10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

 WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2012

¨ 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)

410 S. Rampart Blvd. Ste 390

Las Vegas, NV 89145

 (Address of principal executive offices)

(702) 726-6820

 (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 x

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

Large accelerated filer ¨	Accelerated filer ¨	Non-accelerated filer ¨	Smaller reporting company x
	(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 May 21, 2012 was 285,942,152.

INDEX

		Page
		Number
PART I - FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS	3
	Balance Sheet as at March 31, 2012 (unaudited) and December 31, 2011 (audited)	5
	Statement of Operations for the three months periods ended March 31, 2012 and 2011 and for the period March 14, 2007 (Date of Inception) to March 31, 2012 (unaudited)	6
	Statement of Cash Flows for the three month periods ended March 31, 2012 and 2011 and for the period March 14, 2007 (Date of Inception) to March 31, 2012 (unaudited)	7
	Statement of Stockholders’ Equity (Deficit) for the period March 14, 2007 (Date of Inception) to March 31, 2012 (unaudited)	8
	Notes to the Financial Statements	9-21
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	22
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS	25
ITEM 4.	CONTROLS AND PROCEDURES	25
PART II - OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	25
ITEM 1A.	RISK FACTORS	26
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	26
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	26
ITEM 4.	MINE SAFETY DISCLOSURE	26
ITEM 5.	OTHER INFORMATION	26
ITEM 6.	EXHIBITS	26
SIGNATURES		27

2

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The accompanying balance sheets of Thwapr, Inc. at March 31, 2012 (with comparative figures as at December 31, 2011) and the statement of operations for the three months ended March 31, 2012 and 2011 and for the period from March 14, 2007 (date of inception) to March 31, 2012, the statement of shareholders’ equity (deficit) for the period from March 14, 2007 (date of inception) to March 31, 2012, and the statement of cash flows for the three months ended March 31, 2012 and 2011 and for the period from March 14, 2007 (date of inception) to March 31, 2012 have been prepared by the Company’s management in conformity with accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature.

Operating results for the quarter ended March 31, 2012 are not necessarily indicative of the results that can be expected for the year ending December 31, 2012. These financial statements should be read in conjunction with the financial statements and notes for the years ended December 31, 2011 and 2010, included in Form 10-K filed with the Securities and Exchange Commission on April 16, 2012.

3

THWAPR, INC.

CONTENTS

	PAGE
BALANCE SHEETS	5
STATEMENTS OF OPERATIONS	6
STATEMENTS OF CASH FLOWS	7
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)	8
NOTES TO FINANCIAL STATEMENTS	9-21

4

THWAPR, INC.

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS

	(Unaudited)
	March 31,			December 31,
	2012			2011
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	47,324		$	8,083
Accounts Receivable, net of allowance for doubtful accounts of $0 at March 31, 2012 and December 31, 2011		10,000			17,788
Prepaid Expenses		4,338			17,213
TOTAL CURRENT ASSETS		61,662			43,084
PROPERTY AND EQUIPMENT, NET		9,082			12,409
TOTAL ASSETS	$	70,744		$	55,493
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	195,111		$	184,940
Deferred Revenue		10,208			5,833
Convertible notes due to stockholders		-			1,339,334
Amount payable to stockholders		625,172			734,798
TOTAL CURRENT LIABILITIES		830,491			2,264,905
LONG-TERM LIABILITIES
Convertible note, less discount of $13,542 and $14,792 at March 31, 2012 and December 31, 2011, respectively		11,458			10,208
Secured Convertible notes due to stockholders less discount of $1,181,050 and $0 at March 31, 2012 and December 31, 2011, respectively		579,664			-
Derivative liability		948,093			1,701
TOTAL LONG-TERM LIABILITIES		1,539,215			11,909
COMMITMENTS AND CONTINGENCIES, Note 5
STOCKHOLDERS' DEFICIT:
Convertible Preferred, $.0001 par value; 50,000,000 shares authorized; 46,961,636 and -0- shares issued and outstanding		4,706			4,706
Common stock, $.0003 par value; 300,000,000 shares authorized; 59,049,129 and 58,094,129 shares issued and outstanding at March 31, 2012 and December 31, 2011, respectively		4,011			3,711
Additional paid-in capital		21,092,066			20,474,730
Deficit accumulated during the development stage		(23,399,745	)		(22,704,468	)
TOTAL STOCKHOLDERS' DEFICIT		(2,298,962	)		(2,221,321	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	70,744		$	55,493

5

THWAPR, INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF OPERATIONS (Unaudited)

FOR THE THREE MONTHS ENDED MARCH 31, 2012 AND 2011 AND THE PERIOD FROM

MARCH 14, 2007 (DATE OF INCEPTION) THROUGH MARCH 31, 2012

							March 14, 2007
	For the Three Months Ended						(Date of Inception)
	March 31,						through
	2012			2011			March 31, 2012
REVENUE	$	16,975		$	508		$	54,805
COST OF SALES		40,048			47,977			254,157
GROSS LOSS		(23,073	)		(47,469	)		(199,352	)
OPERATING EXPENSES:
Product Development		73,301			1,027,674			9,972,999
General and Administrative Expenses		812,215			1,335,156			13,317,720
								-
TOTAL OPERATING EXPENSES		885,516			2,362,830			23,290,719
								-
LOSS FROM OPERATIONS		(908,589	)		(2,410,299	)		(23,490,071	)
OTHER INCOME (EXPENSES)
Interest Income		-			-			193
Other Income		-			-			43,198
Change in Derivative Liability		261,980			5,598			287,079
Interest Expense		(48,668	)		(4,693	)		(232,855	)
Other Expense		-			-			(7,289	)
TOTAL OTHER INCOME (EXPENSE)		213,312			905			90,326
NET LOSS	$	(695,277	)	$	(2,409,394	)	$	(23,399,745	)
Basic and diluted (loss) per share	$	(0.01	)	$	(0.05	)
Weighted average shares		59,049,684			52,602,277

6

THWAPR, INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOWS (Unaudited)

FOR THE THREE MONTHS ENDED MARCH 31, 2012 AND 2011 AND THE PERIOD FROM

MARCH 14, 2007 (DATE OF INCEPTION) THROUGH MARCH 31, 2012

							March 14, 2007
	For the Three Months Ended						(Date of Inception)
	March 31,						through
	2012			2011			March 31, 2012
CASH FLOW FROM OPERATING ACTIVITIES
Net loss	$	(695,277	)	$	(2,409,394	)	$	(23,399,745	)
Adjustments to reconcile net loss to net cash used in operating activities:
Forgiveness of Debt		-			-			(43,198	)
Stock based compensation		547,636			1,951,036			15,671,963
Amortization of note discount		28,572			1,250			150,905
Change in Derivative Liability		(261,980	)		(5,598	)		(287,079	)
Depreciation Expense		3,327			3,527			35,657
Loss on Disposal of Fixed Assets		-			-			7,289
(Increase) decrease in:
Accounts Receivable		7,788			(508	)		(10,000	)
Prepaid Expense		12,875			(4,602	)		(4,338	)
Increase (decrease) in:
Accounts payable and accrued expenses		10,313			26,728			299,017
Deferred Revenue		4,375			-			10,208
Accounts payable to stockholders		256,612			144,795			991,410
NET CASH USED IN OPERATING ACTIVITIES		(85,759	)		(292,766	)		(6,577,911	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		-			-			(52,029	)
NET CASH USED IN INVESTING ACTIVITIES		-			-			(52,029	)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from convertible notes		-			-			25,000
Proceeds from convertible notes due to stockholders		-			277,500			1,384,068
Proceeds from secured convertible notes due to stockholders		125,000			-			125,000
Proceeds from sale of common stock, net		-			50,200			5,143,196
NET CASH PROVIDED BY FINANCING ACTIVITIES		125,000			327,700			6,677,264
NET INCREASE (DECREASE) IN CASH		39,241			34,934			47,324
CASH AT BEGINNING OF THE PERIOD		8,083			5,637			-
CASH AT END OF PERIOD	$	47,324		$	40,571		$	47,324
SUPPLEMENTARY DISCLOSURE:
Income taxes paid in cash	$	-		$	-		$	2,660
Issuance of shares as payment of accounts payable	$	70,000		$	-		$	70,000
Convertible notes issued to stockholder as payment of accounts payable	$	296,238		$	-		$	296,238

7

THWAPR, INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)

FOR THE PERIOD MARCH 14, 2007 (DATE OF INCEPTION)

