UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For Quarter Ended: ~~March~~June 3130, 2016

Commission File Number: 000-54587

chatAND, Inc.

(Exact name of registrant as specified in its charter)

Nevada		27-2761655
(State or Jurisdiction of Incorporation or Organization)		(IRS Employer ID No)
(State or Jurisdiction of		(IRS Employer
Incorporation or Organization)		ID No)

244 5^th Avenue, Suite C68

New York, NY 10001

(Address of principal executive office) (Zip code)

(917) 818-2280

(Issuer’s telephone number)

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

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

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

Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] 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). Yes [ ] No [X]

The number of shares outstanding of registrant’s common stock, par value $0.00001 per share, as of ~~May~~August 512, 2016, was 41,386,875 shares.

chatAND, Inc.

Table of Contents

			Page No.
Part I		Financial Information (unaudited)
	Item 1:	Condensed Consolidated Financial Statements	~~F-1~~
		Balance Sheets as of March 31, 2016 and December 31, 2015	F-1
		Balance Sheets as of June 30, 2016 and December 31, 2015	F-3
		Statements of Operations for the Three months ended March 31, 2016 and 2015	F-2
		Statements of Operations for the Three and Six Months ended June 30, 2016 and 2015	F-4
		Statement of Stockholders’ Equity for the period ended March 31, 2016	F-3
		Statement of Stockholders’ Equity for the period ended June 30, 2016	F-5
		Statements of Cash Flows for the Three months ended March 31, 2016 and 2015	F-4
		Statements of Cash Flows for the Six months ended June 30, 2016 and 2015	F-6
		Notes to financial statements	F-57
	Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
	Item 3:	Quantitative and Qualitative Disclosure about Market Risk	53
	Item 4:	Controls and Procedures	53
Part II		Other Information
	Item 1:	Legal Proceedings	64
	Item 1A:	Risk Factors	64
	Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	64
	Item 3:	Defaults Upon Senior Securities	64
	Item 4:	Mine Safety Disclosure	64
	Item 5:	Other Information	64
	Item 6:	Exhibits	75

chatAND, Inc

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31, 2016			December 31, 2015
	(unaudited)
ASSETS
Current assets:
Cash	$	46,360		$	101,427
Total current assets		46,360			101,427
Other assets:
Intellectual Property (Note 4)		1,581,468			1,581,468
Total other assets		1,581,468			1,581,468
Total assets	$	1,627,828		$	1,682,895
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	353,111			346,304
Accrued expenses net of payroll liabilities		19,911			22,614
Accrued interest		3,389			1,017
Advances from stockholders and employees		31,000			31,000
Notes payable, net of discount of $108,203		35,153			26,797
Warrant liability		21,412			14,390
Total current liabilities		463,976			442,122
Stockholders’ equity:
Preferred stock: $0.00001 par value; 100,000,000 shares authorized; no shares issued and outstanding.
Series A Convertible Stock, $0.00001 par value, $48.07309 stated value, 4,807,309 shares authorized; no shares issued and outstanding.
Common stock: $0.00001 par value; 500,000,000 shares authorized; 39,936,875 shares issued and outstanding as of December 31, 2015 and 41,386,375 shares issued and outstanding as of March 31, 2016		414			400
Additional paid in capital		4,266,495			4,237,509
Accumulated deficit		(3,103,057	)		(2,997,136	)
Total stockholders’ equity		1,163,852			1,240,773
Total liabilities and stockholders’ equity	$	1,627,828		$	1,682,895

See the accompanying notes to these unaudited condensed consolidated financial statements.

F-1

chatAND, Inc

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

	Three months ended March 31,
	2016			2015
Revenue:
Total revenue	$	-		$	-
Costs and expenses:
General and administrative		67,446			122,201
Research and development expense		-			-
Asset impairment		-			749
Total costs and expenses		67,446			122,950
Loss from operations		(67,446	)		(122,950	)
Other expenses:
Interest expense		(31,453	)		(741	)
Gain (loss) on change in fair value of warrant liability		(7,022	)		15,462
Total other income (expenses)		(38,475	)		14,721
Net income (loss) before income taxes		(105,921	)		(108,229	)
Income taxes		-			-
NET INCOME (LOSS)	$	(105,921	)	$	(108,229	)
Earnings (loss) per share, basic and diluted	$	(0.00	)	$	(0.00	)
Weighted average number of shares outstanding, basic		40,430,831			38,875,805

See the accompanying notes to these unaudited condensed consolidated financial statements.

