10-K/A

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

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

For the Fiscal Year ended December 31, 2011

OR

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

For the Transition Period From to

Commission File No. 33-20432

KIWIBOX.COM, INC.

(formerly known as Magnitude Information Systems, Inc.)

Exact Name of Registrant as Specified in its Charter

DELAWARE	75-2228828
State or Other Jurisdiction of	IRS Employer
Incorporation or Organization	Identification Number

330 W. 38th Street, #1602, New York, New York	10018
Address of Principal Executive Offices	Zip Code

(212) 239-8210

Registrants Telephone Number, Including Area Code

Securities Registered Pursuant to Section 12(b) of the Act:

NONE

Title of Each Class	Name of Each Exchange on Which Registered
NONE	NONE

Securities Registered pursuant to Section 12(g) of the Exchange Act:

Common Stock, par value $0.0001

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

The Registrant’s revenues for the fiscal year ended December 31, 2011 were $599,615.

Common stock, par value $.0001 per share (“Common Stock”), was the only class of voting stock of the Registrant outstanding on April 5, 2012. Based on the closing price of the Common Stock on the OTC Electronic Bulletin Board as reported on April 5, 2012 the aggregate market value of the shares of the Common Stock held by persons other than officers, directors and persons known to the Registrant to be the beneficial owners (as the term is defined under the rules of the Securities and Exchange Commission) of more than five percent of the Common Stock on April 5, 2012, was approximately $9,375,661. By the foregoing statements, the Registrant does not intend to imply that any of the officers, directors, or beneficial owners are affiliates of the registrant or that the aggregate market value, as computed pursuant to rules of the Securities and Exchange Commission, is in any way indicative of the amount which could be obtained for such shares of Common Stock.

As of April 5, 2012 612,793,060 shares of Common Stock, $.0001 par value, were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE: SEE EXHIBIT INDEX

EXPLANATORY NOTE

The sole purpose of this Amendment No. 1 to Kiwibox.Com, Inc. Annual Report on Form 10-K for the year ended December 31, 2011, filed with the Securities and Exchange Commission on April 16, 2012 (the “Form 10-K”), is to furnish Exhibit 101 in accordance with Rule 405 of Regulation S-T. Exhibit 101 to this report provides the financial statements and related notes from the Form 10-K formatted in XBRL (eXtensible Business Reporting Language).

No other changes have been made to the Form 10-K.  This Amendment No. 1 to the Form 10-K speaks as of the original filing date of the Form 10-K, does not reflect events that may have occurred subsequent to the original filing date and does not modify or update in any way disclosures made in the original Form 10-K.

Pursuant to Rule 406T of Regulation S-T, the interactive data files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

EXHIBIT INDEX

31.01A.* Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated April 14, 2011.

31.02A.* Certification of Acting Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated April 14, 2011.

32.01A.* Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated April 14, 2011.

32.02A.* Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated April 14, 2011.

(A) Financial Statements and Notes to Financial Statements**

101.INS**	XBRL Instance Document
101.SCH**	XBRL Schema Document
101.CAL**	XBRL Calculation Linkbase Document
101.DEF**	XBRL Definition Linkbase Document
101.LAB**	XBRL Labels Linkbase Document
101.PRE**	XBRL Presentation Linkbase Document

*These exhibits were previously filed as exhibits to Kiwibox.Com, Inc.  Annual Report on Form 10K for the year ended December 31, 2011, filed with the Securities and Exchange Commission on April 16, 2012.

** Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Act of 1934 and otherwise are not subject to liability.

SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act, the Registrant has caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

KIWIBOX.COM, INC.
By:	/s/ Andre Scholz	Date:	April 17, 2012
	Andre Scholz
	President and Chief Executive Officer
	(Principal Executive Officer),
	Director
By:	/s/ Craig Cody	Date:	April 17, 2012
	Craig S. Cody
	Secretary, Chief Financial Officer
	(Principal Financial Officer)

In accordance with the requirements of the Securities Exchange Act, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Name	Date
//s/ Joseph J. Tomasek	April  17, 2012
Joseph J. Tomasek, Director
/s/ Andre Scholz	April  17, 2012
Andre Scholz, Director

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WARRANTS

12 Months Ended

Dec. 31, 2011

WARRANTS

19. WARRANTS

 The Company granted common stock purchase warrants between January 1, 2010 and December 31, 2011 which are comprised as follows:

	December 31,
	2011		2010
Outstanding, beginning of year		152,731,315		178,189,648
Granted during the year		5,000,000		67,750,000
Exercised during the year		-		(15,000,000	)
Surrendered /cancelled during the year		-		-
Expired during the year		-		(17,208,333	)
Outstanding, end of year (at prices ranging from $.025 to $.085)		157,731,315		152,732,315
Eligible, end of year (at prices ranging from $.025 to $.085)		157,731,315		152,731,315

At December 31, 2011 and 2010, the weighted average exercise price and weighted average remaining contractual life is $0.05 and $0.05 per share and 1 year 8 months and 3 years 6 months, respectively.

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CONCENTRATIONS OF BUSINESS AND CREDIT RISK

12 Months Ended

Dec. 31, 2011

CONCENTRATIONS OF BUSINESS AND CREDIT RISK

3. CONCENTRATIONS OF BUSINESS AND CREDIT RISK

The Company maintains cash balances in a financial institution which is insured by the Federal Deposit Insurance Corporation up to $250,000. Balances in these accounts may, at times, exceed the federally insured limits. At December 31, 2011, cash balances in bank accounts did not exceed this limit. The Company provides credit in the normal course of business to customers located throughout the U.S. and overseas. The Company performs ongoing credit evaluations of its customers and maintains allowances for doubtful accounts based on factors surrounding the credit risk of specific customers, historical trends, and other information.

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FUTURE IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

12 Months Ended

Dec. 31, 2011

FUTURE IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

23. FUTURE IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

In September 2011, the FASB amended the guidance on testing for goodwill impairment that allows an entity to elect to qualitatively assess whether it is necessary to perform the current two-step goodwill impairment test. If the qualitative assessment determines that it is not more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step test is unnecessary. If the entity elects to bypass the qualitative assessment for any reporting unit and proceed directly to Step One of the test and validate the conclusion by measuring fair value, it can resume performing the qualitative assessment in any subsequent period. The amendments are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The adoption of ASU 2011-08 did not have a material impact on the Company’s results of operations or financial condition.

In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) 2011-04, “Fair Value Measurement (Topic 820) Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” ASU No. 2011-04 is intended to improve the comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with U.S. GAAP and IFRSs, by ensuring that fair value has the same meaning in U.S. GAAP and IFRSs and that their respective disclosure requirements are the same except for inconsequential differences in wording and style. The amendments in ASU No. 2011-04 apply to all reporting entities that are required or permitted to measure or disclose the fair value of an asset, a liability, or an instrument classified in a reporting entity’s shareholders’ equity in the financial statements. Some of the disclosures required by ASU No. 2011-04 are not required for nonpublic entities. These amendments change the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. For many of the requirements, the Board does not intend for the amendments to result in a change in the application of the requirements in ASC Topic 820. Some of the amendments clarify the Board’s intent about the application of existing fair value measurement requirements. Other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The adoption of ASU 2011-04 did not have a material impact on the Company’s results of operations or financial condition.

In December 2010, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2010-29, “Business Combinations (ASC Topic 805): Disclosure of Supplementary Pro Forma Information for Business Combinations.” The amendments in this ASU affect any public entity as defined by ASC Topic 805 that enters into business combinations that are material on an individual or aggregate basis. The amendments in this ASU specify that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. The amendments also expand the supplemental pro forma disclosures to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The amendments are effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. Early adoption is permitted. The Company does not expect adoption of ASU 2010-29 to have a material impact on the Company’s results of operations or financial condition.  

In December 2010, the FASB issued ASU 2010-28, “Intangibles — Goodwill and Other (ASC Topic 350): When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts.” The amendments in this ASU modify Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. For those reporting units, an entity is required to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists. In determining whether it is more likely than not that a goodwill impairment exists, an entity should consider whether there are any adverse qualitative factors indicating that an impairment may exist. The qualitative factors are consistent with the existing guidance and examples, which require that goodwill of a reporting unit be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. For public entities, the amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2010. Early adoption is not permitted. The Company does not expect the adoption of ASU 2010-28 to have a material impact on the Company’s results of operations or financial condition.  

In April 2010, the FASB issued ASU 2010-17, Revenue Recognition — Milestone Method (“ASU 2010-17”). ASU 2010-17 provides guidance on the criteria that should be met for determining whether the milestone method of revenue recognition is appropriate. A vendor can recognize consideration that is contingent upon achievement of a milestone in its entirety as revenue in the period in which the milestone is achieved only if the milestone meets all criteria to be considered substantive. The following criteria must be met for a milestone to be considered substantive. The consideration earned by achieving the milestone should (i) be commensurate with either the level of effort required to achieve the milestone or the enhancement of the value of the item delivered as a result of a specific outcome resulting from the vendor’s performance to achieve the milestone; (ii) be related solely to past performance; and (iii) be reasonable relative to all deliverables and payment terms in the arrangement. No bifurcation of an individual milestone is allowed and there can be more than one milestone in an arrangement. Accordingly, an arrangement may contain both substantive and non-substantive milestones. ASU 2010-17 is effective on a prospective basis for milestones achieved in fiscal years, and interim periods within those years, beginning on or after June 15, 2010. Management evaluated the potential impact of ASU 2010-17 and does not expect its adoption to have a material effect on the Company’s results of operations or financial condition.  

In January 2010, the FASB issued ASU 2010-06, Improving Disclosures about Fair Value Measurements. ASU 2010-06 amends ASC 820 to require a number of additional disclosures regarding fair value measurements. The amended guidance requires entities to disclose the amounts of significant transfers between Level 1 and Level 2 of the fair value hierarchy and the reasons for these transfers, the reasons for any transfers in or out of Level 3, and information in the reconciliation of recurring Level 3 measurements about purchases, sales, issuances and settlements on a gross basis. The ASU also clarifies the requirements for entities to disclose information about both the valuation techniques and inputs used in estimating Level 2 and Level 3 fair value measurements. The amended guidance is effective for interim and annual financial periods beginning after December 15, 2009. The adoption of ASU 2010-06 did not have a significant effect on the Company’s financial statements.  

