection with the Share Exchange. Upon completion of the initial closing, Pulse Entertainment became a subsidiary of the Company in which the Company ~~owns~~owned an 81.1% interest at that time. ~~The~~In ~~remaining~~October 42014,~~068~~ under the terms of the Share Exchange Agreement, the Company issued 15,135,973 shares of its unregistered common stock to shareholders of Pulse Entertainment in exchange for 2,732,869 shares of its common stock raising its ownership percentage in Pulse Entertainment to 93.8% from 81.1%. In April 2015, under the terms of the Share Exchange Agreement, the Company issued 6,801,268 shares of its unregistered common stock to shareholders of Pulse Entertainment in exchange for 1,228,000 ~~may~~shares beof its common stock raising its ownership percentage in Pulse Entertainment to 99.5% from 93.8%. In June 2015, the Company issued 398,772 shares of its unregistered common stock to shareholders of Pulse Entertainment in exchange for 72,000 shares of its common stock, raising its ownership percentage in Pulse Entertainment to 99.9%. In July 2015, the remaining 36,000 shares of Pulse Entertainment common stock were exchanged by the Pulse Entertainment ~~shareholders~~shareholder pursuant to the Share Exchange Agreement for 22199,~~535,399~~386 shares of the Company’s unregistered common stock. In ~~the~~July ~~event these shares are exchanged~~2015, Pulse Entertainment ~~will~~became ~~become~~ a wholly owned ~~subsidiary~~ subsidiary of the Company.

Common Stock Issued in Payment of Subsidiary Payable

~~For~~ During the ~~three~~quarter ~~months~~ ended September 30, 2014, the Advisor had earned 30,000 shares of the Company’s common stock under the terms of the Agreement. The value of the shares was $18,600 and was recorded as a reduction to additional paid in capital.

Common Stock Issued to Service Providers

~~In September~~Pulse ~~2014,~~Entertainment ~~the Company~~ entered into ana ~~exclusive~~business development ~~financial~~advisory ~~services~~agreement ~~and~~(the ~~advisory~~“Business ~~agreement~~Development Agreement”) with a ~~consultant~~consulting tofirm ~~assist~~ (the ~~Company~~ “Consultant”) in ~~its~~May ~~capital~~2014, ~~market~~wherein ~~strategies.~~the ~~Under~~Consultant ~~the~~agreed ~~terms~~to ofprovide ~~the~~certain ~~agreement,~~production ~~the~~and ~~Company~~promotion isservices to ~~pay~~Pulse ~~the~~Entertainment ~~consultant~~in ~~three non-refundable~~exchange ~~monthly~~for ~~payments~~consideration ofincluding ~~$30~~cash,~~000~~ equity, ~~and~~an ~~quarterly~~operating ~~restricted~~budget ~~stock~~and ~~grants~~production ~~equal~~credits toas ~~one-half~~specified ofin ~~one percent of~~ the ~~outstanding~~Business ~~shares~~Development ofAgreement. ~~common~~The ~~stock~~Business ofDevelopment ~~the~~Agreement ~~Company~~provides ~~each~~for ~~quarter~~certain toperformance amilestones ~~maximum~~and offor ~~two~~termination ~~and~~by ~~one-half~~either ~~percent~~party with of30 ~~the~~days’ ~~outstanding~~notice. ~~shares~~The ofmaximum ~~common~~potential ~~stock. The~~equity ~~fee~~consideration is ~~payable~~comprised ~~equally~~of inup ~~cash~~to ~~and~~200,000 stock. ~~The~~options ~~Company~~with ~~recorded~~an ~~stock~~exercise price ~~compensation expense~~ of $~~368,305~~1.73 ~~upon~~per ~~issuance~~share ofas ~~594,039 shares of its common stock.~~follows:

The agreement also calls for a ten percent fee in the event that a qualified financing transaction, as defined in the agreement, is closed. No such qualified financing transaction was entered into as of September 30, 2014.

