UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

______________________

FORM 10-Q

______________________

x	QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED ~~SEPTEMBER~~JUNE 30, ~~2013~~2014

o	TRANSITION REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ~~______~~_________ to ~~______~~_________.

Commission File Number: 000-54733

~~______________________________________________~~ELAYAWAY, INC. (Exact name of registrant as specified in its charter)

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.)

3111 Mahan Drive, Suite 20 #121 Tallahassee, FL		32308
(Address of principal executive offices)		(Zip Code)

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

_________________________________________

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 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 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

As of asAugust ~~of November 8~~14, ~~2013~~2014 the registrant had ~~218~~4,~~197~~779,~~354~~249,582 shares of its Common Stock, $0.001 par value, outstanding.

TABLE OF CONTENTS

eLAYAWAY, INC.

Part I – Financial Information
Item 1	Financial Statements	3
	Consolidated Balance Sheets as of September 30, 2013 (unaudited) and December 31, 2012	3
	Consolidated Balance Sheets as of June 30, 2014 (unaudited) and December 31, 2013	3
	Consolidated Statements of Operations for the three and nine months ended September 30, 2013 and 2012 (unaudited)	4
	Consolidated Statements of Operations for the three and six months ended June 30, 2014 and 2013 (unaudited)	4
	Consolidated Statements of Cash Flows for the nine months ended September 30, 2013 and 2012 (unaudited)	5
	Consolidated Statements of Cash Flows for the six months ended June 30, 2014 and 2013 (unaudited)	5
	Notes to the Unaudited Consolidated Financial Statements (unaudited)	76
Item 2	Management’s Discussion and Analysis or Plan of Operation	2739
Item 3	Quantitative and Qualitative Disclosures about Market Risk	2941
Item 4	Controls and Procedures	2941
Part II – Other Information
Item 1	Legal Proceedings	3143
Item 2	Unregistered Sales Of Equity Securities And Use Of Proceeds	3144
Item 3	Defaults Upon Senior Securities	3846
Item 4	Mine Safety Disclosures	4046
Item 5	Other Information	4046
Item 6	Exhibits	4047

ITEM 1 Financial Statements

eLAYAWAY, INC. and SUBSIDIARIES

eLAYAWAY, INC. and SUBSIDIARIES
Consolidated Balance Sheets
	September 30,			December 31,
	2013			2012
ASSETS
Current assets
Cash	$	1,495		$	22,823
Segregated cash for customer deposits		62,980			86,054
Other receivable		-			50,000
Prepaid expenses		2,746			47,954
Assets attributable to discontinued operations		-			536
Total current assets		67,221			207,367
Property and equipment, net		1,441			2,195
Intangibles, net		3,521			3,844
Other assets		-			4,667
Total assets	$	72,183		$	218,073
LIABILITIES AND SHAREHOLDERS' DEFICIENCY
Current liabilities
Notes and convertible notes, net of discounts and premiums	$	1,503,571		$	1,665,991
Notes, convertible notes, and lines of credit payable to related parties, net of discounts		519,738			427,590
Accounts payable		152,075			165,449
Accounts payable to related parties		18,920			18,920
Accrued liabilities		405,866			249,110
Liability to guarantee equity value		25,000			25,000
Deposits received from customers for layaway sales		61,382			85,604
Embedded conversion option liability		53,570			64,285
Total current liabilities		2,740,122			2,701,949
Total liabilities		2,740,122			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, 49,005,473 and
3,171,543 shares issued, issuable and outstanding, respectively, and (0 and
366,805 shares issuable, respectively)		49,005			3,172
Additional paid-in capital		19,998,160			16,099,721
Accumulated deficit		(22,715,112	)		(18,586,857	)
Total shareholders' deficiency		(2,667,939	)		(2,483,876	)
Total liabilities and shareholders' deficiency	$	72,183		$	218,073

Consolidated Balance Sheets

See accompanying notes to unaudited consolidated financial statements

	June 30,			December 31,
	2014			2013
	(unaudited)

ASSETS

Current assets
Cash	$	5,974		$	3,115
Segregated cash for customer deposits		3,274			22,621
Total current assets		9,248			25,736
Property and equipment, net		794			1,225
Intangibles, net		3,197			3,413
Total assets	$	13,239		$	30,374

LIABILITIES AND SHAREHOLDERS' DEFICIENCY

Current liabilities
Notes and convertible notes, net of discounts and premiums	$	734,845		$	851,613
Notes, convertible notes, and lines of credit payable to related parties, net of discounts		459,680			65,000
Purchased liabilities, net		479,319			1,087,949
Accounts payable		164,177			137,165
Accounts payable to related parties		-			18,920
Accrued liabilities		498,563			388,879
Deposits received from customers for layaway sales		8,991			22,160
Deriviative liability for insufficient shares		720,432			-
Embedded conversion option liability		-			53,570
Total current liabilities		3,066,007			2,625,256
Total liabilities		3,066,007			2,625,256
Commitments and contingencies (Note 5)
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			3
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)		-			-
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			5
Series H preferred stock, $0.001 par value, 10 shares designated, 10 and 0
issued and outstanding, respectively (liquidation value $0 and $0, respectively)		-			-
Common stock, par value $0.001, 5,000,000,000 shares authorized, 4,835,499,582 and
616,486,756 shares issued, issuable and outstanding, respectively, and (56,250,000
and 366,805 shares issuable, respectively)		4,835,499			616,486
Additional paid-in capital		17,025,950			19,943,743
Accumulated deficit		(24,914,225	)		(23,155,119	)
Total shareholders' deficiency		(3,052,768	)		(2,594,882	)
Total liabilities and shareholders' deficiency	$	13,239		$	30,374

See accompanying notes to unaudited consolidated financial statements.

eLAYAWAY, INC. and SUBSIDIARIES

Consolidated Statements of Operations

~~eLAYAWAY, INC. and SUBSIDIARIES Consolidated Statements of Operations~~(unaudited)

	For the Three Months Ended						For the Nine Months Ended
	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	September 30,						September 30,
	2014			2013			2014			2013
	2013			2012			2013			2012
Sales	$	12,428		$	31,120		$	31,869		$	98,733
Sales	$	28,491		$	25,868		$	127,224		$	89,883
Direct costs		33,919			8,547			38,908			19,842
Cost of sales		-			453			19,842			3,836
		28,491			25,415			107,382			86,047
Selling, general and administrative expenses
(includes $110,000 and $71,745 for the three months ended
(includes $46,969 and $33,760 for the three months ended June 30,
September 30, 2013 and 2012, respectively, and $269,978 and
2014 and 2013, respectively, and $63,285 and
$508,318 for the nine months ended September 30, 2013 and
$159,978 for the six months ended June 30, 2014 and 2013,
2012, respectively, of stock-based compensation and
respectively, of stock-based compensation and settlements)		160,857			222,127			239,542			573,238
settlements)		185,040			367,801			758,278			1,538,841
Loss from continuing operations		(182,348	)		(199,554	)		(246,581	)		(494,347	)
								-			-
Loss from continuing operations		(156,549	)		(342,386	)		(650,896	)		(1,452,794	)
Other income (expense)
Interest expense		(71,251	)		(186,225	)		(278,511	)		(750,023	)
Other income		-			-						-
Change in fair value of embedded conversion option liability		-			18,531			6,429			222,150
Interest expense		(352,433	)		(87,363	)		(412,788	)		(207,260	)
Gain on conversion of accounts payable		-			3,980			-			5,580
Change in fair value of embedded conversion option liability		-			-						6,429
Loss on share repurchase		-			(150,461	)		-			(150,461	)
Gain on settlement of debt		-			-			1,000			-
Gain (loss) on settlements of liabilities, net		(285,679	)		101,151			(820,470	)		101,151
Gain on extinguishment of debt		-			-			8,500			-
Gain on extinguishment of debt					14,099			-			14,099
Derivative amortization		133,251			-						-
Loss on issuance of common stock					-			(60,000	)		-
Loss on settlement of liability		-			(534,791	)		(1,744	)		(534,791	)
Loss on conversion of debt into common stock		(31,792	)		-			(2,324,806	)		-
Loss on issuance of common stock		-			-						(60,000	)
Total other income (expense), net		(388,722	)		(198,925	)		(3,477,358	)		(557,504	)
Loss on conversion of debt into common stock		(331,579	)		(1,308,403	)		(1,107,493	)		(2,293,014	)
Net loss from continuing operations		(545,271	)		(541,311	)		(4,128,254	)		(2,010,298	)
Total other income (expense), net		(550,761	)		(1,930,557	)		(1,512,525	)		(3,088,636	)
Net loss from discontinued operations		-			(13,595	)		-			(112,747	)
Net loss	$	(733,109	)	$	(2,130,111	)	$	(1,759,106	)	$	(3,582,983	)
Net loss	$	(545,271	)	$	(554,906	)	$	(4,128,254	)	$	(2,123,045	)
Basic and diluted net loss per share	$	(0.000	)	$	(0.001	)	$	(0.00	)	$	(0.001	)
Basic and diluted net loss per share - continuing operations	$	(0.023	)	$	(1.273	)	$	(0.241	)	$	(5.452	)
Weighted average shares outstanding - basic and diluted		3,846,031,673			2,890,796,541			2,982,658,873			2,389,645,431
Basic and diluted net loss per share - discontinued operations	$	-		$	(0.032	)	$	-		$	(0.306	)
Basic and diluted net loss per share	$	(0.023	)	$	(1.305	)	$	(0.241	)	$	(5.758	)
Weighted average shares outstanding
- basic and diluted		24,062,535			425,161			17,123,265			368,739

See accompanying notes to unaudited consolidated financial statements.

eLAYAWAY, INC. and SUBSIDIARIES ~~Consolidated Statements of Cash Flows For the Nine Months Ended September 30,~~

Consolidated Statements of Cash Flows

For the Six Months Ended June 30,

	2013			2012
Cash flows from operating activities:
Net loss	$	(4,128,254	)	$	(2,123,045	)
Adjustments to reconcile net loss to net cash used in operations:
Depreciation		735			10,125
Amortization of intangibles		323			55,843
Bad debt expense		-			1,668
Amortization of debt discounts to interest expense		187,031			567,033
Amortization of debt issue costs to interest expense		7,167			19,020
Issuance of note for legal services		-			25,000
Deriviative loss		(4,286	)		-
Grant of warrants for services		-			31,071
Grant of options for services		-			30,405
Common stock granted for services		269,978			152,060
Exchange of options and warrants for common stock		-			108,614
Loss on conversion of debt into common stock		2,324,806			-
Loss on issuance of stock		60,000			-
Loss on settlement of payroll		825,000			-
Amortization of stock-based prepaids		-			181,353
Gain on extinguishment of debt					(40,000	)
Accretion of put premium into interest expense		80,658			44,271
(Gain) loss on settlement of liabilities		(4,530	)		24,129
Gain on unclaimed liabilities					(98,823	)
Compensation expense for returned shares					150,461
Adjustment for derivatives for conversion of notes					21,430
Change in fair value of embedded conversion option liability		(6,429	)		(222,150	)
Changes in operating assets and liabilities:
Segregated cash for customer deposit		23,074			(41,580	)
Accounts receivable		-			(1,823	)
Other receivable		50,000			-
Prepaid expenses		45,208			6,645
Other assets		4,667			(2,200	)
Accounts payable		(13,374	)		98,088
Accounts payable to related parties		-			16,445
Accrued expenses		156,756			177,765
Deposits received from customers for layaway sales		(24,222	)		54,233
Net cash used in operating activities		(145,692	)		(753,962	)
Cash flows from investing activities:
Acquisition of fixed assets		-			(901	)
Cash acquired in acquisition		-			2,447
Cash paid in acquisition		-			(6,000	)
Net cash used in investing activities		-			(4,454	)
Cash flows from financing activities:
Proceeds from related party loans		-			273,272
Proceeds from loans		125,075			287,500
Repayment of loans		-			(45,152	)
Repayment of related party loans		(711	)		(65,000	)
Payment of loan fee		-			(7,500	)
Sale of common stock		-			290,040
Net cash provided by financing activities		124,364			733,160

(unaudited)

	2014			2013
Cash flows from operating activities:
Net loss	$	(1,759,106	)	$	(3,582,983	)
Adjustments to reconcile net loss to net cash used in operations:
Depreciation		431			539
Amortization of intangibles		216			108
Amortization of debt discounts to interest expense		284,849			105,142
Loss on conversion of debt into common stock		1,107,493			2,397,987
Loss on issuance of stock		-			60,000
Deriviative loss		-			(10,715	)
Common stock granted for services		-			159,978
Accretion of put premium into interest expense		147,183			80,658
Loss on settlement of liabilities		-			534,791
Change in fair value of embedded conversion option liability		-			(10,715	)
Changes in operating assets and liabilities:
Segregated cash for customer deposit		19,347			1,656
Accounts receivable		-			50,000
Other assets		-			4,369
Accounts payable		27,012			(18,098	)
Accounts payable to related parties		(18,920	)		-
Accrued expenses		109,684			101,572
Deposits received from customers for layaway sales		(13,169	)		(10,911	)
Net cash used in operating activities		(94,980	)		(136,622	)
Cash flows from financing activities:
Proceeds from loans		96,339			125,075
Repayment of related party loans		-			(711	)
Payment of loan fee		1,500			-
Net cash provided by financing activities		97,839			124,364
Net increase (decrease) in cash		2,859			(12,258	)
Cash at beginning of period		3,115			22,823
Cash at end of period	$	5,974		$	10,565
Supplemental disclosure of cash flow information:
Cash paid for interest	$	-		$	-
Cash paid for taxes	$	-		$	-
Non-cash investing and financing activities:
Debt discounts for beneficial conversion features values	$	114,501		$	15,689
Conversion of notes into common stock	$	102,715		$	-
Conversion of liabilities into common stock	$	3,420		$	-
Deriviative liability for insufficient shares	$	720,432		$	-
Debt discounts for loan fees	$	-		$	2,500
Common stock issued for services	$	-		$	930,001
Conversion of liabilities to a related party into notes payable	$	-		$	82,010
Issuance of Series G preferred stock for services	$	-		$	1,000
Conversion of Series E preferred stock into common stock	$	-		$	(712	)
Issuance of Series H preferred stock for services	$	0		$	-

See accompanying notes to unaudited consolidated financial statements.

eLAYAWAY, INC. and SUBSIDIARIES Consolidated Statements of Cash Flows For the Nine Months Ended September 30,

	2013			2012
Net increase (decrease) in cash		(21,328	)		(25,256	)
Cash at beginning of period		22,823			29,458
Cash at end of period	$	1,495		$	4,202
Supplemental disclosure of cash flow information:
Cash paid for interest	$	-		$	3,405
Cash paid for taxes	$	-		$	-
Non-cash investing and financing activities:
Acquisition of Centralized Strategic Placements, Inc.	$	-		$	242,402
Reclassification of liability to equity for expiration of guarantee	$	-		$	135,000
Debt discounts for beneficial conversion features values	$	15,689		$	99,616
Return of Series E preferred stock	$	-		$	6,799
Common stock issued for legal services	$	-		$	37,800
Debt discounts for loan fees	$	2,500		$	6,000
Conversion of loan fees to common stock	$	-		$	2,500
Capitalization of accrued interest to convertible note payable	$	-		$	6,000
Settlement of accounts payable for Series E preferred stock	$	-		$	30,000
Conversion of related party payroll into Series E preferred stock	$	-		$	38,691
Conversion of related party liabilities into Series F preferred stock	$	-		$	10,765
Common stock issued for services	$	930,001		$	60,000
Conversion of debt to common stock including premium	$	-		$	164,934
Conversion of accounts payable to common stock	$	-		$	15,500
Conversion of convertible preferred stock into common stock	$	-		$	-
Conversion of liabilities to a related party into notes payable	$	82,010		$	-
Embedded conversion option liability	$	-		$	24,815
Issuance of Series G preferred stock for services	$	1,000		$	-
Conversion of Series E preferred stock into common stock	$	(712	)	$	-

See accompanying notes to unaudited consolidated financial statements.

eLAYAWAY, INC. and Subsidiaries

Notes to Consolidated Financial Statements

~~September~~June 30, ~~2013~~2014

(unaudited)

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~~. The~~ ~~business~~formed ~~was started~~ on ~~September~~December 826, ~~2005. Our~~2006 ~~subsidiary,~~as ~~eLayaway.com~~Tedom Capital, Inc. On April 16, ~~was~~2010, ~~formed~~the onCompany ~~September~~changed 8its name to eLayaway, ~~2005~~Inc.

InOn ~~April~~March ~~2007~~17, 2010, the Company formed ~~eLayaway~~Tedom ~~Australia~~Acquisition ~~Pty~~Corp. (“TAC”), ~~Ltd~~a Florida corporation, for the purpose of a reverse triangular merger with eLayaway.com, anInc., ~~Australian~~a ~~company~~Florida corporation (f/k/a eLayawayCOMMERCE, Inc. ~~This~~ ~~entity~~and iseLayaway, ~~97%~~Inc., ~~owned~~“eLayaway.com”). byOn April 12, 2010, eLayaway.com ~~and~~merged ~~has~~with ~~been~~TAC ~~inactive~~with ~~since~~eLayaway.com ~~inception~~as the surviving subsidiary of the Company.

OneLayaway.com ~~July~~was ~~28,~~a ~~2010,~~Florida ~~Pay4Tix.com~~limited liability company that was formed on September 8, ~~Inc~~2005 in Florida. ~~(“Pay4Tix,”~~On ~~f/k/a~~September ~~eLayawaySPORTS~~1, ~~Inc.)~~2009, athe 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 ~~formed~~treated as a ~~subsidiary~~recapitalization ofand reflected retroactively for all periods presented in the ~~Company~~accompanying consolidated financial statements. ~~The~~ ~~name~~On ~~change~~April 19, 2010, eLayaway, Inc. changed its name to ~~Pay4Tix~~eLayawayCOMMERCE, ~~was~~Inc. ~~completed~~and subsequently, on March 97, 2012~~. Pay4Tix~~, ~~was~~changed ~~dissolved~~its onname ~~September~~to 27eLayaway.com, ~~2013~~Inc.

OnPrior ~~November~~to ~~15,~~the ~~2011~~formation of eLayaway.com, ~~DivvyTech~~the research and development of the eLayaway concept operated under the entity Triadium, ~~Inc~~LLC. ~~(“DivvyTech”),~~The ainvestors ~~Florida~~and ~~corporation~~founders of Triadium, ~~was~~LLC then formed aseLayaway, aLLC ~~subsidiary~~to ofcommercialize the ~~Company~~eLayaway business concept. ~~DivvyTech~~ ~~was~~There ~~dissolved~~were onno ~~September~~assets 27or liabilities contributed to eLayaway from Triadium, ~~2013~~LLC at the time of formation of eLayaway, LLC.

OnIn ~~January~~April 202007, ~~2012,~~the ~~PrePayGetaway.com,~~Company ~~Inc.~~formed ~~(“PrePayGetaway”)~~eLayaway ~~and~~Australia ~~PlanItPay.com~~Pty, ~~Inc~~Ltd. ~~(“PlanItPay”)~~, ~~both~~an ~~Florida~~Australian ~~corporations,~~company. ~~were~~This ~~formed~~entity asis ~~subsidiaries~~97% ofowned ~~the~~by ~~Company. PrePayGetaway~~eLayaway and ~~PlanItPay~~has ~~were~~been ~~both~~inactive ~~dissolved~~since oninception. ~~September~~In 272012, ~~2013~~this entity was dissolved.

On ~~January~~February 2518, ~~2012~~2009, ~~NuVidaPaymentPlan.com~~the Company acquired MDIP, ~~Inc.~~LLC (“~~NuVida~~MDIP”), afor ~~Florida~~nominal ~~corporation~~consideration, ~~was~~from ~~formed~~its asthree afounders, ~~subsidiary~~who ofare also the ~~Company~~founders of eLayaway. ~~NuVida~~ MDIP held the intellectual property rights related to the electronic payment systems and methods for which a non-provisional patent application was ~~dissolved~~filed on ~~September 27~~October 17, 2006 ~~2013~~for a Letters Patent of the United States and assigned a Utility Patent application Serial No. 11/550,301.

On ~~February~~March 725, ~~2012~~2009, ~~with~~one anof ~~effective~~the ~~date~~founders of ~~February~~eLayaway 1,assigned ~~2012,~~ the ~~Company~~“eLayaway” ~~acquired~~trademark ~~all~~to of the ~~voting~~Company ~~capital~~for ~~stock~~nominal consideration including $6,468 of ~~Centralized~~legal ~~Strategic~~fees ~~Placements,~~paid ~~Inc.~~by ~~(“CSP,”~~the ~~see~~Company ~~Note~~in 2)2006.

On ~~October~~March 129, ~~2012~~2010, the ~~Company,~~intellectual ~~through~~property anwas ~~Asset~~assigned ~~Purchase~~to ~~Agreement with Channel Worth Holdings, LLC (“Channel Worth”), sold certain assets owned by CSP~~eLayaway. ~~Channel~~com ~~Worth acquired the technology of CSP~~ and ~~the~~MDIP ~~respective~~was ~~operations of CSP~~dissolved. 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. See Notes 2, 4, 6 and 8.

