UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DCD.C. 20549

FORM 10-K

	þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
		SECURITIES EXCHANGE ACT OF 1934
		FOR THE FISCAL YEAR ENDED JUNE 30, 2011
	o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
		SECURITIES EXCHANGE ACT OF 1934

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

~~FOR~~For ~~THE~~the ~~TRANSITION~~fiscal ~~PERIOD~~year ~~FROM~~ended ~~___________~~June TO30, ~~___________~~2012

~~Commission File Number 333-168587~~OR

~~EDUTOONS,~~o ~~INC.~~TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

~~(Exact~~Commission ~~name~~File ofNumber: ~~registrant as specified in its charter)~~333-168587

Delaware		27-2701563
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

ContinuityX Solutions, Inc.

~~101~~(Exact ~~East~~Name ~~52nd~~of ~~Street,~~Registrant ~~10th~~as ~~Floor,~~Specified ~~New~~in ~~York,~~Its ~~NY 10022~~Charter)

(Address of principal executive offices, including zip code)

DELAWARE		27-2701563
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

~~Registrant’s~~610 ~~telephone~~State ~~number,~~Route ~~including area code: (212) 319-1754~~116

~~Securities~~Metamora, ~~registered~~IL ~~pursuant to Section 12(b) of the Act:~~61548

~~Title~~(Address of ~~each~~Principal ~~class:~~Executive ~~Name of each exchange on which registered: None None~~Offices)

~~Securities registered pursuant to Section 12~~(g309) ~~of the Act:~~367-2800

~~3,000,000~~(Registrant’s ~~Common~~Telephone ~~Stock~~Number, ~~$0.001~~Including ~~Par~~Area ~~Value~~Code)

~~(Title~~Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of ~~class)~~the Securities Act. Yes ¨ No x

Indicate by check mark if the registrant is anot ~~well-known~~required ~~seasoned~~to ~~issuer~~file ~~(as~~reports ~~defined~~pursuant into ~~Rule~~Section 13 ~~405~~or Section 15(d) of the Act). Yes ¨ No þNo x

Indicate by check mark ifwhether the registrant is(1) has ~~not~~filed all reports required to ~~file~~be ~~reports~~filed ~~pursuant~~by to Section 13 or ~~Section~~ 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 þ¨

Indicate by check mark whether the registrant ~~(1)~~ has ~~filed~~submitted ~~all~~electronically ~~reports~~and posted on its corporate Web site, if any, every Interactive Data File required to be ~~filed~~submitted byand ~~Section~~posted 13pursuant orto ~~15(d)~~Rule 405 of ~~the~~Regulation ~~Securities~~S-T ~~Exchange~~(§ ~~Act~~232.405 of ~~1934~~this chapter) during the preceding 12 months (or for such shorter ~~periods~~period that the registrant was required to ~~file~~submit ~~such reports),~~ and ~~(2)~~post ~~has been subject to~~ such ~~filing~~files). ~~requirements~~Yes ~~for~~x ~~the~~No ~~past 90 days.~~¨

~~Yes~~Indicate ~~¨ No~~by þcheck mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant ~~has~~is ~~submitted~~a ~~electronically~~large ~~and~~accelerated ~~posted~~filer, onan ~~its~~accelerated ~~corporate Web site~~filer, ifa ~~any~~non-accelerated filer, ~~every~~or ~~Interactive~~a ~~Data~~smaller ~~File~~reporting ~~required~~company. toSee bethe ~~submitted~~definitions ~~and~~of ~~posted~~“large ~~pursuant~~accelerated tofiler,” ~~Rule~~“accelerated ~~405~~filer” ofand ~~Regulation~~“smaller ~~S-T~~reporting ~~(§232.405~~company” ofin ~~this~~Rule ~~chapter)~~12b-2 ~~during~~of the ~~preceding~~Exchange 12Act. ~~months~~ (orCheck ~~for such shorter period that the registrant was required to submit and post such files~~one)~~. Yes ¨ No ¨~~:

~~Indicate~~Large byaccelerated ~~check~~filer ~~mark~~¨ ifAccelerated ~~disclosure~~filer of¨ ~~delinquent filers pursuant to Item 405 of Regulation S~~Non-Kaccelerated isfiler ~~not~~¨ ~~contained~~(Do ~~herein, and will~~ not becheck ~~contained,~~if toa ~~the~~small ~~best~~reporting ofcompany) ~~registrant’s~~Smaller ~~knowledge,~~reporting incompany ~~definitive proxy or information statements incorporated by reference in Part III or this Form 10-K or any amendment to this Form 10-K. ¨~~x

Indicate by check mark whether the registrant is a ~~large~~shell ~~accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting~~ company. ~~See~~(as ~~the~~defined ~~definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company”~~ in Rule 12b-2 of the ~~Exchange~~ Act). Yes ¨ No x

~~Large~~The ~~accelerated~~aggregate ~~filer~~market ¨value ~~Accelerated~~of ~~filer~~the ¨Common ~~Non~~Stock of the registrant held by non-~~accelerated~~affiliates ~~filer~~of ¨the ~~Smaller~~registrant ~~reporting~~as ~~company~~of þJune 30, 2012 was approximately $11,070,000 based upon $0.18 per share of Common Stock which was the conversion price of Senior Secured Convertible Debentures sold by the registrant in June, 2012.

~~Indicate~~The bynumber ~~check~~of ~~mark~~shares ~~whether~~of the registrant’s isCommon aStock, ~~shell~~par ~~company~~value ~~(as~~$0.001 ~~defined~~per inshare, ~~Rule~~outstanding ~~12b-2~~as of ~~the~~September ~~Act)~~24, 2012, was 133,979,900.~~Yes~~ ~~þ No o~~

AsTable of ~~October 11, 2011, there were issued and outstanding 3,250,000 shares of Common Stock, $.001 par value.~~Contents

~~DOCUMENTS~~CONTINUITYX ~~INCORPORATED~~SOLUTIONS, ~~BY REFERENCE~~INC.

~~None~~For The Year Ended June 30, 2012

~~TABLE OF CONTENTS~~INDEX

		~~Page~~	Page
PART I		1
PART I.
Item 1.	Business	1
ITEM 1.	BUSINESS		1
Item 1A.	Risk Factors	6
ITEM 1A.	RISK FACTORS		6
Item 1B.	Unresolved Staff Comments	11
ITEM 1B.	UNRESOLVED STAFF COMMENTS		10
Item 2.	Properties	11
ITEM 2.	PROPERTIES		10
Item 3.	Legal Proceedings	11
ITEM 3.	LEGAL PROCEEDINGS		10
Item 4.	Removed and Reserved	11
ITEM 4.	MINE SAFETY DISCLOSURES		10
PART II		12
Part II.
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	12
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES		11
Item 6.	Selected Financial Data	14
ITEM 6.	SELECTED FINANCIAL DATA		12
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		12
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk.	18
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		16
Item 8.	Financial Statements and Supplementary Data	18
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA		17
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	18
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE		31
Item 9A.	Controls and Procedures	18
ITEM 9A.	CONTROLS AND PROCEDURES		31
Item 9B.	Other Information	19
ITEM 9B.	OTHER INFORMATION		31
PART III		19
Part III.
Item 10.	Directors, Executive Officers and Corporate Governance	19
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE		32
Item 11.	Executive Compensation	21
ITEM 11.	EXECUTIVE COMPENSATION		33
Item 12.	Security Ownership Of Certain Beneficial Owners And Management and Related Stockholder Matters	21
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS		34
Item 13.	Certain Relationships and Related Transactions, and Director Independence	22
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE		35
Item 14.	Principal Accounting Fees and Services	22
ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES		35
PART IV		23
Part IV.
Item 15.	Exhibits, Financial Statement Schedules	23
ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES		36
SIGNATURES		25
Signatures			37
INDEX TO EXHIBITS
Exhibit Index			38

PART I

~~Forward~~ITEM 1. ~~Looking Statements~~BUSINESS

~~This~~General ~~Annual~~Organization Report on Form 10-K contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and ~~involve~~Business known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors" and the risks set out below, any of which may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These risks include, by way of example and not in limitation:Overview

-ContinuityX Solutions, Inc. (the ~~uncertainty~~“Company,” ~~that~~“we,” “us” or “our”), formerly known as EDUtoons, Inc. (EDUtoons) was incorporated in the State of Delaware on March 28, 2010. We are headquartered in Metamora, IL. In addition, we ~~will~~currently ~~not~~have be30 ~~able~~data service centers throughout the country devoted to ~~successfully~~colocation ~~identify~~and networks. The Company also hosts Cloud computing, manages equipment and ~~evaluate~~storage aand ~~suitable~~has ~~business~~relationships ~~opportunity;~~with strategic channel partners such as AT&T, Telx, XO Communications and others.

-We ~~risks~~provide ~~related~~consulting toservices ~~the~~and ~~failure~~management toof ~~successfully~~business ~~manage~~continuity, orvirtual ~~achieve~~/ ~~growth~~Cloud ofhosting, amanaged ~~new~~equipment and storage, monitoring, VoIP and voice needs. Our consultative approach provides clients with business ~~opportunity;~~continuity and disaster recovery solutions alongside management, migration and re-engineering, system integration and cross connects, and IT infrastructure services including data center, converged networks (public / private Cloud) services and transformation solutions.

-We ~~other~~provide ~~risks~~client solutions that ensure efficient business continuity and ~~uncertainties~~disaster ~~related~~relief tothrough ~~our~~experienced planning, implementation, and management. We provide reliability and recovery through a methodology that strengthens its client’s business ~~strategy~~continuity and disaster relief framework and preparedness with certified experts that specialize in security, risk management, and consultation for practical business solutions and network-IT visibility.

~~This~~We ~~list~~have isbusiness relationships with many companies including, but not limited to, being a “Premier Solutions Provider” for AT&T, an ~~exhaustive~~XO ~~list~~Communications of“Business Partner” and partnering with Telx in colocation facilities. We also have a relationship with the ~~factors~~St. ~~that~~Louis ~~may~~Rams ~~affect~~wherein ~~any~~we are replacing and upgrading their entire IT infrastructure including all of ~~our~~the ~~forward-looking~~hardware, ~~statements~~software and networks. ~~These~~In ~~and~~addition, ~~other~~we ~~factors~~are ~~should~~installing bea ~~considered~~new ~~carefully~~IP and ~~readers~~voice ~~should~~network ~~not~~and ~~place~~will ~~undue~~assist ~~reliance~~them onin ~~our~~completing ~~forward-looking~~compliance ~~statements~~for content, Ticketmaster, Media and any other requirements identified.

~~Forward~~In ~~looking~~August, ~~statements~~2012, ~~are~~we ~~made~~entered ~~based~~into ona ~~management's~~two ~~beliefs,~~year ~~estimates~~consulting ~~and~~agreement ~~opinions~~with onMillennium ~~the~~Capital ~~date~~Corporation ~~the~~which ~~statements~~will ~~are~~provide ~~made~~various ~~and~~services weto ~~undertake~~us noincluding ~~obligation~~securing toqualified ~~update~~management ~~forward-looking~~executives ~~statements~~and ifpotential ~~these~~Board ~~beliefs,~~of ~~estimates~~Director ~~and~~candidates, ~~opinions~~assisting orus ~~other~~in ~~circumstances~~the ~~should~~search ~~change.~~for ~~Although~~potential weacquisitions, ~~believe~~securing ~~that~~major ~~the~~clients ~~expectations~~and ~~reflected~~introducing inus ~~the~~to ~~forward-looking~~investment ~~statements~~banking ~~are~~contacts ~~reasonable,~~and weinvestment ~~cannot~~relations ~~guarantee~~advisors. ~~future~~Under ~~results,~~the ~~levels~~terms of ~~activity~~the agreement, ~~performance~~we orwill ~~achievements.~~pay ~~Except~~$25,000 asper ~~required~~month byfor ~~applicable~~the ~~law,~~term ~~including~~of the ~~securities~~agreement ~~laws~~in ofaddition to the ~~United~~issuance ~~States~~of cashless warrants for 3,000,000 weshares doof ~~not~~the ~~intend~~Company’s toCommon ~~update~~Stock ~~any~~exercisable for a period of ~~the~~five ~~forward-looking~~years ~~statements~~commencing toon ~~conform~~August ~~these~~1, ~~statements~~2012 toat ~~actual~~an ~~results~~exercise price of $0.20.

~~Item~~In 1September 2012 we entered into a Marketing Agreement with M & M Licensing, Inc. ~~Business~~ focused on major sports leagues, teams, and stadium venues, with a goal to increase the quality of communication and data exchange experience.We will provide leading edge technology access, wi-fi and systems software to the organizations and their ownership companies.

~~Overview~~We meet and exceed new industry standards and requirements for medium and large-scale enterprise organizations by building national, tailor-made networks for public/private business communications. We understand that an organization’s IT staff may not have the deep relationships with third-party technology vendors and telecommunication providers to construct and manage national and international IT infrastructures.

~~EDUtoons,~~Our ~~Inc.~~Network ~~(the~~and ~~“Company,”~~Datacenter ~~“we,”~~infrastructure ~~“us,”~~includes orfacilities ~~“our”)~~built ~~was~~to ~~incorporated~~deliver inhighest ~~the~~level ~~state~~ of ~~Delaware~~uptime onavailability ~~April~~and ~~28,~~24/7 ~~2010. Our~~NOC ~~business~~(Network ~~purpose~~Operational isCenter) toservices; ~~provide~~high ~~reinforcement~~availability in– ~~children’s~~low ~~programming~~latency byconnectivity ~~producing~~services ~~one-minute,~~in ~~three-minute~~any ~~and~~major ~~five-minute~~datacenter ~~educational~~market; ~~cartoons,~~Cloud ~~which~~on ~~are~~demand ~~intended~~via toAppcore® ~~serve~~and asTelx™ ~~both~~partnership; anand ~~educational~~hosting ~~tool~~facilities ~~and~~offering ~~counter-balance~~resilient ~~to the~~network, atdata ~~times~~center, ~~violent~~ and ~~age-inappropriate~~hosted ~~nature~~services ofInternet ~~cartoons~~ and ~~programming~~Network ~~directed at children. We will seek to provide a useful educational format for school children and intend to market the cartoon segments to television programmers~~Services, asdeploying ~~well~~Cisco’s asleading toAggregated ~~educational~~Service ~~institutions~~Router inplatform ~~order~~into ~~to enable teachers to expose their students to~~ a ~~new~~single, ~~learning~~customer ~~format~~facing ~~while~~network ~~keeping~~providing itcost ~~fun~~effective atbandwidth ~~the same time. We believe that the cartoon segments we intend to develop~~ and ~~produce,~~higher ~~once developed, will be in keeping with the FCC regulations regarding educational programming~~performance.

~~Our~~We ~~business~~have ~~plan~~entered ~~evolved~~into as a ~~result~~Joint ~~of Ms.~~Marketing ~~Russell’s~~Agreement ~~background~~with inHutchison ~~television,~~Global ~~broadcasting~~Communications Limited, ~~and~~a ~~teaching~~Hong inKong ~~the public school system~~corporation, ~~during~~and ~~which~~its ~~time,~~subsidiaries ~~she~~including ~~broadened~~Blue ~~her~~City ~~understanding of the industry~~ and ~~determined~~NexGen ~~that~~in ~~there~~the isUnited aStates ~~need~~to ~~for~~market ~~more educational programming. After a discussion with Mr. Irwin Hasen,~~ our ~~Cartoon~~complete ~~and~~portfolio ~~Animation~~of ~~Advisor~~products and ~~Ms.~~services ~~Charlotte~~focusing ~~Veal,~~on ~~our former Vice~~co-~~President~~location access, ~~regarding~~network ~~the~~and ~~programming~~managed ~~that~~services. This ~~she~~relationship ~~believed,~~has ~~based~~created onan ~~her~~opportunity ~~experience,~~ to befurther ~~most~~international ~~effective,~~relationships ~~they~~and ~~determined~~pursue ~~that~~ the ~~combination~~global ofnetwork astrategy ~~formal~~incorporating ~~classroom-instruction-type~~the ~~format~~Far ~~enriched~~East, byCanada, ~~cartoon~~South ~~programming~~America ~~would~~and ~~have~~Europe ~~appeal~~ to ~~broadcasters~~our existing U.S. network and ~~schools~~platform.

In order to execute our business plan, we intend to retain animators on an hourly basis to be chosen by our Cartoon and Animation Advisor, Mr. Irwin Hansen, who currently provides his services to us at no cost and without the benefit of an employment or consulting agreement. These animators will be under the supervision of Mr. Hansen and will be responsible for producing initial sketches of the cartoons, either by hand or using computer illustration software. As our Cartoon and Animation Advisor, Mr. Hansen will be responsible for selecting the final cartoons sketches or strips to be produced. Together with Ms. Russell, Mr. Hansen will supervise the story line of each cartoon.History

On November 1, 2011, we issued three million (3,000,000) shares of our Common Stock pursuant to our Initial Public Offering (“IPO”) for an aggregate purchase price of $150,000, pursuant to a Registration Statement on Form S-1 filed by us with the Securities and Exchange Commission (“SEC”), having an effective date of May 5, 2011 (the “Registration Statement”). Immediately after the closing, we redeemed 3,250,000 shares of our Common Stock owned by our existing shareholders excluding the shareholders who became shareholders pursuant to the IPO (the “Redemption”) for an aggregate cost of $82,500, which was funded by the proceeds of the IPO. The balance of the proceeds of the IPO were utilized to pay various expenses.

For a purchase price of twenty-five thousand ($25,000) dollars we sold 3,250,000 shares of our Common Stock, par value of $0.001 per share, to ContinuityX, Inc.

ToPursuant ~~date, no permanent staff is expected~~ to bean ~~hired~~Acquisition ~~for~~Agreement ~~either~~with ~~the creation of cartoons or for the marketing thereof~~ContinuityX, ~~as such marketing will be done primarily by Ms~~Inc., ~~Russell~~Inc. ~~At this time~~, itdated isNovember ~~anticipated~~8, ~~that~~2011, ~~such~~we ~~marketing~~acquired ~~activities will consist of Internet advertising~~ContinuityX, ~~the~~Inc. ~~sending~~through ofa ~~announcements~~reverse toacquisition ~~his~~which ~~contacts~~gave in the ~~industry~~shareholders ~~and~~of ~~by calls directly to the four major television and cable networks and their affiliates. In addition~~ContinuityX, MsInc. ~~Russell~~effective ~~will~~control ~~also take part in marketing our product to schools, and intends to initially contact the New York City Board~~ of ~~Education and~~ the ~~Teacher’s Union, as well as various educational institutions located in New York City~~Company.

We ~~have~~filed ~~not~~a ~~generated~~Certificate ~~any revenues and as~~ of ~~the~~Amendment ~~date~~to ~~hereof, we have only taken the initial steps necessary before we can implement~~ our ~~business~~Certificate ~~plan, such as the raising~~ of ~~initial~~Incorporation ~~capital~~changing ~~through the sale of 2,750,000 shares of~~ our ~~common~~name ~~stock which occurred in May~~ to ~~June~~ContinuityX ~~of 2010. In addition~~Solutions, ~~in October of 2010, we obtained the domain rights to our website, www~~Inc.~~edutoons4kids.com. During~~ ~~the~~on ~~first~~December ~~quarter of 2010~~28, ~~our management team also developed a business plan~~2011.

WeAlso, ~~have~~on ~~registered~~December 328,~~000~~ 2011,~~000~~ ~~shares~~we ofimplemented ~~common~~a stock ~~with~~split ~~the~~of ~~Securities~~13.333 ~~and~~shares ~~Exchange~~of ~~Commission~~Common ~~(the~~Stock ~~“SEC”~~for every one (1) ~~and~~share ~~the~~of ~~registration~~then ~~statement~~existing ~~was~~Common ~~declared~~Stock ~~effective~~(the on“Forward ~~May~~Stock 05Split”), ~~2011. The~~which ~~shares~~resulted ~~are~~in ~~currently~~a ~~being~~total ~~offered~~of ~~for~~117,330,400 ~~sale. We~~issued ~~have~~and ~~not~~outstanding ~~sold~~shares ~~any~~ of ~~the~~our ~~sales~~Common toStock on such date. ~~Assuming~~On ~~that~~January ~~all~~27, 32012,~~000,000~~ ~~Shares~~we ~~are~~issued ~~sold~~a ~~for~~stock ~~aggregate~~dividend ~~net~~of ~~proceeds~~1.667 shares of ~~approximately~~Common ~~$129,990,~~Stock ~~our~~for ~~management~~every ~~intends~~one ~~to undertake~~share ~~the~~of ~~following activities~~Common ~~during~~Stock ~~the~~issued ~~twelve~~and ~~months~~outstanding ~~following~~prior to the ~~closing~~Forward ofStock ~~the offering:~~Split.

~~First~~Since ~~Quarter~~our ~~Following~~formation ~~the~~we ~~closing~~have brought together a collaboration of ~~the~~individuals ~~Offering:~~in technical sales, marketing and operations, combined with engineers and technology specialists for companies including, but not limited to, Microsoft, VMWare, Cisco, EMC, AT&T, XO Communications, AboveNet, Qwest, and Level 3 among others.

~~During~~Business the first three month period following the offering, we intend to conduct initial research and development activities related to the production of one set of one-minute, three-minute and five-minute cartoons. Such activities will consist mostly of research related to the categories and content of the cartoons in order to determine what categories will be most acceptable to our targeted market. We also intend to begin the actual development and production of the initial set of cartoon segments (i.e. one set of one-minute, three-minute and five-minute cartoons) and intend to use the same for marketing activities to be conducted during the next three-month period. We do not anticipate generating revenues during this period and further anticipate that approximately $18,000 will be spent on the development and production of the initial set of cartoon segments and that approximately $6,000 will be spent on research related to the categories and content of the cartoons.Strategy

~~Second~~Data ~~Quarter~~consumption ~~Following~~has shifted from the ~~Closing~~corporate-only ofdomain and into the ~~Offering:~~daily activities performed by most individuals. This never-ending lust for social media content, videos, gaming, as well as digital entertainment, has clogged the Internet to the extent it is no longer a reliable business resource. Companies are now seeking alternative methods to circumvent traditional Internet connections and establish their own private network connectivity ensuring security, speed and a better return on investment.

~~During~~By ~~this~~specializing ~~time~~in finance, wehealth, ~~intend to begin the marketing of the initial set of cartoons that we develop during the first quarter following the closing of the offering. As part of our initial marketing strategy~~manufacturing, welarge-scale ~~intend to advertise our product on the internet~~distribution, ~~send announcements to our management team’s contacts in the industry~~ and ~~make~~leveraging ~~calls~~long-term ~~directly~~leading torelationships ~~the~~with ~~four major television and cable networks and their affiliates. It is currently intended that Ms. Russell will also market the cartoons to schools~~companies, ~~particularly,~~which ~~those~~we ~~educational~~consider ~~institutions~~“Channel ~~located~~Partners” insuch ~~the City of New York. Also~~ as aAT&T, ~~part~~Telx ofand ~~our~~XO ~~marketing strategy~~Communications, we ~~will~~have ~~make~~been aable ~~clip~~to ofeffectively ~~the~~market ~~cartoon segments available at no charge by posting the same on~~ our ~~website~~company. Moreover, ~~which~~through ~~website will~~anticipating ~~be minimally developed during~~ the ~~second~~needs ~~quarter following the closing~~ of ~~the~~our ~~offering~~clients ~~for the purpose of making such clips available therein. Prior~~ to ~~downloading~~connect ~~such~~and ~~clips,~~communicate ~~any~~more ~~potential~~effectively ~~customer will be required to provide us~~ with ~~their names and contact information. As an additional marketing strategy~~employees, ~~it is anticipated that all such~~ customers, ~~will~~partners ~~be provided with newsletters informing them of any additional cartoon strips developed by the Company. We do not anticipate generating revenues during this period~~ and ~~further anticipate that approximately $60~~suppliers,~~000~~ ~~will~~we beand ~~spent~~our onChannel ~~our~~Partners ~~marketing~~have ~~activities~~created ~~during~~a ~~this~~nationwide ~~period,~~network of ~~which~~carrier ~~approximately~~and ~~$40,000~~Cloud isservice ~~expected~~companies towhich ~~account~~are ~~for~~strategically ~~costs~~positioned ~~related~~ to ~~advertising~~enable ~~our~~next-generation ~~product and~~requirements ~~approximately $19,000 will be spent on the printing of our newsletters. It is also anticipated~~ that ~~approximately~~help $1manage,~~000~~ ~~will~~protect ~~be used to update~~ and ~~develop~~optimize ~~our~~networked ~~website in such a manner that will permit us to make the clips of the cartoon segments we develop available on such website~~communications.

Leveraging partnerships ensures a best-in-class redundancy service and equipment sourcing along with competitive pricing. We compete smartly with small teams combining technical certified experts with project implementation and management. This enables the Company to offer in-depth services at lower pricing.

Our global growth strategy addresses the world-wide ever-growing need for the portability and consumption of data, conducting VoIP calls, reviewing analytics, backing-up servers and accessing video/social media services. The data-centric ecosystem has created a 24/7 appetite, fueled by lower cost smartphones and tablet devices now being adopted by all business sizes and classes. This data phenomenon transcends country borderlines and global time zones to present a type of Telco industry ”gold rush” for talented companies to stake their claims vis-a’-vis the data implementation and management pertaining to: government compliance issues, information recovery, voice and VoIP communications as well as public/private Cloud managed and hosted services. We expect to expand our footprint to include customers throughout North and South America, Europe, Middle and the Far East.

Marketing and Branding

We intend to build upon our success in the enterprise IT arena by expanding our marketing efforts to focus upon growing penetration with regional carriers, service providers, data centers and hosting companies by leveraging our expanded product portfolio to provide network services, disaster recovery, Cloud computing, servers, hosted applications and wireless solutions.

We are unique in that our technology capabilities are fully integrated, from the application services through the distributed Cloud computing platform and into our private, secure network backbone. This enables us to truly offer and specialize in “Integrated IT Solutions” that combine applications, voice, data and on-demand Cloud computing service spanning multiple networks and geographies.

These capabilities provide us with a strong competitive advantage by allowing customers to use their own IP with our services platform.

Our sales strategy includes:

●	Delivering a consistent message to each industry vertical and target audience

●	Positioning ourselves as a premier provider of application centric integrated IT solutions

●	Diversifying our approach to focus on specific niche areas within the enterprise IT and Service Provider spaces :

o	Enterprise IT - offer flexible solutions for integrated voice, video, data, wireless and computing services, position backup and on-demand Cloud capabilities

o	Service Providers (regional carriers, hosting providers, data centers, ISPS) : enable them to expand their reach by interconnecting facilities with the Company and add new sources of revenue by offering our advanced services under white label agreements branded as their own.

●	Expanding our sales reach through independent sales agents who specialize in specific geographic and vertical markets.

●	Emphasizing the integrated, high quality, cost effective, secure and scalable nature of our solutions

~~Third~~● ~~Quarter~~Communicating ~~Following~~our ~~the~~capabilities ~~Closing~~through oftargeted ~~the~~marketing ~~Offering:~~communication campaigns aimed at specific vertical markets to increase our brand awareness in a cost effective manner.