	●	100,000 options immediately upon execution of the Agreement

	●	Up to 50,000 options each quarter for the following two quarters, beginning three months from the date of the Agreement, if certain performance targets are achieved.

The Business Development Agreement was terminated in September 2014. As of December 2014, 125,000 stock options to the Consultant in Pulse Entertainment were vested but not yet issued.

In September 2014, the Company entered into an exclusive financial services and advisory agreement with a consultant to assist the Company in its capital market strategies. Under the terms of the agreement, the Company is to pay the consultant three nonrefundable monthly payments of $30,000, and quarterly restricted stock grants equal to onehalf of one percent of the outstanding shares of common stock of the Company each quarter to a maximum of two and onehalf percent of the outstanding shares of common stock. The fee is payable equally in cash and stock. The Company recorded stock compensation expense of $368,305 upon issuance of 594,039 shares of its common stock. The agreement also calls for a ten percent fee in the event that a qualified financing transaction, as defined in the agreement, is closed. No such qualified financing transaction was contemplated as of December 31, 2014. This agreement has been terminated as of December 31, 2014.

In November 2014, the Company issued 69,680 shares of its common stock to the Advisor in payment of the services provided under the Agreement. As of December 31, 2014, the Company recorded the par value of the stock at $70 and additional paid in capital of $43,132.

In November 2014, the Company issued 124,268 shares of its common stock to a consultant in payment of the services to the Company’s fundraising efforts. As of December 31, 2014, the Company recorded the par value of the stock at $124 and additional paid in capital of $76,922.

Cash Requirements

Our ability to fund our operations and meet our obligations on a timely basis is dependent on our ability to match our available financial resources to our operating model (Talent vs. Producer) and our execution strategy (Contract Talent vs. ~~In-House~~InHouse Talent). The decisions we make with regard to operating model and execution strategy drive the level of capital required and the level of its financial obligations.

If we are unable to generate cash flow from operations and successfully raise sufficient additional capital through future debt and equity financings or strategic and collaborative ventures with potential partners, we would likely have to reduce our dependence on ~~In-House~~InHouse Talent and limit many, if not all, of our activities as a producer. We have analyzed its liquidity requirements and have determined that we have sufficient liquidity to execute our business plan under the Talent Model for the next 12 months.

Off Balance Sheet Arrangements

We have no ~~off-balance~~offbalance sheet arrangements including arrangements that would affect liquidity, capital resources, market risk support and credit risk support or other benefits.

Critical Accounting Policies

We prepare our financial statements in conformity with GAAP. The preparation of the financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Critical accounting policies are those we believe are both most important to the portrayal of our financial condition and results, and require our most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Judgments and uncertainties affecting the application of those policies may result in materially different amounts being reported under different conditions or using different assumptions. We believe the following policies to be the most critical in understanding the judgments that are involved in preparing our financial statements.

~~Revenue Recognition~~Stockbased Compensation

WeASC 718, “CompensationStock Compensation” ~~have~~requires ~~entered~~recognition ~~into~~in athe ~~production~~financial statements of the cost of employee services ~~agreement~~received ~~with~~in exchange for an award of equity instruments over the ~~estate~~period the employee is required to perform the services in exchange for the award (presumptively the vesting period). We measure the cost of aemployee ~~deceased~~services ~~celebrity~~received ~~that~~in ~~provide~~exchange ~~revenues~~for an award based on ~~certain~~the grantdate fair value of the award. ~~production~~We account for nonemployee sharebased awards based upon ASC 50550, “EquityBased Payments to NonEmployees.” ASC 50550 requires the costs of goods and services received in exchange for an award of equity instruments to be recognized using the fair value of the goods and services or the fair value of the equity award, whichever is more reliably measurable. ~~Revenue~~The fair value of the equity award is ~~recognized~~determined on the measurement date, which is the earlier of the date that a ~~straight-line~~performance ~~basis~~commitment is reached or the date that performance is complete. Generally, our awards do not entail performance commitments. When an award vests over time ~~each~~such ~~contract~~that ~~period~~performance occurs over multiple reporting periods, we estimate the fair value of the award as ~~defined~~of inthe end of each reporting ~~agreement~~period and recognize an appropriate portion of the cost based on the fair value on that date. AsWhen the award vests, we adjust the ~~production~~cost ~~services~~previously ~~are~~recognized ~~rendered~~so that the cost ultimately recognized is equivalent to the fair value on the vesting date, ~~revenue~~which is ~~recognized~~presumed to be the date performance is complete.

