As filed with the Securities and Exchange Commission on June 11, 2015

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

__________________

FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

__________________

EFACTOR GROUP CORP.

(Exact Name of Registrant as Specified in its Charter)

Nevada		7389		84-1598154
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification No.)

1177 Avenue of Americas, Suite 5060
New York, New York 10036
(650) 380-8280
(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

__________________

Marion Freijsen
Chief Operating Officer
EFactor Group Corp.
1177 Avenue of Americas, Suite 5060
New York, New York 10036
(650) 380 – 8280
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)

__________________

with copies to:
Richard I. Anslow, Esq. Ellenoff Grossman & Schole LLP 1345 Avenue of the Americas, 11th Floor New York, New York 10105 (212) 370-1300		Spencer G. Feldman, Esq. Olshan Frome Wolosky LLP Park Avenue Tower 65 East 55th Street New York, New York 10022 (212) 451-2300

__________________

Approximate date of commencement of proposed sale to public: As soon as practicable after the effective date hereof.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box. x

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering. ¨

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

 

CALCULATION OF REGISTRATION FEE

Title of each class of securities to be registered		Proposed maximum aggregate offering price(1)(2)(6)			Amount of registration fee
Common stock, $0.001 par value per share(3)		$	17,250,000		$	2,004.45
Warrants to purchase common stock			(4)			(5)
Shares of common stock underlying warrants(3)		$	17,250,000		$	2,004.45
Representative’s warrant			(4)			(5)
Shares of common stock underlying Representative’s warrant(3)(7)		$	1,380,000		$	160.36
Total		$	35,880,000		$	4,169.26

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 (1) Estimated solely for the purpose of calculating the registration fee under Rule 457(o) of the Securities Act of 1933, as amended (the “Securities Act”).

(2)   Includes additional shares of common stock and/or warrants which may be issued upon exercise of a 45-day option granted to the underwriters to cover over-allotments, if any.

(3)   Pursuant to Rule 416 under the Securities Act, the securities being registered hereunder include such indeterminate number of additional shares of common stock as may be issued after the date hereof as a result of stock splits, stock dividends or similar transactions.

(4)   The offering price of the warrants to be issued to investors and the Representative hereunder are included in the price of the common stock listed in the table above.

(5)   No separate registration fee is required pursuant to Rule 457(g) promulgated under the Securities Act.

(6)   Assumes the underwriters’ over-allotment is fully exercised.

(7)   Represents warrants to purchase the number of shares of common stock equal to 8% of the shares to be sold in this offering, including those sold pursuant to the underwriter’s over-allotment option, if any, and assuming a per share exercise price equal to 115% of the price per share in this offering.

 

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

PRELIMINARY PROSPECTUS

SUBJECT TO COMPLETION, DATED JUNE 11, 2015

 

SHARES OF COMMON STOCK AND
WARRANTS TO PURCHASE      SHARES OF COMMON STOCK

We are offering      shares of our common stock, together with warrants to purchase      shares of our common stock, in a firm commitment underwritten offering.

Each share of common stock is being sold together with a warrant, with each warrant being immediately exercisable for one share of common stock at an exercise price of $      per share and expiring five years after the issuance date.

Our common stock is currently traded on the OTCQB Marketplace under the symbol “EFCT.” On June 9, 2015, the last reported sales price for our common stock was $0.05 per share. We have applied to list our common stock and warrants for trading on the NASDAQ Capital Market under the symbols “EFCT” and “EFCTW,” respectively. No assurance can be given that our application will be approved.

We expect to effect a 1-for-     reverse stock split of our outstanding shares of common stock and preferred stock prior to the effectiveness of the registration statement of which this prospectus forms a part.

INVESTING IN OUR SECURITIES INVOLVES A HIGH DEGREE OF RISK. SEE “RISK FACTORS” BEGINNING ON PAGE 6 for certain risk factors that you should consider before investing in our SECURITIES.

		Per Share(1)			Per Warrant(1)			Total
Public offering price		$			$			$
Underwriting discounts and commissions(2)		$			$			$
Proceeds, before expenses, to us		$			$			$

____________

 (1) One share of common stock is being sold together with a warrant, with each warrant being exercisable for one share of common stock.

(2)   We have agreed to issue warrants to the underwriters and to reimburse the underwriters for certain expenses. See “Underwriting” on page 59 of this prospectus for a description of these arrangements.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

We have granted the underwriters a 45-day option to purchase up to additional      shares of common stock and/or up to      additional warrants from us at the public offering price, less underwriting discounts and commissions, to cover over-allotments, if any. The underwriters expect to deliver our securities, against payment, on or about      , 2015.

Sole Book-Running Manager

Maxim Group LLC

The date of this prospectus is            , 2015

 

TABLE OF CONTENTS

		Page
PROSPECTUS SUMMARY		1
RISK FACTORS		6
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS		22
USE OF PROCEEDS		23
DILUTION		24
PRICE RANGE OF OUR COMMON STOCK		25
DIVIDEND POLICY		26
CAPITALIZATION		27
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		28
OUR BUSINESS		35
MANAGEMENT		43
EXECUTIVE COMPENSATION		47
RELATED PARTY TRANSACTIONS		51
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT		52
DESCRIPTION OF SECURITIES		54
SHARES ELIGIBLE FOR FUTURE SALE		58
UNDERWRITING		59
LEGAL MATTERS		62
EXPERTS		62
WHERE YOU CAN FIND MORE INFORMATION		62
INDEX TO FINANCIAL STATEMENTS		F-1

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PROSPECTUS SUMMARY

This summary highlights certain information appearing elsewhere in this prospectus. For a more complete understanding of this offering, you should read the entire prospectus carefully, including the risk factors and the financial statements. References in this prospectus to “we,” “us,” “our” and “Company” refer to EFactor Group Corp. and its subsidiaries. You should read this prospectus together with additional information described below under the heading “Where You Can Find More Information.”

The share and per share information in this prospectus does not give effect to a proposed reverse stock split of our outstanding shares of common stock and preferred stock prior to the effectiveness of the registration statement of which this prospectus forms a part.

The Company

Overview of our Business

Our mission is to assist entrepreneurs in building and growing their businesses. We believe we are the only global company that combines a comprehensive online and in-person social network with business services and funding focused exclusively on the entrepreneurial community. Operating through our wholly-owned subsidiaries, we provide our more than 1.7 million members with social networking opportunities, business services including education and mentoring, and funding including educational tools and opportunities such as donation-based crowdfunding. Coupled with members in every country of the world (196 countries) participating in 240 industry groups, we have created a global, resource-rich ecosystem for entrepreneurs and small businesses that serves as a source of inspiration and ideas and provides essential services to foster business growth.

Our operations consist of the following three divisions:

•      Social Networks — Our social networks division is at the core of our company, offering numerous social networking tools to members, hosting live networking events, connecting business owners, providing direct member benefits and aggregating customer loyalty programs. We utilize our EScore™ benchmarking tool as part of our social networks division. EScore™ is based on our proprietary algorithm which allows individual entrepreneurs to benchmark themselves against a large pool of entrepreneur metrics and helps them find the resources they need for their own operations through a variety of innovative tools accompanied by available guidance and education to make qualified decisions.

•      Business Services — Our business services division offers critical services to entrepreneurs to build their businesses including brand marketing, staffing, graphic design, public relations and other third-party business resources.

•      Funding — Our funding division enables entrepreneurs and small businesses to raise money from donations and pre-orders by the general public through our recently-acquired subsidiary, RocketHub, a leading donation-based crowdfunding platform. We also provide interactive materials concerning financing needs and opportunities for our entrepreneur members.

Our Key Performance Metrics

We measure traffic and member activity on our websites and collect data for visits by members and other visitors, unique visitors, page views, number of average pages per visit and percentage of views by new visitors. We believe that, by tracking and responding to these metrics, we can increase the effectiveness of our network platform, enhance our members’ experience and improve our overall financial performance.

The following table sets forth these metrics, which we have collected internally using Google Analytics, for the three months ended March 31, 2014 and 2015 and for the twelve months ended December 31, 2013 and 2014:

		Three Months Ended March 31,									Twelve Months Ended December 31,
		2014			2015			Change			2013			2014			Change
Visits		5,641,830			7,366,230			30.6	%		21,429,334			21,790,258			1.7	%
Unique visitors		5,209,913			6,782,837			30.2	%		11,038,097			18,878,040			71.0	%
Page views		37,984,078			27,328,372			(28.1	)%		74,394,528			96,163,112			29.3	%
Average pages per visit		6.64			2.84			(57.2	)%		3.54			3.00			(15.3	)%
Percentage of page views by new visitors		91.5	%		69.63	%		(23.9	)%		46.77	%		68.15	%		45.7	%

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Most of our key metrics improved during the comparable periods presented. For example, the number of visits and unique visitors, in particular, to our websites grew steadily during these periods. We believe these improving metrics indicate we are attracting more visitors to our sites who have purposely landed on our pages and are more actively enrolling as members.

We estimate that approximately one-third of our more than 1.7 million members are “regular members” who visit one or more of our sites regularly (at least once per month), participating in our live, in-person events and reading or responding to our newsletters and other member communications. Since June 2014, we have averaged approximately 2.0 million monthly visitors (including members) to our EFactor.com website.

As used in this prospectus, “members” are individuals that have set up a member account at EFactor.com and “unique visitors” are individuals (both members and non-members) that visit EFactor.com or our other social network websites. A “visit” is a series of page views that a single visitor makes during a period of activity, with a visit ending after the visitor closes the browser, clears cookies or is inactive for 30 minutes. “Page views” refer to an instance of one user visiting or looking at a particular page on our website.

Revenue Model and Market Opportunities

We currently generate revenue through each of our three divisions. Our social networks division generates revenue by charging membership fees and providing sponsorship and advertising opportunities through our websites and at our networking events. Our business services division generates revenue by charging fees for the business items and related services we provide to our members such as public relations and advertising, and our funding division generates revenue from performance-based commissions generated by RocketHub on its donation-based crowdfunding platform.

For the three months ended March 31, 2015 and the twelve months ended December 31, 2014, we recorded revenue of $1,003,641 and $1,634,602, respectively. We believe that, with our recent acquisitions including RocketHub, our revenue for the three months ended March 31, 2015 is in line with our internal quarterly estimates for the remainder of this year.

We believe that entrepreneurship globally is on a fast track, becoming the preferred option for both college graduates looking for a career and other individuals who may no longer have traditional long-term employment aspirations. According to Global Entrepreneurship Monitor (January 2015), an independent annual worldwide study of entrepreneurship, Millenials (those persons born in the 2000s) are more likely to start a business than look for a traditional career. In 2014, 300 million people around the world were estimated to be engaged in early-stage entrepreneurial activity, with the most active persons in the 25 to 35 years age group. The rise of the freelance economy (e.g., Airbnb and Uber) has already turned 14% of the U.S. workforce into entrepreneurs and millions of others into part-time entrepreneurs, according to the article. We believe that our targeted social networks, led by EFactor.com and our EScore™ technology, are positioned for growth as entrepreneurs seek specific and relevant resources to build and grow their businesses.

Our Competitive Strengths

We believe that our key competitive strengths are as follows:

Market leader in entrepreneurial segment of social networking. We believe we are a leader in the market segment for social networking among entrepreneurs, by being the only global company that combines a comprehensive online and in-person social network with business services and funding focused exclusively on the entrepreneurial community.

Integrated funding capabilities. We operate one of the world’s largest and most recognized crowdfunding brands through our recent acquisition of RocketHub, which has a registered base of more than 200,000 users, and has facilitated over $10 million in transactions. We believe our integrated funding capabilities complete our social network ecosystem and provide a compelling solution to what has been the biggest impediment for entrepreneurs — access to funding.

Robust network platform with personally-tailored resources. Our technology platform combines a wide array of proprietary coding and algorithms with elements of standard technology that allow us to scale and handle large volumes of traffic from members and other visitors. At the same time, using our EScore™ proprietary selection and matching algorithm, we offer specific content and resources tailored to each individual’s unique business needs.

Experienced management team. Members of our management team are industry professionals with years of experience in building and running large companies and a deep understanding of the social media space. Adriaan Reinders,

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our Chief Executive Officer, is an entrepreneur with significant experience building companies from start-ups to large-scale organizations with more than 1,000 employees. Both Mr. Reinders and Marion Freijsen, our Chief Operating Officer, have substantial international business experience building technology companies. Our management team is further supported by Mark Stanich, our managing director who previously served in key senior marketing and digital media positions at a subsidiary of American Express and at Time Warner, and Ruud Smeets, a co-founder of ELEQT.

However, we are still in an early stage of our development, we have experienced significant net losses over the past two years which are likely to continue, we compete with numerous larger generic social networking platforms and we need to raise substantial amounts of capital to grow our business. No assurance can be given that we will be successful in accomplishing our goals and developing a profitable business. Our ability to grow is impacted by these factors and the other risks we face in our business that are described under “Risk Factors” below.

Our Growth and Expansion Strategy

Our primary business strategy is to expand our regular membership base, both domestically and internationally, and continue to make strategic acquisitions that benefit our members. We believe we can do this through the deployment of capital into the following areas:

Increase the number of regular members with platform improvements. We are focusing more effort on increasing the number of regular members as compared to those individuals who only visit our website occasionally. We believe this will help us achieve our goals to increase overall membership growth, the number of paying members and revenue per paying member. Improving user interactivity in the coming years is a major focus of our work with strategic partner FreedomLab, which is assisting us with website interaction dynamics, “nextgen” content and data-driven services to boost the engagement level of our users.

Acquire strategically compatible companies. We have identified a number of companies that can potentially provide a product or service that is scalable, profitable and easily adapted to our network platform. Historically, we have operated our acquired businesses independently, with little integration, while leveraging our acquired businesses to generate growth initiatives in our other lines of business. We believe we will grow faster through further acquisitions over the next 12 to 18 months by acquiring companies that (i) offer a product or service that is of interest to entrepreneurs, (ii) have a scalable product or service to offer to our members, (iii) have substantial revenue and profit or will be of strategic importance, and (iv) are able to run independently but provide a new revenue stream for us. We believe these companies will grow faster with us than they would independently. We do not intend generally to integrate the companies on an operational level, although we will seek synergies and a reduction of operating costs by streamlining such areas as finance and technology development. We currently have no commitments or agreements with respect to any such acquisitions.

Expand membership base internationally. Although we are a global platform, our marketing efforts have to date been primarily focused on five core territories — the United States, United Kingdom, India, China and The Netherlands. We plan to expand operations to additional territories over time with live events taking place in those geographical regions where a high concentration of our members resides.

Recent Developments

RocketHub Acquisition. On April 15, 2015, we acquired RocketHub Inc., a leader in the donation-based crowdfunding industry, pursuant to the terms of a stock purchase agreement. We issued 21,428,571 shares of our common stock to the stockholders of RocketHub.

2015 Private Placements. Since January 1, 2015, we have issued an aggregate of approximately 38,000,000 shares of common stock in consideration for debt conversions, services rendered and cash in privately placed transactions. The approximately $1,000,000 in cash proceeds we received from these transactions have been used to support our working capital requirements.

Corporate Information

Our principal executive office is located at 1177 Avenue of the Americas, Suite 5060, New York, New York 10036. Our telephone number is (650) 380-8280. Our Internet website is www.efactorgroup.com. Information on our website is not incorporated into or a part of this prospectus.

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The Offering

Securities offered		shares of our common stock, together with warrants to purchase      shares of our common stock at an exercise price of $     per share. The warrants will be immediately exercisable and will expire five years after the issuance date.
Common stock outstanding before this offering(1)		shares
Common stock to be outstanding after this offering(1)(2)		shares
Underwriter’s over-allotment option		We will grant the underwriter an option, exercisable within 45 days after the closing of this offering, to acquire up to an additional 15% of the total number of shares of common stock and/or warrants pursuant to this offering, solely for the purpose of covering over-allotments, if any.
Use of proceeds		We expect to receive net proceeds from this offering of approximately $     after deducting the underwriting discount and our estimated offering expenses.
		We intend to use the net proceeds of this offering as follows: $2,500,000 to finance possible acquisitions of complementary businesses, technologies and other assets, $1,000,000 to repay outstanding indebtedness (a portion of which will be paid to affiliates of ours who had previously loaned us funds for working capital purposes), and the balance of the net proceeds of this offering for working capital and general corporate purposes.
Current OTCQB Marketplace symbol		Our shares of common stock are currently listed on the OTCQB Marketplace under the symbol “EFCT.”
Proposed Nasdaq listing and symbols		We have applied to list our common stock and warrants for trading on the NASDAQ Capital Market under the symbols “EFCT” and “EFCTW,” respectively.
Risk factors		Investing in our securities involves substantial risks. You should carefully review and consider the “Risk Factors” section of this prospectus beginning on page 6 and the other information in this prospectus for a discussion of the factors you should consider before you decide to invest in this offering.
Reverse stock split		We expect to effect a 1-for-     reverse stock split of our outstanding shares of common stock and preferred stock prior to the effectiveness of the registration statement of which this prospectus forms a part.

____________

 (1) The number of shares of our common stock outstanding excludes the following:

•      3,827,541 shares of common stock issuable upon exercise of outstanding stock options, at a weighted average exercise price of $0.57 per share, under our equity incentive plan;

•      7,242,563 shares of common stock issuable upon exercise of outstanding warrants, with current exercise prices ranging from $0.10 per share to $0.25 per share;

•      27,571,409 shares of common stock issuable upon exercise of outstanding convertible promissory notes, of which 1,048,421 shares will no longer be issuable once we repay certain outstanding convertible promissory notes with a portion of the proceeds from this offering;

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•           shares of common stock issuable upon exercise of the warrants to be issued to the public in this offering; and

•      up to      shares of common stock issuable upon exercise of the warrants to be issued to the underwriter in this offering.

(2)   The total number of shares of our common stock outstanding after this offering is based on 195,737,682 shares outstanding as of the date of this prospectus. Additionally, for voting purposes, as of the date of this prospectus, 2,500,000 shares of our Series A preferred stock (which have 25 votes per share, or 62,500,000 votes in the aggregate) are outstanding.

Except as otherwise indicated, all information in this prospectus assumes the underwriter does not exercise the over-allotment option and the warrants being sold in this offering are not exercised.

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RISK FACTORS

You should carefully consider and evaluate all of the information in this prospectus, including the risk factors listed below. Risks and uncertainties in addition to those we describe below, that may not be presently known to us, or that we currently believe are immaterial, may also harm our business and operations. If any of these risks occur, our business, results of operations and financial condition could be harmed, the price of our securities could decline, and future events and circumstances could differ significantly from those anticipated in the forward-looking statements contained in this prospectus. If any of the following risks occur, our business, financial condition or results of operations could be materially and adversely affected. In that case, the trading price of our securities could decline, and you may lose some or all of your investment.

Risks Relating to Our Business

We have a history of losses and cash flow deficits, and we expect to continue to operate at a loss and to have negative cash flow for the foreseeable future, which could cause the price of our stock to decline.

At March 31, 2015, we had cumulative net losses from inception of approximately $48.2 million. We also had negative cash flow from operating activities. Historically, our operating expenses have exceeded our revenues. For our fiscal years ended December 31, 2014 and 2013, we incurred net losses of approximately $28.3 million and approximately $5.9 million, respectively. Historically, we have funded our operations from proceeds from the sale of debt and equity securities and, to a lesser extent, internally generated funds. Our strategic business plan is likely to result in additional losses and negative cash flow for the foreseeable future. We cannot give assurances that we will ever become profitable.

Our independent registered public accounting firm has expressed doubt about our ability to continue as a going concern, which may hinder our credibility in the capital markets.

Our financial statements as of and for the twelve months ended December 31, 2014 have been prepared under the assumption that we will continue as a going concern for the next twelve months. Our financial statements as of and for the twelve months ended December 31, 2014 included a report from our independent registered public accounting firm which contained an explanatory paragraph referring to our need to obtain additional financing and expressing substantial doubt in our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to obtain additional equity financing or other capital, attain further operating efficiencies, reduce expenditures and, ultimately, generate revenue.

Our financial statements do not include any adjustments that may result from the outcome of this uncertainty. We are continually evaluating opportunities to raise additional funds through public or private equity financings, as well as evaluating prospective business partners, and will continue to do so. However, if adequate funds are not available to us when we need it, and we are unable to enter into some form of strategic relationship that will give us access to additional cash resources, we may need to curtail our operations which would, in turn, further raise substantial doubt about our ability to continue as a going concern.

We have a limited operating history in certain of our markets, which makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful.

We have a limited operating history in certain of our markets. This limited operating history makes it difficult to effectively assess our future prospects. You should consider our business and prospects in light of the risks and difficulties we encounter in this rapidly evolving market. These risks and difficulties include our ability to, among other things:

•      increase our number of members and member engagement;

•      avoid interruptions or disruptions in our service or slower than expected website load times;

•      develop a scalable, high-performance technology infrastructure that can efficiently and reliably handle increased member usage globally, as well as the deployment of new features and products;

•      responsibly use the data that our members share with us to provide solutions that make our members more successful and productive and that are critical to the hiring and marketing needs of enterprises and entrepreneurial organizations;

•      increase revenue from the solutions we provide;

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•      continue to earn and preserve our members’ trust with respect to their entrepreneurial reputation and information;

•      process, store and use personal data in compliance with governmental regulation and other legal obligations related to privacy;

•      successfully compete with other companies that are currently in, or may in the future enter, the online entrepreneurial networking space;

•      hire, integrate and retain world class talent; and

•      successfully expand our business, especially internationally.