On ~~April~~July 1828, ~~2013~~2010, ~~the~~Pay4Tix.com, ~~Company’s~~Inc. ~~Board~~(“Pay4Tix,” ~~of Directors unanimously adopted and the consenting stockholders approved~~ f/k/a ~~resolution~~eLayawaySPORTS, toInc.), ~~effect~~ a ~~one-for-two~~Florida ~~hundred~~corporation, ~~(1:200)~~was ~~reverse~~formed ~~stock~~as ~~split~~a ~~(the~~subsidiary ~~"Reverse Split")~~ of the ~~Common Stock of the~~ Company ~~pursuant to clearance and final approval by FINRA~~. ~~The~~This ~~resulting~~company ~~share~~was ~~ownership~~administratively ~~interest~~dissolved ~~including~~on ~~resulting~~September ~~fractional~~27, ~~shares for each individual shareholder shall be rounded up to the third whole integer in such a manner that every shareholder shall own at least 100 shares as a result of the Reverse Split~~2013.

On ~~August~~November 1215, ~~2013~~2011, ~~the~~DivvyTech, ~~Company~~Inc. ~~was~~(“DivvyTech”), ~~notified~~a byFlorida ~~FINRA~~corporation, ~~that~~was itformed ~~had~~as ~~received~~a ~~the~~subsidiary ~~necessary~~of ~~documentation to process~~ the ~~Reverse~~Company. ~~Split~~This (1company ~~for~~was ~~200)~~administratively ~~and~~dissolved ~~that this action would take effect at the open of business~~ on ~~August~~September 1327, 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.

Basis of Presentation

The accompanying unaudited consolidated financial statements of eLayaway, Inc. and Subsidiaries have been prepared in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X. The results of operations for the interim period ended ~~September~~June 30, ~~2013~~2014 shown in this report are not necessarily indicative of results to be expected for the full fiscal year ending December 31, ~~2013~~2014. In the opinion of the Company’s management, the information contained herein reflects all adjustments (consisting of normal recurring adjustments and business combination adjustments – see Note 2) necessary for a fair presentation of the Company’s results of operations, financial position and cash flows. The unaudited interim financial statements should be read in conjunction with the audited consolidated financial statements in the Company’s Form 10-K for the year ended December 31, ~~2012~~2013 filed on ~~April~~March 331, ~~2013~~2014 and Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Nature of Operations

The Company has evolved its technology to remove itself from being identified as a layaway only company. The Company specializes in various payment processing methods including, but not limited to, layaway. The Company'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. The Company’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.

eLAYAWAY, INC. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2013

(unaudited)

When requiring consumers to pay over time, the Company’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.

Reclassification of Balances

The Company reported certain liabilities in its Form 10-K for the period ended December 31, 2013 which were purchased by ASC Recap, LLC pursuant to the Joint Motion for Approval of Settlement Agreement and Stipulation (see Note 5), were reclassified for the period ended December 31, 2013 as reported on the current balance sheet. The reclassification resulted in a decrease in the line items “Notes and convertible notes, net of discounts and premiums” and “Notes, convertible notes, and lines of credit payable to related parties, net of discounts,” to a separate line item, “Purchased liabilities, net.” This reclassification is reflected on the balance sheet and the applicable Notes to Consolidated Financial Statements.

Principles of Consolidation

The consolidated financial statements include the accounts of eLayaway and its wholly-owned ~~subsidiaries~~subsidiary (as of ~~September~~June 30, ~~2013~~2014), eLayaway.com~~, Pay4Tix (inactive), DivvyTech (inactive), NuVida (inactive), CSP (inactive), 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 unaudited consolidated financial statements include the valuation and purchase price allocation of assets acquired and liabilities assumed in business combination, 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 features, 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 will be reflected as a discontinued operation.

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 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.

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 September 30, 2013:

~~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 June 30, 2014:

Notes to Consolidated Financial Statements

	Balance at		Quoted Prices in Active Markets		Significant Other		Significant
	June 30,		for Identical		Observable		Unobservable
	2014		Assets		Inputs		Inputs
			(Level 1)		(Level 2)		(Level 3)
Assets:
Trademarks	$	3,197	$	-	$	-	$	3,197
Total Financial Assets	$	3,197	$	-	$	-	$	3,197

~~September~~Following is a summary of activity through June 30, ~~2013~~2014 of the fair value of intangible assets valued using Level 3 inputs:

(unaudited)

Balance at December 31, 2013	$	3,413
Amortization of intangibles		(216	)
Ending balance at June 30, 2014	$	3,197

			Quoted Prices in		Significant
	Balance at		Quoted Prices in Active Markets		Significant Other		Significant
	Balance at		Active Markets		Other		Significant
	June 30,		for Identical		Observable		Unobservable
	Septmeber 30,		for Identical		Observable		Unobservable
	2014		Assets		Inputs		Inputs
	2013		Assets		Inputs		Inputs
			(Level 1)		(Level 2)		(Level 3)
Assets:
Liabilities:
Trademarks	$	3,521	$	-	$	-	$	3,521
Derivative Liabilities	$	-	$	-	$	-	$	-
Total Financial Assets	$	~~3,521~~-	$	-	$	-	$	~~3,521~~-

Following is a summary of activity through ~~September~~June 30, ~~2013~~2014 of the fair value of ~~intangible~~derivative ~~assets~~liabilities valued using Level 3 inputs:

Balance at December 31, 2012	$	3,844
Balance at December 31, 2013	$	53,570
Amortization of intangibles		(323	)
Change in fair value during the period ended June 30, 2014		(53,570	)
Ending balance at September 30, 2013	$	3,521
Ending balance at June 30, 2014	$	-

~~The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis at September 30, 2013:~~9

			Quoted Prices in		Significant
	Balance at		Active Markets		Other		Significant
	Septmeber 30,		for Identical		Observable		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

Following is a summary of activity through September 30, 2013 of the fair value of derivative liabilities valued using Level 3 inputs:

Balance at December 31, 2012	$	70,704
Change in fair value during the period ended September 30, 2013		(17,134)
Ending balance at September 30, 2013	$	53,570

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 as of ~~September~~June 30, ~~2013~~2014 consist of warrants to purchase 32,619 at ~~September~~June 30, ~~2013~~2014 shares of common stock, employee options to purchase 3,907 shares of common stock and convertible notes convertible into ~~146~~7,~~172~~273,~~989~~033,333 common shares. Equivalent shares are not utilized when the effect is anti-dilutive (see Note 87).

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 ~~September~~June 30, ~~2013~~2014 and ~~2012~~2013.

eLAYAWAY, INC. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2013

(unaudited)

Effect of Recent Accounting Pronouncements

The Company reviews updated ~~new~~ accounting standards as issued. No new updated 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~~June 30, ~~2013~~2014 through the date these unaudited consolidated financial statements were issued.

NOTE 2 – ~~BUSINESS~~GOING ~~ACQUISITIONS AND DISPOSITIONS~~CONCERN

OnThe ~~February~~accompanying 7,unaudited ~~2012,~~consolidated ~~with~~financial anstatements ~~effective~~have ~~date~~been ofprepared ~~February~~on 1,a ~~2012~~going concern basis, ~~the~~which ~~Company~~contemplates ~~acquired~~the ~~all~~realization of ~~the~~assets ~~voting~~and ~~capital~~the ~~stock~~satisfaction of ~~Centralized~~liabilities ~~Strategic~~in ~~Placements,~~the ~~Inc.~~normal ~~(“CSP”)~~course inof ~~exchange~~business. ~~for~~The aCompany ~~commitment~~sustained ~~for~~net ~~21,400~~losses ~~shares~~from ofoperations ~~common stock~~ of ~~the Company~~$1, 5759,~~350~~106 ~~issuable~~(includes atsettlements ~~the~~and ~~date~~$1,107,493 of ~~the~~loss ~~execution~~on conversion of ~~the~~notes ~~agreement,~~payable) ~~5,350~~and ~~issuable~~used oncash ~~August~~in 1,operating ~~2012,~~activities ~~5,350~~of ~~issuable on February 1~~$94,980 ~~2013,~~for ~~and~~the ~~5,350~~six ~~issuable~~months onended ~~August~~June 130, ~~2013~~2014. The ~~shares~~Company ~~were~~had ~~issued~~a toworking ~~Richard~~capital ~~St.~~deficiency, ~~Cyr~~stockholders’ ~~(“St.~~deficiency ~~Cyr”)~~ and ~~Douglas~~accumulated ~~Pinard~~deficit ~~(“Pinard”),~~of ~~the~~continuing ~~co-owners~~operations of ~~CSP. Additionally~~$3,056,759, $3,~~000~~052,768 inand ~~cash~~$24,914,225, ~~was~~respectively, ~~paid~~at toJune ~~each~~30, of2014. ~~the~~In ~~co-owners~~addition, ofthe ~~CSP~~Company ~~and~~was ~~Convertible~~in ~~Promissory~~default ~~Notes~~on ~~were~~twenty-seven ~~issued~~promissory innotes ~~the~~totaling ~~amount of~~ $57790,~~000~~839 ~~each~~at toJune ~~both~~30, ~~owners~~2014. ~~The~~ ~~Company~~These ~~recorded~~factors ~~the~~raise ~~transaction~~substantial atdoubt ~~$248,400,~~about ~~which~~the isability ~~based~~of on the ~~21,400~~Company ~~shares~~to ~~valued~~continue atas ~~the~~a ~~previous~~going ~~day~~concern ~~closing~~for ~~price~~a ofreasonable ~~our~~period ~~common stock~~ of $6time.~~00,~~ orThe ~~$128,400,~~Company’s ~~the~~continuation ~~cash~~as ~~balance~~a ~~paid~~going ofconcern ~~$6,000,~~is ~~and~~dependent ~~the~~upon ~~two~~its ~~promissory~~ability ~~notes~~to ~~for~~generate arevenues ~~combined~~and ~~amount~~its ofability ~~$114,000. The~~to ~~two~~continue ~~promissory~~receiving ~~notes~~investment ~~were~~capital inand ~~default~~loans asfrom ofthird ~~August~~parties 1,to ~~2012~~sustain ~~(see~~its ~~Note~~current ~~4). CSP~~level isof aoperations. ~~strategic~~The ~~acquisition~~Company asis ~~it owns proprietary technology~~ in ~~regards~~the toprocess anof ~~online~~securing ~~shopping~~working ~~mall~~capital ~~and~~from ~~has~~investors ~~contracts~~for ~~with~~common ~~various federal government agencies~~stock, ~~including,~~convertible ~~but~~notes ~~not limited to~~payable, ~~the~~and/or ~~Army~~strategic ~~Air~~partnerships. ~~Force~~No ~~Exchange~~assurance ~~Service,~~can ~~which~~be ingiven ~~total~~that ~~has~~the ~~approximately~~Company ~~fourteen~~will ~~million~~be ~~members~~successful in ~~the~~these ~~various government agencies including the United States military~~efforts.

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

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 Notes 1, 2, 4, 6 and 8. Channel Worth entered into an agreement with the Company whereas it would independently provide the services that were previously in house.

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.

eLAYAWAY, INC. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2013

(unaudited)

NOTE 3 - GOING CONCERN

The accompanying unaudited 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 from continuing operations of $4,128,254 (includes $269,978 of stock-based compensation and settlements and $2,324,806 of loss on conversion of notes payable) and used cash in operating activities of $145,692 for the nine months ended September 30, 2013. The Company had a working capital deficiency, stockholders’ deficiency and accumulated deficit of continuing operations of $2,672,901, $2,667,939 and $22,715,112, respectively, at September 30, 2013. In addition, the Company was in default on thirty-three promissory notes totaling $1,819,844 at September 30, 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.

~~NOTE 4 – NOTES AND CONVERTIBLE NOTES PAYABLE, AND NOTES PAYABLE RELATED PARTIES, NET OF DISCOUNTS AND PREMIUMS~~10

~~Notes~~NOTE ~~and~~3 ~~convertible~~– ~~notes~~NOTES ~~payable,~~AND ~~net~~CONVERTIBLE ofNOTES ~~discounts and premiums~~PAYABLE, ~~all~~AND ~~classified~~NOTES asPAYABLE ~~current~~RELATED ~~at September 30~~PARTIES, ~~2013~~NET ~~and~~OF ~~December~~DISCOUNTS ~~31,~~AND ~~2012, consists of the following:~~PREMIUMS

Notes and convertible notes payable, net of discounts and premiums, all classified as current at June 30, 2014 and December 31, 2013, consists of the following:

Notes and Convertible Notes, Net of Discounts
Notes and convertible notes, net of
discounts	June 30, 2014									December 31, 2013
								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
Evolution Capital, LLC (1) (2)		-		-			-		-		11,500		-			-		11,500
Hanson Capital, LLC (1) (2)		-		-			-		-		98,500		-			-		98,500
Asher Enterprises, Inc. (2)		-		-			-		-		-		-			27,155		27,155
Asher Enterprises, Inc. (2)		-		-			-		-		39,850		-			38,379		78,229
Asher Enterprises, Inc. (2)		-		-			-		-		32,500		-			23,534		56,034
KAJ Capital, LLC (1) (2)		-		-			-		-		10,000		-			-		10,000
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
Douglas Pinard (1)		20,000		-			-		20,000		20,000		-			-		20,000
Richard St. Cyr (1)		17,000		-			-		17,000		17,000		-			-		17,000
Ventana Capital Partners, Inc. (1)		20,000		-			-		20,000		20,000		-			-		20,000
Thomas Carluccio, Jr. (1) (2)		5,000		-			5,000		10,000		5,000		-			-		5,000
Thomas Carluccio, Jr. (1) (2)		5,000		-			5,000		10,000		5,000		-			-		5,000
Thomas Carluccio, Jr. (1) (2)		5,000		-			5,000		10,000		-		-			-		-
Thomas Carluccio, Jr. (1) (2)		5,000		-			5,000		10,000		-		-			-		-
Thomas Carluccio, Jr. (1) (2)		5,000		-			5,000		10,000		-		-			-		-
Thomas Carluccio, Jr. (1) (2)		5,000		-			5,000		10,000		-		-			-		-
Thomas Carluccio, Jr. (1) (2)		5,000		-			5,000		10,000		-		-			-		-
Thomas Carluccio, Jr. (2)		5,000		(2,500	)		5,000		7,500		-		-			-		-
Southridge Capital (2)		20,000		(15,000	)		20,000		25,000		-		-			-		-
Southridge Capital (2)		10,000		(8,750	)		10,000		11,250		-		-			-		-
ASC Capital (2)		60,900		-			-		60,900		-		-			-		-
Total	$	693,900	$	(29,055	)	$	70,000	$	734,845	$	765,350	$	(2,805	)	$	89,068	$	851,613

(1) In default.

(2) Convertible.

NOTE: On the December 31, 2013 footnotes, certain liabilities were reported in this table and as of June 30, 2014, are presented in the table for Purchased Liabilities under the 3(a)(10) as shown below.

eLAYAWAY, INC. and Subsidiaries

Notes, Convertible Notes, and Lines of Credit Payable to Related Parties, Net of Discounts
	June 30, 2014									December 31, 2013
								Principal,								Principal,
			Unamortized			Put		net of				Unamortized		Put		net of
	Principal		Discount			Premium		Discounts		Principal		Discount		Premium		Discounts
Bruce Harmon (1) (2)	$	14,501	$	-		$	14,501	$	29,002	$	-	$	-	$	-	$	-
Sergio Pinon (1) (2)		5,000		-			5,000		10,000		5,000		-		-		5,000
Sergio Pinon (1) (2)		5,000		-			5,000		10,000		5,000		-		-		5,000
Sergio Pinon (1) (2)		5,000		-			5,000		10,000		-		-		-		-
Sergio Pinon (1) (2)		5,000		-			5,000		10,000		-		-		-		-
Sergio Pinon (1) (2)		5,000		-			5,000		10,000		-		-		-		-
Sergio Pinon (1) (2)		5,000		-			5,000		10,000		-		-		-		-
Sergio Pinon (1) (2)		5,000		-			5,000		10,000		-		-		-		-
Sergio Pinon (2)		5,000		(2,500	)		5,000		7,500		-		-		-		-
Lakeport Business Services, Inc. (1) (2)		5,000		-			5,000		10,000		5,000		-		-		5,000
Lakeport Business Services, Inc. (1) (2)		5,000		-			5,000		10,000		5,000		-		-		5,000
Lakeport Business Services, Inc. (1) (2)		5,000		-			5,000		10,000		-		-		-		-
Lakeport Business Services, Inc. (1) (2)		5,000		-			5,000		10,000		-		-		-		-
Lakeport Business Services, Inc. (1) (2)		5,000		-			5,000		10,000		-		-		-		-
Lakeport Business Services, Inc. (1) (2)		5,000		-			5,000		10,000		-		-		-		-
Lakeport Business Services, Inc. (1) (2)		5,000		-			5,000		10,000		-		-		-		-
Lakeport Business Services, Inc. (2)		5,000		(2,500	)		5,000		7,500		-		-		-		-
Lakeport Business Services, Inc. (1) (2)		45,000		-			45,000		90,000		45,000		-		-		45,000
Lakeport Business Services, Inc. (1) (2)		67,839		-			67,839		135,678		-		-		-		-
Lakeport Business Services, Inc. (1) (2)		25,000		-			25,000		50,000		-		-		-		-
Total	$	232,340	$	(5,000	)	$	232,340	$	459,680	$	65,000	$	-	$	-	$	65,000

~~Notes~~(1) toIn ~~Consolidated~~default. ~~Financial~~(2) ~~Statements~~Convertible. NOTE: On the December 31, 2013 footnotes, certain liabilities were reported in this table and as of June 30, 2014, are presented in the table for Purchased Liabilities under the 3(a)(10) as shown below.

September 30, 2013

(unaudited)

Notes and convertible notes,
net of discounts	September 30, 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)		15,000		-			-		15,000		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)		100,000		-			-		100,000		100,000		-			-		100,000
Asher Enterprises, Inc. (2)		31,700		1			27,155		58,856		37,500		(18,103	)		27,155		46,552
Asher Enterprises, Inc. (2)		53,000		1			38,379		91,380		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)		31,415		-			-		31,415		55,300		-			-		55,300
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	$	1,417,306	$	(2,803	)	$	89,068	$	1,503,571	$	1,659,744	$	(59,287	)	$	65,534	$	1,665,991
(1) In default.
(2) Convertible.

eLAYAWAY, INC. and Subsidiaries

Purchased Liabilities under 3(a)(10), Net, of Notes and Convertible Notes, Net of Discounts
	June 30, 2014										December 31, 2013
								Principal,									Principal,
				Unamortized		Put		net of					Unamortized		Put		net of
	Principal			Discount		Premium		Discounts			Principal		Discount		Premium		Discounts
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)		75,000			-		-		75,000			75,000		-		-		75,000
Evolution Capital, LLC (1)		22,750			-		-		22,750			22,750		-		-		22,750
Evolution Capital, LLC (1)		20,255			-		-		20,255			20,255		-		-		20,255
Evolution Capital, LLC (1)		36,580			-		-		36,580			36,580		-		-		36,580
Evolution Capital, LLC (1)		12,990			-		-		12,990			12,990		-		-		12,990
Lakeport Business Services, Inc. - Line of Credit (1) (2) (3)		200,615			-		-		200,615			200,615		-		-		200,615
Bruce Harmon (1) (3)		157,260			-		-		157,260			157,260		-		-		157,260
Bruce Harmon (1) (3)		10,000			-		-		10,000			10,000		-		-		10,000
Bruce Harmon (1) (3)		52,010			-		-		52,010			52,010		-		-		52,010
Bruce Harmon (1) (3)		15,000			-		-		15,000			15,000		-		-		15,000
Bruce Harmon (1) (3)		15,000			-		-		15,000			15,000		-		-		15,000
Bruce Harmon (1) (3)		10,138			-		-		10,138			10,138		-		-		10,138
Lakeport Business Services, Inc. (1) (3)		47,235			-		-		47,235			47,235		-		-		47,235
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
Susan Jones (1)		58,333			-		-		58,333			58,333		-		-		58,333
Total Purchased Liabilities	$	1,087,949		$	-	$	-	$	1,087,949		$	1,087,949	$	-	$	-	$	1,087,949
Less: Legal Liability to Purchase Notes		(608,630	)		-		-		(608,630	)		-		-		-		-
Total Purchased Liabilities, Net	$	479,319		$	-	$	-	$	479,319		$	1,087,949	$	-	$	-	$	1,087,949

(1) In default. (2) Convertible. (3) Related party. NOTE: The above notes were recorded in the separate tables (shown above), reflective of non-related parties and related parties, as noted. The Legal Liability to Purchase Notes, Net, are proceeds that will be paid to ~~Consolidated~~the ~~Financial~~above ~~Statements~~parties as of June 30, 2014, but have yet to be paid to the parties.

September 30, 2013

(unaudited)

Notes, convertible notes, and
lines of credit payable to
related parties, net of discounts	September 30, 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		-		-		-		-
Lakeport Business Services, Inc. (1)		47,235		-		-		47,235		47,235		-		-		47,235
Lakeport Business Services, Inc. - Line of Credit (1) (2)		213,095		-		-		213,095		213,095		-		-		213,095
Total	$	519,738	$	-	$	-	$	519,738	$	427,590	$	-	$	-	$	427,590
(1) In default.
(2) Convertible.