~~Stock-based Compensation~~Item 3. Quantitative and Qualitative Disclosures About Market Risk

~~ASC 718,~~This ~~“Compensation-Stock~~item ~~Compensation” requires recognition in the financial statements of the cost of employee services received in exchange for an award of equity instruments over the period the employee~~ is ~~required~~not toapplicable perform the services in exchange for the award (presumptively the vesting period). We measure the cost of employee services received in exchange for an award based on the grant-date fair value of the award. We account for non-employee share-based awards based upon ASC 505-50, “Equity-Based Payments to ~~Non-Employees.”~~smaller ASC 505-50 requires the costs of goods and services received in exchange for an award of equity instruments to be recognized using the fair value of the goods and services or the fair value of the equity award, whichever is more reliably measurable. The fair value of the equity award is determined on the measurement date, which is the earlier of the date that a performance commitment is reached or the date that performance is complete. Generally, our awards do not entail performance commitments. When an award vests over time such that performance occurs over multiple reporting ~~periods, we estimate the fair~~ ~~value of the award as of the end of each reporting period and recognize an appropriate portion of the cost based on the fair value on that date~~companies. When the award vests, we adjust the cost previously recognized so that the cost ultimately recognized is equivalent to the fair value on the vesting date, which is presumed to be the date performance is complete.

~~Income~~Item 4. Controls ~~Taxes~~and Procedures

~~The Company~~Evaluation ~~uses the asset and liability method~~ of ~~accounting~~Disclosure ~~for~~Controls ~~income taxes. Under this method, deferred income taxes are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets~~ and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to be applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date.Procedures

~~Foreign~~A control system, no matter how well conceived ~~Currency~~and ~~Translation~~operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company, or any company, can be detected. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

The Company’s Executive Chairman and principal financial and accounting officer, with the participation of other members of the Company’s ~~has~~management, ~~adopted~~have evaluated the USeffectiveness ~~dollar~~of the Company’s disclosure controls and procedures (as ~~its~~defined ~~functional~~in Rule 13a-15(e) under the Securities and ~~reporting~~Exchange ~~currency~~Act ~~because~~of ~~most~~1934, as amended) as of the end of the period covered by this report (the “Evaluation Date”) and, based on that evaluation, concluded that, as of the Evaluation Date, the Company’s disclosure controls and procedures were effective to ensure that information that is required to be disclosed in its ~~transactions~~reports ~~are~~under ~~denominated~~the Securities and Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and USthat ~~currency~~such information is accumulated and communicated to management, including the Company’s Executive Chairman and principal financial and accounting officer, as appropriate, to allow timely decisions regarding required disclosure.

~~Fair Value~~Based on this evaluation and the identification of ~~Financial~~our ~~Instruments~~internal controls over financial reporting described below, the Executive Chairman and principal financial and accounting officer, have concluded that for the quarter ended December 31, 2014, the Company’s disclosure controls and procedures were not effective and required improvement.

~~The~~Management determined that at December 31, 2014 the Company ~~determines~~did ~~the~~not ~~fair~~have ~~value~~a sufficient number of ~~its~~personnel, ~~financial~~especially ~~instruments~~in ~~using~~leadership positions within the ~~Black-Scholes~~finance ~~option~~department, with ~~pricing~~an ~~model~~appropriate level of knowledge and ~~utilized~~experience of generally accepted accounting principles in the ~~following~~United States of America ~~assumptions~~(U.S. ~~for~~GAAP) ~~determination~~that ofare commensurate with the Company’s financial reporting requirements. In addressing these needs, the Company took the following actions so that its consolidated financial ~~instrument~~statements as of, ~~September~~and 30for the quarter ended December 31, 2014:, are presented in accordance with U.S. GAAP. These actions included (i) supplementing existing resources with technically qualified third party consultants, (ii) performing additional procedures and analyses in preparation for the review of the Company’s quarterly financials, and (iii) the commencement of a recruiting process to identify and hire a Chief Financial Officer with significant public company accounting leadership experience.

