10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 10-Q

Amendment No. 1

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

For the quarterly period ended June 30, 2011

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

For the transition period from _________________ to _________________

Commission File Number: 000-53640

THWAPR, INC.

(Exact name of registrant as specified in its charter)

Nevada	26-1359430
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
95 Morton Street, Ground Floor, New York, NY New York, New York 10001 (Address of principal executive offices)
(212) 268-0220 (Registrant’s telephone number, including area code)

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

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

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

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

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

The number of shares outstanding of the registrant’s common stock at August 15, 2011 was 54,169,129.

EXPLANATORY NOTE

The sole purpose of this Amendment No. 1 to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2011 (“Form 10-Q”) is to furnish Exhibit 101 to the Form 10-Q in accordance with Rule 405 of Regulation S-T. Exhibit 101 consists of the following materials from the Registrants Form 10-Q for the quarterly period ended June 30, 2011, filed with the Securities and Exchange Commission on August 15, 2011, formatted in XBRL (eXtensible Business Reporting Language):

101.INS  XBRL Instance Document

101.SCH  XBRL Taxonomy Extension Schema Document

101.CAL  XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF  XBRL Taxonomy Extension Definition Linkbase Document

101.LAB  XBRL Taxonomy Extension Label Linkbase Document

101.PRE  XBRL Taxonomy Extension Presentation Linkbase Document

No other changes have been made to the Registrant’s Form 10-Q. This Amendment No. 1 does not reflect any subsequent events occurring after the original filing date of the Form 10-Q or modify or update in any way disclosures made in the original filings.

Item 6.  Exhibits

Exhibit 31.1	Section 302 Certification – Chief Executive Officer*
Exhibit 31.2	Section 302 Certification – Chief Financial Officer*
Exhibit 32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.*
Exhibit 101	Interactive data files formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Cash Flows, (iv) Statement of Stockholders’ Equity (Deficit), and (v) the Notes to the Consolidated Financial Statements.**
	101.INS XBRL Instance Document**
	101.SCH XBRL Taxonomy Extension Schema Document**
	101.CAL XBRL Taxonomy Extension Calculation Linkbase Document**
	101.DEF XBRL Taxonomy Extension Definition Linkbase Document**
	101.LAB XBRL Taxonomy Extension Label Linkbase Document**
	101.PRE XBRL Taxonomy Extension Presentation Linkbase Document**

* Filed on August 15, 2011 as an exhibit to the Registrants’ Form 10-Q’s for the quarterly period ended June 30, 2011.

** Furnished herein

SIGNATURES

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

	THWAPR, INC
Date: September 14, 2011	By:	/s/ Bruce Goldstein
		BRUCE GOLDSTEIN
		CHIEF EXECUTIVE OFFICER
Date: September 14, 2011	By:	/s/ C. Barry Hall
		BARRY HALL
		CHIEF FINANCIAL OFFICER

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BALANCE SHEETS (Parenthetical) (USD $)	Jun. 30, 2011	Dec. 31, 2010
Accounts Receivable, allowance for doubtful accounts	$ 0	$ 0
Convertible note, discount	$ 17,292	$ 19,792
Convertible Preferred, par value	$ 0.0001	$ 0.0001
Convertible Preferred, shares authorized	50,000,000	50,000,000
Convertible Preferred, shares issued	46,961,636	46,961,636
Convertible Preferred, shares outstanding	46,961,636	46,961,636
Common stock, par value	$ 0.0003	$ 0.0003
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares issued	53,769,129
Common stock, shares outstanding	53,769,129

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STATEMENTS OF OPERATIONS (USD $)	3 Months Ended		6 Months Ended		52 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011
REVENUE	$ 5,700		$ 6,208		$ 10,700
COST OF SALES	47,397		95,374		111,645
GROSS LOSS	(41,697)		(89,166)		(100,945)
OPERATING EXPENSES:
Product Development	680,345	1,047,010	1,708,019	1,353,693	9,624,693
General and Administrative Expenses	668,074	1,508,018	2,003,231	2,096,528	10,557,770
TOTAL OPERATING EXPENSES	1,348,419	2,555,028	3,711,250	3,450,221	20,182,463
LOSS FROM OPERATIONS	(1,390,116)	(2,555,028)	(3,800,416)	(3,450,221)	(20,283,408)
OTHER INCOME (EXPENSES)
Interest Income	5	63	5	63	193
Other Income	43,198		43,198		43,198
Change in Derivative Liability	9,809	(68,900)	15,407	(68,900)	11,602
Interest Expense	(12,431)	(2,113)	(17,123)	(3,363)	(28,398)
Other Expense					(4,789)
TOTAL OTHER INCOME (EXPENSE)	40,581	(70,950)	41,487	(72,200)	21,806
NET LOSS	$ (1,349,535)	$ (2,625,978)	$ (3,758,929)	$ (3,522,421)	$ (20,261,602)
Basic and diluted (loss) per share	$ (0.03)	$ (0.01)	$ (0.07)	$ (0.01)
Weighted average shares	53,769,129	471,858,786	53,194,499	450,388,323

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Document and Entity Information	6 Months Ended
	Jun. 30, 2011	Aug. 12, 2011
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2011
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q2
Trading Symbol	THWI
Entity Registrant Name	THWAPR, INC.
Entity Central Index Key	0001451598
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		54,169,129

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2011

COMMITMENTS AND CONTINGENCIES

5.           COMMITMENTS AND CONTINGENCIES

Lease Commitments

On June 1, 2011, the Company entered into a six month lease agreement beginning June 1, 2011for office space, furniture, Internet connectivity and telephony in New York, New York for $8,395 per month.  As of June 30, 2011 a commitment of $41,975 remained on the agreement.