In October 2009, the FASB issued ASU 2009-13, Multiple-Deliverable Revenue Arrangements, (amendments to FASB ASC Topic 605, Revenue Recognition ) (“ASU 2009-13”). ASU 2009-13 requires entities to allocate revenue in an arrangement using estimated selling prices of the delivered goods and services based on a selling price hierarchy. The amendments eliminate the residual method of revenue allocation and require revenue to be allocated using the relative selling price method. ASU 2009-13 should be applied on a prospective basis for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010, with early adoption permitted. The Company does not expect adoption of ASU 2009-13 to have a material impact on the Company’s results of operations or financial condition.

In October 2009, the FASB issued ASU 2009-15, Accounting for Own-Share Lending Arrangements in Contemplation of Convertible Debt Issuance or Other Financing , (“ASU-2009-15”), which provides guidance for accounting and reporting for own-share lending arrangements issued in contemplation of a convertible debt issuance. At the date of issuance, a share-lending arrangement entered into on an entity’s own shares should be measured at fair value in accordance with Topic 820 and recognized as an issuance cost, with an offset to additional paid-in capital. Loaned shares are excluded from basic and diluted earnings per share unless default of the share-lending arrangement occurs. The amendments also require several disclosures including a description and the terms of the arrangement and the reason for entering into the arrangement. The effective dates of the amendments are dependent upon the date the share-lending arrangement was entered into and include retrospective application for arrangements outstanding as of the beginning of fiscal years beginning on or after December 15, 2009. The adoption of ASU 209-15 did not have a material impact on the Company’s results of operations or financial condition. 

Management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.

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FAIR VALUE OF FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2011

FAIR VALUE OF FINANCIAL INSTRUMENTS

22. FAIR VALUE OF FINANCIAL INSTRUMENTS

Cash, accounts receivable, accounts payable, accrued expenses, notes payable, long-term debt and capitalized lease obligations: The carrying amount approximates fair value because of the short term maturity of these instruments.

Limitations

Fair value estimates are made at a specific point in time, based on relevant information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates

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LITIGATION

12 Months Ended

Dec. 31, 2011

LITIGATION

24. LITIGATION

At the time of this report, the Company is not a party in any legal proceedings.

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BUSINESS SEGMENTS

12 Months Ended

Dec. 31, 2011

BUSINESS SEGMENTS

25. BUSINESS SEGMENTS

The Company operates in only one business segment - youth targeted online social networks - through its dedicated proprietary internet website.

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GOING CONCERN

12 Months Ended

Dec. 31, 2011

GOING CONCERN

2. GOING CONCERN

The ability of the Company to continue its operations is dependent on increasing sales and obtaining additional capital and financing. Our revenues during the foreseeable future are insufficient to finance our business and we are entirely dependent on the willingness of existing investors to continue supporting the Company with working capital loans and equity investments, and our ability to find new investors should the financial support from existing investors prove to be insufficient. If we were unable to obtain a steady flow of new debt or equity-based working capital we would be forced to cease operations. In their report for the fiscal year ended December 31, 2011, our auditors have expressed an opinion that, as a result of the losses incurred, there is substantial doubt regarding our ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might be necessary if the Company were unable to continue as a going concern. Management’s plans are to continue seeking equity and debt capital until cash flow from operations cover funding needs.

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SUBSEQUENT EVENTS

12 Months Ended

Dec. 31, 2011

SUBSEQUENT EVENTS

26. SUBSEQUENT EVENTS

During January, February and March 2012 we received an aggregate $240,000 working capital loans from two accredited investors, which are covered by convertible promissory notes carrying interest at 10% per year.

On February 2, 2012 Cambridge Services Inc. converted $581,269 of debt into 26,000,000 shares of common stock.

On March 21, 2012 Cambridge Services, Inc provided $684,251 under an open promissory note for Kiwibox.com to make a partial payment on the Kwick! acquisition.

Effective March 14, 2012 the terms of the original purchase agreement with Kwick! were modified as noted in Note 21. The second payment was due and paid on April 13, 2012 and the third and final payment is now due on April 26, 2012. The possibility of additional bonus payments to the former owners has been eliminated.

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Consolidated Balance Sheets (USD $)	Dec. 31, 2011	Dec. 31, 2010
Current Assets
Cash and cash equivalents	$ 195,613	$ 377
Accounts receivable, net of allowance for doubtful accounts of $0 and $0, respectively	492,430	295
Due from related parties	17,582
Other receivables	91,443
Income taxes receivable	90,138
Prepaid expenses and other current assets	42,241	34,441
Total Current Assets	929,447	35,113
Property and equipment, net of accumulated depreciation of $605,112 and $88,505	244,314	15,323
Website development costs, net of accumulated amortization of $187,128 and $32,864	145,211	106,244
Excess of purchase price over net assets acquired	5,937,378
Deferred tax Asset	1,052,454
Other assets	43,815	9,756
Total Assets	8,352,619	166,436
Current Liabilities
Accounts payable	228,555	226,760
Accrued Expenses	761,191	309,117
Due to related parties	57,874
Obligations to be settled in stock	249,275	183,648
Dividends payable	581,865	530,602
Kwick! acquisition indebtedness	5,221,093
Convertible notes payable-related parties	4,007,950	1,894,980
Current maturities of long-term debt	33,529	33,529
Liability for derivative conversion feature -related parties	4,704,987	2,622,408
Total Current Liabilities	16,326,319	6,181,044
Stockholders' Equity (Impairment)
Preferred Stock, $0.001 par value, non-voting, 3,000,000 shares authorized; 85,890 shares issued and outstanding	86	86
Common Stock, $0.0001 par value, 1,400,000,000 shares authorized; issued and outstanding 586,168,060 and 498,243,060 shares respectively	58,618	49,824
Additional paid-in capital	49,700,653	45,571,867
Accumulated deficit	(57,588,185)	(51,636,385)
Accumulated other comprehensive loss	(144,872)
Total Stockholders' Equity (Impairment)	(7,973,700)	(6,014,608)
Total Liabilities and Equity (Impairment)	8,352,619	166,436
Other
Current Liabilities
Loans and notes payable	140,000	140,000
Related Parties
Current Liabilities
Loans and notes payable	$ 340,000	$ 240,000

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Statements of Cash Flows (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Cash Flows From Operating Activities
Net loss	$ (5,900,537)	$ (3,972,372)
Adjustments to Reconcile Net Loss to Net Cash Used by Operations
Depreciation and amortization	150,093	42,302
Securities issued for services	28,928	15,000
Intrinsic value of beneficial conversion feature	3,659,670	2,083,716
Change in fair value - conversion features	476,281	538,692
Change in deferred taxes	53,593
Impairment of software assets		11,880
(Gain) loss on disposition of assets	13,084	(2,285)
Foreign transaction loss	53,086
Decreases (Increases) in Assets
Accounts receivable	151,269	1,705
Income taxes receivable	(168,990)
Other receivables	28,909
Prepaid expenses	35,548	46,082
Increases (Decreases) in Liabilities
Obligations to be settled in stock	79,627	89,748
Accounts payable	46,733
Accrued expenses	332,681	173,205
Net Cash Used by Operating Activities	(960,023)	(972,327)
Cash Flows From Investing Activities
Proceeds from sale of assets	49,144	4,520
Cash outlay - website development costs	(41,024)	(129,230)
Cash outlay - other assets	(9,572)
Cash acquired - business combination	339,198
Purchases of property and equipment	(35,261)	(10,104)
Net Cash Provided (Used) by Investing Activities	302,485	(134,814)
Cash Flows From Financing Activities
Proceeds from loans payable	845,000	980,000
Net proceeds from related parties	56,517
Proceeds from issuance of common and preferred stock and warrants		125,000
Net Cash Provided by Financing Activities	901,517	1,105,000
Net Increase (Decrease) in Cash	243,979	(2,141)
Effect of exchange rates on cash	(48,743)
Cash at beginning of period	377	2,518
Cash at end of period	195,613	377
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest Paid	4,016	4,467
Income Taxes Paid	124,299
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Settlement of obligations with common stock	24,000
Acquisition of subsidiary via acquisition indebtedness and affiliate debentures	8,567,843
Conversion of debt and related derivative liabilities	2,031,280
Warrants granted in acquisition of other assets
Year to date dividend accruals	51,263
Reduction of derivatives from conversion of debt	2,053,372
Cashless exercise of warrants		1,313
Settlement of obligations with common stock and common stock options		39,000
Reclassification of accrued interest to debt principal		164,980
Offset of security deposits against accrued rent		$ 7,968

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INCOME TAXES

12 Months Ended

Dec. 31, 2011

INCOME TAXES

16. INCOME TAXES

The income tax provision (benefit) is comprised of the following:

	Year Ended December 31,
	2011			2010
State current provision (benefit)	$	1,125		$	410
Foreign (German) deferred provision (benefit)		(40,138	)		-
	$	(39,013	)	$	410

The Company’s total deferred tax asset and valuation allowance are as follows:

	December 31,
	2011			2010
Total deferred tax asset, noncurrent	$	13,852,454		$	12,200,000
Less valuation allowance		(12,800,000	)		(12,200,000	)
Net deferred tax asset, noncurrent	$	1,052,454		$	-

The differences between income tax benefits in the financial statements and the tax benefit computed at the combined state and U.S. Federal statutory rate of 40% are as follows:

	Year Ended December 31,
	2011			2010
Tax benefit		40	%		40	%
Valuation allowance		(40	)%		(40	)%
Effective tax rate		-			-

At December 31, 2011, the Company has available approximately $34,000,000 of net operating losses to carry-forward and which may be used to reduce future federal taxable income and expire between December 31, 2012 and 2031.

At December 31, 2011, the Company has available approximately $13,615,000 of net operating losses to carry-forward and which may be used to reduce future state taxable income which expire between December 31, 2011 and 2017.

The net deferred tax benefit at December 31, 2011 relates to a tax asset created from the excess purchase price in the acquisition of the German subsidiary under tax rules of the foreign government. It derives from the future deductibility of the amortization of this asset over 15 years out of future profits.