THROUGH MARCH 31, 2012

													Additional
	Convertible Preferred Stock						Common Stock						Paid in			Accumulated
		Shares			Amount			Shares			Amount			Capital			Deficit			Total
BALANCE, MARCH 14, 2007 (Date of Inception)		-		$	-			-		$	-		$	-		$	-		$	-
Issuance of stock to founders		-			-			12,857,136			429			(429	)		-			-
Issuance of stock for cash ($.023 per share)		-			-			30,000,000			1,000			770,676			-			771,676
Net loss		-			-			-			-			-			(454,014	)		(454,014	)
																				-
BALANCE, DECEMBER 31, 2007		-			-			42,857,136			1,429			770,247			(454,014	)		317,662
Issuance for cash, ($0.33 per share)		-			-			1,350,000			45			448,755			-			448,800
Net loss		-			-			-			-			-			(891,552	)		(891,552	)
																				-
BALANCE, DECEMBER 31, 2008		-			-			44,207,136			1,474			1,219,002			(1,345,566	)		(125,090	)
Issuance for cash ($0.33 per share)		-			-			2,980,500			99			993,401			-			993,500
Conversion of common stock to preferred stock		15,729,212			1,573			(47,187,636	)		(1,573	)		-			-			-
Issuance for cash ($0.41 per share)		-			-			2,133,600			71			869,489			-			869,560
Amortization of warrants		-			-			-			-			612,298			-			612,298
Net loss		-			-			-			-			-			(2,475,330	)		(2,475,330	)
																				-
BALANCE, DECEMBER 31, 2009		15,729,212			1,573			2,133,600			71			3,694,190			(3,820,896	)		(125,062	)
Conversion of preferred stock to common		(15,729,212	)		(1,573	)		424,688,724			14,156			(12,583	)		-			-
Shares added due to reverse merger		-			-			43,829,262			1,461			(1,461	)		-			-
Issuance for cash ($0.42 per share)								1,207,200			40			495,460						495,500
Issuance for cash ($0.42 per share)		-			-			750,000			75			312,425			-			312,500
Issuance for cash ($0.73 per share)		-			-			684,933			68			469,932			-			470,000
Issuance for cash ($0.83 per share)		-			-			910,800			92			731,369			-			731,461
Conversion of common stock to preferred		47,061,636			4,706			(423,554,724	)		(14,118	)		9,412			-			-
Amortization of warrants		-			-			-			-			7,113,192			-			7,113,192
Amortization of preferred stock issuance		-			-			-			-			2,468,749			-			2,468,749
Stocks issued for services		-			-			1,386,000			138			637,861			-			637,999
Net loss		-			-			-			-			-			(12,681,777	)		(12,681,777	)
BALANCE, DECEMBER 31, 2010		47,061,636			4,706			52,035,795			1,983			15,918,546			(16,502,673	)		(577,438	)
Issuance for cash ($0.06 per share)								833,334			280			49,920			-			50,200
Amortization of stock options														764,938						764,938
Amortization of warrants		-			-			-			-			1,022,368			-			1,022,368
Amortization of preferred stock issuance for services		-			-			-			-			1,549,166			-			1,549,166
Common stock issued for services		-			-			3,500,000			930			829,795			-			830,725
Amortization of common stock issuance for services		-			-			-			-			124,890			-			124,890
Beneficial conversion feature		-			-			-			-			112,125			-			112,125
Conversion of notes into shares		-			-			1,725,000			518			102,982			-			103,500
Preferred stock forfeited		(100,000	)		-			-			-			-			-			-
Net loss		-			-			-			-			-			(6,201,795	)		(6,201,795	)
BALANCE, DECEMBER 31, 2011		46,961,636			4,706			58,094,129			3,711			20,474,730			(22,704,468	)		(2,221,321	)
Issuance of stock for as payment of payables ($0.07 per share)		-			-			1,000,000			300			69,700			-			70,000
Amortization of stock options		-			-			-			-			463,665			-			463,665
Amortization of warrants		-			-			-			-			67,555			-			67,555
Amortization of common stock issued for services		-			-			-			-			16,416			-			16,416
Net loss		-			-			-			-			-			(695,277	)		(695,277	)
BALANCE, MARCH 31, 2012		46,961,636		$	4,706			59,094,129		$	4,011		$	21,092,066		$	(23,399,745	)	$	(2,298,962	)

The above shares of common stock retroactively reflect a 3-for-1 stock split in February 2011.

8

Notes to Financial Statements

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 and from Websites to 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 users and brands 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 research and 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 research and 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 revenue producing business operations. All of the operating results and cash flows reported in the accompanying financial statements from March 14, 2007 through March 31, 2012 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.  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 was to provide.  Second, the Company has spent significant time and resources testing the software against a variety of cell phone models, platforms and carriers.

Restructuring Plan

On March 23, 2012 the Company announced a restructuring plan as part of the Company’s efforts to achieve liquidity, avoid defaults under indebtedness that was due and payable, and satisfy approximately $740,000 of additional debt, accounts payable and accrued expense obligations owed to certain consultants, employees and vendors (the “Payables”), in addition to seeking to raise additional working capital, the Company’s management has commenced to implement a debt restructuring plan (the “Restructuring Plan”).

As an initial step, Messrs. Kevir Kang, an individual who previously loaned the Company an aggregate of $1,282,320, Ron Singh, the President and CEO of the Company, and Barry Hall, Chief Financial Officer of the Company, who previously advanced approximately $117,463 to the Company, each agreed to restructure the repayment of an aggregate of $1,664,847 (inclusive of accrued interest at 6% per annum) of cash loans and advances made to the Company. Under the terms of the Restructuring Plan, each of these creditors were issued 6% convertible secured promissory notes payable as to principal and accrued interest due on June 30, 2013 (the “New Notes”), in lieu of existing indebtedness, including the $200,000 line of credit payable on demand. The New Notes are secured as to repayment by a first priority lien on all of the Company’s assets and are convertible at any time by the holder(s) into shares of the Company’s common stock, $0.0003 par value per share (the “Common Stock”) at an initial conversion price of $0.015 per share, subject to certain anti-dilution and other adjustments.

9

In addition to the issuance of the New Notes, the Company’s management is seeking to negotiate separate settlement and deferred payment arrangements with certain of its creditors holding Company Payables, including Bruce Goldstein, the former President and CEO of the Company. In some cases, the offered such creditors payment of 80% of their payables in the form of 6% Company notes payable on March 31, 2013, but subject to mandatory prepayment out of the net proceeds, if any, received by the Company in connection with any one or more future financings, to the extent of such net proceeds that are in excess of $1.5 million. The balance of such payment would be in the form of restricted shares of Company Common Stock which the Company proposes to issue at $0.015 per share.

Pursuant to private placements of Common Stock consummated in 2009 and 2010, the Company received a total of $2,963,500 in connection with the issuance and sale to 15 investors (none of whom is or was a direct or indirect officer, director or affiliate of the Company) of an aggregate of 5,686,532 shares of Common Stock at prices ranging from $0.417 to $0.833 per share. The Company issued to such investors 191,767,635 additional shares at a value of $0.015 per share on April 23, 2012.

Going Concern

The Company has sustained operating losses since its inception, continues to use cash in its operations 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. Should management fail to raise funds or generate sufficient revenue, the company may need to curtail its operations.

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.

Property & Equipment

Property and Equipment are stated at cost. Depreciation is provided for using the straight-line method over the estimated useful lives of the assets for 3 to 5 years.

10

Revenue Recognition

Revenue currently consists of fees for usage of our technology including set up fees and fees for 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. Set up fees are recognized over the contract period. 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 March 31, 2012 for assets and liabilities measured at fair value on a recurring basis:

	Level 1		Level 2		Level 3
Cash and cash equivalents	$	47,324	$	-	$	-
Derivative liability (conversion feature and warrants)	$	-	$	-	$	948,093

The following table summarizes fair value measurements by level at December 31, 2011 for assets and liabilities measured at fair value on a recurring basis:

	Level 1		Level 2		Level 3
Cash and cash equivalents	$	8,083	$	-	$	-
Derivative liability (conversion feature and warrants)	$	-	$	-	$	1,701

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 three months ended March 31, 2012.

	Level 3 Liabilities
	Derivative Liability
Balance as of December 31, 2011	$	1,701
Creation of Derivative		1,208,372
Changes in value of Derivative Liability		(261,980	)
Balance as of March 31, 2012	$	948,093

11

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 1.25 to 2.75 years; risk-free interest rate of 0.3% to 1.0% dividend yield of 0%; and expected volatility of 200%.

Valuation of Derivative Instruments

ASC 815-40 (formerly SFAS No. 133 “Accounting for Derivative Instruments and Hedging Activities”) requires that embedded derivative instruments be bifurcated and assessed, along with free-standing derivative instruments such as warrants, on their issuance date and in accordance with ASC 815-40-15 to determine whether they should be considered a derivative liability and measured at their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option pricing formula. At March 31, 2012, the Company adjusted its derivative liability to its fair value, and reflected the decrease of $261,980, which represents the gain on change in derivative.

Product Development

Product development costs are expensed as incurred.  These costs primarily include the costs associated with the research and development and testing of video and picture sharing technology.  During the three months ended March 31, 2012 and 2011, product development costs amounted to $73,301 and $1,027,674, respectively.  

Concentrations

The Company has one major customer that individually exceeded 10% of total revenue. Revenue from this one major customer accounted for 74% of total revenue for the three month ended March 31, 2012. Revenue from one customer accounted for 100% of total revenue for the three months ended March 31, 2011. Two customers, one a major customer, accounted for 90% of total accounts receivable as of March 31, 2012, and one customer accounted for 100% of total accounts receivable at March 31, 2011.

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.

Concentration of Risk

The Company maintains its cash at a financial institution which may, at times, exceed insured limits.

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Recently Issued or Newly Adopted Accounting Standards

In May 2011, the Financial Accounting Standards Board (“FASB”) issued ASU 2011-04, Fair Value Measurement (“ASU 2011-04”), which amended ASC 820, Fair Value Measurements (“ASC 820”), providing a consistent definition and measurement of fair value, as well as similar disclosure requirements between U.S. GAAP and International Financial Reporting Standards. ASU 2011-04 changes certain fair value measurement principles, clarifies the application of existing fair value measurement and expands the disclosure requirements. ASU 2011-04 was effective for us beginning January 1, 2012. The adoption of ASU 2011-04 did not have a material effect on our financial statements or disclosures.

In June 2011, the FASB issued ASU 2011-05, Presentation of Comprehensive Income (“ASU 2011-05”). ASU 2011-05 requires the presentation of comprehensive income in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements. ASU 2011-05 was effective for us beginning January 1, 2012. The adoption of ASU 2011-05 did not have a material effect on our financial statements or disclosures.

In September 2011, the FASB issued ASU 2011-08, Testing Goodwill for Impairment (“ASU 2011-08”), which amends the guidance in ASC 350-20, Intangibles—Goodwill and Other – Goodwill. ASU 2011-08 provides entities with the option of performing a qualitative assessment before calculating the fair value of the reporting unit when testing goodwill for impairment. If the fair value of the reporting unit is determined, based on qualitative factors, to be more likely than not less than the carrying amount of the reporting unit, the entities are required to perform a two-step goodwill impairment test. ASU 2011-08 was effective for us beginning January 1, 2012. The adoption of ASU 2011-08 did not have a material effect on our financial statements or disclosures.

In December 2011, the FASB issued ASU No. 2011-11, "Disclosures about Offsetting Assets and Liabilities." The amendments in this update require enhanced disclosures around financial instruments and derivative instruments that are either (1) offset in accordance with either ASC 210-20-45 or ASC 815-10-45 or (2) subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in accordance with either ASC 210-20-45 or ASC 815-10-45. An entity should provide the disclosures required by those amendments retrospectively for all comparative periods presented. The amendments are effective during interim and annual periods beginning after December 31, 2012. The Company does not expect this guidance to have any impact on its financial position, results of operations or cash flows.

3. PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

	March 31,			December 31,
	2012			2011
Computer equipment	$	41,663		$	41,663
Furniture and fixtures		-			-
Leasehold Improvements		-			-
		41,663			41,663
Accumulated depreciation		(32,581	)		(29,254	)
Property and equipment, net	$	9,082		$	12,409

Depreciation expense for the three months ended March 31, 2012 and 2011 was $3,327 and $3,527, respectively.

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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 Vice President Product. Amounts paid to these stockholders were in lieu of salaries and represented compensation for services rendered as executives, directors and the attorney of the Company. During the three months ended March 31, 2012 and 2011 the amounts incurred to these stockholders were $133,750 and $165,000, respectively. A balance of $283,450 remained unpaid at March 31, 2012.

Line of Credit and Restructuring Purchase Agreement

On February 23, 2012, the Company entered into a line of credit and restructuring purchase agreement (the “Agreement”) with Ron Singh the President and CEO of the Company.

Under the terms of the Agreement, Mr. Singh agreed that he or his affiliates would make available to the Company a maximum $200,000 line of credit to be funded in installments over the next four months. The amount of the advances under the line of credit would be used for working capital and to pay or reduce certain of the accounts payable and accrued expenses of the Company deemed to be critical by an executive committee of the board of directors, consisting of Mr. Singh and Barry Hall, the Chief Financial Officer.

Amounts funded under the line of credit are secured by a 6% convertible secured promissory note payable as to principal and accrued interest on June 30, 2013. The note is secured as to repayment by a first priority lien on all of the Company’s assets and are convertible at any time by the holder into shares of the Company’s common stock, $0.0003 par value per share (the “Common Stock”) at an initial conversion price of $0.015 per share, subject to certain anti-dilution and other adjustments.

5. COMMITMENTS AND CONTINGENCIES

Lease Commitments

The company leases an office in Las Vegas, Nevada, which expires in July of 2012. Monthly rent is $1,169, however, according to the terms of the lease agreement, no rent is payable for June or July.

Legal Proceeding

On March 27, 2012, Bruce Goldstein and Universal Management, Inc. ("Universal") filed a summons and complaint against the Company in the Supreme Court of the State of New York County of New York, alleging . This suit is based on an alleged breach of contract between Mr. Goldstein and the Company. Mr. Goldstein owns Universal, through which the Company engaged Goldstein to act as a consultant and later President and CEO of the Company. Mr. Goldstein seeks damages in excess of $225,000. The Company and Mr. Goldstein are in disagreement regarding the amounts owed him for past compensation and the Company believes that only $121,759 is owed to Mr. Goldstein ($160,759 at December 31, 2011) and it has been recorded in the books and record of the Company. The Company also believes that it has substantial defense to Mr. Goldstein’s claims and intends to defend the suit vigorously.

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 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.

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At March 31, 2012, the Company has net operating loss carryforwards available for federal tax purposes, which expire from 2028 to 2031.  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 2031. The amounts of operating loss carryforwards are not determined. The Company’s net operating loss carryforwards are subject to IRS examination until they are fully utilized and such tax years are closed.  

At March 31, 2012 and December 31, 2011, 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, 2011, the Company files income tax returns with the Internal Revenue Service (“IRS”).  For jurisdictions in which tax filings are made, the Company is subject to income tax examination for all fiscal years since inception. The Company’s net operating loss carryforwards are subject to IRS examination until they are fully utilized and such tax years are closed.   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.

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. On March 29, 2012, as part of a restructuring plan, the company issued a note of $60,000 to the holder of the notes. The new note plus accrued interest of $7,178.89 is convertible to the company’s $0.0003 par value common stock at $0.01 per share subject to certain adjustment at the sole discretion of the note holder. The note matures on December 31, 2013 and does not bear interest.

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 notes along with accrued interest are fully due and payable one year from the date of issue in either restricted shares of common stock at a price agreeable to both parties at the time of conversion or cash. On March 20, 2012, as part of a restructuring plan, the Company issued the note holder a 6% convertible secured promissory note payable as to principal and accrued interest due on June 30, 2013 The note is secured as to repayment by a first priority lien on all of the Company’s assets and are convertible at any time by the holder into shares of the Company’s common stock, $0.0003 par value per share (the “Common Stock”) at an initial conversion price of $0.015 per share, subject to certain anti-dilution and other adjustments.

During the three months ended June 30, 2011, the Company issued three separate notes totaling $550,000 to two stockholders. 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 $0.06 per share.  The notes along with accrued interest are fully due and payable six months from the date of issue. The conversion feature is contingent upon the Company raising $4,000,000. The Company became in default on certain notes issued in the second quarter of 2011. One note holder elected to convert two notes totaling $100,000 to common stock in accordance with the terms of the notes. For the remaining notes, on March 20, 2012, as part of a restructuring plan, the Company issued the note holder a 6% convertible secured promissory note payable as to principal and accrued interest due on June 30, 2013 The note is secured as to repayment by a first priority lien on all of the Company’s assets and are convertible at any time by the holder into shares of the Company’s common stock, $0.0003 par value per share (the “Common Stock”) at an initial conversion price of $0.015 per share, subject to certain anti-dilution and other adjustments.

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During the three months ended September 30, 2011, the Company issued five separate notes totaling $318,500 to a stockholder. 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 $0.06 per share.  The notes along with accrued interest are fully due and payable six months from the date of issue. The conversion feature is contingent upon the Company raising $4,000,000. On March 20, 2012, as part of a restructuring plan, the Company issued the note holder a 6% convertible secured promissory note payable as to principal and accrued interest due on June 30, 2013 The note is secured as to repayment by a first priority lien on all of the Company’s assets and are convertible at any time by the holder into shares of the Company’s common stock, $0.0003 par value per share (the “Common Stock”) at an initial conversion price of $0.015 per share, subject to certain anti-dilution and other adjustments.

During the three months ended December 31, 2011, the Company issued two separate notes totaling $95,000 to a stockholder. The notes bear interest at 7% per annum and are convertible to common stock at a 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 six months from the date of issue. The conversion feature is contingent on the Company raising $4,000,000 in debt or equity financing. On March 20, 2012, as part of a restructuring plan, the Company issued the note holder a 6% convertible secured promissory note payable as to principal and accrued interest due on June 30, 2013 The note is secured as to repayment by a first priority lien on all of the Company’s assets and are convertible at any time by the holder into shares of the Company’s common stock, $0.0003 par value per share (the “Common Stock”) at an initial conversion price of $0.015 per share, subject to certain anti-dilution and other adjustments.

On October 28, November 4, November 9, and November 16, 2011 the Company issued four separate notes totaling $65,568. These notes were convertible contingent upon raising $4.0 million. In the first quarter of 2012, these notes were amended and they are now convertible to the company’s $0.0003 par value common stock at $0.01 per share subject to certain adjustment at the sole discretion of the note holder. The notes mature on December 31, 2013 and do not bear interest.

On March 27, 2012 the Company issued a note for $35,000 in exchange for services. The note is convertible to the company’s $0.0003 par value common stock at $0.015 per share subject to certain adjustment at the sole discretion of the note holder. The note matures on December 31, 2013 and does not bear interest.

All convertible notes to stockholders mature in 2013.

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 price at the price stock upon conversion.  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 March 31, 2012 and December 31, 2011 the Company had issued Notes aggregating $25,000.

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.

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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 (after the stock split and 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 March 31, 2012, 2,558,334 shares were sold under this offering.

On January 5, 2012 the Company issued 1,000,000 registered shares of common stock to Mr. Goldstein, the Company’s CEO at that time in exchange for the forgiveness of $70,000 of accounts payable owed to Mr. Goldstein.

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.

On April 26, 2012, the board of directors of Thwapr, Inc. (the “Company”), with the consent of the holder of approximately 72% of our outstanding shares of Series A convertible preferred stock (the “Series A Preferred Stock”), amended and restated the certificate of designation of such Series A Preferred Stock (the "Designation").  Based on the amended sections,

· until July 18, 2015, none of the shares of Series A Preferred Stock or shares of common stock into which the Series A Preferred Stock may be converted, can be sold or otherwise transferred by the holder or any of such holder’s affiliates (other than to such affiliates or immediate family members or trusts established for the benefit of such family members);

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· each share of Series A Preferred Stock shall vote, together with our outstanding common stock, at any meeting of shareholders or on any other matter requiring shareholder consent, on the basis of one vote per share of Series A Preferred Stock; provided, that upon the filing of an amendment to the Articles of Incorporation of the Corporation permitting the board of directors to fix the number of votes to each outstanding share of Series A Preferred Stock shall be entitled to cast, each share of Series A Preferred Stock shall have a number of votes equal to the number of shares of Common Stock then issuable upon conversion of each share of Series A preferred stock; and,

· a majority of the outstanding shares of Series A preferred stock will be able to amend the Designation.

The amended and restated Designation shall be effective upon filing it with Nevada's Secretary of State, which the Company intends to do immediately.

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 warrants for 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 vested to the consultants quarterly over the next three quarters so long as the consultants remained associated with the Company.

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For the three months ended March 31, 2012 and 2011, compensation expense related to the issuance of these shares was $0 and $953,332, 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:	2.01%  - 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.  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, 2011		36,176,340		$	0.36
Granted		-			-
Expried/cancelled		(840,000	)		0.56
Exercised		-			-
Outstanding at March 31, 2012		35,336,340		$	0.36
Exercisable at March 31, 2012		34,711,339		$	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		7.00	$	0.33	$	0.33		29,885,010		7.00	$	0.33
$	0.42		4,498,830		3.04	$	0.42	$	0.42		3,686,328		3.01	$	0.42
$	1.78		307,500		3.67	$	1.78	$	1.78		307,500		3.67	$	1.78
$	0.32		645,000		3.83	$	0.32	$	0.32		645,000		3.83	$	0.32

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

Compensation expenses related to outstanding warrants for the three months ended March 31, 2012 and 2011 was $67,555 and $385,045, respectively.   