One May 16, 2011, the Company entered in to a one year lease agreement beginning August 1, 2011 for office space, furniture, Internet connectivity and telephony in Las Vegas, Nevada for $1,169 per month.  As of June 30, 2011 a commitment of $14,028 remained on the agreement.

Cash Deposits

The Company maintains its cash at a financial institution.  The account is insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000.  On October 3, 2008, the FDIC temporarily increased its coverage from $100,000 to $250,000 per depositor through December 31, 2013.  The Company’s cash account, at times, may exceed federally insured limits.

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SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2011

SUBSEQUENT EVENTS

10.         SUBSEQUENT EVENTS

Subsequent to June 30, 2011, the Company issued two notes totaling $100,000.  The notes bear interest at 7% per annum and are convertible to common stock at price to be mutually agreed upon.  Should the Company and the note holder not agree on a price, the note holder may, at his discretion convert the notes to common stock at the most favorable  price for which the Company has sold restricted common stock since April 1, 2010.  The notes along with accrued interest are fully due and payable one year from the date of issue. The conversion feature is contingent upon the Company raising $4,000,000 in debt or equity financing.

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ORGANIZATION AND BASIS OF PRESENTATION

6 Months Ended

Jun. 30, 2011

ORGANIZATION AND BASIS OF PRESENTATION

1.           ORGANIZATION AND BASIS OF PRESENTATION

Organization and Nature of Operations

Thwapr, Inc. (“Thwapr” or the “Company”) is a Nevada corporation which has developed a mobile video sharing platform that solves the problem of sending quality video content to and from mobile devices.  Thwapr’s systems, applications and software allow users and brands to share pictures and video to mobile phone users regardless of device, platform or carrier. Additionally, Thwapr expects to enable users to easily capture and share pictures and videos on their phones with other mobile and desktop users and into social networks. Thwapr plans to derive revenues from banner and video advertising on its mobile and desktop websites and from mobile media messaging fees from brand sponsors. Thwapr also plans to sell premium services to users and brands via subscriptions and other fees.  In December 2009, Thwapr launched a public beta test of its service.  Thwapr launched its service in late 2010 but to date has not generated any meaningful revenues and does not anticipate such revenues until such time that a significant number of brands and users have signed up for and are using the service.  This service was launched under the name of Thwapr, a trademark it owns.

The technology underlying Thwapr’s product is complex and as such, a significant amount of development expense has gone into the creation of the Thwapr service infrastructure.  To minimize start-up costs, Thwapr uses only consultants for its activities at this time and has no full-time employees and owns no real estate. For its development and other operations, Thwapr employs independent contractors on a part-time and full-time basis. Thwapr expects to convert most of these independent contractors to employees over time as funding becomes available.

Thwapr’s business is subject to several significant risks, any of which could materially adversely affect its business, operating results, financial condition and the actual outcome of matters as to which it makes forward-looking statements.

Development Stage Activities

Since inception the Company has not conducted any significant revenue producing business operations. All of the operating results and cash flows reported in the accompanying financial statements from March 14, 2007 through June 30, 2011 are considered to be those related to the development stage activities and represent the 'cumulative from inception' amounts required to be reported pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915-205 (formerly Statements of Financial Accounting Standards (“SFAS”) No. 7, “Development Stage Enterprises”).  The Company is focusing its efforts in two areas during the development stage. First, the Company has devoted a substantial time and resources to software development related to the service it provides.  Second, the Company has spent significant time and resources testing the software against a variety of cell phone models, platforms and carriers.

Recent Events

On March 29, 2010 the Company, then named Seaospa, Inc., entered into a Share Exchange Agreement (the “Exchange Agreement”) with Thwapr, Inc., a Delaware Corporation (“Thwapr Delaware”), to acquire all of the stock of Thwapr Delaware.   Thwapr Delaware was incorporated on March 14, 2007 under the name Mobile Video Development, Inc.  As a further condition to the closing of the Exchange Transaction, the Company undertook a recapitalization whereby each share of the Seaospa’s common stock was exchanged for three shares of the Company’s common stock, with the same rights, privileges, and obligations (the “Stock Split”).  Subsequent to the Stock Split, the authorized capital stock of Seaospa was 300,000,000 shares of common stock and 50,000,000 shares of preferred stock.