F-2

chatAND, Inc
CONDENSED CONSOLIDATED BALANCE SHEETS

		June 30, 2016			December 31, 2015
		(unaudited)
ASSETS
Current assets:
Cash	$	1,357		$	101,427
Total current assets		1,357			101,427

Other assets:
Intellectual Property (Note 4)		1,581,468			1,581,468
Total other assets		1,581,468			1,581,468

Total assets	$	1,582,825		$	1,682,895

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	333,164			346,304
Accrued expenses net of payroll liabilities		19,911			22,614
Accrued interest		6,225			1,017
Advances from stockholders and employees		31,000			31,000
Notes payable, net of discount of $51,490		63,509			26,797
Warrant liability		30,070			14,390
Total current liabilities		483,879			442,122

Stockholders’ equity:
Preferred stock: $0.00001 par value; 100,000,000 shares authorized; no shares issued and outstanding.	$	-		$	-
Series A Convertible Stock, $0.00001 par value, $48.07309 stated value, 4,807,309 shares authorized; no shares issued and outstanding.		-			-
Common stock: $0.00001 par value; 500,000,000 shares authorized; 39,936,875 shares issued and outstanding as of December 31, 2015 and 41,386,875 shares issued and outstanding as of June 30, 2016		414			400
Additional paid in capital		4,266,495			4,237,509
Accumulated deficit		(3,167,963	)		(2,997,136	)
Total stockholders’ equity		1,098,946			1,240,773

Total liabilities and stockholders’ equity	$	1,582,825		$	1,682,895

ee the accompanying notes to these unaudited condensed consolidated financial statements.

F-3

chatAND, Inc
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

	Three months ended June 30,						Six months ended June 30,
	2016			2015			2016			2015
Revenue:
Total revenue	$	-		$	-		$	-		$	-

Costs and expenses:
General and administrative		27,449			(7,249	)		94,895			114,953
Research and development expense		-			(2,791	)		-			(2,791	)
Asset impairment		-			-			-			749
Total costs and expenses		27,449			(10,040	)		94,895			112,911

Loss from operations		(27,449	)		10,040			(94,895	)		(112,911	)

Other expenses:
Interest expense		(28,798	)		(1,427	)		(60,252	)		(2,168	)
Gain (loss) on change in fair value of warrant liability		(8,659	)		114,221			(15,680	)		129,683
Total other income (expenses)		(37,457	)		112,794			(75,932	)		127,515

Net income (loss) before income taxes		(64,906	)		122,834			(170,827	)		14,604

Income taxes		-			-			-			-

NET INCOME (LOSS)	$	(64,906	)	$	122,834		$	(170,827	)	$	14,604

Earnings (loss) per share, basic and diluted	$	(0.00	)	$	0.00		$	(0.00	)	$	0.00

Weighted average number of shares outstanding, basic		40,430,831			39,150,805			40,430,831			39,150,805

See the accompanying notes to these unaudited condensed consolidated financial statements.

F-4

chatAND, Inc

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

~~THREE~~ SIX MONTHS ENDED JUNE ~~MARCH 31~~30, 2016

(unaudited)

													Common		Additional
													Additional
	~~Preferred stock~~	Preferred stock			~~Series A~~	Series A			~~Common stock~~	Common stock			~~Stock~~	Paid-in	~~Paid-in~~	Accumulated		~~Accumulated~~
	~~Shares~~	Shares	~~Amount~~	Amount	~~Shares~~	Shares	~~Amount~~	Amount	~~Shares~~	Shares	~~Amount~~	Amount	~~Subscriptions~~	Capital	~~Capital~~	Deficit		~~Deficit~~	Total		~~Total~~
Balance, December 31, 2015		-	$	-		-	$	-		39,936,875	$	400	$	-4,237,509	$	4(2,~~237~~997,~~509~~136	)	$	(21,~~997~~240,~~136~~773	)	$	~~1,240,773~~
Common stock issued for services		-		-		-		-		1,450,000		14		-28,986		~~28,986~~-			-29,000			~~29,000~~
Fair value of vested options		-		-		-		-		-		-		-		-			-			-
Net income (loss)		-		-		-		-		-		-		-		(170,827	)		(170,827	)
Net income (loss)		-		-		-		-		-		-		-		-			(105,921	)		(105,921	)
Balance, June 30, 2016		-	$	-		-	$	-		41,386,875	$	414	$	4,266,495	$	(3,167,963	)	$	1,098,946
Balance, March 31, 2016		-	$	-		-	$	-		41,386,875	$	414	$	-	$	4,266,495		$	(3,103,057	)	$	1,163,852

See the accompanying notes to these unaudited condensed consolidated financial statements.

