UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_________________________________________

FORM 10-K

_________________________________________

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

For the fiscal year ended December 31, ~~2012~~2013

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

For the transition period from ______ to ______.

Commission File Number: ~~333~~000-~~148516~~54733

_________________________________________

ELAYAWAY, INC.

(Exact name of registrant as specified in its charter)

_________________________________________

Delaware		20-8235863
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)
1650 Summit Lake Drive, Suite 103 Tallahassee, FL		32317
3111 Mahan Drive, Suite 20 #121 Tallahassee, FL		32308
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (850) ~~219~~583-~~8210~~5019

_________________________________________

Securities registered under Section 12(b) of the Exchange Act:

None

Securities registered under Section 12(g) of the Exchange Act:

Common Stock, $0.001 Par Value

(Title of class)

_________________________________________

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. o Yes x No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. o Yes x No

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

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x o

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

Large Accelerated Filer o Accelerated Filer o Non-Accelerated Filer o Smaller Reporting Company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes x No

On June 30, 2012, the last business day of the registrant’s most recently completed second quarter, the aggregate market value of the Common Stock ~~held by non-affiliates~~ of the registrant was $1,000,922, based upon the closing price on that date of the Common Stock of the registrant on the OTC Bulletin Board system of $0.015. For purposes of this response, the registrant has assumed that its directors, executive officers and beneficial owners of 5% or more of its Common Stock are deemed affiliates of the registrant.

As of as of March 28, ~~2013~~2014 the registrant had 12,~~961~~640,~~840~~511,~~674~~601 shares of its Common Stock, $0.001 par value, outstanding.

TABLE OF CONTENTS

		Page
PART I.
Item 1.	Business		4
Item 1A.	Risk Factors		1411
Item 1B.	Unresolved Staff Comments		2219
Item 2.	Properties		2319
Item 3.	Legal Proceedings		2319
Item 4.	Mine Safety Disclosures		2320
PART II.
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		2421
Item 6.	Selected Financial Data		2622
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operation		2622
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk		3026
Item 8.	Financial Statements and Supplementary Data		3127
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure		3228
Item 9A.	Controls and Procedures		3228
Item 9B.	Other Information		3329
PART III.
Item 10.	Directors, Executive Officers and Corporate Governance		3430
Item 11.	Executive Compensation		3631
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		3832
Item 13.	Certain Relationships and Related Transactions, and Director Independence		3933
Item 14.	Principal Accounting Fees and Services		3933
PART IV.
Item 15.	Exhibits, Financial Statement Schedules		4034
	Signatures		4135
	Exhibits

FORWARD LOOKING STATEMENTS

This report on Form 10-K contains forward-looking statements within the meaning of Rule 175 of the Securities Act of 1933, as amended, and Rule 3b-6 of the Securities Act of 1934, as amended, that involve substantial risks and uncertainties. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about our industry, our beliefs and our assumptions. Words such as “anticipate,” “expects,” “intends,” “plans,” “believes,” “seeks” and “estimates” and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this Form 10-K. Investors should carefully consider all of such risks before making an investment decision with respect to the Company’s stock. The following discussion and analysis should be read in conjunction with our consolidated financial statements for eLayaway, Inc. Such discussion represents only the best present assessment from our Management.

PART I

Item 1. Business

General Overview

We are a consolidated group of technology companies that specialize in the ~~payment’s~~payments industry, for both online and bricks and mortar merchants. The Company also has several subsidiaries specializing in online malls, subscribed merchants, sports and entertainment ticket payment platforms, a travel payment platform, a health-related payment platform, and other avenues. The Company engages consumers under its multiple brand names and as a white-label payment technology provider to medium and large merchants.

We were founded in 2005 and the initial years were spent raising capital through friends and family thereby facilitating the growth of the Company from its pilot program launched 2006 and brand awareness stages to the extensive launch in 2012.

eLayaway, Inc.

eLayaway, Inc. (“ELAY”) is the parent company of six ~~eight~~ subsidiaries; DivvyTech, Inc. (“DivvyTech”), eLayaway.com, Inc. (“eLayaway.com”), PrePayGetaway.com, Inc. (“PrePayGetaway”), NuVidaPaymentPlan.com, Inc. (“NuVida”), PlanItPay.com, Inc. (“PlanItPay”), and Pay4Tix.com, Inc. (“Pay4Tix”)~~, Centralized Strategic Placements, Inc~~. ~~(“CSP”), and eLayaway Australia Pty, Ltd. (“eLayaway Australia”).~~ ELAY provides the management, administrative, marketing and other pertinent focuses for its subsidiaries.

Organizational Chart

(1) Active 2011

(2) Inactive 2011

(3) Formed in 2012

(4) Acquired and discontinued in 2012

DivvyTech, Inc.

DivvyTech’s Technology and Product Development Division empowers retailers and payment processors with a customizable automated recurring payments administration system designed to manage layaway, leasing, micro-lending, layaway-credit hybrid programs and Automated Clearing House (“ACH”) programs. Supported consumer funding sources include: ACH, cash, credit and debit cards. By providing flexible and affordable payment options, retailers and processors increase consumer spending power and enhance their user experience.

DivvyTech’s Business Development and Merchant Network manages ELAY’s subsidiaries and provides sales and marketing support.

eLayaway.com, Inc.

Formerly known as eLayawayCOMMERCE, Inc., eLayaway.com is a patent-pending electronic, or Internet-based, payment process that was conceived to provide additional payment options to consumers and merchants (online and brick and mortar) alike. eLayaway®, like PayPal™, is a comprehensive solution for centralized payment processing. While PayPal™ processes upfront full payment for goods and services, eLayaway® uses a layaway process to facilitate payment over time with delivery occurring once all payments are made in full. While credit card issuers continue to reduce credit lines, charge predatory interest rates, and/or cancel accounts, eLayaway® ~~provides~~ fills the growing void left by the credit card industry’s pull back.

5The eLayaway® budget-conscience payment option allows for consumer-directed partial payments to be made over time and for goods and/or services to be rendered once all payments have been made in full. The Company’s mission is to empower consumers with affordable and fiscally responsible payment methods and services. Equally as important, this provides merchants, both online and brick and mortar, more opportunities to provide goods and/or services thereby potentially being the difference for companies struggling to maintain or increase cash flow and/or affording them the opportunity to maintain their employment levels due wholly or partially to the options provided by eLayaway®.

The eLayaway® budget-conscience payment option allows for consumer directed partial payments to be made over time and for goods and/or services to be rendered once all payments have been made in full. The Company’s mission is to empower consumers with affordable and fiscally-responsible payment methods and services. Equally as important, this provides merchants, both online and brick and mortar, more opportunities to provide goods and/or services thereby potentially being the difference for struggling companies in their survival, maintaining cash flow for these companies, and/or affording them the opportunity to maintain their employment levels due wholly or partially to the options provided by eLayaway®.

We can accommodate multiple funding sources including, but not limited to, ACH, eLayaway Virtual Terminal, cash, bank debit cards, stored value debit cards, prepaid cards, retail location processor, mobile apps, and more.

The eLayawayMALL, the Internet’s largest layaway marketplace, provides eLayaway members with a place to purchase a variety of products and services made available through an affiliate relationship with name brand retailers. The mall provides a platform for affiliates and merchants to present their offering to consumers.

PlanItPay.com, Inc.

PlanItPay.com is an eCommerce merchant supported by a network of affiliate relationships.

Pay4Tx.com, Inc.

Formerly known as eLayawaySPORTS, Inc., Pay4Tix.com is a member-based sports and event tickets payment platform. Pay4Tix.com makes sporting and event tickets easier for consumers to afford by automating a pre-payment plan. The payment platform can be used by professional sports teams and event organizers to present an event and provide a layaway-based payment option to consumers.

PrePayGetaway.com, Inc.

Formerly known as eLayawayTRAVEL,Inc., PrePayGetaway.com is a member-based travel payment platform. PrePayGetaway.com makes travel packages easier for consumers to afford by automating a pre-payment plan. The payment platform can be used by travel agents and providers to present travel packages with a layaway-based payment option.

NuVidaPaymentPlan.com, Inc.

Formerly known as eLayawayHEALTH, NuVidaPaymentPlan.com is a member-based healthcare payment platform. NuVidaPaymentPlan.com makes healthcare services easier for patients to afford by automating a pre-payment plan. The payment platform can be used by healthcare providers to set up and manage a layaway-based payment option.

Centralized Strategic Placements, Inc.

CSP is a company whose technology supports member-based shopping exchanges that serve 14 million Federal Government employees, various retailer partners, distributors and manufacturers. Acquired in February 2012, the Company’s mall technology and merchant network provides a solid technological foundation from which to build and support hosted retail environments. On October 1 2012, the Company discontinued the operations of CSP and, through a licensing agreement with Channel Worth, owned by one of the former owners of CSP, has restructured and begun manufacturing a hosted retail platform called CSPEX. This technology is the core of eLayaway’s Hosted Layaway environment for retailers.

eLayaway Australia Pty, Ltd.

eLayaway Australia is a majority-owned subsidiary formed in Australia. It will represent the Company’s expansion into the Australia market and other international licensing efforts beyond.

The Company reports its business under the following SIC Codes:

SIC Code		Description

6141		Personal Credit Institutions
5961		Retail - Catalog

Our corporate headquarters are located at ~~1650~~3111 ~~Summit~~Mahan ~~Lake~~ Drive, Suite ~~103~~20 #121, Tallahassee, Florida ~~32317~~32308. The Company’s primary web site is www.elayaway.com . The web site is not incorporated in this Form 10-K.

The Industry

Consumer Economics

~~For~~The ~~the first time since the Great Depression, the~~ national personal savings rate has reached negative levels. That fact coupled with overwhelming consumer debt and Americans living 10 to 20 years longer indicates that the next several decades may prove difficult for many.

Banks and credit card companies are partly to blame for our predicament. Their aggressive marketing tactics and minimum payment strategies have made it easy for consumers to overspend and overpay for money borrowed. Recent pressure from federal regulators has required many credit card companies to double their minimum payment requirements from 2% to 4% of the balance. Many of their customers living on a tight budget are finding it difficult to adjust. They are experiencing the true cost of credit. As interest rates increase (up to 29.99%) and consumers begin to reevaluate their spending habits, smart merchants will seek consumer-friendly payment alternatives. The Federal government is attempting to regulate the credit card industry but, as in the past, these billion dollar companies will continue to find loopholes to the benefit of the credit card company and sometimes to the detriment of the cardholder.

The debt crisis has been solidified by the recent sub-prime market crash. All banks have drastically increased their credit qualifications due to increased defaults and delinquencies. This effect has left fewer and fewer consumers with access to credit. Credit card companies have decreased credit limits and/or cancelled accounts. The fall of the real estate market has also slowed spending from home equity accounts as a significant percent of mortgages are close to or exceed the current market value of the mortgaged property. These factors have created a storm that is causing a major decline in the access and use of credit. This situation has caused millions of consumers (and merchants alike) to seek out alternatives like eLayaway®. The FTC has acknowledged layaway as a viable option (see http://www.ftc.go v/bcp/edu/pubs/consumer/alerts/alt173.shtm and http://www.ftc.gov/bcp/edu/pubs/business/adv/bus17.shtm).

The sensitive nature of managing payments from the consumer’s perspective is the driving force behind many of the Company’s recent innovations. By leveraging the core of ELAY’s technology, the Company will be able to develop payment solutions that enhance the user experience and offer the consumer unprecedented access to the payment process.

Online Payment Processing

The most important part of selling online is securely accepting payments from customers. These payments range from a single transaction (i.e. the purchase of an item from a web site) to a series of transactions from a customer (i.e. the payment of membership fees or installment payments via a web site). Online payment processing offers a customer the convenience of submitting their bank account, credit card or other forms of payment on a web site, and allows merchants to receive money from this transaction. Recurring payment processing allows merchants to set up regularly scheduled payments for their customers for a series of transactions.

Online payment processing requires coordinating the flow of transactions among a complex network of financial institutions and processors. Fortunately, DivvyTech’s technology has simplified this process so that retailers, payment processors and financial institutions can create and manage a payment solution that is secure and seamless for all sides of the transaction. eLayaway.com is an example of a payment solution that is “Powered by DivvyTech.” It allows consumers to use ACH and cash payments collected via MoneyGram® to fund and manage layaway purchases. Additional payment solutions that are currently powered by DivvyTech include NuVidaPaymentPlan.com, Pay4Tix.com and PrePayGetaway.com.

Growth of the payment industry depends on continuous innovations designed to improve the security, efficiency and marketability of future payment solutions. PayPal™, the premier upfront payment source, became a powerful alternative to eBay®’s Billpoint (acquired by eBay® in 2002 for $43.5 million) resulting in eBay® buying the superior PayPal™ (also in 2002) for $1.5 billion. eBay® also acquired BillMeLater® in 2008 for $850 million.

Online Retail

There are currently over 300 online retailers that each generates more than $20,000,000 in annual sales volume. We classify these merchants as enterprise-level merchants. This merchant segment represents 50% of all transactions online. Many of these enterprise level merchants are experiencing an increase in the denial rates of their own branded credit programs.

Additionally, over 900,000 small business merchants that each generates less than $20,000,000 in annual sales volume operate in the e-commerce marketplace. These merchants have traditionally struggled to offer additional credit-based multiple payment processes. The small business merchant market is growing by an average of 30% per year.

Customers

Merchants

The merchants that currently utilize and/or are target merchants range from online retailers, brick and mortar retailers, sports teams, travel companies, service industries, and health providers. The Company currently has four divisions; Retail, Event Tickets, Travel, and Healthcare. Each is managed under their individual brands and web sites. They are: eLayaway.com, Pay4Tix.com, PrePayGetaway.com and NuVidaPaymentPlan.com respectively.

eLayaway.com supports the traditional retail industry at large. This includes both online and brick and mortar retailers that sell general merchandise such as electronics, jewelry, appliances, toys, apparel, automotive, etc. Major merchants/affiliates ~~include~~have included Best Buy®, The Home Depot®, Bass Pro Shop®, Apple®, Hyatt®, Ace®, GNC®, Mattel®, Radio Shack®, and others.

Pay4Tix.com currently provides layaway services for the purchase of season tickets for professional sports teams such as the NFL Minnesota Vikings. Efforts are in process for expanding the team coverage with certain National Football League teams, the Major League Baseball, the National Basketball Association, and the National Hockey League. The platform is also being marketed to colleges and universities as well as event organizers. The service would be applicable to event tickets and the sale of memorabilia and other related items.

PrePayGetaway.com is currently focused on the cruise industry and other packaged travel programs. Relationships with other travel package providers and individual agents are pending.

NuVidaPaymentPlan.com will be offered to healthcare providers interested in offering payment flexibility for individuals desiring elective procedures. Disciplines include but are not limited to Cosmetic, Dentistry, Veterinary and more.

Consumers

The consumers that utilize our online payment processor are not defined by any particular segment of the population as our service is used for anything from putting back-to-school items on layaway to putting season tickets for a professional sports team on layaway. Although the average layaway is around $450, our layaways have historically ranged from approximately $25 to $19,000. The consumers, due to the economic situations, have evolved into “planners” and are grasping the ~~budget~~concept ~~concepts~~of budgeting which parallels the concept of what eLayaway can accommodate.

Historically, the consumers that subscribe to memberships are based in the United States. The eLayaway® concept can be easily expanded to work with consumers internationally, especially countries such as Australia, Canada, and various European countries. In 2011, the Company launched eApartado.com, the Spanish version of the eLayaway.com web site.

Spanish Web Site

On March 21, 2011 eLayaway, Inc. launched eApartado.com, a Spanish version of its web site. The site replicates the English web site, eLayaway.com. Site content, FAQ’s, alerts and the user interface will be offered in both English and Spanish. Although the application was designed to support multiple languages as well as manage different currencies, payment processing will be limited to U.S. merchants transacting in USD at this time. Spanish was chosen as the Company’s first multi-lingual release due to consumer demand and marketing opportunities with strategic partners currently engaged in the Hispanic market. The site will launch utilizing eLayaway’s existing network of merchants and affiliates. The Spanish version of eLayaway.com is accessible by clicking on a tab at the top of eLayaway.com or directly by visiting eApartado.com. The brand and the process will continue to be referred to as eLayaway.

According to the U.S. Census Bureau, approximately 15% of the U.S. population is Hispanic or over 45 million people. A recent Pew Home Broadband Adoption Report showed that 40% of Hispanic households have Internet connections at home. In 2010, comScore reported that more than 15% of U.S. Hispanic Internet users prefer Spanish as their language of choice when browsing the Internet.

Our Products and Services

We are active in the alternative payment processor industry providing online layaway to Internet based companies, to brick and mortar retailers and to other industries, including but not limited to, travel, sports and health.

Our Products

Members Products

eLayaway® Membership

eLayaway® provides its members with a debt-free payment option that enables them to purchase the items they want and/or need most, using a flexible payment plan that fits their budget. Our members also have access to various amenities on eLayaway® such as its patent pending payment calculator and extensive merchant network. In addition, customers receive weekly email newsletters that keep them informed about upcoming events, shopping trends, and benefits of eLayaway®. Our goal is to encourage a member base of smart, credit-conscious shoppers, who understand the value of intelligent shopping and remain loyal to eLayaway®.

There are two types of eLayaway® members: Standard and Advantage. Standard memberships are free to the consumer. Standard members pay a transaction fee to use the system. Advantage members are charged a monthly membership fee and a discount on future transactions. Qualified purchases are also reported to PRBC® where their payment history is recorded and reported to FICO® where it helps improve their Enhanced FICO® Score.

Merchant Products

Merchant Network

eLayaway® provides its online and brick and mortar merchants with a profitable alternative payment option that allows them to offer a unique feature that sets them apart from their competition. This option allows merchants to increase their market reach in addition to the merchants collecting 100% of the asking price for their goods and services. Many merchants use eLayaway® as a selling point to their customers and actively market eLayaway® throughout their web sites to stimulate interest in their shoppers. Merchants can generate additional revenue from selling products to shoppers who otherwise could not afford to buy them. eLayaway® merchants also benefit from the increased traffic their web sites generate from the growing member base of eLayaway®.

Merchants pay subscription and transaction fees to integrate and use the eLayaway® system. In exchange for these fees, merchants receive access to the eLayaway® payment option, limited marketing support, and inclusion in the eLayaway® merchant directory and search engine. The subscription fee and transaction fees are recognized as revenue on a monthly basis over the twelve -month subscription period.

The Layaway Generator™

The Layaway Generator is a prebuilt web-based application that allows brick and mortar merchants to create and manage custom layaway orders through their eLayaway Merchant Account. The Layaway Generator™ is simple to use and enables any merchant who does not have an eCommerce web site or POS kiosk to offer and manage layaway as a payment option to their customers. It is ideal for phone orders, email orders and physical storefronts. There is no integration required to get started and the process takes only minutes. A variation of The Layaway Generator™, called The Payment Plan Generator, will be used to support the healthcare providers that will be offering the NuVida Payment Plan. There is a one-time set up fee charged to register, as well as a transaction fee for funds processed through the program.

108

CSPEX (Centralized Strategic Placements Exchange) Network Access

CSPEX is a hosted eCommerce platform for retailers interested in accessing the shopping exchanges offered by several of the United States government federal agencies, including the armed forces. Additional member-based shopping exchanges are offered under this program. CSPEX offers retailer unprecedented access to millions of consumers. Retailers pay an integration fee charged for access to the network and commissions on any sales generated by the members.

We have several product/service initiatives under development:

Onsite Advertising Program

Merchants and affiliates are now able to advertise within the eLayawayMALL and member emails. The ability to offer and manage advertising throughout the eLayaway sites was the result of technology acquired from CSP.

eLayaway Hosted Mall Upgrades

The scope of the eLayawayMALL.com, has expanded to allow existing eLayaway merchants and affiliates to buy advertising space in the mall and to upload and manage their own products and services within the mall. The acquisition of CSP brought with it the capabilities and programming needed to develop this initiative.

Post-Denial Conversion™

This product empowers lenders and retailers with the ability to convert a declined credit application into a sale by offering consumers a flexible and affordable layaway-credit hybrid plan. Retailers can choose to offer a full or partial layaway plan for customers that are declined credit. Additionally, credit can be used to collect a deposit while layaway can subsidize the sale.

Recurring Payment Processor

Offers retailers, payment processors and lenders the ability to set up, manage and automate a recurring payment withdrawal from a variety of payment methods. Withdrawal amounts and payment dates are preset by the biller. Duration and payment frequencies can be set to start or stop at any time, including in perpetuity. Common uses for subscription billing include: membership dues, newsletter fees, annual dues, lease payments, recurring donations, credit programs, annuities and subscription payment services.

Delayed Payment Processor

The product is designed to support secured financing programs. The process offers retailers, collection agencies and payment processors the ability to schedule a single payment from a consumer’s chosen payment method at a later date. Improve your bottom line and decrease your monthly collection turnover by providing this flexible payment alternative. Common uses include collection services and delayed billing.

Private Licensing Program

The eLayaway calculator will be customizable to match a licensed partner’s brand/program. Additional services we may offer in the future include multiple languages for the U.S. site, international sites and enhanced credit reporting capabilities.

Relational Database Enhancements

Improved reporting and enhanced analytics will provide valuable data for the Company and its strategic partners. Industry statistics, trend reports and detailed transactional data will offer a unique and highly accurate insight into future consumer behavior. The precognitive nature of the data will also prove invaluable to the manufacturing, logistics and supply-chain management industry.

~~eLayawayADVANTAGE Mall~~9

eLayaway ADVANTAGE Mall

A members-only eCommerce retail mall will be launched that will provide special discounts to eLayawayADVANTAGE members. This will benefits its members by saving them money and will provide added value to the popular program. The recent acquisition of CSP brought with it the capabilities and programming needed to expedite this initiative.

Competition

eLayaway®’s competitors are not limited to companies that offer online layaway. The Company is also in competition for end consumers with payment processors that do not offer layaway. The three top alternative payment processors are currently PayPal™, Google Checkout™, and BillMeLater®. All three of these processors provide distinctive features that set them apart from their competition. In addition to Internet companies, the Company faces competition from other merchant services and finance companies, including web service providers and from traditional point-of-sale (POS) equipment, software providers and systems already installed into operating merchants. The Company expects that large retailers will adopt a multichannel solution beginning with the adoption of e-commerce integration followed by brick and mortar application. If large (top 300) retailers reintroduce layaway in stores prior to eLayaway® integration, the Company’s ability to penetrate them could be harmed.

Strategy

In addition to building upon our foundation of fiscally-responsible spending and providing both consumers and merchants affordable and relevant financial solutions, we are leveraging eLayaway’s technology to create a core technology that could be used to create various payment solutions, including other layaway payment processors. This approach offers would-be competitors the affordable option of using DivvyTech’s core technology to create and manage their own payment solution, thereby ensuring our involvement in their endeavor and, more importantly, ensuring the integrity of the industry.

By leveraging state-of-the-art technology, implementing the latest sales strategies, engaging the market with effective marketing and following strict policies and procedures, we intend to become the standard of excellence by which others are measured. Continued development and innovation will ensure our relevance far into the future. Both our brands and our products will continue to evolve.

Suppliers

We are not dependent on any significant product or service from third parties. We have strategic alliances with certain third parties.

Intellectual Property

Patents

We had a U.S. Provisional systems patent pending (Serial No. 60/727,519), non-provisional, executed inventor assignment document (Serial No. 11/550,301) for “Electronic Payment System and Method.” The patents are filed under the company name MDIP, LLC, which is a partnership incorporated for the full purpose of accommodating the Company’s current and future patents. The partnership was wholly-owned by eLayaway.com, Inc. until MDIP, LLC was dissolved in 2010 and all rights of MDIP, LLC were assigned to eLayawayCOMMERCE, Inc. On January 31, 2013, the Company filed a United States Provisional Patent Application for a customizable layaway and payment system.

Registered Trademarks

We have registered trademarks with the United States Patent and Trademark Office (USPTO) for the company name “eLayaway (stylized and/or with design)” (Serial No. 77/212,248); the Company logo “a stylized E in an egg shaped circle” (Reg No. 3,487,235 - current); and the Company tagline “Credit is Overrated”. The Company has capitalized $6,468 for the trademarks.

Copyrights

Although the Company does not hold registered copyrights, the Company does claim copyright protection on all text and graphics used in conjunction with their published digital media (web site and DVD) and published printed promotional materials as stated generally in Title 17 of the United States Code, Circular 92, Chapter 1, Section 102.

We plan to apply for additional patents, copyrights and trademarks as applicable, necessary or desirable in the evolution of our business.

Regulatory Matters

Our operations are not currently subject to any governmental regulations specific to layaway. We do follow and consult relevant policies and procedures established for financial institutions to manage internal operations.

Employees

As of March 1015, ~~2012~~20143, we had a total of ~~five~~one full time ~~employees~~employee and ~~four~~three ~~part-~~full time ~~employees~~consultants. Our employees are not party to any collective bargaining agreement. We believe our relations with our employees are good.

Property

We lease approximately ~~3,000~~200 square feet of office space in Tallahassee pursuant to a lease that ~~will~~is ~~expire~~month onto ~~January 31, 2015~~month. This facility serves as our corporate headquarters.

Available Information

All reports of the Company filed with the SEC are available free of charge through the SEC’s web site at www.sec.gov. In addition, the public may read and copy materials filed by the Company at the SEC’s Public Reference Room located at 100 F Street, N.E., Washington, D.C. 20549. The public may also obtain additional information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330.

Item 1A. Risk Factors

The following important factors among others, could cause our actual operating results to differ materially from those indicated or suggested by forward-looking statements made in this Form 10-K or presented elsewhere by management from time to time.

There are numerous and varied risks, known and unknown, that may prevent us from achieving our goals. If any of these risks actually occur, our business, financial condition or results of operation may be materially adversely affected. In such case, the trading price of our common stock could decline and investors could lose all or part of their investment.

Risks Related to Our Business

We have sustained recurring losses since inception and expect to incur additional losses in the foreseeable future.

We were formed on September 8, 2005 and have reported annual net losses since inception. For our year ended December 31, ~~2012~~2013 and ~~2011~~2012, we experienced net losses of $24,~~952~~568,~~594~~ 261 and $42,~~032~~861,~~982~~346, respectively. We used cash in operating activities of $1291,~~063,322~~ 931 and $1,~~120~~063,~~069~~322 in ~~2012~~2013 and ~~2011~~2012, respectively. As of December 31, ~~2012~~2013, we had an accumulated deficit of $1823,~~586~~146,~~857~~869. In addition, we expect to incur additional losses in the foreseeable future, and there can be no assurance that we will ever achieve profitability. Our future viability, profitability and growth depend upon our ability to successfully operate, expand our operations and obtain additional capital. There can be no assurance that any of our efforts will prove successful or that we will not continue to incur operating losses in the future.

We do not have substantial cash resources and if we cannot raise additional funds or generate more revenues, we will not be able to pay our vendors and will probably not be able to continue as a going concern.

As of December 31, ~~2012~~2013, our available cash balance was $223,~~823~~115. We will need to raise additional funds to pay outstanding vendor invoices and execute our business plan. Our future cash flows depend on our ability to enter into, and be paid under, contracts with merchants to provide our online layaway services. There can be no assurance that additional funds will be available when needed from any source or, if available, will be available on terms that are acceptable to us.

We may be required to pursue sources of additional capital through various means, including joint-venture projects and debt or equity financings. Future financings through equity investments will be dilutive to existing stockholders. Also, the terms of securities we may issue in future capital transactions may be more favorable for our new investors. Newly-issued securities may include preferences, superior voting rights, the issuance of warrants or other convertible securities, which will have additional dilutive effects. Further, we may incur substantial costs in pursuing future capital and/or financing, including investment banking fees, legal fees, accounting fees, printing and distribution expenses and other costs. We may also be required to recognize non-cash expenses in connection with certain securities we may issue, such as convertible notes and warrants, which will adversely impact our financial condition and results of operations.

Our ability to obtain needed financing may be impaired by such factors as the weakness of capital markets and the fact that we have not been profitable, which could impact the availability or cost of future financings. If the amount of capital we are able to raise from financing activities, together with our revenues from operations, is not sufficient to satisfy our capital needs, even to the extent that we reduce our operations accordingly, we may be required to cease operations.

We have a limited operating history, and it may be difficult for potential investors to evaluate our business.

We began operations in September 2005. Our limited operating history makes it difficult for potential investors to evaluate our business or prospective operations. Since our formation, we have generated only limited revenues. Our revenues were $~~116~~119,~~153~~996 and $~~105~~116,~~400~~153 for the years ended December 31, ~~2012~~2013 and ~~2011~~2012, respectively. As an early-stage company, we are subject to all the risks inherent in the initial organization, financing, expenditures, complications and delays inherent in a relatively new business. Investors should evaluate an investment in us in light of the uncertainties encountered by such companies in a competitive environment. Our business is dependent upon the implementation of our business plan, as well as the ability of our merchants to enter into agreements with consumers for their respective products and/or services. There can be no assurance that our efforts will be successful or that we will be able to attain profitability.

Competition may increase in the online layaway market.

We may in the future compete for potential customers with companies not yet offering online layaway services but currently offering other payment alternatives and/or new companies to the industry. Competition in the alternative payment industry may increase in the future, partly due to the current economic situation in the United States and internationally. Increased competition could result in price reductions, reduced margins or loss of market share and greater competition for major merchants.

There can be no assurance that we will be able to compete successfully against future competitors. If we are unable to compete effectively, or if competition results in a deterioration of market conditions, our business and results of operations would be adversely affected.

Our profitability depends, in part, on our success and brand recognition and we could lose our competitive advantage if we are not able to protect our trademarks and pending patents, if issued, against infringement, and any related litigation could be time-consuming and costly.

We believe our brand has gained substantial recognition by consumers and merchants in the United States. We have registered the “eLayaway” and the “e” egg trademarks with the United States Patent and Trademark Office. Use of our trademarks or similar trademarks by competitors in geographic areas in which we have not yet operated could adversely affect our ability to use or gain protection for our brand in those markets, which could weaken our brand and harm our business and competitive position. In addition, any litigation relating to protecting our trademarks and patents against infringement could be time consuming and costly.

The success of our business depends on the continuing contributions of Sergio A. Pinon, founder, and other key personnel who may terminate their employment with us at any time, and we will need to hire additional qualified personnel.

We rely heavily on the services of Sergio A. Pinon, founder, ~~vice-~~chairman of the board of directors and our chief executive officer, as well as several other management personnel. Loss of the services of any such individual would adversely impact our operations. In addition, we believe our technical personnel represent a significant asset and provide us with a competitive advantage over many of our competitors and that our future success will depend upon our ability to retain these key employees and our ability to attract and retain other skilled financial, marketing, technical and managerial personnel.

1512

If we are unable to attract, train and retain highly qualified personnel, the quality of our services may decline and we may not successfully execute our internal growth strategies.

Our success depends in large part upon our ability to continue to attract, train, motivate and retain highly skilled and experienced employees, including technical personnel. Qualified technical employees periodically are in great demand and may be unavailable in the time frame required to satisfy our customers’ requirements. While we currently have available technical expertise sufficient for the requirements of our business, expansion of our business could require us to employ additional highly skilled technical personnel.

There can be no assurance that we will be able to attract and retain sufficient numbers of highly skilled technical employees in the future. The loss of personnel or our inability to hire or retain sufficient personnel at competitive rates of compensation could impair our ability to secure and complete customer engagements and could harm our business.

We are exposed to risks associated with the ongoing financial crisis and weakening global economy, which increase the uncertainty of consumers purchasing products and/or services.

The recent severe tightening of the credit markets, turmoil in the financial markets, and weakening global economy are contributing to a decrease in consumer confidence. If these economic conditions are prolonged or deteriorate further, the market for layaway services and online payment solutions in general will decrease accordingly.

Risks Relating to Our Industry

We have experienced technological changes in our industry. New technologies may provide additional alternatives and result in a decrease in our consumer base.

The alternative payment industry, in general, is subject to technological change. Our future success will depend on our ability to appropriately respond to changing technologies and changes in function of products and quality. If we adopt products and technologies that are not attractive to consumers, we may not be successful in capturing or retaining a significant share of our market. In addition, some new technologies are relatively untested and unperfected and may not perform as expected or as desired, in which event our adoption of such products or technologies may cause us to lose money.

Existing regulations, and changes to such regulations, may present technical, regulatory and economic barriers to the use of our products and/or services, which may significantly reduce demand for our products.

Our services, which utilize the consumers’ monies and maintained in accounts with our banks, HSBC Bank and SunTrust Bank, are not directly regulated at this time. The Company does follow and consult relevant policies and procedures established for financial institutions to manage internal operations.

Our services, which utilize the consumers’ monies and maintained in an escrow account with our bank, SunTrust Bank, are not directly regulated at this time. The Company does follow and consult relevant policies and procedures established for financial institutions to manage internal operations.

More individuals are using non-PC devices to access the Internet.

The number of people who access the Internet through devices other than personal computers, including mobile telephones, personal digital assistants (“PDA”s), smart phones and handheld computers and video game consoles, as well as television set-top devices, has increased dramatically in the past few years. If the Company is slow to develop products and technologies that are compatible with non-PC communications devices, eLayaway® will fail to capture a significant share of an increasingly important portion of the market.

1613

Interruption or failure of our information technology and communications systems could hurt the Company’s ability to effectively provide its products and services, which could damage eLayaway®’s reputation and harm its operating results.

The availability of the Company’s products and services depends on the continuing operation of eLayaway®’s information technology and communications systems. Any damage to, or failure of, eLayaway®’s systems could result in interruptions in its service, which could reduce the Company’s revenues and profits, and ultimately, damage eLayaway®’s brand name.

Our business depends on the services of our bank, SunTrust.

SunTrust is considered to be a large national bank. Its stability, or lack thereof, could create various issues related to our services. Other banks are viable alternatives but, without the services of a stable international bank, the offering of our services could be at risk.

Our success depends on providing products and services that make using the Internet and eLayaway® a sensible and enjoyable experience for our members and a profitable supplement for the Company’s merchants.

Our Company must continue to invest significant resources in research and development to enhance its web search technology, its existing products and services, and introduce new products and services that consumers can easily and effectively use. The Company’s operating results would also suffer if our innovations were not responsive to the needs of our users. This may force the Company to compete in different ways and expend significant resources to remain competitive.

Our Company has experienced, and continues to experience, rapid growth in operations, which has placed, and will continue to place, significant demands on its management, operational and financial infrastructure.

If the Company does not effectively manage its growth, the quality of its products and services could suffer, which could negatively affect the Company’s brand and operating results. To effectively manage this growth, the Company will need to continue to improve its operational, financial and management controls and its reporting systems and procedures. Failure to implement these improvements could hurt the Company’s ability to manage its growth and financial position.

The brand identity that the Company has developed has significantly contributed to the success of its business. Maintaining and enhancing the consumer-facing “eLayaway®” brand and the business-facing DivvyTech brand is critical to expanding the Company’s base of users, advertisers, members, and other partners.

The Company believes that the importance of brand recognition will increase due to the relatively low barriers to entry in the Internet market. If the Company fails to maintain and enhance the “eLayaway®“ and “DivvyTech” brands, or if it incurs excessive expenses in this effort, the Company’s business, operating results and financial condition will be materially and adversely affected. Maintaining and enhancing the brands will depend largely on the Company’s ability to be a technology leader and continue to provide high-quality products and services.

eLayaway®’s competitors are not limited to companies that offer online layaway. The Company is also in competition for end consumers with payment processors that do not offer layaway.

The three top alternative payment processors are currently PayPal™, Google Checkout™, and BillMeLater®. All three of these processors provide distinctive features that set them apart from their competition. In addition to Internet companies, the Company faces competition from other merchant services and finance companies, including web service providers and from traditional point-of-sale (POS) equipment, software providers and systems already installed into operating merchants. The Company expects that large retailers will adopt a multichannel solution beginning with the adoption of e-commerce integration followed by brick and mortar application. If large (top 300) retailers reintroduce layaway in stores prior to eLayaway® Internet integration, the Company’s ability to penetrate them could be harmed.

The Company's success will, in large measure, depend on acceptance of its patent-pending payment process, by both consumer and merchants. Achieving such acceptance will require a significant marketing investment.

The Company's success will be dependent on acceptance of its proposed services. Such acceptance cannot be assured nor can it be assured that its services can be developed or performed at acceptable cost levels. The Company’s inability to successfully market its products and services could result in the loss of some or all of your investment. If the Company’s service fails to generate the level of demand it anticipates, the Company will realize a lower than expected return from its investment in research and development and the Company’s results of operations may suffer. Furthermore, the Company has limited historical operations. As an early-stage company, the Company may be viewed negatively by the marketplace and acceptance of its services may suffer.

The Company treats its proprietary information as confidential and relies on internal nondisclosure safeguards and on laws protecting trade secrets, all to protect its proprietary information.

There can be no assurance that these measures will adequately protect the confidentiality of the Company's proprietary information or that others will not independently develop products or technology that are equivalent or superior to those of the Company. The Company’s patents, trademarks, trade secrets, copyrights and/or other intellectual property rights are important assets to the Company. Various events outside of the Company’s control pose a threat to its intellectual property rights as well as to the Company’s products and services. Although the Company seeks to obtain patent protection for its systems, it is possible that the Company may not be able to protect some of these innovations. There is always the possibility, despite the Company’s efforts, that the scope of the protection gained will be insufficient or that an issued patent may be deemed invalid or unenforceable.

