UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One) [ ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 2013 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 001-32438

þMediaShift, ~~QUARTERLY~~Inc ~~REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

For the Quarterly Period Ended September 30, 2012

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

Commission File No. 001-32438

JMG Exploration, Inc

(Exact Name of Registrant as Specified in its Charter)

Nevada		20-1373949
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification Number)
600 Brand Blvd., Suite 230,
20062 SW Birch St. #220,
Glendale, CA		91203
Newport Beach, CA		92660
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (~~818~~949) ~~649~~407-~~5710~~8488

~~Former name, former address and former fiscal year, if changed from last report. 180 South Lake Ave. Seventh Floor, Pasadena, CA 91101~~________________

~~Indicate~~Former byname, ~~check~~former ~~mark~~address ~~whether~~and ~~the~~former ~~registrant~~fiscal (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports)year, ~~and~~if ~~(2) has~~changed ~~been~~from ~~subject~~last ~~to such filing requirements for the past 90 days~~report. ~~Yes þ No o~~

600 Brand Blvd., Suite 230

Glendale, CA 91203

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

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

Large accelerated filer o [ ] Accelerated filer o [ ] Non-accelerated filer [ ] (Do not check if a smaller reporting company) Smaller reporting company [X]

~~Non-accelerated~~ Indicate ~~filer o (Do~~by ~~not~~ check ifmark awhether ~~smaller~~the ~~reporting~~registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) ~~Smaller~~. ~~reporting~~Yes ~~company þ~~[ ] No [X]

~~Indicate~~ The bynumber ~~check~~of ~~mark~~shares ~~whether~~outstanding ~~the~~of ~~registrant~~Registrant’s iscommon astock, ~~shell~~par ~~company~~value ($0.001, as ~~defined in Rule 12b-2~~ of ~~the~~March ~~Exchange~~31, ~~Act).~~2013, ~~Yes o No~~was þ 22,104,816.

~~The number of shares outstanding of Registrant’s common stock~~MediaShift, ~~par~~Inc.Index ~~value~~to ~~$0.01,~~Form as10-Q ofQuarterly ~~November~~Reportto ~~15,~~the ~~2012,~~Securities ~~was~~and ~~5,543,409.~~Exchange Commission


		Page
		No.
	Part I Financial Information

Item 1	Consolidated Financial Statements

	Consolidated Balance Sheets as of March 31, 2013 (unaudited) and December 31, 2012	3

	Consolidated Statements of Operations (unaudited) for the three month periods ended March 31, 2013 and 2012	4

	Consolidated Statements of Cash Flows (unaudited) for three month periods ended March 31, 2013 and 2012	5

	Consolidated Statement of Stockholders’ Equity (unaudited) for the three month period ended March 31, 2013	6

	Notes to Consolidated Financial Statements (unaudited)	7 - 22

Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23 - 30

Item 3	Quantitative and Qualitative Disclosures About Market Risk	30

Item 4T	Controls and Procedures	30-31

	Part II Other Information

Item 1	Legal Proceedings	32

Item 1A	Risk Factors	32

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	32

Item 3	Defaults Upon Senior Securities	32

Item 4	Mine Safety Disclosures	32

Item 5	Other Information	32

Item 6	Exhibits	33

JMG Exploration, Inc.Index to Form 10-Q Quarterly Report to the Securities and Exchange Commission

		Page
		No.
	Part I Financial Information
Item 1	Consolidated Financial Statements
	Consolidated Balance Sheets as of September 30, 2012 (unaudited) and December 31, 2011	3
	Consolidated Statements of Operations (unaudited) for the three and nine month periods ended September 30, 2012 and for the period from February 23, 2010 (Inception of the Development Stage) to September 30, 2012 (unaudited)	4
	Consolidated Statements of Cash Flows (unaudited) for three and nine month periods ended September 30, 2012 and for the period from February 23, 2010 (Inception of the Development Stage) to September 30, 2012 (unaudited)	5
	Consolidated Statement of Stockholders’ Equity (unaudited) for the nine month period ended September 30, 2012 and for the period from February 23, 2010 (Inception of the Development Stage) to September 30, 2012 (unaudited)	6
	Notes to Consolidated Financial Statements (unaudited)	7 - 19
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20 – 25
Item 3	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4T	Controls and Procedures	26
	Part II Other Information
Item 1	Legal Proceedings	27
Item 1A	Risk Factors	27
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3	Defaults Upon Senior Securities	27
Item 4	Mine Safety Disclosures	27
Item 5	Other Information	27
Item 6	Exhibits	27

PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

~~JMG Exploration~~MediaShift, Inc.

(A Development Stage Company)

CONSOLIDATED BALANCE SHEETS

	September 30, 2012	December 31, 2011 *
ASSETS	(unaudited)
Current Assets
Cash and cash equivalents	$ 948,748	$ 648,471
Accounts receivable	746	2,582
Prepaid expenses	1,759	13,177
Total current assets	951,253	664,230
Property and equipment, net of depreciation	117,186	26,674
Discontinued operations: assets held for sale	12,829	-
Patents, net	204,715	141,463
Deposits	10,150	-
Other assets	2,310	-
Total Assets	$1,298,443	$ 832,367
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable and accrued expenses	$ 641,843	$ 84,171
Liabilities directly associated with assets held for sale	32,067	-
Total Current Liabilities	673,910	84,171
Total Liabilities	673,910	84,171
Commitments and Contingencies
Stockholders’ equity
Series A preferred stock, $0.001 par value, 0 and 3,492,061 issued and outstanding at September 30, 2012 (unaudited) and December 31, 2011, respectively; liquidation preference of $0 and $616,000 as of September 30, 2012 (unaudited) and December 31, 2011, respectively	-	3,492
Series B preferred stock, $0.001 par value, 0 and 2,191,838 issued and outstanding at September 30, 2012 (unaudited) and December 31, 2011, respectively; liquidation preference of $0 and $1,013,333 as of September 30, 2012 (unaudited) and December 31, 2011, respectively	-	2,192
Class M preferred stock, $0.01 par value, 169,973.88 issued and outstanding at September 30, 2012 (unaudited) - none at December 31, 2011; no liquidation preference as of September 30, 2012 (unaudited)	1,700	-
Common stock – $0.001 par value, 5,423,409 and 10,431,165 shares issued and outstanding at September 30, 2012 (unaudited) and December 31, 2011, respectively	5.423	10,431
Additional paid-in capital	6,056,886	1,642,742
Accumulated deficit during development stage	(5,439,476)	(910,661)
Total Stockholders’ Equity	624,533	748,196
Total Liabilities and Stockholders’ Equity	$ 1,298,443	$ 832,367
* Amounts derived from the audited financial statements for the year ended December 31, 2011

(unaudited)


	March 31, 2013		December 31, 2012 *
ASSETS	(unaudited)
Current Assets
Cash and cash equivalents	$	3,696,000	$	902,701
Accounts receivable, net		2,825,418		6,240
Prepaid expenses		142,943		57,625
Total current assets		6,664,361		966,566
Property and equipment, net of depreciation		315,499		163,819
Discontinued operations: assets held for sale		10,542		10,542
Patents, net		251,948		215,070
Deposits		117,825		10,250
Intangible Assets		5,687,167		-
Other assets		1,721		434
Total Assets	$	13,049,063	$	1,366,681
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable and accrued expenses	$	4,344,604	$	294,632
Liabilities directly associated with assets held for sale		379,422		378,296
Total Current Liabilities		4,724,026		672,928
Long-Term Liabilities:
Note Payable, less discount of $647,980 and $750,292 in 2013 and 2012		2,622,019		249,707
Total Long-Term Liabilities		2,622,019		249,707
Total Liabilities		7,346,045		922,635
Commitments and Contingencies (note 4)
Stockholders’ equity
Series A preferred stock, $0.001 par value		-		-
Series B preferred stock, $0.001 par value		-		-
Class M preferred stock, $0.001 par value, 0 and 169,973.88 issued and outstanding at March 31, 2013 (unaudited) and December 31, 2012; no liquidation preference as of December 31, 2012		-		1,700
Common stock - 100,000,000 and 25,000,000 shares authorized, $0.001 par value, 22,104,816 and 2,771,705 shares issued and outstanding at March 31, 2013 (unaudited) and December 31, 2012, respectively		22,105		5,543
Additional paid-in capital		22,968,313		10,430,087
Accumulated deficit		(17,287,400)		(9,993,284)
Total Stockholders’ Equity		5,703,018		444,046
Total Liabilities and Stockholders’ Equity	$	13,049,063	$	1,366,681

* Amounts derived from the audited financial statements for the year ended December 31, 2012

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

~~JMG Exploration~~MediaShift, Inc.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

	Three month period endedSeptember 30,		Nine month period ended September 30,		From February 23, 2010 (Inception) through September 30, 2012
	For the three month periods ended March 31,
	2012	2011	2012	2011
	2013			2012
Continuing Operations:
Revenues	$	1,513,312		$	4,787
Revenues	$ 485	$ 49	$ 6,850	$ 49	$ 9,432
Cost of goods sold		(840,169)			(4,718)
Cost of goods sold	(262)	-	(5,841)	-	(7,132)
Gross profit		673,143			69
Net profit	223	49	1,009	49	2,300
Expenses:
Professional expenses	123,512	4,512	184,984	9,804	224,695
General and administrative expenses		2,293,765			384,978
Rent	28,299	-	66,906	-	66,906
Depreciation and Amortization		55,979			4,155
Depreciation	6,572	355	16,532	716	18,808
Research and development expenses		66,572			50,548
Salary and other compensation expense	3,062,446	5,223	3,553,727	14,155	3,766,524
Total expenses		2,416,316			439,681
Research and development expenses	41,676	34,557	137,360	94,384	349,658
Total operating loss		(1,743,173)			(439,612)
Consulting and outside services	152,884	98,438	355,075	226,093	723,698
Advertising	18,810	-	40,239	-	40,239
Other general and administrative	98,555	12,971	177,424	36,113	252,323
Total expenses	3,532,754	156,056	4,532,247	381,265	5,442,851
Total operating loss	(3,532,531)	(156,007)	(4,531,238)	(381,216)	(5,440,551)
Other Income and Expense
Interest income	-	2621	-	~~443~~	~~1,106~~-
Interest expense	-	(800)	-	(800)	(1,900)
Other income		19,436			-
Total other income and expense	-	(774)	-	(357)	(794)
Interest expense		(164,259)			-
Net loss before taxes	(3,532,531)	(156,781)	(4,531,238)	(381,573)	(5,441,345)
Fair value adjustment on derivative liability		(694,918)			-
Taxes	(800)	(554)	(2,000)	(554)	(2,554)
Loss on debt extinguishment		(4,710,423)			-
Net loss from continuing operations	(3,533,331)	(157,335)	(4,533,238)	(382,127)	(5,443,899)
Total other income and expense		(5,550,143)			-
Net loss before taxes		(7,293,316)			(439,612)
Taxes		(800)			(1,200)
Net loss from continuing operations		(7,294,116)			(440,812)
Discontinued Operations:
Gain from discontinued operations	~~4,423~~	-	~~4,423~~	-	~~4,423~~-
Net loss	~~$ (3,528,908)~~	$ (~~157~~7,~~335~~294,116)	~~$ (4,528,815)~~	~~$ (382,127)~~	$ (5440,~~439,476~~812)
Net loss per share applicable to common shareholders:
Less: deemed dividend on warrant extension		-			-
basic	$(0.335)	$(0.015)	$(0.430)	$(0.037)
Net loss applicable to common shareholders	$	(7,294,116)		$	(440,812)
diluted	$(0.335)	$(0.015)	$(0.430)	$(0.037)
Basic and diluted weighted average shares outstanding		6,463,852			10,431,165
Weighted average number of shares used in computing net loss per share of Common Stock:
Per Share Amounts applicable to common shareholders for the period per share, basic and diluted:
basic	10,534,278	10,431,165	10,534,278	10,431,165
(Loss) from continuing operations		$(1.128)			$(0.042)
diluted	10,534,278	10,431,165	10,534,278	10,431,165
(Loss) from discontinued operations		$(0.000)			$(0.000)
(Net Loss) per share		$(1.128)			$(0.042)

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

~~JMG Exploration~~MediaShift, Inc.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	Three month period ended September 30,		Nine month period ended September 30,		From February 23, 2010 (Inception) through September 30, 2012
	Three month periods ended March 31,
	2012	2011	2012	2011
	2013			2012
OPERATING
Net loss	$ ~~(3,528,908)~~	$ (~~157~~7,~~335~~294,116)	~~$(4,528,815)~~	$ ~~(382,127)~~	$ (5440,~~439,476~~812)
Adjustments to reconcile net loss to cash flows from operating activities:
Depreciation	6,572	355	16,531	716	18,807
Depreciation and amortization		55,979			4,154
Fair value of common stock and common stock warrants issued for services rendered	-	-	-	-	~~82,669~~-
Stock based compensation	2,684,115	5,224	2,714,207	14,155	2,740,396
Loss on derivative liability		694,918			-
(Increase) Decrease in accounts receivable	613	(49)	1,836	(49)	(746)
Loss on debt extinguishment		4,710,423			-
(Increase) Decrease in other assets	(1,132)	-	(2,138)	-	(2,138)
Stock based compensation		207,354			11,062
(Increase) Decrease in prepaid expenses	8,042	(47,768)	11,418	(46,174)	(1,759)
Amortization of Note Discount		55,535			-
(Increase) Decrease in security deposits	(200)	-	(10,150)	-	(10,150)
Changes in operating assets and liabilities, net of balances from business combinations: increase (decrease):
Increase (Decrease) in accounts payable and accrued expenses	(3,215)	45,326	121,044	61,745	205,215
Accounts receivable		(103,178)			(1,903)
Increase in accrued interest	-	800	-	800	-
Other assets		(1,287)			-
Cash used in operating activities	(834,113)	(153,447)	(1,676,067)	(350,934)	(2,407,182)
Prepaid expenses		(80,318)			(3,853)
Security deposits		(107,575)			(9,850)
Accounts payable and accrued expenses		398,370			71,262
Liabilities directly associated with assets held for sale		1,126			-
Cash used in operating activities		(1,462,769)			(369,940)
INVESTING
Purchase of property and equipment, leasehold improvements and furniture	~~(60,301)~~	(776,~~495~~953)	~~(107,043)~~	~~(11,883)~~	(~~135~~41,~~993~~960)
Patent costs	(17,050)	(32,648)	(84,146)	(50,990)	(225,609)
Intangible Assets		(304,451)			-
Cash used in investing activities	(77,351)	(40,143)	(191,189)	(62,873)	(361,602)
Net cash paid in acquisition of certain assets of Travora Media Inc.		(500,000)			-
Patent costs		(36,878)			(35,878)
Cash used in investing activities		(918,282)			(77,838)
FINANCING
Loan proceeds	-	806,~~000~~944,350	-	~~80,000~~	~~110,000~~-
Loan payments	-	-	-	-	(110,000)
Payments on Note Payable		(1,770,000)			-
Net cash from JMG	1,509,736	-	1,509,736	-	1,509,736
Cash provided by financing activities		5,174,350			-
Exercise of warrants and options	-	-	55,797	-	55,797
Net increase in cash and cash equivalents		2,793,299			(447,778)
Net proceeds from issuance of preferred stock	-	-	602,000	-	2,151,999
Cash and cash equivalents, beginning of period		902,701			648,471
Cash provided by financing activities	1,509,736	80,000	2,167,533	80,000	3,717,532
Cash and cash equivalents, end of period	$	3,696,000		$	200,693
Net increase in cash and cash equivalents	598,272	(113,590)	300,277	(333,807)	948,748
Cash and cash equivalents, beginning of period	350,476	142,225	648,471	362,442	-
Cash and cash equivalents, end of period	$ 948,748	$ 28,635	$ 948,748	$ 28,635	$ 948,748
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest	$ -	~~$ -~~65,908	~~$ -~~	$ -	~~$ 1,900~~-
Income taxes	~~$ 800~~	~~$ 554~~3,200	~~$ 2,000~~	$ ~~554~~	~~$ 2~~1,~~554~~200
Non-cash activity:
Non Cash Transactions
Dividend of affiliated entity	$ 20,894	$ -	$ 20,894	$ -	$ 20,894
Extinguishment of debt via issuance of common stock	$	10,393,967		$	-

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

~~JMG Exploration~~MediaShift, Inc.