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STOCK OPTION PLANS

12 Months Ended

Dec. 31, 2011

STOCK OPTION PLANS

18. STOCK OPTION PLANS

In April 1996, Magnitude, Inc. adopted its 1996 Stock Incentive Plan (“the 1996 Plan”). The 1996 Plan provides that certain options granted thereunder are intended to qualify as “incentive stock options” (ISO) within the meaning of Section 422A of the United States Internal Revenue Code of 1986, while non-qualified options may also be granted under the Plan. The initial plan and subsequent amendments provided for authorization of up to 480,000 shares. Pursuant to the above described stock exchange offer on July 2, 1997, all options under the 1996 Plan were converted into shares of the Company at a rate of 3.4676 shares of Magnitude, Inc. to 1 share of the Company.

In September 1997, the Company adopted its 1997 Stock Incentive Plan (“the 1997 Plan”). The 1997 Plan provides that certain options granted thereunder are intended to qualify as “incentive stock options” (ISO) within the meaning of Section 422A of the United States Internal Revenue Code of 1986, while non-qualified options may also be granted under the Plan. The initial plan and subsequent amendments provided for the grant of options for up to 1,000,000 shares. The purchase price per share of common stock deliverable upon exercise of each ISO shall not be less than 100% of the fair market value of the common stock on the date such option is granted. If an ISO is issued to an individual who owns, at the time of grant, more than 10% of the total combined voting power of all classes of the Company’s common stock, the exercise price of such option shall be at least 110% of the fair market value of the common stock on the date of grant and the term of the option shall not exceed five years from the date of grant. The purchase price of shares subject to non-qualified stock options shall be determined by a committee established by the Board of Directors with the condition that such prices shall not be less than 85% of the fair market value of the common stock at the time of grant.

In May 2000 the Company adopted its 2000 Stock Incentive Plan (“the 2000 Plan”). The 2000 Plan provides that certain options granted thereunder are intended to qualify as “incentive stock options” (ISO) within the meaning of Section 422A of the United States Internal Revenue Code of 1986, while nonqualified options may also be granted under the Plan. The initial Plan provides for the grant of options for up to 5,000,000 shares. The purchase price per share of common stock deliverable upon exercise of each ISO shall not be less than 100% of the fair market value of the common stock on the date such option is granted. If an ISO is issued to an individual who owns, at the time of grant, more than 10% of the total combined voting power of all classes of the Company’s common stock, the exercise price of such option shall be at least 110% of the fair market value of the common stock on the date of the grant, and the term of the option shall not exceed five years from the date of grant. The purchase price of shares subject to non-qualified stock options shall be determined by a compensation committee established by the Board of Directors.

	Qualified and Non-Qualified Shares Under Option Pursuant to the 1997 Plan December 31,
	2011	2010
Outstanding, beginning of year	-	-
Granted during the year	-	-
Expired during the year	-	-
Surrendered during the year	-	-
Outstanding, end of year	-	-
Eligible, end of year for exercise	-	-

At December 31, 2011 and 2010, no options were outstanding.

At December 31, 2011, there were 1,000,000 shares reserved for future option grants.

	Qualified and Non-Qualified Shares Under Option Pursuant to the 2000 Plan December 31,
	2011	2010
Outstanding, beginning of year	-	-
Granted during the year	-	-
Exercised during the year	-	-
Surrendered during the year	-	-
Expired during the year	-	-
Outstanding, end of year	-	-
Eligible, end of year for exercise	-	-

At December 31, 2011 and 2010, no options were outstanding.

At December 31, 2011, there were 5,000,000 shares reserved for future option grants.

At December 31, 2011 the company has two stock-based employee compensation plans, which are described more fully above. The company accounts for those plans under the recognition and measurement principles of Statement of Financial Accounting Standards (SFAS) 123(R), Share-Based Payment, and related Interpretations. The Company has not granted any options under these plans to employees during 2011 or 2010.

The Company also issues options outside of the Stock Incentive Plans which are comprised as follows:

	December 31,
	2011			2010
Outstanding, beginning of year		8,450,000			10,453,542
Granted during the year		1,200,000			1,900,000
Exercised during the year		-			-
Surrendered or cancelled during the year		(250,000	)		-
Expired during the year		(750,000	)		(3,903,542	)
Outstanding, end of year (at prices ranging from $0.01 to $0.10)		8,650,000			8,450,000
Eligible for exercise, end of year (at prices ranging from $0.01 to $0.10)		8,650,000			8,450,000

At December 31, 2011 and 2010 the weighted average exercise price and weighted average remaining contractual life were $0.06 and $0.06 per share, and 1 year 1 month and 2 year 11 months, respectively.

During 2011, the Company granted 1,200,000 to a director of the Company, exercisable at $0.05 during a four-year period. During 2010, the Company granted 1,900,000 options to two officers and directors of the Company, 700,000 of which are exercisable at $0.10 during a four-year period, and 1,200,000 of which are exercisable at $0.05 during a four-year period.

The weighted average exercise price for options granted during the years ended December 31, 2011 and 2010 were $0.05 and $0.07, respectively. The weighted average exercise price for options expired during the years ended December 31, 2010 were $0.10. The weighted average conversion price for cancelled options in 2011 was $0.025. The weighted average grant date fair value of options granted during the years ended December 31, 2011 and 2010 was $0.01 and $0.01.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2011

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Organization

Kiwibox.Com, Inc. (the “Company”) was incorporated as a Delaware corporation on April 19, 1988 under the name Fortunistics, Inc. On November 18, 1998, the Company changed its name to Magnitude Information Systems, Inc. On December 31, 2009, the Company changed its name to Kiwibox.com, Inc.

On August 16, 2007 the Company acquired all outstanding shares of Kiwibox Media, Inc.

The Company, Magnitude, Inc. and Kiwibox Media Inc. were separate legal entities until December 31, 2009, with Kiwibox Media, Inc. being a wholly owned subsidiary. On December 31, 2009, the two subsidiaries, Magnitude, Inc. and Kiwibox Media, Inc. merged into the Company.

On September 30, 2011, Kiwibox.com acquired the German based social network Kwick!! Community GmbH & Co. KG, a wholly-owned subsidiary.

Cash and Cash Equivalents

The Company accounts for cash and other highly liquid investments with original maturities of three months or less as cash and cash equivalents.

Principles of Consolidation

The consolidated financial statements as of and for the year ended December 31, 2011 include the accounts of Kiwibox.com, Inc. and its subsidiary, KWICK! Community GmbH & Co. KG. The activities of the Company’s newly acquired subsidiary KWICK!! Community GmbH & Co. KG. are included in the financial statements from September 30, 2011 (date of acquisition) through December 31, 2011. Any significant inter-company balances and transactions have been eliminated.

Depreciation and Amortization

Property and equipment are recorded at cost. Depreciation on equipment, furniture and fixtures and leasehold improvements is computed on the straight-line method over the estimated useful lives of such assets between 3-10 years, or lease term for leasehold improvements, if for a shorter period. Maintenance and repairs are charged to operations as incurred. Software costs are amortized using the straight line method and amortized over their estimated useful lives. Amortization begins when the related software is ready for its intended use in accordance with Accounting Standards Codification (“ASC”) 350-40, Internal-Use Software, Subsequent Measurement.

Foreign Currency Translation

Assets and liabilities of foreign operations are translated into U.S. dollars at the rates of exchange in effect at the balance sheet date. Income and expense items are translated at the weighted average exchange rates prevailing during each period presented. Gains and losses resulting from foreign currency transactions are included in the results of operations. Gains and losses resulting from translation of financial statements of our foreign subsidiary operating in a non-hyperinflationary economy are recorded as a component of accumulated other comprehensive loss until either sale or upon complete or substantially complete liquidation by the Company of its investment in the foreign entity. Accumulated gain or (loss) on foreign currency translation adjustment was$(144,872) for the year ended December 31, 2011.

Advertising Costs

Advertising costs are charged to operations when incurred. Advertising expense was $92,049 and $1,909 for the years ended December 31, 2011 and 2010, respectively.

Evaluation of Long Lived Assets

Long-lived assets are assessed for recoverability on an ongoing basis. In evaluating the fair value and future benefits of long-lived assets, their carrying value would be reduced by the excess, if any, of the long-lived asset over management’s estimate of the anticipated undiscounted future net cash flows of the related long-lived asset.

Fair Value Measurements

The Company adopted the provisions of ASC 820, Fair Value Measurements and Disclosures, which is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Under ASC 820, a framework was established for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. The Company accounted for certain convertible debentures modified in the years ended December 31, 2011 and 2010 as derivative liabilities required to be bifurcated from the host contract in accordance with ASC 815-40, Contracts in Entity’s Own Equity, as the conversion feature embedded in the convertible debentures could result in the note principal and related accrued interest being converted to a variable number of the Company’s common shares (see Note 12).

Securities Issued for Services

The Company accounts for stock, stock options and stock warrants issued for services and compensation by employees under the fair value method. For non-employees, the fair market value of the Company’s stock on the date of stock issuance or option/grant is used. The Company has determined the fair market value of the warrants/options issued under the Black-Scholes Pricing Model. The Company has adopted the provisions of ASC 718, “Compensation – Stock Compensation”, which establishes accounting for equity instruments exchanged for employee services. Under the provisions of ASC 718, share-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the employee's requisite service period (generally the vesting period of the equity grant).

Reclassification of Certain Securities Under ASC 815-15

Pursuant to ASC 815-15, “Contracts in Entity’s own Equity”, if a company has more than one contract subject to this Issue, and partial reclassification is required, there may be different methods that could be used to determine which contracts, or portions of contracts, should be reclassified. The Company's method for reclassification of such contracts is reclassification of contracts with the latest maturity date first.

Capitalization of Software /Website Development Costs

The Company capitalizes outside-contracted development work in accordance with the guidelines published under ASC 350-50, “Website Development Costs”. Under ASC 350-50, costs incurred during the planning stage are expensed, whilecosts relating to software used to operate a web site or for developing initial graphics should be accounted for under ASC 350-50, Accounting for the Costs of Computer Software Developed or Obtained for Internal Use, unless a plan exists or is being developed to market the software externally. Under ASC 350-50, internal and external costs incurred to develop internal-use computer software during the application development stage should be capitalized. Costs to develop or obtain software that allows for access or conversion of old data by new systems should also be capitalized, excluding training costs.

Fees incurred for web site hosting, which involve the payment of a specified, periodic fee to an Internet service provider in return for hosting the web site on its server(s) connected to the Internet, are expensed over the period of benefit, and included in cost of sales in the accompanying financial statements.

A total of $57,622 and $117,350 was capitalized for web-site development work during the years ended December 31, 2011 and 2010, respectively. During 2010, software costs of $11,880 were determined to be impaired and were written off during the year then ended.

