searchcore_10-12ga.htm

Item 2. Financial Information.

SELECTED FINANCIAL DATA

	For the Nine Months Ended September 30,			For the Years Ended December 31,
SearchCore, Inc.	2012 (unaudited)			2011 (audited)			2010 (audited)

Statements of Operations Data:

Total revenues	$	12,172,350		$	11,928,932		$	3,355,878
Operating income		2,860,374			1,450,180			456,517

Net income (loss)		7,948,950			(3,244,299	)		350,495

Balance Sheets Data:

Cash	$	812,232		$	1,512,590		$	1,388,574
Current assets		2,057,577			2,160,166			2,492,911
Total assets		9,096,764			8,076,380			7,639,862

Total current liabilities		7,792,172			2,891,862			1,287,023
Total liabilities		15,176,189			26,830,209			24,149,292

Total stockholders' (deficit)	$	(6,079,425	)	$	(18,753,829	)	$	(16,509,430	)

MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Disclaimer Regarding Forward Looking Statements

You should read the following discussion in conjunction with our financial statements and the related notes and other financial information included in this Registration Statement. In addition to historical financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Registration Statement, particularly in the Section titled Risk Factors.

Although the forward-looking statements in this Registration Statement reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report and in our other reports as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations and prospects.

Summary Overview

We, together with our wholly owned subsidiaries, are engaged in developing, operating and monetizing vertical finder websites in numerous industries. We currently are either in the development stage or are marketing in the recreational sports, manufactured home, and tattoo industries. We provide services in three different sectors; media, technology and marketing. All of our operations are conducted through our wholly-owned subsidiaries, each of which is incorporated or qualified to do business in the states in which it does so.

All of our revenue during the nine months ended September 30, 2012, and approximately 99.5% of our 2011 revenue, was generated by our then wholly-owned subsidiary, WeedMaps Media, Inc., which operated www.weedmaps.com as a finder website that aided consumers in finding medicinal cannabis dispensaries. The dispensaries paid a fee to WeedMaps Media in order to post their dispensary information on www.weedmaps.com.

Effective on December 31, 2012, we sold WeedMaps Media, Inc.

Our Telemarketing Sales And Technology Platform

Our technology knowhow and our telemarketing sales are built around a clearly defined set of market criteria, a strong operating foundation, and a subscription-based revenue model.

A reported $37.3 billion was spent on online advertising during 2012 in the United States alone, and the amount is expected to continue to grow. Of the total U.S. market, paid search (like Google Adwords) represents the largest single portion at $17.6 billion. U.S online display ads spend (banners, video, pop-ups) continues to command $15 billion1. The current objective for online marketing and online advertising is to find a mechanism that can deliver a form of value to the consumer in return for engagement with a relevant marketer’s brand across multiple platforms (web, mobile, etc).

Our technology and telemarketing sales platform, however, accomplishes this goal by focusing on delivering value through our niche finder sites. Our sites add a richness and social interactivity to search and display advertising that we believe Google and others don’t match for specific industries or niche industry segments. While Google and others will most always be the catalyst for consumers, our finder sites intend to be the next click, with relevant content and resources specific to each niche. We focus on making the actual experience of engagement with our finder sites pleasing, ensuring that our finder sites provide value to the consumer to accomplish a task (say, in finding a tattoo artist) and on delivering a targeted segment to local businesses that they would otherwise not reach in a cost effective and timely manner.

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1 http://www.emarketer.com/newsroom/index.php/google-display-ad-leader/

Our technology and telemarketing sales platform has been built upon our proven track record. Differentiating factors of our business include:

·	Clear focus and strategic direction: scale the proven paid content model to specifically identified industry niches;

·	Valuable internet real estate in attractive industry verticals: ensure the portfolio is comprised of highly attractive pieces of internet real estate (i.e. premium domain names and supporting domain names) in underserved but large markets;

·	Highly experienced, in-house sales staff with proven consultative sales capabilities: having sales personnel that can manage, advise and consult with business owners;

·	State-of-the-art, multi-channel technology platform: depth of technical knowledge/ability to adapt and benefit from the ever evolving state of search and digital marketing technologies; and

·	Established culture that fosters client service, innovation and adaptability: individual accountability and innovation

Our Plan Of Operation

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Our Process for Vertical Finder Site Development

We have a systematic approach to the development of our finder sites which allows us to budget our time and resources as we expand and manage our base of finder sites. We believe the timeframe and costs should decrease and then stabilize as a result of efficiently executing the full finder site development. For a finder site to reach scalability, with the fewest malfunctions which cause downtime, it is imperative that the site goes through its normal build life cycle.

Costs Of And Funding Our Vertical Finder Site Development

We currently have several finder sites under development. The costs associated for developing our finder sites include, but are not limited to, expenses for our programmers, coders, UI design and content creation. Our total monthly expense for development averages from $50,000 to $60,000 per month. To date, we have funded our development operations from cash on hand, the monthly $100,000 we receive pursuant to the sale of WeedMaps, which we shall receive for the next 25 months, the monthly $10,000 we receive pursuant to our agreement with Tattoo Interactive, which we shall receive for the next 9 months, and to a lesser extent, the listing and advertising revenue we now generate from Tattoo.com. Below is a summary of our finder site development process. There is time overlap between each phase and the labels of the various phases are for example only.

Phase 1: Industry Analysis and Domain Name Acquisition

We begin by identifying potential niche industries. We conduct initial research and if our internal industry criteria are met, we move to acquire an industry premium domain name. For example, our key internal industry criteria include, but are not limited to, an industry must be fragmented and disjoined, have overall market potential of greater than $250 million, and that we can become the top most visited site in that industry.

Phase 2: Discovery & Planning - Approximately 60 – 120 days per industry (per finder site)

During discovery and planning, we interview industry experts and insiders who have working knowledge of the industry. We analyze our competition, what the products and services are in the industry, and more importantly, what products and services are needed. We determine the concept of the main page and how our features are going to engage the user so they increase the length of time on the site. We analyze the larger targeted areas as well as specify regions and communities.

Phase 3: Content Strategy & Content Development – Approximately 30 – 60 days

We determine what content will be viewed, including producing, shooting, editing and posting videos, writing blogs, and drafting content. Typically, we will put up a blog and forum site in order to begin gathering SEO information prior to full site development. The content varies per industry and will include various forms; written forums, blogging, articles and videos.

Phase 4: Graphic Design & Development – Approximately 45 – 90 days

We fine-tune the user interface (UI) experience through graphical mock-ups. We believe the look and feel of the site is as critical as the performance. The UI of the site and its various forms of content must lend itself to the target audience. By this phase, all strategy, planning and design are completed and the finder site is coded.

Phase 5: Testing & Show time – Approximately 1 week – Ongoing

We continually test the site, and the process continues until we determine the product meets our minimal viable standards. This is a collaborative team effort with coders, bloggers, programmers and the sales department. We provide the site to the general public through limited exposure. We obtain quantifying feedback and analyze the results, pivot if need be, refine, and redo any pages or functions as needed.

Status Of Each Of Our Finder Sites

Tattoo.com

Tattoo.com is a preeminent finder site within the $2.3 billion tattoo industry. An interactive community of tattoo shops, artists, and enthusiasts, this premium URL will serve as the authoritative resource for all things tattoo, including tattoo application and removal.

On January 21, 2013, we entered into a Management Agreement with Tattoo Interactive, LLC pursuant to which we will perform various marketing, promotion, and website management services with respect to the domain name known as www.tattoo.com . The Agreement has an initial term of 12 months and shall automatically renew for successive one-year terms unless terminated in accordance with its terms. Pursuant to the Agreement, we will receive twenty percent of all advertising revenue, and after the payment of the advertising revenue, we will receive sixty five percent of all remaining designated gross revenue. We have a right of first refusal in the event Tattoo Interactive elects to sell the domain name, and in the event certain revenue goals, as set forth in the agreement, are satisfied, we will be granted certain equity interests in Tattoo Interactive.

Prior to our entering into the Management Agreement with the owners of the domain name, the site was operational and had nominal revenue. We have begun generating revenue and signing subscription agreements with clients. The fees charged in the subscription agreements are month-to-month and range from $99 to $599. We are compiling a national database of tattoo facilities as well as an ongoing telemarketing campaign to tattoo facilities and artists throughout the US, and introducing these potential clients to the website. Conditional on reaching a certain search rankings and certain number of monthly page view, then we believe that sales of the services and products will correlate with the unique monthly visits to the website.

ManufacturedHomes.com, ManufacturedHome.com and ManufacturedHouse.com

By building an interactive community of potential homebuyers, dealers, and manufacturers, ManufacturedHomes.com will establish itself as the definitive go-to finder site for manufactured home purchasers, dealers, manufacturers and lenders.

On August 2, 2012, we entered into a Domain Name Purchase Agreement pursuant to which we purchased the domain names known as www.manufacturedhome.com and www.manufacturedhouse.com, for total consideration of $50,000, paid at closing. Further, on August 16, 2012, we entered into a Domain Name Purchase Agreement pursuant to which we purchased the domain name known as www.manufacturedhomes.com, for total consideration of $130,000, paid at closing.

ManufacturedHomes.com is currently under development and is expected to launch during the quarter ended September 30, 2013. We expect to begin generating nominal revenues during the quarter ended December 31, 2013 and conditional on reaching a certain search ranking and number of monthly page views, begin generating meaningful revenues during the quarter ended March 31, 2014.

ManufacturedHome.com and ManufacturedHouse.com both currently exist as single web pages which indicate that a website is coming soon. However, at the current date, management is not certain whether these domain names will become their own respective websites that are expected to generate revenue or if they will be websites that exist to drive traffic to ManufacturedHomes.com.

Sportify.com

Sportify.com aims to become a social network designed for recreational sports enthusiasts. Our intent is for the site to enable users to source, schedule, review, connect and participate in up to 90 different recreational sports in a geographic area anywhere throughout the U.S. The complete functionality of the site is pending, however, we believe to incorporate and code all of our concepts to Sportify.com will take approximately two years.

On December 31, 2012, we entered into a Securities Purchase Agreement pursuant to which we purchased 100% of the issued and outstanding equity interests of Sports Asylum, Inc. which owns and operates the intellectual property associated with www.sportify.com, in exchange for (a) the cancellation of a previous Secured Promissory Note issued to Sports Asylum, entered into on or about August 22, 2012 and with an outstanding principal balance of $285,000 and (b) $215,000 represented by promissory notes. Sportify is expected to launch during the quarter ended June 30, 2013. We expect to begin generating nominal revenue during the quarter ended September 30, 2013 and meaningful revenues during the quarter ended March 31, 2014.

We anticipate having a limited release of Sportify.com during the month ended April 30, 2013. The geographical area that we have targeted for the release is the areas from Santa Barbara to San Diego in Southern California.

ModularHomes.com

Modular homes are similar to manufactured homes in that they are factory built. However, distinct from manufactured homes, modular home components are joined at the building site and are regulated in the same way as site-built homes. Currently, there are approximately 150 modular home manufacturing facilities in the United States. We intend for ModularHomes.com to serve as the de facto online destination for all constituents in this growing and regionally diverse industry. The Modular Home finder site will feature tools for both consumers and retailers from custom price quotes and a local site contractor finder to retailer and builder directories and profiles, including featured listings and advertising opportunities for retailers and builders.

On January 25, 2013, we purchased the domain name known as www.modularhomes.com for $140,000, payable in a down payment of $50,000 and the balance over twelve equal monthly payments. ModularHomes.com is currently under development and is expected to launch during the quarter ended September 30, 2013. We expect to begin generating nominal revenues during the quarter ending December 31, 2013 and conditional on reaching a certain search ranking and number of monthly page views, begin generating meaningful revenues during the quarter ended March 31, 2014.

Karate.com

Karate.com is anticipated to become a highly ranked consolidated site for all types of martial arts. It will build a community of martial arts enthusiasts and industry professionals who can share interests and make friends, locate studios and training facilities, find equipment and tournaments, and post items for sale or inquiries. We have already compiled a database of over 60,000 stores and facilities in the United States.

On August 7, 2012, we entered into a Domain Name Purchase Agreement and a Non-Recourse Secured Promissory Note pursuant to which we purchased the domain names known as www.rodeo.com and www.karate.com, for total consideration of $500,000, with the entire purchase price represented by the Note. On October 25, 2012, we amended the Purchase Agreement and the Note. Pursuant to the terms of the amendments, we agreed to make payments of $50,000 on each of August 15, 2012 and November 1, 2012, which we did. The balance of $400,000 is to be paid in eighteen equal monthly installments of $22,222 beginning June 1, 2013, and continuing on the first day of each month thereafter.

Karate.com is currently under development and is expected to launch during the quarter ended September 30, 2013. We expect to begin generating nominal revenues during the quarter ending December 31, 2013 and conditional on reaching a certain search ranking and number of monthly page views, begin generating meaningful revenues during the quarter ended March 31, 2014.

Rodeo.com

Worldwide, the advertising, marketing, and products sold in the rodeo industry exceed $3 billion. To capitalize on this fragmented market, we intend to make Rodeo.com the online hub of information, products, and services for the rodeo industry.

We are currently in the planning and discovery phase for Rodeo.com. Rodeo.com is expected to launch during the quarter ended June 30, 2014. We expect to begin generating nominal revenues during the quarter ending September 30, 2014 and conditional on reaching a certain search ranking and number of monthly page views, begin generating meaningful revenues during the quarter ended December 31, 2014.

Medicinal Cannabis Industry

Prior to the sale of our wholly-owned subsidiary, WeedMaps Media, Inc., on December 31, 2012, our first finder site, www.weedmaps.com, focused primarily on dispensaries in the medicinal cannabis industry. We were never engaged in the growing, harvesting, cultivation, possession, or distribution of cannabis. Instead, we focused on developing our finder site technology and associated business model which could then be implement in a myriad of industries. All of our discussion in this Management’s Discussion and Analysis for the nine months ended September 30, 2012 and for the year ended December 31, 2011 relates to our WeedMaps Media, Inc. business.

Restatement

See Note 26. Current Fiscal Year Adjustment in the footnotes to our annual financial statements for information regarding our previous conclusion that the net change in the fair value of the earn-out liability, $205,000, was immaterial to our net income and as a result did not record a change in the earn-out liability. However, after further consideration of qualitative as well as quantitative factors, we concluded that the change in the fair value of the earn-out liability was material to our operations and as a result, we recorded a change in the earn-out liability of $205,000 at December 31, 2011. The adjustment resulted in the fair value of the earn-out liability at December 31, 2011 being recorded at $18,567,223.

Discontinued Operations of General Health Solutions, Inc.

We terminated our management agreement resulting in the closure of General Health Solutions, Inc., which constituted our entire Medical Clinic Management segment. In February 2012, we committed to a definitive plan to terminate the management agreement and services associated with the agreement, which resulted in General Health Solutions, Inc., our Medical Clinic Management segment being reported as discontinued operations. We were fully divested of all management responsibilities as per the management agreement by the close of the first quarter of 2012, and all operations have ceased. For comparative purposes, all prior periods presented have been restated to reflect the reclassification of this segment to discontinued operations on a consistent basis.

Three and Nine Months Ended September 30, 2012 compared to the Three and Nine Months Ended September 30, 2011

Results of Operations

Revenue

Our sales, total revenue, total operating expenses and operating income for the three and nine months ended September 30, 2012, compared to the three and nine months ended September 30, 2011, were as follows:

	Three Months Ended									Nine Months Ended
	September 30, 2012			September 30, 2011			Percent Change			September 30, 2012			September 30, 2011			Percent Change
Sales		$	4,335,000		$	3,587,000		21	%		$	12,172,000		$	8,587,000		42	%
Total revenue			4,335,000			3,587,000		21	%			12,172,000			8,587,000		42	%
Total operating expenses			3,129,000			2,711,000		15	%			9,312,000			6,025,000		55	%

Operating income		$	1,205,000		$	876,000		38	%		$	2,860,000		$	2,562,000		12	%

The increase in sales from $3.6 million for the three months ended September 30, 2011 to $4.3 million for the three months ended September 30, 2012, an increase of 21%, and the increase in sales from $8.6 million for the nine months ended September 30, 2011 to $12.2 million for the nine months ended September 30, 2012, an increase of 42%, is attributable to an increase in the revenue generated by our then subsidiary, WeedMaps Media, Inc.

The increase in revenues for the three and nine months ended September 30, 2012 is a result of an increase in the fees we charged for our listing packages, an increase in the number of customers as compared to the three and nine months ended September 30, 2011, and an increase in the number of different ‘listing packages’ we offered to our customers.

The fees we charged for listing packages, in general, had increased from the previous year primarily as a result of the increasing number of dispensaries in any given region which had the effect of bidding up the price of premium listing packages. For example, during the nine months ended September 30, 2011 an average Gold, Silver and Bronze listing package in a given region would cost $3,500, $2,500 and $500 respectively, as compared to the nine months ended September 30, 2012 where the same listing packages in the same region would cost $10,000, $7,500 and $5,000, respectively.

During the nine months ended September 30, 2012 and during the year ended December 31, 2011, we experienced a significant growth in the number of our customers, which was attributable to an increase in the number of dispensaries that purchase our listing packages and, to a lesser extent, because we started offering our listing packages in new states such as Washington, Oregon and Michigan, in addition to our existing offerings in California and Colorado. Below is a summary presentation of the average number of clients during each of the quarters ended September 30, 2012 and 2011, as well as those outstanding at the end of each period:

	Quarter ended
	September 30, 2012		September 30, 2011

Average number of clients		2,154		1,762
Total clients at the end of the period		2,153		1,805

Although the number of paying clients had been increasing in total, a number of our customers decided to terminate their listing packages. The reasons for termination varied and may include typical business cycles and/or internal business decisions made by our customers as to their marketing and advertising budgets as it relates to the complex nature of the medicinal cannabis industry. Even forced dispensary closures by municipalities or governmental agencies, which usually only result in a temporary downward sales revenue trend in that geographical area, do not have a material impact because the dispensaries often re-open nearby.

Operating Expenses

Operating Expenses – Our operating expenses as a percentage of sales experienced a slight decrease from 75.5% for the three months ended September 30, 2011, to 72.3% for the three months ended September 30, 2012, and an increase from 70.1% for the nine months ended September 30, 2011, to 76.5% for the nine months ended September 30, 2012.

The increase in operating expenses from $2.7 million for the three months ended September 30, 2011, to $3.1 million for the three months ended September 30, 2012, an increase of 15%, was attributable to our efforts to expand our operations during the three months ended September 30, 2012 as compared to the three months ended September 30, 2011. In particular, during the quarter ended September 30, 2012, we hired technology specialists for our research and development department. Specifically, this included the retention of additional coders, programmers and engineers whose responsibilities included, but were not limited, to developing software and additional finder sites. In addition, we hired media related personnel for the creation of pre and post video production. This was accompanied by increases in salaries and employee benefits, increases in professional fees which included fees for legal and accounting work as well as expenses related to our Securities and Exchange Commission filings and for fees paid to consultants related to business development, investor relations, sales contract work, and increases in general and administrative expenses primarily attributable to non-cash amortization expense associated with our recent acquisitions.

Salaries And Employee Benefits – During the three months ended September 30, 2012 and 2011, salaries and employee benefits were $1.45 million and $1.31 million, respectively. During the nine months ended September 30, 2012 and 2011, salaries and employee benefits were $4.30 million and $3.98 million, respectively. The increase in salaries and employee benefits during the three and nine months ended September 30, 2012 as compared to the three and nine months ended September 30, 2011, was primarily attributed to our increasing operations and hiring various employees which resulted in increases in associated salaries and employee benefits as well as increases in general and administrative costs.

Professional Fees – During the quarters ended September 30, 2012 and 2011, professional fees were $815,000 and $482,000, respectively, and during the nine months ended September 30, 2012 and 2011, professional fees were $2.29 million and $346,000, respectively. This increase during the three and nine months ended September 30, 2012 as compared to 2011 was a result of spending related to accounting and legal expenses related to our SEC filings, investor relations, and sales and marketing contract work. During the quarter ended September 30, 2012, professional fees included fees for legal and accounting work as well as for Securities and Exchange Commission filing related matters and for fees paid to consultants related to business development, investor relations, sales contract work and to support our efforts to expand our operations.

General And Administrative Expenses – During the three months ended September 30, 2012 and 2011, general and administrative expenses were $326,000 and $587,000, respectively, and during the nine months ended September 30, 2012 and 2011, general and administrative expenses were $933,000 and $972,000, respectively. The slight change in these expenses was primarily attributable to decreases in computer and internet expenses and less spending on travel, which were offset slightly by increases in insurances costs.

Gain On Change In Fair Value Of Earn-Out Liability – During the quarter ended September 30, 2012, we recorded a non-cash gain on change in fair value of earn-out liability of $201,000 as a result of remeasuring to fair value at September 30, 2012. The total non-cash gain on change in fair value of earn-out liability for the nine months ended September 30, 2012 was $5.25 million.

Liquidity and Capital Resources

Our cash, current assets, intangible assets, total assets, current liabilities, and total liabilities as of September 30, 2012 and December 31, 2011 were as follows:

	September 30, 2012 (unaudited)		December 31, 2011 (audited)		Percentage Change
Cash	$	812,000	$	1,513,000		(46.3%)
Total current assets		2,058,000		2,160,000		(4.7%)

Intangible assets:
Domain names		5,252,000		4,364,000		20.3%
Trademarks		88,000		-		-
Web software		716,000		501,000		42.9%
Goodwill		486,000		486,000		0.0%
Total intangible assets		6,542,000		5,352,000		22.3%

Total assets		9,097,000		8,076,000		12.6%

Total current liabilities		7,792,000		2,892,000		169.4%
Total long term liabilities		7,384,000		23,938,000		(69.2%)
Total liabilities	$	15,176,000	$	26,830,000		(43.4%)

We had a decrease in cash of $701,000, from $1.5 million at December 31, 2011 to $0.8 million at September 30, 2012. This was primarily attributed to reducing our debt by $2.1 million.

Our intangible assets at September 30, 2012 consisted almost entirely of assets acquired in the WeedMaps Media, Inc., Revyv, LLC, and MMJMenu acquisitions as well as the domain name acquisition of www.marijuana.com, www.rodeo.com and www.karate.com. The balance was goodwill which represented the premium paid for the acquisitions.

Our current liabilities increased by $4.9 million, from $2.9 million at December 31, 2011 to $7.8 million at September 30, 2012, primarily as a result of our purchase of our common stock. See Note 3. Equity Transactions in the Footnotes to our financial statements herewith for more information. Pursuant to the terms of which we purchased the shares of our common stock, as consideration we issued promissory notes in the aggregate amount of $4,875,000 of which at September 30, 2012, the outstanding balance was $4,605,000, and we further agreed to a Revenue Share Liability of up to $4,875,000 of which at September 30, 2012, the outstanding balance of the Revenue Share Liability was $4,609,000, both of which were offset by our making $2.1 million in cash payments on the notes pursuant to the WeedMaps and www.marijuana.com acquisitions and the elimination of the WeedMaps earn-outs pursuant to the terms of which we purchase shares of our common stock. Further we had an increase in accrued liabilities arising from accrual of a $721,000 tax provision during the nine months ended September 30, 2012. These obligations were eliminated on December 31, 2012, as part of our sale of WeedMaps Media, Inc.

Our total long-term liabilities decreased by $16.6 million, from $23.9 million at December 31, 2011 to $7.4 million at September 30, 2012, as a result of our issuing the WeedMaps earn-outs shares which reduced our earn-out liability by $9.1 million, and from our remeasuring to fair value the earn-out provisions related to the WeedMaps acquisition which further reduced our earn-out liability by $5.95 million, and from the elimination of the remaining WeedMaps earn-outs pursuant to the terms of which we purchase shares of our common stock, all of the foregoing of which was offset by an increase in our notes payable and accrued liabilities pursuant to the terms of which we purchased the shares of our common stock for which as consideration we issued promissory notes in the aggregate amount of $4,875,000 and we further agreed to a Revenue Share Liability of up to $4,875,000. See Note 3. Equity Transactions in the Footnotes to our financial statements herewith for more information.

During the three and nine months ended September 30, 2012, we recognized a non-cash gain of $201,000 and $5.95 million, respectively, on change in fair value of earn-out liability.

Cash Requirements

We had approximately $812,000 in cash and cash equivalents as of September 30, 2012. Our operating income for the nine months ended September 30, 2012 was $2.86 million.We had a working capital deficit of approximately $5.7 million at September 30, 2012. During the nine months ended September 30, 2012, our principal source of liquidity was cash generated from our then current operations.

Sources and Uses of Cash

Operations

We had net cash from operating activities of $2.1 million for the nine months ended September 30, 2012, as compared to net cash from operating activities of $1.9 million for the nine months ended September 30, 2011. For the nine months ended September 30, 2012, the net cash provided by operating activities consisted primarily of net income of $7.95 million (including discontinued operations) which included a non-cash $5.95 million gain on change in fair value of earn-outs, which was slightly offset by a $108,000 loss related to the discontinued operations of General Health Solutions, and to a lesser extent, an increase in accounts payable and accrued liabilities of $415,000, an increase in prepaid expenses and deposits of $811,000, plus non-cash amortization and depreciation expense of $138,000 and $88,000, respectively. For the nine months ended September 30, 2011, the net cash used by operating activities consisted primarily of net income of $1.3 million (including discontinued operations), an increase in accounts payable and accrued liabilities of $97,000, a decrease in prepaid expenses and deposits of $569,000, and an increase in accounts receivable of $197,000, plus non-cash amortization and depreciation expense of $111,000 and $51,000, respectively.

Investments

We had net cash used in investing activities of $689,000 for the nine months ended September 30, 2012, as compared to $620,000 for the nine months ended September 30, 2011. For the nine months ended September 30, 2012, the net cash used in investing activities was primarily related to purchases of furniture and computers and other equipment of $72,000, plus purchases of intangible assets of $617,000. For the nine months ended September 30, 2011, the net cash from investment activities was primarily a result of purchases of furniture and computers and other equipment of $472,000, plus purchases of intangible assets of $149,000.

Financing

We had net cash used in financing activities of $2.1 million for the nine months ended September 30, 2012, as compared to net cash used in financing activities of $1.3 million for the nine months ended September 30, 2011. For the nine months ended September 30, 2012, our net cash used in financing activities consisted solely of payments on note payables. For the nine months ended September 30, 2011, our net cash used in financing activities also consisted solely of payment on notes payables.