(ACONSOLIDATED ~~Development~~STATEMENTS ~~Stage~~OF ~~Company)~~CHANGES IN STOCKHOLDERS’ Equity

~~CONSOLIDATED~~From ~~STATEMENTS~~December OF31, ~~CHANGES~~2010 INthrough ~~STOCKHOLDERS’~~March ~~EQUITY~~31, 2013

~~From February 23, 2010~~ (~~Date of Inception~~unaudited) ~~through September 30, 2012~~

	Preferred Stock		Class M Preferred		Common Stock		Additional Paid in Capital	Accumulated Deficit	Total
	Shares	$	Shares	$	Shares	$	$	$	$
Balance at February 23, 2010 (Date of Inception)	-	$ -	-	$ -	-	$ -	$ -	$ -	$ -
Balance at December 31, 2010	3,492,061	3,492	-	-	5,215,583	10,431	625,557	(239,128)	400,352
Issuance of common shares to directors (founder’s shares)	-	-	-	-	10,000,000	10,000	(10,000)	-	-
Warrants issued for services rendered	-	-	-	-	-	-	14,761	-	14,761
Stock issued for services rendered	-	-	-	-	431,165	431	67,477	-	67,908
Stock based compensation	-	-	-	-	-	-	6,811	-	6,811
Series A preferred stock	3,492,061	3,492	-	-	-	-	546,508	-	550,000
Net loss for the period from February 23, 2010 (Date of Inception) through December 31, 2010	-	-	-	-	-	-	-	(239,128)	(239,128)
Balance at December 31, 2010	3,492,061	3,492	-	-	10,431,165	10,431	625,557	(239,128)	400,352
Series B preferred stock	2,191,838	2,192	-	-	-	-	997,807	-	999,999
Stock based compensation	-	-	-	-	-	-	19,378	-	19,378
Net loss for the year ended December 31, 2011	-	-	-	-	-	-	-	(671,533)	(671,533)
Balance at December 31, 2011	5,683,899	5,684	-	-	105,~~431~~215,~~165~~583	10,431	1,642,742	(910,661)	748,196
Series C preferred stock	528,070	528	-	-	-	-	601,472	-	602,000
Exercised warrants, Series A preferred stock	168,651	169	-	-	-	-	26,394	-	26,563
Exercised options	-	-	-	-	~~185~~135,~~604~~302	~~186~~271	2947,~~048~~663	-	2947,~~234~~934
Stock based compensation	-	-	-	-	-	-	2,~~714~~865,~~207~~603	-	2,~~714~~865,~~207~~603
Net equity acquired in JMG Merger	-	-	-	-	52,~~423~~729,~~409~~205	5,~~423~~458	1,048,~~619~~576	-	1,054,~~042~~034
Conversion of stock to Class M Preferred	(6,380,620)	(6,381)	169,974	1,700	(105,~~616~~308,~~769~~385)	(10,617)	15,298	-	-
Dividends	-	-	-	-	-	-	(20,894)	-	(20,894)
Net loss for the nine months ended September 30, 2012	-	-	-	-	-	-	-	(4,528,815)	(4,528,815)
Beneficial conversion feature on convertible note	-	-	-	-		-	818,503	-	818,503
Balance at September 30, 2012 (unaudited)	-	$ -	169,974	$ 1,700	5,423,409	$ 5,423	$ 6,056,886	$(5,439,476)	$ 624,533
Extension of warrant expiration dates	-	-	-	-		-	3,384,730	(3,384,730)	-
Net loss for the year ended December 31, 2012	-	-	-	-		-	-	(5,697,893)	(5,697,893)
Balance at December 31, 2012	-	-	169,974	1,700	2,771,705	5,543	10,430,087	(9,993,284)	444,046
Conversion of Class M Preferred to Common Stock	-	-	(169,974)	(1,700)	16,997,388	16,997	(15,297)	-	-
Par adjustment stock split	-	-	-	-	-	(2,771)	2,771	-	-
Stock based compensation	-	-	-	-	-	-	207,354	-	207,354
Issuance of warrant with debt	-	-	-	-	-	-	1,951,767	-	1,951,767
Issuance of shares to extinguish debt	-	-	-	-	2,335,723	2,336	10,391,631	-	10,393,967
Net loss for the three month period ended March 31, 2013	-	-	-		-	-	-	(7,294,116)	(7,294,116)
Balance at March 31, 2013 (unaudited)	-	-	-	-	22,104,816	22,105	22,968,313	(17,287,400)	5,703,018

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

~~JMG Exploration~~MediaShift, Inc.

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. - Principal Business Activities

Interim Financial Statements

The unaudited financial statements of ~~JMG Exploration~~MediaShift, Inc. (“~~JMG~~MediaShift”, or the “Company”), ~~a development stage company,~~ have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. However, the information included in these interim financial statements reflects all adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for the fair presentation of the financial position and the results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full year. The balance sheet information as of December 31, ~~2011~~2012 was derived from the audited financial statements included in Form 810-K/A filed ~~October~~March 1513, ~~2012~~2013. These interim financial statements should be read in conjunction with that report.

~~JMG’s~~Organization wholly owned subsidiary, Ad-Vantage Networks, Inc. (“Ad-Vantage”), is a development stage company engaged in digital advertising technology services. Ad-Vantage was formed as a Delaware Limited Liability Corporation (LLC) on February 23, 2010 and ~~on July 7, 2010 was converted to a Delaware Corporation.~~ Business

~~On July 6~~MediaShift, ~~2010,~~Inc. ~~Ad-Vantage~~(the ~~completed~~"Company") awas ~~reorganization~~originally inincorporated ~~which~~under the ~~predecessor~~laws toof the ~~Company,~~state ~~Ad-Vantage~~of ~~Networks,~~Nevada ~~LLC,~~in ~~was~~July ~~converted~~2004 ~~into~~as ~~Ad-Vantage~~JMG ~~(the~~Exploration, Inc. (“~~Conversion~~JMG”). At Asa ~~part~~Special Meeting of Shareholders (the ~~Conversion~~"Meeting") of JMG Exploration, ~~Ad-Vantage~~Inc ~~issued~~held 10on March 4,~~000~~ 2013,~~000~~ ~~shares~~JMG ofshareholders ~~common~~approved ~~stock.~~the following:

Liquidity

The Company faces certain risks and uncertainties which are present in many emerging intellectual technology companies regarding product development, future profitability, ability to obtain future capital, protection of patents and property rights, competition, rapid technological change, government regulations, recruiting and retaining key personnel, and third party vendors and manufacturers.

As of September 30, 2012, the Company had an accumulated deficit of $5,439,476 and had insufficient working capital to fund development of our technology. In November 2012 (Note 6) the Company received proceeds of $1,000,000 pursuant to the issuance of promissory notes. Absent the exercise of outstanding warrants or securing additional working capital from other sources, the Company may be forced to scale back its product development efforts.

Merger with Ad-Vantage

On August 31, 2012, Ad-Vantage consummated a reverse triangular merger with a wholly owned subsidiary of JMG pursuant to which Ad-Vantage became the surviving entity of the Merger and Ad-Vantage became a wholly owned subsidiary of JMG. The transaction has been accounted for as a reverse acquisition and the accompanying financial statements are those of Ad-Vantage. As required by accounting guidance, authorized shares, issued and outstanding shares and per share amounts have been retroactively restated throughout these consolidated financial statements and the accompanying notes to reflect JMG’s capital structure.

JMG did not have any ongoing business operations. Assets consisting primarily of cash and oil and gas properties totaling $1,522,737 were acquired and certain current liabilities of $401,864 were assumed from JMG. Because JMG had no operations and only net monetary assets, the Reverse Triangular Merger

is being treated as a capital transaction, whereby Ad-Vantage Networks, Inc. acquired the net monetary assets of JMG, accompanied by a recapitalization of Ad-Vantage Networks. Inc. As such, no fair value adjustments were necessary for any of the assets acquired or liabilities assumed.

The net equity acquired from JMG as the result of the Merger was $1,054,042 and was recorded as an addition to additional paid in capital. Pursuant to and in connection with the Amended and Restated Merger Agreement and the Merger:

~~JMG~~An ~~issued~~increase ~~169,973.88~~in ~~shares of Class M Preferred Stock (~~the ~~“Class M Preferred”), a newly~~ authorized ~~class~~number of ~~JMG~~shares ~~preferred stock, as consideration for the Merger. Each issued and outstanding share~~ of ~~Ad-Vantage~~ common stock ~~and~~from ~~Ad-Vantage~~25,000,000 ~~preferred~~to ~~stock (collectively~~100,000,000 ~~“Ad-Vantage Capital Stock”) was exchanged for 0.01 fully paid and nonassessable share of Class M Preferred~~ (the “~~Exchange~~Authorized ~~Ratio~~Share Increase”).;

~~JMG~~A ~~covenanted,~~change asin ~~soon as reasonably practicable following~~ the ~~consummation~~name offrom ~~the~~JMG ~~Merger and subject to compliance with applicable law~~Exploration, toInc. ~~(i) cause its authorized number of shares of common stock~~ to ~~be increased from 25~~MediaShift,~~000,000~~ toInc. ~~100,000,000~~ (the “~~Authorized~~Name ~~Share Increase~~Change”); and ~~(ii) effect a one-for-two reverse stock split of its issued and outstanding shares of common stock (the “Reverse Stock Split”).~~

~~Upon~~A ~~the~~reverse ~~consummation~~stock ofsplit ~~the Authorized Share Increase and the Reverse Stock Split, the shares~~ of ~~Class M Preferred issued in exchange for the shares of Ad-Vantage Capital Stock shall automatically convert (the “Automatic Conversion”) into shares of JMG’s~~ common stock, ~~at the ratio~~ of ~~100~~one ~~shares~~share ~~of common stock~~ for ~~each~~every ~~share~~two ~~of Class M Preferred~~ (~~the “Conversion Ratio”~~1-for-2). ~~The~~shares ~~Automatic Conversion is currently expected to occur in December, 2012~~outstanding.

·All share and per share information, including earnings per share, in this Form 10-Q have been retroactively adjusted to reflect this reverse stock split and certain items in prior period financial statements have been revised to conform to the current presentation.

~~After~~All ~~giving~~continuing ~~effect~~operations toare ~~the~~being ~~Reverse~~conducted ~~Stock~~by ~~Split~~MediaShift’s ~~and~~wholly ~~the~~owned ~~Automatic~~subsidiaries, ~~Conversion~~Ad-Vantage Networks, ~~JMG~~Inc. ~~will~~(“ADVN”) ~~have~~and ~~approximately~~Travora 19Networks,~~726,603~~ ~~shares~~Inc. of(“TNI”). ~~common~~ADVN ~~stock~~provides ~~outstanding,~~digital ofadvertising ~~which~~software ~~16,997,388~~and ~~shares~~service ~~will~~solutions ~~have~~that ~~been~~enable ~~issued~~access ~~(giving~~providers ~~effect~~and network operators to generate advertising revenues on their free and fee-based networks. TNI operates a leading digital advertising network, where it engages in the ~~Automatic~~marketing ~~Conversion)~~and selling of online advertiser ads to ~~complete~~travel ~~the~~service ~~Merger~~providers through a proprietary network of web publishers.

·TNI was formed on January 14, 2013 as a Delaware Corporation. TNI acquired assets from Travora Media., Inc. related to Travora Media’s ad network business in an Asset Purchase Agreement which was effective on February 1, 2013 and which closed February 6, 2013 and therefore the financial information presented as of and for the three month period ended March 31, 2013 represents only two months of TNI operations.

All issued and outstanding options to acquire shares of Ad-Vantage common stock (collectively, “Ad-Vantage Options”) were converted into options to acquire shares of Class M Preferred (collectively, “Parent Class M Preferred Stock Options”) at the Exchange Ratio, with such Class M Preferred Stock Options having the same terms and being subject to the same conditions as the Ad-Vantage Options, provided, however, that upon the consummation of the Authorized Share Increase and the Reverse Stock Split all of the Class M Preferred Stock Options shall, without the requirement of any further action, convert into options for shares of JMG common stock, with such conversion occurring at the Conversion Ratio. No Ad-Vantage Option shall have accelerated vesting in connection with the Merger.7

·Liquidity

~~JMG~~The ~~will~~Company ~~extend~~faces ~~the~~certain ~~term~~risks ofand ~~its~~uncertainties ~~three~~which ~~classes~~are ofpresent ~~warrants~~in ~~with~~many ~~exercise~~emerging ~~prices,~~technology ~~respectively~~companies regarding product development, offuture ~~$8.50~~profitability, ~~$10.00~~ability to obtain future capital, ~~and~~protection ~~$12.00~~of ~~(such~~patents ~~prices~~and ~~giving~~property ~~effect~~rights, tocompetition, ~~the~~rapid ~~Reverse~~technological ~~Stock~~change, ~~Split)~~government ~~for~~regulations, arecruiting ~~period~~and ofretaining 18key ~~months~~personnel, ~~from~~and ~~the~~third ~~consummation~~party ofvendors ~~the~~and ~~Merger~~manufacturers.

·At March 31, 2013 (unaudited) and December 31, 2012, we had $3,696,000 and $902,701 in cash and cash equivalents, respectively. From our incorporation through March 31, 2013, we have financed our operating cash flow needs principally through private offerings of equity securities and convertible debt.

~~Each~~As of ~~those~~March ~~persons~~31, ~~serving~~2013 ~~prior~~(unaudited) toand ~~the~~December ~~Merger~~31, as2012, awe ~~director~~had ofan ~~JMG~~accumulated ~~resigned~~deficit ~~from~~of ~~the~~$17,287,400 ~~Board~~and $9,993,284, ~~with~~respectively, ~~such~~and ~~resignations~~had ~~becoming~~limited ~~effective~~working ascapital to fund development of ~~September~~our 16technology. On November 5, 2012, ~~(upon~~the ~~expiration~~Company issued an aggregate of $500,000 in two year 10% convertible notes to two investors, and on November 7, 2012 the ~~applicable~~Company ~~waiting~~issued ~~period~~an aggregate of $500,000 in ~~compliance~~two year 10% convertible notes to three additional investors. The notes may be prepaid by the Company with fifteen days’ notice, and may be converted into the ~~provisions~~Company’s ofcommon ~~Rule~~stock ~~14f-1~~at ~~(“Rule~~the ~~14f-1”)~~lesser of 80% of the ~~Exchange~~Company’s ~~Act~~fair market value at the time of ~~1934~~conversion or $8.00 per share. The notes were issued with two year warrants to purchase an aggregate of 100,000 ascommon ~~amended~~shares ~~(the~~at ~~“Exchange~~$6.50 ~~Act”))~~per share.

·During the first quarter of 2013, we received $6,944,350 pursuant to a private placement of 8% convertible promissory notes and warrants (see notes 5 and 6). A total of $2,250,000 of the proceeds was used to finance the TNI acquisition (note 3). We will use the balance of the proceeds to finance our remaining financial commitments pursuant to the TNI acquisition and for working capital purposes. On March 27, 2013, all convertible notes received during the quarter from this private placement, along with accrued interest, net of discount, totaling $7,007,170 were converted to common stock.