If the market for targeted online networks for entrepreneurs does not develop as we expect, or if we fail to address the needs of this market, our business will be harmed.

We may not timely and effectively scale and adapt our existing technology and network infrastructure to ensure that our website is accessible within an acceptable load time.

A key element to our continued growth is our website performance, which is the ability of our visitors (which includes all visitors to our website, regardless of whether or not they are a member), enterprises and entrepreneurial organizations in all geographies to access our website within acceptable load times. We have experienced, and may in the future experience, website disruptions, outages and other performance problems due to a variety of factors, including infrastructure changes, human or software errors, capacity constraints due to an overwhelming number of members accessing our website simultaneously, and denial of service or fraud or security attacks. In some instances, we may not be able to identify the cause or causes of these website performance problems within an acceptable period of time. It may become increasingly difficult to maintain and improve our website performance, especially during peak usage times and as our solutions become more complex and our user traffic increases. If our website is unavailable when members attempt to access it or does not load as quickly as they expect, members may seek other websites to obtain the information for which they are looking, and may not return to our website as often in the future, or at all. This would negatively impact our ability to attract members, enterprises and entrepreneurial organizations and increase engagement on our website. We expect to continually make significant investments to maintain and improve website performance and to enable rapid releases of new features and products. To the extent that we do not effectively address capacity constraints, upgrade our systems as needed and continually develop our technology and network architecture to accommodate actual and anticipated changes in technology, our business and operating results may be harmed.

We currently use outside server farms to support our social platform which perform timely back-ups of the relative information. We currently do not provide a real-time back-up data center, although we do back up all of our data. Accordingly, if our primary data center shuts down, there will be a period of time that the website will remain shut down while the transition to the back-up data center takes place.

Our systems may be vulnerable to damage or interruption from catastrophic occurrences such as earthquakes, floods, fires, power loss, telecommunication failures, terrorist attacks and similar events. Our U.S. facilities where we currently lease our computer and telecommunications equipment may suffer from storms and hurricanes. Despite any precautions we may take, the occurrence of a natural disaster or other unanticipated problems at our hosting facilities could result in lengthy interruptions in our services.

We do not carry business interruption insurance sufficient to compensate us for the potentially significant losses, including the potential harm to the future growth of our business that may result from interruptions in our service as a result of system failures.

If our security measures are compromised, or if our website is subject to attacks that degrade or deny the ability of members or customers to access our solutions, members and customers may curtail or stop their use of our solutions.

Our solutions involve the storage and transmission of members’ and customers’ information, some of which may be private. Security breaches could expose us to a risk of loss of this information, which could result in potential liability and litigation.

Like all websites, our website is vulnerable to computer viruses, break-ins, phishing attacks, attempts to overload our servers with denial-of-service or other attacks and similar disruptions from unauthorized use of our computer systems, any of

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which could lead to interruptions, delays, or website shutdowns, causing loss of critical data or the unauthorized disclosure or use of personally identifiable or other confidential information.

If the security of our website is compromised and we experience website performance or availability problems, the complete shut-down of our website, or the loss or unauthorized disclosure of confidential information, our members or customers may lose trust and confidence in us, and decrease or terminate the use of our website. Further, outside parties may attempt to fraudulently induce employees, members or customers to disclose sensitive information in order to gain access to our information or our members’ or customers’ information. Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently, are often are not recognized until launched against a target and may originate from less regulated and remote areas around the world, we may be unable to proactively address these techniques or to implement adequate preventative measures. Any or all of these issues could negatively impact our ability to attract new members and increase engagement by existing members, cause existing members to close their accounts or existing customers to cancel their contracts, subject us to third-party lawsuits, regulatory fines or other action or liability, thereby harming our operating results.

If we do not continue to attract new customers, or if existing customers do not renew their subscriptions, renew on less favorable terms, or fail to purchase additional solutions, we may not achieve our revenue projections, and our operating results would be harmed.

In order to grow our business, we must continually attract new customers, sell additional solutions to existing customers and reduce the level of non-renewals in our business. Our ability to do so depends in large part on the success of our sales and marketing efforts. We do not typically enter into long-term contracts with our customers, and even when we do, they can generally terminate their relationship with us. We have limited historical data with respect to rates of customer renewals, upgrades and expansions, so we may not accurately predict future trends for any of these metrics. Furthermore, unlike traditional software companies, the nature of our products and solutions is such that customers may decide to terminate or not renew their agreements with us without causing significant disruptions to their own businesses.

The rate at which we expand our customer base or increase our customers’ renewal rates may decline or fluctuate because of several factors, including the prices of our solutions, the prices of products and services offered by our competitors, reduced hiring by our customers or reductions in their hiring or marketing spending levels due to macroeconomic or other factors and the efficacy and cost-effectiveness of our solutions. If we do not attract new customers or if our customers do not renew their agreements for our solutions, renew on less-favorable terms, or do not purchase additional functionality or offerings, our revenue may grow more slowly than expected or decline.

Ultimately, attracting new customers and retaining existing customers requires that we continue to provide high quality solutions that our customers value. In particular, our content, products and services customers will discontinue their purchases of our solutions if we fail to effectively connect them with the talent they seek, and our premium subscribers will discontinue their subscriptions if they do not find the networking and business opportunities that they value. We must continue to demonstrate to our customers that using our solutions and products are the most effective and cost-efficient way to maximize their business results. Even if our products and services are providing value to our customers, advertisers are sensitive to general economic downturns and reductions in consumer spending, among other events and trends, which generally results in reduced advertising expenditures and could adversely affect sales of our products and services. If we fail to provide high quality products and convince customers of our value proposition, we may not be able to retain existing customers or attract new customers, which would harm our business and operating results.

We may encounter difficulties with acquisitions, which could harm our business.

We have completed several acquisitions of businesses, and we expect to continue to pursue strategic acquisitions that we believe will either expand or complement our business in new or existing markets or further enhance the value and offerings we are able to provide to our existing or future potential customers.

Acquisitions involve numerous risks and challenges, including the following:

•      diversion of management’s attention from the normal operation of our business;

•      potential loss of key associates and customers of the acquired companies;

•      difficulties managing and operating in geographically dispersed locations;

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•      the potential for deficiencies in internal controls at acquired companies;

•      increases in our expenses and working capital requirements, which reduce our return on invested capital;

•      lack of experience operating in the geographic market or industry sector of the acquired business; and

•      exposure to unanticipated liabilities of acquired companies, which could require us to write down or write off assets.

To integrate acquired businesses, we must implement our management information systems, operating systems and internal controls, and manage the personnel of the acquired operations. To the extent that we are not able to implement the additional requirements of Section 404 of the Sarbanes-Oxley Act of 2002, we may not be able to assess whether our internal controls over financial reporting are effective, which may subject us to adverse regulatory consequences. Additionally, the transition to new systems and controls may cause delays in rolling out our business model across the newly acquired businesses and thus affect our revenue forecasts.

The number of our registered members is higher than the number of active members, and a substantial majority of our page views are generated by a minority of our members.

The number of registered members in our network is higher than the number of active members because some members have multiple registrations, other members have switched email addresses and no longer have access to their earlier addresses, and others may have registered under fictitious names. While we attempt to identify these accounts, we may not be able to accurately identify the number of active members, and thus we rely on the number of registered members as our measure of the size of our network in line with industry standards. Further, a substantial number of our members do not visit our website or our events on a monthly basis. If the number of our active members does not meet our expectations or we are unable to increase the breadth and frequency of our visiting members, then our business may not grow as fast as we expect, which will harm our operating and financial results and may cause our stock price to decline.

If it is determined by the SEC or any other applicable regulatory authority that we are a broker-dealer, crowdfunding intermediary or financial advisor, and that we are not in compliance with the rules and regulations applicable to broker-dealers, crowdfunding intermediaries and/or financial advisors, we may be subject to civil and/or criminal penalties.

If the SEC determines that we are a broker-dealer, investment adviser or crowdfunding portal, we would need to register with the SEC. Section 3(a) (4) of the Securities Exchange Act of 1934, as amended, or Exchange Act, states that a “broker” is “any person engaged in the business of effecting transactions in securities for the account of others.” Such brokers (and dealers) are required to be registered under Section 15(a) (1) of the Exchange Act, which makes it unlawful for “any broker or dealer to effect any transactions in, or to induce or attempt to induce the purchase or sale of, any security unless such broker or dealer is registered.

If the SEC determines that we are an investment advisor, we must register as an investment adviser with the SEC pursuant to the Investment Advisers Act of 1940, or Investment Advisers Act. Section 202(a)(11) of the Investment Advisers Act defines an investment adviser as any person or firm that (i) for compensation; (ii) is engaged in the business of; (iii) providing advice to others or issuing reports or analyses regarding securities.

Registration requirements for broker-dealers and investment advisers are significant and burdensome. Broker-dealers must register with the SEC by filing an application on Form BD, become a member of a self-regulatory organization such as the Financial Industry Regulatory Authority, as well as a member of the Securities Investor Protection Corporation. Furthermore, broker-dealers are required to be licensed in the states where they conduct business as a broker-dealer, and certain individuals employed by broker-dealers must also meet certain qualifications, including passing the Series 7 exam.

In addition, if we are deemed to be an investment advisor and are required to register with the SEC as an investment adviser, we will become subject to the requirements of the Investment Advisers Act. The Investment Advisers Act requires: (i) fiduciary duties to clients; (ii) substantive prohibitions and requirements; (iii) contractual requirements; (iv) record-keeping requirements; and (v) administrative oversight by the SEC, primarily by inspection. Requirements and obligations imposed on broker-dealers, investment advisers and crowdfunding intermediaries can be burdensome and costly. For example, if the SEC determines that we are an “Internet Investment Adviser” and that we use an interactive website to provide investment advice, we would likely have to register as an investment adviser in every state because our entrepreneur members can come from any state, at any time. If it is deemed that we are out of compliance with such rules and regulations, we may be subject to civil and/or criminal penalties.

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If any of our members engages in the unregistered sale of securities through the use of our website or otherwise without an exemption from registration under the Securities Act of 1933, our members could be subject to civil and/or criminal liability. Members that are found to be civilly or criminally liable for the unregistered sale of non-exempt securities could seek to hold us liable.

Our website, and the services offered in connection with our website, is made available by us for educational purposes only, to provide a networking platform for entrepreneurs and to give general information and a general understanding of available financing opportunities. Although our website and related services are not meant to facilitate, support or negotiate any transactions involving the offer to purchase or sale or the purchase or sale of securities, it is possible that our members, while using our website, will facilitate a transaction involving the unregistered purchase or sale of non-exempt securities. Engaging in an unregistered offer to purchase or sale or the purchase or sale of securities without a valid exemption from registration under the Securities Act of 1933, as amended, or the Securities Act, could result in a member being subject to civil or criminal liability. A member that is held civilly or criminally liable for the unregistered purchase or sale of non-exempt securities could seek to hold us liable. Defending against any such actions could be costly to us and may require our management to spend significant time and effort on these matters, which would otherwise be spent overseeing our operations. Further, should any member be successful in any such action, we could be required to pay a significant sum of damages, which could have a material adverse impact on our operations.

If our members’ profiles are out-of-date, inaccurate or lack the information that members and customers desire, we may not be able to realize the full potential of our network, which could adversely impact the growth of our business.

If our members do not update their information or provide accurate and complete information when they join or do not establish sufficient connections, the value of our network may be negatively impacted because our value proposition as an entrepreneurial network and as a source of accurate and comprehensive data will be weakened.

Incomplete or outdated member information would diminish the ability of our matching algorithm to connect members with relevant target peers or audiences and our ability to provide our customers with valuable insights. Therefore, we must add features, products and services that will bring value to our members and motivate them to contribute additional, timely and accurate information to their profile and our network. If we fail to successfully motivate our members to do so, our business and operating results could be adversely affected.

We collect, process, store, share, disclose and use personal information and other data, which subjects us to governmental regulations and other legal obligations related to privacy and security, and our actual or perceived failure to comply with such obligations could harm our business.

We collect, process, store, share, disclose and use information from and about our members, customers and users, including personal information and other data, and we enable our members to passively and proactively share their personal information with each other and with third parties and to communicate and share news and other information into and across our platform. There are numerous laws around the world regarding privacy and security, including laws regarding the collection, processing, storage, sharing, disclosure, use and security of personal information and other data from and about our members and users. The scope of these laws are changing, subject to differing interpretations, may be costly to comply with, and may be inconsistent among countries and jurisdictions or conflict with other rules.

We strive to comply with applicable laws, policies, and legal obligations and certain applicable industry codes of conduct relating to privacy and data protection and are subject to the terms of our privacy policies and privacy-related obligations to third parties (including voluntary third-party certification bodies such as TRUSTe). However, these obligations may be interpreted and applied in new ways and/or in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or our practices. Data privacy and security are active areas and new laws and regulations are likely to be enacted.

Any failure or perceived failure by us to comply with our privacy policies, our privacy-related obligations to members, customers or other third parties, or our privacy or security-related legal obligations, or any compromise of security that results in the unauthorized release or transfer of personal or other information, which may include personally identifiable information or other member data, may result in governmental enforcement actions, litigation or public statements critical of us by consumer advocacy groups or others and could cause our members and customers to lose trust in us, which could have an adverse effect on our business. Additionally, if third parties we work with, such as customers, vendors or developers, violate applicable laws, our policies or other privacy or security-related obligations, such violations may also put our members’ information at risk and could in turn have an adverse effect on our business. Finally, governmental agencies may request or take member or customer

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data for national security or informational purposes, and also can make data requests in connection with criminal or civil investigations or other matters, which could harm our reputation and our business.

Public scrutiny of Internet privacy and security issues may result in increased regulation and different industry standards, which could deter or prevent us from providing our current products and solutions to our members and customers, thereby harming our business.

The regulatory framework for privacy and security issues worldwide is evolving and is likely to remain in flux for the foreseeable future. Various government and consumer agencies have also called for new regulation and changes in industry practices. Practices regarding the registration, collection, processing, storage, sharing, disclosure, use and security of personal and other information by companies offering online services have recently come under increased public scrutiny.

In the U.S., the federal government, including the White House, the Federal Trade Commission, the Department of Commerce and Congress, and many state governments are reviewing the need for greater regulation of the collection, processing, storage, sharing, disclosure, use and security of information concerning consumer behavior with respect to online services, including regulations aimed at restricting certain targeted advertising practices and collection and use of data from mobile devices. For example, the State of California and other states have passed laws relating to disclosure of companies’ practices with regard to Do-Not-Track signals from Internet browsers, the ability to delete information of minors, and new definitions that may impact data breach notification requirements. California has also adopted privacy guidelines with respect to mobile applications. In addition, the European Union is actively considering a new General Data Protection Regulation, which may result in significantly greater compliance burdens for companies with users and operations in the European Union. Outside the European Union and the United States, a number of countries have adopted or are considering privacy laws and regulations that may result in significant greater compliance burdens.

In addition, government agencies and regulators have reviewed, are reviewing and will continue to review, the privacy practices of online media companies including our privacy and security policies and practices. The FTC in particular has approved consent decrees resolving complaints and their resulting investigations into the privacy and security practices of a number of online social media companies. These reviews can and have resulted in changes to our products and policies, and could result in additional changes in the future. If we are unable to comply with any such reviews or decrees that result in recommendations or binding changes, or if the recommended changes result in degradation of our products, our business could be harmed.

Our business, including our ability to operate and expand internationally or on new technology platforms, could be adversely affected if legislation or regulations are adopted, interpreted or implemented in a manner that is inconsistent with our current business practices and that require changes to these practices, the design of our websites, mobile applications, products, features or our privacy policy. In particular, the success of our business has been, and we expect will continue to be, driven by our ability to responsibly use the data that our members share with us. Therefore, our business could be harmed by any significant change to applicable laws, regulations or industry standards or practices regarding the storage, use or disclosure of data our members choose to share with us, or regarding the manner in which the express or implied consent of consumers for such use and disclosure is obtained. Such changes may require us to modify our products and features, possibly in a material manner, and may limit our ability to develop new products and features that make use of the data that we collect about our members.

Our business is subject to a variety of U.S. and foreign laws, many of which are unsettled and still developing and which could subject us to claims or otherwise harm our business.

We are subject to a variety of laws in the United States and abroad, including laws regarding privacy, data protection, data security, data retention and consumer protection, accessibility, sending electronic messages and the provision of online payment services, including credit card processing, which are continuously evolving and developing. In addition, some of our members are subject to laws and/or licensing or certification obligations that may restrict their ability to engage with our online services. The scope and interpretation of the laws and other obligations that are or may be applicable to us or certain groups of our members are often uncertain and may be conflicting, particularly laws and other obligations outside the United States.

For example, laws related to the online dissemination of content of others and laws related to sending messages over online service are continuing to evolve and are being tested pursuant to actions based on, among other things, invasion of privacy, spam, and other torts, unfair competition, copyright and trademark infringement, credit reporting and other theories based on the nature and content of the materials and messages sent or provided by others.

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In addition, regulatory authorities around the world are considering a number of legislative and regulatory proposals concerning privacy, spam, data storage, data protection, content regulation, cybersecurity and other matters that may be applicable to our business. Compliance with these laws may require substantial investment or may provide technical challenges for our business. It is also likely that as our business grows, evolves, and an increasing portion of our business shifts to mobile, and our solutions are used in a greater number of countries and additional groups, we will become subject to laws and regulations in additional jurisdictions. Further, as our services and solutions expand to include more content (including from third parties), additional laws and regulations may become applicable to our products and offerings including laws requiring us to restrict the availability of such content on a geographical basis or to certain groups of members. In some cases, laws and legal obligations of various jurisdictions may be ambiguous or conflict as to our right to display and distribute certain content as part of our online services. Users of our site and our solutions could also abuse or misuse our products in ways that violate laws. It is difficult to predict how existing laws will be applied to our business and the new laws and legal obligations to which we may become subject.

If we are not able to comply with these laws or other legal obligations or if we (or our members) become liable under these laws or legal obligations, or if our services are suspended or blocked, we could be directly harmed, and we may be forced to implement new measures to reduce exposure to this liability. This may require us to expend substantial resources or to discontinue certain solutions, which would negatively affect our business, financial condition and results of operations. In addition, the increased attention focused upon liability issues as a result of lawsuits and legislative proposals could harm our reputation or otherwise impact the growth of our business. Any costs incurred as a result of this potential liability could harm our business and operating results.

We expect to face increasing competition in the market for online entrepreneurial networks from social networking sites and Internet search companies, among others, as well as continued competition for customers of our hiring and products and services.

We face significant competition in all aspects of our business, and we expect such competition to increase, particularly in the market for online entrepreneurial networks.

Our industry is evolving rapidly and is becoming increasingly competitive. Larger and more established companies may focus on our market and could directly compete with us. Smaller companies, including application developers, could also launch new products and services that compete with us and that could gain market acceptance quickly. We also expect our existing competitors in the markets for hiring and products and services to continue to focus on these areas. A number of these companies may have greater resources than us, which may enable them to compete more effectively. Additionally, members of social networks may choose to use, or increase their use of, those networks for entrepreneurial purposes, which may result in those members decreasing or eliminating their use of our website. Companies that currently focus on social networking could also expand their focus to entrepreneurs.

We and other companies have historically established alliances and relationships with some of these companies to allow broader exposure to members and access to data on the Internet. We may also, in the future, establish alliances or relationships with other competitors or potential competitors. To the extent companies terminate such relationships and establish alliances and relationships with others, our business could be harmed. Specifically, we compete for members, enterprises and entrepreneurial organizations as discussed below.

The market for online entrepreneurial networks is new and rapidly evolving. Other companies with substantially greater resources than us such as Facebook, Google, Microsoft, Twitter and LinkedIn could develop competing solutions. Further, some of these companies are partnering with third parties to offer products and services that could compete with ours. Our competitors may announce new products, services or enhancements that better address changing industry standards or the needs of members and customers, such as mobile access. Any such increased competition could cause pricing pressure, loss of market share or decreased member engagement, any of which could adversely affect our business and operating results. Internet search engines could also change their methodologies in ways that adversely affect our ability to optimize our page rankings within their search results.

With respect to the products and services solutions we offer our members, we compete with online and offline outlets that generate revenue from similar channels. To the extent competitors are better able to provide cost-effective access to attractive demographics, either through new business models or increased user volume, we may not be successful in increasing our revenue from these acquisitions and products and our business would be harmed.

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Finally, other companies that provide content for entrepreneurs could develop more compelling offerings that compete with our premium subscriptions and adversely impact our ability to sell and renew subscriptions to our members.

Our business depends on continued and unimpeded access to our products and services on the Internet by our users and advertisers. If we, or our users, experience disruptions in Internet service or if Internet service providers are able to block, degrade or charge for access to our products and services, we could incur additional expenses and the loss of users and advertisers.

We depend on the ability of our users and advertisers to access the Internet. Currently, this access is provided by companies that have significant market power in the broadband and Internet access marketplace, including incumbent telephone companies, cable companies, mobile communications companies, government-owned service providers, device manufacturers and operating system providers, any of whom could take actions that degrade, disrupt or increase the cost of user access to our products or services, which would, in turn, negatively impact our business. The adoption of any laws or regulations that adversely affect the growth, popularity or use of the Internet, including laws or practices limiting Internet neutrality, could decrease the demand for, or the usage of, our products and services, increase our cost of doing business and adversely affect our operating results. We also rely on other companies to maintain reliable network systems that provide adequate speed, data capacity and security to us and our users. As the Internet continues to experience growth in the number of users, frequency of use and amount of data transmitted, the Internet infrastructure that we and our users rely on may be unable to support the demands placed upon it. The failure of the Internet infrastructure that we or our users rely on, even for a short period of time, could undermine our operations and harm our operating results.