Supplemental Discussion Based On Pro Forma Financial Information Giving Effect To The Disposition Of WeedMaps

The following discussion is based upon our unaudited pro forma condensed combined financial statements giving effect to the sale of our then-wholly owned subsidiary, WeedMaps Media, Inc., for the nine months ended September 30, 2012 and shows the potential impact of this transaction on our financial position and results of operation if the transaction had been consummated as of January 1, 2012. Our pro forma cash, current assets, intangible assets, total assets, current liabilities, and total liabilities for the nine months ended September 30, 2012 giving effect to the sale of WeedMaps if the transaction had been consummated as of January 1, 2012 were as follows:

	September 30, 2012 (unaudited)		December 31, 2011 (audited)		Percentage Change

Cash	$	165,000	$	1,513,000		(89.1	)%
Total current assets		3,352,000		2,160,000		55.2	%

Intangible assets:
Domain names		793,000		4,364,000		(81.8	)%
Web software		-		501,000		(100.0	)%
Goodwill		-		486,000		(100.0	)%
Total intangible assets		793,000		5,352,000		(85.2	)%

Total assets	$	5,829,000	$	8,076,000		(27.8	)%

Total current liabilities		823,000		2,892,000		(71.5	)%
Total long term liabilities		567,000		23,938,000		(97.6	)%
Total liabilities	$	1,390,000	$	26,830,000		(94.8	)%

We had a decrease in cash of $1.35 million, from $1.5 million at December 31, 2011 to $165,000 at September 30, 2012. This was primarily attributed to reducing our debt by $2.1 million and as a result of the sale of WeedMaps which had the transaction been effective as of January 1, 2012 would have eliminated $647,000 in cash.

Our total current assets at September 30, 2012 increased by $1.19 million, from $2.16 million at December 31, 2012 to $3.35 million at September 30, 2012. This was primarily attributed to us recording a $1.35 million note receivable and a $750,000 receivable, from which receivable we retained $500,000 in cash at December 31, 2012 and received the remaining $250,000 during January 2013, as a result of the sale of WeedMaps.

Our intangible assets at September 30, 2012 consisted almost entirely of the domain name acquisitions www.rodeo.com and www.karate.com .

Our current liabilities decreased by $2.07 million, from $2.9 million at December 31, 2011 to $823,000 at September 30, 2012, primarily as a result of the sale of WeedMaps which was offset by our purchase of our common stock. See Note 3. Equity Transactions in the footnotes to our financial statements herewith for more information on the purchase of our common stock. Pursuant to the terms of which we purchased the shares of our common stock, as consideration we issued promissory notes in the aggregate amount of $4,875,000 of which at September 30, 2012, the outstanding balance was $4,605,000, and we further agreed to a Revenue Share Liability of up to $4,875,000 of which at September 30, 2012, the outstanding balance of the Revenue Share Liability was $4,609,000, both of which were offset by our making $2.1 million in cash payments on the notes pursuant to the WeedMaps and www.marijuana.com acquisitions and the elimination of the WeedMaps earn-outs pursuant to the terms of which we purchase shares of our common stock. Further we had an increase in accrued liabilities arising from accrual of a $721,000 tax provision during the nine months ended September 30, 2012. All of the foregoing obligations were eliminated as part of our sale of WeedMaps.

Our total long-term liabilities decreased by $23.37 million, from $23.9 million at December 31, 2011 to $567,000 at September 30, 2012, as a result of our issuing the WeedMaps earn-outs shares which reduced our earn-out liability by $9.1 million, and from our remeasuring to fair value the earn-out provisions which further reduced our earn-out liability by $5.95 million, and from the elimination of the remaining WeedMaps earn-outs pursuant to the terms of which we purchase shares of our common stock, all of the foregoing of which was offset by an increase in our notes payable and accrued liabilities pursuant to the terms of which we purchased the shares of our common stock for which as consideration we issued promissory notes in the aggregate amount of $4,875,000 and we further agreed to a Revenue Share Liability of up to $4,875,000, of which promissory notes of $4,875,000 and Revenue Share Liability of up to $4,875,000 were eliminated as part of our sale of WeedMaps. See Note 3. Equity Transactions in the Footnotes to our financial statements herewith for more information on the purchase of our common stock.

Pro Forma Cash Requirements

Our pro forma cash as of September 30, 2012, giving effect to the sale of WeedMaps if the transaction had been consummated as of January 1, 2012, was approximately $165,000. Our pro forma operating loss for the nine months ended September 30, 2012 was $206,000. Our pro forma working capital was approximately $2.53 million at September 30, 2012.

As noted above, as a result of the completion of the sale of WeedMaps our current liabilities decreased by $2.07 million. In addition, as a result of our issuing the WeedMaps earn-outs shares, remeasuring to fair value the earn-out provisions, the elimination of the remaining WeedMaps earn-outs and the sale of WeedMaps, our total long-term liabilities decreased by $23.37 million. Further, as partial consideration pursuant to the sale of WeedMaps, we will receive $3,000,000 in the form of a Secured Promissory Note pursuant to which we will receive the following payments: (1) $250,000 on January 15, 2013; $100,000 each month beginning February 25, 2013 and continuing on the 25th of each month thereafter for a total of 28 months. Finally, pursuant to the sale of WeedMaps we will receive an additional $750,000 in cash of which we will retain $500,000 on December 31, 2012 from cash on hand and the remaining balance of $250,000 during January 2013. As a result of the foregoing, at our current burn rate and as a result of the significant decrease in our debt, our cash on hand together with the monthly $100,000 we will received pursuant to the sale of WeedMaps will last approximately 12 to 18 months.

Debt Instruments, Guarantees, and Related Covenants

We have no disclosure required by this Item.

Critical Accounting Estimates

Goodwill

In accordance with Goodwill and Other Intangible Assets, goodwill is defined as the excess of the purchase price over the fair value assigned to individual assets acquired and liabilities assumed and is tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis in our fourth fiscal quarter or more frequently if indicators of impairment exist. The performance of the test involves a two-step process. The first step of the impairment test involves comparing the fair value of our reporting units with each respective reporting unit's carrying amount, including goodwill. The fair value of reporting units is generally determined using the income approach. If the carrying amount of a reporting unit exceeds the reporting unit's fair value, the second step of the goodwill impairment test is performed to determine the amount of any impairment loss. The second step of the goodwill impairment test involves comparing the implied fair value of the reporting unit's goodwill with the carrying amount of that goodwill. No amortization is recorded for goodwill with indefinite useful life. No goodwill impairment was recognized during the nine months ended September 30, 2012 and 2011, respectively.

Intangible Assets

In accordance with Goodwill and Other Intangible Assets, intangible assets that are determined not to have an indefinite useful life are subject to amortization. We amortize intangible assets using the straight-line method over their estimated useful lives.

Impairment of Long-Lived and Intangible Assets

Contingent Consideration – Earn-outs

Contingent consideration, the earn-out provisions, which are classified as a liability, pursuant to ASC 805, are required to be remeasured to fair value at each reporting date and any changes in fair value subsequent to the acquisition date are recognized in earnings which could cause a material impact to, and volatility in, our operating results. The primary inputs in determining the fair value of the earn-outs that are remeasured to fair value are the quoted price of the underlying shares of our common stock and the probabilities for the three different scenarios in determining the likelihood of common share payouts. The net effect of the changes to our cash flow model as a result of remeasuring the earn-out liability to fair value was $5.95 million and, as such, a change in the fair value of the earn-out liability was recorded at September 30, 2012. At September 30, 2012, the fair value of the earn-out liability was $36,000 as compared to $18.6 million at December 31, 2011. See Note 3. Equity Transactions in the Footnotes to our financial statements herewith for more information on the elimination of the WeedMaps earn-outs pursuant to the terms of which we purchase shares of our common stock.

For the nine months ended September 30, 2012, we recorded a non-cash gain on change in fair value of the earn-out liability of $5.95 million.

Net Income

For the nine months ended September 30, 2012 and 2011, we had net income of $7.9 million and $1.3 million, respectively. The net income we experience during the nine months ended September 30, 2012 was primarily attributed to the $5.95 million non-cash gain on change in fair value of the earn-our liability.

Year Ended December 31, 2011 compared to Year Ended December 31, 2010

Our revenue growth was primarily a result of three acquisitions, two of which occurred in the fourth quarter of 2010 and were operated as WeedMaps Media, Inc. and General Health Solutions, Inc., and one of which occurred in the first quarter of 2011 and was operated as General Marketing Solutions, Inc. The impact and timing of these acquisitions is referenced below.

WeedMaps, LLC

On November 19, 2010, we entered into an Agreement and Plan of Reorganization and Merger (the “WeedMaps Purchase Agreement”) pursuant to which we acquired 100% of the membership interests of WeedMaps, LLC, a Nevada limited liability company (“WeedMaps”), pursuant to the terms of which WeedMaps, LLC was merged with and into WeedMaps Media, Inc., our wholly-owned subsidiary. Prior to the Merger, SearchCore (formerly General Cannabis, Inc.) was deemed to be a non-operating public shell corporation with nominal net assets and WeedMaps was a private operating company with significant operations. For accounting purposes the transaction was considered to be a reverse merger treated as a recapitalization of SearchCore where SearchCore was the surviving legal entity and the accounting acquiree, and WeedMaps was considered to be the accounting acquirer and the legal acquiree. The assets and liabilities of WeedMaps were recorded at their historical cost with the equity structure of SearchCore. No goodwill was recorded in the transaction. SearchCore was deemed a continuation of the business of WeedMaps and the historical financial statements of WeedMaps became the historical financial statements of SearchCore.

See Note 22. Recapitalization in the footnotes to our annual financial statements filed herewith for a discussion regarding the elimination of the historical results of operation and our accumulated deficit including our wholly owned subsidiary, LV Luxuries Incorporated, as a result of the acquisition and the associated reverse merger accounting and recapitalization of SearchCore.

The total purchase price was $54,962,269, which pursuant to the WeedMaps Purchase Agreement consisted of i) the issuance of 16,400,000 shares of common stock to two individuals, Justin Hartfield and Keith Hoerling (“Hartfield” and “Hoerling” together as “Sellers”), which shares were issued on January 20, 2011; ii) the issuance of Secured Promissory Notes with the aggregate principal amount of $3,600,000, in the form of four $900,000 principal amount 0.35% Secured Promissory Notes, two issued to each of the Sellers, half of which matured on June 30, 2012, and half of which matured on January 10, 2013; and iii) up to an aggregate of 16,000,000 additional shares of common stock pursuant to certain Earn-out Provisions in the WeedMaps Purchase Agreement.

WeedMaps, LLC was operated as WeedMaps Media, Inc., our wholly owned subsidiary, until it was sold on December 31, 2012.

Synergistic Resources, LLC

On December 3, 2010, we entered into a Reorganization and Asset Acquisition Agreement pursuant to which we acquired substantially all the assets of Synergistic Resources, LLC, a California limited liability company. The assets were placed into General Health Solutions, Inc., a wholly-owned subsidiary of the Company. The assets consisted primarily of the assignment of a Management Services Agreement pursuant to which we previously managed medicinal cannabis clinics. As consideration for the purchase, we issued an aggregate of Two Million (2,000,000) shares of our common stock, and paid Fifty Thousand Dollars ($50,000) cash, to Synergistic Resources. Also effective on December 3, 2010, we entered into an at-will employment agreement with Brent Inzer, the sole manager and member of Synergistic Resources, with compensation of Fifteen Thousand Dollars ($15,000) per month. Mr. Inzer is no longer employed by us.

We subsequently terminated our management agreement resulting in the closure of General Health Solutions, Inc., which constituted our entire Medical Clinic Management segment. During February 2012, we committed to a definitive plan to terminate the management agreement and services associated with the agreement, which resulted in General Health Solutions, Inc., our Medical Clinic Management segment being reported as discontinued operations. We were fully divested of all management responsibilities as per the management agreement by the close of the first quarter of 2012, and all operations have ceased. For comparative purposes, all prior periods presented have been restated to reflect the reclassification of this segment to discontinued operations on a consistent basis. See Note 9. Discontinued Operations in the Notes to our annual Financial Statements for further details.

Revyv, LLC

On January 10, 2011, we entered into a Reorganization and Asset Acquisition Agreement pursuant to which General Marketing Solutions, Inc., our wholly-owned subsidiary, acquired substantially all the assets of Revyv, LLC. The assets consisted primarily of the intellectual property associated with the name CannabisCenters, including its website (www.cannabiscenters.com), its related physician software and patient verification system, and numerous existing contracts. As consideration for the purchase, which closed on January 13, 2011, we issued an aggregate of Five Hundred Thousand (500,000) shares of our common stock to Revyv, LLC or its assigns. Effective on January 10, 2011, we entered into an at-will employment agreement with each of James Johnson and David Johnson, each of which are members of Revyv, LLC. The compensation due to each was $12,500 per month. As of the quarter ending September 30, 2011, neither James Johnson nor David Johnson were employed by us.

The business of Revyv, LLC was operated as General Marketing Solutions, Inc., our wholly owned subsidiary, until the assets were sold on December 31, 2012.

Results of Operations

Revenue

Our sales, total revenue, total operating expenses and operating income for the twelve months ended December 31, 2011, compared to the twelve months ended December 31, 2010, were as follows:

	Year ended December 31, 2011		Year ended December 31, 2010		Percentage Change

Sales	$	11,928,932	$	3,355,878		255	%
Total revenue		11,928,932		3,355,878		255	%
Total operating expenses		10,478,752		2,899,361		268	%

Operating income	$	1,450,180	$	456,517		173	%

The increase in sales from $3.3 million for the twelve months ended December 31, 2010 to $11.9 million for the twelve months ended December 31, 2011, an increase of 255% was almost exclusively attributable to a significant increase in the revenue generated by our then subsidiary, WeedMaps Media, Inc.

WeedMaps Media, Inc., which operated www.weedmaps.com and which was our first finder site and which was a service provider to the medicinal-cannabis industry, had revenues of $11.87 million and $3.36 million for the twelve months ended December 31, 2011 and 2010, respectively. The increase in revenues was a result of an increase in the fees we charged for our listing packages, an increase in the number of customers as compared to the previous year, and an increase in the number of ‘listing packages’ we offered to our customers.

The fees we charged for listing packages, in general, had increased from the previous year primarily as a result of the increasing number of customers in any given region which had the effect of bidding up the price of premium listing packages. For example, during the year ended December 31, 2010 an average Gold, Silver and Bronze listing package in a given region would cost $3,500, $2,500 and $500 respectively, as compared to the during the year ended December 31, 2011 for the same listing packages in the same region an average Gold, Silver and Bronze listing package would cost $10,000, $7,500 and $5,000, respectively.

During the year ended December 31, 2011, we experienced a significant growth in the number of our customers which was attributable to an increase in the number of dispensaries that purchased our listing package and, to a lesser extent, because we started offering our listing packages in Washington, Oregon and Michigan states in addition to our existing offerings in California and Colorado. Below is a summary presentation of the average number of clients during each of the years ended December 31, 2011 and 2010, as well as those outstanding at the end of each period:

	Year ended December 31, 2011		Year ended December 31, 2010

Average number of clients		1,559		573
Total clients at the end of the period		1,827		930

Although the number of paying clients had been increasing in total, there had also been a number of our customers which chose to terminate their listing packages. The reasons why our customers chose to terminate varied and may include typical business cycles, internal business decisions made by our customers as to their marketing and advertising budgets as it relates to the complex nature of the medicinal cannabis industry. Even forced dispensary closures by municipalities or governmental agencies, which usually only resulted in a temporary downward sales revenue trend in that geographical area, did not have a material impact because the dispensaries often re-open nearby.

During the year ended December 31, 2011 we increased the number of listing packages we offered to our customers as compared to the year ended December 31, 2010.

Listing Revenue - For the year ended December 31, 2011, we generated $6.38 million from Premium Listing packages and $4.09 million from Standard Listing packages as compared to the year ended December 31, 2010 during which we generated $1.60 million from Premium Listing packages and $1.75 million from Standard Listing packages.

Advertising Revenue - For the year ended December 31, 2011, we generated $1.3 million in advertising as compared to the year ended December 31, 2010 during which we generated approximately $10,000 in advertising revenue.

Content Production - For the year ended December 31, 2011, we generated $101,000 in content production as compared to the year ended December 31, 2010 during which we did not generate any revenues from content production.

Operating Expenses

Operating Expenses – Our operating expenses as a percentage of sales experienced a slight increase from 86% for the twelve months ended December 31, 2010, to 88 % for the twelve months ended December 31, 2011. The increase in operating expenses from $2.9 million for the twelve months ended December 31, 2010 to $10.5 million for the twelve months ended December 31, 2011, an increase of 261%, was attributable to our efforts to expand our support operations during the twelve months ended December 31, 2011 as compared to the twelve months ended December 31, 2010. In particular, during the year ended December 31, 2011, we hired technology specialists for our research and development department. Specifically, this included the retention of additional coders, programmers and engineers whose responsibilities included, but were not limited, to developing software and additional finder sites. In addition, we hired media related personnel for the creation of pre and post video production. This was accompanied by increases in salaries and employee benefits, increases in professional fees which included fees for legal and accounting work as well as expenses related to our Securities and Exchange Commission filings and for fees paid to consultants related to business development, investor relations, sales contract work, increases in general and administrative expenses primarily attributable to non-cash amortization expense associated with our recent acquisitions, and expenses associated with moving into our new offices and the associated leasehold improvements and purchases of office furniture and equipment.

Salaries And Employee Benefits – During the years ended December 31, 2011 and December 31, 2010, salaries and employee benefits were $5.1 million and $1.2 million, respectively. The significant increase in salaries and employee benefits during the year ended December 31, 2011 as compared to the year ended December 31, 2010, was primarily attributed to our substantially increasing our operations and hiring various employees which resulted in increases in associated salaries and employee benefits as well as increases in general and administrative costs.

Professional Fees – During the years ended December 31, 2011 and December 31, 2010, professional fees were $2.3 million and $873,000, respectively. The significant increase in professional fees included fees for legal and accounting work as well as our year end audit for the years ending December 31, 2011 and December 31, 2010, for Securities and Exchange filing related matters and for fees paid to consultants related to business development, investor relations, sales contract work and to support our efforts to expand our operations during the year ended December 31, 2011.

General And Administrative Expenses – During the years ended December 31, 2011 and December 31, 2010, general and administrative expenses were $1.3 million and $422,000, respectively. The increase in general and administrative expenses was primarily attributable to significant increases in advertising and marketing expense during the year ended December 31, 2011 as compared to the year ended December 31, 2010. Advertising expense during the years ended December 31, 2011 and December 31, 2010, were $714,000 and $216,000, respectively.

Loss On Change In Fair Value Of Earn-Out Liability – During the year ended December 31, 2011, we recorded a non-cash loss on change in fair value of earn-out liability of $205,000 as a result of remeasuring to fair value at December 31, 2011.

Liquidity and Capital Resources

Our cash, current assets, intangible assets, total assets, current liabilities, and total liabilities as of December 31, 2011 and December 31, 2010 were as follows:

	December 31, 2011 (audited)		December 31, 2010 (audited)		Percentage Change

Cash	$	1,512,590	$	1,388,574		9	%
Total current assets		2,160,166		2,492,911		-13	%

Intangible assets:
Domain names		4,364,119		9,076		47984	%
Web software		501,343		-		-
Goodwill		486,403		-		-
Total intangible assets		5,351,865		4,165,911		28	%

Total assets		8,076,380		7,639,862		6	%

Total current liabilities		2,891,862		1,287,023		125	%
Total long term liabilities		23,938,347		22,862,269		5	%
Total liabilities	$	26,830,209	$	24,149,292		11	%

We had an increase in cash from $1.3 million at December 31, 2010 to $1.5 million at December 31, 2011, an increase of $124,000.

Our intangible assets at December 31, 2011 consist almost entirely of assets acquired in the WeedMaps and Revyv acquisitions as well as the domain name acquisition of www.marijuana.com. The balance was goodwill which represented the premium paid for the acquisitions.

Our current liabilities increased from $1.2 million at December 31, 2010 to $2.9 million at December 31, 2011, an increase of $1.6 million and is as a result of the reclassification of the current portion of the note payable to the Sellers of WeedMaps of $1.1 million from a long term liability, the $700,000 current portion of the note payable related to the acquisition of the domain name www.marijuana.com, an increase in accrued liabilities arising from non-cash accrual of a $361,000 tax provision during the year ended December 31, 2011 all of which was partially offset by a decrease arising from the termination of the three-year Consulting Agreement entered into by us and Douglas Francis, our President. See Note 5 Other Current Assets in the footnotes to our annual financial statements for information regarding the Employment Agreement entered into by Mr. Francis and us contemporaneously with the Termination Agreement.

Our total long term liabilities increased from $22.8 million at December 31, 2010 to $23.9 million at December 31, 2011, an increase of $1,076,000 and is primarily as a result of a increase in long term note payable of $3.4 million related to the acquisition of the domain name www.marijuana.com and a non-cash increase in the fair value of the earn-out liability which were partially offset by payments we made on notes payables to related parties and the termination of the three-year Consulting Agreement entered into by us and Douglas Francis, our President. See Note 5. Other Current Assets in the Footnotes to our annual Financial Statements for information regarding the Employment Agreement entered into by Mr. Francis and us contemporaneously with the Termination Agreement.

Cash Requirements

We had approximately $1.5 million in cash and cash equivalents as of December 31, 2011. Our operating income for the year ended December 31, 2011 was $1.45 million. We had a working capital deficit of approximately $0.7 million at December 31, 2011. During the year ended December 31, 2011, our principal source of liquidity was cash generated from our current operations.

Sources and Uses of Cash

Operations

We had net cash from operating activities of $1.74 million for the year ended December 31, 2011, as compared to $1.37 million for the year ended December 31, 2010. For the year ended December 31, 2011, the net cash provided by operating activities consisted primarily of net loss of $3.2 million (including discontinued operations) which was offset by a $4.1 million non-cash loss on abandonment related to the discontinued operations of General Health Solutions and the associated impairment of the management contract and goodwill and a non-cash $205,000 increase in the fair value of the earn-out liability, and to a lesser extent, an increase in accounts payable and accrued liabilities of $12,000, an increase in prepaid expenses and deposits of $673,000, plus non-cash amortization and depreciation expense of $285,000 and 71,000, respectively. For the year ended December 31, 2010, the net cash provided by operating activities consisted primarily of net income (including discontinued operations) of $350,000, an increase in accounts payable and accrued liabilities of $62,000, a increase in prepaid expenses and deposits of $879,000, plus non-cash depreciation expense of $115,000.

Investments

We had net cash used in investing activities of $943,000 for the year ended December 31, 2011, as compared to $540,000 for the year ended December 31, 2010. For the year ended December 31, 2011, the net cash used in investing activities was primarily related to purchases of furniture and computers and other equipment of $454,000, plus purchases of intangible assets of $489,000. For the year ended December 31, 2010, the net cash from investment activities was primarily a result of purchases of furniture and computers and other equipment of $212,000, plus purchases of intangible assets of $328,000.

Financing

We had net cash used in financing activities of $670,000 for the year ended December 31, 2011, as compared to net cash from financing activities of $542,000 for the year ended December 31, 2010. For the year ended December 31, 2011, our net cash used in financing activities consisted solely of payments on note payable to related parties. For the year ended December 31, 2010, our net cash from financing activities consisted of $1.65 million in proceeds from the issuance of shares of our common stock which was partially offset by payments on notes payable of $1.1 million.

Debt Instruments, Guarantees, and Related Covenants

We have no disclosure required by this Item.

Critical Accounting Estimates

Goodwill

In accordance with Goodwill and Other Intangible Assets, goodwill is defined as the excess of the purchase price over the fair value assigned to individual assets acquired and liabilities assumed and is tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis in our fourth fiscal quarter or more frequently if indicators of impairment exist. The performance of the test involves a two-step process. The first step of the impairment test involves comparing the fair value of our reporting units with each respective reporting unit's carrying amount, including goodwill. The fair value of reporting units is generally determined using the income approach. If the carrying amount of a reporting unit exceeds the reporting unit's fair value, the second step of the goodwill impairment test is performed to determine the amount of any impairment loss. The second step of the goodwill impairment test involves comparing the implied fair value of the reporting unit's goodwill with the carrying amount of that goodwill. No amortization is recorded for goodwill with indefinite useful life. Goodwill impairment of $2,718,538 and zero was recognized during the twelve months ended December 31, 2011 and 2010, respectively. See Note 9. Discontinued Operations in the notes to our annual financial statements for information regarding the goodwill impairment during the year ended December 31, 2011.

Intangible Assets

In accordance with Goodwill and Other Intangible Assets, intangible assets that are determined not to have an indefinite useful life are subject to amortization. The Company amortizes intangible assets using the straight-line method over their estimated useful lives.

Impairment of Long-Lived and Intangible Assets

In accordance with Accounting for the Impairment or Disposal of Long-Lived Assets, we review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. The Company assesses the recoverability of the long-lived and intangible assets by comparing the carrying amount to the estimated future undiscounted cash flow associated with the related assets. Impairment of intangible assets related to General Health Solutions, Inc. being recorded as discontinued operations of $1,438,297 was recognized during the twelve months ended December 31, 2011. No impairment of long-lived assets was recognized during the twelve months ended December 31, 2010. See Note 9. Discontinued Operations in the notes to our financial statements for information regarding the intangible asset impairment during the year ended December 31, 2011.

Contingent Consideration – Earn-outs

Contingent consideration, the earn-out provisions, which are classified as a liability, pursuant to ASC 805, are required to be remeasured to fair value at each reporting date and any changes in fair value subsequent to the acquisition date are recognized in earnings which could cause a material impact to, and volatility in, our operating results. The primary inputs in determining the fair value of the earn-outs that are remeasured to fair value are the quoted price of the underlying shares of our common stock and the probabilities for the three different scenarios in determining the likelihood of common share payouts. The net effect of the changes to our cash flow model as a result of remeasuring the earn-out liability to fair value was $205,000 and as such, a change in the fair value of the earn-out liability was recorded at December 31, 2011. At December 31, 2011, the fair value of the earn-out liability was $18,567,223. At December 31, 2011, we recorded a loss on change in fair value of the earn-out liability of $205,000.

Net Income

For the years ended December 31, 2011 and 2010, we had a net loss of $3.2 million and net income of approximately $350,000, respectively. The net loss we experienced during the year ended December 31, 2011 is primarily attributed to the $4.1 million non-cash loss on abandonment related to the discontinued operations of General Health Solutions and the associated impairment of the management contract and goodwill. Net income during the year ended December 31, 2010 was primarily attributed to our efforts to expand our operations during the year ended December 31, 2010 and the associated growth that we experienced which resulted in significant increases in our operating expenses.