Fair value of exchange warrants option	September 30, 2014			June 30, 2014
Number of shares		2,800,000
Fair value of option	$	476,000			-
Term in years		1.61			-
Risk-free interest rate		0.34	%		-
Volatility		76.63	%		-
Dividend rate		0.00	%		-

7PART II - OTHER INFORMATION

~~Earnings per~~Item ~~Share~~1. Legal Proceedings

~~Basic~~On May 29, 2014, Hologram USA, Inc., Musion ~~earnings~~Das ~~per~~Hologram ~~share~~Limited ~~are~~and ~~computed~~Uwe ~~based~~Maass ~~upon~~(the “Plaintiffs”) filed an amended complaint in the ~~weighted-average~~U.S. ~~number~~District Court for the District of ~~shares~~Nevada ~~outstanding~~(Case No. 2:14cv00772GMNNJK). The complaint alleges that Plaintiffs own, ~~including~~or ~~nominal~~control, ~~issuances~~certain ofpatents ~~common~~related ~~share~~to ~~equivalents~~the projection illusion technique, ~~for~~historically ~~each~~known ~~period~~as ~~presented~~“Pepper’s Ghost.” ~~Fully-diluted~~The Plaintiffs further allege that Pulse Evolution Corporation, ~~earnings~~Pulse ~~per~~Entertainment ~~share~~Corporation, isJohn ~~computed~~Textor, ~~based~~Dick ~~upon~~Clark ~~the~~Productions, ~~weighted-average~~Inc., ~~number~~John Branca and John McClain, as executors of ~~shares~~the ~~and~~Estate ~~dilutive~~of ~~share~~Michael ~~equivalents~~J. ~~outstanding~~Jackson, ~~for~~MJJ ~~each~~Productions, ~~period~~Inc. ~~presented~~Musion Events, Ltd. ~~Due~~Musion to3D, ~~the~~Ltd., ~~Company~~William James Rock and Ian Christopher O’sConnell ~~net~~(collectively, ~~losses~~the ~~for~~“Defendants”) infringed on the Plaintiffs’ ~~three~~patent ~~months~~rights ~~ended~~by ~~September~~using ~~30,~~the ~~2014,~~Plaintiffs’ projection illusion system to project the ~~inclusion~~visual ofimagery ~~dilutive~~developed ~~common~~and ~~share~~conceived by ~~equivalents~~our company in connection with the ~~calculation~~a ofmusical ~~diluted~~performance ~~earnings~~at the 2014 Billboard Music Awards in Las Vegas Nevada featuring an ~~per~~image ~~share~~of ~~would~~the belate ~~anti-dilutive~~Michael Jackson. ~~Thus~~The Plaintiffs have not alleged that the Company’s core business, the ~~common~~production ~~share~~of ~~equivalents~~visual effects ~~have~~or ~~been~~human ~~excluded~~animation ~~from~~imagery ~~the~~infringes ~~computation~~their intellectual property rights. The complaint sought an order of ~~diluted~~the ~~earnings~~Court temporarily ~~per~~and ~~share~~permanently ~~for~~enjoining the ~~three~~Defendants ~~months~~from ~~ended~~carrying ~~September~~out 30the Michael Jackson performance, ~~2014.~~a ~~These~~judgment ~~common~~for ~~stock~~infringement, ~~equivalents~~damages, attorneys’ ~~include~~fees ~~exchange~~and ~~warrants~~costs. The Plaintiffs’ Emergency Motion for ~~shares~~Temporary ofRestraining Order filed in connection with its May 15, 2014 complaint was denied on May 16, 2014 as the ~~Company~~Court found that the Plaintiffs’s ~~common~~failed ~~stock~~to ~~and~~establish ~~rights~~that they are likely to ~~exchange~~succeed ~~shares~~on the merits of ~~Pulse~~their ~~Entertainment~~patent ~~Corporation~~infringement ~~common~~claims ~~stock~~and ~~for~~that ~~shares~~they ofare ~~the Company’s~~likely ~~common~~to ~~stock~~suffer irreparable harm.