Income Taxes

The Company provides for income taxes based on enacted tax law and statutory tax rates at which items of income and expenses are expected to be settled in the Company’s income tax return. Certain items of revenue and expense are reported for Federal income tax purposes in different periods than for financial reporting purposes, thereby resulting in deferred income taxes. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company has incurred net operating losses for financial-reporting and tax-reporting purposes. Accordingly, for Federal and state income tax purposes, the benefit for income taxes has been offset entirely by a valuation allowance against the related federal and state deferred tax asset.

Net Loss Per Share

Net loss per share, in accordance with the provisions of ASC 260, “Earnings Per Share” is computed by dividing net loss by the weighted average number of shares of Common Stock outstanding during the period. Common Stock equivalents have not been included in this computation since the effect would be anti-dilutive. Such common stock equivalents totaled 259,656,975 common shares at December 31, 2011, comprised of 157,731,315 shares issuable upon exercise of stock purchase warrants, 8,650,000 shares issuable upon exercise of stock options, 729,537 shares exercisable upon conversion of convertible preferred shares, and 92,546,123 shares potentially issuable upon conversion of convertible debt. Such debt and the related accrued interest, presently convertible at the option of four holders at a conversion price of 50% of the ten day trailing market price, totals $4,361,034 which would yield in excess of 230,000,000 shares if fully exercised, however, the respective notes, all of which were issued to these four investors, carry a stipulation whereby the number of all shares issued pursuant to a conversion, may in the aggregate not exceed a number that would increase the total share holdings beneficially owned by such investor to a level above 9.99%. At the end of the quarter, this clause limits any conversion to the aforementioned number of shares. All of the aforementioned conversions or exercises, as the case may be, are at the option of the holders.

Revenue Recognition

The Company’s revenue is derived from advertising on the Kiwibox.Com or Kwick!! Community websites. Most contracts require the Company to deliver the customer impressions, click-throughs or new customers, or some combination thereof. Accordingly, advertising revenue is estimated and recognized for the period in which customer impressions, click through or new customers are delivered. Licensing or hosting revenue consists of an annual contract with clients to provide web-site hosting and assistance.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

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Consolidated Balance Sheets (Parenthetical) (USD $)	Dec. 31, 2011	Dec. 31, 2010
Accounts receivable, allowance for doubtful accounts	$ 0	$ 0
Property and equipment, accumulated depreciation	605,112	88,505
Website development costs, accumulated amortization	$ 187,128	$ 32,864
Preferred Stock, par value	$ 0.001	$ 0.001
Preferred Stock, shares authorized	3,000,000	3,000,000
Preferred Stock, shares issued	85,890	85,890
Preferred Stock, shares outstanding	85,890	85,890
Common Stock, par value	$ 0.0001	$ 0.0001
Common Stock, shares authorized	1,400,000,000	1,400,000,000
Common Stock, shares issued	586,168,060	498,243,060
Common Stock, shares outstanding	586,168,060	498,243,060

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LONG-TERM DEBT

12 Months Ended

Dec. 31, 2011

LONG-TERM DEBT

11. LONG-TERM DEBT

Long-term debt as of December 31, 2011 and 2010 is comprised of the following:
Discounted present value of a non-interest bearing $70,000 settlement with a former investor of Magnitude, Inc. to be paid in 24 equal monthly payments commencing July 1, 1997. The imputed interest rate used to discount the note is 8% per annum. This obligation is in default.	$	33,529
Total		33,529
Less current maturities		33,529
Long-term debt, net of current maturities	$	-

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Document and Entity Information (USD $)	12 Months Ended
	Dec. 31, 2011	Apr. 05, 2012
Document Information [Line Items]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2011
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	FY
Trading Symbol	KIWB
Entity Registrant Name	KIWIBOX.COM, INC.
Entity Central Index Key	0000838796
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		612,793,060
Entity Public Float		$ 9,375,661

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DERIVATIVE CONVERSION FEATURES

12 Months Ended

Dec. 31, 2011

DERIVATIVE CONVERSION FEATURES

12. DERIVATIVE CONVERSION FEATURES

On July 27, 2010, the Company issued two Class A Senior Convertible Revolving Promissory Notes (“Class A Notes”), one to Cambridge Services, Inc., in the principal amount of $683,996, consolidating the series of loans (and related accrued interest) made to the Company since June 26, 2009, and one to Discover Advisory Company, in the principal amount of $1,160,984, consolidating the series of loans (and related accrued interest) made to the Company since September 19, 2008 and including advances through September 30, 2010. Each of these promissory notes are due on demand, accrue interest at the rate of 10%, per annum, are convertible (including accrued interest) at the option of each lender into Common Stock of the Company at 50% of the averaged ten closing prices for the Company's Common Stock for the ten (10) trading days immediately preceding the Conversion Date but in no event less than $0.001 (the "Conversion Price"). Both promissory notes contain conversion caps, limiting conversions under these notes to a maximum beneficial ownership position of Company common stock to 9.99% for each lender. Each of these notes contains Company covenants, requiring the lenders’ prior written consent in order for the Company to merge, issue any common or preferred stock or any convertible debt instruments, declare a stock split or dividends, increase any compensation to its officers or directors by more than five (5%) during any calendar year. During the year ended December 31, 2011, Cambridge Services, Inc reassigned $503,760 to a third investor Kreuzfeld, Ltd and converted $816,720. During the same period Discovery Advisory Company converted $1,160,700 and Kreuzfeld, Ltd converted $492,760. To complete the acquisition of Kwick!!, Discovery Advisory Company, Kreuzfeld, Ltd and Vermoegensverwaltungs-Gesellschaft Zurich LTD (“VGZ”) advanced $679,850, $1,903,580 and $815,820, respectively.

The Company accounted for the conversion features underlying these convertible debentures modified in the year ended December 31, 2011 in accordance with ASC 815-40, Contract in Entity’s Own Equity, as the conversion feature embedded in the convertible debentures could result in the note principal and related accrued interest being converted to a variable number of the Company’s common shares. The Company determined the value of the derivate conversion features of these debentures and subsequent debentures issued to these holders under these terms at the relevant commitment dates to be $3,659,670 utilizing a Black-Scholes valuation model. The Company also recognized $2,053,371 in reductions of fair value to capital for conversions during the year. The fair value of the derivative conversion features was determined to be $4,704,987 at December 31, 2011. The change in fair value of the liability for the conversion feature resulted in a cost of $476,281 for the year ended December 31, 2011, which is included in Other Income (Expense) in the accompanying financial statements.

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Condensed Consolidated Statements of Operations (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Net Sales
Advertising	$ 515,775	$ 2,039
Other	83,840
Total Net Sales	599,615	2,039
Cost of Goods Sold
Website hosting expenses	497,110	3,795
Total Cost of Goods Sold	497,110	3,795
Gross Profit (Loss)	102,505	(1,756)
Selling expenses	401,434	189,320
Stock-based compensation (see below)	28,298	15,000
General and administrative expenses	1,173,383	975,550
Loss From Operations	(1,500,610)	(1,181,626)
Other Income (Expense)
Miscellaneous income	47,553	(761)
Interest expense	(297,456)	(167,167)
Interest expense-derivative conversion features	(3,659,670)	(2,083,716)
Foreign Currency Transaction Loss	(53,086)
Change in fair value - derivative liabilities	(476,281)	(538,692)
Total Other Income (Expense)	(4,438,940)	(2,790,336)
Loss Before Benefit (Provision) for Income Taxes	(5,939,550)	(3,971,962)
Benefit (Provision) for Income Taxes	39,013	(410)
Net Loss	(5,900,537)	(3,972,372)
Dividends on Preferred Shares	(51,263)	(51,263)
Net Loss Applicable to Common Shareholders, basic and diluted	$ (5,951,800)	$ (4,023,635)
Net Loss Per Common Share, basic and diluted	$ (0.011)	$ (0.008)
Weighted Average of Common Shares Outstanding	522,090,046	494,315,316

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INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2011

INTANGIBLE ASSETS

6. INTANGIBLE ASSETS

Intangible assets consisted of software for website development costs as follows: 

	December 31, 2011		December 31, 2010
Website development costs	$	332,339	$	139,108
Less accumulated amortization		187,128		32,864
Total	$	145,211	$	106,244

During 2010, software costs of $11,880 were determined to be impaired and were written off during the year then ended. Amortization expense for the year ended December 31, 2011 and 2010 was $91,570 and $31,051, respectively. Additional amortization over the next 5 years is estimated to be as follows:

	Amortization expense
December 31,  2012	$	71,831
December 31, 2013		28,646
December 31, 2014		8,235
December 31, 2014		1,920
December 31, 2016		1,154
Thereafter		2,819

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PROPERTY AND EQUIPMENT

12 Months Ended

Dec. 31, 2011

PROPERTY AND EQUIPMENT

5. PROPERTY AND EQUIPMENT

Property and equipment consist of the following at:	December 31, 2011		December 31, 2010
Furniture	$	14,322	$	14,322
Leasehold Improvements		24,130		24,130
Computer Equipment		620,746		-
Office Equipment		190,227		65,376
		849,424		103,828
Less accumulated depreciation		605,111		88,505
Total	$	244,314	$	15,323

Depreciation expense charged to operations was $58,513 and $11,251 for the years ended December 31, 2011 and 2010, respectively.

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STOCK BASED COMPENSATION

12 Months Ended

Dec. 31, 2011

STOCK BASED COMPENSATION

17. STOCK BASED COMPENSATION

During 2011 and 2010 the Company issued the following securities to officers, directors, and non-employees as part of their compensation and, in the case of the former principals of Kiwibox Media Inc., pursuant to the Kiwibox acquisition agreement, as amended.

Andre Scholz (president and Chief Executive Officer): During 2011 and 2010 earned 1,200,000 restricted shares (100,000 per month) valued at $28,950 and $24,000, respectively, based on the commitment date fair value of the shares granted. 1,200,000 and 1,950,000 of these shares were issued in 2011 and 2010,respectively.

Joseph J. Tomasek (Director): In each of the years ended December 31, 2011 and 2010 Mr. Tomasek earned options for 1,200,000 restricted shares, valued at $11,880. In addition, as additional compensation, Mr. Tomasek was granted 500,000 warrants exercisable at $0.025 during 5 years, with a cashless exercise option, such warrants are valued at $5,000 pursuant to the Black-Scholes valuation formula.