Stock Option Plan

In October 2011 the Board of Directors adopted the Thwapr, Inc. Equity Incentive Plan (the “Plan”) under which up to 72,000,000 million of common stock have been reserved for issuance. As of March 31, 2012 and December 31, 2011, 20,392,500 and 36,000,000 options, respectively, to purchase stock at $0.13 per share were outstanding and 6,960,000 options were exercisable.

The following table summarizes the stock option transactions:

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TRANSATIONS IN FISCAL YEAR 2012

	Number of Common Shares			Weighted-Average Excercise Price		Weighted- Average Remaining Contractual Life
Outstanding at December 31, 2011		36,000,000		$	0.13		4.81
Granted		-			-		-
Expried/cancelled		(15,637,500	)		0.13		4.56
Exercised		-			-		-
Outstanding at March 31, 2012		20,362,500		$	0.13		4.56
Exercisable at March 31, 2012		6,930,000		$	0.13		4.56

For the trhee months ended March 31, 2012 and 2011, compensation expense related to the issuance of these shares was $463,665 and $0, 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:	0.91% - 1.04%
Expected Life:	3 – 3.5 years
Expected Volatility:	200%
Dividend Yield:	0%

10. SUBSEQUENT EVENTS

Restructuring Plan

Pursuant to private placements of Common Stock consummated in 2009 and 2010, the Company received a total of $2,963,500 in connection with the issuance and sale to 15 investors (none of whom is or was a direct or indirect officer, director or affiliate of the Company) of an aggregate of 5,686,532 shares of Common Stock at prices ranging from $0.417 to $0.833 per share. On April 23, 2012 the Company issued to such investors additional shares at a value of $0.015 per share in the second quarter of 2012. The Company intends to issue as many as 191,880,135 additional shares of Common Stock to such investors.

Preferred Stock

On April 26, 2012, the board of directors of Thwapr, Inc. (the “Company”), with the consent of the holder of approximately 72% of our outstanding shares of Series A convertible preferred stock (the “Series A Preferred Stock”), amended and restated the certificate of designation of such Series A Preferred Stock (the "Designation").  Based on the amended sections,

· until July 18, 2015, none of the shares of Series A Preferred Stock or shares of common stock into which the Series A Preferred Stock may be converted, can be sold or otherwise transferred by the holder or any of such holder’s affiliates (other than to such affiliates or immediate family members or trusts established for the benefit of such family members);

· each share of Series A Preferred Stock shall vote, together with our outstanding common stock, at any meeting of shareholders or on any other matter requiring shareholder consent, on the basis of one vote per share of Series A Preferred Stock; provided, that upon the filing of an amendment to the Articles of Incorporation of the Corporation permitting the board of directors to fix the number of votes to each outstanding share of Series A Preferred Stock shall be entitled to cast, each share of Series A Preferred Stock shall have a number of votes equal to the number of shares of Common Stock then issuable upon conversion of each share of Series A preferred stock; and,

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· a majority of the outstanding shares of Series A preferred stock will be able to amend the Designation.

The amended and restated Designation shall be effective upon filing it with Nevada's Secretary of State, which the Company intends to do immediately.

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

The following discussion should be read in conjunction with the information contained in our financial statements and the notes thereto, which form an integral part of the financial statements, which are attached hereto.

The financial statements mentioned above have been prepared in conformity with accounting principles generally accepted in the United States of America and are stated in United States dollars.

Our Form 10-Q includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words such as: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this Form 10-Q. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.

Overview

Thwapr, Inc. (“Thwapr,” the “Company,” “we,” “us,” or “our”) is a technology company that develops systems, applications and software that allow users and brands to share pictures and video to mobile phone users regardless of device, platform or carrier. Our technology and products enable users to easily capture and share pictures and videos on their phones with other mobile and desktop users and into social networks. We have not generated any revenue to date. However, we plan to derive revenues from banner and video advertising on our mobile and desktop websites and from mobile media messaging fees from brand sponsors and to sell premium services to users and brands via subscriptions and other fees.

Background and Corporate History

We were formed as Seaospa, Inc. in Nevada on December 2, 2007 for the purpose of being engaged in the marketing of skin care, hair care and body treatment products. We did not have operations prior to the share exchange agreement described below.

On March 29, 2010, we closed a voluntary share exchange transaction (the “Exchange Transaction”) with Thwapr, Inc., a Delaware corporation (“Thwapr DE”), pursuant to a Share Exchange Agreement by and among us, certain of our significant stockholders, Thwapr DE and the stockholders of Thwapr DE (the “Thwapr DE Stockholders”), and we conducted a 3-for-1 forward stock split of all of our outstanding and authorized shares of common stock (the “Stock Split”). As a result of the Exchange Transaction, the Thwapr DE Stockholders acquired approximately 90% of our issued and outstanding common stock, Thwapr DE became our wholly-owned subsidiary, and we acquired the business and operations of Thwapr DE.

At the closing of the Exchange Transaction, we issued 142,676,508 shares of our common stock and warrants to acquire 12,181,363 shares of our common stock to the Thwapr DE Stockholders in exchange for 100% of the issued and outstanding capital stock of Thwapr DE. Immediately prior to the Exchange Transaction, we had 14,609,754 shares of common stock issued and outstanding, subsequent to the Stock Split. Immediately after the Exchange Transaction, we 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 we have 10,000,000 registered users on such date, or (ii) upon a change of control. Additionally, of the warrants outstanding, 10,950,003 shares of the underlying securities cannot be sold or traded (i) until June 9, 2012, if we have 10,000,000 registered users on such date, or (ii) upon a change of control.

On April 21, 2010, we changed our name to “Thwapr, Inc.” from “Seaospa, Inc.” by amending our Articles of Incorporation and merging our wholly-owned subsidiary, Thwapr DE into us, with us surviving.

We recently launched our service but we do not anticipate generating any meaningful revenues until such time that a significant number of users and brands have signed up for and are using our service. During the remainder of 2012, we expect to continue to enhance our service offering with an emphasis on allowing brands and content providers to use Thwapr to promulgate rich media to their customers. During the first fiscal quarter of 2012 we actively marketed and sold our product offering to our target market in order to generate revenues

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CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in conformity with United States generally accepted accounting principles requires management of our company to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

Our discussion and analysis of our financial condition and results of operations, including the discussion on liquidity and capital resources, are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we re-evaluate our estimates and judgments. We believe certain critical accounting policies affect our more significant judgments and estimates used in the preparation of our financial statements. A description of our significant accounting policies is set forth in the notes to our audited financial statements for the year ended December 31, 2011, included in our Current Report on Form 10-K, as filed with the SEC on April 16, 2012. As of, and for the three months ended March 31, 2012, there have been no material changes or updates to our critical accounting policies.

Results of Operations

The following discussion of the financial condition, results of operations, cash flows and changes in our financial position should be read in conjunction with our audited financial statements and notes thereto for the fiscal year ended December 31, 2011 included in our Current Report on Form 10-K filed on April 16, 2012.

Comparison of Three Month Periods Ended March 31, 2012 and March 31, 2011

The following table sets forth the results of our operations for the periods indicated:

	Three months ended March 31,
	2012			2011
Sales	$	16,975		$	508
Gross loss		(23,073	)		(47,469	)
Operating expenses:
Product Development		73,301			1,027,674
General and Administrative		812,215			1,335,156
Loss from operations		(908,589	)		(2,410,299	)
Net loss	$	(695,277	)	$	(2,409,394	)

Sales and Gross Loss

Sales for the three months ended March 31, 2012 and 2011 were $16,975 and $508, respectively. Sales increased in the three months ended March 31, 2012 by $16,467 as the result of the addition of three new customers in the fourth quarter of 2011. Gross loss for the three months ended March 31, 2012 was $23,073 versus a gross loss of $47,469 in the same quarter in 2011 as a result of higher revenue and lower cost of sales. The decrease in cost of sales was the result of lower messaging transcoding fees partially offset by higher equipment rental costs.

Product Development Expenses

Product Development Expenses for the three months ended March 31, 2012 decreased 92.9% from $1,027,674 for the same period in 2011 to $73,301 in 2012. The increase was mainly due to a decrease non-cash compensation expense and a decrease in the amounts paid to independent contractors.

General and Administrative Expense

General and Administrative expenses for the three months ended March 31, 2012 decreased by 39.2% from $1,335,156 for the same period in 2011 to $812,215 in 2012. The primary reasons for the decrease were decreases in non-cash compensation expense, rent expense and telecom expense. Non-cash compensation expense related to general and administrative expense for the three months ended March 31, 2012 and 2011 was $535,127 and $1,084,370, respectively. This decrease was partially offset by an increase in executive compensation expense as a result of amounts accrued for severance payments and also Website development expenses.

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Taxes for the three months ended March 31, 2012 and 2011amounted to $0 and $0, respectively.

Loss from Operations

We had a loss from operation of $908,589 for the three months ended March 31, 2012, compared to an operating loss of $2,410,299 for three months ended March 31, 2011.

Net Loss

Net loss for the three months ended March 31, 2012 was $695,277, a decrease of $1,714,117, or 71.1% from $2,409,394 for the same period in 2011. This decrease in net loss was primarily attributable to the decreases in operating expenses and gross loss described above. Also, contributing to the decrease was an increase of $261,980 for the three months ended March 31, 2012 related to the change in derivative liability compared to a decrease of $5,598 for the same period in 2011. This was partially offset by an increase in interest expense of $43,975 from $4,693 for the three months ended March 31, 2011 to $48,668 for the same period in 2012.

Liquidity and Capital Resources

As of March 31, 2012, we had cash and cash equivalents of $47,324 and current liabilities of $830,491. Our cash needs are primarily for working capital to support our operations and develop our technology, products and services. We presently finance our operations through the private placement of equity and debt securities. As of the date of this report we do not have sufficient cash to launch our products and services, grow our customer base, increase revenue and expand our operations. As we have in the past, we rely on obtaining ongoing investments to maintain our business. We will consider debt or equity offerings or institutional borrowing as potential means of financing, however, there are no assurances that we will be successful or that we will obtain terms that are favorable to us.