~~The~~On January 9, 2015, the Court modified the ~~potential~~Revised ~~dilutive~~Discovery ~~securities~~Plan ~~outstanding~~and ~~that~~Scheduling ~~were~~Order ~~excluded~~confirming ~~from~~both the ~~computation~~discovery ofcutoff ~~diluted~~date ~~net~~as ~~loss~~December ~~per~~22, ~~share~~2015 ~~for~~and the ~~following~~deadline for ~~periods~~dispositive motions as January 29, ~~because~~2016. ~~their~~The ~~inclusion~~Court ~~would~~did ~~have~~not ~~had~~set ana ~~anti-dilutive~~trial ~~effect~~date. Motions to Dismiss made pursuant to FRCP Rule 12(b)(6) and 12(b)(3) filed by Pulse Evolution Corporation, ~~are~~Pulse ~~summarized~~Entertainment Corporation and John Textor remain pending. The defendants anticipate filing a Motion for Summary Judgment as ~~follows:~~soon as is practicable.

	Three Months Ended September 30, 2014
Share exchange right of subsidiary shareholders		22,535,399
Exchange warrants option		2,800,000
Total		25,335,399

~~Item~~The Company is involved from time to time 3in routine litigation arising in the ordinary course of conducting its business. ~~Quantitative~~In ~~and~~the ~~Qualitative~~opinion ~~Disclosures~~of ~~About~~the ~~Market~~Company’s ~~Risk~~management, no pending routine litigation will have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

~~This item~~Item ~~is not applicable to smaller reporting companies~~1A. Risk Factors

~~Item 4.~~Not ~~Controls~~applicable ~~and~~to ~~Procedures~~smaller reporting companies.

~~Evaluation~~Item. 2. Unregistered Sales of ~~Disclosure~~Equity ~~Controls~~Securities and ~~Procedures~~Use of Proceeds

~~We maintain~~The ~~disclosure~~following ~~controls~~sets ~~and~~forth ~~procedures~~information ~~(as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange~~regarding ~~Act”)~~securities ~~that~~sold ~~are~~or ~~designed~~issued ~~to ensure that information required to be disclosed~~ by ~~us in reports that we file under~~ the ~~Exchange Act~~Company iswithout ~~recorded,~~registration ~~processed, summarized and reported as specified in the SEC’s rules and forms and that such information required to be disclosed by us in reports that we file~~ under the ~~Exchange~~Securities Act isduring accumulated and communicated to our management, including our Chief Executive Officer, or CEO, and our Chief Financial Officer, CFO, to allow timely decisions regarding required disclosure. Management, with the ~~participation~~period ofcommencing ~~our CEO and CFO, performed an evaluation of the effectiveness of our disclosure controls and procedures as of September 30, 2014. Based~~ on ~~that~~July ~~evaluation~~1, ~~our management, including our CEO and CFO, concluded~~ ~~that our disclosure controls and procedures were not effective as of September 30,~~ 2014.:

Our management, including our Chief Executive Officer and our Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a) ~~control~~Sales ~~system must reflect the fact that there are resource constraints and the benefits~~ of ~~controls~~Unregistered must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected.Securities

~~Changes~~For the six month period of July 1, 2014 through December 31, 2014, we sold 8,391,185 shares of our common stock at an average price of $0.52 per share for proceeds of $4,253,309 which are net of fees of $114,750. Additionally, we issued 2,279,933 shares in ~~Internal~~exchange ~~Control~~for services valued at $945,205 and 50,963,282 shares issued from the share exchange.