~~Each~~2 of- ~~David~~Summary ~~S. Grant and Sanjeev Kuwadekar became directors~~ of ~~JMG,~~Significant ~~effective~~Accounting upon the consummation of the Merger, and each of Donald Wells, Ed Cerkovnik and Robert Burg became directors of JMG as of September 16, 2102 upon expiration of the applicable waiting period in compliance with the provisions of Rule 14f-1.Policies

Those persons serving as officers of JMG prior to the Merger resigned upon the consummation of the Merger and those persons serving as officers of Ad-Vantage became officers of JMG.

The Merger resulted in the pre-Merger stockholders of JMG owning approximately 13.8% of Ad-Vantage and the Ad-Vantage Stockholders, as a group, owning the balance.

Certain members of the Ad-Vantage executive team agreed to lock-up, for a period of 12 months following the closing of the Merger, the shares of JMG’s Class M Preferred to be received by them in connection with the Merger, and the shares of JMG’s common stock which those shares of Class M Preferred will convert into at the Automatic Conversion.

2. Summary of Significant Accounting Policies

Interim (unaudited) Financial Statements

The accompanying unaudited financial statements and related notes for the ~~nine~~three month periods ended ~~September~~March 3031, ~~2012~~2013 and ~~2011~~2012 have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Results for interim periods should not be considered indicative of results for a full year. The accounting policies used in preparing these interim financial statements is the same as those for the year ended December 31, ~~2011~~2012. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair statement of the results for interim periods have been included.

~~Use of Estimates~~Presentation

The ~~preparation~~accompanying ofconsolidated financial statements ininclude ~~conformity~~the ~~with~~accounts ~~accounting~~of ~~principles~~MediaShift, ~~generally~~Inc. ~~accepted~~and our subsidiary Ad-Vantage Networks, Inc. and Travora Networks, Inc. Intercompany balances have been eliminated in ~~the~~consolidation. ~~United~~On ~~States~~March ~~requires~~4, 2013, the ~~use~~Company announced the effectiveness of ~~estimates~~a one-for-two reverse stock split. All share and ~~assumptions~~per byshare ~~management~~information, ~~that~~including ~~affect~~earnings ~~reported~~per ~~amounts~~share, ofin ~~assets~~this ~~and~~Form ~~liabilities~~10-Q ~~and~~have ~~disclosures~~been ofretroactively ~~contingent~~adjusted ~~assets~~to ~~and~~reflect ~~liabilities~~this atreverse ~~the~~stock ~~date~~split ofand ~~the~~certain items in prior period financial statements ~~and~~have been revised to conform to the ~~reported~~current ~~amounts~~presentation. ofOur ~~revenues~~net ~~and~~loss ~~expenses~~is ~~during~~equivalent ~~the~~to ~~reporting~~our ~~period.~~comprehensive ~~Actual~~loss ~~results~~so ~~could~~we ~~differ~~have ~~from~~not ~~these~~presented ~~estimates.~~a separate statement of comprehensive loss.

~~Cash and Cash Equivalents~~ 8

The Company considers all highly liquid investment with a maturity at the date of purchase of three months or less to be cash equivalents.

Cash Concentration

The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. Accounts are guaranteed by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. The company has not experienced any losses in such accounts and does not believe that it is exposed to any significant credit risk on cash.

Fair value of Financial Instruments

The estimated fair values are determined at discrete points in time based on relevant market information. These estimates involve uncertainties and cannot be determined with precision. The estimated fair values of all financial instruments on the Company's balance sheets were determined by using available market information and appropriate valuation methodologies. Fair value is described as the amount at which the instrument could be exchanged in a current transaction between informed willing parties, other than a forced liquidation. However, considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. The Company does not have any off balance sheet financial instruments.

Trade accounts receivable, accounts payable and certain other current assets and liabilities are reported on the balance sheet at carrying value which approximates fair value due to the short-term maturities of these instruments.

The fair value of the Company’s debt is estimated based on current rates offered to the Company for similar debt and approximates carrying value.

Concentration of credit risk

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and cash equivalents. At September 30, 2012, the Company had all of its cash and cash equivalents with two banking institutions. The company partially mitigates the concentration risk associated with cash deposits by only depositing material amounts of funds with major banking institutions.

Interest rate risk

At September 30, 2012 and December 31, 2011, the Company had no outstanding indebtedness that bears interest.

Foreign currency risk

Foreign currency risk is the risk that a variation in exchange rates between the United States dollar and the foreign currencies will affect the Company’s operating and financial results. All of the Company’s business is conducted with US dollars.

The Company has no financial assets that are subject to fair value measurement as of September 30, 2012 and December 31, 2011.

Property and Equipment

Depreciation of property and equipment is provided for by the straight-line method over the three to seven year estimated useful lives of the related assets. Leasehold improvements are amortized over the lesser of the assets’ useful lives or the remaining term of the lease.

Impairment of Long-Lived Assets

When assets are placed into service, we make estimates with respect to their useful lives that we believe are reasonable. However, factors such as competition, regulation, or environmental matters could cause us to change our estimates, thus impacting the future calculation of depreciation and depletion. We evaluate long-lived assets for potential impairment by identifying whether indicators of impairment exist and, if so, assessing whether the long-lived assets are recoverable from estimated future undiscounted cash flows. The actual amount of impairment loss, if any, to be recorded is equal to the amount by which a long-lived asset’s carrying value exceeds its fair value. Estimates of future discounted cash flows and fair values of assets require subjective assumptions with regard to future operating results and actual results could differ from those estimates.

Intangible Assets

The Company evaluates intangible assets for impairment, at least on an annual basis and whenever events or changes in circumstances indicate that the carrying value may not be recoverable from its estimated future cash flows. Recoverability of intangible assets and other long-lived assets is measured by comparing their net book value to the related projected undiscounted cash flows from these assets, considering a number of factors including past operating results, budgets, economic projections, market trends, and product development cycles. If the net book value of the asset exceeds the related undiscounted cash flows, the asset is considered impaired, and a second test is performed to measure the amount of impairment loss.

Patents

Legal costs, patent registration fees, and models and drawings required for filing patent applications are capitalized if they relate to commercially viable technologies. Commercially viable technologies are those technologies that are projected to generate future positive cash flows in the near term. Legal costs

associated with applications that are not determined to be commercially viable are expensed as incurred. All research and development costs incurred in developing the patentable idea are expensed as incurred. Legal fees from the costs incurred in successful defense to the extent of an evident increase in the value of the patents are capitalized.

Revenue Recognition

The Company ~~earns~~recognizes revenue ~~from~~when ~~ads~~persuasive evidence of an arrangement exits, collection of the related receivable is reasonably assured, the fees are fixed or determinable, and as services are provided. Income is recognized as earned when an ad is either placed onfor ~~web~~viewing ~~pages~~by ~~viewed~~a onvisitor to a member network publisher or internet access providers’ proprietary networks. ~~Revenues~~or ~~are~~when ~~earned~~the ~~when~~customer ~~end~~“clicks ~~users~~through” ~~view~~on the ~~advertisements~~ad, depending on the terms with the individual advertisers. In certain cases, the Company records revenue based on available preliminary information from third parties. Collection on the receivable may vary from the preliminary information based upon third party refinement of the estimated and reported amounts owed that occurs in subsequent periods. The Company accrues any revenue sharing percentage with the network provider at the same time.

Concentration of Credit Risk

The Company conducts business with companies in Canada, England, Europe and Australia as part of its ongoing advertising business. This results in a number of receivables denominated in the currencies of those countries, with about $325,000 in receivables outstanding at any time. The company does not engage in hedging activities to offset the risk of exchange rate fluctuations on these payables. During the reporting period, the company incurred foreign exchange losses of $6,182.

Allowance for Doubtful Accounts - The allowance is established through a provision for bad debts charged to expense. Receivables are charged against the allowance for uncollectible accounts when management believes that collectability is unlikely. The allowance is an amount that management believes will be adequate to absorb estimated losses on existing receivables, based on an evaluation of the collectability of accounts receivable, overall accounts receivable quality, review of specific problem accounts receivable, and current economic conditions that may affect the customer’s ability to pay. While management uses the best information available to make its evaluation, future adjustments to the allowance may be necessary if there are significant changes in economic conditions. Recoveries of receivables previously written off are recorded when received.

The company also estimates an allowance for sales credits based on historical credits. The allowance for sales credits is the Company’s best estimate of expected future reductions in advertisers’ payment obligations for delivered services.

Income Taxes

The Company accounts for income taxes using the asset and liability method of accounting for deferred income taxes.

The provision for income taxes includes federal and state income taxes currently payable and deferred taxes resulting from temporary differences between the financial statement and tax bases of assets and liabilities. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized.

With respect to uncertain tax positions, the Company would recognize the tax benefit from an uncertain tax position only if it is more-likely-than-not that the tax position will be sustained upon examination by the taxing authorities, based on the technical merits of the position. The tax benefits to be recognized in the financial statements from such a position would be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. The Company’s reassessment of its tax positions did not have a material impact on its results of operations and financial position.

Advertising

Advertising costs are charged to expense as incurred. ~~There~~and were no$54,887 ~~advertising costs incurred during 2011~~ and ~~2010.~~$15,300 ~~Advertising costs~~ for the three ~~month~~months ~~and nine month periods~~ ended ~~September~~March 3031, ~~2012~~2013 ~~(unaudited)~~ and ~~for the period from February 23,~~ 2012 ~~(Date of Inception) to September 30~~, ~~2012 (unaudited) were as follows:~~respectively.

	Three month period ended September 30,		Nine month period ended September 30,		From February 23, 2010 (Inception) through September 30,
	2012	2011	2012	2011	2012
Advertising Costs	$ 18,810	$ -	$ 40,239	$ -	$ 40,239

Research and Development

Research and development costs are expensed as incurred. ~~Total~~and ~~research~~were $66,572 and ~~development~~$50,548 ~~costs~~ for the three ~~month~~months ~~and nine month periods~~ ended ~~September~~March 3031, ~~2012~~2013 ~~(unaudited)~~ and ~~for the period from February 23~~2012, ~~2010 (Date of Inception) to September 30, 2012 (unaudited) were as follows~~respectively.

	Three month period ended September 30,		Nine month period ended September 30,		From February 23, 2010 (Inception) through September 30,
	2012	2011	2012	2011	2012
Research and development costs	$ 41,676	$ 34,557	$ 137,360	$ 94,384	$ 349,658

Stock-based compensation

The Company accounts for the cost of Director/employee/adviser services received in exchange for the award of common stock options or warrants based on the fair value of the award on the date of grant. The fair value of each stock option grant or warrant was estimated on the date of grant using the Black-Scholes option-pricing model. The expected life assumption is based on the expected life assumptions of similar entities. Expected volatility is based on actual share price volatility of the Company’s stock of the preceding twelve months. The risk-free interest rate is the yield currently available on U.S. Treasury zero-coupon issues with a remaining term approximating the expected term used as the input to the Black-Scholes model. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods as options vest, if actual forfeitures differ from those estimates.

The Company recognizes stock-based compensation expense as a component of salary and other compensation expenses in the statements of operations asand ~~follows:~~was $207,354 and $11,062 for the three months ended March 31, 2013 and 2012, respectively.

	(Unaudited)Three month period ended September 30,		(Unaudited)Nine month period ended September 30,		From February 23, 2010 (Inception) through September 30,
	2012	2011	2012	2011	2012
Salary and other compensation expense	$ 2,684,115	$ 5,223	$ 2,714,207	$ 14,155	$ 2,740,396

Fair Value Measurements

The fair value hierarchy established by ASC 820 “ Fair Value Measurements and Disclosures” prioritizes the inputs used in valuation techniques into three levels as follows:

Level 1 –- Observable inputs –- unadjusted quoted prices in active markets for identical assets and liabilities;

Level 2 –- Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability through corroboration with market data; and

Level 3 –- Unobservable inputs –- includes amounts derived from valuation models where one or more significant inputs are unobservable.

Net Loss per Common Share

~~Basic~~Loss per share ("EPS") is computed based on weighted average number of common shares outstanding and ~~diluted~~excludes ~~net~~any ~~loss~~potential ~~per~~dilution. ~~share~~Diluted isEPS ~~computed~~reflects bythe ~~dividing~~potential ~~loss~~dilution ~~attributable~~that could occur if securities or other contracts to issue common ~~stockholders~~stock bywere ~~the~~exercised ~~weighted~~or ~~average~~converted ~~number~~into common stock or resulted in the issuance of common stock, which would then share in the earnings of the Company. The shares ~~outstanding~~issuable ~~during~~upon the ~~period~~exercise of stock options and warrants are excluded from the calculation of net loss per share for the three months ended March 31, 2013 and 2012 because their effect would be antidilutive. The following shares were accordingly excluded from the net income/loss per share calculation.


	Three month periods ended March 31,
	2013	2012
Stock warrants	4,446,060	84,326
Stock options	4,119,916	298,342
Total shares excluded	8,565,976	382,668

New Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (“FASB”) issued ASU 2011-04, Fair Value Measurement (“ASU 2011-04”), which amended ASC 820, Fair Value Measurements (“ASC 820”), providing a consistent definition and measurement of fair value, as well as similar disclosure requirements between U.S. GAAP and International Financial Reporting Standards. ASU 2011-04 changes certain fair value measurement principles, clarifies the application of existing fair value measurement and expands the disclosure requirements. ASU 2011-04 will be effective for us beginning January 1, 2012. The adoption of ASU 2011-04 did not have a material effect on our financial statements or disclosures.

Management evaluates events occurring to the date of the financial statements in determining the accounting for and disclosure of transactions and events that affect the financial statements. Subsequent events have been evaluated through May 15, 2013, which is the date financial statements were available to be issued.

3 - Business Combination - Acquisition of Ad Network Assets of Travora Media

On February 6, 2013, Travora Networks, Inc. (“TNI”), a wholly owned subsidiary of MediaShift, Inc. executed an asset purchase agreement with Travora Media, Inc. (“Travora” or “Seller”) to acquire Travora’s digital advertising network business, which was effective on February 1, 2013. Activity from February 1^st to February 6^th was immaterial. Headquartered in New York City, Travora provides an established publishing network, advertiser and agency relationships, and an experienced ad sales and ad operations team. Travora represents over 300 established travel brands across desktop, tablet, and mobile platforms, including Fodor’s, Viator, and Vayama. Travora achieved revenues of approximately $13.0 million and $10.9 million in 2011 and 2012 respectively. TNI will retain approximately 20 of Travora’s former employees and will continue to operate out of New York City.

The acquisition was accounted for using the acquisition method of accounting. Accordingly, the assets acquired and liabilities assumed were measured at their estimated fair value at the acquisition date. Travora’s results of operations will be included in the Company’s consolidated financial statements from February 1, 2013.

The preliminary allocation of the purchase price based on the fair value of the acquired assets, less liabilities assumed, as of February 6, 2013, amounted to $8,234,670.

The fair value of the consideration to Seller is as follows:


Cash consideration to Seller		$ 500,000
Payment of Eastward Capital Partners debt		1,750,000
Assumption of Eastward Capital Partners debt		2,250,000
Balance of consideration to be paid in MediaShift common stock	700,000
Less allowance for audit expenses	(70,000)
Less amount of Aged Accounts Payable	(138,000)
Less estimated reduction for Target Working Capital deficiency	(592,000)	(100,000)
		4,400,000
Contingent consideration:
Earn-out consideration for publisher retention		67,747
Earn-out consideration for revenue targets		1,315,081
Total consideration		$ 5,782,828

As part of the purchase price paid in the transaction, TNI assumed Seller’s $4,000,000 obligations to Eastward Capital Partners.

Within ninety (90) days following the closing date, TNI shall prepare and deliver to the Seller a closing statement and its calculation of the working capital deficit or working capital surplus, if any, at the date of purchase. The closing statement shall be prepared in accordance with GAAP, certified by an officer of TNI and prepared applying the same methodology as was applied by TNI and the Seller in calculating the Target Working Capital.