At the closing of the Exchange Agreement, the Company issued 142,676,508 shares of its common stock and warrants to acquire 12,181,363 shares of its common stock to the Thwapr Stockholders in exchange for 100% of the issued and outstanding capital stock of Thwapr.  Immediately prior to the Exchange Transaction, the Company had 14,609,754 shares of common stock issued and outstanding, subsequent to the Stock Split described below.  Immediately after the Exchange Transaction, the Company had 157,286,262 shares of common stock issued and outstanding, of which 141,562,908 cannot be sold or traded (i) until June 9, 2012, if Thwapr has 10,000,000 registered users on such date, or (ii) upon a change of control of Thwapr.  Additionally, of the warrants outstanding, 10,950,003 shares of the underlying securities cannot be sold or traded (i) until June 9, 2012, if Thwapr has 10,000,000 registered users on such date, or (ii) upon a change of control of Thwapr.  (All of these number of shares do not reflect the 3 for 1 stock split of February 2011).

As a condition to closing the Exchange Agreement and as more fully described, Mr. Yakov Terner resigned as President, Treasurer, and Director of the Company, and Mr. Yossi Benitah resigned as Secretary and Director of the Company.  Effective March 22, 2010, Messrs. Bruce Goldstein, Maurizio Vecchione, and Barry Hall, the current directors of Thwapr, were appointed to the Company’s board of directors.  At the closing of the Exchange Transaction, Mr. Goldstein was appointed President and Chief Executive Officer, Maurizio Vecchione was appointed as Chairman of the Board, and Mr. Hall was appointed Chief Financial Officer, Treasurer, and Secretary. Other key members of the management team include Mr. Eric Hoffert as Integrated Chief Technology Officer, Mr. Duncan Kennedy as Chief Operating Officer, and Mr. Leigh Newsome as Vice President of User Experience, each of whom were appointed as of the Closing Date.  Subsequently, both Mr. Vecchione and Mr. Kennedy resigned from their positions.
 

Going Concern

The Company has sustained operating losses since its inception and has negative working capital and an accumulated deficit. The accompanying financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets, liabilities and commitments in the normal course of business.  The accompanying financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern. The Company’s ability to continue as a going concern and the appropriateness of using the going concern basis is dependent upon, among other things, additional cash infusions.  Management is seeking investors which will allow the Company to pursue the development of its software and business model.  However, there can be no assurance that the Company will be able to raise sufficient capital to fully implement its business model.

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CONVERTIBLE NOTES DUE TO STOCKHOLDERS

6 Months Ended

Jun. 30, 2011

CONVERTIBLE NOTES DUE TO STOCKHOLDERS

7.           CONVERTIBLE NOTES DUE TO STOCKHOLDERS

On April 8, April 15 and April 20, 2010, the Company issued three separate notes of $20,000 to a stockholder.  On December 30, 2010 the Company issued a note to another stockholder for $17,500.  The notes bear interest at 7% per annum and are convertible to common stock at the sole discretion of the note holder at a conversion price of $1.25 per share (pre 3-for-1 stock split of February 2011).  The notes along with accrued interest are fully due and payable one year from the date of issue.

During the three months ended March 31, 2011, the Company issued six separate notes totaling $277,500 to a stockholder. The notes bear interest at 7% per annum. The terms of conversion are still being negotiated. A loan discount may be recorded for the value of the conversion feature when both parties agree on the conversion terms. The notes along with the accrued interest are fully due and payable one year from the date of issue in either cash or restricted shares of common stock at a price mutually agreeable to both parties at the time of conversion on cash.

During the three months ended June 30, 2011, the Company issued three separate notes totaling $150,000 to two stockholders.  The notes bear interest at 7% per annum and are convertible to common stock at price to be mutually agreed upon.  Should the Company and the note holder not agree on a price, the note holders may, at their discretion convert the notes to common stock at the most favorable  price for which the Company has sold restricted common stock since April 1, 2010. The notes along with accrued interest are fully due and payable one year from the date of issue. The conversion feature is contingent upon the Company raising $4,000,000.

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CONVERTIBLE PROMISSORY NOTES

6 Months Ended

Jun. 30, 2011

CONVERTIBLE PROMISSORY NOTES

8.           CONVERTIBLE PROMISSORY NOTES

On November 2, 2009, the Board of Directors of the Company authorized the issuance of convertible notes bearing simple interest at 5% which mature in 5 years, convertible on the same conditions as the next major equity financing of the Company in excess of $2.0 million (the “Notes”).  Additionally, each investor in the Notes will be issued, upon conversion of the Notes, warrants in an amount of 10% of the number of shares obtained during the conversion and such warrants would be exercisable at the same price per share as the conversion of the Note.  Also, upon reorganization, consolidation or merger, the Company, at its sole discretion, may convert the principal amount of the Notes and all accrued and unpaid interest, into securities or cash, as the case may be, at a price of $1.25 per share (pre 3-for-1 stock split of February 2011).  As of June 30, 2011 and December 31, 2010 the Company had issued Notes aggregating $25,000 with a discount amounting to $17,292 at June 30, 2011 being amortized over the term of the note.

During the three months ended June 30, 2011, the Company issued four separate notes totaling $450,000 to an individual.  The notes bear interest at 7% per annum and are convertible to common stock at price to be mutually agreed upon.  Should the Company and the note holder not agree on a price, the note holder may, at his discretion convert the notes to common stock at the most favorable  price for which the Company has sold restricted common stock since April 1, 2010.  The notes along with accrued interest are fully due and payable one year from the date of issue. The conversion feature is contingent upon the Company raising $4,000,000 in debt or equity financing.