F-35

chatAND, Inc.

chatAND, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
	Six months ended June 30,
	2016			2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(170,827	)	$	14,604
Adjustments to reconcile net income (loss) to net cash used in operating activities:
(Gain) loss on change in fair value of warrant liability		15,680			(129,683	)
Stock issued for services		29,000			-
Amortization of debt discount		56,712
Impairment of assets		-			749
Changes in operating assets and liabilities:
Accounts payable		(13,140	)		45,412
Accrued interest payable		5,208			-
Accrued expenses		(2,703	)		-
Net cash used in operating activities	$	(80,070	)		(68,917	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Freeline bankruptcy refund		-			18,532
Net cash provided by investing activities		-			18,532

CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of Notes Payable		(20,000	)
Sales of Common Stock		-			35,000
Net cash provided by (used in) financing activities		(20,000	)		35,000

Net increase (decrease) in cash		(100,070	)		(15,386	)

Cash, beginning of the year		101,427			29,421
Cash, end of period	$	1,357		$	14,035

SUPPLEMENTAL INFORMATION
Cash paid for interest	$	-		$	2,168

Non-cash investing and financing activities:
Common stock issued for services	$	29,000		$	-

See the accompanying notes to these unaudited condensed consolidated financial statements.

~~CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS~~F-6

(unaudited)

	Three months ended March 31,
	2016			2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(105,921	)	$	(108,229	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
(Gain) loss on change in fair value of warrant liability		7,022			(15,462	)
Stock issued for services		29,000			-
Interest expense (note discount amortization)		28,356			-
Impairment of assets		-			749
Changes in operating assets and liabilities:		-
Accounts payable		6,807			72,710
Accrued interest payable		2,372
Accrued expenses		(2,703	)		-
Net cash used in operating activities		(35,067	)		(50,232	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash used by investing activities		-			-
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable		(20,000	)		-
Sales of Common Stock		-			35,000
Net cash provided by financing activities		(20,000	)		35,000
Net increase (decrease) in cash		(55,067	)		(15,232	)
Cash, beginning of the year		101,427			29,421
Cash, end of period	$	46,360		$	14,189
SUPPLEMENTAL INFORMATION
Cash paid for interest	$	-		$	741
Non-cash investing and financing activities:
Common stock issued for services	$	29,000		$	-

See the accompanying notes to these unaudited condensed consolidated financial statements.

F-4

chatAND, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~MARCH~~JUNE 3130, 2016

(unaudited)

1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION

chatAND, Inc., a Nevada corporation (the “Company”), organized on May 14, 2010, and its wholly owned subsidiary CHATAND TECH, LLC (“TECH”), a limited liability company organized in Nevada on May 13, 2011, (collectively referred to herein as “Chat&” or the “Company”).

In 2015, the Company decided to abandon the technology platform business it was initially formed to pursue and devote it’s time and energy into fully developing and placing into service its investment asset with the relaunch of the Freeline Sports trademark and patented in-line skating technology.

In 2014, the Company acquired substantially all the assets of Freeline Sports, Inc., an inactive California company.

We do not currently have plans to develop these assets or market any products related to these assets. However, we are currently pursuing financing in order to develop these acquired assets.

Our current plans are to develop these assets and market any products related to these assets and we are currently pursuing financing in order to develop these acquired assets.

Our new goal will be focusing on pushing sports forward with innovation in design and technology. Our exclusive skate technology brings new excitement to the skate community. Our technology will have the biggest names in the industry looking to get their hands on it. With a proper launch and sales it possibly can be applied to all board sports. Adding additional products to our line will increase our validity and will further strengthen the core business, especially in the apparel arena.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and disclosures required by GAAP for annual financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the condensed consolidated financial statements of the Company as of ~~March~~June 3130, 2016 and for the ~~three~~six months ended ~~March~~June 3130, ~~2015~~2016. The results of operations for the ~~three~~six months ended ~~March~~June 3130, 2016 are not necessarily indicative of the operating results for the full year ending December 31, 2016, or any other period. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related disclosures of the Company as of December 31, 2015 and for the year then ended, which were filed with the Securities and Exchange Commission on Form 10-K on March 28, 2016.