Risks Relating to Our Organization and Our Common Stock

As of April 12, 2010, we became a consolidated subsidiary of a company that is subject to the reporting requirements of federal securities laws, which can be expensive and may divert resources from other projects, thus impairing our ability to grow.

As a result of the Merger, we became a public reporting company and, accordingly, subject to the information and reporting requirements of the Exchange Act and other federal securities laws, including compliance with the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”). The costs of preparing and filing annual and quarterly reports, proxy statements and other information with the SEC (including reporting of the Merger) and furnishing audited reports to stockholders will cause our expenses to be higher than they would have been if we remained privately held and did not consummate the Merger.

If we fail to establish and maintain an effective system of internal control, we may not be able to report our financial results accurately or to prevent fraud. Any inability to report and file our financial results accurately and timely could harm our reputation and adversely impact the trading price of our common stock.

It may be time consuming, difficult and costly for us to develop and implement the internal controls and reporting procedures required by the Sarbanes-Oxley Act. We may need to hire additional financial reporting, internal controls and other finance personnel in order to develop and implement appropriate internal controls and reporting procedures. Effective internal control is necessary for us to provide reliable financial reports and prevent fraud. If we cannot provide reliable financial reports or prevent fraud, we may not be able to manage our business as effectively as we would if an effective control environment existed, and our business and reputation with investors may be harmed. In addition, if we are unable to comply with the internal controls requirements of the Sarbanes-Oxley Act, then we may not be able to obtain the independent accountant certifications required by such act, which may preclude us from keeping our filings with the SEC current and may adversely affect any market for, and the liquidity of, our common stock.

Public company compliance may make it more difficult for us to attract and retain officers and directors.

The Sarbanes-Oxley Act and new rules subsequently implemented by the SEC have required changes in corporate governance practices of public companies. As a public company, we expect these new rules and regulations to increase our compliance costs and to make certain activities more time consuming and costly. As a public company, we also expect that these new rules and regulations may make it more difficult and expensive for us to obtain director and officer liability insurance in the future and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified persons to serve on our board of directors or as executive officers.

Because we became public by means of a merger, we may not be able to attract the attention of major brokerage firms.

There may be risks associated with us becoming public through a merger. Securities analysts of major brokerage firms may not provide coverage of us since there is no incentive to brokerage firms to recommend the purchase of our common stock. No assurance can be given that brokerage firms will, in the future, want to conduct any secondary offerings on behalf of our post-Merger company.

Our stock price may be volatile.

The market price of our common stock is likely to be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control, including the following:

●

changes in our industry;

●

competitive pricing pressures;

●

Our ability to obtain working capital financing;

●

additions or departures of key personnel;

	●	limited “public float” in the hands of a small number of persons whose sales or lack of sales could result in positive or negative pricing pressure on the market price for our common stock;

	●	sales of our common stock;

●

our ability to execute our business plan;

●

operating results that fall below expectations;

●

loss of any strategic relationship;

●

regulatory developments;

●

economic and other external factors; and

●

period-to-period fluctuations in our financial results.

In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our common stock.

We may not pay dividends in the future. Any return on investment may be limited to the value of our common stock.

We do not anticipate paying cash dividends in the foreseeable future. The payment of dividends on our common stock will depend on earnings, financial condition and other business and economic factors affecting us at such time as our board of directors may consider relevant. If we do not pay dividends, our common stock may be less valuable because a return on your investment will only occur if our stock price appreciates.

There is currently no liquid trading market for our common stock and we cannot ensure that one will ever develop or be sustained.

To date there has not been a liquid trading market for our common stock. We cannot predict how liquid the market for our common stock might become. As soon as is practicable after becoming eligible, we anticipate applying for listing of our common stock on either the NYSE Amex Equities, The NASDAQ Capital Market or other national securities exchange, assuming that we can satisfy the initial listing standards for such exchange. We currently do not satisfy the initial listing standards for any of these exchanges, and cannot ensure that we will be able to satisfy such listing standards or that our common stock will be accepted for listing on any such exchange. Should we fail to satisfy the initial listing standards of such exchanges, or our common stock is otherwise rejected for listing and remains quoted on the OTC Bulletin Board or is suspended from the OTC Bulletin Board, the trading price of our common stock could suffer and the trading market for our common stock may be less liquid and our common stock price may be subject to increased volatility.

Furthermore, for companies whose securities are quoted on the OTC Bulletin Board, it is more difficult (i) to obtain accurate quotations, (ii) to obtain coverage for significant news events because major wire services generally do not publish press releases about such companies and (iii) to obtain needed capital.

Our common stock is currently considered a “penny stock,” which may make it more difficult for our investors to sell their shares.

Our common stock is currently considered a “penny stock” and may continue in the future to be subject to the “penny stock” rules adopted under Section 15(g) of the Exchange Act. The penny stock rules generally apply to companies whose common stock is not listed on The NASDAQ Stock Market or other national securities exchange and trades at less than $5.00 per share, other than companies that have had average revenue of at least $6,000,000 for the last three years or that have tangible net worth of at least $5,000,000 ($2,000,000 if the company has been operating for three or more years). These rules require, among other things, that brokers who trade penny stock to persons other than “established customers” complete certain documentation, make suitability inquiries of investors and provide investors with certain information concerning trading in the security, including a risk disclosure document and quote information under certain circumstances. Many brokers have decided not to trade penny stocks because of the requirements of the penny stock rules and, as a result, the number of broker-dealers willing to act as market makers in such securities is limited. If we remain subject to the penny stock rules for any significant period, it could have an adverse effect on the market, if any, for our securities. Since our securities are subject to the penny stock rules, investors may find it more difficult to dispose of our securities.

Offers or availability for sale of a substantial number of shares of our common stock may cause the price of our common stock to decline.

If our stockholders sell substantial amounts of our common stock in the public market, or upon the expiration of any statutory holding period under Rule 144, or issued upon the exercise of outstanding options or warrants, it could create a circumstance commonly referred to as an “overhang” and in anticipation of which the market price of our common stock could fall. The existence of an overhang, whether or not sales have occurred or are occurring, also could make more difficult our ability to raise additional financing through the sale of equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate.

The Company has convertible notes with a potential of significant dilution to the current amount of common stock outstanding.

The Company has $1974,~~402,423~~615 of convertible notes which would convert into ~~959~~1,~~666~~269,~~274~~756,363 shares of common stock based on the closing price as of December 31, ~~2012~~2013 ($0.~~0015~~0004). The convertible notes have beneficial conversion features with a discount of 30% to 50% of the current market price.

~~The Company is in default with several of its noteholders as reflected below and disclosed with this report in Note 7 of the Notes to the Consolidated Financial Statements dated December 31, 2012.~~17

	Principal
Notes and convertible notes, net of discounts
Gary Kline	$	56,000
Gary Kline		55,000
Gary Kline		75,000
Gary Kline		23,500
James E. Pumphrey		25,883
Evolution Capital, LLC		25,000
Evolution Capital, LLC		75,000
Marina Development, LLC		19,350
Keith Sazer		5,250
Hanson Capital, LLC		100,000
KAJ Capital, LLC		25,000
Robert Salie - Line of Credit		400,000
Salie Family Limited Partnership		50,000
Transfer Online, Inc.		15,400
Transfer Online, Inc.		25,000
Transfer Online, Inc.		35,000
Transfer Online, Inc.		45,000
Transfer Online, Inc.		55,000
Douglas Pinard		20,000
Richard St. Cyr		17,000
Susan Jones		58,333
SGI Group, LLC		6,419
Ventana Capital Partners, Inc.		20,000
Star City Capital, LLC		20,000
Southridge Partners II, LP		155,225
Southridge Partners II, LP		45,000
Southridge Partners II, LP		55,300
WHC Capital, LLC		24,909
Southridge Partners II, LP		11,375
Notes, convertible notes, and lines of credit payable to related parties, net of discounts
Bruce Harmon		157,260
Bruce Harmon		10,000
Lakeport Business Services, Inc.		47,235
Lakeport Business Services, Inc. - Line of Credit		213,095
Total	$	1,971,534

The Company is in default with several of its noteholders as reflected below and disclosed with this report in Note 7 of the Notes to the Consolidated Financial Statements dated December 31, 2013.

	Principal
Notes and convertible notes, net of discounts
Gary Kline	$	56,000
Gary Kline		55,000
Gary Kline		75,000
Gary Kline		23,500
James E. Pumphrey		25,883
Evolution Capital, LLC		11,500
Evolution Capital, LLC		75,000
Evolution Capital, LLC		22,750
Evolution Capital, LLC		20,255
Evolution Capital, LLC		36,580
Evolution Capital, LLC		12,990
Hanson Capital, LLC		98,500
KAJ Capital, LLC		10,000
Robert Salie - Line of Credit		400,000
Salie Family Limited Partnership		50,000
Transfer Online, Inc.		15,400
Transfer Online, Inc.		25,000
Transfer Online, Inc.		35,000
Transfer Online, Inc.		45,000
Transfer Online, Inc.		55,000
Douglas Pinard		20,000
Richard St. Cyr		17,000
Susan Jones		58,333
Ventana Capital Partners, Inc.		20,000
Asher Enterprises, Inc.		650
Asher Enterprises, Inc.		39,850
Asher Enterprises, Inc.		32,500
Thomas Carluccio, Jr.		5,000
Thomas Carluccio, Jr.		5,000

Notes, convertible notes, and lines of credit payable to related parties, net of discounts
Bruce Harmon		157,260
Bruce Harmon		10,000
Bruce Harmon		52,010
Bruce Harmon		15,000
Bruce Harmon		15,000
Bruce Harmon		10,138
Bruce Harmon		5,000
Bruce Harmon		5,000
Sergio Pinon		5,000
Sergio Pinon		5,000
Lakeport Business Services, Inc.		45,000
Lakeport Business Services, Inc.		47,235
Lakeport Business Services, Inc. - Line of Credit		200,615
Total	$	1,918,949

Sergio A. Pinon, our chief executive officer and vice-chairman of our board of directors, beneficially owns a substantial portion of our outstanding common stock and preferred stock, which enables him to influence many significant corporate actions and in certain circumstances may prevent a change in control that would otherwise be beneficial to our stockholders.

Sergio A. Pinon beneficially owns, as of December 31, ~~2012~~2013, approximately 110.0% of our outstanding shares of common stock and ~~voting preferred stock~~74. ~~As of March 28, 2013, Mr. Pinon beneficially owns approximately~~ 2.7% of our outstanding shares of ~~common stock and voting~~ preferred stock (561,~~500,000~~255 shares of ~~common stock, 251,006 shares of~~ Series E preferred stock, and 15,000~~,000~~ shares of Series G preferred stock). As a percentage of votes, Mr. Pinon holds approximately 10.1% of the total outstanding votes. The Series E preferred stock has super voting rights of fifteen votes for every one share. The Series G preferred stock has super voting rights of ten thousand votes for every one share. Therefore, he controls 010.61% ~~and 76.3%~~ of the outstanding voting rights at December 31, ~~2012 and March 15,~~ 2013~~, respectively~~. As such, he has a substantial impact on matters requiring the vote of the stockholders, including the election of our directors and most of our corporate actions. This control could delay, defer, or prevent others from initiating a potential merger, takeover or other change in our control, even if these actions would benefit our stockholders and us. This control could adversely affect the voting and other rights of our other stockholders and could depress the market price of our common stock.

~~Bruce~~Robert ~~Harmon~~D. Salie, ~~our~~father ~~chief~~of ~~financial~~former officer and ~~chairman~~director ofDouglas ~~our board of directors~~Salie, ~~beneficially owns~~ a ~~substantial~~note ~~portion~~holder of ~~our~~the ~~outstanding common stock and preferred stock~~Company, ~~which~~filed ~~enables~~a ~~him~~lawsuit ~~to influence many significant corporate actions and~~ in ~~certain~~January ~~circumstances~~2012 ~~may~~alleging ~~prevent~~default aon ~~change~~the intwo ~~control~~notes ~~that~~payable ~~would~~which ~~otherwise~~could bematerially ~~beneficial~~affect tothe ~~our stockholders~~Company.

~~Bruce~~The ~~Harmon~~Company ~~beneficially~~was ~~owns,~~served ason ofJanuary ~~December 31~~30, ~~2012, approximately 3.4% of our outstanding shares of common stock and voting preferred stock. As of March 28,~~ 2013, ~~Mr.~~in ~~Harmon~~Robert ~~beneficially owns approximately 3~~D.4% ofSalie ~~our outstanding shares of common stock~~ and ~~voting~~Salie ~~preferred~~Family ~~stock~~Limited ~~(56,505,000~~Partnership ~~shares~~v ~~of common stock~~eLayaway, ~~5,812,517~~Inc. ~~shares~~with ofclaims ~~Series~~on Etwo ~~preferred~~notes ~~stock,~~payable ~~and~~to ~~9,848,432 shares of Series F preferred stock)~~Dr. ~~The~~ ~~Series~~Salie ~~E preferred stock~~ and ~~Series~~an Fentity ~~preferred~~controlled ~~stock~~by ~~has~~him. ~~super~~The ~~voting~~two ~~rights~~notes ofpayable ~~fifteen~~in ~~and~~principal ~~one~~are ~~hundred~~$450,000 ~~votes~~plus ~~for~~accrued ~~every one share, respectively~~interest. ~~Therefore,~~ heThe ~~controls~~Company ~~62.1%~~does ~~and~~not ~~8.6%~~deny of the ~~outstanding~~claim ~~voting rights at December 31, 2012~~ and ~~March~~has ~~15,~~attempted ~~2013,~~to ~~respectively. As~~negotiate ~~such, he has~~ a ~~substantial~~payment ~~impact~~arrangement onprior ~~matters~~to ~~requiring~~ the ~~vote of the stockholders~~lawsuit, ~~including~~which ~~the~~negotiations ~~election~~were ~~of our directors and most of our corporate actions~~unsuccessful. ~~This~~On ~~control~~August ~~could delay~~30, ~~defer~~2013, ~~or prevent others from initiating~~ a ~~potential~~judgment ~~merger,~~was ~~takeover~~awarded orto ~~other change in our control, even if these actions would benefit our stockholders and us~~Dr. ~~This control could adversely affect the voting and other rights of our other stockholders and could depress the market price of our common stock~~Salie.

Dr. Robert Salie, father of former officer and director Douglas Salie, a note holder of the Company, filed a lawsuit in January 2012 alleging default on the two notes payable which could materially affect the Company.

The Company was served on January 30, 2013 in Dr. Robert Salie v eLayaway, Inc. with claims on two notes payable to Dr. Salie and/or an entity controlled by him. The two notes payable in principal are $450,000 plus accrued interest. The Company does not deny the claim and has attempted to negotiate a payment arrangement prior to the lawsuit which Dr. Salie refused to address. The Company does not have the cash nor any material assets. Therefore, the legal fees required to deal with this lawsuit along with the potential awards by the court could severely impact the operations of the Company and its shareholders and could most likely cause the Company to declare bankruptcy. The Company is investigating any potential wrongdoing by Douglas Salie, while serving as an officer and director of the Company, and Dr. Salie, which potentially could indicate alleged collusion in one or more areas of contention between Dr. Salie and the Company.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

Item 3. Legal Proceedings

From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. As of March 15, ~~2012~~2014, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of our operations except as follows:

In 2008, a former employee who served as the CEO of the Company and was an original founder of the Company was terminated for alleged wrongdoings. The Company alleges that this individual illegally deposited investor funds into company bank accounts not authorized by the board of directors and wrote unauthorized checks, combined for approximately $371,000. Subsequently, this individual allegedly withdrew the deposited funds and deposited them into accounts not controlled by the Company. The Board of Directors, upon knowledge of this activity, removed this individual from the Company. The Company has turned this matter over to the Florida Department of Law Enforcement. In 2010, the Company determined that it does not believe that these funds are recoverable.

In March 2011, Thomas R. Park, a former employee who served as the CFO of the Company from 2007 to 2008, contacted the Company demanding that the Company issue additional stock of the Company to pay him additional ownership in the Company as a commission for investments made by third parties in the Company during this timeframe. On April 25, 2011, Mr. Park filed a suit, Thomas R. Park v eLayawayCOMMERCE, Inc., et al , in the Circuit Court for the Second Judicial Circuit in and for Leon County, Florida, Civil Division. The Company’s position is that the claim is without merit as a matter of law. The demand by the former officer is material and potentially detrimental in the Company’s efforts to procure additional funding. The Company, prior to the lawsuit being filed, had issued what it believes to be a fair settlement offer, even though the Company firmly believed that the former officer had no legitimate grounds to substantiate his claims, and the former officer has responded with a counter-offer which is deemed to not be feasible as it was unreasonable. The Company settled the lawsuit in June 2011 with the issuance of 600,000 warrants for common stock. The Company maintains that the claims were without merit but opted to settle to avoid legal costs.

In December 2011, the Board of Directors and the majority of the shareholders of the Company terminated for cause, Douglas Salie, the CEO, Chairman and member of the Board of Directors. Mr. Salie has indicated that he believes his termination was wrongful. The Company firmly believes that its actions were justified and defendable. No indication has been that litigation is threatened or pending.19

In ~~October~~December ~~2012~~2011, ~~Douglas~~the ~~Pinard,~~Board ~~a former owner~~ of ~~CSP~~Directors ~~(see Note 2), resigned from the Company. Certain monies were due to Mr. Pinard related to accrued payroll~~ and ~~notes payable. Mr. Pinard threatened litigation whereas both parties agreed upon a settlement requiring~~ the ~~Company~~majority ~~to pay Mr. Pinard a settlement~~ of ~~$40,000 for those liabilities. The Company paid Mr. Pinard $20,000 according to~~ the ~~conditions~~shareholders of the ~~settlement agreement. The~~ Company ~~then~~terminated ~~notified~~for ~~Mr.~~cause, ~~Pinard~~Douglas ~~that in its opinion~~Salie, ~~Mr. Pinard had allegedly breached~~ the ~~settlement~~CEO, ~~agreement~~Chairman byand ~~not~~member ~~returning all~~ of the ~~Company’s~~Board ~~assets~~of ~~which~~ Directors. Mr. ~~Pinard~~Salie ~~had~~has inindicated ~~his~~that ~~possession~~he atbelieves ~~the~~his ~~time of~~ termination~~. Therefore,~~ ~~the final $20,000~~ was ~~not paid to Mr~~wrongful. ~~Pinard.~~ ~~Due~~The toCompany ~~the~~firmly ~~nonpayment,~~believes ~~Mr. Pinard alleges~~ that ~~the~~its ~~Company~~actions ~~breached~~were ~~the~~justified ~~settlement~~and ~~agreement~~defendable. ~~Mr.~~The ~~Pinard~~Company ~~indicated~~does ~~that~~not hebelieve ~~would~~that ~~seek~~litigation ~~legal~~in ~~recourse. As of the date of~~ this ~~report,~~matter nois ~~further actions have been taken by Mr~~pending. ~~Pinard.~~

In ~~January~~October 2012, Douglas Pinard, a former owner of ~~2013~~CSP (see Note 2), Drresigned from the Company. Certain ~~Robert~~monies ~~Salie,~~were ~~father~~due ofto ~~former~~Mr. ~~chief~~Pinard ~~executive~~related ~~officer~~to accrued payroll and ~~chairman,~~notes ~~Douglas~~payable. Mr. ~~Salie,~~Pinard ~~who~~threatened ~~was~~litigation, ~~terminated~~and ~~for~~both ~~cause,~~parties ~~filed~~agreed upon a ~~suit,~~settlement ~~Robert~~requiring ~~Salie~~the ~~and~~Company ~~Salie~~to ~~Family~~pay ~~Limited~~Mr. ~~Partnership~~Pinard va ~~eLayaway~~settlement of $40,000 ~~Inc~~for those liabilities. The Company paid Mr. Pinard $20,000 inaccording to the ~~Circuit~~conditions ~~Court~~of ~~for~~ the ~~Second~~settlement ~~Judicial~~agreement. The ~~Circuit~~Company inthen ~~and~~notified ~~for~~Mr. ~~Leon~~Pinard ~~County,~~that ~~Florida,~~in ~~Civil~~its ~~Division~~opinion, Mr. ~~The~~ ~~lawsuit~~Pinard ishad inbreached ~~regards~~the tosettlement ~~two~~agreement ~~notes~~by ~~payable~~not ~~with~~returning ~~claims~~all of ~~approximately~~the ~~$565,000~~Company’s assets which Mr. Pinard had in ~~principal~~his ~~and~~possession ~~accrued~~at ~~interest~~the time of termination. ~~The~~Therefore, ~~Company~~the ~~has~~final $20,000 was not ~~responded~~paid to ~~that~~Mr. ~~lawsuit~~Pinard. InDue ~~October~~to ~~2012~~the nonpayment, Mr. Pinard alleges that the Company ~~offered~~breached Drthe settlement agreement. Mr. ~~Salie~~Pinard aindicated ~~principal~~that ~~and~~he ~~interest~~would ~~repayment~~seek ~~plan~~legal ~~utilizing~~recourse. To athe ~~third~~Company’s ~~party~~knowledge, ~~but~~no ~~Dr.~~further ~~Salie~~actions ~~rejected~~has ~~the~~been ~~Company’s~~taken ~~offer~~by Mr. Pinard.

In January of 2013, Dr. Robert Salie, father of former chief executive officer and chairman, Douglas Salie, who was terminated for cause, filed a suit, Robert D. Salie and Salie Family Limited Partnership v eLayaway, Inc., in the Circuit Court for the Second Judicial Circuit in and for Leon County, Florida, Civil Division. The lawsuit is in regards to notes payable with claims of approximately $565,000 in principal and accrued interest. In October 2012, the Company offered Dr. Salie a principal and interest repayment plan utilizing a third party, but Dr. Salie rejected the Company’s offer. On August 30, 2013, a judgment was awarded to Dr. Salie.

In March 2013, ASC Recap, LLC (“ASC”) filed a Joint Motion for Approval of Settlement Agreement and Stipulation, and Request for Fairness Hearing in the Circuit Court of the Second Judicial Circuit in and for Leon County, Florida, Case No. 2012-CA-4074. ASC has contracted with various note holders of the Company to acquire approximately $1,481,830 of Company debt and subsequently converting the debt to common stock of the Company pursuant to Section 3(a)(10) of the Securities Act of 1933, which allows the exchange of claims, securities, or property for stock when the arrangement is approved for fairness by a court proceeding. The Company has agreed to these terms as the acquisition of these debts and subsequent conversion would alleviate a significant portion of the Company’s liabilities. A fairness hearing was held on May 14, 2013 and the arrangement was approved.

On October 31, 2013, the Company entered into a settlement with Dr. Jason Cohen in regards to the guaranteed value associated with his purchase in 2011 of a convertible note and simultaneous conversion into common stock. The guarantee was for $25,000. As Dr. Cohen had not realized the agreed upon value, the Company and Dr. Cohen agreed to release the guarantee with the issuance of an additional 25,000,000 shares of common stock to Dr. Cohen which was subsequently issued to Dr. Cohen.

There are no other proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

Item 4. Mine Safety Disclosures.

Not applicable.

2320

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market for Common Equity

Market Information

The Company’s common stock is traded on the NASDAQ OTC Bulletin Board under the symbol “ELAY.OB.” As of December 31, ~~2012~~2013, the Company’s common stock was held by 325 shareholders of record, which does not include shareholders whose shares are held in street or nominee name.

The Company’s shares commenced trading on or about February 10, 2009 (for Tedom Capital, Inc.). The following chart is indicative of the fluctuations in the stock prices:

	For the Years Ended December 31,
	2012				2011
	2013				2012
	High		Low		High		Low
First Quarter	$	0.0528	$	0.~~021~~06	$	0.2805	$	0.~~028~~021
Second Quarter	$	0.~~035~~06	$	0.~~0115~~02	$	0.24035	$	0.100115
Third Quarter	$	0.~~017~~02	$	0.~~0027~~0023	$	0.24017	$	0.110027
Fourth Quarter	$	0.~~0075~~0034	$	0.~~0014~~0003	$	0.140075	$	0.020014

The Company’s transfer agent is Transfer Online, Inc., of Portland, Oregon.

Dividend Distributions

We have not historically distributed dividends to stockholders.

Securities authorized for issuance under equity compensation plans

The Company does not have any equity compensation plans except for the stock option plan.

Penny Stock

Our common stock is considered "penny stock" under the rules the Securities and Exchange Commission (the "SEC") under the Securities Exchange Act of 1934. The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ Stock Market System, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or quotation system. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the Commission, that:

- contains a description of the nature and level of risks in the market for penny stocks in both public offerings and secondary trading; - contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of Securities' laws; contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price; - contains a toll-free telephone number for inquiries on disciplinary actions; - defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and - contains such other information and is in such form, including language, type, size and format, as the Commission shall require by rule or regulation.

- contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customerwith respect to a violation to such duties or other requirements of Securities' laws; contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price;21

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

- defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and

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

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

- bid and offer quotations for the penny stock; - the compensation of the broker-dealer and its salesperson in the transaction; - the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the marker for such stock; and - monthly account statements showing the market value of each penny stock held in the customer's account.

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

- the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the marker for such stock; and

- monthly account statements showing the market value of each penny stock held in the customer's account.

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

These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our stock.

Related Stockholder Matters

None.

Purchase of Equity Securities

None.

Item 6. Selected Financial Data.

As the Company is a “smaller reporting company,” this item is inapplicable.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation.

This report on Form 10-K contains forward-looking statements within the meaning of Rule 175 of the Securities Act of 1933, as amended, and Rule 3b-6 of the Securities Act of 1934, as amended, that involve substantial risks and uncertainties. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about our industry, our beliefs and our assumptions. Words such as “anticipate”, “expects”, “intends”, “plans”, “believes”, “seeks” and “estimates” and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this Form 10-K. Investors should carefully consider all of such risks before making an investment decision with respect to the Company’s stock. The following discussion and analysis should be read in conjunction with our consolidated financial statements and summary of selected financial data for eLayaway, Inc. Such discussion represents only the best present assessment from our Management.

DESCRIPTION OF COMPANY:

The Company was a startup company that was incorporated in Delaware under the name Tedom Capital, Inc. (“Tedom”) on December 26, 2006. The stockholders of Tedom on March 26, 2010, approved a forward split of one share of common stock for three shares of common stock. On March 19, 2010, Tedom signed a Letter of Intent with eLayaway, Inc., a Florida corporation, to execute a reverse triangular merger (the “Merger”). On April 7, 2010, Tedom filed with the State of Delaware to authorize four classes of preferred stock (Series A, B, C and D). On April 12, 2010, Tedom and eLayaway, Inc. executed the Merger as noted in Form 8-K dated April 16, 2010. The change of officers and directors of the Company associated with the Merger were incorporated in the April 16, 2010 Form 8-K. On April 16, 2010, Tedom filed with the State of Delaware for a name change to eLayaway, Inc. (“eLayaway”). On April 19, 2010, eLayaway, Inc. filed with the State of Florida for a name change to eLayawayCOMMERCE, Inc. On April 20, 2010, eLayaway filed with FINRA for its name change and a symbol change. On May 24, 2010, FINRA notified eLayaway of its symbol change from TDOM.OB to ELAY.OB to be traded on the NASDAQ OTC Bulletin Board. The Florida-based Company is an online payment processor specializing in a layaway service and other payment processing platforms for merchants and consumers.

The Company has evolved its technology to remove itself from being identified as a layaway only company. The Company is changing its image and branding to DivvyTech, which specializes in various payment processing methods including, but not limited to, layaway. DivvyTech's core function is to empower retailers and payment processors with an automated recurring payments administration system. This includes a robust engine with the ability to process multiple and varied payments, a dynamic system to schedule individual plans and a user-friendly interface for reporting the complexities of both. DivvyTech’s technology empowers retailers and payment processors with an automated recurring payments administration system designed to manage layaway, leasing, micro-lending, layaway-credit hybrid programs and Automated Clearing House (“ACH”) programs. Supported consumer funding sources include: ACH, cash, credit and debit cards. By providing flexible an affordable payment options, retailers and processors increase consumer spending power and enhance their user experience.

When requiring consumers to pay over time, DivvyTech’s innovative payment breakthrough offers unprecedented flexibility and access. The Company’s suite of products is perfect for organizations and payment processors that are looking for an autonomous and agnostic payment solution to enhance their existing products and services. This service allows both the provider and consumer to have the ability to manage the automation and distribution of the overall payment transaction process which is unique to the industry.

26The Company currently has six wholly-owned subsidiaries; eLayaway.com, DivvyTech, Inc. (“DivvyTech”), Pay4Tix.com, Inc. (“Pay4Tix.com” f/k/a eLayawaySPORTS, Inc.), NuVidaPaymentPlan.com, Inc. (“NuVida”), PrePayGetaway.com, Inc. (“PrePayGetaway”), PlanItPay.com, Inc. (“PlanItPay”), and Centralized Strategic Placements, Inc. (“CSP,” acquired in February 2012 and dissolved in 2012).

The Company has seven wholly-owned subsidiaries; eLayaway.com, DivvyTech, Inc. (“DivvyTech”), Pay4Tix.com, Inc. (“Pay4Tix.com” f/k/a eLayawaySPORTS, Inc.), NuVidaPaymentPlan.com, Inc. (“NuVida”), PrePayGetaway.com, Inc. (“PrePayGetaway”), PlanItPay.com, Inc. (“PlanItPay”), and Centralized Strategic Placements, Inc. (“CSP,” acquired in February 2012) and one majority-owned subsidiary, eLayaway Australia Pty, Ltd.

DivvyTech Powered Brands:

eLayaway.com (eLayaway.com, Inc., f/k/a eLayawayCOMMERCE, Inc.) is a payment processor that empowers merchants with the ability to easily and efficiently offer an automated layaway payment plan to both online and in-store customers. Consumers can use eLayaway to conveniently pay for any product or service over time and receive their order once it is paid in full. Payment processing and supporting services are handled by eLayaway while merchants provide order fulfillment.

Nuvida Payment Plan (f/k/a eLayawayHEALTH) provides prepayment solutions for patients and healthcare facilities. This patented technology provides patients with the opportunity to prepay for procedures over time without having to use credit or go into debt. Nuvida is managed by HIPAA certified, payment processing professionals.

Pay4Tix (Pay4Tix.com, Inc., f/k/a eLayawaySPORTS, Inc.) ~~provides~~prov ides a prepaid ticket solution for both teams and fans. DivvyTech's payment technology allows teams and ticketing platforms to integrate the prepayment option directly into all sales channels for new ticket sales and season ticket renewals. Pay4Tix is managed by payment processing experts with sports marketing experience.

PrePayGetaway (f/k/a eLayawayTRAVEL) provides a prepayment solution for travel companies and consumers. By leveraging DivvyTech's technology, travel professionals can create a customized recurring prepayments system. PrePayGetaway is managed by payment processing experts with travel industry experience.

PlanItPay (f/k/a eLayawayMALL) consists of a robust community of registered member shoppers connecting online at eLayaway.com with affiliate merchants offering millions of consumer products and services. Thousands of secure transactions are processed weekly with membership increasing daily. PlanItPay’s proprietary technology is managed by payment processing experts with retail experience.

eApatado.com is the eLayaway.com platform recreated for Hispanic merchants and consumers. The site provides the same exclusive technologies offered through eLayaway.com and is managed by a team of bilingual experts.

The following Management Discussion and Analysis should be read in conjunction with the consolidated financial statements and accompanying notes included in this Form 10-K.

~~COMPARISON OF THE YEAR ENDED DECEMBER 31, 2012 TO THE YEAR ENDED DECEMBER 31, 2011~~23

COMPARISON OF THE YEAR ENDED DECEMBER 31, 2013 TO THE YEAR ENDED DECEMBER 31, 2012

Results of Continuing Operations

Revenue. For the year ended December 31, ~~2012~~2013, our revenue was $~~116~~119,~~153~~996, compared to $~~105~~116,~~400~~153 for the same period in ~~2011~~2012, representing an increase of 163.13%. This increase in revenue was primarily attributable to increased sales. ~~Actual revenue for 2012, including discontinued operations, was $195,092, which was an increase of $78,939, or 74.9%.~~

~~Gross~~Direct ~~Profit (Loss)~~Costs. For the year ended December 31, ~~2012~~2013, our ~~gross~~direct ~~profit~~costs ~~was~~were $6630,~~545~~167, compared to ~~a gross loss of~~ $~~198~~49,~~240~~608 for the same period in ~~2011~~2012, representing a decrease of 6639.42%. This decrease in our ~~gross~~direct ~~loss~~costs resulted primarily from the decrease in ~~cost of sales ($49,608 and $303,640, for the year ended December 31, 2012 and 2011, respectively), which primarily was due to the decrease in~~ payroll costs.

27Selling, General and Administrative Expenses. For the year ended December 31, 2013, selling, general and administrative expenses were $916,306 compared to $1,764,407 for the same period in 2012, a decrease of 48.1%. The actual selling, general and administrative expenses, without the stock-based compensation and settlements, was $571,328 and $1,271,595 for the period ended December 31, 2013 and 2012, respectively.

~~Selling,~~Net ~~General and Administrative Expenses~~Loss. ~~For~~We ~~the~~generated ~~year~~net ~~ended~~losses ~~December~~of 31$4, ~~2012~~568,261 ~~selling,~~for ~~general~~the ~~and~~year ~~administrative~~ended ~~expenses~~December ~~were $1~~31,~~764,407~~ 2013 compared to $32,~~040~~861,~~471~~346 for the same period in ~~2011~~2012, aan ~~decrease~~increase of 4280.04%~~. This~~ ~~decrease~~which ~~was~~is primarily ~~caused~~due ~~primarily by stock-based compensation and settlements (from $2,085,314~~ to ~~$492,812,~~the orincrease ~~124.8%~~in of the ~~total~~loss ~~decrease). The~~on ~~actual~~conversion ~~selling,~~of ~~general~~debt ~~and~~into ~~administrative~~common ~~expenses, without the~~ stock~~-based~~ ~~compensation and settlements, was~~ ($12,~~271~~493,~~595~~625 for 2013 and $~~955~~197,~~157~~979 for ~~the period ended December 31,~~ 2012) and ~~2011,~~the ~~respectively. The~~loss ~~actual~~on ~~increase~~settlement inof ~~2012~~payroll ~~was~~ ($~~316~~825,~~438,~~000 ~~which~~for ~~were~~2013 ~~increases~~and to$0 ~~several~~for ~~accounts~~2012).

Net Loss. We generated net losses of $2,952,594 for the year ended December 31, 2012 compared to $4,032,982 for the same period in 2011, a decrease of 26.8% which is primarily due to the decrease in stock-based compensation offset by the increase in professional fees.

Liquidity and Capital Resources

General. At December 31, ~~2012~~2013, we had cash and cash equivalents of $223,~~823~~115. We have historically met our cash needs through a combination of cash flows from operating activities, proceeds from private placements of our securities and loans. Our cash requirements are generally for selling, general and administrative activities. We believe that our cash balance is not sufficient to finance our cash requirements for expected operational activities, capital improvements, and partial repayment of debt through the next 12 months.

Our operating activities used cash of $1291,~~063,322~~931 for the year ended December 31, ~~2012~~2013, and we used cash in operations of $1,~~120~~063,~~069~~322 during the same period in ~~2011~~2012. The principal elements of cash flow from operations for the year ended December 31, ~~2012~~2013 included a net loss of $24,~~952~~568,~~594~~261, offset by stock-based compensation of $344,978 and loss on settlements liabilities of $~~492~~3,~~812~~644,074.

Cash used in investing activities during the year ended December 31, ~~2012~~2013 was $~~4,454~~0 compared to $24,~~586~~454 during the same period in ~~2011~~2012.

Cash generated in our financing activities was $1272,~~061,141~~223 for the year ended December 31, ~~2012~~2013, compared to cash generated of $1,~~052~~061,~~014~~141 during the comparable period in ~~2011~~2012. This increase was primarily attributed to a concentrated effort of capital procurement in ~~2012~~2013 compared to ~~2011~~2012.

As of December 31, ~~2012~~2013, current liabilities exceeded current assets by 13102.0 times. Current assets decreased from $~~330~~207,~~188~~367 at December 31, ~~2011~~2012 to $~~207~~25,~~367~~736 at December 31, ~~2012~~2013 whereas current liabilities ~~increased~~decreased from $2,~~295~~701,~~784~~949 at December 31, ~~2011~~2012 to $2,~~701~~625,~~949~~906 at December 31, ~~2012~~2013.

	For the years ended December 31,
	2012			2011
	2013			2012
Cash used in operating activities	$	(1291,~~063,322~~931	)	$	(1,~~120~~063,~~069~~322	)
Cash used in investing activities		~~(4,454~~-	)		(24,~~586~~454	)
Cash provided by financing activities		1272,~~061,141~~223			1,~~052~~061,~~014~~141
Net changes to cash	$	(619,~~635~~708	)	$	(706,~~641~~635	)

2824

Going Concern

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company had sales of $~~116~~119,~~153~~996 and net losses of $24,~~952~~568,~~594~~261 ($~~492~~344,~~812~~978 represents stock-based compensation and settlements) for the year ended December 31, ~~2012~~2013 compared to sales of $~~105~~116,~~400~~153 and net losses of $42,~~032~~861,~~982~~346 ($2492,~~085,314~~812 represents stock-based compensation and settlements) for the year ended December 31, ~~2011~~2012. The Company had a working capital deficit, stockholders’ deficit, and accumulated deficit of $2,~~494~~600,~~582~~170, $2,~~483~~595,~~876~~532 and $1823,~~586~~146,~~857~~869, respectively, at December 31, ~~2012~~2013. These factors raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time. The Company is highly dependent on its ability to continue to obtain investment capital from future funding opportunities to fund the current and planned operating levels. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to bring in income generating activities and its ability to continue receiving investment capital from future funding opportunities. No assurance can be given that the Company will be successful in these efforts.