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INCOME TAXES

6 Months Ended

Jun. 30, 2011

INCOME TAXES

6.           INCOME TAXES

The Company has adopted FASB Interpretation No. 48 (“FIN 48”), “Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109” codified in FASB ASC 740-10.  This interpretation clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements in accordance with FASB Statement 109, "Accounting for Income Taxes" codified in FASB ASC 740-10, and prescribes a recognition threshold of more likely than not and a measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. In making this assessment, a company must determine whether it is more likely than not that a tax position will be sustained upon examination, based solely on the technical merits of the position and must assume that the tax position will be examined by taxing authorities.  The Company is subject to examination for all years it has filed income tax returns.  The Company’s net operating loss carryforwards are subject to IRS examination until they are fully utilized and such tax years are closed.  The Company’s policy is to include interest and penalties related to unrecognized tax benefits within the provision for income taxes.  The Company’s review of prior year tax positions using the criteria and provisions presented in FIN 48 did not result in a material impact on the Company’s financial position or results of operations.

At June 30, 2011, the Company has net operating loss carryforwards available for federal tax purposes, which expire from 2027 to 2030.  The amount of net operating losses which may be utilized in future years may be subject to significant annual limitations should an ownership change occur. The Company also has operating loss carryforwards available for California income tax purposes, which expire through 2030.  The amounts of operating loss carryforwards are not determined.

At June 30, 2011 and December 31, 2010, total deferred income tax asset consist principally of net operating loss carryforwards in amounts still to be determined.  For financial reporting purposes, a valuation allowance has been recognized in an amount equal to such deferred income tax asset due to the uncertainty surrounding its ultimate realization.

At December 31, 2010, the Company files income tax returns with the Internal Revenue Service (“IRS”) and the states of New York and California and City of New York.  For jurisdictions in which tax filings are made, the Company is subject to income tax examination for all fiscal years since inception.  Our review of prior year tax positions using the criteria and provisions presented by the FASB did not result in a material impact on the Company’s financial position or results of operations.

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STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT) (USD $)	Total	Convertible Preferred Stock	Common Stock	Additional Paid in Capital	Accumulated Deficit	Founders Common Stock	Founders Additional Paid in Capital	Cash	Cash Common Stock	Cash Additional Paid in Capital	Cash Issuance During Period 1st	Cash Issuance During Period 1st Common Stock	Cash Issuance During Period 1st Additional Paid in Capital	Cash Issuance During Period 2nd	Cash Issuance During Period 2nd Common Stock	Cash Issuance During Period 2nd Additional Paid in Capital	Cash Issuance During Period 3rd	Cash Issuance During Period 3rd Common Stock	Cash Issuance During Period 3rd Additional Paid in Capital	Cash Issuance During Period 4th	Cash Issuance During Period 4th Common Stock	Cash Issuance During Period 4th Additional Paid in Capital	Common Stock	Common Stock Convertible Preferred Stock	Common Stock	Common Stock Additional Paid in Capital	Preferred Stock	Preferred Stock Convertible Preferred Stock	Preferred Stock Common Stock	Preferred Stock Additional Paid in Capital	Services	Services Common Stock	Services Additional Paid in Capital
Beginning Balance at Mar. 13, 2007		$ 0	$ 0
Beginning Balance (in shares) at Mar. 13, 2007		0	0
Net loss	(454,014)				(454,014)
Issuance of stock (in shares)						12,857,136			30,000,000
Issuance of stock						429	(429)	771,676	1,000	770,676
Ending Balance at Dec. 31, 2007	317,662		1,429	770,247	(454,014)
Ending Balance (in shares) at Dec. 31, 2007			42,857,136
Net loss	(891,552)				(891,552)
Issuance of stock (in shares)									1,350,000
Issuance of stock								448,800	45	448,755
Ending Balance at Dec. 31, 2008	(125,090)		1,474	1,219,002	(1,345,566)
Ending Balance (in shares) at Dec. 31, 2008			44,207,136
Amortization of warrants	612,298			612,298
Net loss	(2,475,330)				(2,475,330)
Issuance of stock (in shares)												2,980,500			2,133,600
Issuance of stock											993,500	99	993,401	869,560	71	869,489
Conversion of common stock to preferred stock (preferred stock to common) (in shares)																								15,729,212	(47,187,636)
Conversion of common stock to preferred stock (preferred stock to common)																								1,573	(1,573)
Ending Balance at Dec. 31, 2009	(125,062)	1,573	71	3,694,190	(3,820,896)
Ending Balance (in shares) at Dec. 31, 2009		15,729,212	2,133,600
Amortization of warrants	7,113,192			7,113,192
Net loss	(12,681,777)				(12,681,777)
Issuance of stock (in shares)												1,207,200			750,000			684,933			910,800											1,386,000
Issuance of stock											495,500	40	495,460	312,500	75	312,425	470,000	68	469,932	731,461	92	731,369									637,999	138	637,861
Conversion of common stock to preferred stock (preferred stock to common) (in shares)																								47,061,636	(423,554,724)			(15,729,212)	424,688,724
Conversion of common stock to preferred stock (preferred stock to common)																								4,706	(14,118)	9,412		(1,573)	14,156	(12,583)
Shares added due to reverse merger (in shares)			43,829,262
Shares added due to reverse merger			1,461	(1,461)
Amortization of stock issuance for services																											2,468,749			2,468,749
Ending Balance at Dec. 31, 2010	(577,438)	4,706	1,983	15,918,546	(16,502,673)
Ending Balance (in shares) at Dec. 31, 2010		47,061,636	52,035,795
Amortization of warrants	385,045			385,045
Preferred stock forfeited (in shares)		(100,000)
Net loss	(2,409,394)				(2,409,394)
Issuance of stock (in shares)									833,334																							750,000
Issuance of stock								50,200	280	49,920																					552,000	105	551,895
Amortization of stock issuance for services																							60,659			60,659	953,332			953,332
Ending Balance at Mar. 31, 2011	(985,596)	4,706	2,368	17,919,397	(18,912,067)
Ending Balance (in shares) at Mar. 31, 2011		46,961,636	53,619,129
Amortization of warrants	213,605			213,605
Net loss	(1,349,535)				(1,349,535)
Issuance of stock (in shares)																																150,000
Issuance of stock																															60,000	45	59,955
Amortization of stock issuance for services																							64,231			64,231	595,834			595,834
Ending Balance at Jun. 30, 2011	$ (1,401,461)	$ 4,706	$ 2,413	$ 18,853,022	$ (20,261,602)
Ending Balance (in shares) at Jun. 30, 2011		46,961,636	53,769,129