2. GOING CONCERN AND MANAGEMENT’S LIQUIDITY PLANS

As of ~~March~~June 3130, 2016, the Company had a cash balance of $461,~~360~~357 and a working capital deficit (current liabilities exceeding current assets) of $ ~~417~~482,~~616~~522. During the ~~three~~six months ended ~~March~~June 3130, 2016, the Company used net cash in operating activities of $64100,~~067~~070, out of which $29,000 was in common stock issued for services rendered. The Company has incurred net losses since inception. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

The Company’s primary source of operating funds since inception has been cash proceeds from private placements of common stock and warrants. The Company intends to raise additional capital through private issuances of debt and equity instruments, but there can be no assurance that these funds will be available on terms acceptable to the Company, or will be sufficient to enable the Company to fully execute on its business plan or sustain operations. If the Company is unable to raise sufficient additional funds, it will have to develop and implement a plan to further extend payables, reduce overhead, or scale back its current business plan until sufficient additional capital is raised to support further operations. There can be no assurance that such a plan will be successful.

F-57

chatAND, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~MARCH~~JUNE 3130, 2016

(unaudited)

Accordingly, the accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values. The condensed consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, 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. Significant estimates include the fair value of the Company’s stock, stock-based compensation, fair values relating to warrant and other derivative liabilities, the valuation allowance related to deferred tax assets. Actual results may differ from these estimates.

Net Loss per Share

The Company computes basic net loss per share by dividing net loss per share available to common stockholders by the weighted average number of common shares outstanding for the period and excludes the effects of any potentially dilutive securities. Diluted earnings per share, if presented, would include the dilution that would occur upon the exercise or conversion of all potentially dilutive securities into common stock using the “treasury stock” and/or “if converted” methods as applicable. The computation of basic and diluted loss per share for the ~~three~~six months ended ~~March~~June 3130, 2016 and 2015 excludes potentially dilutive securities when their inclusion would be anti-dilutive, or if their exercise prices were greater than the average market price of the common stock during the period.

Potentially dilutive securities excluded from the computation of basic and diluted net loss per share are as follows:

	March 31, 2016		March 31, 2015
	June 30, 2016		June 30, 2015
Options to purchase common stock		5,370,000		5,370,000
Warrants to purchase common stock		10,950,000		5,000,000
Series A convertible preferred stock		-		4,807,309
Totals		16,320,000		10,370,000
Options to purchase common stock		10,950,000		5,275,000
Totals		16,320,000		15,452,309

Recent Accounting Pronouncements

There are various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company’s financial position, results of operations or cash flows.

F-68

chatAND, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~MARCH~~JUNE 3130, 2016

(unaudited)

Subsequent Events

The Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements except as disclosed in Note 9.

4. INVESTMENTS

In 2014, we acquired substantially all the assets of Freeline Sports, Inc., an inactive California company in Chapter 7 bankruptcy proceeds for cash payment of $250,000 and 5,000,000 shares of the our common stock, valued in aggregate of $1,350,000. The assets acquired were primarily patents, copyrights and trademarks relating to sports equipment. Specifically, we acquired patents 7,059,613, 8,308,171 and Des567,318 for supporting a user’s foot with a personal transportation device.

Our current plans and focus is the development of the assets acquired from Freeline Sports, Inc., we also may consider additional or alternative opportunities, including a change in the primary focus of our efforts. For example, we could determine to acquire, through a merger, share exchange, asset acquisition, plan of arrangement, recapitalization, reorganization or similar business combination, one or more operating businesses, or control of such operating businesses through contractual arrangements, or additional assets. We currently do not have any arrangement, agreement or understanding with respect to any such transaction and there can be no assurance that we will evaluate or conclude one.

5. WARRANT LIABILITY

In 2014, in connection with the sale of common stock, the Company issued an aggregate of 5,000,000 common stock purchase warrants to purchase the Company’s common stock with an exercise prices of $0.10 to $0.15 per share for three years with anti-dilutive (reset) provisions.