Joerg Otzen (former Director): in 2010, Mr. Otzen was granted 500,000 warrants exercisable at $0.025 during 5 years, with a cashless exercise option. Such warrants are valued at $5,000 pursuant to the Black-Scholes valuation formula.

Craig S Cody (Chief Financial Officer): In 2010, Mr. Cody was granted 500,000 warrants exercisable at $0.025 during 5 years, with a cashless exercise option, such warrants are valued at $5,000 pursuant to the Black-Scholes valuation formula.

In computing the Black Scholes values for the previous three warrant grants above, we used a volatility of 296% and a risk-free interest rate of 1.6%.

Rudolf Hauke (former President and Chief Executive Officer): During 2010, Mr. Hauke earned 700,000 non-qualified 4-year stock options, exercisable at $0.10 per common share, valued at $13,867 pursuant to the Black-Scholes valuation formula. In computing the Black Scholes values we used a volatility of 283% and risk-free interest rates of 2.6% and 3.3%.

In 2011, we granted 4,000,000 warrants to a consultant. 2,000,000 exercisable at $.025 and 2,000,000 excercisable at $.075, during 5 years, with a cashless exercise option, such warrants were valued at $40,000 pursuant to a Black-Scholes valuation formula. In 2010, we granted 4,000,000 warrants to a consultant exercisable at $0.025, during 5 years, with a cashless exercise option, such warrants valued at $40,000 pursuant to the Black-Scholes valuation formula. In computing the Black Scholes values we used a volatility of 273% and a risk-free interest rate of 2.33%.

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COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2011

COMMITMENTS AND CONTINGENCIES

13. COMMITMENTS AND CONTINGENCIES

We maintain offices for our operations at 330 W. 38th Street, New York, New York 10018, for approximately 900 square feet. This lease requires minimum monthly rentals of $2,199 plus tenants’ share of utility/cam/property tax charges which average approximately $400 per month. During the 1^st quarter of 2010 the Company successfully negotiated with the landlord to give up a lease of an office located at the same address consisting of approximately 500 square feet. This lease was extended in December 2010 and again in April 30, 2011 through December 31, 2012 with no changes to the monthly rent.

In May 2010 the Company negotiated a lease of an apartment in New York City for the CEO in order to reduce travel costs. The lease was for 12 months at $2,775 per month through May 31, 2011. In May 2011 the lease was extended through August 31, 2011 at the rate of $2,837. In August 2011 the lease was extended through December 31, 2011 at the rate of $2,837 per month. In December 2011 the lease was again extended through May 31, 2012 with no change in the base rent. In December 2010 the CEO through a company that he controls reimbursed Kiwibox.com $20,642 for his use of the Company apartment. There were no reimbursements in 2011 by the CEO and none are expected.

Kwick! has operating leases relate to office space in Weinstadt, Germany along with vehicle leases.The office lease is for a term of one year. All operating lease contracts over 5 years contain clauses for yearly market rental reviews. The Company does not have an option to purchase the leased office at the expiration of the lease period. These operating leases call for minimum monthly payments of $10,387 per month.

Our total rent expenses were $92,049 and $33,506 during the year ended December 31, 2011 and 2010, respectively.

During the second quarter in 2009 we entered into an agreement with a consultant to serve as the Company’s Chief Technology Officer. The agreement had a term of twelve months and could be extended by mutual consent. It provided for remuneration for services and expenses at the rate of $20,000 and 100,000 restricted shares per month, and a signing bonus of 500,000 restricted shares. During the first quarter in 2010, the Company issued the 500,000 shares for the signing bonus and 950,000 shares towards the accrued monthly allowance. In the third quarter the company issued an additional 500,000 shares towards the accrued monthly allowance.

During the third quarter of 2010 the Chief Technology Officer took over the position of Chief Executive Officer with no changes to the above terms, running through July 30, 2011. On October 6, 2010 the terms of the consulting agreement were modified. The new terms called for a reduced monthly consulting fee of $16,667 to be prepaid in the amount of $50,000 on October 1, 2010 covering the period October 1, 2010 through December 31, 2010, and for $100,000 to be prepaid on January 1, 2011 covering the period January 1, 2011 thru June 30, 2011 During the fourth quarter of 2011 this agreement was extended through December 31, 2012. There were no changes to the stock compensation portion of any earlier agreement.

During the third quarter in 2009 we entered into an engagement agreement with a consultant to assist the Company as the liaison to the Company’s shareholders and investors, to promote the Company and its website to the public markets, and to identify potential strategic partners, acquisition opportunities, and joint venture partners for the Company’s social networking website business. The agreement is deemed to have commenced on January 1, 2009 and extends through December 31, 2011, and calls for compensation to the consultant in the form of 2,000,000 five year warrants for the purchase of common shares, exercisable at $ 0.025 per share with a cashless exercise provision, for every six months period during the term of the agreement, and the payment in cash of unspecified amounts, the latter at the sole discretion of the Company. This agreement was amended during the second quarter of 2011 so that the options earned in 2011 would be exercisable at $0.075 per share. This amendment did not change the value per warrant and total compensation is unchanged. The original agreement furthermore recognizes that the same consultant had previously provided similar services to the Company for which he received a one-time payment in form of 15,000,000 five year warrants, exercisable at $0.0025 per share. The 15,000,000 warrants were exercised during the three months ended March 31, 2010 pursuant to a cashless exercise into 13,125,000 shares of common stock.

On March 7, 2011 the Company announced its acquisition of the assets of Pixunity.DE a German photo book community. We purchased the internet domain name, the software codes for capturing, uploading and sharing images and the list of its approximate 15,000 members. The principal reason for this purchase was to acquire the source code and technology for image sharing which could have cost up to $100,000 to develop this technology in house. We are currently integrating the image sharing software into our Kiwibox website and do not intend to market or rely upon the Pixunity brand for our business.

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LOANS PAYABLE

12 Months Ended

Dec. 31, 2011

LOANS PAYABLE

9. LOANS PAYABLE

The Company (Formerly Magnitude, Inc.) had borrowings under short term loan agreements with the following terms and conditions at December 31, 2010 and 2009:

On December 4, 1996, The company (Formerly Magnitude, Inc.) repurchased 500,000 shares of its common stock and retired same against issuance of a promissory note maturing twelve months thereafter accruing interest at 5% per annum and due December 4, 1998. This note is overdue as of September 30, 2005 and no demand for payment has been made.	$	75,000
Total	$	75,000

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ACCRUED EXPENSES

12 Months Ended

Dec. 31, 2011

ACCRUED EXPENSES

7. ACCRUED EXPENSES

Accrued expenses consisted of the following at:

	December 31, 2011		December 31, 2010
Accrued interest	$	462,020	$	168,580
Accrued payroll, payroll taxes and commissions		85,756		7,902
Accrued professional fees		151,862		111,900
Accrued rent		15,158		-
Miscellaneous accruals		46,395		20,735
Total	$	761,191	$	309,117

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OBLIGATIONS TO BE SETTLED IN STOCK

12 Months Ended

Dec. 31, 2011

OBLIGATIONS TO BE SETTLED IN STOCK

8. OBLIGATIONS TO BE SETTLED IN STOCK

Obligations to be settled in stock consisted of the following at 

	December 31,		December 31,
	2011		2010
Obligation for warrants granted for compensation	$	100,000	$	60,000
600,000 common shares issuable to a consultant who was a director of the company, for services rendered.		36,000		36,000
500,000 (2011) and 500,000 (2010) common shares, and 2,900,000 (2011) and 2,900,000 (2010) stock options issuable to two officers of the Company pursuant to their respective employment Agreements		70,605		66,858
3,300,000 (2011) and 2,100,000 (2010 stock options issuable to one director who also serves as the Company’s general counsel		32,670		20,790
1,000,000 warrants granted on the Pixunity.de asset purchase		10,000		-
	$	249,275	$	183,648

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NOTES PAYABLE

12 Months Ended

Dec. 31, 2011

NOTES PAYABLE

10. NOTES PAYABLE

	December 31,		December 31,
	2011		2010
Balance of non-converted notes outstanding. Attempts to locate the holder of this note, to settle this liability, have been unsuccessful.	$	25,000	$	25,000
In January 2008 a shareholder loaned the Company $40,000 pursuant to which the Company issued a demand note bearing interest at the rate of 5% per year.		40,000		40,000
From September 2008 through December 2011 four shareholders loaned the Company funds under the terms of the convertible notes issued, as modified in March 2009 and July 2010 and April 2011 (see Note 12).		4,347,950		1,894,980
In January 2011 and again in February 2011, a shareholder loaned the Company $50,000 under a demand note at 10%. In 2010, this shareholder loaned the Company $240,000 under a demand note at 10%.		340,000		240,000
Total	$	4,752,950	$	1,055,000

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PREFERRED STOCK

12 Months Ended

Dec. 31, 2011

PREFERRED STOCK

15. PREFERRED STOCK

Preferred stock is non-voting, $.001 par value per share with 3,000,000 shares authorized.

Cumulative Preferred Stock has 2,500 shares designated of which 1 share is issued and outstanding. The total Cumulative Preferred Stock at December 31, 2006 is $0 with a liquidation price of $100,000. As of December 31, 2011, there was $9,000 of cumulative preferred dividends in arrears representing $9,000 per cumulative preferred share.

Series A of the Senior Convertible Preferred Stock series which was issued in 2000 has 300,000 shares designated, 22,000 shares issued and outstanding. The total outstanding Series A Senior Convertible Preferred Stock at December 31, 2011 is $22 with a liquidation price of $110,000. The following is a description of the Series A convertible preferred stock:

(1) The holders of said shares of Series A Senior Preferred shall be entitled to receive cumulative dividends at the rate of seven percent (7%) per annum during the first annual period after issuance, increasing by increments of one half of one percent for every year thereafter until the rate reaches ten percent (10%) per annum at which time it will remain at 10% payable semi-annually when declared by the Board of Directors, before any dividend shall be declared, set apart for, or paid upon the Common Stock of the Company. The Dividend Rate shall accrue on the Liquidation Price of each share of the Series A Senior Preferred. The dividends on the Series A Senior Preferred, payable in cash, shall be cumulative, so that if the Company fails in any fiscal year to pay such dividends on all the issued and outstanding Series A Senior Preferred, such deficiency in the dividends shall be fully paid, but without interest, before any dividends shall be paid on or set apart for the Cumulative Preferred Stock or the Common Stock.