Within five (5) Business Days following the determination of the closing statement, if there is a working capital surplus, TNI shall pay to the Seller an amount equal to such working capital surplus by an increase in the number of Closing Shares equal to the dollar value of such excess, and if there is a working capital deficit, the Seller shall pay to TNI an amount equal to such working capital deficit by a reduction and forfeiture of the number of Closing Shares equal to the dollar value of such working capital deficit, or if the value of the Closing Shares is less than such working capital deficit, TNI shall reduce the amount of earnout payments owed or payable to Seller by an amount equal to the amount by which such working capital deficit exceeds the value of the Closing Shares. A preliminary analysis of working capital as of the closing date indicates that the working capital deficit (as defined in the Asset Purchase Agreement) may be approximately $600,000. Consequently, it is not currently anticipated that any Closing Shares will be issued to the Seller in this transaction.

Earnout Consideration

As part of the acquisition, TNI agreed to issue additional cash to the sellers, contingent upon TNI meeting certain operating performance targets: publisher retention goals for 360 days following the acquisition date and revenue goals for the year ending December 31, 2013. As discussed in Note 4 - “Contingent Earnout Liabilities - Travora Earnout Consideration”, the estimated fair value of the contingency was $1,382,828 on the acquisition date and $1,382,828 as of March 31, 2013.

~~events~~Intangible ~~have been evaluated through November 16, 2012, which is the date financial statements were available to be issued.~~Assets

3To determine the estimated fair value of intangibles acquired, MediaShift engaged a third party valuation specialist to assist management. ~~Property~~Based on the preliminary assessment, the acquired intangible asset categories, fair value and ~~Equipment~~amortization periods, generally on a straight line basis are as follows:

Property and equipment, at cost, consists of the following:


	Fair Value at 2/6/2013	Amortization Period
Trademark Portfolio	$ 856,890	Indefinite
Publisher Relationships	3,573,596	15 years
Goodwill	991,936	N/A
Total Intangible	$5,422,422

	September 30, 2012	December 31, 2011
Furniture and fixtures	$ 15,228	$ -
Computer equipment	114,369	28,950
Leasehold improvements	6,396	-
Accumulated depreciation	(18,807)	(2,276)
Property and equipment, net of depreciation	$ 117,186	$ 26,674

4The fair value of the Trademark portfolio was determined based on the “relief from royalty” method, an approach under which fair value is estimated to be the present value of royalties saved because we own the intangible asset and therefore do not have to pay a royalty for its use. ~~Patents~~The fair value for the publisher relationships was determined based on the “excess earning method”, of income approach. Estimated discounted cash flows associated with existing customers and projects were based on historical and market participant data.

The Company has filed for domestic and international patent protection on its technology. In the United States, one patent has been issued and four are pending. Internationally, no patents have been issued. Patents, at cost, consist of the following: ·

	September 30, 2012	December 31, 2011
Patents	$ 204,715	$ 141,463
Accumulated amortization	-	-
Patents, net of amortization	$ 204,715	$ 141,463

These valuations are preliminary and subject to change.

5.The ~~Commitments~~following table summarizes the fair value of the assets acquired and ~~Contingencies~~the liabilities assumed in thousands:

Operating Leases – In January 2012, the Company entered into an operating lease agreement that commenced February 2012 for its office facility which expires on February 19, 2014.


Accounts receivable		$ 2,716
Prepaid expenses & deposits		5
Fixed assets		91
Intangible assets		5,422
Accounts payable		(1,856)
Other accrued expense		(596)
Net assets acquired		$ 5,782

~~Future~~The ~~minimum~~significant ~~lease~~identifiable ~~commitments~~tangible ~~are~~assets asacquired ~~follows:~~include primarily accounts receivable and fixed assets. The Company determined that the book value of accounts receivable reflected fair value of those assets. The Company determined the book value of the fixed assets reflected fair value of those assets.

Years ending December 31,	Amount
2012	$ 90,539
2013	107,475
2014	15,083
	$ 213,097

Supplemental Unaudited Pro Forma Information for the three month period ended March 31, 2012

6The following pro forma information for the three month period ended March 31, 2013 and 2012 presents the results of operations as if the TNI acquisition had occurred January 1, 2012. ~~Note~~ ~~Payable~~The supplemental pro forma information has been adjusted to include:

In March 2011, the Company entered into a lending facility that provides for advances of up to $500,000 with interest at 12% per annum payable monthly. The facility was provided by an investor in our preferred stock (Note 9). As of September 30, 2011, there was a balance of $80,000 on the facility. As of December 31, 2011 and September 30, 2012, there was no balance outstanding on the facility.·

~~On November 5, 2012,~~ the ~~Company~~pro ~~issued~~forma animpact ~~aggregate~~ of ~~$500,000~~amortization inof ~~two~~intangible ~~year~~assets ~~10% convertible notes to two investors,~~ and ondepreciation ~~November 7, 2012 the Company issued an aggregate~~ of ~~$500~~property,~~000~~ inplant ~~two~~and ~~year 10% convertible notes to three additional investors. The notes may be prepaid by the Company with fifteen days’ notice~~equipment, ~~and~~based ~~may~~on ~~be converted into~~ the ~~Company’s common stock at the lesser of 80% of the Company’s fair market value at the time of conversion or $4.00 per share. The notes were issued with two year warrants to~~ purchase anprice ~~aggregate~~allocation; ~~of 200,000 common shares at $3.25 per share.~~

the pro forma impact of interest expense on the assumption of the Eastward Debt of $2,250,000

7The pro forma results are presented for illustrative purposes only and are not necessarily indicative of or intended to represent the results that would have been achieved had the transaction been completed on January 1, 2012 or that may be achieved in the future. ~~Stockholders’~~ The ~~Equity~~pro forma results do not reflect any operating efficiencies and associated cost savings that the Company may, or may not, achieve with respect to the combined companies.


	Three month Period ended March 31, 2013	Three month Period ended March 31, 2012

Revenues	$ 2,128,807	$ 2,556,257
Income from continuing operations, before provision for income taxes	$ (7,483,194)	$ (1,260,985)
Income from continuing operations	$ (7,483,994)	$ (1,262,985)
Net income	$ (7,483,994)	$ (1,262,985)

Weighted average common shares outstanding:
Basic	6,463,852	10,431,165
Diluted	6,463,852	10,431,165

Earnings per share:
Basic - income from continuing operations	$(1.1577)	$(0.1209)
Basic - net income	$(1.1578)	$(0.1211)
Diluted - income from continuing operations	$(1.1577)	$(0.1209)
Diluted - net income	$(1.1578)	$(0.1211)

4 - Commitments and Contingencies

Contingent Earnout Liabilities - Travora Earnout Consideration

As part of the Travora Networks, Inc. (“TNI”) acquisition on February 6, 2013, the Company agreed to issue additional cash to the sellers, contingent upon TNI meeting certain publisher retention goals and revenue performance targets.

Publisher Retention Earnout Payments

The Seller shall be entitled to receive, in two installments, Publisher Retention Earnout Payments equaling, in the aggregate, up to $1,000,000. In the event that the number of Publishers retained by TNI for the initial 180 day period following the Closing Date is equal to or exceeds eighty-five percent (85%) of the Baseline Number of Publishers, the Company shall pay to the Seller an amount equal to the product of $500,000 multiplied by a fraction, the numerator of which is the actual number of Publishers retained by the Company and the denominator of which is the Baseline Number of Publishers.

In the event that the number of Publishers retained by the Company for the second 180 day period following the Closing Date is equal to or exceeds the Baseline Number of Publishers, the Company shall pay to the Seller an amount equal to the product of $500,000 multiplied by a fraction, the numerator of which is the actual number of Publishers retained and the denominator of which is Baseline Number of Publishers.

Notwithstanding the foregoing, if any three (3) of the Seller’s Major Publishers, in the aggregate, cease doing business with TNI during the initial publisher retention earnout period, then no initial publisher retention earnout payment or second publisher retention earnout payment shall be paid to the Seller and if during the second publisher retention earnout period, then no second publisher retention earnout payment shall be paid to the Seller.

The estimated fair value of the Publisher Retention Earnout Payments contingent earnout consideration on the acquisition date was $67,747 on the acquisition date and $67,747 as of March 31, 2013.

Revenue Goal Earnout Payments

The Seller shall be entitled to receive, in two installments, Revenue Goal Earnout Payments equaling, in the aggregate, up to $2,000,000. In the event that Ad Network Revenue for the period beginning on January 1, 2013 and ending on June 30, 2013 is equal to or exceeds $5,159,700, the Company shall pay to the Seller an amount equal to the lesser of the product of $1,000,000 multiplied by a fraction, the numerator of which is the actual Ad Network Revenue achieved during the Initial Revenue Goal Earnout Period and the denominator of which is $5,733,000 and $1,000,000.

In the event that Ad Network Revenue for the period beginning on July 1, 2013 and ending on December 31, 2013 is equal to or exceeds $6,407,100, the Company shall pay to the Seller an amount equal to the lesser of the product of $1,000,000 multiplied by a fraction, the numerator of which is the actual Ad Network Revenue achieved during the Second Revenue Goal Earnout Period and the denominator of which is $7,119,000 and $1,000,000.

The estimated fair value of the Revenue Goal Earnout Payments contingent consideration on the acquisition date was $1,315,081 on the acquisition date and $1,315,081 as of March 31, 2013.

Operating Leases - In January 2012, the Company entered into an operating lease agreement that commenced February 2012 for its office facility in Glendale which expires on February 19, 2014. In March, 2013, the Company entered into an operating lease agreement that commences on substantial completion estimated to be May 1st for its office facility in New York which expires 61 months after commencement. On May 1st, the Company entered into an operating lease agreement that commences on May 1, 2013 for its office facility in Newport Beach which expires on April 30, 2014.

5 - Notes Payable

8% Convertible Promissory Notes

During the first quarter of 2013, we received $6,944,350 pursuant to a private placement of 8% convertible promissory notes (the “8% Notes”). On March 20, 2013, the Company’s Board of Directors authorized an increase from maximum proceeds of $7,000,000 to maximum proceeds of $8,500,000, with a new closing date of April 5, 2013, subject to a ten business day extension at the Company’s option. As of the final closing date of April 19, 2013, a total of $7,757,344 in proceeds had been raised. On March 27, 2013, the Company exercised its option to convert all principal and accrued interest received prior to the end of the quarter to common shares (see below). On April 26, 2013, the Company exercised its option to convert all principal received following the end of the quarter and prior to the final closing date of the financing to common shares. A total of $2,250,000 of the proceeds was used to finance the Travora acquisition. We will use the balance of the proceeds to finance our remaining financial commitments pursuant to the Travora acquisition and for working capital purposes. The terms of the 8% Notes are as follows:

Bearing interest at 8% per annum,

Principal and interest due and payable on or before February 15, 2015,

Prepayable by the Company upon 30 days’ notice,

The 8% Notes are convertible into MediaShift common stock at the rate of $3.00 per share subject to antidilution provisions which provide that if the Company issues securities at a price below the conversion price of the 8% Notes, the conversion price will be reduced to the lower amount,

The 8% Notes may be converted at any time prior to maturity date at the option of the holder or the Company, and

8% Note holders received warrants to purchase MediaShift common stock in an amount equal to the number of shares the 8% Notes are convertible into. Half of the warrants are exercisable at $4.00 per share and half are exercisable at $6.00 per share.

The maximum number of common shares that may be issued through, as applicable, the conversion of the 8% Notes and accrued interest and the exercise of the warrants which were sold in this private placement, is 5,193,346 shares. The 8% Notes were offered and sold by officers and directors of the Company who received no remuneration for the sale of the securities, as well as by three placement agents who received commission of 6% of principal raised by those agents. Sales of the 8% Notes were made pursuant to Section 4(a)(5) and Section 4(a)(2) of the Securities Act, and Rule 506 promulgated thereunder, solely to “accredited investors” as defined in Rule 501(a) of Regulation D. The securities sold in this transaction were not registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

The 8% Note’s conversion feature was determined to be an embedded derivative liability and therefore was bifurcated from the note and recorded at fair value at issuance and is required to be adjusted to fair value at the end of each reporting period. The collective fair value of the conversion feature at the date of issuance calculated using the Black Scholes model totaled $2,694,671. The Company recorded the fair value of the conversion feature as a contra liability offsetting the respective term loan amounts and a corresponding derivative liability, that will be marked to market at each reporting period. The 8% Notes were issued with two year warrants to purchase an aggregate of 241,000 common shares at $3.00 per share and 241,000 common shares at $6.00. The warrants are exercisable immediately after issuance and expire in 2 years. The fair value of the warrants of $3,696,327 was calculated using the Black-Scholes option pricing model at the date of issuance using the following assumptions: dividend yield of 0%, expected volatility ranging from 194% to 245%, risk free interest rate ranging from 0.12% to 0.25% and a contractual life of two years. The Company recorded the relative fair value of the warrants of $1,951,767 to loan warrant discount as a contra liability offsetting the respective term loan amounts. The total discount attributable to the issuance of the 8% Notes was $4,646,438. On March 27, 2013, the 8% Notes were extinguished by the company, on that date the collective fair value of the conversion feature was $3,389,589. Accordingly, the Company recorded the change in fair value of $694,918 as a loss on derivative liabilities for the three month period ended March 31, 2013. The 8% Notes were extinguished via the issuance of 2,335,723 shares of common stock with a fair value of $10,393.967. The net carry value of the related debt and conversion feature was $5,683,594. Accordingly the company recorded a $4,710,423 loss on extinguishment of debt.

A total of 2,335,723 shares of common stock with a fair value of $10,393,967 was issued in retirement of the 8% notes. A loss of $4,710,423 was recorded on the extinguishment.

On March 20, 2013, the Company received consent from the outstanding 8% promissory note holders to increase the maximum issuance from $7,000,000 to $8,500,000. The private placement was closed on April19, 2013, and an additional $812,994 in 8% convertible promissory notes were issued. On April 26, 2013, the principal raised between March 31, 2013 and the final closing of the private placement on April 26, 2013, along with accrued interest, was converted into 271,844 common shares of the Company.

10% Convertible Notes

On November 5, 2012, the Company issued an aggregate of $500,000 in two year 10% convertible notes (the “10% Notes”) to two investors, and on November 7, 2012 the Company issued an aggregate of $500,000 in two year 10% convertible notes to three additional investors. The 10% Notes may be prepaid by the Company with fifteen days’ notice, and may be converted into the Company’s common stock at the lesser of 80% of the Company’s fair market value at the time of conversion or $8.00 per share. The 10% Notes were issued with two year warrants to purchase an aggregate of 100,000 common shares at $6.50 per share. The warrants are exercisable immediately after issuance and expire in 2 years. The fair value of the warrants of $284,251 was calculated using the Black-Scholes option pricing model at the date of issuance using the following assumptions: dividend yield of 0%, expected volatility of 102% and 104%, risk free interest rate of 0.28% and 0.27% and a contractual life of two years. The Company recorded the fair value of the warrants of $284,251 to loan warrant discount as a contra liability offsetting the respective term loan amounts on the Balance Sheet.

The fair value of the conversion feature on December 31, 2012 calculated using the Black Scholes model totaled $534,251 and is reflected as a discount to the 10% Notes. The discount attributable to the issuance date aggregate fair value of the conversion options and warrants, totaling $750,292, was amortized using the straight line interest method over the term of the 10% Notes. The intrinsic value of the conversion option in the 10% Notes totaling $534,251 was calculated in accordance with ASC 470 and recorded, on the issuance date, as additional paid in capital and a corresponding reduction of the carrying value of the 10% Notes. The discount remaining was $422,949 and $750,293 as of March 31, 2013 and December 31,2012 respectively.

Line of Credit

In March 2011, the Company entered into a lending facility that provides for advances of up to $500,000 with interest at 12% per annum payable monthly. The facility was provided by an investor in our preferred stock. As of December 31, 2011 and 2012, there was no balance outstanding on the facility.