The Company has identified embedded derivatives related to the issued warrants. The accounting treatment of derivative financial instruments requires that the Company record allocated fair value of the derivatives as of the inception date and to fair value as of each subsequent reporting date.

At ~~December~~June 3130, ~~2015~~2016, the fair value of the reset provision of $1430,~~390~~070 was determined using the Black-Scholes Option Pricing model ~~with~~ with the following assumptions: dividend yield: 0%; volatility: ~~126.29~~119%; risk free rate: 0.56%; and expected life: 10.2575 to 10.27 77 years. The Company recorded a ~~gain~~loss on change in derivative liabilities of $~~328~~8,~~363~~658 during the ~~year~~three months ended ~~December~~June 3130, ~~2015~~2016.

~~At March 31, 2016, the fair value of the reset provision of $21,412 was determined using the Black~~F-Scholes Option Pricing model with the following assumptions: dividend yield: 0%; volatility: 122.72%; risk free rate: 0.56%; and expected life: 1.00 to 1.02 years. The Company recorded a loss on change in derivative liabilities of $7,022 during the three months ended March 31, 2016.9

F-7

chatAND, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~MARCH~~JUNE 3130, 2016

(unaudited)

6. STOCKHOLDERS’ EQUITY

Preferred stock

The Company is authorized to issue up to 100,000,000 shares of preferred stock with a par value of $0.00001. At ~~March~~June 3130, 2016 and December 31, 2015, no shares were issued and outstanding.

On April 9, 2015, the Company filed a Form 8-K/A and Exhibit 10.1 Series A Convertible Preferred Stock Exchange Agreement. In this filing the Company stated that it issued 4,807,309 shares of Series A Preferred Stock (the “Shares”) to 224 Stanhope Note LLC (“Stanhope”) in exchange for 4,807,309 shares of common stock of the Company. However the Shares in fact have not yet been issued pursuant to that certain Series A Convertible Preferred Stock Exchange Agreement (the “Agreement”), dated April 2, 2015, between the Company and Stanhope because the Common Stock certificate has not yet been returned and therefore the terms of the Agreement have not yet been met.

Common stock

The Company is authorized to issue up to 500,000,000 shares of common stock with a par value of $0.00001. At ~~March~~June 3130, 2016 and 2015 there were 41,386,~~375~~875 and 39,936,875 shares issued and outstanding, respectively.

7. RELATED PARTY TRANSACTIONS

At December 31, 2015 advances from shareholders and employees were granted 411,070 shares of common stock. These shares had an aggregate grant fair date value of $77,367. This was in conjunction with the release and settlement agreements for Daniel and Michael Lebor. Pursuant to Unanimous Board Written Consent ~~dtd~~dated 12/29/15, it was determined that Msssrs. Daniel and Michael Lebor were never issued Options for their 2012 and 2013 Cash Advanced to the Company. During the 12/29/15 Board meeting it was determined stock be issued with a $0.15 per share price.

	March 31, 2016		December 31, 2015
	June 30, 2016		December 31, 2015
Michael Lebor, Chief Executive Officer	$	-	$	20,094
Former employees		-		57,273
	$	-	$	77,367

Employment agreements

As of ~~March~~June 3130, 2016, the Company does not have any employee accounts.

8. FAIR VALUE MEASUREMENT

The Company adopted the provisions of Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”) on January 1, 2008. ASC 825-10 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. ASC 825-10 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825-10 establishes three levels of inputs that may be used to measure fair value:

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

F-810

chatAND, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~MARCH~~JUNE 3130, 2016

(unaudited)

Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.

All items required to be recorded or measured on a recurring basis are based upon level 3 inputs.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed and is determined based on the lowest level input that is significant to the fair value measurement.

Upon adoption of ASC 825-10, there was no cumulative effect adjustment to beginning retained earnings and no impact on the financial statements.

The carrying value of the Company’s cash, accounts payable, short-term borrowings and other current assets and liabilities approximate fair value because of their short-term maturity.

As of ~~March~~June 3130, 2016 and December 31, 2015, the Company did not have any items that would be classified as level 1 or 2 disclosures.

The Company recognizes its derivative liabilities as level 3 and values its derivatives using the methods discussed in Note 5. While the Company believes that its valuation methods are appropriate and consistent with other market participants, it recognizes that the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. The primary assumptions that would significantly affect the fair values using the methods discussed in Note 5 are that of volatility and market price of the underlying common stock of the Company.