(2) The Series A Senior Preferred shall with respect to dividend rights and liquidation rights rank prior to all classes and series of Common Stock and the Cumulative Preferred Stock, and on a par with the Series B, C and D Senior Convertible Preferred Stock.

(3) In the event of any liquidation, of the Company, whether voluntary or otherwise, after payment or provision for payment of the debts and other liabilities of the Company, the holders of the Series A Senior Preferred shall be entitled to receive, out of the remaining net assets of the Company, the amount of Five ($5.00) dollars for each share of Series A Senior Preferred (the "Liquidation Price") held of record by such holder, payable in cash or in shares of stock, securities or other consideration, the value of which stock, securities or other consideration shall be fixed by the Board of Directors, plus the amount of all dividends in arrears on each such share up to the date fixed for distribution, provided, however, that such remaining net assets are sufficient to cover all the before mentioned payments and also like payments to holders of Series B and C Senior Preferred, before any distribution shall be made to the holders of Common Stock or Cumulative Preferred Stock of the Company. In case such remaining net assets are insufficient to cover all such payments to holders of Series A, B, C and D Senior Preferred, the holders of these series shall receive payments on a pro rata basis.

(4) The Company shall have the right to redeem pro rata any or all of its Series A Senior Preferred issued and outstanding at any time, with the Board of Directors of the Company in its sole discretion deciding how many shares to redeem, provided, however, that any such shares called for redemption have been issued and outstanding for a minimum of three (3) years at the time of notice of redemption to the holders of such shares, by paying to the holders thereof the Liquidation Price for each share of Series A Senior Preferred held by such holder plus a "call premium" of 15% of the Liquidation Price, together with the amount of any accrued and unpaid dividends as may have accumulated thereon at the time of redemption (the "Redemption Price").

(5) Each share of Series A Senior Preferred shall be convertible at any time prior to the Redemption Date, at the holder’s option, into such number (the "Conversion Ratio") of shares of the Common Stock of the Company as arrived at by dividing the Liquidation Price by one hundred fifty (150) percent of the market price of the Common Stock of the Corporation ("Market Price") on the earlier of the dates such share of Series A Senior Preferred is subscribed for or issued (the "Effective Date").

As of December 31, 2011 there were $121,665 Series A Senior Convertible Preferred share dividends accrued and unpaid representing $5.03 per share.

Series B of the Senior Convertible Preferred Stock series which was issued in 2000 has 350,000 shares designated, no shares issued and outstanding. The total outstanding Series B Senior Convertible Preferred Stock at December 31, 2011 is $0. The following is a description of the Series B Senior Convertible Stock:

(1) The holders of said shares of Series B Senior Preferred shall be entitled to receive cumulative dividends thereon at the rate of seven percent (7%) per annum, payable semi-annually when declared by the Board of Directors, before any dividend shall be declared, set apart for, or paid upon the Common Stock of the Company. The Dividend Rate shall accrue on the Liquidation Price of each share of the Series B Senior Preferred. The dividends on the Series B Senior Preferred, payable in cash, shall be cumulative, so that if the Company fails in any fiscal year to pay such dividends on all the issued and outstanding Series B Senior Preferred, such deficiency in the dividends shall be fully paid, but without interest, before any dividends shall be paid on or set apart for the Cumulative Preferred Stock or the Common Stock.

(2) The Series B Senior Preferred shall, with respect to dividend rights and liquidation rights, rank prior to all classes and series of Common Stock and the Cumulative Preferred Stock, and on a par with the Series A, C and D Senior Convertible Preferred Stock.

(3) In the event of any liquidation of the Company, whether voluntary or otherwise, after payment or providing for payment of the debts and other liabilities of the Company, the holders of the Series B Senior Preferred shall be entitled to receive, out of the remaining net assets of the Company, the amount of nine ($9.00) dollars for each share of Series B Senior Preferred (the "Liquidation Price") held of record by such holder, payable in cash or in shares of stock, securities or other consideration, the value of which stock, securities or other consideration shall be fixed by the Board of Directors, plus the amount of all dividends in arrears on each such share up to the date fixed for distribution, provided however, that such remaining net assets are sufficient to cover all the before mentioned payments and also like payments to holders of Series A and C Senior Preferred, before any distribution shall be made to the holders of Common Stock or Cumulative Preferred Stock of the Company. In case such remaining net assets are insufficient to cover all such payments to holders of Series A, B, C and D Senior Preferred, the holders of these series shall receive payments on a pro rata basis.

(4) The Company shall have the right to redeem pro rata any or all of its Series B Senior Preferred issued and outstanding at any time, with the Board of Directors of the Company in its sole discretion deciding how many shares to redeem, provided, however, that any such shares called for redemption have been issued and outstanding for a minimum of three (3) years at the time of notice of redemption of the holders of such shares, by paying to the holders thereof the Liquidation Price for each share of Series B Senior Preferred held by such holder plus a "call premium" of 10% of the Liquidation Price, together with the amount of any accrued and unpaid dividends as may have accumulated thereon at the time of redemption (the "Redemption Price").

(5) Each share of Series B Senior Preferred shall be convertible at any time prior to the Redemption Date, at the holder’s option, into shares of Common Stock of the Company on the basis of ten (10) shares of Common Stock for 1 share of Series B Senior Preferred.

As of December 31, 2011 there were no Series B Senior Convertible Preferred share dividends accrued and unpaid.

Series C of the Senior Convertible Preferred Stock series which was issued in 2000 has 120,000 shares designated. There were no shares of Series C Senior Convertible Preferred Stock outstanding at December 31, 2011. The following is a description of the Series C Senior Convertible Stock:

(1) The holders of said shares of Series C Senior Preferred shall be entitled to receive cumulative dividends thereon at the rate of seven percent (7%) per annum, payable monthly, before any dividend shall be declared, set apart for, or paid upon the Common Stock of the Company. The Dividend Rate shall accrue on the Liquidation Price (as hereinafter defined) of each share of the Series C Senior Preferred. The dividends on the Series C Senior Preferred, payable in cash, shall be cumulative, so that if the Company fails in any fiscal year to pay such dividends on all the issued and outstanding Series C Senior Preferred, such deficiency in the dividends shall be fully paid, but without interest, before any dividends shall be paid on or set apart for the Cumulative Preferred Stock or the Common Stock.

(2) The Series C Senior Preferred shall with respect to dividend rights and liquidation rights rank prior to all classes and series of Common Stock and the Cumulative Preferred Stock, and on a par with the Series A, B and D Senior Convertible Preferred Stock.

(3) In the event of any liquidation of the Company, whether voluntary or otherwise, after payment or provision for payment of the debts and other liabilities of the Company, the holders of the Series C Senior Preferred shall be entitled to receive, out of the remaining net assets of the Company, the amount of nine ($9.00) dollars for each share of Series C Senior Preferred (the "Liquidation Price") held of record by such holder, payable in cash or in shares of stock, securities or other consideration, the value of which stock, securities or other consideration shall be fixed by the Board of Directors, plus the amount of all dividends in arrears on each such share up to the date fixed for distribution, provided, however, that such remaining net assets are sufficient to cover all the before mentioned payments and also like payments to holders of Series A and B Senior Preferred, before any distribution shall be made to the holders of Common Stock or Cumulative Preferred Stock of the Company. In case such remaining net assets are insufficient to cover all such payments to holders of Series A, B, C and D Senior Preferred, the holders of these series shall receive payments on a pro rata basis.

(4) The Company shall have the right to redeem pro rata any or all of its Series C Senior Preferred issued and outstanding at any time, with the Board of Directors of the Company in its sole discretion deciding how many shares to redeem, provided, however, that any such shares called for redemption have been issued and outstanding for a minimum of three (3) years at the time of notice of redemption to the holders of such shares, by paying to the holders thereof the Liquidation Price for each share of Series C Senior Preferred held by such holder plus a "call premium" of 10% of the Liquidation Price together with the amount of any accrued and unpaid dividends as may have accumulated thereon at the time of redemption (the "Redemption Price").

(5) Each share of Series C Senior Preferred shall be convertible at any time prior to the Redemption Date, at the holder’s option, into shares of Common Stock of the Company on the basis of ten (10) shares of Common Stock for 1 share of Series C Senior Preferred.

As of December 31, 2011 there were no Series C Senior Convertible Preferred share dividends accrued and unpaid.

Series D of the Senior Convertible Preferred Stock series which was issued in 2000 has 500,000 shares designated, 63,890 shares issued and outstanding. The total outstanding Series D Senior Convertible Preferred Stock at December 31, 2011 is $64 with a liquidation price of $575,010. The following is a description of the Series D Senior Convertible Stock:

(1) The holders of said shares of Series D Senior Preferred shall be entitled to receive cumulative dividends thereon at the rate of seven percent (7%) per annum, payable semi-annually when declared by the Board of Directors before any dividend shall be declared, set apart for, or paid upon the Common Stock of the Company. The Dividend Rate shall accrue on the Stated Value (the "Stated Value"), which Stated Value shall be noted on the certificate issued to the holder, of each share of the Series D Senior Preferred. The dividends on the Series D Senior Preferred, payable in cash, shall be cumulative, so that if the Company fails in any fiscal year to pay such dividends on all the issued and outstanding Series D Senior Preferred, such deficiency in the dividends shall be fully paid, but without interest, before any dividends shall be paid on or set apart for the Cumulative Preferred Stock or the Common Stock.

(2) The Series D Senior Preferred shall with respect to dividend rights and liquidation rights rank prior to all classes and series of Common Stock and the Cumulative Preferred Stock, and on a par with the Series A, B and C Senior Convertible Preferred Stock.

(3) In the event of any liquidation of the Company, whether voluntary or otherwise, after payment or provision for payment of the debts and other liabilities of the Company, the holders of the Series D Senior Preferred shall be entitled to receive, out of the remaining net assets of the Company, an amount equal to the Stated Value of each share of Series D Senior Preferred held of record by such holder, payable in cash or in shares of stock, securities or other consideration, the value of which stock, securities or other consideration shall be fixed by the Board of Directors, plus the amount of all dividends in arrears on each such share up to the date fixed for distribution, provided, however, that such remaining net assets are sufficient to cover all the before mentioned payments and also like payments to holders of Series A, B and C Senior Preferred, before any distribution shall be made to the holders of Common Stock or Cumulative Preferred Stock of the Company. In case such remaining net assets are insufficient to cover all such payments to holders of Series A, B, C and D Senior Preferred, the holders of these series shall receive payments on a pro rata basis.

