UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

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

For the quarterly period ended ~~March~~June 3130, 2015

~~[ ]~~ ☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________________ to __________________

Commission file number: 000-55220

WOWIO, INC. (Exact name of registrant as specified in its charter)

(Exact name of registrant as specified in its charter)

Texas		27-2908187
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

626 North Doheny Drive
9107 Wilshire Blvd., Suite 450
West Hollywood, California		90069
Beverly Hills, California		90210
(Address of principal executive offices)		(zip code)

(310) ~~807~~ 272-~~8181~~7988

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ~~[X]~~ ☒ No ~~[ ]~~☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ~~[X]~~☒ No ~~[ ]~~☐

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

Large accelerated filer [☐ ] Accelerated filer [☐ ] Non-accelerated filer [☐ ] Smaller reporting company ~~[X]~~☒ (Do not check if smaller reporting company)

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

The number of shares of the registrant’s common stock issued and outstanding as of ~~May~~August 1525, 2015, was ~~966~~1,~~014~~001,~~552~~054,486.

WOWIO, INC.

Form 10-Q

For the Fiscal Quarter Ended ~~March~~June 3130, 2015

TABLE OF CONTENTS

		Page No.
PART I. - FINANCIAL INFORMATION
Item 1.	Financial Statements.	F-1
	Condensed Consolidated Balance Sheets at March 31, 2015 (unaudited) and December 31, 2014	F-1
	Condensed Consolidated Balance Sheets at June 30, 2015 (unaudited) and December 31, 2014	F-1
	Unaudited Condensed Consolidated Statements of Operations for the Three months Ended March 31, 2015 and 2014	F-2
	Unaudited Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2015 and 2014	F-2
	Unaudited Condensed Consolidated Statement of Stockholders’ Deficit for the Three months Ended March 31, 2015	F-3
	Unaudited Condensed Consolidated Statement of Stockholders’ Deficit for the Six Months Ended June 30, 2015	F-3
	Unaudited Condensed Consolidated Statements of Cash Flows for the Three months Ended March 31, 2015 and 2014	F-4
	Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2015 and 2014	F-4
	Notes to Unaudited Condensed Consolidated Financial Statements	F-5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	3
Item 3.	Quantitative and Qualitative Disclosures About Market Risk .	9
Item 4	Controls and Procedures.	9
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings.	1011
Item 1A.	Risk Factors.	1011
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	1011
Item 3.	Defaults Upon Senior Securities.	1011
Item 4.	Mine Safety Disclosures.	1011
Item 5.	Other Information.	1011
Item 6.	Exhibits.	1011

PART I. - FINANCIAL INFORMATION

Item 1. Financial Statements.

WOWIO, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31, 2015			December 31, 2014
	June 30,
	(Unaudited)
	2015			December 31,
	(Unaudited)			2014
Assets
Current Assets
Cash	$	-1,936		$	552
Current portion of prepaid expenses and other current assets		203,394			312,274
Total Current Assets		~~203~~205,~~394~~330			312,826
Prepaid consulting and other assets, net of current portion		~~128~~67,~~394~~032			167,578
Note receivable and accrued interest		-—			195,678
Intangible assets		195,678			-—
Total Assets	$	~~527~~468,~~466~~040		$	676,082
Liabilities and Stockholders’ Deficit
Current Liabilities:
Accounts payable and accrued expenses	$	1,371,260		$	1,287,413
Accounts payable and accrued expense	$	1,379,467		$	1,287,413
Acquisition related liabilities		231,~~171~~025			231,171
Related party payables		677			677
Related party payable		677			677
Accrued compensation and related costs		~~612~~680,~~645~~145			597,372
Revolving loan		50,000			50,000
Notes payable – related parties		100,902			100,902
Notes payable, net of debt discount of $4,956 and $15,131		938,454			1,016,099
Notes payable, net of debt discount of $0 and $15,131		902,930			1,016,099
Derivative liabilities		~~593~~803,000			992,000
Convertible notes payable, net of debt discount of $194,839 and $180,040		215,280			160,575
Convertible notes payable, net of debt discount of $151,554 and $180,040		284,616			160,575
Total Liabilities		4,~~113~~432,~~389~~762		$	4,436,209
Commitments and contingencies		—			—
Stockholders’ Deficit:
Series A preferred stock, $0.0001 par value per share; 5,000,000 shares authorized; 4,750,000 and 500,000 shares issued and outstanding, respectively		475			50
Series A preferred stock, $0.0001 par value;		475			50
Series B preferred stock, $0.0001 par value per share; 2,000,000 shares authorized; 0 shares issued and outstanding		-			-
5,000,000 shares authorized; 4,750,000 and 500,000 shares issued and outstanding, respectively
Common stock, $0.0001 par value per share; 4,000,000,000 shares authorized; 277,439,783 and 41,969,953 shares issued and outstanding, respectively		27,744			4,197
Series B preferred stock, $0.0001 par value;		—			—
Additional paid in capital		25,162,089			24,721,034
2,000,000 shares authorized; 0 shares issued and outstanding
Accumulated deficit		(28,776,231	)		(28,485,408	)
Series D preferred stock, $0.00001 par value;		—			—
Total stockholders’ deficit		(3,585,923	)		(3,760,127	)
4 shares authorized; 4 and 0 shares issued and outstanding, respectively
Total Liabilities and Stockholders’ Deficit	$	527,466		$	676,082
Common stock, $0.00001 par value;		10			—
5,000,000,000 shares authorized; 1,011,365 and 32,285 shares issued and outstanding, respectively
Additional paid in capital		25,495,684			24,725,231
Accumulated deficit		(29,460,891	)		(28,485,408	)
Total stockholders’ deficit		(3,964,722	)		(3,760,127	)
Total Liabilities and Stockholders’ Deficit	$	468,040		$	676,082

See accompanying notes to these condensed consolidated financial statements

F-1

WOWIO, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	For Three Months Ended			For Three Months Ended			For Six Months Ended			For Six Months Ended
	March 31, 2015			March 31, 2014
	June 30,			June 30,			June 30,			June 30,
Net sales	$	25,407		$	1,267
	2015			2014			2015			2014
Cost of sales		3,598			9,133
Net sales	$	—		$	51,042			25,407		$	52,309
Gross profit (loss)		21,809			(7,866	)
Cost of sales		580			10,151			4,178			19,284
Operating expenses:
Gross profit (loss)		(580	)		40,891			21,229			33,025
General and administrative		436,315			941,834
Operating expenses:
Total operating expenses		436,315			941,834
General and administrative		461,652			449,238			897,967			1,388,662
Operating loss		(414,506	)		(949,700	)
Total operating expenses		461,652			449,238			897,967			1,388,662
Other income (expense)
Operating loss		(462,232	)		(408,347	)		(876,738	)		(1,355,637	)
Interest expense, net		(316,317	)		(40,402	)
Other Income (expense)
Change in fair value of derivatives liabilities		898,000			-
Interest expense, net		(345,563	)		(255,140	)		(661,880	)		(295,542	)
Loss on extinguishment of debt		(458,000	)		-
Gain on settlement of accrued expense		67,135			—			67,135			—
Other income (expense), net		123,683			(40,402	)
Gain on change in fair value of derivatives liabilities		177,000			—			1,075,000			—
Loss before income tax benefit		(290,823	)		(990,102	)
Loss on extinguishment of debt		(121,000	)		—			(579,000	)		—
Income tax benefit, net		-			-
Other expense, net		(224,428	)		(255,140	)		(98,745	)		(295,542	)
Net Loss	$	(290,823	)	$	(990,102	)
Loss before income tax benefit		(684,660	)		(663,487	)		(975,483	)		(1,651,179	)
Basic and diluted net loss per common share	$	(0.00	)	$	(0.04	)
Income tax benefit, net		—			—			—			—
Weighted-average number of common shares outstanding - basic and diluted		107,825,525			23,488,173
Net Loss		(684,660	)	$	(663,487	)		(975,483	)	$	(1,651,179	)
Basic and diluted net loss per common share	$	(0.96	)	$	(34.21	)	$	(2.43	)	$	(88.16	)
Weighted-average number of common shares outstanding - basic and diluted		713,610			19,395			400,618			18,729

See accompanying notes to these condensed consolidated financial statements

F-2

WOWIO, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT

For The ~~Three~~Six Months Ended ~~March~~June 3130, 2015

	Preferred Series A					Preferred Series B		~~Common stock~~			Preferred Series D			~~Additional Paid in~~		~~Accumulated~~	Common stock		~~Total Stockholders’~~				Additional Paid in		Accumulated			Total Stockholders’
	~~Shares~~	Shares		Amount			Shares	~~Shares~~		Amount	~~Amount~~		Shares	~~Capital~~	Amount	~~Deficit~~		Shares	~~Deficit~~		Amount			Capital		Deficit			Deficit
Balance as of December 31, 2014		500,000		$50	50		—		~~41,969,953~~$	—	$	~~4,197~~	—	$	~~24,721,034~~—	$	~~(28,485,408~~	)41,969,953	$	~~(3,760,127~~$	)4,197		$	24,721,034	$	(28,485,408	)	$	(3,760,127	)
Conversion of convertible notes payable and accrued interest into common stock		-—		—	-				~~230,861,588~~			~~23,086~~			~~129,316~~		-	1,268,196,875		~~152,402~~	126,820			108,443		—			235,263
Common stock issued for services		-			-				4,608,242			461			31,039		-			31,500
Common stock issued for debt		—		—														4,608,242			461			31,039		—			31,500
Preferred stock issued for services		250,000			25				-			-			1,100		-			1,125
Preferred stock issued for cash		—		—			—			—			—		—			—			—			—					—
Preferred stock issued for settlement of accrued wages		4,000,000			400				-			-			39,600					40,000
Preferred stock issued for services		250,000		25														—			—			1,100					1,125
Reclass of derivative liabilities for conversions of debt		-			-				-			-			240,000		-			240,000
Preferred stock issued for settlement of accrued wages		4,000,000		400									4					—			—			49,600					50,000
Net loss		-			-				-			-			-		(290,823	)		(290,823	)
Reclass of derivative liabilities for conversions of debt																		—			—			453,000					453,000
Balance as of March 31, 2015		4,750,000		$	475				277,439,783		$	27,744		$	25,162,089	$	(28,776,231	)	$	(3,585,923	)
1:1300 reverse stock split adjustment		—		—														(1,313,763,705	)		(131,468	)		131,468		—			—
Net loss		—		—														—			—			—		(975,483	)		(975,483	)
Balance as of June 30, 2015		4,750,000	$	475			—		$	—			4	$	—		$	1,011,365		$	10		$	25,495,684	$	(29,460,891	)	$	(3,964,722	)

See accompanying notes to these condensed consolidated financial statements

F-3

WOWIO, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Three Months Ended March 31,
	Six Months Ended June 30,
	2015			2014
Cash Flows from Operating Activities
Net loss	$	(~~290~~975,~~823~~483	)	$	(~~990~~1,~~102~~651,179	)
Adjustments to reconcile net loss to net cash used in operating activities
Interest earned on note receivable		-—			(36,~~279~~595	)
Estimated fair value of preferred and common stock issued for services		33,025			-
Estimated fair value of preferred stock and common issued for services		251,625			—
Change in fair value of derivative liabilities		(~~898~~1,075,000	)		-—
Excess interest expense of derivative instruments		~~138~~333,500			-—
Amortization of prepaid consulting		149,264			353,607
Gain on settlement of accrued expense		(67,135	)
Loss on extinguishment of debt		458,000			-
Amortization of prepaid consulting		210,626			407,783
Amortization of debt discount and debt issuance costs		138,747			3,165
Loss on extinguishment of debt		579,000			—
Changes in operating assets and liabilities:		-			-
Amortization of debt discount and debt issuance costs		253,924			192,193
Prepaid consulting and other assets		(1,200	)		-
Changes in operating assets and liabilities:
Accounts payable and accrued expenses		106,382			404,386
Prepaid consulting and other assets		(1,200	)		12,000
Related party payables		-			(22,411	)
Accounts payable and accrued expenses		228,700			582,175
Accrued compensation and related costs		54,873			-
Related party payables		—			(29,611	)
Acquisition related liabilities		-			(37,664	)
Accrued compensation and related costs		132,773			—
Net cash used in operating activities		(111,232	)		(292,298	)
Acquisition related liabilities		(146	)		(70,144	)
Net cash used in operating activities		(128,816	)		(563,378	)
Cash Flows from Financing Activities
Principal payments on notes payable		(16,820	)		(30,000	)
Principal payments on revolving loan		—			(250,000	)
Proceeds from the issuance of notes payable		-			305,000
Principal payments on notes payable		(22,300	)		(30,000	)
Proceeds from the issuance of convertible notes payable, net of fees		127,500			-
Proceeds from the issuance of notes payable		—			755,000
Proceeds from the issuance of common stock		-			25,000
Proceeds from the issuance of convertible notes payable		152,500			37,500
Net cash provided by financing activities		110,680			300,000
Proceeds from the issuance of common stock		—			50,000
Net change in cash		(552	)		7,702
Net cash provided by financing activities		130,200			562,500
Net change in cash		1,384			(878	)
Cash at beginning of period		552			943
Cash at end of period	$	-		$	8,645
Cash and Cash Equivalents, end of period	$	1,936		$	65
Supplemental disclosure of cash flow information:
Cash paid for income taxes	$	-—		$	-—
Cash paid for interest	$	-—		$	11,072
Supplemental disclosure of non-cash investing and financing activities:
Exercise of warrant in settlement of notes/accounts payable	$	-—		$	22,922
Preferred stock issued for settlement of accrued wages	$	40,000		$	-
Common and preferred stock recorded as prepaid consulting for services	$	—		$	59,964
Debt issuance costs and debt discounts	$	159,130		$	-
Reclass of derivative liabilities to equity for conversions of debt	$	453,000		$	—
Reclass of derivative liabilities for conversions of debt	$	240,000		$	-
Reassignment of amounts from note payable to convertible notes	$	110,300		$	—
Reassignment of amounts from notes payable to convertible notes payable	$	66,300		$	-
Conversion of debt and accrued interest for shares of common stock	$	235,263		$	729,413
Estimated fair value of beneficial conversion features and relative fair value of warrants issued with debt	$	-		$	15,190
Debt issuance costs and debt discounts	$	228,265		$	215,221
Conversion of debt and accrued interest for shares of common stock	$	152,402		$	255,931
Settlement of accrued expenses through issuance of shares of preferred and common stock	$	50,000		$	285,316

See accompanying notes to these condensed consolidated financial statements

F-4

WOWIO, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For The ~~Three~~Six Months Ended ~~March~~June 3130, 2015

NOTE 1 - DESCRIPTION OF BUSINESS

Organization

Wowio, LLC was formed on June 29, 2009 under the laws of Texas (“Wowio Texas”). On July 16, 2010, the Company converted to a C-corporation under the laws of Texas. Wowio, Inc. and its wholly owned subsidiary Carthay Circle Publishing (collectively, the “Company”, “we”, “our”, “Wowio”) is an emerging company in the creation, production, distribution and monetization of digital entertainment. We specialize in creating custom brand strategies to develop, produce, distribute and promote entertainment properties across multiple product lines and distribution channels, including our own websites, traditional media, social media and emerging technologies.

The Company operates in a rapidly changing technological and digital entertainment market and its activities are subject to significant risks and uncertainties, including failing to secure additional funding to further exploit the Company’s current technology and digital entertainment properties.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies is presented to assist the reader in understanding and evaluating the Company’s consolidated financial statements. The consolidated financial statements and notes are the representations of the Company’s management, who are responsible for their integrity and objectivity. The accounting policies conform to accounting principles generally accepted in the United States of America (“U.S. GAAP”) and have been consistently applied in the preparation of the consolidated financial statements.

Basis of Presentation

The condensed consolidated balance sheet as of December 31, 2014, which has been derived from audited financial statements and the interim unaudited condensed consolidated financial statements as of ~~March~~June 3130, 2015 and 2014 have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Securities and Exchange Commission (“SEC”) Form 10-Q and Article 8 of SEC Regulation S-X. These condensed consolidated financial statements do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2014, included in the Company’s Form 10-K.

The condensed consolidated financial statements included herein as of and for the three and six months ended ~~March~~June 3130, 2015 and 2014 are unaudited; however, they contain all normal recurring accruals and adjustments that, in the opinion of the Company’s management, are necessary to present fairly the condensed consolidated financial position of the Company as of ~~March~~June 3130, 2015, the condensed consolidated results of its operations for the three and six months ended June 30, 2015 and 2014 and condensed consolidated statements of cash flows for the ~~three~~six months ended June ~~March 31~~30, 2015 and 2014. The results of operations for the three and six months ended ~~March~~June 3130, 2015 are not necessarily indicative of the results to be expected for the full year or any future interim periods.

Recently Issued Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). ASU 2014-09 amends the guidance for revenue recognition to replace numerous, industry specific requirements and converges areas under this topic with those of the International Financial Reporting Standards. The ASU implements a five-step process for customer contract revenue recognition that focuses on transfer of control, as opposed to transfer of risk and rewards. The amendment also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. Other major provisions include the capitalization and amortization of certain contract costs, ensuring the time value of money is considered in the transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. On ~~April~~July 299, 2015, the FASB approved ~~proposed~~amendments deferring the effective date by one year to December 15, 2017 for annual reporting periods beginning after that date. ~~The~~and ~~FASB also proposed~~ permitting early adoption of the standard, but not before the original effective date or for reporting periods beginning after December 15, 2016. The Company has not yet selected a transition method and is currently assessing the impact the adoption of ASU 2014-09 will have on our consolidated financial statements and disclosures.

~~In August 2014, the FASB issued ASU No. 2014~~F-15, “Presentation of Financial Statements - Going Concern”. The amendments in this update provide guidance in U.S. GAAP about management’s responsibilities to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The main provision of the amendments are for an entity’s management, in connection with the preparation of financial statements, to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. Management’s evaluation should be based on relevant conditions and events that are known or reasonably knowable at the date the consolidated financial statements are issued. When management identifies conditions or events that raise substantial doubt about an entity’s ability to continue as a going concern, the entity should disclose information that enables users of the consolidated financial statements to understand all of the following: (1) principal conditions or events that raised substantial doubt about the entity’s ability to continue as a going concern (before consideration of management’s plans); (2) management’s evaluation of the significance of those conditions or events in relation to the entity’s ability to meet its obligations; and (3) management’s plans that alleviated substantial doubt about the entity’s ability to continue as a going concern or management’s plans that are intended to mitigate the conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern. The amendments in this update are effective for interim and annual reporting periods after December 15, 2016 and early application is permitted. The Company is currently assessing this guidance for future implementation.5

In ~~April~~ ~~2015~~August 2014, the FASB issued ~~Accounting Standard Update (“~~ASU”) ~~2015~~No. 2014-0315, ~~Simplifying the~~ “Presentation of ~~Debt~~Financial ~~Issuance Costs~~Statements - Going Concern”. ~~This~~The amendments in this update ~~requires~~provide ~~capitalized~~guidance in ~~debt~~U.S. ~~issuance~~GAAP ~~costs~~about management’s responsibilities to beevaluate ~~classified~~whether there is substantial doubt about an entity’s ability to continue as a ~~reduction~~going concern and to ~~the~~provide ~~carrying~~related ~~value~~footnote disclosures. The main provision of ~~debt~~the ~~rather~~amendments are for an entity’s ~~than~~management, ain ~~deferred~~connection ~~charge~~with the preparation of financial statements, to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as isa ~~currently~~going ~~required~~concern within one year after the date that the financial statements are issued. ~~This~~Management’s ~~update~~evaluation ~~will~~should be ~~effective~~based ~~for~~on relevant conditions and events that are known or reasonably knowable at the ~~Company~~date ~~for~~the ~~all~~consolidated ~~annual~~financial ~~and~~statements ~~interim~~are ~~periods~~issued. When management identifies ~~beginning~~conditions ~~after~~or ~~December~~events 15that raise substantial doubt about an entity’s ability to continue as a going concern, ~~2015~~the entity should disclose information that enables users of the consolidated financial statements to understand all of the following: (1) principal conditions or events that raised substantial doubt about the entity’s ability to continue as a going concern (before consideration of management’s plans); (2) management’s evaluation of the significance of those conditions or events in relation to the entity’s ability to meet its obligations; and is(3) ~~required~~management’s plans that alleviated substantial doubt about the entity’s ability to becontinue ~~adopted~~as ~~retroactively~~a going concern or management’s plans that are intended to mitigate the conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern. The amendments in this update are effective for ~~all~~interim and annual reporting periods ~~presented~~after December 15, 2016 and early ~~adoption~~application is permitted. The Company is currently ~~evaluating~~assessing ~~the expected impact of~~ this ~~new~~guidance ~~accounting~~for ~~standard~~future ~~on its financial statements~~implementation.

FIn April 2015, the FASB issued Accounting Standard Update (“ASU”) 2015-503, Simplifying the Presentation of Debt Issuance Costs. This update requires capitalized debt issuance costs to be classified as a reduction to the carrying value of debt rather than a deferred charge, as is currently required. This update will be effective for the Company for all annual and interim periods beginning after December 15, 2015 and is required to be adopted retroactively for all periods presented, and early adoption is permitted. The Company is currently evaluating the expected impact of this new accounting standard on its consolidated financial statements.

Principles of Consolidation

The consolidated financial statements include the accounts of Wowio, Inc. and its wholly-owned subsidiary Carthay Circle Publishing. All intercompany balances and transactions have been eliminated in consolidation.

Revenue Recognition and Deferred Revenue

The Company recognizes revenues in accordance with FASB Accounting Standards Codification (“ASC”) Topic 605, which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (4) will be based on management’s judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments will be provided for in the same period the related sales are recorded. The Company will defer any revenue for which the product has not been delivered or for which services have not been rendered or are subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or services have been rendered or no refund will be required.

The Company’s primary revenues streams are as follows:

eBooks

Occasionally, the Company sells download cards to retailers and directly to end customers, which are redeemable on its websites for content downloads over an established time frame. The Company records proceeds from the initial sale of the card to deferred revenue, which is included in accounts payable and accrued expenses in the accompanying consolidated balance sheets, and is recognized as revenue over the related download period, which approximates the usage period.

Advertising

Visitor demographics and time spent on a website are the primary drivers behind advertising-based revenue models for internet properties. Website advertising revenue is primarily recognized on a flat-fee basis based on cost per thousand impressions (“CPM”). The Company earns CPM revenue from the display of graphical advertisements on its websites. Revenue from flat-fee services is based on a customer’s period of contractual service and is recognized on a straight-line basis over the term of the contract. Proceeds from such contracts are deferred and are included in revenue on a pro-rata basis over the term of the related agreements.

Patent Licensing

The Company owns Patent No. 7,848,951, issued by the USPTO on December 7, 2010, protecting the insertion of ads into eBooks. The Company intends to pursue patent licensing arrangements with eBook distribution outlets looking to create new revenue streams for eBook downloads. The Company will also pursue any violators who infringe on the patent’s claims, ultimately generating license revenues on a per-book or per-ad basis.

Revenue from patent licensing arrangements is recognized when earned, estimable and realizable. The timing of revenue recognition is dependent on the terms of each license agreement and on the timing of sales of licensed products. The Company generally recognizes royalty revenue when it is reported to the Company by its licensees, which is generally one quarter in arrears from the licensees’ sales. For licensing fees that are not determined by the number of licensed units sold, the Company recognizes license fee revenue on a straightF-~~line basis over the life of the license.~~6

FRevenue from patent licensing arrangements is recognized when earned, estimable and realizable. The timing of revenue recognition is dependent on the terms of each license agreement and on the timing of sales of licensed products. The Company generally recognizes royalty revenue when it is reported to the Company by its licensees, which is generally one quarter in arrears from the licensees’ sales. For licensing fees that are not determined by the number of licensed units sold, the Company recognizes license fee revenue on a straight-6line basis over the life of the license.

Creative IP Licensing

Revenues are also generated by the exploitation of WOWIO’s own proprietary content of creative material such as comic books, graphic novels, screenplays, and other published and non-published content. The WOWIO-owned Spacedog library is available for sale on wowio.com and the Company retains 90% of all retail sales for that content library.

The Company’s content also generates revenues from licensing stories/characters/concepts to studios and other producing partners. Licensing deals that may generate revenue for the Company include film option/acquisition fees, television option/acquisition fees, video game licensing, content licensing for apps, apparel and merchandise licensing.

Concentrations of Credit Risk

A financial instrument which potentially subjects the Company to concentrations of credit risk is cash. The Company places its cash with financial institutions deemed by management to be of high credit quality. The Federal Deposit Insurance Corporation (“FDIC”) provides basic deposit coverage with limits to $250,000 per owner. At ~~March~~June 3130, 2015 and December 31, 2014, there were no uninsured amounts.

During the ~~three~~six months ended ~~March~~June 3130, 2015, one customer accounted for approximately 98% of revenues.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting periods.