Our products and services may contain undetected software errors, which could harm our business and operating results.

Our products and services incorporate complex software and we encourage employees and consultants to quickly develop and help us launch new and innovative features. Our software has contained, and may now or in the future contain errors, bugs or vulnerabilities. Some errors in our software code may only be discovered after the product or service has been released. Any errors, bugs or vulnerabilities discovered in our code after release could result in damage to our reputation, loss of users, loss of platform partners, loss of advertisers or advertising revenue or liability for damages, any of which could adversely affect our business and operating results.

Our business depends on a strong brand, and any failure to maintain, protect and enhance our brand would hurt our ability to retain or expand our base of members, enterprises and entrepreneurial organizations, or our ability to increase their level of engagement.

We have developed a strong brand that we believe has contributed significantly to the success of our business. Our brand is predicated on the idea that individual entrepreneurs will find immense value in building and maintaining their personal and business identities and reputations on our platform. Maintaining, protecting and enhancing the “EFactor” brand is critical to expanding our base of members, enterprises, advertisers, corporate customers and other partners, and increasing their engagement with our website, and will depend largely on our ability to maintain member trust, be a technology leader and continue to provide high-quality solutions, which we may not do successfully. If we do not successfully maintain a strong brand, our business could be harmed.

We may not be able to successfully halt the operations of other websites that aggregate our data as well as data from other companies, including social networks, or copycat websites that have misappropriated our data in the past or may misappropriate our data in the future.

From time to time, third parties attempt to misappropriate data through website scraping, robots or other means and aggregated this data on their websites with data from other companies. In addition, “copycat” websites have attempted to misappropriate data on our network and attempted to imitate our brand or the functionality of our website. When we have become aware of such websites, we have employed technological or legal measures in an attempt to halt their operations. However, we may not be able to detect all such websites in a timely manner and, even if we could, technological and legal measures may be insufficient to stop their operations. In some cases, particularly in the case of websites operating outside of the United States, our available remedies may not be adequate to protect us against such websites. Regardless of whether we can successfully enforce our rights against these websites, any measures that we may take could require us to expend significant financial or other resources.

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Failure to protect or enforce our intellectual property rights could harm our business and operating results.

We regard the protection of our trade secrets, copyrights, trademarks, trade dress and domain names as critical to our success. In particular, we must maintain, protect and enhance the “EFactor” brand. We strive to protect our intellectual property rights by relying on federal, state and common law rights, as well as contractual restrictions. We enter into confidentiality and invention assignment agreements with our employees and contractors, and confidentiality agreements with parties with whom we conduct business in order to limit access to, and disclosure and use of, our proprietary information.

However, these contractual arrangements and the other steps we have taken to protect our intellectual property may not prevent the misappropriation of our proprietary information or deter independent development of similar technologies by others.

We pursue the registration of our domain names, trademarks, and service marks in the United States, Europe and in certain other locations. Effective trade secret, copyright, trademark, trade dress and domain name prosecution is expensive to develop and maintain, both in terms of initial and on-going registration requirements and the costs of defending our rights. We are seeking to protect our trademarks and domain names in an increasing number of jurisdictions, a process that is expensive and may not be successful or which may not pursue in every location.

Litigation may be necessary to enforce our intellectual property rights, protect our respective trade secrets or determine the validity and scope of proprietary rights claimed by others. Any litigation of this nature, regardless of outcome or merit, could result in substantial costs and diversion of management and technical resources, any of which could adversely affect our business and operating results. We may incur significant costs in enforcing our trademarks against those who attempt to imitate our “EFactor” brand. If we fail to maintain, protect and enhance our intellectual property rights, our business and operating results may be harmed and the market price of our common stock could decline.

We may be subject to legal proceedings and litigation, including intellectual property and privacy disputes, which are costly to defend and could harm our business and operating results.

We are party to lawsuits in the normal course of business. Litigation is often expensive and disruptive to normal business operations. We may face in the future allegations and lawsuits that we have infringed the intellectual property and other rights of third parties, including patents, privacy, trademarks, copyrights and other rights. Litigation, and particularly the patent infringement and class action matters we are facing or may face, may be protracted and expensive, and the results are difficult to predict. Adverse outcomes may result in significant settlement costs or judgments, require us to modify our products and features while we develop non-infringing substitutes or require us to stop offering certain features.

In addition, we use open source software in our solutions and will use open source software in the future. From time to time, we may face claims against companies that incorporate open source software into their products, claiming ownership of, or demanding release of, the source code, the open source software and/or derivative works that were developed using such software, or otherwise seeking to enforce the terms of the applicable open source license. These claims could also result in litigation, require us to purchase a costly license or require us to devote additional research and development resources to change our solutions, any of which would have a negative effect on our business and operating results.

Although the results of litigation and claims cannot be predicted with certainty, we do not believe that the final outcome of any matter that we currently face will have a material adverse effect on our business. However, there can be no assurance that our expectations will prove correct, and even if these matters are not resolved in our favor or without significant cash settlements, these matters, and the time and resources necessary to litigate or, resolve them, could harm our business, our operating results, our reputation or the market price of our common stock.

Because we recognize most of the revenue from our content, products and services, sponsors and our premium subscriptions over the term of the agreement, a significant downturn in these businesses may not be immediately reflected in our operating results.

We recognize revenue from sales of our content, products and services and premium subscriptions over the terms of the agreements, which are typically 12 months. As a result, a significant portion of the revenue we report in each quarter is generated from agreements entered into during previous quarters. Consequently, a decline in new or renewed agreements in any one quarter may not significantly impact our revenue in that quarter but will negatively affect our revenue in future quarters.

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In addition, we may be unable to adjust our fixed costs in response to reduced revenue. Accordingly, the effect of significant declines in the sales of these offerings may not be reflected in our short-term results of operations.

We depend on world-class talent to grow and operate our business, and if we are unable to hire, retain and motivate our personnel, we may not be able to grow effectively.

Our future success will depend upon our continued ability to identify, hire, develop, motivate and retain world-class talent. Our ability to execute efficiently is dependent upon contributions from all of our employees, in particular our senior management team. Key institutional knowledge remains with a small group of long-term employees and directors whom we may not be able to retain. We may not be able to retain the services of any of our long-term employees or other members of senior management in the future. We do not maintain key person life insurance for any employee. In addition, from time to time, there may be changes in our senior management team that may be disruptive to our business. If our senior management team fails to work together effectively and to execute our plans and strategies on a timely basis, our business could be harmed.

Our growth strategy also depends on our ability to expand and retain our organization with world-class talent. Identifying, recruiting, training and integrating qualified individuals will require significant time, expense and attention. In addition to hiring new employees, we must continue to focus on retaining our best talent. Competition for these resources is intense, particularly in the San Francisco Bay area and in New York City. If we are not able to effectively increase and retain our talent, our ability to achieve our strategic objectives will be adversely impacted, and our business will be harmed.

We believe that our culture and acquisitive nature has the potential to be a key contributor to our success. We expect to continue to hire aggressively as we expand, especially in field sales and internationally. If we do not continue to develop our corporate culture as we grow and evolve, including maintaining our culture of transparency with our employees, it could harm our ability to foster the innovation, creativity and teamwork we believe we need to support our growth.

Many individuals are using devices other than personal computers to access the Internet. If members with these devices do not widely adopt solutions we develop for these devices, our business could be adversely affected.

The number of people who access the Internet through devices other than personal computers, including mobile telephones, personal digital assistants, smart phones and handheld tablets or computers has increased dramatically in the past few years and is projected to continue to increase. If we are unable to develop mobile solutions to meet the needs of our members, our business could suffer. Additionally, as new devices and new platforms are continually being released, it is difficult to predict the problems we may encounter in developing versions of our solutions for use on these alternative devices, and we may need to devote significant resources to the creation, support, and maintenance of such devices.

Enterprises or organizations, including governmental agencies, may restrict access to our website, which could lead to the loss or slowing of growth in our member base or the level of member engagement.

Our solutions depend on the ability of our members to access the Internet and our website. Enterprises or professional organizations, including governmental agencies, could block access to our website or the Internet generally for a number of reasons such as security or confidentiality concerns or regulatory reasons, or they may adopt policies that prohibit listing the employers’ names on their employees’ profiles in order to minimize the risk that employees will be contacted and hired by other employers.

For example, the government of the People’s Republic of China has previously blocked access to similar websites in China. We cannot assure you that the Chinese government will not block access to one or more of our features and products or our entire site in China for a longer period of time or permanently. If these entities block or limit access to our website or adopt policies restricting our members from providing us with accurate and up-to-date information, the value of our network could be negatively impacted, which would adversely affect our ability to offer compelling hiring and products and services and subscriptions to our members, enterprises, entrepreneurial organizations and customers.

If Internet search engines’ methodologies are modified or our search result page rankings decline for other reasons, our member engagement could decline.

We depend in part on various Internet search engines, such as Google, Bing and Yahoo!, to direct a significant amount of traffic to our website. Our ability to maintain the number of visitors directed to our website is not entirely within our control. Our competitors’ search engine optimization efforts may result in their websites receiving a higher search result page ranking

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than ours, or Internet search engines could revise their methodologies in an attempt to improve their search results, which could adversely affect the placement of our search result page ranking. If search engine companies modify their search algorithms in ways that are detrimental to our new user growth or in ways that make it harder for our members to use our website, or if our competitors’ optimization efforts are more successful than ours, overall growth in our member base could slow, member engagement could decrease, and we could lose existing members. These modifications may be prompted by search engine companies entering the online entrepreneurial networking market or aligning with competitors. Our website has experienced fluctuations in search result rankings in the past, and we anticipate similar fluctuations in the future. Any reduction in the number of members directed to our website would harm our business and operating results.

Our growth depends in part on the success of our strategic relationships with third parties.

We anticipate that we will continue to depend on relationships with various third parties, including technology and content providers to grow our business. Identifying, negotiating and documenting relationships with third parties require significant time and resources, as does integrating third-party content and technology. Our agreements with technology and content providers and similar third parties are typically non-exclusive and do not prohibit them from working with our competitors or from offering competing services. Our competitors may be effective in providing incentives to these parties to favor their solutions or may prevent us from developing strategic relationships with these parties. In addition, these third parties may not perform as expected under our agreements with them, and we have had, and may in the future have, disagreements or disputes with these parties, which could negatively affect our brand and reputation. It is possible that these third parties may not be able to devote the resources we expect to the relationship. If we are unsuccessful in establishing or maintaining our relationships with these third parties, our ability to compete in the marketplace or to grow our revenue could be impaired, and our operating results would suffer. Even if we are successful, these relationships may not result in improved operating results.

Payments under our loan agreements with Magna Equities I, LLC and Magna Equities II, LLC would reduce our working capital if not converted. In addition, a default under these loan agreements would have a material adverse effect on our financial position.

In the first quarter of 2015, we entered into loan agreements with Magna Equities I, LLC and Magna Equities II, LLC. Under the terms of the loan agreements, the lenders provided us with an aggregate of $957,500, of which $105,000 has been converted into common stock, leaving a balance of $852,500. Payments under the loan agreements could result in a significant reduction of our working capital unless the loans are converted into shares of our common stock. In addition, we are required to comply with certain negative covenants under the loan agreements, including not incurring additional debt, encumbering our assets, amending our charter, repurchasing shares of our common stock, repaying other indebtedness, paying cash dividends or selling our assets other than in the ordinary course of business without their approval. If any indebtedness under the loan agreements were to be accelerated, there can be no assurance that our assets would be sufficient to repay in full that indebtedness.

If currency exchange rates fluctuate substantially in the future, the results of our operations, which are reported in U.S. dollars, could be adversely affected.

As we continue to expand our international operations, we become more exposed to the effects of fluctuations in currency exchange rates. We incur expenses for employee compensation and other operating expenses at our non-U.S. locations in the local currency, and an increasing percentage of our international revenue is from customers who pay us in currencies other than the U.S. dollar. Fluctuations in the exchange rates between the U.S. dollar and those other currencies could result in the dollar equivalent of such expenses being higher and/or the dollar equivalent of such foreign-denominated revenue being lower than would be the case if exchange rates were stable.

This has resulted in losses on foreign currency exchange in the past and could have a negative impact on our reported operating results. To date, we have not engaged in any hedging strategies, and any such strategies, such as forward contracts, options and foreign exchange swaps related to transaction exposures that we may implement to mitigate this risk may not eliminate our exposure to foreign exchange fluctuations.

The intended tax benefits of our corporate structure depends on the application of the tax laws of various jurisdictions and on how we operate our business.

Our corporate structure is intended to reduce our worldwide effective tax rate. The application of the tax laws of various jurisdictions, including the United States, to our international business activities is subject to interpretation and depends on our

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ability to operate our business in a manner consistent with our corporate structure. The taxing authorities of the jurisdictions in which we operate may determine that the manner in which we operate our business does not achieve the intended tax consequences, which could increase our worldwide effective tax rate and harm our financial position and results of operations.

The enactment of legislation implementing changes in the U.S. taxation of international business activities, the adoption of other tax reform policies or changes in tax legislation or policies in jurisdictions outside the United States could materially impact our financial position and results of operations.

Members of the U.S. House of Representatives and the U.S. Senate have released draft proposals to reform the U.S. system for taxing cross-border income. Possible future changes to U.S. tax laws, including limitations on the ability of taxpayers to claim and utilize foreign tax credits and the deferral of certain tax deductions until earnings outside of the United States are repatriated to the United States, as well as changes to U.S. tax laws that may be enacted in the future, could impact the tax treatment of our foreign earnings and adversely impact our effective tax rate. Due to the large and expanding scale of our international business activities, any changes in the U.S. or international taxation of such activities may increase our worldwide effective tax rate and harm our financial position and results of operations.

Risks Related to Our Common Stock

There is currently limited trading volume in our common stock and the market price of our common stock may fluctuate significantly.

There is currently a limited public market for our common stock and there can be no assurance that an active trading market for our common stock or warrants will develop. This could adversely affect our shareholders’ ability to sell our common stock in short time periods or possibly at all. Our common stock has experienced and is likely to continue to experience significant price and volume fluctuations that could adversely affect the market price of our common stock without regard to our operating performance. Our stock price could fluctuate significantly in the future based upon any number of factors such as: general stock market trends; announcements of developments related to our business; fluctuations in our operating results; announcements of technological innovations, new products, or enhancements by us or our competitors; general conditions in the U.S. and/or global economies; developments in intellectual property rights; and developments in our relationships with our customers and suppliers. Substantial fluctuations in our stock price could significantly reduce the price of our stock.

The issuance of equity securities by us in any financing or merger transaction could result in dilution to our existing stockholders and have a material adverse effect on our earnings and results of operations.

Any issuance of equity securities by us in a future financing or merger transaction could result in dilution to our existing stockholders as a direct result of our issuance of additional shares of our capital stock. In addition, our business strategy may include expansion through internal growth, by acquiring complementary businesses, by acquiring or licensing additional brands, or by establishing strategic relationships with targeted customers and suppliers. In order to do so, or to finance the cost of our other activities, we may issue additional equity securities that could dilute our stockholders’ stock ownership. We may also assume additional debt and incur impairment losses related to goodwill and other tangible assets if we acquire another company, which could negatively impact our earnings and results of operations.

Future sales of our common stock in the public market could lower the price of our common stock and impair our ability to raise funds in future securities offerings.

Future sales of a substantial number of shares of our common stock in the public market, or the perception that such sales may occur, could adversely affect the then prevailing market price of our common stock and could make it more difficult for us to raise funds in the future through a public offering of its securities.

Our current management can exert significant influence over us and make decisions that are not in the best interests of all stockholders.

Our executive officers and directors currently beneficially own as a group approximately 17.5% of our outstanding shares of common stock. Furthermore, our executive officers and directors as a group control approximately 37.5% of the voting power of our shareholders (including our outstanding shares of Series A preferred stock). Following this offering, our executive officers and directors will beneficially own as a group approximately    % of our outstanding shares of common stock and

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control approximately    % of the voting power of our shareholders (including our outstanding shares of Series A preferred stock). As a result, they will be able to assert significant influence over all matters requiring stockholder approval, including the election and removal of directors and any change in control. In particular, this concentration of ownership of our outstanding shares of common stock could have the effect of delaying or preventing a change in control, or otherwise discouraging or preventing a potential acquirer from attempting to obtain control. This, in turn, could have a negative effect on the market price of our common stock. It could also prevent our stockholders from realizing a premium over the market prices for their shares of common stock. Moreover, the interests of the owners of this concentration of ownership may not always coincide with our interests or the interests of other stockholders and, accordingly, could cause us to enter into transactions or agreements that we would not otherwise consider.

The market price of our common stock may be volatile and may be affected by market conditions beyond our control.

The market price of our common stock is subject to significant fluctuations in response to, among other factors:

•      variations in our operating results and market conditions specific to social media industry companies;

•      changes in financial estimates or recommendations by securities analysts;

•      announcements of innovations or new products or services by us or our competitors;

•      the emergence of new competitors;

•      operating and market price performance of other companies that investors deem comparable;

•      changes in our board of directors or management;

•      sales or purchases of our common stock by insiders;

•      commencement of, or involvement in, litigation;

•      changes in governmental regulations; and

•      general economic conditions and slow or negative growth of related markets.

In addition, if the market for stocks in our industry, or the stock market in general, experiences a loss of investor confidence, the market price of our common stock could decline for reasons unrelated to our business, financial condition or results of operations. If any of the foregoing occurs, it could cause the price of our common stock to fall and may expose us to lawsuits that, even if unsuccessful, could be costly to defend and a distraction to the board of directors and management.

We do not intend to pay dividends for the foreseeable future, and you must rely on increases in the market prices of our common stock for returns on your investment.

For the foreseeable future, we intend to retain any earnings to finance the development and expansion of our business, and we do not anticipate paying any cash dividends on our common stock. In addition, our loan agreements with Magna Equities I, LLC and Magna Equities II, LLC restrict us from paying cash dividends on our stock. Accordingly, investors must be prepared to rely on sales of their common stock after price appreciation to earn an investment return, which may never occur. Investors seeking cash dividends should not purchase our common stock. Any determination to pay dividends in the future will be made at the discretion of our board of directors and will depend on our results of operations, financial condition, contractual restrictions, restrictions imposed by applicable law and other factors our board of directors deems relevant.

Our internal financial reporting procedures are still being developed. We will need to allocate significant resources to meet applicable internal financial reporting standards.

We have adopted disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that we submit under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act are accumulated and communicated to management, including principal executive and principal financial officers, as appropriate

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to allow timely decisions regarding required disclosure. As of December 31, 2014, management concluded that our disclosure controls and procedures were not effective because we did not document internal controls and procedures as required by Section 404 of the Sarbanes-Oxley Act.

We are taking steps to improve our disclosure controls and procedures. These efforts require significant time and resources. If we are unable to improve our internal financial reporting controls and procedures, our reported financial information may be inaccurate and we will encounter difficulties in the audit or review of our financial statements by our independent auditors, which in turn may have material adverse effects on our ability to prepare financial statements in accordance with generally accepted accounting principles in the United States and to comply with SEC reporting obligations.

Failure to achieve and maintain effective internal controls in accordance with Section 404 of the Sarbanes Oxley Act of 2002 could prevent us from producing reliable financial reports or identifying fraud. In addition, current and potential stockholders could lose confidence in our financial reporting, which could have an adverse effect on our stock price.

We are subject to Section 404 of the Sarbanes-Oxley Act of 2002. Effective internal controls are necessary for us to provide reliable financial reports and effectively prevent fraud, and a lack of effective controls could preclude us from accomplishing these critical functions. We are required to document and test our internal control procedures in order to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, in connection with, Public Company Accounting Oversight Board (“PCAOB”) Auditing Standard No. 5 which requires annual management assessments of the effectiveness of our internal controls over financial reporting. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2014 and concluded that our internal controls and procedures were not effective due to our limited accounting staff. In addition, our failure to achieve and maintain effective internal controls could be impacted by recent and future acquisitions. Although we intend to augment our internal control procedures and expand our accounting staff, there is no guarantee that this effort will be adequate. Our failure to achieve and maintain effective internal controls could prevent us from producing reliable financial reports or identifying fraud. In addition, current and potential stockholders could lose confidence in our financial reporting, which could have an adverse effect on our stock price.

Nevada law limits the personal liability of corporate directors and officers and requires indemnification under certain circumstances.

Section 78.138(7) of the Nevada Revised Statutes provides that, subject to certain very limited statutory exceptions or unless the articles of incorporation provide for greater individual liability, a director or officer of a Nevada corporation is not individually liable to the corporation or its stockholders for any damages as a result of any act or failure to act in his or her capacity as a director or officer, unless it is proven that the act or failure to act constituted a breach of his or her fiduciary duties as a director or officer and such breach involved intentional misconduct, fraud or a knowing violation of law. We have not included in our articles of incorporation any provision intended to provide for greater liability as contemplated by this statutory provision.

In addition, Section 78.7502(3) of the Nevada Revised Statutes provides that to the extent a director or officer of a Nevada corporation has been successful on the merits or otherwise in the defense of certain actions, suits or proceedings (which may include certain stockholder derivative actions), the corporation shall indemnify such director or officer against expenses (including attorneys’ fees) actually and reasonably incurred by such director or officer in connection therewith.

