UNITED STATES

SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-Q

(Mark One)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or 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. [X] Yes [  ] No

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

Large accelerated filer [  ]                      

Accelerated filer [  ]

Non-accelerated filer [  ]

Smaller reporting company [X]

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

As of February 19, 2014 the Registrant had 2,878,848 shares of its $0.00001 par value Common Stock outstanding.

Explanatory Note:

Filed to correct wording in Item 4 Controls and Procedures, Exhibits 31.1, 31.2 and 32.1.  No other changes have been made.

1

TABLE OF CONTENTS

PAGE

PART I — FINANCIAL INFORMATION

3

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

3

ITEM 2. MANAGEMENT’S DISCUSSON AND ANALYSIS OF FINANCIALS CONDITION

AND RESULTS OF OPERATIONS

17

PART II — OTHER INFORMATION

24

ITEM 1. LEGAL PROCEEDINGS

24

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

24

ITEMS 3. DEFAULTS UPON SENIOR SECURITIES

24

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

24

ITEM 5. OTHER INFORMATION

24

None

24

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

24

SIGNATURES

25

2

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

6

SILVERTON ADVENTURES, INC.

Notes to Condensed Consolidated Financial Statements

December 31, 2013 (Unaudited)

NOTE 1 - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The accompanying consolidated financial statements have been prepared by the Company without audit.  In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at December 31, 2013, and for all periods presented herein, have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted.  It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's June 30, 2013 audited financial statements.  The results of operations for the periods ended December 31, 2013 and 2012 are not necessarily indicative of the operating results for the full years.

NOTE 2 - GOING CONCERN

The Company's financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs which raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES

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.

Recent Accounting Pronouncements

Management has considered all recent accounting pronouncements issued since the last audit of its financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

Basic (Loss) per Common Share

Basic loss per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are 7,084,544 common stock equivalents outstanding as of December 31, 2013.

NOTE 4 – RELATED-PARTY TRANSACTIONS

Related party payables totaled $-0- and $1,100 at December 31, 2013 and June 30, 2013, respectively. These amounts payable bear no interest, are uncollateralized and due on demand.  

7

SILVERTON ADVENTURES, INC.

Notes to Condensed Consolidated Financial Statements

December 31, 2013 (Unaudited)

NOTE 5 – ROYALTIES

The Company entered into several royalty agreements wherein the Company acquired rights to licensed content.  The Company intends to either reproduce and distribute the media or sublicense the rights to another party.  The agreements require the Company to pay an upfront royalty fee and then ongoing royalty fees of 15 to 30 percent of gross sales receipts over the life of the licensing agreement.  The agreements vary in length from three to five years.  Royalty expenses totaled $1,761 and $11,374 for the six months ended December 31, 2013 and 2012, respectively. 

As of December 31, 2013 and June 30, 2013, royalty payables under these agreements totaled $41,030 and $39,806, respectively.

Under some of these arrangements, the Company pays an upfront royalty fee that is applied to future royalties as the Company achieves sales and incurs corresponding royalty expense.  The upfront fees that are to be applied against future royalty expenses are capitalized and amortized as royalty expenses are applied.  As of December 31, 2013 and June 30, 2013, the Company has recorded $8,833 and $8,999 as prepaid royalties, respectively. 

The Company has also entered into similar royalty agreements wherein the Company licenses content rights to third parties in exchange for a royalty fee.  During the six months ended December 31, 2013 and 2012, the Company recognized royalty revenue of $22,373 and $22,375, respectively.

NOTE 6 – CONVERTIBLE NOTES PAYABLE

On July 20, 2011, the Company entered into a convertible note payable in the amount of $10,000.  The note bears interest at 8.5 percent per annum and has a maturity date of July 20, 2014.  The creditor has the option at any time to convert the principal and any accrued interest into common stock of the Company according to the following stock prices: year one, $0.75 per share; year two, $1.00 per share; and year Three, $1.25 per share. During the fiscal year ended June 30, 2012 the entire note with a principal balance of $10,000 along with $1,306 in accrued interest was assigned to a third party; in addition the Company assigned another note payable in the amount of $30,000 and accrued interest of $2,544 to the third party. The total aggregate amount assigned to the third party was $43,851. The terms of the assigned notes were amended. The amended terms are:

·

The assigned notes bear interest at 10%

·

The assigned notes are due on demand

·

The principal balance of the note along with accrued interest is convertible at any time, at the option of the note holder, into the Company's common stock at a price of 45 percent of the current market price.  The current market price is defined as the average of the lowest three trading prices for the Common Stock during the ten day period on the latest complete trading day prior to the conversion date. 

As of December 31, 2013 and June 30, 2013, the note balance was $28,851 and $28,851 respectively.

On November 6, 2012, the Company borrowed $42,500 from an unrelated third party entity in the form of a convertible note, $33,000 of which was received in cash and $9,500 of which was for professional fees.  The note bears interest at 8 percent per annum with principal and interest due in full on August 8, 2013.  

During the six months ended December 31, 2013 the Company issued 118,056 shares of common stock for conversion of debt in the amount of $42,500 which fully extinguished the debt.

8

SILVERTON ADVENTURES, INC.

Notes to Condensed Consolidated Financial Statements

December 31, 2013 (Unaudited)

NOTE 6 – CONVERTIBLE NOTES PAYABLE (Continued)

The principal balance of the note along with accrued interest is convertible at any time, at the option of the note holder, into the Company's common stock at a price of 55 percent of the current market price.  The current market price is defined as the average of the lowest three trading prices for the Common Stock during the ten day period on the latest complete trading day prior to the conversion date.  

Pursuant to this conversion feature, the Company recognized a discount on convertible debt in the amount of $42,500 on the note date.  As of December 31, 2013 the Company had amortized $42,500 of the debt discount to interest expense, leaving $-0- in unamortized debt discount at December 31, 2013.

The fair value of the conversion option of the convertible note of $67,368 has been recognized as a derivative liability on the date of issuance with all future changes in the fair value of these conversion options being recognized in earnings in the Company’s statement of operations under the caption “Other income (expense) – Gain (loss) on derivative liability” until such time as the note is converted or the conversion feature expires.

The Company uses the Black-Scholes option pricing model to value the derivative liability and subsequent remeasurements.  Included in the model are the following assumptions: stock price of $0.99, exercise price of $0.495, dividend yield of zero, years to maturity of 0.75, risk free rate of 0.10 percent, and annualized volatility of 237.60 percent.