Significant estimates made by management include, among others, ~~provisions for uncollectible note receivable,~~ fair value of common stock and preferred stock issued, fair value of beneficial conversion features, fair value of derivative liabilities and realization of deferred tax assets. The Company bases its estimates on historical experience, knowledge of current conditions and belief of what could occur in the future considering available information. The Company reviews its estimates on an on-going basis. The actual results experienced by the Company may differ materially and adversely from its estimates. To the extent there are material differences between the estimates and actual results, future results of operations will be affected.

Fair Value Measurements

Fair value measurements are determined based on the assumptions that market participants would use in pricing an asset or liability. U.S. GAAP establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The established fair value hierarchy prioritizes the use of inputs used in valuation methodologies into the following three levels:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets. A quoted price in an active market provides the most reliable evidence of fair value and must be used to measure fair value whenever available.

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. For example, level 3 inputs would relate to forecasts of future earnings and cash flows used in a discounted future cash flows method.

The Company’s financial instruments consist of cash, ~~note receivable,~~ accounts payable, accrued expenses, notes payable, convertible notes payable and related party notes payable. The Company cannot determine the estimated fair value of its convertible notes payable as instruments similar to the convertible notes payable could not be found. Other than for convertible notes payable, the carrying value for all such instruments approximates fair value due to the short-term nature of the instruments.

The Company uses Level 3 of the fair value hierarchy to measure the fair value of the derivative liabilities and revalues its derivative convertible ~~note~~notes, preferred stock and warrant liabilities at every reporting period and recognizes gains or losses in the statements of operations that are attributable to the change in the fair value of the derivative convertible notes, preferred stock and warrant liabilities.

Beneficial Conversion Features

In certain instances, the Company has entered into convertible notes that provide for an effective or actual rate of conversion that is below market value, and the embedded beneficial conversion feature (“BCF”) does not qualify for derivative treatment. In these instances, the Company accounts for the value of the BCF as a debt discount, which is then amortized to interest expense over the life of the related debt using the straight-line method, which approximates the effective interest method.

~~Advertising Expense~~F-7

~~The Company~~Advertising expenses marketing, promotions and advertising costs as incurred. For the three months ended March 31, 2015 and 2014, such costs totaled $540 and $1,094, respectively. Such costs are included in general and administrative expense in the accompanying consolidated statements of operations.Expense

~~F-7~~The Company expenses marketing, promotions and advertising costs as incurred. For the six months ended June 30, 2015 and 2014, such costs totaled $895 and $11,313, respectively. For the three months ended June 30, 2015 and 2014, such costs totaled $355 and $10,219. Such costs are included in general and administrative expense in the accompanying consolidated statements of operations.

Stock-Based Compensation

All share-based payments, including grants of stock to employees, directors and consultants, are recognized in the consolidated financial statements based upon their estimated fair values.

The Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows ASC Topic 505. As such, the value of the applicable stock-based compensation is periodically re-measured and income or expense is recognized during their vesting terms. The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor’s performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is primarily recognized over the term of the consulting agreement. In accordance with FASB guidance, an asset acquired in exchange for the issuance of fully vested, non-forfeitable equity instruments should not be presented or classified as an offset to equity on the grantor’s balance sheet once the equity instrument is granted for accounting purposes.

Income Taxes

The Company accounts for income taxes under the provision of ASC 740. As of ~~March~~June 3130, 2015 and December 31, 2014, there were no unrecognized tax benefits included in the consolidated balance sheets that would, if recognized, affect the effective tax rate. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no accrual for interest or penalties on its consolidated balance sheets as of ~~March~~June 3130, 2015 and December 31, 2014 and has not recognized interest and/or penalties in the consolidated statements of operations for the ~~three~~six months ended ~~March~~June 3130, 2015 and 2014. The Company is subject to taxation in the United States, Texas and California.

Basic and Diluted Loss per Common Share

Basic net loss per common share is computed by dividing net loss attributable to common stockholders for the period by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders for the period by the weighted-average number of common and common equivalent shares, such as warrants outstanding during the period. Common stock equivalents from warrants and convertible notes payable were approximately 2,463,805,012 and 3,009,000 for the ~~three~~six months ended ~~March~~June 3130, 2015 and 2014, respectively, and are excluded from the calculation of diluted net loss per share for all periods presented because the effect is anti-dilutive.

Derivative Liabilities

The Company evaluates debt instruments, preferred stock, stock options, stock warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under the relevant sections of ASC Topic 815-40, ~~Derivative~~ Derivative Instruments and Hedging: Contracts in Entity’s Own Equity. The result of this accounting treatment could be that the fair value of a financial instrument is classified as a derivative instrument and is marked-to-market at each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income or other expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Financial instruments ~~that~~ that are initially classified as equity that become subject to reclassification under ASC Topic 815-40 are reclassified to a liability account at the fair value of the instrument on the reclassification date.

Certain of the Company’s embedded conversion features on debt, preferred stock and derivative liabilities with potentially insufficient authorized shares to settle outstanding contracts in the future are treated as derivatives for accounting purposes. The Company estimates the fair value of these embedded conversion features and derivative liabilities with potentially insufficient authorized shares to settle outstanding contracts in the future using the Black-Scholes Merton option pricing model (“Black-Scholes”) (see Note 7). Based on these provisions, the Company has classified all conversion features and warrants as derivative liabilities at ~~March~~June 3130, 2015.

NOTE 3 - GOING CONCERN

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company’s revenues since inception have been nominal. Additionally, since inception, the Company has had recurring operating losses and negative operating cash flows. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

The Company’s continuation as a going concern is dependent on its ability to obtain additional financing to fund operations, implement its business model, and ultimately, to attain profitable operations. The Company will need to secure additional funds through various means, including equity and debt financing, funding from a licensing arrangement or any similar financing. There can be no assurance that the Company will be able to obtain additional debt or equity financing, if and when needed, on terms acceptable to the Company, or at all. Any additional equity or debt financing may involve substantial dilution to the Company’s stockholders, restrictive covenants or high interest costs. The Company’s longF-term liquidity also depends upon its ability to generate revenues from the sale of its products and achieve profitability. The failure to achieve these goals could have a material adverse effect on the execution of the Company’s business plan, operating results and financial condition. The Company intends to raise additional financing.8

FThe Company’s continuation as a going concern is dependent on its ability to obtain additional financing to fund operations, implement its business model, and ultimately, to attain profitable operations. The Company will need to secure additional funds through various means, including equity and debt financing, funding from a licensing arrangement or any similar financing. There can be no assurance that the Company will be able to obtain additional debt or equity financing, if and when needed, on terms acceptable to the Company, or at all. Any additional equity or debt financing may involve substantial dilution to the Company’s stockholders, restrictive covenants or high interest costs. The Company’s long-8term liquidity also depends upon its ability to generate revenues from the sale of its products and achieve profitability. The failure to achieve these goals could have a material adverse effect on the execution of the Company’s business plan, operating results and financial condition. The Company intends to raise additional financing.

The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

NOTE 4 - INTANGIBLE ASSET

On October 13, 2010, the Company entered into a secured note receivable with Top Cow Productions (“TCP”) for $175,000. Terms of the note required interest at the rate of 10% per annum and equal monthly installments of principal over twelve months beginning in May 2011 through April 2012. The note is secured by certain assets of TCP and individually by two owners of TCP. As of ~~March~~June 3130, 2015 and December 31, 2014, the balance of the note receivable was $0 and $195,678, respectively, including accrued interest receivable of approximately $0 and $62,678, respectively.

●· The Company held a security interest in the assets of TCP; ●· The Company received payments of $5,500 from TCP during 2013 and $4,900 during 2014; and ●· In 2013, the Company entered into an agreement with TCP in which TCP is to provide to the Company certain assets, including ownership of two separate 4 book comic book series and screenplay. The Company receives 70% of the future net revenues derived from these assets, with TCP retaining the remaining 30% as a participation fee. The Company believes the carrying value of the outstanding note receivable and accrued interest is recoverable through the projected undiscounted future cash flows of these assets obtained from TCP. ●· In January 2015, TCP provided the Company a feature film script, and fulfilled its obligations under the note receivable.

The Company has capitalized the costs of ~~bringing~~ bringing this production to market in accordance with ASC 926, “Entertainment – Films.”

NOTE 5 - ACQUISITIONS

Wowio, LLC

On June 29, 2009, Wowio Texas entered into a securities purchase agreement (the “Agreement”) with Platinum Studios, Inc. (“Platinum”) pursuant to which Platinum agreed to transfer to the Company, all of the membership interests of Wowio, LLC (a Pennsylvania Limited Liability Company and wholly owned subsidiary of Platinum) (“Wowio Penn”) in exchange for total consideration of $3,150,000, comprised of assumed liabilities of approximately $1,636,000 (of which $81,171 was still outstanding as of ~~March~~June 3130, 2015 and December 31, 2014), including $794,518 of amounts owed to Brian Altounian (which was fully paid or settled as of December 31, 2014) the Company’s CEO, and an additional $1,514,000 to be paid via royalty at a rate of 20% of gross revenues generated from acquired assets. Subsequent to the $1,514,000 being satisfied, such royalty rate shall reduce to 10% of net revenues generated in perpetuity.

Drunk Duck

On May 5, 2010, Wowio Texas entered into an asset purchase agreement with Platinum pursuant to which Platinum agreed to transfer to the Company, all of the ownership interests in the assets, including related websites, of Drunk Duck (the “Duck”) in exchange for total consideration of $1,000,000 in cash of which $350,000 of such amount had been previously paid, $150,000 was due from July 2010 – October 2010 and $500,000 is to be paid in quarterly installments equal to a minimum of 10% of net revenue derived from the purchased assets. As a security interest, Platinum retained a 10% ownership position in the assets, which is being reduced proportionately, as payments are made to Platinum. As of ~~March~~June 3130, 2015, Platinum retained ownership of 6.5% of the assets, as a result of amounts owed to Platinum under the purchase agreement. The $150,000 initially due from July 2010 to October 2010 remains outstanding as of ~~March~~June 3130, 2015 and December 31, 2014.

~~F-9~~Spacedog Entertainment, Inc.

~~Spacedog~~Effective May 15, 2010, Wowio Texas entered into a securities purchase agreement with Spacedog Entertainment, Inc. (a New York corporation) (“SDE”) pursuant to which SDE agreed to transfer to Wowio, Inc., all of the common stock of SDE in exchange for total consideration of $1,650,000, comprised of $107,000 in cash, 1,187 shares of common stock (valued at $1,543,000 - based on the estimated fair value on the measurement date) and an additional $1,000,000 to be paid via royalty at a rate of 100% of gross revenues generated from SDE assets. Subsequent to the $1,000,000 being satisfied, the seller shall no longer be entitled to receive any further royalties. In accordance with the agreement, the Company neither assumed nor became responsible, in any way, for any liabilities, debts or other obligations of SDE.

Effective May 15, 2010, Wowio Texas entered into a securities purchase agreement with Spacedog Entertainment, Inc. (a New York corporation) (“SDE”) pursuant to which SDE agreed to transfer to Wowio, Inc., all of the common stock of SDE in exchange for total consideration of $1,650,000, comprised of $107,000 in cash, 1,543,000 shares of common stock (valued at $1,543,000 F- based on the estimated fair value on the measurement date) and an additional $1,000,000 to be paid via royalty at a rate of 100% of gross revenues generated from SDE assets. Subsequent to the $1,000,000 being satisfied, the seller shall no longer be entitled to receive any further royalties. In accordance with the agreement, the Company neither assumed nor became responsible, in any way, for any liabilities, debts or other obligations of SDE.9

On December 12, 2012, the Company entered into a purchase agreement with the original owner of SDE, whereby the original owner re-acquired from the Company 10 specific titles from SDE. In exchange for the purchase of these 10 titles, the original owner was to return ~~255,000~~ 196 shares of the Company’s common stock to the Company’s treasury and reduce the contingent royalty liability from $1,000,000 to $500,000. In connection with the reduction in the contingent royalty liability, the fair value of the liability based on estimated payment was reduced by $425,459. The ~~255,000~~196 shares of common stock were received by the Company on May 10, 2013.

NOTE 6 - NOTES PAYABLE

Revolving Loan

Effective September 21, 2012, the Company entered into a credit agreement (“Revolving Loan”) with TCA Global Credit Master Fund, LP (“TCA”), which provided the Company with an initial revolving loan commitment of $250,000. Net proceeds received by the Company amounted to $201,775 after deducting financing fees of $53,225 (which were recorded as debt issue costs). The interest rate on this and all extensions of the Revolving Loan is 12% per annum, with a default rate of 18%. Per the agreement, accrued and unpaid interest on the unpaid principal balance was payable on a weekly basis beginning on September 28, 2012.

The Revolving Loan had a 6-month term that could be extended for 6 months at TCA’s discretion with a 4% renewal fee. The loan is collateralized by a security interest in all tangible and intangible assets of the Company.

In connection with this transaction, the Company issued a series of three warrants to TCA (“TCA Warrants”), each to purchase 184,157 shares of common stock, or 1% of the issued and outstanding common stock of the Company at September 21, 2012. Each warrant had an exercise price of $0.01 per share. Each of the TCA Warrants was immediately exercisable upon issuance and had terms of six months, nine months and twelve months, respectively. Each of the TCA Warrants had a mandatory redemption clause, which obligated the Company to redeem the warrant in full by payment of $30,000 each if not exercised by the respective redemption dates through September 21, 2013. The Company recorded $90,000 in accounts payable and accrued expenses with a corresponding reduction to additional paid-in capital related to TCA Warrants in connection with its mandatory redemption clause, with $60,000 still outstanding as of ~~March~~June 3130, 2015.

~~F-10~~The Revolving Loan contains various covenants, certain of which the Company was not in compliance with at June 30, 2015. The amount of principal due as of June 30, 2015 and December 31, 2014 was $50,000, and $60,000 in warrant liabilities. Accrued interest and fees related to the Revolving Loan of $58,892 and $54,428 is included in accounts payable and accrued expenses in the accompanying condensed consolidated balance sheets as of June 30, 2015 and December 31, 2014, respectively. Creditor has filed a lawsuit related to this note. (see item 1)

~~The Revolving~~Notes ~~Loan~~Payable ~~contains~~– ~~various~~Related covenants, certain of which the Company was not in compliance with at March 31, 2015. The amount of principal due as of March 31, 2015 and December 31, 2014 was $50,000. Accrued interest and fees related to the Revolving Loan of $44,281 and $18,797 is included in accounts payable and accrued expenses in the accompanying condensed consolidated balance sheets as of March 31, 2015 and December 31, 2014, respectively.Parties

~~Notes~~During 2011, the Company issued an aggregate ~~Payable~~of –$157,355 ~~Related~~of ~~Parties~~notes payable to employees in lieu of compensation due. The notes matured in December 2012, are now due on demand and accrue interest at a rate of 2.25% per year. The amount of principal due at June 30, 2015 and December 31, 2014 was $100,902. Accrued interest of $8,584 and $7,458 is included in accounts payable and accrued expenses in the accompanying consolidated balance sheets as of June 30, 2015 and December 31, 2014, respectively.

~~During~~Notes 2011, the Company issued an aggregate of $157,355 of notes payable to employees in lieu of compensation due. The notes matured in December 2012, are now due on demand and accrue interest at a rate of 2.25% per year. The amount of principal due at March 31, 2015 and December 31, 2014 was $100,902. Accrued interest of $8,018 and $7,458 is included in accounts payable and accrued expenses in the accompanying consolidated balance sheets as of March 31, 2015 and December 31, 2014, respectively.Payable

Notes payable consist of the following ~~Payable~~at:

Notes payable consist of the following at:

	June 30, 2015			December 31, 2014
Secured note payable to an individual, 10% interest rate, entered into in December 2011, due on demand, as amended		15,000			100,000
Secured note payable to an individual, 12% interest rate, entered into in September 2013, due on demand with default interest of 17%, 50% satisfied by a third party in 2014		25,000			25,000
Note payable to an individual, 12% interest rate, entered into in November 2013, due on demand with default interest of 17%, 50% satisfied by a third party in 2014		50,000			50,000
Note payable to an individual, flat interest of $20,000, entered into in April 2014, due on demand		450,000			450,000
Note payable to an individual, non-interest bearing, entered into in August 2014, due in August 2015		35,000			35,000
Notes payable to various individuals, 12% interest rate, entered into from August 2013 to January 2014, due on demand		5,000			16,000
Secured note payable to an individual, 12% interest rate, entered into in January 2014, due on demand		290,000			299,366
Note payable to an individual, 8% interest rate, entered into in November 2014, due on demand		20,000			20,000
Note payable to an individual, 8% interest rate, entered into in October 2014, now due on demand, net of discount of $0 and $6,667, respectively		10,000			3,333
Note payable to an individual, flat interest of $9,000, entered into in December 2014, due on demand, net of discount of $0 and $7,830, respectively		2,930			17,400
	$	902,930		$	1,016,099

Less current portion		(902,930	)		(1,016,099	)
	$	—		$	—

	March 31, 2015			December 31, 2014
Secured note payable to an individual, 10% interest rate, entered into in December 2011, due June 20, 2015, as amended		50,000			100,000
Secured note payable to an individual, 12% interest rate, entered into in September 2013, due on demand with default interest of 17%, 50% satisfied by a third party in 2014		25,000			25,000
Note payable to an individual, 12% interest rate, entered into in November 2013, due on demand with default interest of 17%, 50% satisfied by a third party in 2014		50,000			50,000
Note payable to an individual, flat interest of $20,000, entered into in April 2014, due on demand		450,000			450,000
Note payable to an individual, non-interest bearing, entered into in August 2014, due in August 2015		35,000			35,000
Notes payable to various individuals, 12% interest rate, entered into from August 2013 to January 2014, due on demand		5,000			16,000
Secured note payable to an individual, 12% interest rate, entered into in January 2014, due on demand		290,000			299,366
Note payable to an individual, 8% interest rate, entered into in November 2014, due on demand		20,000			20,000
Note payable to an individual, 8% interest rate, entered into in October 2014, now due on demand, net of discount of $1,667 and $6,667, respectively		8,333			3,333
Note payable to an individual, flat interest of $9,000, entered into in December 2014, due on demand, net of discount of $3,289 and $7,830, respectively		5,121			17,400
	$	938,454		$	1,016,099
Less current portion		(938,454	)		(1,016,099	)
	$	-		$	-

F-10

~~F-11~~On December 20, 2011, the Company issued a 10% senior secured promissory note (“Secured Note”) to an individual in the amount of $100,000 and was initially due in December 2012. The Secured Note is secured by all of the Company’s acquired intangible assets. On February 14, 2013, the Company entered into a waiver and amendment #1 agreement to the Secured Note, extending the maturity date from December 20, 2012 to June 20, 2013. In February 2014, the Company entered into a waiver and amendment #2 to this Secured Note extending the maturity date from June 20, 2013 to June 20, 2015. In February 2015, $25,000 of the note was transferred to a third party as a convertible note. In March 2015, additional $25,000 of the note was assigned to a third party as a convertible note. In April 2015, $35,000 of the note was transferred to a third party as a convertible note. See note 7 for discussion of loss on debt extinguishment.

~~On December~~In ~~20,~~January ~~2011~~2014, the Company issued a ~~10% senior~~ secured promissory note ~~(“Secured Note”)~~ to an individual in the amount of $~~100~~300,000 ~~and was initially due in December 2012~~. The ~~Secured~~note ~~Note~~bears isinterest ~~secured~~at by12% ~~all of the Company’s intangible assets. On February 14~~annually, ~~2013,~~with ~~the~~interest ~~Company~~of ~~entered into a waiver and amendment #1 agreement to the Secured Note~~$51,876 ~~extending the~~as ~~maturity~~of ~~date from December 20, 2012 to~~ June 2030, ~~2013. In February 2014, the Company entered into a waiver and amendment #2 to this Secured Note extending the maturity date from June 20, 2013 to June 20,~~ 2015~~. In February 2015~~, ~~$25,000~~due ofon ~~the note was transferred to a third party as a convertible note~~demand. In March 2015, ~~additional~~ $2510,000 of the note was assigned to a third party as a convertible note. See note 7 for discussion of loss an debt extinguishment.

In ~~January~~ ~~2014~~connection with this note, the Company issued athe ~~secured~~holder ~~promissory~~of the note a warrant to anpurchase ~~individual~~25,000 inshares of the ~~amount~~Company’s ofSeries ~~$300,000.~~A ~~The~~Preferred ~~note~~Stock ~~bears~~at ~~interest~~a price of at$1.50 ~~12%~~per ~~annually,~~share with ~~interest~~an ofexpiration ~~$43,200~~date ~~due~~of onJanuary ~~demand~~2017. InThe ~~March~~relative ~~2015,~~fair ~~$10,000~~value of the ~~note~~warrant of $15,190 was ~~assigned~~treated toas a ~~third~~discount and ~~party~~was asamortized ~~a convertible~~over the life of the note. ~~See~~During ~~note~~the 7six ~~for~~months ~~discussion~~ended June 30, 2015, the Company amortized the remaining balance of ~~loss~~$634 anto ~~debt~~interest ~~extinguishment~~expense in the accompanying condensed consolidated statement of operations.

In ~~connection~~ ~~with~~April ~~this note~~2014, the Company issued a promissory note to an individual in the ~~holder~~amount of ~~the~~$450,000. The note abears ~~warrant~~flat tointerest ~~purchase~~of 25$20,000 ~~shares~~and ofwas due in July 2014. In October 2014, the Company~~’s Series~~ Aissued ~~Preferred~~1,538 ~~Stock~~shares atof acommon ~~price~~stock to extend the due date of ~~$1.50~~this ~~per~~promissory ~~share~~note, along with antwo ~~expiration~~other ~~date~~notes ofto this individual, to January ~~2017~~2015 and March 2015. The ~~relative~~estimated fair value of the ~~warrant~~ ~~of $15~~1,~~190~~538 ~~was~~shares ~~treated~~of ascommon astock ~~discount~~of ~~and~~$170,000 was ~~amortized~~computed based ~~over~~on ~~the~~stock ~~life~~price of ~~the~~$111 ~~note.~~per ~~During~~share ~~the~~in ~~three~~accordance ~~months~~with ~~ended~~the ~~March 31,~~terms ~~2015~~of the ~~Company~~agreement ~~amortized~~and ~~the~~was ~~remaining~~treated ~~balance~~as ofa ~~$634~~loss toon ~~interest~~debt ~~expense~~ extinguishment in ~~the~~accordance ~~accompanying~~with ~~condensed~~relevant ~~consolidated~~accounting ~~statement of operations~~guidance.