6 - Stockholders’ Equity

Common Stock

The Company is authorized to issue up to 25100,000,000 shares of Common Stock. As of ~~the~~March ~~date~~31, ~~of this Report~~2013, there are 522,~~543~~104,~~409~~816 shares of Common Stock issued and outstanding. The holders of our Common Stock are entitled to one vote per share. The holders of our Class M Preferred Stock are entitled to 200 votes for each Class M Preferred share they own (on a pre-Automatic Conversion and pre-Reverse Stock Split basis) and 100 votes for each Class M Preferred share they own (on a post-Automatic Conversion and post-Reverse Stock Split basis) on all matters to be voted on by the stockholders. All shares of Common Stock ~~and Series M Preferred Stock~~ are entitled to participate in any distributions or dividends that may be declared by the Board of Directors, subject to any preferential dividend rights of outstanding shares of our Preferred Stock, if any. Subject to prior rights of creditors, all shares of Common Stock are entitled, in the event of our liquidation, dissolution or winding up, to participate ratably in the distribution of all our remaining assets. Our Common Stock has no preemptive or conversion rights or other subscription rights.

Preferred Stock

There are 10,000,000 shares of Preferred Stock authorized for issuance. As of ~~the~~March ~~date~~31, ~~of this Report~~2013, there are ~~169,973.88~~no shares of ~~Series M~~ Preferred Stock issued and outstanding.

Series M Preferred Stock

In connection with the ~~Ad-Vantage~~ADVN merger and pursuant to the filing of a Certificate of Designation with the Nevada Secretary of State on August 28, 2012, the Board of Directors of the Company authorized the issuance of Class M Preferred Stock. Pursuant to the Merger Agreement, the Company agreed to issue shares of its Class M Preferred to the ~~Ad-Vantage~~ADVN Owners in exchange for the shares of ~~Ad-Vantage~~ADVN common stock and preferred stock (and to issue new options for shares of ~~Ad-Vantage~~ADVN common stock underlying ~~Ad-Vantage~~ADVN options).

Holders of the Class M Preferred ~~are~~were entitled, on a post-Automatic Conversion basis, to the same rights and privileges, including voting rights, as holders of our common stock. The holders of our Class M Preferred Stock ~~are~~were entitled to ~~200~~100 votes per share ~~on a pre-Automatic Conversion~~ and ~~pre-Reverse Stock Split basis and~~ one vote per common share on a post-Automatic Conversion and post-Reverse Stock Split basis on all matters to be voted on by the stockholders. Pursuant to the Merger Agreement, the Company ~~agreed~~increased ~~to increase~~ the number of shares of common stock that the Company is authorized to issue from 25,000,000 shares to 100,000,000 shares (the “Authorized Share Increase”). The Authorized Share Increase ~~will~~was beaffected ~~effected~~ by the Company filing an amendment to its Articles of Incorporation aspursuant ~~soon~~to asa ~~reasonably~~special ~~practicable~~meeting ~~following~~of ~~the~~shareholders ~~Closing~~on ofMarch ~~the~~4, ~~Merger~~2013. Upon the effectiveness of the Authorized Share Increase on March 4, 2013, all of the issued and outstanding shares of Class M Preferred ~~shall~~ automatically, ~~without~~converted ~~the requirement of any further action by holders of such shares or by the Company, convert~~ into shares of the Company’s common stock, ~~with such conversion occurring~~ at the Exchange Ratio of 100:1.

Warrants and Options

As of ~~September~~March 3031, ~~2012~~2013, we have the following warrants and options outstanding:

Common Stock Warrants

Warrant summary	Number of warrants outstanding	Exercise price ~~per share~~	Maximum ~~Proceeds ($)~~proceeds	Expiration Date
JMG warrants	369,249	$6.00	2,215,494	01/15/2013
Warrants issued in the preferred stock private placement	184,625	$ 12.00	2,215,500	02/28/2014
JMG warrants	1,739,500	$4.25	7,392,875	01/15/2013
Warrants issued upon conversion of preferred stock	869,750	$ 8.50	7,392,875	02/28/2014
JMG warrants	1,763,802	$5.00	8,819,010	01/15/2013
Warrants issued our initial public offering	881,901	$ 10.00	8,819,010	02/28/2014
JMG warrants	190,000	$7.00	1,330,000	08/03/2013
Warrants issued to our underwriters	95,000	$ 14.00	1,330,000	02/28/2014
Total	4,062,551	various	19,757,379	Various
Warrants issued with 10% convertible notes	100,000	$ 6.50	650,000	11/05/2014
Warrants issued with 8% convertible notes	1,157,392	$ 4.00	4,629,568	07/31/2013
Warrants issued with 8% convertible notes	1,157,392	$ 6.00	6,944,352	07/31/2014
Total	4,446,060	various	31,981,305	various

Following the consummation of the Reverse Stock Split, the number of outstanding JMG warrants will be 184,625, 869,750, 881,901 and 95,000, respectively, and the exercise prices will be $12.00, $8.50, $10.00 and $14.00, respectively. The total warrants outstanding after the Reverse Stock Split will be 2,031,276.

Options

We assumed the option plan of Ad-Vantage, under which options for the purchase of 3,729,916 shares of ~~Ad-Vantage~~ADVN common stock were outstanding at the closing of the Merger (the “Outstanding ~~Ad-Vantage~~ADVN Options”). The Outstanding ~~Ad-Vantage~~ADVN Options were converted into options to purchase ~~37,299.16 shares of Class M Preferred (which represents~~ 3,729,916 shares of the Company’s Common Stock after giving effect to the Automatic Conversion). ~~The~~of ~~Outstanding~~the ~~Ad-Vantage~~Class ~~Options~~M Preferred stock and expire in 2021 and 2022. At the closing of the Merger, ~~and as of the date of this report,~~ there were ~~110~~42,~~000~~500 ~~Options~~options outstanding to purchase the Company’s Common Stock (which ~~will~~were ~~represent~~exercised 55in October,~~000~~ ~~shares~~2012. ofFollowing the ~~Company’s~~Merger, ~~Common~~a ~~Stock~~total ~~after~~of ~~consummation~~390,000 incentive stock options to purchase common stock were granted in October, 2012. As of March 31, 2013, there were 4,119,916 options outstanding to purchase the ~~Reverse~~Company’s ~~Stock~~Common ~~Split)~~Stock.

The Ad-Vantage Board of Directors adopted the Ad-Vantage Plan in September 2010. The Ad-Vantage Plan provided long-term incentives to employees, members of the Board, and advisers and consultants of the Company who were able to contribute towards the creation of or have created stockholder value by providing them stock options and other stock and cash incentives. Provisions such as vesting, repurchase and exercise conditions and limitations were determined by the Ad-Vantage Board of Directors on the grant date. The total number of shares that could be issued pursuant to the Ad-Vantage Plan could not exceed 1,250,000 shares, subject to adjustment in the event of certain recapitalizations, reorganizations, and similar transactions..18

AsThe ADVN Board of Directors adopted the ADVN Plan in September ~~30,~~2010. ~~2012~~The ADVN Plan provided long-term incentives to employees, 1members of the Board,~~115,521~~ ~~options~~and ~~were~~advisers ~~granted~~and ~~under~~consultants of the ~~Ad-Vantage~~Company ~~Plan,~~who ~~and~~were ~~929,917~~able ~~remained~~to ~~outstanding~~contribute attowards the ~~time~~creation of ~~the~~or ~~Merger~~have created stockholder value by providing them stock options and other stock and cash incentives. Provisions such as vesting, atrepurchase ~~which~~and ~~time~~exercise ~~they~~conditions and limitations were ~~exchanged~~determined ~~for~~by ~~92,991.70~~the ~~Class~~ADVN MBoard ~~Preferred~~of ~~Options~~Directors on the grant date. NoThe ~~options~~total ~~will~~number of shares that could be ~~granted~~issued ~~under~~pursuant to the ~~Ad-Vantage~~ADVN Plan ~~following~~could not exceed 1,250,000 shares, subject to adjustment in the ~~Merger~~event of certain recapitalizations, reorganizations, and similar transactions.

NoAs ~~common~~of ~~stock~~March 31, 2013, 1,115,521 options ~~were~~had been granted under the ~~Company’s~~ADVN ~~premerger~~Plan, ~~option~~and ~~plan (JMG Exploration~~929,917 ~~Inc.~~remained ~~Equity~~outstanding ~~Compensation~~at ~~Plan-~~ the ~~“JMG~~time ~~Plan”)~~of ~~during~~ the ~~nine month period ended September 30~~Merger, ~~2012.~~at Awhich ~~total~~time ofthey ~~110,000~~were ~~common~~converted ~~stock~~into options ~~were~~to ~~outstanding~~purchase at929,917 ~~JMG~~shares ~~prior~~of to the ~~merger~~Company’s ~~with~~Common ~~Ad-Vantage.,~~Stock ~~These~~for ~~options~~after ~~are~~giving ~~exercisable~~effect atto ~~$0.22~~the ~~per~~Automatic ~~share~~Conversion ~~and~~of ~~expire~~the onClass ~~January~~M ~~26,~~Preferred ~~2015~~stock. ~~Options~~No ~~granted~~options ~~by the Company following the Merger~~ will be granted under the ~~JMG~~ADVN Plan following the Merger.

InA ~~October~~total ~~2012,~~of 85390,000 ~~JMG~~common ~~Common~~stock ~~Stock~~options ~~Options~~ were ~~exercised~~granted ~~providing~~under ~~proceeds~~the ofCompany’s ~~$18,700.~~premerger Inoption ~~October,~~plan ~~2012~~(JMG Exploration, ~~common~~Inc. ~~stock~~Equity ~~options~~Compensation ~~were~~Plan ~~issued~~- the “JMG Plan”) toduring anthe ~~employee~~three tomonth ~~purchase~~period ~~780,000~~ended ~~shares~~December of31, ~~the~~2012, ~~Company’s~~which ~~Common~~are ~~Stock~~exercisable at $37.9896 per share ~~(which~~with ~~will~~25% ~~represent~~vesting ~~390~~on October 1st,~~000~~ ~~shares~~2013, and 1/36 of the ~~Company’s~~remainder ~~Common~~vesting ~~Stock~~on ~~after~~the ~~consummation~~first of each month thereafter. Options granted by the ~~Reverse~~Company ~~Stock~~following ~~Split)~~the Merger will be granted under the JMG Plan.

15The following summaries information concerning outstanding and exercisable common stock options:


	Number of Options		Weighted average exercise price per share	Weighted- Average Remaining Contractual Life
Outstanding at December 31, 2012	390,000	$	7.96	6.79 years
Exercised	-
Granted	-
Conversion of Class M Preferred options
Outstanding at March 31, 2013	390,000	$	7.96	6.55 years
Exercisable at March 31, 2013	-		-	-

Class M Preferred Stock options

Upon the merger, all issued and outstanding options, warrants and other rights to acquire shares of ~~Ad-Vantage~~ADVN common stock (collectively, “~~Ad-Vantage~~ADVN Options”) were converted into options, warrants or other rights to acquire shares of Class M Preferred (collectively, “Parent Class M Preferred Stock Options”) at the Exchange Ratio, with such Class M Preferred Stock Options having the same terms and being subject to the same conditions as the ~~Ad-Vantage~~ADVN Options, provided, however, that upon the consummation of the Authorized Share Increase and the Reverse Stock Split all of the Class M Preferred Stock Options shall, without the requirement of any further action, convert into options for shares of ~~JMG~~MediaShift common stock, with such conversion occurring at the Conversion Ratio. No ~~Ad-Vantage~~ADVN Option has accelerated vesting in connection with the Merger.

In August 2012, Ad-Vantage issued a total of 330,000 stock options under the Ad-Vantage 2010 Equity Incentive Plan (the “Ad-Vantage Plan”). The options vest principally over a four year period and are exercisable at $1.14 per share. These stock options were converted into options to purchase 3,300 shares of Class M Preferred (which represents 330,000 shares of the Company’s Common Stock after giving effect to the Automatic Conversion). Ad-Vantage also issued 2,799,999 non-qualified stock options outside the Ad-Vantage Plan to be allocated among senior management, fully vesting at the closing of the Merger with JMG and exercisable at $1.14 per share . These stock options were converted into options to purchase 27,999.99 shares of Class M Preferred (which represents 2,799,999 shares of the Company’s Common Stock after giving effect to the Automatic Conversion). During the nine months ended September 30, 2012, Ad-Vantage granted 518,837 (5,188.37 of Class M Preferred) stock options under the Ad-Vantage Plan to certain employees, directors, and advisers, respectively. A total of 150,000 (1,500 of Class M Preferred) options vest monthly over a 24 month period and 368,837 (3,688.37 Class M Preferred) options vest one quarter (1/4) after one year and the balance over a 36 month period.19

16During the year ended December 31, 2012, ADVN granted 518,837 (5,188.37 of Class M Preferred) stock options under the ADVN Plan to certain employees, directors, and advisers, respectively. A total of 150,000 (1,500 of Class M Preferred) options vest monthly over a 24 month period and 368,837 (3,688.37 Class M Preferred) options vest one quarter (1/4) after one year and the balance over a 36 month period. ADVN also issued 2,799,999 non-qualified stock options outside the ADVN Plan to be allocated among senior management, fully vesting at the closing of the Merger with JMG and exercisable at $1.14 per share. These stock options were converted into options to purchase 2,799,999 shares of the Company’s common stock (27,999.99 shares of Class M Preferred). Upon the consummation of the Authorized Share Increase and the Reverse Stock Split on March 12, 2013, all 37,299 Class M Preferred Stock options were converted to 3,729,916 common stock options.

A summary of ~~Ad-Vantage~~ADVN ~~common~~Class M Preferred stock option activity from ~~February~~December ~~23,~~ 2010 ~~(Date of Inception)~~ through ~~September~~March 3031, ~~2012~~2013 is as follows:

	Number ofOptions		Weighted averageexercise price per share		Weighted- Average Remaining Contractual Life
	Number of Options		Weighted Average exercise price per share		Weighted- Average Remaining Contractual Life
Outstanding at Inception (February 23, 2010)		-		-
Outstanding at December 31, 2012, Class M Preferred		37,299	$	1.0493		6.47 years
Granted, Ad-Vantage Common Stock		302,000	$	0.1575		5.65 years
Conversion of Class M Preferred options to common stock options		3,692,617
Exercised		-		-
Outstanding at March 31, 2013, common stock		3,729,916		1.0493		6.23 years
Forfeited		-		-
Expired		-		-
Outstanding at December 31, 2010, Ad-Vantage Common Stock		302,000	$	0.1575		5.65 years
Granted, Ad-Vantage Common Stock		75,500	$	0.1575		6.28 years
Granted, Ad-Vantage Common Stock		219,184	$	0.4562		6.96 years
Exercised		-		-
Forfeited		-		-
Expired		-		-
Outstanding at December 31, 2011, Ad-Vantage Common Stock		596,684	$	0.2672		6.21 years
Granted, Ad-Vantage Common Stock		518,837	$	1.1400		6.78 years
Exercised		(185,604)	$	0.1575
Granted, Ad-Vantage Common Stock upon Merger		2,799,999	$	1.1400		6.87 years
Exchange Conversion from Ad-Vantage Common Stock to JMG Class M Preferred		(3,692,617)	$	-
Forfeited		-		-
Expired		-		-
Outstanding at September 30, 2012, JMG Class M Preferred		37,299	$	1.0493		6.73 years

The exercise price and vesting period of each stock option is specified by the Board of Directors at the time of grant. The stock options expire seven years after the grant date, except for the stock options vesting upon the Merger, which expire six years after the vesting date.