ASC 815 requires the Company to assess the fair market value of certain derivatives at each reporting period and recognize any change in the fair market value of the derivatives as gain (loss) on the income statements.  At December 31, 2013 the derivative liability was extinguished due to the conversion of debt, which led to the Company recording a gain on derivative liability in the amount of $32,749.

On December 26, 2012 the Company entered into a convertible note agreement. Pursuant to the agreement, the agreement was consummated on January 2, 2013 upon the Company’s receipt of $32,500 cash proceeds from the note.   The note bears interest at 8 percent per annum with principal and interest due in full on December 31, 2013.  The principal balance of the note along with accrued interest is convertible after 180 days, at the option of the note holder, into the Company's common stock at a price of 55 percent of the current market price.  The current market price is defined as the average of the lowest three trading prices for the Common Stock during the ten day period on the latest complete trading day prior to the conversion date.

During the six months ended December 31, 2013 the Company issued 283,026 shares of common stock for conversion of debt in the amount of $32,500 which fully extinguished the debt.

Pursuant to this conversion feature, the Company recognized a discount on convertible debt in the amount of $32,500 on the note date.  As of December 31, 2013 the Company had amortized $32,500 of the debt discount to interest expense, leaving $-0- in unamortized debt discount at December 31, 2013.

The fair value of the conversion option of the convertible note of $46,796  has been recognized as a derivative liability on the date of issuance with all future changes in the fair value of these conversion options being recognized in earnings in the Company’s statement of operations under the caption “Other income (expense) – Gain (loss) on derivative liability” until such time as the note is converted or the conversion feature expires.

The Company uses the Black-Scholes option pricing model to value the derivative liability and subsequent remeasurements.  Included in the model are the following assumptions: stock price of $0.55 to $0.005, exercise price of $0.3025 to $0.0002, dividend yield of zero, years to maturity of 0.74to 0.05, risk free rate of 0.14 to 0.01 percent, and annualized volatility of 247 to 350 percent.

ASC 815 requires the Company to assess the fair market value of certain derivatives at each reporting period and recognize any change in the fair market value of the derivatives as gain (loss) on the income statements.   At December 31, 2013 the derivative liability was revalued at $-0-, which led to the Company recording a loss on derivative liability in the amount of $74,173.

9

SILVERTON ADVENTURES, INC.

Notes to Condensed Consolidated Financial Statements

December 31, 2013 (Unaudited)

NOTE 6 – CONVERTIBLE NOTES PAYABLE (Continued)

On February 1, 2013 the Company borrowed $43,581 from an unrelated third party entity in the form of a convertible note. The note bears interest at 10 percent per annum and is due on demand. The principal balance of the note along with accrued interest is convertible at the option of the note holder, into the Company's common stock at a price of 55 percent of the current market price.  The current market price is defined as the average of the lowest three trading prices for the Common Stock during the ten day period on the latest complete trading day prior to the conversion date.

At December 31, 2013 the remaining note balance was $28,851.

Pursuant to this conversion feature, the Company recognized a discount on convertible debt in the amount of $37,500 on the note date.  As of December 31, 2013 the Company had amortized $37,500 of the debt discount to interest expense, leaving $-0- in unamortized debt discount at December 31, 2013.

The fair value of the conversion option of the convertible note of $44,256 has been recognized as a derivative liability at December 31, 2013 with all future changes in the fair value of these conversion options being recognized in earnings in the Company’s statement of operations under the caption “Other income (expense) – Gain (loss) on derivative liability” until such time as the note is converted or the conversion feature expires.

The Company uses the Black-Scholes option pricing model to value the derivative liability and subsequent remeasurements.  Included in the model are the following assumptions: stock price of $.05, exercise price of $0.02, dividend yield of zero, years to maturity of 0.25, risk free rate of 0.07 percent, and annualized volatility of 496 percent.

ASC 815 requires the Company to assess the fair market value of certain derivatives at each reporting period and recognize any change in the fair market value of the derivatives as gain (loss) on the income statements.   At December 31, 2013 the derivative liability was valued at $44,256, which led to the Company recording a loss on derivative liability in the amount of $44,256.

On February 5, 2013 the Company borrowed $37,500 from an unrelated third party entity in the form of a convertible note. The note bears interest at 8 percent per annum with principal and interest due in full on November 7, 2013.  The principal balance of the note along with accrued interest is convertible after 180 days, at the option of the note holder, into the Company's common stock at a price of 55 percent of the current market price.  The current market price is defined as the average of the lowest three trading prices for the Common Stock during the ten day period on the latest complete trading day prior to the conversion date.

On November 8, 2013 the Company became delinquent on the note and pursuant to the note agreement the Company incurred a penalty of $16,300 (150% of the outstanding principal balance).

During the six months ended December 31, 2013 the Company issued 269,164 shares of common stock for conversion of debt in the amount of $39,800 leaving a remaining note balance of $14,000 at December 31, 2013.

Pursuant to this conversion feature, the Company recognized a discount on convertible debt in the amount of $37,500 on the note date.  As of December 31, 2013 the Company had amortized $37,500 of the debt discount to interest expense, leaving $-0- in unamortized debt discount at December 31, 2013.

The fair value of the conversion option of the convertible note of $132,450 has been recognized as a derivative liability on the date of issuance with all future changes in the fair value of these conversion options being recognized in earnings in the Company’s statement of operations under the caption “Other income (expense) – Gain (loss) on derivative liability” until such time as the note is converted or the conversion feature expires.

10

SILVERTON ADVENTURES, INC.

Notes to Condensed Consolidated Financial Statements

December 31, 2013 (Unaudited)

NOTE 6 – CONVERTIBLE NOTES PAYABLE (Continued)

The Company uses the Black-Scholes option pricing model to value the derivative liability and subsequent remeasurements.  Included in the model are the following assumptions: stock price of $0.68 to $0.0003, exercise price of $0.1925 to $0.0001, dividend yield of zero, years to maturity of 0.75 to 0.10, risk free rate of 0.13 to 0.03 percent, and annualized volatility of 842.72 to 312.36 percent.

ASC 815 requires the Company to assess the fair market value of certain derivatives at each reporting period and recognize any change in the fair market value of the derivatives as gain (loss) on the income statements.   At December 31, 2013 the derivative liability was revalued at $21,462, which led to the Company recording a gain on derivative liability in the amount of $6,528.