~~In April~~Accrued ~~2014,~~interest ~~the~~related ~~Company issued a promissory note~~ to annotes ~~individual in the amount~~ payable of $~~450~~139,~~000.~~532 ~~The~~and ~~note bears flat interest of~~ $20101,~~000 and~~537 ~~was~~is ~~due~~included in ~~July~~accounts ~~2014.~~payable Inand ~~October~~accrued ~~2014,~~expenses in the ~~Company~~accompanying ~~issued~~consolidated ~~2,000,000~~balance ~~shares~~sheets as of ~~common~~June ~~stock to extend the due date of this promissory note~~30, ~~along with two other notes to this individual, to January~~ 2015 and ~~March~~December ~~2015. The estimated fair value of the 2~~31,~~000,000~~ ~~shares of common stock of $170~~2014,~~000~~ ~~was computed based on stock price of $0~~respectively.~~085 per share in accordance with the terms of the agreement and was treated as a loss on debt extinguishment in accordance with relevant accounting guidance.~~

~~Accrued interest~~Convertible ~~related~~Notes ~~to notes payable of $119,703 and $101,537 is included in accounts payable and accrued expenses in the accompanying consolidated balance sheets as of March 31, 2015 and December 31, 2014, respectively.~~Payable

~~F-12~~Convertible notes payable consist of the following at:

Convertible Notes Payable

	June 30, 2015			December 31, 2014
Secured convertible note, 8% interest rate, entered into on June 9, 2014, fully converted into common stock, net of discount of $24,565 as of December 31, 2014		—			—
Secured convertible note, 10% interest rate, entered into on August 1, 2014, due August 1, 2015, net of debt discount of $0 and 32,083, respectively		—			22,917
Secured convertible note, 10% interest rate, entered into on August 26, 2014, due August 26, 2015, net of debt discount of $6,417 and $37,102, respectively		32,232			17,898
Secured convertible note, 12% interest rate, entered into on August 29, 2014, due August 29, 2015, net of debt discount of $3,534 and 23,333, respectively		16,001			11,667
Convertible notes, interest rates of 8% to 12%, entered into in September 2014, due one year from issuance date		31,500			31,500
Secured convertible note, 8% interest rate, entered into on November 18, 2014, due November 18, 2015		2,850			20,500
Secured convertible note, 8% interest rate, entered into on November 18, 2014, due November 18, 2015, net of debt discount of $8,062 and $18,812, respectively		13,438			2,688
Secured convertible note, entered into on November 5, 2014, due January 10, 2015, now due on demand, net of debt discount of $5,812 as of December 31, 2014		—			1,738
Secured convertible note, 8% interest rate, entered into on December 15, 2014, due December 15, 2015, net of debt discount of $12,934 and $38,333, respectively		21,391			11,667
Secured convertible note, 8% interest rate, entered into on December 15, 2014, due December 15, 2015		40,000			40,000
Secured convertible note, 12% interest rate, entered into on January 19, 2015, due January 7, 2016, net of debt discount of $18,000		36,000			—
Secured convertible note, 0% interest rate, entered into on February 7, 2015, due August 19, 2015, net of debt discount of $625		1,875			—
Secured convertible note, 8% interest rate, entered into on February 4, 2015, due February 4, 2016, net of debt discount of $21,149		6,351			—
Secured convertible note, 12% interest rate, entered into on February 20, 2015, due November 20, 2015, net of debt discount of $15,250		15,250			—
Secured convertible note, 12% interest rate, entered into on March 16, 2015, due December 16, 2015, net of debt discount of $18,639		11,861			—
Secured convertible note, 12% interest rate, entered into on March 16, 2015, due December 16, 2015		251			—
Secured convertible note, 10% interest rate, entered into on April 20, 2015, due December 16, 2015		29,061
Secured convertible note, 12% interest rate, entered into on April 20, 2015, due December 20, 2015, net of debt discount of $27,500		19,500			—
Secured convertible note, 12% interest rate, entered into on May 1, 2015, due Feb 15, 2016, net of debt discount of $19,444		7,056			—
	$	284,616		$	160,575
Less current portion		(284,616	)		(160,575	)
	$			$

~~Convertible notes payable consist of the following at:~~F-11

	March 31, 2015			December 31, 2014
Secured convertible note, 8% interest rate, entered into on June 9, 2014, fully converted into common stock, net of discount of $24,565 as of December 31, 2014		-			-
Secured convertible note, 10% interest rate, entered into on August 1, 2014, due August 1, 2015, net of debt discount of $6,146 and 32,083, respectively		11,316			22,917
Secured convertible note, 10% interest rate, entered into on August 26, 2014, due August 26, 2015, net of debt discount of $22,917 and $37,102, respectively		32,083			17,898
Secured convertible note, 12% interest rate, entered into on August 29, 2014, due August 29, 2015, net of debt discount of $12,104 and 23,333, respectively		16,863			11,667
Convertible notes, interest rates of 8% to 12%, entered into in September 2014, due one year from issuance date		31,500			31,500
Secured convertible note, 8% interest rate, entered into on November 18, 2014, due November 18, 2015		5,200			20,500
Secured convertible note, 8% interest rate, entered into on November 18, 2014, due November 18, 2015, net of debt discount of $13,437 and $18,812, respectively		8,063			2,688
Secured convertible note, entered into on November 5, 2014, due January 10, 2015, now due on demand, net of debt discount of $5,812 as of December 31, 2014		-			1,738
Secured convertible note, 8% interest rate, entered into on December 15, 2014, due December 15, 2015, net of debt discount of $23,516 and $38,333, respectively		18,084			11,667
Secured convertible note, 8% interest rate, entered into on December 15, 2014, due December 15, 2015		40,000			40,000
Secured convertible note, 12% interest rate, entered into on January 7, 2015, due January 7, 2016, net of debt discount of $36,000		18,000			-
Secured convertible note, 0% interest rate, entered into on February 7, 2015, due August 19, 2015, net of debt discount of $1,875		625			-
Secured convertible note, 8% interest rate, entered into on February 4, 2015, due February 4, 2016, net of debt discount of $24,621		2,879			-
Secured convertible note, 12% interest rate, entered into on February 20, 2015, due November 20, 2015, net of debt discount of $25,417		5,083			-
Secured convertible note, 12% interest rate, entered into on March 16, 2015, due December 16, 2015, net of debt discount of $28,806		1,694			-
Secured convertible note, 12% interest rate, entered into on March 16, 2015, due December 16, 2015		16,029			-
Secured convertible note, 8% interest rate, entered into on March 22, 2015, due March 12, 2016		7,861			-
	$	215,280		$	160,575
Less current portion		(215,280	)		(160,575	)
	$			$

During six months ended June 30, 2015, various holders of convertible note payable converted $228,943 in principal and $6,320 of accrued and unpaid interest into 975,536 shares of the Company’s common stock.

During ~~three~~ six months ended ~~March~~June 3130, 2015, ~~various~~the ~~holders~~Company entered into an aggregate of ~~convertible~~$313,500 ~~note~~(net ~~payable~~cash ~~converted~~of $~~147~~152,~~296~~500) in ~~principal~~convertible promissory notes bearing interest at rates between 8% and $512%,~~106~~ due in one year, net of ~~accrued~~fees approximating $20,500. The convertible notes allow the ~~and~~lender to convert the unpaid principal and accrued interest into ~~230,861,588~~ shares of the Company’s common stock at a variable conversion price (as defined). Certain of these convertible notes allow the lender to determine the timing of conversion, and as such the embedded conversion feature resulted in a derivative liability and a corresponding debt discount in the amount of $209,437 to be recorded (See Note 7). The Company is amortizing the debt discount over the life of the corresponding convertible promissory notes. The amortization of the debt discount for these derivative instruments was $88,830 for six months ended June 30, 2015. In connection with the conversion of debt that were treated as derivative instruments, the Company reclassified $453,000 to additional paid-in capital during the six months ended June 30, 2015.

~~During three~~Accrued ~~month~~interest ~~ended~~related ~~March~~to ~~31, 2015, the Company entered into an aggregate of $127,500 in~~ convertible ~~promissory~~ notes ~~bearing~~payable ~~interest at rates between 8% and 12%, due in one year, net~~ of ~~fees approximating~~ $1725,~~500.~~014 ~~The convertible notes allow the lender to convert the unpaid principal~~ and ~~accrued interest into shares of the Company’s common stock at a variable conversion price (as defined). Certain of these convertible notes allow the lender to determine the timing of conversion~~$8,768 ~~and~~is asincluded ~~such the embedded conversion feature resulted~~ in aaccounts ~~derivative~~payable ~~liability~~ and aaccrued ~~corresponding~~expenses ~~debt discount~~ in the ~~amount~~accompanying ofcondensed ~~$142,500 to be recorded (See Note~~consolidated ~~7).~~balance ~~The~~sheets ~~Company~~as ~~is amortizing the debt discount over the life~~ of ~~the~~June ~~corresponding convertible promissory notes. The amortization of the debt discount for these derivative instruments was $27~~30,~~718~~ ~~for~~2015 ~~three~~and ~~months~~December ~~ended March~~ 31, ~~2015. In connection with the conversion of debt that were treated as derivative instruments~~2014, ~~the Company reclassified $240,000 to additional paid-in capital during the three months ended March 31, 2015~~respectively.

~~Accrued interest~~As ~~related~~of toJune ~~convertible~~30, ~~notes~~2015, ~~payable~~the Revolving Loan and a number of ~~$16,905~~the ~~and~~outstanding ~~$8,768~~related isparty ~~included~~notes inpayable, ~~accounts~~notes payable and ~~accrued~~convertible ~~expenses~~notes inpayable ~~the~~balances are delinquent. ~~accompanying~~The ~~condensed~~Company ~~consolidated~~is ~~balance~~in ~~sheets~~negotiations aswith ofthe ~~March~~note ~~31,~~holders ~~2015~~to ~~and~~amend ~~December~~the ~~31,~~terms ~~2014,~~of ~~respectively~~the notes.

~~As of~~NOTE ~~March~~7 ~~31,~~- ~~2015,~~DERIVATIVE the Revolving Loan and a number of the outstanding related party notes payable, notes payable and convertible notes payable balances are delinquent. The Company is in negotiations with the note holders to amend the terms of the notes.LIABILITIES

FThe Company applies the accounting standard that provides guidance for determining whether an equity-13linked financial instrument, or embedded feature, is indexed to an entity’s own stock. The standard applies to any freestanding financial instrument or embedded features that have the characteristics of a derivative, and to any freestanding financial instruments that are potentially settled in an entity’s own common stock.

~~NOTE~~From time to time, the Company has issued 7notes and preferred stock with embedded conversion features and warrants to purchase common stock. Certain of the embedded conversion features and warrants contain price protection or anti-dilution ~~DERIVATIVE~~features ~~LIABILITIES~~that result in these instruments being treated as derivatives. In addition, potentially in the future, the Company may have an insufficient number of available shares of common stock to settle outstanding contracts. Accordingly, the Company has estimated the fair value of these embedded conversion features, warrants, and derivatives related to the insufficient number of authorized shares to settle outstanding contracts using Black-Scholes with the following assumptions:

~~The Company~~Expected ~~applies~~volatility ~~the~~is ~~accounting~~based ~~standard~~primarily on ~~that~~historical ~~provides~~volatility. ~~guidance~~Historical ~~for~~volatility ~~determining~~was ~~whether~~computed anusing ~~equity-linked~~weekly ~~financial~~pricing ~~instrument, or~~observations ~~embedded~~for ~~feature,~~recent ~~is indexed to an entity’s own stock~~periods. ~~The~~We ~~standard~~believe ~~applies to any freestanding financial instrument~~this ormethod ~~embedded~~produces ~~features~~an estimate that ~~have~~is ~~the~~representative ~~characteristics~~ of aour ~~derivative,~~expectations ~~and~~of tofuture ~~any~~volatility ~~freestanding~~over ~~financial~~the ~~instruments~~expected ~~that~~term ~~are~~of ~~potentially~~these warrants ~~settled~~and inembedded anconversion ~~entity’s own common stock~~features.

~~From time~~We tocurrently ~~time,~~have ~~the~~no ~~Company~~reason ~~has~~to ~~issued~~believe that ~~notes~~future ~~with~~volatility ~~embedded~~over ~~conversion~~the ~~features~~expected ~~and~~remaining ~~warrants~~life toof ~~purchase~~these ~~common~~warrants ~~stock.~~and ~~Certain of the~~ embedded conversion features ~~and~~is ~~warrants~~likely ~~contain~~to ~~price protection or anti-dilution features that result in these instruments~~differ ~~being~~materially ~~treated~~from ashistorical ~~derivatives~~volatility. InThe ~~addition,~~expected ~~potentially~~life inis ~~the~~based ~~future,~~on the ~~Company~~remaining ~~may~~term ~~have~~of anthe ~~insufficient~~warrants ~~number~~and ofembedded ~~available~~conversion ~~shares~~features. ofThe ~~common~~risk-free ~~stock~~interest torate ~~settle~~is ~~outstanding~~based ~~contracts~~on U.S. ~~Accordingly,~~Treasury ~~the~~securities ~~Company~~consistent ~~has~~with ~~estimated~~ the ~~fair~~remaining ~~value~~term of ~~these~~the ~~embedded conversion features,~~ warrants, and ~~derivatives related to the insufficient number of authorized shares to settle outstanding contracts~~ ~~using~~embedded ~~Black-Scholes~~conversion ~~with the following assumptions:~~features.

~~Expected~~During the six months ended June 30, 2015, ~~volatility~~the isCompany ~~based~~issued ~~primarily~~an onaggregate ~~historical~~of ~~volatility.~~$313,500 ~~Historical~~in ~~volatility~~principal ~~was~~of ~~computed~~convertible ~~using~~notes ~~weekly~~payable ~~pricing~~(includes ~~observations~~reassignments ~~for~~of debt) at interest ~~recent~~rates ~~periods~~between 8% and 12% (See Note 6). WeSuch ~~believe~~convertible ~~this~~notes ~~method~~contained ~~produces~~embedded conversion features in the Company’s own stock and have resulted in an ~~estimate~~initial ~~that~~derivative isliability ~~representative~~value of ~~our~~$1,339,000, ~~expectations~~which consisted of ~~future~~$579,000 ~~volatility~~of ~~over~~loss on debt extinguishment, $219,000 related to the ~~expected~~fair ~~term~~value of ~~these~~preferred ~~warrants~~stock, $207,500 of debt discount and ~~embedded~~$333,500 ~~conversion~~of ~~features~~excess interest expense.

We currently have no reason to believe that future volatility over the expected remaining life of these warrants and embedded conversion features is likely to differ materially from historical volatility. The expected life is based on the remaining term of the warrants and embedded conversion features. The riskF-~~free interest rate is based on U.S. Treasury securities consistent with the remaining term of the warrants and embedded conversion features.~~12

During the ~~three~~six months ended ~~March~~June 3130, 2015, the Company ~~issued~~recorded angain ~~aggregate~~ of $~~217~~1,~~600~~075,000, inrelated ~~principal~~to ofthe ~~convertible~~change ~~notes~~in ~~payable~~fair ~~(includes reassignments~~value of ~~debt)~~the atwarrants ~~interest rates between 8%~~ and ~~12% (See Note 6). Such convertible notes contained~~ embedded conversion features inwhich is ~~the~~included ~~Company’s~~in ~~own~~change ~~stock and have resulted~~ in anfair ~~initial derivative liability~~ value of ~~$739,000,~~derivative ~~which~~liabilities ~~consisted of~~in ~~$458,000~~the ofaccompanying ~~loss~~consolidated onstatements ~~debt extinguishment, $142,500~~ of ~~debt discount and $138,500 of excess interest expense~~operations.

~~During the~~The ~~three~~following ~~months~~table ~~ended~~presents ~~March~~our ~~31,~~warrants ~~2015~~and embedded ~~the~~conversion ~~Company~~features ~~recorded~~which ~~other~~have ~~gain~~no ofobservable ~~$898,000,~~market ~~related~~data ~~to the change in fair value of the warrants~~ and ~~embedded~~are ~~conversion~~derived ~~features~~using ~~which~~Black-Scholes ismeasured ~~included~~at ~~in change in~~ fair value ofon a ~~derivative~~recurring ~~liabilities~~basis, inusing ~~the~~Level ~~accompanying consolidated~~3 ~~statements~~inputs, as of ~~operations.~~June 30, 2015:

The following table presents our warrants and embedded conversion features which have no observable market data and are derived using Black-Scholes measured at fair value on a recurring basis, using Level 3 inputs, as of March 31, 2015:

	June 30, 2015
Annual dividend yield		0-8	%
Expected life (years)		0.07 – 4.05
Risk-free interest rate		0.01% – 1.42	%
Expected volatility		139.52%-466.54	%

	March 31, 2015
Annual dividend yield		0	%
Expected life (years)		0.07 – 4.05
Risk-free interest rate		0.02% – 1.42	%
Expected volatility		139.52%-446.40	%

The level 3 carrying value as of June 30, 2015:

The level 3 carrying value as of March 31, 2015:

	June 30, 2015
Embedded Conversion Features	$	803,000
Warrants		—
	$	803,000
Change in fair value	$	(1,075,000	)

	March 31, 2015
Embedded Conversion Features	$	593,000
Warrants		-
	$	593,000
Change in fair value	$	(898,000)

The following table presents the changes in fair value of our warrants and embedded conversion features measured at fair value on a recurring basis for the as of June 30, 2015:

The following table presents the changes in fair value of our warrants and embedded conversion features measured at fair value on a recurring basis for the as of March 31, 2015:

	June 30, 2015
Balance as of January 1, 2015	$	992,000
Issuance of warrants and embedded conversion features		1,339,000
Extinguishment of derivatives		(453,000	)
Change in fair value		(1,075,000	)
Balance as of June 30, 2015	$	803,000

	March 31, 2015
Balance as of January 1, 2015	$	992,000
Issuance of warrants and embedded conversion features		739,000
Extinguishment of derivatives		(240,000	)
Change in fair value		(898,000	)
Balance as of March 31, 2015	$	593,000

NOTE 8 - STOCKHOLDERS’ EQUITY

~~F-14~~Preferred Stock

~~NOTE~~On March 9, 2012 and amended on September 10, 82012, -the ~~STOCKHOLDERS’~~Company ~~EQUITY~~designated and determined the rights and preferences of 5,000,000 shares of Series A convertible preferred stock (“Series A”) with a par value of $0.0001. The Company is authorized to issue 5,000,000 shares of Series A. The holders of Series A are entitled to receive dividends in preference to dividends on common stock and are entitled to vote together with the holders of common stock with a voting right equivalent to 50 votes of common stock for each share of Series A held. In the event of liquidation, the holders of Series A shall be issued one share of common stock for every 50 shares of Series A.

~~Preferred~~On June 19, 2012, the Company issued 85,000 ~~Stock~~shares of Series A in connection with a consulting agreement entered into with a director. The value of the shares was $255,000 (based on the fair value of the Series A on the measurement date) and was recorded as prepaid consulting to be amortized over the service period of twelve months in accordance with the terms of the contract. On October 31, 2012, the Company modified the terms of the consulting agreement to extend the service period for an additional four years or a total of fifty-five months. During the six months ended June 30, 2015 and 2014, the Company amortized $14,609 in general and administrative expense in the accompanying condensed consolidated statements of operations.

On ~~March~~ 9,April ~~2012 and amended on September 10~~2, 2012, the Company designated and determined the rights and preferences of 52,000,000 shares of Series AB convertible preferred stock (“Series AB”) with a par value of $0.0001. The Company is authorized to issue 52,000,000 shares of Series AB. The holders of Series AB are entitled to receive dividends in preference to any dividends on common stock and are entitled to vote together with the holders of common stock with a voting right equivalent to 50300 votes of common stock for each share of Series AB held. In the event that two or more shareholders who combined own more than 20% of ~~liquidation~~the outstanding common stock enter into an agreement for the purpose of acquiring, holding, voting or disposing of any voting securities of the Company, then the holders of Series AB, as a class, shall be issued ~~one~~three shares of common stock for every share of common stock outstanding. In the event of liquidation, the holders of Series B shall be issued one share of common stock for every 50300 shares of Series AB.

On ~~June~~ 19January 27, ~~2012~~2015, the Company issued 85the CEO 4,000,000 shares of Series A inPreferred ~~connection~~Stock ~~with~~of athe ~~consulting~~Company ~~agreement~~as ~~entered~~settlement ~~into~~for ~~with~~$40,000 ~~a director. The value~~ of ~~the~~accrued ~~shares~~wages, ~~was~~which ~~$255,000~~were ~~(based~~valued based on the ~~fair~~market ~~value~~price of the ~~Series~~equivalent Anumber of common shares on the ~~measurement~~ date) ~~and~~of ~~was~~issuance ~~recorded~~of as$0.0026 ~~prepaid consulting~~per toshare, bewhich ~~amortized~~resulted ~~over~~in ~~the~~a gain ~~service~~on ~~period~~settlement of ~~twelve~~accrued ~~months~~wages ~~in accordance with the terms~~ of ~~the contract. On October 31~~$39, ~~2012~~792, ~~the~~which ~~Company~~was ~~modified~~recorded ~~the~~as ~~terms~~contributed ofcapital ~~the~~in ~~consulting agreement to extend~~ the ~~service~~accompanying ~~period~~condensed ~~for an additional four years or~~consolidated astatement ~~total~~ of ~~fifty-five~~stockholders’ ~~months.~~deficit ~~During~~for the ~~three~~six months ended ~~March~~June 3130, 2015 ~~and 2014, the Company amortized $7,305 in general and administrative expense in the accompanying condensed consolidated statements of operations~~.

On April 2, 2012, the Company designated and determined the rights and preferences of 2,000,000 shares of Series B convertible preferred stock (“Series B”) with a par value of $0.0001. The Company is authorized to issue 2,000,000 shares of Series B. The holders of Series B are entitled to receive dividends in preference to any dividends on common stock and are entitled to vote together with the holders of common stock with a voting right equivalent to 300 votes of common stock for each share of Series B held. In the event that two or more shareholders who combined own more than 20% of the outstanding common stock enter into an agreement for the purpose of acquiring, holding, voting or disposing of any voting securities of the Company, then the holders of Series B, as a class, shall be issued three shares of common stock for every share of common stock outstanding. In the event of liquidation, the holders of Series B shall be issued one share of common stock for every 300 shares of Series B.F-13

On ~~January~~ 27February 6, 2015, the Company issued ~~the~~a ~~CEO 4~~consultant 250,000~~,000~~ shares of Series A Preferred Stock of the Company ~~as settlement~~ for ~~$40,000 of~~service ~~accrued~~provided. ~~wages,~~The ~~which~~shares were valued based on the market price of the equivalent number of common shares on ~~the~~ date of issuance of $0.~~0026~~0045 per share, ~~which~~or ~~resulted in a gain on settlement of accrued wages of~~ $391,~~792, which was recorded as contributed capital in the accompanying condensed consolidated statement of stockholders’ deficit for the three months ended March 31, 2015~~125.

On ~~February~~ 6May 11, 2015, the ~~Company~~Board ~~issued a consultant 250,000 shares~~ of ~~Series~~Directors ~~A Preferred Stock~~ of the Company ~~for~~approved ~~service provided. The shares were valued based on~~ the ~~market~~creation ~~price~~ of ~~the~~Series ~~equivalent~~C, ~~number~~D, ofE ~~common~~and F shares ~~on date~~ of ~~issuance~~Preferred ~~of $0~~Stock.~~0045 per share or $1,125.~~

~~Common~~The Company is authorized to issue 5,300 shares of Series C Preferred Stock (“Series C”) par value of $0.0001 per share. The Series C will, with respect to dividends and liquidation, winding up or dissolution, rank: (a) senior with respect to dividends and pari passu in right of liquidation with the common stock, par value $0.0001 per share; (b) junior to the Series A and B Preferred Stock; (c) senior to any future designation of preferred stock; (d) junior to all existing and future indebtedness of the Company. Commending on date of issuance, holders of Series C will be entitled to receive dividends on each outstanding share of Series C, which will accrue in shares of Series C at a rate equal to 8% per annum from the issuance date. The Conversion price of the Series C shall mean the lower of (i) $0.004 per share of common stock, or (ii) 70% of the lowest VWAP in the 10 trading days prior to the date of the conversion notice. The Series C PS may be converted at any time after the earlier to occur of the (i) six-month anniversary of the issuance date or (ii) an effective registration statement covering the shares of common stock to be issued pursuant to the conversion notice.

On ~~March~~ 20May 11, 2015, the ~~Board~~Company issued a consultant an aggregate of ~~Directors~~300 shares of Series C of the Company ~~unanimously~~for ~~adopted~~service ~~resolutions~~provided. ~~approving~~Due anto ~~increase~~the inembedded ~~the~~conversion ~~number~~feature of ~~authorized~~the Series ~~shares~~C, the Company computed the estimated fair value of ~~our~~the ~~common~~derivative ~~stock,~~instrument ~~par~~and recorded the initial fair value of $~~0.0001~~28,000 ~~per~~as a ~~share,~~derivative toliability aon ~~total~~date of 4issuance (see Note 7). The value of the Series C,~~000~~E,~~000,000~~F ~~authorized~~ shares is included in derivative liabilities in the accompanying balance sheet.

~~On June~~The ~~19,~~Company ~~2012,~~is ~~the~~authorized ~~Company~~to ~~issued~~issue an4 ~~aggregate~~ shares of ~~500,000~~Series ~~shares~~D ofPreferred ~~common~~Stock ~~stock~~(“Series atD”) par value of $30.0000001 per share. inIf ~~connection~~at ~~with~~least aone ~~consulting agreement~~share ~~entered~~of ~~into~~Series ~~with~~D aPreferred Stock ~~director.~~is ~~The~~issued ~~value~~and ofoutstanding, then the ~~shares~~total ~~was~~aggregate ~~$1,500,000~~issued ~~(based~~shares onof ~~the~~Series ~~fair~~D ~~value~~Preferred ofStock ~~the~~at ~~common~~any ~~stock~~given ontime, regardless ~~the~~of ~~measurement~~their ~~date)~~number, ~~and~~shall ~~was~~have ~~recorded~~voting asrights ~~prepaid~~equal ~~consulting~~ to befour ~~amortized~~times ~~over~~the sum of: (i) the ~~service~~total ~~period~~number of ~~twelve~~shares ~~months~~of inCommon ~~accordance~~Stock which ~~with~~are ~~the~~issued ~~terms~~and ofoutstanding at the ~~contract.~~time Onof ~~October 31~~voting, ~~2012,~~plus (ii) the ~~Company~~total ~~modified~~number ~~the~~of ~~terms~~shares of ~~the~~Series ~~consulting~~A, ~~agreement~~Series, toB, ~~extend~~Series ~~the~~C, Series ~~service~~E, ~~period~~and ~~for~~Series anF ~~additional~~Preferred ~~four~~Stock ~~years~~which orare aissued ~~total~~and ofoutstanding ~~fifty-five~~at ~~months.~~the ~~During~~time ~~the~~of ~~three~~voting ~~months~~divided ~~ended~~by ~~March~~(iii) ~~31,~~the ~~2015~~number ~~and 2014,~~of ~~the~~shares ~~Company~~of Series ~~amortized~~D ~~$42,969,~~Preferred inStock ~~general~~issued and ~~administrative~~outstanding ~~expense~~at in the ~~accompanying~~time ~~condensed consolidated statements~~ of ~~operations~~voting.