Critical Accounting Policies

Use of Estimates. The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates in the accompanying consolidated financial statements include the amortization period for intangible assets, valuation and impairment valuation of intangible assets, depreciable lives of the web site and property and equipment, valuation of warrant and beneficial conversion feature debt discounts, valuation of share-based payments and the valuation allowance on deferred tax assets.

Changes in Accounting Principles. No significant changes in accounting principles were adopted during fiscal ~~2012~~2013 and ~~2011~~2012.

Derivatives. The Company evaluates its convertible debt, options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for. The result of this accounting treatment is that under certain circumstances the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income or expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Equity instruments that are initially classified as equity that become subject to reclassification under this accounting standard are reclassified to liability at the fair value of the instrument on the reclassification date.

Impairment of Long-Lived Assets. The Company accounts for long-lived assets in accordance with the provisions of Statement of Financial Accounting Standards ASC 360-10, “Accounting for the Impairment or Disposal of Long-Lived Assets”. This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

Fair Value of Financial Instruments and Fair Value Measurements. The Company measures their financial assets and liabilities in accordance with generally accepted accounting principles. For certain of our financial instruments, including cash, accounts payable, accrued expenses escrow liability and short-term loans the carrying amounts approximate fair value due to their short maturities.

Effective January 1, 2008, we adopted accounting guidance for financial and non-financial assets and liabilities. The adoption did not have a material impact on our results of operations, financial position or liquidity. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.

Revenue Recognition. Revenues are recognized on our products in accordance with ASC 605-10, “Revenue Recognition in Financial Statement.” Under these guidelines, revenue is recognized on sales transactions when all of the following exist: persuasive evidence of an arrangement did exist, delivery of service has occurred, the sales price to the buyer is fixed or determinable and collectability is reasonably assured. The Company has several revenue streams as follows:

· Transaction fees for each layaway, which are recognized at the point-of-sale. · eLayawayADVANTAGE™, which is a monthly consumer membership fee paid in advance each month and recognized pro rata over the service period. · eLayawayMALL commissions which are commissions earned by referring customers to merchants through the Company’s web site and are recognized by the Company at the point of sale by the third party merchant. · Cancellation fees ($25 per cancellation) which are charged to eLayaway members upon cancellation of their order and recognized on the cancellation date. · Merchant subscription fees which are either monthly merchant service fees recognized pro rata over the service period or transaction fees recognized at the point-of-sale. · Advertising income derived from the web site of CSP. · Interest income derived from the customer deposit account which is included as income.

· eLayawayADVANTAGE™, which is a monthly consumer membership fee paid in advance each month and recognized pro rata over the service period.

· eLayawayMALL commissions which are commissions earned by referring customers to merchants through the Company’s web site and are recognized by the Company at the point of sale by the third party merchant.

· Cancellation fees ($25 per cancellation) which are charged to eLayaway members upon cancellation of their order and recognized on the cancellation date.

· Merchant subscription fees which are either monthly merchant service fees recognized pro rata over the service period or transaction fees recognized at the point-of-sale.

· Advertising income derived from the web site of CSP.

· Interest income derived from the customer deposit account which is included as income.

Stock-Based Compensation. The Company accounts for stock-based instruments issued to employees in accordance with ASC Topic 718. ASC Topic 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity based compensation issued to employees. The Company accounts for non-employee share-based awards in accordance with ASC Topic 505-50. The value of the portion of an award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line attribution method. The Company estimates the fair value of each stock option at the grant date by using the Black-Scholes option-pricing model. The Company estimates the fair value of each stock option at the grant date by using the Black-Scholes option-pricing model.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

As the Company is a “smaller reporting company,” this item is inapplicable.

3026

Item 8. Financial Statements and Supplementary Data.

eLayaway, Inc. and Subsidiaries

Table of Contents

	Page
Report of Independent Registered Public Accounting Firm		F-1
Consolidated Balance Sheets		F-32
Consolidated Statements of Operations		F-43
Consolidated Statements of Changes in Shareholders’ Equity (Deficiency)		F-54
Consolidated Statements of Cash Flows		F-86
Notes to Consolidated Financial Statements		F-108

3127

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of:

eLayaway, Inc.

We have audited the accompanying consolidated balance sheet of eLayaway, Inc. and Subsidiaries as of December 31, 2013 and 2012 and the related consolidated statements of operations, changes in shareholders’ equity (deficiency), and cash flows for that year in the period ended December 31, 2013 and 2012. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

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

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of eLayaway, Inc. and Subsidiaries as of December 31, 2013 and 2012 and the consolidated results of its operations and its cash flows for the year in the period ended December 31, 2013 and 2012 in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company reported a net loss of $24,~~952~~568,~~594~~261 and $42,~~032~~861,~~982~~346 in ~~2012~~2013 and ~~2011~~2012, respectively, and used cash for operating activities of $1291,~~063,322~~931 and $1,~~120~~063,~~069~~322 in ~~2012~~2013 and ~~2011~~2012, respectively. At December 31, ~~2012~~2013, the Company had a working capital deficiency, shareholders’ deficiency and accumulated deficit of $2,~~494~~600,~~582~~170, $2,~~483~~595,~~876~~532 and $1823,~~586~~146,~~857~~869, respectively. These matters raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans as to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ DKM Certified Public Accountants

DKM CERTIFIED PUBLIC ACCOUNTANTS

Clearwater, Florida

March 2931, ~~2013~~2014

F-1

~~Report~~eLAYAWAY, ofINC. ~~Independent~~and ~~Registered Public Accounting Firm~~SUBSIDIARIES

ToConsolidated ~~the~~Balance ~~Board of Directors and Shareholders of:~~Sheets

~~eLayaway,~~December ~~Inc.~~31,

We have audited the accompanying consolidated balance sheets of eLayaway, Inc. and Subsidiaries as of December 31, 2011 and the related consolidated statements of operations, changes in shareholders’ equity (deficiency), and cash flows for the year ended December 31, 2011. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

	2013			2012

ASSETS

Current assets
Cash	$	3,115		$	22,823
Segregated cash for customer deposits		22,621			86,054
Other receivable		-			50,000
Prepaid expenses		-			47,954
Assets attributable to discontinued operations		-			536
Total current assets		25,736			207,367
Property and equipment, net		1,225			2,195
Intangibles, net		3,413			3,844
Other assets		-			4,667
Total assets	$	30,374		$	218,073

LIABILITIES AND SHAREHOLDERS' DEFICIENCY

Current liabilities
Notes and convertible notes, net of discounts and premiums	$	1,432,954		$	1,665,991
Notes, convertible notes, and lines of credit payable to related parties, net of discounts		572,258			427,590
Accounts payable		137,165			165,449
Accounts payable to related parties		18,920			18,920
Accrued liabilities		388,879			249,110
Liability to guarantee equity value		-			25,000
Deposits received from customers for layaway sales		22,160			85,604
Embedded conversion option liability		53,570			64,285
Total current liabilities		2,625,906			2,701,949
Total liabilities		2,625,906			2,701,949
Commitments and contingencies (Note 10)
Shareholders' deficiency
Preferred stock, par value $0.001, 50,000,000 shares authorized
Series A preferred stock, $0.001 par value, 13,942 shares designated, 0 and 0
issued and outstanding, respectively (liquidation value $0 and $0, respectively)		-			-
Series B preferred stock, $0.001 par value, 13,942 shares designated, 0 and 0
issued and outstanding, respectively (liquidation value $0 and $0, respectively)		-			-
Series C preferred stock, $0.001 par value, 15,712 shares designated, 0 and 0
issued and outstanding, respectively (liquidation value $0 and $0, respectively)		-			-
Series D preferred stock, $0.001 par value, 9,448 shares designated, 0 and 0
issued and outstanding, respectively (liquidation value $0 and $0, respectively)		-			-
Series E preferred stock, $0.001 par value, 50,000 shares designated, 3,429 and 39,699
issued and outstanding, respectively (liquidation value $170,602 and $0, respectively)		3			40
Series F preferred stock, $0.001 par value, 50,000 shares designated, 0 and 49,243
issued and outstanding, respectively (liquidation value $50,303 and $0, respectively)		-			49
Series G preferred stock, $0.001 par value, 5,000 shares designated, 5,000 and 0
issued and outstanding, respectively (liquidation value $1,000 and $0, respectively)		5			-
Common stock, par value $0.001, 5,000,000,000 shares authorized, 603,772,470 and
3,171,543 shares issued, issuable and outstanding, respectively, and (0 and
366,805 shares issuable, respectively)		603,772			3,172
Additional paid-in capital		19,947,557			16,099,721
Accumulated deficit		(23,146,869	)		(18,586,857	)

Total shareholders' deficiency		(2,595,532	)		(2,483,876	)

Total liabilities and shareholders' deficiency	$	30,374		$	218,073

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

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of eLayaway, Inc. and Subsidiaries as of December 31, 2011 and the consolidated results of its operations and its cash flows for the year ended December 31, 2011 in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company reported a net loss of $4,032,982 in 2011 and used cash for operating activities of $1,120,069 in 2011. At December 31, 2011, the Company had a working capital deficiency, shareholders’ deficiency and accumulated deficit of $1,965,596, $1,936,758 and $15,634,263, respectively. These matters raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans as to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Salberg & Company, P.A.

SALBERG & COMPANY, P.A.

Boca Raton, Florida

March 19, 2012

F-2

eLAYAWAY, INC. and SUBSIDIARIES ~~Consolidated Balance Sheets December 31,~~

	2012			2011
ASSETS
Current assets
Cash	$	22,823		$	29,458
Segregated cash for customer deposits		86,054			155,654
Other receivable		50,000			-
Prepaid expenses		47,954			145,076
Assets attributable to discontinued operations		536			-
Total current assets		207,367			330,188
Property and equipment, net		2,195			11,793
Intangibles, net		3,844			4,275
Other assets		4,667			12,770
Total assets	$	218,073		$	359,026
LIABILITIES AND SHAREHOLDERS' DEFICIENCY
Current liabilities
Notes and convertible notes, net of discounts and premiums	$	1,665,991		$	297,572
Notes, convertible notes, and lines of credit payable to related parties, net of discounts		427,590			652,452
Accounts payable		165,449			358,977
Accounts payable to related parties		18,920			14,445
Accrued liabilities		249,110			252,978
Liability to guarantee equity value		25,000			160,000
Deposits received from customers for layaway sales		85,604			126,313
Embedded conversion option liability		64,285			433,047
Total current liabilities		2,701,949			2,295,784
Total liabilities		2,701,949			2,295,784
Commitments and contingencies (Note 10)
Shareholders' deficiency
Preferred stock, par value $0.001, 50,000,000 shares authorized
Series A preferred stock, $0.001 par value, 1,854,013 shares designated, 0 and 0
issued and outstanding, respectively (liquidation value $0 and $0, respectively)		-			-
Series B preferred stock, $0.001 par value, 2,788,368 shares designated, 0 and 0
issued and outstanding, respectively (liquidation value $0 and $0, respectively)		-			-
Series C preferred stock, $0.001 par value, 3,142,452 shares designated, 0 and 0
issued and outstanding, respectively (liquidation value $0 and $0, respectively)		-			-
Series D preferred stock, $0.001 par value, 1,889,594 shares designated, 0 and 0
issued and outstanding, respectively (liquidation value $0 and $0, respectively)		-			-
Series E preferred stock, $0.001 par value, 10,000,000 shares designated, 7,939,724 and 0
issued and outstanding, respectively (liquidation value $170,602 and $0, respectively)		7,940			3,596
Series F preferred stock, $0.001 par value, 10,000,000 shares designated, 9,848,432 and 0
issued and outstanding, respectively (liquidation value $50,303 and $0, respectively)		9,848			-
Common stock, par value $0.001, 1,000,000,000 shares authorized, 634,308,656 and
48,548,773 shares issued, issuable and outstanding, respectively, and (73,360,937 and		634,309			48,549
229,455 shares issuable, respectively)
Additional paid-in capital		15,450,884			13,645,360
Accumulated deficit		(18,586,857	)		(15,634,263	)
Total shareholders' deficiency		(2,483,876	)		(1,936,758	)
Total liabilities and shareholders' deficiency	$	218,073		$	359,026

Consolidated Statements of Operations

~~See~~For ~~accompanying~~the ~~notes~~Years toEnded ~~consolidated~~December ~~financial statements~~31,

	2013			2012

Sales	$	119,996		$	116,153
Direct costs		30,167			49,608
Selling, general and administrative expenses
(includes $344,978 and $492,812 for the years ended December 31,
2013 and 2012, respectively, of stock-based compensation and settlements)		916,306			1,764,407

Loss from continuing operations		(826,477	)		(1,697,862	)

Other income (expense)
Other income		28,707			-
Interest expense		(348,416	)		(1,149,016	)
Change in fair value of embedded conversion option liability		6,429			222,150
Gain on conversion of accounts payable		1,924			5,580
Loss on share repurchase		-			(150,461	)
Gain (loss) on settlements of liabilities, net		(49,339	)		40,756
Gain on extinguishment of debt		-			198,083
Gain on unclaimed liabilities		-			98,823
Derivative amortization		4,286			-
Loss on settlement of payroll		(825,000	)		-
Loss on issuance of common stock		(60,000	)		-
Loss on disposition of discontinued operations		-			(231,420	)
Loss on conversion of debt into common stock		(2,500,375	)		(197,979	)
Total other income (expense), net		(3,741,784	)		(1,163,484	)
Net loss from continuing operations		(4,568,261	)		(2,861,346	)
Net loss from discontinued operations		-			(91,248	)
Net loss	$	(4,568,261	)	$	(2,952,594	)
Basic and diluted net loss per share - continuing operations	$	(0.049	)	$	(4.00	)
Basic and diluted net loss per share - discontinued operations	$	-		$	(0.134	)
Basic and diluted net loss per share	$	(0.049	)	$	(4.00	)
Weighted average shares outstanding - basic and diluted		92,985,027			683,203

See accompanying notes to consolidated financial statements.

F-3

eLAYAWAY, INC. ~~and~~AND SUBSIDIARIES ~~Consolidated~~ Statements of ~~Operations~~Changes in Shareholders' Equity (Deficiency) For the Years Ended December 31, 2012 and 2013

	2012				2011
	Series E Preferred Stock						Series F Preferred Stock				Series G Preferred Stock				Common Stock Issuable						Common Stock						Additional Paid-in			Loss from Discountinued			Accumulated			Total Shareholders' Equity
Sales	$	116,153			$	105,400
	Shares			Amount			Shares		Amount		Shares		Amount		Shares			Amount			Shares			Amount			Capital			Operations			Deficit			(Deficit)
Cost of sales		49,608				303,640
Balance, December 31, 2011		17,979		$	18			-	$	-		-	$	-		1,147		$	1			241,597		$	241		$	13,697,245		$	-		$	(15,634,263	)	$	(1,936,758	)
Gross profit (loss)		66,545				(198,240	)
Amortization of options																												40,540									40,540
Selling, general and administrative expenses
Warrants expense																												5,571									5,571
(includes $492,812 and $2,085,314 for the years ended
Beneficial Conversion Feature																												84,000									84,000
December 31, 2012 and 2011, respectively, of stock-based
Common stock issued for loan fees																						347			0			2,500									2,500
compensation and settlements)		1,764,407				3,040,471
Common stock issued for services																						6,250			6			49,994									50,000
		-
Conversion of payroll into Series E																																					-
Loss from continuing operations		(1,697,862	)			(3,238,711	)
preferred stock		5,952			6																							29,994									30,000
Other income (expense)
Issuance of common stock to officers and																																					-
Interest expense		(1,149,016	)			(808,968	)
directors for services																						30,000			30			151,170									151,200
Change in fair value of embedded conversion option liability		222,150				50,270
Conversion of options and warrants to																																					-
Gain on conversion of accounts payable		5,580				-
common stock																						21,327			21			107,465									107,486
Loss on share repurchase		(150,461	)			-
Issuable stock issued																(1,147	)		(1	)		1,147			1												-
Gain (loss) on settlements of liabilities, net		40,756				(43,181	)
Issuance of common stock for acquisition																																					-
Loss on conversion of debt into common stock		(197,979	)			-
of Centralized Strategic Placements, Inc.																16,050			16			5,350			1			128,383									128,400
Gain on unclaimed liabilities		98,823				-
Sale of restricted stock																						46,680			47			139,993									140,040
Loss on disposition of discontinued operations		(231,420	)			-
Subscription receivable collected																																					-
Gain on extinguishment of debt		198,083				7,608
Conversion of debt																						4,873			5			16,662									16,667
Total other income (expense), net		(1,163,484	)			(794,271	)
Issuance of warrants																												25,500									25,500
Net loss from continuing operations		(2,861,346	)			(4,032,982	)
Conversion of AP into common stock																						3,100			3			13,897									13,900
Net loss from discontinued operations		(91,248	)			-
Issuance of stock - guaranteed issue																						29,420			29			134,971									135,000
Net loss	$	(2,952,594	)		$	(4,032,982	)
Conversion of warrants into common stock																												1,128									1,128
Basic and diluted net loss per share - continuing operations	$	(0.02	)		$	(0.11	)
Stock issued for services																2,500			3									9,997									10,000
Basic and diluted net loss per share - discontinued operations	$	(0.00	)		$	-
Converted note payable into common stock																179,305			179			2,327,521			2,328			625,305									627,812
Basic and diluted net loss per share	$	(0.02	)		$	(0.11	)
Issuable issued																(56,645	)		(57	)		56,645			57												-
Weighted average shares outstanding
Conversion of NP into common stock - Asher																						8,621			9			17,232									17,241
- basic and diluted		136,640,620				36,991,456
Sale of restricted stock																187,500			188									149,812									150,000
Conversion of AP into Series F								18,939		19																		30,284									30,303
Conversion of liabilities into Series E		26,069			26																							57,325									57,351
Reset on Southridge conversion																38,095			38			38,095			38			(76	)								-
Issuance of Series F for personal guarantee								30,303		30																		19,970									20,000
Repurchase of Series E in exchange for N/P		(10,301	)		(10	)																						(6,789	)								(6,799	)
Adjustment of derivatives due to conversions																												10,714									10,714
Put premiums on notes																												580,870									580,870
Conversion rescinded																						(16,234	)		(16	)		(35,699	)								(35,715	)
Gain on extinquishment of convertible debt																												11,767									11,767
Net loss for the year ended December 31, 2012		-			-			-		-		-		-		-			-			-			-			-			(91,248	)		(2,861,346	)		(2,952,594	)

See accompanying notes to consolidated financial statements

F-4

Statements of Changes in Shareholders' Equity (Deficiency)

Balance, December 31, 2012	39,699		$	40		49,242		$	49		-	$	-	366,805		$	367		2,804,738		$	2,800		$	16,099,725		$	(91,248	)	$	(18,495,609	)	$	(2,483,876	)

Common stock issuable issued														(366,805	)	$	(367	)	366,805			367												-
Converted note payable to common stock																			315,838,859			315,839		$	2,670,823									2,986,662
Amortization of stock options																									20,270									20,270
Issuance of Series G preferred stock for services											5,000		5											$	995									1,000
Cancellation of Series E preferred stock and																																		-
conversion into a note payable	(3,556	)	$	(4	)																				(52,006	)								(52,010	)
Debt discounts amortized upon conversion																									25,000									25,000
Issuance of common stock for services																			750,000			750			149,250									150,000
Converted accounts payable to common stock																			158,581			159			31,557									31,716
Converted Series E to common stock	(26,761	)		(27	)														26,761			27												-
Converted Series F to common stock						(49,242	)		(49	)									49,242			49												(0	)
Issuance of S-8 shares																			4,749,969			4,750			945,250									950,000
Liability to acquire common stock due to over issuance
Converted Series E to common stock and settlement																			(5,952	)		(6	)
Common stock issued for services																			20,000,000			20,000			90,000									110,000
Reverse liability to acquire common stock due to over issuance
Adjmt.																			1			3			473									476
Issance of common stock for services																			75,000,000			75,000			-									75,000
Issuance of common stock for payment of liability by a third party																			12,576,800			12,577												12,577
Conversion of accrued interest into common stock																			115,155,000			115,155												115,155
Issuance of common stock under 3(a)(10)																			69,000,000			69,000			(38,400	)								30,600
Net loss for the year ended December 31, 2013	-			-		-			-		-		-	-			-		-			-			-			-			(4,568,261	)		(4,568,261	)

Total	3,429		$	3		-		$	-		5,000	$	5	-		$	-		616,486,756		$	616,486		$	19,943,743		$	(91,248	)	$	(23,063,870	)	$	(2,594,882	)

For the Years Ended December 31, 2011 and 2012

	Preferred Stock Series A		Preferred Stock Series B		Preferred Stock Series C		Preferred Stock Series D		Preferred Stock Series E		Preferred Stock Series F		Common Stock Issuable		Common Stock		Subscription	Additional Paid-in	Loss from Discountinued	Accumulated	Total Shareholders' Equity
	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Amount	Receivable	Capital	Operations	Deficit	(Deficit)
Balance, December 31, 2010	1,854,013	$ 1,854	2,788,368	$ 2,788	3,142,452	$ 3,142	186,242	$ 186	-	$ -			-	$ -	21,090,158	$21,091		$10,302,925		$(11,601,281)	(1,269,295)
Options expense																		297,605			297,605
Warrants expense																		425,271			425,271
Conversion of preferred to common	(1,854,013)	(1,854)	(2,788,368)	(2,788)	(3,142,452)	(3,142)	(186,242)	(186)	-	-					7,971,075	7,970					-
Conversion of note payable															3,400,000	3,400		311,600			315,000
Conversion of payroll into warrants																		84,600			84,600
Conversion of payroll into Series E preferred stock									1,450,603	1,451								172,621			174,072
Beneficial Conversion Feature																		591,351			591,351
Issuance of common stock to non- employees for services															8,275,000	8,276		914,558			922,834
Issuance of common stock to employees for services															4,650,000	4,650		237,850			242,500
Conversion of accounts payable													229,455	$ 229	310,112	310		45,759			46,298
Cancellation of common stock															(1,830,999)	(1,831)		1,831			-
Cancellation of options																		(1,749)			(1,749)
Common stock issued for loan fees															444,448	444		39,556			40,000
Conversion of payroll, notes payable and liabilities into Series E preferred stock									2,145,219	2,145								149,877			152,022
Vesting of common stock															3,000,000	3,000		(3,000)			-
Conversion of notes payable and liabilities of Landlord															1,009,524	1,010		74,705			75,715
Net loss - 2011	-	-	-	-	-	-	-	-	-	-			-	-	-	-		-		(4,032,982)	(4,032,982)
Balance, December 31, 2011	-	$ -	-	$ -	-	$ -	-	$ -	3,595,822	$ 3,596			229,455	$ 229	48,319,318	$48,320		$13,645,360		$(15,634,263)	$(1,936,758)
Options expense																		10,135			10,135
Warrants expense																		5,571			5,571
Beneficial Conversion Feature-Kline $56k notes																		50,000			50,000
Beneficial Conversion Feature-Kline modification																		34,000			34,000
Common stock issued for loan fees															69,444	69		2,431			2,500
Common stock issued for services															1,250,000	1,250		48,750			50,000
Conversion of payroll into Series E preferred stock									1,190,476	1,190								28,810			30,000
Issuance of common stock to officers and directors for services															6,000,000	6,000		145,200			151,200

See accompanying notes to consolidated financial statements

F-5

eLAYAWAY, INC. AND SUBSIDIARIES

Statements of Changes in Shareholders' Equity (Deficiency)

For the Years Ended December 31, 2011 and 2012

	Preferred Stock Series A		Preferred Stock Series B		Preferred Stock Series C		Preferred Stock Series D		Preferred Stock Series E		Preferred Stock Series F		Common Stock Issuable		Common Stock		Subscription	Additional Paid-in	Loss from Discountinued	Accumulated	Total Shareholders' Equity
	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Amount	Receivable	Capital	Operations	Deficit	(Deficit)
Conversion of options and warrants to common stock															4,265,314	4,265		103,221
Issuable stock issued													(229,455)	(229)	229,455	229					-
Issuance of common stock for acquisition of Centralized Strategic Placements, Inc.													3,210,000	3,210	1,070,000	1,070		124,120			128,400
Sale of restricted stock													4,666,667	4,667			(30,000)	65,333			40,000
Subscription receivable collected																	30,000				30,000
Issuable issued													(4,666,667)	(4,667)	4,666,667	4,667					-
Conversion of debt															974,658	975		15,692			16,667
Sale of restricted stock															4,669,333	4,669		65,371			70,040
Issuance of warrants																		25,500			25,500
Amortization of options																		10,135			10,135
Conversion of AP into common stock															620,000	620		13,280			13,900
Issuance of stock - guaranteed issue															5,883,920	5,884		129,116			135,000
Conversion of warrants into common stock																		1,128			1,128
Stock issued for services													500,000	500				9,500			10,000
Conversion of NP into common stock - Evolution															3,246,753	3,247		32,468			35,715
Issuable issued													(500,000)	(500)	500,000	500					-
Issuable issued													(1,070,000)	(1,070)	1,070,000	1,070					-
Conversion of NP into common stock - Asher															1,724,138	1,724		15,517			17,241
Sale of restricted stock													37,500,000	37,500				112,500			150,000
Amortization of options																		10,135			10,135
Conversion of AP into Series F											3,787,826	3,788						26,515			30,303
Conversion of liabilities into Series E									5,213,702	5,214								52,137			57,351
Conversion of NP into common stock - Southridge															6,666,667	6,667		70,000			76,667
Reset on Southridge conversion													7,619,048	7,619	7,619,048	7,619		(15,238)			-
Conversion of NP into common stock - SGI															4,206,896	4,207		1,893			6,100
Conversion of NP into common stock - Star City															8,413,793	8,414		3,786			12,200
Adjustment of Premium due to conversions-Star City and SGI																		18,300			18,300
Issuance of Series F for personal guarantee											6,060,606	6,061						13,939			20,000
Repurchase of Series E in exchange for N/P									(2,060,276)	(2,060)								(4,739)			(6,799)
Adjustment of derivatives due to conversions																		10,714			10,714
Issuable issued													(7,619,048)	(7,619)	7,619,048	7,619					-
Issuable issued													(1,070,000)	(1,070)	1,070,000	1,070					-

See accompanying notes to consolidated financial statements

F-6

Statements of Changes in Shareholders' Equity (Deficiency)

For the Years Ended December 31, 2011 and 2012

	Preferred Stock Series A		Preferred Stock Series B		Preferred Stock Series C		Preferred Stock Series D		Preferred Stock Series E		Preferred Stock Series F		Common Stock Issuable		Common Stock		Subscription	Additional Paid-in	Loss from Discountinued	Accumulated	Total Shareholders' Equity
	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Amount	Receivable	Capital	Operations	Deficit	(Deficit)
Issuable issued													(1,070,000)	(1,070)	1,070,000	1,070					-
Conversion of NP into common stock - Southridge															8,430,769	8,431					8,431
Conversion of NP into common stock - Southridge															8,433,333	8,433					8,433
Conversion of NP into common stock - Southridge															16,253,333	16,253					16,253
Conversion of NP into common stock - Southridge															16,242,857	16,243					16,243
Conversion of NP into common stock - Southridge															23,928,571	23,929					23,929
Conversion of NP into common stock - Southridge															32,171,429	32,171					32,171
Conversion of NP into common stock - Southridge															4,373,077	4,373					4,373
Reset on Southridge conversion															1,311,923	1,312					1,312
Conversion of NP into common stock - Southridge															27,807,692	27,808					27,808
Conversion of NP into common stock - Southridge															8,342,308	8,342					8,342
Conversion of NP into common stock - Southridge															13,850,000	13,850					13,850
Conversion of NP into common stock - Southridge															32,166,667	32,167					32,167
Conversion of NP into common stock - Southridge															32,208,333	32,208					32,208
Conversion of NP into common stock - Marina															9,438,367	9,438					9,438
Conversion of NP into common stock - Mauriello															18,583,657	18,584					18,584
Conversion of NP into common stock - Mauriello													14,278,267	14,278							14,278
Conversion of NP into common stock - Sazer															9,297,943	9,298					9,298
Conversion of NP into common stock - SGI															15,113,467	15,113					15,113
Conversion of NP into common stock - SGI															8,664,771	8,665					8,665
Conversion of NP into common stock - SGI															3,389,433	3,389					3,389
Conversion of NP into common stock - SGI															4,028,400	4,028					4,028
Conversion of NP into common stock - SGI															8,513,160	8,513					8,513
Conversion of NP into common stock - SGI															18,889,371	18,889					18,889
Conversion of NP into common stock - SGI															10,193,857	10,194					10,194
Reset on SGI conversion															2,969,574	2,970					2,970
Reset on Star City conversion															5,939,148	5,939					5,939

See accompanying notes to consolidated financial statements

F-7

Statements of Changes in Shareholders' Equity (Deficiency)

For the Years Ended December 31, 2011 and 2012

	Preferred Stock Series A		Preferred Stock Series B		Preferred Stock Series C		Preferred Stock Series D		Preferred Stock Series E		Preferred Stock Series F		Common Stock Issuable		Common Stock		Subscription	Additional Paid-in	Loss from Discountinued	Accumulated	Total Shareholders' Equity
	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Amount	Receivable	Capital	Operations	Deficit	(Deficit)
Conversion of NP into common stock - Star City															8,513,180	8,513					8,513
Conversion of NP into common stock - Star City															18,889,371	18,889					18,889
Conversion of NP into common stock - Star City															3,938,246	3,938					3,938
Reset on Star City conversion													3,754,061	3,754		-					3,754
Conversion of NP into common stock - WHC															7,286,000	7,286					7,286
Conversion of NP into common stock - WHC															12,695,000	12,695					12,695
Conversion of NP into common stock - WHC															12,526,279	12,526					12,526
Conversion of NP into common stock - WHC													17,828,609	17,829							17,829
Conversion of NP into common stock - Asher															9,473,684	9,474					9,474
Conversion of NP into common stock - Asher															9,247,312	9,247					9,247
Conversion of NP into common stock - Asher															9,450,549	9,451					9,451
Conversion of NP into common stock - Asher															8,217,178	8,217					8,217
Conversion of NP into common stock - Asher															2,191,781	2,192					2,192
Amortization of options																		10,135			10,135
Put premiums on notes																		580,870			580,870
Conversion rescinded															(3,246,753)	(3,247)		(32,468)			(35,715)
Gain on extinquishment of convertible debt																		11,767			11,767
Net loss - 2012	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	(91,428)	(2,861,346)	(2,861,346)
Balance, December 31, 2012	-	$ -	-	$ -	-	$ -	-	$ -	7,939,724	$ 7,939	9,848,432	$ 9,849	73,360,937	$ 73,361	560,947,719	$ 560,948	$ -	$ 15,450,884	$ (91,428)	$(18,495,609)	$ (2,402,477)

See accompanying notes to consolidated financial statements.

F-85

eLAYAWAY, INC. and SUBSIDIARIES

Consolidated Statements of Cash Flows

For the Years Ended December 31,

	2012			2011
	2013			2012
Cash flows from operating activities:
Net loss	$	(24,~~952~~568,~~594~~261	)	$	(42,~~032~~952,~~982~~594	)
Adjustments to reconcile net loss to net cash used in operations:
Depreciation and amortization		10,928			9,691
Depreciation		950			10,928
Amortization of intangibles		~~55,520~~431			~~432~~55,520
Bad debt expense		~~1,668~~-			-1,668
Amortization of debt discounts to interest expense		~~437,833~~-			~~696~~437,~~168~~833
Amortization of debt issue costs to interest expense		387,~~443~~167			238,~~230~~443
Issuance of note for legal services		~~25,000~~-			-25,000
Issuance of note for accrued payroll		~~10,000~~-			-10,000
Grant of warrants for services		31,071			425,271
Deriviative loss		(4,286	)		-
Grant of options for services		30,405			295,856
Grant of warrants for services		-			31,071
Common stock granted for services		152,060			755,666
Grant of options for services		-			30,405
Loss on conversion of debt into common stock		-			-
Common stock granted for services		344,978			152,060
Expense for exchange of options and warrants into common stock		108,614			-
Expense for exchange of options and warrants for common stock		-			108,614
Amortization of stock-based prepaids		~~218,346~~-			~~608~~218,~~521~~346
Gain on settlement of payroll with common stock		-			(9,400	)
Gain on extinguishment of debt		-			(198,083	)
Gain on extinguishment of debt		(198,083	)		(16,108	)
Accretion of put premium into interest expense		105,018			9,052
Gain on settlement of liabilities		(46,336	)		-
(Gain) loss on settlement of liabilities		3,644,074			(46,336	)
Gain on unclaimed liabilities		~~(98,823~~-	)		-(98,823	)
Loss on disposition of CSP		~~231,420~~-			-231,420
Compensation expense for returned shares		~~150,461~~-			-150,461
Adjustment of derivatives for conversion of notes		241,494			-
Adjustment for derivatives for conversion of notes		-			241,494
Accretion of put premium into interest expense		9,052			-
Loss on settlement of accounts payable for common stock		-			804,735
Loss on settlement of payroll for preferred stock		-			82,867
Change in fair value of embedded conversion option liability		(6,429	)		(215,731	)
Loss on settlement of accounts payable for common stock		804,735			(21,786	)
Change in fair value of embedded conversion option liability		(215,731	)		(50,270	)
Changes in operating assets and liabilities:
Segregated cash for customer deposit		6963,~~600~~433			~~(108~~69,~~050~~600	)
Other receivable		(50,000	)		-(50,000	)
Prepaid expenses		9747,~~122~~953			~~(10~~97,~~524~~122	)
Other assets		~~8,103~~-			-8,103
Accounts payable		(~~193~~28,~~528~~284	)		(5193,~~580~~528	)
Accounts payable to related parties		~~4,475~~-			944,~~906~~475
Accrued expenses		(3139,~~868~~769	)		~~104~~(3,~~967~~868	)
Deposits received from customers for layaway sales		(40,709	)		58,055
Liability to guarantee equity value		(25,000	)		-
Net cash used in operating activities		(1,063,322	)		(1,120,069	)
Deposits received from customers for layaway sales		(63,444	)		(40,709	)
Net cash used in operating activities		(291,931	)		(1,063,322	)
Cash flows from investing activities:
Acquisition of fixed assets		~~(901~~-	)		(~~2,586~~901	)
Cash acquired in acquisition		~~2,447~~-			-2,447
Cash paid in acquisition		~~(6,000~~-	)		-(6,000	)
Net cash used in investing activities		~~(4,454~~-	)		(24,~~586~~454	)
Cash flows from financing activities:
Proceeds from related party loans		~~273,272~~-			~~760~~273,~~000~~272
Proceeds from loans		~~615~~272,~~481~~223			~~565~~615,~~000~~481
Repayment of loans		~~(45,152~~-	)		(1745,~~986~~152	)
Repayment of related party loans		~~(65,000~~-	)		(~~255~~65,000	)
Payment of loan fee		~~(7,500~~-	)		-(7,500	)
Sale of common stock		~~290,040~~-			-290,040
Net cash provided by financing activities		1272,~~061,141~~223			1,~~052~~061,~~014~~141

See accompanying notes to consolidated financial statements.

F-96

eLAYAWAY, INC. and SUBSIDIARIES

Consolidated Statements of Cash Flows

For the Years Ended December 31,

	2012			2011
		2013			2012
Net increase (decrease) in cash		(619,~~635~~708	)		(706,~~641~~635	)
Cash at beginning of period		2922,~~458~~823			~~100~~29,~~099~~458
Cash at end of period	$	223,~~823~~115		$	2922,~~458~~823
Supplemental disclosure of cash flow information:
Cash paid for interest	$	~~3,405~~-		$	43,~~321~~405
Cash paid for taxes	$	-		$	-
Non-cash investing and financing activities:
Settlement of payroll with warrants	$	-		$	94,000
Acquisition of Centralized Strategic Placements, Inc.	$	-		$	242,402
Acquisition of Centralized Strategic Placements, Inc.	$	242,402		$	-
Reclassification of liability to equity for expiration of guarantee	$	-		$	135,000
Conversion of convertible notes payable to common stock	$	-		$	340,000
Debt discounts for beneficial conversion features values	$	15,689		$	99,616
Reclassification of equity to liability for guarantee of equity value	$	-		$	160,000
Return of Series E preferred stock	$	-		$	6,799
Reclassification of liability to equity for expiration of guarantee	$	135,000		$	135,000
Common stock issued for legal services	$	-		$	37,800
Debt discounts for benefical conversion features values	$	99,616		$	345,000
Debt discounts for loan fees	$	2,500		$	6,000
Extinguishment of beneficial conversion debt discount to APIC	$	-		$	64,687
Conversion of loan fees to common stock	$	-		$	2,500
Debt modification increase in fair value of embedded conversion options	$	-		$	2,245
Capitalization of accrued interest to convertible note payable	$	-		$	6,000
Settlement of accounts payable with common stock	$	-		$	18,500
Settlement of accounts payable for Series E preferred stock	$	-		$	30,000
Return of Series E preferred stock	$	6,799		$	-
Conversion of related party payroll into Series E preferred stock	$	-		$	38,691
Common stock issued for legal services	$	37,800		$	-
Conversion of related party liabilities into Series F preferred stock	$	-		$	10,765
Debt discounts for loan fees	$	6,000		$	-
Common stock issued for services	$	930,001		$	60,000
Conversion of loan fees to common stock	$	2,500		$	40,000
Conversion of debt to common stock including premium	$	-		$	164,934
Conversion of notes payable and liabilities to common stock	$	-		$	75,715
Conversion of accounts payable to common stock	$	-		$	15,500
Capitalization of accrued interest to convertible note payable	$	6,000		$	-
Conversion of liabilities to a related party into notes payable	$	82,010		$	-
Settlement of accounts payable for Series E preferred stock	$	30,000		$	-
Embedded conversion option liability	$	-		$	24,815
Conversion of related party liabilities into Series E preferred stock	$	38,691		$	272,072
Issuance of Series G preferred stock for services	$	1,000		$	-
Conversion of related party liabilities into Series F preferred stock	$	10,765		$	-
Conversion of Series E preferred stock into common stock	$	(712	)	$	-
Common stock issued for services	$	60,000		$	-
Conversion of debt to common stock including premium	$	164,934		$	-
Conversion of accounts payable to common stock	$	15,500		$	19,298
Conversion of convertible preferred stock into common stock	$	-		$	7,970
Embedded conversion option liability	$	24,815		$	483,317

See accompanying notes to consolidated financial statements.