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The expected life assumption is based on the expected life assumptions of similar entities. Expected volatility is based on actual share price volatility of similar companies of the preceding twelve months. The risk-free interest rate is the yield currently available on U.S. Treasury zero-coupon issues with an expected term ranging from 2.5 to 5 years used as the input to the Black-Scholes model. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods as options vest, if actual forfeitures differ from those estimates. During the ~~nine~~years ~~months~~ ended ~~September~~December 3031, 2012 and ~~December 31,~~ 2011, the Company experienced no forfeitures. ~~The~~No ~~weighted~~options ~~average~~were ~~grant~~granted ~~date~~in ~~fair~~2013 ~~value~~as of ~~options~~March ~~granted during 2012 and 2011 amounted to $0.327 and $0.169 per option~~31, ~~respectively, using the Black Scholes pricing model using the following assumptions:~~2013.

17The weighted average grant date fair value of options granted during 2012 amounted to $0.654 per option using the Black Scholes pricing model using the following assumptions:

For the year ending:	September 30,	December 31,
Weighted average risk-free interest rate	0.90%
	2012	2011
Expected life in years	7.00
Weighted average risk-free interest rate	1.12%	1.72%
Expected volatility	78%
Expected life in years	7.00	7.00
Expected dividends	0
Expected volatility	97%	82%
Expected dividends	0	0

As of ~~September~~March 3031, ~~2012~~2013 there was $~~444~~2,~~377~~682,830 of total unrecognized compensation costs related to non-vested share-based compensation arrangements granted under the Plan. That cost is expected to be recognized over a weighted-average period of approximately 25.8320 years.

~~The following table summarizes information about stock options outstanding at September 30, 2012:~~20

~~Options~~7 ~~outstanding~~- ~~Options~~Income ~~exercisable~~Taxes

Exercise prices	# of shares outstanding	Weighted Average Remaining Contractual Life	Exercise price	# of shares outstanding	Weighted Average Remaining Contractual Life	Exercise price
Common Stock Options:
$0.22	110,000	3.17 years	$0.22	110,000	3.17 years	$0.22
Class M Preferred Stock Options:
$15.75	1,510	5.00 years	$15.75	1,510	5.00 years	$15.75
$15.75	409	5.53 years	$15.75	189	5.53 years	$15.75
$45.62	2,192	6.21 years	$45.62	2,192	6.21 years	$45.62
$114.00	438	6.64 years	$114.00	-	-	-
$114.00	100	6.64 years	$114.00	-	-	-
$114.00	100	6.64 years	$114.00	-	-	-
$114.00	1,000	6.64 years	$114.00	-	-	-
$114.00	250	6.64 years	$114.00	-	-	-
$114.00	500	6.85 years	$114.00	-	-	-
$114.00	1,300	6.85 years	$114.00	-	-	-
$114.00	500	6.85 years	$114.00	63	6.85 years	$114.00
$114.00	500	6.85 years	$114.00	42	6.85 years	$114.00
$114.00	500	6.89 years	$114.00	-	-	-
$114.00	28,000	6.87 years	$114.00	28,000	6.87 years	$114.00
	37,299			31,996

ADVN files income tax returns in the U.S. federal jurisdiction and the state of California. There are currently no income tax examinations underway for these jurisdictions since December 31, 2010 is the initial tax filing period.

Intrinsic Value of options outstanding and options exercisable For the nine months ended September 30, 2012
Intrinsic Value of Options Outstanding	Intrinsic Value of Options Exercisable	Intrinsic Value of Options Exercised
$ 439,616	$ 417,980	n/a

ADVN provides deferred income taxes for differences between the tax reporting bases and the financial reporting bases of assets and liabilities. ADVN had no unrecognized income tax benefits. Should ADVN incur interest and penalties relating to tax uncertainties, such amounts would be classified as a component of interest expense and operating expense, respectively. Unrecognized tax benefits are not expected to increase or decrease within the next twelve months.

18As of December 31, 2012, ADVN has net operating losses for federal and state income tax purposes of approximately 3,639,000 which are available for application against future taxable income and which will start expiring in 2031. The benefit associated with the net operating loss carry forward will more likely than not go unrealized unless a future operation is successful. Since the success of future operations is indeterminable, the potential benefits resulting from these net operating losses have not been recorded in the financial statements.

~~Dividend~~8 - Related Party Transactions

InThe ~~July~~Company ~~2012,~~utilizes the ~~Company~~programming ~~licensed~~services ~~certain specific noncore intellectual property and technology to an affiliated entity in exchange for all~~ of ~~the~~a ~~membership~~company ~~interest~~managed inby ~~the~~its ~~affiliated~~Chief ~~entity~~Technology Officer. ~~The~~Payments ~~membership~~to ~~interests~~this incompany ~~the affiliated entity~~ were ~~then~~$38,958 ~~transferred~~and as$39,009 afor ~~dividend to~~ the ~~shareholders~~three ofmonth ~~record~~periods ofended ~~the~~March ~~Company~~31, as2013 ofand ~~July 2~~2012, ~~2012~~respectively. ~~The value of the intellectual property was approximately $20,000.~~

~~8. Income~~9 ~~Taxes~~- Discontinued Operations

The Company files income tax returns in the U.S. federal jurisdiction and the state of California. There are currently no income tax examinations underway for these jurisdictions since December 31, 2010 is the initial tax filing period.

The Company provides deferred income taxes for differences between the tax reporting bases and the financial reporting bases of assets and liabilities. The Company had no unrecognized income tax benefits. Should the Company incur interest and penalties relating to tax uncertainties, such amounts would be classified as a component of interest expense and operating expense, respectively. Unrecognized tax benefits are not expected to increase or decrease within the next twelve months.

9. Related Party Transactions

The Company utilizes the programming services of a company managed by its Chief Technology Officer. Payments to this company were $135,173 and $100,046 for the nine month period ended September 30, 2012 (unaudited) and the year ended December 31, 2011, respectively.

In March 2011, the Company entered into a lending facility that provides for advances of up to $500,000 with interest at 12% per annum payable monthly. The promissory note was provided by an investor in Ad-Vantage’s preferred stock. The lending facility matures in 36 months and any principal balance is due and payable 90 days after the note matures and the Company has received written notice of demand for payment. A total of $80,000 was borrowed under this promissory note on September 1, 2011 and an additional $30,000 on October 3, 2011. All outstanding balances under this facility were paid in full on November 1, 2011.

On July 12, 2012, Ad-Vantage borrowed $1,400,000 from JMG in anticipation of the Merger of the two companies pursuant to a senior secured promissory note. The note was secured by a lien on all assets of the Company, bears interest at 10% per annum and was due and payable in full on or before the earliest of: (a) the Closing Date of the Merger, (b) January 9, 2014 and (c) the date of any default as specified by the note. The note was converted on September 1, 2012 at the time of the Merger between the two companies into an intra-company obligation that eliminates in consolidation.

10. Discontinued Operations

In connection with the Merger between JMG and Ad-Vantage, the Company agreed to, as soon as practicable after the Closing, sell all of the “Oil and Gas Properties” identified in the Company’s most recent 10-K filed with the SEC (the “O&G Operations” and the “O&G Sale”) or at its option cause the O&G Operations to be spun off for the benefit of the Company’s pre-Merger stockholders as soon as may be practicable following completion of the Merger (the “O&G Spinoff”).

~~The~~Effective ~~Board~~November of21, ~~Directors~~2012, ~~is still reviewing whether to proceed with an O&G Sale or an O&G Spinoff. If~~ the Board of Directors ~~elects~~authorized management to ~~sell~~pursue the ~~O&G Operations, all net proceeds from such sale shall be distributed pro~~spin-~~rata~~off ~~to the Company’s pre-Merger stockholders and not to any~~ of the ~~stockholders~~Oil ~~of Ad-Vantage (unless,~~ and inGas ~~such~~operations ~~event solely to the extent that such stockholders were also pre-Merger stockholders of the Company~~ (~~the~~ “~~Pre-Merger~~O&G ~~Stockholders~~Operations”)). Iffollowing ~~the~~management’s ~~Board~~determination ofthat ~~Directors elects to proceed with~~ the O&G ~~Spinoff~~Operations ~~the~~were ~~Board~~not ofmaterial ~~Directors will create a new entity~~ to ~~own and operate~~ the ~~current~~operations, ~~oil~~assets ~~and~~or ~~gas~~future ~~operations~~commercial ~~(“New~~activity ~~JMG”)~~of ~~and~~MediaShift. ~~will~~The ~~spinoff~~following ~~New~~steps ~~JMG~~are ~~shares~~expected ofto ~~common~~occur ~~stock~~in toconnection with the ~~Pre-Merger~~proposed ~~Stockholders.~~spin-off:

191.

The O&G Operations, including all related assets and liabilities, will be contributed to a new corporation, to be domiciled in Nevada ("JMG Oil") in exchange for 500,000 shares of JMG Oil. Thereafter JMG Oil intends also to issue 4,500,000 of its shares to unrelated accredited investors for $50,000 and certain indemnities relating to the O&G Operations.

The Company proposes to spin off its 500,000 shares of JMG Oil (the "Dividend") to Pre-Merger JMG Stockholders. Based on the Corporation having 5,458,405 shares of its common stock outstanding immediately prior to the Merger, the Corporation anticipates that on distribution the Pre-Merger JMG Stockholders will receive 0.0916019 of a share of JMG Oil for each share of the Corporation's common stock owned by them prior to the Merger.

JMG Oil will bear the costs and expenses of these transactions.

The completion of the spin-off transaction outlined above is deemed to be in the best interests of the Company, may require regulatory approvals and is subject to execution of definitive agreements. No assurance can be given that the spin-off of the Oil and Gas operations will occur or, if it does occur, that the shares of JMG Oil will have any liquidity or value to JMG shareholders.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The unaudited financial statements of ~~JMG Exploration~~MediaShift, Inc. (“~~JMG~~MediaShift”, or the “Company”), ~~a development stage company,~~ have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. However, the information included in these interim financial statements reflects all adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for the fair presentation of the financial position and the results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full year. The balance sheet information as of December 31, ~~2011~~2012 was derived from the audited financial statements included in Form 810-K/A filed ~~October 15~~March 13, ~~2012~~2013. These interim financial statements should be read in conjunction with that report.

Forward-Looking Statements

This report includes forward-looking statements. All statements other than statements of historical facts contained herein, including statements regarding our future financial position, business strategy and plans and objectives of management for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “expect” and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions as described in “Risk Factors.”

Other sections of this report may include additional factors that could adversely affect our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Readers are cautioned that the foregoing lists of factors are not exhaustive. The forward-looking statements contained in this ~~Form~~Report ~~S-1~~ are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except in accordance with applicable securities laws. The forward-looking statements contained in this ~~Form~~Report ~~S-1~~ are expressly qualified by this cautionary statement.

Overview

WeMediaShift, ~~are~~Inc. a(the ~~development-stage~~"Company") ~~company~~was ~~engaged~~originally inincorporated ~~digital~~under ~~advertising~~the ~~technology~~laws ~~services.~~of ~~The~~the ~~Company~~state ~~was~~of ~~formed~~Nevada in July 2004 as JMG Exploration, Inc. (“JMG”). At a ~~Delaware~~Special ~~Limited~~Meeting ~~Liability~~of ~~Corporation~~Shareholders (~~LLC~~the "Meeting") onof ~~February~~JMG 23Exploration, ~~2010~~Inc ~~and~~held on ~~July~~March 74, ~~2010~~2013, ~~was~~JMG ~~converted~~shareholders toapproved athe ~~Delaware Corporation.~~ following:

We closed three private placements in July 2010 totaling $550,000, in November 2011 for $999,999 and in April 2012 for $602,000. On August 31, 2012, The Company consummated a reverse triangular merger with a wholly owned subsidiary of JMG Exploration, Inc. (“JMG”) pursuant to which the Company became the surviving entity of the Merger and a wholly owned subsidiary of JMG. The transaction has been accounted for as a reverse acquisition and the accompanying financial statements are those of Ad-Vantage. As required by accounting guidance, authorized shares, issued and outstanding ·

20An increase in the authorized number of shares of common stock from 25,000,000 to 100,000,000 (the “Authorized Share Increase”);

~~shares and per share amounts have been retroactively restated throughout these consolidated financial statements and the accompanying notes to reflect JMG’s capital structure.~~·

AsA ofchange ~~December~~in ~~31, 2011,~~ the ~~Company~~name ~~has~~from anJMG ~~accumulated~~Exploration, ~~deficit~~Inc. ofto ~~$910~~MediaShift,~~661~~ Inc. (the “Name Change”); and

~~Results of operations for the three month periods ended September 30, 2012 and 2011~~·

~~Revenue.~~A ~~The~~reverse ~~Company~~stock ~~earns~~split ~~revenue~~of ~~from~~common ~~ads~~stock ~~placed~~of onone ~~web~~share ~~pages~~for ~~viewed~~every ontwo ~~internet access providers’ proprietary networks. Revenues are earned when end users view the advertisements. Revenues were $485 and $49~~ (1-for-2) ~~the~~shares ~~three month periods ended September 30, 2012 and 2011~~outstanding.

General and administrative expense. General and administrative expense relates to compensation and overhead for executive officers and fees for general operational and administrative services. For the three month period ended September 30, 2012 and 2011, general and administrative expenses were $3,484,506 and $121,144, respectively. Expenses consist principally of salaries, consulting fees and office costs. Salaries expense for the three months ended September 30, 2012 and 2011 that includes stock based compensation was $3,062,446 and $5,223, respectively, as discussed below. 23

~~The~~All ~~Company~~share ~~has~~and aper ~~stock~~share ~~option~~information, ~~plan~~including ~~under~~earnings ~~which~~per ~~employees~~share, ~~directors,~~in ~~advisors~~this ~~and~~Form ~~consultants are eligible to receive grants. The Company follows the fair value recognition provisions of ASC 718, Share~~10-~~Based~~Q ~~Payment,~~have ~~using~~been ~~the~~retroactively ~~modified-prospective-transition~~adjusted ~~method.~~to ~~Under~~reflect ~~that~~this ~~method,~~reverse ~~compensation~~stock ~~cost~~split ~~recognized~~and ~~includes~~certain ~~all~~items ~~share-based~~in ~~payments~~prior ~~granted~~period ~~based~~financial onstatements ~~the~~have ~~grant-date~~been ~~fair~~revised ~~value~~to ~~estimated~~conform into ~~accordance with~~ the ~~provisions~~current ~~of ASC 718~~presentation.

~~Stock~~All ~~based~~continuing ~~compensation~~operations ~~expense~~are ~~for~~being ~~the~~conducted ~~three~~by ~~month~~MediaShift’s ~~periods~~wholly ~~ended~~owned ~~September~~subsidiaries, 30ADVN Networks, ~~2012~~Inc. (“ADVN”) and ~~2011~~Travora ~~was $2~~Networks,~~684,115~~ Inc. (“Travora”). ADVN provides digital advertising software and ~~$5,223,~~service ~~respectively~~solutions that enable access providers and network operators to generate advertising revenues on their free and fee-based networks. Travora operates a leading digital advertising network.

~~During~~ADVN’s ~~the~~predecessor ~~three~~was ~~month~~formed ~~periods~~as ~~ended~~a ~~September~~Delaware ~~30,~~Limited ~~2012~~Liability ~~and~~Company ~~2011~~on February 23, ~~the~~2010 ~~Company~~and ~~granted~~on ~~330~~July 6,~~000~~ ~~and~~2010 noADVN ~~stock~~completed ~~options,~~a ~~respectively,~~reorganization ~~under~~in which the ~~Plan~~predecessor to ~~certain~~the ~~employees~~Company, ~~directors~~Ad-Vantage Networks, ~~advisors and consultants~~LLC, ~~respectively.~~was Aconverted ~~total~~into ~~of 150~~ADVN,~~000~~ ~~options~~a ~~vest~~Delaware ~~monthly~~Corporation ~~over~~(the a“Conversion”). 24In ~~month~~the ~~period~~Conversion, ~~and~~ADVN ~~180~~issued 10,000,000 ~~options~~shares ~~vest~~of ~~one~~common ~~quarter~~stock ~~(1/4)~~to ~~after~~the ~~one~~members ~~year~~of ~~and~~ the ~~balance~~predecessor ~~over~~LLC. aIn 36August ~~month~~2012, ~~period.~~ADVN ~~With~~consummated ~~respect~~a toreverse ~~the~~triangular ~~issuance~~merger ofwith ~~the~~a ~~new~~wholly ~~stock~~owned ~~options,~~subsidiary ~~the~~of ~~Company~~MediaShift, ~~incurred~~Inc. ~~stock~~(previously ~~based~~JMG ~~compensation~~Exploration, ~~expense~~Inc.) ofThe ~~$23,254~~transaction ~~and~~has ~~$5,223~~been accounted for ~~the~~as ~~three~~a ~~month~~reverse ~~period~~acquisition ~~ended~~and ~~September~~the ~~30,~~accompanying ~~2012~~financial ~~and~~statements ~~2011,~~are ~~respectively~~those of ADVN.