On ~~January~~ 31May 11, ~~2013~~2015, the Company ~~entered~~issued ~~into~~4 ~~an agreement with a consultant to provide certain services, including financial management~~shares ~~and~~of ~~strategy,~~Series ~~establishing~~D ~~strategic partnerships, sales and marketing, business development services, and ongoing strategic business consulting~~ as ~~requested~~settlement ~~by the Company~~ for a$10,000 ~~period~~ of ~~one~~accrued ~~year.~~wages Into ~~exchange~~Brian Altounian, the Company’s ~~issued~~Chief ~~the~~Executive ~~consultant~~Officer ~~320,000~~and ~~shares~~Chairman ofand ~~common~~a ~~stock~~beneficial shareholder. ~~The~~No ~~value~~solicitation ~~of the shares~~ was ~~$640,000,~~made ~~which~~in ~~was~~connection ~~computed~~with ~~based~~these ontransactions ~~320,000~~and ~~shares~~no atunderwriting ~~$2.00~~discounts ~~per~~were made ~~share~~or ~~price~~given. ~~In accordance~~The ~~with~~Company ~~relevant~~believes ~~accounting~~that ~~guidance,~~ the ~~value~~issuance of the ~~non-forfeitable~~Series ~~shares~~D ~~of common stock~~ was ~~recorded~~a astransaction ~~prepaid consulting~~not toinvolving bea ~~amortized~~public ~~over~~offering ~~the~~and ~~service~~was exempt ~~period~~from ofregistration ~~twelve~~with ~~months.~~the ~~The~~Securities ~~Company amortized $0~~ and ~~$53,333,~~Exchange ~~respectively,~~Commission inpursuant ~~general and~~to ~~administrative~~Rule ~~expenses~~4(2) inof the ~~accompanying~~Securities ~~condensed~~Act ~~consolidated statements~~ of ~~operations for the three months ended March 31, 2015 and 2014~~1933.

~~On February~~The ~~15,~~Company ~~2013~~is authorized to issue 10,000,000 ~~the~~shares ~~Company~~of ~~entered~~Series ~~into~~E anPreferred ~~agreement~~Stock ~~with~~(“Series aE”) ~~consultant~~par tovalue ~~provide~~of ~~strategic~~$0.00001 ~~planning~~per ~~services,~~share. ~~business~~The ~~development~~holders of Series ~~introductions,~~E ~~and~~are ~~other~~entitled ~~consulting~~to ~~services~~receive dividends in preference to ~~the~~dividends ~~Company~~on ~~for~~common astock. ~~period~~Each share of ~~one~~Series ~~year~~E shall be convertible at par value $0.00001 Inper ~~exchange,~~share (the ~~Company~~“Series ~~issued~~E ~~the~~Preferred”), ~~consultant 1~~at any time,~~000~~ and/or from time to time,~~000~~ into the number of shares of the Company’s common stock., ~~The~~par value $0.00001 per share equal to the fixed price of the ~~shares~~Series ~~was~~E of $2.50 per share,~~000~~ divided by the par value of the Series E,~~000~~ subject to adjustment as may be determined by the Board of Directors from time to time (the “Conversion Rate”). Upon any liquidation, ~~which~~dissolution ~~was~~or ~~computed~~winding ~~based~~up onof 1the Company,~~000~~ whether voluntary or involuntary,~~000~~ ~~shares~~before atany adistribution or payment shall be made to the holders of any stock ranking junior to the Series E, the holders of the Series E shall be entitled to be paid out of the assets of the Company an amount equal to $21.00 per share ~~price~~or, in the event of an aggregate subscription by a single subscriber for Series E in excess of $100,000, $0.997 Inper ~~accordance~~share (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect ~~relevant~~to ~~accounting~~such ~~guidance~~shares) (the “Preference Value”), plus all declared but unpaid dividends, for each share of Series E held by them. After the ~~value~~payment of the ~~non-forfeitable~~full ~~shares~~applicable Preference Value of ~~common~~each ~~stock~~share ~~was recorded~~of the Series E as ~~prepaid~~set ~~consulting~~forth herein, tothe remaining assets of the Company legally available for distribution, if any, shall be ~~amortized~~distributed ~~over~~ratably to the ~~service~~holders ~~period~~of the Company’s Common Stock. Each share of ~~twelve~~Series ~~months~~E shall have ten votes for any election or other vote placed before the shareholders of the Company. Shares of Series E are anti-dilutive to reverse splits. The ~~Company~~conversion ~~amortized~~rate $0of shares ~~and~~of ~~$250~~Series E,~~000~~ however, ~~respectively,~~ would increase proportionately in ~~general~~the case of forward splits, and ~~administrative~~may ~~expenses~~not inbe ~~the~~diluted ~~accompanying~~by ~~consolidated~~a reverse ~~statement~~split offollowing ~~operations~~a ~~for~~forward ~~the~~split. ~~three~~The ~~months ended~~value ~~March~~of 31the Series C,E,F ~~2015~~shares ~~and~~is ~~2014~~included in derivative liabilities in the accompanying balance sheet.

~~During the~~On ~~year~~May ~~ended December 31~~11, ~~2014~~2015, the Company ~~entered~~issued ~~into~~a ~~agreements~~consultant 40,000 ~~with~~shares ~~consultants~~of toSeries ~~provide~~E ~~business~~of ~~development and other consulting services to~~ the Company for aservice ~~periods ranging from twelve to fifteen months~~provided. InEach ~~exchange,~~share ~~the~~of ~~Company~~preferred ~~issued~~stock ~~the~~can ~~consultants an~~be ~~aggregate~~converted ofinto 28,~~066,444~~342 shares pre-split, ofwhich ~~the~~resulted ~~Company’s~~in ~~common~~total ~~stock.~~number ~~The value~~ of ~~the~~common shares ~~was~~convertible ~~$239,964~~into ~~upon~~after ~~grant,~~split ~~which~~of ~~was computed~~256,667 ~~based on the~~ shares. ~~issued~~Due atto the ~~closing~~embedded conversion ~~price~~feature onof the ~~effective~~Series ~~date~~E, of the ~~related~~Company ~~agreements.~~computed Inthe ~~accordance~~estimated ~~with~~fair ~~related accounting guidance, the~~ value of the ~~non-forfeitable~~derivative ~~shares~~instrument ofand ~~common stock was~~ recorded ~~as prepaid consulting to be amortized~~the ~~over~~initial ~~the~~fair ~~related~~value ~~service~~of ~~periods (through December 2015). The Company amortized~~ $9888,~~991~~000 inas ~~general~~a ~~and~~derivative ~~administrative~~liability ~~expenses in~~on ~~the~~date ~~accompanying consolidated statement~~ of ~~operations~~issuance ~~for~~(see ~~the~~Note ~~three months ended March 31, 2015~~7).

The Company is authorized to issue 10,000,000 shares of Series F Preferred Stock (“Series F”) par value of $0.00001 per share. The holders of Series F are entitled to receive dividends in preference to dividends on common stock. Each share of Series F shall be convertible, at any time, and/or from time to time, into 500 shares of the Company’s common stock, par value $0.00001 per share (the “Common Stock”). Such conversion shall be deemed to be effective on the business day (the “Conversion Date”) following the receipt by the Corporation of written notice from the holder of the Series C Preferred Stock of the holder’s intention to convert the shares of Series C Stock, together with the holder’s stock certificate or certificates evidencing the Series C Preferred Stock to be converted. Upon any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, before any distribution or payment shall be made to the holders of any stock ranking junior to the Series F, the holders of the Series F shall be entitled to be paid out of the assets of the Company an amount equal to $1.00 per share or, in the event of an aggregate subscription by a single subscriber for Series F in excess of $100,000, $0.997 per share (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to such shares) (the “Preference Value”), plus all declared but unpaid dividends, for each share of Series F held by them. After the payment of the full applicable Preference Value of each share of the Series F as set forth herein, the remaining assets of the Company legally available for distribution, if any, shall be distributed ratably to the holders of the Company’s Common Stock. Each share of Series F shall have one vote for any election or other vote placed before the shareholders of the Company. Shares of Series F are anti-15dilutive to reverse splits. The conversion rate of shares of Series F, however, would increase proportionately in the case of forward splits, and may not be diluted by a reverse split following a forward split.

During three month ended March 31, 2015, various holders of convertible note payable converted $147,296 in principal and $5,106 of accrued and unpaid interest into 230,861,588 shares of the Company’s common stock (see note 6).F-14

~~During the~~On ~~three~~June ~~months ended March 31~~29, 2015, the Company issued ana ~~aggregate~~consultant ~~of 4~~1,~~608,242~~600 shares of Series F of ~~its~~the ~~common~~Company ~~stock~~for service provided. Due to ~~various~~the ~~individuals~~embedded conversion feature of the Series F, the Company computed ~~for~~the ~~consulting~~estimated ~~and~~fair ~~other~~value ~~services~~of ~~rendered~~the inderivative instrument and recorded the ~~aggregate~~initial ~~amount~~fair value of $31103,~~500~~000 as a derivative liability on date of issuance (see Note 7). The value of the Series C,E,F shares is included in derivative liabilities in the accompanying balance sheet.

~~Warrants~~Common Stock

~~The~~On March 20, 2015 the Board of Directors of ~~following~~the ~~represents~~Company aunanimously ~~summary~~adopted resolutions approving an increase in the number of ~~all~~authorized shares of our common stock, ~~warrant~~par ~~activity~~value $0.0001 ~~for~~per ~~the~~share, ~~three~~to ~~months~~a ~~ended~~total ~~March~~of 314,000,000,000 ~~2015:~~authorized shares.

	Outstanding Common Stock Warrants
	Number of Shares		Weighted Average Exercise Price		Aggregate Intrinsic Value (1)
Outstanding at December 31, 2014 (2)		1,067,185	$	0.16	$	2,250,002
Grants		-		-
Exercised		-		-
Cancelled/Expired		-		-
Outstanding and exercisable at March 31, 2015 (2)		1,067,185	$	0.16	$	-

On May 18, 2015, the Board of Directors of the Company amended its Certificate of Formation to:

	(1)	Represents the difference between the exercise price and the estimated fair value of the Company’s common stock at the end of the reporting period.
	(2)	The common stock warrants outstanding and exercisable as of March 31, 2015 and December 31, 2014 have a weighted-average contractual remaining life of 3.3 years and 3.9 years, respectively.

increase the authorized common stock from four billion to five billion;

~~In January~~· ~~2014,~~adjust the ~~Company~~par ~~issued~~value ~~a Secured Promissory Note to an individual in the amount~~ of ~~$300,000 (See Note 6). In connection with this note,~~ the ~~Company~~common ~~issued~~stock ~~a warrant~~ to ~~purchase 25,000 shares of the Company’s Series A Preferred Stock at a price of~~ $10.~~50 per share with an expiration date of January 2017. As of March 31, 2015, all of these preferred stock warrants are outstanding.~~00001;

~~NOTE 9~~· -set ~~RELATED~~the ~~PARTY~~par ~~TRANSACTIONS~~value of additional designations of preferred stock to $0.00001.

~~The Company~~On ~~was~~June ~~party~~19, to2012, athe ~~management~~Company ~~fee~~issued ~~agreement~~an ~~with~~aggregate of ~~Alliance~~385 ~~Acquisition~~shares ~~Corp.~~of ~~(“Alliance”).~~common Atstock ~~March~~at 31$3,900.00 ~~2015,~~per ~~Brian Altounian~~share ~~(“Altounian”),~~in ~~CEO,~~connection ~~owned~~with ~~approximately~~a ~~34%~~consulting ofagreement ~~Alliance.~~entered ~~Alliance~~into ~~provided the Company~~ with ~~general~~a ~~business~~director. The ~~support~~value ~~services,~~of ~~including,~~the ~~but~~shares ~~not~~was ~~limited to~~$1,500,000 ~~the~~(based ~~following:~~on ~~providing~~the ~~executive~~fair ~~and~~value ~~administrative~~of ~~level~~the ~~support,~~common ~~general office~~stock ~~support,~~on ~~investor~~the ~~relations~~measurement ~~assistance,~~date) ~~human resource assistance, financial~~ and ~~accounting~~was ~~assistance,~~recorded ~~legal~~as ~~support,~~prepaid ~~office~~consulting ~~equipment~~to ~~and~~be ~~office~~amortized ~~space.~~over ~~From~~the ~~time~~service toperiod ~~time~~of ~~Alliance~~twelve ~~would~~months ~~advance~~in ~~the~~accordance ~~Company~~with ~~capital~~the ~~and~~terms ~~pay~~of ~~expenses~~the oncontract. ~~behalf~~On ofOctober 31, 2012, the Company. ~~Additionally,~~modified ~~from~~the ~~time~~terms toof ~~time,~~ the ~~Company~~consulting ~~would~~agreement ~~advance~~to ~~Alliance~~extend ~~capital~~the ~~and~~service ~~pay~~period ~~expenses~~for onan ~~behalf~~additional offour ~~Alliance. The~~years ~~monthly~~or ~~fee~~a total ~~was~~of ~~$5,000~~fifty-five ~~for~~months. During the ~~period~~six ~~from~~months ~~November~~ended ~~2011 through~~ June ~~2013.~~30, ~~Based~~2015 onand 2014, the ~~decline~~Company amortized $85,938, in ~~business~~general and ~~required~~administrative ~~support~~expense byin the ~~Company,~~accompanying ~~the~~condensed ~~management~~consolidated ~~fee~~statements ~~was~~of ~~terminated effective July 1, 2013~~operations.

On January 31, 2013, the Company entered into an agreement with a consultant to provide certain services, including financial management and strategy, establishing strategic partnerships, sales and marketing, business development services, and ongoing strategic business consulting as requested by the Company for a period of one year. In exchange, the Company issued the consultant 246 shares of common stock. The value of the shares ~~following~~was ~~table~~$640,000, ~~summarizes~~which was computed based on 246 shares at $2,600.00 per share price. In accordance with relevant accounting guidance, the ~~activity~~value ~~between~~of the non-forfeitable shares of common stock was recorded as prepaid consulting to be amortized over the service period of twelve months. The Company amortized $0 and ~~Alliance~~$53,333, ~~during~~respectively, in general and administrative expenses in the ~~three~~accompanying condensed consolidated statements of operations for the six months ended ~~March~~June 3130, 2015: and 2014.

Management fee payable – December 31, 2014	$	667
Management fee		-
Advances to/payments on behalf of the Company		-
Payments to/on behalf of Alliance		-
Management fee payable - March 31, 2015	$	677

On February 15, 2013, the Company entered into an agreement with a consultant to provide strategic planning services, business development introductions, and other consulting services to the Company for a period of one year. In exchange, the Company issued the consultant 769 shares of common stock. The value of the shares was $2,000,000, which was computed based on 769 shares at a $2,600.00 per share price. In accordance with relevant accounting guidance, the value of the non-forfeitable shares of common stock was recorded as prepaid consulting to be amortized over the service period of twelve months. The Company amortized $0 and $250,000, respectively, in general and administrative expenses in the accompanying consolidated statement of operations for the six months ended June 30, 2015 and 2014.

FDuring the year ended December 31, 2014, the Company entered into agreements with consultants to provide business development and other consulting services to the Company for a periods ranging from twelve to fifteen months. In exchange, the Company issued the consultants an aggregate of 1,590 shares of the Company’s common stock. The value of the shares was $239,964 upon grant, which was computed based on the shares issued at the closing price on the effective date of the related agreements. In accordance with related accounting guidance, the value of the non-16forfeitable shares of common stock was recorded as prepaid consulting to be amortized over the related service periods (through December 2015). The Company amortized $110,079 in general and administrative expenses in the accompanying consolidated statement of operations for the six months ended June 30, 2015.

~~Alliance and~~During ~~Altounian~~six ~~have~~months ended ~~ownership~~June ~~interests in Akyumen Technologies~~30, ~~Corp. (“Akyumen”). At March 31,~~ 2015 ~~and December 31~~, ~~2014,~~various ~~Alliance~~holders ~~and Altounian owned less than 1%~~ of ~~Akyumen~~convertible ~~individually~~note ~~and~~payable ~~collectively.~~converted ~~During the three months ended March 31~~$228,943 ~~2015,~~in ~~Akyumen~~principal ~~provided certain software development~~ and ~~technology related services to the Company for~~ $~~250~~6,~~000.~~320 ~~Such~~of ~~costs were~~accrued ~~expensed to general~~ and ~~administrative~~unpaid interest ~~expense~~into in975,536 ~~the~~shares ~~accompanying consolidated statement~~ of ~~operations. In addition, Akyumen engaged~~ the Company ~~for an advertising campaign on the Company~~’s ~~websites.~~common ~~The advertising campaign was for $150,000 for the period April 1, 2014 through March 31, 2015~~stock. ~~The~~(see ~~Company~~note ~~recorded $25,000 in advertising revenue for the three months ended March 31, 2015 in the accompanying consolidated statements of operations.~~6)

~~On January~~During ~~27, 2015,~~ the ~~Company~~six ~~issued~~months ~~the~~ended ~~CEO~~June 430,~~000,000~~ ~~shares of Series A Preferred Stock of~~ 2015, the Company asissued ~~settlement~~an ~~for~~aggregate ~~$40,000~~ of ~~accrued wages~~3,545 ~~which~~shares ~~were valued based on the market price~~ of ~~the~~its ~~equivalent number of~~ common ~~shares~~stock onto ~~the~~various ~~date~~individuals offor ~~issuance of~~consulting ~~$0.0026~~and ~~per~~other ~~share,~~services ~~which resulted in a gain on settlement of accrued wages of $39,792, which was recorded as contributed capital~~rendered in the ~~accompanying~~aggregate ~~condensed~~amount ~~consolidated statement~~ of ~~stockholders’ deficit for the three months ended March~~ $31, ~~2015~~500.

~~NOTE~~On June 3, 2015, the company entered into a 101300 -to ~~COMMITMENTS~~1 ~~AND~~reverse ~~CONTINGENCIES~~stock split. All fractional shares were rounded up, shares issued prior to June 2015, have been retroactively restated to reflect the impact of the reverse stock split.

~~Royalties~~F-15

In connection with certain of the Company’s acquisitions, the Company has entered into various royalty agreements (see Note 5). Royalty payments related to acquisitions range from 10% to 100% of related revenue, as summarized below:Warrants

●The ~~Wowio,~~following ~~LLC~~represents -a ~~20%~~summary of ~~related revenue until~~ all ~~purchase~~common stock ~~price~~warrant ~~consideration~~activity ~~has~~for ~~been~~the ~~satisfied,~~six ~~then~~months ~~10%~~ended ofJune ~~related revenue through perpetuity. ● Duck - 10% of related revenue until all purchase price consideration has been satisfied~~30, ~~with no subsequent royalty amounts due. ● SDE - 100% of related revenue until all purchase price consideration has been satisfied, with no subsequent royalty amounts due.~~2015:

Additionally, the Company enters into royalty agreements with the authors of the eBooks included on its websites, which call for royalty payments based on various percentages of revenues earned, less processing fees and in the case of Sponsored Downloads, a fixed price per download.

	Outstanding Common Stock Warrants
	Number of Shares		Weighted Average Exercise Price		Aggregate Intrinsic Value (1)

Outstanding at December 31, 2014 (2)		821	$	208	$	163,297
Grants		—		—
Exercised		—		—
Cancelled/Expired		—		—

Outstanding and exercisable at June 30, 2015 (2)		821	$	208	$	170,661

Employment Agreements

	(1)	Represents the difference between the exercise price and the estimated fair value of the Company’s common stock at the end of the reporting period.

	(2)	The common stock warrants outstanding and exercisable as of June 30, 2015 and December 31, 2014 have a weighted-average contractual remaining life of 3.3 years and 3.9 years, respectively.

~~The Company~~In isJanuary ~~party to an employment agreement with its Chief Executive Officer~~2014, ~~which~~the ~~expires~~Company inissued ~~March~~a ~~2016, with an automatic renewal~~Secured ~~period~~Promissory ofNote ~~two~~to ~~years~~an ~~unless~~individual ~~otherwise~~in ~~terminated.~~the ~~The~~amount ~~employment agreement requires annual base salary payments~~ of ~~approximately~~ $300,000 ~~per~~(See ~~year~~Note 6). In ~~addition~~connection with this note, the ~~executive~~Company isissued ~~entitled~~a warrant to ~~bonuses~~purchase ~~in amounts based on various factors~~25,000 ~~including~~shares ~~but~~of ~~not limited to~~ the Company’s ~~financial~~Series ~~performance,~~A ~~amount~~Preferred ofStock ~~financing~~at ~~received~~a ~~and~~price ~~producer~~of ~~fee credits~~$1.50 ~~Pursuant~~per toshare ~~the~~with ~~agreement,~~an expiration date ifof ~~the~~January ~~executive~~2017. isAs ~~terminated~~of ~~without~~June ~~cause~~30, he2015, isall ~~entitled~~of tothese ~~receive~~preferred anstock ~~amount~~warrants ~~equal~~are ~~to six months of his annual base salary~~outstanding.

FNOTE 9 -17 RELATED PARTY TRANSACTIONS

~~Indemnities~~The Company was party to a management fee agreement with Alliance Acquisition Corp. (“Alliance”). At June 30, 2015, Brian Altounian (“Altounian”), CEO, owned approximately 34% of Alliance. Alliance provided the Company with general business support services, including, but not limited to, the following: providing executive and ~~Guarantees~~administrative level support, general office support, investor relations assistance, human resource assistance, financial and accounting assistance, legal support, office equipment and office space. From time to time Alliance would advance the Company capital and pay expenses on behalf of the Company. Additionally, from time to time, the Company would advance Alliance capital and pay expenses on behalf of Alliance. The monthly fee was $5,000 for the period from November 2011 through June 2013. Based on the decline in business and required support by the Company, the management fee was terminated effective July 1, 2013.

~~During the~~The ~~normal~~following ~~course~~table ofsummarizes ~~business,~~ the ~~Company has made certain indemnities and guarantees under which the Company may be required~~activity tobetween ~~make payments in relation to certain transactions. These indemnities include certain agreements with its officers under which~~ the Company may be required to indemnify such person for liabilities arising out of their employment relationship. In connection with the Company’s acquisitions, the parties have agreed to indemnify each other from claims relating to the acquisition agreements. In connection with the Company’s publisher agreements, the parties have agreed to indemnify each other from certain claims relating to the agreements. The duration of these indemnities and ~~guarantees~~Alliance ~~varies,~~during ~~and in certain cases, is indefinite. The majority of these indemnities and guarantees do not provide for any limitation of~~ the ~~maximum~~six ~~potential~~months ~~future~~ended ~~payments~~June ~~we may be obligated to make. Historically~~30, the Company has not been obligated to make significant payments for these obligations and no liability has been recorded for these indemnities and guarantees in the accompanying consolidated balance sheets.2015:

Legal

Management fee payable – December 31, 2014	$	667
Management fee		—
Advances to/payments on behalf of the Company		—
Payments to/on behalf of Alliance		—

Management fee payable - June 30, 2015	$	677

~~In October~~Alliance ~~2013,~~and aAltounian ~~former~~have ~~employee~~ownership ~~filed~~interests in aAkyumen ~~complaint~~Technologies, ~~against~~Corp. ~~the~~(“Akyumen”). ~~Company~~At June 30, 2015 and ~~its~~December ~~CEO~~31, ~~seeking~~2014, ~~past~~Alliance ~~due~~and ~~wages~~Altounian ofowned ~~$57,096, damages~~less ~~and~~than ~~attorney’s~~1% ~~fees.~~of ~~The~~Akyumen ~~Company~~individually ~~has~~and ~~accrued~~collectively. During the ~~amount~~six ofmonths ~~past~~ended ~~due~~June ~~wages~~30, in2015, ~~its~~Akyumen ~~consolidated~~provided ~~financial~~certain ~~statements~~software development and ~~although this~~technology ~~lawsuit~~related isservices ~~subject~~ to the ~~uncertainties~~Company ~~inherent~~for $250,000. Such costs were expensed to general and administrative expense in the ~~litigation~~accompanying ~~process~~condensed consolidated statement of operations. In addition, ~~based~~Akyumen onengaged the ~~information~~Company ~~presently~~for ~~available~~an advertising tocampaign on the Company,’s ~~management~~websites. ~~does~~The ~~not~~advertising ~~believe~~campaign was for $150,000 for the ~~ultimate~~period ~~resolution~~April of1, ~~this~~2014 ~~lawsuit~~through ~~will~~June ~~have~~30, 2015. anThe ~~adverse~~Company ~~material~~recorded ~~effect~~$25,000 onin advertising revenue for the ~~Company’s~~ ~~financial~~six ~~condition~~months ended June 30, ~~results~~2015 ofin ~~operations~~the oraccompanying ~~cash~~condensed consolidated ~~flows~~statements of operations.