~~There were~~Subsequent noto ~~changes~~December ~~identified~~31, in2014 through ~~connection~~August ~~with~~20, ~~our~~2015, ~~internal~~we ~~control~~issued ~~over~~1,375,000 ~~financial~~shares ~~reporting~~in ~~during~~exchange ~~the~~for ~~three months ended September 30~~cash, ~~2014 that have materially affected~~597,387 orshares ~~are~~in ~~reasonably~~exchange ~~likely~~for toservice ~~materially~~and ~~affect~~7,399,426 shares ~~our~~issued ~~internal~~from ~~control~~the ~~over~~share ~~financial reporting~~exchange.

810

~~PART~~Each of the abovedescribed IItransactions -was ~~OTHER~~exempt ~~INFORMATION~~from the registration requirements of the Securities Act pursuant to Section 4(2) thereof or Regulation D or Rule 701 promulgated thereunder, as transactions not involving a public offering or involving the issuance of securities in certain compensatory circumstances. With respect to each transaction listed above, no general solicitation was made by either us or any person acting on our behalf; the securities sold are subject to transfer restrictions; and the certificates representing the securities contain an appropriate legend stating that such securities have not been registered under the Securities Act and may not be offered or sold other than pursuant to an effective registration statement under the Securities Act or an applicable exemption from the registration requirements thereof.

Item 1 3. ~~Legal~~Defaults Upon ~~Proceedings~~Senior Securities

~~On May 29, 2014, Hologram USA, Inc~~None., Musion Das Hologram Limited and Uwe Maass (the “Plaintiffs”) filed an amended complaint in the U.S. District Court for the District of Nevada (Case No. 2:14-cv-00772-GMN-NJK). The complaint alleges that Plaintiffs own, or control, certain patents related to the projection illusion technique, historically known as “Pepper’s Ghost.” The Plaintiffs further allege that Pulse Evolution Corporation, Pulse Entertainment Corporation, John Textor, Dick Clark Productions, Inc., John Branca and John McClain, as executors of the Estate of Michael J. Jackson, MJJ Productions, Inc. Musion Events, Ltd. Musion 3D, Ltd., William James Rock and Ian Christopher O’Connell (collectively, the “Defendants”) infringed on the Plaintiffs’ patent rights by using the Plaintiffs’ projection illusion system to project the visual imagery developed and conceived by our company in connection with the a musical performance at the 2014 Billboard Music Awards in Las Vegas Nevada featuring an image of the late Michael Jackson. The Plaintiffs have not alleged that the Company’s core business, the production of visual effects or human animation imagery infringes their intellectual property rights. The complaint sought an order of the Court temporarily and permanently enjoining the Defendants from carrying out the Michael Jackson performance, a judgment for infringement, damages, attorneys’ fees and costs. The Plaintiffs’ Emergency Motion for Temporary Restraining Order filed in connection with its May 15, 2014 complaint was denied on May 16, 2014 as the Court found that the Plaintiffs’ failed to establish that they are likely to succeed on the merits of their patent infringement claims and that they are likely to suffer irreparable harm.

~~On September~~Item 17, 2014, the Court issued a Revised Discovery Plan and Scheduling Order setting the discovery cut-off date of September 28, 2015, and set the deadline for dispositive motions as October 28, 2015. The Court did not set a trial date. The Court also did not rule on the Motions to Dismiss made pursuant to FRCP Rule 12(b)(6) and 12(b)(3) filed on June 24, 2014 by Pulse Evolution Corporation, Pulse Entertainment Corporation and John Textor. The Motions to Dismiss remain pending. On November 4~~, 2014, Pulse Evolution Corporation, Pulse Entertainment Corporation and John Textor served their Initial Disclosure of Non-Infringement and Invalidity Contentions pursuant to L~~.R. ~~16.1.~~Mine ~~The~~Safety ~~defendants anticipate filing a Motion for Summary Judgment as soon as is practicable.~~Disclosures