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 500 warrants in 2010 and, 125, 125, 125, 375, and 500 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 Black-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 $12.00 to $26.00. 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 $20.00, whichever is greater. On January 10, 2011, the conversion rate was, based on the formula, set at $20.00. 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 6).

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, 2012, the balance was $400,000. This LOC contains a conversion provision whereby the conversion price is $20.00 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 7,500 shares of common stock (see Note 10 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. This note is in default. In January 2013, Dr. Salie filed a lawsuit regarding this note (see Note 6).

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 $18.00 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 278 shares of restricted common stock in lieu of the fees. The shares were issued using the closing price of the previous day of $18.00. 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 16,234 shares of common stock at the discounted rate of $1.54 whereas the closing price on the previous day was $2.20. The Company recognized a loss on conversion of $10,714. In 2012, the ownership of the note was assigned to Buko-Evolution, LLC. On May 17, 2013, Buko-Evolution, LLC converted $10,000 into 938,287 shares of common stock (see Note 8) at a conversion rate of $0.01. A loss of $88,829 was recognized. As of September 30, 2013, this note is in default and has a balance of $15,000.

~~eLAYAWAY~~On September 22, ~~INC~~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 500 warrants in 2010 and, ~~Subsidiaries~~125, 125, 125, 375, and 500 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 Black-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 $12.00 to $26.00. 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 $20.00, whichever is greater. On January 10, 2011, the conversion rate was, based on the formula, set at $20.00. 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 5). On August 30, 2013, a judgment was awarded to Dr. Salie in the amount of $64,055, plus interest on the principal balances from January 25, 2013 until full payment, and legal fees for the plaintiff.

~~Notes~~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 ~~Consolidated~~$500,000 ~~Financial~~on ~~Statements~~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, 2012, the balance was $400,000. This LOC contains a conversion provision whereby the conversion price is $20.00 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 7,500 shares of common stock (see Note 10 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. This note is in default. In January 2013, Dr. Salie filed a lawsuit regarding this note (see Note 5). On August 30, 2013, a judgment was awarded to Dr. Salie in the amount of $501,641, plus interest on the principal balances from January 25, 2013 until full payment, and legal fees for the plaintiff.

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 June 30, 2014 and December 31, 2013, 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. 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 7). As of June 30, 2014, the balance is $200,615.

On October 26, 2011, the Company entered into a six month convertible note with Evolution Capital, LLC (~~unaudited~~“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 $18.00 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 278 shares of restricted common stock in lieu of the fees. The shares were issued using the closing price of the previous day of $18.00. The convertible note contains an embedded derivative to be bifurcated from the note and reported as a liability at fair value (see Note 7). On August 27, 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 $2.20. The Company recognized a loss on conversion of $10,714. In 2012, the ownership of the note was assigned to Buko-Evolution, LLC. On May 17, 2013, Buko-Evolution, LLC converted $10,000 into 938,287 shares of common stock (see Note 7) at a conversion rate of $0.01. A loss of $88,829 was recognized. On February 25, 2014, $1,800 of principal was converted into 25,714,290 shares of common stock (see Note 7) at a loss on conversion of $13,629. On February 26, 2014, $9,000 of principal was converted into 56,250,000 shares of common stock (see Note 7) at a loss on conversion of $7,875. On March 17, 2014, $9,000 of principal was converted into 56,250,000 shares of common stock (see Note 7) at a loss on conversion of $69,750. On March 26, 2014, $7,900 of principal was converted into 56,428,570 shares of common stock (see Note 7) at a loss on conversion of $54,171. As of June 30, 2014, this note is in default and has a balance of $11,500.

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 $7.20 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 348 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 $6.00 and $8.40. The convertible note contains an embedded derivative to be bifurcated from the note and reported as a liability at fair value. 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 shares were recorded as issuable as of September 30, 2013. This note is in default. As of September 30, 2013, the note has a principal balance of $10,000.

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 is 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 September 27, 2012, Star City Capital, LLC (“Star City”) converted $12,200 of its $30,000 note into 42,069 shares of common stock at the discounted conversion price of $0.29. On October 12, 2012, due to the reset clause in the note, an additional 29,696 shares of common stock were issued. 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 42,566 shares of common stock at the discounted conversion price of $0.15. On November 16, 2012, Star City converted $6,500 of principal and $85 of accrued interest of its note into 94,447 shares of common stock at the discounted conversion price of $0.07. On December 5, 2012, Star City converted $5,000 of principal and $120 of accrued interest of its note into 19,692 shares of common stock at the discounted conversion price of $0.26 at a gain on conversion of $1,182. On December 20, 2012, due to the reset clause in the note, an additional 18,771 shares of common stock 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 October 22, 2012, Star City purchased $20,000 of the Kline note. On February 11, 2013, Star City converted $20,000 of principal and $744 of accrued interest of the note into 414,871 shares of common stock (see Note 8) at a 50% discount, $0.05, at a loss on conversion of $62,231. The balance as of September 30, 2013 is $0.

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 8) at a conversion rate of $0.012. A loss of $52,703 was recognized. As of September 30, 2013, the remaining balance was $31,700.

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 160,834 shares of common stock at a 50% discount, $0.12, at a loss on conversion of $12,867 on the conversion. On December 11, 2012, Southridge converted $19,325 of the note into 161,042 shares of common stock at a 50% discount, $0.12, at a loss on conversion of $12,883 on the conversion. On January 3, 2013, Southridge converted $11,375 of the note into 94,792 shares of common stock (see Note 8) at a 50% discount, $0.12. A loss on conversion of $15,167 was recognized. On January 9, 2013, under the reset clause of the note, Southridge was issued an additional 18,959 shares of common stock (see Note 8) at a loss of $3,792. The note was fully converted as of September 30, 2013.

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 75,568 shares of common stock at a 50% discount, $0.12, 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 131,756 shares of common stock (see Note 8) at a 50% discount, $0.05, at a loss on conversion of $19,763. The balance as of September 30, 2013 is $0.

On February 11, 2013, under the reset clause of the note, Mauriello was issued an additional 71,392 shares of common stock (see Note 8) at a loss of $14,278. As of September 30, 2013, the note was fully converted.

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 46,490 shares of common stock at a 50% discount, $0.07, at a loss on conversion of $6,044 on the conversion. On February 11, 2013, Sazer converted $5,250 of principal and $145 of accrued interest of the note into 53,954 shares of common stock (see Note 8) at a 50% discount, $0.05, at a loss on conversion of $5,395. As of September 30, 2013, the balance of the note was $0.

~~eLAYAWAY~~On December 12, ~~INC~~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 ~~Subsidiaries~~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 7). 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.

~~Notes~~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 ~~Consolidated~~conversion. ~~Financial~~There ~~Statements~~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. On March 28, 2013, KAJ converted $15,000 of the note into 535,715 shares of common stock (see Note 7) 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 7). 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 7).

~~September~~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. The note is 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”).

~~(unaudited)~~On September 4, 2012, the Company entered into a note with Lakeport in the amount of $47,235. The note matured on October 1, 2012 and accrues interest at the rate of 12% per annum. This note is in default.

On ~~November~~September 3028, 2012, ~~Southridge purchased and was assigned $60,126, $35,126, and $60,273 of principal and accrued interest from~~ the ~~Benchmark~~Company ~~note~~entered 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 ~~189,584 shares of common stock (see Note 8) at~~ a ~~50% discount, $1.20. A loss on conversion of $15,167 was recognized. On January 28, 2013, under the reset clause of the~~ note, ~~Southridge~~with ~~was~~Kline ~~issued~~in ~~an additional 25,917 shares of common stock (see Note 8) at a loss of $5,183. On February 20, 2013, Southridge converted $20,255 of~~ the ~~principal~~amount ~~into 405,042 shares~~ of ~~common stock (see Note 8) at a 50% discount,~~ $~~0.05. A loss on conversion of $60~~55,~~753 was recognized~~000. On ~~February~~The ~~27, 2013, under the reset clause of the~~ note, ~~Southridge~~matured was issued an additional 101,275 shares of common stock (see Note 8) 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 8) at a 50% discount, $0.40. A loss on ~~conversion~~October ~~of $48~~10,~~600~~ ~~was~~2012 ~~recognized. On~~and ~~March~~accrues ~~12,~~interest ~~2013, Southridge converted $24,430 of the principal into 610,750 shares of common stock (see Note 8)~~ at ~~a 50% discount, $0.40. A loss on conversion of $97,720 was recognized. On March 18, 2013, under~~ the ~~reset~~rate ~~clause~~ of ~~the note, Southridge was issued an additional 203,584 shares of common stock (see Note 8) 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 8) at a 50~~% ~~discount,~~per $0annum.~~03.~~ AThis 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 8) 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 10) 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~~is ~~was~~in ~~issued an additional 318,334 shares of common stock (see Note 8) at a loss of $63,667~~default. On April 10, 2013, Southridge converted $9,440 of the principal into 944,000 shares of common stock (see Note 8) 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 8) 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 8) at a 50% discount, $0.01. A loss on conversion of $94,763 was recognized. As of September 30, 2013, the principal balance of the note was $0.

On ~~December~~September 428, 2012, ~~Southridge~~the ~~purchased~~Company ~~$55,300~~entered ofinto ~~the~~a ~~Reserve~~ note. ~~The~~with ~~balance~~TOL asin ofthe ~~December~~amount ~~31,~~of ~~2012 is~~ $55,~~300~~000. OnThe ~~February~~note ~~11,~~matured ~~2013,~~on ~~Southridge~~October ~~converted $14~~10,~~400~~ of2012 ~~the~~and ~~note~~accrues ~~into~~interest ~~405,042 shares of common stock (see Note 8)~~ at athe ~~50%~~rate ~~discount, $0.05. A loss on conversion~~ of ~~$66,608~~12% ~~was~~per ~~recognized~~annum. As ofThis ~~September 30, 2013, the principal balance of the~~ note ~~was~~is ~~$40,900~~in default.

On ~~December~~September 430, 2012, ~~Marina~~the ~~$25,000~~Company ofentered ~~the~~into ~~TOL~~a note ~~dated~~with ~~June~~Susan 28Jones, ~~2011.~~a Onformer ~~December~~officer ~~11, 2012, Marina converted $5,650 principal and $13~~ of ~~accrued interest of~~ the ~~note into 47,192 shares of common stock at a 50% discount, $0~~Company.~~12,~~ atThe aCompany ~~loss~~had onaccrued ~~conversion~~compensation of $358,~~775~~333 onwhich ~~the~~was ~~conversion. 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 8) at~~ a ~~50%~~note ~~discount, $0~~payable.~~10,~~ atThe anote ~~loss~~matured on ~~conversion~~October ~~of $~~15,~~247. On~~ ~~February~~2012 ~~12, 2013, Marina converted $4,350 principal~~ and ~~$100 of~~ accrued interest ofat the ~~note~~rate ~~into 89,003 shares~~ of ~~common stock (see Note 8) at a 50~~2% ~~discount,~~per $0annum.~~05,~~ atThis ~~a loss on conversion of $13,350. As of September 30, 2013, the~~ note ~~had~~is ain ~~balance of $0~~default.

On ~~December~~September 1330, 2012, ~~WHC~~the ~~purchased~~Company ~~$35,000~~entered ofinto ~~the~~a ~~TOL~~ note. Onwith ~~December 27~~Harmon, ~~2012,~~an ~~WHC~~officer ~~converted $10,091~~ of the ~~note~~Company. ~~into~~As ~~89,144~~part ~~shares~~ of ~~common~~an ~~stock~~agreement ~~(see~~whereas ~~Note~~Harmon ~~12)~~provided athis apersonal ~~50%~~guarantee ~~discount,~~to ~~$0.114, at~~ a ~~loss~~liability ~~on conversion~~ of ~~$7,738. On~~the ~~January 10~~Company, ~~2013, WHC converted $10,536 of~~ the ~~principal~~Company ~~and~~purchased ~~$315~~back ~~of accrued interest of the note into 101~~2,~~795~~060,276 shares of ~~common~~Series E preferred stock (see Note 87) atfor athe ~~50%~~original ~~discount, $0.106, at a loss on~~ conversion value of $9157,~~508. On~~260 ~~January~~and ~~18, 2013, WHC~~ converted ~~$10,700~~the ofliability ~~the~~into a note ~~into~~which ~~107,000~~matures ~~shares~~on ofOctober ~~common~~15, ~~stock~~2012 ~~(see~~and ~~Note~~accrues 8)interest at athe 50rate of 2% ~~discount,~~per $0annum.~~05,~~ atThe aCompany ~~loss~~recognized oncompensation ~~conversion~~expense of $10150,~~700. On~~461 ~~February~~in 5,this ~~2013,~~transaction ~~WHC~~as ~~converted $3,673 of~~ the ~~note into 55,098~~ shares ofwere ~~common~~valued ~~stock (see Note 8)~~ at ~~a 50% discount,~~ $~~0.0666~~6, ~~at a loss on conversion of $7,346~~799. As ofThis ~~September 30, 2013, the~~ note ~~had~~is ain ~~balance of $0~~default.

On ~~December~~October 2122, 2012, ~~the~~Star ~~Company~~City ~~entered~~purchased ~~into a convertible note with Asher in the amount of~~ $5320,000. ~~The~~of ~~note~~the ~~matures~~Kline onnote. ~~September~~On 26February 11, 2013, ~~and~~Star ~~may~~City be converted at$20,000 ~~any~~of ~~time~~principal ~~after~~and ~~180~~$744 ~~days~~of ~~from~~accrued ~~the~~interest ~~date~~ of the note. ~~The~~into ~~interest~~414,871 ~~which~~shares ~~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~~(see ~~the~~Note ~~ten~~7) ~~trading~~at ~~day period ending on the day prior to conversion, less~~ a ~~discount of 42~~50%. ~~There~~discount, ~~was a~~ $30.05,~~000~~ ~~fee~~at to a ~~third~~loss ~~party~~on 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 $9162,~~379~~231. The ~~Company~~balance ~~therefore~~as ~~is accreting a premium~~ of ~~$38,379~~June ~~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~~30, ~~2013~~2014 ~~therefore~~is ~~the~~ $~~50,000 was recorded as a receivable as of December 31, 2012~~0.

On ~~December~~October 2823, 2012, ~~Southridge purchased $45,000 of~~ the ~~TOL~~Company ~~note~~entered ~~dated June 28, 2011. On January 28, 2013, Southridge converted $28,100 of the note~~ into ~~62,444,444 shares of common stock (see Note 8) at~~ a ~~50% discount, $0.09. A loss on conversion of $34,344 was recognized. On February 5, 2013, Southridge converted $7,650 of the~~ note ~~into~~with ~~127,500~~Kline ~~shares~~for ~~of common stock (see Note 8) at a 50% discount,~~ $~~0.06. A loss on conversion of $17~~75,~~850 was recognized. On February 6, 2013, Southridge converted $5,750 of the note into 115,~~000 ~~shares of common stock (see Note 8) at a 50% discount, $0~~.~~05.~~ AThe ~~loss on conversion of $17,250 was recognized. On March 5, 2013, Southridge converted $20,375 of the~~ note ~~into~~has ~~509,375~~an ~~shares~~interest ofrate ~~common stock (see Note 8) at a 50% discount, $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 8) at a 50~~12% ~~discount,~~and ~~$0.01.~~matured ~~A loss~~ on ~~conversion~~October ~~of $80~~31,~~988~~ ~~was recognized~~2012. ~~The~~ ~~principal~~This ~~balance of the~~ note asis ofin ~~September 30, 2013 was $0~~default.

~~eLAYAWAY~~On October 24, ~~INC~~2012, the Company entered into a convertible note with Asher in the amount of $37,500. The note matures on July 26, 2013 and ~~Subsidiaries~~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 7) 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 7) 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 7) 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 7) 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 7) 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 7) 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 7) 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 7) 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 7) 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 7) 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 7) at a conversion rate of $0.00037. A loss of $7,189 was recognized. As of June 30, 2014, the note has a principal balance of $650.

~~Notes~~On toNovember ~~Consolidated~~8, ~~Financial~~2012, ~~Statements~~Southridge purchased $50,000 of the Evolution note dated December 1, 2011. On December 5, 2012, Southridge converted $19,300 of the note into 160,834 shares of common stock at a 50% discount, $0.12, at a loss on conversion of $12,867 on the conversion. On December 11, 2012, Southridge converted $19,325 of the note into 161,042 shares of common stock at a 50% discount, $0.12, at a loss on conversion of $12,883 on the conversion. On January 3, 2013, Southridge converted $11,375 of the note into 94,792 shares of common stock (see Note 7) at a 50% discount, $0.12. A loss on conversion of $15,167 was recognized. On January 9, 2013, under the reset clause of the note, Southridge was issued an additional 18,959 shares of common stock (see Note 7) at a loss of $3,792. The note was fully converted as of June 30, 2014.

~~September~~On 30November 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 75,568 shares of common stock at a 50% discount, $0.12, 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 131,756 shares of common stock (see Note 7) at a 50% discount, $0.05, at a loss on conversion of $19,763. The balance as of June 30, 2014 is $0.

On February 11, 2013, under the reset clause of the note, Mauriello was issued an additional 71,392 shares of common stock (~~unaudited~~see Note 7) at a loss of $14,278. As of June 30, 2014, the note was fully converted.

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 189,584 shares of common stock (see Note 7) at a 50% discount, $1.20. 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 7) 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 7) 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 7) 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 7) 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 7) 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 7) 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 7) 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 7) 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 7) 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 7) 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 7) 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 7) 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 7) at a 50% discount, $0.01. A loss on conversion of $94,763 was recognized. As of June 30, 2014, the principal balance of the note was $0.

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 405,042 shares of common stock (see Note 7) at a 50% discount, $0.05. A loss on conversion of $66,608 was recognized. As of June 30, 2014, the principal balance of the note was $40,900.

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 47,192 shares of common stock at a 50% discount, $0.12, at a loss on conversion of $3,775 on the conversion. 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 7) 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 7) at a 50% discount, $0.05, at a loss on conversion of $13,350. As of June 30, 2014, the note had a balance of $0.

On December 13, 2012, WHC purchased $35,000 of the TOL note. On December 27, 2012, WHC converted $10,091 of the note into 89,144 shares of common stock (see Note 7) at a 50% discount, $0.114, 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 7) 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 7) 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 7) at a 50% discount, $0.0666, at a loss on conversion of $7,346. As of June 30, 2014, the note had a balance of $0.

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 as of December 31, 2012. On January 2, 2014, Asher converted $5,000 of principal into 21,739,130 shares of common stock (see Note 7) at loss of conversion of $3,696. On January 10, 2014, Asher converted $5,640 of principal into 47,000,000 shares of common stock (see Note 7) at loss of conversion of $8,460. On January 16, 2014, Asher converted $6,210 of principal into 51,750,000 shares of common stock (see Note 7) at loss of conversion of $9,315. On January 22, 2014, Asher converted $5,175 of principal into 51,750,000 shares of common stock (see Note 7) at loss of conversion of $10,350. On January 28, 2014, Asher converted $5,000 of principal into 21,739,130 shares of common stock (see Note 7) at loss of conversion of $10,350. On January 30, 2014, Asher converted $5,000 of principal into 21,739,130 shares of common stock (see Note 7) at loss of conversion of $10,350. On February 7, 2014, Asher converted $5,000 of principal into 21,739,130 shares of common stock (see Note 7) at loss of conversion of $2,070. On February 11, 2014, Asher converted $5,000 of principal into 21,739,130 shares of common stock (see Note 7) at loss of conversion of $7,245. On February 14, 2014, Asher converted $5,000 of principal and $2,120 of accrued interest into 21,739,130 shares of common stock (see Note 7) at loss of conversion of $2,257.

On December 28, 2012, Southridge purchased $45,000 of the TOL note dated June 28, 2011. On January 28, 2013, Southridge converted $28,100 of the note into 62,444,444 shares of common stock (see Note 7) at a 50% discount, $0.09. A loss on conversion of $34,344 was recognized. On February 5, 2013, Southridge converted $7,650 of the note into 127,500 shares of common stock (see Note 7) at a 50% discount, $0.06. A loss on conversion of $17,850 was recognized. On February 6, 2013, Southridge converted $5,750 of the note into 115,000 shares of common stock (see Note 7) at a 50% discount, $0.05. A loss on conversion of $17,250 was recognized. On March 5, 2013, Southridge converted $20,375 of the note into 509,375 shares of common stock (see Note 7) at a 50% discount, $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 7) at a 50% discount, $0.01. A loss on conversion of $80,988 was recognized. The principal balance of the note as of June 30, 2014 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.

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.

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

On January 31, 2013, the Company entered into a convertible note with Asher in the amount of $32,500. The note ~~matures~~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 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 $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 7). 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 7). 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 7). A loss on conversion of $16,500 was recognized.

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 87) 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 87) at a 50% discount, $0.028, at a loss of $41,642. As of ~~September~~June 30, ~~2013~~2014, 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 was in default after the date of this Report.

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 was in default after the date of this Report.

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 was in default after the date of this Report.