~~Interest~~Travora ~~expense.~~was ~~Interest~~acquired ~~expense~~in February 2013 and therefore the financial information presented as of and for the three month ~~periods~~period ended ~~September~~March 3031, ~~2012~~2013 ~~and~~represents ~~2011~~only ~~was~~two $0months ~~and~~of ~~$800,~~Travora ~~respectively~~operations.

~~Interest~~Results ~~income.~~of ~~Interest~~operations for the three month periods ended ~~September~~March 3031, ~~2012~~2013 and ~~2011 was $0 and $26, respectively. Interest income is from temporary investment of operating cash.~~ 2012

~~Income taxes~~Revenue. The Company ~~files~~earns ~~income~~revenue ~~tax~~from ~~returns~~ads inplaced ~~the~~on ~~U.S.~~web ~~federal~~pages ~~jurisdiction~~viewed ~~and~~on ~~California~~internet access providers’ proprietary networks. ~~There~~Revenues are ~~currently~~earned nowhen ~~income~~end ~~tax~~users ~~examinations~~view ~~underway~~the ~~for~~advertisements. ~~these~~Revenues ~~jurisdictions~~were $1,513,312 ~~although~~and $4,787 for the ~~tax~~three ~~years~~months ended ~~December~~March 31, ~~2011~~2013 and ~~2010~~2012. $1,509,234 ~~are~~of ~~all~~the ~~still~~revenue ~~open~~ for ~~examination~~March 31, 2013 is a result of the acquisition.

Cost of Goods Sold. The Company pays publishers and network providers for a share of the advertisements they placed on publisher sites and proprietary networks. Cost of Goods Sold were $840,169 and $4,718 for the three months ended March 31, 2013 and 2012.

General and administrative expense. General and administrative expense relates to compensation and overhead for executive officers and fees for general operational and administrative services. For the three months ending March 31, 2013 and 2012, general and administrative expenses were $2,293,765 and $384,978, respectively. Expenses consist principally of salaries, consulting fees and office costs. Salary expense for the months ending March 31, 2013 and 2012, including stock based compensation, was $1,360,053 and $211,048, respectively, as discussed below.

Depreciation and Amortization. Depreciation and Amortization expense for the three months ending March 31, 2013 and 2012 was $55,979 and $4,155, respectively. The increase in 2013 was primarily due to the amortization of goodwill related to the acquisition and an increase in depreciable property.

Research and Development. Research and development costs are expensed as incurred and were $66,572 and $50,548 for the three months ended March 31, 2013 and 2012 respectively.

Interest expense. Interest expense for the three months ending March 31, 2013 and 2012 was $164,259 and $0, respectively. The increase in 2013 was principally due to the issuance of $1,000,000 of two year 10% convertible notes to five investors in November, 2012, $7,000,000 of 8% convertible notes to multiple investors during the first quarter of 2013, and a $2,250,000 loan assumed in the acquisition of Travora.

Fair Value adjustment on derivative liability. The fair value adjustment on the derivative liability was $694,918 and $0 for the three month ended March 31, 2013 and 2012. The loss in 2013 is related to the conversion of the 8% convertible debt. (note 5)

Loss on debt extinguishment. Loss on extinguishment for the three months ending March 31, 2013 and 2012 was $4,710,423 and $0. The loss in 2013 is related to the conversion of the 8% convertible debt (note 5)

Interest income. Interest for the three months ending March 31, 2013 and 2012 was $21 and $0, respectively. Interest income is from temporary investment of operating cash.

Other Income. Other income for the three months ending March 31, 2013 and 2012 was $19,436 and $0, respectively. The other income in 2013 is related to funds in a bank account related the reverse merger with JMG that was not previously disclosed.

Income taxes. The Company files income tax returns in the U.S. federal jurisdiction and California. There are currently no income tax examinations underway for these jurisdictions, although the tax years ended December 31, 2012 and 2011 are all still open for examination. Beginning in 2013, returns will also be filed in Florida, Illinois and New York.

The Company provides for income taxes in accordance with ASC 740 “Income Taxes” (ASC 740). ASC 740 requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial statement carrying amounts and the tax basis of the assets and liabilities. Where it is more likely than not that a tax benefit will not be realized, a valuation allowance is recorded to reduce the deferred tax asset to its realizable value.

A valuation allowance has been provided against the Company’s net deferred tax assets as the Company believes that it is more likely than not that the net deferred tax assets will not be realized. As a result of this valuation allowance, the effective tax rate for the years ended December 31, ~~2011~~2012 and ~~2010~~2011 is zero percent.

Results of operations for the nine month periods ended September 30, 2012 and 2011

Revenue. The Company earns revenue from ads placed on web pages viewed on internet access providers’ proprietary networks. Revenues are earned when end users view the advertisements. The Company accrues any revenue sharing percentage with the network provider at the same time. Revenues were $6,850 and $49 for the nine month periods ended September 30, 2012 and 2011.

General and administrative expense. General and administrative expense relates to compensation and overhead for executive officers and fees for general operational and administrative services. For the nine month periods ended September 30, 2012 and 2011 general and administrative expenses were $4,378,355 and $286,165, respectively. Expenses consist principally of salaries, consulting fees and office costs. Salaries expense for the nine month periods ended September 30, 2012 and 2011 that includes stock based compensation was $3,553,727 and $14,155, respectively, as discussed below.

The Company has a stock option plan under which employees, directors and consultants are eligible to receive grants. The Company follows the fair value recognition provisions of ASC 718, Share-Based Payment, using the modified-prospective-transition method. Under that method, compensation cost recognized includes all share-based payments granted based on the grant-date fair value estimated in accordance with the provisions of ASC 718.

Stock-based compensation expense for the nine month periods ended September 30, 2012 and 2011 was $2,714,207 and $14,155, respectively.

During the nine month period ended September 30, 2012, Ad-Vantage granted 518,837 stock options (5,188.37 shares of Class M Preferred stock) under the Ad-Vantage Plan to certain employees, directors, and consultants. A total of 368,837 options (3,688.37 shares of Class M Preferred stock) vest one quarter (1/4) after one year and the balance over a 36 month period. 150,000 options (1,500 shares of Class M Preferred stock) vest monthly over a 24 month period. Ad-Vantage also granted 2,799,999 options (27,999.99 shares of Class M Preferred stock) issued outside the Ad-Vantage Plan to Ad-Vantage senior management, all of which vested upon the close of the Merger with the Company. During the years ended December 31, 2011 and 2010, Ad-Vantage granted 294,684 (2,946.84 shares of Class M Preferred stock) and 302,000 stock options (30,200 shares of Class M Preferred Stock), respectively, under the Ad-Vantage Plan to certain employees, directors, and consultants, respectively. A total of 377,500 options (37,750 shares of Class M Preferred stock) vest monthly over a 24 month period and 219,184 options vest one quarter (1/4) after one year and the balance over a 36 month period. With respect to the issuance of the stock options, Ad-Vantage incurred stock based compensation expense of $2,714,207 and $2,740,396 for the nine month period ended September 30, 2012 and for the period from February 23, 2010 through September 30, 2012, respectively.

Interest expense. Interest expense the nine month periods ended September 30, 2012 and 2011 was $0 and $800, respectively.

Interest income. Interest for nine month periods ended September 30, 2012 and 2011 was $0 and $443, respectively. Interest income is from temporary investment of operating cash.

Income taxes. The Company files income tax returns in the U.S. federal jurisdiction and California. There are currently no income tax examinations underway for these jurisdictions, although the tax years ended December 31, 2011 and 2010 are all still open for examination.

Liquidity and capital resources

Cash flows and capital expenditures

At ~~December~~March 31, ~~2011~~2013 (unaudited) and ~~September~~December 3031, 2012 (unaudited), we had $~~648~~3,~~471~~696,000 and $~~948~~902,~~748~~701 in cash and cash equivalents, respectively. Since our incorporation through March 31, 2013, we have financed our operating cash flow needs principally through private offerings of equity securities and convertible debt.

As of ~~September~~March 3031, 2013 (unaudited) and March 31, 2012, ~~the~~we ~~Company~~ had an accumulated deficit of $517,~~439~~287,~~476~~400 and $9,993,284, respectively, and had ~~insufficient~~limited working capital to fund development of our technology. InOn November 5, 2012, ~~(see~~the ~~Subsequent~~Company ~~Events~~issued ~~below)~~an aggregate of $500,000 in two year 10% convertible notes to two investors, and on November 7, 2012 the Company ~~received~~issued ~~proceeds~~an aggregate of $1500,000~~,000~~ ~~pursuant~~in two year 10% convertible notes to ~~the~~three ~~issuance~~additional ofinvestors. ~~promissory~~The notes~~. Absent~~ may be prepaid by the ~~exercise~~Company ofwith ~~outstanding~~fifteen ~~warrants~~days’ ornotice, ~~securing~~and ~~additional~~may ~~working~~be ~~capital~~converted ~~from~~into ~~other~~the ~~sources,~~Company’s common stock at the lesser of 80% of the Company’s ~~may~~fair bemarket ~~forced~~value at the time of conversion or $8.00 per share. The notes were issued with two year warrants to ~~scale~~purchase ~~back~~an ~~its~~aggregate ~~product~~of ~~development~~100,000 ~~efforts~~common shares at $6.50 per share.

~~The~~During ~~Company~~the ~~has~~first ~~the~~quarter ~~following~~of ~~warrants~~2013, ~~outstanding~~we ashave received approximately $7,000,000 pursuant to a private placement of ~~December~~8% 31convertible promissory notes to multiple investors. A total of $2,250,000 ~~2011~~of the proceeds was used to finance the Travora acquisition. We will use the balance of the proceeds to finance our remaining financial commitments pursuant to the Travora acquisition and ~~September~~for 30working capital purposes. On March 27, ~~2012:~~2013, all convertible notes, including $708,377 of accrued interest, net of discount, from this private placement were converted to common stock.

Warrant summary	Numberof warrantsoutstanding	Exercise price	Maximumproceeds	Expiration Date
Warrants issued in the preferred stock private placement	369,249	$6.00	$ 2,215,494	01/15/2013
Warrants issued upon conversion of preferred stock	1,739,500	$4.25	7,392,875	01/15/2013
Warrants issued in our initial public offering	1,763,802	$5.00	8,819,010	01/15/2013
Warrants issued to our underwriters	190,000	$7.00	1,330,000	08/03/2013
Total	4,062,551	various	$ 19,757,379	various

~~Following~~We ~~the~~have ~~consummation of~~ the ~~Reverse~~following ~~Stock Split, the number of outstanding~~ warrants ~~will be 184,625, 869,750, and 881,901, respectively, and the exercise prices will be $12.00, $8.50, and $10.00, respectively. The total warrants~~ outstanding ~~after~~as ~~the~~of ~~Reverse~~March ~~Stock Split will be 2~~31,~~126,276.~~ 2013:


Warrant summary	Number of warrants outstanding	Exercise price	Maximum proceeds	Expiration Date
Warrants issued in the preferred stock private placement	184,625	$ 12.00	2,215,500	02/28/2014
Warrants issued upon conversion of preferred stock	869,750	$ 8.50	7,392,875	02/28/2014
Warrants issued our initial public offering	881,901	$ 10.00	8,819,010	02/28/2014
Warrants issued to our underwriters	95,000	$ 14.00	1,330,000	02/28/2014
Warrants issued with 10% convertible notes	100,000	$ 6.50	650,000	11/05/2014
Warrants issued with 8% convertible notes	1,157,392	$ 4.00	4,629,568	07/31/2013
Warrants issued with 8% convertible notes	1,157,392	$ 6.00	6,944,352	07/31/2014
Total	4,446,060	various	31,981,305	various

Cash flow used in operations.

Cash utilized by operating activities was $1,~~676~~462,~~067~~769 for the ~~nine~~three months ended ~~September~~March 3031, ~~2012~~2013. The use of cash was ~~principally~~included ~~attributable~~in to the net loss for the ~~year~~period of $47,~~528~~294,~~815~~116, ~~decreased~~but offset by an increase in accounts payable and accrued liabilities of $~~121~~398,~~044~~370. The ~~reductions~~use inof cash ~~flow~~was ~~were~~a ~~offset~~smaller bycontributor ~~the~~to ~~$1,836~~net ~~decrease~~loss inthan ~~accounts~~non-cash ~~receivable,~~components: ~~the~~stock based compensation of $11207,~~418~~354, ~~decrease~~depreciation inof ~~prepaid expenses~~$55,979, ~~and~~note ~~items~~discount ~~that~~amortization ~~did~~of ~~not~~$55,535, ~~use~~the ~~cash:~~loss ~~depreciation~~on derivative liability of $16694,~~531~~918 and ~~stock~~loss ~~based~~on ~~compensation~~debt extinguishment of $24,~~714~~710,~~207~~423. ~~The~~Further uses of cash included the following: $2103,~~138~~178 increase in accounts receivable, $1,287 increase in other assets, ~~and~~$80,318 increase in prepaid expenses, $10107,~~150~~575 increase in security deposits ~~increased~~and ~~the~~$1,126 ~~use~~increase in ~~cash.~~other long term liabilities.

Cash utilized by operating activities was $2369,~~407,182~~940 for the ~~period~~three ~~February~~months ~~23,~~ended ~~2010~~March ~~(Date of Inception) to September 30~~31, 2012. The use of cash was ~~principally~~included ~~attributable~~in to the net loss for the period of $5440,~~439~~812,~~476,~~ ~~decreased~~but offset by an increase in accounts payable and accrued liabilities of $~~205~~71,~~215~~262. The ~~reductions~~use inof cash ~~flow~~was ~~were~~a ~~offset~~smaller bycontributor ~~items~~to ~~that~~net ~~did~~loss ~~not~~than ~~use~~ non-cash components: ~~depreciation expense of $18,807,~~ stock based compensation of $211,~~740~~062,~~396~~ ~~and~~depreciation ~~the~~of ~~fair~~$4,154. ~~value~~Further uses of ~~common~~cash ~~stock~~included ~~and~~the ~~common~~following: ~~stock~~$1,903 ~~warrants~~increase ~~issued~~in ~~for~~accounts ~~services~~receivable, ~~rendered of~~ $823,~~669.~~853 ~~Further~~increase ~~uses~~in ofprepaid ~~cash~~expenses, ~~were~~and ~~the following: The~~ $~~746~~9,850 increase in security deposits.

accounts receivable, the $2,138 increase in other assets, the $1,759 increase in prepaid expenses, and the $10,150 increase in security deposits.

Cash flow provided by investing activities.

Cash used by investing activities was $~~191~~918,~~189~~282 for the ~~nine~~three months ~~period~~ ended ~~September~~March 3031, ~~2012~~2013. The use of cash was ~~principally~~ attributable to capitalized patent costs of $8436,~~146~~878, ~~and~~ $~~107~~76,~~043~~953 for purchase of computer equipment, leasehold improvements, and furniture, ~~for~~an ~~the~~increase ~~nine~~in ~~month~~intangible ~~period~~assets ~~ended~~of ~~September 30~~$304,451 ~~2012~~and note repayment of $500,000.