We● ~~currently~~Marketing ~~intend~~our toCloud ~~devote~~computing ~~the~~capabilities ~~third~~to ~~quarter~~expand ~~following~~awareness, ~~the~~promoted ~~closing~~capabilities ofand ~~the~~enable ~~offering~~customers onto ~~further~~sample ~~developing and completing~~ our ~~website. At~~services ~~the~~growing ~~present~~trust ~~time, it is anticipated that a website designer will be engaged during this period that will assist us in designing~~ and ~~completing~~increasing ~~our website. It is anticipated that approximately $8,000 will be spend for the development of our website.~~spending

It● isLeveraging ~~also~~our ~~anticipated,~~strong ~~although~~relationships ~~no assurance can be given, that during this period, we will begin to receive orders for the cartoons that we intend to produce. During this time, only the initial set of one-minute, three-minute~~ and ~~five-minute~~international ~~cartoons~~reach ~~will be available for sale and/or distribution. However, we do not anticipate receiving a significant amount of revenue during this period.~~partners

~~Fourth~~● ~~Quarter~~Capitalizing ~~Following~~on ~~the~~our ~~Closing~~presence ofin ~~the~~over ~~Offering:~~30 data center locations, which house IT infrastructure for many enterprises and Cloud computing companies.

~~Based~~Services on our current business plan, we anticipate that the fourth quarter following the closing of the offering will be devoted to the development of additional cartoons at an anticipated cost of roughly $3,000. It is intended that the cartoons that we develop will have themes and ~~categories that are based on the feedback we get from potential customers as a result of our marketing efforts.~~Solutions

ItWe ishave currently anticipated that the net proceeds from the offering may be less than our estimated budget for the twelve months following the closing of the offering. Further, we do not anticipate receiving a ~~significant~~broad ~~amount~~set of ~~revenues,~~ ifIT ~~any,~~services ~~until~~to ~~after~~meet 12most ~~months~~business ~~following~~needs ~~the~~ranging ~~closing of the offering. In the event that the net proceeds~~ from the ~~offering~~simplest ~~are~~secure ~~insufficient~~point-point toconnectivity ~~cover our expenses for the 12 months following the closing of the offering, we intend~~ to ~~revise~~complex ~~our~~integrated ~~business~~multi-protocol ~~plan~~networks ~~accordingly~~combined bywith ~~proportionally~~hosted ~~decreasing~~applications ~~the~~and ~~amount spent~~ on-demand ~~marketing~~public and ~~advertising,~~private byCloud ~~delaying~~services ~~the~~– ~~printing~~all ~~and~~with ~~distribution~~managed ofoptions ~~our planned newsletter and by delaying the completion of our website which is scheduled~~ to bekeep ~~completed during the third quarter. We may further engage in additional financing activities in order to implement~~ our ~~business~~customers’ ~~plan,~~IT ~~including~~operating ~~the~~at ~~possible~~peek ~~sale of debt instruments to be issued by us~~efficiency. However, no assurance can be given that we will be successful in obtaining the necessary financing, or that we will be able to negotiate acceptable terms in a timely fashion. In addition, our access to capital is affected by prevailing conditions in the financial and equity capital markets, as well as our own financial condition. At this time, we have not entered into any agreements with any third-party relating to the provision of credit facilities to us.

InService the event that we are able to sell only 1,000,000 Shares pursuant to the offering for aggregate net proceeds of approximately $29,990*, we intend to use such proceeds as set forth in the table below. All amounts below are approximations only and any amounts remaining after payment of the anticipated expenses described below will be set aside for any unexpected expenses that we may incur in the operation of our intended business.offerings

Use of Proceeds	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
Development and Production of Cartoons	$	18,000	$	0	$	0	$	0
Marketing and Research	$	2,000	$	2,000	$	1,000	$	1,000
Development of Website	$	0	$	0	$	0	$	0
Printing and Distribution of Newsletter	$	0	$	0	$	0	$	0
SUB TOTAL PER QUARTER	$	20,000	$	2,000	$	1,000	$	1,000
GRAND TOTAL							$	24,000

●	Data Center Services

*o ~~Based~~Our ondata ancenters ~~offering~~are ~~price~~deployed ofin ~~$0.05~~connectivity ~~per~~and ~~share~~power dense facilities currently in 30 locations across the Americas and ~~takes~~Asia ~~into~~to ~~account~~meet ~~estimated~~the ~~expenses~~needs of ~~$20~~the most demanding customers for colocation,~~010~~ connectivity, security, service and support.

Ino ~~the~~Capabilities ~~event~~include, ~~that~~colocation, wededicated ~~are~~A ~~able~~& toB ~~sell~~side ~~only~~power 2option,~~000,000~~ ~~Shares~~connectivity ~~pursuant~~(local, tonational, ~~the~~international), ~~offering~~converged ~~for~~exchange ~~aggregate net proceeds of approximately $79~~services,~~990*,~~ wemanaged ~~intend~~services ~~to use such proceeds as set forth in the table below. All amounts below are approximations only~~ and ~~any~~remote ~~amounts remaining after payment of the anticipated expenses described below will be set aside for any unexpected expenses that we may incur in the operation of our intended business~~hands.

●	Networking

Whether our customers' business needs point to point connectivity or a complete integrated multi-national managed network, we not only have a networking service to meet those needs, we deliver it as a complete integrated IT solution that leverages the right technology for each application, location or security instance. We offer networking services that include :

o	MPLS IP VPN

o	Layer 2 MPLS VPN

o	Private Line

o	Ethernet VPLS

WiFi

●	Office and large scale multi-tenant solutions

●	Applications

Our application hosting services enable IT departments to lighten the load on the business by deploying applications on secure, reliable systems in any one of our data center facilities and facilitate connectivity to those applications via the Internet and/or our private MPLS network. We have a range of managed application services options to meet the needs of most IT departments plus enables customers to leverage our integrated on-demand public and private Cloud capabilities seamlessly. Managed application available include :

§	Messaging and Collaboration

§	Microsoft Sharepoint

§	Windows Servers

§	Linux Servers

Storage

●	On Demand Cloud Services

o	Private Cloud

§	Benefit from Cloud technology but securely connect privately

o	Public (Internet facing) Cloud

§	On-demand, connect any time, anywhere over the Internet

o	Wholesale & White Label Cloud

§	Our Cloud infrastructure, each customer’s services, and pricing, branded and packaged for each customer.

●	Disaster Recovery

On-Demand

§	Start backing up computers and servers today to our Cloud, provision standby applications and servers to go live when needed.

§	Connect via the Internet now, move to private connectivity in the future

o	Integrated Back-up network

§	Securely connect to a network point of presence at practically any USA carrier hotel, bridge your existing networks, enable redundancy and backup critical application systems to our distributed disaster recovery infrastructure for complete peace of mind

Use of Proceeds	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
Development and Production of Cartoons	$	18,000	$	3,000	$	0	$	0
Marketing and Research	$	6,000	$	20,000	$	10,000	$	10,000
Development of Website	$	0	$	1,000	$	0	$	0
Printing and Distribution of Newsletter	$	0	$	0	$	0	$	0
SUB TOTAL PER QUARTER	$	24,000	$	24,000	$	10,000	$	10,000
GRAND TOTAL							$	68,000

Service Level Agreements

*Every ~~Based~~service onis anbacked ~~offering~~by ~~price~~applicable ofstringent ~~$0.05~~service ~~per~~level ~~share and takes into account estimated expenses of $20,010~~agreements.

~~Educational~~Private ~~Cartoons~~Line

~~Pediatric and Adolescent Medicine magazine has reported that about 90% of children aged twenty~~-~~four~~ ~~(24) months and under regularly watch television. A study conducted by the University of Texas in Austin has shown that pre~~On-~~school~~net ~~children~~pop ~~who watch a few hours a week of educational programming perform better on achievement tests over time than those who watch general entertainment shows. Our intent is~~ to ~~provide~~pop ~~children~~availability ~~with~~(uptime ~~the~~per ~~educational programming that we deem is currently lacking in the market today.~~month)

~~We intend to initially produce television programming in a one~~-~~minute,~~ 26Off-~~segment~~net ~~series,~~pop ~~each devoted~~ to ~~one~~pop ~~letter~~availability of(uptime ~~the~~per alphabet. For instance, “A” could be illustrated by “Ant”; “B” by “Bear”; and so forth. Thereafter, three-minute segments, which would be offered in 13 and 26 series, will have varied subjects such as “Presidents of the United States”; the “Countries of the World”; the “States of the United States”, and the like. The five-minute segments will be focused primarily on nature, various animal habitats around the world, the stars, sea life—the potential content of our five-minute segments is virtually unlimited and we intend to produce such five-minute segments that we deem to be educational and of high quality.month)

~~During~~- ~~our~~On-Net ~~start~~pop ~~up period, our management will be primarily responsible for developing the contents of the cartoon segments that we intend~~ to ~~produce. We~~pop ~~also~~Meant ~~intend~~time to ~~engage~~restore ~~individual animators who will execute on our management’s ideas and vision.~~(MTTR)

~~All~~MPLS of our cartoon animators will be supervised by Irwin Hansen, our Cartoon and Animation Advisor. Mr. Hansen created the comic strip “Dondi,” a cartoon strip about a six-year old boy which was syndicated in 300 newspapers around the country. While Mr. Hansen has not previously created cartoon animation for distribution on the internet similar to the cartoons that we intend to produce and develop, he was retained as the consultant on the movie based on the comic strip he created. He began his career drawing covers for comic books including The Green Lantern, Wonder Woman, The Flash and Wildcat. He is a two-time recipient of the annual National Cartoonist Society Award. The Company’s management believes that Mr. Hansen's experience, his ability to create a story-line that appeals to children (as evidenced by the success of Dondi) and his understanding of cartoon presentation makes him a suitable selection as the Company’s Cartoon and Animation Advisor.Services

~~Given~~- ~~the~~Pop ~~limited amount of funding available~~ to ~~the~~pop ~~Company,~~availability we(uptime ~~intend~~per to engage cartoon animators with the intention of compensating them on an hourly basis. At the present time however, we have not entered into any agreements with cartoon animators regarding the creation of educational cartoons.month)

~~Pricing~~- ~~and~~Pop ~~Licensing~~to pop inter-packet delay (Jitter)

Ito is our intention to develop the cartoons at a minimal cost so that we can produce quality work and become established as providers of educational programming. In order to keep costs at a minimum, we currently do not intend to hire any office staff or hire any cartoon animators on a full time basis and will retain such individuals on an hourly basis only. At this time, prices for the cartoons we intend to develop are not definitively set. However, it is intended that each cartoon developed will be offered at three times of the aggregate hourly fee paid by us to the particular cartoon animator responsible for creating such cartoon.Bronze

Weo intend to grant each purchaser of the cartoons a license to use such for a period of one (1) year, which license will be renewable for an unlimited number of one (1) year periods. It is further anticipated that each customer will be require to contractually agree not to distribute or copy any of the cartoons purchased without the express written consent of the Company.Silver

Gold

Platinum

-	Pop to pop latency

o	Transcontinental USA (east-west coast)

o	West coast USA to Hong Kong

-	Network wide pack loss

Ethernet VPLS

-	Pop to pop availability (uptime per month)

-	Pop to pop latency in milliseconds

o	Transcontinental USA (east-west coast)

o	West coast USA to Hong Kong

-	Network wide pack loss

Our Networks and Technology

Service Coverage

By leveraging key datacenter facilities in carrier centric locations we can take advantage of selecting the best, cost-effective, interconnected, high-performing providers at each point of presence. This approach combined with advanced, modern networking technologies from recognized hardware providers such as Cisco enables us to deliver a broad spectrum of services on a common integrated infrastructure to meet the needs of the most demanding customers with room to grow physically and virtually.

Strategic Expansion planning

Interconnecting our network at key datacenter locations enables us to bridge services between various providers, data centers and even customers. Being an application centric, IP enabled IT solutions focused business with advanced networking technology, our offerings are more than just network services. Hence this enables us to continually look to expand our reach by leveraging strategic international partners that enable us to enter new markets with the lowest capital exposure and only take our network there as demand justifies. By establishing MPLS (Multi-protocol label switching) Option A, B or C Interconnects with other providers that meet our criteria for quality performance, we are able to not only deliver services on our private MPLS network but also to end-points on our partners’ networks. These relationships are typically reciprocal enabling our partner to also reach locations on our backbone and leverage our services as ‘white label’ for their customers and offer new services such as Cloud computing.

We currently offer services in the following locations

●	36 North East 2nd Street, Miami, FL, USA

●	56 Marietta Street, Atlanta, GA, USA

●	60 Hudson Street, New York, NY, USA

●	100 Delawanna Avenue, Clifton, NJ, USA

●	111 Eighth Avenue, New York, NY, USA

●	113 N. Myers Street, Charlotte, NC, USA

~~Sales~~● ~~and~~120 ~~Marketing~~East ~~Strategy~~Van Buren Street, Phoenix, AZ, USA

~~The~~● ~~Internet~~200 isPaul ~~the least expensive marketing tool and we intend to use the Internet as a primary tool in our efforts to reach out to television station programmers~~Avenue, asSan ~~well as to educational institutions and individual teachers. During the first three (3) months following the closing of the offering~~Francisco, ~~we intend to begin the development of an initial set of our one-minute~~CA, three-minute and five-minute educational cartoon segments. As part of our initial marketing strategy, a clip of such segments will be made available at no charge on the Internet. Prior to downloading such clips, any potential customer will be required to provide us with their names and contact information. As an additional marketing strategy, it is anticipated that all such customers will be provided with newsletters informing them of any additional cartoon strips developed by the Company.USA

We● ~~anticipate~~300 ~~that~~Boulevard ~~revenue will come from the sales of the programming series. At the present time~~East, ~~we intend to sell the cartoon segments to various television networks and independent television stations~~Weehawken, ~~other digital platforms and to educational institutions throughout the United States and Canada. At this time~~NJ, ~~we have not entered into any agreements with any third parties for the sale and/or purchase of the cartoon segments.~~USA

We● ~~anticipate~~350 ~~that~~East ~~initial~~Cermak ~~sales of the cartoons we intend to produce will be difficult. However~~Road, ~~we believe~~Chicago, ~~although no assurance can be given~~IL, that when television stations start to include EDUtoons to their children programming, customer feedback and word-of-mouth will stimulate sales fairly rapidly. Further, we believe, although no assurance can be given, that educational institutions and individual teachers and educators may also be another important source of revenue for the Company. We would also seek to capitalize on any of the cartoon characters that become popular with children by licensing stuffed toys, games and similar extensions.USA

~~Competition~~● 600 South Federal Street, Chicago, IL, USA

~~There~~● ~~are~~600 aWest ~~number~~7th ~~of companies that offer cartoon programs for children. Based on our initial research~~Street, ~~the~~Los ~~four major networks~~Angeles, ~~ABC~~CA, CBS, NBC and Fox all have over 200 affiliate stations. In addition, the CW network has approximately 100 affiliate stations. These stations cover almost all of the cartoon programs that are geared towards our same target market. Further, there are numerous small companies that also offer cartoon programs for children, some of which we may be unfamiliar with, and which may be in direct competition with our products.USA

~~These~~● ~~companies~~1100 ~~have~~Space ~~funding~~Park ~~and personnel far exceeding ours. However~~Drive, ~~based~~Santa ~~on our initial research~~Clara, ~~it appears that their programs are significantly different in terms of content and length and do not specifically aim to educate as we expect EDUtoons will do. Moreover~~CA, our initial research has shown that there are no other companies that are focused on the 1, 3, and 5-minute educational cartoon segments that we intend to offer. However, in the event that we are successful in selling the cartoons, there is no guarantee that companies already engaged in offering programs for children will not capitalize on our success and seek to produce cartoon segments similar to ours.USA

~~Sources~~● ~~and~~2323 ~~Availability~~Bryan ofStreet, ~~Products~~Dallas, ~~and~~TX, ~~Supplies~~USA

We● ~~believe~~2820 ~~there~~Northwestern ~~are~~Parkway, noSanta ~~constraints~~Clara, ~~on the sources or availability of products and supplies related to the development of our educational cartoons.~~USA

~~Regulatory~~● ~~Matters~~8435 Stemmons Freeway, Dallas, TX, USA

~~The~~● ~~cartoon~~50 ~~segments~~NE ~~may~~9th ~~be subject to federal and state regulations relating to content. The Company intends to distribute its cartoon segments initially through the Internet~~Street, ~~and thereafter~~Miami, through various television networks that the Company may be able to secure contracts with. Both the Internet and television industries are subject to a variety of regulations at the federal and state levels. We expect that legislative enactmentsFL, court actions, and regulatory proceedings will continue to expand these regulations, and in some cases change the rights of cable companies and other entities providing video content, such as the cartoon segments we intend to produce, under the Communications Act of 1934, as amended (the “Communications Act”).USA

~~Employees~~● 530 West 6th Street, Los Angeles, CA, USA

As● of624 ~~September~~South ~~30,~~Grand ~~2011~~Avenue, weLos doAngeles, ~~not~~CA, ~~have any employees.~~USA

●	650 South Grand Avenue, Los Angeles, CA, USA

●	800 South Hope Street, Los Angeles, CA, USA

●	3 Corporate Place, Piscataway, NJ, USA

●	2500 Riva Road, Annapolis, MD, USA

●	5732 Pacific Center Boulevard, San Diego, CA, USA

●	17300 Washington 99, Lynnwood, WA, USA

●	21571 Beaumeade Circle, Ashburn, VA, USA

●	165 Halsey Street, Newark, NJ, USA

●	401 North Broad Street, Philadelphia, PA, USA

●	Warwick House, Hong Kong

●	151 Front St W, Toronto, ON

Network Management

Our global network operations center (“NOC”) is located in Santa Clara, California, USA and provides round-the-clock network surveillance, provisioning and customer service.

We utilize many tools for monitoring a network of its size. Industry leading partner Solarwinds is a key software package deployed to monitor the network from within from speed to latency down to dropped packets. Everything is monitored 24x7 from a staffed NOC in Santa Clara. We also utilize the skills and expertise of outside companies such as IPsoft- that augment our capabilities to exceed customer expectations. Our global network was designed to be carrier agnostic and using BGP and advanced routing techniques with Cisco’s Nexus platform to seamlessly fail over to other sites in the event of a problem or catastrophe. Using an internal inventory and ticketing system every action within the network is tracked and backed-up to ensure reliability.

Our distributed Cloud platform is designed to be highly available both within zone (a single location) and across zones delivering upwards of 99.999% availability globally, it is interconnected with 10Gbps links on our MPLS backbone plus leverages multiple internet connections for backup and access.

Our Cloud platform utilizes a unique, integrated combination of hardware and software that is power efficient, replicable and highly scalable enabling us to deploy new locations in less than 45 days globally to practically any data center location and expand rapidly as needed. The Company’s Cloud has built-in alarms and recovery capabilities both at a hardware and a software level delivering applications service capabilities far beyond the traditional dedicated server model.

The system is monitored 24x7x365 by the Company’s NOC and the entity which manages the NOC.

Our global network operations center staff serves as the focal point for managing our service level agreements, or SLAs, with our customers and coordinating network maintenance activities. Our NOC also serves as our focal point for provisioning new services on our network and Cloud platforms. We work closely with our customers to ensure that all services are turned up in a timely and error free manner.

Special Note Regarding Forward-looking Statements

Some of the statements and information presented in this report may contain projections or other forward-looking statements regarding future events or the future financial performance of the Company. These statements are based upon management’s current expectations or beliefs. These projections and forward-looking statements are not a guarantee of performance and are subject to a number of uncertainties and other factors, many of which are outside of the Company’s control, which could cause actual events to differ materially from those expressed or implied by our projections or forward-looking statements. The most important factors which could prevent the Company from achieving its stated goals include, but are not limited to, the following: the current uncertainty in the global financial markets and the global economy, a discontinuation of the development and expansion of the Internet as a communications medium and marketplace for the distribution and consumption of data and video, and disruptions in the financial markets which could affect the Company’s ability to obtain additional financing. Additional factors include, but are not limited to, the Company’s ability to do the following: increase and maintain the volume of traffic on its network, develop effective business support systems, manage system and network failures or disruptions, develop new services which meet customer demands and generate acceptable margins, defend intellectual property and proprietary rights, adapt to rapid technological changes which lead to further competition, attract and retain qualified management and other personnel, successfully integrate future acquisitions, and meet all of the terms and conditions of debt obligations.

We also refer you to other documents the Company files from time to time with the Securities and Exchange Commission, specifically, the Company’s annual reports on Form 10-K, its quarterly reports on Form 10-Q and its current reports on Form 8-K. These documents identify important risk factors which could cause the actual results to differ materially from those contained in our projections and forward-looking statements.

This report, together with other statements and information publicly disseminated by the Company, contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with these safe harbor provisions. Except as otherwise required by the federal securities laws, the Company is under no obligation and expressly disclaims any obligation or undertaking to publicly release any updates or revisions to any forward-looking statement contained in this report, whether as a result of new information, future events or otherwise.

~~Research~~Available ~~and Development Expenditures~~Information

We ~~have~~file ~~not~~with ~~incurred~~the ~~any~~SEC ~~research~~our ~~and~~Annual ~~development~~Reports ~~costs~~on toForm ~~date. We~~10-K, ~~anticipate~~Quarterly ~~research~~Reports on Form 10-Q, Current Reports on Form 8-K and ~~development~~Proxy Statements. These reports, and any amendments to ~~begin~~these ~~during~~reports, are available at the ~~first~~SEC’s ~~quarter~~Public ~~after~~Reference ~~the~~Room ~~offering~~at ~~and~~100 ~~further~~F ~~anticipate~~Street ~~that~~NE, ~~expenditures~~Washington, ~~for~~D.C. ~~research~~20549. ~~and~~Additionally, ~~development~~this ofinformation is available at the ~~cartoons~~SEC’s ~~during~~website ~~this~~( ~~time~~http://www.sec.gov ~~will~~). beAll ~~approximately~~of $6our SEC filings are available,~~000~~ free of charge, ~~which~~and ~~amount~~as ~~will~~soon beas ~~taken~~practicable ~~from~~after they are filed with, or furnished to, the ~~proceeds~~SEC ofon our website at www.continuityx.com at the ~~offering~~Investors - SEC Filings tab.

~~Subsidiaries~~ITEM 1A. RISK FACTORS

~~None~~Our business and operations involve numerous risks, some of which are beyond our control which may affect future results and the future market price of our common shares. In any such case, the market price of our common shares could decline, and investors may lose all or part of their investment. The following discussion highlights all material risks known to us.

~~Intellectual~~You ~~Property~~should consider carefully, among other things, the risk factors set forth below as well as the other information contained in this Annual Report on Form 10-K and in our other filings with the SEC before deciding to purchase, hold or sell our Common Stock. If any of the identified risks actually occurs, or is adversely resolved, our consolidated financial statements could be materially, adversely impacted in a particular fiscal quarter or year and our business, financial condition and results of operations may suffer materially. As a result, the market price of our Common Stock could decline and you could lose all or part of your investment in our Common Stock. The identified risks are not the only risks we face. Additional risks and uncertainties, including those not currently known to us or that we currently deem to be immaterial, also could materially adversely affect our business, financial condition and results of operations.

WeRisks ~~intend,~~With inRespect ~~due time and upon advise of counsel,~~ to ~~take~~Our all measures to determine whether we are entitled to protection under current intellectual property laws for the cartoon segments we intend to produce. While no assurance can be given that we will be able to obtain the necessary protection over our intellectual property, we intend to aggressively assert our intellectual property rights, including those relating to any materials that may qualify for copyright protections as well as trade names or trademarks that we may develop. These rights are protected through the application for copyrights, the acquisition of trademark registrations and when appropriate, litigation against those who are, in our opinion, infringing these rights.Business

~~Reports~~We tohave ~~Stockholders~~a limited operating history.

WeContinuityX, ~~are~~Inc., ~~required~~which towe ~~file~~acquired ~~reports~~on ~~with~~November ~~the~~8, ~~SEC~~2011, ~~pursuant~~was toincorporated ~~the~~on ~~Securities~~March ~~Exchange Act of 1934~~25, ~~as amended (the “Exchange Act”)~~2011. As ~~These~~such, ~~reports~~our ~~include~~business ~~annual~~must ~~reports~~be onevaluated ~~Form~~in ~~10-K,~~view ~~quarterly~~of ~~reports~~the onrisks ~~Form 10-Q~~ and ~~current~~uncertainties ~~reports~~associated onwith ~~Form~~a 8start-Kup business. There ~~You~~can ~~may~~be ~~obtain~~no ~~copies~~assurance ofthat our ~~registration~~revenues ~~statement~~will ~~and~~continue ~~our~~to ~~future~~grow. We ~~filings~~may ~~with~~incur ~~the~~losses ~~SEC~~on ~~from~~a ~~the~~quarterly ~~SEC’s~~or ~~Public~~annual ~~Reference~~basis ~~Room~~for ata ~~100~~number Fof ~~Street,~~reasons ~~N.E.,~~both ~~Washington,~~within ~~D.C.~~and ~~20549,~~outside onour ~~official~~control. The ~~business~~growth ~~days~~of ~~during~~our ~~the~~business ~~hours~~and ofability ~~10 A.M.~~ to 3generate ~~P.M.~~revenue orwill onrely ~~the~~greatly ~~SEC’s~~upon ~~website,~~our atability ~~www.sec.gov.~~to ~~You~~execute ~~may~~our ~~also~~business ~~obtain~~plan. However ~~copies~~there ofcan ~~such~~be ~~documents~~no atassurance ~~prescribed~~that ~~rates~~we bywill ~~writing~~be able to ~~the~~successfully ~~Public~~implement ~~Reference~~our ~~Room~~business plan or bycontinue ~~calling~~to ~~the~~generate ~~SEC at 1-800-SEC-0330~~revenues.

~~Item~~Our ~~1A. Risk~~success ~~Factors~~depends on our ability to compete effectively in our industry.

~~Risks~~The ~~Related~~telecommunications industry is extremely competitive, particularly with respect to price and service. Our ~~Business~~failure to compete effectively with our competitors could have a material adverse effect on our business, financial condition and results of operations. A significant increase in industry capacity or reduction in overall demand would adversely affect our ability to maintain or increase prices. Further, we anticipate that prices for certain telecommunications services such as IP bandwidth will continue to decline due to a number of factors including (a) price competition as various network providers attempt to gain market share to cover the fixed costs of their network investments and/or install new networks that might compete with our networks; and (b) technological advances that permit substantial increases in the transmission capacity of many of our competitors’ networks.

We have no operating history and therefore we cannot project our revenues and results of operations.

We have no operating history and our business and investment must be considered in light of the risks and uncertainties to which a start up company is exposed. We cannot provide assurances that our business strategy will be successful or that we will generate any revenues in the future. We may incur losses on a quarterly or annual basis for a number of reasons, some within and others outside our control. The growth of our business and our ability to generate revenue will depend largely on our ability to execute our business plan and the acceptance of the educational cartoons that we may develop. However, no assurance can be given that we will successfully implement our business plan, that our educational cartoons will gain market acceptance or that we will be able to generate any revenues.

Members of our management team have no experience in producing and marketing educational cartoons.

Our officer has no experience in producing and marketing educational cartoons and our director or officer does not have any significant technical training or experience in this regard. Further, our officer or director does not have any experience in operating a publicly reporting company. As a result of management’s inexperience, there is a higher risk of us being unable to successfully execute our business plan or operate as a public company.