On March 27, 2013 the Company borrowed $25,000 from an unrelated third party entity in the form of a convertible note. Pursuant to the note agreement the Company was charged a 10% original issue discount of $2,500. The note bears no interest for the first Three months. If the Company does not repay the note on or before 90 days from the effective date, a one-time interest charge of 12% shall be applied to the Principle sum of the note. Principal and interest on the note are due in full on March 27, 2014. The principal balance of the note along with accrued interest is convertible at any time at the option of the note holder, into the Company's common stock at a price of the lessor of, $0.09, or 60 percent of the lowest trading price for the Common Stock during the twenty five day period on the latest complete trading day prior to the conversion date.

Pursuant to this conversion feature, the Company recognized a discount on convertible debt in the amount of $25,000 on the note date.  As of December 31, 2013 the Company had amortized $21,192 of the debt discount to interest expense, leaving $3,808 in unamortized debt discount at December 31, 2013.

The fair value of the conversion option of the convertible note of $36,222 has been recognized as a derivative liability on the date of issuance with all future changes in the fair value of these conversion options being recognized in earnings in the Company’s statement of operations under the caption “Other income (expense) – Gain (loss) on derivative liability” until such time as the note is converted or the conversion feature expires.

The Company uses the Black-Scholes option pricing model to value the derivative liability and subsequent remeasurements.  Included in the model are the following assumptions: stock price of $0.9 to $0.0003, exercise price of $0.054 to $0.0002, dividend yield of zero, years to maturity of 1 to 0.24, risk free rate of 0.14 to 0.07 percent, and annualized volatility of 274 to 558 percent.

ASC 815 requires the Company to assess the fair market value of certain derivatives at each reporting period and recognize any change in the fair market value of the derivatives as gain (loss) on the income statements.   At December 31, 2013 the derivative liability was revalued at $17,428, which led to the Company recording a gain on derivative liability in the amount of $27,012.

During the six months ended December 31, 2013 the Company issued 214,000 shares of common stock for conversion of debt in the amount of $10,700 leaving a remaining note balance of $14,300 at December 31, 2013.

On May 1, 2013 the Company entered into a convertible note agreement to borrow $9,500. Pursuant to the agreement, the agreement was consummated on May 2, 2013 upon the Company’s receipt of $-0- cash proceeds and $9,500 of which was for professional fees. The note bears interest at 8 percent per annum with principal and interest due in full on February 3, 2014.  The principal balance of the note along with accrued interest is convertible after 180 days, at the option of the note holder, into the Company's common stock at a price of 55 percent of the current market price.  The current market price is defined as the average of the lowest three trading prices for the Common Stock during the ten day period on the latest complete trading day prior to the conversion date.

Pursuant to this conversion feature, the Company recognized a discount on convertible debt in the amount of $633 on the note date.  As of December 31, 2013 the Company had amortized $555 of the debt discount to interest expense, leaving $78 in unamortized debt discount at December 31, 2013.

11

SILVERTON ADVENTURES, INC.

Notes to Condensed Consolidated Financial Statements

December 31, 2013 (Unaudited)

NOTE 6 – CONVERTIBLE NOTES PAYABLE (Continued)

The fair value of the conversion option of the convertible note of $633 has been recognized as a derivative liability on the date of issuance with all future changes in the fair value of these conversion options being recognized in earnings in the Company’s statement of operations under the caption “Other income (expense) – Gain (loss) on derivative liability” until such time as the note is converted or the conversion feature expires.

The Company uses the Black-Scholes option pricing model to value the derivative liability and subsequent remeasurements.  Included in the model are the following assumptions: stock price of $0.035 to $0.0003, exercise price of $0.3025 to $0.0001, dividend yield of zero, years to maturity of 0.76to 0.35, risk free rate of 0.1 to 003 percent, and annualized volatility of 311 to 486 percent.

ASC 815 requires the Company to assess the fair market value of certain derivatives at each reporting period and recognize any change in the fair market value of the derivatives as gain (loss) on the income statements.   At December 31, 2013 the derivative liability was revalued at $8,717, which led to the Company recording a gain on derivative liability in the amount of $6,417.

On May 24, 2013 the Company entered into a convertible note agreement. Pursuant to the agreement, the agreement was consummated on June 3, 2013 upon the Company’s receipt of $32,830 cash proceeds and $14,670 of which was for professional fees. The note bears interest at 8 percent per annum with principal and interest due in full on February 28, 2014.  The principal balance of the note along with accrued interest is convertible after 180 days, at the option of the note holder, into the Company's common stock at a price of 55 percent of the current market price.  The current market price is defined as the average of the lowest three trading prices for the Common Stock during the ten day period on the latest complete trading day prior to the conversion date.

Pursuant to this conversion feature, the Company recognized a discount on convertible debt in the amount of $47,500 on the note date.  As of December 31, 2013 the Company had amortized $37,120 of the debt discount to interest expense, leaving $10,380 in unamortized debt discount at December 31, 2013.

The fair value of the conversion option of the convertible note of $120,160 has been recognized as a derivative liability on the date of issuance with all future changes in the fair value of these conversion options being recognized in earnings in the Company’s statement of operations under the caption “Other income (expense) – Gain (loss) on derivative liability” until such time as the note is converted or the conversion feature expires.

The Company uses the Black-Scholes option pricing model to value the derivative liability and subsequent remeasurements.  Included in the model are the following assumptions: stock price of $0299 to $0.0003, exercise price of $0.011 to $0.0001, dividend yield of zero, years to maturity of 0.74 to 0.41, risk free rate of 0.10 to 0.03 percent, and annualized volatility of 363 to 502 percent.

ASC 815 requires the Company to assess the fair market value of certain derivatives at each reporting period and recognize any change in the fair market value of the derivatives as gain (loss) on the income statements.  At December 31, 2013 the derivative liability was revalued at $52,228, which led to the Company recording a gain on derivative liability in the amount of $23,609.

On July 26, 2013 the Company entered into a convertible note agreement to borrow $37,500. Pursuant to the agreement, the Company received cash proceeds of $24,700 and $12,800 of which was for professional fees. The note bears interest at 8 percent per annum with principal and interest due in full on April 30, 2014.  The principal balance of the note along with accrued interest is convertible after 180 days, at the option of the note holder, into the Company's common stock at a price of 55 percent of the current market price.  The current market price is defined as the average of the lowest three trading prices for the Common Stock during the ten day period on the latest complete trading day prior to the conversion date.