Cash used by investing activities was $~~361~~77,~~602~~838 for the ~~period~~three ~~from~~month ~~February~~ended ~~23,~~March ~~2010 (Date of Inception) to September 30~~31, 2012. The use of cash was ~~principally~~ attributable to capitalized patent costs of $~~225~~35,~~609~~878 and $~~135~~41,~~993~~960 for purchase of computer equipment, leasehold improvements, and furniture ~~for the period from February 23, 2010 (Date of Inception) to September 30, 2012~~.

Cash flow provided by financing activities.

Cash provided by financing activities was $25,~~167~~174,~~533~~350 for the ~~nine~~three months ended ~~September~~March 3031, ~~2012~~2013. The proceeds of cash were principally attributable to the proceeds from the private placement of ~~Ad-Vantage~~8% ~~Series~~convertible Cpromissory ~~Preferred~~notes ~~stock~~ of $~~602~~6,~~000 and the exercise of warrants and options totaling $55~~944,~~797,~~350 and ~~net~~note ~~cash~~repayments ~~acquired from JMG~~ of $1,~~509~~770,~~736~~000.

Cash provided by financing activities was $3,717,532 for the period February 23, 2010 (Date of Inception) to September 30, 2012. The proceeds of cash was principally attributable to net cash acquired from JMG of $1,509,736 and the proceeds from the private placement of Ad-Vantage Series A Preferred stock totaling $550,000 in July 2010, Ad-Vantage Series B Preferred stock totaling $999,999 in November 2011, and Ad-Vantage Series C Preferred stock totaling $602,000 in May 2012. In March 2011, Ad-Vantage entered into a secured lending facility that provides for advances of up to $500,000 with interest at 12% per annum payable monthly. The lending facility matures in 36 months and any principal balance is due and payable 90 days after the facility matures and the Company has received written notice of demand for payment. A total of $110,000 was borrowed under this promissory note in September and October 2011. The promissory note was paid in full in November 2011. In April and May 2012, $55,797 of stock options and warrants were exercised.26

~~Subsequent~~No ~~Events~~cash was provided by financing activities for the three months ended March 31, 2012

InDiscontinued ~~October~~Operations ~~2012,~~- ~~85,000~~Spin-off ~~JMG Common Stock Options were exercised providing proceeds~~ of ~~$18,700.~~Oil Inand ~~October,~~Gas ~~2012,~~Properties common stock options were issued the JMG Plan to an employee to purchase 780,000 shares of the Company’s Common Stock at $3.98 per share (which will represent 390,000 shares of the Company’s Common Stock after consummation of the Reverse Stock Split).

OnIn ~~November~~connection 5,with ~~2012~~the Merger, the Company ~~issued~~agreed anto ~~aggregate~~sell ofthe ~~$500,000~~existing oil and gas properties identified in ~~two~~its ~~year~~2011 form 10%-K ~~convertible~~as ~~notes~~soon toas ~~two~~practible ~~investors,~~following ~~and~~the onMerger ~~November~~or, 7at its option, ~~2012~~spin those assets off to the benefit of Company's ~~issued~~pre-Merger anshareholders. ~~aggregate~~As of November ~~$500~~21,~~000~~ in2012, ~~two~~the ~~year~~Board ~~10%~~of ~~convertible~~Directors ~~notes~~authorized tomanagement, ~~three~~following ~~additional~~a ~~investors.~~determination ~~The~~that ~~notes~~the ~~may~~Oil beand ~~prepaid~~Gas byproperties were not material to the Company's ~~with~~operations, ~~fifteen~~assets ~~days’~~or ~~notice~~future commercial activity, ~~and~~to ~~may~~undertake bea ~~converted~~spin-off ~~into~~of ~~the~~those ~~Company’s~~properties. ~~common~~A ~~stock~~new atcorporation, ~~the~~JMG ~~lesser~~Oil, ofhas ~~80%~~been offormed to facilitate the spinoff, and the Company’s ~~fair~~is ~~market~~in ~~value~~negotiations atwith ~~the~~external ~~time~~sources of ~~conversion~~financing orto ~~$4.00~~provide ~~per~~funding ~~share.~~to ~~The~~JMG ~~notes~~Oil ~~were~~following ~~issued~~the ~~with~~transfer ~~two~~of ~~year~~the ~~warrants~~Oil and Gas properties to ~~purchase~~JMG anOil ~~aggregate~~in ofexchange ~~200,000~~for ~~common~~equity ~~shares~~ownership atin $3that company.25 ~~per~~We ~~share.~~anticipate that we will complete the spinoff during the second or third quarter of 2013

24Acquisition of Ad Network Assets of Travora Media

On February 6, 2013, Travora Networks, Inc. (“Travora”), a wholly owned subsidiary of MediaShift, Inc. executed an asset purchase agreement (the “Asset Purchase Agreement”) with Travora Media, Inc. (the “Seller”) to acquire the Seller’s digital advertising network business. Headquartered in New York City, the Seller provided an established publishing network, advertiser and agency relationships, and an experienced ad sales and ad operations team. The Seller represented over 300 established travel brands across desktop, tablet, and mobile platforms, including Fodor’s, Viator, and Vayama. The Seller achieved revenues of approximately $13.0 million in 2011. Travora retained approximately 20 of the Seller’s former employees and will continue to operate in New York City.

The preliminary allocation of the purchase price based on the fair value of the acquired assets, less liabilities assumed, as of February 6, 2013, amounted to $8,234,670 million.

The fair value of the consideration to Seller is as follows:


Cash consideration to Seller		$ 500,000
Payment of Eastward Capital Partners debt		1,750,000
Assumption of Eastward Capital Partners debt		2,250,000
Balance of consideration to be paid in MediaShift common stock	700,000
Less allowance for audit expenses	(70,000)
Less amount of Aged Accounts Payable	(138,000)
Less estimated reduction for Target Working Capital deficiency	(592,000)	(100,000)
		4,400,000
Contingent consideration:
Earn-out consideration for publisher retention		67,747
Earn-out consideration for revenue targets		1,315,081
Total consideration		$ 5,782,828

As part of the purchase price paid in the transaction, Travora paid down $1,750,000 and assumed $2,250,000 of the Seller’s $4,000,000 obligations to Eastward Capital Partners, pursuant to the terms of that certain Master Lease Agreement No. 527 dated as of January 13, 2012, by and between the Seller and Eastward Capital Partners V, L.P. as modified by letter agreement.

Within ninety (90) days following the closing date, Travora shall prepare and deliver to the Seller a closing statement and its calculation of the working capital deficit or working capital surplus, if any, at the date of purchase. The closing statement shall be prepared in accordance with GAAP, certified by an officer of Travora and prepared applying the same methodology as was applied by Travora and the Seller in calculating the Target Working Capital.

Within five (5) Business Days following the determination of the closing statement, if there is a working capital surplus, Travora shall pay to the Seller an amount equal to such working capital surplus by an increase in the number of Closing Shares equal to the dollar value of such excess, and if there is a working capital deficit, the Seller shall pay to Travora an amount equal to such working capital deficit by a reduction and forfeiture of the number of Closing Shares equal to the dollar value of such working capital deficit, or if the value of the Closing Shares is less than such working capital deficit, Travora shall reduce the amount of earnout payments owed or payable to Seller by an amount equal to the amount by which such working capital deficit exceeds the value of the Closing Shares. A preliminary analysis of working capital as of the closing date indicates that the working capital deficit (as defined in the Asset Purchase Agreement) may be approximately $600,000. Consequently, it is not currently anticipated that any Closing Shares will be issued to the Seller in this transaction.

The significant identifiable tangible assets acquired include primarily accounts receivable and property, plant and equipment. Intangible assets include contracts, business relationships, trademarks and domain names. The Company will determine the fair value of the tangible and intangible assets acquired for the acquisition, but does not have the information necessary for such an allocation at this time.

Earnout Consideration

As part of the acquisition, TNI agreed to issue additional cash to the sellers, contingent upon TNI meeting certain operating performance targets: publisher retention goals for 360 days following the acquisition date and revenue goals for the year ending December 31, 2013. The estimated fair value of the earnout consideration discussed below was $1,382,828 on the acquisition date and $1,382,828 as of March 31, 2013.

Publisher Retention Earnout Payments

The Seller shall be entitled to receive, in two installments, publisher retention earnout payments equaling, in the aggregate, up to $1,000,000. In the event that the number of publishers retained by the Company for the initial 180 day period following the closing date is equal to or exceeds eighty-five percent (85%) of the baseline number of publishers, the Company shall pay to the Seller an amount equal to the product of $500,000 multiplied by a fraction, the numerator of which is the actual number of publishers retained by the Company and the denominator of which is the baseline number of publishers.

In the event that the number of publishers retained by the Company for the second 180 day period following the closing date is equal to or exceeds the baseline number of publishers, the Company shall pay to the Seller an amount equal to the product of $500,000 multiplied by a fraction, the numerator of which is the actual number of publishers retained and the denominator of which is baseline number of publishers.

Notwithstanding the foregoing, if any three (3) of the Seller’s major publishers, in the aggregate, cease doing business with Travora (a) during the initial publisher retention earnout period, then no initial publisher retention earnout payment or second publisher retention earnout payment shall be paid to the Seller, or if during the second publisher retention earnout period, then no second publisher retention earnout payment shall be paid to the Seller.

The estimated fair value of the publisher retention earnout payments contingent earnout consideration on the acquisition date was $67,747 on the acquisition date and $67,747 as of March 31, 2013.

Revenue Goal Earnout Payments

The Seller shall be entitled to receive, in two installments, revenue goal earnout payments equaling, in the aggregate, up to $2,000,000. In the event that ad network revenue for the period beginning on January 1, 2013 and ending on June 30, 2013 is equal to or exceeds $5,159,700, the Company shall pay to the Seller an amount equal to the lesser of the product of $1,000,000 multiplied by a fraction, the numerator of which is the actual ad network revenue achieved during such period and the denominator of which is $5,733,000 and $1,000,000.

In the event that ad network revenue for the period beginning on July 1, 2013 and ending on December 31, 2013 is equal to or exceeds $6,407,100, the Company shall pay to the Seller an amount equal to the lesser of the product of $1,000,000 multiplied by a fraction, the numerator of which is the actual ad network revenue achieved during such period and the denominator of which is $7,119,000 and $1,000,000.

The estimated fair value of the revenue goal earnout payments contingent consideration on the acquisition date was $1,315,081 on the acquisition date and $1,315,081 as of March 31, 2013.

Private placement of 8% convertible promissory notes

During the first quarter of 2013, we received approximately $7,000,000 pursuant to a private placement of 8% convertible promissory notes (the “Notes”). A total of $2,250,000 of the proceeds was used to finance the Travora acquisition. We will use the balance of the proceeds to finance our remaining financial commitments pursuant to the Travora acquisition and for working capital purposes. The terms of the Notes are as follows:

Bearing interest at 8% per annum,

Principal and interest due and payable on or before February 15, 2015,

Prepayable by the Company upon 30 days’ notice,

The Notes are convertible into MediaShift common stock at the rate of $3.00 per share subject to anti-dilution provisions which provide that if the Company issues securities at a price below the conversion price of the Notes, the conversion price will be reduced to the lower amount,

The Notes may be converted at any time prior to maturity date at the option of the holder or the Company, and

Note holders received warrants to purchase MediaShift common stock in an amount equal to the number of shares the Notes are convertible into. Half of the warrants are exercisable at $4.00 per share up to July 31, 2013 and half are exercisable at $6.00 per share up to July 31, 2014.

The maximum number of common shares that may be issued through, as applicable, the conversion of the Notes and the exercise of the warrants which were sold in this private placement, is 5,193,346 shares. The Notes were offered and sold by officers and directors of the Company who received no remuneration for the sale of the securities, as well as by three placement agents who received commission of 6% of principal raised by those agents. Sales of the Notes were made pursuant to Section 4(a)(5) and Section 4(a)(2) of the Securities Act, and Rule 506 promulgated thereunder, solely to “accredited investors” as defined in Rule 501(a) of Regulation D. The securities sold in this transaction were not registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

A total of 2,335,723 shares of common stock with a fair value of $10,393,967 was issued in retirement of the 8% notes. A loss of $4,710,423 was recorded on the extinguishment.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not Applicable

Item 4T4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), as of ~~September~~March 3031, ~~2012~~2013. Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are effective in alerting them on a timely basis to material information relating to our Company required to be included in our reports filed or submitted under the Exchange Act.

~~Changes in Internal Controls~~30

~~There~~Changes ~~were no significant changes (including corrective actions with regard to significant deficiencies or material weaknesses)~~ in ~~our~~Internal internal controls over financial reporting that occurred during the quarter September 30, 2012,that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.Controls

25There were no significant changes (including corrective actions with regard to significant deficiencies or material weaknesses) in our internal controls over financial reporting that occurred during the quarter March 31, 2013, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

~~Part II. Other Information~~31

Part II. Other Information

Item 1. Legal Proceedings

There are no material outstanding or threatened legal claims by or against us.

Item 1A. Risk Factors

~~There~~Except as follows, there have been no material changes to the information included in response to Item 1A. “Risk Factors” in our ~~2011~~2012 Annual Report on Form 10-K.

Our revenue could decline if we fail to effectively manage our existing advertising space and our growth could be impeded if we fail to acquire new advertising space

Our success depends in part on our ability to effectively manage our existing advertising space as well as successfully access additional advertising space through web publishers, network providers, and on ad exchanges. The web publishers and network providers that we sell advertising for are not typically bound by long-term contracts that ensure us a consistent supply of advertising space, which we refer to as inventory. In addition, web publishers and network providers can change the amount of inventory they make available to us at any time. If a web publisher or network provider decides not to make advertising space from its websites or network available to us, we may not be able to replace this advertising inventory with advertising inventory from other web publishers or network providers that have comparable traffic patterns and user demographics quickly enough to fulfill our advertisers' requests. This would result in lost revenue.

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities

None

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

None

Item 5. Other Information

None

Item 6. Exhibits

(a) Exhibits required by Item 601 of Regulation S-K are as follows:

Exhibits required by Item 601 of Regulation S-K are as follows:


Designation of Exhibits in This Report		Description of Exhibit
31.1		Certification of Chief Executive Officer of Periodic Report Pursuant to Rule 13a-15(e) or Rule 15d-15(e).*
31.2		Certification of Chief Financial Officer of Periodic Report Pursuant to Rule 13a-15(e) or Rule 15d-15(e).*
32.1		Certification by Chief Executive Officer of Periodic Report Pursuant to 18 U.S.C. Section 1350.*
32.2		Certification by Chief Financial Officer of Periodic Report Pursuant to 18 U.S.C. Section 1350.*
101.INS		XBRL Instance Document**
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document**
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document**
101.LAB		XBRL Taxonomy Extension Labels Linkbase Document**
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document**
101.SCH		XBRL Taxonomy Extension Schema Document**

Designation of Exhibits in This Report		Description of Exhibit
31.1		Certification of Chief Executive Officer of Periodic Report Pursuant to Rule 13a-15(e) or Rule 15d-15(e).*
31.2		Certification of Chief Financial Officer of Periodic Report Pursuant to Rule 13a-15(e) or Rule 15d-15(e).*
32.1		Certification by Chief Executive Officer of Periodic Report Pursuant to 18 U.S.C. Section 1350.*
32.2		Certification by Chief Financial Officer of Periodic Report Pursuant to 18 U.S.C. Section 1350.*

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

*filed herewith

**Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections

2633

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		JMG Exploration, Inc
		MediaShift, Inc
Date: November 16, 2012		By:/s/David Grant
Date: May 15, 2013		By:/s/David Grant
		David Grant
		Chief Executive Officer

2734

Filing Compare · MediaShift, Inc.