On March 23, 2012, we announced a restructuring plan as part of our efforts to achieve liquidity, avoid defaults under indebtedness that was due and payable, and satisfy approximately $740,000 of additional debt, accounts payable and accrued expense obligations owed to certain consultants, employees and vendors (the “Payables”), in addition to seeking to raise additional working capital, our management has commenced to implement a debt restructuring plan (the “Restructuring Plan”).

As an initial step, Messrs. Kevir Kang, an individual who previously loaned the Company an aggregate of $1,282,320, Ron Singh, the President and CEO of the Company, and Barry Hall, Chief Financial Officer of the Company, who previously advanced approximately $117,463 to the Company, each agreed to restructure the repayment of an aggregate of $1,664,847 (inclusive of accrued interest at 6% per annum) of cash loans and advances made to the Company. Under the terms of the Restructuring Plan, each of these creditors were issued 6% convertible secured promissory notes payable as to principal and accrued interest on June 30, 2013 (the “New Notes”), in lieu of existing indebtedness, including the $200,000 line of credit payable on demand. As of March 31, 2012 $125,000 has been drawn against the line of credit. The New Notes are secured as to repayment by a first priority lien on all of the Company’s assets and are convertible at any time by the holder(s) into shares of the Company’s common stock, $0.0003 par value per share (the “Common Stock”) at an initial conversion price of $0.015 per share, subject to certain anti-dilution and other adjustments.

In addition to the issuance of the New Notes, the Company’s management is seeking to negotiate separate settlement and deferred payment arrangements with certain of its creditors holding Company Payables, including Bruce Goldstein, the former President and CEO of the Company. In some cases, the offered such creditors payment of 80% of their payables in the form of 6% Company notes payable on March 31, 2013, but subject to mandatory prepayment out of the net proceeds, if any, received by the Company in connection with any one or more future financings, to the extent of such net proceeds that are in excess of $1.5 million. The balance of such payment would be in the form of restricted shares of Company Common Stock which the Company proposes to issue at $0.015 per share.

Pursuant to private placements of Common Stock consummated in 2009 and 2010, the Company received a total of $2,963,500 in connection with the issuance and sale to 15 investors (none of whom is or was a direct or indirect officer, director or affiliate of the Company) of an aggregate of 5,686,532 shares of Common Stock at prices ranging from $0.417 to $0.833 per share. The Company issued to such investors 191,767,635 additional shares at a value of $0.015 per share on April 23, 2012.

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Net cash used in operating activities for the year ended March 31, 2012 was $85,760 compared with net cash used in operating activities of $292,766 for the same period in 2011. Net cash used in operating activities for year three months ended March 31, 2012 was mainly due to net loss of $695,278 and conversion of secured convertible notes to stockholder to long-term secured convertible notes to stockholders of $1,208,372, partially offset by non-cash expenses that did not affect cash flows of $1,525,927. Net cash used in operating activities for the three months ended March 31, 2011 was primarily due to net loss of $2,409,394 partially offset by non-cash items not affecting cash flows of $1,950,215, an increase of $144,795 in amounts payable to shareholders and an increase of $26,728 of accrued liabilities.

Net cash provided by financing activities was $125,000 for the three months ended March 31, 2012 as a result of funds drawn against a $200,000 credit line, compare to financing activities of $327,700 for the three months ended March 31, 2011 resulting from the proceeds from sales of our common stock and from the issuance of notes to stockholders.

Off-Balance Sheet Arrangements

We have not entered into any other financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder’s equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

As a smaller reporting company, we are not required to provide this information.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures.

It is management's responsibility to establish and maintain adequate internal control over all financial reporting pursuant to Rule 13a-15 under the Securities Exchange Act of 1934 (the "Exchange Act"). Our management, including our chief executive officer and our chief financial officer, have reviewed and evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2012. Following this review and evaluation, management collectively determined that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to management, including our chief executive officer, and our chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no significant changes in the Company's internal controls over financial reporting or in other factors that could significantly affect these internal controls subsequent to the date of their most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On March 27, 2012, Bruce Goldstein and Universal Management, Inc. ("Universal") filed a summons and complaint against the Company in the Supreme Court of the State of New York County of New York, alleging . This suit is based on an alleged breach of contract between Mr. Goldstein and the Company. Mr. Goldstein owns Universal, through which the Company engaged Goldstein to act as a consultant and later President and CEO of the Company. Mr. Goldstein seeks damages in excess of $225,000. The Company believes it has substantial defenses to Mr. Goldstein’s claim and disagrees with the amount of damages. The Company and Mr. Goldstein are in disagreement regarding the amounts owed him for past compensation and the Company believes that only $121,759 is owed to Mr. Goldstein ($160,759 at December 31, 2011) and it has been recorded in the books and record of the Company. The Company also believes that it has substantial defense to Mr. Goldstein’s claims and intends to defend the suit vigorously.

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ITEM 1 A. RISK FACTORS

As a smaller reporting company we are not required to provide this information; however, we direct you to the risk factors in our Annual Report Form 10-K for the year ended December 31, 2011, as filed with the Securities and Exchange Commission on April 16, 2012.

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

On March 20, 2012, as part of the Restructuring Plan described above, Messrs. Kevir Kang, an individual who previously loaned the Company an aggregate of $1,282,320, Ron Singh, the President and CEO of the Company, and Barry Hall, Chief Financial Officer of the Company, who previously advanced approximately $117,463 to the Company, each agreed to restructure the repayment of an aggregate of $1,664,847 (inclusive of accrued interest at 6% per annum) of cash loans and advances made to the Company. Under the terms of the Restructuring Plan, each of these creditors were issued 6% convertible secured promissory notes payable as to principal and accrued interest on June 30, 2013 (the “New Notes”), in lieu of existing indebtedness, including the $200,000 line of credit payable on demand. As of March 31, 2012 $125,000 has been drawn against the line of credit. The New Notes are secured as to repayment by a first priority lien on all of the Company’s assets and are convertible at any time by the holder(s) into shares of the Company’s common stock, $0.0003 par value per share (the “Common Stock”) at an initial conversion price of $0.015 per share, subject to certain anti-dilution and other adjustments. The New Notes were issued pursuant to Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”).

Following the end of the quarter covered by this Report, on April 23, 2012, pursuant to private placements of Common Stock consummated in 2009 and 2010, the Company received a total of $2,963,500 in connection with the issuance and sale to 15 investors (none of whom is or was a direct or indirect officer, director or affiliate of the Company) of an aggregate of 5,686,532 shares of Common Stock at prices ranging from $0.417 to $0.833 per share. The Company issued to such investors 191,767,635 additional shares at a value of $0.015 per share on April 23, 2012; these shares were issued pursuant to the Securities Act.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURE

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibit Number	Description
31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Principal Financial Officer and Principal Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Principal Financial Officer and Principal Accounting Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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SIGNATURES

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

	THWAPR, INC.
Date: May 21, 2012	/s/ Ron Singh
	Name: Ron Singh
	Title: President and Chief Executive Officer
	(Principal Executive Officer)
Date: May 21, 2012	/s/ Barry Hall
	Name: Barry Hall
	Title: Chief Financial Officer
	(Principal Financial Officer and Principal Accounting Officer)

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EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO 18 USC, SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Ron Singh, certify that:

1.           I have reviewed this report on Form 10-Q of Thwapr, Inc.;

2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.           The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)          Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)          Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)          Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)          Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.           The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)          All significant deficiencies and material weakness in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)          Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 21, 2012

/s/ Ron Singh

Ron Singh, President and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO 18 USC, SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Barry Hall, certify that:

1.         I have reviewed this report on Form 10-Q of Thwapr, Inc.;

2.         Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.          Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.          The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)          Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)          Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)          Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)          Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.          The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)          All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)          Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 21, 2012

/s/ Barry Hall

Barry Hall, Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Thwapr, Inc. (the “Company”) on Form 10-Q for the quarterly period ended March 31, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ron Singh, President and Chief Executive Officer of the Company, certify, to the best of my knowledge and belief, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

i. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and

ii. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 21, 2012

/s/ Ron Singh

Name: Ron Singh

Title: President and Chief Executive Officer (Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Thwapr, Inc. (the “Company”) on Form 10-Q for the quarterly period ended March 31, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Barry Hall, Chief Financial Officer of the Company, certify, to the best of my knowledge and belief, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

i. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and

ii. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 21, 2012

/s/ Barry Hall

Name: Barry Hall

Title: Chief Financial Officer

(Principal Financial Officer and Principal Accounting Officer)

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2012

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.

Property & Equipment

Property and Equipment are stated at cost. Depreciation is provided for using the straight-line method over the estimated useful lives of the assets for 3 to 5 years.

Revenue Recognition

Revenue currently consists of fees for usage of our technology including set up fees and fees for 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. Set up fees are recognized over the contract period. 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 March 31, 2012 for assets and liabilities measured at fair value on a recurring basis:

	Level 1		Level 2		Level 3
Cash and cash equivalents	$	47,324	$	-	$	-
Derivative liability (conversion feature and warrants)	$	-	$	-	$	948,093

The following table summarizes fair value measurements by level at December 31, 2011 for assets and liabilities measured at fair value on a recurring basis:

	Level 1		Level 2		Level 3
Cash and cash equivalents	$	8,083	$	-	$	-
Derivative liability (conversion feature and warrants)	$	-	$	-	$	1,701

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 three months ended March 31, 2012.

	Level 3 Liabilities
	Derivative Liability
Balance as of December 31, 2011	$	1,701
Creation of Derivative		1,208,372
Changes in value of Derivative Liability		(261,980	)
Balance as of March 31, 2012	$	948,093

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 1.25 to 2.75 years; risk-free interest rate of 0.3% to 1.0% dividend yield of 0%; and expected volatility of 200%.