F-107

eLayaway, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, ~~2012~~2013 and ~~2011~~2012

NOTE 1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

eLayaway, Inc. (the “Company,” “we,” “us,” “our,” or “eLayaway”) is a Delaware corporation formed on December 26, 2006 as Tedom Capital, Inc. On April 16, 2010, the Company changed its name to eLayaway, Inc.

On March 17, 2010, the Company formed Tedom Acquisition Corp. (“TAC”), a Florida corporation, for the purpose of a reverse triangular merger with eLayaway.com, Inc., a Florida corporation (f/k/a eLayawayCOMMERCE, Inc. and eLayaway, Inc., “eLayaway.com”). On April 12, 2010, eLayaway.com merged with TAC with eLayaway.com as the surviving subsidiary of the Company.

eLayaway.com was a Florida limited liability company that was formed on September 8, 2005 in Florida. On September 1, 2009, the Managing Members of the Florida limited liability company filed with the State of Florida to convert the Company to a corporation. For accounting purposes, the conversion to a corporation was treated as a recapitalization and reflected retroactively for all periods presented in the accompanying consolidated financial statements. On April 19, 2010, eLayaway, Inc. changed its name to eLayawayCOMMERCE, Inc. and subsequently, on March 7, 2012, changed its name to eLayaway.com, Inc.

Prior to the formation of eLayaway.com, the research and development of the eLayaway concept operated under the entity Triadium, LLC. The investors and founders of Triadium, LLC then formed eLayaway, LLC to commercialize the eLayaway business concept. There were no assets or liabilities contributed to eLayaway from Triadium, LLC at the time of formation of eLayaway, LLC.

In April 2007, the Company formed eLayaway Australia Pty, Ltd., an Australian company. This entity is 97% owned by eLayaway and has been inactive since inception. In 2012, this entity was dissolved.

On February 18, 2009, the Company acquired MDIP, LLC (“MDIP”), for nominal consideration, from its three founders, who are also the founders of eLayaway. MDIP held the intellectual property rights related to the electronic payment systems and methods for which a non-provisional patent application was filed on October 17, 2006 for a Letters Patent of the United States and assigned a Utility Patent application Serial No. 11/550,301.

On March 25, 2009, one of the founders of eLayaway assigned the “eLayaway” trademark to the Company for nominal consideration including $6,468 of legal fees paid by the Company in 2006.

On March 29, 2010, the intellectual property was assigned to eLayaway.com and MDIP was dissolved.

On July 28, 2010, ~~Pay4Tx~~Pay4Tix.com, Inc. (“Pay4Tix,” f/k/a eLayawaySPORTS, Inc.), a Florida corporation, was formed as a subsidiary of the Company. This company was administratively dissolved on September 27, 2013.

On November 15, 2011, DivvyTech, Inc. (“DivvyTech”), a Florida corporation, was formed as a subsidiary of the Company. This company was administratively dissolved on September 27, 2013.

On January 20, 2012, PrePayGetaway.com, Inc. (“PrePayGetaway”) and PlanItPay.com, Inc. (“PlanItPay”), both Florida corporations, were formed as subsidiaries of the Company. These companies were administratively dissolved on September 27, 2013.

On January 25, 2012, NuVidaPaymentPlan.com, Inc. (“NuVida”), a Florida corporation, was formed as a subsidiary of the Company. This company was administratively dissolved on September 27, 2013.

On February 7, 2012, with an effective date of February 1, 2012, the Company acquired all of the voting capital stock of Centralized Strategic Placements, Inc. (“CSP,” see Note 2). CSP is a discontinued operation.

F-8

Nature of Operations

F-11

eLayaway, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

DivvyTech Powered Brands:

eLayaway.com is a payment processor that empowers merchants with the ability to easily and efficiently offer an automated layaway payment plan to both online and in-store customers. Consumers can use eLayaway to conveniently pay for any product or service over time and receive their order once it is paid in full. Payment processing and supporting services are handled by eLayaway while merchants provide order fulfillment.

NuVida Payment Plan provides prepayment solutions for patients and healthcare facilities. This patented technology provides patients with the opportunity to prepay for procedures over time without having to use credit or go into debt. ~~Nuvida~~NuVida is managed by HIPAA certified, payment processing professionals.

Pay4Tix provides a prepaid ticket solution for both teams and fans. DivvyTech's payment technology allows teams and ticketing platforms to integrate the prepayment option directly into all sales channels for new ticket sales and season ticket renewals. Pay4Tix is managed by payment processing experts with sports marketing experience.

PrePayGetaway provides a prepayment solution for travel companies and consumers. By leveraging DivvyTech's technology, travel professionals can create a customized recurring prepayments system. PrePayGetaway is managed by payment processing experts with travel industry experience.

PlanItPay consists of a robust community of registered member shoppers connecting online at eLayaway.com with affiliate merchants offering millions of consumer products and services. Thousands of secure transactions are processed weekly with membership increasing daily. PlanItPay’s proprietary technology is managed by payment processing experts with retail experience.

eApartado.com is the eLayaway.com platform recreated for Hispanic merchants and consumers. The site provides the same exclusive technologies offered through eLayaway.com and is managed by a team of bilingual experts.

Principles of Consolidation

The consolidated financial statements include the accounts of eLayaway and its wholly-owned subsidiaries (as of December 31, ~~2012~~2013), eLayaway.com, Pay4Tix (inactive), DivvyTech (inactive), NuVida (inactive), CSP (discontinued operations), PrepayGetaway (inactive), PlanItPay (inactive) and majority-owned subsidiary eLayaway Australia Pty, Ltd. (inactive). All significant inter-company balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates in the accompanying consolidated financial statements include the valuation and purchase price allocation of assets acquired and liabilities assumed in business combinations, amortization period for intangible assets, valuation and impairment valuation of intangible assets, depreciable lives of the web site and property and equipment, valuation of warrants and beneficial conversion feature debt discounts, valuation of derivatives, valuation of share-based payments and the valuation allowance on deferred tax assets.

Discontinued Operations

As a result of an agreement dated October 1, 2012 with a third party, the operations of CSP are reflected as a discontinued operation.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.

F-129

eLayaway, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

Property, Equipment and Depreciation

Property and equipment is recorded at cost. Depreciation is computed using the straight-line method based on the estimated useful lives of the related assets of three years for computer equipment, five years for office furniture and fixtures, and the lesser of the lease term or the useful life of the leased equipment. Leasehold improvements, if any, would be amortized over the lesser of the lease term or the useful life of the improvements. Expenditures for maintenance and repairs along with fixed assets below our capitalization threshold are expensed as incurred.

Web site Development Costs

The Company accounts for its web site development costs in accordance with Accounting Standards Codification (“ASC”) ASC 350-10 “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use” (“ASC 350-10”). These costs are included in intangible assets in the accompanying consolidated financial statements.

ASC 350-10 requires the expensing of all costs of the preliminary project stage and the training and application maintenance stage and the capitalization of all internal or external direct costs incurred during the application development stage. The Company amortizes the capitalized cost of software developed or obtained for internal use over an estimated life of three years.

Accounting for Derivatives

The Company evaluates its convertible debt, options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for. The result of this accounting treatment is that under certain circumstances the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income or expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Equity instruments that are initially classified as equity that become subject to reclassification under this accounting standard are reclassified to liability at the fair value of the instrument on the reclassification date.

Impairment of Long-Lived Assets

The Company accounts for long-lived assets in accordance with the provisions of Statement of Financial Accounting Standards ASC 360-10, “Accounting for the Impairment or Disposal of Long-Lived Assets”. This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

Fair Value of Financial Instruments

The Company measures its financial assets and liabilities in accordance with generally accepted accounting principles. For certain of our financial instruments, including cash, accounts payable, accrued expenses, deposits received from customers for layaway sales and short term loans the carrying amounts approximate fair value due to their short maturities.

We follow accounting guidance for financial and non-financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.

F-1310

~~eLayaway,~~We ~~Inc~~currently measure and report at fair value our derivative liabilities. The fair value of intangible assets has been determined using the present value of estimated future cash flows method. The fair value of derivative liabilities is measured using the Black-Scholes option pricing method. The following table summarizes our non-financial assets and ~~Subsidiaries~~liabilities measured at fair value on a recurring basis as of December 31, 2013:

Notes to Consolidated Financial Statements

	Balance at December 31,		Quoted Prices in Active Markets for Identical		Significant Other Observable		Significant Unobservable
	2013		Assets		Inputs		Inputs
			(Level 1)		(Level 2)		(Level 3)
Assets:
Trademarks	$	3,413	$	-	$	-	$	3,413
Total Financial Assets	$	3,413	$	-	$	-	$	3,413

Following is a summary of activity through December 31, ~~2012~~2013 ~~and~~of ~~2011~~the fair value of intangible assets valued using Level 3 inputs:

We currently measure and report at fair value our intangible assets (due to our impairment analysis) and derivative liabilities. The fair value of intangible assets has been determined using the present value of estimated future cash flows method. The fair value of derivative liabilities is measured using the Black-Scholes option pricing method. The following table summarizes our non-financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2012:

Balance at December 31, 2012	$	3,844
Amortization of intangibles		(431	)
Ending balance at December 31, 2013	$	3,413

			Quoted Prices in
	Balance at		Active Markets		Significant Other		Significant
	December 31,		for Identical		Observable		Unobservable
	2012		Assets		Inputs		Inputs
			(Level 1)		(Level 2)		(Level 3)
Assets:
Trademarks	$	3,844	$	-	$	-	$	3,844
Total Financial Assets	$	3,844	$	-	$	-	$	3,844

The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis at December 31, 2013:

Following is a summary of activity through December 31, 2012 of the fair value of intangible assets valued using Level 3 inputs:

	Balance at December 31,		Quoted Prices in Active Markets for Identical		Significant Other Observable		Significant Unobservable
	2013		Assets		Inputs		Inputs
			(Level 1)		(Level 2)		(Level 3)
Liabilities:
Derivative Liabilities	$	53,570	$	-	$	-	$	53,570
Total Financial Assets	$	53,570	$	-	$	-	$	53,570

Balance at December 31, 2011	$	4,275
Acquired intangible assets		249,840
Amortization of intangibles		(55,941)
Effect of discontinued operations		(194,330	)
Ending balance at December 31, 2012	$	3,844

Following is a summary of activity through December 31, 2013 of the fair value of derivative liabilities valued using Level 3 inputs:

The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis at December 31, 2012:

Balance at December 31, 2012	$	70,704
Note inception date fair value		24,815
Change in fair value during 2013		(41,949)
Ending balance at December 31, 2013	$	53,570

			Quoted Prices in
	Balance at		Active Markets		Significant Other		Significant
	December 31,		for Identical		Observable		Unobservable
	2012		Assets		Inputs		Inputs
			(Level 1)		(Level 2)		(Level 3)
Liabilities:
Derivative Liabilities	$	70,704	$	-	$	-	$	70,704
Total Financial Assets	$	70,704	$	-	$	-	$	70,704

Following is a summary of activity through December 31, 2012 of the fair value of derivative liabilities valued using Level 3 inputs:

Balance at December 31, 2011	$	433,047
Note inception date fair value		24,815
Change in fair value during 2012		(387,158)
Ending balance at December 31, 2012	$	70,704

Revenue Recognition

The Company recognizes revenue on our products in accordance with ASC 605-10, “Revenue Recognition in Financial Statements”. Under these guidelines, revenue is recognized on sales transactions when all of the following exist: persuasive evidence of an arrangement did exist, delivery of service has occurred, the sales price to the buyer is fixed or determinable and collectability is reasonably assured. The Company has several revenue streams as follows:

F-14

eLayaway, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

	•	Transaction fees for each layaway, which are recognized at the point-of-sale.
	•	eLayawayADVANTAGE™, which is a monthly consumer membership fee paid in advance each month and recognized pro rata over the service period.
	•	eLayawayMALL commissions which are commissions earned by referring customers to merchants through the Company’s web site and are recognized by the Company at the point of sale by the third party merchant.
	•	Cancellation fees ($25 per cancellation) which are charged to eLayaway members upon cancellation of their order and recognized on the cancellation date.
	•	Merchant subscription fees which are either monthly merchant service fees recognized pro rata over the service period or transaction fees recognized at the point-of-sale.
	•	Interest income derived from the escrow account which is included as other income.

F-11

Stock-Based Compensation

The Company accounts for stock-based instruments issued to employees in accordance with ASC Topic 718. ASC Topic 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity based compensation issued to employees. The value of the portion of an award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line attribution method. The Company accounts for non-employee share-based awards in accordance with the measurement and recognition provisions ASC Topic 505-50. The Company estimates the fair value of stock options at the grant date by using the Black-Scholes option-pricing model.

Advertising

Advertising is expensed as incurred and is included in selling, general and administrative expenses on the accompanying statement of operations. For the years ended December 31, ~~2012~~2013 and ~~2011~~2012 advertising expense for continuing operations was $956,~~678~~129 and $895,~~505~~678, respectively.

Income Taxes

Prior to September 1, 2009, the Company operated as an LLC and thus had no income tax exposure. Effective September 1, 2009, the Company accounts for income taxes pursuant to the provisions of ASC 740-10, “Accounting for Income Taxes,” which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized.

Beginning September 1, 2009, the Company adopted the provisions of ASC 740-10, “Accounting for Uncertain Income Tax Positions.” When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for unrecognized tax benefits. As of December 31, ~~2012~~2013, tax years 2012, 2011, 2010 and 2009 remain open for IRS audit. The Company has received no notice of audit from the IRS for any of the open tax years.

Effective September 1, 2009, the Company adopted ASC 740-10, “Definition of Settlement in FASB Interpretation No. 48”, (“ASC 740-10”), which was issued on May 2, 2007. ASC 740-10 amends FIN 48 to provide guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits. The term “effectively settled” replaces the term “ultimately settled” when used to describe recognition, and the terms “settlement” or “settled” replace the terms “ultimate settlement” or “ultimately settled” when used to describe measurement of a tax position under ASC 740-10. ASC 740-10 clarifies that a tax position can be effectively settled upon the completion of an examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. The adoption of ASC 740-10 did not have an impact on the accompanying consolidated financial statements.

F-15

eLayaway, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

Net Earnings (Loss) Per Share

In accordance with ASC 260-10, “Earnings Per Share”, basic net earnings (loss) per common share is computed by dividing the net earnings (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share are computed using the weighted average number of common and dilutive common stock equivalent shares outstanding during the period. Dilutive common stock equivalent shares which may dilute future earnings per share consist of warrants to purchase 632,~~523,720~~618 at December 31, ~~2012~~2013 shares of common stock (which are not in the money), employee options to purchase ~~781~~3,~~272~~907 shares of common stock (which are not in the money) and convertible notes convertible into ~~959~~1,~~666~~408,~~274~~949,713 common shares. All of the outstanding warrants and options have exercise prices that are out of the money therefore would not be converted at the current market price. As of December 31, ~~2011~~2013, there were a total of 241,~~338~~408,~~621~~986,238 common stock equivalents that were not utilized in the computation of ~~2011~~2013 dilutive net loss per share as the effect was anti-dilutive. Equivalent shares are not utilized when the effect is anti-dilutive (see Note 12).

Segment Information

In accordance with the provisions of ASC 280-10, “Disclosures about Segments of an Enterprise and Related Information”, the Company is required to report financial and descriptive information about its reportable operating segments. The Company does not have any operating segments as of December 31, ~~2012~~2013 and ~~2011~~2012.

F-12

Recent Accounting Pronouncements

The Company reviews new accounting standards as issued. No new standards had any material effect on these unaudited consolidated financial statements. The accounting pronouncements issued subsequent to the date of these unaudited consolidated financial statements that were considered significant by management were evaluated for the potential effect on these unaudited consolidated financial statements. Management does not believe any of the subsequent pronouncements will have a material effect on these unaudited consolidated financial statements as presented and does not anticipate the need for any future restatement of these unaudited consolidated financial statements because of the retro-active application of any accounting pronouncements issued subsequent to ~~September~~December 3031, ~~2012~~2013 through the date these unaudited consolidated financial statements were issued.

NOTE 2 – BUSINESS ACQUISITIONS AND DISPOSITIONS

On February 7, 2012, with an effective date of February 1, 2012, the Company acquired all of the voting capital stock of Centralized Strategic Placements, Inc. (“CSP”) in exchange for a commitment for 4,280,000 shares of common stock of the Company, 1,070,000 issuable at the date of the execution of the agreement, 1,070,000 issuable on August 1, 2012, 1,070,000 issuable on February 1, 2013, and 1,070,000 issuable on August 1, 2013. The shares were issued to Richard St. Cyr (“St. Cyr”) and Douglas Pinard (“Pinard”), the co-owners of CSP. Additionally, $3,000 in cash was paid to each of the co-owners of CSP and Convertible Promissory Notes were issued in the amount of $57,000 each to both owners. The Company recorded the transaction at $248,400, which is based on the 4,280,000 shares valued at the previous day closing price of our common stock of $0.03, or $128,400, the cash balance paid of $6,000, and the two promissory notes for a combined amount of $114,000. The two promissory notes were in default as of August 1, 2012 (see Note 7). CSP is a strategic acquisition as it owns proprietary technology in regards to an online shopping mall and has contracts with various federal government agencies, including, but not limited to, the Army Air Force Exchange Service, which in total has approximately fourteen million members in the various government agencies including the United States military.

The purchase price was allocated first to record identifiable acquired assets and assumed liabilities at fair value as follows:

Current assets	$	13,002
Property and equipment		24,220
Other assets		346
Website technology intangibles		249,840
Total assets acquired		287,408
Liabilities assumed		(39,008	)
Total purchase price	$	248,400

The amounts of revenues and net losses from CSP included in the Company’s consolidated statement of operations for the year ended December 31, 2012, and the unaudited supplemental pro forma revenues and net income (loss) of the combined entity that give effect to the acquisition had it occurred January 1, ~~2011~~2012 is as follows:

F-16

			Net
(Unaudited)	Revenues		Income (Loss)

CSP actual from February 1, 2012 to December 31, 2012	$	77,908	$	(91,248	)

eLayaway, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

			Net
(Unaudited)	Revenues		Income (Loss)
CSP actual from February 1, 2012 to December 31, 2012	$	77,908	$	(91,248	)
Supplemental unaudited consolidated pro forma information for the year ended December 31, 2011	$	251,693	$	(4,003,908	)

In preparing the unaudited pro forma information, various assumptions were made, and the Company does not purport this information to be indicative of what would have happened had acquisition been made as of January 1, 2011, nor is it indicative of the results of future combined operations.

On October 1, 2012, the Company, through an Asset Purchase Agreement with Channel Worth Holdings, LLC (“Channel Worth”), sold certain assets owned by CSP. Channel Worth acquired the technology of CSP and the respective operations of CSP. The Company and Channel Worth entered into an agreement whereas Channel Worth would provide on a long-term basis, the services of the operation independently of CSP and/or the Company. In exchange for the services, the principal of Channel Worth, St. Cyr, forgave $40,000 of the note payable of $57,000 and the related accrued interest due to him, as well as any accounts payable. See Note 1 and 117. Channel Worth entered into an agreement with the Company whereas it would independently provide the services that were previously in house.

F-13

Disposition of Centralized Strategic Placements, Inc.

The operations of CSP were transferred to Channel Worth on October 1, 2012 in order to facilitate the growth quicker via a third party and to settle on the outstanding liabilities associated with the original acquisition. The consideration to be received for the transfer is 5% of net sales by Channel Worth for two years. Therefore, due to the transfer of the assets of CSP to the third party, the accounting for CSP in this period and historically would be classified as a discontinued operation. Accordingly, the Company has excluded results for CSP from its continuing operations in the Consolidated Statement of Operations for all periods presented. The following table shows the results of CSP included in the loss from discontinued operations:

	For the Years Ended
	December 31,
	2012			2011
	2013			2012
Sales	$	~~78,939~~-		$	-78,939
Cost of sales		~~12,154~~-			-12,154
Gross profit (loss)		~~66,785~~-			-66,785
Selling, general and administrative expenses		~~171,856~~-			-171,856
Loss from discontinued operations		~~(105,071~~-	)		-(105,071)
Other income (expense)
Interest expense		~~(916~~-	)		-(916)
Gain on settlement of debt		~~14,739~~-			-14,739
Total other income (expense), net		~~13,823~~-			-13,823
Net loss from discontinued operations	$	~~(91,248~~-	)	$	-(91,248)

F-17

eLayaway, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

The major classes of assets and liabilities of discontinued operations on the balance sheet are as follows:

	December 31,		December 31,
	2012		2011
	2013		2012
ASSETS
Current assets
Cash	$	~~536~~-	$	-536
Total current assets		~~536~~-		-536
Total assets of discontinued operations	$	~~536~~-	$	-536
LIABILITIES
Current liabilities
Accounts payable	$	-	$	-
Total current liabilities of discontinued operations	$	-	$	-

NOTE 3 - GOING CONCERN

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company sustained net losses of $24,~~952~~568,~~594~~261 (includes $~~492~~344,~~812~~978 of stock-based compensation and settlements) and used cash in operating activities of $1291,~~063,322~~931 for the year ended December 31, ~~2012~~2013. The Company had a working capital deficiency, stockholders’ deficiency and accumulated deficit of $2,~~494~~600,~~582~~170, $2,~~483~~595,~~876~~532 and $1823,~~586~~146,~~857~~869, respectively, at December 31, ~~2012~~2013. These factors raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time. The Company’s continuation as a going concern is dependent upon its ability to generate revenues and its ability to continue receiving investment capital and loans from third parties to sustain its current level of operations. The Company is in the process of securing working capital from investors for common stock, convertible notes payable, and/or strategic partnerships. No assurance can be given that the Company will be successful in these efforts.

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

F-14

NOTE 4 – SEGREGATED CASH FOR CUSTOMER DEPOSITS

The Company maintains an account at a bank, which facilitates the deposit of customers’ funds during the layaway process. The account is under the control of the Company's management. Once the complete payment is made by the customer, the bank transfers via ACH the appropriate amount to the merchant for finalization of the layaway process. The funds on deposit are interest bearing for the benefit of eLayaway. As of December 31, ~~2012~~2013 and ~~2011~~2012, the Company had $8522,~~054~~621 and $~~155~~86,~~654~~054, respectively, on deposit in this account. Generally the related liability entitled "Deposits received from customers for layaway sales" should equal the cash balance, however, timing differences in transferring earned cash from the segregated bank account to the operating bank account, may result in the segregated cash balance exceeding the liability balance at any time.

NOTE 5 – PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

	December 31,
	2012			2011
	2013			2012
Computer equipment	$	126,330		$	~~125~~126,~~429~~330
Office equipment		47,027			47,027
Leased equipment		89,459			89,459
		262,816			~~261~~262,~~915~~816
Less: Accumulated depreciation		(~~260~~261,~~621~~591	)		(~~250~~260,~~122~~621	)
Property and equipment, net	$	21,~~195~~225		$	112,~~793~~195

~~F-18~~Depreciation expense for continuing operations was $950 and $10,928 for the years ended December 31, 2013 and 2012, respectively.

eLayaway, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

Depreciation expense for continuing operations was $10,497 and $9,692 for the years ended December 31, 2012 and 2011, respectively.

NOTE 6 – INTANGIBLES, NET

Intangibles consist of the following:

	December 31,
	2012			2011
	2013			2012
Trademark	$	6,468		$	6,468
Web site		303,046			303,046
		309,514			309,514
Less: Accumulated amortization		(~~305~~306,~~670~~101	)		(305,~~239~~670	)
Intangibles, net	$	3,~~844~~413		$	43,~~275~~844

Amortization expense for continuing operations was $431 and $~~432~~55,520 for the years ended December 31, ~~2012~~2013 and ~~2011~~2012, respectively.

F-15

NOTE 7 – NOTES AND CONVERTIBLE NOTES PAYABLE, AND NOTES PAYABLE RELATED PARTIES, NET OF DISCOUNTS

Notes and convertible notes payable, net of discounts, all classified as current at December 31, ~~2012~~2013 and ~~2011~~2012, consists of the following:

F-19

Notes and convertible notes,
net of discounts	December 31, 2013									December 31, 2012
								Principal,									Principal,
			Unamortized			Put		net of				Unamortized			Put		net of
	Principal		Discount			Premium		Discounts		Principal		Discount			Premium		Discounts

Gary Kline (1) (2)	$	56,000	$	-		$	-	$	56,000	$	56,000	$	-		$	-	$	56,000
Gary Kline (1)		55,000		-			-		55,000		55,000		-			-		55,000
Gary Kline (1)		75,000		-			-		75,000		75,000		-			-		75,000
Gary Kline (1)		23,500		-			-		23,500		23,500		-			-		23,500
James E. Pumphrey (1)		25,883		-			-		25,883		25,883		-			-		25,883
Evolution Capital, LLC (1) (2)		11,500		-			-		11,500		25,000		-			-		25,000
Evolution Capital, LLC (1) (2)		75,000		-			-		75,000		75,000		-			-		75,000
Evolution Capital, LLC (1)		22,750		-			-		22,750		-		-			-		-
Evolution Capital, LLC (1)		20,255		-			-		20,255		-		-			-		-
Evolution Capital, LLC (1)		36,580		-			-		36,580		-		-			-		-
Evolution Capital, LLC (1)		12,990		-			-		12,990		-		-			-		-
Marina Development, LLC (1) (2)		-		-			-		-		19,350		-			-		19,350
Keith Sazer (1) (2)		-		-			-		-		5,250		-			-		5,250
Hanson Capital, LLC (1) (2)		98,500		-			-		98,500		100,000		-			-		100,000
Asher Enterprises, Inc. (2)		650		-			27,155		27,805		37,500		-18,103			27,155		46,552
Asher Enterprises, Inc. (2)		39,850		-			38,379		78,229		53,000		-38,379			38,379		53,000
Asher Enterprises, Inc. (2)		32,500		-			23,534		56,034		-		-			-		-
KAJ Capital, LLC (1) (2)		10,000		-			-		10,000		25,000		-			-		25,000
Robert Salie - Line of Credit (1) (2)		400,000		-2,805			-		397,195		400,000		-2,805			-		397,195
Salie Family Limited Partnership (1) (2)		50,000		-			-		50,000		50,000		-			-		50,000
Transfer Online, Inc. (1)		15,400		-			-		15,400		15,400		-			-		15,400
Transfer Online, Inc. (1)		25,000		-			-		25,000		25,000		-			-		25,000
Transfer Online, Inc. (1)		35,000		-			-		35,000		35,000		-			-		35,000
Transfer Online, Inc. (1)		45,000		-			-		45,000		45,000		-			-		45,000
Transfer Online, Inc. (1)		55,000		-			-		55,000		55,000		-			-		55,000
Douglas Pinard (1)		20,000		-			-		20,000		20,000		-			-		20,000
Richard St. Cyr (1)		17,000		-			-		17,000		17,000		-			-		17,000
Susan Jones (1)		58,333		-			-		58,333		58,333		-			-		58,333
SGI Group, LLC (1) (2)		-		-			-		-		6,419		-			-		6,419
Ventana Capital Partners, Inc. (1)		20,000		-			-		20,000		20,000		-			-		20,000
Star City Capital, LLC (1) (2)		-		-			-		-		20,000		-			-		20,000
Southridge Partners II, LP (1) (2)		-		-			-		-		155,525		-			-		155,525
Southridge Partners II, LP (1) (2)		-		-			-		-		45,000		-			-		45,000
Southridge Partners II, LP (1) (2)		-		-			-		-		55,300		-			-		55,300
Thomas Carluccio, Jr. (2)		5,000		-			-		5,000		-		-			-		-
Thomas Carluccio, Jr. (2)		5,000		-			-		5,000		-		-			-		-
WHC Capital, LLC (1) (2)		-		-			-		-		24,909		-			-		24,909
Southridge Partners II, LP (1) (2)		-		-			-		-		11,375		-			-		11,375
Southridge Partners II, LP (2)		-		-			-		-		25,000		-			-		25,000
Total	$	1,346,691	$	(2,805	)	$	89,068	$	1,432,954	$	1,659,744	$	(59,287	)	$	65,534	$	1,665,991

(1) In default.
(2) Convertible.

~~eLayaway, Inc. and Subsidiaries~~F-16

Notes to Consolidated Financial Statements

Notes, convertible notes, and
lines of credit payable to related parties, net of discounts
	December 31, 2013								December 31, 2012
							Principal,								Principal,
			Unamortized		Put		net of				Unamortized		Put		net of
	Principal		Discount		Premium		Discounts		Principal		Discount		Premium		Discounts

Bruce Harmon (1)	$	157,260	$	-	$	-	$	157,260	$	157,260	$	-	$	-	$	157,260
Bruce Harmon (1)		10,000		-		-		10,000		10,000		-		-		10,000
Bruce Harmon (1)		52,010		-		-		52,010		-		-		-		-
Bruce Harmon (1)		15,000		-		-		15,000		-		-		-		-
Bruce Harmon (1)		15,000		-		-		15,000		-		-		-		-
Bruce Harmon (1)		10,138		-		-		10,138		-		-		-		-
Sergio Pinon (2)		5,000		-		-		5,000		-		-		-		-
Sergio Pinon (2)		5,000		-		-		5,000		-		-		-		-
Lakeport Business Services, Inc. (2)		5,000		-		-		5,000		-		-		-		-
Lakeport Business Services, Inc. (2)		5,000		-		-		5,000		-		-		-		-
Lakeport Business Services, Inc. (2)		45,000		-		-		45,000		-		-		-		-
Lakeport Business Services, Inc. (1)		47,235		-		-		47,235		47,235		-		-		47,235
Lakeport Business Services, Inc. - Line of Credit (1) (2)		200,615		-		-		200,615		213,095		-		-		213,095
Total	$	572,258	$	-	$	-	$	572,258	$	427,590	$	-	$	-	$	427,590

(1) In default.
(2) Convertible.

~~December~~On 31March 12, 2009, the Company secured a note for $50,703 from Premier Bank Lending Center. The note matures on March 12, 2010, bears interest at a rate of 6%, and has monthly interest only payments. On March 12, 2010, Premier Bank Lending Center renewed the note for $50,703 to the Company. The note matures on September 12, 2010, bears interest at a rate of 6.50% and has monthly interest only payments. James E. Pumphrey, a shareholder of the Company, was a guarantor to the financing. On November 30, 2010, Mr. Pumphrey assumed the note with Premier Bank Lending Center and eLayaway.com, Inc. executed a promissory note with Mr. Pumphrey for $50,535. The note matures on May 30, 2011, bears interest at a rate of 12%, and has monthly interest only payments. On June 1, 2011 the Company and Mr. Pumphrey agreed to an extension of the loan which extended the maturity date until November 30, 2011. On November 30, 2011, the promissory note was amended and due to the lack of significant funding, the parties agreed to extend the expiration of the loan to September 30, 2012 and to set up payment terms. The Company will make principal payment starting December 15, 2011 with final payment to be made in September 30, 2012. This amendment was treated as a "Trouble Debt Restructuring" in accordance with FASB ASC 470-60. There is no gain or loss on the restructuring of the payables. The remaining principal balance as of December 31, 2013 was $25,883. This note is in default.

Notes and convertible notes,
net of discounts	December 31, 2012									December 31, 2011
								Principal,									Principal,
			Unamortized			Put		net of				Unamortized			Put		net of
	Principal		Discount			Premium		Discounts		Principal		Discount			Premium		Discounts
Gary Kline (3)	$	-	$	-		$	-	$	-	$	165,000	$	-		$	-	$	165,000
Gary Kline (1) (3)		56,000		-			-		56,000
Gary Kline (1)		55,000		-			-		55,000
Gary Kline (1)		75,000		-			-		75,000
Gary Kline (1)		23,500		-			-		23,500
James E. Pumphrey (1)		25,883		-			-		25,883		43,535		-			-		43,535
Evolution Capital, LLC (1) (3) (4)		25,000		-			-		25,000		50,000		(31,868	)		-		18,132
Evolution Capital, LLC (1) (3) (4)		-		-			-		-		50,000		(36,339	)		-		13,661
Evolution Capital, LLC (1) (3)		-		-			-		-		50,000		(31,868	)		-		18,132
Reserve Capital, LLC (1) (3)		-		-			-		-		50,000		(37,543	)		-		12,457
Evolution Capital, LLC (1) (3)		75,000		-			-		75,000		100,000		(83,517	)		-		16,483
Marina Development, LLC (1) (3)		19,350		-			-		19,350
Keith Sazer (1) (3)		5,250		-			-		5,250
Hanson Capital, LLC (1) (3)		100,000		-			-		100,000		100,000		(89,828	)		-		10,172
Asher Enterprises, Inc. (3)		37,500		(18,103	)		27,155		46,552		-		-			-		-
Asher Enterprises, Inc. (3)		53,000		(38,379	)		38,379		53,000		-		-			-		-
KAJ Capital, LLC (1) (3)		25,000		-			-		25,000		-		-			-		-
Robert Salie - Line of Credit (1) (2) (3)		400,000		(2,805	)		-		397,195		-		-			-		-
Salie Family Limited Partnership (1) (2) (3)		50,000		-			-		50,000		-		-			-		-
Transfer Online, Inc. (1)		15,400		-			-		15,400		-		-			-		-
Transfer Online, Inc. (1)		25,000		-			-		25,000		-		-			-		-
Transfer Online, Inc. (1)		35,000		-			-		35,000		-		-			-		-
Transfer Online, Inc. (1)		45,000		-			-		45,000		-		-			-		-
Transfer Online, Inc. (1)		55,000		-			-		55,000		-		-			-		-
Douglas Pinard (1)		20,000		-			-		20,000		-		-			-		-
Richard St. Cyr (1)		17,000		-			-		17,000		-		-			-		-
Susan Jones (1)		58,333		-			-		58,333		-		-			-		-
SGI Group, LLC (1) (3)		6,419		-			-		6,419		-		-			-		-
Ventana Capital Partners, Inc. (1)		20,000		-			-		20,000		-		-			-		-
Star City Capital, LLC (1) (3)		20,000		-			-		20,000		-		-			-		-
Southridge Partners II, LP (1) (3)		155,225		-			-		155,225		-		-			-		-
Southridge Partners II, LP (1) (3)		45,000		-			-		45,000		-		-			-		-
Southridge Partners II, LP (1) (3)		55,300		-			-		55,300		-		-			-		-
WHC Capital, LLC (1) (3)		24,909		-			-		24,909		-		-			-		-
Southridge Partners II, LP (1) (3)		11,375		-			-		11,375		-		-			-		-
Southridge Partners II, LP (3)		25,000		-			-		25,000		-		-			-		-
Total	$	1,659,444	$	(59,287	)	$	65,534	$	1,665,691	$	608,535	$	(310,963	)	$	-	$	297,572

(1) In default. (2) Shown as related party as of December 31, 2011. (3) Convertible. (4) Acquired from Benchmark Capital, LLC

F-20

Notes, convertible notes, and
lines of credit payable to
related parties, net of discounts	December 31, 2012								December 31, 2011
							Principal,									Principal,
			Unamortized		Put		net of				Unamortized			Put		net of
	Principal		Discount		Premium		Discounts		Principal		Discount			Premium		Discounts
Ventana Capital Partners, Inc. (1) (2)	$	-	$	-	$	-	$	-	$	20,000	$	-		$	-	$	20,000
Robert Salie - Line of Credit (1) (2) (3)		-		-		-		-		400,000		(36,562	)		-		363,438
Salie Family Limited Partnership (1) (2) (3)		-		-		-		-		50,000		-			-		50,000
Transfer Online, Inc. (1) (2) (3)		-		-		-		-		150,000		-			-		150,000
Bruce Harmon (1)		157,260		-		-		157,260		-		-			-		-
Bruce Harmon (1)		10,000		-		-		10,000		-		-			-		-
Lakeport Business Services, Inc. (1)		47,235		-		-		47,235		-		-			-		-
Lakeport Business Services, Inc. - Line of Credit (1) (3)		213,095		-		-		213,095		69,014		-			-		69,014
Total	$	427,590	$	-	$	-	$	427,590	$	689,014	$	(36,562	)	$	-	$	652,452

(1) In default. (2) Shown in non-related parties as of December 31, 2012. (3) Convertible.