WeProblems ~~have~~in ~~incurred~~the ~~historical~~economy ~~losses~~could ~~and~~negatively asaffect ~~a result, we may not be able to generate profits, support~~ our ~~operations,~~future oroperating ~~establish a return on invested capital~~results.

WeThe ~~incurred~~problems ~~cumulative net losses from our inception, April 28, 2010 to June 30, 2011~~ in the ~~amount~~economy ofcould ~~$36,746. We~~adversely ~~expect~~affect ~~that~~ our ~~operating expenses will increase as we begin to produce and develop cartoon segments. In addition~~operations, weby ~~will~~among ~~incur additional expenses associated with being a public company, such as additional legal expenses, additional accounting costs and~~ other ~~expenses related to the compliance and disclosure requirements that are imposed on all public companies~~things, which are currently estimated at approximately $7,500 per quarter. We cannot assure you that our business strategy will be successful or that significant revenues or profitability will ever be achieved or, if they are achieved, that they can be consistently sustained or increased on a quarterly or annual basis. Further, based on our financial history since inception, our independent auditor has expressed substantial doubt as to our ability to continue as a going concern.

~~Our~~● ~~limited~~reducing ~~operating~~and/or ~~history~~delaying ~~makes~~the itdemand ~~difficult~~for toour ~~evaluate~~services; ● increasing our ~~current~~customer ~~business~~turnover, both with respect to customer terminations and ~~future~~with ~~prospects,~~respect to reduced prices upon renewals of customer agreements; ● leading to reduced services from our vendors facing economic difficulties; and ~~may~~● ~~increase~~increasing the ~~risk~~bad ofdebts ~~your~~in ~~investment~~our customer receivables.

WeThese ~~have~~and ~~been~~other inrelated ~~existence~~factors ~~only~~could ~~since~~negatively ~~April~~affect ~~2010. Our limited operating history will make it difficult for an investor to evaluate~~ our ~~current business and our~~ future ~~prospects.~~operating ~~We have encountered, and will continue to encounter, risks and difficulties frequently experienced by start-up companies~~results. ~~If we do not address these risks successfully, our business will be harmed, which may increase the risk associated with an investment in the Shares.~~

IfRapid wetechnological dochanges ~~not~~could ~~effectively~~affect ~~build~~the ~~our~~continued ~~sales~~use ~~force~~of ~~and internal support staff,~~ our ~~future operating results will suffer~~services.

WeThe ~~plan~~telecommunications toindustry ~~build~~is asubject ~~direct sales force that will be responsible for marketing our products~~ to ~~television~~rapid ~~station programmers~~ and ~~educators. We believe that there is~~ significant ~~competition~~changes ~~for~~in ~~direct~~technology ~~sales,~~that ~~service~~could ~~and~~materially ~~support~~affect ~~personnel with~~ the ~~skills~~continued ~~and~~use ~~knowledge~~of ~~that~~our ~~we, as a new business, will require~~services. ~~Our~~Changes ~~ability to achieve significant revenue growth will depend not only on our internal marketing but also on our success~~ in ~~recruiting,~~technology ~~training~~could ~~and~~negatively ~~retaining~~affect athe ~~sufficient~~desire ~~number~~ of ~~personnel~~customers to ~~support~~purchase our ~~growth.~~existing ~~New~~services ~~hires~~and ~~often~~may require ~~significant~~us ~~training~~to ~~and,~~make ~~in most cases, take~~ significant ~~time~~investments ~~before~~in ~~they~~order ~~achieve full productivity. Our intended hires may not become as productive as we expect, and we may be unable~~ to ~~hire~~meet orcustomer ~~retain~~demands afor ~~sufficient~~services ~~number~~incorporating ofnew ~~qualified individuals~~technologies. We Ifalso ~~our~~cannot ~~efforts~~assure tothat ~~build~~technological achanges ~~direct~~in ~~sales~~the ~~force~~communications ~~are~~industry ~~not~~and ~~successful~~Internet-related orindustry dowill not ~~generate~~have a ~~corresponding~~material ~~increase~~adverse ineffect ~~revenue,~~on our business, ~~will~~financial becondition ~~harmed~~and results of operations.

We may not be ~~unable~~able to ~~properly~~successfully ~~manage~~implement our ~~growth~~business strategy because we depend upon factors beyond our control, which could adversely affect our results of operations.

WeOur ~~may~~future besuccess ~~unable~~largely depends upon our ability to ~~properly~~implement ~~manage~~our ~~any~~business ~~rapid~~strategy ~~growth~~to increate ~~our~~new business inand ~~the~~revenue ~~event~~opportunities. Our ~~that~~results ~~the~~of ~~cartoons~~operations will be adversely affected if we ~~produce~~cannot ~~gain~~fully ~~wide~~implement ~~market~~our ~~acceptance~~business strategy. ~~Failure~~Successful toimplementation ~~manage~~depends ~~this~~upon ~~growth~~numerous ~~effectively~~factors ~~could~~beyond ~~adversely affect~~ our ~~profitability.~~control, Ifincluding weeconomic, ~~are~~competitive, ~~not~~regulatory ~~successful~~and inother ~~managing~~conditions orand ~~expanding~~uncertainties, ~~our~~the ~~operations~~ability orto ~~maintaining~~obtain ~~adequate~~licenses, ~~management~~permits, ~~financial~~franchises and ~~operating~~rights-of-way ~~systems~~on reasonable terms and ~~controls,~~conditions ~~our~~and ~~performance~~the ~~will~~ability beto ~~adversely~~hire ~~affected~~and retain qualified management personnel.

WeGovernmental ~~are~~regulation ~~highly~~may ~~dependent~~negatively ~~upon~~affect our ~~current management~~operations.

WeExisting ~~intend~~and tofuture ~~expand~~government ~~operations~~laws ~~in the future~~ and ~~anticipate~~regulations ~~that~~greatly ~~such~~influence ~~expansion~~how ofwe operate our ~~operations~~business. U.S. ~~will~~federal ~~continue~~and tostate belaws ~~required~~directly inshape ~~order~~the totelecommunications ~~address~~and ~~potential~~Internet ~~market opportunities~~markets. ~~Any such growth~~ Consequently, ifregulatory itrequirements ~~occurs,~~and ~~will~~changes ~~place~~could aadversely ~~significant~~affect ~~strain on~~ our ~~management~~operations and onalso ~~our~~influence ~~operational~~the ~~and~~markets ~~financial resources. Our success is principally dependent on our current management personnel~~ for ~~the~~telecommunications ~~operation~~and ~~of our~~Internet ~~business~~services. ~~The~~We ~~loss~~cannot ofpredict ~~any~~the offuture ~~the~~regulatory ~~members~~framework of our ~~management could negatively impact our ability to develop and/or sell our educational cartoons, which could adversely affect our financial results and impair our operations~~business.

WeLocal ~~have~~governments noalso ~~employment~~exercise orlegal ~~consulting~~authority ~~agreement~~that ~~with~~may have an adverse effect on our ~~Cartoon~~business ~~and~~because ~~Animation~~of ~~Advisor,~~our ~~Irwin~~need ~~Hansen~~to ~~and~~obtain rights-of-way for our ~~business~~fiber networks. While local governments may ~~suffer~~not prohibit persons from providing telecommunications services nor treat telecommunication service providers in ~~the~~a ~~event~~discriminatory ~~that~~manner, ~~Mr.~~they ~~Hansen~~can ~~decides~~affect tothe ~~cease~~timing toand ~~offer~~costs ~~his~~associated ~~services~~with toour ususe of public rights-of-way.

~~Mr.~~We Irwin Hansen, our Cartoon and Animation Advisor, provides his services to the Company free of charge pursuant to a verbal agreement between him and our Chief Executive Officer and President, Ms. Eileen Russell and we do not have ~~any~~incurred ~~written~~secured ~~agreement with Mr~~indebtedness. Hansen that obligates him to continue to provide his services to us, whether with or without compensation, for any definite period of time. Mr. Hansen is currently tasked with selecting and supervising our animators, with providing editorial direction and with selecting the final cartoon strips and sketches to be used in our cartoons. As such, any loss of his services may delay the execution of our business plan. Further, our anticipated expenses and forecasts regarding revenue all presume that Mr. Hansen will continue to provide his services to us free of charge. As such, in the event that Mr. Hansen ceases to provide services to us under the current arrangement, for whatever reason, our financial operations will suffer.

We have secured certain debt using our receivables as collateral. We currently have a secured borrowing of $3,000,000 with a pledge of the subject receivables as collateral with Forest Capital, LLC (the “Factor”) pursuant to the Forest Capital Master Factoring Agreement.

In addition, in June 2012, and in September 2012, we issued a series of Senior Secured Convertible Debentures totaling $1,985,000 and $2,975,000, respectively. The Senior Secured Convertible Debentures are secured by all of the assets and property of the Company and are due on June 15, 2014 and are junior only to the interest of the Factor and other existing secured interests incurred with respect to the purchase of equipment.

We cannot predict our future tax liabilities. If we become subject to increased levels of taxation, our financial condition and results of operations could be adversely affected.

We provide telecommunication and other services in multiple jurisdictions across the United States and internationally and are therefore subject to multiple sets of complex and varying tax laws and rules. We cannot predict the amount of future tax liabilities to which we may become subject. Any increase in the amount of taxation incurred as a result of our operations or due to legislative or regulatory changes could result in a material adverse effect on our sales, financial condition and results of operations. While we believe that our current provisions for taxes are reasonable and appropriate, we cannot assure you that these items will be settled for the amounts accrued or that we will not identify additional exposures in the future.

WeCompetition ~~have~~could ~~not~~substantially ~~sold~~impair ~~any~~our ~~cartoons~~business toand ~~date. We~~our ~~cannot~~operating ~~guarantee we will be successful in selling cartoons or that if we are able to sell cartoons, that we will make a profit~~results.

WeThe doIT ~~not~~industry ~~currently~~is ~~have~~extremely ~~any~~competitive, ~~clients~~particularly ~~who~~with ~~have~~respect ~~agreed~~ to ~~purchase~~price ~~the~~and ~~cartoons~~service. We weare ~~intend~~engaging in a business similar to ~~produce~~several major corporations. Most of the financial and notechnical ~~assurance~~resources, ~~can~~name berecognition, ~~given~~market ~~that~~access, wecommercial ~~will~~connections, besales ~~successful~~and inmarketing ~~selling~~and ~~the~~research ~~cartoons~~and todevelopment resources and capabilities of each of our ~~targeted~~competitors ~~markets~~far exceed ours. ~~Further,~~ In ~~even~~view ifof weour ~~obtain~~limited ~~clients~~history, nolack ~~assurance~~of ~~can~~capital and number of personnel, it will be ~~given~~difficult ~~that~~for ~~that~~us to gain market access, and if we ~~will~~do ~~generate~~develop a ~~profit~~successful ~~from~~service, ~~such~~one ~~sales~~or more of these companies may develop a similar or superior service within a short time. IfOur wefailure ~~cannot~~to ~~generate~~compete effectively with our competitors could have a ~~profit~~material adverse effect upon our business, wefinancial ~~will~~condition ~~have~~and results of operations. A significant increase in industry capacity or reduction in overall demand would adversely affect our ability to ~~suspend~~maintain or ~~cease~~increase ~~operations~~prices. Increased ~~and~~activity ~~any~~by ~~investor~~these competitors could result in ~~the~~downward ~~Company~~pricing ~~may~~pressure ~~lose~~or ~~their~~loss ~~entire~~of ~~investment~~customers, which could adversely affect our business, financial condition and results of operations.

IfWe wedepend ~~are~~upon ~~unable~~third toparties ~~sell~~for important parts of our ~~products~~business operations and the failure of those third parties to ~~our~~provide ~~targeted~~their ~~market~~products, ~~our~~services ~~revenue~~and/or ~~will~~technologies ~~not~~could ~~grow~~negatively asaffect ~~expected~~our services.

~~Our~~We ~~ability~~rely toupon ~~attract~~third ~~customers~~parties ~~and~~for ~~generate~~important ~~revenue~~parts ~~will~~of ~~depend in large part on~~ our ~~ability~~business, toincluding ~~successfully~~provision ~~market~~of the ~~cartoons~~products, weservices ~~produce~~and/or totechnologies ~~our~~which ~~targeted~~we ~~markets, television~~market ~~station programmers~~ and ~~educators~~sell. ~~Our~~ ~~success~~If inthese ~~selling~~third ~~our~~party ~~product~~providers ~~depends~~fail onto ~~several~~perform ~~factors, including~~ the ~~timely~~services ~~completion,~~required ~~introduction~~under ~~and~~the ~~market~~terms ~~acceptance~~ of our ~~educational~~contracts ~~cartoons.~~with ~~Further,~~them ~~any new educational cartoons we develop~~ or ~~produce~~fail ~~in response~~ to ~~market~~renew ~~demands~~agreements ~~may~~upon ~~not~~reasonable beterms ~~completed~~and inconditions, ait ~~timely~~could ormaterially ~~cost-effective~~and ~~manner,~~adversely oraffect ~~may not achieve~~ the ~~broad~~provisioning ~~market~~of ~~acceptance~~our ~~necessary~~products, toservices ~~generate~~and/or ~~significant~~technologies, ~~revenue. If we are unable to successfully market~~ and ~~sell the cartoons that~~ we ~~produce,~~may ~~sell~~experience ~~the~~difficulties ~~same~~locating ~~into~~alternative ~~new~~service ~~markets~~and ortechnology ~~enhance~~providers ~~existing~~on ~~educational~~favorable ~~cartoons to meet customer requirements~~terms, ~~our~~if ~~revenue~~at ~~will not grow as expected~~all, ~~which~~and ~~may~~our ~~have~~operations acould ~~negative~~be ~~impact~~negatively ~~on our financial operations~~affected.

We ~~expect~~are todependent ~~face~~upon ~~intense~~key ~~competition~~personnel.

~~The~~Mr. ~~educational~~David ~~cartoons~~Godwin ~~will~~is ~~compete~~critical ~~with~~to aour ~~variety~~operations. ofIf ~~other~~we ~~programs~~were ~~intended~~to ~~for~~lose ~~children. All~~the services of ~~our~~Mr. ~~competitors~~Godwin, ~~have~~it ~~greater~~could ~~financial~~have ~~resources,~~a ~~greater~~material ~~public~~adverse ~~and~~effect ~~industry~~upon ~~recognition~~our ~~and~~business. The ~~broader~~Company ~~marketing~~intends ~~capabilities~~to ~~than~~obtain ~~us.~~Key InPerson ~~addition,~~life ~~the~~insurance ~~market~~on inMr. ~~which~~Godwin. To wedate ~~operate~~no isKey ~~characterized~~Person byLife ~~numerous~~Insurance ~~small~~policy ~~companies,~~has ~~with~~been ~~whose~~obtained ~~products~~upon wethe ~~may~~life beof ~~unfamiliar~~Mr. ~~with,~~Godwin and ~~which~~there ~~may~~can be inno ~~direct~~assurance ~~competition~~as ~~with our products. Our inability~~ to ~~adequately~~the ~~compete~~availability ~~with~~or ~~our~~cost ~~competitors regardless~~ of ~~their~~such ~~respective~~a ~~size, may~~policy ~~result~~upon inthe ~~lost~~life ~~sales~~of ~~and~~Mr. ~~will affect our overall profitability~~Godwin.

~~Risks~~ Our ~~Related~~directors Toand ~~Our~~officers ~~Industry~~will have substantial influence over our operations and control substantially all business matters.

~~Lack~~Currently, our sole director is also one of ~~compliance~~our ~~with~~two ~~industry~~executive ~~laws~~officers. We ~~and~~will ~~regulations~~not benefit from the multiple judgments which a greater number of directors or officers may ~~result~~provide, and we rely completely upon the judgment of such people in ~~litigation~~making ~~against~~business usdecisions, without the assistance of any outside directors on matters which require the judgment of the Board of Directors.

We ~~operate~~will inneed afinancing ~~highly regulated industry. Our failure~~ to ~~comply~~develop ~~with rules and regulations of various federal, state and local government authorities could have a significant financial impact on~~ our ~~operations~~business and ~~profitability. No assurance can be given that we will always be in compliance with these rules and regulations. Failure~~ to ~~comply~~meet with these rules and regulations may result in, among other things, class action lawsuits, administrative enforcement actions and/or civil and criminal liability against us, any of which may have a negative impact on our ~~reputation~~capital ~~and our over-all profitability~~requirements.

~~Inability~~We will need financing to ~~protect~~develop our ~~intellectual~~business ~~property~~and ~~may~~meet ~~have~~our acapital ~~negative~~requirements. We ~~impact~~currently onare ~~our~~making ~~profitability.~~arrangements to obtain financing and we will be dependent upon sources such as:

~~Trademarks~~● ~~and~~funds ~~other~~from ~~proprietary~~private ~~rights~~sources ~~are~~such ~~important~~as, toloans ~~our~~from ~~success~~shareholders and ~~competitive~~private ~~position. While~~placements, we● ~~intend~~funds tofrom ~~protect~~public ~~our trademarks and other proprietary rights through a variety of means when products that are entitled to intellectual property protection are developed by us~~offerings, no assurance can be given that such actions will be adequate to protect these rights. Our failure to protect our intellectual property may result in third parties using our products without payment of royalties to us and ~~may~~● ~~have~~future ~~a negative impact on our profitability~~earnings.

Financing may only be available, if at all, upon terms which may not be commercially advantageous. If adequate funds are not available from operations or additional sources of financing, our business will be materially adversely affected.

We have received substantially all of our revenues from one service provider.

For the year ended June 30, 2012, approximately 80% of our revenues were derived from one entity, AT&T, Inc. (“AT&T”). AT&T has designated us as a “Premier Solutions Provider”. If, for any reason this relationship terminates, management believes it will be able to utilize other service providers for its customers. There can be no assurance that any such termination will not disrupt our business activities and cash flow.

Our primary bank account which receives a substantial portion of our revenues is under the control of another party.

The bank account into which substantially all of our revenues are deposited is under the exclusive control of Forest Capital, LLC. This account receives the payments from two of our service providers, including AT&T, which, to date, has been our primary source of revenues, and serves as collateral for $3,000,000 in account receivables pledged to Forest Capital by Continuity. We have two other accounts which receive revenues from other sources as well as the payments from accounts receivable in excess of what is owed to Forest Capital, LLC under our factoring agreement.

~~Assertions~~If bywe acannot ~~third~~consistently ~~party~~generate ~~that~~positive wecash ~~infringe~~flows ~~its~~or ~~intellectual~~raise ~~property,~~sufficient ~~whether~~capital ~~successful~~then orwe will not, ~~could~~realize ~~subject~~our usgrowth topotential ~~costly~~ and ~~time-consuming~~the ~~litigation~~business could suffer financially .

~~The~~We ~~industry in which we~~ are ~~engaged~~attempting into isgrow ~~characterized~~while bymaintaining ~~the~~costs. ~~existence of a large number of copyrights~~However, ~~trademarks~~we ~~and~~expect ~~trade~~to ~~secrets~~require ~~and by frequent litigation based on allegations of infringement or other violations of intellectual property rights. As we face~~ increasing ~~competition~~cash ~~and~~flows ~~become~~to afinance ~~publicly~~our ~~traded~~needs ~~company,~~in the ~~possibility that claims against us for alleged intellectual property rights violations may grow~~marketplace. ~~Any~~To ~~intellectual~~finance ~~property~~growth, ~~rights~~we ~~claim~~will ~~against~~need ~~us,~~to ~~with~~raise orcapital ~~without~~to ~~merit,~~fund ~~could~~infrastructure ~~be time-consuming~~needs, ~~expensive~~expand toour ~~litigate~~service orofferings ~~settle~~ and ~~could~~implement ~~divert~~more ~~management~~aggressive ~~attention~~sales, marketing and ~~our financial~~advertising ~~resources~~programs. However, Anif ~~adverse determination could also prevent us from offering the cartoon segments~~ we ~~intend~~are tonot ~~produce~~successful toin ~~our~~raising ~~customers~~additional ~~and~~capital, ~~may require that~~ we ~~develop~~will ~~substitute cartoon segments that do~~ not ~~infringe~~meet onour ~~any~~projections ~~third~~for ~~party’s~~growth ~~intellectual~~and ~~property,~~sales ~~which~~ could be ~~financially~~adversely ~~burdensome~~affected ~~and~~due ~~may~~to ~~affect~~loss ~~our~~of ~~profitability~~customers.

WeRisks ~~may~~With ~~fail~~Respect to ~~comply~~Our ~~with~~Shares ~~rules~~of ~~and~~Common ~~regulations promulgated by the FCC and other state and federal agencies.~~Stock

~~Though~~We wehave ~~receive~~never ~~advice~~paid ~~from~~dividends ~~management~~on ~~and~~our ~~consultants~~Common ~~regarding compliance with FCC regulations, such regulations are very complex and, in some instances, are subject to interpretation~~Stock. Our business is primarily regulated by the FCC which has jurisdiction over granting licenses and monitoring what goes out over the public airwaves. Any violation or alleged violation of FCC regulations could adversely affect our business.

~~Risks~~We ~~Relating~~have Tonever ~~Our~~paid cash dividends on our Common Stock, and there can be no assurance that we will have sufficient earnings to pay any dividends with respect to our Common Stock. Moreover, even if we have sufficient earnings, we are not obligated to declare dividends with respect to the Common Stock. The future declaration of any cash or stock dividends will be in the sole and absolute discretion of the Board of Directors and will depend upon our earnings, capital requirements, financial position, general economic conditions and other pertinent factors. It is also possible that the terms of any future debt financing may restrict the payment of dividends. We presently intend to retain earnings, if any, for the development and expansion of our business.

~~Because~~ There ~~our~~can ~~sole~~be ~~officer~~no ~~and~~assurance ~~director~~that ~~owns 38.46% of~~ our ~~issued~~Common ~~and~~Stock ~~outstanding~~will ~~common~~ever ~~stock,~~be ~~she~~quoted ~~can~~on ~~exert~~any ~~significant~~market ~~influence~~or ~~over~~traded ~~corporate~~on ~~decisions~~national ~~that~~securities ~~may~~exchanges beor ~~disadvantageous to minority shareholders~~markets.

AsOur ~~of October~~Common ~~11,~~Stock ~~2011,~~has ~~our~~received ~~Chief~~approval ~~Executive~~from ~~Officer,~~FINRA ~~President and~~to ~~sole~~be ~~director,~~listed ~~Ms.~~but ~~Eileen~~has ~~Russell~~not ~~owns~~yet ~~approximately~~traded ~~38.46%~~as of ~~our~~the ~~issued~~date ~~and~~of ~~outstanding~~this ~~shares~~report. In ofaddition, ~~common~~we ~~stock.~~have ~~While~~received ~~such~~approval ~~ownership~~from ~~does~~DTC ~~not~~to ~~grant her~~have ~~absolute~~it ~~control~~begin ~~over~~electronically ~~the~~trading ~~Company,~~and ~~such~~clearing ~~ownership~~our isfree ~~sufficient~~trading toCommon ~~permit~~Stock. ~~her~~Until tosuch ~~exert~~time ~~influence~~as inour ~~determining~~Common ~~the~~Stock ~~outcome~~is oftraded ~~all~~upon ~~corporate~~any ~~transactions~~securities exchanges or ~~other matters~~markets, ~~including~~of ~~the~~which ~~election~~there ofcan ~~directors,~~be ~~mergers,~~no ~~consolidations~~assurance, accurate quotations as to the ~~sale~~market value of ~~all~~our orsecurities ~~substantially~~may ~~all~~not be possible. Sellers of our ~~assets,~~securities ~~and~~are alikely ~~change~~to inhave ~~control.~~more ~~Her~~difficulty ~~interests~~disposing ~~may~~of ~~differ~~their ~~from~~securities ~~the~~than ~~interests~~sellers of ~~our~~securities ~~other~~which ~~shareholders~~are ~~and~~listed ~~thus~~upon ~~may~~any ~~result~~of inthe ~~corporate~~several ~~decisions~~NASDAQ ~~that~~markets, ~~are~~the ~~disadvantageous~~New toYork ~~our~~Stock Exchange, the American Stock Exchange, or one of the other ~~shareholders~~national securities exchanges or markets.

WeAlthough ~~arbitrarily~~we ~~determined~~have ~~the~~made ~~price~~arrangements offor our Common Stock to be traded upon a public market, the ~~shares~~OTCQB, ofthere ~~our~~can ~~common~~be ~~stock~~no toassurance that we would be ~~sold~~successful ~~may~~in ~~not~~having ~~reflect~~our ~~the~~Common ~~actual~~Stock ~~market~~quoted ~~price~~on ~~for~~any ~~the~~other ~~Shares~~public markets, or that if so quoted, that our Common Stock would thereafter increase in value.

~~The~~Even ~~initial~~if ~~offering~~public ofmarkets ~~3,000,000~~do ~~shares of common stock at $0.05 per share offered by us was determined by us arbitrarily. The price is not based on our financial condition and prospects~~develop, ~~market~~the ~~prices~~volume of ~~similar~~trading ~~securities~~in ofour ~~comparable~~Common ~~publicly~~Stock ~~traded~~will ~~companies,~~presumably ~~certain~~be ~~financial~~limited and ~~operating~~likely ~~information~~dominated ofby ~~companies~~a ~~engaged~~few ~~in similar activities to ours, or general conditions of the securities market~~individuals. The ~~price~~limited ~~may not be indicative of the market price~~volume, if any, ~~for~~will ~~the~~make ~~common stock that may develop in~~ the ~~trading market after this offering. The market~~ price ~~for~~of our ~~common~~Common ~~stock,~~Stock ifsubject ~~any,~~to ~~may~~manipulation ~~decline~~by ~~below~~one ~~the~~or ~~initial~~more ~~public~~shareholders ~~price at which the Shares are offered. Moreover, recently the stock markets have experienced extreme price~~ and ~~volume~~will ~~fluctuations~~significantly ~~which~~limit ~~have had a negative effect impact on smaller companies. In~~ the ~~past,~~number ~~securities~~of ~~class~~shares ~~action~~that ~~litigation~~one ~~has~~can ~~often~~purchase ~~been~~or ~~instituted~~sell ~~against various companies following periods of volatility~~ in ~~the~~a ~~market~~short ~~price~~period of ~~their securities~~time. IfAn ~~instituted~~investor ~~against~~may ~~us,~~find ~~regardless~~it ofdifficult ~~the~~to ~~outcome,~~dispose ~~such litigation would result in substantial costs and a diversion~~ of ~~management’s attention and resources~~his, ~~which~~hers ~~would~~or ~~increase~~its ~~our operating expenses and affect our financial condition and business operations~~securities.

~~Because~~We webecame doa ~~not~~publicly ~~intend~~traded tocompany ~~pay~~through ~~any~~the ~~dividends~~acquisition ~~on our common stock, holders~~ of ~~our~~a ~~common~~public ~~stock~~shell ~~must~~company, ~~rely~~and onwe ~~stock~~could ~~appreciation~~face ~~for~~repercussions ~~any~~as ~~return~~a onresult ~~their investment~~thereof.

We ~~have~~face ~~not~~risks ~~declared~~associated orwith ~~paid~~being ~~any~~a ~~dividends~~former onpublic ~~our~~shell ~~common~~company. ~~stock~~The ~~since~~current ~~our~~regulatory ~~inception,~~environment ~~and~~does ~~we do~~ not ~~anticipate~~look ~~paying~~favorably ~~any~~upon ~~such~~reverse ~~dividends~~acquisitions ~~for~~which ~~the~~could ~~foreseeable~~adversely ~~future.~~affect ~~Accordingly, holders of~~ our ~~common stock will have to rely on stock appreciation, if any, to earn a return on their investment in our common stock~~shareholders.