Valuation of Derivative Instruments

ASC 815-40 (formerly SFAS No. 133 “Accounting for Derivative Instruments and Hedging Activities”) requires that embedded derivative instruments be bifurcated and assessed, along with free-standing derivative instruments such as warrants, on their issuance date and in accordance with ASC 815-40-15 to determine whether they should be considered a derivative liability and measured at their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option pricing formula. At March 31, 2012, the Company adjusted its derivative liability to its fair value, and reflected the decrease of $261,980, which represents the gain on change in derivative.

Product Development

Product development costs are expensed as incurred.  These costs primarily include the costs associated with the research and development and testing of video and picture sharing technology.  During the three months ended March 31, 2012 and 2011, product development costs amounted to $73,301 and $1,027,674, respectively.  

Concentrations

The Company has one major customer that individually exceeded 10% of total revenue. Revenue from this one major customer accounted for 74% of total revenue for the three month ended March 31, 2012. Revenue from one customer accounted for 100% of total revenue for the three months ended March 31, 2011. Two customers, one a major customer, accounted for 90% of total accounts receivable as of March 31, 2012, and one customer accounted for 100% of total accounts receivable at March 31, 2011.

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.

Concentration of Risk

The Company maintains its cash at a financial institution which may, at times, exceed insured limits.

Recently Issued or Newly Adopted Accounting Standards

In May 2011, the Financial Accounting Standards Board (“FASB”) issued ASU 2011-04, Fair Value Measurement (“ASU 2011-04”), which amended ASC 820, Fair Value Measurements (“ASC 820”), providing a consistent definition and measurement of fair value, as well as similar disclosure requirements between U.S. GAAP and International Financial Reporting Standards. ASU 2011-04 changes certain fair value measurement principles, clarifies the application of existing fair value measurement and expands the disclosure requirements. ASU 2011-04 was effective for us beginning January 1, 2012. The adoption of ASU 2011-04 did not have a material effect on our financial statements or disclosures.

In June 2011, the FASB issued ASU 2011-05, Presentation of Comprehensive Income (“ASU 2011-05”). ASU 2011-05 requires the presentation of comprehensive income in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements. ASU 2011-05 was effective for us beginning January 1, 2012. The adoption of ASU 2011-05 did not have a material effect on our financial statements or disclosures.

In September 2011, the FASB issued ASU 2011-08, Testing Goodwill for Impairment (“ASU 2011-08”), which amends the guidance in ASC 350-20, Intangibles—Goodwill and Other – Goodwill. ASU 2011-08 provides entities with the option of performing a qualitative assessment before calculating the fair value of the reporting unit when testing goodwill for impairment. If the fair value of the reporting unit is determined, based on qualitative factors, to be more likely than not less than the carrying amount of the reporting unit, the entities are required to perform a two-step goodwill impairment test. ASU 2011-08 was effective for us beginning January 1, 2012. The adoption of ASU 2011-08 did not have a material effect on our financial statements or disclosures.

In December 2011, the FASB issued ASU No. 2011-11, "Disclosures about Offsetting Assets and Liabilities." The amendments in this update require enhanced disclosures around financial instruments and derivative instruments that are either (1) offset in accordance with either ASC 210-20-45 or ASC 815-10-45 or (2) subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in accordance with either ASC 210-20-45 or ASC 815-10-45. An entity should provide the disclosures required by those amendments retrospectively for all comparative periods presented. The amendments are effective during interim and annual periods beginning after December 31, 2012. The Company does not expect this guidance to have any impact on its financial position, results of operations or cash flows.

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ORGANIZATION AND BASIS OF PRESENTATION

3 Months Ended

Mar. 31, 2012

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 and from Websites to 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 users and brands 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 research and 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 research and 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 revenue producing business operations. All of the operating results and cash flows reported in the accompanying financial statements from March 14, 2007 through March 31, 2012 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.  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 was to provide.  Second, the Company has spent significant time and resources testing the software against a variety of cell phone models, platforms and carriers.

Restructuring Plan

On March 23, 2012 the Company announced a restructuring plan as part of the Company’s efforts to achieve liquidity, avoid defaults under indebtedness that was due and payable, and satisfy approximately $740,000 of additional debt, accounts payable and accrued expense obligations owed to certain consultants, employees and vendors (the “Payables”), in addition to seeking to raise additional working capital, the Company’s management has commenced to implement a debt restructuring plan (the “Restructuring Plan”).

As an initial step, Messrs. Kevir Kang, an individual who previously loaned the Company an aggregate of $1,282,320, Ron Singh, the President and CEO of the Company, and Barry Hall, Chief Financial Officer of the Company, who previously advanced approximately $117,463 to the Company, each agreed to restructure the repayment of an aggregate of $1,664,847 (inclusive of accrued interest at 6% per annum) of cash loans and advances made to the Company. Under the terms of the Restructuring Plan, each of these creditors were issued 6% convertible secured promissory notes payable as to principal and accrued interest due on June 30, 2013 (the “New Notes”), in lieu of existing indebtedness, including the $200,000 line of credit payable on demand. The New Notes are secured as to repayment by a first priority lien on all of the Company’s assets and are convertible at any time by the holder(s) into shares of the Company’s common stock, $0.0003 par value per share (the “Common Stock”) at an initial conversion price of $0.015 per share, subject to certain anti-dilution and other adjustments.

In addition to the issuance of the New Notes, the Company’s management is seeking to negotiate separate settlement and deferred payment arrangements with certain of its creditors holding Company Payables, including Bruce Goldstein, the former President and CEO of the Company. In some cases, the offered such creditors payment of 80% of their payables in the form of 6% Company notes payable on March 31, 2013, but subject to mandatory prepayment out of the net proceeds, if any, received by the Company in connection with any one or more future financings, to the extent of such net proceeds that are in excess of $1.5 million. The balance of such payment would be in the form of restricted shares of Company Common Stock which the Company proposes to issue at $0.015 per share.

Pursuant to private placements of Common Stock consummated in 2009 and 2010, the Company received a total of $2,963,500 in connection with the issuance and sale to 15 investors (none of whom is or was a direct or indirect officer, director or affiliate of the Company) of an aggregate of 5,686,532 shares of Common Stock at prices ranging from $0.417 to $0.833 per share. The Company issued to such investors 191,767,635 additional shares at a value of $0.015 per share on April 23, 2012.

Going Concern

The Company has sustained operating losses since its inception, continues to use cash in its operations 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. Should management fail to raise funds or generate sufficient revenue, the company may need to curtail its operations.

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BALANCE SHEETS (USD $)	Mar. 31, 2012	Dec. 31, 2011
CURRENT ASSETS
Cash and cash equivalents	$ 47,324	$ 8,083
Accounts Receivable, net of allowance for doubtful accounts of $0 at March 31, 2012 and December 31, 2011	10,000	17,788
Prepaid Expenses	4,338	17,213
TOTAL CURRENT ASSETS	61,662	43,084
PROPERTY AND EQUIPMENT, NET	9,082	12,409
TOTAL ASSETS	70,744	55,493
CURRENT LIABILITIES
Accounts payable and accrued expenses	195,111	184,940
Deferred Revenue	10,208	5,833
Convertible notes due to stockholders		1,339,334
Amount payable to stockholders	625,172	734,798
TOTAL CURRENT LIABILITIES	830,491	2,264,905
LONG-TERM LIABILITIES
Derivative liability	948,093	1,701
TOTAL LONG-TERM LIABILITIES	1,539,215	11,909
COMMITMENTS AND CONTINGENCIES, Note 5
STOCKHOLDERS' DEFICIT:
Convertible Preferred, $.0001 par value; 50,000,000 shares authorized; 46,961,636 and -0- shares issued and outstanding	4,706	4,706
Common stock, $.0003 par value; 300,000,000 shares authorized; 59,049,129 and 58,094,129 shares issued and outstanding at March 31, 2012 and December 31, 2011, respectively	4,011	3,711
Additional paid-in capital	21,092,066	20,474,730
Deficit accumulated during the development stage	(23,399,745)	(22,704,468)
TOTAL STOCKHOLDERS' DEFICIT	(2,298,962)	(2,221,321)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	70,744	55,493
Convertible Notes
LONG-TERM LIABILITIES
Convertible note	11,458	10,208
Secured Convertible Notes
LONG-TERM LIABILITIES
Convertible note	$ 579,664

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STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT) (USD $)	Total	Cash	Common Stock shares	Preferred Stock	Services	Issuance During Period 1st Cash	Issuance During Period 2nd Cash	Issuance During Period 3rd Cash	Issuance During Period 4th Cash	Convertible Preferred Stock	Convertible Preferred Stock Common Stock shares	Convertible Preferred Stock Preferred Stock	Common Stock	Common Stock Founders	Common Stock Cash	Common Stock Common Stock shares	Common Stock Preferred Stock	Common Stock Services	Common Stock Issuance During Period 1st Cash	Common Stock Issuance During Period 2nd Cash	Common Stock Issuance During Period 3rd Cash	Common Stock Issuance During Period 4th Cash	Additional Paid in Capital	Additional Paid in Capital Founders	Additional Paid in Capital Cash	Additional Paid in Capital Common Stock shares	Additional Paid in Capital Preferred Stock	Additional Paid in Capital Services	Additional Paid in Capital Issuance During Period 1st Cash	Additional Paid in Capital Issuance During Period 2nd Cash	Additional Paid in Capital Issuance During Period 3rd Cash	Additional Paid in Capital Issuance During Period 4th Cash	Accumulated Deficit
BEGINNING BALANCE at Mar. 14, 2007
Issuance of stock (in shares)														12,857,136	30,000,000
Issuance of stock		$ 771,676												$ 429	$ 1,000									$ (429)	$ 770,676
Net loss																																	(454,014)
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
Issuance of stock (in shares)															1,350,000
Issuance of stock		448,800													45										448,755
Net loss																																	(891,552)
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
Issuance of stock (in shares)																			2,980,500	2,133,600
Issuance of stock						993,500	869,560												99	71									993,401	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)
Amortization of warrants	612,298																						612,298
Net loss																																	(2,475,330)
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
Shares added due to reverse merger (in shares)													43,829,262
Shares added due to reverse merger													1,461										(1,461)
Issuance of stock (in shares)																		1,386,000	1,207,200	750,000	684,933	910,800
Issuance of stock					637,999	495,500	312,500	470,000	731,461									138	40	75	68	92						637,861	495,460	312,425	469,932	731,369
Conversion of common stock to preferred stock (preferred stock to common) (in shares)											47,061,636	(15,729,212)				(423,554,724)	424,688,724
Conversion of common stock to preferred stock (preferred stock to common)											4,706	(1,573)				(14,118)	14,156									9,412	(12,583)
Amortization of warrants	7,113,192																						7,113,192
Amortization of stock issuance for services				2,468,749																							2,468,749
Net loss	(12,681,777)																																(12,681,777)
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
Issuance of stock (in shares)															833,334			3,500,000
Issuance of stock		50,200			830,725										280			930							49,920			829,795
Amortization of stock options	764,938																						764,938
Amortization of warrants	1,022,368																						1,022,368
Amortization of stock issuance for services			124,890	1,549,166																						124,890	1,549,166
Beneficial conversion feature	112,125																						112,125
Conversion of notes into shares (in shares)													1,725,000
Conversion of notes into shares	103,500												518										102,982
Preferred stock forfeited (in shares)										(100,000)
Net loss	(6,201,795)																																(6,201,795)
ENDING BALANCE at Dec. 31, 2011	(2,221,321)									4,706			3,711										20,474,730										(22,704,468)
ENDING BALANCE (in shares) at Dec. 31, 2011										46,961,636			58,094,129
Issuance of stock (in shares)													1,000,000
Issuance of stock	70,000												300										69,700
Amortization of stock options	463,665																						463,665
Amortization of warrants	67,555																						67,555
Amortization of stock issuance for services	16,416																						16,416
Net loss	(695,277)																																(695,277)
ENDING BALANCE at Mar. 31, 2012	$ (2,298,962)									$ 4,706			$ 4,011										$ 21,092,066										$ (23,399,745)
ENDING BALANCE (in shares) at Mar. 31, 2012										46,961,636			59,094,129