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 was in default after the date of this Report.

On ~~March~~June 3130, 2013, the Company entered into a note with Harmon for $15,000 in regards to accrued compensation from February 16, 2013 – ~~March~~June 3130, 2013. The note has an interest rate of 12% and matured on April 10, 2013. The note was in default after the date of this Report.

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 was in default after the date of this Report.

~~NOTE 5 – DERIVATIVES~~18

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.

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.

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 6.

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 6.

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.

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 6.

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.

On November 14, 2013, the Company entered into a consulting agreement with Lakeport for one year to provide various services. The agreement provides for compensation, in the form of a convertible note, in the amount of $5,000 per month. On January 1, 2014, February 1, 2014, March 1, 2014 and April 1, 2014, the Company issued four notes, each for $5,000. See Note 7 and 9.

On November 14, 2013, the Company entered into a consulting agreement with Thomas Carluccio, Jr. for one year to provide various services. The agreement provides for compensation, in the form of a convertible note, in the amount of $5,000 per month. On January 1, 2014, February 1, 2014, March 1, 2014 and April 1, 2014, the Company issued four notes, each for $5,000. See Note 7 and 9.

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. On January 1, 2014, February 1, 2014, March 1, 2014 and April 1, 2014, the Company issued four notes, each for $5,000. See Notes 6 and 9.

On January 1, 2014, the Company issued its monthly note to Lakeport for $5,000 under the same contractual terms. See disclosure on November 14, 2013 and Note 6.

On January 1, 2014, the Company issued its monthly note to Thomas Carluccio, Jr. for $5,000 under the same contractual terms. See disclosure on November 14, 2013.

On January 1, 2014, 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 6.

On January 2, 2014, 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 rate of $0.00023.

On January 2, 2014, the Company cancelled the 12,756,800 shares of common stock issued to Bruce Harmon on October 16, 2013 and issued a convertible promissory note (see Note 7). The note bears interest at 12% per annum and has a maturity date of March 2, 2014. The 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 of the inception of the note until conversion.

On January 10, 2014, Asher converted $5,640 of the note dated December 21, 2012, into 47,000,000 shares of common stock (see Note 7) at a discounted conversion rate of $0.00012.

On January 22, 2014, Asher converted $5,175 of the note dated December 21, 2012, into 51,750,000 shares of common stock (see Note 7) at a discounted conversion rate of $0.0001.

On January 28, 2014, Asher converted $5,175 of the note dated December 21, 2012, into 51,750,000 shares of common stock (see Note 7) at a discounted conversion rate of $0.0001.

On January 28, 2014, the Company issued ASC 76,000,000 shares of common stock under the settlement terms of the 3(a)(10) (see Note 7). The shares were valued at $15,200 based on a per share price of $0.0002.

On January 30, 2014, Asher converted $5,175 of the note dated December 21, 2012, into 51,750,000 shares of common stock (see Note 7) at a discounted conversion rate of $0.0001.

On February 1, 2014, the Company issued its monthly note to Lakeport for $5,000 under the same contractual terms. See disclosure on November 14, 2013 and Note 6.

On February 1, 2014, the Company issued its monthly note to Thomas Carluccio, Jr. for $5,000 under the same contractual terms. See disclosure on November 14, 2013.

On February 1, 2014, 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 6.

On February 5, 2014, the Company issued ASC 93,000,000 shares of common stock under the settlement terms of the 3(a)(10) (see Note 7). The shares were valued at $9,300 based on a per share price of $0.0001.

On February 7, 2014, Asher converted $3,105 of the note dated December 21, 2012, into 51,750,000 shares of common stock (see Note 7) at a discounted conversion rate of $0.00006.

On February 11, 2014, Asher converted $3,105 of the note dated December 21, 2012, into 51,750,000 shares of common stock (see Note 7) at a discounted conversion rate of $0.00006.

On February 13, 2014, the Company issued ASC 113,000,000 shares of common stock under the settlement terms of the 3(a)(10) (see Note 7). The shares were valued at $33,900 based on a per share price of $0.0003.

On February 14, 2014, Asher converted $1,265 of principal and $2,120 of accrued interest of the note dated December 21, 2012, into 56,416,667 shares of common stock (see Note 7) at a discounted conversion rate of $0.00006.

On February 20, 2014, Asher converted $9,100 of the note dated January 31, 2013, into 113,750,000 shares of common stock (see Note 7) at a discounted conversion rate of $0.00008.

On February 24, 2014, Asher converted $13,700 of the note dated January 31, 2013, into 114,166,667 shares of common stock (see Note 7) at a discounted conversion rate of $0.00012.

On February 24, 2014, the Company issued ASC 141,000,000 shares of common stock under the settlement terms of the 3(a)(10) (see Note 7). The shares were valued at $42,300 based on a per share price of $0.0003.

On February 26, 2014, Buko-Evolution converted $9,000 of the note dated October 26, 2011, into 56,250,000 shares of common stock (see Note 7) at a discounted conversion rate of $0.00016.

On February 27, 2014, Asher converted $9,700 of principal and $1,300 of accrued interest of the note dated January 31, 2013, into 91,666,667 shares of common stock (see Note 7) at a discounted conversion rate of $0.00012.

On March 1, 2014, the Company issued its monthly note to Lakeport for $5,000 under the same contractual terms. See disclosure on November 14, 2013 and Note 6.

On March 1, 2014, the Company issued its monthly note to Thomas Carluccio, Jr. for $5,000 under the same contractual terms. See disclosure on November 14, 2013.

On March 1, 2014, 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 6.

On March 4, 2014, the Company issued ASC 178,000,000 shares of common stock under the settlement terms of the 3(a)(10) (see Note 7). The shares were valued at $35,600 based on a per share price of $0.0002.

On March 6, 2014, KAJ sold the remaining principal balance of $10,000 and accrued interest of $8,200 to Southridge for $18,200 (see Note 7).

On March 17, 2014, Buko-Evolution converted $9,000 of the note dated October 26, 2011, into 56,250,000 shares of common stock (see Note 7) at a discounted conversion rate of $0.00016.

On March 12, 2014, the Company issued ASC 195,000,000 shares of common stock under the settlement terms of the 3(a)(10) (see Note 7). The shares were valued at $78,000 based on a per share price of $0.0004.

On March 17, 2014, Southridge converted $18,575 of the note acquired on March 6, 2014 into 185,750,000 shares of common stock.

On March 20, 2014, the Company issued ASC 239,000,000 shares of common stock under the settlement terms of the 3(a)(10) (see Note 7). The shares were valued at $191,200 based on a per share price of $0.0008.

On March 24, 2014, the Company entered into a convertible note with Southridge for $20,000. The note matures on February 28, 2015 and bears interest of 10% per annum. The conversion rate is the lesser of $0.002 or a 50% discount from the lowest closing bid price in the 30 trading days prior to the day of conversion.

On March 27, 2014, ASC purchased the Hansen note (see Note 7) dated December 12, 2011.

On April 1, 2014, the Company issued its monthly note to Lakeport for $5,000 under the same contractual terms. See disclosure on November 14, 2013 and Note 6.

On April 1, 2014, the Company issued its monthly note to Thomas Carluccio, Jr. for $5,000 under the same contractual terms. See disclosure on November 14, 2013.

On April 1, 2014, 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 6.

On May 1, 2014, the Company issued its monthly note to Lakeport for $5,000 under the same contractual terms. See disclosure on November 14, 2013 and Note 6.

On May 1, 2014, the Company issued its monthly note to Thomas Carluccio, Jr. for $5,000 under the same contractual terms. See disclosure on November 14, 2013.

On May 1, 2014, 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 6.

On May 13, 2014, the Company entered into a convertible note with Southridge for $10,000. The note matures on April 30, 2015 and bears interest of 10% per annum. The conversion rate is the lesser of $0.002 or a 50% discount from the lowest closing bid price in the 30 trading days prior to the day of conversion.

On June 1, 2014, the Company issued its monthly note to Lakeport for $5,000 under the same contractual terms. See disclosure on November 14, 2013 and Note 6.

On June 1, 2014, the Company issued its monthly note to Thomas Carluccio, Jr. for $5,000 under the same contractual terms. See disclosure on November 14, 2013.

On June 1, 2014, 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 6.

NOTE 4 – 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 ~~September~~June 30, ~~2013~~2014 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			June 30, 2014			December 31, 2013
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	%

~~eLAYAWAY,~~The ~~INC.~~following reflects the initial fair value on the note inception date and ~~Subsidiaries~~changes in fair value through June 30, 2014:

Notes to Consolidated Financial Statements

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		(368,762	)
Embedded conversion option derivative liability fair value on December 31, 2012		64,285
Change in fair value for the year ended December 31, 2013 – (gain) loss		(10,715	)
Embedded conversion option derivative liability fair value on December 31, 2013		53,570
Change in fair value for the period ended June 30, 2014 – (gain) loss		(53,570	)
Embedded conversion option derivative liability fair value on June 30, 2014	$	-

~~September 30, 2013~~23

~~(unaudited)~~NOTE 5 – COMMITMENTS AND CONTINGENCIES

	Note Inception Date			September 30, 2013			December 31, 2012
Volatility		251% - 257	%		307	%		251	%
Expected Term	0.17 - 0.5 years			0.17 - 0.67 years			0.08 – 0.46 years
Risk Free Interest Rate		0.33	%		0.27	%		0.315	%

The following reflects the initial fair value on the note inception date and changes in fair value through September 30, 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		(368,762	)
Embedded conversion option derivative liability fair value on December 31, 2012		64,285
Change in fair value for the nine months ended September 30, 2013 – (gain) loss		(10,715	)
Embedded conversion option derivative liability fair value on September 30, 2013	$	53,570

NOTE 6 – COMMITMENTS AND CONTINGENCIES

Legal Matters

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. On ~~or about May 6, 2012, a Company employee received a telephone call from Mr. Salie stating that the Company would have to answer for his termination.~~ The Company firmly believes that its actions were justified, and nodefendable. ~~legal~~No ~~proceeding~~indication has been ~~filed~~that litigation is threatened or pending.

In October 2012, Douglas Pinard, a former owner of CSP ~~(see Note 2~~, ~~4, 6 and 8),~~ 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. OnThe ~~June~~Company ~~19,~~has ~~2013,~~not ~~Plantiffs’~~responded ~~Motion~~to ~~For~~that ~~Default~~lawsuit. ~~Judgment~~In ~~was~~October ~~filed. On~~2012, ~~August~~the ~~30,~~Company ~~2013,~~offered Dr. Salie a ~~default~~principal ~~judgment~~and ~~was~~interest ~~granted~~repayment toplan utilizing a third party, but Dr. Salie ~~against~~rejected the Company’s offer. ~~The~~ ~~lawsuit~~On ~~was~~August ~~filed against eLayaway~~30, ~~Inc.~~2013, a ~~Florida~~judgment ~~corporation,~~was ~~which~~awarded ~~does~~to ~~not~~Dr. ~~exist~~Salie for $565,696, ~~whereas~~collectively ~~the~~for ~~judgment~~all ~~was~~plaintiffs, ~~issued~~additional ~~erroneously~~interest ~~against~~from ~~eLayaway,~~January ~~Inc.~~25, a2013 ~~Delaware~~on ~~corporation,~~the ~~which~~principal ~~was~~balances ~~not~~until ~~the~~full ~~corporation~~payment ~~named~~is inreceived, and legal fees for the ~~lawsuit~~plaintiff.

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 ~~their~~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 ~~majority~~significant portion of the Company’s liabilities ~~thereby putting the Company in a better position to facilitate growth~~. ~~The~~ ~~amount of the proposed purchases is approximately $1.2 million.~~ A fairness hearing was held on May 14, 2013 and the ~~joint~~arrangement ~~motion~~ was approved.

Other

On March 30, 2012, the Company and Southridge entered into an Equity Purchase Agreement. Pursuant to this Equity Purchase Agreement, the Investor shall commit to purchase up to Ten Million Dollars ($10,000,000) of our common stock over the course of twenty four (24) months commencing on the agreement date but the company may not put a purchase to Southridge until the effective date of the initial Registration Statement (as defined below) covering the Registrable Securities (as defined below) pursuant to the Equity Purchase Agreement. The put option price is ninety-two percent (92%) of the average of two lowest closing prices of any two applicable trading days during the five (5) trading day period commencing the date a put notice is delivered to the Investor in a manner provided by the Equity Purchase Agreement.

eLAYAWAY, INC. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2013

(unaudited)

The “Registrable Securities” include the Put Shares, any Blackout Shares (each as defined in the Equity Purchase Agreement) and any securities issued or issuable with respect to any of the foregoing by way of exchange, stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise.

We are obligated to file a registration statement (the “Registration Statement”) with the U.S. Securities and Exchange Commission (the “SEC’) to cover the Registrable Securities after the execution of the Equity Purchase Agreement. The amount of the Registrable Securities required to be included in the initial Registration Statement shall be no less than 100% of the maximum amount of common stock permitted by the SEC to be included in a Registration Statement pursuant to Rule 415 (the “Rule 415 Amount”) promulgated under the Securities Act of 1933, as amended (the “Act”), and shall file additional Registration Statement(s) to register additional Rule 415 Amounts until all the Registrable Securities are registered (see Note 10).

In connection with the Equity Purchase Agreement, the Company paid the Investor a fee of $25,000 as a convertible promissory note which has interest of 8% per annum and matures on April 1, 2013 (see Note 4).

NOTE 76 – RELATED PARTIES

~~Bruce~~Sergio ~~Harmon~~Pinon, ~~former~~CEO, CFO and Chairman of the Company, is a note holder of the Company (see Note 43). ~~Line~~ ofNotes ~~credit and notes~~ payable of $~~519~~40,~~738~~000 and $~~427~~10,~~590~~000 was due ~~to our CFO’s company and himself personally~~ at ~~September~~June 30, ~~2013~~2014 and December 31, ~~2012~~2013, respectively~~, for advances to the Company~~. At ~~September~~June 30, ~~2013~~2014 and December 31, ~~2012~~2013, the Company had ~~accounts payable to Mr. Harmon of $0 and $14,681, respectively, and~~ accrued interest of $672,~~218~~882 and $330,~~563,~~ respectively.

OnBruce ~~April 8~~Harmon, ~~2013,~~former ~~Harmon~~CFO ~~converted~~and 29Chairman of the Company,~~063~~ ~~shares~~is a note holder of ~~Series~~the ECompany ~~preferred~~(see ~~stock~~Note 3). Line of credit and ~~49,242~~notes ~~shares~~payable of ~~Series~~$700,598 Fand ~~preferred~~$562,258 ~~stock~~was due to our former CFO’s company and himself personally at June 30, ~~collectively~~2014 onand aDecember ~~1:1~~31, ~~basis~~2013, ~~into~~respectively, 78for advances to the Company. At June 30,~~3055~~ ~~shares~~2014 ofand ~~common~~December ~~stock~~31, ~~(see~~2013, ~~Note~~the 8)Company had accrued interest of $56,131 and $18,475, respectively.

On ~~April~~March 86, 2013, ~~Pinon~~the ~~converted~~Board ~~1,256~~of ~~shares~~Directors approved the grant of ~~Series~~common Estock ~~preferred~~to the officers and directors of the Company in consideration of the dilution of the Company’s outstanding common stock. onMr. aPinon ~~1:1~~and ~~basis~~Mr. ~~into~~Harmon, ~~1256~~the CEO and former CFO, respectively, were each granted 250,000 shares of restricted common stock. ~~(see~~See Note 8)7.

~~NOTE~~On 8March –6, ~~STOCKHOLDERS’~~2013, ~~DEFICIENCY~~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 was a director of the Company. See Note 7.

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 7).

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 7.

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 7.

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 7).

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 7). 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, April 1, 2014, May 1, 2014 and June 1, 2014, each for $5,000. See Notes 3 and 9.

On November 14, 2013, the Company entered into a consulting agreement with Bruce Harmon for one year to provide various services. 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, April 1, 2014, May 1, 2014 and June 1, 2014, each for $5,000. See Notes 3 and 9.

On May 2, 2014, the Company issued 10 shares of Series H Preferred Stock to Sergio Pinon in exchange for services. The shares were valued at $0.003.

NOTE 7 – 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, 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 $2,000.00 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.

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 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.

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 the26

eLAYAWAY, INC. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2013

(unaudited)

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.

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 March 26, 2012, as approved by the Board of Directors, the Company issued 5,953 shares of the Series E Preferred Stock to Susan Jones in exchange for the conversion of accrued payroll in the amount of $30,000. The Series E Preferred Stock is immediately convertible into common stock, therefore the preferred shares are valued at the $5.04 per share closing price of the common stock on the date prior to this transaction. Accordingly, there is no beneficial conversion value recorded. These shares were converted into common stock on April 4, 2013.

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 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.

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 Corporation Law. The Certificate of Designation was filed with the Delaware Department of State on January 22, 2013. The Certificate of Designation created 5,000 shares of Series G Preferred Stock. Each holder of Series G 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 G Preferred Stock is convertible into. Each share of Series G Preferred 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 G 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 G Preferred Stock will have a dilutive effect on the distributions available to the holders of the Company’s common stock.

On February 25, 2013, the Company issued 5,000 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 $0.12 per share closing price of the common stock on the date of this transaction or $600.

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.

eLAYAWAY, INC. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2013

(unaudited)

On April 8, 2013, Sergio Pinon (“Pinon”) converted 1,256 shares of Series E preferred stock on a 1:1 basis into 1,256 shares of common stock.

On August 13, 2013, as 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.

On February 28, 2014, the Company’s Board of Directors approved the filing of a Certificate of Designation of the Preferences and Rights of Series H 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 H 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 April 8, 2014. The Certificate of Designation created 10 shares of Series H Preferred Stock. Each holder of Series H 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 H Preferred Stock is convertible into. Each share of Series H Preferred Stock is convertible, at the option of the holder of the Series H Preferred Stock, into one share of the Company’s common stock. Shares of the Series H 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 H Preferred Stock will be entitled to five billion (5,000,000,000) 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 H 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 H Preferred Stock). Due to the Enhanced Voting Rights, following the issuance of shares of Series H Preferred Stock, the holders of the Series H Preferred Stock may be able to exercise voting control over the Company. In such case, the holders of the Series H 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 H 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 H Preferred Stock will have a dilutive effect on the distributions available to the holders of the Company’s common stock. See Note 9.

On May 2, 2014, the Company issued 10 shares of Series H Preferred Stock to Sergio Pinon in exchange for services. The shares were valued at $0.003.

Common Stock

The Company is authorized to issue 5,000,000,000 shares of common stock, as amended on April 30, 2012, May 30, 2012, September 27, 2012, and February 22, 2013. The common stock is voting.

On August 12, 2013, the Company received notification from FINRA that the reverse stock split of our common stock at a ratio of 1:200 had been approved. The corporate action took effect at the open of business on August 13, 2013.

On January 3, 2013, 89,144 shares were issued to WHC which were recorded as issuable as of December 31, ~~2013~~2012 (see Note 43).

On January 3, 2013, due to a reset clause in the note acquired on November 8, 2012 (see Note 43), Southridge was issued an additional 94,792 shares of common stock.

~~On January 3, 2013, Southridge converted $11,375 of the note dated November 8, 2012, into 94,792 shares of common stock (see Note 4) at a 50% discount, $0.12. A loss on conversion will be recognized.~~28

On January 3, 2013, Southridge converted $2211,~~750~~375 of the note dated November 308, 2012, into ~~189~~94,~~584~~792 shares of common stock (see Note 43) at a 50% discount, $0.12. A loss on conversion will be recognized. ~~Due to the deficiency of available shares to be issued at the time, the Company issued 60,000 shares on January 10, 2013 and the remaining 12,984 on January 24, 2013.~~

On January 83, 2013, ~~due~~Southridge toconverted a$22,750 ~~reset~~of ~~clause in~~ the note ~~acquired~~dated onNovember ~~September 26~~30, 2012, into 189,584 shares of common stock (see Note 43) at a 50% discount, ~~Star~~$0.12. ~~City~~A ~~was~~loss on conversion will be recognized. Due to the deficiency of available shares to be issued anat ~~additional~~the 18time,~~771~~ the Company issued 60,000 shares ofon ~~common~~January ~~stock~~10, 2013 and the remaining 12,984 on January 24, 2013.

On January 98, 2013, due to a reset clause in the note acquired on ~~November~~September 826, 2012 (see Note 43), ~~Southridge~~Star City was issued an additional 18,~~959~~771 shares of common stock.

On January 119, 2013, ~~101,790~~due ~~shares of common stock were issued~~ to ~~WHC for~~ a ~~conversion~~reset ofclause ain the note ~~payable~~acquired inon ~~December~~November 8, 2012 (see Note 43), ~~which~~Southridge was ~~recorded~~issued asan ~~issuable~~additional as18,959 shares of ~~December~~common ~~31, 2012~~stock.