~~In the~~On ~~normal~~January ~~course~~27, ~~of business~~2015, the Company ~~may~~issued ~~become~~the CEO ~~involved~~4,000,000 inshares ~~various~~of ~~legal~~Series ~~proceedings.~~A ~~The~~Preferred Stock of the Company ~~knows~~as settlement for $40,000 of noaccrued ~~pending~~wages, orwhich were valued based ~~threatened~~on ~~legal~~the ~~proceeding~~market toprice ~~which~~of the ~~Company~~equivalent isnumber orof ~~will~~common beshares aon ~~party~~the ~~that,~~date ifof ~~successful~~issuance of $0.0026 per share, ~~might~~which ~~result~~resulted in ~~material~~a gain ~~adverse~~on ~~change~~ settlement of accrued wages of $39,792, which was recorded as contributed capital in the ~~Company~~accompanying condensed consolidated statement of stockholders’s ~~business,~~deficit ~~properties~~for orthe ~~financial~~six ~~condition~~months ended June 30, 2015.

NOTE 12 –9 ~~WITHHELD~~- ~~PAYROLL~~COMMITMENTS ~~TAXES~~AND CONTINGENCIES

Since its inception, the Company made several payments to employees for wages that were net of state and federal income taxes. Due to cash constraints, the Company has not yet remitted all of these withheld amounts to the appropriate government agency. Accordingly, the Company has recorded $346,096 and $345,214, related to this obligation in accrued compensation and related costs in the accompanying condensed consolidated balance sheets as of March 31, 2015 and December 31, 2014, respectively, including estimated penalties and interest.Royalties

~~NOTE~~In connection with certain of the Company’s 13acquisitions, -the ~~SUBSEQUENT~~Company ~~EVENTS~~has entered into various royalty agreements (see Note 5). Royalty payments related to acquisitions range from 10% to 100% of related revenue, as summarized below:

The Company has evaluated subsequent events after the balance sheet date and based upon its evaluation, management has determined that no subsequent events have occurred that would require recognition in the accompanying consolidated financial statements or disclosure in the notes thereto other than as disclosed in the accompanying notes.

	·	Wowio, LLC - 20% of related revenue until all purchase price consideration has been satisfied, then 10% of related revenue through perpetuity.

	·	Duck - 10% of related revenue until all purchase price consideration has been satisfied, with no subsequent royalty amounts due.

Subsequent to March 31, 2015, through May 15, 2015, holders of certain convertible notes payable converted $70,420 in principal and accrued and unpaid interest into 688,574,769 shares of the Company’s common stock.F-16

~~Equity Purchase~~· ~~Agreement~~SDE - 100% of related revenue until all purchase price consideration has been satisfied, with no subsequent royalty amounts due.

~~On April 2~~Additionally, ~~2015,~~ the Company ~~entered~~enters into ~~the~~royalty agreements ~~Equity Purchase Agreement~~ with ~~Premier Venture Partners, LLC. Pursuant to~~ the ~~terms and~~authors ~~provisions~~ of the ~~Equity~~eBooks ~~Purchase~~included ~~Agreement,~~on ~~for~~its awebsites, ~~period~~which ofcall ~~forty-eight~~for ~~(48)~~royalty ~~months~~payments ~~commencing~~based on ~~the~~various ~~execution date of the~~percentages ~~agreement. The Company will create a new series~~ of ~~Preferred~~revenues ~~Shares~~earned, ~~Series~~less C,processing asfees anand ~~obligation~~ in ~~this Agreement (~~the ~~“Shares”). The~~case ~~Shares will be nonvoting, accrue dividends in Series C Shares at a rate~~ of 8%Sponsored ~~per annum~~Downloads, ~~and have~~ a ~~Liquidation~~fixed ~~Value of $1,000 plus accrued dividends. Premier Venture shall commit to purchase up to 5,000 of the Company’s Series C Preferred Shares, at a purchase~~ price ~~of $1,000~~ per ~~share (subject to adjustment, as defined)~~download. The Company can make its first Purchase Request on the date that is the earlier to occur of the following: (i) the effective date of the Registration Statement (as defined below) and (ii) 192 days after the Execution Date. The Company shall issue to Premier Venture Partners 300 Series C Shares as Commitment Shares. In connection with the Equity Purchase Agreement, the Company entered into the Registration Rights Agreement with Premier Venture. Pursuant to the terms and provisions of the Registration Rights Agreement, the Company is obligated to use all commercially reasonable efforts to file a registration statement (the “Registration Statement”) with the Securities and Exchange Commission to cover the Shares within thirty (30) days from the date of execution of the Registration Rights Agreement. The Company must use its commercially reasonable efforts to cause the Registration Statement to be declared effective by the Securities and Exchange Commission.

~~Business Advisory~~Employment ~~& Consulting Agreement~~Agreements

~~On April~~The ~~2, 2015, the~~ Company ~~entered~~is ~~into~~party ato ~~Consulting~~an ~~agreement~~employment agreement with ~~Goldbird~~its ~~Limited~~Chief ~~(“Consultants”)~~Executive ~~for~~Officer, ~~business advisory~~which ~~services~~expires ~~over~~in aMarch ~~one~~2016, ~~year~~with ~~term.~~an ~~The~~automatic ~~Company~~renewal ~~will~~period ~~create~~of atwo ~~new~~years ~~series~~unless ofotherwise ~~Preferred~~terminated. The ~~Shares,~~employment ~~Series~~agreement D,requires asannual anbase ~~obligation~~salary ~~in this~~payments ~~Agreement~~of ~~(the~~approximately ~~“Preferred~~$300,000 Dper ~~Shares”)~~year. ~~The~~In ~~Preferred~~addition, Dthe ~~Shares~~executive ~~will~~is entitled beto ~~non-voting~~bonuses ~~and~~in ~~will~~amounts ~~have~~based aon ~~conversion~~various ~~feature into~~factors, ~~shares~~including ofbut not limited to the Company’s ~~Common~~financial ~~Stock~~performance, amount atof afinancing ~~conversion~~received ~~price~~and ofproducer $0fee credits.~~0001.~~ AsPursuant ~~consideration~~to ~~for~~the ~~providing~~agreement, ~~these~~if ~~consulting services~~the ~~over~~executive ~~the~~is ~~one~~terminated ~~year~~without ~~term~~cause, he ~~the~~is ~~Company~~entitled ~~has~~to ~~agreed~~receive toan ~~issue~~amount ~~40,000~~equal ~~shares~~to ofsix ~~Company’s~~months ~~Series~~of Dhis ~~Preferred~~annual ~~Shares~~base salary.

~~F-18~~Indemnities and Guarantees

~~Item~~During the normal course of business, the Company 2has made certain indemnities and guarantees under which the Company may be required to make payments in relation to certain transactions. These ~~Management~~indemnities include certain agreements with its officers under which the Company may be required to indemnify such person for liabilities arising out of their employment relationship. In connection with the Company’s ~~Discussion~~acquisitions, the parties have agreed to indemnify each other from claims relating to the acquisition agreements. In connection with the Company’s publisher agreements, the parties have agreed to indemnify each other from certain claims relating to the agreements. The duration of these indemnities and ~~Analysis~~guarantees varies, and in certain cases, is indefinite. The majority of ~~Financial~~these ~~Condition~~indemnities and ~~Results~~guarantees do not provide for any limitation of ~~Operations~~the maximum potential future payments we may be obligated to make. Historically, the Company has not been obligated to make significant payments for these obligations and no liability has been recorded for these indemnities and guarantees in the accompanying consolidated balance sheets.

This Quarterly Report contains forward-looking statements. Statements that are not purely historical may be forward-looking. You can identify some forward-looking statements by the use of words such as “believes,” “anticipates,” “expects,” “intends” and similar expressions. Forward looking statements involve inherent risks and uncertainties regarding events, conditions and financial trends that may affect our future plans of operation, business strategy, results of operations and financial position. A number of important factors could cause actual results to differ materially from those included within or contemplated by such forward-looking statements, including, but not limited to risks relating to the uncertainty of growth in market acceptance for our technology, a history of losses since inception, our ability to remain competitive in response to new technologies, the costs to defend, as well as risks of losing, patents and intellectual property rights, a reliance on our future customers’ ability to develop and sell products that incorporate our technology, our customer concentration and dependence on a limited number of customers, the uncertainty of demand for our technology in certain markets, the length of a product development and release cycle, our ability to manage growth effectively, our dependence on key members of our management and development team, uncertainty regarding expansion or other corporate transactions and our ability to obtain adequate capital to fund future operations, For a discussion of these and other factors that could cause actual results to differ from those contemplated in the forward-looking statements, please see the discussion under “Risk Factors” contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014 and in our other publicly available filings with the Securities and Exchange Commission. Forward-looking statements reflect our analysis only as of the filing date of this quarterly report. Actual events or results may differ materially from the results discussed in or implied by the forward-looking statements. We do not undertake any responsibility to update or revise any of these factors or to announce publicly any revisions to forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.Legal

~~The~~In October 2013, a former employee filed a ~~following~~complaint ~~Management’s~~against ~~Discussion~~the Company and ~~Analysis~~its ~~should~~CEO, beseeking ~~read~~past indue ~~conjunction~~wages ~~with~~of $57,096, damages and attorney’s fees. The Company has accrued the amount of past due wages in its condensed consolidated financial statements and ~~the~~although ~~notes~~this ~~thereto~~lawsuit ~~included~~is insubject ~~Item~~to the 1uncertainties ofinherent ~~this~~in ~~Quarterly~~the ~~Report~~litigation onprocess, ~~Form~~based ~~10-Q~~on ~~and~~the ~~consolidated~~information ~~financial~~presently ~~statements~~available ~~for~~to the ~~year~~Company, management does ~~ended~~not ~~December~~believe ~~31,~~the ~~2014~~ultimate ~~included~~resolution inof ~~our~~this ~~Annual~~lawsuit ~~Report~~will have an adverse material effect on ~~Form~~the ~~10-K~~Company’s financial condition, results of operations or cash flows.

~~Overview~~In the normal course of business, the Company may become involved in various legal proceedings. The Company knows of no pending or threatened legal proceeding to which the Company is or will be a party that, if successful, might result in material adverse change in the Company’s business, properties or financial condition.

~~WOWIO, Inc.~~NOTE ~~(“WOWIO”,~~10 ~~“we”,~~– ~~“us”,~~WITHHELD ~~“our”~~PAYROLL or the “Company”) is a Los Angeles-based digital media company with an eBook distribution platform. The Company owns a proprietary patent that provides for the specific process for inserting ads into eBooks while adding both personalization and an anti-theft identifier, positioning WOWIO as a participant in the growing eBook distribution arena. In addition to its ownership of this patent, the Company has completed the development of a mobile application (“mobile app”) that will allow for the insertion of mobile ads in eBooks read on a mobile device. During the 2nd quarter of 2014, the Company began to focus its efforts primarily in the area of technology development in order to take advantage of the opportunity to exploit its proprietary patent and build additional proprietary technologies in the eBook and mobile ad space. As such, the Company is currently in the early stages of development of a mobile advertising network that will provide WOWIO additional proprietary technology and a unique vertically integrated technology solution that will generate revenues for the company through ad-subsidized eBooks. Management believes that the Company can generate additional revenues by creating an enterprise-level mobile ad delivery platform, utilizing the unique position represented by the patent and other technologies currently being developed.TAXES

~~Using our~~Since ~~eBook~~its ~~distribution platform as the anchor~~inception, the ~~digital~~Company ~~media~~made ~~side~~several payments ofto ~~our~~employees ~~business~~for ~~includes~~wages ~~the~~that ~~creation,~~were ~~distribution,~~net ~~marketing, and monetization~~ of ~~“published”~~state ~~material, such as books, comic books, illustrated novels~~ and ~~graphic~~federal ~~novels,~~income astaxes. ~~well as~~Due ~~other digital media productions, including web series, eBooks, eComics, graphic novels and branded entertainment which we provide~~ to ~~digital~~cash ~~and traditional media channels~~constraints, ~~such~~the asCompany ~~film~~has ~~and~~not ~~television. Management believes that its enterprise-level mobile ad~~yet ~~delivery~~remitted ~~platform~~all ~~will~~of ~~offer~~these ~~new~~withheld ~~revenue~~amounts ~~opportunities by delivering ads~~ to ~~these~~the ~~digital~~appropriate ~~media~~government ~~products~~agency. ~~Our operations are conducted through four main divisions: 1) wowio.com~~Accordingly, the ~~eBook~~Company ~~distribution~~has ~~platform~~recorded ~~with a unique pricing model~~$346,096 ~~that takes advantage of~~and ~~our proprietary patent~~$345, ~~2) StudioW digital media~~214, ~~the~~related ~~production~~to ~~entity~~this ~~that~~obligation ~~creates~~in ~~online~~accrued compensation and ~~off-line~~related ~~brand-expansion~~costs ~~entertainment properties~~in ~~and~~the ~~programs~~accompanying ~~for~~condensed ~~our~~consolidated ~~content,~~balance sheets 3)as ~~Carthay~~of ~~Circle~~June ~~Publishing~~30, ~~Inc.~~2015 ~~which was created to develop our catalog of new~~ and ~~original~~ ~~content~~December to31, ~~exploit across our various consumer-facing properties~~2014, ~~and 4) the technology development group~~respectively, ~~focused~~including ~~on new~~estimated ~~revenue-generating~~penalties ~~technologies~~and interest.

~~Our business~~NOTE ~~began~~11 ~~as a web~~-~~based~~ ~~eBook~~SUBSEQUENT store in 2005, and was re-launched in early 2010 with a new design and new business model that included advertising revenue-generating opportunities. In 2010, as part of our initial focus on digital media content development, we acquired a library of comic books, novels, graphic novels, and screenplays to distribute on our eBook platform as well as to market and promote across other web properties that we also acquired and built in 2010. That same year, we were granted a broad patent that allows for the insertion of advertising into eBooks delivering a new revenue stream for eBook publishers and authors. We believe this patent could provide us with a competitive advantage in the highly competitive eBook distribution market. Since 2010, we have broadened our operational focus to include the services of a digital media studio, which operates as StudioW, and in September 2012, we formed Carthay, a digital publishing entity, for the purpose of identifying and acquiring unpublished content for exploitation and “brand-building” across the digital and traditional media landscape. In the 2nd quarter of 2014, the Company learned that the digital advertising market in general and the mobile advertising market specifically is projected to grow more than any other advertising segment in the United States, per a study conducted and published by eMarketer, dated June, 2014. According to this study, mobile advertising is projected to grow from 6% of overall advertising in 2013 to 26% by 2018, with mobile advertising projected to exceed $58.33 Billion in 2018. Based on these projections, the Company is focusing its efforts on technology development in order to use its proprietary patent and take advantage of projected growth of mobile advertising over the next 5 years.EVENTS

3The Company has evaluated subsequent events after the balance sheet date and based upon its evaluation, management has determined that no subsequent events have occurred that would require recognition in the accompanying condensed consolidated financial statements or disclosure in the notes thereto other than as disclosed in the accompanying notes.

On ~~the~~ ~~digital~~July ~~media side of the business~~24, ~~through wowio.com~~2015, wethe ~~currently~~Company ~~distribute~~issued ~~both~~to ~~company-owned~~certain officers and 3directors rdof ~~-party-owned~~the ~~eBooks and eComics~~Company, ~~generating~~an ~~revenues~~aggregate ~~through~~of ~~eBook~~1,000,000,000 ~~and~~restricted ~~eComics~~shares ~~sales transactions. Approximately 87%~~ of ~~the~~common ~~content we distribute through wowio~~stock.~~com~~ isThe ~~owned~~Shares bywere ~~third~~issued pursuant ~~parties.~~to ~~We currently generate revenues through~~ the ~~insertion~~conversion of ~~advertising~~debt in(the ~~eBooks.~~“Debt ~~To date,~~Conversions”) ~~such~~of ~~advertising~~an ~~campaigns~~aggregate ~~have~~of ~~not utilized our proprietary patented technology~~$20,000 ~~but~~in weoutstanding ~~anticipate~~debt ~~such~~held ~~use in~~ on the ~~future as~~books ~~we release our mobile app~~ and ~~further~~records ~~develop~~of the ~~enterprise-level ad platform~~Company. WePursuant ~~currently~~to ~~generate~~the ~~revenues~~terms ~~through~~of ~~online advertising on~~ the ~~wowio.com~~Debt ~~website~~Conversions, ~~and~~the weCompany ~~anticipate~~has ~~generating~~the ~~revenues~~right, ~~through~~but ~~advertising~~not onthe ~~our mobile app as well. Through StudioW~~obligation, to werepurchase ~~create~~100% ~~and~~of ~~produce~~the ~~our~~shares ~~own~~prior ~~content~~to ~~such~~July as31, ~~online videos~~2016, ~~generating revenues through pre-roll video ads~~ and ~~additional online~~50% ~~advertising~~of onthe ~~our~~shares ~~content-oriented~~from ~~websites~~August ~~TheDuck Webcomics~~31, ~~PopGalaxy~~2016 ~~and~~until ~~our~~July ~~branded~~31, ~~YouTube~~2017 ~~channels.~~at ~~Through Carthay,~~the weconversion ~~intend~~price toof ~~publish~~$0.00002 ~~our~~per ~~own~~share. ~~library~~No ofsolicitation ~~material~~was asmade ~~eBooks~~ and ~~eComics,~~no ~~which~~underwriting wediscounts ~~will~~were ~~distribute~~given onor ~~our~~paid ~~own~~in ~~wowio.com~~connection ~~site as~~with ~~well~~this ~~as distribute through other eBook distribution platforms, generating revenues through eBook sales transactions~~transaction. WeThe ~~intend for~~Company ~~approximately~~believes ~~50%~~that of the ~~content~~issuance ~~from~~of ~~Carthay~~shares pursuant to ~~be original material created by~~ the ~~Company~~agreement ~~and~~as ~~approximately~~exempt ~~50% to be~~ from ~~third~~ ~~parties.~~registration Inwith ~~addition to generating revenues through eBook/eComics sales, we intend to license our content library for exploitation~~the ~~across~~Securities ~~traditional media outlets such as film~~ and ~~television.~~Exchange WeCommission ~~intend~~pursuant to ~~license~~Section ~~our~~4(2) ~~patent~~of tothe ~~other~~Securities ~~eBook~~Act ~~distribution~~of ~~platforms, though we have not yet begun to do so~~1933.

~~WOWIO owns a library of books and generates income from the retail sales thereof. We typically sell WOWIO~~F-branded eBooks for $0.99 each. We also offer digital content and eBooks provided by third party publishers to consumers for free when advertising campaigns are available. If the eBook or digital content does not contain an advertising campaign, then we offer the eBook to the consumer at a retail price selected by the publisher and the Company receives an allowance for administration and credit card processing charges, for which we hold back approximately 10% - 30% of the retail price. When there has been a sponsorship advertising campaign, we have charged the sponsor between $1.00 and $3.00 a book and we have paid the publisher between $0.25 - $0.50 per book depending on the length of the book and we keep the remaining portion. We anticipate altering these sponsorship fees and publisher royalty fees to be more in line with mobile ad offerings once we release a final version of the mobile app. EBook sales not tied to advertising campaigns are intended to draw traffic to our websites, so that we can profitably sell advertising on our websites, and are also intended to draw publishers, so that we can seek to enter into additional advertising campaigns for the eBooks sold on our websites.17

~~EBook sponsorship~~Item ~~ad campaigns are ads inserted into eBooks~~2. To date, such ad campaigns have not utilized our patented technology, but we anticipate such use in the future. Currently, advertising campaigns are represented as book “sponsorships” where the ad is presented in the eBook as a digital book cover. These ads are the first two pages of the book and the last page in the file. The digital book covers are personalized with the readerManagement’s ~~name~~Discussion ~~(which the reader has provided to the Company by registering with us to use the site)~~ and ~~include~~Analysis ~~hyperlink connections to the advertiser’s website as well as static copy. This personalization makes every eBook downloaded a unique and original file. The full use~~ of ~~the~~Financial ~~patent~~Condition ~~will include this personalization but the selection of the advertisement will be dependent on~~ and ~~matched~~Results ~~to the specific user profile~~ of the reader such that all ads will be unique to the reader, will be placed at various locations within the eBook in addition to the front and back eBook cover and will match the reader’s preferences, profile, online behavior, or other unique identifying characteristicsOperations.

~~Advertisements~~This Quarterly Report contains forward-looking statements. Statements that ~~appear~~are onnot purely historical may be forward-looking. You can identify some forward-looking statements by the ~~website~~use of words such as “believes,” “anticipates,” “expects,” “intends” and ~~mobile~~similar ~~app~~expressions. ~~are~~Forward ~~separate~~looking ~~revenue~~statements ~~streams~~involve inherent risks and ~~are~~uncertainties regarding events, conditions and financial trends that may affect our future plans of operation, business strategy, results of operations and financial position. A number of important factors could cause actual results to differ materially from those included within or contemplated by such forward-looking statements, including, but not ~~related~~limited to risks relating to the ~~insertion~~uncertainty of ~~ads~~growth ~~into~~in ~~eBooks.~~market acceptance for our technology, ~~There~~a ~~have~~history ~~been~~of ~~occasions~~losses ~~where~~since aninception, ~~advertiser~~our ~~has~~ability ~~requested~~to ~~category-specific~~remain ~~ads~~competitive in response to ~~appear~~new ontechnologies, the ~~website~~costs asto defend, as well as ~~within~~risks ~~the~~of losing, patents and intellectual property rights, a reliance on our future customers’ ability to develop ~~eBooks~~and insell products that incorporate our technology, our customer concentration and dependence on a ~~particular~~limited ~~category.~~number ~~For~~of ~~example~~customers, the ~~Adam~~uncertainty &of ~~Eve~~demand ~~received~~for ~~one~~our ~~month~~technology in certain markets, the length of ~~advertising~~a ~~placement~~product development and release cycle, our ability to manage growth effectively, our dependence on key members of our management and development team, uncertainty regarding expansion or other corporate transactions and our ability to obtain adequate capital to fund future operations, For a discussion of these and other factors that could cause actual results to differ from those contemplated in the forward-looking statements, please see the discussion under “~~Romance~~Risk Factors” ~~category~~ contained in our Annual Report on ~~the~~Form ~~website~~10-K asfor ~~part~~the offiscal ayear ~~larger~~ended ~~eBook~~December 31, ~~sponsorship~~2014 ~~campaign~~and in ~~addition~~our toother ~~ads~~publicly ~~within~~available filings with the ~~eBooks~~Securities inand ~~that~~Exchange ~~category~~Commission. asForward-looking statements reflect ~~sponsorships~~our analysis only as ~~described~~of ~~above~~the filing date of this quarterly report. ~~Generally,~~Actual ~~however,~~events ~~website~~or ~~advertising~~results ~~revenues~~may ~~are~~differ ~~generated~~materially from ~~more~~the ~~traditional~~results discussed ~~web~~in ~~advertising~~or implied by the forward-looking statements. We do not undertake any responsibility to update or revise any of these ~~networks~~factors ~~such~~or asto ~~Gorilla~~announce ~~Nation~~publicly any revisions to forward-looking statements, ~~Burst~~whether ~~Media~~as ~~and~~a ~~other~~result ~~network~~of adnew ~~providers~~information, ~~placing~~future ~~ads~~events or onotherwise, ~~webpages~~except ~~independent~~as ofmay ~~the~~be ~~content~~required under applicable securities laws.

The ~~revenues~~ wefollowing ~~earn~~Management’s Discussion ~~have~~and ~~not~~Analysis ~~been~~should ~~adequate~~be toread ~~support~~in ~~our~~conjunction ~~operations. We have supplemented our revenue~~ with the ~~proceeds~~condensed ~~from~~consolidated ~~offerings of~~financial ~~our~~statements ~~debt~~ and ~~equity~~the ~~securities.~~notes ~~Where~~thereto included ~~possible,~~in weItem ~~have~~1 ~~also paid expenses by issuing shares~~ of ~~our~~this ~~common~~Quarterly ~~stock~~Report toon ~~conserve our~~Form ~~cash.~~10-Q Weand ~~expect~~consolidated ~~that~~financial ~~our~~statements ~~operating expenses will continue to exceed our revenues~~ for ~~at least~~ the ~~next~~year 9ended toDecember ~~12 months~~31, ~~and~~ ~~possibly~~2014 ~~longer.~~included Ifin ~~we cannot raise the funds necessary to pay~~ our ~~operating~~Annual ~~expenses,~~Report weon ~~may~~Form ~~be required to severely curtail, or even to cease our operations~~10-K.