Item 3. Properties.

Our executive offices are located in Lake Forest, California, at 26497 Rancho Parkway South, Lake Forest, CA 92630. Our office space is approximately 7,000 square feet that is shared with Miracle Housing, Inc., a business controlled by one of our employees, Brad Nelms. Our rent, pursuant to a verbal agreement with Miracle Housing, is $8,000 per month and covers exactly all of the obligations of Miracle Housing under its primary lease.

Item 4. Security Ownership of Certain Beneficial Owners and Management.

The following table sets forth, as of the date of this Registration Statement, certain information with respect to our equity securities owned of record or beneficially by (i) each Officer and Director; (ii) each person who owns beneficially more than 10% of each class of our outstanding equity securities; and (iii) all Directors and Executive Officers as a group.

Title of Class	Name and Address of Beneficial Owner (1)	Amount and Nature of Beneficial Ownership		Percent of Class (2)

Common Stock	James Pakulis (3)(4)		27,817,290		73.1	%

Common Stock	Munjit Johal (3)		70,000	<1		%

Common Stock	All Directors and Officers As a Group (2 persons)		27,887,290		73.3	%

(1)	Unless indicated otherwise, the address of the shareholder is c/o SearchCore, Inc., 26497 Rancho Parkway South, Lake Forest, CA 92630.

(2)

Unless otherwise indicated, based on 38,027,967 shares of common stock issued and outstanding. Shares of common stock subject to options or warrants currently exercisable, or exercisable within 60 days, are deemed outstanding for purposes of computing the percentage of the person holding such options or warrants, but are not deemed outstanding for the purposes of computing the percentage of any other person.

(3)	Indicates one of our officers or directors.

(4)

27,782,290 of the shares held by Mr. Pakulis are held of record by R.H. Daignault Law Corporation, In Trust, pursuant to an escrow agreement between them and the parties who assigned certain debts to Pakulis prior to its conversion into the shares. Mr. Pakulis maintains investment control, including the power of disposition and voting, over the shares.

The issuer is not aware of any person who owns of record, or is known to own beneficially, ten percent or more of the outstanding securities of any class of the issuer, other than as set forth above. The issuer is not aware of any person who controls the issuer as specified in Section 2(a)(1) of the 1940 Act. There are no classes of stock other than common stock issued or outstanding. We do not have an investment advisor.

There are no current arrangements which will result in a change in control.

Item 5. Directors and Executive Officers.

The following table sets forth the names, ages, and biographical information of each of our current directors and executive officers, and the positions with us held by each person, and the date such person became a director or executive officer. Our executive officers are elected annually by the Board of Directors. The directors serve one-year terms until their successors are elected. The executive officers serve terms of one year or until their death, resignation or removal by the Board of Directors. Family relationships among any of the directors and officers are described below.

Name	Age	Position

James Pakulis	49	Chairman of the Board of Directors and Chief Executive Officer

Munjit Johal	57	Chief Financial Officer, Secretary, Treasurer, and Director

James Pakulis, age 49, has been one of our directors since August 2010, our Chief Executive Officer since November 2010, and our Chairman of the Board since January 2011. He served as our Chairman of the Board, President and COO from August 2010 to November 2010. Mr. Pakulis was an advisor to Synergistic Resources, LLC from January 2010 until the time of our acquisition of its assets in December 2010. Mr. Pakulis was made a director at the time of his acquisition of control of the company in August 2010.

Mr. Pakulis has three decades of experience working with entrepreneurial companies in a variety of emerging and high-growth sectors including internet, finance, real estate, and health care. He has extensive experience in all aspects of corporate management for both public and private enterprises, including strategy development and execution, operations, mergers and acquisitions, real estate transactions, finance/accounting, legal and human resources. Mr. Pakulis is a skilled leader, negotiator and consensus builder.

Mr. Pakulis has played a key leadership role for us in both defining strategy and guiding operational execution. He was instrumental in building our highly successful medicinal cannabis finders website, which became the largest in the industry before it was sold in late 2012. Leveraging the technology platform, sales team and marketing services expertise from that initial finder site, Mr. Pakulis has successfully transitioned SearchCore into a diversified internet marketing services company through the acquisition and integration of a portfolio of premium domain names in attractive verticals including recreational sports, manufactured homes, rodeo, karate and tattoo.

Prior to joining SearchCore, Mr. Pakulis was an advisor to Synergistic Resources, LLC, an outsourced healthcare clinic management company whose assets we acquired in December 2010. In this role, Mr. Pakulis was responsible for defining Synergistic Resources’ business expansion strategy and plans. He also oversaw the reorganization of its customer service department and upgraded its accounting and legal functions.

From 2003 to 2009, Mr. Pakulis was President of Pacific West Funding Corporation, a real estate financing firm headquartered in Utah, where he oversaw operations, finance, accounting, legal and compliance. He also structured non-residential real estate transactions and sourced financing for real estate development projects.

From 1990 to 1995, Mr. Pakulis played a key role in corporate development and business expansion for CliniCorp, a publicly traded company, providing outsourced clinic management and operations services to healthcare clinics. During his tenure at CliniCorp, he was involved in a number of acquisitions that drove the firm’s successful expansion in California, New Mexico, Colorado and Arizona. Mr. Pakulis was also instrumental in managing CliniCorp’s transition from a fee for service to a managed health care model.

Mr. Pakulis received his BA degree in English from the Ohio State University in 1987.

Munjit Johal, age 57, has been a director and our Chief Financial Officer since October 20, 2006. Additionally, Mr. Johal serves as the Controller of High Tower Capital, Inc., where he has served since January 2007. Prior to that, Mr. Johal was the Chief Financial Officer of Secured Diversified Investment, Ltd from 2002 to January 2009 and Davi Skin, Inc. from March 2007 to May 2010. Since 1990, Mr. Johal has served as a financial officer of various companies including Pacific Heritage Bank as Executive Vice President. From 1981 to 1987 Mr. Johal was a Senior Analytical Manager for Office of Thrift Supervision, Department of the Treasury (formerly Federal Home Loan Bank Board, the 11th District). Mr. Johal oversaw a staff of seventeen people and was responsible for, among other things, monitoring banking activities and enforcement actions for lending institutions and holding companies valued at $500 million or less. Mr. Johal’s skill set at researching, reviewing, analyzing, managing and overseeing entities from a financial prospective has provided SearchCore (formerly General Cannabis, Inc.) with valuable direction and guidance as it relates to our reporting procedures. Mr. Johal’s extensive financial expertise has also played a material role in providing management and the Board of Directors of SearchCore with sound financial counsel as it relates to analyzing potential acquisition targets. In addition, Mr. Johal’s regulatory experience and other prior experience with public companies and banks as a compliance officer, in addition to being a CFO, is beneficial to the company with respect to internal controls, disclosures, and complying with necessary regulatory requirements.

In total, Mr. Johal has over 28 years of broad experience in banking, accounting, finance, and management in the private and public sector. Mr. Johal earned his MBA from the University of San Francisco in 1980. He received his BS degree in History from the University of California, Los Angeles, in 1978.

Involvement in Certain Legal Proceedings

None of our officers or directors has, in the past ten years, filed bankruptcy, been convicted in a criminal proceeding or is named in a pending criminal proceeding, been the subject of any order, judgment, or decree of any court permanently or temporarily enjoining him from any securities activities, or any other disclosable event required by Item 401(f) of Regulation S-K.

Family Relationships

There are no family relationships among any of our officers, directors, or greater-than-10% shareholders.

Director Independence and Committees

We are not a “listed issuer” as such term is defined in Rule 10A-3 under the Exchange Act. We use the definition of independence of The NASDAQ Stock Market LLC. None of our directors is independent.

We do not have a compensation, audit, or nominating committee. The functions of these committees are performed by our entire Board of Directors.

Item 6. Executive Compensation.

We currently have a written employment agreement with James Pakulis. All of our executives are at-will employees or consultants whose compensation is set forth in the Summary Compensation Table below.

On August 1, 2011, we entered into an at-will Employment Agreement with James Pakulis, our Chief Executive Officer and Chairman of our Board of Directors. Mr. Pakulis’ employment is effective as of August 1, 2011. Under the terms of the agreement, his compensation is thirty thousand dollars ($30,000) per month. In the event of termination of the agreement for a reason other than for cause, Mr. Pakulis will be entitled to severance equal to eighteen (18) months of compensation. In 2012, Mr. Pakulis was paid a bonus of $370,000.

Summary Compensation Table

The following table sets forth information with respect to compensation earned by our Chief Executive Officer, President, and Chief Financial Officer for the fiscal years ended December 31, 2012 , 2011 and 2010.

Name and Principal Position	Year	Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Nonqualified Deferred Compensation ($)		All Other Compensation ($)		Total ($)

James Pakulis (1)	2012		360,000		370,000		9,000		-0-		-0-		-0-		-0-		739,000
CEO	2011		360,000		-0-		-0-		-0-		-0-		-0-		-0-		360,000
	2010		30,000		-0-		-0-		-0-		-0-		-0-		-0-		30,000

Douglas Francis (2)	2012		240,000		-0-		-0-		-0-		-0-		-0-		-0-		240,000
President	2011		360,000		518,000		-0-		-0-		-0-		-0-		150,000		1,028,000
	2010		30,000		-0-		-0-		-0-		-0-		-0-		-0-		30,000

Munjit Johal (3)	2012		48,000		20,000		27,500		-0-		-0-		-0-		-0-		95,500
CFO	2011		48,000		-0-		-0-		-0-		-0-		-0-		-0-		48,000
	2010		4,000		-0-		-0-		-0-		-0-		-0-		-0-		4,000

(1)

Mr. Pakulis' annual salary, beginning in December 2010, is $360,000. In August 2012, Mr. Pakulis was issued 20,000 shares of our common stock as a one-time bonus for his service as a director. During the year ended December 31, 2012, Mr. Pakulis was paid a bonus $370,000.

(2)

Mr. Francis' annual consulting compensation, beginning in December 2010, was $360,000. Effective August 1, 2011, he entered into an employment agreement and his consulting agreement was terminated. During 2011 and prior to Termination of the Consulting Agreement on August 1, 2011, Mr. Francis received a total of $150,000 in payments pursuant to the Consulting Agreement. Mr. Francis is no longer entitled to the $1,800,000 as a result of the Termination of the Consulting Agreement. During the year ended December 31, 2011, we awarded a discretionary bonus to Mr. Francis’s in the amount of $518,000 which was based on his critical role in identifying, negotiating and completing key acquisitions, materially increasing corporate revenue, and overseeing the expansion of our core branding in the marketplace.

(3)

Mr. Johal's receives $4,000 per month, beginning in December 2010, for his services as Chief Financial Officer. At December 31, 2010 the $4,000 represents accrued amounts due to Mr. Johal. During 2012, Mr. Johal was issued 70,000 shares of our common stock as a one-time bonus for his service as a director.

Narrative Disclosure to Summary Compensation Table

Employment Agreements

Director Compensation

During the year ended December 31, 2012, James Pakulis and our then-director, Bonni Goldstein, each received 20,000 shares of our common stock as a one-time bonus for service as a director and Munjit Johal received 70,000 shares of our common stock as a one-time bonus for service as a director. As of December 31, 2012, 20,000 shares of our common stock remained to be issued to each of our directors. For the years ended December 31, 2011 and 2010, none of the members of our Board of Directors received compensation for his or her service as a director. We do not currently have an established policy to provide compensation to members of our Board of Directors for their services in that capacity. We intend to develop such a policy in the near future.

Outstanding Equity Awards at Fiscal Year-End

We do not currently have a stock option or grant plan.

Item 7. Certain Relationships and Related Transactions.

Stock Issuances

Office Share

Sports Asylum, Inc.

On December 31, 2012, we entered into a Securities Purchase Agreement by and among us, on the one hand, and Sports Asylum, Inc., a Nevada corporation, and its shareholders, Sabas Carrillo, an individual, and James Pakulis, an individual and one of our officers and directors, on the other hand. Pursuant to the agreement, upon the closing of the transaction, we purchased 100% of the issued and outstanding equity interests of Sports Asylum in exchange for (a) the cancellation of a previous Secured Promissory Note issued to Sports Asylum, entered into on or about August 22, 2012 and with an outstanding principal balance of Two Hundred Eighty Five Thousand Dollars ($285,000) and (b) Two Hundred Fifteen Thousand Dollars ($215,000) represented by promissory notes in the original principal amount of One Hundred Sixty One Thousand Two Hundred Fifty Dollars ($161,250) to Pakulis and Fifty Three Thousand Seven Hundred Fifty ($53,750) to Carrillo. The closing of the purchase took place on December 31, 2012.

Sports Asylum, Inc. owns and operates the intellectual property associated with www.sportify.com , and represents our introduction into the recreational sports industry.

Employment Agreements

Securities Purchases

On November 23, 2010, we sold an aggregate of 825,000 shares of our common stock, restricted in accordance with Rule 144 and containing an appropriate restrictive legend, to four shareholders at a purchase price of $2.00 per share, for aggregate cash consideration of $1,650,000. One of the four shareholders was James Pakulis, our Chief Executive Officer and a member of our Board of Directors, who purchased 150,000 shares for aggregate cash consideration of $300,000.

On August 18, 2010, a total of $1,609,704 in our convertible debt was assigned by various parties to James Pakulis. On that same date, Mr. Pakulis converted the debt into an aggregate of 53,656,814 shares of our common stock, representing (as of October 29, 2010) 84.5% of our issued and outstanding common stock, which were issued on August 24, 2010. Mr. Pakulis subsequently sold one-half (1/2) of the shares to Douglas Francis, another of our officers and directors. Also on August 18, 2010, James Pakulis purchased 5,000,000 shares of our common stock from a former affiliate shareholder, representing (as of October 29, 2010) 7.8% of our issued and outstanding common stock. The shares held by Mr. Pakulis and Mr. Francis are held of record by R.H. Daignault Law Corporation, In Trust, pursuant to an escrow agreement between them and the parties who assigned the debts to Pakulis prior to its conversion into the shares.

Item 8. Legal Proceedings.

We are not a party to or otherwise involved in any legal proceedings.

In the ordinary course of business, we are from time to time involved in various pending or threatened legal actions. The litigation process is inherently uncertain and it is possible that the resolution of such matters might have a material adverse effect upon our financial condition and/or results of operations. However, in the opinion of our management, other than as set forth herein, matters currently pending or threatened against us are not expected to have a material adverse effect on our financial position or results of operations.

Item 9. Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters.

Holders

As of January 14, 2013, there were 55 holders of record of our common stock.

Market Information

Our common stock is quoted on the OTCQX tier of the marketplace maintained by OTC Markets Group, Inc. under the symbol “SRER.” Our stock has traded there since July 26, 2011, and traded prior to that on the Pink Sheets marketplace maintained by OTC Markets Group, Inc. Our common stock trades on a limited or sporadic basis and should not be deemed to constitute an established public trading market. There is no assurance that there will be liquidity in the common stock.

The following table sets forth the high and low transaction price for each quarter within the fiscal years ended December 31, 2012, 2011, and 2010, as provided by OTC Markets Group, Inc. The information reflects prices between dealers, and does not include retail markup, markdown, or commission, and may not represent actual transactions.

Fiscal Year Ended		Transaction Prices
December 31,	Period	High		Low

2010	First Quarter	$	0.015	$	0.015
	Second Quarter	$	0.00	$	0.00
	Third Quarter	$	5.60	$	0.02
	Fourth Quarter	$	4.70	$	3.51

2011	First Quarter	$	4.48	$	1.53
	Second Quarter	$	4.90	$	2.75
	Third Quarter	$	3.40	$	1.50
	Fourth Quarter	$	2.18	$	1.15

2012	First Quarter	$	1.55	$	0.515
	Second Quarter	$	1.01	$	0.385
	Third Quarter	$	0.90	$	0.25
	Fourth Quarter	$	0.89	$	0.30

The Securities Enforcement and Penny Stock Reform Act of 1990 requires additional disclosure relating to the market for penny stocks in connection with trades in any stock defined as a penny stock. The Commission has adopted regulations that generally define a penny stock to be any equity security that has a market price of less than $5.00 per share, subject to a few exceptions which we do not meet. Unless an exception is available, the regulations require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock market and the risks associated therewith.

Securities Eligible for Resale

Rule 144. Under Rule 144, as recently amended by the SEC, all shares held by non-affiliates that have been issued and outstanding for more than six months are presently eligible for resale and commencing upon the effective date of this registration statement. Future sales of large numbers of shares into a limited trading market or the concerns that those sales may occur could cause the trading price of our common stock to decrease or to be lower than it might otherwise be. If an active, stable and sustained trading market does not develop, the market price for our shares will decline and such declines are likely to be permanent.

Options and Warrants

We have no options outstanding on the date of this Registration Statement. We have warrants outstanding to purchase 250,000 shares of our common stock at $4.00 per share.

Dividend Policy

We have not paid any dividends on our common stock and do not expect to do so in the foreseeable future. We intend to apply our earnings, if any, in expanding our operations and related activities. The payment of cash dividends in the future will be at the discretion of the Board of Directors and will depend upon such factors as earnings levels, capital requirements, our financial condition and other factors deemed relevant by the Board of Directors.

Item 10. Recent Sales of Unregistered Securities.

On November 15, 2012, we issued an aggregate of One Hundred Fifty Thousand (150,000) shares of our common stock, restricted in accordance with Rule 144, to three individuals or their controlled entities for services rendered. One of the individuals was Munjit Johal, a member of our Board of Directors. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, the shareholders were sophisticated, and there was no solicitation in connection with the offering and sale.

On November 5, 2012, we issued Two Hundred Fifty Thousand (250,000) shares of our common stock, restricted in accordance with Rule 144, to one shareholder for services rendered from July 1, 2012 through September 30, 2012. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, the shareholder was sophisticated, and there was no solicitation in connection with the offering and sale.

On August 20, 2012, we approved the issuance of Twenty Thousand (20,000) shares of our common stock, restricted in accordance with Rule 144, to each then- member of our Board of Directors, namely James Pakulis, Bonnie Goldstein, and Munjit Johal, as a one-time bonus for serving as a Director. The issuances were exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, the shareholders were accredited, and there was no solicitation in connection with the offering and sale.

On December 19, 2011, we entered into a Reorganization and Asset Purchase Agreement pursuant to which we acquired substantially all the assets of MMJMenu, LLC, an unrelated Colorado limited liability company. As consideration for the purchase, we issued an aggregate of Two Hundred Thousand (200,000) shares of our common stock to MMJMenu, LLC. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investor was accredited and had access to information necessary to make an investment decision, and there was no solicitation. The shares were restricted securities as described in Rule 144 pursuant to the Securities Act of 1933.

On January 10, 2011, we entered into a Reorganization and Asset Acquisition Agreement pursuant to which we acquired substantially all the assets of Revyv, LLC. As consideration for the purchase, we issued an aggregate of Five Hundred Thousand (500,000) shares of our common stock to Revyv. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investor was accredited and had access to information necessary to make an investment decision, and there was no solicitation. The shares were restricted securities as described in Rule 144 pursuant to the Securities Act of 1933.

On December 15, 2010, we issued Twenty Five Thousand (25,000) shares of common stock, restricted in accordance with Rule 144, to The Lebrecht Group, APLC, our legal counsel, in exchange for services rendered. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investor was accredited and had access to information necessary to make an investment decision, and there was no solicitation.

On December 3, 2010, we entered into a Reorganization and Asset Acquisition Agreement pursuant to which we acquired substantially all the assets of Synergistic Resources, LLC. As consideration for the purchase, we issued an aggregate of Two Million (2,000,000) shares of our common stock to Synergistic Resources. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investor was accredited and had access to information necessary to make an investment decision, and there was no solicitation. The shares were restricted securities as described in Rule 144 pursuant to the Securities Act of 1933.

On November 19, 2010, we entered into an Agreement and Plan of Reorganization and Merger pursuant to which we acquired 100% of the membership interests of WeedMaps, LLC, a Nevada limited liability company. As consideration for the purchase, we issued an aggregate of Sixteen Million Four Hundred Thousand (16,400,000) shares of our common stock to two individuals, Justin Hartfield and Keith Hoerling. Hartfield and Hoerling can collectively earn up to an aggregate of Sixteen Million (16,000,000) additional shares of our common stock pursuant to certain earn-out provisions in the purchase agreement. Each of the issuances was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and each of the investors was accredited and had access to information necessary to make an investment decision, and there was no solicitation. The shares were all restricted securities as described in Rule 144 pursuant to the Securities Act of 1933.

On October 5, 2010, pursuant to the terms of a marketing services agreement of the same date, we issued four-year warrants to acquire 250,000 shares of our common stock at $4.00 per share. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and each of the investors was accredited and had access to information necessary to make an investment decision, and there was no solicitation.

On August 18, 2010, we issued 53,656,814 shares of our common stock to James Pakulis, one of our officers and directors, in exchange for the cancellation of $1,609,704 in convertible debt at $0.03 per share. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, Mr. Pakulis was accredited and had access to information necessary to make an investment decision, and there was no solicitation. Mr. Pakulis subsequently sold one-half (1/2) of the shares to Douglas Francis, another of our officers and directors in a private sale exempt from registration pursuant to the “Section 4(1 1/2)” exemption.

Item 11. Description of Registrant’s Securities to be Registered.

Our authorized capital stock consists of 200,000,000 shares of common stock, par value $0.001, and 20,000,000 shares of preferred stock, par value $0.001. As of the date of this Registration Statement, there are 37,967,967 shares of our common stock issued and outstanding, and no shares of preferred stock issued or outstanding.

Common Stock. Each shareholder of our common stock is entitled to a pro rata share of cash distributions made to shareholders, including dividend payments. The holders of our common stock are entitled to one vote for each share of record on all matters to be voted on by shareholders. There is no cumulative voting with respect to the election of our directors or any other matter. Therefore, the holders of more than 50% of the shares voted for the election of those directors can elect all of the directors. The holders of our common stock are entitled to receive dividends when and if declared by our Board of Directors from funds legally available therefore. Cash dividends are at the sole discretion of our Board of Directors. In the event of our liquidation, dissolution or winding up, the holders of common stock are entitled to share ratably in all assets remaining available for distribution to them after payment of our liabilities and after provision has been made for each class of stock, if any, having any preference in relation to our common stock. Holders of shares of our common stock have no conversion, preemptive or other subscription rights, and there are no redemption provisions applicable to our common stock.

Preferred Stock. We are authorized to issue 20,000,000 shares of preferred stock. The rights, privileges, and preferences of our preferred stock can be set by our Board of Directors without further shareholder approval. We have not authorized or established any series’ of preferred stock, and none are anticipated. There are no shares of preferred stock issued or outstanding. The availability or issuance of these shares could delay, defer, discourage or prevent a change in control.

Dividend Policy. We have not declared or paid a cash dividend on our capital stock in our last two fiscal years and we do not expect to pay cash dividends on our common stock in the foreseeable future. We currently intend to retain our earnings, if any, for use in our business. Any dividends declared in the future will be at the discretion of our Board of Directors and subject to any restrictions that may be imposed by our lenders.

Options, Warrants and Convertible Securities. Pursuant to the terms of a marketing services agreement with Crystal Research Associated, LLC dated October 5, 2010, we issued four-year warrants to acquire 250,000 shares of our common stock at $4.00 per share. Crystal Research will perform traditional investor relations services for us, including public dissemination of our financial and other information, as well as the preparation of a research report and up to four quarterly updates.

Item 12. Indemnification of Directors and Officers.

Article V of our Articles of Incorporation provides that, the personal liability of the directors of the corporation is hereby eliminated to the fullest extent permitted by paragraph 1 of Section 78.037 of the General Corporation Law of the State of Nevada, as the same may be amended and supplemented.

Article VI of our Articles of Incorporation provides that, the corporation shall, to the fullest extent permitted by Section 78.751 of the General Corporation Law of the State of Nevada, as the same may be amended and supplemented, indemnify any and all persons whom it shall have power to indemnify under said section from and against any and all expenses, liabilities, or other matters referred to in or covered by said section.

Our bylaws do not further address indemnification, and there are no resolutions of our shareholders or directors which address indemnification.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the “Act”) may be permitted to directors, officers and controlling persons of the small business issuer pursuant to the foregoing provisions, or otherwise, the small business issuer has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.

Item 13. Financial Statements and Supplementary Data.

The financial statements and supplementary data listed in Item 15, below, are included with this Registration Statement.

Item 14. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Mendoza Berger & Company, LLP

On approximately June 1, 2010, Mendoza Berger & Company, LLP, our independent accountants previously engaged as the principal accountants to audit our financial statements, were dismissed as our independent accountants. The decision to change independent accountants was approved by our Board of Directors and did not arise out of any dispute or disagreement with Mendoza Berger & Company, LLP.

Mendoza Berger & Company, LLP audited our financial statements, including our balance sheet as of December 31, 2008 and 2007 and our related statements of operations, changes in stockholders’ equity, and statements of cash flows for the two years then ended, which were filed with our Annual Report on Form 10K with the Commission on April 1, 2009. The audit report of Mendoza Berger & Company, LLP on our financial statements for the period stated above (the “Mendoza Audit Period”) did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles, but it did indicate conditions which raised substantial doubt about our ability to continue as a going concern. During the Mendoza Audit Period, and through their termination, there were no disagreements with Mendoza Berger & Company, LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of the former accountants, would have caused it to make reference to the subject matter of the disagreements in connection with its report, and there were no reportable events as described in Item 304(a)(1)(v) of Regulation S-K.

We have provided a copy of this disclosure to Mendoza Berger & Company, LLP and requested that the former accountants furnish us with a letter addressed to the Securities and Exchange Commission stating whether they agree with the statements made by us, and, if not, stating the respects in which they do not agree. A copy of the letter from Mendoza Berger & Company, LLP to the Securities and Exchange Commission stating that they agree with the statements made by us is attached hereto as Exhibit 16.1.

Dale Matheson Carr-Hilton Labonte, LLP

On June 1, 2010, we engaged Dale Matheson Carr-Hilton Labonte, LLP, Chartered Accountants, as our independent public accountant for all our audit work going forward, starting with the fiscal year ended December 31, 2009.

During the two most recent fiscal years, or any subsequent interim period, prior to engaging Dale Matheson Carr-Hilton Labonte, LLP neither we nor anyone acting on our behalf consulted with Dale Matheson Carr-Hilton Labonte, LLP regarding (i) the application of accounting principles to a specific completed or contemplated transaction, or (ii) the type of audit opinion that might be rendered on our financial statements where either written or oral advice was provided that was an important factor considered by us in reaching a decision as to the accounting, auditing, or financial reporting issue, or (iii) any matter that was the subject of a disagreement with our former accountant on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of the former accountant, would have caused it to make reference to the subject matter of the disagreements in connection with its audit report.