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STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT) (Parenthetical) (USD $)	Mar. 31, 2012	Dec. 31, 2011 Cash	Dec. 31, 2008 Cash	Dec. 31, 2007 Cash	Dec. 31, 2010 Issuance During Period 1st Cash	Dec. 31, 2009 Issuance During Period 1st Cash	Dec. 31, 2010 Issuance During Period 2nd Cash	Dec. 31, 2009 Issuance During Period 2nd Cash	Dec. 31, 2010 Issuance During Period 3rd Cash	Dec. 31, 2010 Issuance During Period 4th Cash
Issuance of stock for cash, per share	$ 0.07	$ 0.06	$ 0.33	$ 0.023	$ 0.42	$ 0.33	$ 0.42	$ 0.41	$ 0.73	$ 0.83
Common stock, stock Split	3

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BALANCE SHEETS (Parenthetical) (USD $)	Mar. 31, 2012	Dec. 31, 2011
Accounts Receivable, allowance for doubtful accounts	$ 0	$ 0
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	0
Convertible Preferred, shares outstanding	46,961,636	0
Common stock, par value	$ 0.0003	$ 0.0003
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares issued	59,049,129	58,094,129
Common stock, shares outstanding	59,049,129	58,094,129
Convertible Notes
Convertible note, discount	13,542	14,792
Secured Convertible Notes
Convertible note, discount	$ 1,181,050

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SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2012

SUBSEQUENT EVENTS

10. SUBSEQUENT EVENTS

Restructuring Plan

Pursuant to private placements of Common Stock consummated in 2009 and 2010, the Company received a total of $2,963,500 in connection with the issuance and sale to 15 investors (none of whom is or was a direct or indirect officer, director or affiliate of the Company) of an aggregate of 5,686,532 shares of Common Stock at prices ranging from $0.417 to $0.833 per share. On April 23, 2012 the Company issued to such investors additional shares at a value of $0.015 per share in the second quarter of 2012. The Company intends to issue as many as 191,880,135 additional shares of Common Stock to such investors.

Preferred Stock

On April 26, 2012, the board of directors of Thwapr, Inc. (the “Company”), with the consent of the holder of approximately 72% of our outstanding shares of Series A convertible preferred stock (the “Series A Preferred Stock”), amended and restated the certificate of designation of such Series A Preferred Stock (the "Designation").  Based on the amended sections,

· until July 18, 2015, none of the shares of Series A Preferred Stock or shares of common stock into which the Series A Preferred Stock may be converted, can be sold or otherwise transferred by the holder or any of such holder’s affiliates (other than to such affiliates or immediate family members or trusts established for the benefit of such family members);

· each share of Series A Preferred Stock shall vote, together with our outstanding common stock, at any meeting of shareholders or on any other matter requiring shareholder consent, on the basis of one vote per share of Series A Preferred Stock; provided, that upon the filing of an amendment to the Articles of Incorporation of the Corporation permitting the board of directors to fix the number of votes to each outstanding share of Series A Preferred Stock shall be entitled to cast, each share of Series A Preferred Stock shall have a number of votes equal to the number of shares of Common Stock then issuable upon conversion of each share of Series A preferred stock; and,

· a majority of the outstanding shares of Series A preferred stock will be able to amend the Designation.

The amended and restated Designation shall be effective upon filing it with Nevada's Secretary of State, which the Company intends to do immediately.

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Document and Entity Information	3 Months Ended
	Mar. 31, 2012	May 21, 2012
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q1
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		285,942,152

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STATEMENTS OF OPERATIONS (USD $)	3 Months Ended		61 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Mar. 31, 2012
REVENUE	$ 16,975	$ 508	$ 54,805
COST OF SALES	40,048	47,977	254,157
GROSS LOSS	(23,073)	(47,469)	(199,352)
OPERATING EXPENSES:
Product Development	73,301	1,027,674	9,972,999
General and Administrative Expenses	812,215	1,335,156	13,317,720
TOTAL OPERATING EXPENSES	885,516	2,362,830	23,290,719
LOSS FROM OPERATIONS	(908,589)	(2,410,299)	(23,490,071)
OTHER INCOME (EXPENSES)
Interest Income			193
Other Income			43,198
Change in Derivative Liability	261,980	5,598	287,079
Interest Expense	(48,668)	(4,693)	(232,855)
Other Expense			(7,289)
TOTAL OTHER INCOME (EXPENSE)	213,312	905	90,326
NET LOSS	$ (695,277)	$ (2,409,394)	$ (23,399,745)
Basic and diluted (loss) per share	$ (0.01)	$ (0.05)
Weighted average shares	59,049,684	52,602,277

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2012

COMMITMENTS AND CONTINGENCIES

5. COMMITMENTS AND CONTINGENCIES

Lease Commitments

The company leases an office in Las Vegas, Nevada, which expires in July of 2012. Monthly rent is $1,169, however, according to the terms of the lease agreement, no rent is payable for June or July.

Legal Proceeding

On March 27, 2012, Bruce Goldstein and Universal Management, Inc. ("Universal") filed a summons and complaint against the Company in the Supreme Court of the State of New York County of New York, alleging . This suit is based on an alleged breach of contract between Mr. Goldstein and the Company. Mr. Goldstein owns Universal, through which the Company engaged Goldstein to act as a consultant and later President and CEO of the Company. Mr. Goldstein seeks damages in excess of $225,000. The Company and Mr. Goldstein are in disagreement regarding the amounts owed him for past compensation and the Company believes that only $121,759 is owed to Mr. Goldstein ($160,759 at December 31, 2011) and it has been recorded in the books and record of the Company. The Company also believes that it has substantial defense to Mr. Goldstein’s claims and intends to defend the suit vigorously.

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RELATED PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2012

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 Vice President Product. Amounts paid to these stockholders were in lieu of salaries and represented compensation for services rendered as executives, directors and the attorney of the Company. During the three months ended March 31, 2012 and 2011 the amounts incurred to these stockholders were $133,750 and $165,000, respectively. A balance of $283,450 remained unpaid at March 31, 2012.

Line of Credit and Restructuring Purchase Agreement

On February 23, 2012, the Company entered into a line of credit and restructuring purchase agreement (the “Agreement”) with Ron Singh the President and CEO of the Company.

Under the terms of the Agreement, Mr. Singh agreed that he or his affiliates would make available to the Company a maximum $200,000 line of credit to be funded in installments over the next four months. The amount of the advances under the line of credit would be used for working capital and to pay or reduce certain of the accounts payable and accrued expenses of the Company deemed to be critical by an executive committee of the board of directors, consisting of Mr. Singh and Barry Hall, the Chief Financial Officer.

Amounts funded under the line of credit are secured by a 6% convertible secured promissory note payable as to principal and accrued interest on June 30, 2013. The note is secured as to repayment by a first priority lien on all of the Company’s assets and are convertible at any time by the holder into shares of the Company’s common stock, $0.0003 par value per share (the “Common Stock”) at an initial conversion price of $0.015 per share, subject to certain anti-dilution and other adjustments.

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CONVERTIBLE PROMISSORY NOTES

3 Months Ended

Mar. 31, 2012

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 price at the price stock upon conversion.  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 March 31, 2012 and December 31, 2011 the Company had issued Notes aggregating $25,000.

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INCOME TAXES

3 Months Ended

Mar. 31, 2012

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 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 March 31, 2012, the Company has net operating loss carryforwards available for federal tax purposes, which expire from 2028 to 2031.  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 2031. The amounts of operating loss carryforwards are not determined. The Company’s net operating loss carryforwards are subject to IRS examination until they are fully utilized and such tax years are closed.  

At March 31, 2012 and December 31, 2011, 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, 2011, the Company files income tax returns with the Internal Revenue Service (“IRS”).  For jurisdictions in which tax filings are made, the Company is subject to income tax examination for all fiscal years since inception. The Company’s net operating loss carryforwards are subject to IRS examination until they are fully utilized and such tax years are closed.   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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CONVERTIBLE NOTES DUE TO STOCKHOLDERS

3 Months Ended

Mar. 31, 2012

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. On March 29, 2012, as part of a restructuring plan, the company issued a note of $60,000 to the holder of the notes. The new note plus accrued interest of $7,178.89 is convertible to the company’s $0.0003 par value common stock at $0.01 per share subject to certain adjustment at the sole discretion of the note holder. The note matures on December 31, 2013 and does not bear interest.