The Company owes certain contingency royalty payments, which will affect its enjoyment of revenue and its ability to become profitable. In particular, the Company has outstanding obligations remaining from the initial acquisition agreements of certain properties and owes contingency royalty payments to the sellers. The Company will be required to pay these obligations out of revenues, ranging from 10% to 100% until the acquisition costs are completed. For Wowio.com, we owe a total of approximately $1.5 million to the seller Platinum Studios, payable as a royalty of 20% of related revenue until all purchase price consideration has been satisfied. After we have completed paying the acquisition balance, we will pay Platinum Studios a royalty of 10% of related revenue in perpetuity. For The Duck Webcomics site, we owe a total of approximately $650,000, including a current payable of $150,000, with the remaining $500,000 payable as a royalty of 10% of related revenue until all purchase price consideration has been satisfied. After we have completed paying the acquisition balance, there will be no further obligation owed on this asset. For the Spacedog library, we will pay a royalty of 100% of related revenue, net of direct expenses, for all Spacedog assets acquired until the entire purchase price consideration of $500,000 has been satisfied. After we have paid such contingency royalty in full, there will be no further obligation owed on this asset.Overview

~~As set~~WOWIO, ~~forth~~Inc. ~~above~~(“WOWIO”, “we”, ~~all~~“us”, of“our” or the “Company’s”) ~~royalty~~is ~~payment~~a ~~obligations,~~Los ~~except~~Angeles-based digital media company with ~~respect~~an eBook distribution platform. The Company owns a proprietary patent that provides for the specific process for inserting ads into eBooks while adding both personalization and an anti-theft identifier, positioning WOWIO as a participant in the growing eBook distribution arena. In addition to its ownership of this patent, the ~~10%~~Company ~~royalty~~has ~~payment~~completed ~~which~~the development of a mobile application we(“mobile app”) that will ~~owe~~allow for the insertion of mobile ads in ~~perpetuity~~eBooks read on a mobile device. During the 2nd quarter of 2014, the Company began to ~~Platinum~~focus ~~Studios~~its efforts primarily in the area of technology development in order to take advantage of the opportunity to exploit its proprietary patent and build additional proprietary technologies in the eBook and mobile ad space. As such, ~~are~~the ~~finite~~Company was in the early stages of development of a mobile advertising network that would provide WOWIO additional proprietary technology and a unique vertically integrated technology solution that will generate revenues for the company through ad-subsidized eBooks. Management believed that the Company can generate additional revenues by creating an enterprise-level mobile ad delivery platform, utilizing the unique position represented by the patent and other technologies currently being developed. The Company also ~~did~~utilized ~~not~~various ~~make~~professionals ~~any~~in ~~royalty~~the ~~payments~~technology ~~during~~development sector at the ~~three~~University ~~months~~level to explore the possibility of ~~ended~~acquiring ~~March~~additional ~~31,~~technology ~~2015~~complementary to the Company’s existing patent and ~~2014~~platform.

~~WOWIO’s~~Using our eBook distribution ~~principal~~platform ~~place~~as the anchor, the digital media side of our business isincludes ~~located~~the atcreation, ~~626~~distribution, ~~North~~marketing, ~~Doheny~~and ~~Drive~~monetization of “published” material, ~~West~~such ~~Hollywood~~as books, ~~California~~comic books, ~~90069~~illustrated novels and graphic novels, as well as other digital media productions, including web series, eBooks, eComics, graphic novels and branded entertainment which we provide to digital and traditional media channels, such as film and television. Management believes that its enterprise-level mobile ad delivery platform will offer new revenue opportunities by delivering ads to these digital media products. Our operations are conducted through four main divisions: 1) wowio.com, the eBook distribution platform with a unique pricing model, that takes advantage of our proprietary patent, 2) StudioW digital media, the production entity that creates online and off-line brand-expansion entertainment properties and programs for our content, 3) Carthay Circle Publishing, Inc. which was created to develop our catalog of new and original content to exploit across our various consumer-facing properties, and 4) the technology development group, focused on new revenue-generating technologies.

4Our business began as a web-based eBook store in 2005, and was re-launched in early 2010 with a new design and new business model that included advertising revenue-generating opportunities. In 2010, as part of our initial focus on digital media content development, we acquired a library of comic books, novels, graphic novels, and screenplays to distribute on our eBook platform as well as to market and promote across other web properties that we also acquired and built in 2010. That same year, we were granted a broad patent that allows for the insertion of advertising into eBooks delivering a new revenue stream for eBook publishers and authors. We believe this patent could provide us with a competitive advantage in the highly competitive eBook distribution market. Since 2010, we have broadened our operational focus to include the services of a digital media studio, which operates as StudioW, and in September 2012, we formed Carthay, a digital publishing entity, for the purpose of identifying and acquiring unpublished content for exploitation and “brand-building” across the digital and traditional media landscape. Per a study conducted and published by eMarketer, dated April, 2015, the global mobile advertising market will surpass $100 billion in spending and accounting for more than 50% of all digital ad expenditure for the first time. According to this study, mobile advertising is projected to grow 430% increase from 2013 and will represent over 25% of total overall digital advertising in 2019, with mobile advertising projected to exceed $195.55 Billion in 2019. Based on these projections, the Company is focusing its efforts on technology development in order to use its proprietary patent and take advantage of projected growth of mobile advertising over the next 5 years.

~~Plan of Operations~~3

~~Our business~~WOWIO ~~goals~~owns ~~are~~a tolibrary ~~increase~~of books ~~audience~~and ~~size~~generates ~~and~~income ~~procure~~from ~~greater~~the ~~market~~retail ~~share~~sales inthereof. ~~the~~We ~~eBook~~typically ~~distribution~~sell ~~industry~~WOWIO-branded aseBooks ~~well~~for as$0.99 ~~create~~each. We also offer ~~additional~~digital ~~technologies~~content ~~that~~and ~~enhance~~eBooks ~~our~~provided ~~Company’s~~by ~~position~~third ~~within~~party ~~that~~publishers ~~space.~~to Onconsumers for free when advertising campaigns are available. If the eBook or digital ~~media~~content ~~side~~does ofnot ~~our~~contain ~~business~~an advertising campaign, then we ~~anticipate~~offer ~~possible~~the ~~acquisition~~eBook ~~opportunities~~to ~~that~~the ~~will~~consumer ~~enable~~at usa toretail ~~increase~~price selected ~~our~~by ~~capabilities~~the inpublisher and the ~~creation~~Company receives an allowance for administration and credit card processing charges, ~~distribution~~for which ~~and~~we ~~monetization~~hold back approximately 10% - 30% of ~~traditional~~the ~~content~~retail ~~including~~price. ~~films,~~When ~~television~~there ~~shows~~has been a sponsorship advertising campaign, we have charged the sponsor between $1.00 and ~~books,~~$3.00 a book and ~~digital~~we ~~content~~have ~~such~~paid asthe ~~eBooks,~~publisher ~~eComics, graphic~~between ~~novels,~~$0.25 ~~online~~- ~~video~~$0.50 ~~content,~~per ~~casual~~book ~~games,~~depending ~~apps~~on the length of the book and ~~enhanced~~we keep the remaining portion. We anticipate altering these sponsorship fees and ~~blended~~publisher ~~media~~royalty ~~formats~~fees to be more in line with mobile ad offerings once we release a final version of the mobile app. EBook sales not tied to advertising campaigns are intended to draw traffic to our websites, ~~utilizing~~so that we can profitably sell advertising on our ~~own~~websites, ~~proprietary~~and are also intended ~~distribution~~to ~~platforms~~draw ~~and~~publishers, ~~proprietary~~so adthat ~~delivery~~we ~~platforms~~can seek to ~~generate~~enter ~~revenues~~into additional advertising campaigns for the eBooks sold on our websites.

~~Traditional~~EBook sponsorship ad campaigns ~~media~~are ~~creators~~ads ~~have~~inserted ~~generally~~into ~~focused~~eBooks. onTo adate, ~~primary~~such ~~distribution~~ad ~~window~~campaigns ~~with~~have ~~subsequent~~not ~~distribution~~utilized our patented technology, but we anticipate such use in ~~secondary~~the ~~outlets~~future. ~~Our~~Currently, advertising campaigns are represented as book “sponsorships” where the ad is presented in ~~strategy~~the ~~allows~~eBook usas toa ~~work~~digital ~~around~~book cover. These ads are the ~~limitations~~first two pages of ~~this~~the ~~model~~book and the last page in the file. The digital book covers are personalized with the reader’s ~~short~~name ~~time~~(which ~~frames~~the reader has provided to the Company by registering with us to use the site) and ~~high~~include ~~marketing~~hyperlink ~~costs~~connections to the advertiser’s website as well as static copy. ~~StudioW~~This ~~utilizes~~personalization makes every eBook downloaded a ~~multi-window,~~unique ~~day/date~~and ~~release~~original ~~strategy,~~file. ~~giving~~The full use of the ~~consumer~~patent ~~repeated,~~will ~~overlapping~~include ~~opportunities~~this personalization but the selection of the advertisement will be dependent on and matched to ~~discover~~the specific user profile of the ~~content,~~reader ~~thus building~~such athat ~~“relationship”~~all ~~with~~ads will be unique to the ~~story~~reader, will be placed at various locations within the ~~characters,~~eBook in addition to the ~~universe~~front orand back eBook cover and will match the ~~brand~~reader’s preferences, profile, online behavior, or other unique identifying characteristics.

WeAdvertisements that appear ~~intend~~on tothe ~~expand~~website ~~our~~and ~~business~~mobile ~~through~~app ~~the~~are ~~acquisition~~separate ofrevenue ~~creative~~streams ~~properties,~~and are not related to the ~~acquisition~~insertion of ~~synergistic~~ads ~~technology~~into ~~platforms~~eBooks. There have ~~and~~been ~~capabilities,~~occasions ~~the~~where ~~establishment~~an ofadvertiser ~~business~~has requested category-specific ads to~~-business~~ ~~partnerships,~~appear on the ~~development~~website ofas ~~our~~well ~~consumer-facing~~as ~~brands~~within the eBooks in a particular category. For example, ~~and~~Adam ~~further~~& Eve received one month of advertising placement on the “Romance” category ~~technology~~on ~~development~~the website as part of a larger eBook sponsorship campaign in addition to ads within the eBooks in that ~~will~~category ~~provide~~as ~~enhanced~~sponsorships as ~~distribution~~described ~~platforms~~above. ~~for~~Generally, ~~creators~~however, ~~target~~website ~~monetization~~advertising ~~pathways~~revenues ~~for~~are ~~advertisers,~~generated from more traditional web advertising networks such as Gorilla Nation, Burst Media and ~~provide~~other anetwork ~~unique~~ad ~~user~~providers ~~experience~~placing ~~for~~ads ~~our~~on ~~audience~~webpages independent of the content.

We The revenues we earn have not ~~access~~been adequate to ~~creators,~~support ~~content~~our ~~libraries,~~operations. ~~and~~We ~~various~~have ~~distribution~~supplemented ~~avenues,~~our ~~providing~~revenue awith ~~unique~~the ~~opportunity~~proceeds ~~and~~from ~~monetization path~~offerings ~~for~~of usour todebt ~~become~~and equity ansecurities. ~~entertainment~~Where ~~studio~~possible, ~~that~~we ~~will~~have ~~focus~~also onpaid ~~digital~~expenses ~~media~~by ~~across~~issuing ~~platforms~~shares ~~and~~of ~~business~~our ~~units~~common ~~within~~stock ~~the organization~~to conserve our cash. We ~~intend~~expect that our operating expenses will continue to ~~generate~~exceed our revenues ~~through~~for ~~original~~at ~~and~~least ~~branded~~the ~~content~~next ~~development,~~9 ~~licensing~~to ~~deals~~12 months, ~~strategic~~and ~~partnerships,~~possibly longer. If ~~app~~we ~~and~~cannot ~~eBook~~raise ~~sales~~the funds necessary to pay our operating expenses, ~~and~~we ~~online~~may ~~and~~be ~~mobile~~required ~~advertising~~to ~~revenues~~severely curtail, or even to cease our operations.

The Company owes certain ~~chief~~contingency ~~initiatives~~royalty wepayments, ~~intend~~which towill ~~undertake~~affect ~~within~~its ~~the~~enjoyment ~~next~~of ~~year~~revenue inand ~~order~~its ability to ~~accomplish~~become ~~these~~profitable. ~~near-term~~In ~~business~~particular, ~~goals~~the Company ~~include:~~has ~~1) increase~~outstanding ~~our~~obligations ~~sales~~remaining ~~staff~~from bythe ~~2-4~~initial ~~people~~acquisition toagreements ~~increase~~of ~~the~~certain ~~ad-insertion~~properties ~~campaigns~~and onowes contingency royalty payments to the ~~site,~~sellers. ~~which~~The Company will ~~increase~~be required to pay these obligations out of revenues, ~~traffic~~ranging from 10% to 100% ~~and~~until ~~transactions;~~the 2)acquisition ~~increase~~costs ~~our~~are ~~technical~~completed. ~~staff~~For byWowio.com, ~~2-4~~we ~~people~~owe ~~and~~a ~~launch~~total ~~the~~of ~~new~~approximately ~~wowio~~$1.~~com~~5 ~~site,~~million to the ~~mobile~~seller ~~app~~Platinum ~~and~~Studios, payable ~~other~~as ~~planned technology~~a ~~development~~royalty byof ~~creating~~20% ~~apps~~of ~~and~~related ~~other~~revenue ~~new~~until ~~technology~~all ~~initiatives~~purchase inprice ~~the~~consideration ~~eBook~~has ~~and~~been ~~digital~~satisfied. ~~media~~After ~~areas;~~we 3)have ~~increase~~completed ~~our~~paying ~~content~~the ~~development~~acquisition ~~team~~balance, bywe 1will orpay 2Platinum ~~people~~Studios toa ~~develop~~royalty ~~and~~of ~~create~~10% ~~original~~of ~~content~~related torevenue bein ~~published~~perpetuity. ~~through~~For ~~our~~The ~~Carthay~~Duck ~~label,~~Webcomics ~~increasing~~site, ~~our~~we ~~library~~owe ofa ~~content~~total byof atapproximately ~~least~~$650,000, 10including toa 15current ~~new~~payable ~~titles~~of ~~for~~$150,000, ~~exploitation;~~with 4)the ~~increase~~remaining ~~our~~$500,000 ~~social~~payable ~~media~~as a ~~team~~royalty byof 110% ~~or 2~~of torelated ~~help~~revenue ~~build~~until ~~brand~~all ~~awareness~~purchase ~~across~~price ~~all~~consideration ofhas ~~the~~been ~~WOWIO-owned~~satisfied. ~~sites~~After ~~and~~we tohave ~~support~~completed paying the acquisition ~~marketing/sales~~balance, ~~efforts~~there ofwill ~~Carthay;~~be ~~and 5)~~no ~~increase~~further ~~our~~obligation ~~marketing~~owed ~~and~~on ~~promotional~~this ~~team~~asset. byFor 1the orSpacedog 2library, ~~people~~the toCompany ~~support~~entered ~~sales~~into an ~~efforts~~agreement ~~across~~whereby ~~all~~the ~~platforms.~~original Weseller ~~anticipate~~of ~~overhead expenses~~the tolibrary ~~support~~agreed ~~these~~to ~~efforts~~re-acquire to20 ~~increase~~titles tofrom ~~approximately~~the ~~$3.0~~library ~~million~~in toexchange for assuming $~~5.0~~45,000 ~~million~~in ~~over~~debt and relieving the ~~next~~Company 12of -any 18further ~~months~~obligation.

~~We expect~~As toset ~~generate~~forth future revenue by licensing both our patent rights and our creative intellectual property. We expect to re-launch a multi-channel eBook delivery platform in a newly-designed wowio.com site during the second quarter of 2015. We also anticipate launching our mobile app across various platformsabove, ~~including the release of our app on the Android operating system at the same~~all ~~time, and the Apple operating system (iOS) and the Microsoft Windows Mobile platforms during the second half~~ of ~~2015. We also anticipate releasing an enterprise-level mobile ad delivery platform during~~ the ~~second~~Company’s ~~half~~royalty ofpayment ~~2015. With this new platform~~obligations, ~~we expect~~except ~~to increase online visibility by connecting to other related sites through Application Programming Interfaces (APIs) that will allow us to engage~~ with ~~the~~respect ~~audience of partner sites. With a broader audience reach and more attractive product offering, our goal is~~ to ~~increase our revenues through increased sales of eBooks and ad revenues generated from~~ the ~~expected~~10% ~~higher~~royalty ~~traffic. Through~~payment ~~our~~which ~~Carthay subsidiary,~~ we ~~expect~~will toowe ~~generate~~in ~~increased revenues as we anticipate higher revenue participation as a publisher,~~perpetuity ~~earning 30-50% of revenues as opposed~~ to ~~merely~~Platinum ~~a distributor~~Studios, ~~earning~~are ~~10-20% of revenues~~finite. ~~Finally,~~The weCompany ~~also~~did ~~anticipate~~not ~~increasing revenues~~make ~~through~~any ~~the~~royalty ~~licensing~~payments ofduring ~~our patent, a process we are beginning to undertake as~~ the ~~advertising~~six ~~community~~months ~~has~~ended ~~just~~June ~~started to~~30, ~~see~~2015 ~~the~~and ~~eBook distribution channel as a viable alternative to other content distribution outlets~~2014.

~~We are~~WOWIO’s ~~also~~principal ~~exploring~~place ~~potential acquisitions~~ of ~~synergistic companies with related product lines or~~ business ~~strategies that could~~is ~~possibly~~located ~~support~~at or9107 ~~enhance~~Wilshire ~~our current plan of operations~~Blvd., ~~Our~~Suite ~~evaluation~~450, ofBeverly ~~these~~Hills, ~~potential~~CA, ~~acquisition targets would include analysis of their financial information to determine that they would be accretive to our revenue streams and assets~~90210.

~~Critical Accounting~~Plan ~~Policies~~of Operations

~~General~~Our business goals are to increase audience size and procure greater market share in the eBook distribution industry as well as create additional technologies that enhance our Company’s position within that space. On the digital media side of our business, we anticipate possible acquisition opportunities that will enable us to increase our capabilities in the creation, distribution and monetization of traditional content including films, television shows, and books, and digital content such as eBooks, eComics, graphic novels, online video content, casual games, apps and enhanced and blended media formats, utilizing our own proprietary distribution platforms and proprietary ad delivery platforms to generate revenues.

~~Our discussion~~Traditional ~~and~~media ~~analysis~~creators have ofgenerally ~~our~~focused ~~financial condition and results of operations is based~~ on ~~our~~a ~~consolidated~~primary ~~financial~~distribution ~~statements, which~~window ~~have been prepared in accordance~~ with ~~accounting~~subsequent ~~principles~~distribution ~~generally accepted~~ in ~~the~~secondary ~~United~~outlets. ~~States~~Our ofstrategy ~~America (“GAAP”).~~allows ~~The~~us ~~preparation~~to ofwork ~~these~~around ~~consolidated~~the ~~financial~~limitations ~~statements~~of ~~requires~~this usmodel’s toshort ~~make~~time ~~estimates~~frames and ~~judgments~~high ~~that~~marketing ~~affect~~costs. ~~the~~StudioW ~~reported amounts~~utilizes ofa ~~assets~~multi-window, day/date ~~liabilities~~release ~~and~~strategy, ~~expenses.~~giving Wethe ~~base~~consumer ~~our~~repeated, ~~estimates~~overlapping onopportunities ~~historical~~to ~~experience~~discover ~~and~~the oncontent, ~~various~~thus ~~other~~building ~~assumptions~~a ~~that~~“relationship” wewith ~~believe to be reasonable under~~ the ~~circumstances~~story, the ~~results~~characters, ~~of which form~~ the ~~basis~~universe ~~for~~or ~~making judgments about~~ the ~~carrying values of assets and liabilities that are not readily apparent from other sources~~brand. ~~Actual results may differ from these estimates under different assumptions or conditions.~~

We believe that the accounting policies described below are critical to understanding our business, results of operations and financial condition because they involve more significant judgments and estimates used in the preparation of our consolidated financial statements. An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and any changes in the different estimates that could have been used in the accounting estimates that are reasonably likely to occur periodically could materially impact our consolidated financial statements.4

~~Our~~We intend to expand our ~~most~~business ~~critical~~through ~~accounting~~the ~~policies~~acquisition of creative properties, the acquisition of synergistic technology platforms and ~~estimates~~capabilities, the ~~that~~establishment ~~may~~of ~~materially~~business-to-business ~~impact~~partnerships, ~~our~~the ~~results~~development of ~~operations~~our ~~include:~~consumer-facing brands, and further technology development that will provide enhanced distribution platforms for creators, target monetization pathways for advertisers, and provide a unique user experience for our audience.

5We have access to creators, content libraries, and various distribution avenues, providing a unique opportunity and monetization path for us to become an entertainment studio that will focus on digital media across platforms and business units within the organization. We intend to generate revenues through original and branded content development, licensing deals, strategic partnerships, app and eBook sales, and online and mobile advertising revenues.

~~Revenue~~The chief initiatives we ~~Recognition~~intend ~~Policy~~to undertake within the next year in order to accomplish these near-term business goals include: 1) increase our sales staff by 2-4 people to increase the ad-insertion campaigns on the site, which will increase revenues, traffic and transactions; 2) increase our technical staff by 2-4 people and launch the new wowio.com site, the mobile app and other planned technology development by creating apps and other new technology initiatives in the eBook and digital media areas; 3) increase our content development team by 1 or 2 people to develop and create original content to be published through our Carthay label, increasing our library of content by at least 10 to 15 new titles for exploitation; 4) increase our social media team by 1 or 2 to help build brand awareness across all of the WOWIO-owned sites and to support the marketing/sales efforts of Carthay; and 5) increase our marketing and promotional team by 1 or 2 people to support sales efforts across all platforms. We anticipate overhead expenses to support these efforts to increase to approximately $3.0 million to $5.0 million over the next 12 - 18 months.

~~The~~We expect to generate future ~~Company~~revenue ~~recognizes~~by ~~revenues~~licensing inboth ~~accordance~~our ~~with~~patent ~~FASB~~rights ~~Accounting~~and ~~Standards~~our ~~Codification~~creative ~~(“ASC”)~~intellectual ~~Topic~~property. ~~605,~~We ~~which~~expect ~~requires that~~to ~~four~~re-launch ~~basic~~a ~~criteria~~multi-channel ~~must~~eBook delivery beplatform ~~met~~in ~~before~~a ~~revenue~~newly-designed ~~can~~wowio.com besite ~~recognized:~~during ~~(1)~~the ~~persuasive~~second ~~evidence~~quarter of an2015. ~~arrangement~~We ~~exists;~~also ~~(2)~~anticipate ~~delivery~~launching our mobile ~~has~~app ~~occurred;~~across ~~(3)~~various platforms, including the ~~selling~~release ~~price~~of isour ~~fixed~~app ~~and~~on ~~determinable;~~the ~~and~~Android ~~(4)~~operating ~~collectability~~system isat ~~reasonably~~the ~~assured.~~same ~~Determination~~time, ofand the Apple ~~criteria~~operating system (4iOS) ~~will~~and bethe ~~based~~Microsoft onWindows ~~management’s~~Mobile ~~judgments~~platforms ~~regarding~~during the ~~fixed~~second ~~nature~~half of 2015. We also anticipate releasing an enterprise-level mobile ad delivery platform during the ~~selling~~second ~~prices~~half of ~~the~~2015. ~~products~~With ~~delivered~~this new platform, we expect to increase online ~~and~~visibility by connecting to other related sites through Application Programming Interfaces (APIs) that will allow us to engage with the ~~collectability~~audience of ~~those~~partner ~~amounts~~sites. ~~Provisions~~With ~~for~~a ~~discounts~~broader audience reach and ~~rebates~~more toattractive ~~customers~~product offering, ~~estimated~~our ~~returns~~goal ~~and~~is ~~allowances,~~to increase ~~and~~our ~~other~~revenues ~~adjustments~~through ~~will~~increased besales ~~provided~~of ~~for~~eBooks inand ~~the~~ad ~~same~~revenues ~~period~~generated from the ~~related~~expected ~~sales~~higher ~~are recorded~~traffic. ~~The~~Through ~~Company~~our ~~will~~Carthay subsidiary, ~~defer~~we ~~any~~expect to generate increased revenues as we anticipate higher revenue ~~for~~ ~~which~~participation ~~the~~as ~~product~~a ~~has~~publisher, ~~not~~earning ~~been~~30-50% of ~~delivered~~revenues oras ~~for~~opposed ~~which~~to ~~services~~merely ~~have~~a ~~not~~distributor, ~~been~~earning ~~rendered~~10-20% orof ~~are~~revenues. ~~subject~~Finally, towe ~~refund~~also ~~until~~anticipate ~~such time~~increasing ~~that~~revenues through the ~~Company~~licensing ~~and~~of ~~the~~our ~~customer~~patent, ~~jointly~~a ~~determine~~process ~~that~~we are beginning to undertake as the ~~product~~advertising community has ~~been~~just ~~delivered~~started orto ~~services~~see ~~have~~the ~~been~~eBook distribution ~~rendered~~channel ~~or no~~as ~~refund~~a ~~will~~viable bealternative ~~required~~to other content distribution outlets.

~~The~~We are also exploring potential ~~Company’s~~acquisitions ~~primary~~of ~~revenues~~synergistic ~~sources~~companies ~~are~~with asrelated ~~follows:~~product lines or business strategies that could possibly support or enhance our current plan of operations. Our evaluation of these potential acquisition targets would include analysis of their financial information to determine that they would be accretive to our revenue streams and assets.