Pursuant to this conversion feature, the Company recognized a discount on convertible debt in the amount of $37,500 on the note date.  As of December 31, 2013 the Company had amortized $21,313 of the debt discount to interest expense, leaving $16,187 in unamortized debt discount at December 31, 2013.

12

SILVERTON ADVENTURES, INC.

Notes to Condensed Consolidated Financial Statements

December 31, 2013 (Unaudited)

NOTE 6 – CONVERTIBLE NOTES PAYABLE (Continued)

The fair value of the conversion option of the convertible note of $47,860 has been recognized as a derivative liability on the date of issuance with all future changes in the fair value of these conversion options being recognized in earnings in the Company’s statement of operations under the caption “Other income (expense) – Gain (loss) on derivative liability” until such time as the note is converted or the conversion feature expires.

The Company uses the Black-Scholes option pricing model to value the derivative liability and subsequent remeasurements.  Included in the model are the following assumptions: stock price of $0.0011 to $0.0003, exercise price of $0.0008 to $0.0001, dividend yield of zero, years to maturity of 0.76 to 0.58, risk free rate of 0.10 to 0.04 percent, and annualized volatility of 407 to 463 percent.

ASC 815 requires the Company to assess the fair market value of certain derivatives at each reporting period and recognize any change in the fair market value of the derivatives as gain (loss) on the income statements. At December 31, 2013 the derivative liability was revalued at $58,961, which led to the Company recording a loss on derivative liability in the amount of $11,101.

On October 4, 2013 the Company entered into a convertible note agreement to borrow $14,500. Pursuant to the agreement, the Company received no cash and $14,500 which was for professional fees. The note bears interest at 8 percent per annum with principal and interest due in full on July 8, 2014.  The principal balance of the note along with accrued interest is convertible after 180 days, at the option of the note holder, into the Company's common stock at a price of 55 percent of the current market price.  The current market price is defined as the average of the lowest three trading prices for the Common Stock during the ten day period on the latest complete trading day prior to the conversion date.

Pursuant to this conversion feature, the Company recognized a discount on convertible debt in the amount of $14,500 on the note date.  As of December 31, 2013 the Company had amortized $4,606 of the debt discount to interest expense, leaving $9,894 in unamortized debt discount at December 31, 2013.

The fair value of the conversion option of the convertible note of $14,500 has been recognized as a derivative liability on the date of issuance with all future changes in the fair value of these conversion options being recognized in earnings in the Company’s statement of operations under the caption “Other income (expense) – Gain (loss) on derivative liability” until such time as the note is converted or the conversion feature expires.

The Company uses the Black-Scholes option pricing model to value the derivative liability and subsequent remeasurements.  Included in the model are the following assumptions: stock price of $0.15 to $0.05, exercise price of $0.45 to $0.0275, dividend yield of zero, years to maturity of 0.76 to 0.52, risk free rate of 0.11 to 0.13 percent, and annualized volatility of 473 to 503 percent.

ASC 815 requires the Company to assess the fair market value of certain derivatives at each reporting period and recognize any change in the fair market value of the derivatives as gain (loss) on the income statements. At December 31, 2013 the derivative liability was revalued at $25,013, which led to the Company recording a gain on derivative liability in the amount of $21,441.

On November 13, 2013 the Company entered into a convertible note agreement to borrow $6,500. Pursuant to the agreement, the Company received no cash and $6,500 which was for professional fees. The note bears interest at 8 percent per annum with principal and interest due in full on August 15, 2014.  The principal balance of the note along with accrued interest is convertible after 180 days, at the option of the note holder, into the Company's common stock at a price of 31 percent of the current market price.  The current market price is defined as the average of the lowest three trading prices for the Common Stock during the ten day period on the latest complete trading day prior to the conversion date.

Pursuant to this conversion feature, the Company recognized a discount on convertible debt in the amount of 6,500 on the note date.  As of December 31, 2013 the Company had amortized $1,135 of the debt discount to interest expense, leaving $5,365 in unamortized debt discount at December 31, 2013.

13

SILVERTON ADVENTURES, INC.

Notes to Condensed Consolidated Financial Statements

December 31, 2013 (Unaudited)

NOTE 6 – CONVERTIBLE NOTES PAYABLE (Continued)

The fair value of the conversion option of the convertible note of $6,500 has been recognized as a derivative liability on the date of issuance with all future changes in the fair value of these conversion options being recognized in earnings in the Company’s statement of operations under the caption “Other income (expense) – Gain (loss) on derivative liability” until such time as the note is converted or the conversion feature expires.

The Company uses the Black-Scholes option pricing model to value the derivative liability and subsequent remeasurements.  Included in the model are the following assumptions: stock price of $0.2 to $0.05, exercise price of $0.015 to $0.0155, dividend yield of zero, years to maturity of 0.75 to 0.62, risk free rate of 0.11 to 0.13 percent, and annualized volatility of 494 to 505 percent.

ASC 815 requires the Company to assess the fair market value of certain derivatives at each reporting period and recognize any change in the fair market value of the derivatives as gain (loss) on the income statements. At December 31, 2013 the derivative liability was revalued at $20,445, which led to the Company recording a gain on derivative liability in the amount of $162.

On November 1, 2013 the Company borrowed $5,000 in the form of a convertible note payable. The note bears no interest and is due on demand. The note is convertible into shares of the Company’s common stock at a conversion price of $.00001. The Company analyzed the convertible debt for a beneficial conversion feature under ASC 470-20 on the date of the note and determined that a beneficial conversion feature exists. The intrinsic value of the beneficial conversion feature was determined to be $5,000 and was recorded as debt discount. During the six months ended December 31, 2013, debt discount of $5,000 was amortized.

On November 8, 2013 the Company borrowed $12,000 in the form of a convertible note payable. The note bears no interest and is due on demand. The note is convertible into shares of the Company’s common stock at a conversion price of $.00001. The Company analyzed the convertible debt for a beneficial conversion feature under ASC 470-20 on the date of the note and determined that a beneficial conversion feature exists. The intrinsic value of the beneficial conversion feature was determined to be $12,000 and was recorded as debt discount. During the six months ended December 31, 2013, debt discount of $12,000 was amortized.