Dale Matheson Carr-Hilton Labonte, LLP audited our financial statements, including our balance sheet as of December 31, 2009 and our related statements of operations, changes in stockholders’ equity, and statements of cash flows for the year then ended. The audit report of Dale Matheson Carr-Hilton Labonte, LLP on our financial statements for the period stated above (the “DMCL Audit Period”) did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles, but it did indicate conditions which raised substantial doubt about our ability to continue as a going concern. During the DMCL Audit Period, and through their termination, there were no disagreements with Dale Matheson Carr-Hilton Labonte, LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of the former accountants, would have caused it to make reference to the subject matter of the disagreements in connection with its report, and there were no reportable events as described in Item 304(a)(1)(v) of Regulation S-K.

We have provided a copy of this disclosure to Dale Matheson Carr-Hilton Labonte, LLP and requested that the former accountants furnish us with a letter addressed to the Securities and Exchange Commission stating whether they agree with the statements made by us, and, if not, stating the respects in which they do not agree. A copy of the letter from Dale Matheson Carr-Hilton Labonte, LLP to the Securities and Exchange Commission stating that they agree with the statements made by us is attached hereto as Exhibit 16.2.

Tarvaran, Askelson & Company LLP

On approximately October 1, 2010, Dale Matheson Carr-Hilton Labonte, LLP, was dismissed as our independent accountants. The decision to change independent accountants was approved by our Board of Directors and did not arise out of any dispute or disagreement with Dale Matheson Carr-Hilton Labonte, LLP.

On October 1, 2010, we engaged Tarvaran, Askelson & Company LLP, Certified Public Accountants, as our independent certified public accountant for all our audit work going forward, starting with the fiscal years ended December 31, 2010 and 2009.

During the two most recent fiscal years, or any subsequent interim period prior to engaging Tarvaran, Askelson & Company LLP neither we nor anyone acting on our behalf consulted with Tarvaran, Askelson & Company LLP regarding (i) the application of accounting principles to a specific completed or contemplated transaction, or (ii) the type of audit opinion that might be rendered on our financial statements where either written or oral advice was provided that was an important factor considered by us in reaching a decision as to the accounting, auditing, or financial reporting issue, or (iii) any matter that was the subject of a disagreement with our former accountant on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of the former accountant, would have caused it to make reference to the subject matter of the disagreements in connection with its audit report.

Item 15. Financial Statements and Exhibits.

List of Financial Statements

Consolidated Balance Sheets as of September 30, 2012 (unaudited) and December 31, 2011 (audited)			F-1
Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2012 and 2011			F-2
Consolidated Statements of Cash Flows for the Three and Nine Months Ended September 30, 2012 and 2011			F-3
Consolidated Statements of Stockholders’ Equity (Deficit) for the Nine Months Ended September 30, 2012 (unaudited) and the Years Ended December 31, 2011 and 2010 (audited)			F-4
Notes to Financial Statements			F-5 to F-32

Report of Independent Registered Public Accounting Firm			F-33
Consolidated Balance Sheets as of December 31, 2011 and 2010			F-44
Consolidated Statements of Operations for the Years Ended December 31, 2011 and 2010			F-35
Consolidated Statements of Cash Flows for the Years Ended December 31, 2011 and 2010			F-36
Consolidated Statements of Stockholders’ Equity (Deficit) for the Years Ended December 31, 2011 and 2010			F-37
Notes to Financial Statements			F-38 to F-68

SEARCHCORE, INC.

Condensed Consolidated Balance Sheets

	September 30,			December 31,
	2012			2011
	(Unaudited)			(Audited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	812,232		$	1,512,590
Accounts receivable		127,671			206,091
Inventory		—			9,830
Other current assets		966,667			379,860
Current assets - discontinued operations		151,007			51,795
TOTAL CURRENT ASSETS	$	2,057,577		$	2,160,166

Property and equipment, net		414,679			430,041
Intangible assets:
Domain names		1,008,572			114,119
Domain name - Marijuana.com, net		4,243,754			4,250,000
Trademarks		87,832			—
Web software, net		715,615			501,343
Goodwill		486,403			486,403
Other assets		82,332			82,332
Other assets - discontinued operations		—			51,976

TOTAL ASSETS	$	9,096,764		$	8,076,380

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable	$	87,219		$	50,632
Accrued liabilities		4,186,961			759,312
Notes payable		733,901			708,901
Notes payable - related party		2,659,091			1,130,000
Current liabilities - discontinued operations		125,000			243,017
TOTAL CURRENT LIABILITIES	$	7,792,172		$	2,891,862

LONG TERM LIABILITIES

Other accrued liabilities		2,067,001			155,025
Notes payable		3,334,756			3,416,099
Notes payable - related party		1,945,834			1,800,000
Earn-out provisions		36,426			18,567,223

TOTAL LONG TERM LIABILITIES		7,384,017			23,938,347

TOTAL LIABILITIES	$	15,176,189		$	26,830,209

STOCKHOLDERS' EQUITY (DEFICIT)

Preferred stock, $0.001 par value: 20,000,000 shares authorized;
zero shares issued and outstanding at September 30, 2012;
zero shares issued and outstanding at December 31, 2011;		—			—
Common stock, $0.001 par value: 200,000,000 shares authorized;
89,340,256 shares issued and outstanding at September 30, 2012,
83,140,256 shares issued and outstanding at December 31, 2011;		89,340			83,140
Treasury stock;
51,772,289 shares issued and outstanding at September 30, 2012,
zero shares issued and outstanding at December 31, 2011;		(51,772	)		-
Paid-in capital		(11,194,018	)		(15,965,044	)
Retained earnings (accumulated deficit)		5,077,025			(2,871,925	)

TOTAL STOCKHOLDERS' EQUITY (DEFICIT)		(6,079,425	)		(18,753,829	)

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$	9,096,764		$	8,076,380

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

F-1

SEARCHCORE, INC.

Condensed Consolidated Statements of Operations (Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
	2012			2011			2012			2011
REVENUE
Sales	$	4,334,682		$	3,586,729		$	12,172,350		$	8,586,519

Total revenue		4,334,682			3,586,729			12,172,350			8,586,519

OPERATING EXPENSES
Cost of sales		290,049			40,239			722,462			176,020
Selling, general and administrative expenses		2,839,430			2,671,008			8,589,514			5,848,491

Total operating expenses		3,129,479			2,711,247			9,311,976			6,024,511

Operating Income (loss)		1,205,203			875,482			2,860,374			2,562,008

Other Income (Expense)
Gain on change in fair value of earn-out liabilities		200,859			—			5,954,030			—
Interest income		587			35			587			214
Interest expense		(11,017	)		—			(36,786	)		—
Total other income		190,429			35			5,917,831			214


INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		1,395,632			875,517			8,778,205			2,562,222

Provision for Income Taxes		353,000			324,000			721,000			853,000
INCOME (LOSS) FROM CONTINUING OPERATIONS		1,042,632			551,517			8,057,205			1,709,222

(Loss) income from discontinued operations, net of $73,000 and zero tax benefit for the nine months ended September 30, 2012 and 2011, respectively, and net of $3,000 and zero tax benefit for the three months ended September 30, 2012 and 2011, respectively.		(3,505	)		(117,282	)		(108,255	)		(425,491	)

NET INCOME (LOSS)	$	1,039,127		$	434,235		$	7,948,950		$	1,283,731

Income (loss) per share, Basic and Diluted
Income (loss) from continuing operations	$	0.02		$	0.01		$	0.11		$	0.02
Income (loss) from discontinued operations		0.00			(0.00	)		(0.00	)		(0.01	)
Total income (loss) per share	$	0.02		$	0.01		$	0.11		$	0.02

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING		53,572,158			83,140,256			72,236,822			83,116,446

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

F-2

SEARCHCORE, INC.

Condensed Consolidated Statements of Cash Flows (Unaudited)

	Nine Months Ended
	September 30,			September 30,
	2012			2011
Cash flows from operating activities:
Net income	$	7,948,950		$	1,283,731
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation		87,834			50,703
Amortization		138,306			110,755
Stock-based compensation		125,000			—
Gain on change in fair value of earn-out liabilities		(5,954,030	)
Changes in operating assets and liabilities:
Accounts receivable		78,420			(197,140	)
Inventories		9,830			—
Prepaid expenses and deposits		(811,019	)		569,176
Other assets		51,976			—
Accounts payable and accrued liabilities		414,882			96,781

Net cash provided by operating activities		2,090,149			1,914,006

Cash flows from investing activities:
Purchases of property and equipment		(72,472	)		(471,949	)
Purchases of intangible assets		(616,617	)		(148,518	)

Net cash used in investing activities		(689,089	)		(620,467	)

Cash flows from financing activities:
Payments on note payable		(506,343	)		—
Payments on note payable - related party		(1,595,075	)		(1,295,000	)

Net cash used in financing activities		(2,101,418	)		(1,295,000	)

Net (decrease) increase in cash and cash equivalents		(700,358	)		(1,461	)

Cash and cash equivalents at beginning of period		1,512,590			1,388,574

Cash and cash equivalents at end of period	$	812,232		$	1,387,113

Non-cash investing and financing activity:

Shares issued pursuant to Revyv acquisition	$	—		$	1,000,000
Shares issued pursuant to MMJMenu acquisition	$	262,000		$	—
Shares issued pursuant to WeedMaps Earn-outs	$	9,120,000		$	—

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

F-3

SEARCHCORE, INC.

Condensed Consolidated Statements of Stockholders' Equity (Deficit)

	Preferred Stock				Common Stock				Treasury Stock						Additional Paid-In			Accumulated			Total Shareholders’ Equity
	Shares		Amount		Shares		Amount		Shares			Amount			Capital			Deficit			(Deficit)
BALANCES, December 31, 2010		—		—		82,640,256	$	82,640		-		$	-		$	(16,964,444	)	$	372,374		$	(16,509,430	)

Issuance of common stock						500,000		500								999,500						1,000,000
Paid in capital, Revyv, LLC acquisition																(100	)					(100	)

Net income (loss) from continuing operations																			(3,244,299	)		(3,244,299	)

BALANCES, December 31, 2011		—		—		83,140,256	$	83,140		-		$	-		$	(15,965,044	)	$	(2,871,925	)	$	(18,753,829	)

Issuance of common stock, MMJmenu						200,000		200								261,800						262,000
Issuance of common stock, WeedMaps earnouts						6,000,000		6,000								9,114,000						9,120,000
Treasury stock purchases										(51,772,289	)		(51,772	)		(4,604,774	)					(4,656,546	)

Net income (loss) from continuing operations																			7,948,950			7,948,950

BALANCES, September 30, 2012		—		—		89,340,256	$	89,340		(51,772,289	)	$	(51,772	)	$	(11,194,018	)	$	5,077,025		$	(6,079,425	)

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

F-4

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Condensed Consolidated Financial Statements

September 30, 2012

Unaudited

Note 1. General

Nature of Business

We, together with our wholly owned subsidiaries, are engaged in developing and leveraging technology in order to market our services in numerous industries. We currently are either in the development stage or are marketing in the recreational sports, manufactured home and medicinal cannabis industries. We provide services in three different sectors; media, technology and marketing. As it relates to medicinal cannabis, we are not engaged in the growing, harvesting, cultivation, possession, or distribution of cannabis. Instead, we assist the physicians, dispensaries and end-users within the medicinal cannabis industry in finding each other and in advertising their businesses through our various finder websites, software applications and programs, and other media. Our expanded direction is to provide finder site and search capabilities to non-cannabis related industries.

SearchCore, Inc. was formed on July 14, 2003 in the State of Nevada as Tora Technologies, Inc. On November 21, 2006, we changed our name to Makeup.com Limited, on January 29, 2010, we changed our name to LC Luxuries Limited, on November 5, 2010, we changed our name to General Cannabis, Inc. Finally, on January 6, 2012, we changed our name to SearchCore, Inc.

All of our operations are conducted through our wholly-owned subsidiaries, each of which is incorporated or qualified to do business in the states in which it does so.

The Medicinal Cannabis Industry

There are a total of 22 states, plus the District of Columbia with legislation either passed or pending as it relates to medicinal cannabis.

Eighteen states, plus the District of Columbia, have adopted laws that exempt patients from state criminal penalties who use medicinal cannabis under a physician’s supervision. These are collectively referred to as the states that have de-criminalized medicinal cannabis, although there is a subtle difference between de-criminalization and legalization, and each state’s laws are different. The states that have legalized medicinal cannabis are as follows (in alphabetical order):

Alaska,

Arizona,

California,

Colorado,

Connecticut,

Delaware

District of Columbia,

Hawaii,

Maine,

Massachusetts,

Michigan,

Montana,

Nevada,

New Jersey,

F-5

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Condensed Consolidated Financial Statements

September 30, 2012

Unaudited

New Mexico,

Oregon,

Rhode Island,

Vermont, and

Washington.

As of November 14, 2012, four states have pending legislation or ballot measures to legalize medical marijuana. The states are as follows (in alphabetical order):

Illinois,

New York,

Ohio, and

Pennsylvania,

Medical cannabis decriminalization is generally referred to as the removal of all criminal penalties for the private possession and use of cannabis by adults, including cultivation for personal use and casual, nonprofit transfers of small amounts. Legalization is generally referred to as the development of a legally controlled market for cannabis, where consumers purchase from a safe, legal, and regulated source.

The United States federal government regulates drugs through the Controlled Substances Act (21 U.S.C. § 811), which places controlled substances, including cannabis, in a schedule. Cannabis is classified as a Schedule I drug, which is viewed as highly addictive and having no medical value. Under the First Amendment, doctors may recommend cannabis for medical use; however, under federal law, they may not prescribe cannabis for medical use. In 2010, the United States Veterans Affairs Department clarified that veterans using medicinal cannabis will not be denied services or other medications that are denied to those using illegal drugs.

Recent Developments

Share Purchases – Treasury Stock

See Note 3. Equity Transactions for detail of our purchase of 51,772,289 shares of our common stock (Treasury Stock) reducing the number of our total shares of common stock outstanding to 37,567,967. At September 30, 2012 the total number of shares of our common stock that were issued and outstanding was 89,340,256 of which 51,772,289 were treasury stock. Pursuant to terms of which we purchased shares of our common stock, 51,272,289 shares held in escrow are released monthly on a pro-rata basis as we make payments on the promissory notes related to their purchase. Further, pursuant to the terms of which we purchased 500,000 shares of our common stock, 186,567 shares held in escrow will be release on January 10, 2013 upon final payment of the associated promissory note.

Domain Name Acquisitions

See Note 7. Intangible Assets for detail of several transactions totaling $780,000 where by we acquired over 60 domain names during the quarter ended September 30, 2012.

F-6

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Condensed Consolidated Financial Statements

September 30, 2012

Unaudited

MMJMenu

On January 5, 2012, WeedMaps Media, Inc. acquired substantially all the assets of MMJMenu, LLC (“MMJ”). The assets consist primarily of the intellectual property associated with MMJ, including its website (www.mmjmenu.com). As consideration for the purchase we issued an aggregate of Two Hundred Thousand (200,000) shares of our common stock to MMJ or its assigns. Effective on January 4, 2012, we entered into an at-will employment agreement with each of Justin Weidmann and Alex Weidmann, each of which are members of MMJ. The compensation due to each is $10,000 per month.

Principal Services

The Company’s principal services are offered through the following wholly owned subsidiaries.

WeedMaps Media, Inc.

WeedMaps Media, Inc. is our wholly-owned subsidiary, and its primary operation is the internet website, www.weedmaps.com. Weedmaps.com is an online finder site service that allows patients to find local medical cannabis dispensaries, which are also referred to as collectives. Dispensaries are locations where patients who have received letters of recommendation from a health care provider can purchase medicinal cannabis, as well as a variety of other non-cannabis related items including, but not limited to, apparel accessories, posters, bumper stickers, concert tickets, books and musical CD’s.

General Marketing Solutions, Inc.

General Marketing Solutions, Inc. is our wholly-owned subsidiary, and its primary operation is the internet website, www.cannabiscenters.com. Though primarily in the development stage, the website aids prospective patients in finding physicians across the country that support and recommend medicinal cannabis. There is a patient verification system which verifies the authenticity of the patient’s Letter Of Recommendation. This is an internal control system designed to validate the status of a patient to law enforcement, dispensaries and other interested parties, as well as a social media platform for users.

General Merchant Solutions, Inc.

Prior to August 1, 2011, General Merchant Solutions supplied dispensaries with credit card processing services, however, due to market conditions (specifically lack of reliable financing) we felt it to be in our best interests to discontinue providing merchant services to dispensaries. The remaining credit card processing business proved to be only nominally profitable, and on October 31, 2011, General Merchant Solutions discontinued all retail credit card processing operations. The entity is held as an entity in good standing with no operations.

General Management Solutions, Inc.

General Management Solutions, Inc., is our wholly-owned subsidiary that oversees and provides all of the human resource issues for employees including hiring, terminating, and employee benefits.

F-7

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Condensed Consolidated Financial Statements

September 30, 2012

Unaudited

General Health Solutions, Inc.

See Note 9. Discontinued Operations for further details of our decision to terminate the management agreement and services associated with the agreement which constitutes our entire Medical Clinic Management segment. During February 2012, we committed to a plan to terminate the management agreement and services associated with the agreement which resulted in General Health Solutions, Inc., our Medical Clinic Management segment being reported as discontinued operations. For comparative purposes, all prior periods presented have been restated to reflect the reclassification of this segment to discontinued operations on a consistent basis.

Other Subsidiaries

We have two additional wholly-owned subsidiaries whose operations are relatively inactive at this time, namely General Processing Corporation, CannaCenters Corporation (dbaCannaCenters), and a third subsidiary, LV Luxuries Incorporated (which operated as makeup.com), whose operations have been discontinued. As of right now we have no imminent or specific plans for either of the entities and they are held as corporations in good standing with no operations.

Note 2. Basis Of Presentation And Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America.

Reclassifications

Certain prior year amounts in the accompanying consolidated financial statements have been reclassified to conform to the current year’s presentation. These reclassifications had no effect on the consolidated results of operations or financial position for any years presented.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. 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 amounts reported in the financial statements and accompanying notes. These estimates are based on knowledge of current events and anticipated future events and accordingly, actual results may differ from those estimates.

F-8

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Condensed Consolidated Financial Statements

September 30, 2012

Unaudited

Risks related to cash

The Company maintains cash in bank and deposit accounts, which at times may exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk on cash and cash equivalents.

Cash and Cash equivalents

The Company considers only highly liquid investments such as money market funds and commercial paper with maturities of 90 days or less at the date of their acquisition as cash and cash equivalents.

Fair Value of Financial Instruments

The accounting standards regarding disclosures about fair value of financial instruments defines financial instruments and required fair value disclosure of those instruments. This accounting standard defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. Receivables, investments, payables, short and long term debt and warrant liabilities qualified as financial instruments. Management believes the carrying amounts of receivables, payables and debt are a reasonable estimate of fair value because of the short period of time between the origination of such instruments, their expected realization, and if applicable, their stated interest rate is equivalent to interest rates currently available. The three levels are defined as follows:

Level 1

Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2

Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

Level 3

Inputs to the valuation methodology are unobservable and significant to the fair value.

The Company analyzes all financial instruments with features of both liabilities and equity under the accounting standards regarding accounting for certain financial instruments with characteristics of both liabilities and equity, accounting for derivative instruments and hedging activities, accounting for derivative financial instruments indexed to, and potentially settled in, a company’s own stock, and the accounting standard regarding determining whether an instrument (or embedded feature) is indexed to an entity’s own stock. The accounting standard specifies that a contract that would otherwise meet the definition of a derivative but is both (a) indexed to the Company’s own stock and (b) classified in stockholders’ equity in the statement of financial position would not be considered a derivative financial instrument. This standard provides a two-step model to be applied in determining whether a financial instrument or an embedded feature is indexed to an issuer’s own stock and thus able to qualify for this accounting standard scope exception. All warrants issued by the Company are denominated in U.S. dollars.

F-9

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Condensed Consolidated Financial Statements

September 30, 2012

Unaudited

Accounts Receivable

Accounts receivable are recorded at the invoice amount and do not bear interest.

Advertising Cost

The Company expenses advertising costs when incurred. Advertising expense for the nine months ended September 30, 2012 and 2011 was $180,000 and $609,000, respectively.

Allowance for Doubtful Accounts

Allowance for doubtful accounts is defined as a company's estimate of the amount of probable credit losses in the company's existing accounts receivable. The Company does not maintain an allowance for doubtful account based upon management’s review of the Company’s revenue structure whereby substantially all receivables are confirmed before they are booked as revenue. The Company reviews its allowance for doubtful accounts policy periodically. The Company does not have any off-balance-sheet exposure related to its customers.

Inventory

The Inventory balance at December 31, 2011 consisted of credit card terminals which were stated at the lower of cost (average) or market. We previously supplied dispensaries with credit card processing services. On October 31, 2011, General Merchant Solutions, our wholly owned subsidiary, discontinued all retail credit card processing operations.

Property and Equipment

Property and equipment are recorded at cost and depreciated using the straight-line method over the useful lives of the assets, generally from three to seven years. Property and equipment at September 30, 2012 and 2011 are presented net of accumulated depreciation of $159,000 and $75,000, respectfully.

Goodwill

In accordance with Goodwill and Other Intangible Assets, goodwill is defined as the excess of the purchase price over the fair value assigned to individual assets acquired and liabilities assumed and is tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis in the Company's fourth fiscal quarter or more frequently if indicators of impairment exist. The performance of the test involves a two-step process. The first step of the impairment test involves comparing the fair value of the Company's reporting units with each respective reporting unit's carrying amount, including goodwill. The fair value of reporting units is generally determined using the income approach. If the carrying amount of a reporting unit exceeds the reporting unit's fair value, the second step of the goodwill impairment test is performed to determine the amount of any impairment loss. The second step of the goodwill impairment test involves comparing the implied fair value of the reporting unit's goodwill with the carrying amount of that goodwill. No amortization is recorded for goodwill with indefinite useful life. No goodwill impairment was recognized during the nine months ended September 30, 2012 and 2011, respectively.

F-10

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Condensed Consolidated Financial Statements

September 30, 2012

Unaudited

Intangible Assets

Impairment of Long-Lived and Intangible Assets

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with the provisions of Share-Based Payment, which addresses the accounting for equity-based compensation and which requires that the cost of all equity-based compensation arrangements, be reflected in the financial statements over the vesting period based on the estimated fair value of the awards. During the nine months ended September 30, 2012 and 2011, the Company had $125,000 and zero, respectively, in stock-based compensation expense related to issuances of shares of the Company’s common stock to consultants.

Treasury Stock

We account for treasury stock using the cost method and include treasury stock as a component of shareholders’ equity. Other than the share purchases described in Note 3. Equity Transactions, we currently do not have or intend to initiate a share repurchase program.

Contingent Consideration – Earn-outs

Revenue Recognition

We recognize revenue in accordance with ASC 605, “Revenue Recognition,” we recognize as revenue the fees we charge customers as referenced below because persuasive evidence of an arrangement exists, the fees we charge are substantially fixed or determinable during the period that we provide the services, we and our customers understand the specific nature and terms of the agreed upon transactions, collectability is reasonable assured and services have been rendered.

F-11

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Condensed Consolidated Financial Statements

September 30, 2012

Unaudited

The Company and its wholly owned subsidiaries recognize revenue as follows:

Listing Fee Revenue – The Company operates WeedMaps.com and several associated websites, together composing a large scale, medical-cannabis industry focused internet media portal that targets dispensaries, advertisers and consumers. The Company generates revenues from listings on the Company’s website. We recognize as revenue the fees we charge customers for listing their related company on our website. The terms of the listing arrangements with our customers are pursuant to a marketing agreement entered into with each customer pursuant to the terms of which the listing period is on a month-to-month term, listings are prepaid monthly and we do not offer returns, as such, our policy is to recognize revenues on a per-listing fee basis in the month that we provide the listing service.

Ad Revenue – The Company generates revenues from advertising on the Company’s websites. We recognize as revenue the fees we charge customers for placing ads for their related company on our websites. The terms of the advertising arrangements with our customers are pursuant to an advertising agreement entered into with each customer pursuant to the terms of which the advertising period is on a month-to-month term, ads are prepaid monthly and we do not offer returns, as such, our policy is to recognize revenues on a per-ad fee basis in the month that we provide the advertising service.

Content Production Revenue – The Company generates revenues from photo and video production of content, which is displayed on the Company’s websites. We recognize as revenue the fees we charge customers for photo and video production services pursuant to which we create virtual tours of their establishments and products, which are then displayed on our websites. The terms of the production services with our customers are pursuant to an agreement entered into with each customer pursuant to the terms of which the production services are on a one-time basis and our policy is to recognize revenues on a per-production basis in the month that we provide the production services.

Software Product Revenue – The Company generates revenues from the delivery of our software products via the cloud. We recognize as revenue the fees we charge customers for a software subscription service. The terms of the software subscription arrangements with our customers are pursuant to an agreement entered into with each customer pursuant to the terms of which the subscription period is on a month-to-month term, subscriptions are prepaid monthly and we do not offer returns, as such, our policy is to recognize revenues on a per-subscription fee basis in the month that we provide the software subscription service.

Income Taxes

The Company follows Accounting for Income Taxes that requires recognition of deferred income tax liabilities and assets for the expected future tax consequences of temporary differences between the income tax basis and financial reporting basis of assets and liabilities. Provision for income taxes consists of taxes currently due plus deferred taxes.

The charge for taxation is based on the results for the year as adjusted for items that are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences, and deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized.

F-12

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Condensed Consolidated Financial Statements

September 30, 2012

Unaudited

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it relates to items credited or charged directly to equity, in which case the deferred tax is also recorded in equity.

Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.

Uncertain tax positions

The Company recognizes uncertain tax positions based on a benefit recognition model. Provided that the tax position is deemed more likely than not of being sustained, the Company recognizes the largest amount of tax benefit that is greater than 50 percent likely of being ultimately realized upon settlement. The tax position is derecognized when it is no longer more likely than not of being sustained. The Company classifies income tax-related interest and penalties as interest expense and SGA expense, respectively, on the Consolidated Statement of Operations.

Subsequent Events

During May 2009 and February 2010, the FASB issued new authoritative pronouncement regarding recognized and non-recognized subsequent events. This guidance establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before the financial statements are issued or are available to be issued. The Company adopted this guidance and it had no impact on the Company’s results of operations or financial position.