If securities or industry analysts do not publish research or reports about our business, or if they change their recommendations regarding our stock adversely, our stock price and trading volume could decline.

The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business. We do not currently have and may never obtain research coverage by industry or financial analysts. If no or few analysts commence coverage of us, the trading price of our stock would likely decrease. Even if we do obtain analyst coverage, if one or more of the analysts who cover us downgrade our stock, our stock price would likely decline. If one or more of these analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.

Provisions of our Articles of Incorporation, bylaws and Nevada corporate law have anti-takeover effects.

Some provisions in our Articles of Incorporation and bylaws could delay or prevent a change in control of us, even if that change might be beneficial to our stockholders. Our Articles of Incorporation and bylaws contain provisions that might make

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acquiring control of us difficult, including provisions limiting rights to call special meetings of stockholders and regulating the ability of our stockholders to nominate directors for election at annual meetings of our stockholders. In addition, our board of directors has the authority, without further approval of our stockholders, to issue preferred stock having such rights, preferences and privileges as the board of directors may determine. Any such issuance of preferred stock could, under some circumstances, have the effect of delaying or preventing a change in control of us and might adversely affect the rights of holders of common stock.

In addition, we are subject to Nevada statutes regulating business combinations, takeovers and control share acquisitions, which might also hinder or delay a change in control of us. Anti-takeover provisions in our articles of incorporation and bylaws, anti-takeover provisions that could be included in the common stock when issued and the Nevada statutes regulating business combinations, takeovers and control share acquisitions can depress the market price of our securities and can limit the stockholders’ ability to receive a premium on their shares by discouraging takeover and tender offer bids, even if such events could be viewed by our stockholders or others as beneficial transactions.

Our Articles of Incorporation authorize our board of directors to issue new series of preferred stock that may have the effect of delaying or preventing a change of control, which could adversely affect the value of your shares.

Our articles of incorporation provide that our board of directors is authorized to issue from time to time, without further stockholder approval, up to 20,000,000 shares of preferred stock in one or more series and to fix or alter the designations, preferences, rights and any qualifications, limitations or restrictions of the shares of each series, including the dividend rights, dividend rates, conversion rights, voting rights, rights of redemption, including sinking fund provisions, redemption price or prices, liquidation preferences and the number of shares constituting any series or designations of any series. Such shares of preferred stock could have preferences over our common stock with respect to dividends and liquidation rights. We may issue additional preferred stock in ways that may delay, defer or prevent a change of control of our company without further action by our stockholders. Such shares of preferred stock may be issued with voting rights that may adversely affect the voting power of the holders of our common stock by increasing the number of outstanding shares having voting rights, and by the creation of class or series voting rights.

Risks Relating to this Offering

We may allocate net proceeds from this offering in ways which differ from our estimates based on our current plans and assumptions discussed in the section entitled “Use of Proceeds” and with which you may not agree.

The allocation of net proceeds of the offering set forth in the “Use of Proceeds” section below represents our estimates based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures. The amounts and timing of our actual expenditures will depend on numerous factors, including market conditions, cash generated by our operations, business developments and related rate of growth. We may find it necessary or advisable to use portions of the proceeds from this offering for other purposes. Circumstances that may give rise to a change in the use of proceeds and the alternate purposes for which the proceeds may be used are discussed in the section entitled “Use of Proceeds” below. You may not have an opportunity to evaluate the economic, financial or other information on which we base our decisions on how to use our proceeds. As a result, you and other stockholders may not agree with our decisions. See “Use of Proceeds” section for additional information.

Future sales by our stockholders may adversely affect our stock price and our ability to raise funds in new stock offerings.

All the securities sold in this offering will be freely tradable without restrictions or further registration under the Securities Act of 1933, as amended, or the Securities Act, except for any shares held by our affiliates as defined in Rule 144 under the Securities Act. Sales of our common stock by our stockholders and warrant or option holders following this offering could lower the market price of our common stock and warrants. Sales may also make it more difficult for us to sell equity securities or equity-related securities in the future at a time and price that our management deems acceptable or at all. The issuance of approximately 38,641,513 shares issuable upon exercise of outstanding options, warrants and convertible notes as of the date of this prospectus and the issuance of additional shares of common stock upon exercise of the warrants issued in this offering could also lower the market price of our common stock.

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You will experience immediate and substantial dilution as a result of this offering and may experience additional dilution in the future.

You will incur immediate and substantial dilution as a result of this offering. After giving effect to the sale by us of up to      shares of common stock and corresponding warrants offered in this offering at a public offering price of $      per share, and after deducting underwriter commissions and estimated offering expenses payable by us, investors in this offering can expect an immediate dilution of $      per share, or      %, at the public offering price, assuming no exercise of the warrants. In addition, in the past, we issued options and warrants to acquire shares of common stock and may need to do so in the future to support our operations. To the extent these options and/or warrants are ultimately exercised, you will sustain future dilution.

Holders of warrants will have no rights as common stockholders until such holders exercise their warrants and acquire our common stock.

Until holders of warrants acquire shares of our common stock upon exercise of the warrants, holders of warrants will have no rights with respect to the shares of our common stock underlying such warrants. Upon exercise of the warrants, the holders will be entitled to exercise the rights of a common stockholder only as to matters for which the record date occurs after the exercise date.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included in this prospectus, including, without limitation, statements regarding the assumptions we make about our business, strategy and other plans and objectives for our future operations, are forward-looking statements.

These forward-looking statements include declarations regarding our management’s beliefs and current expectations. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “would,” “could,” “expects,” “plans,” “contemplates,” “anticipates,” “believes,” “estimates,” “predicts,” “projects,” “intend” or “continue” or the negative of such terms or other comparable terminology, although not all forward-looking statements contain these identifying words. Forward-looking statements are subject to inherent risks and uncertainties in predicting future results and conditions that could cause the actual results to differ materially from those projected in these forward-looking statements. Some, but not all, of the forward-looking statements contained in this prospectus include, among other things, statements about the following:

•      our significant losses and negative cash flow raise questions about our ability to continue as a going concern;

•      the effect certain conversions of securities may have on us, whether the conversion is pursuant to convertible notes, options, warrants or contractual obligation;

•      future sale of our common stock that could depress the trading price of our common stock, lower our value and make it more difficult for us to raise capital;

•      our ability to compete effectively;

•      regulatory compliance costs; and

•      the other matters described in “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business.”

You should also read the matters described in “Risk Factors” and the other cautionary statements made in this prospectus as being applicable to all related forward-looking statements wherever they appear in this prospectus. The forward-looking statements in this prospectus may not prove to be accurate and therefore you are encouraged not to place undue reliance on forward-looking statements. You should read this prospectus completely.

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USE OF PROCEEDS

We estimate that we will receive up to $     in net proceeds from the sale of common stock and warrants in this offering, based on a price of $     per share of common stock and $     per warrant and after deducting the underwriting discount and estimated offering expenses payable by us. If the underwriters’ over-allotment option to purchase additional shares of our common stock and/or warrants from us is exercised in full, we estimate that our net proceeds will be approximately $    .

We cannot predict when or if the warrants will be exercised. If all of the warrants issued in this offering are exercised for cash, then we will receive an additional $     of proceeds. It is possible that the warrants may be exercised on a cashless basis or expire prior to being exercised, in which case we will not receive any additional proceeds.

We intend to use the net proceeds of this offering as follows: $2,500,000 to finance possible acquisitions of complementary businesses, technologies and other assets, $1,000,000 to repay outstanding indebtedness, and the balance of the net proceeds of this offering for working capital and general corporate purposes.

We are not a party to any commitments or agreements with respect to any acquisitions as of the date of this prospectus.

The interest rates on the outstanding loans that we intend to repay from a portion of the proceeds of this offering range from 0.25% to 15% per annum and all such loans are currently payable. Approximately 20% of the proceeds being used to repay these loans will be paid to affiliates of ours who had previously loaned us funds for working capital purposes.

The expected use of the net proceeds of the offering set forth above represents our estimates based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures. The amounts and timing of our actual expenditures will depend upon numerous factors, including market conditions, cash generated by our operations, business developments and related rate of growth. We may find it necessary or advisable to use portions of the proceeds from this offering for other purposes.

From time to time, we evaluate these and other factors and we anticipate continuing to make such evaluations to determine if the existing allocation of resources, including the proceeds of this offering, is being optimized. Pending such uses, we intend to invest the net proceeds of this offering in short-term, interest-bearing, investment-grade securities such as money market funds, certificates of deposit, commercial paper and guaranteed obligations of the U.S. government.

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DILUTION

If you purchase securities in this offering, your interest will be diluted immediately to the extent of the difference between the public offering price of $     per share and corresponding warrant, and the pro forma net tangible book value per share of our common stock immediately following this offering.

Our net tangible book value as of March 31, 2015 was approximately $(9,247,267) or approximately $(0.06) per share. Net tangible book value per share represents our total tangible assets less total liabilities, divided by the number of shares of common stock outstanding as of March 31, 2015.

Net tangible book value dilution per share of common stock to new investors represents the difference between the amount per share paid by purchasers in this offering and the pro forma net tangible book value per share of common stock immediately after completion of this offering. After giving effect to our sale of      shares in this offering at a public offering price of $     per share, and after deducting the underwriting discount and estimated offering expenses, our as adjusted net tangible book value as of March 31, 2015 would have been $     million, or $     per share. This represents an immediate increase in net tangible book value of $     per share to existing stockholders and an immediate dilution in net tangible book value of $     per share to purchasers in this offering, as illustrated in the following table:

Public offering price per share		$
Pro forma net tangible book value per share as of March 31, 2015		$	(0.06	)
Increase in pro forma net tangible book value per share attributable to new investors		$
Pro forma net tangible book value per share as of March 31, 2015, after giving effect to this offering		$
Net tangible book value dilution per share to new investors in this offering		$

____________

The above discussion and table do not include the following:

•      3,827,541 shares of common stock issuable upon exercise of outstanding stock options, at a weighted average exercise price of $0.57 per share, under our equity incentive plan;

•      7,242,563 shares of common stock issuable upon exercise of outstanding warrants, with current exercise prices ranging from $0.10 per share to $0.25 per share;

•      27,571,409 shares of common stock issuable upon exercise of outstanding convertible promissory notes, of which 1,048,421 shares will no longer be issuable once we repay certain outstanding convertible promissory notes with a portion of the proceeds from this offering;

•           shares of common stock issuable upon exercise of the warrants to be issued to the public in this offering; and

•      up to      shares of common stock issuable upon exercise of the warrants to be issued to the underwriter in this offering.

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PRICE RANGE OF OUR COMMON STOCK

Market Information

From December 2007 until November 2013, our common stock was quoted on the OTC Bulletin Board under the symbol STDR. Since November 2013, our common stock has been quoted on the OTC Bulletin Board and, since September 2013, on the OTCQB Marketplace, under the symbol EFCT.

Our stockholders have authorized our board of directors to effect a reverse stock split of our outstanding common stock and preferred stock at a specific ratio within a range of not less than 1-for-20 and not more than 1-for-150. The share and per share information in the table below does not reflect the reverse stock split, which we intend to complete prior to the effectiveness of the registration statement of which this prospectus forms a part.

The following table sets forth, for the periods indicated, the high and low sales prices per share of our common stock as reported by the OTC Bulletin Board or OTCQB Marketplace (as adjusted for a reverse stock split of our common stock at a ratio of 1-for-40, that became effective October 13, 2013).

		High			Low
2015
Quarter ended June 30, 2015 (through June 9, 2015)		$	0.11		$	0.02
Quarter ended March 31, 2015		$	0.22		$	0.07
2014
Quarter ended December 31, 2014		$	0.83		$	0.12
Quarter ended September 30, 2014		$	0.82		$	0.45
Quarter ended June 30, 2014		$	1.50		$	0.60
Quarter ended March 31, 2014		$	2.00		$	1.00
2013
Quarter ended December 31, 2013		$	3.60		$	1.00
Quarter ended September 30, 2013		$	4.80		$	1.20
Quarter ended June 30, 2013		$	6.40		$	2.80
Quarter ended March 31, 2013		$	12.00		$	0.40

These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commissions, and may not represent actual transactions. On June 9, 2015, the last sales price reported on the OTCQB Marketplace for our common stock was $0.05 per share.

Holders

As of the date of this prospectus, our outstanding shares consisted of 195,737,682 shares of common stock and 2,500,000 shares of Series A preferred stock. There were approximately 526 record holders of our common stock and two record holders of our Series A preferred stock as of the date of this prospectus.

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DIVIDEND POLICY

We have not paid any dividends on our common stock or Series A preferred stock since inception and we expect to continue to retain all earnings generated by our operations for the development and growth of our business and do not anticipate paying any cash dividends to our stockholders in the foreseeable future. In addition, our loan agreements with Magna Equities I, LLC and Magna Equities II, LLC restrict us from paying cash dividends on our stock. The payment of future dividends on the common stock or the Series A preferred stock and the rate of such dividends, if any, will be determined by our board of directors in light of our earnings, financial condition, capital requirements and other factors.

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CAPITALIZATION

The following table sets forth our cash and total capitalization as of March 31, 2015 on:

•      an actual basis; and

•      on an as adjusted basis to give effect to the sale of      shares of common stock and      warrants in this offering, and the initial application of the estimated net proceeds therefrom.

You should read this table in conjunction with “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements and related notes appearing elsewhere in this prospectus.

		As of March 31, 2015
		Actual				As Adjusted
		(Unaudited)
Cash and cash equivalents		$	38,607
Liabilities:
Convertible note payable(1)			1,401,560
Note payable – related parties			230,398
Capital Lease			12,584
Operating line of credit			400,000
Bank loans			202,667
Total Liabilities		$	2,247,208
Equity:
Equity (deficit) attributable to our stockholders:
Preferred stock, 20,000,000 shares authorized and 2,500,000 issued			2,500
Common stock, no par value, 300,000,000 shares authorized 145,658,700 and shares issued and outstanding, actual;      shares issued and outstanding, pro forma			145,658
Additional paid-in capital			67,442,739
Subscription receivable			(168,000	)
Accumulated deficit			(48,203,488	)
Accumulated other comprehensive loss			(1,225,839	)
Total stockholders’ equity (deficit) attributable to our shareholders			17,993,570
Total capitalization		$	20,240,778			$

____________

 (1) Includes $544,897 relating to deduction for discounts.

The above discussion and table do not include the following:

•      3,827,541 shares of common stock issuable upon exercise of outstanding stock options, at a weighted average exercise price of $0.57 per share;

•      7,242,563 shares of common stock issuable upon exercise of outstanding warrants, with current exercise prices ranging from $0.10 per share to $0.25 per share;

•      27,571,409 shares of common stock issuable upon exercise of outstanding convertible promissory notes, of which 1,048,421 shares will no longer be issuable once we repay certain outstanding convertible promissory notes with a portion of the proceeds from this offering;

•           shares of common stock issuable upon exercise of the warrants to be issued to the public in this offering; and

•      up to      shares of common stock issuable upon exercise of the warrants to be issued to the underwriter in this offering.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

This discussion and analysis contains forward-looking statements relating to future events, our future financial performance and financial condition. Such statements are only predictions and the actual events or results may differ materially from the results discussed in or implied by the forward-looking statements. The historical results set forth in this discussion and analysis are not necessarily indicative of trends with respect to any actual or projected future financial performance. This discussion and analysis should be read in conjunction with the financial statements and the related notes thereto included elsewhere in this prospectus.

Overview

Our mission is to assist entrepreneurs in building and growing their businesses. We believe we are the only global company that combines a comprehensive online and in-person social network with business services and funding focused exclusively on the entrepreneurial community. Operating through our wholly-owned subsidiaries, we provide our more than 1.7 million members with social networking opportunities, business services including education and mentoring, and funding including educational tools and opportunities such as donation-based crowdfunding. Coupled with members in every country of the world (196 countries) participating in 240 industry groups, we have created a global, resource-rich ecosystem for entrepreneurs and small businesses that serves as a source of inspiration and ideas and provides essential services to foster business growth.

Historically, our operating expenses have exceeded our revenues. For our fiscal years ended December 31, 2014 and 2013, we have incurred net losses of $28,264,566 and $5,947,079, respectively. Our operating expenses consisted primarily of the following:

•      Cost of revenue, which consists primarily of the cost of services including applied labor costs and benefits expenses, maintenance, facilities and other operating costs associated with our revenues;

•      Salaries and wages, which consist primarily of common stock and cash, issued for services;

•      Goodwill impairment to reflect current market conditions; and

•      General and administrative expenses, which consist primarily of office rent and other administrative costs including professional fees.

Social Networks Revenue

We generate revenue from our social networks division as follows:

Member Fees. We have, among others, a VIP package which offers members access to premium services such as all our events, airport lounges, VIP lounges and VIP content on the site. We also hold a variety of networking and informational events for our members to which members can gain a subscription and provide varying other membership packages to our members that allow them access to premium services via our website.

In addition, with our acquisitions which we completed since July 2014, we are building a series of products and services with those acquired companies’ offerings that are suitable and affordable to our members. Such packages will be brought into the mix and will be offered to members through promotions as well as prompts.

Sponsorships. We generate revenues from sponsors in a variety of ways. Sponsors can gain exposure to our members either through placement or short write-ups in newsletters and event invitations or by sponsoring one of our events where they may provide access to their products or services (booth/stall) or by serving as a speaker or panelist at an event relating to their industry. This may also include contributing content to our website.

Website advertising. We gained added revenue from selling banner advertising spots along with and click-throughs with well-known brands that target our entrepreneurial membership.

Third-party revenue sharing. In addition to our own products, we will offer products of third parties to our members provided they are suitable and will offer a discount on their retail value to our members. We will receive a small portion of the revenue from such third party services.

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Business Services Revenue

We generate revenue from our business services division as follows:

Public Relations. We provide market and brand awareness consulting services, targeting high and emerging technology and science companies, as well as professional service organizations that help get recognition within the practiced community and provide an explicit company identity.

Branding and Design. We provide our clients with graphic design, marketing and corporate positioning to help improve their clients’ visual identity and packaging of our stakeholders products and services.

Advisory Services. We promote and make available advisory and consulting services to members for support, introduction guidance and general mentoring of members in their pursuit of their entrepreneurial objectives, for which fees are charged.

Education. We are a fully-accredited provider of high-quality apprenticeships and work-based vocational learning and are also an experienced welfare-to-work job-broker. Our key drivers include a business model that is inherently flexible and highly scalable, to our clients human capital needs so they can respond rapidly to their evolving employment requirements. Some of the apprenticeships include, but not limited to; business administration, customer service, leadership and management, childcare and nursery assistants. health and social care, and hair and beauty.

Funding

Funding revenue is derived from performance based commissions on total funds raised by a customer. Customers set a fundraising goal, if the goal is met or surpassed a 4% commission is calculated. If a fundraising goal is not met, an 8% commission is calculated. In addition, 4% is charged for transactions costs, and is considered to be pass-through revenue directly tied to merchant processing costs.

Results of Operations

Three Months Ended March 31, 2015 Compared to Three Months Ended March 31, 2014

Revenue

Our revenue for the three months ended March 31, 2015 was $1,003,641 compared to $116,545 for the three months ended March 31, 2014. The revenue for the three months ended March 31, 2015 consisted of $485,157 from our social networks division and $518,484 from our business services division. All of our revenue was derived from member payments, event fees, annual event packages, public relations and advertising revenue along with advisory fees, sponsorships and revenue shares with strategic partners. The increase in revenue was primarily due to the acquisitions of MCC, HT Skills, Member Digital, GroupCard, ELEQT and Robson Dowry.

The table below sets forth the amount and type of revenues we recognized for the three months ended March 31, 2015 and 2014:

		Three Months Ended March 31,
		2015			2014
		(Unaudited)			(Unaudited)
Social Networks		$	485,157		$	23,009
Business Services			518,484			93,536
		$	1,003,641		$	116,545

Nonmonetary transactions

Based on guidance provided in accordance with ASC No. 845 Nonmonetary Transactions (“ASC 845”), barter transactions with commercial substance are recorded at the estimated fair value of the products exchanged, unless the products received have a more readily determinable estimated fair value. The fair value of the product and services received during the three months ended March 31, 2015 was $31,700.

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Operating expenses

Our operating expenses increased by $152,348 to $2,581,050 for the three months ended March 31, 2015, from $2,428,702 for the three months ended March 31, 2014. This increase was primarily due to the increase in cost of revenue of $131,207, an increase in sales and marketing of $139,368, and an increase in depreciation and amortization of $42,898. These increases were partially offset by a decrease in general and administrative costs of $161,125.

Interest expense

Our interest expense decreased to $238,352 for the three months ended March 31, 2015, compared to $987,935 for the three months ended March 31, 2014. In the three months ended March 31, 2015, our interest expenses included interest on notes payable we issued to meet our capital and operating requirements along with the amortization of $205,862 for the amortization of debt discount and share issuance costs relating to shares issued in connection with certain of our notes payable as part of the consideration provided to lenders for such loans. These notes will be converted to equity where possible and/or will be repaid.

Net loss

Net loss decreased by $1,650,674 to $2,259,236 for the three months ended March 31, 2015 from $3,909,910 for the three months ended March 31, 2014. The decrease in net loss compared to the prior year period was primarily a result of an increase in revenue of $887,096, a decrease in interest expense of $749,583, a decrease in derivative loss of $440,314, and a decrease in other expense of $49,926. These decreases were offset by an increase in operating expense of $152,348 and an increase in loss on change in fair value of derivative liability of $309,174.