~~eBooks~~Critical Accounting Policies

For eBook downloads purchased by the customer directly through the Company’s website, the Company recognizes revenue when the right to download content is granted. The Company evaluates whether it is appropriate to record the gross amount of product sales and related costs or the net amount. Generally, the Company records such revenues on a net basis due to a general lack of indicators that the Company is the primary obligor primarily due to the Company’s lack of ability to determine price. Typically for these sales, the Company’s net revenues consist of a credit card processing fee along with the majority of the advertising fee when there is an advertisement or an ad sponsor. Occasionally, the Company sells download cards to retailers and directly to end customers, which are redeemable on its websites for content downloads over an established time frame. The Company records proceeds from the initial sale of the card to deferred revenue, which is included in accounts payable and accrued expenses in the accompanying balance sheets, and is recognized over the related download period, which approximates the usage period.General

~~Advertising~~Our discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of these condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

~~Visitor demographics~~We ~~and~~believe ~~time~~that ~~spent on a website are~~ the ~~primary drivers behind advertising-based revenue models for internet properties.~~accounting ~~Website~~policies ~~advertising~~described ~~revenue~~below isare ~~primarily~~critical ~~recognized~~to onunderstanding aour ~~flat-fee~~business, ~~basis~~results ~~based~~of onoperations ~~cost~~and ~~per~~financial ~~thousand~~condition ~~impressions~~because ~~(“CPM”).~~they ~~The~~involve ~~Company~~more ~~earns~~significant ~~CPM~~judgments ~~revenue~~and ~~from~~estimates used in the ~~display~~preparation of ~~graphical~~our ~~advertisements~~condensed onconsolidated ~~its~~financial ~~websites~~statements. ~~Revenue~~An accounting ~~from~~policy ~~flat-fee services~~ is ~~based~~ ondeemed ato ~~customer’s~~be ~~period~~critical ofif ~~contractual~~it ~~service~~requires ~~and~~an isaccounting ~~recognized~~estimate onto abe ~~straight-line~~made ~~basis~~based ~~over~~on ~~the~~assumptions ~~term~~about ~~of the contract.~~matters Atthat ~~the~~are ~~end~~highly ofuncertain ~~March~~at ~~2014,~~ the ~~Company~~time ~~signed~~the anestimate ~~insertion~~is ~~order~~made, ~~for~~and ~~display~~any ~~advertising~~changes ~~across~~in ~~all of~~ the ~~Company’s~~different ~~sites with~~estimates ~~Akyumen~~that ~~Technologies~~could tohave ~~advertise~~been ~~Akyumen’s proprietary mobile hardware devices. The insertion order provides that~~used ~~Akyumen~~in ~~an aggregate of $150,000 (as amended) during~~ the ~~final~~accounting ~~three~~estimates ~~quarters~~that ofare ~~2014.~~reasonably Aslikely ofto ~~December~~occur ~~2014,~~periodically ~~the~~could ~~Company~~materially ~~received $150,000~~impact inour ~~advertising~~consolidated ~~revenues from Akyumen related to this order for advertising~~financial statements.

~~Patent~~Our most critical accounting policies ~~Licensing~~and estimates that may materially impact our results of operations include:

~~The Company~~Revenue ~~owns~~Recognition Patent No. 7,848,951, issued by the USPTO on December 7, 2010, protecting the method for insertion of specifically targeted advertisements into eBooks. The scope of our patent covers (i) two methods for providing individuals with a plurality of electronic books containing targeted advertising; and (ii) an apparatus for providing one or more subscribers with a plurality of electronic books containing specifically targeted advertising. The Company intends to pursue patent licensing arrangements with eBook distribution outlets looking to create new revenue streams for eBook downloads. The Company will also pursue any violators who infringe on the patent’s claims, ultimately generating license revenues on a per-book or per-ad basis.Policy

~~Revenue~~The Company recognizes ~~from~~revenues ~~patent~~in ~~licensing~~accordance ~~arrangements~~with isFASB ~~recognized~~Accounting ~~when~~Standards ~~earned~~Codification (“ASC”) Topic 605, ~~estimable~~which ~~and~~requires ~~realizable.~~that ~~The~~four ~~timing~~basic criteria ofmust be met before revenue ~~recognition~~can isbe ~~dependent~~recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; on(3) the ~~terms~~selling ofprice ~~each~~is ~~license~~fixed ~~agreement~~and determinable; and (4) collectability is reasonably assured. Determination of criteria (4) will be based on management’s judgments regarding the ~~timing~~fixed nature of ~~sales~~the selling prices of ~~licensed~~the products. ~~The~~delivered ~~Company~~and ~~generally~~the ~~recognizes royalty~~collectability ~~revenue~~of ~~when~~those itamounts. isProvisions ~~reported~~for discounts and rebates to ~~the~~customers, ~~Company~~estimated byreturns ~~its~~and ~~licensees~~allowances, ~~which~~and isother ~~generally~~adjustments ~~one~~will be ~~quarter~~provided for in ~~arrears~~the ~~from~~same period the ~~licensees’~~ related sales are recorded. ~~For~~The ~~licensing~~Company ~~fees~~will ~~that~~defer ~~are~~any ~~not~~revenue ~~determined~~for bywhich the ~~number~~product ofhas not ~~licensed~~been ~~units~~delivered ~~sold,~~or ~~the~~for ~~Company~~which ~~recognizes~~services ~~license~~have ~~fee~~not ~~revenue on~~been arendered ~~straight-line~~or ~~basis~~are ~~over~~subject to refund until such time that the ~~life~~Company ofand the customer ~~license~~jointly determine that the product has been delivered or services have been rendered or no refund will be required.

~~Creative IP Licensing~~5

The ~~Company~~ ~~also generates revenues from the exploitation of WOWIO~~Company’s ~~own~~primary revenues ~~proprietary~~sources ~~content~~are ~~of creative material such~~ as comic books, graphic novels, screenplays, and other published and non-published content. The WOWIO-owned Spacedog library is available for sale on wowio.com and the Company retains 90% of all sales for that content library.follows:

The Company’s content also generates nominal revenues from licensing stories/characters/concepts to studios and other producing partners. Licensing deals that may generate revenue for the Company include film option/acquisition fees, television option/acquisition fees, video game licensing, content licensing for apps, apparel and merchandise licensing.eBooks

6For eBook downloads purchased by the customer directly through the Company’s website, the Company recognizes revenue when the right to download content is granted. The Company evaluates whether it is appropriate to record the gross amount of product sales and related costs or the net amount. Generally, the Company records such revenues on a net basis due to a general lack of indicators that the Company is the primary obligor primarily due to the Company’s lack of ability to determine price. Typically for these sales, the Company’s net revenues consist of a credit card processing fee along with the majority of the advertising fee when there is an advertisement or an ad sponsor. Occasionally, the Company sells download cards to retailers and directly to end customers, which are redeemable on its websites for content downloads over an established time frame. The Company records proceeds from the initial sale of the card to deferred revenue, which is included in accounts payable and accrued expenses in the accompanying balance sheets, and is recognized over the related download period, which approximates the usage period.

Cost of sales includes royalty payments made to the authors of the eBooks included on its websites, which call for royalty payments based on various percentages of revenues earned, less processing fees and in the case of sponsored downloads, a fixed price per download.Advertising

~~Use~~Visitor demographics and time spent on a website are the primary drivers behind advertising-based revenue models for internet properties. Website advertising revenue is primarily recognized on a flat-fee basis based on cost per thousand impressions (“CPM”). The Company earns CPM revenue from the display of ~~Estimates~~graphical advertisements on its websites. Revenue from flat-fee services is based on a customer’s period of contractual service and is recognized on a straight-line basis over the term of the contract. At the end of March 2014, the Company signed an insertion order for display advertising across all of the Company’s sites with Akyumen Technologies to advertise Akyumen’s proprietary mobile hardware devices. The insertion order provides that Akyumen pay an aggregate of $150,000 (as amended) during the final three quarters of 2014. As of December 2014, the Company received $150,000 and $25,000 in 2015, in advertising revenues from Akyumen related to this order for advertising.

~~The preparation~~Patent of financial statements in conformity with GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting periods. Significant estimates made by management include, among others, provisions for uncollectible notes receivable, fair value of common stock and warrants issued, fair value of beneficial conversion features, fair value of derivative liability and realization of deferred tax assets. The Company bases its estimates on historical experience, knowledge of current conditions and its belief of what could occur in the future considering available information. The Company reviews its estimates on an on-going basis. The actual results experienced by the Company may differ materially and adversely from its estimates. To the extent there are material differences between the estimates and actual results, future results of operations will be affected.Licensing

~~Fair~~The Company owns Patent ~~Value~~No. ~~Measurements~~7,848,951, issued by the USPTO on December 7, 2010, protecting the method for insertion of specifically targeted advertisements into eBooks. The scope of our patent covers (i) two methods for providing individuals with a plurality of electronic books containing targeted advertising; and (ii) an apparatus for providing one or more subscribers with a plurality of electronic books containing specifically targeted advertising. The Company intends to pursue patent licensing arrangements with eBook distribution outlets looking to create new revenue streams for eBook downloads. The Company will also pursue any violators who infringe on the patent’s claims, ultimately generating license revenues on a per-book or per-ad basis.

~~Fair~~Revenue from patent licensing ~~value~~arrangements ~~measurements~~is ~~are~~recognized ~~determined~~when ~~based~~earned, onestimable ~~the~~and ~~assumptions~~realizable. ~~that~~The ~~market~~timing ~~participants~~of ~~would~~revenue ~~use~~recognition inis ~~pricing~~dependent anon ~~asset~~the orterms ~~liability.~~of ~~GAAP~~each ~~establishes~~license aagreement ~~hierarchy~~and ~~for~~on ~~inputs~~the ~~used~~timing inof ~~measuring~~sales ~~fair~~of ~~value~~licensed ~~that~~products. ~~maximizes~~The ~~the~~Company ~~use~~generally ofrecognizes ~~observable~~royalty ~~inputs~~revenue ~~and~~when ~~minimizes~~it ~~the~~is ~~use~~reported ofto ~~unobservable~~the ~~inputs~~Company by ~~requiring~~its ~~that~~licensees, ~~the~~which ~~most~~is ~~observable~~generally ~~inputs~~one bequarter ~~used~~in ~~when~~arrears ~~available.~~from ~~The~~the ~~established~~licensees’ ~~fair~~sales. ~~value~~For licensing ~~hierarchy~~fees ~~prioritizes~~that are not determined by the ~~use~~number of ~~inputs~~licensed ~~used~~units insold, ~~valuation~~the ~~methodologies~~Company ~~into~~recognizes license fee revenue on a straight-line basis over the ~~following~~life ~~three~~of ~~levels:~~the license.

~~Level 1:~~Creative ~~Quoted~~IP prices (unadjusted) for identical assets or liabilities in active markets. A quoted price in an active market provides the most reliable evidence of fair value and must be used to measure fair value whenever available.Licensing

~~Level~~The Company also generates 2:revenues ~~Significant~~from ~~other~~the ~~observable~~exploitation ~~inputs~~of ~~other~~WOWIO’s ~~than~~own ~~Level~~proprietary 1content ~~prices~~of creative material such as ~~quoted~~comic ~~prices~~books, ~~for~~graphic ~~similar~~novels, screenplays, ~~assets~~and orother ~~liabilities;~~published ~~quoted prices~~and innon-published ~~markets~~content. ~~that~~The ~~are~~WOWIO-owned ~~not~~Spacedog ~~active;~~library oris ~~other~~available ~~inputs~~for ~~that~~sale ~~are~~on ~~observable~~wowio.com and orthe ~~can~~Company beretains ~~corroborated~~90% byof ~~observable~~all ~~market~~sales ~~data~~for that content library.

~~Level 3:~~The ~~Significant~~Company’s ~~unobservable~~content also ~~inputs~~generates ~~that~~nominal ~~reflect~~revenues afrom ~~reporting~~licensing ~~entity’s~~stories/characters/concepts ~~own~~to ~~assumptions~~studios ~~about~~and ~~the~~other ~~assumptions~~producing ~~that~~partners. ~~market~~Licensing ~~participants~~deals ~~would~~that ~~use~~may ingenerate ~~pricing~~revenue anfor ~~asset~~the orCompany ~~liability.~~include ~~For~~film ~~example~~option/acquisition fees, ~~Level~~television 3option/acquisition ~~inputs~~fees, ~~would~~video ~~relate~~game licensing, tocontent ~~forecasts~~licensing offor ~~future~~apps, ~~earnings~~apparel and ~~cash flows~~merchandise ~~used in a discounted future cash flows method~~licensing.

~~The Company’s~~Cost ~~financial instruments consist~~ of ~~cash,~~sales ~~notes receivable, accounts payable, accrued expenses, note payable and~~includes ~~related~~royalty ~~party~~payments ~~notes~~made ~~payable~~to ~~and~~the ~~convertible~~authors ~~notes~~of ~~payable.~~the ~~Except~~eBooks ~~for~~included ~~the~~on ~~convertible~~its ~~notes payable~~websites, ~~the~~which ~~carrying~~call ~~value~~ for ~~all such~~royalty ~~instruments~~payments ~~approximates~~based ~~fair~~on ~~value~~various ~~due to the short-term nature~~ percentages of ~~the~~revenues ~~instruments.~~earned, ~~The~~less ~~Company~~processing ~~cannot~~fees ~~determine~~and in the ~~estimated fair~~case ~~value~~ of ~~its~~sponsored ~~convertible~~downloads, ~~notes~~a ~~payable~~fixed asprice ~~instruments~~per ~~similar to the convertible notes payable could not be found~~download.

~~The Company~~Use ~~uses Level 3~~ of the fair value hierarchy to measure the fair value of the derivative liabilities and revalues its derivative convertible note and warrant liabilities at every reporting period and recognizes gains or losses in the statements of operations that are attributable to the change in the fair value of the derivative convertible notes and warrant liabilities.Estimates

~~Beneficial~~The preparation of financial ~~Conversion~~statements ~~Features~~in conformity with GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting periods. Significant estimates made by management include, among others, fair value of common stock, preferred stock issued, fair value of beneficial conversion features, fair value of derivative liability and realization of deferred tax assets. The Company bases its estimates on historical experience, knowledge of current conditions and its belief of what could occur in the future considering available information. The Company reviews its estimates on an on-going basis. The actual results experienced by the Company may differ materially and adversely from its estimates. To the extent there are material differences between the estimates and actual results, future results of operations will be affected.

In certain instances, the Company entered into convertible notes that provide for an effective or actual rate of conversion that is below market value, and the embedded beneficial conversion feature (“BCF”) does not qualify for derivative treatment. In these instances, the Company accounts for the value of the BCF as a debt discount, which is then amortized to interest expense over the life of the related debt using the straight-line method which approximates the effective interest method.6

~~Stock-Based Compensation~~Fair Value Measurements

~~All~~Fair value measurements ~~share-~~are determined based ~~payments,~~on ~~including~~the ~~grants~~assumptions ofthat ~~stock~~market toparticipants ~~employees,~~would ~~directors~~use ~~and~~in ~~consultants,~~pricing ~~are~~an ~~recognized~~asset or liability. GAAP establishes a hierarchy for inputs used in measuring fair value that maximizes the ~~consolidated~~use ~~financial~~of observable inputs and minimizes the use of unobservable ~~statements~~inputs ~~based~~by ~~upon~~requiring ~~their~~that ~~fair~~the ~~values~~most observable inputs be used when available. The established fair value hierarchy prioritizes the use of inputs used in valuation methodologies into the following three levels:

~~The Company’s~~Level ~~accounting~~1: ~~policy~~Quoted ~~for~~prices equity instruments issued to consultants and vendors in exchange for goods and services follows ASC Topic 505. As such, the value of the applicable stock-based compensation is periodically remeasured and income or expense is recognized during the vesting terms. The measurement date for the fair value of the equity instruments issued is determined at the earlier of (iunadjusted) ~~the date at which a commitment~~ for ~~performance by the consultant or vendor is reached or (ii) the date at~~identical ~~which~~assets ~~the consultant~~ or ~~vendor’s~~liabilities ~~performance~~in isactive ~~complete~~markets. InA ~~the~~quoted ~~case~~price ofin ~~equity~~an ~~instruments~~active ~~issued~~market toprovides ~~consultants,~~ the ~~fair value~~most ofreliable ~~the~~evidence ~~equity instrument is primarily recognized over the term~~ of ~~the~~fair ~~consulting~~value ~~agreement. In accordance with FASB guidance,~~and anmust ~~asset acquired in exchange for the issuance of fully vested, non-forfeitable equity instruments should not~~ be ~~presented~~used ~~or classified as an offset~~ to ~~equity~~measure onfair ~~the~~value ~~grantor’s~~whenever ~~balance sheet once the equity instrument is granted for accounting purposes~~available.

~~Income~~Level 2: Significant other observable inputs ~~Taxes~~other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

~~We account~~Level ~~for~~3: ~~income~~Significant ~~taxes~~unobservable ~~under~~inputs ~~the~~that reflect ~~provision~~a ofreporting ~~ASC~~entity’s ~~Topic~~own ~~740.~~assumptions Asabout ~~of March 31, 2015 and December 31, 2014, there were no unrecognized tax benefits included in~~ the ~~consolidated~~assumptions ~~balance~~that ~~sheets~~market ~~that~~participants would, ifuse ~~recognized,~~in ~~affect~~pricing ~~the~~an ~~effective tax rate. Our practice~~asset ~~is to recognize interest and/~~or ~~penalties related to income tax matters in income tax expense~~liability. WeFor ~~had~~example, noLevel ~~accrual~~3 ~~for~~inputs ~~interest or~~would ~~penalties~~relate onto ~~our~~forecasts ~~consolidated balance sheets as~~ of ~~March~~future ~~31,~~earnings ~~2015~~ and ~~December~~cash ~~31,~~flows ~~2014,~~used ~~respectively, and have not recognized interest and/or penalties~~ in ~~the~~a ~~statements~~discounted ~~of operations for each of the years then ended. The Company is subject to taxation~~future incash ~~the~~flows ~~United States, Texas and California~~method.

7The Company’s financial instruments consist of cash, accounts payable, accrued expenses, note payable and related party notes payable and convertible notes payable. Except for the convertible notes payable, the carrying value for all such instruments approximates fair value due to the short-term nature of the instruments. The Company cannot determine the estimated fair value of its convertible notes payable as instruments similar to the convertible notes payable could not be found.

~~Basic~~The Company uses Level 3 of the fair value hierarchy to measure the fair value of the derivative liabilities and ~~Diluted~~revalues ~~Loss~~its ~~per~~derivative ~~Common~~convertible ~~Share~~notes, preferred stock and warrant liabilities at every reporting period and recognizes gains or losses in the statements of operations that are attributable to the change in the fair value of the derivative convertible notes, preferred stock and warrant liabilities.

~~Basic net~~Beneficial ~~loss~~Conversion per common share is computed by dividing net loss attributable to common shareholders for the period by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the net loss attributable to common shareholders for the period by the weighted-average number of common and common equivalent shares, such as warrants, convertible notes payable and convertible preferred stock outstanding during the period.Features

~~Derivative~~In certain instances, the ~~Liabilities~~Company entered into convertible notes that provide for an effective or actual rate of conversion that is below market value, and the embedded beneficial conversion feature (“BCF”) does not qualify for derivative treatment. In these instances, the Company accounts for the value of the BCF as a debt discount, which is then amortized to interest expense over the life of the related debt using the straight-line method which approximates the effective interest method.

The Company evaluates debt instruments, stock options, stock warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under the relevant sections of ASC Topic 815Stock-~~40, Derivative~~Based Instruments and Hedging: Contracts in Entity’s Own Equity. The result of this accounting treatment could be that the fair value of a financial instrument is classified as a derivative instrument and is marked-to-market at each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income or other expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Financial instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815-40 are reclassified to a liability account at the fair value of the instrument on the reclassification date.Compensation

~~From time~~All toshare-based ~~time~~payments, ~~the Company has issued notes with embedded conversion features and warrants to purchase common stock. Certain of~~ ~~the~~including ~~embedded~~grants conversion features and warrants contain price protection or anti-dilution features that result in these instruments being treated as derivatives. In addition, potentially in the future, the Company may have an insufficient number of ~~available shares of common~~ stock to ~~settle~~employees, ~~outstanding~~directors ~~contracts.~~and ~~Accordingly~~consultants, ~~the~~are ~~Company~~recognized ~~has~~in ~~estimated~~ the ~~fair~~condensed ~~value~~consolidated offinancial ~~these embedded~~statements ~~conversion~~based ~~features,~~upon ~~warrants,~~their ~~and~~fair ~~derivatives related to the potential insufficient number of authorized shares to settle outstanding contracts using Black-Scholes~~values.

~~Results~~The Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows ASC Topic 505. As such, the value of ~~Operations~~the applicable stock-based compensation is periodically remeasured and income or expense is recognized during the vesting terms. The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor’s performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is primarily recognized over the term of the consulting agreement. In accordance with FASB guidance, an asset acquired in exchange for the issuance of fully vested, non-forfeitable equity instruments should not be presented or classified as an offset to equity on the grantor’s balance sheet once the equity instrument is granted for accounting purposes.

~~Three months~~Income ~~ended March 31, 2015 Compared to Three months ended March 31, 2014~~Taxes

~~The Company~~We ~~has~~account ~~been~~for ~~focusing~~income ~~on establishing a product, customer base and related marketplace. As a result, the Company has only~~taxes ~~generated~~under ~~minimal amounts of revenue, which, because of their size, can fluctuate without~~ the ~~influence~~provision of ~~any~~ASC ~~specific~~Topic ~~economic trend~~740. ~~Due~~As ~~to a lack~~ of ~~sufficient~~June ~~operating capital~~30, ~~the~~2015 ~~Company does not currently have a sales force~~ and ~~does~~December ~~not generate significant revenues. Our net sales increased by $24,140 or 1905% from $1,267 during the three months ended March~~ 31, 2014 ~~to $25~~,~~407~~ ~~for~~there ~~the three months ended March 31, 2015. Our revenues~~ were ~~from~~no ~~sales~~unrecognized oftax ~~eBooks~~benefits ~~generated through our website resulting~~included in ~~revenues of $308 for~~ the ~~three~~consolidated ~~months~~balance ~~ended~~sheets ~~March~~that 31would, ~~2014~~if ~~compared~~recognized, toaffect ~~$0 for~~ the ~~three~~effective ~~months~~tax ~~ended~~rate. ~~March~~Our ~~31,~~practice ~~2015;~~is ato ~~increase~~recognize interest inand/or ~~advertising~~penalties ~~revenue~~related ~~from~~to ~~$959~~income ~~for~~tax ~~the~~matters ~~three~~in ~~months~~income ~~ended~~tax ~~March~~expense. ~~31,~~We ~~2014~~had tono ~~$25,407~~accrual for ~~the~~interest ~~three~~or ~~months~~penalties ~~ended~~on ~~March~~our ~~31, 2015.~~consolidated ~~Cost~~balance ofsheets ~~sales~~as ~~decreased~~of byJune $130,~~966~~ or2015 ~~18%~~and ~~from~~December ~~$9,133 for the three months ended March~~ 31, 2014, ~~as compared to $3~~respectively,~~595~~ ~~for~~and ~~the three~~have ~~months~~not ~~ended~~recognized ~~March~~interest ~~31,~~and/or ~~2015.~~penalties ~~Our~~in ~~overall~~the statements ~~gross~~of ~~profit~~operations ~~increased~~for byeach ~~$29,675 from a gross loss~~ of ~~$7,866 for~~ the ~~three~~periods ~~months~~ then ended. ~~March~~The ~~31,~~Company ~~2014~~is assubject ~~compared~~ to ataxation ~~gross~~in ~~profit of $21,809 for~~ the ~~three~~United ~~months ended March 31~~States, ~~2015~~Texas and California.

~~Our total~~Basic ~~operating~~and ~~expenses~~Diluted ~~were~~Loss ~~$414,506~~per ~~during~~Common ~~the three months ended March 31, 2015, a decrease of $535,194 or 56%, as compared to $949,700 for the three months ended March 31, 2014.~~Share

~~Other~~Basic net loss per common ~~expenses~~share ~~decreased~~is computed by ~~$164,085~~dividing ~~from~~net ~~$40,402~~loss attributable to common shareholders for the ~~three~~period ~~months~~by ~~ended~~the ~~March~~weighted-average ~~31,~~number ~~2014,~~of tocommon shares ~~other~~outstanding ~~income~~during ~~$123,683~~the ~~for~~period. ~~the~~Diluted ~~three months~~net ~~ended~~loss ~~March~~per ~~31,~~share ~~2015~~is ~~due~~computed by dividing the net loss attributable to ~~gain~~common ~~from~~shareholders for athe ~~change~~period inby ~~fair~~the ~~value~~weighted-average number of ~~derivative~~common ~~liabilities~~and ofcommon ~~$898~~equivalent shares,~~000,~~ ansuch ~~interest~~as ~~expense of $316~~warrants,~~317,~~ convertible notes payable and ~~loss~~convertible onpreferred ~~extinguishment~~stock ofoutstanding ~~debt~~during ofthe ~~$458,000~~period.