~~The Company~~Not believes that its claims and defenses in this case are substantial because the visual imagery the Company develops and conceives is distinct from the Plaintiffs’ projection system allowing the Company to use a variety of projection systems in its productionsapplicable. Litigation is, however, inherently unpredictable. The outcome of this lawsuit is subject to significant uncertainties and, therefore, determining the likelihood of a loss and/or the measurement of any loss is complex. Consequently, the Company is unable to estimate the range of reasonably possible loss. The Company’s assessments are based on estimates and assumptions that have been deemed reasonable by management, but the assessment process relies heavily on estimates and assumptions that may prove to be incomplete or inaccurate, and unanticipated events and circumstances may occur that might cause the Company to change those estimates and assumptions.

~~The Company~~Item ~~is involved from time to time in routine litigation arising in the ordinary course of conducting its business~~5. InOther ~~the opinion of the Company’s management, no pending routine litigation will have a material adverse effect on the Company’s financial condition, results of operations or cash flows.~~Information

~~Item 1A~~None. ~~Risk Factors~~

~~Not applicable to smaller reporting companies.~~ 11

Item 6. 2. ~~Unregistered Sales of Equity Securities and Use of Proceeds~~Exhibits

The following sets forth information regarding securities sold or issued by the Company without registration under the Securities Act during the period commencing on July 1, 2014 and ending on September 30, 2014:

Incorporated by Reference

Filed or

Exhibit

File

Filing

Furnished

Number

Description

Form

Number

Exhibit

Date

Herewith

2.1

Share Exchange Agreement among Pulse Evolution Corporation and Pulse Entertainment Corporation dated September 25, 2014.

333190431

2.1

9/26/2014

10.1

Lease Agreement between Pulse Entertainment Corporation and Inland Diversified Port St. Lucie Square, LLC dated March 1, 2014.

333190431

10.1

10/7/14

10.2

Asset Transfer and Assignment Agreement between Pulse Entertainment Corporation and Tradition Studios I.P. Acquisition Inc. dated April 4, 2014.

333190431

10.2

10/7/14

10.3

Form of Share Purchase Agreement between Alon Nigri and certain purchasers.

333190431

10.2

5/16/14

10.4

Form of Securities Purchase Agreement.

333190431

10.1

9/26/14

10.5

* Partner Agreement between ABG EPE IP, LLC and Pulse Evolution Corporation effective as of August 1, 2014.

333190431

10.2

9/26/14

10.6

* Partner Agreement between The Estate of Marilyn Monroe LLC and Pulse Evolution Corporation effective as of October 1, 2014.

333190431

10.1

10/10/14

31.1

Certification of the Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a).

32.1

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

101.INS**

XBRL INSTANCE DOCUMENT

101.SC**

XBRL TAXONOMY EXTENSION SCHEMA

101.CA**

XBRL TAXONOMY EXTENSION CALCULATION LINKBASE

101.DE**

XBRL TAXONOMY EXTENSION DEFINITION LINKBASE

101.LA**

XBRL TAXONOMY EXTENSION LABEL LINKBASE

101.PR**

XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE

~~a) Sales~~+ ofManagement ~~Unregistered~~contract ~~Securities~~or compensatory plan or arrangement.

~~For the~~* ~~three~~Portions ~~month period~~ of ~~July~~this 1,agreement ~~2014~~have ~~through~~been ~~September~~omitted and ~~30,~~redacted ~~2014,~~and weseparately ~~sold~~filed ~~4,919,356~~with ~~shares~~the ofSecurities ~~our~~and ~~common~~Exchange ~~stock~~Commission atwith ana ~~average price~~request ~~of $0.45 per share~~ for ~~aggregate,~~confidential ~~gross proceeds of $2,225,000~~treatment.