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 notes along with accrued interest are fully due and payable one year from the date of issue in either restricted shares of common stock at a price agreeable to both parties at the time of conversion or cash. On March 20, 2012, as part of a restructuring plan, the Company issued the note holder a 6% convertible secured promissory note payable as to principal and accrued interest due on June 30, 2013 The note is secured as to repayment by a first priority lien on all of the Company’s assets and are convertible at any time by the holder into shares of the Company’s common stock, $0.0003 par value per share (the “Common Stock”) at an initial conversion price of $0.015 per share, subject to certain anti-dilution and other adjustments.

During the three months ended June 30, 2011, the Company issued three separate notes totaling $550,000 to two stockholders. 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 $0.06 per share.  The notes along with accrued interest are fully due and payable six months from the date of issue. The conversion feature is contingent upon the Company raising $4,000,000. The Company became in default on certain notes issued in the second quarter of 2011. One note holder elected to convert two notes totaling $100,000 to common stock in accordance with the terms of the notes. For the remaining notes, on March 20, 2012, as part of a restructuring plan, the Company issued the note holder a 6% convertible secured promissory note payable as to principal and accrued interest due on June 30, 2013 The note is secured as to repayment by a first priority lien on all of the Company’s assets and are convertible at any time by the holder into shares of the Company’s common stock, $0.0003 par value per share (the “Common Stock”) at an initial conversion price of $0.015 per share, subject to certain anti-dilution and other adjustments.

During the three months ended September 30, 2011, the Company issued five separate notes totaling $318,500 to a stockholder. 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 $0.06 per share.  The notes along with accrued interest are fully due and payable six months from the date of issue. The conversion feature is contingent upon the Company raising $4,000,000. On March 20, 2012, as part of a restructuring plan, the Company issued the note holder a 6% convertible secured promissory note payable as to principal and accrued interest due on June 30, 2013 The note is secured as to repayment by a first priority lien on all of the Company’s assets and are convertible at any time by the holder into shares of the Company’s common stock, $0.0003 par value per share (the “Common Stock”) at an initial conversion price of $0.015 per share, subject to certain anti-dilution and other adjustments.

During the three months ended December 31, 2011, the Company issued two separate notes totaling $95,000 to a stockholder. The notes bear interest at 7% per annum and are convertible to common stock at a 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 six months from the date of issue. The conversion feature is contingent on the Company raising $4,000,000 in debt or equity financing. On March 20, 2012, as part of a restructuring plan, the Company issued the note holder a 6% convertible secured promissory note payable as to principal and accrued interest due on June 30, 2013 The note is secured as to repayment by a first priority lien on all of the Company’s assets and are convertible at any time by the holder into shares of the Company’s common stock, $0.0003 par value per share (the “Common Stock”) at an initial conversion price of $0.015 per share, subject to certain anti-dilution and other adjustments.

On October 28, November 4, November 9, and November 16, 2011 the Company issued four separate notes totaling $65,568. These notes were convertible contingent upon raising $4.0 million. In the first quarter of 2012, these notes were amended and they are now convertible to the company’s $0.0003 par value common stock at $0.01 per share subject to certain adjustment at the sole discretion of the note holder. The notes mature on December 31, 2013 and do not bear interest.

On March 27, 2012 the Company issued a note for $35,000 in exchange for services. The note is convertible to the company’s $0.0003 par value common stock at $0.015 per share subject to certain adjustment at the sole discretion of the note holder. The note matures on December 31, 2013 and does not bear interest.

All convertible notes to stockholders mature in 2013.

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STOCKHOLDERS' EQUITY

3 Months Ended

Mar. 31, 2012

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 (after the stock split and 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 March 31, 2012, 2,558,334 shares were sold under this offering.

On January 5, 2012 the Company issued 1,000,000 registered shares of common stock to Mr. Goldstein, the Company’s CEO at that time in exchange for the forgiveness of $70,000 of accounts payable owed to Mr. Goldstein.

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.

On April 26, 2012, the board of directors of Thwapr, Inc. (the “Company”), with the consent of the holder of approximately 72% of our outstanding shares of Series A convertible preferred stock (the “Series A Preferred Stock”), amended and restated the certificate of designation of such Series A Preferred Stock (the "Designation").  Based on the amended sections,

· until July 18, 2015, none of the shares of Series A Preferred Stock or shares of common stock into which the Series A Preferred Stock may be converted, can be sold or otherwise transferred by the holder or any of such holder’s affiliates (other than to such affiliates or immediate family members or trusts established for the benefit of such family members);

· each share of Series A Preferred Stock shall vote, together with our outstanding common stock, at any meeting of shareholders or on any other matter requiring shareholder consent, on the basis of one vote per share of Series A Preferred Stock; provided, that upon the filing of an amendment to the Articles of Incorporation of the Corporation permitting the board of directors to fix the number of votes to each outstanding share of Series A Preferred Stock shall be entitled to cast, each share of Series A Preferred Stock shall have a number of votes equal to the number of shares of Common Stock then issuable upon conversion of each share of Series A preferred stock; and,

· a majority of the outstanding shares of Series A preferred stock will be able to amend the Designation.

The amended and restated Designation shall be effective upon filing it with Nevada's Secretary of State, which the Company intends to do immediately.

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 warrants for 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 vested to the consultants quarterly over the next three quarters so long as the consultants remained associated with the Company.

For the three months ended March 31, 2012 and 2011, compensation expense related to the issuance of these shares was $0 and $953,332, 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:	2.01%  - 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.  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, 2011		36,176,340		$	0.36
Granted		-			-
Expried/cancelled		(840,000	)		0.56
Exercised		-			-
Outstanding at March 31, 2012		35,336,340		$	0.36
Exercisable at March 31, 2012		34,711,339		$	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		7.00	$	0.33	$	0.33		29,885,010		7.00	$	0.33
$	0.42		4,498,830		3.04	$	0.42	$	0.42		3,686,328		3.01	$	0.42
$	1.78		307,500		3.67	$	1.78	$	1.78		307,500		3.67	$	1.78
$	0.32		645,000		3.83	$	0.32	$	0.32		645,000		3.83	$	0.32

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

Compensation expenses related to outstanding warrants for the three months ended March 31, 2012 and 2011 was $67,555 and $385,045, respectively.   

Stock Option Plan

In October 2011 the Board of Directors adopted the Thwapr, Inc. Equity Incentive Plan (the “Plan”) under which up to 72,000,000 million of common stock have been reserved for issuance. As of March 31, 2012 and December 31, 2011, 20,392,500 and 36,000,000 options, respectively, to purchase stock at $0.13 per share were outstanding and 6,960,000 options were exercisable.

The following table summarizes the stock option transactions:

TRANSATIONS IN FISCAL YEAR 2012

	Number of Common Shares			Weighted-Average Excercise Price		Weighted- Average Remaining Contractual Life
Outstanding at December 31, 2011		36,000,000		$	0.13		4.81
Granted		-			-		-
Expried/cancelled		(15,637,500	)		0.13		4.56
Exercised		-			-		-
Outstanding at March 31, 2012		20,362,500		$	0.13		4.56
Exercisable at March 31, 2012		6,930,000		$	0.13		4.56

For the trhee months ended March 31, 2012 and 2011, compensation expense related to the issuance of these shares was $463,665 and $0, 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:	0.91% - 1.04%
Expected Life:	3 – 3.5 years
Expected Volatility:	200%
Dividend Yield:	0%

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STATEMENTS OF CASH FLOWS (USD $)	3 Months Ended		61 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Mar. 31, 2012
CASH FLOW FROM OPERATING ACTIVITIES
Net loss	$ (695,277)	$ (2,409,394)	$ (23,399,745)
Adjustments to reconcile net loss to net cash used in operating activities:
Forgiveness of Debt			(43,198)
Stock based compensation	547,636	1,951,036	15,671,963
Amortization of note discount	28,572	1,250	150,905
Change in Derivative Liability	(261,980)	(5,598)	(287,079)
Depreciation Expense	3,327	3,527	35,657
Loss on Disposal of Fixed Assets			7,289
(Increase) decrease in:
Accounts Receivable	7,788	(508)	(10,000)
Prepaid Expense	12,875	(4,602)	(4,338)
Increase (decrease) in:
Accounts payable and accrued expenses	10,313	26,728	299,017
Deferred Revenue	4,375		10,208
Accounts payable to stockholders	256,612	144,795	991,410
NET CASH USED IN OPERATING ACTIVITIES	(85,759)	(292,766)	(6,577,911)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment			(52,029)
NET CASH USED IN INVESTING ACTIVITIES			(52,029)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from convertible notes			25,000
Proceeds from sale of common stock, net		50,200	5,143,196
NET CASH PROVIDED BY FINANCING ACTIVITIES	125,000	327,700	6,677,264
NET INCREASE (DECREASE) IN CASH	39,241	34,934	47,324
CASH AT BEGINNING OF THE PERIOD	8,083	5,637
CASH AT END OF PERIOD	47,324	40,571	47,324
SUPPLEMENTARY DISCLOSURE:
Income taxes paid in cash			2,660
Issuance of shares as payment of accounts payable	70,000		70,000
Convertible notes issued to stockholder as payment of accounts payable	296,238		296,238
Convertible Notes
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from convertible notes due to stockholders		277,500	1,384,068
Secured Convertible Notes
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from convertible notes due to stockholders	$ 125,000		$ 125,000

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PROPERTY AND EQUIPMENT

3 Months Ended

Mar. 31, 2012

PROPERTY AND EQUIPMENT

3. PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

	March 31,			December 31,
	2012			2011
Computer equipment	$	41,663		$	41,663
Furniture and fixtures		-			-
Leasehold Improvements		-			-
		41,663			41,663
Accumulated depreciation		(32,581	)		(29,254	)
Property and equipment, net	$	9,082		$	12,409

Depreciation expense for the three months ended March 31, 2012 and 2011 was $3,327 and $3,527, respectively.