Twelve Months Ended December 31, 2014 Compared to Twelve Months Ended December 31, 2013

Revenue

Our revenue for the twelve months ended December 31, 2014 was $1,634,602 compared to $741,785 for the twelve months ended December 31, 2013. The revenue for the twelve months ended December 31, 2014 consisted of $744,245 from our social networks division and $890,357 from our business services division. All of our revenue was derived from member payments, event fees, annual event packages, mentoring fees, public relations revenue along with advisory fees, sponsorships and revenue shares with strategic partners. The increase in revenue was primarily due to having a full year of revenue from MCC and the acquisitions of HT Skills, Member Digital, GroupCard, ELEQT and Robson Dowry.

The table below sets forth the amount and type of revenues we recognized for the twelve months ended December 31, 2014 and 2013:

		Twelve Months Ended December 31,
		2014			2013
Social Networks		$	744,245		$	68,994
Business Services			890,357			672,791
		$	1,634,602		$	741,785

Nonmonetary transactions

Based on guidance provided in accordance with ASC No. 845 Nonmonetary Transactions (“ASC 845”), barter transactions with commercial substance are recorded at the estimated fair value of the products exchanged, unless the products received have a more readily determinable estimated fair value. The fair value of the product and services received during the twelve months ended December 31, 2014 was $68,685.

Operating expenses

Our operating expenses increased by $23,186,523 to $28,021,830 for the twelve months ended December 31, 2014, from $4,835,307 for the twelve months ended December 31, 2013. The increase was primarily due to an impairment loss of $17,698,000 offset by the gain on forgiveness of liabilities of $303,114, and the increase in administrative costs related to the consolidations of the acquisitions during 2014 and legal and accounting fees incurred for public reporting filing requirements.

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Interest expense

Interest expense increased to $2,438,172 for the twelve months ended December 31, 2014, compared to $911,527 for the twelve months ended December 31, 2013. In the twelve months ended December 31, 2014 our interest expense included interest on notes payable we issued to meet our capital and operating requirements along with the amortization of $2,105,860 of common stock issuance costs for shares issued in connection with the notes and the corresponding beneficial conversion feature that were recorded as debt discounts. During the twelve months ended December 31, 2014, $2,303,083 of these notes and related accrued interest were converted into equity.

Loss on debt extinguishment

During the twelve months ended December 31, 2014, we recognized a loss of $585,961 related to the extinguishment of debt. On July 9, 2013, we entered into modification agreements for two of our notes. Pursuant to the terms of the modification agreements, we issued an additional 3,011 shares of common stock. As a result of this issuance, we recognized a loss on debt extinguishment of $1,026,859 for the twelve months ended December 31, 2013.

Net loss

Our net loss increased to $28,264,566 for the twelve months ended December 31, 2014 from $5,947,079 for the twelve months ended December 31, 2013. The increase in net loss compared to the prior year was primarily a result of the recognition of an impairment to goodwill of $17,698,000 and an increase in administrative costs from the acquisitions of HT Skills, Member Digital, GroupCard, ELEQT and Robson Dowry, and additional public company compliance costs, as well as the recognition of the loss on extinguishment of debt as described above. As we grow, we need to continue to attract top-notch personnel. This increases our payroll costs to compensate for these additional employees. The use of our stock as compensation has helped reduce the demand for cash to secure the employment of key personnel, which increases our operating expenses and consequently our net loss.

Liquidity and Capital Resources

Overview

During the three months ended March 31, 2015, we did not generate positive operating cash flows because of our operating losses. Our cash on hand as of March 31, 2015 was $38,607 and our monthly cash flow burn rate, that includes the operations of our numerous recent acquisitions, has increased to approximately $225,000, excluding professional fees and consultants on an as-needed basis. In addition, we anticipate investing approximately $700,000 over the next six months to expand our core business infrastructure. Historically, we have satisfied our short-term cash needs through proceeds from sales of our securities and/or issuance of promissory notes. We are expecting to reduce the need for such short-term financing as we continue to build our revenues through both acquisitions and organic growth. See “Cash Requirements” below. In order to repay our obligations in full or in part when due, we will be required to raise capital from other sources. There is no assurance, however, that we will be successful in these efforts.

Going Concern

Our financial statements are prepared using generally accepted accounting principles, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. The accompanying consolidated financial statements for the twelve months ended December 31, 2014 and 2013 have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

We have incurred recurring losses from operations and have a working capital deficit, which raises substantial doubt about our ability to continue as a going concern.

We are taking steps to raise additional funds to address our operating and financial cash requirements to continue operations. We have devoted a significant amount of time to raising capital from additional debt and equity financing. However, our ability to continue as a going concern is dependent upon raising additional funds through debt and equity financing and generating revenue. There are no assurances that we will receive the necessary funding or generate revenue necessary to fund operations. Our financial statements contain no adjustments for the outcome of this uncertainty.

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Cash Requirements

We had cash available of approximately $38,607 as of March 31, 2015. Based on our revenues, cash on hand and current monthly burn rate, around $225,000, excluding professional fees and consultants on an as-needed basis, we will need to continue borrowing from our shareholders and other related parties, and/or raise money from sales of our securities, to fund operations.

On June 7, 2013, we entered into a revolving line of credit (the “Line of Credit”) with an accredited investor for an amount of up to $750,000. Under the terms of the Line of Credit, the lender agreed to advance to us for a period of 24 months ending on July 7, 2015 such amounts as we may request up to $750,000. All sums advanced bear interest from the date each advance is made until paid-in-full at a rate of 15% per annum. Each advance was due and payable in full 12 months following the day each advance was made. In addition, should we consummate a capital raise, that when aggregated with any preceding capital raise results in $10 million of gross proceeds (excluding amounts advanced under the Line of Credit) (the “Capital Raise”), all amounts due and payable under the Line of Credit will become due and payable 14 days after the consummation of such Capital Raise. A portion of the net proceeds from this offering will be used to repay the Line of Credit. As of March 31, 2015, we have issued 118,750 shares of common stock based on the current advances. The number of shares issued in connection with the Line of Credit will be pro-rated according to the amount of the advance. In connection with the Line of Credit, we entered into a security agreement (the “Security Agreement”) with the lender, whereby we granted to the lender, as collateral for our obligations under the Line of Credit. As of March 31, 2015, we had received advances under the Line of Credit totaling $475,000. As of March 31, 2015, we completed a first repayment of $75,000 and we subsequently completed an additional repayment of $20,000. We have been advised by the lender that, due to extenuating circumstances, it is not currently able, nor likely to be able in the future, to provide us with additional advances under the Line of Credit.

We have been able to satisfy short-term needs through the sale of securities to individual accredited investors over the past year. Even though management has had success in the past in generating funds from these sources of capital, there can be no assurance that we will be successful in procuring these types of proceeds in the future.

Cash Flows from Operating Activities

Net cash used in operating activities was $672,070 for the three months ended March 31, 2015, as compared to $784,930 in cash used in operations for the three months ended March 31, 2014. For the three months ended March 31, 2015, the net cash used consisted primarily of the net loss of $2,259,236 offset by non-cash expenses of approximately $1,571,746 consisting of amortization of debt discount and deferred finance cost of $177,563, stock and option based expense of $852,172, loss on derivative valuation of $309,174, derivative related interest expense of $119,578, warrant expense of $14,723, and depreciation and amortization of $98,536. Additionally, changes in assets and liabilities consisted of increases in unbilled revenue of $222,708, accounts receivable of $13,028, other current assets of $122,239, accounts payable — related party of $184,261, accrued expenses of $110,508, and deferred revenue of $237,988. These increases were offset by decreases in accounts payable of $150,972 and deferred rent of $8,390.

Net cash used in operating activities was $2,409,864 for the twelve months ended December 31, 2014, as compared to net cash used in operating activities of $1,586,568 for the twelve months ended December 31, 2013. To secure our long-term objectives for growth and profitability through both acquisition and organic growth, we were in active discussions with investment banking firms and developing our strategy. Net cash used consisted primarily of the comprehensive net loss of $28,264,566 offset by non-cash expenses of approximately $24,100,147 consisting of amortization of impairment loss of $17,698,000, amortization debt discount and deferred financing fees of $2,105,860, shares issued for services of $4,743,660, stock option expense of $135,738, gain on derivative valuation of $1,188,041, depreciation and amortization of $257,284, a loss on conversion of debt of $553,182, gain on forgiveness/settlement of liabilities of $270,336, and a provision for bad debts of $64,800. Additionally, changes in assets and liabilities consisted of increases in accounts receivable of $83,362, unbilled revenue of $229,115, prepaid expenses and other current assets of $164,523, accounts payable of $595,370, accounts payable — related party of $131,053, accrued expenses and other current liabilities of $957,133, deferred revenue of $16,455, and deferred rent of $68,684.

Cash Flows from Investing Activities

Net cash used in investing activities was $48,085 for the three months ended March 31, 2015, as compared to $59,850 in net cash used in investing activities for the three months ended March 31, 2014. For the three months ended March 31, 2015, the net cash provided by investing activities related to expenditures associated with building our website and increasing the

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infrastructure and architecture needed to support the growth in our member base along with migrating our range of servers to a more robust environment.

Net cash used in investing activities was $117,043 for the twelve months ended December 31, 2014, as compared to $330,381 for the twelve months ended December 31, 2013. In the twelve months ended December 31, 2014, the net cash used by investing activities related to expenditures associated with building our website and increasing the infrastructure and architecture needed to support the growth in our member base.

Cash Flows from Financing Activities

Net cash provided by financing activities was $674,957 for the three months ended March 31, 2015, as compared to $885,282 in cash provided by financing activities for the three months ended March 31, 2014. For the three months ended March 31, 2015, the financing activities consisted primary of $448,250 in proceeds from borrowings, $169,950 in proceeds from the issuance of shares and proceeds from the exercise of warrants of $14,060, and bank overdraft of $42,697. For the three months ended March 31, 2014, our financing activities consisted of $885,282 in proceeds from borrowings.

Net cash provided by financing activities was $2,662,406 for the twelve months ended December 31, 2014, as compared to $1,918,700 for the twelve months ended December 31, 2013. Our financing activities consisted primary of $1,926,950 in proceeds from borrowings, and $831,730 in proceeds from common stock issuances, offset by $96,274 in repayment of borrowings.

Capital Expenditures

We had cash used in investing activities which included our capital expenditure program along with cash associated with our acquisitions of $117,043 for the twelve months ended December 31, 2014, as compared to $330,381 for the twelve months ended December 31, 2013. In the twelve months ended December 31, 2014, the net cash used in investing activities related to expenditures associated with building our website and increasing the infrastructure and architecture needed to support the growth in our member base. We migrated our range of servers to a more stable environment. Capital expenditures consisted of $48,085 for the three months ended March 31, 2015, mainly used in website enhancements.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that we consider material.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, we evaluate our estimates, including those related to uncollectible receivables, inventory valuation, deferred compensation and contingencies. We base our estimates on historical performance and on various other assumptions that we believe to be reasonable under the circumstances. These estimates allow us to make judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

We believe the following accounting policies are our critical accounting policies because they are important to the portrayal of our financial condition and results of operations and they require critical management judgments and estimates about matters that may be uncertain. If actual results or events differ materially from those contemplated by us in making these estimates, our reported financial condition and results of operations for future periods could be materially affected.

Revenue Recognition

Revenues are presented net of discounts. In general, we recognize revenue when (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered to the customer, (iii) the fee is fixed or determinable, and (iv) collectability is reasonably assured. Where arrangements have multiple elements, revenue is allocated to the elements based

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on the relative selling price method and revenue is recognized based on our policy for each respective element. We generate revenue primarily from sales of the following services:

Member Fees — We have a VIP package which offers members access to premium services such as all our events, airport lounges, VIP lounges and VIP content on the site. We also hold a variety of networking and informational events for our members to which members can gain a subscription and provide varying other membership packages to our members that allow them access to premium services via our website.

In addition, with our acquisitions which we have completed since July 2014, we are building a series of products and services with those acquired companies’ offerings that are suitable and affordable to our members. Such packages will be brought into the mix and will be offered to members through promotions as well as prompts. Revenue from member services is recognized ratably over the contractual period, generally from one to 12 months.

Sponsorships — We generate revenues from sponsors in a variety of ways. Sponsors can gain exposure to our members, either through placement or short write-ups in newsletters, on event invitations or by participating as a sponsor at one of our events where a sponsor may provide access to its products or service (booth/stall) or by being a speaker or panelist at an event that fits in their industry. This revenue is recognized over the specific event timeline, which varies from a single day event or a longer-term promotional event over a series of weeks.

Advisory Services — We promote and make available advisory and consulting services to members for the purpose of support, introduction guidance and general mentoring of members in their pursuit of their entrepreneurial objectives, for which fees are charged.

Public Relations — We provide market and brand awareness consulting services, targeting high and emerging technology and science companies, as well as professional service organizations that help get recognition within the practiced community and provide an explicit company identity.

Advertising — Visitor demographics and time spent on a website are the primary drivers behind advertising-based revenue models for internet properties. When a user clicks an advertisement (cost per click or CPC basis), views an advertisement impression (cost per thousand or CPM basis), registers for an external website via an advertisement clicked on through our application (cost per acquisition or CPA basis). Proceeds from such contracts is recognized over the period in which the advertisements are displayed on the websites

These revenues are recorded when services for the transactions are determined to be concluded, generally as set forth under the terms of the engagement or when the various milestones have been completed after the defined services are performed. Transaction-related expenses, primarily consisting of costs directly associated with the transaction, are deferred and recognized in the same period as the transaction revenue.

Barter Transactions — We engage in barter transactions in which marketing services are exchanged for products or services. Barter transactions are accounted for at the estimated fair value of the products or services received, or marketing services given up, whichever is more clearly determinable. Barter revenue is recognized at the time the marketing services are provided. Barter expense is recorded at the time the merchandise or services are used and/or received.

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OUR BUSINESS

Overview of our Business

Our mission is to assist entrepreneurs in building and growing their businesses. We believe we are the only global company that combines a comprehensive online and in-person social network with business services and funding focused exclusively on the entrepreneurial community. Operating through our wholly-owned subsidiaries, we provide our more than 1.7 million members with social networking opportunities, business services including education and mentoring, and funding including educational tools and opportunities such as donation-based crowdfunding. Coupled with members in every country of the world (196 countries) participating in 240 industry groups, we have created a global, resource-rich ecosystem for entrepreneurs and small businesses that serves as a source of inspiration and ideas and provides essential services to foster business growth.

Our operations consist of the following three divisions:

•      Social Networks — Our social networks division is at the core of our company, offering numerous social networking tools to members, hosting live networking events, connecting business owners, providing direct member benefits and aggregating customer loyalty programs. We utilize our EScore™ benchmarking tool as part of our social networks division. EScore™ is based on our proprietary algorithm which allows individual entrepreneurs to benchmark themselves against a large pool of entrepreneur metrics and helps them find the resources they need for their own operations through a variety of innovative tools accompanied by available guidance and education to make qualified decisions.

•      Business Services — Our business services division offers critical services to entrepreneurs to build their businesses including brand marketing, staffing, graphic design, public relations and other third-party business resources.

•      Funding — Our funding division enables entrepreneurs and small businesses to raise money from donations and pre-orders by the general public through our recently-acquired subsidiary, RocketHub, a leading donation-based crowdfunding platform. We also provide interactive materials concerning financing needs and opportunities for our entrepreneur members.

Our Subsidiaries

Our operations consist of the following subsidiaries, categorized by our three business divisions:

Social Networks

•      EFactor.com provide a full-featured social network for entrepreneurs. EFactor.com also provides a platform that enables access to a network of contacts, registration for live events in entrepreneurial education, pitch-it-in person events and other networking opportunities, advisory, consulting, various business tools and a broad range of services and information.

•      Member Digital, Inc. (“Member Digital”) is a United Kingdom based company that offers entrepreneurial solutions that help entrepreneurs build their business through two distinct member-centric service offerings. These are SubHub — a solution for building and managing paid subscription and membership websites, and MemberCore — an easy-to-build database and CRM for organizations and associations to manage and record member data. A third service, CampaignHuddle, is a digital advocacy platform that enables charities, not-for-profits, businesses and organizations to build and manage digital advocacy campaigns in order to influence a political or social cause. Member Digital, which has grown under EFactor.com to approximately 50,000 members as of March 31, 2015 and approximately 200,000 members as of the date of this prospectus, offers an advanced group functionality including e-commerce capability for EFactor.com members.

•      GroupCard B.V. (“GroupCard”) is a European based marketing and communication firm founded in 2010 with the goal of helping local sporting clubs and associations create additional revenue streams. GroupCard encourages fan spending and loyalty of select and participating sponsors. GroupCard is activating these communities, which currently consists of a total 90,000 members, via websites, e-mail marketing, apps, posters, flyers and in-store advertising and then compensating local clubs for the frequency of GroupCard use.

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•      ELEQT is an exclusive social discovery network for trendsetters in style and business. ELEQT offers a trusted social network, via www.eleqt.com, where members can engage with fascinating people to meet, discover things to do, places to go and trends to follow. ELEQT also organizes hundreds of exclusive member-only events around the world.

Business Services

•      MCC International (“MCC”) is public relations and communications agency founded in 1988. The agency is based in the United Kingdom and promotes through enhancement of company’s reputation utilizing print and social media news outlets, focusing on upper tier emerging technology and science companies, as well as professional service organizations, from entrepreneur start-ups and spin-offs to global consumer brands. MCC has created and launched a PR package aimed specifically at the EFactor.com members.

•      Robson Dowry provides its clients with graphic design, marketing and corporate positioning to help improve their clients’ visual identity and packaging.

•      HT Skills, Ltd (“HT Skills”) is a United Kingdom based provider of high-quality apprenticeships and work-based vocational learning, and is also an experienced welfare-to-work job-broker. HT Skills is a fully-accredited and internationally-recognized by awarding bodies including; City & Guilds and the Institute of Leadership and Management. HT Skills has delivered a number of government-funded contracts for the Skills Funding Agency, the Department of Work and Pensions and the European Social Fund.

•      EQmentor is an online professional development company organized in 2007 that provides working professionals 24/7 access to a custom-matched mentor, a global cross-industry peer community, and repositories of knowledge to empower high performance in the workplace. EQmentor delivers mentoring to corporate clients and the EFactor.com members.

Funding

Rockethub is a donation-based crowdfunding platform with a specific focus on educating its members. The RocketHub platform permits entrepreneurs to raise funds online for their entrepreneurial endeavors. The funds are raised leveraging the entrepreneur's social network. The platform permits both perks and donation based contributions on a global basis. The RocketHub platform has enjoyed high levels of media exposure with features in top-press including print, radio, and television. RocketHub also maintains partnerships with top brands and organizations, including the White House, A&E Networks, the U.S. Department of State, Fractured Atlas and the New York Foundation for the Arts. In the past, RocketHub has partnered and provided services for various companies, such as American Express, Cisco, Microsoft, Chrysler, Wieden+Kennedy, Fresh Direct, Remy Martin, Fulbright Foundation, Conde Nast/Bon Appetit and Bonnier Corporation/Popular Science.

Our Key Performance Metrics

We measure traffic and member activity on our websites and collect data for visits by members and other visitors, unique visitors, page views, number of average pages per visit and percentage of views by new visitors. We believe that, by tracking and responding to these metrics, we can increase the effectiveness of our network platform, enhance our members’ experience and improve our overall financial performance.

The following table sets forth these metrics, which we have collected internally using Google Analytics, for the three months ended March 31, 2014 and 2015 and for the twelve months ended December 31, 2013 and 2014:

		Three Months Ended March 31,									Twelve Months Ended December 31,
		2014			2015			Change			2013			2014			Change
Visits		5,641,830			7,366,230			30.6	%		21,429,334			21,790,258			1.7	%
Unique visitors		5,209,913			6,782,837			30.2	%		11,038,097			18,878,040			71.0	%
Page views		37,984,078			27,328,372			(28.1	)%		74,394,528			96,163,112			29.3	%
Average pages per visit		6.64			2.84			(57.2	)%		3.54			3.00			(15.3	)%
Percentage of page views by new visitors		91.5	%		69.63	%		(23.9	)%		46.77	%		68.15	%		45.7	%

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Most of our key metrics improved during the comparable periods presented. For example, the number of visits and unique visitors, in particular, to our websites grew steadily during these periods. We believe these improving metrics indicate we are attracting more visitors to our sites who have purposely landed on our pages and are more actively enrolling as members.

We estimate that approximately one-third of our more than 1.7 million members are “regular members” who visit one or more of our sites regularly (at least once per month), participating in our live, in-person events and reading or responding to our newsletters and other member communications. Since June 2014, we have averaged approximately 2.0 million monthly visitors (including members) to our EFactor.com website.

As used in this prospectus, “members” are individuals that have set up a member account at EFactor.com and “unique visitors” are individuals (both members and non-members) that visit EFactor.com or our other social network websites. A “visit” is a series of page views that a single visitor makes during a period of activity, with a visit ending after the visitor closes the browser, clears cookies or is inactive for 30 minutes. “Page views” refer to an instance of one user visiting or looking at a particular page on our website.

Market Opportunities

We are a targeted social network that operates in the social media industry. We believe targeted social networks such as ours are poised for growth in the coming years as people shift from generic platforms to those where they can connect with people sharing a common interest.