~~For~~** XBRL (Extensible Business Reporting Language) ~~the~~information ~~three~~is ~~months~~furnished ~~ended~~and ~~September~~not ~~30,~~filed ~~2014,~~or ~~the~~a ~~Advisor~~part ~~had~~of ~~earned~~this ~~30,000~~Quarterly ~~shares~~Report on Form 10-Q for purposes of ~~the~~Sections ~~Company’s~~11 ~~common~~or ~~stock~~12 ~~under~~of the ~~terms~~Securities Act of ~~the~~1933, ~~Agreement.~~as ~~The~~amended, ~~value~~is deemed not filed for purposes of Section 18 of the ~~shares~~Securities ~~was~~Exchange ~~$18~~Act of 1934,~~600~~ as amended, and ~~was~~otherwise ~~recorded~~is asnot asubject ~~reduction~~ to ~~additional~~liability ~~paid~~under inthese ~~capital~~sections.

912

Each of the above-described transactions was exempt from the registration requirements of the Securities Act pursuant to Section 4(2) thereof or Regulation D or Rule 701 promulgated thereunder, as transactions not involving a public offering or involving the issuance of securities in certain compensatory circumstances. With respect to each transaction listed above, no general solicitation was made by either us or any person acting on our behalf; the securities sold are subject to transfer restrictions; and the certificates representing the securities contain an appropriate legend stating that such securities have not been registered under the Securities Act and may not be offered or sold other than pursuant to an effective registration statement under the Securities Act or an applicable exemption from the registration requirements thereof.SIGNATURES

~~Item 3.~~Pursuant ~~Defaults~~to ~~Upon~~the ~~Senior~~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.

None.

Date: August 20, 2015	PULSE EVOLUTION CORPORATION
	(Registrant)

	By:	/s/ John Textor
	Name:	John Textor
	Title:	Executive Chairman (principal financial and accounting officer)

~~Item 4. Mine Safety Disclosures~~13

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

Incorporated by Reference

Filed or Furnished Herewith

Exhibit Number

Description

Form

File Number

Exhibit

Filing Date

2.1

Share Exchange Agreement among Pulse Evolution Corporation and Pulse Entertainment Corporation dated September 25, 2014.

8-K

333-190431

2.1

9/26/2014

10.1

Lease Agreement between Pulse Entertainment Corporation and Inland Diversified Port St. Lucie Square, LLC dated March 1, 2014.

8-K

333-190431

10.1

10/7/14

10.2

Asset Transfer and Assignment Agreement between Pulse Entertainment Corporation and Tradition Studios I.P. Acquisition Inc. dated April 4, 2014.

8-K

333-190431

10.2

10/7/14

10.3

Form of Share Purchase Agreement between Alon Nigri and certain purchasers.

8-K

333-190431

10.2

5/16/14

10.4

Form of Securities Purchase Agreement.

8-K

333-190431

10.1

9/26/14

10.5*

Partner Agreement between ABG EPE IP, LLC and Pulse Evolution Corporation effective as of August 1, 2014.

8-K

333-190431

10.2

9/26/14

10.6*

Partner Agreement between The Estate of Marilyn Monroe LLC and Pulse Evolution Corporation effective as of October 1, 2014.

8-K

333-190431

10.1

10/10/14

31.1

Certification of the Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a).

31.2

Certification of the Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a).

32.1

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

101.INS**

XBRL INSTANCE DOCUMENT

101.SC**

XBRL TAXONOMY EXTENSION SCHEMA

101.CA**

XBRL TAXONOMY EXTENSION CALCULATION LINKBASE

101.DE**

XBRL TAXONOMY EXTENSION DEFINITION LINKBASE

101.LA**

XBRL TAXONOMY EXTENSION LABEL LINKBASE

101.PR**

XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE

+ Management contract or compensatory plan or arrangement.

* Portions of this agreement have been omitted and redacted and separately filed with the Securities and Exchange Commission with a request for confidential treatment.

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of this Quarterly Report on Form 10-Q 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.

	PULSE EVOLUTION CORPORATION
Date: November 14, 2014	(Registrant)
	By:	/s/ Frank Patterson
	Name:	Frank Patterson
	Title:	Chief Executive Officer (principal executive officer)
	By:	/s/William P. Krueger
	Name:	William P. Krueger
	Title:	Chief Financial Officer (principal financial and accounting officer)

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