(4) The Company shall have the right to redeem pro rata any or all of its Series D Senior Preferred issued and outstanding at anytime, with the Board of Directors of the Company in its sole discretion deciding how many shares to redeem, provided, however, that any such shares called for redemption have been outstanding for a minimum of three (3) years at the time of notice of redemption to the holders of such shares, by paying to the holders thereof the Stated Value for each share of Series D Senior Preferred held by such holder plus a "call premium" of 10% of the Stated Value, together with the amount of any accrued and unpaid dividends as may have accumulated thereon at the time of redemption (the "Redemption Price").

(5) Each share of Series D Senior Preferred shall be convertible at any time prior to the Redemption Date, at the holder’s option, into shares of Common Stock of the corporation on the basis of ten (10) shares of Common Stock for 1 share of Series D Senior Preferred.

As of December 31, 2011 there were $451,201 Series D Senior Convertible Preferred share dividends accrued and unpaid representing $6.43 per share.

Series E of the Senior Convertible Preferred Stock series which was issued in 2005 has 500,000 shares designated, with no shares issued and outstanding.

(1) The holders of said shares of Series E Senior Preferred shall be entitled to receive cumulative dividends at the rate of six percent (6%) per annum, payable at the time said shares are converted into shares of common stock of the Company and when declared by the board of Directors, before any dividend shall be declared, set apart for, or paid upon the Common Stock and any other Preferred Stock of the Company. The Dividend Rate shall accrue on the Stated Value, which Stated Value shall be noted on the certificate issued to the holder of each share of the Series E Senior Preferred. The dividends on the Series E Senior Preferred, payable in cash, shall be cumulative, so that if the company fails in any fiscal year to pay such dividends on all the issued and outstanding Series E Senior Preferred, such deficiency in the dividends shall be fully paid, but without interest, before any dividends shall be paid on or set apart for any other class of Preferred Stock or the Common Stock. The holders of the currently outstanding shares of Series E Senior Convertible Stock have waived their right for dividends, consequently, no dividends have been accrued on this stock.

(2) The Series E Senior Preferred shall with respect to dividend rights rank prior to all classes and series of Common Stock, Cumulative Preferred Stock, and the Series A, B, C, and D Senior Convertible Preferred Stock and, with respect to liquidation rights rank prior to all classes and series of Common Stock, the Cumulative Preferred Stock, and be on a par with the Series A, B, C and D Senior Convertible Preferred Stock.

(3) In the event of any liquidation, dissolution, or winding up of the affairs of the Company, whether voluntary or otherwise, after payment or provision for payment of the debts and other liabilities of the Company, the holders of the Series E Senior Preferred shall be entitled to receive, out of the remaining net assets of the Company, an amount equal to the Stated Value of each share of Series E Senior Preferred held of record by such holder, payable in cash or in shares of stock, securities or other consideration, the value of which stock, securities or other consideration shall be fixed by the Board of Directors, plus the amount of all dividends in arrears on each such share up to the date fixed for distribution, provided, however, that such remaining net assets are sufficient to cover all the before mentioned payments and also like payments to holders of Series A, B, C and D Senior Preferred, before any distribution shall be made to the holders of Common Stock or Cumulative Preferred Stock of the Company. In case such remaining net assets are insufficient to cover all such payments to holders of Series A, B, C, D and E Senior Preferred, the holders of these series shall receive payments on a pro rata basis.

(4) The holders of said shares of Series E Senior Preferred shall not be entitled to any voting rights.

(5) Shares of Series E Senior Preferred which have been issued and reacquired in any manner, including shares purchased or converted into Common Stock exchanged or redeemed, shall be canceled on the books of the Company and shall not be considered outstanding for any purpose.

(6) During such time as there exist unpaid cumulative dividends due on the Series E Senior Preferred, no reclassification of the shares of the Company or capital reorganization of the Company in any manner provided by law shall be valid unless (a) the holders of a majority of all the Series E Senior Preferred approve, and (b) provision is made for the payment of the aggregate unpaid cumulative dividends then in arrears.

(7) Each share of Series E Senior Preferred shall automatically convert, on the date six months after the date of issuance (the “Conversion Date”) which Conversion Date shall be noted on the certificate issued to the holder of each share of the Series E Senior Preferred, into shares of Common Stock of the Company on the basis of one hundred (100) shares of Common Stock for 1 share of Series E Senior Preferred. The holder of any shares of Series E Senior Preferred shall surrender, as soon as practicable on or after the Conversion Date, at the principal office of the Company or at such other office or agency maintained by the Company for that purpose, the certificate or certificates representing the shares of Series E Senior Preferred due for conversion. As promptly as practicable, and in any event within ten business days after surrender of such certificates, the Company shall deliver or cause to be delivered certificates representing the number of validly issued, fully paid and non-assessable shares of Common Stock of the Company to which such holder of Series E Senior Preferred so converted shall be entitled. Such conversion shall be deemed to have been made at the close of business on the Conversion Date, so that the rights of the holders of the Series E Senior Preferred shall thereafter cease except for the right to receive Common Stock of the Company in accordance herewith, and such converting holder of Series E Senior Preferred shall be treated for all purposes as having become the record holder of such Common Stock of the Company at such time.

(8) In the event that, prior to the conversion of the Series E Senior Preferred Stock by the holder thereof into Common Stock of the company, there shall occur any change in the outstanding shares of Common Stock of the Company by reason of the declaration of stock dividends, or through a re-capitalization resulting from stock splits or combinations, without the receipt by the Company of fair consideration therefore in the form of cash, services or property, the conversion ratio of the Series E Senior Preferred Stock into Common Stock of the Company shall be adjusted such that any holder of Series E Senior Preferred Stock converting such stock into Common Stock subsequent to such change in the outstanding shares of Common Stock of the Company be entitled to receive, upon such conversion, a number of shares of Common Stock of the Company representing the same percentage of common shares outstanding as presented by the shares that he would have received had he converted his Series E Senior Preferred Stock to Common Stock prior to such change in the outstanding shares of Common Stock of the Company.

As of December 31, 2011 there were no Series E Senior Convertible Preferred share dividends accrued.

Series G of the Senior Convertible Preferred Stock series which was issued in 2007 has 43,610 shares designated. All such shares were issued and outstanding at December 31, 2008. In February 2009, these shares automatically converted into 17,857,142 common shares, leaving no Series G preferred shares outstanding at December 31, 2011.

(1) The holders of said shares of Series G Senior Convertible Preferred shall not be entitled to receive dividends.

(2) The Series G Senior Preferred shall with respect to dividend rights rank junior to all classes and series of Common Stock, Cumulative Preferred Stock, and the Series A, B, C, D, E and F Senior Convertible Preferred Stock and, with respect to liquidation rights rank prior to all classes and series of Common Stock, the Cumulative Preferred Stock, and be on a par with the Series A, B, C, D, E and F Senior Convertible Preferred Stock.

(3) In the event of any liquidation, dissolution, or winding up of the affairs of the Company, whether voluntary or otherwise, after payment or provision for payment of the debts and other liabilities of the Company, the holders of the Series E Senior Preferred shall be entitled to receive, out of the remaining net assets of the Company, an amount equal to the Stated Value of $11.46526 for each share of Series G Senior Preferred held of record by such holder, payable in cash or in shares of stock, securities or other consideration, the value of which stock, securities or other consideration shall be fixed by the Board of Directors, plus the amount of all dividends in arrears on each such share up to the date fixed for distribution, provided, however, that such remaining net assets are sufficient to cover all the before mentioned payments and also like payments to holders of Series A, B, C, D, E and F Senior Preferred, before any distribution shall be made to the holders of Common Stock or Cumulative Preferred Stock of the Company. In case such remaining net assets are insufficient to cover all such payments to holders of Series A, B, C, D, E and F Senior Preferred, the holders of these series shall receive payments on a pro rata basis.

(4) The holders of said shares of Series G Senior Preferred shall not be entitled to any voting rights.

(5) Shares of Series G Senior Preferred which have been issued and reacquired in any manner, including shares purchased or converted into Common Stock exchanged or redeemed, shall be canceled on the books of the Company and shall not be considered outstanding for any purpose.

(6) No cumulative dividends shall be payable on Series G Senior Preferred.

(7) Upon the second anniversary of the Agreement and Plan of Reorganization, dated February 19, 2007, all the issued and outstanding shares of Series G Senior Preferred automatically converted into shares of common stock based on the “Market Price”, which was determined by dividing the conversion value of $500,000 by the average sales price of a common share for the twenty successive trading days preceding the second anniversary date of the agreement, subject to a minimum of 10 million common shares. The outstanding 43,610 preferred shares converted into 17,857,142 common shares on February 19, 2009: based the average sales price for our common shares during the twenty trading days period immediately preceding February 19, 2009, of $.028. Stock certificates for the new common shares were issued upon surrender of the original preferred stock certificates.

(8) In the event that, prior to the conversion of the Series G Senior Preferred Stock by the holder thereof into Common Stock of the company, there shall occur any change in the outstanding shares of Common Stock of the Company by reason of the declaration of stock dividends, or through a re-capitalization resulting from stock splits or combinations, without the receipt by the Company of fair consideration therefore in the form of cash, services or property, the conversion ratio of the Series G Senior Preferred Stock into Common Stock of the Company shall be adjusted such that any holder of Series G Senior Preferred Stock converting such stock into Common Stock subsequent to such change in the outstanding shares of Common Stock of the Company be entitled to receive, upon such conversion, a number of shares of Common Stock of the Company representing the same percentage of common shares outstanding as presented by the shares that he would have received had he converted his Series G Senior Preferred Stock to Common Stock prior to such change in the outstanding shares of Common Stock of the Company.

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RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2011

RELATED PARTY TRANSACTIONS

20. RELATED PARTY TRANSACTIONS

During the year ended December 31, 2011 and 2010 one outside director of the Company who also serves as the Company’s general and securities counsel, was paid an aggregate $60,000 and $60,000, respectively, for each period for legal services. The director also received 100,000 common stock options per month during the year ended December 30, 2011, valued at $11,880. The director also received 100,000 common stock options per month during the year ended December 30, 2010, valued at $11,880, and $500,000 warrants in December 2010 valued at $5,000. The balance due to this director at December 31, 2011 and 2010 was $5,000 and $0, respectively.