F-21

eLayaway, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

On March 12, 2009, the Company secured a note for $50,703 from Premier Bank Lending Center. The note matures on March 12, 2010, bears interest at a rate of 6%, and has monthly interest only payments. On March 12, 2010, Premier Bank Lending Center renewed the note for $50,703 to the Company. The note matures on September 12, 2010, bears interest at a rate of 6.50% and has monthly interest only payments. James E. Pumphrey, a shareholder of the Company, was a guarantor to the financing. On November 30, 2010, Mr. Pumphrey assumed the note with Premier Bank Lending Center and eLayaway.com, Inc. executed a promissory note with Mr. Pumphrey for $50,535. The note matures on May 30, 2011, bears interest at a rate of 12%, and has monthly interest only payments. On June 1, 2011 the Company and Mr. Pumphrey agreed to an extension of the loan which extended the maturity date until November 30, 2011. On November 30, 2011, the promissory note was amended and due to the lack of significant funding, the parties agreed to extend the expiration of the loan to September 30, 2012 and to set up payment terms. The Company will make principal payment starting December 15, 2011 with final payment to be made in September 30, 2012. This amendment was treated as a "Trouble Debt Restructuring" in accordance with FASB ASC 470-60. There is no gain or loss on the restructuring of the payables. The remaining principal balance as of December 31, 2012 was $25,883. This note is in default.

On November 2, 2009, the Company secured a note for $15,300 from Lakeport Business Services, Inc. (“Lakeport”), a company owned by Bruce Harmon (“Harmon”), CFO and Chairman of the Company (see Note 10 - Related Parties). The note bears interest at a rate of 12%. The note matured on January 1, 2010. Lakeport has agreed in an addendum to the note to defer interest payments until maturity and extended the maturity date to September 1, 2011. On June 29, 2010, an addendum to the note to add an advance of $5,025 from Lakeport to the Company was added. On October 26, 2011, this balance was converted into Series E preferred stock (see Note 12).

On February 10, 2010, the Company entered into a Promissory Note with Hillside Building, LLC, the landlord for the Company’s office space, for $10,000. The amount is related to the required deposit for the office space. The note has a one year term and accrues interest at the rate of 7% per annum. The note was in default as of February 10, 2011. On November 18, 2011, the Company settled the note converting it into common stock of the Company (see Note 12).

F-17

On April 6, 2010, the Company entered into a Convertible Promissory Note with Gary Kline (“Kline”) for $100,000. The note has a one year term and accrues or pays, at the option of Kline, interest at 12% per annum. The note was transferred to the Parent company after the reverse merger and is convertible at the option of Kline into common stock of the public Parent company at $0.25 per share on or after the maturity date of the loan. On August 9, 2010, the Company executed an addendum to the April 6, 2010 convertible promissory note. The addendum facilitates $65,000 additional working capital for the Company. The addendum also modifies the previous terms and conditions by providing a conversion rate of $0.165 per share. This modification is considered a debt extinguishment for accounting purposes due to the increase of the fair value of the embedded conversion option on the modification date before the change of the conversion rate and after the rate change. All prior debts and related discounts were removed and the Company recorded a new debt of $165,000. The Company recorded $135,000 as a Debt Discount related to the Beneficial Conversion Feature of the new note which is amortized over the remaining term of the one year note and accordingly, five months of interest of $56,250 were recorded as of December 31, 2010 and another $14,063 through February 8, 2011. On February 8, 2011, the Company modified the $165,000 convertible promissory note by decreasing the conversion price to $0.10 from $0.165. This modification qualifies for treatment as a debt extinguishment for financial accounting purposes. Therefore the $69,545 intrinsic value of the beneficial conversion feature of the old debt on the modification date was charged to additional paid-in capital as of the February 8, 2011 modification date and the new loan was recorded as $165,000 with a beneficial conversion value of $165,000 recorded as a debt discount to be amortized over the remaining term of the note. The full $165,000 discount was amortized as of the maturity date of April 5, 2011. Any remaining discount from the old debt totaling $64,687 was removed and the Company recorded a gain on extinguishment of debt of $4,858 at September 30, 2011. From April, 2011 through September, 2011, Kline sold $165,000 of the Convertible Promissory Note to some investors. Each party, simultaneous with their purchase, converted their investment into common stock for a total of 1,650,000 of common stock. Subsequently, Kline invested $165,000 into the Company under separate addendums to the Convertible Promissory Note. The new loans are due on demand. These additional loans are not treated as modifications under accounting standards. The Company also recorded $150,318 of interest expenses related to the beneficial conversion feature of the new notes. In March 2012, the Company amended the Convertible Promissory Note to change the conversion price from $0.10 for $50,000, and its apportioned accrued interest. The new conversion price is 60% of the lowest conversion bid price of the Company’s common stock during the five days immediately preceding a conversion. On March 29, 2012, Mr. Kline sold $50,000 and its apportioned accrued interest of $6,000 to Southridge Partners II LP. This modification qualifies for treatment as a debt extinguishment for financial accounting purposes therefore the old debt of $50,000 was removed and the new loan was recorded as $56,000 ($50,000 principal and $6,000 accrued interest) with a stock settled debt premium of $34,000. The Company recorded the $34,000 as interest expense because the loan is due on demand. On September 20, 2012, Kline sold $25,000 to SGI Group, LLC and $30,000 to Star City Capital, LLC. On September 20, 2012, the Company amended the Convertible Promissory Note to change the conversion price from $0.10 for $55,000. The new conversion price is 60% of the lowest conversion bid price of the Company’s common stock during the five days immediately preceding a conversion. These modifications qualifies for treatment as a debt extinguishment for financial accounting purposes therefore the old debt of $55,000 was removed and the new loan was recorded as $25,000 and $30,000, respectively with a combined stock settled debt premium of $55,000. The Company recorded the $55,000 as interest expense because the loan is due on demand. On October 22, 2012, Kline sold $50,000 to Southridge. On October 22, 2012, the Company amended the Convertible Promissory Note to change the conversion price from $0.10 for $50,000. The new conversion price is 50% of the lowest conversion bid price of the Company’s common stock during the five days immediately preceding a conversion. These modifications qualifies for treatment as a debt extinguishment for financial accounting purposes therefore the old debt of $50,000 was removed and the new loan was recorded as $50,000 with a stock settled debt premium of $50,000. The Company recorded the $50,000 as interest expense because the loan is due on demand. On October 22, 2012, Kline sold $30,000 to Star City. On October 22, 2012, the Company amended the Convertible Promissory Note to change the conversion price from $0.10 for $30,000. The new conversion price is 50% of the lowest conversion bid price of the Company’s common stock during the five days immediately preceding a conversion. These modifications qualifies for treatment as a debt extinguishment for financial accounting purposes therefore the old debt of $30,000 was removed and the new loan was recorded as $30,000 with a stock settled debt premium of $30,000. The Company recorded the $30,000 as interest expense because the loan is due on demand. On October 22, 2012, Kline sold $5,000 to SGI Group. On October 22, 2012, the Company amended the Convertible Promissory Note to change the conversion price from $0.10 for $5,000. The new conversion price is 50% of the lowest conversion bid price of the Company’s common stock during the five days immediately preceding a conversion. These modifications qualifies for treatment as a debt extinguishment for financial accounting purposes therefore the old debt of $5,000 was removed and the new loan was recorded as $5,000 with a stock settled debt premium of $5,000. The Company recorded the $5,000 as interest expense because the loan is due on demand.

F-22

eLayaway, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

On June 18, 2010, the Company issued a promissory note in exchange for cash for $20,000 from Ventana Capital Partners, Inc. (“Ventana”), a related party that was under contract to assist the Company in its reverse merger, investor and public relations, and other pertinent roles. Additionally, the contract obligated Ventana to raise an initial $1,500,000. Ventana, due to its ownership, is a principal stockholder of the Company. The note bears interest at a rate of 1% per month. The note matures after an additional $100,000 in funding is raised. Ventana, and its principal, Ralph Amato, required that Douglas Salie, the former CEO and Chairman of the Company, use 500,000 of his personal restricted common stock in the Company as collateral at a conversion rate of $0.04 per share. In August 2010 this note was amended to increase the funding amount required for repayments to $200,000 from $100,000. This note is in default.

On July 6, 2010, the Company issued a Convertible Promissory Note with Dr. Robert Salie (“Dr. Salie”), the father of the Company’s former CEO, for $25,000. The principal is due in one year or upon the receipt of $150,000 in common stock sales, whichever comes first. Interest accrues at the rate of 12%. The note is convertible at the option of Dr. Salie into common stock at $0.25 per share on or after the maturity date of the loan. The Company recorded $13,340 as a Debt Discount relating to the Beneficial Conversion Feature and $11,660 as a Debt Discount related to the 50,000 warrants and an exercise price of $.25 per share that were issued as a loan fee with this debt. The Company amortized $12,500 to interest expense through December 31, 2010 based on the one year term of the note. On October 29, 2010, as a condition of the Revolving Credit Agreement with Dr. Salie and due to the lack of performance of the Company to date, the conversion price of this note was modified to be the 10 day volume weighted average price (“VWAP”) of the Company as of January 10, 2011 or $0.10, whichever is greater. On January 10, 2011, the conversion rate was, based on the formula, set at $0.10. This modification did not qualify as a debt extinguishment. The Company recorded additional debt discount of $2,245 which represents the increase in fair value of the embedded conversion option resulting from the modification. On February 12, 2011, this Note was purchased by a third party. Simultaneous with the acquisition of the Note, this Note was converted to 250,000 shares of common stock (see Note ~~11 and~~ 12). Upon conversion of the note, the Company amortized the debt discount of $2,245 to interest expense.

On September 22, 2010, the Company issued a Promissory Note with the Salie Family Limited Partnership, which is controlled by Dr. Salie, for $50,000. The principal is due in one year or upon the receipt by the Company of $450,000 in common stock sales, whichever comes first. Interest accrues at the rate of 12%. As a condition of the financing, the Company issued 100,000 warrants in 2010 and, 25,000, 25,000, 25,000, 75,000, and 100,000 warrants in 2011 for common stock at the exercise price of $0.33, $0.25, $0.11, $0.11, $0.07, and $0.07 per share, respectively. The warrants have a five year life. The Company recorded $18,394 in 2010 and $23,500 in 2011 for the relative fair value of the warrants as a Debt Discount which was to be amortized over the term of the one year note. The values in 2011 were based upon BlackF-Scholes computations with the following ranges of assumptions: Volatility 135% to 143%, interest rate 0.445% to 0.86%, expected term of 5 years and stock prices from $0.06 to $$0.13. On October 29, 2010, as a condition of the Revolving Credit Agreement with Dr. Salie and due to the lack of performance by the Company, this note was amended to add a conversion feature at a price based on the 10 day VWAP of the Company as of January 10, 2011 or $0.10, whichever is greater. On January 10, 2011, the conversion rate was, based on the formula, set at $0.10. The modification of the note qualified as a debt extinguishment for accounting purposes due to the addition of the conversion feature and accordingly all remaining warrant debt discount on the modification date was expensed. This note is in default. In January 2013, Dr. Salie filed a lawsuit regarding this note (see Note 10).18

On ~~October~~September 2922, 2010, the Company ~~executed~~issued a ~~Revolving~~Promissory ~~Credit~~Note ~~Agreement ("LOC")~~ with ~~Dr.~~the Salie inFamily ~~the~~Limited ~~amount~~Partnership, ofwhich ~~$250,000.~~is ~~This~~controlled ~~LOC~~by ~~was~~Dr. ~~increased~~Salie, tofor $~~500~~50,000. onThe ~~February~~principal 9,is ~~2011.~~due ~~The~~in ~~agreement,~~one asyear ~~extended~~or inupon ~~November~~the ~~2011~~receipt by the Company of $450,000 ~~expires~~in oncommon ~~October~~stock 28sales, ~~2012~~whichever ~~and~~comes ~~bears~~first. ~~interest~~Interest accrues at the rate of 12%. ~~which~~As ~~accrues~~a ~~until~~condition ~~maturity.~~of Asthe offinancing, ~~December~~the 31Company issued 100,000 ~~2012~~warrants in 2010 and, ~~the~~25,000, ~~balance~~25,000, ~~was~~25,000, ~~$400~~75,000., ~~This~~and ~~LOC~~100,000 ~~contains~~warrants ain ~~conversion~~2011 ~~provision~~for ~~whereby~~common stock at the ~~conversion~~exercise price isof $0.1033, ~~which~~$0.25, ~~was~~$0.11, ~~set~~$0.11, on$0.07, ~~January~~and 10$0.07 per share, ~~2011~~respectively. AtThe ~~that~~warrants ~~date~~have ~~the~~a ~~exercise~~five ~~price~~year ~~exceeded~~life. ~~the~~The ~~quoted~~Company ~~stock~~recorded ~~price~~$18,394 in 2010 and ~~therefore~~$23,500 ~~there~~in ~~was~~2011 nofor ~~beneficial~~the ~~conversion~~relative fair value toof ~~record.~~the Onwarrants ~~September~~as ~~12,~~a ~~2011,~~Debt aDiscount ~~portion~~which ofwas ~~this~~to ~~LOC,~~be ~~$150,000,~~amortized ~~was~~over ~~purchased~~the byterm aof ~~third~~the ~~party~~one year note. ~~Simultaneous~~The values in 2011 were based upon Black-Scholes computations with the ~~acquisition~~following ranges of ~~this~~assumptions: ~~portion~~Volatility of135% ~~the~~to ~~LOC~~143%, ~~that~~interest ~~portion~~rate ~~was~~0.445% ~~converted~~ to 10.86%,~~500,000~~ ~~shares~~expected term of ~~common~~5 ~~stock~~years ~~(see~~and ~~Note~~stock 11prices ~~and~~from ~~12)~~$0.06 Drto $$0.13. ~~Salie~~On ~~loaned~~October ~~another~~29, ~~$150~~2010,~~000~~ ~~under~~as a condition of the ~~LOC~~Revolving inCredit ~~September~~Agreement ~~2011~~with Dr. ~~The~~Salie ~~Company~~and ~~recorded~~due ~~$60,000~~to asthe alack ~~debt~~of ~~discount~~performance ~~related~~by the Company, this note was amended to ~~the~~add ~~beneficial~~a conversion feature ofat ~~the~~a ~~additional~~price ~~$150,000,~~based ~~which~~on isthe ~~amortized~~10 ~~over~~day VWAP of the ~~remaining~~Company ~~term~~as of ~~the~~January ~~LOC.~~10, ~~The~~2011 ~~Company~~or ~~recorded~~ $950.10,~~995~~ ofwhichever ~~interest~~is ~~expense~~greater. asOn ofJanuary ~~December~~10, 312011, ~~2012.~~the ~~For~~conversion ~~reporting~~rate ~~purposes~~was, ~~this~~based ~~note~~on isthe ~~reported~~formula, asset aat ~~related~~$0.10. ~~party~~The ~~due~~modification toof the ~~former~~note ~~officer~~qualified ~~and~~as ~~director,~~a ~~Douglas~~debt ~~Salie,~~extinguishment for accounting purposes due to the ~~son~~addition of ~~Dr.~~the ~~Salie,~~conversion ~~controlling~~feature inand ~~excess~~accordingly ofall ~~10%~~remaining ofwarrant debt discount on the ~~voting~~modification ~~stock~~date was expensed. This note ~~was~~is in default. In January 2013, Dr. Salie filed a lawsuit regarding this note (see Note 10). On August 30, 2013, a judgment was awarded to Dr. Salie.

~~F-23~~On October 29, 2010, the Company executed a Revolving Credit Agreement ("LOC") with Dr. Salie in the amount of $250,000. This LOC was increased to $500,000 on February 9, 2011. The agreement, as extended in November 2011, expires on October 28, 2012 and bears interest at the rate of 12% which accrues until maturity. As of December 31, 2013, the balance was $400,000. This LOC contains a conversion provision whereby the conversion price is $0.10 which was set on January 10, 2011. At that date the exercise price exceeded the quoted stock price and therefore there was no beneficial conversion value to record. On September 12, 2011, a portion of this LOC, $150,000, was purchased by a third party. Simultaneous with the acquisition of this portion of the LOC, that portion was converted to 1,500,000 shares of common stock (see Note 11 and 12). Dr. Salie loaned another $150,000 under the LOC in September 2011. The Company recorded $60,000 as a debt discount related to the beneficial conversion feature of the additional $150,000, which is amortized over the remaining term of the LOC. The Company recorded $95,995 of interest expense as of December 31, 2013. For reporting purposes, this note is reported as a related party due to the former officer and director, Douglas Salie, the son of Dr. Salie, controlling in excess of 10% of the voting stock. This note was in default. In January 2013, Dr. Salie filed a lawsuit regarding this note (see Note 10). On August 30, 2013, a judgment was awarded to Dr. Salie.

~~eLayaway~~On December 27, ~~Inc~~2010, the Company executed a Revolving Credit Agreement ("LOC") with Lakeport in the amount of $100,000. The agreement expires on September 30, 2012 and ~~Subsidiaries~~bears interest at the rate of 12% which accrues until maturity. As of December 31, 2012 and December 31, 2012, the balance was $200,615 and $213,095, respectively. On October 26, 2011, $25,000 of this balance was converted into Series E preferred stock (see Note 12). This LOC contained a contingent conversion provision whereby the conversion price will be determined at an undetermined future date and at that time the LOC will become convertible. On June 7, 2012, a conversion price of $0.015 was established which was the current trading price of the Company’s stock. On October 5, 2012, the conversion price was modified to be the lesser of $0.015 or the five day VWAP. Additionally, the credit line was increased to $300,000. The modification of the LOC qualified as a debt extinguishment for accounting purposes. However, the conversion price equals the fair value of common stock at June 7, 2012, therefore the Company did not record any discount related to beneficial conversion feature. This note is in default. On October 5, 2012, the Company agreed, due to the LOC being in default, with Lakeport to amend the conversion feature to be the lesser of $0.015 or the five day VWAP. On December 20, 2013, ASC Recap was issued 39,000,000 shares of common stock in exchange for its partial purchase of $12,480 of the LOC (see Notes 10 and 12). As of December 31, 2013, the balance is $200,615.

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

On December 27, 2010, the Company executed a Revolving Credit Agreement ("LOC") with Lakeport in the amount of $100,000. The agreement expires on September 30, 2012 and bears interest at the rate of 12% which accrues until maturity. As of September 30, 2012 and December 31, 2011, the balance was $213,095 and $69,014, respectively. On October 26, 2011, $25,000 of this balance was converted into Series E preferred stock (see Note 12). This LOC contained a contingent conversion provision whereby the conversion price will be determined at an undetermined future date and at that time the LOC will become convertible. On June 7, 2012, a conversion price of $0.015 was established which was the current trading price of the Company’s stock. On October 5, 2012, the conversion price was modified to be the lesser of $0.015 or the five day VWAP. Additionally, the credit line was increased to $300,000. The modification of the LOC qualified as a debt extinguishment for accounting purposes. However, the conversion price equals the fair value of common stock at June 7, 2012, therefore the Company did not record any discount related to beneficial conversion feature. This note is in default. On October 5, 2012, the Company agreed, due to the LOC being in default, with Lakeport to amend the conversion feature to be the lesser of $0.015 or the five day VWAP. As of December 31, 2012, the balance is $213,095.

On June 29, 2011, the Company executed a Revolving Credit Agreement ("LOC") with Transfer Online, Inc. (“TOL”) in the amount of $500,000. The agreement expires on December 29, 2011 and bears interest at the rate of 12% which accrues until maturity. As of September 30, 2011, the balance was $300,000. This LOC contains a conversion provision whereby the conversion price is $0.10. The Company recorded $210,000 as a Debt Discount related to the Beneficial Conversion Feature of the note. On August 17, 2011, the Company repaid $150,000 of the note. The Company amortized 1.5 months of the debt discount of $52,500 to interest expense, half of the remaining discount or $78,750 was removed from the books and the $90,000 intrinsic value of the $150,000 portion of the loan paid was charged to additional paid-in capital. The Company recognized a gain on the extinguishment of debt of $11,250. On October 26, 2011, the Company executed an addendum modifying the conversion feature to the lesser of $0.09 or 70% of the closing price prior to conversion. As the October 26, 2011 modification caused the embedded conversion option to be treated as a bifurcated derivatives, this modification is not considered a debt extinguishment for accounting purposes. Accordingly the $108,695 fair value of the embedded conversion option on the modification date was recorded as additional effective interest to debt discount and as a derivative liability. The derivative liability was adjusted to $64,286 as of September 30, 2012. All discounts were amortized to interest expense as of the debt maturity date of December 29, 2011. This note is in default. Transfer Online, Inc. is owned by Lori Livingston, the former CTO of the Company. On September 24, 2012, the Company modified the terms of the new note. It is convertible at any time into the Company’s common stock at a 50% discount to the future stock price, as defined in the amended note. On September 24, 2012, TOL sold $55,000 of this note to Southridge. On December 4, 2012, TOL sold $25,000 of this note to Marina Development, LLC. On November 20, 2012, TOL sold $6,800 principal and $8,619 accrued interest of this note to SGI Group, LLC. On December 13, 2012, TOL sold $35,000 of this note to WHC Capital, LLC. On December 28, 2012, TOL sold $45,000 of this note to Southridge. As of December 28, 2012, this note was completely purchased and assigned to third parties.

On October 26, 2011, the Company entered into a six month convertible note with Evolution Capital, LLC (“Evolution”), in the amount of $50,000. The interest, which accrues, is at a rate of 12% per annum. The conversion feature is the lesser of $0.09 or 70% of the closing price prior to conversion. There was a $5,000 fee to the lender for legal expenses and related expenses for the closing of the note which was recorded as debt discounts and is being amortized over the debt term. Evolution was issued 55,556 shares of restricted common stock in lieu of the fees. The shares were issued using the closing price of the previous day of $0.09. The convertible note contains an embedded derivative to be bifurcated from the note and reported as a liability at fair value (see Note 8). On August 27, 2012, Evolution converted $25,000 of this note into 3,246,753 shares of common stock at the discounted rate of $0.0077 whereas the closing price on the previous day was $0.011. The Company recognized a loss on conversion of $10,714. On November 30, 2012, $25,000 of principal and $10,126 of accrued interest was purchased and assigned to Southridge. On December 17, 2012, Evolution rescinded its August 27, 2012 conversion and returned the shares to the Company for cancellation. As of December 31, 2012, this note has a balance of $25,000.F-19

On October 26, 2011, the Company entered into a six month convertible note with ~~Benchmark~~Evolution Capital, LLC (“~~Benchmark~~Evolution”), in the amount of $50,000. The interest, which accrues, is at a rate of 12% per annum. The conversion feature is the lesser of $018.0900 or 70% of the closing price prior to conversion. There was a $5,000 fee to the lender for legal expenses and related expenses for the closing of the note which was recorded as debt discounts and is being amortized over the debt term. Evolution ~~Benchmark~~ was issued ~~55,556~~278 shares of restricted common stock in lieu of the fees. The shares were issued using the closing price of the previous day of $018.0900. The convertible note contains an embedded derivative to be bifurcated from the note and reported as a liability at fair value (see Note 8). On ~~April~~August 2327, 2012, Evolution converted $25,000 of this note into 16,234 shares of common stock at the discounted rate of $1.54 whereas the closing price on the previous day was ~~purchased~~$2.20. The ~~and~~Company recognized a loss on conversion of $10,714. In 2012, the ownership of the note was assigned to Buko-Evolution., LLC. On ~~November~~May 3017, ~~2012~~2013, ~~$50~~Buko-Evolution,~~000~~ ofLLC ~~principal~~converted ~~and~~ $10,~~126~~000 into 938,287 shares of ~~accrued~~common ~~interest~~stock ~~was~~(see ~~purchased~~Note ~~and~~12) ~~assigned~~at toa ~~Southridge~~conversion rate of $0.01. A loss of $88,829 was recognized. As of ~~November~~December 3031, ~~2012~~2013, this note ~~was~~is ~~completely~~in ~~purchased~~default and ~~assigned~~has toa ~~third~~balance ~~parties~~of $11,500.

~~F-24~~On December 12, 2011, the Company entered into a six month convertible note with Equity Trust Company Custodian FBO Curt Hansen beneficiary DCD Ann Hansen IRA (“Hansen”), in the amount of $100,000. The interest, which accrues, is at a rate of 12% per annum. The conversion feature is the lesser of $0.07 or 70% of the closing price prior to conversion. There was a $10,000 fee to a third party for legal expenses and related expenses for the closing of the note which was recorded as debt issue cost to be amortized over the debt term. Evolution was issued 111,112 shares of restricted common stock in lieu of the fees. The shares were issued using the closing price of the previous day of $0.07. The convertible note contains an embedded derivative to be bifurcated from the note and reported as a liability at fair value (see Note 8). This note is in default. On October 4, 2013, Hansen converted $1,500 into 1,004,689 shares of common stock based on a conversion price of $0.00149. A loss on conversion of $1,098 was recorded.

~~eLayaway~~On January 30, ~~Inc~~2012, the Company entered into a six month convertible note with KAJ Capital, LLC (“KAJ”), in the amount of $25,000. The interest, which accrues, is at a rate of 12% per annum. The conversion feature is the lesser of $0.036 or 70% of the closing price prior to conversion. There was a $2,500 fee to a third party for legal expenses and ~~Subsidiaries~~related expenses for the closing of the note which was recorded as debt issue costs to be amortized over the debt term. The third party was issued 69,444 shares of restricted common stock in lieu of the fees. The shares were issued using the average of the closing price of the previous two days of $0.03 and $0.042. On March 28, 2013, KAJ converted $15,000 of the note into 535,715 shares of common stock (see Note 8) at a 30% discount, $0.028, at a loss on conversion of $92,143. The convertible note contains an embedded derivative to be bifurcated from the note and reported as a liability at fair value (see Note 8). This note is in default as of December 31, 2013. On March 6, 2014, KAJ sold the remaining principal balance of $10,000 and accrued interest of $8,200 to Southridge for $18,200 which converted the entire balance into 185,750,000 shares of common stock (see Note 15).

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

On November 11, 2011, the Company entered into a six month convertible note with Benchmark, in the amount of $50,000. The interest, which accrues, is at a rate of 12% per annum. The conversion feature is the lesser of $0.09 or 70% of the closing price prior to conversion. There was a $5,000 fee to the lender for legal expenses and related expenses for the closing of the note which was recorded as debt discounts and is being amortized over the debt term. Benchmark was issued 55,556 shares of restricted common stock in lieu of the fees. The shares were issued using the closing price of the previous day of $0.09. The convertible note contains an embedded derivative to be bifurcated from the note and reported as a liability at fair value (see Note 8). On April 23, 2012, this note was purchased and assigned to Evolution.

On November 15, 2011, the Company entered into a six month convertible note with Reserve Capital, LLC (“Reserve”), in the amount of $50,000. The interest, which accrues, is at a rate of 12% per annum. The conversion feature is the lesser of $0.09 or 70% of the closing price prior to conversion. There was a $5,000 fee to a third party for legal expenses and related expenses for the closing of the note which was recorded as debt issue cost and is being amortized over the debt term. A third party was issued 55,556 shares of restricted common stock in lieu of the fees. The shares were issued using the closing price of the previous day of $0.09. The convertible note contains an embedded derivative to be bifurcated from the note and reported as a liability at fair value (see Note 8). As of September 30, 2012, this note is in default. On December 4, 2012, Reserve sold $50,000 of principal and $5,300 of accrued interest to Southridge. On December 4, 2012, the Company amended the Convertible Promissory Note to change the conversion price from a 30% discount to a 50% discount. The new conversion price is 50% of the lowest conversion bid price of the Company’s common stock during the five days immediately preceding a conversion. These modifications qualifies for treatment as a debt extinguishment for financial accounting purposes therefore the old debt of $50,000 was removed and the new loan was recorded as $50,000 with a stock settled debt premium of $50,000. The Company recorded the $50,000 as interest expense because the loan is due on demand.

On December 1, 2011, the Company entered into a six month convertible note with Evolution, in the amount of $100,000. The interest, which accrues, is at a rate of 12% per annum. The conversion feature is the lesser of $0.07 or 70% of the closing price prior to conversion. There was a $10,000 fee to the lender for legal expenses and related expenses for the closing of the note which was recorded as debt discount and is being amortized over the debt term. Evolution was issued 111,112 shares of restricted common stock in lieu of the fees. The shares were issued using the closing price of the previous day of $0.07. The convertible note contains an embedded derivative to be bifurcated from the note and reported as a liability at fair value (see Note 8). On November 8, 2012, Southridge acquired $50,000 of principal of this note. On November 30, 2011, $50,000 of principal and $10,273 of accrued interest was purchased and assigned to Southridge. As of November 30, 2012, this note had been completely purchased and assigned to third parties.

On December 12, 2011, the Company entered into a six month convertible note with Equity Trust Company Custodian FBO Curt Hansen beneficiary DCD Ann Hansen IRA (“Hansen”), in the amount of $100,000. The interest, which accrues, is at a rate of 12% per annum. The conversion feature is the lesser of $0.07 or 70% of the closing price prior to conversion. There was a $10,000 fee to a third party for legal expenses and related expenses for the closing of the note which was recorded as debt issue cost to be amortized over the debt term. Evolution was issued 111,112 shares of restricted common stock in lieu of the fees. The shares were issued using the closing price of the previous day of $0.07. The convertible note contains an embedded derivative to be bifurcated from the note and reported as a liability at fair value (see Note 8). This note is in default.

On January 30, 2012, the Company entered into a six month convertible note with KAJ Capital, LLC (“KAJ”), in the amount of $25,000. The interest, which accrues, is at a rate of 12% per annum. The conversion feature is the lesser of $0.036 or 70% of the closing price prior to conversion. There was a $2,500 fee to a third party for legal expenses and related expenses for the closing of the note which was recorded as debt issue costs to be amortized over the debt term. The third party was issued 69,444 shares of restricted common stock in lieu of the fees. The shares were issued using the average of the closing price of the previous two days of $0.03 and $0.042. The convertible note contains an embedded derivative to be bifurcated from the note and reported as a liability at fair value (see Note 8). This note is in default.

On February 1, 2012, the Company entered into two convertible promissory notes as part of the acquisition of CSP (see Note 2). The notes, each for $57,000, were issued to Douglas Pinard and Richard St. Cyr. The notes bear interest at the rate of 6% per annum with interest being accrued. The conversion rate is at $0.60 per share. On February 1, 2012, the conversion price was greater than the value of common stock, therefore the Company did not record any discount related to the beneficial conversion feature. The notes expire on August 1, 2012. As of the date of this report, both notes are in default. On September 30, 2012, as part of an agreement dated October 1, 2012, $40,000 of the note to Mr. St. Cyr was retroactively extinguished. On October 17, 2012, as part of a settlement agreement, the $57,000 note to Mr. Pinard was extinguished.

On February 1, 2012, the Company, as part of the acquisition of CSP, assumed the liability of a note payable to Douglas Pinard in the amount of $6,800. The date of the note was January 4, 2012. The note bears interest at the rate of 6% per annum with interest payable quarterly. The note matures on January 20, 2014. On October 17, 2012, as part of a settlement agreement, the $6,800 note to Mr. Pinard and its accrued interest was extinguished.

F-25

eLayaway, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

On February 2, 2012, the Company entered into a convertible note with Asher Enterprises (“Asher”), in the amount of $37,500. The note matures on November 6, 2012 and may be converted at any time after 180 days from the date of the note. The interest, which accrues, is at a rate of 8% per annum. The conversion feature is at the average of the lowest three days trading price for the Company’s common stock during the ten trading day period ending on the day prior to conversion, less a discount of 42%. There was a $2,500 fee to a third party for legal expenses and related expenses for the closing of the note which was recorded as debt issue cost to be amortized over the debt term. The note is considered a stock settled debt since any future stock issued upon conversion will have a fair market value of $64,655. The Company therefore is accreting a premium of $27,155 into interest expense over the 180 day period to the first conversion date of the note. On September 6, 2012, Asher converted $10,000 of the principal of this note into 1,724,138 shares of common stock. The Company recognized a gain on extinguishment of $6,858. On September 20, 2012, the Company paid a settlement price of $42,500 to Asher.

On March 28, 2012, the Company entered into a convertible promissory note with Kline in the amount of $56,000. The note is due on September 28, 2012. The interest, which accrues, is a rate 12% per annum, and is convertible. The note is convertible at the option of the holder at $0.015 per share on or the later of the maturity date and the date of payment of the default amount. The Company recorded $56,000 as debt discount; $50,000 is related to the Beneficial Conversion Feature of the loan and $6,000 related to the loan fee.

On March 30, 2012, the Company entered into a convertible promissory note with Southridge in the amount of $25,000, in exchange for legal services in regards to the Equity Purchase Agreement (see Note 7 and 12). The note iswas due on April 1, 2013 and can be converted at the option of the holder at any time after six months from the date of the note. The interest, which accrues, is at a rate of 8% per annum, and is convertible. The conversion feature is at the current market price, defined as the average of the two lowest closing bid prices, with a 30% discount. The note is considered a stock settlement debt since any future stock issued upon conversion will have a fair market value of $35,714. The Company therefore accreted a premium of $10,714 into interest expense over the six months to the first conversion date of the note. On February 26, 2013, Southridge sold the note principal of $25,000 to Momoma Capital, LLC (“Momoma Capital”).

On ~~April~~September 14, 2012, the Company entered into a ~~convertible~~ note with ~~Asher~~Lakeport in the amount of $3247,~~500~~235. The note ~~matures~~matured on ~~January~~October 21, ~~2013~~2012 and ~~may~~accrues beinterest ~~converted~~ at ~~any time after 180 days from~~ the ~~date of the note. The interest, which accrues, is at a~~ rate of 812% per annum. ~~The~~This conversion feature is at the average of the lowest three days trading price for the Company’s common stock during the ten trading day period ending on the day prior to conversion, less a discount of 42%. There was a $2,500 fee to a third party for legal expenses and related expenses for the closing of the note ~~which was recorded as debt issue costs to be amortized over the debt term. The note~~ is ~~considered~~in ~~a stock settled debt since any future stock issued upon conversion will have a fair market value of $56,034~~default. The Company therefore is accreting a premium of $23,534 into interest expense over the 180 day period to the first conversion date of the note. On October 1, 2012, the Company paid a settlement price of $48,500 to Asher.

On ~~April~~September 228, 2012, ~~Southridge~~the ~~converted~~Company ~~$10,000~~entered ofinto ~~their~~a ~~$56,000 convertible~~ note ~~(see~~with ~~Note~~Kline ~~12) into 694,444 shares of common stock. On April 17, 2012,~~ in ~~conjunction with this conversion, as~~ the ~~closing~~amount ~~trading price on the clearing date~~ of ~~the 694~~$55,~~444~~000. ~~shares~~The ofnote ~~common~~matured ~~stock was less than the closing trading price~~ on ~~the~~October ~~date of conversion~~10, ~~the~~2012 ~~Company~~and ~~was~~accrues ~~required~~interest toat ~~issue~~the anrate ~~addition 280,214 shares~~ of ~~common~~12% ~~stock~~per ~~to Southridge~~annum. AsThis ~~of December 31, 2012, the balance of this~~ note ~~was~~is ~~$46,000~~in default.

On ~~June~~September 728, 2012, the Company entered into a ~~convertible~~ note with ~~Asher~~TOL in the amount of $3255,~~500~~000. The note ~~matures~~matured on ~~March~~October 1110, ~~2013~~2012 and ~~may~~accrues beinterest ~~converted~~ at ~~any time after 180 days from~~ the ~~date of the note. The interest, which accrues, is at a~~ rate of 812% per annum. ~~The~~This conversion feature is at the average of the lowest three days trading price for the Company’s common stock during the ten trading day period ending on the day prior to conversion, less a discount of 42%. There was a $2,500 fee to a third party for legal expenses and related expenses for the closing of the note ~~which was recorded as debt issue costs to be amortized over the debt term. The note~~ is ~~considered~~in ~~a stock settled debt since any future stock issued upon conversion will have a fair market value of $56,034~~default. The Company therefore is accreting a premium of $23,534 into interest expense over the 180 day period to the first conversion date of the note. On December 17, 2012, Asher converted $9,000 of the note into 9,473,684 shares of common stock at a conversion price of $0.00095 (see Note 12). The Company recorded a loss on conversion of $474. On December 19, 2012, Asher converted $8,600 of the note into 9,247,312 shares of common stock at a conversion price of $0.00093 (see Note 12). The Company recorded a loss on conversion of $647. On December 20, 2012, Asher converted $8,600 of the note into 9,450,549 shares of common stock at a conversion price of $0.00091 (see Note 12). The Company recorded a loss on conversion of $851. On December 24, 2012, Asher converted $6,000 of the note into 8,219,178 shares of common stock at a conversion price of $0.00073 (see Note 12). The Company recorded a loss on conversion of $2,219. On December 27, 2012, Asher converted $300 of principal and $1,300 of accrued interest of the note into 2,191,781 shares of common stock at a conversion price of $0.00073 (see Note 12). The Company recorded a loss on conversion of $592. As of December 27, 2012, the note was fully converted.

On September 430, 2012, the Company entered into a note with ~~Lakeport~~Susan inJones, a former officer of the ~~amount~~Company. The Company had accrued compensation of $4758,~~235~~333 which was converted into a note payable. The note ~~matures~~matured on October 115, 2012 and ~~accrues~~accrued interest at the rate of 122% per annum. This note is in default.