On November 18, 2013 the Company borrowed $5,000 in the form of a convertible note payable. The note bears no interest and is due on demand. The note is convertible into shares of the Company’s common stock at a conversion price of $.00001. The Company analyzed the convertible debt for a beneficial conversion feature under ASC 470-20 on the date of the note and determined that a beneficial conversion feature exists. The intrinsic value of the beneficial conversion feature was determined to be $5,000 and was recorded as debt discount. During the six months ended December 31, 2013, debt discount of $5,000 was amortized.

NOTE 7 – STOCKHOLDERS’ DEFICIT

On December 2, 2011 the Company issued 100,000 shares of Series A preferred stock to two unrelated entities for cash at $0.10 per share in exchange for $3,500 and $6,500 in professional fees paid on behalf of the Company by the recipient of the shares.  According to the terms of the preferred stock, each share of Series A preferred stock is convertible into shares of the Company’s common stock at a conversion ratio of one hundred (100) shares of common stock for every one (1) shares of preferred stock.  The Company’s Series A preferred stock is not entitled to receive any dividends, has no liquidation rights, and is not entitled to any voting rights.

During the year ended June 2013 17,600 shares of Series A preferred stock were converted into 3,520 shares of common stock.

During the six months ended December 31, 2013 the Company issued an aggregate of 1,522,246 shares of common stock to various entities upon conversion of various debts.  The common stock was valued at the value of the debt converted in cases in which no derivative liability was associated with the converted debt, or at the fair market value of the shares issued in cases which derivative liabilities were associated with the converted debt. The total value of common stock issued upon conversion of debt was $128,790.

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SILVERTON ADVENTURES, INC.

Notes to Condensed Consolidated Financial Statements

December 31, 2013 (Unaudited)

NOTE 7 – STOCKHOLDERS’ DEFICIT (Continued)

On November 1, 2013, the Company approved a 1 for 500 reverse stock split of the Company’s common stock. All references to share and per share amounts in the consolidated financial statements and accompanying notes to the consolidated financial statements have been retroactively restated to reflect the stock split.

NOTE 8 – SEGMENT DISCLOSURES

Operating segments are defined as components of an enterprise about which separate and discreet financial information is available and is evaluated regularly by the chief operating decision-maker in assessing performance and determining how to best allocate Company resources. The Company’s chief operating decision makers direct the allocation of resources to operating segments based on the profitability and cash flows of each respective segment.

The Company has two principal operating segments: (1) printing services, and (2) media development and distribution. These operating segments were delineated based on the nature of the products and services offered.

The Company has determined that there are two reportable segments: (1) printing services and (2) media development and distribution.  The Company evaluates the financial performance of the respective segments based on several factors, of which the primary measure is business segment income before taxes. The following tables show the operations of the Company’s reportable segments for the six months ended December 31, 2013 and 2012:

NOTE 9 – FAIR VALUE MEASUREMENTS AND DERIVATIVE LIABILITY

The Company evaluates all of it financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. For option-based derivative financial instruments, the Company uses the Black-Scholes option-pricing model to value the derivative instruments at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.

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SILVERTON ADVENTURES, INC.

Notes to Condensed Consolidated Financial Statements

December 31, 2013 (Unaudited)

NOTE 9 – FAIR VALUE MEASUREMENTS AND DERIVATIVE LIABILITY (Continued)

Under ASC-815 the conversion options embedded in the notes payable described in Note 6 require liability classification because they do not contain an explicit limit to the number of shares that could be issued upon settlement.

During 2013, certain notes payable were converted resulting in settlement of the related derivative liabilities.  The Company re-measured the embedded conversion options at fair value on the date of settlement and recorded these amounts to additional paid-in capital.

During 2013, the Company issued additional convertible notes.  The conversion options and warrants were classified as derivative liabilities at their fair value on the date of issuance.

As defined in FASB ASC 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilized the market data of similar entities in its industry or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. FASB ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).

The three levels of the fair value hierarchy are as follows:

The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value as December 31, 2013.

NOTE 10 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events in accordance with ASC 855 and has not identified any reportable subsequent events.

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ITEM 2. MANAGEMENT’S DISCUSSON AND ANALYSIS OF FINANCIALS CONDITION AND RESULTS OF OPERATIONS

This section must be read in conjunction with the unaudited Financial Statements included in this report.

A.

Management’s Discussion

Silverton Adventures, Inc. ("SAI" or the "Company"), was originally incorporated in the State of Nevada on May 31, 2006 as Mor Travel, Inc. (“Mor”). On December 26, 2007, the Company changed its name to Silverton Adventures, Inc.

The Company recently formed a new wholly owned subsidiary named Silverton Printing, Inc. (“Silverton Printing”) whereby it operates its original printing and mailing services to companies nationwide. On December 30, 2010, the Company acquired 100% of the outstanding common stock of Worldwide Media Organization, Inc. making it a wholly owned subsidiary (“Worldwide Media”). Worldwide Media is a marketing, production and distribution company with its principal business objective being the production, acquisition (through exclusive licensing arrangements with independent producers worldwide), sale and distribution of special interest, family oriented, inspirational and children’s DVDs and programs. Video distribution is made by a non-theatrical home video retailer, catalog, mass-merchant and rack-jobber markets (including specialty markets such as gift and museum shops, premium and direct response markets). WMO also licenses to the television broadcast markets, as well as the educational, school and public library markets, both nationally and worldwide.  This distribution includes emerging venues such as digital downloads via Internet, video-on-demand (VOD) and download streaming on various platforms, among others.

Company Overview

The Company operates two wholly owned subsidiaries. Through Silverton Printing, the Company has a principal business objective of providing printing and mailing services to companies nationwide. Through Worldwide Media, the Company has a principal business objective of the production, acquisition (through exclusive licensing arrangements with independent producers worldwide), sale and distribution of special interest, family oriented, inspirational and children’s DVDs and programs.

During the three months ended December 31, 2013, the Company generated revenues of $15,872 (as compared to revenues of $59,915 for three months ended December 31, 2012) while incurring $5,844 in cost of sales resulting in a gross margin of $10,028 (as compared to a gross margin of $47,580 for three months ended December 31, 2012). After the Company deducted $123,173 for total operating expenses we incurred a loss from operations of $113,145 for the three months ended December 31, 2013 (as compared to a loss from operations of $87,069 for three months ended December 31, 2012). During the three months ended December 31, 2013, the company incurred $85,906 in total other expenses (as compared to total other expenses of 30,017 for the three months ended December 31, 2012) resulting in a net loss of $199,051 and $117,086 for the three months ended December 31, 2013 and 2012, respectively.