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2011

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.           SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and Cash Equivalents

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

Accounts Receivable

The Company maintains an allowance for doubtful accounts for estimated losses that may arise if any of its customers are unable to make required payments. Management specifically analyzes the age of customer balances, historical bad debt experience, customer credit-worthiness, and changes in customer payment terms when making estimates of the collectability of the Company's trade accounts receivable balances. If the Company determines that the financial conditions of any of its customers have deteriorated, whether due to customer specific or general economic issues, increases in the allowance may be made.  Accounts receivable are written off when all collection attempts have failed.

Revenue Recognition

Revenue currently consists of fees for usage of our technology and one time consulting services. Our contracts for the usage of our technology are typically usage-based or in some case on a flat fee for monthly services.  We recognize revenue when the service has been rendered.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures.  Management uses its historical records and knowledge of its business in making estimates.  Accordingly, actual results could differ from those estimates.

Fair Value Measurements

The Company measures its financial assets and liabilities at fair value.  Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., exit price) in an orderly transaction between market participants at the measurement date.  Additionally, the Company is required to provide disclosure and categorize assets and liabilities measured at fair value into one of three different levels depending on the assumptions (i.e., inputs) used in the valuation.  Level 1 provides the most reliable measure of fair value while Level 3 generally requires significant management judgment.  Financial assets and liabilities are classified in their entirety based on the lowest level of input significant to the fair value measurement.  The fair value hierarchy is defined as follows:

· Level 1 – quoted prices in active markets for identical assets or liabilities,

· Level 2 – other significant observable inputs for the assets or liabilities through corroboration with market data at the measurement date,

· Level 3 – significant unobservable inputs that reflect management’s best estimate of what market participants would use to price the assets or liabilities at the measurement date.

The following table summarizes fair value measurements by level at June 30, 2011 for assets and liabilities measured at fair value on a recurring basis:

	Level I		Level II		Level III
Cash and cash equivalents	$	18,585	$	-	$	-
Derivative liability (conversion feature and warrants)	$	-	$	-	$	15,198

The following table summarizes fair value measurements by level at December 31, 2010 for assets and liabilities measured at fair value on a recurring basis:

	Level I		Level II		Level III
Cash and cash equivalents	$	5,637	$	-	$	-
Derivative liability (conversion feature and warrants)	$	-	$	-	$	30,605

The following table sets forth a summary of changes in the fair value of the Company’s level 3 assets (conversion feature and warrants) for the six months ended June 30, 2011.

	Level 3 Liabilities
	Derivative Liability
Balance as of December 31, 2010	$	30,605
Changes in value of Derivative Liability		(15,407	)
Balance as of June 30, 2011	$	15,198

The carrying amount of certain financial instruments, including cash and cash equivalents and accounts payable and accrued expenses, approximates fair value due to the relatively short maturity of such instruments.

The Company used the Black-Scholes option pricing model for estimating the fair value of the note conversion feature and the warrants with the following assumptions: expected life of 3.5 years; risk-free interest rate of 1.76%; dividend yield of 0%; and expected volatility of 200%.

Product Development

Product development costs are expensed as incurred.  These costs primarily include the costs associated with the development and testing of video and picture sharing technology.  During the three months ended June 30, 2011 and 2010, product development costs amounted to $680,345 and $1,047,010, respectively.  During the six months ended June 30, 2011 and 2010, product development costs amounted to $1,708,019 and $1,353,693, respectively.  
 