F-2620

eLayaway, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

On September 24, 2012, Southridge purchased a portion, $55,000, of the TOL note dated June 29, 2011. On October 18, 2012, Southridge converted $5,480 of the note into 8,430,769 shares of common stock (see Note 12) at a 50% discount, $0.00065, at a loss of $2,951 on the conversion. On November 5, 2012, Southridge converted $6,325 of the note into 8,433,333 shares of common stock (see Note 12) at a 50% discount, $0.00075, at a loss of $2,108 on the conversion. On November 9, 2012, Southridge converted $12,190 of the note into 16,253,333 shares of common stock (see Note 12) at a 50% discount, $0.00075, at a loss of $4,063 on the conversion. On November 15, 2012, Southridge converted $5,685 of the note into 16,242,857 shares of common stock (see Note 12) at a 50% discount, $0.00035, at a loss of $10,558 on the conversion. On November 21, 2012, Southridge converted $8,375 of the note into 23,928,571 shares of common stock (see Note 12) at a 50% discount, $0.00035, at a loss of $15,554 on the conversion. On November 30, 2012, Southridge converted $11,260 of the note into 32,171,429 shares of common stock (see Note 12) at a 50% discount, $0.00035, at a loss of $20,911 on the conversion. On December 5, 2012, Southridge converted $5,685 of the note into 4,373,077 shares of common stock (see Note 12) at a 50% discount, $0.00013, at a gain of $132,951 on the conversion of $1,312. On December 11, 2012, under the reset clause of the note, Southridge was issued an additional 1,311,923 shares of common stock (see Note 12) at a loss of $1,312. The note was fully converted as of December 11, 2012.

On September 27, 2012, SGI Group, LLC (“SGI Group”) converted $6,100 of principal of its $25,000 note into 4,206,896 shares of common stock at the discounted conversion price of $0.00145 (see Note 8) with a loss on conversion of $1,893. On October 12, 2012, due to the reset clause in the note, an additional 2,969,574 shares of common stock were issued. The Company recognized a loss of $2,970 for the additional issuance (see Note 12). On October 22, 2012, SGI Group $2,600 of principal and $18 of accrued interest of the note into 4,028,400 shares of common stock (see Note 12) at the discounted conversion price of $0.00065 with a loss on conversion of $1,410. On November 5, 2012, SGI Group $6,300 of principal and $85 of accrued interest of the note into 8,513,160 shares of common stock (see Note 12) at the discounted conversion price of $0.00075 with a loss on conversion of $2,128. On November 16, 2012, SGI Group $6,500 of principal and $111 of accrued interest of the note into 18,889,371 shares of common stock (see Note 12) at the discounted conversion price of $0.00035 with a loss on conversion of $12,278. On November 23, 2012, SGI Group $3,500 of principal and $68 of accrued interest of the note into 10,193,857 shares of common stock (see Note 12) at the discounted conversion price of $0.00035 with a loss on conversion of $6,626. As of November 23, 2012, the note was fully converted.

On September 27, 2012, Star City Capital, LLC (“Star City”) converted $12,200 of its $30,000 note into 8,413,793 shares of common stock at the discounted conversion price of $0.00145 (see Note 12). On October 12, 2012, due to the reset clause in the note, an additional 5,939,148 shares of common stock were issued (see Note 12). The Company recognized a loss of $5,939 for the additional issuance. On November 5, 2012, Star City converted $6,300 of principal and $85 of accrued interest of its note into 8,513,180 shares of common stock at the discounted conversion price of $0.00075 (see Note 12). On November 16, 2012, Star City converted $6,500 of principal and $85 of accrued interest of its note into 18,889,371 shares of common stock at the discounted conversion price of $0.00035 (see Note 12). On December 5, 2012, Star City converted $5,000 of principal and $120 of accrued interest of its note into 3,938,246 shares of common stock at the discounted conversion price of $0.0013 (see Note 7) at a gain on conversion of $1,182. On December 20, 2012, due to the reset clause in the note, an additional 3,754,061 shares of common stock (see Note 12) were to be issued. They were not issued until January 2013. The Company recognized a loss of $3,754 for the additional issuance. As of December 20, 2012, the note was fully converted.

On September 28, 2012, the Company entered into a note with Kline in the amount of $55,000. The note matures on October 10, 2012 and accrues interest at the rate of 12% per annum. This note is in default.

On September 28, 2012, the Company entered into a note with TOL in the amount of $55,000. The note matures on October 10, 2012 and accrues interest at the rate of 12% per annum. This note is in default.

On September 30, 2012, the Company entered into a note with Susan Jones, a former officer of the Company. The Company had accrued compensation of $58,333 which was converted into a note payable. The note matures on October 15, 2012 and accrued interest at the rate of 2% per annum. This note is in default.

On September 30, 2012, the Company entered into a note with Harmon, an officer of the Company. As part of an agreement whereas Harmon provided his personal guarantee to a liability of the Company, the Company purchased back 2,060,276 shares of Series E preferred stock (see Note 12) for the original conversion value of $157,260 and converted the liability into a note which matures on October 15, 2012 and accrues interest at the rate of 2% per annum. The Company recognized compensation expense of $150,461 in this transaction as the shares were valued at $6,799. This note is in default.

On October 22, 2012, Southridge purchased $50,000 of the Kline note. On December 5, 2012, Southridge converted $36,150 of the note into 27,807,692 shares of common stock (see Note 12) at a 50% discount, $0.0013, at a gain of $8,342 on the conversion. On December 11, 2012, under the reset clause of the note, Southridge was issued an additional 8,342,308 shares of common stock (see Note 12) at a loss of $8,342. On December 11, 2012, Southridge converted $13,850 of the note into 13,850,000 shares of common stock (see Note 12) at a 50% discount, $0.001. The note was fully converted as of December 11, 2012.

On October 22, 2012, SGI Group purchased $5,000 of the Kline note. On November 23, 2012, SGI Group converted $3,000 of principal and $33 of accrued interest of the note into 8,664,771 shares of common stock (see Note 12) at a 50% discount, $0.00035, at a loss on conversion of $5,632 on the conversion. On December 11, 2012, Southridge converted $2,000 of principal and $34 of accrued interest of the note into 3,389,433 shares of common stock (see Note 12) at a 50% discount, $0.0006. The note was fully converted as of December 11, 2012.

F-27

eLayaway, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

On October 22, 2012, Star City purchased $20,000 of the Kline note. The balance as of December 31, 2012 is $20,000.

On October 23, 2012, the Company entered into a note with Kline for $75,000. The note has an interest rate of 12% and matured on October 31, 2012. This note is in default.

On October 24, 2012, the Company entered into a convertible note with Asher in the amount of $37,500. The note matures on July 26, 2013 and may be converted at any time after 180 days from the date of the note. The interest, which accrues, is at a rate of 8% per annum. The conversion feature is at the average of the lowest three days trading price for the Company’s common stock during the ten trading day period ending on the day prior to conversion, less a discount of 42%. There was a $2,500 fee to a third party for legal expenses and related expenses for the closing of the note which was recorded as debt issue costs to be amortized over the debt term. The note is considered a stock settled debt since any future stock issued upon conversion will have a fair market value of $64,655. The Company therefore is accreting a premium of $27,155 into interest expense over the 180 day period to the first conversion date of the note. On May 1, 2013, Asher converted $5,800 into 483,334 shares of common stock (see Note 12) at a conversion rate of $0.012. A loss of $52,703 was recognized. On October 9, 2013, Asher converted $1,000 into 1,000,000 shares of common stock (see Note 12) at a conversion rate of $0.001. A loss of $1,400 was recognized. On October 28, 2013, Asher converted $2,300 into 4,791,667 shares of common stock (see Note 12) at a conversion rate of $.00048. A loss of $2,492 was recognized. On October 30, 2013, Asher converted $2,300 into 4,791,667 shares of common stock (see Note 12) at a conversion rate of $0.00048. A loss of $2,013 was recognized. On November 8, 2013, Asher converted $1,695 into 4,842,857 shares of common stock (see Note 12) at a conversion rate of $0.00035. A loss of $1,695 was recognized. On November 13, 2013, Asher converted $3,150 into 10,862,069 shares of common stock (see Note 12) at a conversion rate of $0.00029. A loss of $4,453 was recognized. On November 18, 2013, Asher converted $2,925 into 10,833,333 shares of common stock (see Note 12) at a conversion rate of $0.00027. A loss of $5,742 was recognized. On November 20, 2013, Asher converted $2,925 into 10,833,333 shares of common stock (see Note 12) at a conversion rate of $0.00027. A loss of $3,575 was recognized. On November 18, 2013, Asher converted $2,925 into 10,833,333 shares of common stock (see Note 12) at a conversion rate of $0.00027. A loss of $20,908 was recognized. On November 18, 2013, Asher converted $2,925 into 10,833,333 shares of common stock (see Note 12) at a conversion rate of $0.00027. A loss of $20,908 was recognized. On December 2, 2013, Asher converted $8,060 into 21,783,784 shares of common stock (see Note 12) at a conversion rate of $0.00037. A loss of $7,189 was recognized. As of December 31, 2013, the note has a principal balance of $650.

On November 78, 2012, ~~WHC~~Southridge purchased ~~and was assigned~~ $2550,000 of the Evolution note dated ~~October~~December 261, 2011. On ~~November~~December 95, 2012, ~~WHC~~Southridge converted $519,~~465~~300 of the note into 732,~~286~~166,~~000~~667 shares of common stock (see Note 12) at a 50% discount, $0.~~00075~~0006, at a loss on conversion of $112,~~822~~867 on the conversion. On ~~November~~December 2611, 2012, ~~WHC~~Southridge converted $619,~~982~~325 of the note into 1232,~~695~~208,~~000~~333 shares of common stock (see Note 12) at a 50% discount, $0.~~00055~~0006, at a loss on conversion of $512,~~713~~883 on the conversion. On ~~December~~January 113, ~~2012~~2013, ~~WHC~~under ~~converted~~the ~~$12~~reset clause of the note,~~553~~ Southridge was issued an additional 18,958,333 shares of ~~principal~~common ~~and~~stock (see Note 12) at a loss of $~~182~~18,958. The balance as of ~~accrued~~December ~~interest~~31, 2013 is $11,375. On January 3, 2013, Southridge converted $11,375 of the note into 1218,~~526~~958,~~279~~333 shares of common stock (see Note 12) at a 50% discount, $0.~~00075,~~0006. atA aloss ~~gain~~ on conversion of $~~209~~15,167 onwas recognized. On January 9, 2013, under the ~~conversion.~~reset Asclause of ~~December~~the 11note, ~~2012~~Southridge was issued an additional 3,791,800 ~~the~~shares of common stock (see Note 12) at a loss of $3,792. The note was fully converted as of December 31, 2013.

On November 8, 2012, Southridge purchased $50,000 of the Evolution note dated December 1, 2011. On December 5, 2012, Southridge converted $19,300 of the note into 32,166,667 shares of common stock (see Note 12) at a 50% discount, $0.0006, at a loss on conversion of $12,867 on the conversion. On December 11, 2012, Southridge converted $19,325 of the note into 32,208,333 shares of common stock (see Note 12) at a 50% discount, $0.0006, at a loss on conversion of $12,883 on the conversion. On January 3, 2013, under the reset clause of the note, Southridge was issued an additional 18,958,333 shares of common stock (see Note 12) at a loss of $18,958. The balance as of December 31, 2012 is $11,375. On January 3, 2013, Southridge converted $11,375 of the note into 18,958,333 shares of common stock (see Note 16) at a 50% discount, $0.0006. A loss on conversion will be recognized.

On November 13, 2012, the Company entered into a note with Evolution for $75,000. The note has an interest rate of 12% and matured on November 23, 2012. This note is in default.

On November 15, 2012, the Company entered into a note with Harmon for $10,000 related to accrued payroll. The note has an interest rate of 12% and matured on November 25, 2012. This note is in default.

On November 20, 2012, SGI Group purchased $15,419 of the TOL note dated June 28, 2011. On December 12, 2012, SGI Group converted $9,000 of principal and $68 of accrued interest of the note into 15,113,467 shares of common stock (see Note 12) at a 50% discount, $0.0006, at a loss on conversion of $6,045 on the conversion. On February 7, 2013, SGI Group converted $6,419 of principal and $169 of accrued interest of the note into 26,351,200 shares of common stock (see Note 12) at a 50% discount, $0.00025, at a loss on conversion of $19,763. The balance as of December 31, ~~2012~~2013 iswas $~~6,419~~0.

On November 20, 2012, ~~Mauriello~~Sazer purchased $158,~~000~~500 of the Kline note dated April 6, 2010. On November 2923, 2012, ~~Mauriello~~Sazer converted $63,~~500~~250 of principal and $4 of accrued interest of the note into 189,~~583~~297,~~657~~943 shares of common stock (see Note 12) at a 50% discount, $0.00035, at a loss on conversion of $126,~~079~~044 on the conversion. On ~~December~~February 1311, ~~2012~~2013, ~~Mauriello~~Sazer converted $85,~~500~~250 of principal and $67145 of accrued interest of the note into 1410,~~278~~790,~~267~~800 shares of common stock (see Note 12) at a 50% discount, $0.~~0006~~00025, at a loss on conversion of $5,~~711 on the conversion~~395. As of December 13, 2012, the balance of the note was ~~fully converted~~$0.

On November 20, 2012, Sazer purchased $8,500 of the Kline note dated April 6, 2010. On November 23, 2012, Sazer converted $3,250 of principal and $4 of accrued interest of the note into 9,297,943 shares of common stock (see Note 12) at a 50% discount, $0.00035, at a loss on conversion of $6,044 on the conversion. As of December 13, 2012, the balance of the note was $5,250.

On November 26, 2012, the Company entered into a note with Kline for $23,500. The note has an interest rate of 12% and matured on November 30, 2012. This note is in default.

On November 26, 2012, the Company entered into a note with TOL for $15,400. The note has an interest rate of 12% and matured on December 3, 2012. This note is in default.

On November 30, 2012, Southridge purchased and was assigned $60,126, $35,126, and $60,273 of principal and accrued interest from the Benchmark note dated October 26, 2011, the Evolution note dated October 26, 2011, and the Evolution note dated December 1, 2011, respectively, for a total of $155,525. On January 3, 2013, Southridge converted $22,750 of the principal into 37,916,667 shares of common stock at a conversion rate of $0.006 (see Note 16). A loss on conversion of will be recognized.F-21

F-On November 30, 2012, Southridge purchased and was assigned $60,126, $35,126, and $60,273 of principal and accrued interest from the Benchmark note dated October 26, 2011, the Evolution note dated October 26, 2011, and the Evolution note dated December 1, 2011, respectively, for a total of $155,525. On January 3, 2013, Southridge converted $22,750 of the principal into 37,916,667 shares of common stock at a conversion rate of $0.006 (see Note 12). A loss on conversion of $15,167 was recognized. On January 28, 2013, under the reset clause of the note, Southridge was issued an additional 25,917 shares of common stock (see Note 12) at a loss of $5,183. On February 20, 2013, Southridge converted $20,255 of the principal into 405,042 shares of common stock (see Note 12) at a 50% discount, $0.05. A loss on conversion of $60,753 was recognized. On February 27, 2013, under the reset clause of the note, Southridge was issued an additional 101,275 shares of common stock (see Note 12) at a loss of $60,753. On February 27, 2013, Southridge converted $12,150 of the principal into 303,750 shares of common stock (see Note 12) at a 50% discount, $0.40. A loss on conversion of $48,600 was recognized. On March 12, 2013, Southridge converted $24,430 of the principal into 610,750 shares of common stock (see Note 12) at a 50% discount, $0.40. A loss on conversion of $97,720 was recognized. On March 18, 2013, under the reset clause of the note, Southridge was issued an additional 203,584 shares of common stock (see Note 12) at a loss of $40,717. On March 18, 2013, Southridge converted $12,990 of the principal into 433,000 shares of common stock (see Note 12) at a 50% discount, $0.03. A loss on conversion of $73,610 was recognized. On March 22, 2013, Southridge converted $19,100 of the principal into 636,667 shares of common stock (see Note 12) at a 50% discount, $0.03. A loss on conversion of $108,233 was recognized. On April 1, 2013, Southridge converted $13,010 of the principal into 650,500 shares of common stock (see Note 12) at a 50% discount, $0.02. A loss on conversion of $58,545 was recognized. On April 1, 2013, under the reset clause of the note, Southridge was issued an additional 318,334 shares of common stock (see Note 12) at a loss of $63,667. On April 10, 2013, Southridge converted $9,440 of the principal into 944,000 shares of common stock (see Note 12) at a 50% discount, $0.01. A loss on conversion of $89,680 was recognized. On April 15, 2013, Southridge converted $11,125 of the principal into 222,500,000 shares of common stock (see Note 12) at a 50% discount, $0.01. A loss on conversion of $105,688 was recognized. On April 22, 2013, Southridge converted $9,975 of the principal into 997,500 shares of common stock (see Note 12) at a 50% discount, $0.01. A loss on conversion of $94,763 was recognized. As of December 31, 2013, the principal balance of the note was $0.

~~eLayaway~~On December 4, ~~Inc~~2012, Southridge purchased $55,300 of the Reserve note. On February 11, 2013, Southridge converted $14,400 of the note into 81,008,219 shares of common stock (see Note 12) at a 50% discount, $0.00025. A loss on conversion of $66,608 was recognized. On October 3, 2013, Southridge converted $1,585 of principal and ~~Subsidiaries~~$52 of accrued interest of the note into 2,406,639 shares of common stock (see Note 12). On October 11, 2013, Southridge converted $1,563 of principal and $73 of accrued interest of the note into 2,405,268 shares of common stock (see Note 12). On October 28, 2013 converted $6,530 of principal and $53 of accrued interest of the note into 13,714,282 shares of common stock (see Note 12). On October 25, 2013, Southridge converted $3,805 of principal and $38 of accrued interest of the note into 13,724,384 shares of common stock (see Note 12). On November 1, 2013, Southridge converted $3,265 of the note into 13,725,295 shares of common stock (see Note 12) at a 50% discount, $0.00024. A loss on conversion of $4,941 was recognized. On November 12, 2013, Southridge converted $2,710 of the note into 13,719,376 shares of common stock (see Note 12) at a 50% discount, $0.0002. A loss on conversion of $4,116 was recognized. On November 20, 2013, Southridge converted $2,180 of the note into 13,734,430 shares of common stock (see Note 12) at a 50% discount, $0.00016. A loss on conversion of $6,043 was recognized. On November 22, 2013, Southridge converted $2,192 of the note into 13,718,399 shares of common stock (see Note 12) at a 50% discount, $0.00016. A loss on conversion of $19,755 was recognized. On November 25, 2013, Southridge converted $2,285 of the note into 14,295,336 shares of common stock (see Note 12) at a 50% discount, $0.00016. A loss on conversion of $29,162 was recognized. As of December 31, 2013, the balance of the note was $0.

~~Notes~~On toDecember ~~Consolidated~~4, ~~Financial~~2012, ~~Statements~~Marina $25,000 of the TOL note dated June 28, 2011. On December 11, 2012, Marina converted $5,650 principal and $13 of accrued interest of the note into 9,438,367 shares of common stock (see Note 12) at a 50% discount, $0.0006, at a loss on conversion of $3,775. On January 23, 2013, Marina converted $15,000 principal and $247 of accrued interest of the note into 152,466 shares of common stock (see Note 12) at a 50% discount, $0.10, at a loss on conversion of $15,247. On February 12, 2013, Marina converted $4,350 principal and $100 of accrued interest of the note into 89,003 shares of common stock (see Note 12) at a 50% discount, $0.05, at a loss on conversion of $13,350. As of December 31, 2013, the note had a balance of $0.

December 31, 2012 and 2011

On December 4, 2012, Southridge purchased $55,300 of the Reserve note. The balance as of December 31, 2012 is $55,300. On February 11, 2013, Southridge converted $14,400 of the note into 81,008,219 shares of common stock (see Note 16) at a 50% discount, $0.00025. A loss on conversion will be recognized.

On December 4, 2012, Marina $25,000 of the TOL note dated June 28, 2011. On December 11, 2012, Marina converted $5,650 principal and $13 of accrued interest of the note into 9,438,367 shares of common stock (see Note 12) at a 50% discount, $0.0006, at a loss on conversion of $3,775 on the conversion. As of December 31, 2012, the note had a balance of $19,350.

On December 7, 2012, the Company entered into a note with TOL for $25,000. The note has an interest rate of 12% and matured on December 14, 2012. This note is in default.

On December 13, 2012, WHC purchased $35,000 of the TOL note. On December 27, 2012, WHC converted $10,091 of the note into 1789,~~828,609~~144 shares of common stock (see Note 12) at a 50% discount, $0.~~00057~~114, at a loss on conversion of $7,738. On January 10, 2013, WHC converted $10,536 of the principal and $315 of accrued interest of the note into 101,795 shares of common stock (see Note 12) at a 50% discount, $0.106, at a loss on conversion of $9,508. On January 18, 2013, WHC converted $10,700 of the note into 107,000 shares of common stock (see Note 12) at a 50% discount, $0.05, at a loss on conversion of $10,700. On February 5, 2013, WHC converted $3,673 of the note into 55,098 shares of common stock (see Note 8) at a 50% discount, $0.0666, at a loss on conversion of $7,346. As of December 31, ~~2012~~2013, the note had a balance of $~~24,909~~0.

F-22

On December 14, 2012, the Company entered into a note with TOL for $35,000. The note has an interest rate of 12% and matured on December 18, 2012. This note is in default.

On December 21, 2012, the Company entered into a convertible note with Asher in the amount of $53,000. The note matures on September 26, 2013 and may be converted at any time after 180 days from the date of the note. The interest, which accrues, is at a rate of 8% per annum. The conversion feature is at the average of the lowest three days trading price for the Company’s common stock during the ten trading day period ending on the day prior to conversion, less a discount of 42%. There was a $3,000 fee to a third party for legal expenses and related expenses for the closing of the note which was recorded as debt issue costs to be amortized over the debt term. The note is considered a stock settled debt since any future stock issued upon conversion will have a fair market value of $91,379. The Company therefore is accreting a premium of $38,379 into interest expense over the 180 day period to the first conversion date of the note. The funding of the note was on January 2, 2013 therefore the $50,000 was recorded as a receivable (see Note 12). On December 5, 2013, Asher converted $3,150 into 9,000,000 shares of common stock (see Note 12) at a conversion rate of $0.00035. A loss of $3,150 was recognized. On December 16, 2013, Asher converted $5,000 into 21,739,130 shares of common stock at a conversion price of $0.00023. A loss on conversion of $8,043 was recognized. On December 19, 2013, Asher converted $5,000 into 21,739,130 shares of common stock at a conversion price of $0.00023. A loss on conversion of $1,522 was recognized. On January 2, 2014, Asher converted $5,000 into 21,739,130 shares of common stock at a conversion price of $0.00023 (see Note 15). A loss on conversion of $3,696 will be recognized. On January 10, 2014, Asher converted $5,640 into 47,000,000 shares of common stock at a conversion price of $0.00012 (see Note 15). A loss on conversion of $8,460 will be recognized. On January 22, 2014, Asher converted $5,175 into 51,750,000 shares of common stock at a conversion price of $0.0001 (see Note 15). A loss on conversion of $10,350 will be recognized. On January 28, 2014, Asher converted $5,175 into 51,750,000 shares of common stock at a conversion price of $0.0001 (see Note 15). A loss on conversion of $10,350 will be recognized. On January 30, 2014, Asher converted $5,175 into 51,750,000 shares of common stock at a conversion price of $0.0001 (see Note 15). A loss on conversion of $10,350 will be recognized. On February 7, 2014, Asher converted $3,105 into 51,750,000 shares of common stock at a conversion price of $0.00006 (see Note 15). A loss on conversion of $2,070 will be recognized. On February 11, 2014, Asher converted $3.105 into 51.750.000 shares of common stock at a conversion price of $0.00006 (see Note 15). A loss on conversion of $7,245 will be recognized. On February 14, 2014, Asher converted $1,265 of principal and accrued interest of $2,120 into 56,416,667 shares of common stock at a conversion price of $0.00006 (see Note 15). A loss on conversion of $2,257 will be recognized. As of December 31, 2013, the balance was $39,850.

On December 28, 2012, Southridge purchased $45,000 of the TOL note dated June 28, 2011. AsOn ofJanuary ~~December~~28, 312013, ~~2012~~Southridge converted $28,100 of the note ~~had~~into 62,444,444 shares of common stock (see Note 12) at a ~~balance~~50% discount, $0.09. A loss on conversion of $4534,~~000~~344 was recognized. On ~~January~~February 285, 2013, Southridge converted $287,~~100~~650 of the note into 62127,~~444,444~~500 shares of common stock (see Note 1612) at a 50% discount, $0.~~00045~~06. A loss on conversion ~~will~~of be$17,850 was recognized. On February 56, 2013, Southridge converted $75,~~650~~750 of the note into 25115,~~500,~~000 shares of common stock (see Note 1612) at a 50% discount, $0.~~0003~~05. A loss on conversion ~~will~~of be$17,250 was recognized. On ~~February~~March 65, 2013, Southridge converted $520,~~750~~375 of the note into 23509,~~000~~375 shares of common stock (see Note 12) at a 50% discount,~~000~~ $0.04. A loss on conversion of $81,500 was recognized. On May 4, 2013, Southridge converted $8,525 of the note into 852,500 shares of common stock (see Note 1612) at a 50% discount, $0.~~00025~~01. A loss on conversion ~~will~~of be$80,988 was recognized. The principal balance of the note as of December 31, 2013 was $0.

On December 31, 2012, the Company entered into a note with TOL for $45,000. The note has an interest rate of 12% and matured on January 7, 2013. The note was in default after the date of this Report.

~~F-29~~On January 21, 2013, the Company entered into a note with Harmon for $52,010. The note has an interest rate of 12% and matured on January 24, 2013. The note was in default as of date of this Report.

~~eLayaway~~On January 30, ~~Inc~~2013, the Company entered into a note with Evolution for $22,750. The note has an interest rate of 12% and ~~Subsidiaries~~matured on February 7, 2013. The note was in default as of the date of this Report.

~~Notes~~On January 31, 2013, the Company entered into a convertible note with Asher in the amount of $32,500. The note matured on November 4, 2013 and may be converted at any time after 180 days from the date of the note. The interest, which accrues, is at a rate of 8% per annum. The conversion feature is at the average of the lowest three days trading price for the Company’s common stock during the ten trading day period ending on the day prior to ~~Consolidated~~conversion, ~~Financial~~less ~~Statements~~a discount of 42%. There was a $2,500 fee to a third party for legal expenses and related expenses for the closing of the note which was recorded as debt issue costs to be amortized over the debt term. The note is considered a stock settled debt since any future stock issued upon conversion will have a fair market value of $56,034. The Company therefore is accreting a premium of $23,534 into interest expense over the 180 day period to the first conversion date of the note. On February 20, 2014, Asher converted $9,100 into 113,750,000 shares of common stock at a conversion price of $0.00008 (see Note 15). A loss on conversion of $13,650 will be recognized. On February 24, 2014, Asher converted $13,700 into 114,166,667 shares of common stock at a conversion price of $0.00012 (see Note 15). A loss on conversion of $9,133 will be recognized. On February 27, 2014, Asher converted $9,700 of principal and accrued interest of $1,300 into 91,666,667 shares of common stock at a conversion price of $0.00012 (see Note 15). A loss on conversion of $16,500 will be recognized.

~~December 31, 2012 and 2011~~F-23

On February 15, 2013, the Company entered into a note with Harmon for $15,000 in regards to accrued compensation from January 1, 2013 through February 15, 2013. The note has an interest rate of 12% and matured on February 25, 2013. The note was in default as of the date of this Report.

On February 26, 2013, Momoma Capital purchased from Southridge a note dated March 30, 2012 for $25,000. On February 26, 2013, Momoma Capital converted $13,100 of the principal and $1,825 of accrued interest of the note into 213,210 shares of common stock (see Note 12) at a 50% discount, $0.07, at a loss on conversion of $27,717. On April 3, 2013, Momoma Capital converted $11,900 of the principal and $1,658 of accrued interest of the note into 484,209 shares of common stock (see Note 12) at a 50% discount, $0.028, at a loss of $41,642. As of December 31, 2013, the balance of the note was $0.

On February 27, 2013, the Company entered into a note with Evolution for $20,255. The note has an interest rate of 12% and matured on March 1, 2013. The note is in default.

On March 11, 2013, the Company entered into a note with Evolution for $36,580. The note has an interest rate of 12% and matured on March 15, 2013. The note is in default.

On March 22, 2013, the Company entered into a note with Evolution for $19,100. The note has an interest rate of 12% and matured on March 25, 2013. The note is in default.

On March 28, 2013, the Company entered into a note with Evolution for $62,650. The note has an interest rate of 12% and matured on April 1, 2013. The note is in default.

On March 31, 2013, the Company entered into a note with Harmon for $15,000 in regards to accrued compensation from February 16, 2013 – March 31, 2013. The note has an interest rate of 12% and matured on April 10, 2013. The note is in default.

On April 1, 2013, the Company entered into a note with Harmon for $10,138 in regards to accounts payable due to Harmon as of April 1, 2013. The note has an interest rate of 12% and matured on April 10, 2013. The note is in default.

On November 14, 2013, the Company entered into a consulting agreement with Lakeport for one year to provide accounting and administrative services including the preparation of SEC filings. The agreement provides for compensation, in the form of a convertible note, in the amount of $5,000 per month. A note will be prepared on the first day of each month for that month’s service. For November 2013, the note was dated November 14, 2013. Each note bears interest of 12% per annum and has a term of two months. Each note is convertible at the lesser of the closing price of the common stock at the day prior to the note less 50% or at the average of the lowest three trading prices for the common stock during the period sixty days prior to conversion. On November 14, 2013, the Company issued a note for $5,000. See Note 15.

On November 14, 2013, the Company entered into a consulting agreement with Thomas Carluccio, Jr. for one year to marketing, operations and administrative services. The agreement provides for compensation, in the form of a convertible note, in the amount of $5,000 per month. A note will be prepared on the first day of each month for that month’s service. For November 2013, the note was dated November 14, 2013. The note bears interest of 12% per annum and each note will have a term of two months. The notes are convertible at the lesser of the closing price of the common stock at the day prior to the note less 50% or at the average of the lowest three trading prices for the common stock during the period sixty days prior to conversion. On November 14, 2013, the Company issued a note to Thomas Carluccio, Jr. for $5,000. See Note 15.

On November 14, 2013, the Company entered into an addendum to Sergio Pinon’s employment agreement for a one year period to provide management, operations, marketing and administrative services in lieu of employee compensation as previously agreed to in the employment agreement. Mr. Pinon has received common stock of the Company for a majority of 2013 while serving as chief executive officer, interim chief financial officer, and director. The addendum provides for compensation, in the form of a convertible note, in the amount of $5,000 per month. A note will be prepared on the first day of each month for that month’s service. For November 2013, the note was be dated November 14, 2013. Each note will bear interest of 12% per annum and each note will have a term of two months. Each note is convertible at the lesser of the closing price of the common stock at the day prior to the note less 50% or at the average of the lowest three trading prices for the common stock during the period sixty days prior to conversion. On November 14, 2013, the Company issued a note for $5,000. See Notes 11 and 15.

F-24

On December 1, 2013, the Company issued its monthly note to Lakeport for $5,000 under the same contractual terms. See disclosure on November 14, 2013 and Note 15.

On December 1, 2013, the Company issued its monthly note to Thomas Carluccio, Jr. for $5,000 under the same contractual terms. See disclosure on November 14, 2013 and Note 15.

On December 1, 2013, the Company issued its monthly note to Sergio Pinon for $5,000 under the same contractual terms. See disclosure on November 14, 2013 and Note 15.

On December 17, 2013, the Company entered into a note with Lakeport for $45,000. The note will bear interest of 12% per annum and each note will have a term of two months. The notes are convertible at the lesser of the closing price of the common stock at the day prior to the note less 50% or at the average of the lowest three trading prices for the common stock during the period of the inception of the note until conversion.

NOTE 8 – DERIVATIVES

Embedded Conversion Option Derivatives

Due to the conversion terms of certain promissory notes, the embedded conversion options met the criteria to be bifurcated and presented as derivative liabilities. The Company calculated the estimated fair values of the liabilities for embedded conversion option derivative instruments at the original note inception date and as of December 31, ~~2012~~2013 using the Black-Scholes option pricing model using the share prices of the Company’s stock on the dates of valuation and using the following ranges for volatility, expected term and the risk free interest rate at each respective valuation date, no dividend has been assumed for any of the periods:

	Note Inception Date			December 31, ~~2012~~2013			December 31, ~~2011~~2012
Volatility		251% - 257	%		251	%		251	%
Expected Term	0.17 - 0.5 years			0.08 - 0.46 years			0.08 – 0.46 years
Risk Free Interest Rate		0.33	%		0.315	%		0.315	%

The following reflects the initial fair value on the note inception date and changes in fair value through December 31, ~~2012~~2013:

Note inception date fair value allocated to debt discount	$	483,317
Note inception date fair value allocated to other expense		23,132
Change in fair value in 2011 (gain) loss		(73,402	)
Embedded conversion option derivative liability fair value on December 31, 2011		433,047
Change in fair value in 2012-(gain) loss		(362,343	)
Change in fair value in 2012 (gain) loss		(368,762	)
Embedded conversion option derivative liability fair value on December 31, 2012	$	7064,~~704~~285
Change in fair value in 2013 (gain) loss		(10,715
Embedded conversion option derivative liability fair value on December 31, 2013	$	53,570

F-30

eLayaway, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

NOTE 9 – ACCRUED LIABILITIES

The major components of accrued expenses are summarized as follows:

	December 31,
	2012		2011
	2013		2012
Accrued payroll	$	~~8,491~~-	$	~~143~~8,~~201~~491
Accrued interest		~~240~~388,~~449~~879		~~107~~240,~~277~~449
Other accrued expenses		~~170~~-		~~2,500~~170
Total	$	~~249~~388,~~110~~879	$	~~252~~249,~~978~~110

F-25

NOTE 10 – COMMITMENTS AND CONTINGENCIES

Legal Matters

In 2008, a former employee who served as the CEO of the Company and was an original founder of the Company was terminated for alleged wrongdoings. The Company alleges that this individual illegally deposited investor funds into company bank accounts not authorized by the Board of Directors and wrote unauthorized checks, combined for approximately $371,000. Subsequently, this individual allegedly withdrew the deposited funds and deposited them into accounts not controlled by the Company. The Board of Directors, upon knowledge of this activity, removed this individual from the Company. The Company has turned this matter over to the Florida Department of Law Enforcement. In 2010, the Company determined that it does not believe that these funds are recoverable.

In March 2011, Thomas R. Park, a former employee who served as the CFO of the Company from 2007 to 2008, contacted the Company demanding that the Company issue additional stock of the Company to pay him additional ownership in the Company as a commission for investments made by third parties in the Company during this timeframe. On April 25, 2011, Mr. Park filed a suit, Thomas R. Park v eLayawayCOMMERCE, Inc., et al, in the Circuit Court for the Second Judicial Circuit in and for Leon County, Florida, Civil Division. The Company’s position is that the claim is without merit as a matter of law. The demand by the former officer is material and potentially detrimental in the Company’s efforts to procure additional funding. The Company, prior to the lawsuit being filed, had issued what it believes to be a fair settlement offer, even though the Company firmly believed that the former officer had no legitimate grounds to substantiate his claims, and the former officer has responded with a counter-offer which is deemed to not be feasible as it was unreasonable. The Company settled the lawsuit in June 2011 with the issuance of 600,000 warrants for common stock. The Company maintains that the claims were without merit but opted to settle to avoid legal costs (see Note 12).

In October 2012, Douglas Pinard, a former owner of CSP (see Note 2), resigned from the Company. Certain monies were due to Mr. Pinard related to accrued payroll and notes payable. Mr. Pinard threatened litigation whereas both parties agreed upon a settlement requiring the Company to pay Mr. Pinard a settlement of $40,000 for those liabilities. The Company paid Mr. Pinard $20,000 according to the conditions of the settlement agreement. The Company then notified Mr. Pinard that in its opinion, Mr. Pinard had allegedly breached the settlement agreement by not returning all of the Company’s assets which Mr. Pinard had in his possession at the time of termination. Therefore, the final $20,000 was not paid to Mr. Pinard. Due to the nonpayment, Mr. Pinard alleges that the Company breached the settlement agreement. Mr. Pinard indicated that he would seek legal recourse. As of the date of this report, no further actions have been taken by Mr. Pinard.

In January of 2013, Dr. Robert Salie, father of former chief executive officer and chairman, Douglas Salie, who was terminated for cause, filed a suit, Robert D. Salie and Salie Family Limited Partnership v eLayaway, Inc. , in the Circuit Court for the Second Judicial Circuit in and for Leon County, Florida, Civil Division. The lawsuit is in regards to two notes payable with claims of approximately $565,000 in principal and accrued interest. The Company has not responded to that lawsuit. In October 2012, the Company offered Dr. Salie a principal and interest repayment plan utilizing a third party, but Dr. Salie rejected the Company’s offer. On August 30, 2013, a judgment was awarded to Dr. Salie.