Recent Accounting Pronouncements

FASB issued an accounting standards update amending ASC 220 to improve the comparability, consistency and transparency of reporting of comprehensive income. It amends existing guidance by allowing only two options for presenting the components of net income and other comprehensive income: (1) in a single continuous financial statement, statement of comprehensive income or (2) in two separate but consecutive financial statements, consisting of an income statement followed by a separate statement of other comprehensive income. Also, items that are reclassified from other comprehensive income to net income must be presented on the face of the financial statements. ASU No. 2011-05 requires retrospective application, and it is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, with early adoption permitted. In December 2011, FASB issued ASU 2011-12. ASU 2011-12 indefinitely deferred the provisions of ASU 2011-05 requiring the presentation of reclassification adjustments on the face of the financial statements for items reclassified from other comprehensive income to net income. The adoption of this standard did not have a material impact on our financial statements.

FASB issued an accounting standards update amending ASC 820, which is effective for interim and annual periods beginning after December 31, 2011, to achieve common fair value measurement and disclosure requirements between GAAP and IFRS. This amendment changes the wording used to describe fair value and requires additional disclosures. The adoption of this amendment did not have a material impact on our financial statements.

F-13

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Condensed Consolidated Financial Statements

September 30, 2012

Unaudited

In September 2011, the FASB issued an amendment to an existing accounting standard, which provides an option to perform a qualitative assessment to determine whether further impairment testing on goodwill is necessary. Specifically, an entity has the option to first assess qualitative factors to determine whether it is necessary to perform the current two-step test. If an entity believes, as a result of its qualitative assessment, that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is required. Otherwise, no further testing is required. This standard is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The adoption of this standard did not have a material impact on our financial statements.

In January 2010, FASB issued ASU No. 2010-01- Accounting for Distributions to Shareholders with Components of Stock and Cash. The amendments in this Update clarify that the stock portion of a distribution to shareholders that allows them to elect to receive cash or stock with a potential limitation on the total amount of cash that all shareholders can elect to receive in the aggregate is considered a share issuance that is reflected in EPS prospectively and is not a stock dividend for purposes of applying Topics 505 and 260 (Equity and Earnings Per Share). The amendments in this update are effective for interim and annual periods ending on or after December 15, 2009, and should be applied on a retrospective basis. The adoption of this ASU did not have a material impact on our consolidated financial statements.

In January 2010, FASB issued ASU No. 2010-02 - Accounting and Reporting for Decreases in Ownership of a Subsidiary - a Scope Clarification. The amendments in this Update affect accounting and reporting by an entity that experiences a decrease in ownership in a subsidiary that is a business or nonprofit activity. The amendments also affect accounting and reporting by an entity that exchanges a group of assets that constitutes a business or nonprofit activity for an equity interest in another entity. The amendments in this update are effective beginning in the period that an entity adopts Non-controlling Interests in Consolidated Financial Statements. If an entity has previously adopted Non-controlling Interests in Consolidated Financial Statements as of the date the amendments in this update are included in the Accounting Standards Codification, the amendments in this update are effective beginning in the first interim or annual reporting period ending on or after December 15, 2009. The amendments in this update should be applied retrospectively to the first period that an entity adopted Non-controlling Interests in Consolidated Financial Statements. The adoption of this ASU did not have a material impact on our consolidated financial statements.

In January 2010, FASB issued ASU No. 2010-06 - Improving Disclosures about Fair Value Measurements. This update provides amendments to Subtopic 820-10 that requires new disclosure as follows: 1) Transfers in and out of Levels 1 and 2. A reporting entity should disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers. 2) Activity in Level 3 fair value measurements. In the reconciliation for fair value measurements using significant unobservable inputs (Level 3), a reporting entity should present separately information about purchases, sales, issuances, and settlements (that is, on a gross basis rather than as one net number). This update provides amendments to Subtopic 820-10 that clarify existing disclosures as follows: 1) Level of disaggregation. A reporting entity should provide fair value measurement disclosures for each class of assets and liabilities. A class is often a subset of assets or liabilities within a line item in the statement of financial position. A reporting entity needs to use judgment in determining the appropriate classes of assets and liabilities. 2) Disclosures about inputs and valuation techniques. A reporting entity should provide disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements. Those disclosures are required for fair value measurements that fall in either Level 2 or Level 3. The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. These disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The adoption of this ASU did not have a material impact on our consolidated financial statements.

F-14

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Condensed Consolidated Financial Statements

September 30, 2012

Unaudited

In September 2009, the FASB issued Accounting Standards Update No. 2009-08 Earnings Per Share - Amendments to Section 260-10-S99, which represents technical corrections to topic 260-10-S99 Earnings per share, based on EITF Topic D-53 Computation of Earnings Per Share for a Period that includes a Redemption or an Induced Conversion of a Portion of a Class of Preferred Stock and EITF Topic D-42 The Effect of the Calculation of Earnings per Share for the Redemption or Induced Conversion of Preferred Stock. The adoption of this ASU did not have a material impact on our consolidated financial statements, results of operations or cash flows.

In August 2009, the FASB issued Accounting Standards Update No. 2009-05 Fair Value Measurement and Disclosures Topic 820 - Measuring Liabilities at Fair Value, which provides amendments to subtopic 820-10 Fair Value Measurements and Disclosures - Overall for the fair value measurement of liabilities. This update provides clarification that in circumstances in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using one or more of the following techniques: 1. A valuation technique that uses: a) the quoted price of the identical liability when traded as an asset b) quoted prices for similar liabilities or similar liabilities when traded as assets. 2. Another valuation technique that is consistent with the principles of topic 820; two examples would be an income approach, such as a present value technique, or a market approach, such as a technique that is based on the amount at the measurement date that the reporting entity would pay to transfer the identical liability or would receive to enter into the identical liability. The amendments in this update also clarify that when estimating the fair value of a liability, a reporting entity is not required to include a separate input or adjustment to other inputs relating to the existence of a restriction that prevents the transfer of the liability. The amendments in this update also clarify that both a quoted price in an active market for the identical liability when traded as an asset in an active market when no adjustments to the quoted price of the asset are required are Level 1 fair value measurements. The adoption of this ASU did not have a material impact on our consolidated financial statements, results of operations or cash flows.

In June 2009, the FASB issued standards that establish only two levels of U.S. GAAP, authoritative and nonauthoritative. The FASB Accounting Standards Codification (the “Codification”) became the source of authoritative, nongovernmental GAAP, except for rules and interpretive releases of the SEC, which are sources of authoritative GAAP for SEC registrants. All other non-grandfathered, non-SEC accounting literature not included in the Codification became nonauthoritative. This standard is effective for financial statements for interim or annual reporting periods ending after September 15, 2009. We use the new guidelines and numbering system prescribed by the Codification when referring to GAAP. As the Codification was not intended to change or alter existing GAAP, it did not have a material impact on our consolidated financial statements.

F-15

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Condensed Consolidated Financial Statements

September 30, 2012

Unaudited

In April 2009, the FASB issued standards that require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. This standard also requires those disclosures in summarized financial information at interim reporting periods. This standard applies to all financial instruments within the scope of Statement 107 held by publicly traded companies, as defined by APB 28, and requires that a publicly traded company include disclosures about the fair value of its financial instruments whenever it issues summarized financial information for interim reporting periods. This standard is effective for interim reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. The adoption of this standard did not have a material impact on our consolidated financial statements, results of operations or cash flows.

In April 2009, the FASB issued standards that provide additional guidance for estimating fair value when the volume and level of activity for the asset or liability have significantly decreased and also includes guidance on identifying circumstances that indicate a transaction is not orderly for fair value measurements. This standard is effective for interim and annual periods ending after June 15, 2009. The adoption of this standard did not have a material impact on our consolidated financial statements, results of operations or cash flows.

In May 2009, the FASB issued standards that require management to evaluate subsequent events through the date the financial statements are either issued, or available to be issued. Companies are required to disclose the date through which subsequent events have been evaluated. This standard is effective for interim or annual financial periods ending after June 15, 2009. The Company evaluated its September 30, 2012 financial statements for subsequent events through November 14, 2012, the date the financial statements were available to be issued. Other than the events in Note 21. Subsequent Events, the Company is not aware of any subsequent events that would require recognition or disclosure in the financial statements.

Note 3. Equity Transactions

The below purchases of shares of our common stock (Treasury Stock) were accounted for using the cost method and we include the treasury stock as a component of our shareholders’ equity. In aggregate, we purchased 51,772,289 shares of our common stock, reducing the number of our total shares of common stock outstanding to 37,567,967.At September 30, 2012 the total number of shares of our common stock that were issued and outstanding was 89,340,256 of which 51,772,289 were treasury stock. Pursuant to terms of which we purchased shares of our common stock, 51,272,289 shares held in escrow are released monthly on a pro-rata basis as we make payments on the promissory notes related to their purchase. Further, pursuant to the terms of which we purchased 500,000 shares of our common stock, 186,567 shares held in escrow will be release on January 10, 2013 upon final payment of the associated promissory note.

F-16

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Condensed Consolidated Financial Statements

September 30, 2012

Unaudited

Share Purchases from Hartfield, Hoerling and Francis

During August 2012, we closed (A) a Global Securities Purchase, Consulting, and Resignation Agreement (the "Hartfield Agreement"), Secured Promissory Note (the " Hartfield Note") and Consulting Agreement (the "Consulting Agreement") by and among Justin Hartfield, an individual ("Hartfield") and WeedMaps Media, Inc., a Nevada corporation and our wholly-owned subsidiary ("WeedMaps"), (B) a Global Securities Purchase Agreement (the "Hoerling Agreement") and Secured Promissory Note (the "Hoerling Note") by and among us, Keith Hoerling, an individual ("Hoerling") and WeedMaps and (C) a Global Securities Purchase and Resignation Agreement (the "Francis Agreement", collectively with the Hartfield and Hoerling Agreements, the "Global Agreements") and Secured Promissory Note (the "Francis Note", collectively with the Hartfield and Hoerling Notes, the "Notes") by and among us, Douglas Francis, an individual ("Francis", collectively with Hartfield and Hoerling, the “Selling Parties”) and WeedMaps. Pursuant to the Global Agreements, Hartfield and Francis have delivered letters of resignation as our employees. Mr. Hoerling will remain employed by us as our Chief Technology Officer. Mr. Francis has resigned his position as a member of our Board of Directors. Further, pursuant to the Global Agreements, the Selling Parties have terminated all rights to consideration due from us (including cash and/or stock owed to Hartfield and Hoerling pursuant to agreements whereby we acquired WeedMaps, LLC). Pursuant to the Global Agreements, we purchased a total of 51,272,289 shares of our common stock from the Selling Parties.

As consideration for the Global Agreements, the Notes were issued to Hartfield, Hoerling and Francis, individually. The Notes are secured by the shares of common stock sold to the Company by the Selling Parties, and each of them, pursuant to the Global Agreements. Pursuant to the Notes, beginning in September 2012, we began making monthly payments in the amount of $78,099.38 to each of the Selling Parties. The original aggregate amount of the Notes was $4,875,000. At September 30, 2012, the outstanding balance of the Notes was $4,605,000, of which $2,659,000 was recorded as the current portion and $1,946,000 was recorded as the noncurrent portion.

In addition to the Notes, as consideration for the Global Agreements, we agreed to pay to each of the Selling Parties up to $1,625,000, to be paid in monthly payments beginning in September 2012, and ending in January 2015, based on the monthly gross revenue of WeedMaps as more fully set forth in the Global Agreements (the “Revenue Share Liability”). The original aggregate amount of the Revenue Share Liability was $4,875,000. At September 30, 2012, the outstanding balance of the Revenue Share Liability was $4,609,000, of which $2,659,000 was recorded as the current portion and $1,950,000 was recorded as the noncurrent portion.

Pursuant to the Consulting Agreement, we will pay Hartfield Five Thousand Dollars ($5,000) per month for a period of 30 months for the services provided pursuant thereto.

Share Purchases from Revyv, LLC

On August 16, 2012, we entered into a Stock Purchase Agreement with Revyv, LLC to acquire 500,000 shares of our common stock for consideration of $67,000 of which $42,000 was paid at closing and by issuing a $25,000 promissory note due January 10, 2013.

F-17

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Condensed Consolidated Financial Statements

September 30, 2012

Unaudited

Stock-based Compensation

On November 5, 2012, we issued 250,000 shares of our common stock to one shareholder for services rendered from July 1, 2012 through September 30, 2012 and was accounted for as an expensed during the quarter ended September 30, 2012. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investor was accredited and had access to information necessary to make an investment decision. The shares were restricted securities as described in Rule 144 pursuant to the Securities Act of 1933.

MMJMenu, LLC

On January 5, 2012, WeedMaps acquired substantially all the assets of MMJMenu, LLC (“MMJ”). As consideration for the purchase we issued an aggregate of Two Hundred Thousand (200,000) shares of our common stock to MMJ or its assigns. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investor was accredited and had access to information necessary to make an investment decision. The shares were restricted securities as described in Rule 144 pursuant to the Securities Act of 1933.

Note 4. Business Combinations

MMJMenu, LLC

On January 5, 2012, WeedMaps Media, Inc. acquired substantially all the assets of MMJMenu, LLC (“MMJ”) including its website (www.mmjmenu.com). MMJ is a dispensary point-of-service and collective management software system that gives customers inventory tracking, patient management and a point-of-sales system. The MMJMenu is being integrated with WeedMaps, so that our customers can have their inventory updated in real-time on their respective WeedMaps.com listing page. The acquisition of MMJ was accounted for in accordance with the authoritative literature described in ASC 805-10 Business Combinations. Pursuant to ASC 805-10 Business Combinations only the acquisition method may be applied to account for a business combination. As consideration for the purchase we issued an aggregate of Two Hundred Thousand (200,000) shares of our common stock to MMJ or its assigns. The total purchase price was $262,000 which was based on the price of the underlying common stock, $1.31, as quoted on the OTC Markets on January 5, 2012, the date of the acquisition. Effective on January 4, 2012, we entered into an at-will employment agreement with each of Justin Weidmann and Alex Weidmann, each of which are members of MMJMenu, LLC. The compensation due to each is $10,000 per month.

The Significance test pursuant to Rule 8-04(b) of Regulation S-X was used to determine that the acquisition of MMJMenu, LLC was not significant to our financial statements for the fiscal year ended December 31, 2011 and as such, the financial statements of MMJ were not required pursuant to Rule 3-05(b)(2)(i) and Rule 8-04(c)(1).

The following table summarizes the acquisition with a total purchase price of $262,000:

Current assets	$	—
Domains		1,950
Software		340,560
Total assets acquired	$	342,510
Earn-out provision		(80,510	)
Total purchase price	$	262,000

The Software will be amortized over a period of five years.

F-18

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Condensed Consolidated Financial Statements

September 30, 2012

Unaudited

Earn out provisions, MMJ

Pursuant to the earn out provisions of the MMJMenu Purchase Agreement, in year one following the acquisition of MMJ each of the Sellers will be eligible to earn and be issued 50,000 shares of the Company’s common stock, if the gross revenues of SearchCore for the fiscal year ended December 31, 2012 are at least 50% higher than they were for the fiscal year ended December 31, 2011. Further, in year two following the acquisition of MMJ each of the Sellers will be eligible to earn and be issued 50,000 shares of the Company’s common stock, if the gross revenues of SearchCore for the fiscal year ended December 31, 2013 are at least 50% higher than they were for the fiscal year ended December 31, 2012.

The Company accounts for Contingent Consideration according to FASB ASC 805 Business Combinations. Contingent consideration typically represents the acquirer's obligation to transfer additional assets or equity interests to the former owners of the acquiree if specified future events occur or conditions are met. FASB ASC 805 requires that contingent consideration be recognized at acquisition-date fair value as part of the consideration transferred in the transaction. FASB ASC 805 uses the fair value definition in Fair Value Measurements, which defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As defined in FASB ASC 805, contingent consideration is (i) an obligation of the acquirer to transfer additional assets or equity interests to the former owners of an acquiree as part of the exchange for control of the acquiree if specified future events occur or conditions are met or (ii) the right of the acquirer to the return of previously transferred consideration if specified conditions are met.

Accordingly, the Company valued the Earn-out Provisions based on an analysis using a cash flow model (a "decision tree") to determine the Expected Earn-Out Payment, which model determined that the aggregate Expected Earn-out Payment was $104,800 and the present value of the contingent consideration liability was $80,510. The Company thus recognized at the acquisition date an $80,510 Earn-out Provisions Liability amount associated with the Earn-out Provisions as part of the consideration transferred in the MMJMenu Purchase Agreement.

The probabilities for the two different scenarios in determining the likelihood of payouts related to the earn-out provisions, as well as the discount rate used in our calculations were based on internal Company projections which were vetted by senior management. Below is a summary presentation of the earn-outs on January 5, 2012, the date of the acquisition:

Year one of the cash flow model:

Scenarios	# of Shares Earn-Out	Probability	Probability-Weighted Shares

Upside	50,000	85%	42,500
Gross Revenue 50% higher than previous year

Base	0	15%	0
Gross Revenue not 50% higher than previous year

F-19

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Condensed Consolidated Financial Statements

September 30, 2012

Unaudited

	Expected Earn-Out Shares		42,500

	$/Share		$1.31

	rate		20%
	nper		1.00
	pmt		$-
	fv		$55,675

	PV factor at 20% for 12 months		0.83333

	Fair Value of Liability		$46,396

Year two of the cash flow model:

Scenarios	# of Shares Earn-Out	Probability	Probability-Weighted Shares

Upside	50,000	75%	37,500
Gross Revenue 50% higher than previous year

Base	0	25%	0
Gross Revenue not 50% higher than previous year

	Expected Earn-Out Shares		37,500

	$/Share		$1.31

	rate		20%
	nper		2.00
	pmt		$-
	fv		$49,125

	PV factor at 20% for 24 months		0.69444

	Fair Value of Liability		$34,115

See Note 15. Earn-Out Provisions for a summary presentation of the change in earn-out liabilities as a result of remeasuring the earn-out liabilities to fair value at September 30, 2012.

F-20

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Condensed Consolidated Financial Statements

September 30, 2012

Unaudited

Note 5. Other Current Assets

At September 30, 2012, the Company had recorded $252,000 in prepaid services such as legal, accounting and marketing services with third party firms, which terms are from one to two years and are amortized on a straight-line basis over the term of the respective agreement, $57,000 in payroll and commission advances to employees and consultants, $136,000 in prepaid insurance, $196,000 in current deferred tax assets, and $41,000 in other prepaid services.

Sports Asylum, Inc.

At September 30, 2012, the Company had $285,000 recorded as a note receivable pursuant to the First Amended and Restated Letter of Intent ("LOI") we entered into on August 22, 2012 with Sports Asylum, Inc. ("SAI") pursuant to which we intend to purchase 100% of the issued and outstanding securities of SAI (the "SAI Securities") for consideration to be determined between the parties. SAI is a development stage company which is developing sportify.com, a website which aims to get people to play sports by creating the largest social networking site related to playing sports. As a deposit for the acquisition of the SAI Securities, we paid SAI $50,000 (the "Deposit"). The Deposit is fully refundable. Pursuant to the LOI, we will advance additional funds to SAI, up to a maximum of $300,000 (the "Advance" and, together with the Deposit, the "Loaned Funds"). We have entered into a Secured Promissory Note with SAI, covering the full amount of the Loaned Funds, that provides for repayment by SAI in twelve (12) equal monthly payments beginning July 1, 2013, with interest at 1.01% per annum (the "Note"). If the purchase of the SAI Securities is consummated, the Loaned Funds will be offset against the purchase price of the SAI Securities and the Note will be terminated.

Note 6. Property And Equipment

	September 30,				December 31,
Property and Equipment	2012				2011
Furniture and Computer Equipment		$	573,808			$	501,336
Less: Accumulated Depreciation			(159,129	)			(71,295	)
Property and Equipment, net		$	414,679			$	430,041

For the nine months ended September 30, 2012 and for the twelve months ended December 31, 2011, depreciation expense totaled $88,000 and $71,000, respectively.

F-21

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Condensed Consolidated Financial Statements

September 30, 2012

Unaudited

Note 7. Intangible Assets

Intangible assets consist of a suite of domain names, including our recent acquisition of the domain name marijuana.com, web software (Product Software to be sold or marketed to third parties and not for internal use) and goodwill associated with our recent acquisitions.

The domain names have been determined to have an indefinite useful life based primarily on the renewability of the domain name. Intangible assets with an indefinite life are not subject to amortization, but will be subject to periodic evaluation for impairment.

Rodeo.com and Karate.com - On August 7, 2012, we entered into a Domain Name Purchase Agreement and a Non-Recourse Secured Promissory Note (the "Note") with Domain Holdings, Inc., an Alberta corporation, pursuant to which we purchased the domain names www.rodeo.com and www.karate.com (the "Purchased Domains"), for total consideration of $500,000, all represented by the Note. Pursuant to the terms of the Note, we made payments of $50,000 on each of August 15, 2012 and November 1, 2012, with the balance to be paid in 18 equal monthly installments of $22,222 beginning June 1, 2013, and continuing on the 1st of each month thereafter. Title to the Purchased Domains shall remains in escrow, with full beneficial rights of use granted to us immediately, until the Note is paid in full. The domain names www.rodeo.com and www.karate.com are considered premium domain names for a variety of reasons, including, but not limited to, their level of monthly page views, unique visitors, search engine optimization results, industry strength, sales value history, market potential, linguistical viability, brand recognition and recall value. The domain names rodeo.com and karate.com have an indefinite life subject to annual renewal fees of approximately $10 per year. We fully intend and believe that we will have the financial wherewithal to renew the domain names indefinitely. The domain names have worldwide recognition and presumably will be able to generate advertising revenue regardless of the stability and/or stage of their respective industries in the United States. We believe the domain names will maintain their value principally because of there broad worldwide appeal. As a result, at this point in time, we believe that the domain names have an indefinite useful life. Consequently, we currently are not aware of any legal, regulatory, or contractual provisions that would limit our use of the domain name or our ability to renew it as needed.

Manufacturedhome.com, Manufacturedhouse.com and Manufacturehomes.com - During August 2012, we purchased the domain names www.manufacturedhome.com and www.manufacturedhouse.com for total consideration of $50,000 which was paid at closing, and we purchased the domain name www.manufacturedhomes.com for total consideration of $130,000 which was paid at closing. The domain names are considered premium domain names for a variety of reasons, including, but not limited to, their level of monthly page views, unique visitors, search engine optimization results, industry strength, sales value history, market potential, linguistical viability, brand recognition and recall value. The domain names have an indefinite life subject to annual renewal fees of approximately $10 per year. We fully intend and believe that we will have the financial wherewithal to renew the domain names indefinitely. The domain names have worldwide recognition and presumably will be able to generate advertising revenue regardless of the stability and/or stage of their respective industries in the United States. We believe the domain names will maintain their value principally because of there broad worldwide appeal. As a result, at this point in time, we believe that the domain names have an indefinite useful life. Consequently, we currently are not aware of any legal, regulatory, or contractual provisions that would limit our use of the domain name or our ability to renew it as needed.

F-22

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Condensed Consolidated Financial Statements

September 30, 2012

Unaudited

On August 24, 2012, we entered into a Domain Name Purchase Agreement with High Level Technologies, Inc., pursuant to which we purchased 57 domain names which among other include sports related domain names likeallsportsrules.com,mapmysport.com, sportsasylum.com,and domain names related to the manufactured home industry like manufacturedhomelots.com, manufacturedlots.com and prefabhomelots.com, for total consideration of $100,000 which was paid at closing.The domain names are considered premium domain names for a variety of reasons, including, but not limited to, their level of monthly page views, unique visitors, search engine optimization results, industry strength, sales value history, market potential, linguistical viability, brand recognition and recall value. The domain names have an indefinite life subject to annual renewal fees of approximately $10 per year. We fully intend and believe that we will have the financial wherewithal to renew the domain names indefinitely. The domain names have worldwide recognition and presumably will be able to generate advertising revenue regardless of the stability and/or stage of their respective industries in the United States. We believe the domain names will maintain their value principally because of there broad worldwide appeal. As a result, at this point in time, we believe that the domain names have an indefinite useful life. Consequently, we currently are not aware of any legal, regulatory, or contractual provisions that would limit our use of the domain name or our ability to renew it as needed.

Marijuana.com - The domain name www.marijuana.com is considered a premium domain name for a variety of reasons, including, but not limited to, its level of monthly page views, unique visitors, search engine optimization results, industry strength, sales value history, market potential, linguistical viability, brand recognition and recall value. The domain name Marijuana.com has an indefinite life subject to annual renewal fees of approximately $10 per year. We fully intend and believe that we will have the financial wherewithal to renew Marijuana.com indefinitely. The domain name Marijuana.com has worldwide recognition and presumably will be able to generate advertising revenue regardless of the stability and/or stage of the medical marijuana industry in the United States. We believe Marijuana.com will maintain its value principally because of its broad worldwide appeal. The recognition of Marijuana.com in the United States only represents a portion of its potential brand identity and marketing potential. The brand recognition of the domain name Marijuana.com transcends both the medicinal dispensary industry as well as the more established industries, such as the pharmaceutical industry. Medicinal cannabis is approved in eighteen states, plus the District of Columbia. Further, as of November 14, 2012, there are four states with pending legislation to legalize medical marijuana. Though the medicinal cannabis industry may be compliant with applicable state laws, it is deemed illegal under federal law. However, to date, the federal government has concentrated their efforts on actions against suppliers, growers or sellers of marijuana, and not pursued, to our knowledge, actions against entities that provide marketing or advertising. As a result, at this point in time, we believe that the asset Marijuana.com has an indefinite useful life. Consequently, we currently are not aware of any legal, regulatory, or contractual provisions that would limit our use of the domain name or our ability to renew it as needed.

Pursuant to the Marijuana.com Purchase Agreement, during the Revenue Obligation Period (69 months during which we are making payments on the promissory note), the Seller shall be entitled to two text links on marijuana.com, as well as two banner ads (of average size based on the site) that are static (non rotational) (the “Advertising Rights”). The Seller is responsible for providing all necessary graphics and text, which are subject to final approval by us in our sole discretion. The fair value of the Advertising Rights were determined to be $47,886 over the Revenue Obligation Period based upon an analysis composed of twelve comparable websites and the average ad rates they charge for banner ads and text links which average monthly rates were $249.50 for banner ads and $97.50 for text links. We recorded a $47,886 Advertising Rights intangible asset associated with the Advertising Rights which will be amortized over the term of the Revenue Obligation Period (beginning in January 2012—the month we took possession of the domain name).