The net loss for the three months ended December 31, 2013 is attributable primarily to a 74% drop in our total revenues (from $59,915 for three months ended December 31, 2012 to $15,872 for three months ended December 31, 2013) and to an increase in other expenses from $30,017 for the three months ended December 31, 2012 to $85,906 for the three months ended December 31, 2013. The decrease in revenue is primarily due to the Company’s lack of capital resources which have limited the Company’s ability to implement its business strategy to expand our inventory of educational and family oriented DVD titles under our subsidiary Worldwide Media, and marketing our printing services regionally under our subsidiary Silverton Printing, Inc..  The increase in total other expenses is primarily due to interest expense associated with our convertible debt and the associated amortization of debt discount.

During the six months ended December 31, 2013, the Company generated revenues of $59,357 (as compared to revenues of $135,346 for six months ended December 31, 2012) while incurring $11,972 in cost of sales resulting in a gross margin of $47,385 (as compared to a gross margin of $100,766 for six months ended December 31, 2012). After the Company deducted $267,191 for total operating expenses we incurred a loss from operations of $219,806 for the six months ended December 31, 2013 (as compared to a loss from operations of $158,721 for six months ended December 31, 2012). During the six months ended December 31, 2013, the company incurred $248,697 in total other expenses (as compared to

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total other expenses of 31,351 for the six months ended December 31, 2012) resulting in a net loss of $468,503 and $190,072 for the six months ended December 31, 2013 and 2012, respectively.

The net loss for the six months ended December 31, 2013 is attributable primarily to a 56% drop in our total revenues (from $135,346 for six months ended December 31, 2012 to $59,357 for six months ended December 31, 2013) and to an increase in other expenses from $31,351 for the six months ended December 31, 2012 to $248,697 for the six months ended December 31, 2013. The decrease in revenue is primarily due to the Company’s lack of capital resources which have limited the Company’s ability to implement its business strategy to expand our inventory of educational and family oriented DVD titles under our subsidiary Worldwide Media, and marketing our printing services regionally under our subsidiary Silverton Printing, Inc.. The increase in total other expenses is primarily due to losses on derivative liability and interest expense associated with our convertible debt and the associated amortization of debt discount.

To reach and maintain quarterly profitability, the Company must raise significant investment capital to be able to expand our inventory of educational and family oriented DVD titles under our subsidiary Worldwide Media, and marketing our printing services regionally under our subsidiary Silverton Printing, Inc.

Liquidity and Capital Resources

As of December 31, 2013, the Company had negative working capital of $926,127, which is current assets minus current liabilities.  This negative working capital is attributable to accounts payable, accrued liabilities, notes payable, derivative liability, and convertible notes payable. The Company’s current assets as of December 31, 2013 consisted of $8,833 in prepaid royalties, $777 in prepaid expenses, and $8,839 in trade account receivable, net.

SAI has limited capital resources from which to operate.  Without the realization of either significant cash flow from ongoing revenue or additional capital investment, the Company may not be able to continue without short term loans from its current officer and director.  However, the Company’s independent auditors have expressed substantial doubt about the Company's ability to continue as a going concern.

B.

Plan of Operation

The Company operates two wholly owned subsidiaries. Through Silverton Printing, the Company has a principal business objective of providing printing and mailing services to companies nationwide. Through Worldwide Media, the Company has a principal business objective of the production, acquisition (through exclusive licensing arrangements with independent producers worldwide), sale and distribution of special interest, family oriented, inspirational and children’s DVDs and programs.

SILVERTON PRINTING, INC.

Business Segment Summary

Silverton Printing has a principal business objective of providing printing and mailing services to companies nationwide. The Company plans on completing the printing and mailing from its corporate offices depending on the size of the job. In other cases, the Company has developed accounts with wholesale printers who are more equipped to handle large print and mailing orders. Our mission is to provide the highest quality print and mail services to our clients.

Since inception, we have generated consistent revenues, but have incurred a cumulative net loss as reflected in the financial statements. The Company has never been party to any bankruptcy, receivership or similar proceeding, nor has it undergone any material reclassification, merger, consolidation, purchase or sale of a significant amount of assets not in the ordinary course of business.

Product Development

Silverton Printing’s mission is to provide small and large businesses a printing and mailing services of a wide variety of products (See list below). Also, the Company will provide a mailing service which will include Automated Presort and Insert and Address. This service will be primarily for companies that want to save money on postage. Instead of paying

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$0.42 for a first class letter, Silverton will sort the mail pieces by zip codes saving the customer almost 50% in postage costs.

The following are print and mail services offered by the Company:

• Business Cards

• Carbonless Forms

• Catalogs/Booklets

• Flyers

• Posters

• Graphic Design

• Automated Presort

• Brochures

• Copying

• Envelopes

• Letterhead

• Postcards

• Presentation Folders

• Insert and Address

Marketing

Silverton Printing is gearing up to be a direct marketer of printing and mailing to businesses nationwide. The Company will be placing Yellow Page advertisements offering our services under the classification of printers and mailers in major cities throughout the United States. Even though the Company maintains its facility in Las Vegas, Nevada, the Company will ship all orders directly to the customer for a small shipping charge. Additionally, the Company plans to constantly mail postcards throughout the United States to new and upcoming businesses that have been recently approved for a business license.

WORLDWIDE MEDIA ORGANIZATION, INC.

Business Segment Summary

Worldwide Media is a marketing, production and distribution company with its principal business objective being the production, acquisition (through exclusive licensing arrangements with independent producers worldwide), sale and distribution of special interest, family oriented, inspirational and children’s DVDs and programs.  Distribution is made into the non-theatrical home video retailer, catalog, mass-merchant and rack-jobber markets (including specialty markets such as gift and museum shops, premium and direct response markets). Worldwide Media also licenses to the television broadcast markets, as well as the educational, school and public library markets, both nationally and worldwide.  This distribution includes emerging venues such as digital downloads via Internet, video-on-demand (VOD) and download streaming on various platforms, among others.

Product Development

There are two key product development strategies for general market sale and distribution that Worldwide Media is involved in; inexpensive, but high quality and high-perceived value productions and, strategic partnership exclusive acquisition of other quality programs from outside producers.