~~Additional~~ We ~~issuances~~may ofbe ~~our~~subject ~~securities~~to ~~may~~the ~~result~~Securities inand ~~immediate~~Exchange ~~dilution~~Commission's to"penny ~~existing~~stock" ~~shareholders~~rules if our Common Stock sells below $5.00 per share.

WeIf ~~are~~the ~~authorized~~trading price of our Common Stock sells below $5.00 per share, trading in our securities may be subject to ~~issue~~the uprequirements of the Securities and Exchange Commission's rules with respect to 10securities trading below $5.00,~~000,000 shares~~ which are referred to as "penny stocks". These rules require the delivery prior to any transaction of ~~common~~a disclosure schedule explaining the penny stock market and all associated risks and impose various sales practice requirements on broker-dealers who sell "penny stocks" to persons other than established customers and accredited investors, ~~$0.001~~which ~~par~~are ~~value~~generally ~~per~~defined ~~share~~as institutions or an investor individually or with their spouse, ofwho ~~which~~has 3a net worth exceeding $1,~~250~~000,000, ~~shares~~excluding oftheir ~~common~~primary ~~stock~~residence, ~~are~~or ~~currently~~annual ~~issued~~income, ~~and~~individually ~~outstanding~~exceeding $200,000 or, with their spouse, exceeding $300,000. ~~Our~~For ~~Board~~these types of ~~Directors~~transactions ~~has~~the broker-dealer must make a special suitability determination for the ~~authority~~purchaser toand ~~cause~~have usreceived the purchaser's written consent to ~~issue~~the ~~additional~~transaction ~~shares~~prior ofto ~~common~~the ~~stock~~sale. WeIn ~~may~~addition, inbroker-dealers must disclose commissions payable to both the ~~future,~~broker-dealer ~~issue~~and ~~shares~~the inregistered ~~connection~~representative ~~with~~and ~~financing~~current ~~arrangements~~quotations orfor ~~otherwise~~the securities they offer. ~~Any~~The additional burdens imposed upon broker-dealers by such ~~issuances~~requirements ~~will~~may ~~result~~discourage inbroker-dealers ~~immediate~~from ~~dilution~~effecting totransactions in our ~~existing~~Common ~~shareholders’ interests~~Stock, which ~~will~~could ~~negatively~~severely ~~affect~~limit ~~the~~its ~~value~~market ofprice ~~your~~and ~~Shares~~liquidity.

~~Currently,~~Our ~~there~~Director ishas nothe ~~public~~right ~~market~~to ~~for~~authorize ~~our~~the ~~common~~issuance ~~stock,~~of ~~and~~Preferred ~~there is no assurance that any public market will ever develop or that our common stock will be quoted for trading and, even if quoted, that a viable, liquid market with low volatility will develop~~Stock.

~~Currently,~~Our ~~our common stock is not listed on any public market~~director, ~~exchange,~~without orfurther ~~quotation~~action ~~system.~~by ~~Although we are taking steps to enable~~ our ~~common stock to be publicly traded~~shareholders, ahave ~~market~~the ~~for~~authority ~~our~~to ~~common~~issue ~~stock~~shares ~~may~~of ~~never~~Preferred ~~develop.~~Stock Wefrom ~~currently~~time ~~plan~~ to ~~apply~~time ~~for~~in ~~quotation~~one ofor ~~our~~more ~~common~~series, ~~stock~~and onto ~~the~~fix ~~Over~~ the ~~Counter~~number ~~Bulletin~~of ~~Board~~shares, (the ~~“OTC~~relative ~~Bulletin~~rights, ~~Board”).~~conversion ~~However~~rights, ~~our~~voting ~~common~~rights, ~~stock~~terms ~~may~~of ~~never be traded on the OTC Bulletin Board or even if traded~~redemption, aliquidation ~~viable~~preferences ~~public~~and ~~market~~any ~~may~~other ~~not materialize. Even if we are successful in developing a public market~~preferences, ~~there~~special ~~may~~rights ~~not~~and bequalifications ~~enough~~of ~~liquidity~~any in such ~~market to enable shareholders to sell their Shares~~series. IfAny ~~our~~issuance ~~common~~of ~~stock~~Preferred isStock ~~not~~could ~~quoted~~adversely onaffect the ~~OTC~~rights ~~Bulletin~~of ~~Board~~holders orof ifCommon aStock ~~viable~~and ~~public market for our common stock does not develop, investors may not be able to re-sell~~ the ~~Shares,~~value ~~rendering the same effectively worthless and resulting in a complete loss~~ of ~~their~~such ~~investment~~Common Stock.

WeIn ~~are~~addition, ~~planning~~the toCompany ~~identify~~has athe ~~market~~right ~~maker~~ to ~~file~~issue anpreferred ~~application~~shares ~~with~~which ~~the~~shall ~~Financial~~have ~~Industry~~anti-dilutive ~~Regulatory Authority, Inc~~rights. If ~~(“FINRA”) on~~the ~~our~~Company ~~behalf~~issues so10,000,000 ~~that we may quote our~~ shares of ~~common~~preferred stock ~~on the OTC Bulletin Board (~~which isare ~~maintained~~convertible byinto ~~the~~30,000,000 ~~FINRA).~~shares Weof ~~cannot~~Common ~~assure~~Stock, ~~you~~an ~~that~~example ~~such~~of ~~market~~anti-dilutive ~~maker’s~~rights ~~application~~would ~~will~~provide bethat ~~accepted~~if by the ~~FINRA.~~Company Wedoes ~~are~~a ~~not~~reverse ~~permitted~~split toand ~~file such application on our own behalf. If the application is accepted~~100,000,000 ~~there~~shares ~~can be no assurances as to whether any market for our common stock will develop or~~ of ~~the~~Common ~~price~~Stock atoutstanding ~~which~~are ~~our~~reduced ~~common~~to ~~stock~~50,000,000 ~~will~~shares, ~~trade. If~~ the ~~application is accepted~~10,000,000 weshares ~~cannot~~of ~~predict~~Preferred ~~the~~Stock ~~extent~~would continue to ~~which~~be ~~investor~~convertible ~~interest~~into ~~in us will lead to~~ the ~~development of an active~~30,000,000 ~~liquid~~shares ~~trading market. Active trading markets generally result in lower price volatility and more efficient execution~~ of ~~buy~~Common ~~and sell orders for investors~~Stock.

~~In addition, our common stock is unlikely to be followed by any market analysts, and there may be few institutions acting as market makers for the common stock~~ITEM 1B. ~~Either~~UNRESOLVED ofSTAFF these factors could adversely affect the liquidity and trading price of our common stock. Until our common stock is fully distributed and an orderly market develops in our common stock, if ever, the price at which it trades is likely to fluctuate significantly. Prices for our common stock will be determined in the marketplace and may be influenced by many factors, including the depth and liquidity of the market for shares of our common stock, developments affecting our business, including the impact of the factors referred to elsewhere in these Risk Factors, investor perception of the Company, and general economic and market conditions. No assurances can be given that an orderly or liquid market will ever develop for the shares of our common stock.COMMENTS

IfNot ~~we do not comply with the state regulations in regard to the sale of these securities or find an exemption therefrom there may be potential limitations on the resale of your stock~~applicable.

With few exceptions, every offer or sale of a security must, before it is offered or sold in a state, be registered or exempt from registration under the securities, or blue sky laws, of the state(s) in which the security is offered and soldITEM 2. Blue sky statutes vary widely and there is very little uniformity in the blue sky filing requirements among state securities laws. To date, we have offered our common stock for sale since the effectiveness of the Registration Statement to potential purchasers in the states of New York, New Jersey, Connecticut and Florida. While we intend to review the relevant blue sky laws of these states before the distribution of the shares therein, should we fail to properly register the securities as required by the respective states or find an exemption from registration, you may not be able to resell your stock once purchased.PROPERTIES

~~Because~~The weCompany ~~will~~leases bespace ~~subject~~in toMetamora, ~~“penny~~Illinois ~~stock”~~through ~~rules~~its ~~once~~subsidiary, ~~our~~ContinuityX, ~~shares~~Inc. ~~are~~The ~~quoted~~term onof the ~~OTC~~lease ~~Bulletin~~ends ~~Board~~July 31, 2016 and the ~~level~~rent ofis ~~trading~~$1,950 ~~activity~~per inmonth. ~~our~~In ~~stock~~September, ~~may~~2012, bethe ~~reduced~~Company entered into an agreement to lease office space at 800 3rd Avenue, New York, NY on a month to month basis for $4,850 per month.

~~Broker-dealer~~We ~~practices~~presently inhave ~~connection~~no ~~with~~agreements transactions in “penny stocks” are regulated by penny stock rules adopted by the Securities and Exchange Commission. Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on some national securities exchanges or quoted on NASDAQ). The penny stock rules require a broker-dealer, prior to aacquire ~~transaction~~any ~~in a penny stock not otherwise exempt from the rules~~properties, ~~to deliver a standardized risk disclosure document that provides information about penny stocks~~ and ~~the~~have ~~nature~~no ~~and~~policy ~~level of risks in the penny stock market. The broker-dealer also must provide the customer~~ with ~~current~~respect ~~bid~~to ~~and~~investments ~~offer~~or ~~quotations~~interest ~~for the penny stock, the compensation of the broker-dealer and its salesperson~~ in ~~the~~real ~~transaction~~estate, ~~and,~~real ifestate ~~the~~mortgages ~~broker-dealer~~or is the sole market maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market, and monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, broker-dealers who sell these securities to persons other than established customers and “accredited investors” must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. Consequently, these requirements may have the effect of ~~reducing the level of trading activity~~, ifor ~~any,~~interests in ~~the secondary market for a security subject to the penny stock rules~~, ~~and~~entities ~~investors~~primarily engaged in ~~our~~real ~~common~~estate ~~stock may find it difficult to sell their Shares~~activities.

ITEM 3. LEGAL PROCEEDINGS

We are not a party to any legal proceedings.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

Item 1B. Unresolved Staff Comments

Not Appliable.

Item 2. Property

We currently maintain our corporate office at 101 East 52nd Street, 10th Floor, New York, NY 10022, which premises are currently being provided to us free of charge from an independent third party that has no affiliations with the Company.

Item 3. Legal Proceedings

There are no pending, nor to our knowledge threatened, legal proceedings against us.

Item 4. (Removed and Reserved)

PART II

~~Item~~ITEM 5. ~~Market~~MARKET ~~for~~FOR ~~Registrant~~REGISTRANT’sS ~~Common~~COMMON ~~Equity~~EQUITY, ~~Related~~RELATED ~~Stockholder~~STOCKHOLDER ~~Matters~~MATTERS ~~and~~AND ~~Issuer~~ISSUER ~~Purchases~~PURCHASES ofOF ~~Equity~~EQUITY ~~Securities.~~SECURITIES

Market ~~for Our Common Equity~~Information

~~There~~The isCompany’s ~~presently~~Common noStock ~~public~~has ~~market~~been ~~for~~approved ~~our~~to ~~common~~be ~~stock.~~quoted ~~Our~~by ~~registration~~OTC/QB ~~statement~~and ~~was~~the ~~declared~~OTC ~~effective~~Bulletin onBoard ~~May~~under ~~05,~~the ~~2011~~symbol CUSX. WeIn ~~will~~addition, ~~apply~~we ~~for~~have ~~quotation~~received ofapproval from DTC to have it begin electronically trading and clearing our ~~common~~free ~~stock~~trading onCommon Stock. As of the ~~OTC~~date ~~Bulletin~~of ~~Board.~~this ~~However~~report, wethe ~~cannot~~Company’s ~~assure~~Common ~~you~~Stock ~~that~~has ~~our~~not ~~common~~yet ~~stock~~been ~~will~~traded beand ~~quoted~~no onquotations ~~the~~of ~~OTC~~our ~~Bulletin~~price ~~Board~~are ~~or,~~available ifas ~~quoted,~~of ~~that~~the adate ~~public~~of ~~market~~this ~~will materialize~~report.

~~The~~There ~~SEC~~were ~~has~~approximately ~~adopted~~76 ~~rules~~shareholders ~~that~~of ~~regulate~~record ~~broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price~~ of ~~less than $5.00, other than securities registered on certain national securities exchanges or quoted on~~ the ~~NASDAQ~~Company’s ~~system,~~Common ~~provided~~Stock ~~that~~as ~~current~~of ~~price~~September ~~and volume information with respect to transactions in such securities is provided by the exchange or quotation system. The penny stock rules require a broker-dealer~~18, ~~prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the Securities and Exchange Commission, that:~~2012.

~~(a)~~The ~~contains~~Company ahas ~~description~~no ofplans to declare cash dividends on its Common Stock in the ~~nature~~future and ~~level~~has ofnot ~~risk~~declared inany since inception. There are no restrictions which limit the ~~market~~ability ~~for~~of ~~penny~~to ~~stocks~~declare incash ~~both~~dividends ~~public~~on ~~offerings~~its Common Stock and ~~secondary~~does ~~trading;~~not believe that there are any that are likely to do so in the future.

(b) contains a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties or other requirements of the securities laws;

(c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price;

(d) contains a toll-free telephone number for inquiries on disciplinary actions;

(e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and

(f) contains such other information and is in such form, including language, type, size and format, as the Securities and Exchange Commission shall require by rule or regulation.

The broker or dealer also must provide, prior to effecting any transaction in a penny stock, the customer with:

(a) bid and offer quotations for the penny stock;

(b) the compensation of the broker-dealer and its salesperson in the transaction;

(c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and

(d) a monthly account statement showing the market value of each penny stock held in the customer’s account.

In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a suitably written statement.

These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our common stock. Therefore, if our common stock becomes subject to the penny stock rules, stockholders may have difficulty selling those securities.

Shareholders of Our Common Stock

As of October 11, 2011, we have 28 shareholders of record.

Dividends

We have never declared or paid any cash dividends on our common stock. We currently intend to retain future earnings, if any, to finance the expansion of our business. As a result, we do not anticipate paying any cash dividends in the foreseeable future.

Securities Authorized for Issuance under Equity Compensation Plans

We do not have any securities authorized for issuance under any equity compensation plans.

Recent Sales of Unregistered Securities

~~Since~~The following sets forth information relating to all previous sales during the ~~Company’s~~period ~~inception~~covered onby ~~April~~this ~~28,~~report ~~2010~~of our Common Stock, wewhich ~~sold~~sales were not registered pursuant to the ~~following~~Securities ~~securities:~~Act.

1.On InNovember ~~May~~8, ~~2010,~~2011 we ~~sold~~issued 1an aggregate of 7,~~000~~300,000 shares to 10 shareholders of ~~our~~Company ~~common~~in exchange for 100% of the stock toin ~~our~~ContinuityX, ~~Chief~~Inc. The ~~Executive~~shareholders ~~Officer~~who ~~and~~are ~~President~~designees of Highland Global Partners, MsInc. ~~Eileen~~(“Highland”), ~~Russell~~who are designated in the chart below, ~~for~~have ~~proceeds~~agreed ofto ~~$10~~cancel 1,500,000; shares of these shares. Please note that the shares listed below do not reflect the forward stock split by the Company of December 28, 2011 or the Stock Dividend issued by the Company on January 27, 2012. A list of the Company shareholders and the stock received are listed below:

2. From May 11, 2010 to June 30, 2010, we sold an aggregate of 1,750,000 shares of common stock to 26 other individuals for aggregate proceeds of $17,500.

NAME OF INVESTOR	TOTAL SHARES
David Godwin		2,040,000
Anthony G. Roth		1,440,000
Gary Elliston		1,320,000
Andrew Rubin		312,500*
Lisa Diaz		312,500*
Linda Rubin		312,500*
Robert M. Rubin		312,500*
Breckenridge Associate, Inc.		570,000*
Beverly Pomerantz		340,000*
Elizabeth Rosenfeld		340,000*

3.The Onnumber ~~December~~of ~~15,~~Shares ~~2010,~~listed wedoes ~~issued~~not anreflect ~~aggregate~~the ofsubsequent ~~500,000~~forward ~~shares of our common~~ stock tosplit ~~our Chief Executive Officer~~ and ~~President,~~stock ~~Ms.~~dividend ~~Eileen Russell, and to our former Vice-President and secretary, Ms. Charlotte Kelly Veal, for services rendered to the Company~~ by ~~each of them during~~ the ~~month of December, 2010~~Company.

We* ~~believe~~Subsequently ~~that~~cancelled ~~the~~60% ~~sales~~ of ~~these~~shares ~~securities~~received ~~were considered to be exempt from registration under Section 4~~(2)as ofstated ~~the Securities Act and/or Rule 506 of Regulation D promulgated there under. The purchasers of the securities~~ in ~~such~~table) ~~transactions~~pursuant ~~represented their intention~~ to ~~acquire~~ the ~~securities~~Acquisition for investment purposes only and not with a view to or for sales in connection with any distribution thereof and appropriate legends were affixed to the certificates for the securities issued in such transactions.Agreement

~~Use of Proceeds~~11

WeITEM ~~conducted a self-underwritten offering of 3,000,000 shares of common stock in the public market (the “Offering”), which was registered with the SEC on Form S-1 Registration Statement (File No~~6. ~~333-168587).~~SELECTED ~~The~~FINANCIAL ~~offering is being conducted on a self-underwritten basis and no minimum number of Shares needs to be sold in order for the offering to proceed.~~DATA

We anticipate incurring costs of approximately $95,000 within 12 months following the completion of the offering in order to fully implement our business plan. However, the full implementation of our business plan is contingent on us being able to sell all of the Shares offered pursuant to the offering. If we are unable to sell all of the Shares sold hereby, we intend to adjust our business plan accordingly.

Below is a table showing the amount of proceeds to be allocated to each aspect of our business plan based on different amounts of Shares sold in the offering. Any amounts remaining will be set aside for any unexpected expenses that we may incur in the operation of our intended business.

	Allocation
	1,000,000 shares (Net Proceeds of approximately $29,990*)		2,000,000 shares (Net proceeds of approximately $79,990*)		3,000,000 shares (Net proceeds of approximately $129,990*)
Development and Production of Initial Set of Cartoons	$	18,000	$	21,000	$	21,000
Marketing and Research	$	6,000	$	46,000	$	46,000
Development of Website	$	0	$	1,000	$	9,000
Printing and Distribution of Newsletter	$	0	$	0	$	19,000
SUB TOTAL	$	24,000	$	68,000	$	95,000
Remaining Amounts**	$	5,990	$	11,990	$	34,990
TOTAL	$	29,990	$	79,990	$	129,990

* Based on an offering price of $0.05 per share and takes into account estimated expenses of $20,010.

** To be set aside for any unexpected expenses that we may incur in the operation of our intended business.

For detailed description on how we intend to use the proceeds, refer to Item 1 Business Overview.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.

Item 6. Selected Financial Data.

Not applicable.

~~Item~~ITEM 7. ~~Management~~MANAGEMENT’S ~~Discussion~~DISCUSSION ~~and~~AND ~~Analysis~~ANALYSIS ofOF ~~Financial~~FINANCIAL ~~Condition~~CONDITION ~~and~~AND ~~Results~~RESULTS ofOF ~~Operations.~~OPERATIONS

The following discussion and analysis of the financial condition and results of our operations should be read in conjunction with our ~~audited~~consolidated financial statements and ~~the~~ related notes ~~that~~and ~~appear~~schedules included elsewhere in this Annual Report ~~on Form 10-K~~. ~~The~~This ~~following~~ discussion contains forward-looking statements that ~~reflect~~involve ~~our~~risks ~~plans, estimates~~ and ~~beliefs~~uncertainties. ~~Our~~Such ~~actual~~information ~~results~~is ~~could~~based ~~differ~~on ~~materially~~management’s ~~from~~current ~~those~~expectations ~~discussed~~about infuture ~~the~~events, ~~forward~~which ~~looking~~are ~~statements~~susceptible to uncertainty and changes in circumstances. Factors that could cause or contribute to such differences include, ~~those~~but ~~discussed~~are ~~below~~not limited to, intensified competition and/or ~~elsewhere~~operating problems in ~~this~~its ~~Annual~~operating ~~Report~~business projects and their impact on ~~Form~~revenues ~~10-K~~and profit margins or additional factors, and those discussed in the section entitled “Risk Factors” in Part I, Item 1A of this Annual Report.

Our financial statements are stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles.

Application of Critical Accounting Estimates

The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year. The more significant areas requiring the use of estimates include asset impairment, stock-based compensation, and future income tax amounts. Management bases its estimates on historical experience and on other assumptions considered to be reasonable under the circumstances. However, actual results may differ from the estimates.

General Organization and Business

~~EDUtoons~~ContinuityX Solutions, Inc. (the “Company,” “we,” “us,” or “our”), formerly known as EDUtoons, Inc. (EDUtoons) was incorporated in the State of Delaware on ~~April~~March 28, 2010. toWe ~~produce~~are ~~one-minute,~~headquartered ~~three-minute~~in ~~and five-minute educational cartoons primarily to be sold to television networks and independent television stations~~Metamora, ~~and~~IL. ~~digital~~In ~~platforms throughout the United States and Canada~~addition, ~~and~~we ~~thereafter~~currently ~~offered~~have atapproximately a30 ~~lower~~data ~~cost~~service tocenters ~~schools. We~~throughout ~~aim to provide reinforcement in children’s programming that will serve as both an educational tool and counter-balance to~~ the ~~violence~~country ~~and age-inappropriate nature of cartoons and programming currently directed at children. Our one-minute television programming consists of 26-segment series, each~~ devoted to ~~one~~colocation ~~letter of the alphabet; the three-minute segments would be offered in 13~~ and 26networks. ~~series~~The inCompany ~~subjects~~also ~~such~~hosts asCloud ~~the presidents of the United States~~computing, ~~the~~manages ~~countries~~equipment ~~of the world,~~ and ~~the~~storage ~~states of the United States, etc.;~~ and ~~the~~has ~~five-minute~~relationships ~~segments~~with ~~would~~strategic bechannel ~~focused~~partners ~~primarily~~such onas ~~nature~~AT&T, ~~various animal habitats around the world~~Telx, ~~the~~XO ~~stars~~Communications and ~~sea life~~others.

14We provide consulting services and management of business continuity, virtual / Cloud hosting, managed equipment and storage, monitoring, VoIP and voice needs. Our consultative approach provides clients with business continuity and disaster recovery solutions alongside management, migration and re-engineering, system integration and cross connects, and IT infrastructure services including data center, converged networks (public / private Cloud) services and transformation solutions.

We ~~are~~provide inclient ~~the~~solutions ~~development~~that ~~stage~~ensure ~~and~~efficient ~~have~~business ~~not~~continuity ~~generated any revenues from operations~~ and ~~have~~disaster norelief ~~assurance~~through ofexperienced ~~any~~planning, ~~future~~implementation, ~~revenues~~and management. We ~~will~~The ~~require~~Company ~~substantial~~provides ~~additional~~reliability ~~funds~~and torecovery ~~cover~~through ~~our~~a ~~operations. There~~methodology isthat nostrengthens ~~assurance~~its ~~that~~client’s webusiness ~~will~~continuity beand ~~able~~disaster torelief ~~obtain~~framework ~~sufficient~~and ~~additional~~preparedness ~~funds~~with ~~when~~certified ~~needed,~~experts or that ~~such~~specialize ~~funds~~in security, ifrisk ~~available~~management, ~~will~~and beconsultation ~~obtainable~~for onpractical ~~terms~~business ~~satisfactory~~solutions toand usnetwork-IT visibility.

~~Cash~~We have business relationships with many companies including, but not limited to, being a “Premier Solutions Provider” for AT&T, an XO Communications “Business Partner” and ~~Cash~~partnering ~~Equivalents~~with Telx in colocation facilities and many others. We also have a relationship with the St. Louis Rams wherein we are replacing and upgrading their entire IT infrastructure including all of the hardware, software and networks. In addition, we are installing a new IP and voice network and will assist them in completing compliance for content, Ticketmaster, Media and any other requirements identified.

~~The~~In ~~Company~~August, ~~considers~~2012, ~~all~~we ~~liquid~~entered ~~investments~~into ~~with~~a antwo ~~original~~year ~~maturity~~consulting ofagreement ~~three~~with ~~months~~Millennium orCapital ~~less~~Corporation ~~that~~which ~~are~~will ~~readily~~provide ~~convertible~~various ~~into~~services ~~cash~~ to beus ~~cash~~including ~~equivalents. The~~securing ~~Company~~qualified ~~places~~management ~~its~~executives ~~cash~~and ~~with~~potential ~~high~~Board ~~credit~~of ~~quality~~Director ~~financial~~candidates, ~~institutions. Accounts~~assisting atus ~~these~~in ~~institutions~~the ~~are~~search ~~insured~~for bypotential ~~the~~acquisitions, ~~Federal~~securing ~~Deposit~~major ~~Insurance~~clients ~~Corporation~~and ~~(FDIC)~~introducing upus to ~~$250,000. At~~investment ~~June~~banking ~~30,~~contacts ~~2011~~ and ~~June~~investment ~~30,~~relations ~~2010,~~advisors. Under the ~~Company~~terms ~~did~~of ~~not~~the ~~have~~agreement, ~~cash~~we ~~balances~~will ~~which~~pay ~~were~~$25,000 inper ~~excess~~month offor the ~~FDIC~~term ~~insurance~~of ~~limit. The~~the ~~Company~~agreement ~~performs~~in ~~ongoing~~addition ~~evaluations~~to ofthe ~~these~~issuance ~~institutions~~of tocashless ~~limit~~warrants ~~its~~for ~~concentration~~3,000,000 shares of ~~risk~~the ~~exposure. Management~~Company’s ~~believes~~Common ~~this~~Stock ~~risk~~exercisable isfor ~~not~~a ~~significant~~period ~~due~~of tofive ~~the~~years ~~financial~~commencing ~~strength~~on ofAugust ~~the~~1, ~~financial~~2012 ~~institutions~~at ~~utilized~~an byexercise ~~the~~price ~~Company~~of $0.20.

~~Due~~In September 2012 we entered into a Marketing Agreement with M & M Licensing, Inc. focused on major sports leagues, teams, and stadium venues, with a goal to ~~Stockholder~~increase the quality of communication and data exchange experience. We will provide leading edge technology access, wi-fi and systems software to the organizations and their ownership companies.

~~Amount~~We ~~due~~meet toand ~~stockholder,~~exceed ~~representing~~new ~~the~~industry ~~advance~~standards ~~from~~and arequirements ~~stockholder,~~for ismedium ~~non~~and large-~~interest~~scale ~~bearing~~enterprise ~~and~~organizations isby ~~due~~building onnational, ~~demand~~tailor-made networks for public/private business communications. InWe ~~August~~understand ~~2010,~~that an organization’s IT staff may not have the ~~advance~~deep ~~was~~relationships ~~paid~~with ~~off~~third-party technology vendors and telecommunication providers to construct and manage national and international IT infrastructures.