On January 1811, 2013, ~~WHC converted $10~~101,~~700~~790 shares of ~~the~~common ~~note~~stock ~~dated~~were ~~December~~issued ~~13,~~to ~~2012,~~WHC ~~into~~for ~~107,000~~a ~~shares~~conversion of ~~common~~a ~~stock~~note payable in December 2012 (see Note 43) atwhich awas ~~50%~~recorded ~~discount~~as issuable as of December 31, $02012.~~05.~~

On January 2318, 2013, ~~Marina~~WHC converted $1510,~~000~~700 of ~~principal and $246.58 of accrued interest of~~ the note dated December 513, 2012, into ~~152~~107,~~466~~000 shares of common stock (see Note 43) at a 50% discount, $0.05.

On January 2423, 2013, ~~71,392~~Marina ~~shares~~converted $15,000 of ~~common~~principal ~~stock~~and ~~were~~$246.58 ~~issued~~of toaccrued ~~Mauriello~~interest ~~in regards to a conversion~~ of athe note ~~payable~~dated on December 135, 2012, ~~(see~~into ~~Note~~152,466 4)shares ~~which~~of ~~were~~common ~~recorded~~stock as(see ~~issuable~~Note as3) ofat ~~December~~a 3150% discount, ~~2012~~$0.05.

On January 2824, 2013, ~~Southridge converted $28~~71,~~100~~392 shares of ~~the~~common ~~note~~stock ~~dated~~were ~~December~~issued ~~28,~~to ~~2012,~~Mauriello ~~into~~in ~~312,223~~regards ~~shares~~to a conversion of ~~common~~a ~~stock~~note payable on December 13, 2012 (see Note 43) atwhich awere ~~50%~~recorded ~~discount~~as issuable as of December 31, $02012.~~09.~~

On January 28, 2013, ~~due~~Southridge toconverted a$28,100 ~~reset~~of ~~clause in~~ the note ~~acquired~~dated onDecember ~~September 26~~28, 2012, ~~(see~~into ~~Note 4)~~312,223 ~~Star~~shares ~~City~~of ~~was~~common ~~issued~~stock an(see ~~additional~~Note ~~18,771~~3) ~~shares~~at ofa ~~common~~50% ~~stock~~discount, $0.09.

On January 28, 2013, due to a reset clause in the note acquired on ~~November~~September 3026, 2012 (see Note 73), ~~Southridge~~Star City was issued an additional 2518,~~917~~771 shares of common stock.

On ~~February~~January 428, 2013, due to a reset clause in the note acquired on ~~January~~November 230, ~~2013~~2012 (see Note 43), Southridge was issued an additional 8925,~~207~~917 shares of common stock.

On February 54, 2013, ~~Southridge~~due ~~converted~~to ~~$7,650~~a ofreset clause in the note ~~dated~~acquired ~~December~~on ~~28,~~January ~~2012~~2, ~~into~~2013 ~~127,500 shares of common stock~~ (see Note 43), atSouthridge awas ~~50%~~issued ~~discount~~an additional 89,207 $0shares of common stock.~~06.~~

20On February 5, 2013, Southridge converted $7,650 of the note dated December 28, 2012, into 127,500 shares of common stock (see Note 3) at a 50% discount, $0.06.

~~eLAYAWAY~~On February 5, ~~INC.~~2013, ~~and~~WHC ~~Subsidiaries~~converted $3,673 of the note dated December 13, 2012, into 55,098 shares of common stock (see Note 3) at a 50% discount, $0.0334.

~~Notes~~On toFebruary ~~Consolidated~~6, ~~Financial~~2013, ~~Statements~~Southridge converted $5,750 of the note dated December 28, 2012, into 115,000 shares of common stock (see Note 3) at a 50% discount, $0.05.

~~September 30, 2013~~29

On February 7, 2013, SGI Group converted $6,419 of principal and $168.80 of accrued interest of the note dated November 20, 2012, into 131,756 shares of common stock (~~unaudited~~see Note 3) at a 50% discount, $0.05.

On February 511, 2013, ~~WHC~~due ~~converted~~to ~~$3,673~~a ofreset clause in the note ~~dated~~acquired ~~December~~on 13November 20, 2012, ~~into 55,098 shares of common stock~~ (see Note 43), atMauriello awas ~~50%~~issued ~~discount~~an additional 71,392 $0shares of common stock.~~0334.~~

On February 611, 2013, ~~Southridge~~Sazer converted $5,~~750~~250 of principal and $145.32 of accrued interest of the note dated ~~December~~November 2820, 2012, into ~~115~~53,~~000~~954 shares of common stock (see Note 43) at a 50% discount, $0.05.

On February 711, 2013, ~~SGI~~Southridge ~~Group~~ converted $614,~~419~~400 of ~~principal and $168.80 of accrued interest of~~ the note dated ~~November~~December 204, 2012, into ~~131~~405,~~756~~042 shares of common stock (see Note 43) at a 50% discount, $0.05.

On February 11, 2013, ~~due~~Star toCity aconverted ~~reset~~$20,000 ~~clause~~of inprincipal ~~the~~and ~~note~~$743.54 ~~acquired~~of onaccrued ~~November~~interest ~~20,~~of ~~2012~~the ~~(see~~note ~~Note~~dated 4)October 22, ~~Mauriello~~2012, ~~was~~into ~~issued an additional 71~~414,~~392~~871 shares of common stock (see Note 3) at a 50% discount, $0.05.

On February 1120, 2013, ~~Sazer~~Southridge converted $520,~~250~~255 of ~~principal and $145.32 of accrued interest of~~ the note dated November 2030, 2012, into 53405,~~954~~100 shares of common stock (see Note 43) at a 50% discount, $0.05.

On February 1126, 2013, ~~Southridge~~Momoma Capital converted the $14,~~400~~925 ~~of the note dated December 4, 2012,~~ into ~~405~~213,~~042~~210 shares of common stock ~~(see Note 4)~~ at a ~~50%~~ discount of 30%, $0.0507 (see Note 3).

On February 1127, 2013, ~~Star~~due ~~City~~to ~~converted~~a ~~$20,000~~reset ofclause ~~principal~~in ~~and $743.54 of accrued interest of~~ the note ~~dated~~acquired ~~October~~on 22November 30, 2012, ~~into 414,871 shares of common stock~~ (see Note 43), atSouthridge awas ~~50%~~issued ~~discount~~an additional 101,275 $0shares of common stock.~~05.~~

On February 2027, 2013, Southridge converted $2012,~~255~~150 of the note dated November 30, 2012, into ~~405~~303,~~100~~750 shares of common stock (see Note 43) at a 50% discount, $0.0504.

On ~~February~~March 265, 2013, ~~Momoma~~Southridge ~~Capital~~ converted $20,375 of the ~~$14~~note dated December 28,~~925~~ 2012, into ~~213~~509,~~210~~375 shares of common stock at(see aNote ~~discount~~3) ofat 30a 50% discount, $0.~~07 (see Note 4)~~04.

On ~~February~~March 276, 2013, ~~due~~the Board of Directors approved the grant of common stock to athe ~~reset~~officers ~~clause~~and directors of the Company in consideration of the ~~note~~dilution ~~acquired~~of onthe ~~November~~Company’s ~~30,~~outstanding ~~2012~~common ~~(see~~stock. ~~Note~~Mr. 4)Pinon and Mr. Harmon, ~~Southridge~~the ~~was~~CEO ~~issued~~and anCFO, ~~additional~~respectively, ~~101~~were each granted 250,~~275~~000 shares of restricted common stock. The issuance was valued at $30,000 each for Mr. Pinon and Mr. Harmon. See Note 6.

On ~~February~~March 276, 2013, ~~Southridge~~the ~~converted~~Board ~~$12,150~~ of Directors approved the ~~note~~compensation ~~dated~~for ~~November~~2013 30for Vincent & Rees, ~~2012~~legal counsel for the Company, ~~into~~thereby ~~303~~granting Vincent & Rees 250,~~750~~000 shares of restricted common stock. ~~(see~~The ~~Note~~issuance 4)was valued at $30,000. Mr. Rees was a ~~50%~~director ~~discount,~~of $0the Company.~~04.~~

On March 512, 2013, Southridge converted $2024,~~375~~430 of the note dated ~~December~~November 2830, 2012, into ~~509~~610,~~375~~750 shares of common stock (see Note 43) at a 50% discount, $0.04.

On March 618, 2013, ~~the~~due ~~Board of Directors approved the grant of common stock~~ to ~~the~~a ~~officers~~reset ~~and~~clause ~~directors of the Company~~ in ~~consideration of~~ the ~~dilution~~note ofacquired ~~the~~on ~~Company’s~~November ~~outstanding common stock. Mr. Pinon and Mr. Harmon~~30, ~~the~~2012 ~~CEO~~(see ~~and~~Note ~~CFO~~3), ~~respectively,~~Southridge ~~were~~was ~~each~~issued ~~granted~~an ~~250~~additional 203,~~000~~584 shares of ~~restricted~~ common stock.

On March 618, 2013, ~~the~~Southridge ~~Board~~converted $12,990 of ~~Directors approved~~ the ~~compensation~~note ~~for~~dated ~~2013~~November ~~for Vincent & Rees~~30, ~~legal counsel for the Company~~2012, ~~thereby~~into ~~granting Vincent & Rees 250~~433,000 shares of ~~restricted~~ common stock~~. Mr.~~ ~~Rees~~(see isNote a3) ~~director~~at ofa ~~the~~50% ~~Company~~discount, $0.03.

On March 1222, 2013, Southridge converted $2419,~~430~~100 of the note dated November 30, 2012, into ~~610~~636,~~750~~667 shares of common stock (see Note 43) at a 50% discount, $0.0403.

~~On March 18, 2013, due to a reset clause in the note acquired on November~~ 30~~, 2012 (see Note 4), Southridge was issued an additional 203,584 shares of common stock.~~

On March 1828, 2013, ~~Southridge~~KAJ converted $1215,~~990~~000 of the note dated ~~November~~January 30, 2012, into ~~433~~535,~~000~~715 shares of common stock (see Note 43) at a 5030% discount, $0.03028.

On ~~March~~April 221, 2013, Southridge converted $1913,~~100~~010 of the note dated November 30, 2012, into ~~636~~650,~~667~~500 shares of common stock (see Note 43) at a 50% discount, $0.0302.

On ~~March~~April 281, 2013, ~~KAJ~~due ~~converted~~to ~~$15,000~~a ofreset clause in the note ~~dated~~acquired ~~January~~on November 30, 2012, ~~into 535,715 shares of common stock~~ (see Note 43), atSouthridge awas ~~30%~~issued ~~discount~~an additional 318,334 $0shares of common stock.~~028.~~

21On April 3, 2013, Momoma Capital converted $11,900 of principal and $1,658 of accrued interest of the note dated February 26, 2013, into 484,209 shares of common stock (see Note 3) at a 50% discount, $0.028.

eLAYAWAY, INC. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2013

(unaudited)

On April 1, 2013, Southridge converted $13,010 of the note dated November 30, 2012, into 650,500 shares of common stock (see Note 4) at a 50% discount, $0.02.

On April 1, 2013, due to a reset clause in the note acquired on November 30, 2012 (see Note 4), Southridge was issued an additional 318,334 shares of common stock.

On April 3, 2013, Momona Capital, LLC converted $11,900 of principal and $1,658 of accrued interest of the note dated February 26, 2013, into 484,209 shares of common stock (see Note 4) at a 50% discount, $0.028.

On April 4, 2013, Susan Jones was issued 10,000 shares of common stock in exchange for 1,190,476 of Series E preferred stock. The Series E preferred stock had super voting rights and, to compensate Susan Jones for those super voting rights, the Company issued the additional 4,047 shares of common stock.

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 6.

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 6.

On April 10, 2013, Southridge converted $9,440 of the note dated November 30, 2012, into 944,000 shares of common stock (see Note 43) at a 50% discount, $0.01.

On April 15, 2013, Southridge converted $11,125 of the note dated November 30, 2012, into 1,112,500 shares of common stock (see Note 43) at a 50% discount, $0.01.

On April 18, 2013, the board of directors of the Company approved a reverse split proposed to be between an exchange rate of 1:100 up to 1:250. A majority of the shareholders subsequently approved the transaction. The Company appropriately filed with FINRA to effect the reverse split at a rate of 1:200.

On April 19, 2013, the Company approved the 2013 Stock Option Plan which authorized 4,750,000 shares of common stock to be used as S-8 shares.

On April 22, 2013, Southridge converted $9,975 of the note dated November 30, 2012, into 997,500 shares of common stock (see Note 43) at a 50% discount, $0.01.

On April 25, 2013, ~~326~~1,~~141~~533,~~667~~709 shares of S-8 common stock were issued to Pinon (see Note 6), Harmon (see Note 6), Thomas Carluccio, Jr. (“Carluccio”), and Melissa Valido (“Valido”) (575,000, 575,000, 217,375 and 166,334 shares, respectively), in lieu of payroll for April and May 2013. The issuances were recorded at a cost of $20,000, $20,000, $7,500, and $5,000, respectively.

On May 4, 2013, Southridge converted $8,525 of the note dated December 28, 2012, into 852,500 shares of common stock (see Note 43) at a 50% discount, $0.01.

On May 1, 2013, Asher converted $5,800 of the note dated October 24, 2012, into 483,334 shares of common stock (see Note 43) at a 42% discount, $0.012.

~~On May 17, 2013, Buko-Evolution, LLC converted $10,000 of the note dated October 26, 2011, into 938,287 shares of common stock (see Note 4) at a 50% discount, $0.01.~~31

On May 2217, 2013, 3Buko-Evolution,~~119,292~~ ~~shares~~LLC ofconverted ~~S-8 common stock were issued to Pinon~~$10,000 ~~Harmon,~~of ~~Carluccio,~~the ~~and~~note ~~Valido~~dated ~~(1,099,886,~~October 126,~~099,886,~~ ~~511~~2011,~~447,~~ ~~and~~into ~~408~~938,~~074~~287 shares, ~~respectively), in lieu~~ of ~~payroll~~common ~~for~~stock ~~June~~(see ~~and~~Note ~~July~~3) ~~2013. Harmon~~at ~~had his 1,099,886 shares cancelled to facilitate~~ a ~~note~~50% ~~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~~discount, ~~2013~~$0.01.

On ~~September~~May 1222, 2013, ~~the Company issued 10~~3,~~000~~119,~~000~~292 shares of S-8 common stock towere ~~Sergio~~issued to Pinon (see Note 6), ~~the~~Harmon ~~Company’s~~(see ~~CEO~~Note 6), Carluccio, and ~~director~~Valido (1,099,886, as1,099,886, ~~compensation~~511,447, ~~for~~and ~~his~~408,074 ~~services~~shares, respectively), in lieu of payroll for June and July 2013. ~~The~~ Harmon had his 1,099,886 shares ~~were~~cancelled ~~recorded~~to atfacilitate ana ~~expense~~note conversion by a third party as the remaining available shares from the authorized amount of ~~$55~~shares were not sufficient. Harmon’s shares were issued on August 15,~~000~~ 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 6). The shares were recorded at an expense of $55,000.

On September 12, 2013, the Company issued 6,000,000 shares of common stock to Thomas Carluccio, Jr. as compensation for his services in lieu of payroll. The shares were recorded at an expense of $33,000.

eLAYAWAY, INC. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2013

(unaudited)

On September 12, 2013, the Company issued 4,000,000 shares of common stock to Melissa Valido as compensation for his services in lieu of payroll. The shares were recorded at an expense of $22,000.

On September 15, 2013, Southridge converted $1,885 of principal and $314 of accrued interest of the note dated December 4, 2012, into 2,199,091 shares of common stock (see Note 43) at a 50% discount, $0.001.

On September 25, 2013, Southridge converted $1,855 of principal and $92 of accrued interest of the note dated December 4, 2012, into 2,212,450 shares of common stock (see Note 43) at a 50% discount, $0.0009.

On October 3, 2013, Southridge converted $1,585 of principal and $52 of accrued interest of the note dated December 4, 2012, into 2,406,639 shares of common stock (see Note 3).

On October 4, 2013, Hansen converted $1,500 of the note dated December 12, 2011, into 1,004,689 shares of common stock (see Note 3) at a discounted conversion price of $0.00149.

On October 9, 2013, Asher converted $1,000 of the note dated October 24, 2012, into 1,000,000 shares of common stock (see Note 3) at a discounted conversion price of $0.001.

On October 11, 2013, Southridge converted $1,563 of principal and $73 of accrued interest of the note dated December 4, 2012, into 2,405,268 shares of common stock (see Note 3).

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. See Note 6.

On October 15, 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 shares were valued at $25,000.

On October 16, 2013, the Company issued 12,756,800 shares of common stock to Bruce Harmon 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.

On October 18, 2013, Southridge converted $6,530 of principal and $53 of accrued interest of the note dated December 4, 2012, into 13,714,282 shares of common stock (see Note 3).

On October 25, 2013, Southridge converted $3,805 of principal and $38 of accrued interest of the note dated December 4, 2012, into 13,724,384 shares of common stock (see Note 3).

On October 28, 2013, Asher converted $2,300 of the note dated October 24, 2012, into 4,791,667 shares of common stock (see Note 3) at a discounted conversion price of $0.00048.

On October 31, 2013, the Company entered into a settlement with Dr. Jason Cohen in regards to his 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. The shares issued were valued at $25,000.

On November 1, 2013, Southridge converted $3,265 of principal and $29 of accrued interest of the note dated December 4, 2012, into 13,725,295 shares of common stock (see Note 3) at a 50% discount, $0.00024.

On November 8, 2013, Asher converted $1,695 of the note dated October 24, 2012, into 4,842,857 shares of common stock (see Note 3) at a discounted conversion price of $0.00035.

On November 12, 2013, Southridge converted $2,710 of principal and $34 of accrued interest of the note dated December 4, 2012, into 13,719,376 shares of common stock (see Note 3) at a 50% discount, $0.0002.

On November 13, 2013, Asher converted $3,150 of the note dated October 24, 2012, into 10,862,069 shares of common stock (see Note 3) at a discounted conversion price of $0.00029.

On November 18, 2013, Asher converted $2,925 of the note dated October 24, 2012, into 10,833,333 shares of common stock (see Note 3) at a discounted conversion price of $0.00027.

On November 20, 2013, Southridge converted $2,180 of principal and $18 of accrued interest of the note dated December 4, 2012, into 13,734,430 shares of common stock (see Note 3) at a 50% discount, $0.00016.

On November 20, 2013, the Company ordered the issuance of 115,155,000 shares of common stock to Harmon for the conversion of $69,093 of accrued interest for various notes payable to Harmon and Lakeport, a company solely owned by Harmon. This conversion was approved by the board of directors on September 15, 2013 for interest through that date. The order was not processed until November 20, 2013.

On November 20, 2013, Asher converted $2,925 of the note dated October 24, 2012, into 10,833,333 shares of common stock (see Note 3) at a discounted conversion price of $0.00027.

On November 22, 2013, Southridge converted $2,192 of principal and $3 of accrued interest of the note dated December 4, 2012, into 13,718,399 shares of common stock (see Note 3) at a 50% discount, $0.00016.

On November 25, 2013, Southridge converted $2,285 of principal and $2 of accrued interest of the note dated December 4, 2012, into 14,295,336 shares of common stock (see Note 3) at a 50% discount, $0.00016.

On November 25, 2013, Asher converted $2,925 of the note dated October 24, 2012, into 10,833,333 shares of common stock (see Note 3) at a discounted conversion price of $0.00027.

On December 2, 2013, Asher converted $8,060 of the note dated October 24, 2012, into 21,783,784 shares of common stock (see Note 3) at a discounted conversion price of $0.00037.

On December 5, 2013, Asher converted $3,150 of the note dated October 24, 2012, into 9,000,000 shares of common stock (see Note 3) at a discounted conversion price of $0.00035.

On December 6, 2013, the Company issued ASC 30,000,000 under the settlement terms of the 3(a)(10) (see Note 5). The shares were valued at $15,000 based on the per share price of $0.0005.

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

On December 16, 2013, Asher converted $5,000 of the note dated December 21, 2012, into 21,739,130 shares of common stock (see Note 3) at a discounted conversion price of $0.00023.

On December 19, 2013, Asher converted $5,000 of the note dated December 21, 2012, into 21,739,130 shares of common stock (see Note 3) at a discounted conversion price of $0.00023.

On December 20, 2013, the Company issued ASC 39,000,000 under the settlement terms of the 3(a)(10) (see Note 5). The shares were valued at $15,600 based on a per share price of $0.0004.

On January 2, 2014, the Company cancelled the 12,756,800 shares of common stock issued to Bruce Harmon on October 16, 2013 and issued a convertible promissory note (see Note 3).

On January 2, 2014, Asher converted $5,000 of the note dated December 21, 2012, into 21,739,130 shares of common stock (see Note 3) at a discounted conversion rate of $0.00023.

On January 10, 2014, Asher converted $5,640 of the note dated December 21, 2012, into 47,000,000 shares of common stock (see Note 3) at a discounted conversion rate of $0.00012.

On January 16, 2014, Asher converted $6,210 of the note dated December 21, 2012, into 51,750,000 shares of common stock (see Note 3) at a discounted conversion rate of $0.00012.

On January 22, 2014, Asher converted $5,175 of the note dated December 21, 2012, into 51,750,000 shares of common stock (see Note 3) at a discounted conversion rate of $0.0001.

On January 28, 2014, Asher converted $5,175 of the note dated December 21, 2012, into 51,750,000 shares of common stock (see Note 3) at a discounted conversion rate of $0.0001.