FIn March 2013, ASC Recap, LLC (“ASC”) filed a Joint Motion for Approval of Settlement Agreement and Stipulation, and Request for Fairness Hearing in the Circuit Court of the Second Judicial Circuit in and for Leon County, Florida, Case No. 2012-31CA-4074. ASC has contracted with various note holders of the Company to acquire approximately $1,481,830 of Company debt and subsequently converting the debt to common stock of the Company pursuant to Section 3(a)(10) of the Securities Act of 1933, which allows the exchange of claims, securities, or property for stock when the arrangement is approved for fairness by a court proceeding. The Company has agreed to these terms as the acquisition of these debts and subsequent conversion would alleviate a significant portion of the Company’s liabilities. A fairness hearing was held on May 14, 2013 and the arrangement was approved.

eLayaway, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

Lease Commitment

The Company ~~has~~does annot ~~office~~have any lease ~~agreement~~commitments. ~~starting on February 1~~Previously, ~~2013through~~the ~~January~~Company ~~31,~~had ~~2015.~~a ~~Future~~long-term ~~minimum~~office lease ~~payments~~which ~~under~~was ~~this lease are as follows for the years ended December 31:~~cancelled.

2013	$	51,000
2014		51,000
2015		4,250
Total	$	106,250

Rent expense for continuing operations in 2013 and 2012 was $34,353 and $43,187, respectively.

Rent expense for continuing operations in 2012 and 2011 was $43,187 and $72,183, respectively.

Other

On February 10, 2010, the Company entered into an agreement with Ventana Partners, Inc. to facilitate the acquisition of the shares of a public company which eLayaway would utilize for a reverse merger. The agreement has contingent fees based on successful funding provided by an introduction of Ventana Partners, Inc. On July 7, 2010, the Company entered into an agreement with Garden State Securities, Inc. (“GSS”) as advisor to the Company. On August 18, 2010, the Company entered into a subsequent engagement agreement with GSS to act as an exclusive selling/placement agent for the Company. On February 3, 2011, the Company terminated the agreement with GSS with an effective date of March 4, 2011. The agreement had contingent fees based on successful funding provided by an introduction of GSS.

NOTE 11 – RELATED PARTIES

Bruce Harmon, former CFO and Chairman of the Company, is a note holder of the Company (see Note 7). Line of credit and notes payable of $~~427~~519,~~590~~738 and $69427,~~014,~~590 ~~respectively, along with accrued interest of $31,715,~~ was due to our CFO’s company and himself personally, at December 31, ~~2012~~2013 and ~~2011~~December 31, 2012, respectively, for ~~CFO services and~~ advances to the Company. At December 31, ~~2012~~2013 and ~~2011~~December 31, 2012, the Company had accounts payable to Mr. Harmon of $50 and $14,~~525~~681, respectively, and accrued interest of $218,~~205~~475 and $33,563, respectively. The 2013 balance is not reflected as a related party.

Douglas Salie, the former CEO and Chairman of the Company, is the son of Dr. Robert Salie, who is a shareholder and a note holder (see Note 7). For presentation purposes, Dr. Salie is reported as a related party at December 31, 2011 due to the beneficial ownership of his son, Douglas Salie.F-26

~~The~~On ~~principal~~March 6, 2013, the Board of ~~Transfer~~Directors ~~Online,~~approved ~~Inc.,~~the ~~our~~grant of common stock ~~transfer~~to ~~agent~~the officers and adirectors ~~noteholder,~~of ~~became~~the anCompany ~~officer~~in consideration of the ~~Company~~dilution inof ~~November~~the ~~2011~~Company’s ~~and~~outstanding ~~resigned~~common instock. Mr. ~~January~~Pinon ~~2012~~and Mr. ~~Accordingly~~Harmon, the ~~convertible~~CEO ~~note~~and isCFO, ~~presentedat~~respectively, ~~December~~were ~~31,~~each ~~2011~~granted as250,000 ashares ~~related~~of ~~party~~restricted ~~note~~common ~~(see~~stock. See Note 7)12.

On March 6, 2013, the Board of Directors approved the compensation for 2013 for Vincent & Rees, P.C. (“Vincent & Rees”), legal counsel for the Company, thereby granting Vincent & Rees 250,000 shares of restricted common stock. Mr. Rees is a director of the Company. See Note 12.

On April 8, 2013, Harmon converted 29,063 shares of Series E preferred stock and 49,242 shares of Series F preferred stock, collectively on a 1:1 basis, into 78,305 shares of common stock (see Note 12).

April 8, 2013, Harmon converted accounts payable of $9,301 into 155,025 shares of common stock at a conversion rate of $0.06. See Note 12.

On April 8, 2013, Pinon converted 251,006 shares of Series E preferred stock on a 1:1 basis into 1,256 shares of common stock. See Note 12.

On April 25, 2013, 1,150,000 shares of S-8 common stock were issued to Pinon and Harmon (575,000 and 575,000 shares, respectively), in lieu of payroll for April and May 2013 (see Note 12).

On May 22, 2013, 2,199,772 shares of S-8 common stock were issued to Pinon and Harmon (1,099,886 and 1,099,886 shares, respectively), in lieu of payroll for June and July 2013. Harmon had his 1,099,886 shares cancelled to facilitate a note conversion by a third party as the remaining available shares from the authorized amount of shares were not sufficient. Harmon’s shares were issued on August 15, 2013.

On September 12, 2013, the Company issued 10,000,000 shares of common stock to Sergio Pinon, the Company’s CEO and director, as compensation for his services in lieu of payroll (see Note 12). The shares were recorded at an expense of $55,000.

On November 14, 2013, the Company entered into an addendum to the employment agreement with Sergio Pinon for one year to provide various services including serving as chief executive officer, interim chief financial officer and director. The agreement provides for compensation, in the form of a convertible note, in the amount of $5,000 per month. The Company issued notes on November 14, 2013, December 1, 2013, January 1, 2014, February 1, 2014, March 1, 2014 and April 1, 2014, each for $5,000. See Notes 7 and 15.

NOTE 12 – STOCKHOLDERS’ DEFICIENCY

Preferred Stock

The Company authorized 50,000,000 shares of preferred stock and has designated seven Series as Series A, B, C, D, E, F and G. Series A, B, ~~Cand~~C and D of preferred stock are non-voting and have liquidation preference over common stock with liquidation preference value equal to the price paid for each preferred share. The Series A, B, C and D preferred stock are mandatorily and automatically convertible on a one for one basis to common stock upon the earlier of (i) the effectiveness of the sale of the Company’s common stock in a firm commitment, underwritten public offering registered under the Securities Act of 1933, as amended, other than a registration relating solely to a transaction under rule 145 under the Securities Act or to an employee benefit plan of the corporation, with aggregate proceeds to the Company and/or selling stockholders (prior to deduction of underwriter commissions and offering expenses) of at least $20,000,000, (ii) a sale of substantially all assets of the Company, (iii) the event whereby the average closing price per share of common stock of the Company, as reported by such over-the-counter market, interdealer quotation service or exchange on which shares of common stock of the Company are primarily traded (if any), equals or is greater than $102,000.00 per share, for thirty (30) consecutive trading days or (iv) twelve months after the April 12, 2010 merger. Upon the automatic conversion of Series A, B, C, and D preferred stock to common stock, the shares are entitled to piggyback registration rights.

F-3227

On August 12, 2010, the Company’s Board of Directors approved the filing of a Certificate of Designation of the Preferences and Rights of Series E Preferred Stock of eLayaway, Inc. (“Certificate of Designation”) with the Department of State of the State of Delaware authorizing the creation of a new series of preferred stock designated as “Series E Preferred Stock” pursuant to the authority granted to the Board of Directors under the Company’s Amended and ~~Subsidiaries~~Restated Certificate of Incorporation and Section 151 of the Delaware General Corporation Law. The Certificate of Designation was filed with the Delaware Department of State on August 13, 2010. The Certificate of Designation created 2,500,000 shares of Series E Preferred Stock. Each holder of Series E Preferred Stock will be entitled to participate in dividends or distributions payable to holders of the Company’s common stock at a rate of the dividend payable to each share of Common Stock multiplied by the number of shares of Common Stock that each share of such holder’s Series E Preferred Stock is convertible into. Each share of Series E Preferred Stock is convertible, at the option of the holder of the Series E Preferred Stock, into three (3) shares of the Company’s common stock. Shares of the Series E Preferred Stock will be issued to certain officers of the Company as the Board determines if (i) the average closing price per share of the Company’s Common Stock equals or is greater than $10,000 per share for the preceding 20 trading days, (ii) the Company earns $100 per share EBITDA in any twelve consecutive months, (iii) the Company stock is trading on a U.S. Exchange such as AMEX, NASDAQ, or NYSE, or (iv) controlling interest of the Company is acquired by a third party. Each shares of Series E Preferred Stock will be entitled to three (3) votes on all matters submitted to a vote of the stockholders of the Company (“Enhanced Voting Rights”). Upon the liquidation, dissolution or winding up of the Company, the holders of the Series E Preferred Stock will participate in the distribution of the Company’s assets with the holders of the Company’s Common Stock pro rata based on the number of shares of Common Stock held by each (assuming conversion of all shares of Series E Preferred Stock). Due to the Enhanced Voting Rights, following the issuance of shares of Series E Preferred Stock, the holders of the Series E Preferred Stock may be able to exercise voting control over the Company. In such case, the holders of the Series E Preferred Stock may gain the ability to control the outcome of corporate actions requiring stockholder approval, including mergers and other changes of corporate control, going private transactions, and other extraordinary transactions. The concentration of voting control in the Series E Preferred Stock could discourage investments in the Company, or prevent a potential takeover of the Company which may have a negative impact on the value of the Company’s securities. In addition, the liquidation rights granted to the holders of the Series E Preferred Stock will have a dilutive effect on the distributions available to the holders of the Company’s common stock.

Notes to Consolidated Financial Statements

On August 12, 2010, the Company’s Board of Directors approved the filing of a Certificate of Designation of the Preferences and Rights of Series E Preferred Stock of eLayaway, Inc. (“Certificate of Designation”) with the Department of State of the State of Delaware authorizing the creation of a new series of preferred stock designated as “Series E Preferred Stock” pursuant to the authority granted to the Board of Directors under the Company’s Amended and Restated Certificate of Incorporation and Section 151 of the Delaware General CorporationLaw. The Certificate of Designation was filed with the Delaware Department of State on August 13, 2010. The Certificate of Designation created 2,500,000 shares of Series E Preferred Stock. Each holder of Series E Preferred Stock will be entitled to participate in dividends ordistributions payable to holders of the Company’s common stock at a rate of the dividend payable to each share of Common Stock multiplied by the number of shares of Common Stock that each share of such holder’s Series E Preferred Stock is convertible into. Each share of Series EPreferred Stock is convertible, at the option of the holder of the Series E Preferred Stock, into three (3) shares of the Company’s common stock. Shares of the Series E Preferred Stock will be issued to certain officers of the Company as the Board determines if (i) the average closing price per share of the Company’s Common Stock equals or is greater than $50 per share for the preceding 20 trading days, (ii) theCompany earns $0.50 per share EBITDA in any twelve consecutive months, (iii) the Company stock is trading on a U.S. Exchange such as AMEX, NASDAQ, or NYSE, or (iv) controlling interest of the Company is acquired by a third party. Each shares of Series E Preferred Stock will be entitled to three (3) votes on all matters submitted to a vote of the stockholders of the Company (“Enhanced Voting Rights”). Upon the liquidation, dissolution or winding up of the Company, the holders of the Series E Preferred Stock will participate in the distribution of the Company’s assets with the holders of the Company’s Common Stock pro rata based on the number of shares of Common Stock held by each (assuming conversion of all shares of Series E Preferred Stock). Due to the Enhanced Voting Rights, following the issuance of shares of Series E Preferred Stock, the holders of the Series E Preferred Stock may be able to exercise voting control over the Company. In such case, the holders of the Series E Preferred Stock may gain the ability to control the outcome of corporate actions requiring stockholder approval, including mergers and other changes of corporate control, going private transactions, and other extraordinary transactions. The concentration of voting control in the Series E Preferred Stock could discourage investments in the Company, or prevent a potential takeover of the Companywhich may have a negative impact on the value of the Company’s securities. In addition, the liquidation rights granted to the holders of the Series E Preferred Stock will have a dilutive effect on the distributions available to the holders of the Company’s common stock.

On April 12, 2011, the series A, B, C, and D of preferred stock were automatically converted to common stock based upon the twelve month automatic conversion provision.

On September 8, 2011, the Company’s Board of Directors approved the filing of an Amended Certificate of Designation of the Preferences and Rights of Series E Preferred Stock of eLayaway, Inc. (“Amended Certificate of Designation”) with the Department of State of the State of Delaware authorizing the amended terms of the Series E Preferred Stock pursuant to the authority granted to the Board of Directors under the Company’s Amended and Restated Certificate of Incorporation and Section 151 of the Delaware General Corporation Law. The Certificate of Designation was filed with the Delaware Department of State on September 26, 2011. The Certificate of Designation removed the various conditions associated with the issuance, changed the conversion rate to one common share for one preferred share and the voting rights to provide 15 votes for each Series E preferred share. The liquidation preference is the amount paid for the shares.

On ~~September~~March 26, ~~2011~~2012, as approved by the Board of Directors ~~on September 8~~, ~~2011,~~ the Company issued 15,~~450,603~~953 shares of the Series E Preferred Stock to ~~Messrs.~~Susan ~~Salie,~~Jones ~~Harmon, and Pinon~~ in exchange for the conversion of accrued payroll in the amount of $~~120~~30,~~050~~000. The Series E Preferred Stock is immediately convertible into common stock, therefore the preferred shares are valued at the $05.1204 per share ~~or $174,072 which was the~~ closing price of the common stock on the date ofprior to this transaction. Accordingly, ~~The~~there ~~Company~~is ~~recorded~~no abeneficial ~~loss~~conversion ofvalue ~~$54,022~~recorded. These ~~which~~shares iswere ~~included~~converted ininto ~~Other~~common ~~Expense~~stock ~~- Gain (Loss)~~ on ~~settlement~~April of4, ~~liabilities~~2013.

On ~~October~~January 2622, ~~2011~~2013, asthe Company’s Board of Directors approved bythe filing of a Certificate of Designation of the Preferences and Rights of Series G Preferred Stock of eLayaway, Inc. (“Certificate of Designation”) with the Department of State of the State of Delaware authorizing the creation of a new series of preferred stock designated as “Series G Preferred Stock” pursuant to the authority granted to the Board of Directors, under the Company’s ~~issued~~Amended 1and Restated Certificate of Incorporation and Section 151 of the Delaware General Corporation Law. The Certificate of Designation was filed with the Delaware Department of State on January 22,~~374~~ 2013. The Certificate of Designation created 5,~~551~~000 shares of ~~the~~Series G Preferred Stock. Each holder of Series EG Preferred Stock towill ~~Bruce~~be ~~Harmon~~entitled to participate in ~~exchange~~dividends ~~for~~or distributions payable to holders of the ~~conversion~~Company’s common stock at a rate of ~~accrued~~the ~~payroll~~dividend inpayable to each share of Common Stock multiplied by the ~~amount~~number of ~~$48~~shares of Common Stock that each share of such holder’s Series G Preferred Stock is convertible into. Each share of Series G Preferred Stock is convertible,~~500~~ at the option of the holder of the Series G Preferred Stock, ainto ~~note~~one ~~with~~share ~~Lakeport~~of inthe Company’s common stock. Shares of the ~~amount~~Series G Preferred Stock will be issued to certain officers of ~~$20,325,~~the aCompany ~~line~~as ~~ofcredit~~the ~~with~~Board ~~Lakeport~~determines infor consideration of financial investment and/or forgiveness of liabilities of the ~~amount~~Company to the officer. Each shares of ~~$25~~Series G Preferred Stock will be entitled to ten thousand (10,000) votes on all matters submitted to a vote of the stockholders of the Company (“Enhanced Voting Rights”). Upon the liquidation, ~~and~~dissolution ~~accrued~~or ~~interest~~winding up of the Company, the holders of the Series G Preferred Stock will participate in the ~~amount~~distribution of ~~$6,685.~~the ~~The~~Company’s assets with the holders of the Company’s Common Stock pro rata based on the number of shares of Common Stock held by each (assuming conversion of all shares of Series EG Preferred Stock). isDue ~~immediately~~to ~~convertible~~the ~~into~~Enhanced ~~common~~Voting ~~stock~~Rights, ~~therefore~~following the ~~preferred~~issuance of shares ~~are~~of ~~valued~~Series atG Preferred Stock, the $0holders of the Series G Preferred Stock may be able to exercise voting control over the Company.~~089~~ ~~per~~In ~~share~~such ~~closing~~case, ~~price~~the holders of the ~~common~~Series ~~stock~~G onPreferred Stock may gain the ~~date~~ability to control the outcome of ~~this~~corporate ~~transaction~~actions orrequiring ~~$122~~stockholder approval,~~335~~ including mergers and other changes of corporate control, going private transactions, and other extraordinary transactions. The concentration of voting control in the Series G Preferred Stock could discourage investments in the Company, ~~recorded~~or prevent a ~~loss~~potential takeover of ~~$21,825~~the Company which ismay ~~included~~have ina ~~Other~~negative ~~Expense~~impact –on ~~Gain~~the ~~(loss)~~value of the Company’s securities. In addition, the liquidation rights granted to the holders of the Series G Preferred Stock will have a dilutive effect on ~~settlement~~the distributions available to the holders of ~~liabilities~~the Company’s common stock.

On November 23, 2011, as approved by the Board of Directors, the Company issued 385,182 shares of the Series E Preferred Stock to Bruce Harmon in exchange for the conversion of accrued payroll in the amount of $10,000 and accrued interest in the amount of $6,685. The Series E Preferred Stock is immediately convertible into common stock, therefore the preferred shares are valued at the $0.055 per share closing price of the common stock on the date of this transaction or $21,185. The Company recorded a loss of $4,500 which is included in Other Expense – Gain (loss) on settlement of liabilities.F-28

On ~~December~~February 2125, ~~2011~~2013, ~~as approved by~~ the ~~Board of Directors, the~~ Company issued ~~385~~5,~~486~~000 shares of ~~the~~ Series EG Preferred Stock to Sergio Pinon ~~and~~as ~~Bruce~~incentive ~~Harmon in exchange for the conversion of accrued payroll, net of an adjustment for the duplicate conversion of accrued interest of $6,685 in October 2011 and November 2011, in the amount of $5,982~~compensation. The Series EG Preferred Stock is immediately convertible into common stock, therefore the preferred shares are valued at the $0.~~0221~~12 per share closing price of the common stock on the date of this transaction or $~~8,502~~600. ~~The Company recorded a loss of $2,520 which is included in Other Expense – Gain (loss) on settlement of liabilities.~~

On ~~March~~April 268, ~~2012~~2013, asHarmon ~~approved~~converted ~~by the Board of Directors~~29,063 ~~the Company issued 1,190,476~~ shares of ~~the~~ Series E ~~Preferred~~preferred ~~Stock~~stock toand ~~Susan~~49,242 ~~Jones~~shares ~~in exchange for the conversion~~ of ~~accrued~~Series ~~payroll~~F inpreferred ~~the amount of $30~~stock,~~000.~~ ~~The~~collectively ~~Series~~on Ea ~~Preferred~~1:1 ~~Stock~~basis, isinto ~~immediately convertibleinto common stock~~78,305 ~~therefore the preferred~~ shares ~~are valued at the $0.0252 per share closing price~~ of ~~the~~ common stock ~~on the date prior to this transaction~~. ~~Accordingly, there is no beneficial conversion value recorded.~~

On ~~August~~April 218, ~~2012~~2013, asSergio ~~approved~~Pinon by(“Pinon”) ~~the~~converted ~~Board of Directors~~1,256 ~~the Company issued 5,213,702~~ shares of ~~the~~ Series E ~~Preferred~~preferred ~~Stock~~stock toon ~~Bruce~~a ~~Harmon~~1:1 inbasis ~~exchange~~into ~~for the conversion of accrued payroll in the amount of $27~~1,~~990~~256 ~~and accounts payable in the amount of $10,701. The Series E Preferred Stock is immediately convertible into common stock; the preferred~~ shares ~~are valued at the $0.011 per share closing price~~ of ~~the~~ common stock ~~on the date of this transaction or $57,351~~. ~~The Company recorded a loss of $18,660 which is included in Other Expense – Gain (loss) on settlement of liabilities.~~

On June 30, 2013, Harmon personally guaranteed approximately $20,000 in debt for the Company. In exchange for the personal guarantee, the board of directors agreed to the following: 1) issue an equivalent amount of Series F~~-33~~ Preferred Stock based on the closing trading price on the previous day of $0.66 or 30,304 shares. Harmon’s previous proxy to Mr. Pinon covers these shares also; 2) as a condition of previous conversions into Series E Preferred Stock of accrued payroll to Harmon, he is returning to the Company 10,302 shares and the Company will reestablish the liability of $157,260 on its books accordingly as a note payable (see Note 4). It is noted that Harmon has never received any cash compensation for his services for more than three years.

~~eLayaway~~On August 13, ~~Inc.~~2013, ~~and~~as ~~Subsidiaries~~related to the reverse split approved by FINRA on August 12, 2013, the outstanding shares of preferred stock were effected by a reverse split of 1:200.

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

On September 10, 2012, as approved by the Board of Directors, the Company issued 3,787,826 shares of the Series F Preferred Stock to Harmon in exchange for the conversion of accounts payable in the amount of $10,765 related to advances by Harmon. The Series F Preferred Stock is immediately convertible into common stock; the preferred shares are valued at the $0.008 per share closing price of the common stock on the date of this transaction or $30,303. The Company recorded a loss of $19,538 which is included in Other Expense – Gain (loss) on settlement of liabilities. Harmon provided a proxy to Sergio Pinon (“Pinon”), CEO of the Company, for 50% of the votes of the Series F Preferred Stock held by Harmon.

On September 30, 2012, Harmon personally guaranteed approximately $20,000 in debt for the Company. In exchange for the personal guarantee, the board of directors agreed to the following: 1) issue an equivalent amount of Series F Preferred Stock based on the closing trading price on the previous day of $0.0033 or 6,060,606 shares. Harmon’s previous proxy to Mr. Pinon covers these shares also; 2) as a condition of previous conversions into Series E Preferred Stock of accrued payroll to Harmon, he is returning to the Company 2,060,276 shares and the Company will reestablish the liability of $157,260 on its books accordingly as a note payable (see Note 7). It is noted that Harmon has never received any cash compensation for his services for more than three years.

On January 22, 2013, the Company’s Board of Directors approved the filing of a Certificate of Designation of the Preferences and Rights of Series G Preferred Stock of eLayaway, Inc. (“Certificate of Designation”) with the Department of State of the State of Delaware authorizing the creation of a new series of preferred stock designated as “Series G Preferred Stock” pursuant to the authority granted to the Board of Directors under the Company’s Amended and Restated Certificate of Incorporation and Section 151 of the Delaware General CorporationLaw. The Certificate of Designation was filed with the Delaware Department of State on January 22, 2013. The Certificate of Designation created 1,000,000 shares of Series G Preferred Stock. Each holder of Series G Preferred Stock will be entitled to participate in dividends ordistributions payable to holders of the Company’s common stock at a rate of the dividend payable to each share of Common Stock multiplied by the number of shares of Common Stock that each share of such holder’s Series G Preferred Stock is convertible into. Each share of Series GPreferred Stock is convertible, at the option of the holder of the Series G Preferred Stock, into one share of the Company’s common stock. Shares of the Series G Preferred Stock will be issued to certain officers of the Company as the Board determines for consideration of financial investment and/or forgiveness of liabilities of the Company to the officer. Each shares of Series G Preferred Stock will be entitled to ten thousand (10,000) votes on all matters submitted to a vote of the stockholders of the Company (“Enhanced Voting Rights”). Upon the liquidation, dissolution or winding up of the Company, the holders of the Series G Preferred Stock will participate in the distribution of the Company’s assets with the holders of the Company’s Common Stock pro rata based on the number of shares of Common Stock held by each (assuming conversion of all shares of Series G Preferred Stock). Due to the Enhanced Voting Rights, following the issuance of shares of Series G Preferred Stock, the holders of the Series G Preferred Stock may be able to exercise voting control over the Company. In such case, the holders of the Series G Preferred Stock may gain the ability to control the outcome of corporate actions requiring stockholder approval, including mergers and other changes of corporate control, going private transactions, and other extraordinary transactions. The concentration of voting control in the Series FPreferred Stock could discourage investments in the Company, or prevent a potential takeover of the Companywhich may have a negative impact on the value of the Company’s securities. In addition, the liquidation rights granted to the holders of the Series G Preferred Stock will have a dilutive effect on the distributions available to the holders of the Company’s common stock.

F-34

eLayaway, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

On February 25, 2013, the Company issued 1,000,000 shares of Series G Preferred Stock to Sergio Pinon as incentive compensation.The Series G Preferred Stock is immediately convertible into common stock therefore the preferred shares are valued at the $0.0006 per share closing price of the common stock on the date of this transaction or $600.

Common Stock

The Company is authorized to issue ~~250~~5,000,000,000 shares of common stock, as amended on April 30, 2012, ~~and~~ May 30, 2012., ~~The common stock is voting. On~~ September 27, 2012, ~~the~~and ~~Company~~February ~~filed to amend its authorized shares to 1~~22,~~000,000,000.~~ 2013. The ~~effective~~common ~~date~~stock ofis ~~the amendment was October 19, 2012~~voting.

On ~~November~~August 812, ~~2010~~2013, the Company ~~issued~~received ~~900,000~~notification ~~shares~~from ofFINRA ~~common~~that ~~stock~~the toreverse ~~various~~stock ~~members~~split of ~~Vincent~~our ~~& Rees, the Company’s SEC legal counsel. Vincent & Rees has historically been issued~~ common stock ofat the Company in exchange for its services. Due to the amount of work for the Company and the lack of performance by the Company, the arrangement was renegotiated to issue these additional shares for past services and future services through May 31, 2011. This share issuance agreement contains a ~~stock~~ratio ~~price guarantee whereby if the value~~ of ~~the~~1:200 ~~900,000~~had ~~Company~~been common shares as quoted on May 5, 2011 is less than $135,000, Vincent & Rees will be issued additional shares such that the value of the additional shares when added to the value of the par value of the 900,000 shares will equal $135,000approved. The ~~$135,000~~corporate ~~was~~action ~~recorded~~took aseffect aat ~~guarantee liability as of December 31, 2010 in accordance with ASC 480 and~~ the ~~$135,000~~open ~~expense was fully amortized by May 5, 2011. On May 5, 2011, the Company’s stock price was $0.22 therefore the $135,000 was reclassified to equity with no additional issuance~~ of ~~shares.~~business ~~Amortization~~on toAugust ~~legal expense was $73~~13,~~022~~ ~~in 2011 and the balance was fully amortized as of May 2011~~2013.

On ~~November~~January 83, ~~2010~~2013, ~~the Company issued 1~~89,~~500,000~~144 shares ofwere ~~common~~issued ~~stock~~ to ~~various~~WHC ~~members~~which of Aries Investment Partnership in exchange for services related to investor relations for a period of six months. The share value was based on the quoted trading price of $0.11 for the Company’s common stock, or $165,000. The share values were recorded as aissuable ~~prepaid~~as ~~asset~~of toDecember be31, ~~amortized~~2012 on(see aNote ~~straight-line basis over the six-month term~~7). ~~Amortization in 2010 and 2011 was $48,049 and $116,951, respectively.~~

On ~~February~~January 83, ~~2011~~2013, ~~the~~due ~~Company issued 50,000 shares~~ to ~~GSS~~a asreset ~~per~~clause in the ~~agreement~~note ~~between~~acquired ~~GSS~~on ~~and~~November ~~the~~8, ~~Company.~~2012 ~~The~~(see ~~shares~~Note ~~are~~7), ~~valued~~Southridge atwas ~~the~~issued ~~then~~an ~~$0.25~~additional ~~quoted~~94,792 ~~trading~~shares ~~price~~ of ~~the Company’s~~ common stock ~~or $12,500~~. ~~The share values were recognized as expense on the issuance date.~~

On January 103, ~~2011~~2013, ~~the~~Southridge ~~Company~~converted ~~issued 1~~$11,~~200,000~~375 ~~fully-vested~~of ~~shares to Douglas Salie,~~ the ~~Company’s~~note ~~former~~dated ~~CEO~~November ~~and~~8, ~~Chairman.~~2012, ~~The~~into 94,792 shares ~~are valued at the then $0.05 quoted trading price~~ of ~~the Company’s~~ common stock or(see ~~$60,000.~~Note ~~The~~7) ~~share~~at ~~values~~a ~~were~~50% ~~recognized as expense on the issuance date. At the time of the reverse merger in April 2010~~discount, Mr$0.12. ~~Salie~~A ~~forfeited~~loss ~~1,169,000~~on ~~options~~conversion ~~under~~will ~~the~~be ~~2009 Stock Option Plan~~recognized.

On January 103, ~~2011~~2013, ~~the~~Southridge ~~Company~~converted ~~issued 1~~$22,~~000,000~~750 ~~fully-vested~~of ~~shares~~the tonote ~~Bruce~~dated ~~Harmon~~November 30, ~~the~~2012, ~~Company’s~~into ~~CFO~~189,584 ~~and~~shares ~~Chairman.~~of ~~The~~common ~~shares~~stock ~~are~~(see ~~valued~~Note 7) at ~~the~~a ~~then~~50% discount, $0.0512. ~~quoted~~A ~~trading~~loss ~~price~~on ofconversion ~~the~~will ~~Company’s~~be ~~common stock or $50,000~~recognized. ~~The~~Due ~~share~~to ~~values~~the ~~were~~deficiency ~~recognized~~of asavailable ~~expense~~shares onto ~~the~~be ~~issuance~~issued ~~date.~~at At the time, of the ~~reverse~~Company ~~merger~~issued ~~in April 2010~~60,000 ~~Mr.~~shares ~~Harmon~~on ~~forfeited~~January 210,~~029,000~~ ~~options~~2013 ~~under~~and the ~~2009~~remaining ~~Stock~~12,984 ~~Option~~on ~~Plan~~January 24, 2013.

On January 108, ~~2011~~2013, ~~the~~due ~~Company~~to ~~issued~~a ~~2,200,000~~reset ~~shares~~clause toin ~~Sergio~~the ~~Pinon,~~note ~~the~~acquired ~~Company’s~~on ~~CEO,~~September ~~Vice-Chairman~~26, ~~and~~2012 ~~Founder.~~(see ~~The~~Note ~~shares~~7), ~~are~~Star ~~valued~~City atwas ~~the~~issued ~~then~~an ~~$0.05~~additional ~~quoted~~18,771 ~~trading~~shares ~~price~~ of ~~the Company’s~~ common stock ~~or $110,000~~. ~~The share values will be recognized as expense on the issuance date. At the time of the reverse merger in April 2010, Mr. Pinon forfeited 2,633,039 options under the 2009 Stock Option Plan.~~

On ~~February~~January 129, ~~2011~~2013, adue ~~convertible~~to ~~debt~~a ~~noteholder~~reset ~~converted~~clause ~~his~~in ~~$25,000~~the note ~~into~~acquired ~~250,000~~on ~~shares~~November ~~of common stock. The company has agreed to guarantee the value of the shares of $25~~8,~~000.~~ In2012 ~~accordance~~(see ~~with~~Note ~~ASC 480 “Distinguishing Liabilities From Equity” the guaranteed value of $25~~7),~~000~~ ~~has~~Southridge ~~been~~was ~~recorded~~issued asan aadditional ~~current liability and the 250~~18,~~000~~959 shares ~~issued~~of ~~are recorded as a credit to~~ common stock ~~and charge to additional paid-in capital for the par value of the shares~~.

On ~~April~~January 111, ~~2011~~2013, a101,790 ~~convertible~~shares ~~debt~~of ~~noteholder~~common ~~converted~~stock ~~his~~were ~~$20,000~~issued to WHC for a conversion of a note ~~into~~payable ~~200,000~~in ~~shares~~December 2012 (see Note 7) which was recorded as issuable as of ~~common~~December ~~stock~~31, 2012.

On ~~April~~January 118, ~~2011~~2013, aWHC ~~convertible debt noteholder~~ converted ~~his~~ $10,~~000~~700 of the note dated December 13, 2012, into ~~100~~107,000 shares of common stock (see Note 7) at a 50% discount, $0.05.

On ~~April~~January 623, ~~2011~~2013, aMarina ~~convertible~~converted ~~debt~~$15,000 ~~noteholder~~of ~~converted~~principal ~~his~~and $~~50,000~~246.58 of accrued interest of the note dated December 5, 2012, into ~~500~~152,~~000~~466 shares of common stock (see Note 7) at a 50% discount, $0.05.

F-3529

~~eLayaway~~On January 24, ~~Inc.~~2013, ~~and~~71,392 ~~Subsidiaries~~shares of common stock were issued to Mauriello in regards to a conversion of a note payable on December 13, 2012 (see Note 7) which were recorded as issuable as of December 31, 2012.

~~Notes~~On toJanuary ~~Consolidated~~28, ~~Financial~~2013, ~~Statements~~Southridge converted $28,100 of the note dated December 28, 2012, into 312,223 shares of common stock (see Note 7) at a 50% discount, $0.09.

~~December~~On 31January 28, 2013, due to a reset clause in the note acquired on September 26, 2012 ~~and~~(see ~~2011~~Note 7), Star City was issued an additional 18,771 shares of common stock.

On ~~May~~January 328, ~~2011~~2013, ~~the~~due ~~Company~~to ~~issued~~a ~~100,000~~reset ~~shares~~clause ofin ~~restricted~~the ~~common~~note ~~stock~~acquired toon ~~Larry~~November ~~Witherspoon~~30, ~~the~~2012 ~~Company’s~~(see ~~Chief~~Note ~~Information Officer~~7), inSouthridge ~~exchange~~was ~~for~~issued ~~the~~an ~~conversion~~additional ~~of $13~~25,~~500~~917 ~~in accounts payable. These~~ shares ~~were converted at an agreed value~~ of ~~$0.135. The stock price for the Company’s~~ common stock ~~on May 3, 2011 was $0~~.~~18 therefore there was a loss on settlement of $4,500.~~

On ~~May~~February 164, ~~2011~~2013, due to a ~~convertible~~reset ~~debt~~clause ~~noteholder~~in ~~converted~~the ~~her~~note $6acquired on January 2,~~000~~ ~~note~~2013 ~~into~~(see 60Note 7),~~000~~ Southridge was issued an additional 89,207 shares of common stock.

On ~~May~~February 175, ~~2011~~2013, aSouthridge ~~convertible~~converted ~~debt~~$7,650 ~~noteholder~~of ~~converted~~the ~~his~~note ~~$20~~dated December 28,~~000~~ ~~note~~2012, into ~~200~~127,~~000~~500 shares of common stock (see Note 7) at a 50% discount, $0.06.

On ~~May~~February 185, ~~2011~~2013, ~~the~~WHC ~~Company~~converted ~~issued 4~~$3,~~020,000~~673 ~~shares to various members~~ of ~~Aries~~the ~~Investment~~note ~~Partnership in conjunction with a contract~~ dated ~~January~~December 313, ~~2011. The total issuance as contractually obligated is 4~~2012,~~500,000~~ ~~shares.~~into ~~The shares contractually should have been issued onJanuary 3~~55,098 ~~2011 but due to an oversight, were not issued until May 18, 2011. The~~ shares ~~were issued in exchange for services related toinvestor relations and other administrative services for a period~~ of ~~eighteen months. The share value was based on the quoted trading price of $0.06 for the Company’s~~ common stock, or(see ~~$270,000,~~Note as7) ofat ~~the date contractually obligated for issuance. The share values were recorded as~~ a ~~prepaid~~50% ~~asset to be amortized on a straight-line basis over the eighteen-month term. Accumulated amortization through September 30~~discount, ~~2011 was~~ $~~135,000~~0. ~~The remaining 480,000 shares were issued in July 2011~~0334.

On ~~May~~February 236, ~~2011~~2013, ~~the~~Southridge ~~Company~~converted ~~issued 50,000 shares to GSS as settlement for accounts payable of~~ $5,~~000~~750 ~~related~~of to the ~~agreement~~note ~~between~~dated ~~GSS~~December ~~and~~28, ~~the~~2012, ~~Company.~~into ~~The~~115,000 shares ~~are valued at the settlement price~~ of ~~$0.10 per share. The quoted trading price of the Company’s~~ common stock ~~was~~(see ~~$0.18~~Note or7) ~~$9,000.~~at ~~The share values were recognized as expense on the issuance date with~~ a ~~loss~~50% ondiscount, ~~settlement of~~ $~~4,000~~0.05.

On ~~June~~February 37, ~~2011~~2013, ~~Donald~~SGI ~~Read,~~Group aconverted ~~significant shareholder of the Company~~$6,419 ~~signed a Memorandum~~ of ~~Understanding~~principal ~~stating~~and ~~that~~$168.80 of ~~his~~accrued ~~2,830,999~~interest ~~shares~~ of ~~common stock of~~ the ~~Company,~~note ~~that~~dated heNovember ~~would return 1~~20,~~830,999~~ ~~of those shares to the Company for cancellation. They were returned in July 2011 but~~2012, ~~for~~into ~~accounting purposes~~131,756 ~~had~~shares ~~an effective date~~ of ~~June~~common 3,stock ~~2011.~~(see ~~The~~Note ~~transaction~~7) ~~was~~at ~~treated~~a as50% ~~Contributed~~discount, ~~Capital~~$0.05.