~~Deferred~~Our ~~Registration~~Network ~~Costs~~and Datacenter infrastructure includes facilities built to deliver highest level of uptime availability and 24/7 NOC (Network Operational Center) services; high availability – low latency connectivity services in any major datacenter market; Cloud on demand via Appcore® and Telx™ partnership; and hosting facilities offering resilient network, data center, and hosted services Internet and Network Services, deploying Cisco’s leading Aggregated Service Router platform into a single, customer facing network providing cost effective bandwidth and higher performance.

~~Deferred~~In ~~registration~~August ~~costs~~2012, ~~are~~we ~~incremental~~entered ~~costs~~into ~~incurred~~a byJoint ~~the~~Marketing ~~Company~~Agreement inwith ~~connection~~Hutchison ~~with~~Global Communications Limited, a ~~proposed~~Hong ~~common~~Kong ~~stock~~corporation, ~~offering~~and toits besubsidiaries ~~charged~~including ~~against~~Blue ~~the~~City ~~gross~~and ~~proceeds~~NexGen ofin the ~~offering. Deferred~~United ~~registration~~States ~~costs~~to domarket ~~not~~our ~~include~~complete ~~any~~portfolio ~~allocation~~ of ~~salaries~~products and services focusing on co-location access, ~~overhead~~network orand ~~similar~~managed ~~costs~~services. This ~~Deferred~~relationship ~~registration~~has ~~costs~~created ~~were~~an ~~$36,193~~opportunity to further international relationships and ~~$10,000~~pursue asthe ofglobal ~~June~~network ~~30,~~strategy ~~2011~~incorporating ~~and~~the ~~June~~Far 30East, ~~2010~~Canada, ~~respectively~~South America and Europe to our existing U.S. network and platform.

~~Income Taxes~~12

The Company accounts for income taxes in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740, Income Taxes, which requires the recognition of deferred income taxes for differences between the basis of assets and liabilities for financial statement and income tax purposes. Deferred tax assets and liabilities represent the future tax consequence for those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. At June 30, 2011 and June 30, 2010, the Company has established full valuation allowances against deferred tax assets, recognized for operating losses, due to the uncertainty in realizing their benefits. At June 30, 2011, the Company had $36,611 of unused operating losses expiring in 2031.History

~~The~~On ~~Company~~November ~~adopted~~1, ~~the~~2011, ~~provisions~~we issued three million (3,000,000) shares of ~~FASB~~our ~~ASC~~Common ~~740-10-25. The~~Stock ~~provisions~~pursuant ~~prescribe~~to our Initial Public Offering (“IPO”) for an aggregate purchase price of $150,000, pursuant to a ~~recognition~~Registration ~~threshold~~Statement ~~and~~on ~~measurement~~Form ~~attribute~~S-1 ~~for~~filed by us with the ~~recognition~~Securities and ~~measurement~~Exchange Commission (“SEC”), having an effective date of ~~tax~~May ~~positions~~5, ~~taken~~2011 or(the ~~expected~~“Registration Statement”). Immediately after the closing, we redeemed 3,250,000 shares of our Common Stock owned by our existing shareholders excluding the shareholders who became shareholders pursuant to bethe ~~taken~~IPO in(the ~~income~~“Redemption”) ~~tax~~for ~~returns~~an ~~and~~aggregate ~~require~~cost ~~that~~of ~~uncertain~~$82,500, ~~tax~~which ~~positions~~was ~~are~~funded ~~evaluated~~by inthe aproceeds ~~two-step~~of ~~process~~the IPO. The balance of the proceeds of the IPO were utilized to pay various expenses.

~~The~~For ~~Company~~a ispurchase inprice ~~the process~~ of ~~preparing~~twenty-five ~~and~~thousand ~~filing its federal income tax return for the year ended June 30~~($25,000) ~~2010. As~~dollars ofwe ~~June~~sold 303, ~~2011 and 2010~~250,000 ~~accrual~~shares of ~~taxes,~~our ~~interest~~Common Stock, ~~and~~par ~~penalty~~value of $~~385 and $~~0 ~~are included in accrued liabilities in the accompanying balance sheets, respectively~~. ~~For~~001 ~~year~~per ~~ended June 30~~share, ~~2011 and for the period from April 28, 2010 (inception)~~ to ~~June 30~~ContinuityX, 2011, the Company recorded its federal income tax, penalty, and interest of $135 as income tax expense and its State of Delaware franchise tax, filing fee, penalties, and interest of $250 as general and administrative expensesInc.

NoPursuant ~~income~~to ~~taxes~~an orAcquisition ~~interest~~Agreement ~~were~~with ~~paid~~ContinuityX, asInc., ofInc., ~~June~~dated 30November 8, 2011, we acquired ContinuityX, Inc. through a reverse acquisition which gave the shareholders of ContinuityX, Inc. effective control of the Company.

15We filed a Certificate of Amendment to its Certificate of Incorporation changing our name to ContinuityX Solutions, Inc. on December 28, 2011.

~~Fair~~Also, ~~Value~~on December 28, 2011, we implemented a stock split of ~~Financial~~13.333 ~~Instruments~~ shares of Common Stock for every one (1) share of then existing Common Stock (the “Forward Stock Split”), which resulted in a total of 117,330,400 issued and outstanding shares of our Common Stock on such date. On January 27, 2012, we issued a stock dividend of 1.667 shares of Common Stock for every one share of Common Stock issued and outstanding prior to the Forward Stock Split.

~~FASB~~Since ~~ASC~~our ~~820,~~formation ~~Fair~~we ~~Value~~have ~~Measurements~~brought ~~and~~together ~~Disclosures,~~a ~~defines~~collaboration ~~fair value as the price that would be received upon sale~~ of anindividuals ~~asset or paid upon transfer of a liability~~ in antechnical ~~orderly~~sales, ~~transaction~~marketing ~~between~~and ~~market~~operations, ~~participants~~combined atwith ~~the~~engineers ~~measurement date~~ and intechnology ~~the~~specialists ~~principal or most advantageous market~~ for ~~that~~companies ~~asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability~~including, but not onlimited ~~assumptions specific~~ to, ~~the~~Microsoft, ~~entity. The~~VMWare, ~~Company~~Cisco, ~~did~~EMC, ~~not~~AT&T, ~~identify~~XO ~~any~~Communications, ~~financial~~AboveNet, ~~assets~~Qwest, and ~~liabilities~~Level ~~that~~3 ~~are~~among ~~required to be presented on the balance sheets at fair value~~others.

~~Financial~~Intellectual instruments include cash, due to stockholder and accrued liabilities. As of June 30, 2011 and 2010, the carrying values of these financial instruments approximated their fair values due to the short term nature of these financial instruments.Property

~~Earnings~~We ~~per~~filed ~~Share~~for trademark protection for the mark “ContinuityX” in various trademark classes in which we operate and a name search has been completed. The name has been cleared and our Formal Application has been accepted by the US Patent and Trademark Office as of April 12, 2012.

Net income (loss) per share is calculated in accordance with FASB ASC 260, Earnings Per Share. Basic net income (loss) per share is based upon the weighted average number of common shares outstanding. Diluted net income (loss) per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Basic and diluted earnings per share are the same for the year ended June 30, 2011, for the period from April 28, 2010 (inception) to June 30, 2010, and for the period from April 28, 2010 (inception) to June 30, 2011 because the Company had no common stock equivalents.Competition

~~Stock~~We ~~Based~~believe ~~Compensation~~our main competitors are the companies set forth below:

~~The~~● ~~Company~~Accenture records stock based compensation in accordance with FASB ASC 718, Compensation – Stock Based Compensation, which requires the Company measure stock based compensation based on the grant date estimated fair values for all stock based awards made to employees and directors, including stock options and recognize the compensation expense on the straight-line basis over the period during which an employee or director is required to provide service in exchange for the award.Consulting

~~Share~~o ~~Capital~~Accenture is a global management consulting, technology consulting and technology outsourcing company headquartered in New York City. According to its Yahoo Finance profile it is the largest consulting firm in the world and is a Fortune Global 500 company. According to Accenture’s website, as of September 2011, Accenture had more than 211,000 employees across 120 countries.

	Number of shares		Amount
Authorized:
Common stock at $0.001 par value per share		10,000,000	$	10,000
At June 30, 2011 and June 30, 2010		10,000,000	$	10,000
Issued and outstanding:
Common stock at $0.001 par value per share		2,750,000	$	2,750
At June 30, 2010		2,750,000	$	2,750
Issued and outstanding:
Common stock at $0.001 par value per share		3,250,000	$	3,250
At June 30, 2011		3,250,000	$	3,250

Going Concern/Risk and Uncertainties

	●	IBM Consulting
			o	IBM Global Services is the information technology and business services arm of International Business Machines and operates in approximately 170 countries, providing a comprehensive range of enterprise IT and consulting services to commercial and public sector clients. According to IBM’s website, IBM Global Services started in the spring of 1991, with the aim towards helping companies manage their IT operations and resources. IBM Global Business Services “GBS” is the professional services arm of Global Services, including management consulting, systems integration, and application management services. GBS is also the highest revenue earning division of IBM.

~~The~~● ~~Company’s~~Others ~~financial~~o ~~statements~~Abovenet, ~~have~~which ~~been~~provides ~~presented~~high onbandwidth ~~the~~connectivity ~~basis~~primarily ~~that~~for itlarge iscorporate aenterprises ~~going~~and ~~concern,~~communications ~~which~~carriers ~~contemplates~~as ~~the~~well ~~realization~~as ofan ~~assets~~optical ~~and~~network ~~the~~that ~~satisfaction~~delivers ofkey ~~liabilities~~network inand ~~the~~IP ~~normal~~services ~~course~~throughout ofthe ~~business. The~~United ~~Company~~States isand aLondon; ~~startup~~Rack ~~company~~Space, ~~subject~~which toprovides ~~the~~Cloud ~~substantial~~hosting, ~~business~~managed ~~risks~~hosting, ~~and~~hybrid ~~uncertainties~~hosting, ~~inherent~~managed toserver ~~such~~configuration anand ~~entity,~~managed ~~including~~colocation ~~the~~servers ~~potential~~and ~~risk~~collaboration ofand ~~business~~Masergy, ~~failure. This~~which ~~raises~~provides ~~substantial~~managed, ~~doubt~~secure, ~~about~~and ~~the~~virtualized ~~Company’s~~services ~~ability~~ to ~~continue~~enterprises asthat ahave ~~going~~complex ~~concern~~needs across multiple locations.

The reasons for the substantial doubt along with management’s plans are as follows.

The Company has not generated any revenues since inception. While the Company is attempting to commence operations and generate revenues, the Company’s cash position may not be sufficient to support the Company’s daily operations. Management intends to raise additional funds through the issuance of equity or debt securities. Management believes that the actions presently being taken to implement its business plan and to generate revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect. The Company’s continuation as a going concern and its ability to emerge from the development stage with any planned principal business activity is dependent upon the continued financial support from its stockholders and its ability to obtain the necessary equity or debt financing and attain profitable operations.

The accompanying financial statements do not include any adjustments that would be necessary should the Company be unable to continue as a going concern.

Stock Based Compensation

On December 15, 2010, the Company issued an aggregate of 500,000 shares of common stock to the Company’s officers in consideration for services rendered by them to the Company during the month of December 2010. Such shares were valued at $25,000 at $0.05 per share. The total stock-based compensation cost recognized in the statements of operation for the year ended June 30, 2011 and for the period from April 28, 2010 (inception) to June 30, 2011 was $25,000.

Results of Operations

WeYear ~~are~~Ended ~~a development stage company with no established source of revenue. From the period from inception (April 28, 2010) to~~ June 30, ~~2011,~~2012 ~~we have incurred cumulative general & administrative expenses in the amount of $36,611 which primarily consists of the audit fee~~ and ~~stock~~Period ~~based~~Ended compensation. We have not generated any revenues and as of the date hereof, we have only taken the initial steps necessary before it can fully implement its business plan, such as the raising of initial capital through the sale of 2,750,000 shares of our common stock and obtaining the domain rights to our website. Our auditors have expressed substantial doubt about our ability to continue as a going concern. Without realization of additional capital, it would be unlikely for us to continue as a going concern. Since inception, our activities have been supported by equity financing, and as of June 30, 2011~~, we have sustained losses in the amount of $36,746.~~

	June 30, 2012			June 30, 2011
Operating income	$	7,521,469		$	132,884
Other (expenses):		(431,613	)		(68,906	)
Income before income taxes		7,089,856			63,978
Provision for income taxes		2,855,086			11,325
Net income	$	4,234,770		$	52,653

The year ended June 30, 2012, was our first full year of operations. The period ended June 30, 2011, represents activity from March 25, 2011 to June 30, 2011.

Revenue

Gross service revenue for the year ended June 30, 2012 amounted to $18,586,466. During the year, $1,031,691 of reseller commissions were recognized resulting in $17,554,775 of net service revenue. During the period ended June 30, 2011, gross service revenue amounted to $1,115,176. During the year ended June 30, 2012, our gross service revenue has increased each quarter. Our gross revenue for the quarter ended June 30, 2012 amounted to $7,652,866 compared to $1,018,566 for the quarter ended September 30, 2011.

Cost of Services and Gross Profit

Cost of services for the year ended June 30, 2012 amounted to $4,007,843. Gross profit was $13,546,932 which resulted in a gross profit percentage of approximately 73% for the year ended June 30, 2012. Cost of revenue for the period ended June 30, 2011 amounted to $171,198. Gross profit was $943,978 which resulted in a gross profit percentage of approximately 85% for the period ended June 30, 2011. Cost of revenue and gross profit also increased each quarter during the year ended June 30, 2012. Cost of revenue and gross profit for the quarter ended June 30, 2012 amounted to $2,054,652 and $5,502,633, respectively, compared to $212,816 and $805,750, respectively for the quarter ended September 30, 2011.

Selling and Administrative Expenses

For the year ended June 30, 2012, selling and administrative expenses amounted to $6,025,463. For the year ended June 30, 2011, selling and administrative expenses amounted to $811,094. The major categories of selling and administrative expenses and the amounts for the year ended June 30, 2012 and the period ended June 30, 2011, respectively, were the following: advertising and promotion, approximately $326,000 and $10,000, consulting, approximately $924,000 and $34,000, and payroll and related expenses, approximately $3,345,000 and $644,000.

Interest Expense

Interest expense for the year ended June 30, 2012 amounted to $433,919. Interest expense for the period ended June 30, 2011 amounted to $68,930. Interest expense was earned by the holders of the notes payable and the Factor.

Other (Income)

During the year ended June 30, 2012, $2,306 of other income was recognized. During the period ended June 30, 2011, $24 of other income was recognized.

Income Tax Provision

Income tax expense for the year ended June 30, 2012 and the period ended June 30, 2011 amounted to $2,855,086 and $11,325, respectively. The expense was based on the U.S. Federal and Illinois income tax rates.

Impact of Inflation

The impact of inflation upon the Company’s revenue and income from operations during each of the past two periods has not been material to its financial position or results of operations for those periods because the Company does not maintain any inventories whose costs are affected by inflation.

Liquidity and Capital Resources

Since inception in 2011, we have ~~raised~~generated ~~$27,500~~income ~~through~~from ~~the~~operations. ~~sale~~As orof ~~our~~June ~~common~~30, ~~stock~~2012 and ~~have~~June ~~incurred expenses of $36~~30,~~611. In~~ ~~addition~~2011, ~~since~~our ~~inception,~~shareholders’ weequity ~~obtained~~was anapproximately ~~advance~~$4,500,000 ~~from~~and ~~a stockholder in the amount of~~ $1063,000, ~~which was repaid in August of 2010~~respectively. We ~~anticipate~~The ~~that~~Company’s ~~our~~operating ~~future~~income ~~cash needs will be approximately $95,000~~ for the ~~twelve~~year ~~month~~ended ~~period~~June ~~following~~30, ~~the~~2012 ~~closing~~and of the ~~offering. We~~period ~~anticipate~~ended ~~obtaining~~June ~~net~~30, ~~proceeds~~2011 ofwas ~~approximately~~ $297,~~900~~521,469 toand $~~129~~132,~~990~~884, ~~through the sale of our common stock~~respectively. ~~Such~~ ~~amounts~~Net ~~will~~cash be used toby ~~fund~~operations ~~our~~was ~~anticipated~~$2,165,429 ~~expenses~~and $12,716 for the ~~next~~year ~~twelve~~ended toJune ~~eighteen months~~30, ~~including~~2012 ~~those~~and ~~expenses relating to~~ the ~~execution~~period ofended ~~our~~June ~~business~~30, ~~plan~~2011, ~~as discussed above~~respectively. ~~However,~~ noOperations ~~assurance~~since ~~can~~inception behave ~~given~~been ~~that~~mainly ~~any~~funded ~~proceeds~~with ~~will be received, in which event, we may revise our business plan or may engage in additional financing activities, including~~ the ~~possible~~proceeds ~~sale~~from of debt ~~instruments~~financings toand besales ~~issued by us~~activity. No ~~assurance~~Our ~~can~~net beincome ~~given~~for ~~that we will be successful in obtaining~~ the ~~necessary~~year ~~financing,~~ended orJune ~~that we will be able to negotiate acceptable terms in a timely fashion. In addition~~30, ~~our~~2012 ~~access~~was ~~to capital is affected by prevailing conditions in the financial and equity capital markets~~$4, ~~as well as our own financial condition. At this time~~234, ~~we have not entered into any agreements with any third-party relating to the provision of credit facilities to us~~770. In ~~addition,~~As ~~none~~ of ~~our~~June ~~current officers~~30, ~~directors or shareholders has committed~~2012, ~~whether orally or in writing, to provide us with additional financing when needed. Moreover, even if~~ we ~~are~~had ~~able~~cash toand ~~execute~~cash ~~our~~equivalents ~~business~~of ~~plan as intended~~$698,283. noAs ~~assurance can be given that we will be able to sell any~~ of ~~the~~June ~~cartoons~~30, ~~that~~2012 weour ~~create~~working orcapital ~~that~~was ~~we will be able to generate sufficient revenues to become profitable~~$6,006,203.

Net cash used in investing activities was $761,046 for the year ended June 30, 2012. Net proceeds from financing activities were $3,474,974 and $162,500 for the year ended June 30, 2012 and the period ended June 30, 2011, respectively. During the year ended June 30, 2012, we generated net cash of $2,040,000 from the issuance of notes payable and $2,815,227 from factored accounts receivable. We also repaid $1,125,253 of debt during the year ended June 30, 2012.

We finance our day to day operations through financing our accounts receivable and working capital from revenues. We intend to expand operations to generate cash flow and to raise funds through either borrowings and / or selling equity.

Off Balance Sheet Arrangements

~~None~~As of June 30, 2012 and 2011, the Company had no material off-balance sheet arrangements other than operating leases to which we are a party.

17Critical Accounting Estimates and Recent Accounting Pronouncements

~~Recent~~Critical ~~Developments~~Accounting Estimates

~~During~~The ~~the~~preparation ~~previous~~of ~~twelve~~consolidated ~~months,~~financial westatements ~~focused~~in onaccordance with Generally Accepted Accounting Principals in the ~~preparation~~United ~~and~~States ~~filling~~requires ofmanagement ~~our~~to ~~Registration~~make ~~Statement~~estimates onand ~~Form~~assumptions ~~S-1~~that affect reported amounts and ~~the~~related ~~Offering~~disclosures in ~~order~~the consolidated financial statements. Management considers an accounting estimate to ~~raise~~be ~~the~~critical ~~necessary~~if ~~funds~~it requires assumptions to ~~develop~~be made that were uncertain at the time the estimate was made, and ~~market~~changes in the estimate or different estimates that could have been selected could have a material impact on our ~~product~~consolidated results of operations or financial condition.

~~Plan~~Revenue Recognition. The Company recognizes revenue when it is realized or realizable and earned, net of ~~Operation~~commissions paid to third parties. The Company’s current revenue generating activities primarily involve compensation earnings from coordinating network and telecommunication needs with third parties and maintaining a customer service relationship with those parties on behalf of the Company’s customers.

~~Our~~Depending ~~plan~~on ofthe ~~operation~~nature ~~for~~of the ~~twelve~~customer ~~(12)~~contract, ~~months following~~ the ~~closing~~timing of the ~~offering~~Company’s isrevenue torecognition ~~primarily~~occurs ~~develop~~in ~~our~~two ~~three (3) cartoon segments (1, 3 and 5 minutes) that focus on educational story lines and animation, which will be distributed initially through the Internet.~~ways:

~~Over~~Type the next twelve (12) months, we anticipate spending approximately $95,000 for business operations. This budget assumes that all of the shares offered herein will be sold, permitting the Company to execute its current business plan, as intended, and includes all anticipated costs associated with the production of cartoon segments, professional fees (which include the filing of the registration statement) and future compliance with reporting obligations and marketing expenses. Any amounts remaining from the sale of the shares offered herein, if any, after expenses for the production of cartoons, marketing efforts and other expenses will be retained for any unknown expenses that the Company may incur.1

~~During~~The ~~this~~Company ~~first~~submits ~~year~~a ofcontract ~~operation,~~with ~~our~~a ~~management~~third ~~team~~party ~~will~~to ~~contribute~~its tocustomer for services that the ~~long~~customer will provide (typically over a 36-~~term~~month ~~growth~~period). ~~and~~The ~~success~~customer completes its review of the ~~business~~submitted contract and accepts the submitted contract by ~~donating~~publishing ~~their~~an ~~time~~order ~~without~~number ~~charge~~and toreleasing the ~~business~~contract for provisioning. ~~Our~~The ~~director~~amount ~~will~~is ~~spend~~determined atbased ~~least~~on 25the toagreed 30upon ~~hours~~total ~~per~~contract ~~week~~value onmultiplied ~~company~~by ~~business~~the established compensation rates and revenue is recognized. These sales result in a one-time incentive compensation fee.

~~For~~In ~~detailed~~these ~~information~~lump-sum compensation arrangements, ~~please~~the ~~refer~~customer tomay ~~Item~~not 1claw ~~Business~~back ~~Overview~~– unreasonably withhold – or transfer these orders and must pay the Company per agreement within 60-90 days depending on the type and timing of the contract.

~~Item 7A. Quantitative and Qualitative Disclosures about Market Risk.~~15

Type 2

The Company submits a contract with a third party to its customer for services that the customer will provide (typically over a 36-month period). The customer completes set-up and installation services with the third party. The third party will provide acceptance to the customer at which point the Company is also granted acceptance from its customer. The amount is based on the customer’s monthly billing to the third party times an established compensation rate. These sales result in monthly recognition of the compensation fee.

Recent Accounting Pronouncements

In April 2011, the FASB issued ASU No. 2011-03 “Transfers and Servicing (Topic 860) - Reconsideration of Effective Control for Repurchase Agreement.” ASU 2011-03 removes from the assessment of effective control the criterion relating to the transferor’s ability to repurchase or redeem financial assets on substantially the agreed terms, even in the event of default by the transferee. The other criteria to assess effective control were not changed. ASU 2011-03 is effective for the first interim or annual period beginning on or after December 15, 2011. The guidance should be applied prospectively to transactions or modifications of existing transactions that occur on or after the effective date. Early adoption is not permitted. The amendments were effective for the Company beginning January 1, 2012, and do not have a material effect on the consolidated financial statements.

In May 2011, the FASB issued ASU No. 2011-04, which amends ASC 820, Fair Value Measurements, and provides guidance related to fair value measurements and disclosures in the financial statements. This guidance conforms the wording to describe many of the requirements in U.S. GAAP to International Financial Reporting Standards to ensure the related standards are consistently applied. The guidance also expands the disclosures for fair value measurements that are estimated using significant unobservable (Level 3) inputs. This new guidance is effective during interim and annual periods beginning after December 15, 2011 and is to be applied prospectively. The adoption of this standard did not materially expand the Company’s consolidated financial statement footnote disclosures.

Office Locations

We are headquartered in Metamora, IL.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

~~Item 8. Financial Statements and Supplementary Data.~~16

~~The financial statements, notes to the financial statements and report of the Company’s independent registered accountant required to be filed in response to this Item~~ ITEM 8. FINANCIAL ~~begin~~STATEMENTS onAND ~~page~~SUPPLEMENTARY ~~F-1.~~DATA

~~Item~~CONTINUITYX 9SOLUTIONS, INC. ~~Changes~~AND ~~in and Disagreements with Accountants on Accounting and Financial Disclosure.~~SUBSIDIARY

~~None~~INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Item 9A. Controls and Procedures

		Page

Report of Independent Registered Public Accounting Firm		18

Consolidated Balance Sheets as of June 30, 2011 and 2012		19

Consolidated Statements of Operations for the period March 25, 2011 (Inception) through June 30, 2011 and the year ended June 30, 2012		20

Consolidated Statements of Shareholders’ Equity for the period March 25, 2011 (Inception) through June 30, 2011 and the year ended June 30, 2012		21

Consolidated Statements of Cash Flows for the period March 25, 2011 (Inception) through June 30, 2011 and the year ended June 30, 2012		22

Notes to Consolidated Financial Statements		23

~~(a) Evaluation of disclosure controls and procedures~~17

Our management, under the supervision and with the participation of our Principal Executive Officer (“PEO”) and Principal Financial Officer (“PFO”), has evaluated the effectiveness of our disclosure controls and procedures (“Disclosure Controls”) as defined in Rules 13a-15 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this Annual Report ~~(the “Evaluation Date”). Based on such evaluation, our PEO and PFO have concluded that as~~ of ~~the~~Independent ~~Evaluation~~Registered ~~Date,~~Public ~~our~~Accounting Disclosure Controls were not effective to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified by the SEC, and that material information relating to our company is made known to management, including the PEO and PFO, particularly during the period when our periodic reports are being prepared, to allow timely decisions regarding required disclosure.Firm

The Board of Directors and Shareholders of

ContinuityX Solutions, Inc.

We have audited the accompanying consolidated balance sheets of ContinuityX Solutions, Inc. and Subsidiary (the “Company”) as of June 30, 2012 and 2011 and the related consolidated statements of operations,, shareholders’ equity and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of ContinuityX Solutions, Inc. and Subsidiaries at June 30, 2012 and 2011, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

/s/ EFP Rotenberg, LLP

Rochester, New York

September 28, 2012

~~Internal~~CONTINUITYX ~~Control~~SOLUTIONS, ~~over~~INC. ~~Financial~~AND ~~Reporting~~SUBSIDIARY

~~Management~~CONSOLIDATED isBALANCE responsible for establishing and maintaining adequate internal control over financial reporting for the Company. As defined by the Public Company Accounting Oversight Board Auditing Standard No. 5, a material weakness is a deficiency or a combination of deficiencies, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected.SHEETS

Management assessed the effectiveness of our internal control over financial reporting as of the Evaluation Date based on the criteria for effective internal control over financial reporting described in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management has determined that as of the Evaluation Date, there were material weaknesses in our internal control over financial reporting. The material weaknesses identified during management’s assessment were (i) the financial statement were not complete and did not include all of the disclosures required by accounting principles generally accepted in the United States of America; and (ii) certain material transactions were not recorded in a general ledger.