On January 28, 2014, the Company issued ASC 76,000,000 shares of common stock under the settlement terms of the 3(a)(10) (see Note 5). The shares were valued at $15,200 based on a per share price of $0.0002.

On January 30, 2014, Asher converted $5,175 of the note dated December 21, 2012, into 51,750,000 shares of common stock (see Note 3) at a discounted conversion rate of $0.0001.

On February 5, 2014, the Company issued ASC 93,000,000 shares of common stock under the settlement terms of the 3(a)(10) (see Note 5). The shares were valued at $9,300 based on a per share price of $0.0001.

On February 7, 2014, Asher converted $3,105 of the note dated December 21, 2012, into 51,750,000 shares of common stock (see Note 3) at a discounted conversion rate of $0.00006.

On February 11, 2014, Asher converted $3,105 of the note dated December 21, 2012, into 51,750,000 shares of common stock (see Note 3) at a discounted conversion rate of $0.00006.

On February 13, 2014, the Company issued ASC 113,000,000 shares of common stock under the settlement terms of the 3(a)(10) (see Note 5). The shares were valued at $33,900 based on a per share price of $0.0003.

On February 14, 2014, Asher converted $1,265 of principal and $2,120 of accrued interest of the note dated December 21, 2012, into 56,416,667 shares of common stock (see Note 3) at a discounted conversion rate of $0.00006.

On February 20, 2014, Asher converted $9,100 of the note dated January 31, 2013, into 113,750,000 shares of common stock (see Note 3) at a discounted conversion rate of $0.00008.

On February 24, 2014, Asher converted $13,700 of the note dated January 31, 2013, into 114,166,667 shares of common stock (see Note 3) at a discounted conversion rate of $0.00012.

On February 24, 2014, the Company issued ASC 141,000,000 shares of common stock under the settlement terms of the 3(a)(10) (see Note 5). The shares were valued at $42,300 based on a per share price of $0.0003.

On February 26, 2014, Buko-Evolution converted $9,000 of the note dated October 26, 2011, into 56,250,000 shares of common stock (see Note 3) at a discounted conversion rate of $0.00016.

On February 27, 2014, Asher converted $9,700 of principal and $1,300 of accrued interest of the note dated January 31, 2013, into 91,666,667 shares of common stock (see Note 3) at a discounted conversion rate of $0.00012.

On March 4, 2014, the Company issued ASC 178,000,000 shares of common stock under the settlement terms of the 3(a)(10) (see Note 5). The shares were valued at $35,600 based on a per share price of $0.0002.

On March 6, 2014, KAJ sold the remaining principal balance of $10,000 and accrued interest of $8,200 to Southridge for $18,200 (see Note 3).

On March 7, 2014, Buko-Evolution converted $9,000 of the note dated October 26, 2011, into 56,250,000 shares of common stock (see Note 3) at a discounted conversion rate of $0.00016.

On March 12, 2014, the Company issued ASC 195,000,000 shares of common stock under the settlement terms of the 3(a)(10) (see Note 5). The shares were valued at $78,000 based on a per share price of $0.0004.

On March 17, 2014, Southridge converted $18,575 of the note acquired on March 6, 2014 into 185,750,000 shares of common stock (see Note 3).

On March 17, 2014, Buko-Evolution converted $9,000 of the note dated October 26, 2011, into 56,250,000 shares of common stock (see Note 3) at a discounted conversion rate of $0.00016. The shares remain unissued as of June 30, 2014.

On March 20, 2014, the Company issued ASC 239,000,000 shares of common stock under the settlement terms of the 3(a)(10) (see Note 5). The shares were valued at $191,200 based on a per share price of $0.0008.

On March 26, 2014, Buko-Evolution converted $7,900 of the note dated October 26, 2011, into 56,428,570 shares of common stock (see Note 3) at a discounted conversion rate.

On March 28, 2014, the Company issued ASC 278,000,000 shares of common stock under the settlement terms of the 3(a)(10) (see Note 5). The shares were valued at $222,400 based on a per share price of $0.0008.

On March 31, 2014, ASC converted $5,500 of principal and $375 of related legal fees of the note dated March 27, 2014, as acquired from Hansen (see Note 3), into 117,500,000 shares of common stock.

On April 1, 2014, the Company issued ASC 91,500,000 shares of common stock under the settlement terms of the 3(a)(10) (see Note 5). The shares were valued at $64,050 based on a per share price of $0.0007.

On April 4, 2014, the Company issued ASC 117,700,000 shares of common stock under the settlement terms of the 3(a)(10) (see Note 5). The shares were valued at $70,620 based on a per share price of $0.0006.

On April 7, 2014, the Company issued ASC 90,352,055 shares of common stock under the settlement terms of the 3(a)(10) (see Note 5). The shares were valued at $54,211 based on a per share price of $0.0006.

On April 11, 2014, the Company issued ASC 236,443,836 shares of common stock under the settlement terms of the 3(a)(10) (see Note 5). The shares were valued at $118,222 based on a per share price of $0.0005.

On April 16, 2014, the Company issued ASC 72,674,000 shares of common stock under the settlement terms of the 3(a)(10) (see Note 5). The shares were valued at $29,070 based on a per share price of $0.0004.

On April 23, 2014, the Company issued ASC 205,831,600 shares of common stock under the settlement terms of the 3(a)(10) (see Note 5). The shares were valued at $82,333 based on a per share price of $0.0004.

On April 25, 2014, the Company issued ASC 339,000,000 shares of common stock under the settlement terms of the 3(a)(10) (see Note 5). The shares were valued at $101,700 based on a per share price of $0.0003.

On May 2, 2014, the Company issued ASC 87,500,000 shares of common stock under the settlement terms of the 3(a)(10) (see Note 5). The shares were valued at $26,250 based on a per share price of $0.0003.

On May 21, 2014, Asher converted $19,000 of principal and $760 of accrued interest of the note dated November 11, 2013, into 329,333,333 shares of common stock (see Note 3) at a discounted conversion rate of $0.00006.

Derivative Liability for Insufficient Shares

The Company has determined that as of June 30, 2014, the combination of outstanding shares of common stock, with the inclusion of option for common stock, warrants for common stock, and convertible promissory notes, there is a deficiency in the required amount of available stock. The Company, if all of the above were recognized, could cause the Company to have to repurchase its own stock on the open market causing the Company to have a derivative liability of $720,432 as of June 30, 2014.

Stock Warrants

The Company has granted warrants to non-employee individuals and entities. Warrant activity for non-employees for the ~~nine~~three months ended ~~September~~June 30, ~~2013~~2014 is as follows:

					Weighted
			Weighted		Average
			Average		Remaining		Aggregate
	Number		Exercise		Contractual		Intrinsic
	of Warrants		Price		Terms		Value
Outstanding at December 31, 2012		31,526	$	24.00
Outstanding at December 31, 2013		31,526	$	24.00
Granted		0
Reclassification		000
Outstanding and exercisable at September 30, 2013		31,526	$	24.00		3.04	$	-
Outstanding and exercisable at June 30, 2014		31,526	$	24.00		2.39	$	-
Weighted Average Grant Date Fair Value			$	4.00

OnThe ~~January 15, 2012, the~~ Company has granted ~~715 fully-vested~~ warrants ~~with~~to ~~an exercise price of $7~~employees.00 ~~per~~Warrant ~~share~~activity for ~~common~~employees ~~stock~~the toyear ~~Catalyst~~ended ~~Business~~June ~~Development~~30, ~~Inc.~~2014 ~~for~~is ~~services~~as ~~rendered. The warrants were valued at $7.80 per warrant or $5,571 using a Black-Scholes option-pricing model with the following assumptions~~follows:

Stock Price	$	7.80
						Weighted
Expected Term	5 Years
				Weighted		Average
Expected Volatility		239	%
				Average		Remaining		Aggregate
Dividend Yield		0
	Number			Exercise		Contractual		Intrinsic
Risk Free Interest Rate		0.29	%
	of Warrants			Price		Terms		Value
Outstanding at December 31, 2013		1,092		$	50.00
Forfeited		0		$
Reclassification		0		$
Outstanding at June 30, 2014		1,092		$	50.00		1.13	$	-
Exercisable at June 30, 2014		1,092		$	50.00
Weighted Average Grant Date Fair Value				$	16.00

The expected term equals the contractual term for this non-employee grant. The volatility is based on comparable volatility of other companies since the Company was thinly trading and had no historical volatility. The Company recognized an expense of $5,571 as of September 30, 2013, which is included in operations.37

On June 25, 2012, the Company granted warrants for its common stock in the amount of 7,500 to Digital Farmstand, LLC. The 7,500 warrants, with an exercise price of $15.00, were issued as compensation for their services. The warrants were valued at $3.40 per warrant or $25,500 using a Black-Scholes option-pricing model with the following assumptions:

Stock Price	$	3.40
Expected Term	2.5 Years
Expected Volatility		267	%
Dividend Yield		0
Risk Free Interest Rate		0.35	%

The expected term was computed using the simplified method for this director grant. The volatility is based on comparable volatility of other companies since the Company was thinly trading and had no reliable historical volatility. The Company recognized an expense of $25,500 on the issuance date since the warrant is earned.

eLAYAWAY, INC. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2013

(unaudited)

The Company has granted warrants to employees. Warrant activity for employees the year ended September 30, 2013 is as follows:

					Weighted
			Weighted		Average
			Average		Remaining		Aggregate
	Number		Exercise		Contractual		Intrinsic
	of Warrants		Price		Terms		Value
Outstanding at December 31, 2012		1,092	$	50.00
Forfeited		0	$
Reclassification		0	$
Outstanding at September 30, 2013		1,092	$	50.00		1.62	$	-
Exercisable at September 30, 2013		1,092	$	50.00
Weighted Average Grant Date Fair Value			$	16.00

On March 26, 2012, three officers and/or directors, as a directive from the board of directors, forfeited 6,125 warrants for common stock in exchange for 6,125 shares of common stock. The Company recorded additional expense of $520 on the transaction.

Stock Options

eLayaway.com, Inc. approved the 2009 Stock Option Plan which had 5,831,040 options issued to management. As a condition of the reverse merger, these options were forfeited and the 2009 Stock Option Plan was discontinued at the time of the reverse merger in April 2010. The Company approved the 2010 Stock Option Plan in July 2010 under which 15,000,000 shares were reserved for issuance.

The Company has granted options to employees. Options activity for the year ended ~~September~~June 30, ~~2013~~2014 is as follows:

			Weighted		Weighted Average
			Average		Remaining		Aggregate
	Number		Exercise		Contractual		Intrinsic
	of Options		Price		Terms		Value
Outstanding at December 31, 2012		6,815	$	23.80
Outstanding at December 31, 2013		6,815	$	23.80
Granted		0
Forfeited		0
Outstanding at September 30, 2013		6,815	$	23.80		7.22	$	-
Outstanding at June 30, 2014		6,815	$	23.80		6.72	$	-
Exercisable at September 30, 2013		3,907	$	16.00
Exercisable at June 30, 2014		3,907	$	16.00
Weighted Average Grant Date Fair Value			$	6.00

24NOTE 8 – CONCENTRATIONS

eLAYAWAY, INC. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2013

(unaudited)

On March 26, 2012, the Company granted various employees 9,500 options for common stock. The options are conditional based on various milestones. The options vest, after the milestones are met, over a three year period, have a ten year life, and have an exercise price of $6.00. The options were valued at $5.04 per option or $47,880 using a Black-Scholes option-pricing model with the following assumptions:

Stock Price	$	5.04
Expected Term	6.5 Years
Expected Volatility		257	%
Dividend Yield		0
Risk Free Interest Rate		0.33	%

The expected term was computed using the simplified method for these employee grants. The volatility is based on comparable volatility of other companies since the Company was thinly trading and had no reliable historical volatility. The milestones associated with the issuance of these options were not met therefore they were forfeited on September 30, 2013.

On March 26, 2012, three officers of the Company forfeited 15,202 options for common stock in exchange for 15,202 shares of common stock. The Company recorded an additional expense of $608 on this transaction.

NOTE 9 – CONCENTRATIONS

Concentration of Credit Risk

Financial instruments, which potentially subject the Company to a concentration of credit risk, consist principally of temporary cash investments.

The Company places its temporary cash investments with financial institutions insured by the FDIC. No amounts exceeded federally insured limits as of ~~September~~June 30, ~~2013~~2014. There have been no losses in these accounts through ~~September~~June 30, ~~2013~~2014.

Concentration of Intellectual Property

The Company owns the trademark “eLayaway” and the related logo, and owns, through the assignment from its former subsidiary, MDIP, LLC, the U.S. utility patent pending rights, title and interest, filed on October 17, 2006, relating to the eLayaway business process. The Company’s business is reliant on these intellectual property rights. MDIP Assigned the Utility Patent Application to the Company in March 2010.

NOTE 109 – SUBSEQUENT EVENTS

On ~~October~~or 3about July 24, ~~2013~~2014, ~~Southridge~~and ~~converted~~July $128,~~585~~ of2014, ~~principal~~the Company filed with FINRA and ~~$52~~the State of ~~accrued~~Delaware, ~~interest~~respectively, to effect a 1 for 200 reverse stock split of the ~~note~~Company’s ~~dated~~common ~~December~~stock. As 4of August 18, ~~2012~~2014, ~~into~~the ~~2,406,639~~reverse ~~shares~~split ofhas ~~common~~not ~~stock~~yet ~~(see~~been ~~Note~~approved 4)and effected.

~~On October 4, 2013, Hanson Capital, LLC converted $1,500 of principal of the note dated December 12, 2011 into 1,004,689 shares of common stock (see Note 4).~~38

On October 11, 2013, Southridge converted $1,563 of principal and $73 of accrued interest of the note dated December 4, 2012, into 2,405,268 shares of common stock (see Note 4).

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.

On October 15, 2013, the Company issued 25,000,000 shares of common stock to Bruce Harmon, a consultant to the Company, as compensation for his services.

On October 16, 2013, the Company issued 12,576,800 shares of common stock to Bruce Harmon in regards to his investment in the Company for the payment of a credit card liability of the Company. The shares were issued at a discount of 25% based on the restriction.

On October 18, 2013, Southridge converted $6,530 of principal and $53 of accrued interest of the note dated December 4, 2012, into 13,714,282 shares of common stock (see Note 4).

On October 25, 2013, Southridge converted $3,805 of principal and $38 of accrued interest of the note dated December 4, 2012, into 13,724,384 shares of common stock (see Note 4).

On October 28, 2013, Asher Enterprises, Inc. converted $2,300 of the note dated October 24, 2012, into 4,791,667 shares of common stock (see Note 4).

eLAYAWAY, INC. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2013

(unaudited)

On November 1, 2013, Southridge converted $3,265 of principal and $29 of accrued interest of the note dated December 4, 2012, into 13,725,295 shares of common stock (see Note 4).

On November 8, 2013, Asher Enterprises, Inc. converted $1,695 of principal of the note dated October 24, 2012, into 4,842,857 shares of common stock (see Note 4).

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

We believe that it is important to communicate our future expectations to our security holders and to the public. This report, therefore, contains statements about future events and expectations which are “forward-looking statements” within the meaning of Sections 27A of the Securities Act of 1933 and 21E of the Securities Exchange Act of 1934, including the statements about our plans, objectives, expectations and prospects under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” You can expect to identify these statements by forward-looking words such as “may,” “might,” “could,” “would,” ”will,” “anticipate,” “believe,” “plan,” “estimate,” “project,” “expect,” “intend,” “seek” and other similar expressions. Any statement contained in this report that is not a statement of historical fact may be deemed to be a forward-looking statement. Although we believe that the plans, objectives, expectations and prospects reflected in or suggested by our forward-looking statements are reasonable, those statements involve risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements, and we can give no assurance that our plans, objectives, expectations and prospects will be achieved.

Important factors that might cause our actual results to differ materially from the results contemplated by the forward-looking statements are contained in the “Risk Factors” section of and elsewhere in our Form 10-K dated December 31, 2012 for the fiscal year ended December 31, 2012 and in our subsequent filings with the Securities and Exchange Commission.

THIS REPORT CONTAINS FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933 AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934. THESE FORWARD LOOKING STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM HISTORICAL RESULTS OR ANTICIPATED RESULTS, INCLUDING THOSE SET FORTH UNDER "RISK FACTORS" IN THIS “MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" AND ELSEWHERE IN THIS REPORT. THE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ IN CONJUNCTION WITH "SELECTED FINANCIAL DATA" AND THE COMPANY'S FINANCIAL STATEMENTS AND NOTES THERETO INCLUDED ELSEWHERE IN THIS REPORT.

Company Overview

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.

2739

Results of Continuing Operations

Three months ended ~~September~~June 30, ~~2013~~2014 compared to the three months ended June 30, ~~2012~~2013

Revenue. For the three months ended ~~September~~June 30, ~~2013~~2014, our revenue was $2812,~~491~~428, compared to $2531,~~868~~120 for the same period in ~~2012~~2013, representing ana ~~increase~~decrease of 1060.1%.

~~Revenue~~Direct ~~less Cost of Sales~~Costs. For the three months ended ~~September~~June 30, ~~2013~~2014, our ~~revenue~~direct ~~less~~costs ~~cost~~were ~~of sales was~~ $2833,~~491~~919, compared to $258,~~415~~547 for the same period in ~~2012~~2013.

Selling, General and Administrative Expenses. For the three months ended ~~September~~June 30, ~~2013~~2014, selling, general and administrative expenses were $~~185~~160,~~040~~857 compared to $~~367~~222,~~801~~127 for the same period in ~~2012~~2013, a decrease of 4927.76%. This decrease was primarily caused by a reduction in expenses to maximize the use of working capital.

Net Loss. We generated net losses from operations of $~~545~~733,~~271~~109 for the three months ended ~~September~~June 30, ~~2013~~2014 compared to $~~541~~2,~~311~~130,111 for the same period in ~~2012~~2013 for continuing operations, a decrease of 065.76%.

~~Nine~~Six months ended ~~September~~June 30, ~~2013~~2014 compared to the ~~nine~~six months ended June 30, ~~2012~~2013

Revenue. For the ~~nine~~six months ended ~~September~~June 30, ~~2013~~2014, our revenue was $~~127~~31,~~224~~869, compared to $8998,~~883~~733 for the same period in ~~2012~~2013, representing ana ~~increase~~decrease of 4167.57%.

~~Revenue~~Direct ~~less Cost of Sales~~Costs. For the ~~nine~~six months ended ~~September~~June 30, ~~2013~~2014, our ~~revenue~~direct ~~less~~costs ~~cost~~were ~~of sales was~~ $~~107~~38,~~382~~908, compared to $8619,~~047~~842 for the same period in ~~2012. This change is due to higher revenue in~~ 2013.

Selling, General and Administrative Expenses. For the ~~nine~~six months ended ~~September~~June 30, ~~2013~~2014, selling, general and administrative expenses were $~~758~~239,~~278~~542 compared to $1573,~~538,841~~238 for the same period in ~~2012~~2013, a decrease of 4758.8%. This decrease was primarily caused by a reduction in expenses to maximize the use of working capital ~~and stock-based compensation decreasing from $508,318 for 2012 compared to $269,978 for 2013~~.

Net Loss. We generated net losses from operations of $41,~~128~~759,~~254~~106 for the ~~nine~~six months ended ~~September~~June 30, ~~2013~~2014 compared to $23,~~010~~582,~~298~~983 for the same period in ~~2012~~2013 for continuing operations, ana ~~increase~~decrease of ~~105~~50.49%. The net losses without the effect of the recording of stock-based compensation and losses on conversion of debt into common stock was $1,533,470 and $1,501,980 for the nine months ended September 30, 2013 and 2012, respectively, primarily due to the loss on conversions of notes payable, $2,324,806.

Liquidity and Capital Resources

General. At ~~September~~June 30, ~~2013~~2014, we had cash and cash equivalents of $15,~~495~~974. 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 of cash in operations of $~~145~~94,~~692~~980 for the ~~nine~~six months ended ~~September~~June 30, ~~2013~~2014, and we used cash in operations of $~~753~~136,~~962~~622 during the same period in ~~2012~~2013. The principal elements of cash flow from operations for the six ~~nine~~ months ended ~~September~~June 30, ~~2013~~2014 included a net loss of $41,~~128~~759,~~254~~106, offset primarily by loss on conversion of debt into common stock, $21,~~324~~107,~~806, and stock-based compensation and settlements of $269,978~~493.

Cash ~~used~~provided inby ~~investing~~our financing activities was $097,839 for the ~~nine~~six months ended ~~September~~June 30, ~~2013~~2014, compared to $4124,~~454~~364 during the comparable period in ~~2012~~2013.

Cash provided by our financing activities was $124,364 for the nine months ended September 30, 2013, compared to cash generated of $733,160 during the comparable period in 2012. This increase was primarily attributed to a concentrated effort of capital procurement in 2013 compared to 2012.40

As of ~~September~~June 30, ~~2013~~2014, current liabilities exceeded current assets by ~~40.8~~332 times. Current assets decreased from $~~207~~25,~~367~~736 at December 31, ~~2012~~2013 to $679,~~221~~248 at ~~September~~June 30, ~~2013~~2014 whereas current liabilities increased from $2,~~701~~625,~~949~~256 at December 31, ~~2012~~2013 to $23,~~740~~066,~~122~~007 at ~~September~~June 30, ~~2013~~2014.