On ~~June~~February 811, ~~2011~~2013, adue ~~convertible~~to ~~debt~~a ~~noteholder~~reset ~~converted~~clause ~~her~~in ~~$49,000~~the note ~~into~~acquired ~~490,000~~on ~~shares~~November of20, ~~common~~2012 ~~stock~~ (see Note 7)., ~~These~~Mauriello ~~shares~~was ~~were~~issued ~~not~~an ~~issued~~additional ~~until~~71,392 ~~July~~shares ~~2011~~of common stock.

On ~~June~~February 1011, ~~2011~~2013, ~~the~~Sazer ~~Company~~converted ~~issued 3~~$5,~~000,000~~250 ~~shares~~of ~~into~~principal anand ~~escrow account in exchange for services related to a contract to provide information technology services in the amount estimated at~~ $~~300,000~~145.32 ~~The~~of ~~contract~~accrued isinterest ~~projected to have a period~~ of ~~approximately six months. For accounting purposes,~~ the ~~shares~~note ~~are~~dated ~~not considered issued or outstanding until released from escrow to the vendor. On~~ November 320, ~~2011~~2012, ~~the~~into ~~remaining~~53,954 shares ~~held~~of incommon ~~escrow~~stock ~~were~~(see ~~released~~Note to7) ~~the~~at ~~vendor.~~a ~~The~~50% ~~shares were valued and~~discount, ~~for accounting purposes, the expense recognized as earned~~$0.05.

On ~~June~~February 2211, ~~2011~~2013, ~~the~~Southridge ~~Company~~converted ~~issued 900~~$14,~~000~~400 ~~shares~~ of ~~common stock to various members of Vincent & Rees,~~ the ~~Company’s~~note ~~SEC~~dated ~~legal~~December ~~counsel. The issuance was a condition of a new contract with Vincent & Rees for the period May 6~~4, ~~2011 through May 6,~~ 2012~~. Vincent & Rees has historically been issued common stock of the Company in exchange for its services. This share issuance agreement contains a stock price guarantee whereby if the value of the 900~~,~~000~~ ~~Company~~into ~~common shares as quoted on May 6~~405,042 ~~2012 is less than $135,000, Vincent & Rees will be issued additional~~ shares ~~such that the value~~ of the additional shares when added to the value of the 900,000 shares will equal $135,000. In accordance with ASC 480 “Distinguishing Liabilities From Equity” the guaranteed value of $135,000 has been recorded as a current liability and the 900,000 shares issued are recorded as a credit to common stock ~~and~~(see ~~charge~~Note to7) ~~additional~~at ~~paid-in capital. The shares value of $171,000 was allocated as~~ a ~~prepaid~~50% ~~expense for the future services to be amortized on a straight line basis through May 6~~discount, ~~2012. Amortization to legal expense for this contract was~~ $~~121,500 in 2011 and $49,500 in 2012~~0. ~~On May 6, 2012, upon the expiration of the guarantee, 5,883,920 additional common shares were issued and the $135,000 liability was reclassified to equity~~05.

On ~~June~~February 2411, ~~2011~~2013, ~~the~~Star ~~Company~~City ~~issued~~converted ~~300~~$20,000 ~~shares~~of toprincipal ~~Rempel~~and ~~Ventures Group in exchange for services related to a contract to provide various administrative services estimated at a value of~~ $~~30,000~~743.54 ~~The~~of ~~contract~~accrued ~~period~~interest isof ~~July~~the 1,note ~~2011~~dated ~~through~~October ~~June 30~~22, 2012., ~~The~~into 414,871 shares ~~were valued at the then $0.19 quoted trading price~~ of ~~the Company’s~~ common stock or(see ~~$57,000~~Note ~~which~~7) ~~is considered more reliable than the contractvalue. The share value was recorded as prepaid expense~~ at ~~the~~a ~~issuance~~50% ~~date and was being amortized over the six-month term of the agreement. In October 2011~~discount, ~~the Company terminated this agreement and expensed the remaining unamortized balance of the~~ $~~57,000 to stock-based compensation~~0.05.

On ~~July~~February 20, ~~2011~~2013, ~~the~~Southridge ~~Company~~converted ~~entered into a contract with StocksThatMove.com~~$20,255 ~~LLC. The contract is for a six month period for services related to the promotion~~ of the ~~Company.~~note ~~The~~dated ~~contract~~November ~~requires~~30, ~~the~~2012, ~~issuance~~into ~~of 600~~405,~~000~~100 shares of ~~restricted~~ common stock. ~~For accounting purposes, the shares were valued at $0.14~~ (~~closing~~see ~~price~~Note ~~of common stock the day before the execution of this agreement~~7)~~for~~ aat ~~total of $84,000. This obligation was recorded as~~ a ~~prepaid~~50% ~~expense and will be expensed over the six month period of the agreement. In October 2011~~discount, ~~the Company terminated this contract and expensed the remaining unamortized balance~~$0.05.

~~F-36~~On February 26, 2013, Momoma Capital converted the $14,925 into 213,210 shares of common stock at a discount of 30%, $0.07 (see Note 7).

~~eLayaway~~On February 27, ~~Inc.~~2013, ~~and~~due ~~Subsidiaries~~to a reset clause in the note acquired on November 30, 2012 (see Note 7), Southridge was issued an additional 101,275 shares of common stock.

~~Notes~~On toFebruary ~~Consolidated~~27, ~~Financial~~2013, ~~Statements~~Southridge converted $12,150 of the note dated November 30, 2012, into 303,750 shares of common stock (see Note 7) at a 50% discount, $0.04.

On March 5, 2013, Southridge converted $20,375 of the note dated December 3128, 2012, ~~and~~into ~~2011~~509,375 shares of common stock (see Note 7) at a 50% discount, $0.04.

On ~~September~~March 126, ~~2011~~2013, athe ~~convertible~~Board ~~debt~~of ~~noteholder~~Directors ~~converted~~approved ~~his~~the ~~$150~~grant of common stock to the officers and directors of the Company in consideration of the dilution of the Company’s outstanding common stock. Mr. Pinon and Mr. Harmon,~~000~~ ~~convertible~~the ~~note~~CEO ~~into~~and 1CFO,~~500~~ respectively, were each granted 250,000 shares of restricted common stock. The ~~(see~~issuance was valued at $30,000 each for Mr. Pinon and Mr. Harmon. See Note 7)11.

~~On September 21, 2011, a convertible debt noteholder converted his $10,000 convertible note into 100,000 shares of common stock (see Note 7).~~F-30

On ~~October~~March 16, ~~2011~~2013, the ~~Company~~Board ~~entered~~of ~~into~~Directors aapproved ~~contract~~the ~~with~~compensation ~~Sage Market Advisors. The contract is~~ for a2013 ~~six month period~~ for ~~services~~Vincent ~~related~~& toRees, ~~the~~legal ~~marketing~~counsel offor the Company., ~~The~~thereby ~~contract~~granting ~~requires~~Vincent ~~the~~& ~~issuance~~Rees ~~of 1~~250,~~500,~~000 shares of restricted common stock. The toissuance ~~Sage~~was ~~Market~~valued ~~Advisors~~at ~~for services to be rendered~~$30,000. Mr. ~~For~~Rees ~~accounting~~is ~~purposes,~~a ~~the~~director ~~share~~of ~~values will be determined and recognized as an expense as they are earned. In October 2011,~~ the Company ~~terminated this contract~~. See AnNote ~~expense of $210,000 was recorded to stock-based compensation in 2011~~11.

On ~~October~~March 112, ~~2011~~2013, ~~the~~Southridge ~~Company~~converted ~~entered into a contract with Cape MacKinnon~~$24,430 ~~Inc. The contract is for a ninety day period for services related to the public and media relations~~ of the ~~Company.~~note ~~The~~dated ~~contract~~November ~~requires the issuance of 375~~30,~~000~~ ~~shares of restricted common stock for the first thirty days~~2012, ~~325,000~~into ~~shares of restricted common stock for the second thirty days~~610,750 ~~and 325,000~~ shares of ~~restricted~~ common stock ~~for~~(see ~~the~~Note ~~final~~4) ~~thirty~~at ~~days.~~a In50% ~~October 2011~~discount, ~~the Company terminated this contract. At the time of termination, 375,000 shares had been issued and recorded as an expense of~~ $~~52,500 to stock-based compensation~~0.04.

On ~~October~~March 2618, ~~2011~~2013, ~~Larry Witherspoon converted $14,250 of the balance~~ due to ~~him~~a ~~for~~reset ~~services~~clause ~~into~~in ~~160,112~~the ~~shares~~note ofacquired ~~restricted~~on ~~common~~November ~~stock~~30, at2012 a(see ~~conversion~~Note ~~rate of $0.089 per share~~7), ~~the~~Southridge ~~quoted market price on the conversion date. There~~ was noissued ~~gain~~an oradditional ~~loss~~203,584 onshares ~~this~~of ~~transaction~~common stock.

On ~~November~~March 1518, ~~2011~~2013, ~~the~~Southridge ~~Company~~converted ~~granted 250~~$12,~~000~~990 ~~vested shares~~ of ~~common~~the ~~stock~~note todated ~~Susan~~November ~~Jones~~30, ~~the~~2012, ~~COO~~into ~~for the Company~~433,000 asshares ~~part~~ of ~~her~~common ~~employment~~stock ~~agreement.~~(see ~~The~~Note ~~Company~~7) ~~recorded~~at ana ~~expense~~50% ~~of $22~~discount,~~500~~ ~~to stock-based compensation~~$0.03.

On ~~November~~March 1822, ~~2011~~2013, ~~the~~Southridge ~~Company,~~converted ~~in order to accommodate its landlord~~$19,100 ~~Hillside Building, LLC, agreed to move to a larger office facility. As part~~ of the ~~negotiation,~~note adated ~~new~~November ~~lease~~30, ~~was entered into which provided for the conversion of all deferred rent and accrued interest of $106~~2012,~~000,~~ into ~~common stock. The conversion was at a rate of $0.105 thereby issuing 1~~636,~~009,524~~667 shares of ~~restricted~~ common stock. ~~The~~(see ~~shares~~Note ~~were~~7) ~~valued~~ at ~~their quoted trading price of $0.075 per share for~~ a ~~total~~50% ~~$75~~discount,~~714.~~ ~~There was a gain of~~ $~~30,286 on this transaction~~0.03.

On ~~December~~March 3028, ~~2011~~2013, aKAJ ~~legal provider~~ converted $515,~~048~~000 of the ~~balance~~note ~~due~~dated toJanuary ~~him~~30, ~~for~~2012, ~~services~~ into ~~229~~535,~~455~~715 shares of ~~restricted~~ common stock (see Note 7) at a ~~conversion~~30% ~~rate~~discount, of $0.~~022 per share, the quoted market price on the conversion date~~028. ~~There was no gain or loss on this transaction.~~

InOn ~~November~~April ~~and~~1, ~~December~~2013, ~~2011~~Southridge ~~the~~converted ~~Company issued 444~~$13,~~448~~010 ~~common~~of ~~shares~~the innote ~~lieu~~dated ofNovember ~~$40~~30,~~000~~ in2012, ~~loan~~into ~~fees.~~650,500 ~~The~~ shares ~~were~~of ~~issued~~common atstock ~~market~~(see ~~value~~Note ~~with~~7) noat ~~gain~~a or50% ~~loss~~discount, ~~recorded~~$0.02.

On ~~January~~April 301, ~~2012~~2013, ~~the~~due ~~Company~~to ~~issued~~a ~~69,444~~reset ~~shares~~clause ofin ~~common~~the ~~stock~~note toacquired ~~Evolution~~on inNovember ~~exchange~~30, ~~for~~2012 ~~legal fees~~ (see Note 7), Southridge was issued an additional 318,334 shares of common stock.

On ~~February~~April 153, ~~2012~~2013, asMomoma ~~part~~Capital ofconverted ~~the~~$11,900 ~~acquisition~~ of ~~CSP,~~principal ~~the~~and ~~Company was obligated to issue 4~~$1,~~280,000~~658 ~~shares~~ of ~~common~~accrued ~~stock~~interest toof the ~~owners~~note ofdated ~~CSP~~February ~~(see~~26, ~~Note~~2013, ~~2).~~into ~~As contractually obligated~~484,209 ~~1,070,000~~ shares of common stock ~~were~~(see ~~issued~~Note ~~with~~7) ~~3,210,000~~at ~~issuable~~a at50% ~~various~~discount, ~~times~~$0.028.

On ~~February~~April 204, ~~2012~~2013, ~~the~~Susan ~~Company~~Jones ~~entered into an investor relations contract with American Capital Ventures, Inc. for a term of one year. As part of the contract, the Company~~ was ~~obligated~~issued ~~to pay $3~~10,~~500 per month and to issue 1,750,~~000 shares of common stock, ofin ~~which~~exchange for 1,~~250~~190,~~000~~476 ~~were to be issued at the time~~ of ~~execution,~~Series ~~and~~E ~~the~~preferred ~~remaining 500,000 shares of common~~ stock ~~to be issued on August 18, 2012~~. The ~~Company~~Series ~~valued~~E ~~the~~preferred ~~1,250,000~~stock ~~shares~~had atsuper ~~$50,000~~voting orrights ~~$0.0252 per share based on the quoted price~~ and, ~~recorded~~to acompensate ~~prepaid~~Susan ~~expense~~Jones offor ~~$44,521.~~those Onsuper ~~May~~voting 21rights, ~~2012,~~ the Company ~~replaced~~issued the ~~first~~additional ~~contract with a new one for a term of nine months. The Company issued 500~~4,~~000~~047 shares of common stock ~~on August 18, 2012~~. ~~The Company valued the shares at $10,000 or $0.02 per share based on the quoted price and recorded a prepaid expense of $10,000. As of December 31, 2012, a total of $44,445had been expensed.~~

OnApril ~~March 26~~8, ~~2012~~2013, ~~the~~Harmon ~~Board of Directors of the Company issued common stock and~~ converted ~~options~~accounts ~~and~~payable ~~warrants for common stock into common stock as part~~ of the compensation plan for 2012 for its officers and directors. The actions were submitted to the Board of Directors from the Company’s Compensation Committee. As a result of the action, Messrs. Pinon and Harmon, the Company’s CEO and CFO, were each issued 2,000,000 shares of common stock, each valued at $509,~~400~~301 ~~based~~into ~~on the prior day’s closing price of $0.0252. The Company’s two independent directors~~155,025 ~~Messrs. Rees and Wittler, were each issued 250,000~~ shares of common stock ~~for their services for 2012, each valued~~ at ~~$6,300~~a based on $0.0252 per share as previously stated. During prior periods, the officers and directors were all issued options for common stock and/or warrants for common stock, as previously disclosed, for services and/or conversion ofrate ~~liabilities to the officer and/or director. The Board~~ of Directors converted each of their outstanding options and/or warrants to the same amount of common stock. As a result of this action, 3,040,314 options were converted to 3,040,314 shares of common stock and 1,225,000 warrants were converted to 1,225,000 shares of common stock. The conversions were recorded as an expense based on the $0.~~0252~~06 ~~per~~(see ~~share~~Note ~~or $107,486~~11).

On April 8, 2013, Harmon converted 29,063 shares of Series E preferred stock and 49,242 shares of Series F~~-37~~ preferred stock, collectively on a 1:1 basis, into 78,305 shares of common stock (see Note 11).

~~eLayaway~~On April 8, ~~Inc.~~2013, ~~and~~Pinon ~~Subsidiaries~~converted 251,006 shares of Series E preferred stock on a 1:1 basis into 1,256 shares of common stock (see Note 11).

~~Notes~~On toApril ~~Consolidated~~10, ~~Financial~~2013, ~~Statements~~Southridge converted $9,440 of the note dated November 30, 2012, into 944,000 shares of common stock (see Note 7) at a 50% discount, $0.01.

~~December~~On 31April 15, 2013, Southridge converted $11,125 of the note dated November 30, 2012, ~~and~~into ~~2011~~1,112,500 shares of common stock (see Note 7) at a 50% discount, $0.01.

On ~~March~~April 2618, ~~2012~~2013, the ~~Company~~board ~~approved the issuance~~ of ~~1,500,000~~directors ~~shares~~ of ~~common~~the ~~stock~~Company inapproved ~~exchange~~a ~~for~~reverse ~~legal~~split ~~services~~proposed byto ~~Vincent~~be ~~and~~between ~~Rees~~an ~~for~~exchange ~~the~~rate ~~period~~ of ~~June~~1:100 6,up ~~2012~~to ~~through June 5, 2013~~1:250. A ~~The~~majority ~~issuance~~of ~~was~~the ~~based~~shareholders onsubsequently approved the ~~prior~~transaction. The ~~day’s~~Company ~~closing~~appropriately ~~price~~filed ofwith ~~$0.0252~~FINRA orto ~~$37,800~~effect ~~and~~the ~~will~~reverse besplit ~~expensed~~at ~~appropriately~~a ~~throughout~~rate ~~the~~of ~~contract year~~1:200.

On ~~March~~April 2619, ~~2012~~2013, the Company ~~sold~~approved the 2013 Stock Option Plan which authorized 4,~~666~~750,~~667~~000 shares of common stock into ~~exchange~~be ~~for~~used ~~$70,000~~as ~~which~~S-8 ~~were issued in April 2012~~shares.

On April 222, ~~2012~~2013, Southridge converted $109,~~000~~975 of ~~their~~the ~~$56,000~~ note ~~(see~~dated ~~Note~~November ~~7) into 694~~30,~~444~~ ~~shares of common stock. On April 17,~~ 2012, ininto ~~conjunction with this conversion~~997,500 ~~as the closing trading price on the clearing date of the 694,444~~ shares of common stock ~~was~~(see ~~less~~Note ~~than~~7) ~~the~~at ~~closing~~a ~~trading~~50% ~~price on the date of conversion~~discount, ~~the Company was required to issue an addition 280,214 shares of common stock to Southridge. Since this was previously accounted for as stock settled debt, the~~ $~~10,000 principal and $6,667 premium totaling $16,667 was reclassified to equity~~0.01.

~~In April 2012, the Company sold 4,669,333 shares of common stock in exchange for $70,040.~~F-31

On ~~May~~April 625, ~~2012~~2013, ~~the Company issued 5~~1,~~883~~533,~~920~~709 ~~additional~~ shares of S-8 common stock towere ~~Vincent~~issued &to ~~Rees~~Pinon in(see ~~regards~~Note to11), ~~its~~Harmon ~~contractually~~(see ~~obligated~~Note ~~guaranteed~~11), ~~issue~~Thomas ~~value~~Carluccio, ofJr. ~~$135~~(“Carluccio”),~~000~~ ~~for~~and ~~the~~Melissa ~~legal~~Valido ~~services~~(“Valido”) ~~provided~~(575,000, ~~from~~575,000, ~~May 7~~217,375 ~~2011~~and ~~through May 6~~166,334 ~~2012. On May 6~~shares, ~~2012~~respectively), ~~upon~~in ~~the~~lieu ~~expiration~~ of ~~the~~payroll ~~guarantee,~~for ~~5,883,920~~April ~~additional~~and ~~common~~May ~~shares~~2013. The issuances were ~~issued~~recorded ~~and~~at ~~the~~a cost of $~~135~~20,000, ~~liability~~$20,000, ~~was~~$7,500, ~~reclassified~~and to$5,000, ~~equity~~respectively.

On May 294, ~~2012~~2013, ~~the~~Southridge ~~Company~~ converted $108,~~500~~525 of ~~accounts~~the ~~payable~~note dated December 28, 2012, into ~~420~~852,~~000~~500 shares of common stock at(see aNote ~~conversion~~7) ~~price~~at ofa ~~$0.025~~50% ~~per~~discount, ~~share based on the prior day’s closing price of~~ $0.~~025~~01.

On ~~June~~May 251, ~~2012~~2013, ~~the~~Asher ~~Company~~ converted $5,~~000~~800 of ~~accounts~~the ~~payable~~note dated October 24, 2012, into ~~200~~483,~~000~~334 shares of common stock at(see aNote ~~conversion~~7) ~~price~~at ~~of $0.025 per share. The Company recorded~~ a ~~gain~~42% ~~on conversion of $1~~discount,~~600~~ ~~based on the prior day’s closing price of~~ $0.~~017~~012.

On ~~August~~May 317, ~~2012~~2013, ~~the~~Buko-Evolution, ~~Company~~LLC ~~issued~~converted ~~Mr. Pinard and Mr. St. Cyr each 535~~$10,000 ~~shares~~ of ~~common~~the ~~stock~~note asdated ~~contractually~~October ~~obligated~~26, in2011, ~~regards~~into to938,287 ~~the~~shares ~~Company’s purchase~~ of ~~CSP~~common stock (see Note 27). ~~These~~at ~~shares~~a ~~were~~50% ~~previously~~discount, ~~recorded as issuable common stock~~$0.01.

On ~~August~~May 922, ~~2012~~2013, ~~Southridge~~3,119,292 ~~converted~~shares ~~$46~~of S-8 common stock were issued to Pinon (see Note 11),~~000~~ ofHarmon ~~its~~(see ~~convertible~~Note ~~promissory~~11), ~~note~~Carluccio, ~~into~~and 6Valido (1,~~666~~099,~~667~~886, 1,099,886, 511,447, and 408,074 shares, respectively), in lieu of ~~common~~payroll ~~stock~~for atJune and July 2013. Harmon had his 1,099,886 shares cancelled to facilitate a note conversion ~~price~~by ofa ~~$0.0069~~third ~~per~~party ~~share~~as ~~based~~the onremaining available shares from the ~~conversion~~authorized ~~feature~~amount inof ~~the~~shares ~~note~~were ~~(see~~not ~~Note~~sufficient. Harmon’s 7)shares were issued on August 15, 2013.

On September 12, 2013, the Company issued 10,000,000 shares of common stock to Sergio Pinon, the Company’s CEO and director, as compensation for his services in lieu of payroll (see Note 11). The shares were recorded at an expense of $55,000.

On ~~August~~September 1812, ~~2012~~2013, the Company issued ~~to American Capital Ventures 500~~6,000,000 shares of common stock to Thomas Carluccio, Jr. as ~~contractually~~compensation ~~obligated~~for inhis ~~regards~~services toin alieu ~~consulting~~of ~~agreement~~payroll. The ~~These~~ shares were ~~previously~~ recorded asat ~~issuable~~an ~~common~~expense ~~stock~~of $33,000.

On ~~August~~September 2712, ~~2012~~2013, ~~Evolution~~the ~~converted~~Company ~~$25~~issued 4,000 ~~of its convertible promissory note into 3~~,~~246,753~~000 shares of common stock atto aMelissa ~~conversion~~Valido ~~price~~as ofcompensation ~~$0.0077~~for ~~per~~his ~~share~~services ~~based~~in onlieu ~~the~~of ~~conversion~~payroll. The ~~feature~~shares inwere ~~the~~recorded ~~note~~at ~~(see~~an ~~Note~~expense 7)of $22,000.

On September 615, ~~2012~~2013, ~~Asher~~Southridge converted $101,~~000~~885 of ~~its~~principal ~~convertible~~and ~~promissory~~$314 of accrued interest of the note dated ~~February~~December 14, 2012, into 12,~~724~~199,~~138~~091 shares of common stock (see Note 7) at a ~~conversion~~50% ~~price~~discount, of $0.~~0058 (see Note 7)~~001.

On September 1825, ~~2012~~2013, ~~the~~Southridge ~~Company~~converted ~~sold 37~~$1,~~500,000~~855 ~~shares~~ of ~~common~~principal ~~stock~~and ~~in exchange for~~ $~~150,000.~~92 ~~The~~of ~~shares~~accrued ~~were~~interest ~~sold~~of ~~at a 50% discount to~~ the ~~previous~~note ~~day’s~~dated ~~closing price of $0.008. As of~~ December 314, 2012, ~~these~~into 2,212,450 shares ~~remain~~of ~~issuable~~common asstock ~~the~~(see ~~Company~~Note ~~has~~7) ~~not~~at ~~received~~ a ~~signed~~50% ~~subscription~~discount, ~~agreement from the purchaser~~$0.0009.

On ~~September~~October 203, ~~2012~~2013, Southridge ~~was~~converted ~~issued 7~~$1,~~619,048~~585 ~~anti-dilutive shares~~ of ~~common~~principal ~~stock~~and in$52 ~~regards~~of toaccrued ainterest ~~provision in their conversion~~ of ~~their~~the note ~~and~~dated ~~its~~December ~~respective~~4, ~~reset~~2012, ~~clause.~~into ~~An additional 7~~2,~~619~~406,~~048~~639 shares of common stock ~~remain issuable under this reset~~ (see Note 74).

On ~~September~~October 274, ~~2012~~2013, ~~SGI~~Hansen ~~Group~~ converted $61,~~100~~500 of ~~its~~the ~~Convertible~~note ~~Promissory~~dated ~~Note~~December 12, 2011, into 41,~~206~~004,~~896~~689 shares of common stock. ~~The~~(see ~~conversion~~Note ~~price~~7) ~~was~~at ~~$0.00145~~a ~~based~~discounted ~~on the~~ conversion ~~feature~~price ~~(see~~of ~~Note 7)~~$0.00149.

On ~~September~~October 279, ~~2012~~2013, ~~Star~~Asher ~~City~~ converted $121,~~200~~000 of ~~its~~the ~~$25~~note dated October 24,~~000~~ ~~note~~2012, into 81,~~413~~000,~~793~~000 shares of common stock (see Note 7) at ~~the~~a discounted conversion price of $0.~~00145 (see Note 7)~~001.

On October 1211, ~~2012~~2013, ~~due~~Southridge toconverted ~~the~~$1,563 ~~reset~~of ~~clause~~principal inand $73 of accrued interest of the note ~~with~~dated ~~SGI~~December ~~Group~~4, an2012, ~~additional~~into ~~anti-dilutive~~ 2,~~969~~405,~~574~~268 shares of common stock ~~were issued~~ (see Note 74).

~~F-38~~On October 15, 2013, the Company issued 50,000,000 shares of common stock to Sergio Pinon, the Company’s CEO and director, as compensation for his services in lieu of payroll. The shares were valued at $50,000.

~~eLayaway~~On October 15, ~~Inc~~2013, the Company issued 25,000,000 shares of common stock to Bruce Harmon, a consultant to the Company, as compensation for his services. The ~~and~~shares ~~Subsidiaries~~were valued at $25,000.

~~Notes~~On October 16, 2013, the Company issued 12,756,800 shares of common stock to ~~Consolidated~~Bruce ~~Financial~~Harmon ~~Statements~~in regards to his investment in the Company for the payment of $14,501 for a credit card liability of the Company. The shares were issued at a discount of 25% based on the restriction.

~~December 31, 2012 and 2011~~F-32

On October 1218, ~~2012~~2013, ~~due~~Southridge toconverted ~~the~~$6,530 ~~reset~~of ~~clause~~principal inand $53 of accrued interest of the note ~~with~~dated ~~Star~~December ~~City~~4, an2012, ~~additional~~into ~~anti-dilutive 5~~13,~~939~~714,~~148~~282 shares of common stock ~~were issued~~ (see Note 74).

On October 1725, ~~2012~~2013, asSouthridge aconverted ~~condition of a settlement agreement with Pinard~~$3,805 ~~the Company issued the remaining 1,070,000 contractually obligated shares~~ of ~~common~~principal ~~stock (see Note 2~~ and ~~7).~~$38 ~~Additionally, the notes payable to Pinard in the amounts~~ of ~~$57,000 and $6,800, and their related~~ accrued interest, ~~was~~of ~~forgiven,~~the innote ~~exchange~~dated ~~for~~December ~~an agreement to pay Pinard $40~~4,~~000~~ ~~in installments starting on October 17,~~ 2012 ~~through November 15~~, ~~2012.~~into ~~As part of the settlement~~13, ~~an American Express credit card in the name of CSP which was personally guaranteed by Pinard prior to the acquisition of CSP by the Company~~724,384 ~~through~~shares ~~a personal guarantee~~ of ~~Harmon,~~common ~~relinquished~~stock ~~the personal liability maintained by Pinard~~ (see Note 24).

On October 1828, ~~2012~~2013, ~~Southridge~~Asher converted $52,~~480~~300 of ~~its~~the note ~~acquired~~dated onOctober ~~September 26~~24, 2012, into 84,~~430~~791,~~769~~667 shares of common stock (see Note 7) at a discounted conversion price of $0.~~00065 per share (see Note 7)~~00048.

On October 2231, ~~2012~~2013, ~~SGI~~the ~~converted~~Company ~~$2,600~~entered into a settlement with Dr. Jason Cohen in regards to his guaranteed value associated with his purchase in 2011 of ~~principal~~a convertible note and ~~accrued~~simultaneous ~~interest~~conversion ofinto common stock. The guarantee was for $1825,000. As ofDr. ~~the~~Cohen ~~note~~had ~~acquired~~not onrealized ~~September~~the 26agreed upon value, ~~2012~~the ~~(see~~Company ~~Note~~and 7)Dr. ~~into~~Cohen 4agreed to release the guarantee with the issuance of an additional 25,~~028~~000,~~400~~000 shares of common stock atto aDr. ~~conversion~~Cohen. ~~price~~The ofshares ~~$0.00065~~issued ~~per~~were ~~share~~valued at $25,000.

On November 51, ~~2012~~2013, ~~SGI~~Southridge converted $63,~~300~~265 of principal and $29 of accrued interest of ~~$85 of~~ the note ~~acquired~~dated onDecember ~~September 26~~4, 2012, ~~(see Note 7)~~ into 813,~~513~~725,~~160~~295 shares of common stock (see Note 7) at a ~~conversion~~50% ~~price~~discount, of $0.~~00075 per share~~00024.

On November 58, ~~2012~~2013, ~~Star~~Asher ~~City~~ converted $61,~~300~~695 of ~~principal and accrued interest of $85 of~~ the note ~~acquired~~dated onOctober ~~September 26~~24, 2012, ~~(see Note 7)~~ into 84,~~513~~842,~~160~~857 shares of common stock (see Note 7) at a discounted conversion price of $0.~~00075 per share~~00035.

On November 512, ~~2012~~2013, Southridge converted $62,~~325~~710 of principal ofand ~~its~~$34 ~~note~~of ~~acquired~~accrued oninterest ~~September~~of ~~24,~~the ~~2012~~note ~~(see~~dated ~~Note~~December 7)4, 2012, into 813,~~433~~719,~~333~~376 shares of common stock (see Note 7) at a ~~conversion~~50% ~~price~~discount, of $0.~~00075 per share~~0002.

On November 913, ~~2012~~2013, ~~Southridge~~Asher converted $123,~~190~~150 of ~~principal~~the ~~of its~~ note ~~acquired~~dated onOctober ~~September~~ 24, 2012, ~~(see Note 7)~~ into 1610,~~253~~862,~~333~~069 shares of common stock (see Note 7) at a discounted conversion price of $0.~~00075 per share~~00029.

On November 918, ~~2012~~2013, ~~WHC~~Asher converted $52,~~465~~925 of ~~principal~~the ~~of its~~ note ~~acquired~~dated onOctober ~~November 6~~24, 2012, ~~(see Note 7)~~ into 710,~~286~~833,~~000~~333 shares of common stock (see Note 7) at a discounted conversion price of $0.~~00075 per share~~00027.

On November 1520, ~~2012~~2013, Southridge converted $52,~~685~~180 of principal ofand ~~its~~$18 ~~note~~of ~~acquired~~accrued oninterest ~~September~~of ~~24,~~the ~~2012~~note ~~(see~~dated ~~Note~~December 7)4, 2012, into 1613,~~242~~734,~~857~~430 shares of common stock (see Note 7) at a ~~conversion~~50% ~~price~~discount, of $0.~~00035 per share~~00016.

On November 1620, ~~2012~~2013, ~~SGI~~the ~~converted~~Company $6ordered the issuance of 115,~~500~~155,000 shares of ~~principal~~common ~~and~~stock ~~accrued~~to ~~interest~~Harmon for the conversion of $~~111~~69,093 of ~~the~~accrued ~~note~~interest ~~acquired~~for onvarious ~~September~~notes 26payable to Harmon and Lakeport, ~~2012~~a ~~(see~~company ~~Note~~solely 7)owned ~~into~~by ~~18,889,371~~Harmon. This ~~shares~~conversion was approved by the board of ~~common~~directors ~~stock~~on atSeptember a15, ~~conversion~~2013 ~~price~~for ofinterest $0through that date.~~00035~~ The ~~per~~order ~~share~~was not processed until November 20, 2013.

On November 1620, ~~2012~~2013, ~~Star~~Asher ~~City~~ converted $62,~~500~~925 of ~~principal and accrued interest of $85 of~~ the note ~~acquired~~dated onOctober ~~September 26~~24, 2012, ~~(see Note 7)~~ into 1810,~~889~~833,~~371~~333 shares of common stock (see Note 7) at a discounted conversion price of $0.~~00035 per share~~00027.

On November 2122, ~~2012~~2013, Southridge converted $82,~~375~~192 of principal ofand ~~its~~$3 ~~note~~of ~~acquired~~accrued oninterest ~~September~~of ~~24,~~the ~~2012~~note ~~(see~~dated ~~Note~~December 7)4, 2012, into 2313,~~928~~718,~~571~~399 shares of common stock (see Note 7) at a ~~conversion~~50% ~~price~~discount, of $0.~~00035 per share~~00016.

On November 2325, ~~2012~~2013, ~~SGI~~Southridge ~~Group~~ converted $32,~~000~~285 of principal and $332 of accrued interest of ~~its~~the note ~~acquired~~dated onDecember ~~October 22~~4, 2012, ~~(see Note 7)~~ into 814,~~664~~295,~~771~~336 shares of common stock (see Note 7) at a ~~conversion~~50% ~~price~~discount, of $0.~~00035 per share~~00016.

On November 2325, ~~2012~~2013, ~~SGI~~Asher converted $32,~~500~~925 of ~~principal and accrued interest of $68 of~~ the note ~~acquired~~dated onOctober ~~September 26~~24, 2012, ~~(see Note 7)~~ into 10,~~193~~833,~~857~~333 shares of common stock (see Note 7) at a discounted conversion price of $0.~~00035 per share~~00027.

On November 2325, ~~2012~~2013, ~~Sazer~~Asher converted $32,~~250~~925 of ~~principal and accrued interest of $4 of~~ the note ~~acquired~~dated onOctober ~~November 26~~24, 2012, ~~(see Note 7)~~ into 910,~~297~~833,~~943~~333 shares of common stock (see Note 7) at a discounted conversion price of $0.~~00035 per share~~00027.

On ~~November~~December 262, ~~2012~~2013, ~~WHC~~Asher converted $68,~~982~~060 of ~~principal~~the ~~of its~~ note ~~acquired~~dated onOctober ~~November 6~~24, 2012, ~~(see Note 7)~~ into 1221,~~695~~783,~~000~~784 shares of common stock (see Note 7) at a discounted conversion price of $0.~~00055 per share~~00037.

On ~~November~~December 295, ~~2012~~2013, ~~Mauriello~~Asher converted $63,~~500~~150 of ~~principal~~the ~~of its~~ note ~~acquired~~dated onOctober ~~November 20~~24, 2012, ~~(see Note 7)~~ into 189,~~583~~000,~~657~~000 shares of common stock (see Note 7) at a discounted conversion price of $0.00035 ~~per share~~.

On ~~November~~December 306, ~~2012~~2013, ~~Southridge~~the ~~converted~~Company ~~$11,260~~issued ofASC ~~principal~~30,000,000 ofunder ~~its~~the ~~note~~settlement ~~acquired~~terms onof ~~September~~the ~~24,~~3(a)(10) ~~2012~~ (see Note 710). The ~~into~~shares ~~32,171,429~~were ~~shares~~valued ofat ~~common~~$15,000 ~~stock~~based aton athe ~~conversion~~per share price of $0.~~00035 per share~~0005.

F-3933

~~eLayaway~~On December 10, ~~Inc.~~2013, ~~and~~Buko-Evolution ~~Subsidiaries~~converted $3,500 of the note dated October 26, 2011, into 10,606,060 shares of common stock (see Note 7) at a discounted conversion price of $0.0004.

~~Notes~~On toDecember ~~Consolidated~~16, ~~Financial~~2013, ~~Statements~~Asher converted $5,000 of the note dated December 21, 2012, into 21,739,130 shares of common stock (see Note 7) at a discounted conversion price of $0.00023.

On December 3119, 2013, Asher converted $5,000 of the note dated December 21, 2012, ~~and~~into ~~2011~~21,739,130 shares of common stock (see Note 7) at a discounted conversion price of $0.00023.

On December 520, ~~2012~~2013, ~~Southridge~~the ~~converted~~Company ~~$5,685~~issued ofASC ~~principal~~39,000,000 ofunder ~~its~~the ~~note~~settlement ~~acquired~~terms onof ~~September~~the ~~24,~~3(a)(10) ~~2012~~ (see Note 710). The ~~into~~shares ~~4,373,077~~were ~~shares~~valued ofat ~~common~~$15,600 ~~stock~~based aton a ~~conversion~~per share price of $0.~~0013 per share~~0004.

On December 5, 2012, Star City converted $5,000 of principal and accrued interest of $120 of the note acquired on September 26, 2012 (see Note 7) into 3,938,246 shares of common stock at a conversion price of $0.0013 per share.

On December 5, 2012, Southridge converted $36,150 of principal of its note acquired on October 22, 2012 (see Note 7) into 27,807,692 shares of common stock at a conversion price of $0.0013 per share.

Filing Compare · eLayaway, Inc.