~~There was no income tax benefit or provision during the three months ended March 31, 2015 and 2014.~~7

~~Liquidity and~~Derivative ~~Capital Resources~~Liabilities

WeThe Company evaluates ~~had~~debt ~~cash~~instruments, preferred stock, stock options, stock warrants or other contracts to determine if those contracts or embedded components of $0those ~~and~~contracts ~~$552~~qualify as derivatives to be separately accounted for under the relevant sections of ~~March~~ASC 31Topic 815-40, Derivative ~~2015~~Instruments and ~~December~~Hedging: 31Contracts in Entity’s Own Equity. The result of this accounting treatment could be that the fair value of a financial instrument is classified as a derivative instrument and is marked-to-market at each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, ~~2014~~the change in fair value is recorded in the statement of operations as other income or other expense. Upon conversion or exercise of a derivative instrument, the ~~respectively~~instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Financial instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815-40 are reclassified to a liability account at the fair value of the instrument on the reclassification date.

~~We used~~From ~~cash~~time ofto ~~$111~~time,~~232~~ ~~in our operating activities during~~ the ~~three months ended March 31, 2015. Non-cash adjustments included~~ ~~$149,264~~Company ~~related~~has toissued ~~amortization~~notes ofwith ~~prepaid~~embedded ~~consulting, $0 related to the amortization of beneficial~~ conversion features, ~~debt discount~~ and ~~debt~~warrants ~~issuance~~to ~~costs,~~purchase ~~and~~shares ~~the change in fair value~~ of ~~derivatives~~common ~~of $898,000~~stock. ~~Changes~~Certain inof ~~operating~~the ~~assets and liabilities~~embedded ~~consist~~conversion offeatures anand ~~increase~~warrants incontain ~~accounts~~price ~~payable~~protection ~~and~~or ~~accrued~~anti-dilution ~~expenses~~features ofthat ~~$106,382~~result ~~and a decrease~~ in ~~prepaid~~these ~~consulting~~instruments ~~and~~being ~~other current~~treated ~~assets~~as ~~of $1,200~~derivatives. WeIn ~~used cash of $292~~addition,~~298~~ potentially in ~~our operating activities during~~ the ~~three months ended March 31~~future, ~~2014.~~the ~~Non-cash adjustments~~Company ~~included~~may ~~$353,607~~have ~~related~~an toinsufficient ~~the~~number ~~amortization~~ of ~~prepaid~~available ~~consulting,~~shares ~~$3,165~~of ~~related~~common stock to ~~the~~settle ~~amortization~~outstanding ofcontracts. ~~debt~~Accordingly, ~~discount and~~the ~~debt~~Company ~~issue~~has ~~costs,~~estimated ~~and~~the ~~interest~~fair ~~earned~~value onof ~~notes~~these ~~receivable~~embedded ofconversion ~~$13~~features,~~482.~~ warrants, ~~Changes in operating assets~~ and ~~liabilities~~derivatives ~~consist of~~related ~~increases~~to inthe ~~accounts~~potential ~~payable~~insufficient ~~and~~number ~~accrued expenses~~ of ~~$404,386~~authorized ~~and~~shares anto ~~decrease~~settle inoutstanding ~~related~~contracts ~~party payables of $22,411. We decreased~~using ~~related liabilities by $37,664~~Black-Scholes.

~~We had~~Results ~~cash provided by investing activities~~ of ~~$0 during the three months ended March 31, 2015 and 2014.~~Operations

8Three months ended June 30, 2015 Compared to Three months ended June 30, 2014

~~Our financing~~The ~~activities~~Company ~~provided~~has ~~cash~~been offocusing ~~$110~~on establishing a product,~~680~~ ~~during~~customer base and related marketplace. As a result, the ~~three~~Company ~~months~~has ~~ended~~only ~~March~~generated 31minimal amounts of revenue, ~~2015~~which, because ~~compared~~of totheir ~~$300~~size,~~000~~ ~~during~~can fluctuate without the ~~same~~influence of any specific economic trend. Due to a lack of sufficient operating ~~period~~capital, inthe ~~2014~~Company does not currently have a sales force and does not generate significant revenues. ~~Cash~~Our ~~provided~~net sales decreased by ~~financing~~$51,042 ~~activities~~or 100% from $51,042 during the three months ended ~~March~~June 3130, ~~2015,~~2014 ~~reflect~~to ~~net~~$0 ~~proceeds~~for ~~from~~the three months ended June 30, 2015. Our revenues for the ~~issuance~~three ofmonths ~~notes~~ended ~~and~~June ~~convertible~~30, ~~notes~~2014 ~~payable~~were offrom a $~~127~~50,~~500,~~000 ~~offset~~quarterly byadvertising ~~principal~~campaign ~~payments~~attributable onto ~~notes~~one ~~payable~~customer. Cost of sales decreased by $169,~~820.~~571 ~~Cash provided~~or by94% ~~financing~~from ~~activities~~$10,151 ~~during~~for the three months ended ~~March~~June 3130, 2014, ~~reflect~~as ~~net~~compared ~~proceeds~~to ~~from~~$580 for the ~~sale~~three months ofended ~~common~~June ~~stock of $25~~30,~~000,~~ ~~net~~2015. ~~proceeds~~Our ~~from~~overall ~~the~~gross ~~issuance~~profit ofdecreased ~~notes~~by ~~payable~~$41,471 from a gross profit of $~~305~~40,~~000~~891 for the three months ended June 30, ~~offset~~2014 byas ~~principal~~compared ~~payments~~to ona ~~notes~~gross ~~payable~~loss of $580 for the three months ended June 30,~~000~~ 2015.

~~As of~~Our ~~March~~total ~~31,~~operating ~~2015~~expenses were $461,652 weduring ~~had~~the anthree ~~accumulated~~months ~~deficit~~ended ofJune ~~approximately~~30, ~~$28~~2015,~~000,000.~~ ~~Management~~an ~~anticipates~~increase ~~that~~of ~~future~~$12,414 ~~operating~~or ~~results will~~3%, ~~continue~~as tocompared ~~be subject~~ to ~~many of the expenses~~$449,238 ~~delays~~for ~~and risks inherent in~~ the ~~establishment~~three months ofended anJune ~~early stage business enterprise~~30, ~~many of which we cannot control~~2014.

~~Going~~Other expenses decreased ~~Concern~~by $30,712 from $255,140 for the three months ended June 30, 2014, to $224,428 for the three months ended June 30, 2015 due to gain from a change in fair value of derivative liabilities of $177,000, gain on settlement of accrued expense of $67,135, an interest expense of $345,563, and loss on extinguishment of debt of $121,000.

~~Our consolidated~~There ~~financial~~was ~~statements~~no ~~have~~income ~~been~~tax benefit ~~prepared~~or ~~assuming~~provision weduring ~~will~~the ~~continue~~three asmonths aended ~~going~~June ~~concern~~30, ~~which~~2015 ~~contemplates the realization of assets~~ and ~~liquidation of liabilities in the normal course of business~~2014. ~~We cannot provide assurance that we will obtain sufficient funding from financing or operating activities to support continued operations or business deployment.~~

~~Since our~~Six ~~inception we have reported net losses, including losses of $290,823 and $990,102 during the three~~ months ended ~~March~~June 3130, 2015 ~~and~~ ~~2014, respectively. We expect that we will report net losses into the near future, until we are able~~ Compared to ~~generate~~Six ~~meaningful revenues~~months ~~from~~ended ~~operations.~~June ~~At March 31~~30, ~~2015, our accumulated deficit was approximately $28 million. These matters raise substantial doubt about the Company’s ability to continue as a going concern.~~2014

The Company’s ~~continuation~~has asbeen focusing on establishing a ~~going~~product, ~~concern~~customer isbase ~~dependent~~and onrelated ~~its~~marketplace. ~~ability~~As toa ~~obtain~~result, ~~additional~~the ~~financing~~Company tohas ~~fund~~only ~~operations~~generated minimal amounts of revenue, which, ~~implement~~because ~~its~~of ~~business~~their ~~model~~size, ~~and~~can ~~ultimately,~~fluctuate towithout ~~attain~~the ~~profitable~~influence ~~operations.~~of ~~The~~any ~~Company~~specific ~~will~~economic ~~need~~trend. Due to ~~secure~~a ~~additional~~lack ~~funds through~~of ~~various~~sufficient ~~means~~operating capital, ~~including~~the ~~equity~~Company ~~and~~does ~~debt~~not ~~financing,~~currently ~~funding~~have ~~from~~ a ~~licensing~~sales ~~arrangement~~force orand ~~any~~does ~~similar~~not ~~financing~~generate significant revenues. ~~There~~Our net sales decreased ~~can~~by be$26,920 noor ~~assurance~~51% ~~that~~from $52,309 during the ~~Company~~six ~~will~~months beended ~~able~~June to30, ~~obtain~~2014 ~~additional~~to ~~debt~~$25,407 orfor ~~equity~~the ~~financing,~~six ifmonths ~~and~~ended ~~when~~June ~~needed~~30, on2015. ~~terms~~Our ~~acceptable~~revenues towere ~~the~~from ~~Company.~~a ~~Any~~$50,000 ~~additional~~quarterly ~~equity~~advertising orcampaign ~~debt~~attributable ~~financing~~to ~~may~~one ~~involve~~customer ~~substantial~~for ~~dilution~~the tosix ~~the~~months ~~Company’s~~ended ~~stockholders~~June 30, 2014. ~~restrictive~~Cost ~~covenants~~of sales decreased by $15,106 or ~~high~~78% ~~interest~~from ~~costs.~~$19,284 ~~The~~for ~~Company’s~~the ~~long-term~~six ~~liquidity~~months ~~also~~ended ~~depends~~June ~~upon~~30, ~~its~~2014, ~~ability~~as compared to ~~generate revenues~~$4,178 ~~from~~for the ~~sale~~six months ofended ~~its~~June ~~products~~30, ~~and achieve profitability~~2015. ~~The~~Our ~~failure~~overall togross ~~achieve~~profit ~~these~~decreased ~~goals~~by ~~could~~$11,796 ~~have~~from a ~~material~~gross ~~adverse effect~~profit onof ~~the~~$33,025 ~~execution~~for of the ~~Company’s~~six ~~business~~months ~~plan~~ended June 30, ~~operating~~2014 ~~results~~as ~~and~~compared ~~financial~~to ~~condition.~~a ~~The~~gross ~~Company~~profit ~~intends~~of ~~to raise~~$21,229 ~~additional~~for ~~financing~~the six months ended June 30, 2015.

~~The consolidated~~Our ~~financial~~total ~~statements~~operating doexpenses were ~~not~~$897,967 ~~include~~during ~~any~~the ~~adjustments~~six ~~relating~~months toended ~~the~~June ~~recoverability~~30, ~~and~~2015, ~~classification~~a decrease of ~~recorded asset~~$490,695 ~~amounts~~ or ~~the~~35%, ~~amounts~~as ~~and~~compared ~~classification~~to of$1,388,662 ~~liabilities~~for ~~that might be necessary should~~ the ~~Company~~six ~~be unable to continue~~months asended aJune ~~going~~30, ~~concern~~2014.

~~Item~~Other expenses decreased 3.by ~~Quantitative~~$196,797 ~~and~~from ~~Qualitative~~$295,542 ~~Disclosures~~for the six months ended June 30, 2014, to $98,745 for the six months ended June 30, 2015 due to gain ~~About~~from ~~Market~~a ~~Risk~~change in fair value of derivative liabilities of $1,075,000, gain on settlement of accrued expenses of $67,135 an interest expense of $661,880, and loss on extinguishment of debt of $579,000.

~~Not~~There was no income tax ~~required~~benefit ~~for~~or aprovision ~~smaller~~during ~~reporting~~the ~~company~~six months ended June 30, 2015 and 2014.

~~Item 4.~~Liquidity ~~Controls~~ and ~~Procedures.~~Capital Resources

~~Evaluation~~We had cash of $1,936 and $552 as of ~~Disclosure~~June ~~Controls~~30, 2015 and ~~Procedures~~December 31, 2014, respectively.

Under the supervision and with the participation of our management, including our principal executive officer who is also our principal financial officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, our principal executive officer/principal financial officer has concluded that our disclosure controls and procedures are not effective, due to the deficiencies in our internal controls over financial reporting described below.8

● We ~~had~~used ~~not~~cash ~~effectively~~of ~~implemented~~$128,816 ~~comprehensive~~in ~~entity-level~~our ~~internal~~operating ~~controls~~activities during the six months ended June 30, 2015. ●Non-cash Weadjustments ~~did~~included ~~not~~$210,626 ~~have~~related ato ~~sufficient~~amortization ~~complement~~of prepaid consulting, $251,625 related to the estimated fair value of ~~personnel~~preferred ~~with~~and ~~appropriate~~common ~~training~~stock issued for services, $67,135 related to gain on settlement of accrued expenses, $333,500 related to excess interest expense of derivative instruments, $579,000 of loss on debt extinguishment, $253,924 related to amortization of debt discounts and ~~experience~~debt issuance costs, and the change in ~~accounting~~fair ~~principles~~value ~~generally~~of ~~accepted~~derivatives of $1,075,000. Changes in ~~the~~operating ~~United~~assets ~~States~~and liabilities consist of ~~America~~an increase in accounts payable and accrued expenses of $228,700, oran ~~GAAP.~~increase in ●accrued compensation and related costs of $132,773 and a decrease in prepaid consulting and other current assets of $1,200. We ~~did~~used ~~not~~cash ~~adequately~~of ~~segregate~~$563,378 in our operating activities during the ~~duties~~six months ended June 30, 2014. Non-cash adjustments included $407,783 related to amortization of ~~different~~prepaid ~~personnel~~consulting, ~~within~~$185,231 ~~our~~related ~~accounting~~to ~~group~~the ~~due~~amortization of beneficial conversion features, $6,962 related to anamortization ~~insufficient~~of ~~complement~~debt discount and debt issuance costs offset by interest earned on notes receivables of ~~staff~~$6,595. ●Changes Wein ~~did~~operating assets ~~not~~and ~~implement~~liabilities ~~financial~~consist ~~controls~~of ~~that~~an ~~were~~increase ~~properly~~in ~~designed~~accounts topayable ~~meet~~and ~~the~~accrued ~~control~~expenses ~~objectives~~of or$582,175 ~~address~~and ~~all~~a ~~risks~~decrease in related party payables of ~~the~~$29,611, ~~processes~~a ordecrease ~~the~~in ~~applicable~~acquisition ~~assertions~~related liabilities of ~~the~~$70,144 ~~significant~~and ~~accounts~~a decrease in prepaid consulting and other current assets of $12,000.

~~Management believes~~We ~~that~~had ~~the~~cash ~~aforementioned~~provided ~~material~~by investing ~~weaknesses~~activities ~~did~~of ~~not~~$0 ~~impact~~during ~~our~~the ~~financial~~six ~~reporting~~months orended ~~result~~June in30, a2015 ~~material~~and ~~misstatement of our financial statements~~2014.

~~Changes~~Our financing activities provided cash of $130,200 during the six months ended June 30, 2015 compared to $562,500 during the same period in ~~Internal~~2014. ~~Control~~Cash ~~over~~provided by ~~Financial~~financing ~~Reporting~~activities during the six months ended June 30, 2015, reflect net proceeds from the issuance of notes and convertible notes payable of $152,000, offset by principal payments on notes payable of $22,300. Cash provided by financing activities during the six months ended June 30, 2014, reflect net proceeds from the sale of common stock of $50,000, net proceeds from the issuance of notes payable of $792,500, offset by principal payments on notes payable of $280,000.

~~There were~~As noof ~~changes~~June in30, ~~our~~2015, ~~internal~~we had ~~control~~an ~~over~~accumulated ~~financial~~deficit ~~reporting~~of ~~during~~approximately ~~the~~$29,500,000. ~~quarter~~Management ~~ended~~anticipates ~~March~~that ~~31,~~future ~~2015~~operating ~~that~~results ~~have~~will ~~materially~~continue to ~~affected~~be subject to many of the expenses, ordelays ~~are~~and ~~reasonably~~risks ~~likely~~inherent toin ~~materially~~the ~~affect,~~establishment ~~our~~of ~~internal~~an ~~control~~early ~~over~~stage ~~financial~~business ~~reporting~~enterprise, many of which we cannot control.

9Going Concern

~~PART~~Our condensed consolidated IIfinancial -statements ~~OTHER~~have ~~INFORMATION~~been prepared assuming we will continue as a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. We cannot provide assurance that we will obtain sufficient funding from financing or operating activities to support continued operations or business deployment.

~~Item~~Since our inception we have reported net losses, including losses of $975,483 and $1,651,179 during the six months ended June 30, 2015 and 2014, respectively. We ~~Legal~~expect ~~Proceedings~~that we will report net losses into the near future, until we are able to generate meaningful revenues from operations. At June 30, 2015, our accumulated deficit was approximately $29.5 million. These matters raise substantial doubt about the Company’s ability to continue as a going concern.

~~There~~The ~~have~~Company’s continuation as a going concern is dependent on its ability to obtain additional financing to fund operations, implement its business model, and ultimately, to attain profitable operations. The Company will need to secure additional funds through various means, including equity and debt financing, funding from a licensing arrangement or any similar financing. There can be no ~~material~~assurance ~~developments~~that the Company will be able to ~~previously~~obtain ~~disclosed~~additional ~~legal~~debt ~~proceedings~~or equity financing, if and when needed, on terms acceptable to the Company. Any additional equity or debt financing may involve substantial dilution to the Company’s stockholders, restrictive covenants or high interest costs. The Company’s long-term liquidity also depends upon its ability to generate revenues from the sale of its products and achieve profitability. The failure to achieve these goals could have a material adverse effect on the execution of the Company’s business plan, operating results and financial condition. The Company intends to raise additional financing.

~~Item~~The consolidated financial ~~1A.~~statements ~~Risk~~do ~~Factors~~not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

~~Not~~Item ~~required for~~3. aQuantitative ~~smaller~~and ~~reporting~~Qualitative ~~company~~Disclosures About Market Risk.

~~Item 2.~~Not ~~Unregistered~~required ~~Sales~~for ofa ~~Equity~~smaller ~~Securities~~reporting ~~and Use of Proceeds~~company.

~~In July~~Item ~~2014, the Company issued 75,000 shares of common stock, at a price of $0~~4.40 ~~per~~Controls ~~share for cash proceeds of $30,000 to an accredited investor. In July~~ and ~~September 2014, the Company issued an aggregate of 660,000 shares of common stock in the aggregate amount of $72,500 to two employees as a bonus~~Procedures. From July through September 2014, the Company issued an aggregate of 1,873,314 shares of common stock to various consultants, debt holders and service providers in settlement of certain accounts payable, debt and for services rendered in the aggregate amount of $653,066.

~~In connection~~Evaluation ~~with the foregoing, the Company relied upon the exemption from registration provided by Section 4(a)(2) under the Securities Act~~ of ~~1933,~~Disclosure asControls ~~amended,~~and ~~for transactions not involving a public offering.~~Procedures

~~Item~~Under the supervision and 3with the participation of our management, including our principal executive officer who is also our principal financial officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. ~~Defaults~~Based ~~Upon~~on ~~Senior~~that ~~Securities~~evaluation, our principal executive officer/principal financial officer has concluded that our disclosure controls and procedures are not effective, due to the deficiencies in our internal controls over financial reporting described below.

~~As discussed~~· ~~above~~We ~~under~~had ~~“Management’s~~not ~~Discussion~~effectively ~~and~~implemented ~~Analysis~~comprehensive ofentity-level ~~Financial~~internal ~~Condition~~controls. ~~and~~· ~~Results~~We ofdid ~~Operations”, as~~not ofhave ~~October~~a ~~31,~~sufficient ~~2014~~complement ~~the~~of ~~Company~~personnel iswith inappropriate ~~default~~training onand ~~the~~experience ~~notes~~in ~~payable~~accounting toprinciples ~~former~~generally ~~employees~~accepted ~~totaling~~in ~~$100,902~~the ~~and~~United onStates 9of ~~other notes payable totaling $640~~America,~~448,~~ ~~which~~or ~~are currently due~~GAAP. ~~The Company has not reached agreement with the noteholders on due date extensions.~~

~~Item 4. Mine Safety Disclosures.~~9

~~Not~~ · We did not adequately segregate the duties of different personnel within our accounting group due to an insufficient complement of staff. · We did not implement financial controls that were properly designed to meet the control objectives or address all risks of the processes or the applicable assertions of the significant accounts.

~~Item~~Management believes that the aforementioned 5.material ~~Other~~weaknesses ~~Information~~did not impact our financial reporting or result in a material misstatement of our financial statements.

~~None.~~Changes in Internal Control over Financial Reporting

~~Item~~There were no changes 6.in ~~Exhibits~~our internal control over financial reporting during the six months ended June 30, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

No.		Description
31.1		Rule 13a-14(a)/ 15d-14(a) Certification of Chief Executive and Financial Officer
32.1		Section 1350 Certification of Chief Executive and Financial Officer
EX-101.INS		XBRL INSTANCE DOCUMENT
EX-101.SCH		XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT
EX-101.CAL		XBRL TAXONOMY EXTENSION CALCULATION LINKBASE
EX-101.LAB		XBRL TAXONOMY EXTENSION LABELS LINKBASE
EX-101.PRE		XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE

10PART II - OTHER INFORMATION

~~SIGNATURES~~Item 1. Legal Proceedings.

~~Pursuant~~On July 31, 2015, TCA Global Credit Master toFund, LP (“TCA”) filed a lawsuit against the ~~requirements~~Company in the Circuit Court of the ~~Securities~~8th ~~Exchange~~Judicial ~~Act~~District Court of ~~1934~~Clark County, Nevada, requesting compensatory damages in the ~~registrant~~amount ~~has~~of ~~duly~~$248,798.93 ~~caused~~plus ~~this~~default ~~report~~interest toand beattorney’s ~~signed~~fees, in respect of the Company’s current default on ~~its~~a ~~behalf~~September 21, 2012 Credit Agreement, and other amendments and agreements ancillary thereto, providing for an initial revolving credit facility of $250,000 to the Company by TCA. The accelerated interest is calculated at the ~~undersigned~~default ~~thereunto~~rate ~~duly~~of ~~authorized~~18%. As of August 15, 2015 the Company has accrued a liability of $_170,026 related to the TCA claim and it is included in the Company’s notes payable and accrued liabilities.

	Wowio, Inc.
Date: May 18, 2015	By:	/s/ Brian Altounian
		Brian Altounian
		Chief Executive Officer and Chief Financial Officer (principal executive, financial and accounting officer)

Item 1A. Risk Factors.

11Not required for a smaller reporting company.

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

On May 11, 2015, the Company issued a consultant an aggregate of 300 shares of Series C of the Company for service provided. On May 11, 2015, the Company issued 4 shares of Series D as settlement for $10,000 of accrued wages to Brian Altounian, the Company’s Chief Executive Officer and Chairman and a beneficial shareholder. On May 11, 2015, the Company issued a consultant 40,000 shares of Series E of the Company for service provided. Each share of preferred stock can be converted into 8,342 shares pre-split, which resulted in total number of common shares convertible into after split of 256,667 shares. On June 29, 2015, the Company issued a consultant 1,600 shares of Series F of the Company for service provided. During six months ended June 30, 2015, various holders of convertible note payable converted $228,943 in principal and $6,320 of accrued and unpaid interest into 975,536 shares of the Company’s common stock. (see note 6) During the six months ended June 30, 2015, the Company issued an aggregate of 3,545 shares of its common stock to various individuals for consulting and other services rendered in the aggregate amount of $31,500.

On June 3, 2015, the company entered into a 1300 to 1 reverse stock split. All fractional shares were rounded up, shares issued prior to June 2015, have been retroactively restated to reflect the impact of the reverse stock split.

In connection with the foregoing, the Company relied upon the exemption from registration provided by Section 4(a)(2) under the Securities Act of 1933, as amended, for transactions not involving a public offering.

Item 3. Defaults Upon Senior Securities.

As discussed above under “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, as of August 31, 2015 the Company is in default on the notes payable to former employees totaling $100,902, on 8 other notes payable totaling $880,000, and on revolving loan $50,000 which are currently due. The Company has not reached agreement with the noteholders on due date extensions.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

No.		Description

31.1		Rule 13a-14(a)/ 15d-14(a) Certification of Chief Executive and Financial Officer

32.1		Section 1350 Certification of Chief Executive and Financial Officer

EX-101.INS		XBRL INSTANCE DOCUMENT

EX-101.SCH		XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT

EX-101.CAL		XBRL TAXONOMY EXTENSION CALCULATION LINKBASE

EX-101.LAB		XBRL TAXONOMY EXTENSION LABELS LINKBASE

EX-101.PRE		XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE

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.

	Wowio, Inc.

Date: September 3, 2015	By:	/s/ Brian Altounian
		Brian Altounian
		Chief Executive Officer and Chief Financial Officer (principal executive, financial and accounting officer)

Filing Compare · Wowio, Inc.