As of ~~March~~June 3130, 2016 and December 31, 2015, the Company did not have any derivative instruments that were designated as hedges.

The derivative liability as of ~~March~~June 3130, 2016, in the amount of $2130,~~411~~070 has a level 3 classification.

Level 1

Level 2

Level 3

Derivative Liability

2130,~~412~~070

The following table provides a summary of changes in fair value of the Company’s Level 3 financial liabilities as of ~~March~~June 3130, 2016 and for the six months ended June 30, 2016:

	Warrant Liability
	Warrant
	Liability
Balance, December 31, 2015	$	14,390
Mark-to-market at March 31, 2016		7,022
Total (gains) losses		-
Balance, March 31, 2016	$	21,412
Mark-to-market		15,680
Net Gain (Loss) for the period included in earnings relating to the liabilities held at March 31, 2016		(7,022	)
Balance, June 30, 2016	$	30,070
Net Gain for the period included in earnings relating to the liabilities held at June 30, 2016		(15,680	)

F-11

chatAND, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016

(unaudited)

9. SUBSEQUENT EVENTS

~~None~~On July 5, 2016, David Stefansky, a member of the Board of Directors of chatAND, Inc, a Nevada corporation (the “Company”) invested $15,000 in the Company pursuant to the terms of a 10% Convertible Promissory Note (the “Note”). The Note is convertible at $0.01 per share and is convertible at any time after issuance until all principal and/or accrued interest has either by repaid or converted. The Note is due on July 5, 2017. In the event the Company raises additional capital at a price per share below $0.01, the conversion price of the Note shall be reduced to such an amount. A Form 8-K with additional details was filed on July 7, 2016.

~~F-9~~On August 10, 2016, David Stefansky, a member of the Board of Directors of chatAND, Inc, a Nevada corporation (the “Company”) invested $15,000 in the Company pursuant to the terms of a 10% Convertible Promissory Note (the “Note”). The Note is convertible at $0.01 per share and is convertible at any time after issuance until all principal and/or accrued interest has either by repaid or converted. The Note is due on August 10, 2017. In the event the Company raises additional capital at a price per share below $0.01, the conversion price of the Note shall be reduced to such an amount. Attached herein as Exhibit 4.1.

On August 10, 2016, Jonathan Steinhouse, a member of the Board of Directors of chatAND, Inc, a Nevada corporation (the “Company”) invested $7,500 in the Company pursuant to the terms of a 10% Convertible Promissory Note (the “Note”). The Note is convertible at $0.01 per share and is convertible at any time after issuance until all principal and/or accrued interest has either by repaid or converted. The Note is due on August 10, 2017. In the event the Company raises additional capital at a price per share below $0.01, the conversion price of the Note shall be reduced to such an amount. Attached herein as Exhibit 4.2.

F-12

ITEM 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes appearing elsewhere in this Form 10-Q. This discussion and analysis may contain forward-looking statements based on assumptions about our future business. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those set forth elsewhere in this Form 10-Q.

Management’s Analysis of Business

The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which are prepared in conformity with accounting principles generally accepted in the United States of America. As such, we are required to make certain estimates, judgments and assumptions that management believes are reasonable based upon the information available. We base these estimates on our historical experience, future expectations and various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for our judgments that may not be readily apparent from other sources. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. These estimates and assumptions relate to estimates of the carrying amount of intangibles, stock based-compensation, valuation allowances for deferred income taxes, accruals and other factors. We evaluate these estimates on an ongoing basis. Actual results could differ from those estimates under different assumptions or conditions, and any differences could be material.

We have not generated any revenues to date and had cash balances of $46,360 and $101,247 at March 31, 2016 and December 31, 2015, respectively.

ChatAND headquarters are at 244 5^th Avenue, Suite C68, New York, NY 10001. Our telephone number is 917-818-2280.

Chat& is a an up and coming sport action company that expects to fully develop and place into service its investment asset with the relaunch of the Freeline Sports trademark and patented in-line skating technology.

The Company is considered a pre-development company because it has not generated any revenue, has limited resources and has not established operations to generate sufficient capital to complete its business plan.