For the year ended December 31, 2011 and 2010 we incurred an aggregate $444,390 and $252,412, respectively, to companies controlled by the Chief Technology Officer of the Company, for website hosting, website development and technical advisory services, and server farm installations, and paid $7,585 in 2010, for promotional materials.

During 2011 and 2010, the beneficial ownership in the Company’s securities held respectively, by Tell Capital AG of Switzerland and its principal, Ulrich Schuerch on a consolidated basis, was approximately 10.4% and approximately 9.9% of the voting stock was beneficially held by Discovery Advisory Company, located in the Bahamas, and Cambridge Services Inc., Kreuzfeld, LTD and Vermoegensverwaltungs-Gesellschaft Zurich LTD. (VGZ) of Switzerland. Discovery Advisory Company, Cambridge Services Inc., Kreuzfeld, LTD and VGZ are major creditors, having advanced operating capital against issuance by the Company of convertible promissory notes during 2011 and 2010.During 2011 Cambridge Services, Inc reassigned $503,760 to a third investor Kreuzfeld, Ltd and converted $377,820. During the same periods Discovery Advisory Services converted $721,800 and Kreuzfeld, Ltd. converted $492,760. To complete the acquisition of Kwick!!, Discovery Advisory Services, Kreuzfeld, Ltd and VGZ advanced $679,850, $1,903,580 and $815,820, respectively. During the year ended December 31, 2011, Cambridge Services, Inc. advanced an additional $560,000 and Discovery Advisory Services another $185,000. At December 31, 2011, $785,13434 and $492,416 of such notes were outstanding and owed to Discovery Advisory Company and Cambridge Services Inc, respectively and $1,914,580 and $815,820 owed to Kreuzfeld, Ltd. and VGZ, respectively. At December 31, 2010, $1,080,984 and $813,996 of such notes were outstanding and owed to Discover Advisory Company and Cambridge Services Inc, respectively. Aditionally, Ulrich Schuerch advanced the Company $100,000 in the year ended December 31, 2011, and holds $340,000 of demand notes issued at a rate of interest of 10%. At December 31, 2010 $240,000 of such notes were outstanding.

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Statement of Stockholders' Equity (Deficit) (USD $)	Total USD ($)	Cash received for stock subscriptions USD ($)	Partial settlements of obligation USD ($)	Services performed USD ($)	Common Stock USD ($)	Common Stock Cash received for stock subscriptions USD ($)	Common Stock Partial settlements of obligation USD ($)	Common Stock Services performed USD ($)	Stock Subscriptions Receivable USD ($)	Stock Subscriptions Receivable Cash received for stock subscriptions USD ($)	Additional Paid in Capital USD ($)	Additional Paid in Capital Partial settlements of obligation USD ($)	Additional Paid in Capital Services performed USD ($)	Accumulated Deficit USD ($)	Accumulated Other Comprehensive Income (Loss) USD ($)	Convertible Preferred Shares USD ($)	Cumulative Preferred Shares
Beginning Balances at Dec. 31, 2009	$ (2,169,971)				$ 47,817				$ (124,500)		$ 45,519,375			$ (47,612,749)		$ 86
Beginning Balances (in shares) at Dec. 31, 2009					478,168,060											85,890	1
Issuance of common stock (in shares)						5,000,000	1,950,000
Issuance of common stock		125,000	39,000			500	195			124,500		38,805
Issuance of stock purchase warrants for services performed	15,000										15,000
Cashless exercise of stock warrants Issuance (in shares)					13,125,000
Cashless exercise of stock warrants Issuance					1,313						(1,313)
Dividends on conv. preferred stock	(51,263)													(51,263)
Net loss	(3,972,372)													(3,972,372)
Ending Balances at Dec. 31, 2010	(6,014,608)				49,824						45,571,867			(51,636,385)		86
Ending Balances (in shares) at Dec. 31, 2010					498,243,060											85,890	1
Issuance of common stock (in shares)							1,200,000	725,000
Issuance of common stock			24,000	28,928			120	73				23,880	28,855
Shares issued upon conversions of debt (in shares)					86,000,000
Shares issued upon conversions of debt	2,031,280				8,600						2,022,680
Recognition of capital from conversion of derivative liabilities	2,053,369										2,053,370
Dividends on conv. preferred stock	(51,263)													(51,263)
Net loss	(5,900,537)													(5,900,537)
Other comprehensive income:
Foreign currency translation loss	(144,872)														(144,872)
Ending Balances at Dec. 31, 2011	$ (7,973,700)				$ 58,618						$ 49,700,653			$ (57,588,185)	$ (144,872)	$ 86
Ending Balances (in shares) at Dec. 31, 2011					586,168,060											85,890	1

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PREPAID EXPENSES

12 Months Ended

Dec. 31, 2011

PREPAID EXPENSES

4. PREPAID EXPENSES

Prepaid expenses consist of the following at:	December 31, 2011		December 31, 2010
Rent	$	20,512	$	-
Promotional supplies inventory		10,302		25,176
Business insurance		9,237		6,536
Other		2,190		2,729
		42,241		34,441

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ACQUISITION OF KWICK!

12 Months Ended

Dec. 31, 2011

ACQUISITION OF KWICK!

21. ACQUISITION OF KWICK!

On September 30, 2011 Kiwibox.com acquired 100% of the limited partner’s interests in the social network, KWICK!! Community GmbH & Co. KG, a private German Limited Partnership and all of the shares of its General Partner, Kwick!! Community Beteiligungs GMBH for 7,100,000 Euros, payable as follows: 2,500,000 euros at the closing on September 30, 2011. On March 14, 2012 payment arrangements were changed to reflect the following: 2,300,000 Euros by April 13, 2012 and a third payment on or before April 26, 2012 of 1,600,000. This converts using the conversion rate in effect on September 30, 2011 to $8,567,343. The original agreement also called for 700,000 Euros, contingent on certain earnings goals (“original bonus payment”).The original payment was amended by mutual consent of both parties and the original bonus payment possibly due Kwick! were eliminated.

Kwick! is a leading Social network Community in Europe focused on the German speaking market, with more than 1 million members and more than 2.5 Million unique users a month generating 2 Billion page impressions per month.

The following table represents the fair values of the assets acquired and liabilities assumed as of the date of the acquisition:

Cash	$	339,198
Accounts receivable, net		643,403
Related party receivables		16,225
Other receivables		120,352
Prepaid expenses and other current assets		43,348
Fixed assets		314,479
Software		80,101
Deferred tax asset		1,106,047
Other assets		24,486
Income tax payable		(78,852	)
Accounts payable		(8,061	)
Accrued expenses		(171,093	)
Net assets acquired with acquisition	$	2,429,633

The excess of purchase price over tangible net assets acquired at September 30, 2011 was initially allocated to goodwill in the amount of $6,138,210. Due to exchange rate fluctuations, the Company recorded an unrealized loss of $200,832 against the foreign currency translation gain (loss), reducing the carrying value to $5,937,378.

The goodwill is the residual value after identified assets are separately valued and represents the acquired workforce and expected future cash flows. Goodwill is not expected to be deductible for tax purposes. The Company will obtain a valuation to determine if there are any identifiable intangible assets and the final allocation of the purchase price within the measurement period.

The following unaudited pro forma financial information for the year ended December 31, 2011 and 2010 combines the historical results of the company Kiwibox.com and its acquired subsidiary Kwick! as if the acquisition occurred on January 1, 2010, as follows:

2011	Year Ended December 31, 2011
Revenues	$	3,426,181
Net Operating (Loss)		(883,298	)
Net (Loss)		(5,113,049	)
Net (loss) per share 2011		(0.010	)

2010	Year Ended December 31, 2010
Revenues	$	5,320,008
Net Operating (Loss)		687,581
Net (Loss)		(2,936,143	)
Net (loss) per share		(0.006	)

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FAIR VALUE

12 Months Ended

Dec. 31, 2011

FAIR VALUE

14. FAIR VALUE

Some of the Company’s financial instruments are not measured at fair value on a recurring basis but are recorded at amounts that approximate fair value due to their liquid or short-term nature, such as cash and cash equivalents, receivables and payables.

Effective July 1 2009, the Company adopted ASC 820, Fair Value Measurements and Disclosures. This topic defines fair value for certain financial and nonfinancial assets and liabilities that are recorded at fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. This guidance supersedes all other accounting pronouncements that require or permit fair value measurements. The Company accounted for the conversion features underlying certain convertible debentures in accordance with ASC 815-40, Contracts in Entity’s Own Equity, as the conversion feature embedded in the convertible debentures could result in the note principal and related accrued interest being converted to a variable number of the Company’s common shares.

Effective July 1 2009, the Company adopted ASC 820-10-55-23A, Scope Application to Certain Non-Financial Assets and Certain Non-Financial Liabilities, delaying application for non-financial assets and non-financial liabilities as permitted. ASC 820 establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows:

Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date. Financial assets and liabilities utilizing Level 1 inputs include active exchange- traded securities and exchange-based derivatives.

Level 2 — inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. Financial assets and liabilities utilizing Level 2 inputs include fixed income securities, non-exchange-based derivatives, mutual funds, and fair-value hedges.

Level 3 — unobservable inputs for the asset or liability only used when there is little, if any, market activity for the asset or liability at the measurement date. Financial assets and liabilities utilizing Level 3 inputs include infrequently- traded, non-exchange-based derivatives and commingled investment funds, and are measured using present value pricing models.

The following table reconciles, for the year ended December 31, 2011, the beginning and ending balances for financial instruments that are recognized at fair value in the consolidated financial statements:

Conversion Liability at January 1, 2010	$	-
Value of beneficial conversion features of new debentures		2,083,716
Change in value of beneficial conversion features during period		538,692
Reductions in fair value due to principal conversions		-
Conversion Liability at December 31, 2010		2,622,408
Value of beneficial conversion features of new debentures		3,659,669
Change in value of beneficial conversion features during period		476,281
Reductions in fair value due to principal conversions		(2,053,371	)
Conversion Liability at December 31, 2011	$	4,704,987

The fair value of the conversion features are calculated at the time of issuance and the Company records a conversion liability for the calculated value. The Company recognizes interest expense for the recognition of the conversion liability.