	June 30,
	2011		2012
ASSETS:
Current assets:
Cash and cash equivalents	$	149,784	$	698,283
Investment – convertible note receivable		-		75,000
Accounts receivable:
Factored		-		10,567,669
Other		537,879		3,070
Prepaid expenses and other current assets		46,000		92,448
Total current assets		733,663		11,436,470

Other assets:
Security deposits		240,000		2,137,598
Deferred finance costs, net		-		249,688
Total other assets		240,000		2,387,286

Property and equipment:
Cost		-		2,765,427
Accumulated depreciation		-		(400,915)
Property and equipment, net		-		2,364,512

Total assets	$	973,663	$	16,188,268

LIABILITIES:
Current liabilities:
Current portion of long-term debt	$	-	$	668,777
Notes payable		533,500		345,441
Amount due factor		-		2,815,227
Accounts payable		140,849		1,053,532
Accrued expenses:
Salaries, wages, commissions, etc.		208,146		464,447
Outside commissions		-		516,307
Interest		17,190		34,994
Income taxes		11,325		-
Other		-		92,640
Total current liabilities		911,010		5,991,365

Long-term debt, less current portion shown above		-		2,785,569
Deferred income taxes		-		2,866,411

Total liabilities		911,010		11,643,345

SHAREHOLDERS’ EQUITY:
Preferred stock, $0.001 par value, authorized 25,000,000 shares at June 30, 2011 and 2012; none issued		-		-
Common stock, $0.001 par value, authorized 200,000,000; issued 97,330,900 and 133,979,900 shares at June 30, 2011 and 2012, respectively		97,331		133,980
Additional paid-in capital		(87,331)		710,304
Retained earnings		52,653		3,700,639
Total shareholders’ equity		62,653		4,544,923
Total liabilities and shareholders’ equity	$	973,663	$	16,188,268

ItThe ~~can~~accompanying benotes ~~difficult~~are ~~for~~an ~~small~~integral ~~businesses~~part ~~such as the Company to maintain the necessary internal control procedures because~~ of ~~insufficient~~these ~~personnel~~consolidated to cover each and every process and procedure. Ultimately, checks and balances need to be in place as a supportive measure to the business operations, but also as a fraud prevention measure as well. Because we have limited financial ~~personnel and limited resources, there is a reasonable possibility that a material misstatement of our annual or interim financial~~ statements ~~will not be prevented or detected on a timely basis by the Company’s internal controls procedures~~. However, the Company’s management believes that the material weaknesses set forth above were the result of the scale of our operations, are intrinsic to our small size and are of a nature that companies of our size would normally encounter. In order to remediate such weaknesses, the Company intends to engage the services of a third-party accountant as well as skilled outside consultants tasked to assist the Company in strengthening its internal control procedures over financial reporting.

Changes in internal control over financial reporting

There were no changes in the Company’s internal control over financial reporting during the Company’s fiscal year ended June 30, 2011 covered by this Annual Report on Form 10-K that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Item 9B. Other Information

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Our executive officer and director and her age as of October 11, 2011 are as follows:

Director:

Name of Director		Age
Eileen Russell		70

Executive Officer:

Name of Officer		Age		Position
Eileen Russell		70		Chief Executive Officer, President and Treasurer

Biographical Information

Set forth below is a brief description of the background and business experience of our executive officer and director for the past five years.

Eileen Russell, CEO, President, Treasurer and Director

~~Ms.~~CONTINUITYX ~~Russell joined the Company in April~~SOLUTIONS, ~~2010 as its CEO, President, Treasurer and sole Director~~INC. ~~Ms.~~ ~~Russell~~AND is an educator and journalist and spent 18 years at ABC News where she produced investigative documentaries on Agribusiness, Illegal Aliens, the Oil Industry, Chemicals in the Environment, Police Stress, The Art Field, Asbestos, Sex Discrimination at Yale University, and Vietnam Veterans, as well as The Castro Generation, Cambodia: The Lost Generation, and two Action Biographies. Action Biography: Sadat won the George Forster Peabody Award and Action Biography: Rabin won the Overseas Press Club of America Award. Ms. Russell also taught children in middle and high school in Yonkers, New York, and was an adjunct professor of broadcast journalism at Columbia University School of Journalism in New York. She received her Bachelor of Science Degree from Marymount Manhattan College in 1961 and her Masters Degree from Fordham University in 1965.SUBSIDIARY

~~Term~~CONSOLIDATED ofSTATEMENTS ~~Office~~OF OPERATIONS

Our directors hold office for a period of one-year term, and hold such office until the next annual meeting of our shareholders or until removed from office in accordance with our bylaws.

For the Period March 25, 2011 (Inception) through June 30, 2011 and the Year Ended June 30, 2012

	2011		2012
Gross service revenues	$	1,115,176	$	18,586,466
Less; reseller commissions		-		1,031,691
Net service revenue		1,115,176		17,554,775

Costs of services		171,198		4,007,843

Gross profit		943,978		13,546,932

Other income and expenses:
Selling and administrative expenses		811,094		6,025,463
Interest expense		69,930		433,919
Other (income)		(24)		(2,306)
		880,000		6,457,076

Income before income taxes		63,978		7,089,856

Provision for income taxes:
Current		11,325		-
Deferred		-		2,855,086

Net income	$	52,653	$	4,234,770

Earnings per share, basic and diluted:
Basic net income per share	$	0.00	$	0.04

Weighted average number of common shares		97,330,900		117,239,334

~~Committees~~The ofaccompanying ~~the~~notes ~~Board~~are an integral part of ~~Directors~~these consolidated financial statements.

To date, our Board of Directors has not established a nominating and governance committee, a compensation committee, nor an audit committee. Nor do we have an audit committee "financial expert." As such, our entire Board of Directors acts as our audit committee and handles matters related to compensation and nominations of directors.

Director Independence

We are not subject to listing requirements of any national securities exchange or national securities association and, as a result, we are not at this time required to have our board comprised of a majority of "independent directors." Our determination of independence of directors is made using the definition of "independent director" contained in Rule 4200(a)(15) of the Marketplace Rules of the NASDAQ Stock Market ("NASDAQ"), even though such definitions do not currently apply to us because we are not listed on NASDAQ. We have determined that none of our directors currently meet the definition of "independent" as within the meaning of such rules as a result of their current positions as our executive officer.

Code of Ethics

We currently do not have a written code of ethics applicable to our executive officers. We have not yet adopted a written code of ethics due the early stage of development of the Company.

Stockholder Communications with the Board

We have not implemented a formal policy or procedure by which our stockholders can communicate directly with our Board of Directors. Nevertheless, every effort has been made to ensure that the views of stockholders are heard by the Board of Directors or individual directors, as applicable, and that appropriate responses are provided to stockholders in a timely manner. We believe that we are responsive to stockholder communications, and therefore have not considered it necessary to adopt a formal process for stockholder communications with our Board. During the upcoming year, our Board will continue to monitor whether it would be appropriate to adopt such a process.

~~Item~~CONTINUITYX 11SOLUTIONS, INC. ~~Executive~~AND ~~Compensation.~~SUBSIDIARY

~~The~~CONSOLIDATED ~~following~~STATEMENTS ~~table~~OF ~~sets~~SHAREHOLDERS’ ~~forth the aggregate cash compensation paid by the Company to its officers and our sole director for services performed from our inception, April 28, 2010, to our fiscal year ended June 30, 2011.~~EQUITY

Name and Principal Position	Salary ($)			Bonus ($)		Stock Awards ($)		Option Awards ($)			Non- Equity Incentive Plan Compen- sation ($)			Non- qualified Deferred Compen- sation Earnings ($)			All Other Compen- sation ($)			Total ($)
											Additional
Eileen Russell/CEO, President, Treasurer and Board Member		0			0		0		0			0			0			0			0
						Preferred		Treasury			Paid-in			Retained
	Shares			Amount		Stock		Stock			Capital			Earnings			Total
Balance – March 25, 2011		-		$	-	$	-	$	-		$	-		$	-		$	-
Issuance of common stock		97,330,900			97,331		-		-			(87,331	)		-			10,000
Net income		-			-		-		-			-			52,653			52,653
Balance – June 30, 2011		97,330,900			97,331		-		-			(87,331	)		52,653			62,653
Repurchase of common stock		(33,332,500	)		-		-		(33,333	)		-			-			(33,333	)
Issuance of treasury stock		33,332,500					-		33,333			-			-			33,333
Issuance of common stock in lieu of compensation		1,980,000			1,980		-		-			245,520			-			247,500
Common shares issued to then existing shareholders in reorganization		19,999,400			19,999		-		-			(19,999	)		-			-
Common stock dividend		14,669,600			14,670		-		-			572,114			(586,784	)		-
Net income		-			-		-		-			-			4,234,770			4,234,770
Balance – June 30, 2012		133,979,900		$	133,980	$	-	$	-		$	710,304		$	3,700,639		$	4,544,923

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

To date, no stock options have been granted to officers or the director of the Company.

Stock Awards

On December 15, 2010, we granted 250,000 shares of common stock to each of our CEO and President, Ms. Eileen Russell and our former Vice-President and Secretary, Ms. Charlotte Kelly Veal, for services rendered by them to the Company during the month of December 2010.

Employment Agreements and Consulting Agreements

We have not entered into any employment agreement or consulting agreements since our inception.

Item 12. Security Ownership Of Certain Beneficial Owners And Management and Related Stockholder Matters

The following table sets forth certain information regarding beneficial ownership of our capital stock as of June 30, 2011 by (i) each person whom we know to beneficially own more than five percent of our common stock, (ii) our director, (iii) each of our executive officers and (iv) our director and executive officer. Unless otherwise indicated, each of the persons listed below have sole voting and investment power with respect to the shares beneficially owned.

Our total authorized capital stock consists of 10,000,000 shares of common stock, par value $0.001 per share. As of June 30, 2011 there were 3,250,000 shares of our common stock outstanding. Each share of our common stock entitles its holder to one vote on each matter submitted to our stockholders. As of June 30, 2011, there were no shares of preferred stock authorized.

Name and Address of Beneficial Owner	Shares of Common Stock Beneficially Owned(1)		Percentage of Common Shares Beneficially Owned
Eileen Russell/CEO, President, Treasurer and Board Member		1,250,000		38.46	%
Charlotte Kelly Veal		250,000		7.69	%
As a group (2 persons)		1,500,000		46.15	%

(1) Pursuant to the rules and regulations of the Securities and Exchange Commission, shares of common stock that an individual or group has a right to acquire within 60 days pursuant to the exercise of options or warrants are deemed to be outstanding for the purposes of computing the percentage ownership of such individual or group, but are not deemed to be outstanding for the purposes of computing the percentage ownership of any other person shown in the table.

~~Compensation~~CONTINUITYX ~~Plans~~SOLUTIONS, INC. AND SUBSIDIARY

WeCONSOLIDATED ~~currently~~STATEMENTS doOF ~~not~~CASH ~~have any compensation plans in place.~~FLOWS

Item 13. Certain Relationships and Related Transactions, and Director Independence

For the Period March 25, 2011 (Inception) through June 30, 2011 and the Year Ended June 30, 2012
	2011			2012
Cash flows from operating activities:
Net income	$	52,653		$	4,234,770
Adjustments to reconcile net income to net cash provided by operations:
Deferred tax		-			2,855,086
Depreciation and amortization		-			406,227
Common stock issued for services		750			-
Changes in operating assets and liabilities:
Accounts receivable		(537,879	)		(10,032,860	)
Prepaid expenses and other current assets		(46,000	)		(46,448	)
Security deposits		-			(1,717,598	)
Accounts payable and accrued expenses		517,760			2,135,394
Net cash used in operating activities		(12,716	)		(2,165,429	)

Cash flows used in investing activities:
Note receivable		-			(75,000	)
Purchase of property and equipment		-			(686,046	)
Net cash used in investing activities		-			(761,046	)

Cash flows provided by financing activities:
Issuance of senior secured convertible debentures		-			1,985,000
Issuance of notes payable		211,000			55,000
Proceeds for sale of common stock		2,000			-
Net proceeds from factor		-			2,815,227
Debt payments – current and long term		(50,500	)		(1,125,253	)
Deferred finance costs		-			(255,000	)
Net cash provided by financing activities		162,500			3,474,974

Net increase in cash and cash equivalents		149,784			548,499

Cash and cash equivalents, beginning of period		-			149,784

Cash and cash equivalents, end of year	$	149,784		$	698,283

Supplemental disclosure of cash flow information:
Cash paid for interest	$	3,240		$	375,475
Cash paid for income taxes	$	-		$	-

Supplemental disclosure of non-cash investing and financing activities:
Issuance of common stock to reduce commissions payable	$	7,250		$	247,500
Issuance of note payable to reduce commissions payable	$	77,000		$	-
Issuance of notes payable due to transfer of security deposits	$	240,000		$	180,000
Issuance of notes payable to reduce accounts payable	$	56,000		$	-
Assets acquired through the assumption of debt	$	-		$	1,161,415
Assets acquired through capital lease	$	-		$	917,966
Accrued interest rolled into debt	$	-		$	40,640
Issuance of notes payable to reduce deferred compensation	$	-		$	50,000

~~None~~The ofaccompanying ~~our~~notes ~~director,~~are ~~officers~~an orintegral ~~principal~~part ~~shareholders, nor any family member~~ of ~~the~~these ~~foregoing, has~~consolidated orfinancial ~~had any material interest, direct or indirect, in any transaction, or in any proposed transaction which has materially affected or will materially affect us~~statements.

Item 14. Principal Accounting Fees and Services.

The following table presents aggregate fees for professional services rendered by our principal independent registered public accounting firm, Wei, Wei & Co., LLP for the audit of our annual financial statements for the fiscal year ended June 30, 2011 and 2010.

	For the Years Ended June 30,
	2011		2010
Audit fees (1)	$	6,850	$	3,950
Audit- related fees (2)		-		-
Tax fees (3)		-		-
All other fees		-		-
Total fees	$	6,850	$	3,950

(1) Audit fees are comprised of annual audit fees and quarterly review fees.

(2) Audit-related fees for fiscal years 2011 and 2010 are comprised of consent fees and work on registration statements.

(3) Tax fees are comprised of tax compliance, preparation and consultation fees.

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors

The Audit Committee pre-approves all audit and non-audit services provided by the independent auditors prior to the engagement of the independent auditors with respect to such services. The Chairman of the Audit Committee has been delegated the authority by the Committee to pre-approve interim services by the independent auditors other than the annual audit. The Chairman must report all such pre-approvals to the entire Audit Committee at the next Committee meeting.

~~PART~~CONTINUITYX IVSOLUTIONS, INC. AND SUBSIDIARY

~~Item~~NOTES ~~15.~~TO ~~Exhibits,~~CONSOLIDATED ~~Financial~~FINANCIAL ~~Statement Schedules.~~STATEMENTS

~~(a)~~Note ~~Exhibits:~~1 – BUSINESS

~~The~~ContinuityX ~~following~~Solutions, ~~exhibits~~Inc., ~~are~~(the ~~filed~~“Company”) asformerly ~~part~~EDUtoons, Inc., incorporated under the laws of ~~this~~the ~~annual~~State ~~report~~of Delaware on ~~Form~~March 1018, 2010, provides client solutions that ensure efficient business continuity and disaster relief through experienced planning, implementation and management with its main offices located in Metamora, Illinois. The Company provides virtual/Cloud hosting, managed equipment and storage, VoIP and voice connectivity and network and interconnection services through 30 co-K:location data service facilities throughout the country. In addition, the Company provides advanced broadband communication and high performance networks with strategic partners such as AT&T, XO Communications, Telx and others.

Exhibit		Description of Exhibit
3.1*		Certificate of Incorporation of EDUtoons, Inc.
3.2*		Bylaws of EDUtoons, Inc.
4.1*		Specimen Stock Certificate
31.1		Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2		Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

The Registrant changed its name to ContinuityX Solutions, Inc. pursuant to a Certificate of Amendment of the Certificate of Incorporation of EDUtoons, Inc., which was filed with the Secretary of State of the State of Delaware on December 28, 2011.

*The ~~Previously~~Company ~~filed~~entered asinto ~~exhibits~~a toStock ~~the~~Purchase ~~Registration~~Agreement ~~Statement~~with EDUtoons, Inc. (“EDUtoons”), dated October 27, 2011, which closed on ~~Form~~November S-1, ~~filed~~2011. Pursuant byto the agreement, the Company acquired 3,250,000 shares of EDUtoons Common Stock. On November 8, 2011, the Company and EDUtoons entered into an Acquisition Agreement whereby EDUtoons acquired 100% of the issued and outstanding common shares of the Company for 7,300,000 shares of EDUtoons Common Stock issuable to its shareholders. EDUtoons filed a Certificate of Amendment to its Certificate of Incorporation on ~~August~~December 628, ~~2010~~2011, to change its name to ContinuityX Solutions, Inc., increase the number of authorized shares from 10,000,000 to 200,000,000 shares and implementing a forward stock split of 13.333 to 1. In addition, on January 27, 2012, the Company approved a stock dividend of 1.667 common shares per Common Stock share that was outstanding prior to the forward split.

The effect of the Acquisition Agreement is such that effectively a reorganization of the entities has occurred for accounting purposes and is deemed to be a reverse acquisition. Subsequent to the closing pursuant to the Acquisition Agreement, the Company and its shareholders have effective control of EDUtoons, even though EDUtoons has acquired the Company. For accounting purposes, the Company has been deemed to be the accounting acquirer in the transaction and, consequently, the transaction has been treated as a recapitalization of EDUtoons, i.e., a capital transaction involving the issuance of shares by EDUtoons for the shares of the Company. Accordingly, the combined assets, liabilities and results of operations of the Company became the historical financial statements of EDUtoons at the closing of the Acquisition Agreement, and EDUtoons’ assets, liabilities and results of operations have been consolidated with those of the Company commencing as of November 8, 2011, the date of the closing. No step-up in basis or intangible assets or goodwill was recorded in this transaction. As this transaction is being accounted for as a reverse acquisition, all direct costs of the transaction have been charged to additional paid-in capital. All professional fees associated with the transaction have been charged to additional paid-in-capital. The Company has determined to continue to utilize June 30 as the end of its fiscal year.

Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

The consolidated financial statements have been prepared on the accrual basis of accounting. The significant accounting policies are described below.

Fiscal Year

The Company’s fiscal year ends on June 30.

Consolidation Policy

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, ContinuityX, Inc. All significant inter-company balances and transactions have been eliminated in consolidation.

~~(b)~~Note ~~Financial~~2 ~~Statements:~~- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

EDUTOONS, INC.

(A DEVELOPMENT STAGE COMPANY)

FINANCIAL STATEMENTS JUNE 30, 2011 AND 2010

CONTENTS		PAGE
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM		F-2
FINANCIAL STATEMENTS:
Balance Sheets		F-4
Statements of Operations		F-5
Statements of Changes in Stockholders’ Equity		F-6
Statements of Cash Flows		F-7
NOTES TO FINANCIAL STATEMENTS		F-8

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of

EDUtoons, Inc.

We have audited the accompanying balance sheets of EDUtoons, Inc. (the “Company”), a development stage company, as of June 30, 2011 and 2010, and the related statements of operations, changes in stockholders’ equity, and cash flows for the year ended June 30, 2011, for the period from April 28, 2010 (inception) to June 30, 2010, and for the period from April 28, 2010 (inception) to June 30, 2011. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required, nor have we been engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentations. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of EDUtoons, Inc. at June 30, 2011 and 2010, and the results of its operations and its cash flows for the year ended June 30, 2011, for the period from April 28, 2010 (inception) to June 30, 2010, and for the period from April 28, 2010 (inception) to June 30, 2011, in conformity with accounting principles generally accepted in the United States of America.

F-2

The accompanying financial statements have been prepared assuming that EDUtoons, Inc. will continue as a going concern. As more fully described in Note 5, the Company is a start up company subject to substantial business risks and uncertainties that has not generated revenues since inception. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 5. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

/s/Wei, Wei & Co., LLP

New York, New York

October 12, 2011

F-3

EDUTOONS, INC.

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS

	June 30, 2011			June 30, 2010
ASSETS
Current assets:
Cash (Note2)	$	525		$	27,500
Total current assets		525			27,500
Deferred registration costs (Note 2)		36,193			10,000
TOTAL ASSETS	$	36,718		$	37,500
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Due to stockholder (Note 2)	$	-		$	10,000
Accrued liabilities		20,964			3,950
Total current liabilities		20,964			13,950
Stockholders’ equity:
Common stock, $0.001 par value per share, 10,000,000 shares authorized, and 3,250,000 shares issued and outstanding at June 30, 2011 and 2,750,000 shares issued and outstanding at June 30, 2010		3,250			2,750
Additional paid-in capital		49,250			24,750
Deficit accumulated during development stage		(36,746	)		(3,950	)
Total stockholders’ equity		15,754			23,550
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	36,718		$	37,500

See accompanying notes to financial statements.

F-4

EDUTOONS, INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF OPERATIONS

				For the Period from			For the Period from
				April 28, 2010			April 28, 2010
	For the Year Ended June 30, 2011			(Inception) to June 30, 2010 (Cumulative)			(Inception) to June 30, 2011 (Cumulative)
Revenue	$	-		$	-		$	-
Operating expenses:
General and administrative expenses		32,661			3,950			36,611
Net (loss) before income taxes		(32,661	)		(3,950	)		(36,611	)
Provision for income tax (Note 2)		(135	)		-			(135	)
Net (loss)	$	(32,796	)	$	(3,950	)	$	(36,746	)
(Loss) per common share, basic and diluted (Note 2)	$	(0.01	)	$	(0.00	)	$	(0.01	)
Weighted average shares outstanding, basic and diluted		3,021,233			2,750,000			2,980,769

See accompanying notes to financial statements.

F-5

EDUTOONS, INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE PERIOD FROM APRIL 28, 2010 (INCEPTION) TO JUNE 30, 2011

			Additional		Deficit Accumulated During
	Common		Paid-in		Development
	Stock		Capital		Stage			Total
Initial capitalization	$	2,750	$	24,750	$	-		$	27,500
Net (loss)		-		-		(3,950	)		(3,950	)
Balance, June 30, 2010		2,750		24,750		(3,950	)		23,550
Stock based compensation (Notes 2 and 6)		500		24,500		-			25,000
Net (loss)		-		-		(32,796	)		(32,796	)
Balance, June 30, 2011	$	3,250	$	49,250	$	(36,746	)	$	15,754

See accompanying notes to financial statements.

F-6

EDUTOONS, INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOWS

				For the Period from			For the Period from
				April 28, 2010			April 28, 2010
	For the Year Ended June 30, 2011			(Inception) to June 30, 2010 (Cumulative)			(Inception) to June 30, 2011 (Cumulative)
Cash flows from operating activities:
Net (loss)	$	(32,796	)	$	(3,950	)	$	(36,746	)
Stock based compensation		25,000			-			25,000
Change in operating assets and liabilities:
Deferred registration costs		(26,193	)		(10,000	)		(36,193	)
Stockholder advance		(10,000	)		10,000			-
Accrued liabilities		17,014			3,950			20,964
Net cash (used in) operating activities		(26,975	)		-			(26,975	)
Cash flows from financing activities:
Proceeds from issuance of common stock		-			27,500			27,500
Net cash provided by financing activities		-			27,500			27,500
Net change in cash		(26,975	)		27,500			525
Cash, beginning of period		27,500			-			-
Cash, end of period	$	525		$	27,500		$	525

See accompanying notes to financial statements.

F-7

EDUTOONS, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 AND 2010

1. GENERAL

Organization and Business Nature

EDUtoons, Inc. (the “Company”) was incorporated in the State of Delaware on April 28, 2010 to produce one-minute, three-minute and five-minute educational cartoons primarily to be sold to television networks and independent television stations, and digital platforms throughout the United States and Canada, and thereafter offered at a lower cost to schools. The Company aims to provide reinforcement in children’s programming that will serve as both an educational tool and counter-balance to the violence and age-inappropriate nature of cartoons and programming currently directed at children. The Company’s one-minute television programming consists of 26-segment series, each devoted to one letter of the alphabet; the three-minute segments would be offered in 13 and 26 series in subjects such as the presidents of the United States, the countries of the world, and the states of the United States, etc.; and the five-minute segments would be focused primarily on nature, various animal habitats around the world, the stars and sea life.

The Company is in the development stage and has not generated any revenues from operations and has no assurance of any future revenues. The Company will require substantial additional funding to cover its operations. There is no assurance that the Company will be able to obtain sufficient additional funds when needed, or that such funds, if available, will be obtainable on terms satisfactory to the Company.

2. ACCOUNTING POLICIES

Cash and Cash Equivalents

The Company considers all liquid investments with an original maturity of three months or less that are readily convertible into cash to be cash equivalents. The Company places its cash with high credit quality financial institutions. Accounts at these institutions are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. At June 30, 2011 and June 30, 2010, the Company did not have cash balances which were in excess of the FDIC insurance limit. The Company performs ongoing evaluations of these institutions to limit its concentration of risk exposure. Management believes this risk is not significant due to the financial strength of the financial institutions utilized by the Company.

F-8

EDUTOONS, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 AND 2010

2. ACCOUNTING POLICIES (continued)

Due to Stockholder

Amount due to stockholder, representing the advance from a stockholder, is non-interest bearing and is due on demand. In August 2010, the advance was paid off.

Deferred Registration Costs

Deferred registration costs are incremental costs incurred by the Company in connection with a proposed common stock offering to be charged against the gross proceeds of the offering. Deferred registration costs do not include any allocation of salaries, overhead or similar costs. Deferred registration costs were $36,193 and $10,000 as of June 30, 2011 and June 30, 2010, respectively.

Use of Estimates

The preparation of consolidated financial statements in conformity with ~~accounting~~Generally ~~principles~~Accepted ~~generally~~Accounting ~~accepted~~Principles (“GAAP”) in the United States of America requires management to make estimates and assumptions that affect ~~certain~~the reported amounts of assets and liabilities. ~~and~~Disclosure ~~disclosure~~ of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of consolidated revenues and expenses during the reporting period also is required. Actual results could differ from those estimates.

Fair Value Measurements

The Company defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.

The fair value hierarchy is based on three levels of inputs that may be used to measure fair value, of which the first two are considered observable and the last is considered unobservable.

Level 1: Quoted prices in active markets for identical assets or liabilities.

Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, 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 for substantially the full term of the assets or liabilities.

Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The Company’s convertible note receivable ($75,000 at June 30, 2012) is classified as a Level 3 investment. The carrying value of the convertible note receivable approximates its fair value due to the short maturity of the instrument.

Cash and Cash Equivalents

The Company considers all highly-liquid financial instruments with a maturity of three months or less to be cash equivalents. The Company maintains cash and cash equivalents at financial institutions which periodically may exceed federally insured amounts.

Property and Equipment

Property and equipment are stated at cost and consists of $2,712,484 of data storage and related equipment and $52,943 of office equipment. It is the Company's policy to capitalize certain purchases with a useful life greater than one year and a value greater than $2,000.

Furniture and equipment	3 - 7 years
Computer equipment and software	2 - 5 years
Leasehold improvements	5 - 15 years

Depreciation is provided over the estimated useful life of each class of depreciable assets and is computed using the straight-line method. Equipment under capital lease obligations is amortized on the straight-line method over the shorter period of the lease term or the estimated useful life of the equipment. Such amortization is included in depreciation and amortization in the accompanying statements of income.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are uncollateralized customer obligations due under normal trade terms requiring payment within 60 - 90 days from the invoice date. Unpaid accounts receivable with invoice dates over 60 days old bear interest at 5% per month. Due to the uncertainty regarding collection, delinquency fees are recognized as income when received. Accounts receivable are stated at the amounts billed to the customer plus any accrued and unpaid interest.

Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Payments of accounts receivable are allocated to the specific invoices identified on the customers’ remittance advice or, if unspecified, are applied to the earliest unpaid invoices.

Trade accounts receivable are stated at the amount management expects to collect from outstanding balances. The carrying amounts of accounts receivable are reduced by an allowance for doubtful accounts that reflects management's best estimate of the amounts that will not be collected. Management individually reviews all accounts receivable balances that exceed 90 days from invoice date and based on an assessment of current creditworthiness, estimates the portion, if any, of the balance that will not be collected. Management provides for probable uncollectible amounts through a charge to earnings and a credit to the allowance for doubtful accounts based on its assessment of the current status of individual accounts. Balances still outstanding after management has used reasonable collection efforts are written off through a charge to the allowance for doubtful accounts and a credit to trade accounts receivable. Changes in the allowance for doubtful accounts have not been material to the financial statements

No bad debt expense and no allowance for doubtful accounts have been recorded as of June 30, 2011 and 2012.

Factored Accounts Receivable

The Company accounted for the sale of accounts receivable under the Forest Capital Master Factoring Agreement as a secured borrowing with a pledge of the subject receivables as collateral, in accordance with FASB ASC 860, the authoritative guidance for accounting for transfers and servicing of financial assets. Factored accounts receivable on the accompanying balance sheets in the amount of $10,567,669 as of June 30, 2012 represents the gross accounts receivable that were designated as “sold” to Forest Capital, LLC (the “Factor”). There were no factored receivables as of June 30, 2011.

Security Deposits

The Company has assumed security deposits on systems and monthly recurring services from several customers. The deposits secure space on the customer’s network which is necessary for the Company’s operations and amount to $240,000 and $2,137,598 at June 30, 2011 and 2012, respectively.

Deferred Finance costs

Deferred finance costs are amortized to income on a straight line basis over the period of time associated with each liability from which the costs arise.

Revenue Recognition

The Company recognizes revenue when it is realized or realizable and earned, net of commissions paid to third parties. The Company’s current revenue generating activities primarily involve compensation earnings from coordinating network and telecommunication needs with third parties and maintaining a customer service relationship with those parties on behalf of the Company’s customers.

Depending on the nature of the customer contract, the timing of the Company’s revenue recognition occurs in two ways:

Type 1

The Company submits a contract with a third party to its customer for services that the customer will provide (typically over a 36-month period). The customer completes its review of the submitted contract and accepts the submitted contract by publishing an order number and releasing the contract for provisioning. The amount is determined based on the agreed upon total contract value multiplied by the established compensation rates and revenue is recognized. These sales result in a one-time incentive compensation fee.

In these lump-sum compensation arrangements, the customer may not claw back – unreasonably withhold – or transfer these orders and must pay the Company per agreement within 60-90 days depending on the type and timing of the contract.

Type 2

Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Advertising and Promotion Costs

The Company expenses advertising and promotion costs as they are incurred. Costs of $9,520 and $325,929 are included in the accompanying Statements of Income for the years ended June 30, 2011 and 2012, respectively.

Income Taxes

The Company ~~accounts~~files ~~for~~ income taxes in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740, Income Taxes, which requires the recognition of deferred income taxes for differences between the basis of assets and liabilities for financial statement and income tax ~~purposes. Deferred~~returns ~~tax~~in ~~assets and liabilities represent~~ the ~~future tax consequence for those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled~~U. ~~Deferred taxes are also recognized for operating losses that are available to offset future taxable income~~S. ~~Valuation~~ ~~allowances~~Federal ~~are established when necessary to reduce deferred tax assets to the amount expected to be realized. At June 30, 2011~~ and ~~June~~Illinois ~~30, 2010, the Company has established full valuation allowances against deferred tax assets, recognized for operating losses, due to the uncertainty in realizing their benefits~~jurisdictions. ~~At June 30, 2011, the Company had $36,611 of unused operating losses expiring in 2031.~~

~~F-9~~Income taxes provide for the tax effects of transactions reported in the financial statements. The provision for income taxes consists of taxes currently due and, if material, deferred taxes resulting from differences in the accounting methods used for financial reporting purposes and those used for income tax reporting. There are deferred tax items for the period ended June 30, 2012 (none at June 30, 2011) based upon the Company’s intention to file its Federal tax return on the cash basis.

~~EDUTOONS~~The Company follows the provisions of uncertain tax positions as addressed in FASB Accounting Standards Codification 740-10-65-1. The Company recognized no liability for unrecognized tax benefits. The Company has no tax position at June 30, ~~INC~~2012, for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Company had no accruals for interest and penalties related to income taxes at June 30, 2011 and 2012.

(ARecent ~~DEVELOPMENT~~Accounting ~~STAGE COMPANY)~~Pronouncements

~~NOTES~~Transfers TOand ~~FINANCIAL STATEMENTS JUNE 30, 2011 AND 2010~~Servicing

2In April 2011, the FASB issued ASU No. ~~ACCOUNTING~~2011-03 ~~POLICIES~~“Transfers and Servicing (~~continued~~Topic 860) - Reconsideration of Effective Control for Repurchase Agreement.” ASU 2011-03 removes from the assessment of effective control the criterion relating to the transferor’s ability to repurchase or redeem financial assets on substantially the agreed terms, even in the event of default by the transferee. The other criteria to assess effective control were not changed. ASU 2011-03 is effective for the first interim or annual period beginning on or after December 15, 2011. The guidance should be applied prospectively to transactions or modifications of existing transactions that occur on or after the effective date. Early adoption is not permitted. The amendments were effective for the Company beginning January 1, 2012, and do not have a material effect on the financial statements.

~~Income~~Fair ~~Taxes~~Value ~~(continued)~~Measurements

~~The~~In ~~Company~~May ~~adopted~~2011, the ~~provisions~~FASB ofissued ~~FASB~~ASU ~~ASC~~No. ~~740~~2011-~~10-25~~04, which amends ASC 820, Fair Value Measurements, and provides guidance related to fair value measurements and disclosures in the financial statements. ~~The~~This ~~provisions~~guidance ~~prescribe~~conforms athe ~~recognition~~wording ~~threshold~~to ~~and~~describe ~~measurement~~many ~~attribute~~of ~~for~~the requirements in U.S. GAAP to International Financial Reporting Standards to ensure the ~~recognition~~related standards are consistently applied. The guidance also expands the disclosures for fair value measurements that are estimated using significant unobservable (Level 3) inputs. This new guidance is effective during interim and ~~measurement~~annual ofperiods ~~tax~~beginning ~~positions~~after ~~taken~~December or15, ~~expected~~2011 and is to be ~~taken~~applied inprospectively. ~~income~~The ~~tax~~adoption ~~returns~~of ~~and~~this ~~require~~standard ~~that~~did ~~uncertain~~not ~~tax~~materially ~~positions~~expand ~~are~~the ~~evaluated~~Company’s inconsolidated afinancial ~~two-step~~statement ~~process~~footnote disclosures.

The Company is in the process of preparing and filing its federal income tax return for the year ended June 30, 2010 and its State of Delaware Annual Report and Franchise Taxes for the year of 2010. As of June 30, 2011 and 2010, accrual of taxes, interest, and penalty of $385 and $0 are included in accrued liabilities in the accompanying balance sheets, respectively. For year ended June 30, 2011 and for the period from April 28, 2010 (inception) to June 30, 2011, the Company recorded its federal income tax, penalty, and interest of $135 as income tax expense and its State of Delaware franchise tax, filing fee, penalties, and interest of $250 as general and administrative expenses. Reclassifications

NoCertain ~~income~~amounts ~~taxes~~in orthe ~~interest~~prior ~~were~~period ~~paid~~consolidated asfinancial ofstatements ~~June~~have ~~30,~~been ~~2011~~reclassified to conform to current presentation.

~~Fair~~Note ~~Value~~3 of– ~~Financial~~INVESTMENT ~~Instruments~~– CONVERTIBLE NOTE RECEIVABLE

~~FASB~~On ~~ASC~~December ~~820~~22, ~~Fair~~2011, ~~Value~~the ~~Measurements~~Company ~~and~~received ~~Disclosures,~~a ~~defines~~convertible ~~fair~~note ~~value~~from asa ~~the~~private ~~price~~company ~~that~~for ~~would~~$75,000. beThe ~~received~~note ~~upon~~matures ~~sale~~on the earliest of an(a) ~~asset~~December or31, ~~paid~~2012 ~~upon~~or ~~transfer~~(b) ofthe adate ~~liability~~on inwhich an ~~orderly~~Event ~~transaction~~of ~~between~~Default ~~market~~has ~~participants~~occurred, at ~~the~~which ~~measurement~~time ~~date~~the ~~and~~private incompany ~~the~~shall ~~principal~~pay orContinuityX ~~most~~Solutions, ~~advantageous~~Inc., ~~market~~in ~~for~~cash, ~~that~~the ~~asset~~amount orof ~~liability. The~~the ~~fair~~then ~~value~~outstanding ~~should~~principal bebalance ~~calculated~~of ~~based~~the onnote ~~assumptions~~plus ~~that~~all ~~market~~accrued ~~participants~~and ~~would~~unpaid ~~use~~interest inhereon. ~~pricing~~The ~~the~~note ~~asset~~bears ora ~~liability,~~simple ~~not~~interest onrate ~~assumptions~~of ~~specific~~4% toper ~~the~~year; ~~entity. The~~provided, ~~Company~~however, ~~did~~that ~~not~~upon ~~identify~~and ~~any~~during ~~financial~~the ~~assets~~continuance ~~and~~of ~~liabilities~~an ~~that~~Event ~~are~~of ~~required~~Default, tothe beinterest ~~presented~~rate onshall ~~the~~be ~~balance~~increased ~~sheets~~to at7% ~~fair~~per ~~value~~annum.

Financial instruments include cash, due to stockholder and accrued liabilities. As of June 30, 2011 and 2010, the carrying values of these financial instruments approximated their fair values due to the short term nature of these financial instruments.26

~~F-10~~Note 3 – INVESTMENT – CONVERTIBLE NOTE RECEIVABLE (continued)

~~EDUTOONS~~The note holds a mandatory conversion upon the occurrence of qualified financing in the amount of $2,000,000 ~~INC~~by November 30, 2012. The note and all unpaid interest will convert into a number of equity securities equal to the quotient of the aggregate amount of outstanding principal and accrued and unpaid interest on this note divided by the price per share paid in such financing. The payer has the option to convert the note to Common Stock thirty days prior to the maturity date based upon a valuation of the payer of $7,000,000.

(ANote ~~DEVELOPMENT~~4 ~~STAGE~~- ~~COMPANY)~~LEASES

~~NOTES~~Capital ~~TO FINANCIAL STATEMENTS JUNE 30, 2011 AND 2010~~Lease

2A capital lease included in Property and Equipment in the accompanying balance sheets has a cost of $917,966 at June 30, 2012 (none at June 30, 2011) and accumulated amortization of $229,491. ~~ACCOUNTING~~Future ~~POLICIES~~payments associated with this lease are $362,549 (~~continued~~including $78,672 of interest) and $181,274 (including $10,505 of interest) for the years ending June 30, 2013 and 2014, respectively.

~~Earnings~~Operating ~~per Share~~Leases

~~Net~~Rent ~~income~~expense ~~(loss)~~under ~~per~~operating ~~share is calculated in accordance with FASB ASC 260~~leases, ~~Earnings~~which ~~Per~~are ~~Share. Basic~~charged ~~net~~against income, (loss) per share is based upon the weighted average number of common shares outstanding. Diluted net income (loss) per share is based on the assumption that all dilutive convertible shares and stock options were ~~converted or exercised. Dilution is computed by applying the treasury stock method. Under this method~~$5,184 ~~options~~ and ~~warrants are assumed to be exercised at the beginning of the period (or at the time of issuance~~$37,336 ~~if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Basic and diluted earnings per share are the same~~ for the ~~year~~years ended June 30, 2011, ~~for the period from April 28, 2010 (inception) to June 30, 2010,~~ and ~~for the period from April 28~~2012, ~~2010 (inception) to June 30, 2011 because the Company had no common stock equivalents~~respectively.

~~Stock~~At ~~Based~~June ~~Compensation~~30, 2012, future minimum rental payment commitments under operating leases that have initial or remaining non-cancelable lease terms in excess of one year are $23,400, $23,400, $23,400 and $23,400 for the years ending June 30, 2013, 2014, 2015 and 2016, respectively. No amounts are due subsequent to the year ending June 30, 2016.

~~The~~Note ~~Company~~5 records stock based compensation in accordance with FASB ASC 718, Compensation – Stock Based Compensation, which requires the Company measure stock based compensation based on the grant date estimated fair values for all stock based awards made to employees and directors, including stock options and recognize the compensation expense on the straight-~~line~~ ~~basis~~SIGNIFICANT ~~over~~CUSTOMERS ~~the~~AND ~~period~~CREDIT ~~during which an employee or director is required to provide service in exchange for the award.~~RISK

3Gross Service Revenues for the year ending June 30, 2012 were derived from three service providers, with 80% from one service provider, and accounts receivable and factored accounts receivable were derived from two service providers, with 66% from one service provider. ~~RECENTLY~~The ~~ISSUED~~80% ~~ACCOUNTING~~service ~~STANDARDS~~provider is AT&T and there are 14 shared customers with AT&T.

InNote ~~January~~6 ~~2010,~~– ~~the~~FINANCIAL FASB issued Accounting Standards Update No. 2010-06, Improving Disclosures about Fair Value Measurements (“ASU No. 2010-06”). ASU No. 2010-06 amends FASB ASC Topic 820, to require additional information to be disclosed principally regarding Level 3 measurements and transfers to and from Level 1 and 2. In addition, enhanced disclosure is required concerning inputs and valuation techniques used to determine Level 2 and Level 3 measurements. This guidance is generally effective for interim and annual reporting periods beginning after December 15, 2009; however, requirements to disclose separately purchases, sales, issuances, and settlements in the Level 3 reconciliation are effective for fiscal years beginning after December 15, 2010 (and for interim periods within such years). The update did not have a material impact on the Company’s results of operations or financial position.ARRANGEMENTS

~~F-11~~The Company’s debt consists of the following:

EDUTOONS, INC.

	June 30,
	2011		2012
Senior Secured Convertible Debentures	$	-	$	1,985,000
Capitalized lease obligation		-		454,646
Installment purchase of equipment		-		1,014,700
Factoring agreement		-		2,815,227
Notes payable to management employees		424,750		215,441
Other notes payable		108,750		130,000

Total debt		533,500		6,615,014

Less current portion		533,500		3,829,445

Long-term debt	$	-	$	2,785,569

~~(A DEVELOPMENT STAGE COMPANY)~~27

~~NOTES~~Note TO6 – FINANCIAL ~~STATEMENTS~~ARRANGEMENTS ~~JUNE 30, 2011 AND 2010~~(continued)

3In April 2011, the Company entered into a loan agreement with a shareholder for $141,000. ~~RECENTLY~~Terms ~~ISSUED~~of ~~ACCOUNTING~~the ~~STANDARDS~~agreement ~~(continued)~~provided for interest of 18% per year through the maturity date of September 30, 2011. The loan was secured by a first lien on a certain security deposit and all other assets of the Company. On October 1, 2011, the loan was replaced by another note in which all previously accrued and unpaid interest and penalties were included in the new note balance of $207,640. The new note provided for installment payments through November 30, 2011, was secured by the assets of the Company, subject to subordination by third party financiers and provided for interest of 18% per year. Subsequent to November 30, 2011, the lender agreed to extend the maturity date of the note. The principal balance outstanding associated with this note was $82,640 at June 30, 2012. Subsequent to June 30, 2012, the maturity date of the loan was extended to October 31, 2012.

In ~~February~~April ~~2010~~2011, the ~~FASB~~Company ~~issued~~entered ~~Accounting~~into ~~Standards~~a ~~Update~~loan ~~No.~~agreement ~~2010-09,~~with ~~Amendments~~the toCompany’s ~~Certain~~now ~~Recognition~~former Executive Vice President and ~~Disclosure~~Chief ~~Requirements~~Financial ~~(“ASU~~Officer Nofor $95,000. ~~2010-09”)~~Terms of the agreement provide for interest of 12% per year through the maturity date of June 30, 2011. ~~ASU~~ NoThe loan was secured by the assets of the Company and was subject to subordination by third party financiers. ~~2010-09~~An ~~amends~~additional ~~FASB~~loan ~~ASC~~agreement ~~Topic~~with ~~855-10,~~this ~~Subsequent~~individual ~~Events~~was entered into in April 2011 for $38,750. toTerms ~~remove~~of the ~~requirement~~agreement provided for aninterest ~~SEC~~of ~~filer~~18% toper ~~disclose~~year through the maturity date ~~through~~of ~~which~~September ~~subsequent~~30, ~~events~~2011. ~~have~~This ~~been~~loan ~~evaluated~~was insecured ~~both~~by ~~issued~~a first lien on a certain security deposit and ~~revised~~all ~~financial~~other ~~statements~~assets of the Company. ~~This~~ ~~change~~During ~~alleviates~~the ~~potential~~year ~~conflicts~~ended ~~between~~June ~~ASC~~30, ~~855-10~~2012, the due dates of these notes were extended to December 31, 2012, unpaid interest was forgiven and the ~~SEC’s~~remaining ~~requirements~~amounts due are non-interest bearing. ~~The~~ ~~update~~Interest ~~did~~forgiven ~~not~~for ~~have~~amounts apreviously recorded was not material ~~impact~~to onthe consolidated financial statements of the Company’s. ~~results~~The ofprincipal ~~operations~~balance oroutstanding ~~financial~~was ~~position~~$9,301 at June 30, 2012. Subsequent to June 30, 2012, this loan was paid in full as discussed in Note 10.

In ~~March~~May ~~2010~~2011, the ~~FASB~~Company ~~issued~~entered ~~Accounting~~into ~~Standards~~a ~~Update~~loan ~~No.~~agreement ~~2010-11,~~with ~~which~~the isCompany’s ~~included~~President inand ~~the~~Chief ~~Codification~~Executive ~~under~~Officer ~~ASC~~for ~~815~~$60,000. ~~Derivatives~~Terms ~~and~~of ~~Hedging~~the ~~(“ASC~~agreement ~~815”)~~provided for interest of 6% per year through the maturity date of January 15, 2012. ~~This~~ ~~update~~The ~~clarifies~~loan was secured by the ~~type~~assets of ~~embedded~~the ~~credit~~Company ~~derivative~~and ~~that~~was issubject ~~exempt~~to ~~from~~subordination ~~embedded~~by ~~derivative~~third ~~bifurcation~~party ~~requirements~~financiers. ~~Only~~ anAdditional ~~embedded~~borrowings ~~credit~~from ~~derivative~~this ~~that~~individual isduring ~~related~~the tocurrent ~~the~~year ~~subordination~~totaled of$67,000 ~~one~~under ~~financial~~similar ~~instrument~~terms tonoted ~~another~~above. ~~qualifies~~During ~~for~~the year ended June 30, 2012, the ~~exemption. This~~due ~~guidance~~date isof ~~effective~~these ~~for~~notes ~~interim~~was extended to December 31, 2012, unpaid interest was forgiven and ~~annual~~the ~~reporting~~remaining ~~periods~~amounts ~~beginning~~due ~~January~~are 1,non-interest ~~2010~~bearing. ~~The~~ ~~adoption~~Interest offorgiven ~~this~~for ~~standard~~amounts ~~did~~previously ~~not~~recorded ~~have~~was anot material ~~impact~~to onthe consolidated financial statements of the Company’s. ~~results~~The ofprincipal ~~operations~~balance oroutstanding ~~financial~~was ~~position~~$123,500 at June 30, 2012.

InThe ~~April 2010,~~Company ~~the~~entered ~~FASB~~into ~~issued~~a ~~ASU~~factoring ~~No. 2010-13,~~agreement ~~Effect~~ of ~~Denominating~~receivables ~~the~~on ~~Exercise~~September ~~Price~~9, of2011 afor ~~Share-Based~~up ~~Payment~~to ~~Award~~$500,000, inincreasing ~~the~~on ~~Currency~~November of17, ~~the~~2011 ~~Market~~to in$1,000,000, to $1,250,000 ~~Which~~on ~~the~~January ~~Underlying~~19, ~~Equity Security Trades~~2012, ~~(“ASU~~to ~~2010-13”).~~$2,000,000 ~~ASU~~on ~~2010-13~~March ~~addresses~~30, ~~the~~2012, ~~classification~~to of$2,550,000 aon ~~share-based~~April ~~payment~~17, ~~award~~2012 ~~with~~and anto ~~exercise~~$3,000,000 ~~price~~on ~~denominated~~April in24, ~~the~~2012 ~~currency~~to ofbe apayable ~~market~~immediately inat ~~which~~70%. ~~the~~Upon ~~underlying~~collections ~~equity~~by ~~security~~the ~~trades. FASB~~factor, ~~ASC~~the ~~Topic~~Company ~~718~~is ~~was~~remitted ~~amended~~the tobalance, ~~clarify~~less ~~that~~applicable adiscount ~~share-based~~fees ~~payment~~and ~~award~~5% ~~with~~of anthe ~~exercise~~remaining ~~price~~uncollected ~~denominated~~assigned inaccounts ~~the~~to ~~currency~~be ofused ato ~~market~~establish inand ~~which~~maintain a ~~substantial~~“contingency ~~portion~~account”. ofFees per the ~~entity’s~~agreement ~~equity~~start ~~securities~~at ~~trade~~1.30% ~~shall~~for ~~not~~collections bewithin ~~considered~~30 ~~to contain a market~~days, ~~performance~~increasing orby ~~service condition~~0.65% ~~Therefore,~~every ~~such~~15 andays. ~~award~~The isfactored ~~not~~receivables toare besecured ~~classified~~by asthe aassets ~~liability~~of ifthe itCompany ~~otherwise~~and ~~qualifies~~are ~~for~~with ~~equity~~recourse ~~classification.~~if ~~The~~the ~~amendments~~assigned inaccount ~~ASU~~becomes ~~2010-13~~the ~~are~~subject ~~effective~~of ~~for~~a ~~fiscal years~~dispute, ~~and~~there ~~interim~~exists ~~periods~~any ~~within~~breach ~~those~~of ~~fiscal~~representation ~~years,~~under ~~beginning~~the onagreement or ~~after~~an ~~December 15,~~assigned ~~2010,~~account ~~with~~is ~~early application permitted. The Company does~~ not ~~believe~~paid ~~that~~within ~~the~~90 ~~adoption~~days of ~~this~~its ~~standard~~invoice. ~~will~~The ~~have~~Company ahad ~~material~~an ~~impact~~outstanding onprincipal ~~the~~balance ~~Company’s results~~ of ~~operations~~$2,815,227 orat ~~financial~~June ~~position~~30, 2012.

~~F-12~~In January 2012, the Company entered into an installment purchase agreement for $1,161,415 of support equipment for use in its operations. The agreement provides for monthly installment payments of $38,682 with an interest rate of approximately 13%. The agreement is secured by a purchase money security interest in the related equipment. Future payments associated with this agreement are $502,869 (including $117,968 of interest), $464,186 (including $57966 of interest) and $232,093 (including $8,514 of interest) for the years ending June 30, 2013, 2014 and 2015, respectively.

~~EDUTOONS~~In June 2012, ~~INC~~the Company issued a series of Senior Secured Convertible Debentures totaling $1,985,000. The Senior Secured Convertible Debentures bear an 8% interest rate to be paid semi-annually on December 15 and June 15 of each year commencing on December 15, 2012. Interest shall be payable at the holder’s option in cash or restricted shares of the Company’s Common Stock at the volume weighted average closing price for the ten previous trading days to the interest due date. The Senior Secured Convertible Debentures are secured by all of the assets and property of the Company subject to the prior claim of the factor and other existing secured interests incurred with respect to the purchase of equipment and are due on June 15, 2014. The holders of the Senior Secured Convertible Debentures may elect to convert all or part of the principal of the debentures into restricted shares of the Company’s Common Stock at the Conversion Price of $0.18 per share at any time or times before or on the maturity date. If the Company sells securities, convertible securities or debt with a price per share less than the Conversion Price noted above, the Conversion Price shall be reduced to equal the price per share of such offering. The right to the reduction in the Conversion Price shall terminate upon the Company raising $5,000,000 or more at a price per share of more than the Conversion Price.

(ANote ~~DEVELOPMENT~~7 ~~STAGE~~– ~~COMPANY)~~EQUITY TRANSACTIONS

~~NOTES~~ A TOsubsidiary ~~FINANCIAL~~of ~~STATEMENTS~~the ~~JUNE~~Company 30entered into a Consulting Agreement, dated July 5, 2011, ~~AND~~with ~~2010~~a third party to provide consulting services during a 12 month term. The agreement provides that such party shall receive 34.25% of the issued and outstanding shares of the Company Common Stock based upon the Company’s then capitalization. To provide for the issuance of said shares, the subsidiary repurchased 34,250 shares from the existing shareholders for $0.10 per share and issued 34,250 pre-reorganization and pre-split shares to the consultant and/or its designees.

~~3. RECENTLY ISSUED ACCOUNTING STANDARDS (continued)~~28

InNote ~~December~~7 ~~2010,~~– ~~the~~EQUITY ~~FASB~~TRANSACTIONS ~~issued ASU No. 2010-28, When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts~~ (~~“ASU 2010-28”~~continued). ASU 2010-28 modifies Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. This eliminates an entity’s ability to assert that a reporting unit is not required to perform Step 2 because the carrying amount of the reporting unit is zero or negative despite the existence of qualitative factors that indicate the goodwill is more likely than not impaired. ASU 2010-28 is effective for fiscal and interim periods beginning after December 15, 2010. The Company does not believe that the adoption of this standard will have a material impact on the Company’s results of operations or financial position.

InOn December ~~2010~~28, 2011, the ~~FASB~~Company ~~issued~~authorized ~~ASU~~a No13. ~~2010~~333-~~29, Disclosure of Supplementary Pro Forma Information~~ for-1 ~~Business~~stock ~~Combinations~~split (~~“ASU~~the ~~2010-29~~"Stock Split”). ~~ASU 2010-29 specifies that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings~~ of the ~~combined~~Company's ~~entity~~Common asStock. All ~~though~~references ~~the~~to ~~business combination that occurred during~~ the ~~current~~number ~~year had occurred as~~ of ~~the~~shares ~~beginning~~ of ~~the~~Common ~~comparable~~Stock ~~prior~~and ~~annual~~per ~~reporting~~share ~~period~~amounts ~~only.~~have ~~ASU~~been ~~2010-29~~retroactively isrestated ~~effective~~in ~~prospectively for business combinations for which~~ the ~~acquisition~~accompanying ~~date~~financial isstatements onto orreflect ~~after~~ the ~~beginning~~effect of the ~~first~~Stock ~~annual reporting period beginning on or after December 15, 2010~~Split. ~~The Company does not believe that the adoption of this standard will have a material impact on the Company’s results of operations or financial position.~~

InOn ~~May~~January ~~2011~~24, ~~the~~2012, ~~FASB issued ASU No~~Mr. ~~2011-04~~Godwin, ~~Amendments~~the toCompany’s ~~Achieve~~President ~~Common Fair Value Measurement~~ and ~~Disclosure~~Chief ~~Requirements~~Executive inOfficer, ~~U.S.GAAP~~entered ~~and~~into ~~IFRSs~~an ~~(“ASU~~agreement ~~2011-04”)~~with ~~that provides clarification about~~ the ~~application~~Company ~~of existing fair value measurements and disclosure requirements and expands certain other disclosure requirements. ASU 2011-04 amends U.S. GAAP~~ to ~~provide~~receive common fair value measurements and disclosure requirements with International Financial Reporting Standards. The amendments in this ASU are effective prospectively for interim and annual periods beginning after December 151, ~~2011~~800,000 ~~with~~shares noof ~~early~~the ~~adoption permitted. The~~ Company’s ~~does~~Common ~~not~~Stock ~~believe~~for ~~that~~ the ~~adoption~~cancelation of ~~this~~$225,000 ~~standard will have a material impact on the Company’s results~~ of ~~operations~~unpaid ~~or financial position~~compensation.