GOING CONCERN

The accompanying unaudited 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 $~~127~~31,~~224~~869 and net losses of $41,~~128~~759,~~254~~106 ($~~269~~1,~~978 represents stock-based compensation and settlements and $2~~107,~~324,806~~493 represents losses on conversion of debt into common stock) for the ~~nine~~six months ended ~~September~~June 30, ~~2013~~2014 compared to sales from ~~continuing~~ operations of $8998,~~883~~733 and net losses from ~~continuing~~ operations of $23,~~010~~582,~~298~~983 ($~~508~~2,~~318~~293,014 represents ~~stock-based~~losses ~~compensation~~on ~~and~~conversion ~~settlements~~of debt into common stock) for the ~~nine~~six months ended June 30, ~~2012~~2013. The Company had a working capital deficiency, stockholders’ deficiency, and accumulated deficit for continuing operations of $23,~~672~~056,~~901~~759, $23,~~667~~052,~~939~~768 and $2224,~~715~~914,~~112~~225, respectively, at ~~September~~June 30, ~~2013~~2014, and used cash in operations of $~~145~~94,~~692~~980 in the ~~nine~~six months ended ~~September~~June 30, ~~2013~~2014. 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 unaudited 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.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Securities and Exchange Commission defines the term “disclosure controls and procedures” to mean a company's controls and other procedures of an issuer that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the issuer’s management, including its chief executive and chief financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. The Company maintains such a system of controls and procedures in an effort to ensure that all information which it is required to disclose in the reports it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified under the SEC's rules and forms and that information required to be disclosed is accumulated and communicated to the chief executive and interim chief financial officer to allow timely decisions regarding disclosure.

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are not effective as of such date. The Chief Executive Officer and Chief Financial Officer have determined that the Company continues to have the following deficiencies which represent a material weakness:

1.	The Company has appointed an independent director on April 1, 2011 who additionally is serving as the chairman of the Audit Committee. The Company intends to appoint additional independent directors;
2.	Lack of in-house personnel with the technical knowledge to identify and address some of the reporting issues surrounding certain complex or non-routine transactions. With material, complex and non-routine transactions, management has and will continue to seek guidance from third-party experts and/or consultants to gain a thorough understanding of these transactions;
3.	Insufficient personnel resources within the accounting function to segregate the duties over financial transaction processing and reporting;
4.	Insufficient written policies and procedures over accounting transaction processing and period end financial disclosure and reporting processes.

To remediate our internal control weaknesses, management intends to implement the following measures:

▪

The Company will add sufficient number of independent directors to the board and appoint additional member(s) to the Audit Committee.

▪

The Company will add sufficient accounting personnel to properly segregate duties and to effect a timely, accurate preparation of the financial statements.

▪

The Company will hire staff technically proficient at applying U.S. GAAP to financial transactions and reporting.

▪

Upon the hiring of additional accounting personnel, the Company will develop and maintain adequate written accounting policies and procedures.

The additional hiring is contingent upon the Company’s efforts to obtain additional funding through equity or debt and the results of its operations. Management expects to secure funds in the coming fiscal year but provides no assurances that it will be able to do so.

Changes in Internal Control over Financial Reporting

Except as set forth above, there were no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Controls

The Company’s management, including the CEO and CFO, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of the control system must reflect that there are resource constraints and that the benefits must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

3042

PART II - OTHER INFORMATION

ITEM 1. 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 ~~May~~March 115, ~~2013~~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 ~~December 2011~~2008, ~~the~~a ~~Board~~former ofemployee ~~Directors~~who ~~and~~served as the ~~majority~~CEO of the ~~shareholders~~Company and was an original founder of the Company was terminated for ~~cause,~~alleged ~~Douglas~~wrongdoings. ~~Salie,~~The ~~the~~Company ~~CEO,~~alleges ~~Chairman~~that ~~and~~this ~~member~~individual ofillegally deposited investor funds into company bank accounts not authorized by the ~~Board~~board of ~~Directors~~directors and wrote unauthorized checks, combined for approximately $371,000. ~~Mr.~~ ~~Salie~~Subsequently, ~~has~~this ~~indicated~~individual ~~that~~allegedly hewithdrew ~~believes~~the ~~his~~deposited ~~termination~~funds ~~was~~and ~~wrongful~~deposited them into accounts not controlled by the Company. On orThe ~~about~~Board ~~May~~of 6Directors, ~~2012,~~upon aknowledge ~~Company~~of ~~employee~~this ~~received~~activity, aremoved ~~telephone~~this ~~call~~individual from Mrthe Company. ~~Salie~~The ~~stating~~Company ~~that~~has ~~the~~turned ~~Company~~this ~~would~~matter ~~have~~over to ~~answer~~the ~~for~~Florida ~~his~~Department ~~termination~~of Law Enforcement. ~~The~~ ~~Company~~In ~~firmly~~2010, ~~believes~~the ~~that~~Company ~~its~~determined ~~actions~~that ~~were~~it ~~justified,~~does ~~and~~not nobelieve ~~legal~~that ~~proceeding~~these ~~has~~funds ~~been~~are ~~filed~~recoverable.

OnIn ~~October~~March 172011, ~~2012~~Thomas R. Park, a former employee who served as the CFO of the Company ~~entered~~from ~~into~~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 ~~settlement~~commission ~~agreement~~for ~~with~~investments ~~Douglas~~made ~~Pinard~~by third parties in the Company during this timeframe. On April 25, 2011, Mr. Park filed a ~~former~~suit, ~~owner~~Thomas R. Park v eLayawayCOMMERCE, Inc., et al , in the Circuit Court for the Second Judicial Circuit in and ~~employee~~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 ~~subsidiary,~~efforts ~~CSP~~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 ~~Mr.~~the ~~Pinard~~former ~~currently~~officer ~~have~~has responded with a ~~dispute~~counter-offer ~~regarding~~which ~~whether~~is Mrdeemed to not be feasible as it was unreasonable. ~~Pinard~~The ~~has~~Company ~~since~~settled ~~complied~~the lawsuit in June 2011 with the ~~settlement~~issuance ~~agreement~~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 ~~January~~December ~~of 2013~~2011, ~~Dr.~~the ~~Robert~~Board ~~Salie, father~~ of ~~former~~Directors ~~chief~~and ~~executive~~the ~~officer~~majority ~~and~~of ~~chairman,~~the ~~Douglas~~shareholders ~~Salie,~~of ~~who~~the ~~was~~Company terminated for cause, ~~filed~~Douglas ~~a suit, Robert~~ Salie ~~and Salie Family Limited Partnership v eLayaway~~, ~~Inc., in~~ the ~~Circuit~~CEO, ~~Court~~Chairman ~~for the Second Judicial Circuit in~~ and ~~for~~member ~~Leon~~of ~~County,~~the ~~Florida,~~Board ~~Civil~~of ~~Division~~Directors. ~~The lawsuit is in regards to two notes payable with claims of approximately $565,000 in principal and accrued interest~~Mr. OnSalie ~~June~~has ~~19,~~indicated ~~2013,~~that ~~Plantiffs’~~he ~~Motion~~believes ~~For~~his ~~Default~~termination ~~Judgment~~ was ~~filed~~wrongful. On ~~August~~The ~~30,~~Company ~~2013,~~firmly abelieves ~~default~~that ~~judgment~~its ~~was~~actions ~~granted~~were tojustified Drand defendable. ~~Salie~~The ~~against the~~ Company~~. The~~ ~~lawsuit was filed against eLayaway, Inc., a Florida corporation, which~~ does not ~~exist,~~believe ~~whereas~~that ~~the~~litigation ~~judgment~~in ~~was~~this ~~issued~~matter ~~erroneously~~is ~~against eLayaway, Inc~~pending.~~, a Delaware corporation, which was not the corporation named in the lawsuit.~~

In ~~March~~October ~~2013~~2012, ~~ASC~~Douglas ~~Recap~~Pinard, ~~LLC (“ASC”) filed~~ a ~~Joint~~former ~~Motion~~owner ~~for Approval~~ of ~~Settlement~~CSP ~~Agreement~~(see ~~and~~Note ~~Stipulation~~2), ~~and~~resigned ~~Request~~from ~~for~~the ~~Fairness~~Company. ~~Hearing~~Certain inmonies ~~the~~were ~~Circuit~~due ~~Court~~to ofMr. ~~the~~Pinard ~~Second~~related ~~Judicial~~to ~~Circuit~~accrued inpayroll and ~~for~~notes ~~Leon~~payable. ~~County,~~Mr. ~~Florida,~~Pinard ~~Case~~threatened ~~No.~~litigation, ~~2012-CA-4074. ASC~~and ~~has~~both ~~contracted~~parties ~~with~~agreed ~~various~~upon ~~note~~a ~~holders~~settlement ofrequiring the Company to ~~acquire~~pay ~~their~~Mr. ~~debt~~Pinard ~~and~~a ~~subsequently~~settlement ~~converting~~of ~~the~~$40,000 ~~debt~~for those liabilities. The Company paid Mr. Pinard $20,000 according to ~~common~~the ~~stock~~conditions of the ~~Company~~settlement agreement. The Company ~~has~~then ~~agreed~~notified toMr. ~~these~~Pinard ~~terms~~that asin ~~the~~its ~~acquisition~~opinion, ofMr. ~~these~~Pinard ~~debts~~had ~~and~~breached ~~subsequent~~the ~~conversion~~settlement ~~would~~agreement ~~alleviate~~by anot ~~majority~~returning all of the Company’s ~~liabilities~~assets ~~thereby~~which ~~putting~~Mr. ~~the~~Pinard ~~Company~~had in ahis ~~better~~possession ~~position~~at the time of termination. Therefore, the final $20,000 was not paid to ~~facilitate~~Mr. ~~growth~~Pinard. ~~The~~ ~~amount~~Due ofto the ~~proposed~~nonpayment, ~~purchases~~Mr. isPinard ~~approximately~~alleges $1that the Company breached the settlement agreement.2 ~~million~~Mr. A ~~hearing~~Pinard ~~was~~indicated ~~held~~that onhe ~~May~~would ~~14,~~seek ~~2013~~legal ~~and~~recourse. To the ~~joint~~Company’s ~~motions~~knowledge, ~~were~~no ~~approved~~further actions has been taken by Mr. Pinard.

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 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On January 302, ~~2012~~2014, ~~the~~Asher ~~Company~~converted ~~issued 69~~$5,~~444~~000 ~~shares~~ of ~~common~~the ~~stock~~note todated ~~Evolution~~December in21, ~~exchange~~2012, ~~for~~into ~~legal~~21,739,130 ~~fees~~shares of common stock.

On ~~February~~January 1510, ~~2012~~2014, asAsher ~~part~~converted of$5,640 ~~the acquisition~~ of ~~CSP,~~ the ~~Company~~note ~~was~~dated ~~obligated~~December ~~to issue~~ 21,~~400~~ ~~shares~~2012, ofinto ~~common stock to the owners of CSP. As contractually obligated~~47, 5000,~~350~~000 shares of common stock ~~were issued with 16,050 issuable at various times~~.

On ~~February~~January 2016, ~~2012~~2014, ~~the~~Asher ~~Company~~converted ~~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 to pay~~ $~~3,500 per month and to issue 8,750 shares of common stock, of which~~ 6,~~250~~210 ~~were to be issued at the time~~ of ~~execution, and~~ the ~~remaining~~note ~~2,500~~dated ~~shares~~December ~~of common stock to be issued on August 18, 2012. On May~~ 21, 2012, ~~the~~into ~~Company replaced the first contract with a new one for a term of nine months. The Company will issue the 2~~51,~~500~~750,000 shares of common stock ~~on August 18, 2012~~.

31On January 22, 2014, Asher converted $5,175 of the note dated December 21, 2012, into 51,750,000 shares of common stock.

On ~~March~~January 2628, ~~2012~~2014, ~~the~~Asher ~~Board of Directors of the Company issued common stock and~~ converted ~~options~~$5,175 ~~and warrants for common stock into common stock as part~~ of the ~~compensation~~note ~~plan~~dated ~~for~~December ~~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~~21, ~~Messrs. Pinon and Harmon~~2012, ~~the~~into ~~Company’s CEO and CFO~~51, ~~were each issued 10~~750,000 shares of common stock. The Company’s two independent directors, Messrs. Rees and Wittler, were each issued 1,250 shares of common stock for their services for 2012. 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 of 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, 15,202 options were converted to 15,202 shares of common stock and 6,125 warrants were converted to 6,125 shares of common stock.

On ~~March~~January 2628, ~~2012~~2014, the Company ~~approved~~issued ~~the~~ASC ~~issuance of 7~~76,~~500~~000,000 shares of common stock inunder ~~exchange~~the ~~for~~settlement ~~legal~~terms ~~services~~of ~~by Vincent and Rees for~~ the ~~period of June 6, 2012 through June 5, 2013~~3(a)(10).

On ~~March~~January 2630, ~~2012~~2014, ~~the~~Asher ~~Company~~converted ~~sold 23~~$5,~~334~~175 ~~shares~~ of ~~common~~the ~~stock~~note indated ~~exchange~~December ~~for~~21, ~~$70~~2012,~~000~~ ~~which~~into ~~were~~51,750,000 ~~issued~~shares inof ~~April~~common ~~2012~~stock.

On ~~April~~February 25, ~~2012~~2014, ~~Southridge~~the ~~converted~~Company ~~$10,000~~issued ofASC ~~their $56~~93,000 ~~note into 3~~,~~473~~000 shares of common stock~~. On~~ ~~April~~under ~~17, 2012, in conjunction with this conversion, as~~ the ~~closing~~settlement ~~trading~~terms ~~price on the clearing date~~ of the 3~~,473 shares of common stock was less than the closing trading price on the date of conversion, the Company was required to issue an addition 1,402 shares of common stock to Southridge~~(a)(10).

InOn ~~April~~February ~~2012~~7, ~~the~~2014, ~~Company~~Asher ~~sold~~converted 23$3,~~347~~105 ~~shares~~ of ~~common~~the ~~stock~~note indated ~~exchange~~December ~~for~~21, ~~$70~~2012,~~040~~ into 51,750,000 shares of common stock.

On ~~May~~February 611, ~~2012~~2014, ~~the~~Asher ~~Company~~converted ~~issued 29~~$3,~~420~~105 ~~additional shares~~ of ~~common stock to Vincent & Rees in regards to its contractually obligated guaranteed issue value of $135,000 for~~ the ~~legal~~note ~~services~~dated ~~provided~~December ~~from May 7~~21, ~~2011 through May 6~~2012, ~~2012. On~~into ~~May 6~~51, ~~2012~~750,000 ~~upon~~shares ~~the expiration~~ of ~~the guarantee, 29,420 additional~~ common ~~shares were issued~~stock.

On ~~May~~February 2913, ~~2012~~2014, the Company ~~converted~~issued ~~$10,500~~ASC ~~of accounts payable into 2~~113,~~100~~000,000 shares of common stock atunder athe ~~conversion~~settlement ~~price~~terms of ~~$5.00~~the ~~per share~~3(a)(10).

On ~~June~~February 2514, ~~2012~~2014, ~~the~~Asher ~~Company~~ converted $51,~~000~~265 of ~~accounts~~principal ~~payable~~and ~~into 1~~$2,~~000~~120 ~~shares~~of accrued interest of ~~common~~the ~~stock~~note atdated aDecember ~~conversion~~21, ~~price~~2012, ofinto ~~$5.00~~56,416,667 ~~per~~shares ~~share~~of common stock.

On ~~August~~February 320, ~~2012~~2014, ~~the~~Asher ~~Company~~converted ~~issued~~$9,100 ~~Douglas~~of ~~Pinard~~the ~~(“Pinard”)~~note ~~and~~dated ~~Richard~~January ~~St.~~31, ~~Cyr~~2013, ~~(“St.~~into ~~Cyr”) each 2~~113,~~675~~750,000 shares of common stock ~~as contractually obligated in regards to the Company’s purchase of CSP~~.

On ~~August~~February 1824, ~~2012~~2014, ~~the~~Asher ~~Company~~converted ~~issued to American Capital Ventures 2~~$13,~~500~~700 ~~shares~~ of ~~common~~the ~~stock~~note asdated ~~contractually~~January ~~obligated~~31, in2013, ~~regards~~into to114,166,667 ~~a consulting agreement. These~~ shares ~~were~~of ~~previously recorded as issuable~~ common stock.

On ~~August~~February 2724, ~~2012~~2014, ~~Evolution~~the ~~converted~~Company ~~$25,000~~issued ofASC ~~its convertible promissory note into 16~~141,~~234~~000,000 shares of common stock atunder athe ~~conversion~~settlement ~~price~~terms of ~~$1.54~~the ~~per share~~3(a)(10).

~~On September 6, 2012, Asher converted $10,000 of its convertible promissory note dated February 1, 2012 into 8,621 shares of common stock at a conversion price of $1.16 per share.~~44

On ~~September~~February 1826, ~~2012~~2014, ~~the~~Buko-Evolution ~~Company~~converted ~~sold 187~~$9,~~500~~000 ~~shares~~ of ~~common~~the ~~stock~~note indated ~~exchange~~October ~~for~~26, ~~$150~~2011, into 56,250,000 shares of common stock.

On ~~September~~February 2027, ~~2012~~2014, ~~Southridge~~Asher ~~was~~converted ~~issued 38~~$9,~~096~~700 ~~shares~~ of ~~common~~principal ~~stock~~and in$1,300 ~~regards~~of toaccrued ainterest ~~provision in their conversion~~ of ~~their~~the note ~~and~~dated ~~its~~January ~~respective~~31, ~~reset~~2013, ~~clause. An~~into ~~additional 7~~91,~~619~~666,~~048~~667 shares of common stock ~~remain issuable under this reset~~.

32On March 4, 2014, the Company issued ASC 178,000,000 shares of common stock under the settlement terms of the 3(a)(10).

On ~~September~~March 277, ~~2012~~2014, ~~SGI~~Buko-Evolution ~~Group, LLC~~ converted $69,~~100~~000 of ~~its~~the ~~Convertible~~note ~~Promissory~~dated ~~Note~~October 26, 2011, into 2156,~~035~~250,000 shares of common stock ~~at a conversion price was $0~~.~~29 per share.~~

On ~~September~~March 2712, ~~2012~~2014, ~~Star~~the ~~City~~Company ~~Capital,~~issued ~~LLC~~ASC ~~converted $12~~195,~~200 of its $25~~000,000 ~~note into 42,069~~ shares of common stock atunder athe ~~conversion~~settlement ~~price~~terms of ~~$0.29~~the ~~per share~~3(a)(10).

On ~~October~~March 117, ~~2012~~2014, asSouthridge aconverted ~~condition~~$18,575 of ~~an agreement with St. Cyr,~~ the ~~Company~~note ~~issued~~acquired ~~the~~on ~~remaining~~March 56,~~350~~ ~~contractually~~2014 ~~obligated~~into 185,750,000 shares of common stock.

On ~~October~~March 1817, ~~2012~~2014, ~~Southridge~~Buko-Evolution converted $59,~~480~~000 of ~~its~~the note dated October 26, 2011, into 4256,~~154~~250,000 shares of common stock ~~at a conversion price of $0~~.~~13 per share.~~

On ~~October~~March 1220, ~~2012~~2014, ~~as a condition of~~ the ~~note~~Company ~~and~~issued ~~its~~ASC ~~reset clause~~239, ~~Star City Capital~~000,000 ~~LLC~~shares ~~was~~of ~~issued~~common anstock ~~additional~~under ~~29,696~~the ~~shares~~settlement terms of ~~common~~the ~~stock~~3(a)(10).

On ~~October~~March 1226, ~~2012~~2014, asBuko-Evolution aconverted ~~condition~~$7,900 of the note ~~and~~dated ~~its~~October ~~reset clause~~26, ~~SGI Group~~2011, ~~LLC~~into ~~was issued an additional 14~~56,~~848~~428,570 shares of common stock.

On ~~October~~March 1728, ~~2012~~2014, asthe aCompany ~~condition~~issued ofASC a278,000,000 ~~settlement~~shares ~~agreement~~of ~~with~~common ~~Pinard,~~stock ~~the~~under ~~Company issued~~ the ~~remaining~~settlement ~~5,350~~terms ~~contractually obligated shares~~ of ~~common~~the ~~stock~~3(a)(10).

On ~~October~~March 2231, ~~2012~~2014, ~~SGI~~ASC converted $25,~~600~~500 of principal and ~~accrued~~$375 ~~interest~~ of ~~$18~~related legal fees of the note ~~acquired~~dated onMarch ~~September~~27, 262014, ~~2012~~as acquired from Hansen (see Note 43), into 20117,~~142~~500,000 shares of common stock ~~at a conversion price of $0~~.~~13 per share.~~

On ~~November~~April 51, ~~2012~~2014, ~~SGI converted $6,300 of principal and accrued interest of $85 of~~ the ~~note~~Company ~~acquired~~issued onASC ~~September 26~~91, ~~2012 (see Note 4) into 42~~500,~~566~~000 shares of common stock atunder athe ~~conversion~~settlement ~~price~~terms of ~~$0.15~~the ~~per share~~3(a)(10).