We believe that entrepreneurship globally is on a fast track, becoming the preferred option for both college graduates looking for a career and other individuals who may no longer have traditional long-term employment aspirations. According to Global Entrepreneurship Monitor (January 2015), Millenials (those persons born in the 2000s) are more likely to start a business than look for a traditional career. In 2014, 300 million people around the world were estimated to be engaged in early-stage entrepreneurial activity, with the most active persons in the 25 to 35 years age group. The rise of the freelance economy (e.g., Airbnb and Uber) has already turned 14% of the U.S. workforce into entrepreneurs and millions of others into part-time entrepreneurs, according to the article. We believe that our targeted social networks, led by EFactor.com and our EScore™ technology, are positioned for growth as entrepreneurs seek specific and relevant resources to build and grow their businesses.

Entrepreneurs are among the happiest individuals across the globe with respect to their well-being and satisfaction with their work conditions. Starting a new business is a desirable career choice and high social status and media contributes positively to developing an entrepreneurial culture. In the U.S. and Canada, 2/3 of early stage entrepreneurs were driven by improvement-driven opportunity. North American early-stage entrepreneurs stand out with optimistic expectations of high growth in job creation. Nevertheless, fear of failure is the biggest barrier to entrepreneurship, as 25% of new businesses fail in the first year, another 36% fail in the second year and another 44% fail in the third year.

        The foregoing confirms our belief that entrepreneurship globally is on a fast-growth track, becoming the preferred option for both graduates looking for a career and individuals who may no longer have traditional long-term employment aspirations. Accordingly, we are focused on supporting entrepreneurs to develop themselves and their businesses. Entrepreneurs are looking for answers to the many questions they face on their road to success. We believe that our social networks division, led by EFactor.com, and our EScore^TM technology, is well positioned to provide entrepreneurs with the answers, products and services they need to succeed as well as access to peers across the world with whom they can share successes and failures.

Our relevant market size is based on entrepreneurs in fast-growing industries that have an affinity with the online world. We believe approximately 25% of the estimated 300 million potential entrepreneurs mentioned above are our target audience, or 90 million members. Of these, we believe we can reach and sign up approximately 3 million members by the end of 2015 and 5 million by the end of 2016.

Our Competitive Strengths

We believe that our key competitive strengths are as follows:

Market leader in entrepreneurial segment of social networking. We believe we are a leader in the market segment for social networking among entrepreneurs, by being the only global company that combines a comprehensive online and in-person social network with business services and funding focused exclusively on the entrepreneurial community.

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Integrated funding capabilities. We operate one of the world’s largest and most recognized crowdfunding brands through our recent acquisition of RocketHub, which has a registered base of more than 200,000 users, and has facilitated over $10 million in transactions. We believe our integrated funding capabilities complete our social network ecosystem and provide a compelling solution to what has been the biggest impediment for entrepreneurs — access to funding.

Robust network platform with personally-tailored resources. Our technology platform combines a wide array of proprietary coding and algorithms with elements of standard technology that allow us to scale and handle large volumes of traffic from members and other visitors. At the same time, using our EScore™ proprietary selection and matching algorithm, we offer specific content and resources tailored to each individual’s unique business needs.

Experienced management team. Members of our management team are industry professionals with years of experience in building and running large companies and a deep understanding of the social media space. Adriaan Reinders, our Chief Executive Officer, is an entrepreneur with significant experience building companies from start-ups to large-scale organizations with more than 1,000 employees. Both Mr. Reinders and Marion Freijsen, our Chief Operating Officer, have substantial international business experience building technology companies. Our management team is further supported by Mark Stanich, our managing director who previously served in key senior marketing and digital media positions at a subsidiary of American Express and at Time Warner, and Ruud Smeets, a co-founder of ELEQT.

Our Growth and Expansion Strategy

Our primary business strategy is to expand our regular membership base, both domestically and internationally, and continue to make strategic acquisitions that benefit our members. We believe we can do this through the deployment of capital into the following areas:

Increase the number of regular members with platform improvements. We are focusing more effort on increasing the number of regular members as compared to those individuals who only visit our website occasionally. We believe this will help us achieve our goals to increase overall membership growth, the number of paying members and revenue per paying member. Improving user interactivity in the coming years is a major focus of our work with strategic partner FreedomLab, which is assisting us with website interaction dynamics, “nextgen” content and data-driven services to boost the engagement level of our users.

Acquire strategically compatible companies. We have identified a number of companies that can potentially provide a product or service that is scalable, profitable and easily adapted to our network platform. Historically, we have operated our acquired businesses independently, with little integration, while leveraging our acquired businesses to generate growth initiatives in our other lines of business. We believe we will grow faster through further acquisitions over the next 12 to 18 months by acquiring companies that (i) offer a product or service that is of interest to entrepreneurs, (ii) have a scalable product or service to offer to our members, (iii) have substantial revenue and profit or will be of strategic importance, and (iv) are able to run independently but provide a new revenue stream for us. We believe these companies will grow faster with us than they would independently. We do not intend generally to integrate the companies on an operational level, although we will seek synergies and a reduction of operating costs by streamlining such areas as finance and technology development. We currently have no commitments or agreements with respect to any such acquisitions.

Expand membership base internationally. Although we are a global platform, our marketing efforts have to date been primarily focused on five core territories — the United States, United Kingdom, India, China and The Netherlands. We plan to expand operations to additional territories over time with live events taking place in those geographical regions where a high concentration of our members reside

Technology Platform

Network for Entrepreneurs

Our EFactor.com technology platform uses state-of-the-art technologies, such as data engine search and data vector analysis, to broaden the opportunities and to increase success in business relationships. Our data mapping algorithms introduce a new service, a new prospect, a new partner or a new advisor to a member when they are ready to begin building this business relationship. Our business maturity modeling facilitates gap analysis for members and recommends pathways to accelerate their business maturity. We recognize technology is designed to support human beings and our entire platform is conceived to integrate human interaction with technology to benefit the business relationship.

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Our Social Networks provide a platform for building high impact business relationships. For example, the EFactor.com network’s gap analysis through EScoreTM may identify the need for a member to improve his or her business goals. It will then make recommendations for a well-qualified mentor to mature the member’s skills required to fill this gap. At the same time, the member could seek recommendations for a new business supplier located in a distant city. Or a member can simply ask for opinions about attending a particular trade show. Building strong business relationships leads to business success and Network for Entrepreneurs is an important tool in achieving those relationships.

EScoreTM

In September 2013, we released a beta version of a new service called EScoreTM which, with over a thousand underlying parameters, allows entrepreneurs to self-test their entrepreneurial skills in five key areas called vectors: leadership, finance, technology, sales and marketing and social value. During 2014, we strengthened this benchmarking tool allowing members to follow clearly defined steps to build up their personal EScoreTM. The overall score continuously guides the member to additional opportunities to build a better business. Each vector leads to a maximum score of 200, with the five vectors combining to a maximum EScoreTM of 1,000. The EScoreTM functions as a companion and referral tool towards relevant members, tools and courses, as well as content attuned to the context of that specific entrepreneur and their business. In 2015, we intend to further enhance the EScoreTM service algorithm by making it more data-driven, which we believe will increase its ability for tailored matchmaking.

FreedomLab

In December 2014, we announced our partnership with the FreedomLab campus for crossover innovation. Freedomlab is a creative strategy boutique, and is one of the pillars of the Dasym Investment Group. We are working closely with FreedomLab’s team in our current redesign and have inserted their group of design thinkers, gamefication experts, social storytellers, algorithm specialists, engineers and experts with many other relevant skill sets to further boost the engagement level of our users. Together, we are developing the next version of our platform that will encourage the increase of interaction among members and which will deploy specific services. The process we are currently following is a mix of service design thinking, gamification and lean development, to ensure that we are co-creating the new platform with the entrepreneurs and entrepreneurial spirit in our organization and network.

We have identified three key areas in which FreedomLab will assist: website interaction dynamics, “nextgen” content and data driven services. During 2015, EScoreTM will undergo a transformation and become more intuitive and adaptive to each individual member. The main pivot in our strategy going forward is to change EScoreTM from a tool that is embedded into our network itself towards a more data driven mobile app which can learn and nudge entrepreneurs on those actions, contacts and content that help them to build a better business. In this way, the interplay of the app and the network provides advantages to the entrepreneur and data for EFactor to further improve the relevance of our products and services. This is an approach referred to as “narrow AI” (narrow intelligence), a technology subset focused on solving specific, reasonably well-defined problems. This type of engine will also help further improve our ability in matchmaking with relevant people, content and services available for entrepreneurs. It will also allow us in the near future to gradually move towards a marketplace for co-creation between entrepreneurs and services such as our new crowdfunding platform, RocketHub.

Technical Overview

In addition to the above components with EScoreTM, the forefront of our technology platform is further defined as:

Product Management

Our product management teams continually evaluate and improve product concepts and drive a development release cycle to ensure rapid time-to-value for our service offerings.

Global Availability

We currently serve over 1.7 million members in 196 countries with several digital offerings. Although our current capacity, with entry points in 52 countries, already supports accelerated growth we are steadily expanding our global infrastructure to achieve lower latency and higher throughput, and to ensure that our data always reside close to our end-users.

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Architecture

We use a multi-device (mobile, tablets, desktops), fully location-aware and language and operating system agnostic platform. We choose the development platform that makes the most sense for our business. This flexibility allows us to focus on innovation, not infrastructure.

Information Security

We use a secure, durable technology platform with industry-recognized certifications and audits. Our services and data centers have multiple layers of operational and physical security to ensure the integrity and safety of our data.

Business Continuity

Our secure and durable cloud disaster recovery platform with industry-recognized certifications and audits, supports many disaster recovery (DR) architectures from “pilot light” environments that are ready to scale up at a moment’s notice to “hot standby” environments that enable rapid failover. We load balance incoming application traffic across multiple availability zones to prevent down-time.

Digital Marketing

We use a cloud computing solution that provides online and digital marketing businesses a flexible, highly scalable, elastic, and low-cost way to deliver our content. Our queues are available whenever applications need them. To prevent messages from being lost or becoming unavailable, all messages are stored redundantly across multiple servers and data centers.

During 2015, we plan to further enhance the business value proposition with significant technology advances in cooperation with our strategic partner FreedomLab. The primary business objective is to provide an adaptive and refocused EScore^TM, as well as additional service offerings with associated additional revenue streams bringing in the offerings of each of the acquisitions made or to be made during the course of the next 12-18 months. With FreedomLab, we will also continue working on website interaction dynamics, “nextgen” content and data-driven services to boost the engagement level of our users.

Acquisitions

Since January 1, 2014, we have completed the following acquisitions:

On July 1, 2014, we entered into an Exchange Agreement with HT Skills Ltd., an entity organized under the laws of England and Wales (“HT Skills”), and Five5Five PTE Ltd., the sole shareholder of HT Skills (“HT Seller”). On the same date, the parties consummated the transaction, pursuant to which the HT Seller sold, and we purchased all of HT Skills’ outstanding capital stock in exchange for 13,319,100 of our unregistered shares of common stock.

On July 1, 2014, we entered into an Exchange Agreement with Member Digital Ltd. (“Member Digital”) and the shareholders of Member Digital (the “MD Sellers”). On the same date, the parties consummated the transaction, pursuant to which the MD Sellers sold, and we purchased, all of Member Digital’s outstanding capital stock, in exchange for 1,250,000 unregistered shares of our common stock.

On July 7, 2014, we entered into an Exchange Agreement with GroupCard BV, an entity organized under the laws of the Netherlands (“GroupCard”), and the shareholders of GroupCard. On the same date, the parties consummated the transaction, pursuant to which the GC Sellers sold and we purchased, all of GroupCard’s outstanding capital stock, in exchange for 2,812,500 unregistered shares of our common stock.

On October 1, 2014, we entered into an Exchange Agreement with ELEQT Ltd., an entity organized under laws of the England and Wales (“ELEQT”), and the shareholders of ELEQT (the “ELEQT Sellers”). On the same date, the parties consummated the transaction, pursuant to which the ELEQT Sellers sold, and we purchased, all of ELEQT’s outstanding capital stock, in exchange for 31,000,000 unregistered shares of our common stock.

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On November 15, 2014, we entered into an Exchange Agreement with Robson Dowry Associates Ltd., an entity organized under the laws of the England and Wales (“Robson Dowry”), and the shareholders of Robson Dowry Associates Ltd. (the “Robson Dowry Sellers”). On the same date, the parties consummated the transaction, pursuant to which the Sellers sold, and we purchased, all of Robson Dowry’s outstanding capital stock, in exchange for 1,500,000 unregistered shares of our common stock.

On April 15, 2015, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with EFactor Merger Sub Inc., a New York corporation and our wholly owned subsidiary (“Merger Sub”), RocketHub Inc., a New York corporation (“RocketHub”), the shareholders of RocketHub (the “Sellers”) and Eric Schneider in his capacity thereunder as the representative of the Sellers (the “Seller Representative”). Pursuant and subject to the terms and conditions of the Merger Agreement, Merger Sub was merged with and into RocketHub, with RocketHub surviving as our wholly owned subsidiary (the “Merger”). The Merger was closed simultaneously with the execution of the Merger Agreement, on April 15, 2015. As consideration for the Merger, the Sellers received 21,428,571 shares of our common stock, at a purchase price of $0.70 per share, for an aggregate purchase price valued at $15 million.

Government Regulation

We are subject to a number of U.S. federal and state, and foreign laws and regulations that affect companies conducting business on the Internet, many of which are still evolving and being tested in courts, and could be interpreted in ways that could harm our business. These may involve user privacy, rights of publicity, data protection, content, intellectual property, distribution, electronic contracts and other communications, competition, protection of minors, consumer protection, taxation and online payment services. In particular, we are subject to federal, state, and foreign laws regarding privacy and protection of user data.

Foreign data protection, privacy, and other laws and regulations are often more restrictive than those in the United States. U.S. federal and state and foreign laws and regulations are constantly evolving and can be subject to significant change. In addition, the application and interpretation of these laws and regulations are often uncertain, particularly in the new and rapidly-evolving industry in which we operate. There are also a number of legislative proposals pending before the U.S. Congress, various state legislative bodies, and foreign governments concerning privacy and data protection which could affect us. Complying with these varying domestic and international requirements could cause us to incur additional costs and change our business practices. Further, any failure by us to adequately protect our members’ privacy and data could result in a loss of member confidence in our services and ultimately in a loss of members and customers, which could adversely affect our business.

Intellectual Property Rights

We rely on trade secret laws in the United States and other jurisdictions as well as confidentiality procedures and contractual provisions to protect our proprietary technology and branding. We control access to our proprietary technologies and enter into confidentiality agreements with our employees and third party developers. We restrict access to our key proprietary technology to a limited number of our executive officers and managers. We have not applied for patent protection of our proprietary technology because such applications would require us to publicly disclose these aspects of our technology we wish to remain confidential. Instead, we have chosen to maintain the technology as trade secrets. We also own a trademark registration relating to the EFactor name and color trademark in The Netherlands and the European Union. In the United States, we have a trademark for our subsidiary SubHub which is a solution for building and managing membership websites with our Member Digital business unit.

Research and Development Activities

We have spent approximately $65,000 and $350,000 in the years ended December 31, 2014 and 2013, respectively, on website development activities, along with approximately $125,000 of employee time in enhancing our website in the year ended December 31, 2014 and $0 in the year ended December 31, 2013.

We understand that the true value of social media companies is measured in the quantity and quality of the data they collect, analyze and sell to their customers. A significant criterion in our selection of the companies to be acquired is their contribution to our data value. EQmentor, with its broad and deep collection elements for an entrepreneur’s professional development, is a prime example of this strategy. We will not only integrate these data sets into our business network for the entrepreneur but we will build analytic tools on top of our unique data. The primary purpose of these analytic tools will be to measure and quantify the readiness of entrepreneurs to present their business plan to qualified investors.

We intend to take a leading role in analytics about entrepreneurs. We believe our role as a trusted advisor and mentor, our commitment to guarding business information, and our experience in sophisticated data analysis will propel us into a recognized authority on this market space.

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Employees

As of June 8, 2015, we had 58 full-time employees (including five members of management) and nine independent contractors. The table below sets forth the number of our employees and independent contractors by company.

		Full-Time Employees		Independent Contractors		Total
Social Networks		36		6		42
Business Services		11		1		12
Funding		3		1		4
Corporate		8		1		9
Total		58		9		67

We may hire temporary labor to satisfy our employment needs as required. We believe that we will be able to hire a sufficient number of qualified employees to meet our employment needs. None of our employees is represented by a labor union or a collective bargaining agreement. We consider our relations with our employees to be good.

Properties

We currently lease our office facilities. Rent expenses totaled $134,196 and $126,770 for the fiscal years 2014 and 2013, respectively, which included former facilities located in Pacifica, California and Cornelius, North Carolina. All of our facilities other than the Amsterdam office are leased from non-affiliated parties. The Amsterdam office is leased from Mr. Smeets, who is President of our Social Networks division and one of our directors. We consider these properties adequate for our current operational needs. The table below sets forth information regarding our current facilities:

Location		Expiration of Lease		Approximate Sq. Ft.		Monthly Payment
1177 Avenue of the Americas Suite 5060 New York, NY 10036		3/31/2016		300			$4,500
7 Berkeley Square Bristol, UK, BS8 1HG		9/30/2015		1,334			$4,367
Hornweg 5, 1432 GD Aalsmeer The Netherlands		12/31/2015		484			$1,113
3rd floor, South Point House, 321 Chase Road, London N14 6JT, England.		12/31/2015		3,000			$10,386
Saxen Weimarlaan 58hs.  1075 CE Amsterdam The Netherlands(1)		8/21/2015		1,830			$2,782
Brakkeput Ariba 160, Willemstad, Curacao		12/31/2015		2,300			$4,200

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 (1) This property was recently sold and we intend to relocate this office in August 2015.

Legal Proceedings

From time to time, we may become involved in various lawsuits and legal proceedings that arise in the ordinary course of business. However, litigation is subject to inherent uncertainties and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.

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MANAGEMENT

The following table sets forth certain information concerning our executive officers and directors as of the date of this prospectus.

Name		Age		Position(s)
Adriaan Reinders		70		President, Chief Executive Officer and Director
Marion Freijsen		52		Chief Operating Officer and Director
Mark Noffke		59		Chief Financial Officer and Director
Thomas Trainer		68		Director, Chairman of the Board
Brian Banmiller		71		Director
Ruud Smeets		44		President, Social Networks Division and Director
Mark Stanich		54		Managing Director and Director

Our officers and directors are elected annually for a one year term or until their respective successors are duly elected and qualified or until their earlier resignation or removal.

Adriaan Reinders is our co-founder and has served as our President and Chief Executive Officer and a member of our board of directors since September 2008. He has launched numerous businesses, growing and selling them through all economic cycles. He has created multiple businesses through a roll-up strategy, the largest of which — Rijnhaave, a Netherlands information technology company specializing in systems integration — had 1,110 employees and was sold to British Telecom. Mr. Reinders is also the Co-Founder and until 2010, served as an Executive Board Member of OHM Inc., a sales consulting firm serving emerging technology companies. Further, he was a founder and served as the Acting Chief Executive Officer of Supply Chain Solutions B.V., a global business solutions firm specializing in supply chain management and software services for the U.S. pharmaceutical manufacturers and large European retailers. In 1989, Mr. Reinders founded Rijnhaave, and subsequently executed six acquisitions in the Netherlands and the U.S. before selling the company to Syntegra, a subsidiary of British Telecom. In 1975, Mr. Reinders founded Microlife, a Netherlands information technology firm specializing in customer services and training for mainframe environments. Mr. Reinders’ also serves as a board member of the Kelley School of Business at the University of Indiana and the Executive Chairman of Artilium plc, a mobile virtual network provider, and previously served as a director of the global IT division of British Telecom. He is a frequent speaker and a published author with books on entrepreneurial networking and social media. Mr. Reinders holds a degree in Social Geography from the University of Amsterdam. We believe Mr. Reinders is well-qualified to serve as a member of our board of directors due to his extensive experience running international businesses.

Marion Freijsen is our co-founder and has served as our Chief Operating Officer and a member of our board of directors since September 2008. She was responsible for and managed the building of our platform. Ms. Freijsen is also the owner of Elegio BV, a Netherlands company providing business consulting and management expertise in the areas of strategy, vision, finance, international expansion and business development. In addition, Ms. Freijsen is the founder and the former Chief Executive Officer and Executive Board Member of OHM Inc., a sales consulting firm serving emerging technology companies. Ms. Freijsen co-launched OHM with no outside investment, and in five years established a portfolio of more than 100 clients. Ms. Freijsen previously served as Vice President (Central Europe) for Currenex Ltd., Commercial Director of Speedport NV, Country Manager (Benelux) for Newsedge Corp., Major Account Manager for ICV Ltd. / S&P Comstock, and Account Manager for Bloomberg Financial Markets. Ms. Freijsen is the co-author of two books (the most recent published in November 2012 called “The E-Factor: Entrepreneurship in the Social Media Age”). She is a frequent speaker at global conferences in cities such as New York, Boston, San Francisco, London, Amsterdam and Berlin. Ms. Freijsen holds a marketing degree from the Chartered Institute of Marketing in London. We believe Ms. Freijsen is well-qualified to serve as a member of our board of directors due to her ability to set-up and run international operations, lead complex processes and provide leadership to technology teams.