InOn ~~June~~January ~~2011~~24, ~~the~~2012, ~~FASB issued ASU No~~Mr. ~~2011-05~~Roth, ~~Presentation of Comprehensive Income (“ASU No. 2011-05”) that improves~~ the ~~comparability,~~Company’s ~~consistency,~~then ~~and~~Executive ~~transparency~~Vice ofPresident ~~financial reporting~~ and ~~increases~~Chief ~~the~~Financial ~~prominence~~Officer, ofentered ~~items~~into ~~reported~~an inagreement ~~other~~with ~~comprehensive income by eliminating~~ the ~~option~~Company to ~~present~~receive ~~components~~180,000 shares of ~~other~~the ~~comprehensive~~Company’s ~~income~~Common asStock ~~part~~for of the ~~statement~~cancelation of ~~changes~~$22,500 inof ~~stockholders’~~unpaid ~~equity~~compensation.

~~F-13~~On January 27, 2012 our Board of Directors agreed to issue a stock dividend of 1.667 shares of Common Stock for every one (1) share of Common Stock which was issued and outstanding immediately prior to the Stock Split.

~~EDUTOONS,~~Note ~~INC.~~8 – RETIREMENT PLAN

The Company’s employees are eligible to become participants in the Company’s sponsored 401(Ak) ~~DEVELOPMENT~~plan, ~~STAGE~~effective ~~COMPANY~~June 2012. Under provisions of the plan, voluntary deposits by employees (up to 4% of their salaries) are matched by the Company on the basis of $1.00 for every $1.00 deposited. Participants in the plan vest 100% immediately in all voluntary deposits and the Company’s matching contribution. The Company’s total contribution under this phase of the plan amounted to $2,166 for the year ended June 30, 2012.

~~NOTES~~The TOCompany ~~FINANCIAL~~may ~~STATEMENTS~~also ~~JUNE~~make ~~30,~~a ~~2011~~profit-sharing ~~AND~~contribution ~~2010~~at its discretion for employees who worked at least 1000 hours and are employed on the last day of the plan year. Vesting by employees in the Company’s profit-sharing contribution accrues at the rate of 20% per year beginning in year 2 with 100% vesting at year 6. No contribution under this phase of the plan was made for the year ended June 30, 2012.

3The plan’s trustee is directed by each employee on how to invest all employee and employer contributions. ~~RECENTLY~~The ~~ISSUED~~investment ~~ACCOUNTING~~alternatives ~~STANDARDS~~include ~~(continued)~~a variety of investment funds.

~~ASU~~Note ~~No.~~9 ~~2011-05~~– ~~requires~~INCOME that all nonowner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both methods, the entity is required to present on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statement(s) where the component of net income and the components of other comprehensive income are presented. ASU No. 2011-05 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011 and is to be applied retrospectively, with early adoption permitted. The Company does not believe that the adoption of this standard will have a material impact on the Company’s results of operations or financial position.TAXES

4Deferred income taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and like amounts for income tax reporting. ~~SHARE~~The ~~CAPITAL~~deferred tax liability reflected in the accompanying balance sheet at June 30, 2012 is associated with the Company using accrual based accounting (in accordance with Generally Accepted Accounting Principles) for financial reporting purposes versus cash basis accounting for income tax reporting purposes.

	Number of shares		Amount
Authorized:
Common stock at $0.001 par value per share		10,000,000	$	10,000
At June 30, 2011 and June 30, 2010		10,000,000	$	10,000
Issued and outstanding:
Common stock at $0.001 par value per share		2,750,000	$	2,750
At June 30, 2010		2,750,000	$	2,750
Issued and outstanding:
Common stock at $0.001 par value per share		3,250,000	$	3,250
At June 30, 2011		3,250,000	$	3,250

A summary of the components of the provision for income taxes for the years ended June 30, 2011 and 2012 is as follows:

F-14

	2011		2012
Current tax expense - Federal	$	10,500	$	-
Current tax expense - state		825		-
Deferred tax expense - Federal		-		2,181,550
Deferred tax expense - state		-		673,536
Provision for income taxes	$	11,325	$	2,855,086

~~EDUTOONS,~~A ~~INC.~~reconciliation of the statutory Federal income tax rate and the effective income tax rate is as follows:

(A DEVELOPMENT STAGE COMPANY)

	Year Ended June 30,
	2011					2012
U.S. Federal statutory rate	$	22,392		35.0	%	$	2,481,450		35.0	%
State income tax, net of Federal tax benefit		536		0.8			437,798		6.2
Tax table rate differential		(11,398	)	(17.8	)		(64,162	)	(0.9	)
Other, net		(205	)	(0.3	)		-		-

Effective income tax rate	$	11,325		17.7	%	$	2,855,086		40.3	%

~~NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 AND 2010~~29

5.Note ~~GOING~~9 ~~CONCERN/RISKS~~– ~~AND~~INCOME ~~UNCERTAINTIES~~TAXES (continued)

The ~~Company’s~~temporary ~~financial~~differences ~~statements~~between ~~have been presented on~~ the ~~basis~~consolidated ~~that~~financial itstatements isand atax ~~going~~return ~~concern,~~related ~~which~~primarily ~~contemplates~~to ~~the~~differences ~~realization of assets and the satisfaction of liabilities~~ in ~~the~~cash ~~normal course of business. The Company is a startup company subject~~ to ~~the~~accrual ~~substantial~~accounting ~~business risks~~ and ~~uncertainties~~differences ~~inherent~~in todepreciation ~~such an entity, including the potential risk of business failure~~methods. ~~This raises substantial doubt about the Company’s ability to continue as a going concern.~~

The ~~reasons~~tax ~~for~~effects ~~the~~of ~~substantial~~these ~~doubt~~temporary ~~along~~differences ~~with~~have ~~management’s~~been ~~plans~~recognized ~~are~~as a deferred tax liability at June 30, 2012 as follows.:

Deferred tax asset:
Net operating loss	$	830,180
Total deferred tax asset		830,180

Deferred tax liabilities:
Cash basis adjustments		3,340,161
Property and equipment - principally due to differences in depreciation methods		356,430
Total deferred tax liabilities		3,696,591
Net deferred tax liability	$	2,866,411

~~The~~As ~~accompanying~~of ~~financial~~June ~~statements~~30, do2012, ~~not~~the ~~include~~Company ~~any~~has ~~adjustments~~a ~~that~~net ~~would~~operating beloss ~~necessary~~carry ~~should~~forward ~~the~~of ~~Company~~approximately be$2,060,000 ~~unable~~for toFederal ~~continue~~tax aspurposes. aThe ~~going~~net ~~concern~~operating loss expires through 2032.

6.Note ~~STOCK~~10 ~~BASED~~– ~~COMPENSATION~~SUBSEQUENT EVENTS

On ~~December~~July 1525, ~~2010~~2012, the Company issued a $1,125,000 Promissory Note. This note bears an ~~aggregate~~8% ofinterest ~~500,000~~rate ~~share~~to ofbe ~~common~~paid ~~stock~~on or prior to the ~~Company~~note’s ~~officers~~maturity indate ~~consideration~~(December ~~for~~19, ~~services~~2012) ~~rendered~~and is secured by ~~them~~all toof the assets and property of the Company. ~~during~~In connection with this note, the ~~month~~Company issued to the holder of ~~December~~this ~~2010. Such~~note ~~shares~~a ~~were~~warrant ~~valued~~to atpurchase ~~$25~~3,125,000 shares of the Company’s Common Stock at an exercise price of $0.0518 per share. The ~~total~~warrant ~~stock-based~~expires ~~compensation~~on ~~cost~~January ~~recognized~~25, in2017. ~~the~~In ~~statements~~August, 2012, an additional $700,000 of ~~operation~~Promissory ~~for~~Notes ~~the~~were ~~year~~sold ~~ended~~to ~~June~~three ~~30,~~investors ~~2011~~which ~~and~~were issued with warrants for the ~~period~~purchase ~~from~~of ~~April~~an 28aggregate of 1,944,445 ~~2010~~shares ~~(inception)~~of the Company’s Common Stock. These notes bear a 6% interest rate to ~~June~~be ~~30,~~paid ~~2011~~on ~~was~~or ~~$25~~prior to the note’s maturity date (February,~~000~~ 2013).

~~F-15~~The warrants are exercisable for five years from the date of issuance with an exercise price of $0.18 per share. The warrants have both cash and cashless exercise options. The exercise price of the warrants shall be reduced if the Company issues Common Stock or any Common Stock equivalent at an effective price of less than the warrants’ exercise price. The number of shares to be issued shall be adjusted if the Company issues rights, options or warrants to all holders of the Common Stock. The investors who were issued warrants received registration rights as follows: (i) the right to demand registration once commencing one year after the issuance of the warrant and (ii) unlimited piggy back registration rights.

On August 1, 2012, the Company entered into a two year consulting agreement with Millennium Capital Corporation which will provide various services for the Company including securing qualified management executives and potential Board of Director candidates, assisting the Company in the search for potential acquisitions, securing major clients and introducing the Company to investment banking contacts and investment relations advisors. Under the terms of the agreement, the Company will pay $25,000 per month for the term of the agreement in addition to the issuance of cashless warrants for 3,000,000 shares of the Company’s Common Stock exercisable for a period of five years commencing on August 1, 2012 at an exercise price of $0.20.

On August 16, 2012, the Company entered into a three year consulting agreement with BAW Holding Corp. and Brian A. Wasserman. Under the terms of the agreement, Mr. Wasserman will function as the Chief Financial Officer of the Company and provide financial consulting services for the Company (debt/equity financing, financial projections/budgets, review of financial statements and filings with the Securities and Exchange Commission, etc.). In addition to a monthly fee of $10,500, the Company agreed to issue an option to purchase 2,720,000 shares of the Company’s Common Stock at $0.183 per share. Effective upon entering into such agreement, one-sixth of the option shares were vested with the remaining shares vesting equally on December 31, 2012, June 30, 2013, December 31, 2013, June 30, 2014 and December 31, 2014. The option expires 5 years from each respective vesting date.

On August 24, 2012, the Company issued a series of Promissory Notes totaling $700,000. These notes bear a 6% interest rate to be paid on or prior to the notes’ maturity date (February 24, 2013) and are secured by all of the assets and property of the Company subject to the prior claim of the factor and other existing secured interests incurred with respect to the purchase of equipment.

On September 12, 2012, the Company entered into a Severance Agreement and Mutual Release agreement with Anthony Roth, the Company’s Executive Vice President and Chief Financial Officer. Under the terms of the agreement, Mr. Roth’s employment would terminate immediately. In return, Mr. Roth will receive his full base salary due him under his employment agreement (a total of $149, 333 through March 31, 2013) and a monthly auto and remote office allowance (a total of $11,900 through March 31, 2013). In addition, he will receive a bonus of $34,133 and accrued deferred compensation due him in the amount of $345,132 over an 18 month period beginning April 15, 2013. The Company also agreed to pay his outstanding loan to the Company ($9,301) and legal fees associated with the agreement ($2,500). Pursuant to the agreement, Mr. Roth also entered into a Stock Purchase Agreement pursuant to which Mr Roth sold 2,614,300 shares and agreed to sell an additional 4,385,700 shares in the future.

In September 2012, the Company issued a series of Senior Secured Convertible Debentures totaling $2,975,000. The Senior Secured Convertible Debentures are secured by all of the assets and property of the Company and are due on June 15, 2014 and are junior only to the interest of the Factor and other existing secured interests incurred with respect to the purchase of equipment.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

ITEM 9A. CONTROLS AND PROCEDURES

(a) Disclosure Controls and Procedures.

Management, with the participation of our Principal Executive Officer and Principal Financial Officer, carried out an evaluation of the effectiveness of our “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Annual Report on Form 10-K (the “Evaluation Date”). Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that, as of the Evaluation Date, our disclosure controls and procedures are not effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported, within the time periods specified in the SEC rules and forms and (ii) is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Notwithstanding the conclusion that our disclosure controls and procedures were not effective as of the end of the period covered by this Annual Report, the Principal Executive Officer and the Principal Financial Officer believe that the consolidated financial statements and other information contained in this Annual Report present fairly, in all material respects, our business, financial condition and results of operations.

(b) Management’s Annual Report on Internal Control over Financial Reporting

Our management is also responsible for establishing and maintaining adequate internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act). The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with Generally Accepted Accounting Principles (“GAAP”).

As of June 30, 2012, we carried out an assessment of the effectiveness of our internal control over financial reporting based on the framework in “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation, our management concluded that our internal control over financial reporting was not effective as of June 30, 2012.

As of June 30, 2012, we had identified certain matters that constituted material weaknesses in our internal controls over financial reporting, specific material weaknesses include the fact that we (i) have experienced difficulty in generating data in a form and format that facilitates the timely analysis of information needed to produce accurate financial reports, (ii) have experienced difficulty in applying complex accounting and financial reporting and disclosure rules required under GAAP and the SEC reporting regulations, (iii) have limited segregation of duties and (iv) do not have proper internal control’s in place in regard’s to proper documentation. During the year ended June 30, 2012, we have taken certain steps in an effort to correct these material weaknesses, including hiring of a Chief Financial Officer who has significant experience with publicly held companies. Although this is an important step towards improving the application of complex accounting principles, the preparation of financial reports and the segregation of duties, additional time is still required to fully implement additional internal controls procedures and test their operating effectiveness before we can definitively conclude that we have remediated our deficiencies. Because these remediation steps have not yet been completed, we have performed additional analyses and other procedures to ensure that our consolidated financial statements contained in this Annual Report were prepared in accordance with GAAP and applicable SEC regulations.

This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to the exemption provided to issuers that are neither “large accelerated filers” nor “accelerated filers” under the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Notwithstanding our remedial actions and integration of our financial reporting systems, there was no change in our internal control over financial reporting that occurred during the fourth quarter of our fiscal year that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Directors

Mr. David Godwin who is also our President, Chief Executive Officer (“CEO”) and Principal Financial Officer is presently our sole director. Mr. Anthony Roth, who was a director of the Company as well as our Executive Vice President, Chief Financial Officer and Corporate Secretary, resigned on September 12, 2012.

Our present executive officers and director, their ages and present positions are as follows:

Name	Age		Position	First Year Elected/Appointed
David Godwin		50	President, CEO, Principal Financial Officer		2011
Brian Wasserman		47	Chief Financial Officer		2012

Our director shall hold office until such time as his successors, if any, have been duly elected and qualified. Our director has currently been appointed to indefinite initial terms and we do not currently intend to elect additional directors or replace any of our current officers and director.

All of our executive officers shall hold office until the next annual meeting of the Board of Directors and until their successors, if any, have been duly appointed and qualified.

Mr. David Godwin

Mr. David Godwin (“Godwin”) has been the President of the Company since its inception in 2011. As a technical sales consultant for the Midwest Region of AT&T from 2008 to 2010, Godwin served over 8,000 customers in the National Business Market Group. Through his technical expertise and extensive industry knowledge he was ranked number one in his position, by AT&T, throughout the US in both sales and customer satisfaction. His past industry positions with ISI (2006-2008) and AT&T (2008-2010) have provided him the necessary business experience in the continuity, Cloud computing and disaster recovery industry.

Godwin obtained his undergraduate degree from the University of Maryland in 1986 while serving in the United States Army from which he received an Honorable Discharge.

Mr. Brian Wasserman

Mr. Brian Wasserman, CPA, (“Wasserman”) was appointed Chief Financial Officer (“CFO”) of the Company on August 16, 2012. Although Wasserman will not devote all his professional time to serving as the CFO of the Company, he will devote as much time as is necessary to fully and professionally perform his duties as our CFO. He has served as a director of SG Blocks, Inc. (“SGB”) since May 23, 2012 as well serving as SGB’s Chief Financial Officer since June 2011. Wasserman has been a Partner and a Director of Forensic Services at Janover, LLC, a public accounting firm since January 2010 and the Chief Executive Officer of BAW, a financial consulting business, since September 2005. Wasserman was a founder, the Chief Financial Officer and Treasurer of Newtek Business Services, Inc. (“Newtek” — NASDAQ Symbol “NEWT”) from September 1997 through July 2005. Newtek is a direct distributor of a wide range of business services and financial products to the small- and medium-sized business market under the Newtek brand. Newtek serves as a “one-stop-shop” provider of business services to the small- and medium-sized business market. From 1992 thru 1997, Wasserman was the Chief Financial Officer for a Wall Street investment banking firm, the General Partner of various investment limited partnerships and the Treasurer of Engex, Inc., a publicly traded closed end mutual fund. Wasserman is a licensed New York State Certified Public Accountant and holds a BS in Accounting from Lehigh University. From 1987 thru 1992, Wasserman worked for Coopers & Lybrand (now PricewatershouseCoopers) and achieved the position of Manager.

Our directors do not have any family relationships with each other. However, Mr. Godwin’s wife, Kathy Godwin, has been, and will continue to be, employed by the Company as Vice President Operations, Channel Management, overseeing vendor and customer operations, which Continuity does not deem to be an Executive Office.

ITEM 11. EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth all compensation awarded to, paid to or earned by the following executive officers, for the Company, for the fiscal year ended June 30, 2012 and the period ending June 30, 2011: (i) individuals who served as, or acted in the capacity of, the principal executive officers of the Company; (ii) the two most highly compensated executive officers of the Company, other than the principal executive officer; and (iii) up to two additional individuals, other than former principal executive officers, for whom disclosure would have been provided but for the fact that the individual was not serving as an executive officer of the Company at the end of the fiscal year ended June 30, 2012. No disclosure is made for any executive officer, other than the Principal Executive Officer, whose total compensation did not exceed $100,000.

Name and Principal Position	Year/Period	Salary ($)		Bonus ($)		All Other Compensation ($)		Total ($)

David Godwin	2012	250,000			109,600	958,865	(a)(b)(f)		1,318,465
Chief Executive Officer and President	2011	56,250	(d)		-	268,151	(a)(g)		324,401-

Anthony Roth	2012	232,542			71,680	448,239	(a)(c)		752,461
Former Chief Financial Officer and Executive Vice President	2011	48,000	(e)		-	27,637			75,637

(a)	These amounts represent commissions earned, reimbursement of taxes, and automobile and office expense allowances.
(b)	During 2012, $225,000 of deferred compensation was converted into 1,800,000 shares of the Company’s Common Stock
(c)	During 2012, $22,500 of deferred compensation was converted into 180,000 shares of the Company’s Common Stock.
(d)	During 2011, $4,250 of deferred compensation was converted into 42,500 shares of the Company’s Common Stock.
(e)	During 2011, $3,000 of deferred compensation was converted into 30,000 shares of the Company’s Common Stock.
(f)	During 2012, $50,000 of deferred compensation was converted into notes payable.

(g)	During 2011, $77,000 of deferred compensation was converted into notes payable.

Employment Contracts and Termination of Employment

We are a party to an employment agreement with David Godwin, our Chief Executive Officer. We had an employment agreement with Anthony Roth, until September 12, 2012, when we entered into a Severance Agreement and Mutual Release agreement with him, as described below. Both agreements were for a term beginning April 1, 2011 through March 31, 2013. Mr. Godwin’s base salary is $210,000 per year and Mr. Roth’s base salary was $192,000. Both agreements call for an automatic 10% increase in base salary upon the Company reaching $200,000 pre-tax operating profit in trailing three or six months periods. Both agreements also call for an annual bonus, ranging from 20% to 40% of base salary based on the Company’s profitability, the executive’s performance and discretionary factors.

On September 12, 2012, the Company entered into a Severance Agreement and Mutual Release agreement with Anthony Roth, the Company’s Executive Vice President and Chief Financial Officer. Under the terms of the agreement, Mr. Roth’s employment would terminate immediately. In return, Mr. Roth will receive his full base salary due him under his employment agreement (a total of $149, 333 through March 31, 2013) and a monthly auto and remote office allowance (a total of $11,900 through March 31, 2013). In addition, he will receive a bonus of $34,133 and accrued deferred compensation due him in the amount of $345,132 over an 18 month period beginning April 15, 2013. The Company also agreed to pay his outstanding loan to the Company ($9,301) and legal fees associated with the agreement ($2,500). Pursuant to the agreement, Mr. Roth also entered into a Stock Purchase Agreement pursuant to which Mr Roth shall sell 2,614,300 shares and agrees to sell an additional 4,385,700 shares in the future.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth, as of September 27, 2012, certain information regarding beneficial ownership of our Common Stock by (a) each person or entity who is known by us to own beneficially more than 5% of our Common Stock, (b) each of our directors, (c) each of our named executive officers and (d) all executive officers and directors as a group. Unless otherwise indicated, each of the shareholders shown in the table below has sole voting and investment power with respect to the shares beneficially owned. As used in this table, a beneficial owner of a security includes any person who, directly or indirectly, through contract, arrangement, understanding, relationship or otherwise has or shares (i) the power to vote, or direct the voting of, such security or (ii) investment power which includes the power to dispose, or to direct the disposition of, such security. In addition, a person is deemed to be the beneficial owner of a security if that person has the right to acquire beneficial ownership of such security within 60 days of September 27, 2012.

Name of Beneficial Owner	Common Stock Beneficially Owned		Percentage of Common Stock (1)
David Godwin 1004 Thornberry Lane Metamora, IL 61548		28,400,000		21.2	%

Anthony Roth 14330 Avalon Drive Northborough, MA 01532		17,665,700		13.2	%

Gary Elliston 901 Main Street, Suite 3500 Dallas, TX 75202		19,800,000		14.8	%

Brian Wasserman 100 Quentin Roosevelt Blvd., Suite 516 Garden City, NY 11530	(1)	462,000		0.3	%

All directors and executive officers as a group (two persons)		28,862,000		21.5	%

Please Note: Shares shown reflect Forward Stock Split on December 28, 2011 and Stock Dividend on January 27, 2012.

(1)	Mr. Wasserman has the option to purchase these shares but has not exercised that option as of September 27, 2012.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Using the definition of director independence set forth in NASDAQ Marketplace Rule 4200(a)(15), David Godwin is not considered to be an independent director.

John Fox, the principal of Forest Capital, which has entered into an agreement with the Company to purchase certain accounts receivable from the Company, owns 20,000 shares of the Company. These shares represent approximately 0.00015% ownership of the Company.

The promoter of EDUtoons was Eileen Russell, its initial President, CEO, Director and largest shareholder who no longer has any interest in, or relationship with, the Company because she has resigned from the Board of Directors and sold all her shares of the Company as of November 1, 2011. There is no outstanding agreement between the Company and Eileen Russell.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Aggregate fees billed for professional services rendered for the Company by EFP Rotenberg, LLP through September 21, 2012 for the year ended June 30, 2012 and the period ended June 30, 2011 were:

Audit Fees. The aggregate fees billed by EFP Rotenberg, LLP for the year ended June 30, 2012 and the period ended June 30, 2011 were $47,065 and $13,930, which included the audits of the Company’s annual financial statements, cost of the reviews of the Company’s quarterly financial statements and other periodic reports for each respective period.

Audit-Related Fees. The aggregate fees billed by EFP Rotenberg, LLP for the year ended June 30, 2012 was $23,325, which represent consulting costs as well as Form 8-K filings and review.

Tax Fees. The aggregate fees billed by EFP Rotenberg, LLP for the year ended June 30, 2012 was $1,200, which represent tax consulting costs.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)	The following documents are filed as part of this Annual Report on Form 10-K:

Exhibits
Exhibit 2	Acquisition Agreement, dated November 8, 2011, between the Stockholders of ContinuityX, Inc. and EDUtoons*
Exhibit 3.1	Articles of Incorporation**
Exhibit 3.2	Bylaws**
Exhibit 10.1	Loan Agreements (2), between ContinuityX, Inc. and Anthony Roth*
Exhibit 10.2	Loan Agreements (2), between ContinuityX, Inc. and David Godwin*
Exhibit 10.3	Loan Agreements (5), between ContinuityX, Inc. and Gary Elliston*
Exhibit 10.4	Consulting Agreement, dated July 5, 2011, between ContinuityX, Inc. and Highland Global Partners, Inc.*
Exhibit 10.5	Master Factoring Agreement, dated September 6, 2011, between ContinuityX, Inc. and Forest Capital, LLC.*
Exhibit 10.6	Deposit Account Control Agreement dated September 6, 2011 by and among ContinuityX, Forest Capital LLC, and JP Morgan Chase.*
Exhibit 10.7	Employment Agreement effective April 1, 2011 by and between David Godwin and ContinuityX, Inc.*
Exhibit 10.8	Employment Agreement effective April 1, 2011 by and between Anthony Roth and ContinuityX, Inc.*
Exhibit 14	Code of Ethics*
Exhibit 31.1	Certification Pursuant to Rule 13a-14(a) (17 CFR 240.13a-14(a)) (17 CFR 240.13a-14(a)) or Rule 15d-1(a) (17 CFR 240.15d-14(a))
Exhibit 32.1	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

* Previously filed as exhibits to the Form 8-K/A filed by the Company on November 23, 2011

** Previously filed as exhibits to the Registration Statement on Form S-1 filed by the Company on August 6, 2010

1.	Financial Statements

For a list of the financial statements of the Company included in this Annual Report on Form 10-K, please see Index to Consolidated Financial Statements appearing at the beginning of Item 8, “Financial Statements and Supplementary Data.”

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

	EDUtoons, Inc.
Date: October 13, 2011	By:	/s/ Eileen Russell
		Eileen Russell
		Chief Executive Officer and President

CONTINUITYX SOLUTIONS, INC.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Date: September 28, 2012	By:	/s/ David Godwin
		David Godwin Director, Chief Executive Officer and President

Date: October 13, 2011	By:	/s/ Eileen Russell
		Eileen Russell
		Chief Executive Officer, President and Director (Principal Executive Officer, Principal Financial Officer and Principal Accountant Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Date: September 28, 2012	By:	/s/ David Godwin
		David Godwin Director, Chief Executive Officer and President (Principal Executive Officer)

Date: September 28, 2012	By:	/s/ David Godwin
		David Godwin Principal Financial and Accounting Officer

EXHIBIT INDEX

Exhibit No.		Description of Exhibit
101.INS		XBRL Instance Document (filed herewith)
101.SCH		XBRL Taxonomy Extension Schema (filed herewith)
101.CAL		XBRL Taxonomy Extension Calculation Linkbase (filed herewith)
101.LAB		XBRL Taxonomy Extension Label Linkbase (filed herewith)
101.PRE		XBRL Taxonomy Extension Presentation Linkbase (filed herewith)
101.DEF		XBRL Taxonomy Extension Definition Linkbase (filed herewith)

Filing Compare · ContinuityX Solutions, Inc.