Income Taxes

The Company accounts for income taxes under the liability method in accordance with FASB ASC 740-10.  Under this standard, deferred income tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using the enacted tax rates expected to be in effect for the year in which the differences are expected to reverse.  Deferred income tax assets are reduced by a valuation allowance when the Company is unable to make the determination that it is more likely than not that some portion or all of the deferred income tax asset will be realized.

Earnings (Loss) per Share

The Company utilizes FASB ASC 260.  Basic earnings per share is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Common equivalent shares are excluded from the computation if their effect is anti-dilutive. The number of shares of common stock retroactively reflect the 3-for-1 stock split that occured in February 2011.

Recently Issued Accounting Pronouncements

In January 2010, the FASB issued Accounting Standards Update ASU No. 2010-06, “Fair Value Measurements and Disclosures (Topic 820) – Improving Disclosures about Fair Value Measurements”. This guidance requires new disclosures related to recurring and nonrecurring fair value measurements. The guidance requires disclosure of transfers of assets and liabilities between Level 1 and Level 2 of the fair value measurement hierarchy, including the reasons and the timing of the transfers and information on purchases, sales, issuance, and settlements on a gross basis in the reconciliation of the assets and liabilities measured under Level 3 of the fair value measurement hierarchy. The adoption of this guidance is effective for interim and annual reporting periods beginning after December 15, 2009. We have adopted this guidance in the financial statements presented herein, which did not have a material impact on our financial position or results of operations.

In October 2009, the FASB issued guidance under the Multiple Element Revenue Arrangements topic of the Codification which requires separation of the consideration received in such arrangements by establishing a selling price hierarchy for determining the selling price of a deliverable, which will be based on available information in the following order: vendor-specific objective evidence, third-party evidence, or estimated selling price. It also eliminates the residual method of allocation, requires that the consideration be allocated at the inception of the arrangement to all deliverables using the relative selling price method, which allocates any discount in the arrangement to each deliverable on the basis of each deliverable’s selling price, and requires that a vendor determine its best estimate of selling price in a manner that is consistent with that used to determine the price to sell the deliverable on a standalone basis. These changes became effective for us on January 1, 2011, but did not have a material impact on our financial position or results of operations.

Recent Accounting Guidance Not Yet Adopted

In January 2010, the FASB issued guidance to amend the disclosure requirements related to fair value measurements. The guidance requires the disclosure of roll forward activities on purchases, sales, issuance, and settlements of the assets and liabilities measured using significant unobservable inputs (Level 3 fair value measurements). The guidance will become effective for us with the reporting period beginning January 1, 2012. Other than requiring additional disclosures, the adoption of this new guidance should not have a material impact on our financial statements.

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PROPERTY AND EQUIPMENT

6 Months Ended

Jun. 30, 2011

PROPERTY AND EQUIPMENT

3.           PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

	June 30,			December 31,
	2011			2010
Computer equipment	$	41,663		$	37,815
Furniture and fixtures		3,138			3,138
Leasehold improvements		668			668
		45,469			41,621
Accumulated depreciation		(23,083	)		(16,381	)
Property and equipment, net	$	22,386		$	25,240

Depreciation expense for the three and six months ended June 30, 2011 was $3,175 and $6,702, respectively.

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RELATED PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2011

RELATED PARTY TRANSACTIONS

4.           RELATED PARTY TRANSACTIONS

Payment for Consulting Services

Certain stockholders of the Company have provided and provide general management and technology services to the Company as Chairman, CEO, CFO, CTO and Senior Vice President Product. Amounts incurred to these individuals who were stockholders at the time were in lieu of salaries and represented compensation for services rendered as executives and directors of the Company. During the three months ended June 30, 2011 and 2010 the amounts incurred to these stockholders were $171,225 and $105,000, respectively with $159,663 remaining unpaid at June 30, 2011.  During the six months ended June 30, 2011 and 2010 the amounts incurred to these individuals were $371,475 and $225,000, respectively with $228,662 remaining unpaid at June 30, 2011.

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STATEMENTS OF CASH FLOWS (USD $)	6 Months Ended		52 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011
CASH FLOW FROM OPERATING ACTIVITIES
Net loss	$ (3,758,929)	$ (3,522,421)	$ (20,261,602)
Adjustments to reconcile net loss to net cash used in operating activities:
Forgiveness of debt	(43,198)		(43,198)
Stock based compensation	2,884,706	2,129,830	13,716,945
Amortization of note discount	2,500	2,500	7,708
Change in Derivative Liability	(15,407)	68,900	(11,602)
Depreciation Expense	6,702	5,843	24,853
Loss on Disposal of Fixed Assets			4,789
(Increase) decrease in:
Accounts Receivable	(2,958)		(4,950)
Prepaid Expense	(940)	(22,764)	(22,722)
Increase (decrease) in:
Accounts payable and accrued expenses	(117,759)	35,855	196,291
Accounts payable to stockholders	134,379	(6,370)	340,906
NET CASH USED IN OPERATING ACTIVITIES	(910,904)	(1,308,627)	(6,052,582)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(3,848)	(8,232)	(52,029)
NET CASH USED IN INVESTING ACTIVITIES	(3,848)	(8,232)	(52,029)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from convertible notes	450,000		450,000
Proceeds from convertible notes due to stockholders	427,500	60,000	530,000
Proceeds from sale of common stock, net	50,200	1,278,001	5,143,196
NET CASH PROVIDED BY FINANCING ACTIVITIES	927,700	1,338,001	6,123,196
NET INCREASE IN CASH	12,948	21,142	18,585
CASH AT BEGINNING OF THE PERIOD	5,637	23,820
CASH AT END OF PERIOD	18,585	44,962	18,585
SUPPLEMENTARY DISCLOSURE:
Income taxes paid in cash			$ 2,660