Mark Noffke has served as our Chief Financial Officer and a member of our board of directors since June 2014 and as our Executive Vice President since October 2012. Mr. Noffke has more than 35 years of experience as a seasoned financial and management professional. Mr. Noffke also serves as a member of the board of directors for Cafe Serendipity Holdings Inc., a start-up retail branding company, and SYDYS Corporation, an online media company specializing in special interest website publishing. Since January 2007, he has also served as Chief Financial Officer of Beyond Commerce, Inc., an e-commerce company. From August 2006 to January 2007, Mr. Noffke served as Chief Executive Officer of Financial Media Group, Inc., a formerly public investor relations company. He served as Chief Financial Officer of National Storm Management, Inc., a storm

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restoration company, from May 2004 to August 2006, where he was instrumental in its initial public offering. From September 1996 to June 2003, Mr. Noffke served as the Chief Financial Officer and a director of U.S. Forest Industries, Inc., a formerly private timber manufacturing company, where he was responsible for developing its accounting infrastructure. Mr. Noffke is a Certified Public Accountant in Illinois and has a Bachelor of Science in Accounting from Valparaiso University in Indiana in 1977. We believe Mr. Noffke is well-qualified to serve as a member of our board of directors due to his extensive experience preparing financial statements for public companies and his certified public accounting designation.

Thomas Trainer has served as a member of our board of directors since February 2013, and as Chairman of our board of directors since July 2014. Mr. Trainer is a well-recognized and awarded leader in the business technology field. He served as Global Chief Information Officer for each of Joseph E. Seagram (1985 to 1989), Reebok (1990 to 1994), Eli Lilly & Company (1995 to 1999), Citigroup (1999 to 2001) and PepsiCo (2003 to 2007). In 1996, Mr. Trainer helped found “The Working Council of CIOs of The Advisory Board” and “The Pharmaceutical Research and Manufacturers Association (PHARMA) CIO Forum. He has lectured internationally on business and technology issues, including “The World Congress of Information Technology” in Washington, DC in 1998; and various conferences sponsored by The Economist, Forbes, Business Week, Fortune, and Financial Times. In 2009, he keynoted in Beijing the “Inaugural Sino-American CIO Conference”. Mr. Trainer has also been profiled on CBS TV’s “American Edition” and CNBC’s “Technology Edge” Broadcast programs. We believe Mr. Trainer is well-qualified to serve as a member of our board of directors due to his extensive experience with technology and transformation processes.

Brian Banmiller has served as a member of our board of directors since October 2013. Since January 1980, Mr. Banmiller has served as a national broadcast journalist, commentator and public speaker. He has a 35-year affiliation with CBS News Radio as a National Business Reporter. He was the Business Editor for KTVU Channel 2 News, Oakland, California, from 1989 to 2005. From 1992 to 1999, he served as Executive Producer, Anchor and Chief Correspondent of the national television business news magazine, “On the Money with Brian Banmiller,” and for five years as Managing Editor and Co-Anchor of “Silicon Valley Business”. Prior to joining KTVU, Mr. Banmiller was a Contributing Correspondent for “The Wall Street Journal Report on Television.” He received a business degree from Villanova University. He has also served five years in the United States Air Force where he obtained the rank of captain. We believe Mr. Banmiller is well-qualified to serve as a member of our board of directors due to his extensive experience in publishing and media.

Ruud Smeets has been President of our Social Networks division and has served as a member of our board of directors since October 2014. Mr. Smeets is a co-founder of ELEQT, which we acquired in 2014. As President of Social Networks, Mr. Smeets is responsible for the growth of the social networks which form the core of our activities, including our flagship networks EFactor.com and ELEQT.com. From 2008 to 2014, Mr. Smeets served as Chief Executive Officer of ELEQT. During that period, ELEQT grew into a global exclusive social lifestyle network with members from over 200 countries and operations in 15 metropolitan areas around the world. ELEQT is the social network of choice of the Quintessentially Group, a leading concierge service with offices in over 60 countries around the world. Mr. Smeets also launched www.telegraaf.nl, the largest Dutch news website, introduced digital business directory Scoot in the United Kingdom and Europe, co-founded and served as general partner and director of Newconomy, a technology and media venture capital firm, established and led KPMG’s Information, Communication and Entertainment advisory services business segment, introduced Yahoo! in the Netherlands and served as general manager for Yahoo! Search Europe. Mr. Smeets also co-founded and served as Chief Executive Officer of Mediamall, the Netherlands’ first interactive television company. Mr. Smeets holds a Master’s degree in Business Administration and Economics from the University of Maastricht and was awarded the Milia d’ Or, the Grand Jury Prize for Best Online Reference Site. We believe Mr. Smeets is well-qualified to serve as a member of our board of directors due to his ability to lead remote teams, provide leadership to multiple operating countries and manage complex processes.

Mark Stanich has served as our Managing Director since December 2014, in which position he is responsible for the strategy and growth of all of our business lines. Mr. Stanich has served as a member of our board of directors since September 2013. Prior to joining us, Mr. Stanich served in a number of senior marketing, strategy, operations, and digital media leadership positions in the consumer services sector. From September 2013 to August 2014, he served as President, Digital Media and Chief Marketing Officer for the Time Inc. Affluent Media Group, a division of Time Warner Inc. (NYSE:TWX). From January 2009 to September 2013, Mr. Stanich served as Chief Marketing Officer and President, Digital Media for American Express Publishing Corp. (“AEPC”), a wholly-owned media subsidiary of American Express Company (NYSE:AXP). He also served in prior capacities at AEPC including Chief Marketing Officer (May 2001 to January 2009) and Senior Vice President of Consumer Products (July 1997 to May 2001). Mr. Stanich has broad experience leading existing and emerging digital businesses including websites, social media platforms, e-newsletters, mobile and tablet applications, e-commerce, and digital partnerships. In his Chief Marketing Officer capacities, he has directed consumer strategy, marketing, and product development for traditional consumer media products including magazines, books, products, and branded affinity services, as well as database marketing

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and international operations. He has served on several industry boards, including directorships with the Online Publishers Association and BPA Worldwide. He is a graduate of the University of California, Berkeley and received his MBA from the Harvard Business School. We believe Mr. Stanich is well-qualified to serve as a member of our board of directors due to his extensive leadership in large marketing operations and running divisions of public companies.

Family Relationships

There are no family relationships between or among the above directors, executive officers or persons nominated or charged by us to become directors or executive officers. However, Roeland Reinders, one of our three co-founders and one of our employees, is the adult son of Adriaan Reinders, our President and Chief Executive Officer.

Board Leadership Structure

Adriaan Reinders currently serves as our principal executive officer and Mr. Trainer serves as chairman of our board of directors. Our board of directors has chosen to separate the principal executive officer and chairman positions because it believes that (i) independent oversight of management is an important component of an effective board of directors and (ii) this structure benefits the interests of all stockholders. If our board of directors convenes for a special meeting, the non-management directors will meet in executive session if circumstances warrant. Given that we are still in the early stages of our development and given that we have an independent chairman, the board of directors does not believe that it is necessary to formally designate a lead independent director at this time, although it may consider appointing a lead independent director if circumstances change. We believe that the structure described above is the best structure to lead us in the achievement of our goals and objectives and establishes an effective balance between management leadership and appropriate oversight by independent directors.

Involvement in Certain Legal Proceedings

To the best of our knowledge, none of our directors or executive officers has been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, or has been a party to any judicial or administrative proceeding during the past five years that resulted in a judgment, decree, or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws, except for matters that were dismissed without sanction or settlement. Except as set forth in our discussion below in “Related Party Transactions,” none of our directors, director nominees, or executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates, or associates which are required to be disclosed pursuant to the rules and regulations of the Commission.

Committees of the Board

Our board of directors maintains separate audit and compensation committees. While we are not required to maintain such committees under the rules applicable to companies that do not have securities listed or quoted on a national securities exchange, we believe it was important to have implemented such committees as early on as possible. Prior to listing, we will maintain an independent audit committee and compensation committee, in compliance with the requirements for such listing and in compliance with Rule 10A-3 of the Exchange Act.

Our Compensation Committee consists of Thomas Trainer (Chairman) and Brian Banmiller. Mr. Trainer and Mr. Banmiller are independent committee members. Our Audit Committee consists of Mark Noffke, our Chief Financial Officer, Mr. Banmiller and Mark Stanich, our Managing Director. Mr. Banmiller is an independent committee member and is our audit committee financial expert. Upon the listing of our securities on the NASDAQ Capital Market, Messrs.        and        will be appointed as independent members of the Audit Committee in place of Messrs. Noffke and Stanich.

We do not have a standing nominating committee, though we intend to form a corporate governance and nominating committee as and when required to do so by law or NASDAQ rules. In accordance with Rule 5605(e)(2) of the NASDAQ rules, a majority of the independent directors may recommend a director nominee for selection by the board of directors. The board of directors believes that the independent directors can satisfactorily carry out the responsibility of properly selecting or approving director nominees without the formation of a standing nominating committee. The directors who shall participate in the consideration and recommendation of director nominees are Messrs. Trainer and Banmiller. In accordance with Rule 5605(e)(1)(A) of the NASDAQ rules, Messrs. Trainer and Banmiller are independent. As we do not have a standing nominating committee, we do not have a nominating committee charter in place.

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Code of Ethics

We have adopted a code of ethics that applies to our officers, directors and employees, a copy of which will be available on our website upon the completion of this offering. In addition, a copy of the code of ethics will be provided without charge upon request to us. We intend to disclose any amendments to or waivers of certain provisions of our code of ethics in a Current Report on Form 8-K.

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EXECUTIVE COMPENSATION

Summary Compensation Table

The table below sets forth the compensation earned for services rendered to us for the fiscal years indicated by our named executive officers.

Name and Principal Position		Year		Salary			Bonus			Stock Awards(2)(3)			All Other Compensation				Total
Adriaan Reinders		2014		$	225,000		$	—		$	390,000		$	48,000	(1)		$	438,000
(President and Chief Executive Officer)		2013		$	112,500		$	—		$	—		$	32,000			$	144,500
Marion Freijsen		2014		$	225,000		$	—		$	390,000		$	48,000	(1)		$	438,000
(Chief Operating Officer)		2013		$	112,500		$	—		$	—		$	32,000			$	144,500
James E. Solomon		2014		$	—		$	—		$	68,750		$	24,000	(1)		$	92,750
(Former Chief Financial Officer)(5)		2013		$	—		$	—		$	—		$	52,000	(4)		$	52,000
Mark Noffke		2014		$	120,000		$	—		$	83,500		$	24,000	(1)		$	227,500
(Chief Financial Officer)		2013		$	120,000		$	—		$	—		$	—			$	120,000
Mark Stanich		2014		$	20,000		$	—		$	68,750		$	48,000	(1)		$	136,750
(Managing Director)		2013		$	—		$	—		$	—		$	10,452	(1)		$	10,452
Ruud Smeets		2014		$	50,000		$	—		$	—		$	12,000	(1)		$	62,000
(President of Social Networks)		2013		$	—		$	—		$	—		$	—			$	—

____________

(1)   Reflects director fees received by the officer.

(2)   The amounts reported include the aggregate grant date fair value of the stock portion of the discretionary bonus paid to the named executive officers in lieu of cash bonuses.

(3)   The amounts reported include the aggregate grant date fair value of the stock portion of their director fees.

(4)   Includes $32,000 for director fees and $20,000 for consulting fees.

(5)   Mr. Solomon resigned June 30, 2014.

Employment Agreements

Adriaan Reinders

On October 11, 2013, we entered into an employment agreement with Mr. Reinders (the “Reinders Agreement”). Pursuant to the terms of the Reinders Agreement, Mr. Reinders will work for us on a full-time basis and will receive an annual base salary of $225,000. Mr. Reinders may receive an annual cash bonus in an amount up to 100% of his base salary, as may be determined by the compensation committee of our board of directors in its sole discretion. In addition, Mr. Reinders was granted 100,000 restricted stock units and may be granted additional units or options annually, as may be determined by the compensation committee of our board of directors in its sole discretion.

The initial term of the Reinders Agreement was until December 31, 2014, and automatically renews for successive one-year periods, unless a notice of non-renewal is provided by either party at least sixty days prior to the expiration date of the term.

In the event Mr. Reinders’ employment is terminated by us for cause or due to his death, Mr. Reinders will be entitled to receive any accrued and unpaid base salary up to the date of termination. In the event Mr. Reinders is physically or mentally incapacitated or disabled or otherwise unable to discharge his duties for a period of six months, the Reinders Agreement shall terminate upon 90 days written notice.

In the event Mr. Reinders’ employment is terminated by us for any reason other than cause, death or disability, he will be entitled to receive any accrued and unpaid base salary up to the date of termination. In addition, he will be entitled to receive

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a lump-sum cash payment equal to his base salary and a bonus equal to 50% of his base salary for the greater of (x) two years following the date of termination and (y) the remainder of the term of the Reinders Agreement. In addition, any issued but unvested options will vest immediately upon such termination. Furthermore, the period of the non-competition provisions in the Reinders Agreement will decrease from two years to one year following termination of his employment.

In the event Mr. Reinders’ employment is terminated by us within six months of a change of control (as defined in the Reinders Agreement), or if Mr. Reinders terminates his employment within six months of a change in control, he will be entitled to receive a lump-sum cash payment equal to his base salary and a bonus equal to 50% of his base salary for the greater of (x) two years following the date of termination and (y) the remainder of the term of the Reinders Agreement. In addition, any issued but unvested options will vest immediately upon such termination. Furthermore, the period of the non-competition provisions in the Reinders Agreement will decrease from two years to one year following termination of his employment. If our stockholders exchange their shares for stock of any other company, Mr. Reinders will also be entitled to receive an amount equal to the per share price paid to our stockholders less the pre-announcement price of the shares, multiplied by 50,000.

The Reinders Agreement contains customary non-competition provisions that extend to two years (or one year upon the occurrence of the events described above) after termination of Mr. Reinders’ employment with us. Mr. Reinders also agreed to customary terms regarding confidentiality.

Marion Freijsen

On October 11, 2013, we entered into an employment agreement with Ms. Freijsen (the “Freijsen Agreement”). Pursuant to the terms of the Freijsen Agreement, Ms. Freijsen will work for us on a full-time basis and will receive an annual base salary of $225,000. Ms. Freijsen may receive an annual cash bonus in an amount up to 100% of her base salary, as may be determined by the compensation committee of our board of directors in its sole discretion. In addition, Ms. Freijsen was granted 100,000 restricted stock units and may be granted additional units or options annually, as may be determined by the compensation committee of our board of directors in its sole discretion. The initial term of the Freijsen Agreement was until December 31, 2014, and automatically renews for successive one-year periods, unless a notice of non-renewal is provided by either party at least sixty days prior to the expiration date of the term.

In the event Ms. Freijsen’s employment is terminated by us for cause or due to her death, Ms. Freijsen will be entitled to receive any accrued and unpaid base salary up to the date of termination. In the event Ms. Freijsen is physically or mentally incapacitated or disabled or otherwise unable to discharge her duties for a period of six months, the Freijsen Agreement shall terminate upon 90 days written notice.

In the event Ms. Freijsen’s employment is terminated by us for any reason other than cause, death or disability, she will be entitled to receive any accrued and unpaid base salary up to the date of termination. In addition, she will be entitled to receive a lump-sum cash payment equal to her base salary and a bonus equal to 50% of her base salary for the greater of (x) two years following the date of termination and (y) the remainder of the term of the Freijsen Agreement. In addition, any issued but unvested options will vest immediately upon such termination. Furthermore, the period of the non-competition provisions in the Freijsen Agreement will decrease from two years to one year following termination of her employment.

In the event Ms. Freijsen’s employment is terminated by us within six months of a change of control (as defined in the Freijsen Agreement), or if Ms. Freijsen terminates her employment within six months of a change in control, she will be entitled to receive a lump-sum cash payment equal to her base salary and a bonus equal to 50% of her base salary for the greater of (x) two years following the date of termination and (y) the remainder of the term of the Freijsen Agreement. In addition, any issued but unvested options will vest immediately upon such termination. Furthermore, the period of the non-competition provisions in the Freijsen Agreement will decrease from two years to one year following termination of her employment. If our stockholders exchange their shares for stock of any other company, Ms. Freijsen will also be entitled to receive an amount equal to the per share price paid to our stockholders less the pre-announcement price of the shares, multiplied by 50,000.

The Freijsen Agreement contains customary non-competition provisions that extend to two years (or one year upon the occurrence of the events described above) after termination of Ms. Freijsen employment with us. Ms. Freijsen also agreed to customary terms regarding confidentiality.

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Mark Stanich

Pursuant to the terms of his employment agreement, dated December 18, 2014 (the “Stanich Agreement”), Mr. Stanich will work for us on a full-time basis and will receive a monthly base stipend of $20,000. Mr. Stanich may receive an annual cash bonus in an amount up to $250,000, as may be determined by the compensation committee of our board of directors in its sole discretion. In addition, Mr. Stanich is entitled to receive 6,000,000 restricted stock units (2,000,000 of which have been granted) in three equal annual tranches of 2,000,000 and may be granted additional units or options annually, as may be determined by the compensation committee of our board of directors in its sole discretion. The Stanich Agreement will continue until December 1, 2015, and will automatically renew for successive one-year periods, unless a notice of non-renewal is provided by either party at least sixty days prior to the expiration date of the term.

In the event Mr. Stanich’s employment is terminated by us for cause or due to his death, Mr. Stanich will be entitled to receive any accrued and unpaid base salary up to the date of termination. In the event Mr. Stanich is physically or mentally incapacitated or disabled or otherwise unable to discharge his duties for a period of six months, the Stanich Agreement shall terminate upon 90 days written notice.

In the event Mr. Stanich’s employment is terminated by us for any reason other than cause, death or disability, he will be entitled to receive any accrued and unpaid base salary up to the date of termination. In addition, he will be entitled to receive a lump-sum cash payment equal to his base salary and a bonus equal to 50% of his base salary for the greater of (x) two years following the date of termination and (y) the remainder of the term of the Stanich Agreement. In addition, any issued but unvested options will vest immediately upon such termination. Furthermore, the period of the non-competition provisions in the Stanich Agreement will decrease from two years to one year following termination of his employment.

In the event Mr. Stanich’s employment is terminated by us within six months of a change of control (as defined in the Stanich Agreement), or if Mr. Stanich terminates his employment within six months of a change in control, he will be entitled to receive a lump-sum cash payment equal to his base salary and a bonus equal to 50% of his base salary for the greater of (x) two years following the date of termination and (y) the remainder of the term of the Stanich Agreement. In addition, any issued but unvested options will vest immediately upon such termination. Furthermore, the period of the non-competition provisions in the Stanich Agreement will decrease from two years to one year following termination of his employment. If our stockholders exchange their shares for stock of any other company, Mr. Stanich will also be entitled to receive an amount equal to the per share price paid to our stockholders less the pre-announcement price of the shares, multiplied by 50,000.

The Stanich Agreement contains customary non-competition provisions that extend to two years (or one year upon the occurrence of the events described above) after termination of Mr. Stanich employment with us. Mr. Stanich also agreed to customary terms regarding confidentiality.

Director Compensation

The following table summarizes the compensation for our non-employee board of directors for the twelve months ended December 31, 2014. All compensation paid to our employee directors is included under the summary compensation table above.

Name		Fees Earned or Paid in Cash ($)		Stock Awards ($)(3)(4)			Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Nonqualified Deferred Compensation Earnings ($)		All Other Compensation ($)			Total ($)
Thomas Trainer		-0-		$	143,750		-0-		-0-		-0-		$	119,000		$	262,750
Brian Banmiller		-0-		$	106,250		-0-		-0-		-0-		$	48,000		$	154,250
John Barbera(1)		-0-		$	100,000		-0-		-0-		-0-		$	24,000		$	124,000

____________

(1)   Mr. Barbera resigned from our board of directors on June 30, 2014.

(2)   Includes $48,000 for director fees and $71,000 for consulting fees.

(3)   The amounts reported include the aggregate grant date fair value of the stock portion of the discretionary bonus paid to the named director.

(4)   The amounts reported include the aggregate grant date fair value of the stock portion of the director fees paid to the named director.

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Outstanding Equity Awards at Fiscal Year-End

The following table sets forth certain information concerning outstanding stock awards held by our named executive officers as of December 31, 2014:

		Option Awards										Stock Awards
Name		Number of Securities Underlying Unexercised Options (#) Exercisable		Number of Securities Underlying Unexercised Options (#) Unexercisable		Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)		Option Exercise Price ($)		Option Expiration Date		Number of Shares or Units of Stock That Have Not Vested (#)		Market Value of Shares Or Units Of Stock That Have Not Vested ($)		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)		Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)
Adriaan Reinders		-0-		-0-		-0-		-0-		—		-0-		-0-		-0-		-0-
Marion Freijsen		-0-		-0-		-0-		-0-		—		-0-		-0-		-0-		-0-
Mark Stanich		-0-		-0-		-0-		-0-		—		6,000,000		1,140,000		-0-		-0-
Mark Noffke		-0-		-0-		-0-		-0-		—		-0-		-0-		-0-		-0-
Ruud Smeets		-0-		-0-		-0-		-0-		—		-0-		-0-		-0-		-0-
James E. Solomon(1)		-0-		-0-		-0-		-0-		—		-0-		-0-		-0-		-0-

____________

(1)   Mr. Solomon resigned June 30, 2014.