Recent Business Developments

Results of Operations

Three months ended ~~March~~June 3130, 2016 compared to three months ended ~~March~~June 3130, 2015

Following is a summary of expenses for the three months ended ~~March~~June 3130, 2016 and 2015.

	2016		2015
General and administrative expense	$	6727,~~446~~449	$	~~122~~(7,~~201~~249	)
Asset impairment		-		~~749~~(2,791	)
	$	6727,~~446~~449	$	~~122~~(10,~~950~~040	)

General and administrative expenses are summarized as follows:

	2016		2015
Professional fees	$	2712,~~897~~632	$	~~110~~(7,~~519~~744	)
Reseller fees		-		-
Option expense		-		-
Consultant		9,300		2,200
Consultant		36,075		7,500
Other		5,517		(1,705	)
Insurance		-		-
	$	27,449	$	(7,249	)
Other		3,474		4,182
	$	67,446	$	122,201

General and administrative expense ~~decreased~~increased by $5446,~~755~~362 for the three months ended ~~March~~June 3130, 2016, as compared to the three months ended ~~March~~June 3130, 2015. This increase is primarily due to a ~~decrease~~write-off inof ~~professional~~legal fees ~~of $82,622~~ and an increase in ~~Consulting~~auditing ofand Nevada State filing ~~$28,575~~fees due to pay-down of prior year outstanding payables.

These costs are expected to increase in the future if additional funding becomes available and additional employees are hired. The Company has had reduced funding since July 2012, resulting in payroll not being paid since July 2012 and a reduction in other costs until funding becomes available.

Other income (expense) consists of the following for the three months ended ~~March~~June 3130, 2016 and 2015.

	2016			2015
Interest expense		(3128,~~453~~798	)		(~~741~~1,427	)
Gain (loss) on change in fair value of derivative liability		(78,~~022~~658	)		15114,~~462~~221
	$	(38,475	)	$	14,721
Other income		11,664			-
	$	(37,457	)	$	112,794

Interest expense for the three months ended ~~March~~June 3130, 2016 is primarily an accrual of the interest on ~~certain~~notes ~~accounts~~ payable~~, and notes payable~~. Interest expense in 2015 includes interest on certain accounts payable.

Warrant liability expense was calculated using the Black Scholes valuation method as described in Note 5 to the financial statements.

Liquidity and Capital Resources and Going Concern

At ~~March~~June 3130, 2016 and December 31, 2015, the Company had current assets of $461,~~360~~357 and $101,427; current liabilities of $~~463~~483,~~976 and~~879 and $442,122; and a working capital deficit of $~~417~~482,~~616~~522 and $340,695, respectively.

We have not generated any revenues to date and have suspended active development activities. The Company has not had any cash available other than nominal loans from shareholders and has discontinued accruing payroll. The Company’s continuing existence depends upon its ability to find alternative sources of financing.

At ~~March~~June 3130, 2016 and December 31, 2015, we had no liquidity. The Company will require additional financing before it can implement its business plan.

We presently do not have any available credit, bank financing or other external sources of liquidity. Due to our historical operating losses, our operations have not been a source of liquidity. We may seek additional capital in order to develop operations and become profitable. In order to obtain capital, we may need to sell additional shares of common or preferred stock or borrow funds from private lenders pursuant to instruments, which are junior to our outstanding secured debt instruments. There can be no assurance that we will be successful in obtaining additional funding.

If the above events do not occur or the Company is unable to implement its business plan, substantial doubt about the Company’s ability to continue as a going concern exists.

Item 3: QUANTITATIVE and QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

Item 4: Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that material information required to be disclosed in our periodic reports filed under the Securities Exchange Act of 1934, as amended, or 1934 Act, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and to ensure that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer as appropriate, to allow timely decisions regarding required disclosure. We carried out an evaluation, under the supervision and with the participation of our management, including the principal executive officer and the principal financial officer (principal financial officer), of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13(a)-15(e) under the 1934 Act, as of the end of the period covered by this report. Based on this evaluation, because of the Company’s limited resources and limited number of employees, management concluded that our disclosure controls and procedures were ineffective as of December 31, 2014.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is designed to provide reasonable assurances regarding the reliability of financial reporting and the preparation of the financial statements of the Company in accordance with U.S. generally accepted accounting principles, or GAAP. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree or compliance with the policies or procedures may deteriorate.