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STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT) (Parenthetical) (Cash, USD $)	Dec. 31, 2010 Issuance During Period 1st	Dec. 31, 2009 Issuance During Period 1st	Dec. 31, 2010 Issuance During Period 2nd	Dec. 31, 2009 Issuance During Period 2nd	Dec. 31, 2010 Issuance During Period 3rd	Dec. 31, 2010 Issuance During Period 4th	Mar. 31, 2011	Dec. 31, 2008	Dec. 31, 2007
Issuance of stock for cash, per share	$ 0.42	$ 0.33	$ 0.42	$ 0.41	$ 0.73	$ 0.83	$ 0.06	$ 0.33	$ 0.023

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STOCKHOLDERS' EQUITY

6 Months Ended

Jun. 30, 2011

STOCKHOLDERS' EQUITY

9.           STOCKHOLDERS’ EQUITY

Between January 27, 2009 and June 11, 2009, the Company sold an aggregate of 993,500 shares of common stock to the Company’s largest stockholder.  Each share was sold at a price of $1.00 per share (pre 3-for-1 stock split of February 2011).  These shares were converted to Series A preferred stock on July 29, 2009.

Between July 31, 2009 and December 16, 2009, the Company sold an aggregate of 711,200 shares of common stock in private placements with institutional and accredited investors.  Each share of common stock was priced at $1.25 per share, and as an added incentive, for every 10 shares purchased, a five-year warrant to purchase one share at a price per share of $1.25 was added.  In total, the Company issued to these investors 71,120 warrants along such terms described above (these numbers are pre 3-for-1 stock split of February 2011).

On July 20, 2010, the Company entered into another Exchange Offer Agreement with Thwapr’s five largest stockholders including the founders of the Company.  Pursuant to this agreement Thwapr issued 47,061,636 shares of Series A preferred stock in exchange for 141,184,908 shares of common stock (pre 3-for-1 stock split of February 2011) which was retired.  This preferred stock will automatically convert into common stock at a ratio of 3 (subsequently 6.5) shares of Common Stock for each share of preferred upon the occurrence of either of the following events:

(a) the two year anniversary of the Offering, or

(b) a change of control in the Company.

On February 4, 2011, the company effected a 3-for-1 forward stock split.  As a result of the split the number of the Company’s issued and outstanding common stock increase to 52,335,795, from 17,445,265.

On March 24, 2011 the Board of Directors authorized the Company to offer for sale up to 100,000,000 shares of restricted common stock to raise up to $6,000,000.  As of June 30, 2011, 833,334 shares were sold under this offering.

Preferred Stock

The Company is authorized to issue preferred stock.  The board of directors has the authority to fix and determine the designations, rights, qualification, preferences, limitations and terms of the preferred stock.  Each share of  preferred stock issued and outstanding were convertible into 9 shares of common stock upon the occurrence of either of the following events: (1) two year anniversary of the Offering and  when the Company obtain at least 10,000,000 registered users, or (2) a change in control of the Company.

On February 28, 2011 all of the preferred shareholders signed an agreement whereby they accepted a modification in the conversion ratio of the preferred to common from 9-for-1 to 6.5-for-1 in exchange for removing the restriction that such shares could not be converted until the Company obtained at least 10,000,000 active registered users.  On March 24, 2011 this modification was ratified by the Board of Directors of the Company.  The effect of this modification was to reduce the amount of the common shares that that would be issued upon conversion to 305,250,634.

Warrant Agreements

On March 1, 2009, the Company issued warrants to consultants to purchase 70,000 shares at $1.00 per share.

On April 15, 2009 and May 11, 2009 the Company issued warrants to consultants, vendors and advisors to purchase a total of 1,170,000 at $1.00 per share ($0.333 adjusted for the stock split).  Such warrants vest over a period of 18 months with one-third of the warrants vesting at the end of each six month period from the date of issuance.

On November 2, 2009 all of the warrants described above were converted to warrants for Series A preferred shares described in Note 1.  The shares of Series A preferred stock shall automatically convert into shares of common stock at a ratio of nine shares of common stock for each share of Series A preferred Stock upon the occurrence of either of the following events:

(a) the three year anniversary of the Offering if the Company has obtained at least 10,000,000 active registered users, or

(b)  a change of control in the Company.

In preparation for a reverse merger into a public shell, on February 19, 2010 the Company converted all of the warrants for Series A preferred shares into 9 shares of common stock with such stock underlying the warrants being restricted from sale until the prior conditions for conversion to common from preferred are met.