First, Worldwide Media has established relationships with talented, highly experienced producers, writers and editors that contract with Worldwide Media to produce low-cost but high quality productions that are suitable for sale into Worldwide Media’s market niches.  One strategy Worldwide Media has developed in this regard is what is called in the industry “theatrical drafting” wherein smaller independent producers under contract with Worldwide Media create low budget, ancillary and parallel programs that tie into subjects and/or events dealing with current major theatrical releases, thereby taking advantage of the consumer interest and “buzz” caused by the multi-million dollar budget advertising campaigns major studios spend to successfully market their big-budget films, by tapping into this interest without the enormous

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financial expenditures associated in creating this “Buzz”, hence “drafting” in the studios wake.  This was done with Worldwide Media’s production of The Extraordinary Life of Amelia Earhart (following the Hillary Swank biopic, “Amelia”), The Mystery of Sherlock Holmes (following the Robert Downey blockbuster “Sherlock Holmes”) and the upcoming The True Legend of Robin Hood (in anticipation of the big budget 3D release of Russell Crowe’s “Robin Hood” later this year).  Worldwide Media is continually researching the upcoming film release announcements to anticipate these various potential hits.  Along with this, Worldwide Media is continually producing timely biographies and documentaries that would have interest in both the general consumer market, as well as the educational markets, including recent productions dealing with Great Women Leaders In World History, The Life of Albert Einstein, Famous Explorers, Joan of Arc (upcoming), the Korean War (upcoming) and a documentary on the life of, and conquest of Everest by, Sir Edmund Hillary (in anticipation of an upcoming feature film starring Liam Neeson, about the mysterious death and controversy surrounding George Mallory, who supposedly summited Everest 30 years before Hillary’s attempt.).

Secondly, Worldwide Media is also strategically acquiring various films, programs and series that meet its market niches.  There is a vast source of quality programming produced by numerous independent producers worldwide, that simply do not have the resources, nor ability, to distribute their product and profitably into the market.  Worldwide Media negotiates distribution contracts with these producers for the distribution of their programs in niche markets, often with little or no advance monies paid up front, providing instead the producers royalties on actual per unit sales.  This is a favorable situation for both Worldwide Media (in providing the marketplace with a steady stream of finished quality programs at virtually no upfront costs, other than package design, that are fresh and appealing to the markets that Worldwide Media services), and to the producer (in that, they now have an effective distribution partner, allowing them to continue producing quality programming, while realizing a steady stream of royalty revenue from their productions).  A good example of this is Worldwide Media’s recent acquisition of a series of entertaining inspirational feature films with a leading Christian producer, Eternal Pictures; and the imminent agreement with one of the industry’s leading independent family friendly production companies, Grizzly Adams Productions, Inc.  These are but two examples.  There are numerous others either consummated or in-negotiation.  To better effect this critical growth strategy, and in conjunction with e-mail and direct mail solicitations for programs, Worldwide Media also attends several key international film conventions throughout the year featuring independent producers, and is bringing unique, family friendly, inspirational and educational programs to the market from these sources.

Marketing and Industry Analysis

Market research and analysis reveals that the population is gradually becoming older, thereby more conservative, with the aging of the baby boom generation.  With the increase in recreational and discretionary time that this maturing generation will have, along with their greater flexible spending ability, all indications point to even greater desire by the consumer for more family-friendly and special quality programming that is inexpensive and can be enjoyed by a wide demographic in society.  History has shown time and time again that G/PG and family films consistently do well at the box office both in audience attendance and revenue.  Furthermore, this programming has excellent “shelf life” in that these are generally films people want to watch over and over again, thereby driving greater sales (versus rental) of these types of DVD’s for home DVD collections.  Children’s programming in general can do particularly well. Another area that can do well, is the special interest niche market, such as travel, history, military, art, biography, and of course, wildlife and nature programming….all genres that have unique and devoted viewers and collectors served by different catalogs, specialty stores, retail chains and internet sites.  Worldwide Media’s product mix, both through acquisition and production, is specifically targeted for these markets…in content, packaging and retail pricing.

Worldwide Media has also pursued the inspirational DVD market, which is a vastly underserved market.  Surveys consistently show that over 85% of the population defines itself as spiritual in some way.  The usual Hollywood market has simply not addressed that market; which is numerous and broad-based, best described as mid-America having traditional family values, and highly desirous of programming that reflects those values.  Reasons for this lack of product content through traditional DVD venues may reside in the industry’s lack of understanding, or perhaps dismissiveness in general, of the potential of the market.  Worldwide Media is positioned to serve that market with general quality light inspirational programming provided through the traditional home video distribution venues consumers generally frequent (such as home catalogs, retail stores and mass-merchants, warehouse chains), and feels that Worldwide Media can become a leading brand and label for that market.  Furthermore, current management has extensive experience in servicing that market niche through previous business affiliations, thereby further solidifying understanding the needs of that market and how best to serve it with proper content.

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Worldwide Media management also has extensive experience in creating high-perceived value combo, specialty DVD packs for price conscious consumers, thereby serving the mass market, all the while maintain maximum gross and net profit margins.  These “collection sets” are very popular in the sell-thru, versus rent-thru, markets, which relates back directly to Worldwide Media’s business model.

Worldwide Media is becoming an established brand in the educational, public library and home-school markets.  The principles have over 25 years’ experience in servicing the needs of that particular market, with quality documentary, special interest and educational programs suited for the K-12 grade levels.  Education is a consistent priority in terms of funding and curriculum quality on the local, state and federal levels.  There is a constant need in the market for relevant and new programming to meet those requirements.  Worldwide Media is uniquely positioned in that regard, having relationships with hundreds of independent producers worldwide that have relevant quality content for the educational market, but lack the means to distribute it on a wide scale.  Worldwide Media has the distribution means in place either directly through direct solicitation or through strategic relationships with several of the top wholesalers and re-sellers into the educational/library markets.  Worldwide Media has also entered into strategic alliances with several companies in providing educational programming for on-line streaming and closed circuit broadcast into digital libraries serving schools and libraries throughout North America, a technology growing exponentially.