On ~~November~~April 54, ~~2012~~2014, ~~Star City converted $6,300 of principal and accrued interest of $85 of~~ the ~~note~~Company ~~acquired~~issued onASC ~~September 26~~117, ~~2012 (see Note 4) into 42~~700,~~566~~000 shares of common stock atunder athe ~~conversion~~settlement ~~price~~terms of ~~$0.15~~the ~~per share~~3(a)(10).

On ~~November~~April 97, ~~2012~~2014, ~~Southridge~~the ~~Partners~~Company ~~II,~~issued LPASC ~~converted $12~~90,~~190 of its $56~~352,~~000~~055 ~~note into 81,267~~ shares of common stock atunder athe ~~conversion~~settlement ~~price~~terms of ~~$0.15~~the ~~per share~~3(a)(10).

On ~~November~~April 1511, ~~2012~~2014, ~~Southridge~~the ~~converted~~Company ~~$5,685~~issued ofASC ~~principal of its note acquired on September 24~~236, ~~2012 into 81~~443,~~215~~836 shares of common stock atunder athe ~~conversion~~settlement ~~price~~terms of ~~$0.07~~the ~~per share~~3(a)(10).

On ~~November~~April 16, ~~2012~~2014, ~~SGI converted $6,500 of principal and accrued interest of $111 of~~ the ~~note~~Company ~~acquired~~issued onASC ~~September 26~~72, ~~2012 into 94~~674,~~447~~000 shares of common stock atunder athe ~~conversion~~settlement ~~price~~terms of ~~$0.07~~the ~~per share~~3(a)(10).

On ~~November~~April 1623, ~~2012~~2014, ~~Star City converted $6,500 of principal and accrued interest of $85 of~~ the ~~note~~Company ~~acquired~~issued onASC ~~September 26~~205, ~~2012 into 94~~831,~~447~~600 shares of common stock atunder athe ~~conversion~~settlement ~~price~~terms of ~~$0.07~~the ~~per share~~3(a)(10).

On ~~November~~April 2125, ~~2012~~2014, ~~Southridge~~the ~~converted~~Company ~~$8,375~~issued ofASC ~~principal of its note acquired on September 24~~339, ~~2012 into 119~~000,~~643~~000 shares of common stock atunder athe ~~conversion~~settlement ~~price~~terms of ~~$0.07~~the ~~per share~~3(a)(10).

On ~~November~~May 232, ~~2012~~2014, ~~SGI~~the ~~Group~~Company ~~converted~~issued ~~$3,000~~ASC ~~of principal and $33 of accrued interest of its note acquired on October 22~~87, ~~2012 into 43~~500,~~324~~000 shares of common stock atunder athe ~~conversion~~settlement ~~price~~terms of ~~$0.07~~the ~~per share~~3(a)(10).

On ~~November~~May 2321, ~~2012~~2014, ~~SGI~~Asher converted $319,~~500~~000 of principal and $760 of accrued interest of ~~$68 of~~ the note ~~acquired~~dated onNovember ~~September~~11, 262013, ~~2012~~ into 50329,~~970~~333,333 shares of common stock ~~at a conversion price of $0~~.~~07 per share.~~

On November 23, 2012, Sazer converted $3,250 of principal and accrued interest of $4 of the note acquired on November 26, 2012 into 46,490 shares of common stock at a conversion price of $0.07 per share.45

OnThe ~~November~~securities ~~26,~~issued ~~2012~~to ASC above, were ~~WHC~~issued ~~converted~~pursuant ~~$6,982~~to Section 3(a)(10) of ~~principal~~the Securities Act of ~~its~~1933, ~~note~~which ~~acquired~~allows onthe ~~November~~exchange 6of claims, ~~2012~~securities, ~~into~~or 63property for stock when the arrangement is approved for fairness by a court proceeding,~~475~~ ~~shares~~and the remaining securities were issued pursuant to exemptions from registration requirements relying on Section 4(2) of ~~common~~the ~~stock~~Securities atAct aof ~~conversion~~1933 ~~price~~and upon Rule 506 of ~~$0.11~~Regulation ~~per~~D ~~share~~of the Securities Act of 1933.

On November 29, 2012, Mauriello converted $6,500 of principal of its note acquired on November 20, 2012 into 92,919 shares of common stock at a conversion price of $0.07 per share.

On November 30, 2012, Southridge converted $11,260 of principal of its note acquired on September 24, 2012 into 160,858 shares of common stock at a conversion price of $0.07 per share.

On December 5, 2012, Southridge converted $5,685 of principal of its note acquired on September 24, 2012 into 21,866 shares of common stock at a conversion price of $0.26 per share.

On December 5, 2012, Star City converted $5,000 of principal and accrued interest of $120 of the note acquired on September 26, 2012 into 19,692 shares of common stock at a conversion price of $0.26 per share.

On December 5, 2012, Southridge converted $36,150 of principal of its note acquired on October 22, 2012 into 139,039 shares of common stock at a conversion price of $0.26 per share.

On December 5, 2012, Southridge converted $19,300 of principal of its note acquired on November 8, 2012 into 160,834 shares of common stock at a conversion price of $0.12 per share.

On December 11, 2012, Southridge converted $19,325 of principal of its note acquired on November 8, 2012 into 161,042 shares of common stock at a conversion price of $0.12 per share.

On December 11, 2012, Marina converted $5,650 of principal of its note acquired on December 11, 2012 into 47,192 shares of common stock at a conversion price of $0.12 per share.

On December 11, 2012, due to a reset clause in the note acquired on September 24, 2012, Southridge was issued an additional 6,560 shares of common stock.

On December 11, 2012, WHC converted $12,553 of principal and $182 of accrued interest of its note acquired on November 6, 2012 into 62,632 shares of common stock at a conversion price of $0.20334 per share.

On December 11, 2012, Southridge converted $13,850 of principal of its note acquired on October 22, 2012 into 69,250 shares of common stock at a conversion price of $0.20 per share.

On December 11, 2012, due to a reset clause in the note acquired on October 22, 2012, Southridge was issued an additional 41,712 shares of common stock.

On December 11, 2012, SGI Group converted $2,000 of principal and $34 of accrued interest of its note acquired on October 22, 2012 into 16,948 shares of common stock at a conversion price of $0.12 per share.

On December 12, 2012, SGI converted $9,000 of principal and accrued interest of $68 of the note acquired on November 20, 2012 into 75,568 shares of common stock at a conversion price of $0.12 per share.

On December 13, 2012, Mauriello converted $8,500 of principal and $67 of accrued interest of its note acquired on November 20, 2012 into 71,392 shares of common stock at a conversion price of $0.12 per share.

On December 17, 2012, Asher converted $9,000 of principal of its note dated June 7, 2012 into 47,369 shares of common stock at a conversion price of $0.19 per share.

On December 19, 2012, Asher converted $8,600 of principal of its note dated June 7, 2012 into 46,237 shares of common stock at a conversion price of $0.00093 per share.

On December 20, 2012, Asher converted $8,600 of principal of its note dated June 7, 2012 into 9,450,549 shares of common stock at a conversion price of $0.186 per share.

On December 20, 2012, due to a reset clause in the note acquired on September 26, 2012, Star City was issued an additional 18,771 shares of common stock.

On December 24, 2012, Asher converted $6,000 of principal of its note dated June 7, 2012 into 1,096 shares of common stock at a conversion price of $0.146 per share.

On December 27, 2012, Asher converted $300 of principal and $1,300 of accrued interest of its note dated June 7, 2012 into 10,959 shares of common stock at a conversion price of $0.146 per share.

On December 27, 2012, WHC converted $10,091 of principal of its note acquired on December 13, 2012 into 89,144 shares of common stock at a conversion price of $0.114 per share.

On January 3, 2013, 89,144 shares were issued to WHC which were recorded as issuable as of December 31, 2013.

On January 3, 2013, due to a reset clause in the note acquired on November 8, 2012, Southridge was issued an additional 94,792 shares of common stock.

On January 3, 2013, Southridge converted $11,375 of the note dated November 8, 2012, into 94,792 shares of common stock at a 50% discount, $0.12.

On January 3, 2013, Southridge converted $22,750 of the note dated November 30, 2012, into 189,584 shares of common stock at a 50% discount, $0.12. Due to the deficiency of available shares to be issued at the time, the Company issued 60,000 shares on January 10, 2013 and the remaining 129,584 on January 24, 2013.

On January 8, 2013, due to a reset clause in the note acquired on September 26, 2012, Star City was issued an additional 18,771 shares of common stock.

On January 9, 2013, due to a reset clause in the note acquired on November 8, 2012, Southridge was issued an additional 18,959 shares of common stock.

On January 11, 2013, 101,790 shares of common stock were issued to WHC for a conversion of a note payable in December 2012 which were recorded as issuable as of December 31, 2012.

On January 18, 2013, WHC converted $10,700 of the note dated December 13, 2012, into 107,000 shares of common stock at a 50% discount, $0.05.

On January 23, 2013, Marina converted $15,000 of principal and $246.58 of accrued interest of the note dated December 5, 2012, into 152,466 shares of common stock at a 50% discount, $0.10.

On January 24, 2013, 71,392 shares of common stock were issued to Mauriello in regards to a conversion of a note payable on December 13, 2012 which were recorded as issuable as of December 31, 2012.

On January 28, 2013, Southridge converted $28,100 of the note dated December 28, 2012, into 312,223 shares of common stock at a 50% discount, $0.09.

On January 28, 2013, due to a reset clause in the note acquired on September 26, 2012, Star City was issued an additional 18,771 shares of common stock.

On January 28, 2013, due to a reset clause in the note acquired on November 30, 2012, Southridge was issued an additional 25,917 shares of common stock.

On February 4, 2013, due to a reset clause in the note acquired on January 2, 2013, Southridge was issued an additional 89,207 shares of common stock.

On February 5, 2013, Southridge converted $7,650 of the note dated December 28, 2012, into 127,500 shares of common stock at a 50% discount, $0.06.

On February 5, 2013, WHC converted $3,673 of the note dated December 13, 2012, into 55,098 shares of common stock at a 50% discount, $0.0334.

On February 6, 2013, Southridge converted $5,750 of the note dated December 28, 2012, into 115,000 shares of common stock at a 50% discount, $0.05.

On February 7, 2013, SGI Group converted $6,419 of principal and $168.80 of accrued interest of the note dated November 20, 2012, into 131,756 shares of common stock at a 50% discount, $0.05.

On February 11, 2013, due to a reset clause in the note acquired on November 20, 2012, Mauriello was issued an additional 71,392 shares of common stock.

On February 11, 2013, Sazer converted $5,250 of principal and $145.32 of accrued interest of the note dated November 20, 2012, into 53,954 shares of common stock at a 50% discount, $0.05.

On February 11, 2013, Southridge converted $14,400 of the note dated December 4, 2012, into 405,042 shares of common stock at a 50% discount, $0.05.

On February 11, 2013, Star City converted $20,000 of principal and $743.54 of accrued interest of the note dated October 22, 2012, into 414,871 shares of common stock at a 50% discount, $0.05.

On February 20, 2013, Southridge converted $20,255 of the note dated November 30, 2012, into 405,100 shares of common stock at a 50% discount, $0.05.

On February 26, 2013, Momoma Capital converted the $14,925 into 213,210 shares of common stock at a discount of 30%, $0.07.

On February 27, 2013, due to a reset clause in the note acquired on November 30, 2012, Southridge was issued an additional 101,275 shares of common stock.

On February 27, 2013, Southridge converted $12,150 of the note dated November 30, 2012, into 303,750 shares of common stock at a 50% discount, $0.04.

On March 5, 2013, Southridge converted $20,375 of the note dated December 28, 2012, into 509,375 shares of common stock at a 50% discount, $0.04.

On March 6, 2013, the Board of Directors approved the 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, the CEO and CFO, respectively, were each granted 250,000 shares of restricted common stock.

On March 6, 2013, the Board of Directors approved the compensation for 2013 for 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.

On March 12, 2013, Southridge converted $24,430 of the note dated November 30, 2012, into 610,750 shares of common stock at a 50% discount, $0.04.

On March 18, 2013, due to a reset clause in the note acquired on November 30, 2012, Southridge was issued an additional 203,584 shares of common stock.

On March 18, 2013, Southridge converted $12,990 of the note dated November 30, 2012, into 433,000 shares of common stock at a 50% discount, $0.03.

On March 22, 2013, Southridge converted $19,100 of the note dated November 30, 2012, into 636,667 shares of common stock at a 50% discount, $0.03.

On March 28, 2013, KAJ converted $15,000 of the note dated January 30, 2012, into 535,715 shares of common stock at a 30% discount, $0.028.

On April 1, 2013, Southridge converted $13,010 of its note dated November 30, 2012 into 650,500 shares of common stock at a discounted rate of 50%, $0.02.

On April 10, 2013, Southridge converted $9,440 of its note dated November 30, 2012 into 944,000 shares of common stock at a discounted rate of 50%, $0.02.

On April 15, 2013, Southridge converted $11,125 of its note dated November 30, 2012 into 1,112,500 shares of common stock at a discounted rate of 50%, $0.02.

On April 22, 2013, Southridge converted $9,975 of its note dated November 30, 2012 into 997,500 shares of common stock at a discounted rate of 50%, $0.02.

On April 25, 2013, the Board of Directors issued S-8 shares to various employees of the Company in lieu of cash compensation. The shares issued were to Pinon, 575,000, Harmon, 575,000, Thomas Carluccio, Jr., 217,375, and Melissa Valido, 163,334, for compensation for April and May 2013.

On May 4, 2013, Southridge converted $8,525 of its note dated December 28, 2012 into 852,500 shares of common stock at a discounted rate of 50%, $0.02.

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.

On September 12, 2013, the Company issued 6,000,000 shares of common stock to Thomas Carluccio, Jr. as compensation for his services in lieu of payroll.

On September 12, 2013, the Company issued 4,000,000 shares of common stock to Melissa Valido as compensation for his services in lieu of payroll.

On September 15, 2013, Southridge converted $1,885 of principal and $314 of accrued interest of the note dated December 4, 2012, into 2,199,091 shares of common stock.

On September 25, 2013, Southridge converted $1,855 of principal and $92 of accrued interest of the note dated December 4, 2012, into 2,212,450 shares of common stock.

On October 3, 2013, Southridge converted $1,585 of principal and $52 of accrued interest of the note dated December 4, 2012, into 2,406,639 shares of common stock.

On October 4, 2013, Hanson Capital, LLC converted $1,500 of principal of the note dated December 12, 2011 into 1,004,689 shares of common stock.

On October 11, 2013, Southridge converted $1,563 of principal and $73 of accrued interest of the note dated December 4, 2012, into 2,405,268 shares of common stock.

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.

On October 15, 2013, the Company issued 25,000,000 shares of common stock to Bruce Harmon, a consultant to the Company, as compensation for his services.

On October 18, 2013, Southridge converted $6,530 of principal and $53 of accrued interest of the note dated December 4, 2012, into 13,714,282 shares of common stock.

On October 25, 2013, Southridge converted $3,805 of principal and $38 of accrued interest of the note dated December 4, 2012, into 13,724,384 shares of common stock.

On October 28, 2013, Asher Enterprises, Inc. converted $2,300 of the note dated October 24, 2012, into 4,791,667 shares of common stock.

On November 1, 2013, Southridge converted $3,265 of principal and $29 of accrued interest of the note dated December 4, 2012, into 13,725,295 shares of common stock.

The Securities were issued pursuant to exemptions from registration requirements relying on Section 4(2) of the Securities Act of 1933 and upon Rule 506 of Regulation D of the Securities Act of 1933.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

The Company is in default with several of its noteholders as reflected below and disclosed within this report in Note 4 of the Notes to the Consolidated Financial Statements dated ~~September~~June 30, ~~2013~~2014.

	Principal
Notes and convertible notes, net of discounts
Gary Kline	$	56,000
Robert Salie - Line of Credit		400,000
Salie Family Limited Partnership		50,000
Douglas Pinard		20,000
Richard St. Cyr		17,000
Ventana Capital Partners, Inc.		20,000
Thomas Carluccio, Jr.		5,000
Thomas Carluccio, Jr.		5,000
Thomas Carluccio, Jr.		5,000
Thomas Carluccio, Jr.		5,000
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		5,000
Bruce Harmon		5,000
Bruce Harmon		5,000
Bruce Harmon		5,000
Bruce Harmon		5,000
Bruce Harmon		5,000
Sergio Pinon		5,000
Sergio Pinon		5,000
Sergio Pinon		5,000
Sergio Pinon		5,000
Sergio Pinon		5,000
Sergio Pinon		5,000
Lakeport Business Services, Inc.		45,000
Lakeport Business Services, Inc.		25,000
Lakeport Business Services, Inc.		67,839
Total	$	790,839

	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		15,000
Evolution Capital, LLC		75,000
Evolution Capital, LLC		22,750
Evolution Capital, LLC		36,580
Evolution Capital, LLC		12,990
Evolution Capital, LLC		20,255
Hanson Capital, LLC		100,000
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
SGI Group, LLC		-
Ventana Capital Partners, Inc.		20,000
Star City Capital, LLC		-
Southridge Partners II, LP		31,415
Southridge Partners II, LP		-
Southridge Partners II, LP		-
WHC Capital, LLC		-
Southridge Partners II, LP		-
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
Lakeport Business Services, Inc.		47,235
Lakeport Business Services, Inc. - Line of Credit		213,095
Total	$	1,819,844

ITEM 4. MINE SAFETY DISCLOSURES

None

ITEM 5. OTHER INFORMATION

~~The~~On ~~Company~~or ~~relocated~~about ~~its~~July ~~office~~24, to2014, ~~3111~~and ~~Mahan~~July ~~Dr.~~28, ~~Suite~~2014, 20the ~~#121~~Company filed with FINRA and the State of Delaware, ~~Tallahassee~~respectively, FLto ~~32308~~effect a 1 for 200 reverse stock split of the Company’s common stock. ~~Additionally~~As of August 18, 2014, the ~~telephone~~reverse ~~number~~split ~~changed~~has tonot ~~850-583-5019~~yet been approved and effected.

ITEM 6. EXHIBITS

Number		Description
3.1 (1)		Articles of Incorporation, as Amended
3.2 (1)		Bylaws
3.2 (3)		Bylaws
3.3 (2)		Certificate of Designation of the Preferences and Rights of Series E Preferred Stock
3.4 (3)		Certificate of Designation of the Preferences and Rights of Series F Preferred Stock
3.4 (4)		Certificate of Designation of the Preferences and Rights of Series F Preferred Stock
31.1 (3)		Certification of Chief Executive Officer and interim Chief Financial Officer of eLayaway, Inc. Required by Rule 13a-14(1) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
3.5 (4)		Certificate of Designation of the Preferences and Rights of Series G Preferred Stock
32.1 (3)		Certification of Chief Executive Officer and interim Chief Financial Officer of eLayaway, Inc. Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and Section 1350 Of 18 U.S.C. 63
3.5 (5)		Certificate of Designation of the Preferences and Rights of Series H Preferred Stock
101.INS**		XBRL Instance Document
31.1 (5)		Certification of Principal Executive Officer and Principal Accounting Officer of eLayaway, Inc. Required by Rule 13a-14(1) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
101.SCH**		XBRL Taxonomy Extension Schema Document
32.1 (5)		Certification of Principal Executive Officer and Principal Accounting Officer of eLayaway, Inc. Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and Section 1350 Of 18 U.S.C. 63
101.CAL**		XBRL Taxonomy Extension Calculation Linkbase Document
101.INS (5)		XBRL Instance Document**
101.DEF**		XBRL Taxonomy Extension Definition Linkbase Document
101.SCH (5)		XBRL Taxonomy Extension Schema Document**
101.LAB**		XBRL Taxonomy Extension Label Linkbase Document
101.CAL (5)		XBRL Taxonomy Extension Calculation Linkbase Document **
101.PRE**		XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF (5)		XBRL Taxonomy Extension Definition Linkbase Document**
101.LAB (5)		XBRL Taxonomy Extension Label Linkbase Document**
101.PRE (5)		XBRL Taxonomy Extension Presentation Linkbase Document**

_______________

(1) Previously filed with the Form 8-K filed on April 16, 2010 and is incorporated herein by reference.

(2) Previously filed with the Form 10-Q for the period ended June 30, ~~2010~~2011 and is incorporated herein by reference.

(3) ~~Filed~~ ~~herewith~~Incorporated by reference from the Company’s Registration Statement on Form SB-2 (File No. 333-148516) filed with the Securities and Exchange Commission on January 8, 2008.

(4) Previously filed with the Form 10-K for the period ended December 31, 2013 and is incorporated herein by reference.

(5) Filed herewith

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

4047

SIGNATURES

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

	ELAYAWAY, INC.
Date: November 12, 2013	By:	/s/ Sergio A. Pinon
Date: August 18, 2014	By:	/s/ Sergio A. Pinon
		Sergio A. Pinon
		Chief Executive Officer and interim Chief Financial Officer

41 48

Filing Compare · eLayaway, Inc.