In addition to the warrants described above, the Company issued more warrants to Directors and Consultants to the Company.  On February 16, 2010 the Company issued 3,000,000 warrants with and exercise price of $0.42 per share to a consultant to the Company.  Such warrants vest quarter over a period of three years.  On March 5, 2010 the Company issued 360,000 warrants with an exercise price of $0.42 per warrant to consultants to the Company.  Such warrants vest quarterly over one year.  On May 19, 2010 the Company issued 7,896,000 warrants to members of the Board of Directors and consultants to the Company with an exercise price of $0.42 per warrant.  Such warrants vest quarterly over three years.  On November 12, 2010 the Company issued 420,000 with an exercise price of $1.78 per warrant to members of the Board of Directors.  Such warrants vest quarterly over one year.  On January 4, 2011, the Company issued 1,110,000 warrants with an exercise price of $0.32 per share to members of the Board of Directors.  Such warrants vest quarterly over one year.  All warrants issued to members of the Board of Directors were done in accordance with the Company’s Board Compensation Plan.

On September 27, 2010, the Company issued 1,666,666 shares of its convertible preferred stock to consultants to the Company in exchange for 1,047,916 of previously issued warrants to purchase the Company’s common stock issued in March 2009.  The preferred shares were previously returned to the Company by the former Chairman of the Company on August 15, 2010.  One-fourth of the preferred shares vested to the consultants upon issuance.  The remaining three-quarters of the shares vest to the consultants quarterly over the next three quarters so long as the consultants remain associated with the Company.

For the three and six months ended June 30, 2011, compensation expense related to the issuance of these shares was $595,834 and $1,549,166, respectively.

The Company used the Black-Scholes option pricing model for estimating the fair value of the warrants with the following assumptions:

Risk Free Interest Rate:		1.35% - 2.13	%
Expected Life:	5 years
Expected Volatility:		200	%
Dividend Yield:		0	%

The following table summarizes the changes in warrants outstanding and the related prices for the shares of the Company’s common stock issued to employees and non-employees of the Company for the six months ended June 30, 2011.  These warrants were granted in lieu of cash compensation for services performed or as part of fundraising related to the sale of the Company’s common stock.

	Number of Common Shares			Average Exercise Price
Outstanding at December 31, 2010		36,678,840		$	0.36
Granted		1,110,000			0.32
Expried/cancelled		(1,612,500	)		0.49
Exercised		-			0
Outstanding at June 30, 2011		36,176,340		$	0.36
Exercisable at June 30, 2011		33,490,088		$	0.35

Awards Outstanding							Awards Exercisable
Exercise Price		Quantity		Weighted Average Remaining Contractual Life	Weighted Average Exercise Price		Exercise Price		Quantity		Weighted Average Remaining Contractual Life	Weighted Average Exercise Price
$	0.33		29,885,010	7.75 years	$	0.33	$	0.33		29,885,010	7.75 years	$	0.33
$	0.42		5,248,830	3.80 years	$	0.42	$	0.42		3,248,828	3.73 years	$	0.42
$	1.78		307,500	4.42 years	$	1.78	$	1.78		172,500	4.42 years	$	1.78
$	0.32		735,000	4.58 years	$	0.32	$	0.32		183,750	4.58 years	$	0.32

Warrants to purchase 1,890,000 shares of stock at $0.33 per share have no maturity date.

Compensation expense related to outstanding warrants for the three and six months ended June 30, 2011 were $213,605 and $598,650, respectively.

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BALANCE SHEETS (USD $)	Jun. 30, 2011	Dec. 31, 2010
CURRENT ASSETS
Cash and cash equivalents	$ 18,585	$ 5,637
Accounts Receivable, net of allowance for doubtful accounts of $0 at June 30, 2011 and December 31, 2010	4,950	1,992
Prepaid Expenses	22,722	21,782
TOTAL CURRENT ASSETS	46,257	29,411
PROPERTY AND EQUIPMENT, NET	22,386	25,240
TOTAL ASSETS	68,643	54,651
CURRENT LIABILITIES
Accounts payable and accrued expenses	133,691	309,270
Convertible notes due to stockholders	519,457	80,479
Convertible notes	453,145
Amount payable to stockholders	340,905	206,526
TOTAL CURRENT LIABILITIES	1,447,198	596,275
LONG-TERM LIABILITIES
Convertible note, less discount of $17,292 and $19,792 at June 30, 2011 and December 31, 2010, respectively	7,708	5,208
Derivative liability	15,198	30,605
TOTAL LONG-TERM LIABILITIES	22,906	35,813
COMMITMENTS AND CONTINGENCIES, Note 5
STOCKHOLDERS' DEFICIT:
Convertible Preferred, $.0001 par value; 50,000,000 shares authorized; 46,961,636 shares issued and outstanding	4,706	4,706
Common stock, $.0003 par value; 300,000,000 shares authorized; 53,769,129 shares issued and outstanding at June 30, 2011	2,413	1,983
Additional paid-in capital	18,853,022	15,918,546
Deficit accumulated during the development stage	(20,261,602)	(16,502,673)
TOTAL STOCKHOLDERS' DEFICIT	(1,401,461)	(577,438)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$ 68,643	$ 54,651