Growth Strategy of the Company

The home video/DVD/educational markets are broad, complex and fragmented into different distribution channels and niches: retail, mass merchants (box stores), catalog, internet, resellers that purchase from wholesalers and producers, specialty chains and stores (gift stores, museum shops, airport stores, etc.), and, of course, individual consumers served directly by web advertising, schools, libraries, and school districts, among others.  The time required establishing profitable relationships with these various venues and buyers directly can be both time consuming and capital intensive, in terms of direct face-to-face meetings, attending trade shows and constantly forwarding market material and press releases to generate interest in particular programs and films.  Worldwide Media’s management has made a strategic decision that, rather than expending the time, energy and resources in cultivating those markets, Worldwide Media’s business interests and growth strategies are better served by leveraging key relationships with a handful of well-established, well respected and aggressive sub-distributors, resellers and sub-licensors that have established, personal and solid vendor relationships and established SKU’s and vendor accounts with all of the key players and buyers in these various market niches and accounts.  By maintaining above average gross margins in the discount pricing provided to these resellers, Worldwide Media is able to penetrate the market more quickly, efficiently, cost effectively and deeply with its programs without the expenditures of time and resources noted above.  Examples of some of the key relationships are listed below:

Allegro Media Group - a direct premium independent distributor into the retail home video music CD’s, and digital content market with over 25 years in representing a handful of labels into the general retail market and over 400 direct vendor/buyer account relationships; including but not limited to, Walmart, Target, Sams Clubs, Anderson Merchandising, Costco, Amazon, Netflix, Barnes & Noble, Baker & Taylor, Ingram (serving over 5,000 individual stores), Best Buy, Critics Choice, Movies Unlimited, AAFES (Navy PX’s), Eurpac (military PX’s worldwide), Waxworks, Library Video, Midwest Tape, Blockbuster, Borders, VPD, etc. (complete account list available).

Total Content – a sub-licensor dealing with top catalogers with 20+ years’ experience; including, but not limited to:  Publishers Clearing House, Readers Digest, Avon, Carol Wright, Johnson Smith, Colombia House, Miles Kimball, Christian Book Distributors (serving over 25 million home schoolers), Discovery Catalog, Guideposts, Doubleday Direct, Harriet Carter, Wireless, Taylor Gifts, etc. (complete account list available).

Echo Bridge – sub licensor with proprietary displays and end caps in a large number of grocery, retail, drugstores chains, mass merchants, specializing in very high volume (“tonnage”) discount videos/DVD sales for the consumer mass market; including, but not limited to Walmart, Safeway, a number of Midwest grocery chains and hardware/drug store chains, specialty catalogs, etc.  Echo Bridge is very focused and selective in product acquisition; and, when distributing, can generally move in excess of several thousand units per title.  Echo Bridge has licensed six family films from Worldwide Media and is considering a number of others.

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Cerebellum – market’s leading distributor for educational media with 15+ years’ experience serving all major distributors and resellers into the educational, K-12, university, and public library markets; including but not limited to, Follett, Library Video, Barnes Noble, Christian Book Distributors (educational division), Brodarts, Midwest Tapes,  Mackin Distributors, Quality Books, Scholastic Media, Discovery, AIM, Learn 360 (digital downstreaming into individual classrooms nationwide), etc. (complete account list available).

John McClean Media – major distributor and licensor into the international television and DVD markets, with over 20 years’ experience and relationships cultivated with all major players in all broadcast and media markets worldwide.  Worldwide Media has entered into an exclusive licensing arrangement to have JMM represent all current, and future, productions into this sizable and very lucrative market.  Our current mix includes five of Worldwide Media’s productions, with a commitment for acquiring licensing rights to an additional twelve to thirteen productions, along with future productions still in developmental phase.

In addition to the above relationships, Worldwide Media has signed distribution agreements with major players in specialty markets, including:

Starcrest Catalog – major specialty catalog with mailings to over 26 million homes 4 to 6 times a year.  This brand is popular with buyers of family/special interest programs.

5min Media – an innovative 5 year-old company in the business as internet content provider that has established contracts with all major search engines whereby millions of users are directed to informational and themed streaming videos, based on their queries on-line, and whereby Worldwide Media is then paid a royalty for each “hit” on line.  Additionally links on the site are provided to drive the user directly to Worldwide Media’s various websites, leading to further consumer direct sales.

To control outside costs with key vendors, Worldwide Media has entered into relationships with large, fully licensed and industry professional duplication/replication companies to manufacture, assemble, shrinkwrap and ship its DVD programs:  CDI Media in Salt Lake City, Utah and VEA Associates in Irvine, CA.  Worldwide Media has negotiated very favorable most-favored-nation pricing for its manufacturing and shipping needs.  Worldwide Media is negotiating with a third lab, RLX Media, in Coral Gables, FL. as well; in order to cover all US retail and catalog drop-ship locations in the most cost effective way possible.

Competitor Analysis

Direct competition for Worldwide Media is hard to pinpoint and fragmented.  Worldwide Media’s management feels it is in a superior position to affectively seize market share in its niche over and above its competitors, due to Worldwide Media’s unique business paradigm and diversification into a number of distribution venues; its ability to leverage relationships in a highly favorable and profitable way with both independent production companies and major distributors in the industry; its control of overhead by having key production and marketing support elements in-house, including the ability to produce and edit high quality programs for very low cost, and print and reconfigure all packaging and ancillary marketing material quickly; a warehouse and duplication capabilities in house to handle smaller incremental orders for product; and finally, and perhaps most importantly, extensive experience in the industry on a senior management and sales.

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ITEM 4. CONTROLS AND PROCEDURES

The effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended) was evaluated under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, as of the end of the period covered by this quarterly report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are not effective in providing reasonable assurance that the information required to be disclosed in this quarterly report is recorded, processed, summarized and reported within the time period required for the filing of this quarterly report.  This is due to inadequate segregation of duties and the lack of an audit committee.  The Company has plans to address these material weaknesses in internal controls as resources become available.

There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934, as amended) identified in connection with the evaluation of our internal control performed during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all fraud. A control system no matter how well conceived and operated can provide only reasonable, not absolute assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of control systems must be considered relative to their cost. As a result of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues of fraud, if any, have been detected.

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

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

None.

ITEMS 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)

Exhibits required by Item 601 of Regulation S-B

(1)

Filed with the Securities and Exchange Commission on September 23, 2008 as an exhibit numbered as indicated above, to the Registrant’s registration statement on Form S-1 (file no. 333-153626 which exhibit is incorporated herein by reference.

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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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