F-23

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Condensed Consolidated Financial Statements

September 30, 2012

Unaudited

Intangible asset amounts at September 30, 2012 and December 31, 2011 are as follows:

	September 30,			December 31,
Intangible Assets	2012			2011

Domain names	$	5,258,571		$	4,364,119
Web software		841,903			501,343
Trademarks		93,605			—
Goodwill		486,403			486,403
Subtotal	$	6,680,482		$	5,351,865
Accumulated amortization		(138,306	)		—
Total intangible Assets	$	6,542,176		$	5,351,865

Intangible assets subject to amortization:	Amount		Useful life		Weighted-average amortization period
Advertising rights	$	47,886		5.0		0.27
Web software	$	841,903		4.25		4.02

Total intangible assets subject to amortization	$	889,789				4.29

Intangible assets not subject to amortization	Amount
Domain Names	$	5,304,290
Goodwill		486,403
Total intangible assets not subject to amortization	$	5,790,693

Note 8. Other Assets

The balance of other assets at September 30, 2012 includes $54,000 in rent deposits and $28,000 in noncurrent deferred tax assets.

F-24

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Condensed Consolidated Financial Statements

September 30, 2012

Unaudited

Note 9. Discontinued Operations

General Health Solutions, Inc.

We discontinued the operations of General Health Solutions, Inc., which constitutes our entire Medical Clinic Management segment. We discontinued the operations of General Health Solutions because of increasing costs associated with managing the clinics and the recent increased competition in the medicinal cannabis clinic industry. A major factor in the success of managing the medicinal cannabis clinics is running successful online Pay Per Click (“PPC”) advertising campaigns. In PPC campaigns targeting is key, and factors that determine the pricing pertaining to certain key words depend heavily on the number of advertisers bidding on those certain key words. Taken together, i) our increasing success with our technology in our Marketing and Media Segment and ii) the increasing costs of PPC campaigns coupled with the increasing number of sole-practitioner doctors now offering medicinal cannabis recommendation letters as part of their medical practice offerings which places downward pressure on pricing, led us to decide to discontinue the operations of General Health Solutions, which composes our entire Medical Clinic Management Segment, and focus our efforts instead on our technology in our Marketing and Media Segment.

During February 2012, we committed to a definitive plan to terminate the Management Agreement (“Agreement”) and services associated with the Agreement, which resulted in General Health Solutions, Inc., our Medical Clinic Management segment being reported as discontinued operations. For comparative purposes, all prior periods presented have been restated to reflect the reclassification of this segment to discontinued operations on a consistent basis.

General Health Solutions comprised the entirety of our Medical Clinic Management segment and as such, the entire segment was reported in discontinued operations. Following the closure of the clinics during the first quarter 2012, we do not expect any continuing cash flows from discontinued operations.

The assets and liabilities of our discontinued operations are as follows:

Current assets – discontinued operations at September 30, 2012 consists of $151,000 note receivable.

Current liabilities – discontinued operations at September 30, 2012 consists of $10,000 in accounts payable and $115,000 in notes payable.

Note 10. Accounts Payable

Accounts payable at September 30, 2012 included amounts owed to certain vendors related to the ongoing normal course of the Company’s operations.

F-25

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Condensed Consolidated Financial Statements

September 30, 2012

Unaudited

Note 11. Accrued Liabilities

Accrued liabilities at September 30, 2012 and December 31, 2011 are comprised of the following:

	September 30,		December 31,
Accrued liabilities	2012		2011
Revenue Share Liability	$	2,659,000	$	-
MMJMenu earn-outs		37,000		-
Obligations on marketing agreements		240,000		42,000
Tax payable		1,064,000		361,000
Deferred rent		125,000		183,000
Insurance		12,000		-
Payroll liabilities		33,000		166,000
Interest		17,000		7,000
Total accrued liabilities	$	4,187,000	$	759,000

Summary of the Revenue Share Liability amounts at September 30, 2012 and December 31, 2011:

Revenue Share Liability	September 30, 2012		December 31, 2011
Current portion	$	2,659,000	$	-
Long term portion		1,950,000		-
	$	4,609,000	$	-

See Note 3. Equity Transactions for a description of our obligations on share purchases, including the Revenue Share Liability.

Note 12. Notes Payable

On August 7, 2012, we entered into a Domain Name Purchase Agreement and a Non-Recourse Secured Promissory Note (the "Note") with Domain Holdings, Inc., an Alberta corporation, pursuant to which we purchased the domain names www.rodeo.com and www.karate.com (the "Purchased Domains"), for total consideration of $500,000, all represented by the Note. Pursuant to the terms of the Note, we made payments of $50,000 on each of August 15, 2012 and November 1, 2012, with the balance to be paid in 18 equal monthly installments of $22,222 beginning June 1, 2013, and continuing on the 1st of each month thereafter. Title to the Purchased Domains shall remains in escrow, with full beneficial rights of use granted to us immediately, until the Note is paid in full.

F-26

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Condensed Consolidated Financial Statements

September 30, 2012

Unaudited

On November 18, 2011, pursuant to our acquisition of the domain name marijuana.com, we issued a Non-Recourse Secured Promissory Note with a principal amount of $4,150,000, payable over sixty-nine (69) consecutive months beginning on January 18, 2012. Below is a summary of the note payable related to the marijuana.com domain name acquisition:

Marijuana.com Notes Payable	September 30, 2012		December 31, 2011
Current portion	$	708,901	$	708,901
Long term portion		2,884,756		3,416,099
	$	3,593,657	$	4,125,000

Below is a summary of our note payable amounts:

	September 30, 2012		December 31, 2011
Marijuana.com promissory note	$	3,593,657	$	4,125,000
Rodeo.com/Karate.com promissory note		450,000		-
Revyv share purchase promissory note		25,000		-
	$	4,068,657	$	4,125,000

Note 13. Notes Payable– Related Party

Promissory Notes to Hartfield, Hoerling and Francis

F-27

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Condensed Consolidated Financial Statements

September 30, 2012

Unaudited

As consideration for the Global Agreements, the Notes were issued to Hartfield, Hoerling and Francis (the " Selling Parties"), individually. The Notes are secured by the shares of common stock sold to the Company by the Selling Parties, and each of them, pursuant to the Global Agreements. Pursuant to the Notes, beginning in September 2012, we began making monthly payments in the amount of $78,099.38 to each of the Selling Parties. The aggregate amount of the Notes is $4,875,000.

At September 30, 2012, the outstanding balance of the Notes was $4,605,000, which comprised all of our notes payable-related party of which $2,659,000 was recorded as the current portion and $1,946,000 was recorded as the noncurrent portion.

See Note 3. Equity Transactions for a description of our obligations on share purchases.

Note 14. Other Long Term Accrued Liabilities

At September 30, 2012, we had a balance of $117,000 in deferred tax liability. At September 30, 2012 we had recorded the $1,950,000 noncurrent portion of the Revenue Share Liability related to our share purchases. See Note 3. Equity Transactions for a description of our obligations on share purchases, including the Revenue Share Liability.

Note 15. Earn-out Provisions

See Note 3. Equity Transactions for a description the Global Agreements by and amongMessrs. Hartfield and Hoerling and us, pursuant to which we purchased a total of 51,272,289 shares of our common stock and whereby they have terminated all rights to consideration due from us (including cash and/or stock owed to Hartfield and Hoerling pursuant to agreements whereby we acquired WeedMaps, LLC). As a result of the Global Agreements, the WeedMaps Earn-Outs were cancelled during August 2012. The below description includes the cancellation of the WeedMaps Earn-outs.

Summary of changes in total earn-outs during the nine months ended September 30, 2012:

MMJMenu earn-outs August 2012	$	(80,510	)
Issuance of WeedMaps Earn-out shares August 2012		9,120,000
Gain on change in fair value of WeedMaps earn-out liability August 2012		5,909,946
Gain on change in fair value of MMJMenu earn-out liability at September 30, 2012		44,084
Cancellation of WeedMaps earn-outs August 9, 2012		3,537,054
Total change in earn-outs during the nine months ended September 30, 2012		18,530,574
Earn-outs at December 31, 2011		(18,567,000	)
Earn-outs at September 30, 2012	$	(36,426	)

Earn-out liabilities at September 30, 2012 were $36,000 related to the MMJMenu acquisition.

The cumulative non-cash gain on change in fair value of the WeedMaps earn-out was $5,910,000.

F-28

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Condensed Consolidated Financial Statements

September 30, 2012

Unaudited

MMJ Earn-outs

Contingent consideration, the earn-out provisions, which are classified as a liability are required to be remeasured to fair value at each reporting date and any changes in fair value subsequent to the acquisition date are recognized in earnings. The primary inputs in determining the fair value of the earn-outs that were remeasured to fair value at June 30, 2012 were i) the quoted price of the underlying shares of our common stock and ii) the probabilities for the two year scenarios in determining the likelihood of common share payouts.

The price of our common stock was reduced to $0.50 in the cash flow model because the price of our common stock as quoted on the OTCQX on September 30, 2012, the balance sheet date, was $0.50.

The net effect of the change to our cash flow model as a result of remeasuring the earn-out liability to fair value was a decrease of $43 and as such, a change in the fair value of the earn-out liability was recorded at September 30, 2012. At September 30, 2012, the fair value of the earn-out liability was $36,400. At September 30, 2012, we recorded a gain on change in fair value of the earn-our liability of $43.

Note 16. Income Per Common Share

Income per common share is based on the weighted average number of common shares outstanding. The Company complies with Earnings Per Share, which requires dual presentation of basic and diluted earnings per share on the face of the statements of operations. Basic per share earnings or loss excludes dilution and is computed by dividing income (loss) available to common stockholders by the weighted-average common shares outstanding for the period. Diluted per share earnings or loss reflect the potential dilution that could occur if convertible preferred stock or debentures, options and warrants were to be exercised or converted or otherwise result in the issuance of common stock that is then shared in the earnings of the entity.

As of September 30, 2012, there were outstanding 250,000 common stock purchase warrants that were not included in the computation of diluted EPS because to do so would have been antidilutive for the period presented.

F-29

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Condensed Consolidated Financial Statements

September 30, 2012

Unaudited

Note 17. Income Taxes

Deferred income taxes reflect the net tax effects of temporary differences between carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes. Significant components of the Company's tax provision and deferred tax assets as of September 30, 2012 and December 31, 2011 are as follows:

The components of tax provision:

	September 30, 2012			December 31, 2011
Current
Federal	$	560,000		$	268,000
State		166,000			31,700
		726,000			299,700
Deferred
Federal		(74,000	)		(16,000	)
State		(4,000	)		19,000
		(78,000	)		3,000

Change in valuation allowance		-			(20,000	)

Total provision	$	648,000		$	282,700

The total tax provision is $648,000 of which $721,000 corresponds to current operations and $73,000 (tax benefit) corresponds to discontinued operations.

The components of deferred tax asset:

Deferred income tax assets:
State taxes	$	114,000		$	40,000
Net operating losses		461,000			468,000
Accruals and other		82,000			97,000
		657,000			605,000

Deferred income tax liabilities:
Depreciation and amortization		(117,000	)		(148,000	)
		540,000			457,000

Valuation allowance		(433,000	)		(440,000	)

Net deferred tax assets	$	107,000		$	17,000

F-30

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Condensed Consolidated Financial Statements

September 30, 2012

Unaudited

The ultimate realization of deferred tax assets depends upon the generation of future taxable income during the periods in which those temporary differences become deductible. Based upon the Company's income for the quarter ended September 30, 2012, the Company has provided a valuation allowance in the amount of $433,000 against our future net operating losses. The amount of deferred tax assets considered realizable could change if future taxable income is realized.

At September 30, 2012 and December 31, 2011, the Company had U.S. federal tax net operating loss carryforwards (“NOLs”) of approximately $1.3 million and $1.4 million, respectively, which begin to expire in 2021. We do not have any State NOLs. The NOLs are subject to limitations under IRC Section 382 of the Internal Revenue Code (“Section 382”).

Earn-out Provisions, WeedMaps Tax Effects - The WeedMaps acquisition was a tax-free reorganization and as such, the tax effect of the earn-outs is recorded as a permanent difference between the carrying amount of the earn-out liability for financial reporting purposes and the amount used for tax purposes.

Note 18. Related Party Transactions

All material intercompany transactions have been eliminated upon consolidation of our entities. During the nine months ended September 30, 2012, cash transfers, equity and accounts between the Company and its subsidiaries have been eliminated upon consolidation.

Note 19. Commitment And Contingencies

On January 27, 2011, the Company entered into a commercial lease agreement for approximately 20,332 square feet of office space in Newport Beach, California. The lease expires on January 31, 2014 and requires monthly payments of $39,647. The Company is confident that this commercial space will provide adequate space to meet our needs and provide for future growth.

Set forth below is a summary of our current obligations as of September 30, 2012 comprised exclusively of a rental lease obligation to make future payments due by the period indicated below:

Operating lease payments	Minimum Payments		Monthly Base Rent
October - December 2012	$	123,822	$	41,274
2013	$	514,806	$	42,901
2014	$	42,901	$	42,901

F-31

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Condensed Consolidated Financial Statements

September 30, 2012

Unaudited

Note 20. Warrants

As of September 30, 2012, there were outstanding 250,000 common stock purchase warrants. The following table summarizes information about common stock warrants outstanding at September 30, 2012.

Outstanding								Exercisable
Exercise Price		Number Outstanding		Weighted Average Remaining Contractual Life (years)		Weighted Exercise Price Average		Number Exercisable		Weighted Average Exercise Price

$	4		250,000		2.12	$	4		250,000	$	4

$	4		250,000		2.12	$	4		250,000	$	4

Note 21. Subsequent Events

The Company evaluated its September 30, 2012 financial statements for subsequent events through November 14, 2012, the date the financial statements were available to be issued.

On November 5, 2012, we issued 250,000 shares of our common stock to one shareholder for services rendered from July 1, 2012 through September 30, 2012.

F-32

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of SearchCore, Inc.

We have audited the accompanying consolidated balance sheets of SearchCore, Inc. as of December 31, 2011 and 2010, and the related consolidated statements of operations, stockholders’ equity (deficit), and cash flows for each of the years in the two-year period ended December 31, 2011. SearchCore, Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of SearchCore, In. as of December 31, 2011 and 2010, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2011 in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 26 to the financial statements, the 2011 financial statements have been restated to correct a misstatement.

Tarvaran, Askelson & Company, LLP

Laguna Niguel, CA

May 10, 2012

F-33

SEARCHCORE, INC.

Consolidated Balance Sheets (Audited)

	December 31,			December 31,
	2011			2010

ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	1,512,590		$	1,388,574
Accounts receivable		206,091			—
Inventory		9,830			—
Other current assets		379,860			1,104,337
Current assets - discontinued operations		51,795			—
TOTAL CURRENT ASSETS	$	2,160,166		$	2,492,911

Property and equipment, net		430,041			2,202
Property and equipment - discontinued operations		—			44,966
Intangible assets:
Domain names		114,119			9,076
Domain name - Marijuana.com		4,250,000			—
Web software		501,343			—
Goodwill		486,403			—
Intangible assets - discontinued operations		—			4,156,835
Other assets		82,332			900,000
Other assets - discontinued operations		51,976			33,872

TOTAL ASSETS	$	8,076,380		$	7,639,862

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES

Accounts payable	$	50,632		$	46,757
Accrued liabilities		759,312			1,037,670
Note payable		708,901			—
Note payable - related party		1,130,000			—
Current liabilities - discontinued operations		243,017			202,596

TOTAL CURRENT LIABILITIES	$	2,891,862		$	1,287,023

LONG TERM LIABILITIES

Other accrued liabilities		155,025			900,000
Note payable		3,416,099			—
Note payable - related party		1,800,000			3,600,000
Earn-out provisions, WeedMaps		18,567,223			18,362,269

TOTAL LONG TERM LIABILITIES		23,938,347			22,862,269

TOTAL LIABILITIES	$	26,830,209		$	24,149,292

STOCKHOLDERS' EQUITY

Preferred stock, $0.001 par value: 20,000,000 shares authorized;
zero shares issued and outstanding at December 31, 2011;
zero shares issued and outstanding at December 31, 2010;		—			—
Common stock, $0.001 par value: 200,000,000 shares authorized;
83,140,256 shares issued and outstanding at December 31, 2011;
82,640,256 shares issued and outstanding at December 31, 2010;		83,140			82,640
Paid-in capital		(15,965,044	)		(16,964,444	)
Retained earnings (accumulated deficit)		(2,871,925	)		372,374

TOTAL STOCKHOLDERS' EQUITY (DEFICIT)		(18,753,829	)		(16,509,430	)

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	8,076,380		$	7,639,862

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

F-34

SEARCHCORE, INC.

Consolidated Statements of Operations (Audited)

	Years Ended
	December 31,				December 31,
	2011				2010


REVENUE
Sales		$	11,928,932		$	3,355,878

Total revenue			11,928,932			3,355,878

OPERATING EXPENSES
Cost of sales			793,789			365,702
Selling, general and administrative expenses			9,684,963			2,533,659

Total operating expenses			10,478,752			2,899,361

Operating Income			1,450,180			456,517

Other Income (Expense)
Loss on change in fair value of earn-out liability			(204,954	)		—
Interest income			213			66
Interest expense			(13,241	)		—

Total other income (expense)			(217,982	)		66

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES			1,232,198			456,583

Provision for Income Taxes			416,130			80,914
INCOME FROM CONTINUING OPERATIONS			816,068			375,669

Loss from discontinued operations, net of $133,500 and $18,100 tax benefit for the years ended December 31, 2011 and 2010, respectively			(4,060,367	)		(25,174	)

NET (LOSS) INCOME		$	(3,244,299	)	$	350,495

Income (loss) per share, Basic and Diluted
Income from continuing operations		$	0.010		$	0.013
Loss from discontinued operations			(0.049	)		(0.001	)
Total income (loss) per share		$	(0.039	)	$	0.012

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING			83,140,256			28,868,864

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

F-35

SEARCHCORE, INC.

Consolidated Statements of Cash Flows (Audited)

	Years Ended
	December 31,			December 31,
	2011			2010
Cash flows from operating activities:
Net (loss) income	$	(3,244,299	)	$	350,495
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation		71,295			115,319
Amortization		284,856			—
Stock-based compensation		—			87,777
Loss on change in fair value of earn-out liability		204,954			—
Loss on abandonment		4,142,835			—
Changes in operating assets and liabilities:
Accounts receivable		(206,091	)		—
Inventories		(9,830	)		—
Prepaid expenses and deposits		672,682			878,670
Other assets		54,589			—
Accounts payable and accrued liabilities		(234,061	)		(62,161	)

Net cash provided by operating activities		1,736,930			1,370,100

Cash flows from investing activities:
Purchases of property and equipment		(454,168	)		(211,781	)
Purchases of intangible assets		(488,746	)		(327,834	)

Net cash used in investing activities		(942,914	)		(539,615	)

Cash flows from financing activities:
Proceeds from issuance of common stock		—			1,650,000
Payments from note payable		—			(40,000	)
Payments from convertible notes		—			(419,392	)
Convertible note related party		—			(211,489	)
Payments on note payable - related party		(670,000	)		(437,543	)

Net cash from (used by) financing activities		(670,000	)		541,576

Net increase in cash and cash equivalents		124,016			1,372,061

Cash and cash equivalents at beginning of period		1,388,574			16,513

Cash and cash equivalents at end of period	$	1,512,590		$	1,388,574

Non-cash investing and financing activity:

Issuance of warrants to consultants		—			250,000
Shares issued pursuant to Revyv acquisition	$	1,000,000		$	—
Shares issued pursuant to consulting agreement	$	—		$	50,000

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

F-36

SEARCHCORE, INC.

Consolidated Statements of Stockholders' Equity (Deficit)

													Total
	Preferred Stock				Common Stock				Additional Paid-In		Accumulated		Shareholders’ Equity
	Shares		Amount		Shares		Amount		Capital		Deficit		(Deficit)

BALANCES, December 31, 2009		—		—		9,733,442	$	9,733	$	(9,733)	$	21,879	$	21,879

Issuance of common stock, convertible debt						53,656,814		53,657		1,493,839				1,547,496
Issuance of common stock, private placements						825,000		825		1,649,175				1,650,000
Issuance of common stock, acquisition						2,000,000		2,000		3,998,000				4,000,000
Stock based compensation						25,000		25		49,975				50,000
Recapitalization						16,400,000		16,400		(24,145,700)				(24,129,300)

Net income (loss) from continuing operations												350,495		350,495

BALANCES, December 31, 2010		—		—		82,640,256	$	82,640	$	(16,964,444)	$	372,374	$	(16,509,430)

Issuance of common stock						500,000		500		999,500				1,000,000
Paid in capital, Revyv, LLC acquisition										(100)				(100)

Net income (loss) from continuing operations												(3,244,299)		(3,244,299)

BALANCES, December 31, 2011		—		—		83,140,256	$	83,140	$	(15,965,044)	$	(2,871,925)	$	(18,753,829)

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

F-37

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2011

Audited

Note 1. General

Nature of Business

SearchCore, Inc., together with its wholly owned subsidiaries (hereinafter collectively referred to as the “Company,” “we,” “us,” and “our”) is engaged in providing a technology services to the medicinal cannabis industry. The Company provides services in three different sectors: media, technology and marketing. The Company is not engaged in the growing, harvesting, cultivation, possession, or distribution of cannabis. Instead, the Company assists the physicians, dispensaries, and end-users within the medicinal cannabis industry in finding each other.

All of our operations are conducted through our wholly-owned subsidiaries, each of which is incorporated or qualified to do business in the states in which it does so.

The Medicinal Cannabis Industry

There are a total of 28 states, plus the District of Columbia with legislation either passed or pending as it relates to medicinal cannabis.

Sixteen states, plus the District of Columbia, have adopted laws that exempt patients from state criminal penalties who use medicinal cannabis under a physician’s supervision. These are collectively generally referred to as the states that have de-criminalized medicinal cannabis, although there is a subtle difference between de-criminalization and legalization, and each state’s laws are different. The states that have legalized medicinal cannabis are as follows (in alphabetical order):

Alaska,

Arizona,

California,

Colorado,

Delaware

District of Columbia,

Hawaii,

Maine,

Michigan,

Montana,

Nevada,

New Jersey,

New Mexico,

Oregon,

Rhode Island,

Vermont, and

Washington.

F-38

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2011

Audited

As of April 2012, twelve states have pending legislation or ballot measures to legalize medical marijuana. The states are as follows (in alphabetical order):

Alabama,

Connecticut,

Idaho,

Illinois,

Kansas,

Maryland,

Massachusetts,

Missouri,

New Hampshire,

New York,

Ohio, and

Pennsylvania,

Recent Developments

Discontinued Operations of General Health Solutions, Inc.

F-39

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2011

Audited

We have decided to shut down General Health Solutions, Inc., which constitutes our entire Medical Clinic Management segment. During February 2012, we committed to a definitive plan to terminate the management agreement and services associated with the agreement, which resulted in General Health Solutions, Inc., our Medical Clinic Management segment being reported as discontinued operations. We anticipate being fully divested of all management responsibilities as per the management agreement by the close of the first quarter of 2012. For comparative purposes, all prior periods presented have been restated to reflect the reclassification of this segment to discontinued operations on a consistent basis. See Note 9. Discontinued Operations for further details.

WeedMaps Acquisition and Recapitalization of the Company

On November 19, 2010, SearchCore, Inc. entered into an Agreement and Plan of Reorganization and Merger with WeedMaps Media, Inc., a wholly owned subsidiary of SearchCore and WeedMaps, LLC (“WeedMaps”) (the “Merger Agreement”) (the “Merger”). Prior to the Merger, SearchCore was deemed to be a non-operating public shell corporation with nominal net assets and WeedMaps was a private operating company with significant operations. For accounting purposes the transaction is considered to be a reverse merger treated as a recapitalization of SearchCore where SearchCore is the surviving legal entity and the accounting acquiree, and WeedMaps is considered to be the accounting acquirer and the legal acquiree. The assets and liabilities of WeedMaps are recorded at their historical cost with the equity structure of SearchCore. No goodwill was recorded in the transaction. SearchCore was deemed a continuation of the business of WeedMaps and the historical financial statements of WeedMaps became the historical financial statements of SearchCore.

See Note 22. Recapitalization for a discussion regarding the elimination of the historical results of operation and the accumulated deficit of SearchCore including its wholly owned subsidiary, LV Luxuries Incorporated, as a result of the Merger and the associated reverse merger accounting and recapitalization of SearchCore.

Revyv, LLC

On January 10, 2011, we entered into a Reorganization and Asset Acquisition Agreement pursuant to which we acquired substantially all the assets of Revyv, LLC. The assets were placed into General Marketing Solutions, Inc., a wholly-owned subsidiary of the Company. The assets consisted primarily of the intellectual property associated with the name CannabisCenters, including its website (www.cannabiscenters.com), its related physician software and patient verification system, and numerous existing contracts. As consideration for the purchase, which closed on January 13, 2011, we issued an aggregate of Five Hundred Thousand (500,000) shares of our common stock to Revyv, LLC or its assigns. Effective on January 10, 2011, we entered into an at-will employment agreement with each of James Johnson and David Johnson, each of which are members of Revyv, LLC. The compensation due to each is $12,500 per month. As of the quarter ending September 30, 2011, neither James Johnson nor David Johnson were employed by us.

Marijuana.com

On November 18, 2011, we entered into a Domain Name Purchase Agreement with an unrelated party for the purchase of “marijuana.com.” Pursuant to the terms of the Agreement, the purchase price was $4,250,000, payable $125,000 on the date of execution of the Agreement, and the remaining balance over sixty nine (69) consecutive months beginning on January 18, 2012 pursuant to a Non-Recourse Secured Promissory Note of the same date (the “Note”).

F-40

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2011

Audited

MMJMenu

On January 5, 2012, WeedMaps acquired substantially all the assets of MMJMenu, LLC (“MMJ”). The assets consist primarily of the intellectual property associated with MMJMENU, including its website (www.mmjmenu.com). As consideration for the purchase we issued an aggregate of Two Hundred Thousand (200,000) shares of our common stock to MMJ or its assigns. Effective on January 4, 2012, we entered into an at-will employment agreement with each of Justin Weidmann and Alex Weidmann, each of which are members of MMJMenu, LLC. The compensation due to each is $10,000 per month.

Principal Services

The Company’s principal services are offered through the following wholly owned subsidiaries.