With the participation of our Chief Executive Officer and Chief Financial Officer, our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of March 31, 2016 based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

Based on our evaluation and the material weaknesses described below, management concluded that the Company did not maintain effective internal control over financial reporting as of March 31, 2016 based on the COSO framework criteria. Management has identified control deficiencies regarding the lack of segregation of duties and the need for a stronger internal control environment. Management of the Company believes that these material weaknesses are due to the small size of the Company’s accounting staff and support personnel. The small size of the Company’s accounting staff may prevent adequate controls in the future, such as segregation of duties, due to the cost/benefit of such remediation.

To mitigate the current limited resources and limited employees, we rely heavily on direct management oversight of transactions. As we grow, we expect to increase our number of employees, which will enable us to implement adequate segregation of duties within the internal control framework.

These control deficiencies could result in a misstatement of account balances that would result in a reasonable possibility that a material misstatement to our financial statements may not be prevented or detected on a timely basis. Accordingly, we have determined that these control deficiencies as described above together constitute a material weakness.

In light of this material weakness, we performed additional analyses and procedures in order to conclude that our consolidated financial statements for the three months ended March 31, 2016 included in this Quarterly Report on Form 10-Q were fairly stated in accordance with US GAAP. Accordingly, management believes that despite our material weaknesses, our financial statements for the three months ended March 31, 2016 are fairly stated, in all material respects, in accordance with US GAAP.

Changes in internal control over financial reporting

There have been no significant changes in internal controls or in other factors that could significantly affect these controls during the quarter ended March 31, 2016, including any corrective actions with regard to significant deficiencies and material weaknesses.

ITEM 1: LEGAL PROCEEDINGS

None.

ITEM 1A: RISK FACTORS

Not applicable.

ITEM 2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Not applicable.

ITEM 3: DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4: MINE SAFETY DISCLOSURE

Not applicable.

ITEM 5: OTHER INFORMATION

Not applicable.

ITEM 6: EXHIBITS

The following exhibits are filed with this report on Form 10-Q.

Exhibits		Description
10.1		A Form 8-K filed on June 2, 2016 announced the resignation of ~~NON-STATUTORY~~Michael ~~STOCK~~Lebor ~~OPTION~~and ~~GRANT~~appointment ~~AND~~of ~~AGREEMENT~~Victoria Rudman as interim CEO.
10.2		~~Form~~On ofApril ~~SHARE~~19 ~~EXCHANGE~~and ~~AGREEMENT~~20, 2016, the Company entered into a general release with Ellenoff Grossman & Schole LLP.
4.1		A form of 10% Convertible Promissory Note issued by chatAND, Inc.
4.2		A form of Warrant to Purchase Shares of Common Stock issued by chatAND, Inc
31.1		Certification pursuant to 18 U.S.C. Section 1350 Section 302 of the Sarbanes-Oxley Act of 2002 – Chief Executive Officer*
31.2		Certification pursuant to 18 U.S.C. Section 1350 Section 302 of the Sarbanes-Oxley Act of 2002 – Chief Financial Officer*
32.1		Certification pursuant to 18 U.S.C. Section 1350 Section 906 of the Sarbanes-Oxley Act of 2002 – Chief Executive Officer*
32.2		Certification pursuant to 18 U.S.C. Section 1350 Section 906 of the Sarbanes-Oxley Act of 2002 – Chief Financial Officer*
101.INS		XBRL Instance Document**
101.SCH		XBRL Taxonomy Extension Schema Document**
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document**
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document**
101.LAB		XBRL Taxonomy Extension Label Linkbase Document**
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document**

* Filed Herewith.

** In accordance with Regulation S-T, the XBRL-formatted interactive data files that comprise Exhibit 101 in this Quarterly Report on Form 10-Q shall be deemed “furnished” and not “filed”.

SIGNATURE

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

	chatAND, Inc.
Date: May 13, 2016	By:	/s/ Michael Lebor
Date: August 15, 2016	By:	/s/ Victoria D. Rudman
		Michael Lebor
		Victoria D. Rudman
		Chief Executive Officer
		Interim Chief Executive Officer
Date: May 13, 2016	By:	/s/ Victoria Rudman
Date: August 15, 2016	By:	/s/ Victoria D. Rudman
		Victoria Rudman
		Victoria D. Rudman
		Chief Financial Officer
		Interim Chief Financial Officer

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