WeedMaps Media, Inc.

General Marketing Solutions, Inc.

General Merchant Solutions, Inc.

General Management Solutions, Inc.

General Management Solutions, Inc., is our wholly-owned subsidiary that oversees and provides all of the human resource issues for employees including hiring, terminating, and employee benefits.

General Health Solutions, Inc.

F-41

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2011

Audited

Other Subsidiaries

We have two additional wholly-owned subsidiaries whose operations are relatively inactive at this time, namely General Processing Corporation, CannaCenters Corporation (dba CannaCenters), and a third subsidiary, LV Luxuries Incorporated (which operated as makeup.com), whose operations have been discontinued. As of right now we have no imminent or specific plans for either of the entities and they are held as corporations in good standing with no operations.

Note 2. Basis Of Presentation And Significant Accounting Policies

Basis of Presentation

Reclassifications

Principles of Consolidation

Use of Estimates

Risks related to cash

Cash and Cash equivalents

The Company considers only highly liquid investments such as money market funds and commercial paper with maturities of 90 days or less at the date of their acquisition as cash and cash equivalents.

F-42

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2011

Audited

Fair Value of Financial Instruments

Level 1

inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2

inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

Level 3

inputs to the valuation methodology are unobservable and significant to the fair value.

Accounts Receivable

Accounts receivable are recorded at the invoice amount and do not bear interest.

Advertising Cost

The Company expenses advertising costs when incurred. Advertising expense for the twelve months ended December 31, 2011 and 2010 was $714,000 and $216,000, respectively.

Allowance for Doubtful Accounts

Allowance for doubtful accounts is defined as a Company's estimate of the amount of probable credit losses in the Company's existing accounts receivable. The Company does not maintain an allowance for doubtful account based upon management’s review of the Company’s revenue structure whereby substantially all receivables are confirmed before they are booked as revenue. The Company reviews its allowance for doubtful accounts policy periodically. The Company does not have any off-balance-sheet exposure related to its customers.

F-43

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2011

Audited

Inventory

Inventories consisting of credit card terminals are stated at the lower of cost (average) or market.

Property and Equipment

Property and equipment are recorded at cost and depreciated using the straight-line method over the useful lives of the assets, generally from three to seven years. Property and equipment at December 31, 2011 and December 31, 2010 are presented net of accumulated depreciation of $71,000 and $55,000, respectfully.

Goodwill

In accordance with Goodwill and Other Intangible Assets, goodwill is defined as the excess of the purchase price over the fair value assigned to individual assets acquired and liabilities assumed and is tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis in the Company's fourth fiscal quarter or more frequently if indicators of impairment exist. The performance of the test involves a two-step process. The first step of the impairment test involves comparing the fair value of the Company's reporting units with each respective reporting unit's carrying amount, including goodwill. The fair value of reporting units is generally determined using the income approach. If the carrying amount of a reporting unit exceeds the reporting unit's fair value, the second step of the goodwill impairment test is performed to determine the amount of any impairment loss. The second step of the goodwill impairment test involves comparing the implied fair value of the reporting unit's goodwill with the carrying amount of that goodwill. No amortization is recorded for goodwill with indefinite useful life. Goodwill impairment of $2,718,538 and zero was recognized during the twelve months ended December 31, 2011 and 2010, respectively. See Note 9. Discontinued Operations for information regarding the goodwill impairment.

Intangible Assets

Impairment of Long-Lived and Intangible Assets

In accordance with Accounting for the Impairment or Disposal of Long-Lived Assets, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. The Company assesses the recoverability of the long-lived and intangible assets by comparing the carrying amount to the estimated future undiscounted cash flow associated with the related assets. Impairment of intangible assets related to General Health Solutions, Inc. being recorded as discontinued operations of $1,438,297 was recognized during the twelve months ended December 31, 2011. No impairment of long-lived assets was recognized during the twelve months ended December 31, 2010. See Note 9. Discontinued Operations for information regarding the intangible asset impairment.

F-44

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2011

Audited

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with the provisions of Share-Based Payment, which addresses the accounting for equity-based compensation and which requires that the cost of all equity-based compensation arrangements, be reflected in the financial statements over the vesting period based on the estimated fair value of the awards. During the twelve months ended December 31, 2011 and 2010, the Company had stock-based compensation expense related to issuances of shares of the Company’s common stock to consultants of zero and $88,000, respectively.

Contingent Consideration – Earn-outs

Revenue Recognition

The Company and its wholly owned subsidiaries recognize revenue as follows:

F-45

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2011

Audited

Management Fee Revenue – In the past, the Company managed medical cannabis clinics throughout California pursuant to a contractual arrangement with a professional medical corporation. We recognized as revenue the fees we charged the professional medical corporation for providing administrative, marketing and human resources services. Our policy was to recognize revenues during the period that the services were rendered and we did not offer returns. See Note 9. Discontinued Operations for more information.

Income Taxes

Uncertain tax positions

Subsequent Events

F-46

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2011

Audited

Recent Accounting Pronouncements

FASB issued an accounting standards update amending ASC 220 to improve the comparability, consistency and transparency of reporting of comprehensive income. It amends existing guidance by allowing only two options for presenting the components of net income and other comprehensive income: (1) in a single continuous financial statement, statement of comprehensive income or (2) in two separate but consecutive financial statements, consisting of an income statement followed by a separate statement of other comprehensive income. Also, items that are reclassified from other comprehensive income to net income must be presented on the face of the financial statements. ASU No. 2011-05 requires retrospective application, and it is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, with early adoption permitted. In December 2011, FASB issued ASU 2011-12. ASU 2011-12 indefinitely deferred the provisions of ASU 2011-05 requiring the presentation of reclassification adjustments on the face of the financial statements for items reclassified from other comprehensive income to net income. The adoption of this standard will not have a material impact on our financial statements.

FASB issued an accounting standards update amending ASC 820 to achieve common fair value measurement and disclosure requirements between GAAP and IFRS. This amendment changes the wording used to describe fair value and requires additional disclosures. We do not expect this amendment, which is effective for interim and annual periods beginning after December 31, 2011, to have an impact on our financial position, results of operations, or cash flows.

In September 2011, the FASB issued an amendment to an existing accounting standard, which provides an option to perform a qualitative assessment to determine whether further impairment testing on goodwill is necessary. Specifically, an entity has the option to first assess qualitative factors to determine whether it is necessary to perform the current two-step test. If an entity believes, as a result of its qualitative assessment, that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is required. Otherwise, no further testing is required. This standard is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The adoption of this standard will not have a material impact on our financial statements.

F-47

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2011

Audited

F-48

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2011

Audited

In May 2009, the FASB issued standards that require management to evaluate subsequent events through the date the financial statements are either issued, or available to be issued. Companies are required to disclose the date through which subsequent events have been evaluated. This standard is effective for interim or annual financial periods ending after June 15, 2009. The Company evaluated its December 31, 2011 financial statements for subsequent events through May 10, 2012, the date the financial statements were available to be issued. Other than the events in Note 24. Subsequent Events, the Company is not aware of any subsequent events that would require recognition or disclosure in the financial statements.

Note 3.Business Combinations

Revyv, LLC

On January 11, 2011, we entered into a Reorganization and Asset Acquisition Agreement pursuant to which we acquired substantially all the assets of Revyv, LLC. The assets consisted primarily of the intellectual property associated with the name CannabisCenters, including its website (www.cannabiscenters.com), its related physician software and patient verification system. As consideration for the purchase, which closed on January 13, 2011, we issued an aggregate of Five Hundred Thousand (500,000) shares of our common stock to Revyv, LLC or its assigns. Effective on January 10, 2011, we entered into an at-will employment agreement with each of James Johnson and David Johnson, each of which are members of Revyv, LLC. The compensation due to each is $12,500 per month. This business is now operated as General Marketing Solutions, Inc. Neither James Johnson nor David Johnson are currently employed by us.

The purchase price was $1,000,000, which pursuant to the Revyv Purchase Agreement consisted of the issuance of 500,000 shares of the Company’s common stock. The purchase price was determined based on the value of the associated underlying shares of the Company’s common stock, which value of $2.00 per share, represented the offering price of the Company’s Common Stock used in its most recently completed equity transactions prior to the date of the acquisitions in accordance with the following FASB ASC 820-10-35-5, Principal Market or Most Advantageous Market guidance.

F-49

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2011

Audited

The following table summarizes the acquisition with a total purchase price of $1,000,000:

Current assets	$	—
Domains		18,500
Software		501,343
Goodwill		486,403
Total assets acquired		1,006,246
Accrued liabilities assumed		(6,246	)
Total purchase price	$	1,000,000

The Software will be amortized over a period of five years.

Synergistic Resources, LLC

On December 3, 2010, we entered into a Reorganization and Asset Acquisition Agreement (the “Synergistic Purchase Agreement”) pursuant to which we acquired substantially all the assets of Synergistic Resources, LLC, a California limited liability company (“Synergistic Resources”). Pursuant to the terms of the Synergistic Purchase Agreement, the Synergistic Resources assets were placed into General Health Solutions, Inc., a wholly-owned subsidiary of the Company. See Note 9. Discontinued Operations for details on the discontinuation of operations of General Health Solutions, Inc.

The acquisition of Synergistic Resources was accounted for in accordance with the authoritative literature described in ASC 805-10 Business Combinations. Pursuant to ASC 805-10 Business Combinations only the acquisition method may be applied to account for a business combination. The assets consisted primarily of the intellectual property and established marketing associated with the name Marijuana Medicine Evaluation Centers, including its website www.marijuanamedicine.com, and the assignment of a Management Services Agreement. Pursuant to the terms of the Management Services Agreement (the “Management Contract”) entered into by Synergistic Resources, LLC and a private medical corporation, we managed medicinal cannabis clinics. The terms of the Management Contract provide that Synergistic Resources will provide administrative, management and development services and to supervise and manage the day-to-day operations of the medicinal cannabis clinics for a term of ten (10) years with an automatic renewal period of five (5) years for a total term of fifteen (15) years.

The purchase price was $4,050,000, which pursuant to the Synergistic Purchase Agreement consisted of the issuance of 2,000,000 shares of the Company’s common stock, and a payment in the agreement amount of $50,000 to Synergistic Resources.

F-50

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2011

Audited

The following table summarizes the acquisition with a total purchase price of $4,050,000:

Domain Name	$	14,000
Management Contract		1,424,297
Goodwill		2,718,538
Furniture, Equipment & Software		75,985
Accumulated Depreciation		(42,383	)
Leasehold Improvements		11,364
Rent Deposits		33,872
Accounts Payable		(60,674	)
Note Payables		(125,000	)
Net Assets	$	4,050,000

See Note 9. Discontinued Operations for details on the discontinuation of operations of General Health Solutions, Inc.

WeedMaps, LLC

Note 4. Asset Acquisitions

Marijuana.com

On November 18, 2011, we entered into a Domain Name Purchase Agreement with an unrelated party for the purchase of the domain name “marijuana.com.” Pursuant to the terms of the Agreement, the purchase price was $4,250,000, payable $125,000 on the date of execution of the Agreement, and the remaining balance over sixty nine (69) consecutive months beginning on January 18, 2012 pursuant to a Non-Recourse Secured Promissory Note of the same date (the “Note”).

F-51

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2011

Audited

In addition to the purchase price, beginning on the tenth (10th) business day of the month immediately following the first full month after the Transfer Date, we will pay to the Seller, or its assigns, an amount equal to ten percent (10%) of the gross revenue generated by the Domain Name (the “Revenue Payment”) until such time as the Note is paid in full (the “Revenue Obligation Period”). The Revenue Payment will be accounted for pursuant to ASC 805-10-55-25 as a separate transaction. Since the Revenue Payments formula is a specified percentage of earnings (i.e. 10%), it is a profit-sharing arrangement and will be expensed as it is paid.

Furthermore, during the Revenue Obligation Period (69 months during which we are making payments on the promissory note), pursuant to the terms of the Agreement, the Seller shall be entitled to two text links on marijuana.com, as well as two banner ads (of average size based on the site) that are static (non rotational) (the “Advertising Rights”). The Seller is responsible for providing all necessary graphics and text, which are subject to final approval by us in our sole discretion.

The fair value of the Advertising Rights were determined to be $47,886 over the Revenue Obligation Period based upon an analysis composed of twelve comparable websites and the average ad rates they charge for banner ads and text links which average monthly rates were $249.50 for banner ads and $97.50 for text links. We recorded a $47,886 Advertising Rights intangible asset associated with the Advertising Rights which will be amortized over the term of the Revenue Obligation Period (beginning in January 2012—the month we took possession of the domain name). A summary of the Marijuana.com Asset Acquisition is presented below.

Domain name - marijuana.com *	$	4,250,000
Cash payment		(125,000	)
Non-Recourse Secured Promissory Note	$	(4,125,000	)

* Included in Domain name – marijuana.com is $47,886 in advertising rights.

The operations and/or revenues generated from marijuana.com prior to the acquisition were not part of the domain name purchase. The domain name www.marijuana.com is considered a premium domain name due to its level of monthly page views. We intend to increase our brand recognition by utilizing marijuana.com as a referral page to WeedMaps.com, and selling advertising banner space on the site. There can be no assurance that we will be able to make the payments or that we will be able to pay off the notes. If we are unable to satisfy our obligations under the notes, it will have a material negative effect on our cash flow, operations, profitability, and we could be forced to return marijuana.com to the seller.

We did not hire any of the Sellers of the domain name marijuana.com.

Note 5. Other Current Assets

Marketing Agreements

During April 2011, the Company entered into a marketing services agreement with a third-party firm (the “Marketing Agreement”) pursuant to the terms of which, the Company would receive marketing services for a term of one year. Pursuant to the terms of the Marketing Agreement, consideration consisted of a cash payment of $100,000 which cash payment portion will be amortized on a straight-line basis over the term of the Marketing Agreement. At December 31, 2011, the Company has recorded a prepaid expense balance of $29,000.

During November 2010, the Company entered into a marketing services agreement with a third-party firm (the “Marketing Agreement”) pursuant to the terms of which, the Company would receive marketing services for a term of two years. Pursuant to the terms of the Marketing Agreement, consideration consisted of a cash payment of $115,000 and 250,000 Common Stock purchase warrants with a four-year contractual term and with each warrant entitling the holder thereof to purchase one share of common stock at a price of $4.00. The Company valued the agreement at $115,000 and will be amortized on a straight-line basis over the term of the Marketing Agreement. At December 31, 2011, the Company has recorded a prepaid expense balance of $67,000.

F-52

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2011

Audited

Credit Card Processing

During the normal course of business, the Company processes customer payments using a third-party merchant credit card processing system, which payments normally take one to three days to “clear.” At December 31, 2011, the Company had $124,000 in merchant processing.

Consulting Agreement and Employment Agreement

During November 2010, the Company entered into a three-year Consulting Agreement with Douglas Francis, our President, pursuant to the terms of which the Company would receive merger and acquisition consulting services for a term of three years. The Company valued the agreement at $1,850,000 which consisted of a cash payment of $50,000 and a consulting fee of One Million Eight Hundred Thousand Dollars ($1,800,000) payable, one-half on June 30, 2012 (per an Amendment to the agreement) and the other half on January 10, 2013. Subsequent to the Consulting Agreement being executed, it was contemplated that the Company would consummate an employment agreement with Mr. Francis, pursuant to the terms of which the services received and consideration given pursuant to the Consulting Agreement would be included in the employment agreement such that the employment agreement would supersede the Consulting Agreement.

On August 1, 2011, we entered into a Termination of Consulting Agreement with Douglas Francis, our President and a member of our Board of Directors, which terminated, effective as of April 1, 2011, his Consulting Agreement with us dated as of November 19, 2010, with no further amounts due under the Consulting Agreement.

On August 1, 2011, we entered into an at-will Employment Agreement with Douglas Francis, our President and a member of our Board of Directors. Mr. Francis’ employment is effective as of April 1, 2011. Under the terms of the agreement, his compensation is thirty thousand dollars ($30,000) per month. In the event of termination of the agreement for a reason other than for cause, Mr. Francis will be entitled to severance equal to eighteen (18) months of compensation.

The balance of other current assets is attributable to $137,000 in current deferred tax assets.

Note 6. Property And Equipment

Property and equipment are recorded at cost and depreciated using the straight-line method over the useful lives of the assets, generally from three to seven years. Property and equipment at December 31, 2011 and December 31, 2010 consist of the following:

Property and Equipment	December 31, 2011			December 31, 2010
Furniture and Computer Equipment	$	501,336		$	2,269
Less: Accumulated Depreciation		(71,295	)		(67	)
Property and Equipment, net	$	430,041		$	2,202

Property and equipment amounts at December 31, 2011 and 2010 do not include the accumulated depreciation amounts attributed to discontinued operations.

For the twelve months ended December 31, 2011 and 2010, depreciation expense totaled $71,000 and $67, respectively.

F-53

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2011

Audited

Note 7. Intangible Assets

Intangible assets consists of a suite of domain names, including our recent acquisition of the domain name marijuana.com, web software (Product Software to be sold or marketed to third parties and not for internal use) and goodwill associated with the Revyv, LLC. acquisition.

Marijuana.com - The domain name www.marijuana.com is considered a premium domain name for a variety of reasons, including, but not limited to, its level of monthly page views, unique visitors, search engine optimization results, industry strength, sales value history, market potential, linguistical viability, brand recognition and recall value. The domain name Marijuana.com has an indefinite life subject to annual renewal fees of approximately $10 per year. We fully intend and believe that we will have the financial wherewithal to renew Marijuana.com indefinitely. The domain name Marijuana.com has worldwide recognition and presumably will be able to generate advertising revenue regardless of the stability and/or stage of the medical marijuana industry in the United States. We believe Marijuana.com will maintain its value principally because of its broad worldwide appeal. The recognition of Marijuana.com in the United States only represents a portion of its potential brand identity and marketing potential. The brand recognition of the domain name Marijuana.com transcends both the medicinal dispensary industry as well as the more established industries, such as the pharmaceutical industry. Medicinal cannabis is approved in sixteen states, plus the District of Columbia. Further, as of April 1st, 2012, there are twelve states with pending legislation to legalize medical marijuana. Though the medicinal cannabis industry may be compliant with applicable state laws, it is deemed illegal under federal law. However, to date, the federal government has concentrated their efforts on actions against suppliers, growers or sellers of marijuana, and not pursued, to our knowledge, actions against entities that provide marketing or advertising. As a result, at this point in time, we believe that the asset Marijuana.com has an indefinite useful life. Consequently, we currently are not aware of any legal, regulatory, or contractual provisions that would limit our use of the domain name or our ability to renew it as needed.

To determine the fair value of the software, the company used the Income Approach valuation method. The company used a 5-year discounted cash flow model which cash flows were based on current and recent period actual results, had an assumed flat growth rate of 5% over the 5 year period, and a discount rate of 25%. The software acquired from Revyv, LLC is a comprehensive application suite that is designed for the complete management of alternative healthcare practices. The software is a comprehensive physician software suite which provides healthcare practices with a patient verification system as well as the ability to manage appointments, including automated voice, email and SMS patient reminders and appointment confirmations, easy website integration, and the ability to create management reports. The amortization period for the software is 5 years.

Intangible assets acquisitions and impairments as a result of discontinued operations during the year ended December 31, 2011 are summarized in the following table.

Asset Description	Balance December 31, 2010		General Marketing		Weed Maps		General Processing		General Health Discontinued Operations			Balance December 31, 2011
Management Contract	$	1,424,297	$	-	$	-	$	-	$	(1,424,297	)	$	-
Domain Names		23,076		18,500		80,839		5,704		(14,000	)		114,119
Domain Name - Marijuana.com		-		-		4,250,000		-		-			4,250,000
Web Software		-		501,343		-		-		-			501,343
Goodwill		2,718,538		486,403		-		-		(2,718,538	)		486,403
Total intangible Assets	$	4,165,911	$	1,006,246	$	4,330,839	$	5,704	$	(4,156,835	)	$	5,351,865

Intangible assets and accumulated amortization at December 31, 2011 and December 31, 2010 are comprised of the following:

	December 31,		December 31,
Intangible Assets	2011		2010
Management contract	$	—	$	1,424,297
Domain names		4,364,119		23,076
Web software		501,343		—
Goodwill		486,403		2,718,538
Subtotal	$	5,351,865	$	4,165,911
Accumulated amortization		—		—
Total intangible Assets	$	5,351,865	$	4,165,911

F-54

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2011

Audited

Intangible asset amounts at December 31, 2011 and 2010 do not include the accumulated amortization amount attributed to discontinued operations, specifically amortization of the management contract.

Intangible assets subject to amortization	Amount		Useful life		Weighted-average amortization period
Advertising rights	$	47,886		5.75		0.50
Web software	$	501,343		5		4.56
Total intangible assets subject to amortization	$	549,229				5.07

Intangible assets not subject to amortization	Amount
Domain Names	$	4,316,233
Goodwill		486,403
Total intangible assets not subject to amortization	$	4,802,636

Note 8. Other Assets

The balance of other assets includes $54,000 in rent deposits and $28,000 in noncurrent deferred tax assets.

Note 9. Discontinued Operations

General Health Solutions, Inc.

We have decided to discontinue the operations of General Health Solutions, Inc., which constitutes our entire Medical Clinic Management segment. During the years ended December 31, 2011 and 2010, General Health Solutions had net operating losses of $336,000 and $43,000, respectively. We decided to discontinue the operations of General Health Solutions because of increasing costs associated with managing the clinics and the recent increased competition in the medicinal cannabis clinic industry. A major factor in the success of managing the medicinal cannabis clinics is running successful online Pay Per Click (“PPC”) advertising campaigns. In PPC campaigns targeting is key, and factors that determine the pricing pertaining to certain key words depend heavily on the number of advertisers bidding on those certain key words. Taken together, i) our increasing success with our technology in our Marketing and Media Segment and ii) the increasing costs of PPC campaigns coupled with the increasing number of sole-practitioner doctors now offering medicinal cannabis recommendation letters as part of their medical practice offerings which places downward pressure on pricing, led us to decide to discontinue the operations of General Health Solutions, which composes our entire Medical Clinic Management Segment, and focus our efforts instead on our technology in our Marketing and Media Segment.

F-55

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2011

Audited

During February 2012, we committed to a definitive plan to terminate the management agreement and services associated with the agreement, which resulted in General Health Solutions, Inc., our Medical Clinic Management segment being reported as discontinued operations. For comparative purposes, all prior periods presented have been restated to reflect the reclassification of this segment to discontinued operations on a consistent basis.

General Health Solutions comprised the entirety of our Medical Clinic Management segment and as such, the entire segment was reported in discontinued operations.

Following the closure of the clinics during the first quarter 2012, we do not expect any continuing cash flows from discontinued operations.

At December 31, 2011, we recorded a $30,000 liability related to one-time employee termination benefits and a $71,000 liability related to contract termination costs.

The amounts of revenue, pretax loss as well as impairment of long-lived assets and goodwill reported in discounted operations are as follows:

	Years ended December 31,
	2011			2010
Net revenue	$	2,065,622		$	220,540
Loss before impairment and taxes		(36,962	)		(43,288	)
Impairment of intangible assets		(1,438,297	)		-
Impairment of goodwill		(2,718,538	)		-
Income tax benefit		133,430			18,114
Loss from discontinued operations	$	(4,060,367	)	$	(25,174	)

Current assets – discontinued operations at December 31, 2011 consists of $48,000 in accounts receivable, $3,000 in inventory and $800 in prepaid expense.

Other assets – discontinued operations at December 31, 2011 consists of $52,000 note receivable which includes accrued interest receivable of $43.

Current liabilities – discontinued operations at December 31, 2011 consists of $17,000 in accounts payable, $115,000 notes payable, a $30,000 liability related to one-time employee termination benefits, a $71,000 liability related to contract termination costs and $10,000 in accrued interest.

Note 10. Accounts Payable

Accounts payable at December 31, 2011 included amounts owed to certain vendors related to the ongoing normal course of the Company’s operations.

F-56

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2011

Audited

Note 11. Accrued Liabilities

Accrued liabilities at December 31, 2011 and December 31, 2010 are comprised of the following:

	December 31,		December 31,
Accrued liabilities	2011		2010
Obligations on consulting agreements	$	—	$	900,000
Obligations on marketing agreements		42,000		73,000
Tax provision		361,300		62,000
Deferred rent		183,000		3,000
Payroll liabilities		166,000		—
Other		7,000		—
Total accrued liabilities	$	759,300	$	1,038,000

Note 12. Note Payable

See Note 4. Asset Acquisitions for details of our acquisition of the domain name marijuana.com on November 18, 2011, pursuant to which we issued a Non-Recourse Secured Promissory Note with a principal amount of $4,150,000, payable over sixty nine (69) consecutive months beginning on January 18, 2012.

Below is a summary of the note payable related to the domain name marijuana.com acquisition.

Notes payable	December 31, 2011		December 31, 2010
Current portion	$	708,901	$	-
Long term portion		3,416,099		-
	$	4,125,000	$	-

Accrued interest	$	-	$	-

Interest begins to accrue in January 2012, the month in which we took possession of the domain name.

Note 13. Note Payable – Related Party

During November 2010 we acquired 100% of the membership interests of WeedMaps, LLC, a Nevada limited liability Company, pursuant to which we issued Secured Promissory Notes with the aggregate principal amount of $3,600,000, in the form of four $900,000 principal amount 0.35% Secured Promissory Notes, two issued to each of the Sellers, half of which principal matures on June 30, 2012, and half of which principal matures on January 10, 2013.

Below is a summary of the notes payable – related party related to the WeedMaps acquisition and the associated accrued interest.

Notes payable - related party	December 31, 2011		December 31, 2010
Current portion	$	1,130,000	$	-
Long term portion		1,800,000		3,600,000
	$	2,930,000	$	3,600,000

Accrued interest	$	13,241	$	1,450

F-57

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2011

Audited

Note 14. Other Long Term Accrued Liabilities

See Note 13. Note Payable – Related Party for information on the promissory notes issued as part of the WeedMaps acquisition of which $7,025 represents the accrued interest of the long-term portion of the note payable.

At December 31, 2011, we had a balance of $148,000 in deferred tax liability.

Note 15. Earn out provisions, WeedMaps

Pursuant to the earn out provisions of the WeedMaps Purchase Agreement, in year one following the acquisition of WeedMaps, LLC each of the Sellers will be eligible to earn and be issued 3,000,000 shares of the Company’s common stock on January 31, 2012, if the gross revenues of WeedMaps for the fiscal year ended December 31, 2011 are at least 20% higher than they were for the fiscal year ended December 31, 2010, which such gross revenues for the fiscal year ended December 31, 2011 were at lest 20% higher than they were in the previous year and as such have each become eligible to be issued 3,000,000 shares of the Company’s common stock for a total of 6,000,000 shares of our common stock. We expect to issue the shares to each of the Sellers during the quarter ending March 31, 2012.

See Note 22. Recapitalization for a discussion regarding the recapitalization of SearchCore as a result of the merger with WeedMaps, LLC. In part, and as further consideration for the purchase, the sellers of WeedMaps, LLC can collectively earn up to an aggregate of Sixteen Million (16,000,000) additional shares of our common stock pursuant to certain earn-out provisions (the “Earn-out Provisions”) in the Purchase Agreement.

Accordingly, the Company valued the Earn-out Provisions based on an analysis using a cash flow model (a "decision tree") to determine the Expected Earn-Out Payment, which model determined that the aggregate Expected Earn-out Payment was $25,450,000 and the present value of the contingent consideration liability was $18,362,269. The Company thus recognized at the acquisition date an $18,362,269 Earn-out Provisions Liability amount associated with the Earn-out Provisions as part of the consideration transferred in the WeedMaps Purchase Agreement.

F-58

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2011

Audited

The probabilities for the three different scenarios in determining the likelihood of payouts related to the earn-out provisions, as well as the discount rate used in our calculations were based on internal Company projections which were vetted by senior management, which probability rate for year 1 has, to date, already been exceeded, and as such, each of Mr. Hartfield and Mr. Hoerling will earn their respective earn-out provisions for year 1.

Contingent consideration, the earn-out provisions, which are classified as a liability are required to be remeasured to fair value at each reporting date and any changes in fair value subsequent to the acquisition date are recognized in earnings. The primary inputs in determining the fair value of the earn-outs that were remeasured to fair value at December 31, 2011 were i) the quoted price of the underlying shares of our common stock and ii) the probabilities for the three different scenarios in determining the likelihood of common share payouts.

The price of our common stock was reduced to $1.52 from $2.00 in all three years of our cash flow model since the price of our common stock as quoted on the OTCQX on December 31, 2011, the balance sheet date, was $1.52. The probability rate for year one upside scenario of the earn-outs has been met and thus such probability rate was increased to 100% from 75%, and as a result the fair value of the earn-out liability for year one increased by $786,667, to $9,120,000 ($1.52 x 6 million shares). Consequently, the cash flow model for year one of the earn-outs is no longer presented.

Furthermore, the upside probability rates in year two and year three of our cash flow model have been increased to 75% and 65%, respectively, from 70% and 60%, respectively, which resulted in a decrease in the fair value of the earn-out liability of $353,000 and $229,000, respectively. The net effect of the changes to our cash flow model as a result of remeasuring the earn-out liability to fair value was $205,000 and as such, a change in the fair value of the earn-out liability was recorded at December 31, 2011. At December 31, 2011, the fair value of the earn-out liability was $18,567,223. At December 31, 2011, we recorded a loss on change in fair value of the earn-our liability of $205,000.

Pursuant to the WeedMaps Purchase Agreement, the Earn-out Provisions provide that for a period of three years following the acquisition of WeedMaps, LLC, each of the Sellers will be eligible to earn and be issued a certain number of shares of the Company’s common stock based upon the following formula as follows:

In year one following the acquisition of WeedMaps, LLC each of the Sellers will be eligible to earn and be issued 3,000,000 shares of the Company’s common stock on January 31, 2012, if the gross revenues of Merger Sub [WeedMaps, LLC was merged with and into WeedMaps Media, Inc. (“Merger Sub”)], for the fiscal year ended December 31, 2011 are at least 20% higher than they were for the fiscal year ended December 31, 2010. If the 2011 gross revenues of Merger Sub are at least 10%, but less than 20%, higher than the 2010 gross revenues, then the number of shares to be issued shall be reduced to 1,250,000 shares to each of the Sellers. If the 2011 gross revenues of Merger Sub are less than 10% higher than the 2010 gross revenues, then no shares shall be issued hereunder. At December 31, 2011 the 20% gross revenue milestone was met for year one, and as such, each of Mr. Hartfield and Mr. Hoerling will earn their respective earn-out shares for year one. At December 31, 2011, the fair value of the year one earn-our shares was $9,120,000.

F-59

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2011

Audited

ii.

In year two following the acquisition of WeedMaps, LLC each of the Sellers will be eligible to earn and be issued 3,000,000 shares of the Company’s common stock on January 31, 2013, if the gross revenues of Merger Sub for the fiscal year ended December 31, 2012 are at least 20% higher than they were for the fiscal year ended December 31, 2011. If the 2012 gross revenues of Merger Sub are at least 10%, but less than 20%, higher than the 2011 gross revenues, then the number of shares to be issued shall be reduced to 1,250,000 shares to each of the Sellers. If the 2012 gross revenues of Merger Sub are less than 10% higher than the 2011 gross revenues, then no shares shall be issued.

Year 2 Scenarios	# of Shares Earn-Out		Probability			Probability-Weighted Shares

Upside		6,000,000		75	%		4,500,000
Gross Revenue 20% higher than previous year

Mid		2,500,000		15	%		375,000
Gross Revenue higher than 10% but less than 20% of previous year

Downside
Gross Revenue 10% or lower than previous year		0		10	%		0

	Expected Earn-Out Shares						4,875,000

	Price per common share					$	1.52

	Discount rate						20	%
	No. of Years (nper)						1.00
	Payments (pmt)					$	-
	Fair value (fv)					$	7,410,000

	Present value factor at 20% discount rate for 24 months						0.83333

	Year 2 Present value of liability					$	6,175,000

F-60

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2011

Audited

iii.

In year three following the acquisition of WeedMaps, LLC each of the Sellers will be eligible to earn and be issued 2,000,000 shares of the Company’s common stock on January 31, 2014, if the gross revenues of Merger Sub for the fiscal year ended December 31, 2013 are at least 20% higher than they were for the fiscal year ended December 31, 2012. If the 2012 gross revenues of Merger Sub are at least 10%, but less than 20%, higher than the 2013 gross revenues, then the number of shares to be issued shall be reduced to 1,250,000 shares to each of the Sellers. If the 2013 gross revenues of Merger Sub are less than 10% higher than the 2012 gross revenues, then no shares shall be issued.

Year 3 Scenarios	# of Shares Earn-Out		Probability			Probability-Weighted Shares

Upside		4,000,000		65	%		2,600,000
Gross Revenue 20% higher than previous year

Mid		2,500,000		20	%		500,000
Gross Revenue higher than 10% but less than 20% of previous year

Downside
Gross Revenue 10% or lower than previous year		0		15	%		0

	Expected Earn-Out Shares						3,100,000

	Price per common share					$	1.52

	Discount rate						20	%
	No. of Years (nper)						2.00
	Payments (pmt)					$	-
	Fair value (fv)					$	4,712,000

	Present value factor at 20% discount rate for 36 months						0.69444

	Year 3 Present Value of Liability					$	3,272,222

F-61

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2011

Audited

Note 16. Income Per Common Share

As of December 31, 2011, there were outstanding 250,000 common stock purchase warrants that were not included in the computation of diluted EPS because to do so would have been antidilutive for the period presented. See Note 5. Other Current Assets for information on the warrants.

Note 17. Income Taxes

As described in Note 22. Recapitalization, the Company completed a Merger with WeedMaps, LLC. in November 2010 and for accounting purposes the transaction is considered to be a reverse merger treated as a recapitalization of SearchCore where SearchCore is the surviving legal entity and the accounting acquiree, and WeedMaps is considered to be the accounting acquirer and the legal acquiree. The assets and liabilities of WeedMaps are recorded at their historical cost with the equity structure of SearchCore. No goodwill was recorded in the transaction. SearchCore was deemed a continuation of the business of WeedMaps and the historical financial statements of WeedMaps became the historical financial statements of SearchCore. Prior to the Merger, WeedMaps, LLC was not a tax paying entity for federal and state income tax purposes. Income from WeedMaps prior to the Merger was taxed at the members’ level.

As described in Note 3. Business Combinations, the Company acquired substantially all the assets of Synergistic Resources, LLC during December 2010. Synergistic Resources, LLC is not a tax paying entity for federal and state income tax purposes. Income from Synergistic Resources, LLC is taxed at the members’ level. Further, the results of operations of Synergistic Resources, LLC prior to the date of acquisition, the year ended December 31, 2009 and the period ended December 2, 2010, were attributed to the single member of the LLC. Accordingly, the Company has not provided a provision for income taxes from operations of Synergistic Resources, LLC prior to its acquisition. Effective the date of the acquisition, Synergistic Resources, LLC converted to a C-corp.

The components of net loss before income tax (benefit) consist of approximately the following:

	Years Ended December 31,
	2011			2010
Operating income from continuing operations	$	1,232,198		$	456,583
Loss from discontinued operations		(4,193,797	)		(25,174	)
	$	(2,961,599	)	$	431,409

F-62

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2011

Audited

The components of tax provision (benefit)	December 31,
	2011			2010
Current
Federal	$	268,000		$	-
State		31,700			62,800
		299,700			62,800

Deferred
Federal	$	(16,000	)	$	(429,000	)
State		19,000			(31,000	)
		3,000			(460,000	)

Change in valuation allowance		(20,000	)		460,000

Total tax (benefit) provision	$	282,700		$	62,800


The components of deferred tax asset (liability)	December 31,
		2011			2010
Deferred income tax assets:
State taxes	$	40,000		$	-
Net operating losses		468,000			460,000
Accruals and other		97,000			-
		605,000			460,000
Deferred income tax liabilities:
Depreciation and amortization	$	(148,000	)	$	-
		457,000			460,000

Valuation allowance		(440,000	)		(460,000	)

Net deferred tax assets/(liabilities)	$	17,000		$	-

F-63

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2011

Audited

For the years ended December 31, 2011 and 2010, a reconciliation of the federal statutory tax rate to the Company's effective tax rate is as follows:

Effective Tax Rate	December 31,
	2011			2010
Federal statutory tax rate		34.00	%		34.00	%
State and local income taxes, net of federal tax benefit		-4.87	%		15.19	%
Permanent items		-36.49	%		0.00	%
Return to provision		-1.82	%		0.00	%
Valuation allowance		-0.59	%		-34.00	%

Total effective tax rate		-9.77	%		15.19	%

The ultimate realization of deferred tax assets depends upon the generation of future taxable income during the periods in which those temporary differences become deductible. Based upon the Company's loss for the year ended December 31, 2011, the Company has provided a valuation allowance in the amount of $440,000 against our future net operating losses. The amount of deferred tax assets considered realizable could change if future taxable income is realized.

At December 31, 2011 and December 31, 2010, the Company had U.S. federal tax net operating loss carryforwards (“NOLs”) of approximately $1.4 million and $1.4 million, respectively, which begin to expire in 2021. We do not have any State NOLs. The NOLs are subject to limitations under IRC Section 382 of the Internal Revenue Code (“Section 382”).

Note 18. Related Party Transactions

All material intercompany transactions have been eliminated upon consolidation of our entities. During the twelve months ended December 31, 2011, cash transfers, equity and accounts between the Company and its subsidiaries have been eliminated upon consolidation.

Note 19. Commitment And Contingencies

F-64

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2011

Audited

Set forth below is a summary of our current obligations as of December 31, 2011 comprised exclusively of a rental lease obligation to make future payments due by the period indicated below:

Operating lease payments	Minimum Payments		Monthly Base Rent
FYE 2012	$	495,288	$	41,274
FYE 2013	$	514,806	$	42,901
2014	$	42,901	$	42,901

Note 20. Equity Transactions

On January 11, 2011, we entered into a Reorganization and Asset Acquisition Agreement pursuant to which we acquired substantially all the assets of Revyv, LLC. As consideration for the purchase, we issued an aggregate of Five Hundred Thousand (500,000) shares of our common stock to Revyv. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investor was accredited and had access to information necessary to make an investment decision. The shares were restricted securities as described in Rule 144 pursuant to the Securities Act of 1933.

On December 3, 2010, we entered into a Reorganization and Asset Acquisition Agreement pursuant to which we acquired substantially all the assets of Synergistic Resources, LLC. As consideration for the purchase, we issued an aggregate of Two Million (2,000,000) shares of our common stock to Synergistic Resources. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investor was accredited and had access to information necessary to make an investment decision. The shares were restricted securities as described in Rule 144 pursuant to the Securities Act of 1933.

On November 19, 2010, we entered into an Agreement and Plan of Reorganization and Merger pursuant to which we acquired 100% of the membership interests of WeedMaps, LLC, Nevada limited liability company. As consideration for the purchase, we issued an aggregate of Sixteen Million Four Hundred Thousand (16,400,000) shares of our common stock to two individuals, Justin Hartfield and Keith Hoerling. Hartfield and Hoerling can collectively earn up to an aggregate of Sixteen Million (16,000,000) additional shares of our common stock pursuant to certain earn-out provisions in the purchase agreement. Each of the issuances was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and each of the investors was accredited and had access to information necessary to make an investment decision. The shares were all restricted securities as described in Rule 144 pursuant to the Securities Act of 1933.

On August 24, 2010, we issued 53,656,814 shares of our common stock to James Pakulis, one of our officers and directors, in exchange for the cancellation of $1,609,704 in convertible debt at $0.03 per share. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933. Mr. Pakulis subsequently sold one-half (1/2) of the shares to Douglas Francis, another of our officers and directors.

F-65

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2011

Audited

Note 21. Warrants

As of December 31, 2011, there were outstanding 250,000 common stock purchase warrants. See Note 5. Other Current Assets for information on the warrants.

The following table summarizes information about common stock warrants outstanding at December 31, 2011.

Outstanding								Exercisable
Exercise Price		Number Outstanding		Weighted Average Remaining Contractual Life (years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$	4.00		250,000		2.87	$	4.00		250,000	$	4.00
$	4.00		250,000		2.87	$	4.00		250,000	$	4.00

Note 22. Recapitalization

On November 19, 2010, SearchCore, Inc. entered into an Agreement and Plan of Reorganization and Merger with WeedMaps Media, Inc., a wholly owned subsidiary of SearchCore (“Merger Sub”) and WeedMaps, LLC (“WeedMaps”) (the “Merger Agreement”). WeedMaps was a privately held medical-cannabis industry-focused, marketing and media company, whose business plan was to monetize industry related information and to provide advertisers and industry professionals a direct and accessible platform via the internet. Pursuant to the terms of the Merger Agreement, Merger Sub merged with and into WeedMaps and WeedMaps is the surviving corporation and a wholly owned subsidiary of SearchCore (the “Merger”).

Prior to the Merger, SearchCore was deemed to be a non-operating public shell corporation with nominal net assets and WeedMaps was a private operating company with significant operations. After the completion of the Merger, assuming the issuance of shares pursuant to certain earn-out provisions, SearchCore’s previous shareholders owned 64,215,256 shares of common stock and WeedMaps shareholders owned 32,400,000, or approximately 34% of the outstanding shares of SearchCore’s common stock and as such, for accounting purposes the transaction is considered to be a reverse merger treated as a recapitalization of SearchCore where SearchCore is the surviving legal entity and the accounting acquiree, and WeedMaps is considered to be the accounting acquirer and the legal acquiree. The assets and liabilities of WeedMaps are recorded at their historical cost with the equity structure of SearchCore. No goodwill was recorded in the transaction. SearchCore was deemed a continuation of the business of WeedMaps and the historical financial statements of WeedMaps became the historical financial statements of SearchCore.

The following summary reflects the conversion of 100% membership interest of WeedMaps into 16,400,000 shares of SearchCore common stock, the additional 16,000,000 shares of common stock pursuant to the Earn-out provisions and the elimination of the accumulated deficit of SearchCore including its wholly owned subsidiary LV Luxuries:

Recapitalization Adjustment

Issuance of SearchCore’s common stock—16,400,000 shares at $.001 par value	$	16,400
Earn-out provisions liability, WeedMaps		18,362,269
Elimination of SearchCore’s accumulated deficit		5,625,522
Elimination of LV Luxuries' accumulated deficit		141,509
Recapitalization adjustment to additional-paid-in capital	$	24,145,700

F-66

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2011

Audited

Note 23. Operating Segments

In the past, our operations contained two identifiable segments, the media and marketing segment and the medical clinic management segment. The factors that the Company considered when identifying our reportable segments were primarily the products and services which were offered by each segment. Based on the reporting of our entire Medical Clinic Management Segment as discontinued operations, we determined that we now have one reportable segment and accordingly we will no longer report on a segment basis. Further prior year segment information is no longer reported as well. See Note 9. Discontinued Operations for further information on the discontinuation of our medical clinic management segment.

Note 24. Subsequent Events

The Company evaluated its December 31, 2011 financial statements for subsequent events through May 10, 2012, the date the financial statements were available to be issued.

MMJMenu

Note 25. Current Fiscal Year Interim Period Error Corrections

During the first quarter of 2011, we began capitalizing certain software development costs, which we subsequently realized that our accounting treatment was incorrect. Consequently, the capitalized software development costs were expensed as research and development costs during the quarter ending December 31, 2011. At December 31, 2011, the software development costs that were expensed as research and development costs was $520,000.

The effect on income from continuing operations, net income, and related per-share amounts for each prior interim period of the current fiscal year is as follows:

Quarter ending March 31, 2011
Income from continuing operations	$	(66,392	)
Net income	$	(66,392	)
Income loss per share, Basic and Diluted
Income from continuing operations	$	(0.00	)
Total income (loss) per share	$	(0.00	)

Quarter ending June 30, 2011
Income from continuing operations	$	(260,337	)
Net income	$	(260,337	)
Income loss per share, Basic and Diluted
Income from continuing operations	$	(0.00	)
Total income (loss) per share	$	(0.00	)

Quarter ending September 30, 2011
Income from continuing operations	$	(484,789	)
Net income	$	(484,789	)
Income loss per share, Basic and Diluted
Income from continuing operations	$	(0.01	)
Total income (loss) per share	$	(0.01	)

Quarter ending December 31, 2011
Income from continuing operations	$	(519,789	)
Net income	$	(519,789	)
Income loss per share, Basic and Diluted
Income from continuing operations	$	(0.01	)
Total income (loss) per share	$	(0.01	)

F-67

SEARCHCORE, INC.

(Formally General Cannabis, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2011

Audited

Note 26. Current Fiscal Year Error Correction

We previously concluded that the net change in the fair value of the earn-out liability, $205,000, was immaterial to our net income and as a result did not record a change in the earn-out liability. However, after further consideration of qualitative as well as quantitative factors, we concluded that the change in the fair value of the earn-out liability was material to our operations and as a result, we recorded a change in the earn-out liability of $205,000 at December 31, 2011. The correction of this error resulted in the fair value of the earn-out liability at December 31, 2011 being recorded at $18,567,223.

Below is a comparative presentation of the consolidated balance sheets, consolidated statements of operations, and statement of cash flows for the year ended December 31, 2011 as restated in this report and as previously reported in the Company’s Amendment No. 8 on Form S-1 previously filed with the SEC on April 19, 2012:

	Year Ended December 31, 2011
Changes to Consolidated Balance Sheet	As filed			As restated			Adjustment

Earn-out provisions, WeedMaps		18,362,269			18,567,223			204,954

Retained (deficit) earnings		(2,666,971	)		(2,871,925	)		(204,954	)

	Year Ended December 31, 2011
Changes to Consolidated Statement of Operations	As filed			As restated			Adjustment

Loss on change in fair value of earn-out liability	$	—		$	204,954		$	204,954
Income from continuing operation		1,021,022			816,068			(204,954	)

Net income	$	(3,039,345	)	$	(3,244,299	)	$	(204,954	)

Basic and diluted per share amounts:
Continuing operations	$	0.012		$	0.010		$	(0.002	)
Net income	$	(0.037	)	$	(0.039	)	$	(0.002	)

	Year Ended December 31, 2011
Changes to Consolidated Statements of Cash Flows	As filed				As restated				Adjustment
Net income from continuing operations		$	(3,039,345	)		$	(3,244,299	)		$	(204,954	)
Loss on change in fair value of earn-out liability			—				204,954				204,954

F-68

Index to Exhibits

2.1 (1)		Agreement and Plan of Reorganization and Merger dated November 19, 2010

2.2 (1)		First Amendment to Agreement and Plan of Reorganization and Merger dated November 19, 2010.

2.3 (1)		Reorganization and Asset Acquisition Agreement dated December 3, 2010

2.4 (1)		Reorganization and Asset Acquisition Agreement dated January 11, 2011.

2.5 (1)		Reorganization and Asset Purchase Agreement dated December 19, 2011.

2.6 (1)		Agreement and Plan of Reorganization dated December 11, 2012.

2.7 (1)		Securities Purchase Agreement dated December 31, 2012.

3.1 (1)		Amended and Restated Articles of Incorporation of General Cannabis, Inc.

3.2 (1)		Certificate of Amendment to Articles of Incorporation

3.3 (1)		Bylaws of General Cannabis, Inc.

10.1 (1)		Common Stock Purchase Warrant issued to Crystal Research Associates, LLC dated April 13, 2011.

10.2 (1)		Marketing Service Agreement with Crystal Research Associates, LLC dated October 5, 2010.

10.3 (1)		Employment Agreement with James Pakulis dated August 1, 2011

10.4		Global Securities Purchase, Consulting, and Resignation Agreement with Justin Hartfield dated July 31, 2012.

10.5		Secured Promissory Note with Justin Hartfield dated August 1, 2012.

10.6		Consulting Agreement with Justin Hartfield dated August 1, 2012.

10.7		Security Agreement with Justin Hartfield dated August 1, 2012.

10.8		Cancellation Agreement with Justin Hartfield dated August 1, 2012.

10.9		Resignation of Justin Hartfield dated August 1, 2012.

10.10		Stock Power for Justin Hartfield dated August 1, 2012.

10.11		Global Securities Purchase and Resignation Agreement with Francis dated July 31, 2012.

10.12		Secured Promissory Note with Douglas Francis dated August 1, 2012.

10.13		Security Agreement with Douglas Francis dated August 1, 2012.

10.14		Cancellation Agreement with Douglas Francis dated August 1, 2012.

10.15		Resignation of Douglas Francis dated August 1, 2012.

10.16		Stock Power for Douglas Francis dated August 1, 2012.

10.17		Domain Name Purchase Agreement dated August 2, 2012.

10. 18 (1)		Domain Name Purchase Agreement with Domain Holdings, Inc. dated August 7, 2012.

10.19 (1)		Non-Recourse Secured Promissory Note with Domain Holdings, Inc. dated August 7, 2012.

10.20		Global Securities Purchase Agreement with Keith Hoerling dated August 9, 2012.

10.21		Secured Promissory Note with Keith Hoerling dated August 9, 2012.

10.22		Security Agreement with Keith Hoerling dated August 9, 2012.

10.23		Cancellation Agreement with Keith Hoerling dated August 9, 2012.

10.24		Domain Holding and Transfer Agreement dated August 13, 2013.

10.25		Domain Name Purchase Agreement dated August 16, 2012.

10.26 (1)		Domain Names Purchase Agreement, dated August 24, 2012.

10.27 (1)		First Amendment to Domain Name Purchase Agreement with Domain Holdings, Inc. dated October 25, 2012.

10.28 (1)		First Amendment to Non-Recourse Secured Promissory Note with Domain Holdings, Inc. dated October 25, 2012.

10.29 (1)		Carrillo Promissory Note dated December 31, 2012.

10.30 (1)		Pakulis Promissory Note dated December 31, 2012.

10.31 (1)		Secured Promissory Note dated December 31, 2012.

10.32 (1)		Pledge and Security Agreement dated December 31, 2012.

10.33 (1)		Hartfield Assignment, Assumption and Release Agreement dated December 31, 2012.

10.34 (1)		Francis Assignment, Assumption and Release Agreement dated December 31, 2012.

10.35 (1)		Hoerling Assignment, Assumption and Release Agreement dated December, 31, 2012.

10.36 (1)		Lease Assumption Agreement dated December 31, 2012.

10.37 (1)		Agreement Assumption Agreement dated December 31, 2012.

10.38 (1)		Buyer Non-Competition Agreement dated December 31, 2012.

10.39 (1)		Seller Non-Competition Agreement dated December 31, 2012

10.40 (1)		Assignment of Trademarks dated December 31, 2012.

10.41 (1)		Assignment of Domain Names dated December 31, 2012.

10.42 (1)		Side Letter Agreement dated December 31, 2012.

10.43 (1)		Asset Purchase Agreement dated December 11, 2012.

10.44 (1)		Assignment of Domain Names dated December 31, 2012.

10.45 (1)		Management Agreement dated January 21, 2013

10.46 (1)		Escrow Instructions and Agreement

10.47		Domain Name Purchase Agreement

10.48		Domain Name Purchase Agreement

16.1 (1)		Letter from Mendoza Berger & Company, LLP

16.2 (1)		Letter from Dale Matheson Carr-Hilton Labonte, LLP

21		List of Subsidiaries

99.1		Proforma Financial Statements

(1)	Incorporated by reference from our Registration Statement on Form 10 dated January 29, 2013 and filed with the Commission on January 30, 2013.

SIGNATURES

In accordance with Section 12 of the Securities Exchange Act of 1934, the registrant caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized.

	SearchCore, Inc.

Dated: March 27 , 2013		/s/ James Pakulis
		By: James Pakulis
		Its: Chief Executive Officer

Nevada		43-2041643
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

26497 Rancho Parkway South Lake Forest, CA		92630
(Address of principal executive offices)		(Zip Code)

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

Programmers and testing	$	240,000
Developer firms		105,000
Purchased Software		175,000
	$	520,000

Title of each class to be so registered		Name of each exchange on which each class is to be registered
None		None

Item 1.	Business.	3

Item 1A.	Risk Factors.	19

Item 2.	Financial Information.	27

Item 3.	Properties.	49

Item 4.	Security Ownership of Certain Beneficial Owners and Management.	50

Item 5.	Directors and Executive Officers.	51

Item 6.	Executive Compensation.	52

Item 7.	Certain Relationships and Related Transactions, and Director Independence.	54

Item 8.	Legal Proceedings.	56

Item 9.	Market Price of and Dividends on the Registrants Common Equity and Related Stockholder Matters.	56

Item 10.	Recent Sales of Unregistered Securities.	57

Item 11.	Description of Registrants Securities to be Registered.	59

Item 12.	Indemnification of Directors and Officers.	60

Item 13.	Financial Statements and Supplementary Data.	60

Item 14.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.	60

Item 15.	Financial Statements and Exhibits.	63