2010 Stock Option Plan

In September 2011, we adopted the 2010 Stock Option Plan pursuant to which stock options to acquire 10,228,844 shares of our common stock were available for issuance. We subsequently reduced the common stock available for issuance under the Plan by 6,401,303 shares on November 12, 2012 to 3,827,541 shares. Under the Plan, non-statutory stock options and stock purchase rights may be granted to employees and consultants. Incentive stock options may be granted only to employees. In September 2011, we issued 3,827,541 options to purchase common shares to employees. These options had terms of 4 to 5 years, exercise prices of $0.53 to $0.59, and had vesting dates from the grant date to October 1, 2011. No additional stock or stock option grants are authorized under the Plan at this time.

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RELATED PARTY TRANSACTIONS

Certain Relationships and Related Transactions

The following is a description of the transactions we have engaged in from January 1, 2013 through the date of this prospectus, with our directors and officers and beneficial owners of more than five percent of our voting securities and their affiliates.

On February 11, 2013, in connection with the Acquisition and Share Exchange Agreement with The E-Factor Corp., we issued Adriaan Reinders, our Chief Executive Officer, in exchange for his shares of The E-Factor Corp., 2,500,000 shares of Series A Convertible Preferred Stock, of which 1,250,000 were converted into 6,453,111 shares of common stock upon the effectiveness of the 1-for-40 reverse stock split of our common stock.

On February 11, 2013, in connection with the Acquisition and Share Exchange Agreement with The E-Factor Corp., we issued Marion Freijsen, our Chief Operating Officer, in exchange for her shares of The E-Factor Corp., 2,500,000 shares of Series A Convertible Preferred Stock, of which 1,250,000 were converted into 6,453,111 shares of common stock upon the effectiveness of the 1-for-40 reverse stock split of our common stock.

On May 6, 2015, we issued 3,200,000 and 2,425,340 shares of our common stock to Mr. Reinders and Ms. Freijsen, respectively, to convert certain indebtedness aggregating to $703,167 of our related-party liabilities. In addition to the common stock, the individuals received 1,406,335 three-year warrants with an exercise price of $0.25 per share.

On December 6, 2012, Linge Beleggingen, BV, an affiliate of Mr. Reinders, loaned $200,000 to us at an interest rate of 15% per annum. This loan was due on September 1, 2013. As of the date of this prospectus, we owe $181,081 in principal and approximately $118,000 in interest and penalties under this loan.

Our Amsterdam office is leased from Mr. Smeets, who serves as President of our Social Networks division and as a member of our board of directors. The lease is on a month to month basis and the monthly lease payment for the office is approximately $2,782. This property was recently sold and we intend to relocate this office in August 2015.

Director Independence

Our board of directors is comprised of seven members, two of whom (Thomas Trainer and Brian Banmiller) are “independent” within the meaning of Rule 5605 of the NASDAQ Stock Market.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information known to us regarding the beneficial ownership of our common stock and Series A preferred stock as of the date of this prospectus, and as adjusted to reflect the sale of our common stock and warrants in this offering, for:

•      each person known by us at that date to be the beneficial owner of more than 5% of the outstanding shares of our based solely on Schedule 13D/13G filings with the SEC;

•      each of our officers and directors at such date; and

•      and all of our executive officers and directors at such date, as a group.

Under Rule 13d-3 under the Exchange Act, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares).

Under Rule 13d-3 under the Exchange Act, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares).

The percentage ownership information shown in the table is based upon 189,928,420 shares of common stock and 2,500,000 shares of Series A preferred stock (which have 25 votes per share) issued and outstanding. The table also sets forth the total voting percentage our common stock for these beneficial owners.

Name and Address of Beneficial Owner(1)		Amount and Nature of Beneficial Ownership of Common Stock(2)		Percent of Common Stock			Amount and Nature of Beneficial Ownership of Preferred Stock		Percent of Preferred Stock			Voting Power(2)(4)			Ownership of Common Stock After this Offering		Percent of Common Stock After this Offering		Amount of Preferred Stock After this Offering		Percent of Preferred Stock After this Offering		Voting Power post- Offering
Adriaan Reinders		10,913,785		5.6	%		1,250,000		50	%		16.3	%
Marion Freijsen		11,121,785		5.7	%		1,250,000		50	%		16.4	%
Quintessentially Publishing Limited(3)		12,465,131		6.6	%		—		—			4.9	%
Ruud Smeets		5,541,293		2.8	%		—		—			1.9	%
Thomas Trainer		2,673,762		1.4	%		—		—			1.0	%
Mark Stanich		2,815,629		1.5	%		—		—			1.1	%
Mark Noffke		577,649			*		—		—				*
Brian Banmiller		665,436			*		—		—				*
All directors and named executive officers as a group (7 persons)		34,309,339		17.5	%		2,500,000		100	%		37.5	%

____________

*      Less than 1% of our outstanding shares or voting power.

(1)   Unless otherwise indicated, the business address of each person listed is c/o EFactor Group Corp., 1177 Avenue of the Americas, Suite 5060, New York, New York 10036.

(2)   For purposes of this table, shares are considered beneficially owned if the person directly or indirectly has the sole or shared power to vote or direct the voting of the securities or the sole or shared power to dispose of or direct the disposition of the securities. Shares are also considered beneficially owned if a person has the right to acquire beneficial ownership of the shares within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights.

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(3)   According to a Schedule 13G filed with the SEC on October 14, 2014, Quintessentially Publishing Limited reported beneficial ownership of an aggregate of 12,465,131 shares. Paul Drummond, Ben Elliot and Aaron Simpson share voting and investment control over these securities. The address of the principal business office of the reporting person is 29 Portland Place, London W1B 1QB, United Kingdom.

(4)   Calculated based on 258,237,682 shares of common stock outstanding. Includes an aggregate of 2,500,000 shares of Series A preferred stock, which have 25 votes per share, or a total of 62,500,000 additional votes, on any matter brought before the holders of our common stock for a vote.

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DESCRIPTION OF SECURITIES

Our authorized capital stock consists of 300,000,000 shares of common stock, par value $0.001 per share, and 20,000,000 shares of preferred stock, par value $0.001 per share, of which 5,000,000 such shares have been designated as Series A preferred stock. As of the date of this prospectus, there were 195,737,682 shares of common stock outstanding and 2,500,000 shares of Series A preferred stock outstanding.

Common Stock

The holders of common stock are entitled to one vote per share. Holders of the common stock do not have any conversion rights, pre-emptive or other rights to subscribe for or purchase additional shares of capital stock and there are no redemption provisions applicable to our common stock. We have not paid any dividends on its common stock since inception and expects to continue to retain all earnings generated by our operations for the development and growth of its business and does not anticipate paying any cash dividends to its stockholders in the foreseeable future. The payment of future dividends on the common stock and the rate of such dividends, if any, will be determined by our board of directors in light of our earnings, financial condition, capital requirements and other factors.

Preferred Stock

Holders of our Series A preferred stock are entitled to 25 votes per share. Holders of the Series A preferred stock vote with the holders of the common stock and not as a separate class. Holders of our Series A Preferred Stock do not have any conversion rights, pre-emptive or other rights to subscribe for or purchase additional shares of capital stock and there are no redemption provisions applicable to our Series A Preferred Stock.

We have not paid any dividends on our Series A preferred stock since inception and expect to continue to retain all earnings generated by our operations for the development and growth of our business and do not anticipate paying any cash dividends to our stockholders in the foreseeable future. The payment of future dividends on the Series A preferred stock and the rate of such dividends, if any, will be determined by our board of directors in light of our earnings, financial condition, capital requirements and other factors.

Warrants

As of the date of this prospectus, warrants for the issuance of 7,242,563 shares of our common stock were outstanding, exercisable at a weighted average exercise price of $0.21 per share through various expiration dates through May 2018.

Warrants Issued in this Offering

The warrants issued in this offering entitle the registered holder to purchase one share of our common stock at a price equal to    % of the price per share of common stock sold in this offering, subject to adjustment as discussed below, at any time commencing upon consummation of this offering and terminating at 5:00 p.m. on the fifth anniversary of the date of this prospectus.

The warrants will be issued in registered form under a warrant agreement between us and our warrant agent. The material provisions of the warrants are set forth herein but are only a summary and are qualified in their entirety by the provisions of the warrant agreement that has been filed as an exhibit to the registration statement of which this prospectus forms a part.

The exercise price and number of shares of common stock issuable upon exercise of the warrants may be adjusted in certain circumstances, including in the event of a stock dividend, extraordinary dividend on or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuances of common stock at a price below their respective exercise prices.

The warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form on the reverse side of the public warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price, by certified or official bank check payable to us, for the number of warrants being exercised. Under the terms of the warrant agreement, we have agreed to use our best efforts to maintain the effectiveness of the registration statement and current prospectus relating to common stock issuable upon exercise of the warrants until the expiration of the warrants. During any period we fail to have maintained an effective registration statement covering the shares

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underlying the warrants, the warrant holder may exercise the warrants on a cashless basis. The warrant holders do not have the rights or privileges of holders of common stock and any voting rights until they exercise their warrants and receive shares of common stock. After the issuance of shares of common stock upon exercise of the warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by stockholders.

No fractional shares of common stock will be issued upon exercise of the warrants. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round up to the nearest whole number of shares of common stock to be issued to the warrant holder. If multiple warrants are exercised by the holder at the same time, we will aggregate the number of whole shares issuable upon exercise of all the warrants.

Representative’s Warrants

We have agreed to grant to Maxim Group LLC, the representative of the underwriters, warrants to purchase a number of shares equal to 8% of the total number of shares of common stock sold in this offering at an exercise price equal to 115% of the price per share of the common stock sold in this offering. The warrants will contain a cashless exercise feature.

Transfer Agent and Warrant Agent

Our stock transfer agent is Pacific Stock Transfer Company, 4045 South Spencer Street, Suite 403, Las Vegas, NV 89119, telephone: 702-361-3033. Pacific Stock Transfer Company will also act as the warrant agent for the warrants issued in this offering.

Anti-Takeover Effects of our Articles of Incorporation and Bylaws

Certain provisions in our Amended and Restated Articles of Incorporation and bylaws could delay or prevent a change in control of us, even if that change might be beneficial to our stockholders. Our Amended and Restated Articles of Incorporation and bylaws contain provisions that might make acquiring control of us difficult, including provisions limiting rights to call special meetings of stockholders and regulating the ability of our stockholders to nominate directors for election at annual meetings of our stockholders. In addition, our board of directors has the authority, without further approval of our stockholders, to issue preferred stock having such rights, preferences and privileges as the board of directors may determine. Any such issuance of preferred stock could, under some circumstances, have the effect of delaying or preventing a change in control of us and might adversely affect the rights of holders of common stock.

Anti-Takeover Effects of Nevada Law

Business Combinations

The “business combination” provisions of Sections 78.411 to 78.444, inclusive, of the Nevada Revised Statutes, or NRS, generally prohibit a Nevada corporation with at least 200 stockholders of record, a “resident domestic corporation,” from engaging in various “combination” transactions with any “interested stockholder” unless certain conditions are met or the corporation has elected in its articles of incorporation to not be subject to these provisions. We have not elected to opt out of these provisions and if we meet the definition of resident Domestic Corporation, now or in the future, our company will be subject to these provisions.

A “combination” is generally defined to include (a) a merger or consolidation of the resident domestic corporation or any subsidiary of the resident domestic corporation with the interested stockholder or affiliate or associate of the interested stockholder; (b) any sale, lease, exchange, mortgage, pledge, transfer, or other disposition, in one transaction or a series of transactions, by the resident domestic corporation or any subsidiary of the resident domestic corporation to or with the interested stockholder or affiliate or associate of the interested stockholder having: (i) an aggregate market value equal to 5% or more of the aggregate market value of the assets of the resident domestic corporation, (ii) an aggregate market value equal to 5% or more of the aggregate market value of all outstanding shares of the resident domestic corporation, or (iii) 10% or more of the earning power or net income of the resident domestic corporation; (c) the issuance or transfer in one transaction or series of transactions of shares of the resident domestic corporation or any subsidiary of the resident domestic corporation having an aggregate market value equal to 5% or more of the resident domestic corporation to the interested stockholder or affiliate or associate of the interested stockholder; and (d) certain other transactions with an interested stockholder or affiliate or associate of the interested stockholder.

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An “interested stockholder” is generally defined as a person who, together with affiliates and associates, owns (or within three years, did own) 10% or more of a corporation’s voting stock. An “affiliate” of the interested stockholder is any person that directly or indirectly through one or more intermediaries is controlled by or is under common control with the interested stockholder. An “associate” of an interested stockholder is any (a) corporation or organization of which the interested stockholder is an officer or partner or is directly or indirectly the beneficial owner of 10% or more of any class of voting shares of such corporation or organization; (b) trust or other estate in which the interested stockholder has a substantial beneficial interest or as to which the interested stockholder serves as trustee or in a similar fiduciary capacity; or (c) relative or spouse of the interested stockholder, or any relative of the spouse of the interested stockholder, who has the same home as the interested stockholder.

If applicable, the prohibition is for a period of two years after the date of the transaction in which the person became an interested stockholder, unless such transaction is approved by the board of directors prior to the date the interested stockholder obtained such status; or the combination is approved by the board of directors and thereafter is approved at a meeting of the stockholders by the affirmative vote of stockholders representing at least 60% of the outstanding voting power held by disinterested stockholders; and extends beyond the expiration of the two-year period, unless (a) the combination was approved by the board of directors prior to the person becoming an interested stockholder; (b) the transaction by which the person first became an interested stockholder was approved by the board of directors before the person became an interested stockholder; (c) the transaction is approved by the affirmative vote of a majority of the voting power held by disinterested stockholders at a meeting called for that purpose no earlier than two years after the date the person first became an interested stockholder; or (d) if the consideration to be paid to all stockholders other than the interested stockholder is, generally, at least equal to the highest of: (i) the highest price per share paid by the interested stockholder within the three years immediately preceding the date of the announcement of the combination or in the transaction in which it became an interested stockholder, whichever is higher, plus compounded interest and less dividends paid, (ii) the market value per share of common shares on the date of announcement of the combination and the date the interested stockholder acquired the shares, whichever is higher, plus compounded interest and less dividends paid, or (iii) for holders of preferred stock, the highest liquidation value of the preferred stock, plus accrued dividends, if not included in the liquidation value. With respect to (i) and (ii) above, the interest is compounded at the rate for one-year United States Treasury obligations from time to time in effect.

Applicability of the Nevada business combination statute would discourage parties interested in taking control of our company if they cannot obtain the approval of our board of directors. These provisions could prohibit or delay a merger or other takeover or change in control attempt and, accordingly, may discourage attempts to acquire our company even though such a transaction may offer our stockholders the opportunity to sell their stock at a price above the prevailing market price.

Control Share Acquisitions

The “control share” provisions of Sections 78.411 to 78.444, inclusive, of the Nevada Revised Statutes, apply to “issuing corporations” that are Nevada corporations with at least 200 stockholders of record, including at least 100 stockholders of record who are Nevada residents, and that conduct business directly or indirectly in Nevada, unless the corporation has elected to not be subject to these provisions.

The control share statute prohibits an acquirer of shares of an issuing corporation, under certain circumstances, from voting its shares of a corporation’s stock after crossing certain ownership threshold percentages, unless the acquirer obtains approval of the target corporation’s disinterested stockholders. The statute specifies three thresholds: (a) one-fifth or more but less than one-third, (b) one-third but less than a majority, and (c) a majority or more, of the outstanding voting power. Generally, once a person acquires shares in excess of any of the thresholds, those shares and any additional shares acquired within 90 days thereof become “control shares” and such control shares are deprived of the right to vote until disinterested stockholders restore the right. These provisions also provide that if control shares are accorded full voting rights and the acquiring person has acquired a majority or more of all voting power, all other stockholders who do not vote in favor of authorizing voting rights to the control shares are entitled to demand payment for the fair value of their shares in accordance with statutory procedures established for dissenters’ rights.

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A corporation may elect to not be governed by, or “opt out” of, the control share provisions by making an election in its articles of incorporation or bylaws, provided that the opt-out election must be in place on the 10th day following the date an acquiring person has acquired a controlling interest, that is, crossing any of the three thresholds described above. We have not opted out of these provisions and will be subject to the control share provisions of the NRS if we meet the definition of an issuing corporation upon an acquiring person acquiring a controlling interest unless we later opt out of these provisions and the opt out is in effect on the 10th day following such occurrence.

The effect of the Nevada control share statute is that the acquiring person, and those acting in association with the acquiring person, will obtain only such voting rights in the control shares as are conferred by a resolution of the stockholders at an annual or special meeting of the stockholders. The Nevada control share law, if applicable, could have the effect of discouraging takeovers of our company.

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SHARES ELIGIBLE FOR FUTURE SALE

Future sales of our common stock in the public market, or the availability of such shares for sale in the public market, could adversely affect market prices prevailing from time to time. As described below, the sale of shares issued by us in a private transaction (outside of this offering) will be limited after this offering due to contractual and legal restrictions on resale. Nevertheless, sales of our common stock in the public market after such restrictions lapse, or the perception that those sales may occur, could adversely affect the prevailing market price at such time and our ability to raise equity capital in the future.

Based on the number of shares outstanding as of the date of this prospectus, upon the completion of this offering,      shares of our common stock will be outstanding, assuming (i) no exercise of the underwriter’s option to purchase additional shares, (ii) no exercise of outstanding options or warrants and (iii) no conversion of outstanding debt.

Rule 144

Pursuant to Rule 144, a person who has beneficially owned restricted shares of our common stock or warrants for at least six months would be entitled to sell their securities provided that (i) such person is not deemed to have been one of our affiliates at the time of, or at any time during the three months preceding, a sale and (ii) we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale and have filed all required reports under Section 13 or 15(d) of the Exchange Act during the 12 months (or such shorter period as we were required to file reports) preceding the sale.

Persons who have beneficially owned restricted shares of our common stock or warrants for at least six months but who are our affiliates at the time of, or at any time during the three months preceding, a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of:

•      1% of the total number of shares of common stock then outstanding; or

•      the average weekly reported trading volume of the common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.

Sales by our affiliates under Rule 144 are also limited by manner of sale provisions and notice requirements and to the availability of current public information about us.

For purposes of the six-month holding period requirement of Rule 144, a person who beneficially owns restricted shares of our common stock issued pursuant to a cashless exercise of a warrant shall be deemed to have acquired such shares, and the holding period for such shares shall be deemed to have commenced on the date the warrant was originally issued.

Restrictions on the Use of Rule 144 by Shell Companies or Former Shell Companies

Rule 144 is not available for the resale of securities initially issued by shell companies (other than business combination related shell companies) or issuers that have been at any time previously a shell company. However, Rule 144 also includes an important exception to this prohibition if the following conditions are met:

•      the issuer of the securities that was formerly a shell company has ceased to be a shell company;

•      the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;

•      the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and

•      at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company.

Lock-Up Agreements

In connection with this offering, we and our officers, directors, and holders of 2.0% or more of our common stock have agreed to enter into lock-up agreements with the underwriters. See “Underwriting” for more information.

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UNDERWRITING

We have entered into an underwriting agreement with Maxim Group LLC acting as the sole book-running manager and sole representative for the underwriters named below. Subject to the terms and conditions of the underwriting agreement, the underwriters named below have agreed to purchase, and we have agreed to sell to them, the number of shares of common stock and warrants to purchase common stock at the public offering price, less the underwriting discounts and commissions, as set forth on the cover page of this prospectus and as indicated below:

Underwriter		Number of Shares
Maxim Group LLC
Total

The underwriting agreement provides that the obligations of the underwriters to pay for and accept delivery of the shares and warrants offered by this prospectus are subject to the approval of certain legal matters by their counsel and to other conditions. The underwriters are obligated to take and pay for all of the shares and warrants offered by this prospectus if any such shares and warrants are taken, other than those shares and warrants covered by the over-allotment option described below.

Over-Allotment Option

We have granted to the underwriters an option, exercisable no later than 45 calendar days after the date of the underwriting agreement to purchase up to      shares of common stock and/or warrants at a price, after the underwriting discount, of $     per share to purchase up to      shares of common stock at a price, after the underwriting discount, of $     per warrant from us to cover over-allotments. The underwriters may exercise this option only to cover over-allotments, if any, made in connection with this offering. To the extent the option is exercised and the conditions of the underwriting agreement are satisfied, we will be obligated to sell to the underwriters, and the underwriters will be obligated to purchase, these additional shares of common stock and/or warrant to purchase common stock.

Commissions

We have agreed to pay the underwriters (i) a cash fee equal to eight percent (8%) of the aggregate gross proceeds raised in this offering and (ii) warrants to purchase that number of shares of our common stock equal to an aggregate of eight percent (8%) of the shares of common stock sold in the offering (or      shares, assuming the over-allotment option is fully exercised). Such underwriters’ warrants shall have an exercise price equal to $      per share, which is 115% of the public offering price, terminate five years after the effectiveness of the registration statement of which this prospectus forms a part, and otherwise have the same terms as the warrants sold in this offering except that (1) they will not be subject to redemption by us and (2) they will provide for unlimited “piggyback” registration rights with respect to the underlying shares during the two year period commencing six months after the effective date of this offering. Such underwriters’ warrants will be subject to FINRA Rule 5110(g)(1) in that, except as otherwise permitted by FINRA rules, for a period of 180 days following the effectiveness of the registration statement, of which this prospectus forms a part, the underwriters’ warrants shall not be (A) sold, transferred, assigned, pledged, or hypothecated, or (B) the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the securities by any person.

The representative has advised us that the underwriters propose to offer the shares and warrants directly to the public at the public offering price set forth on the cover of this prospectus. In addition, the representative may offer some of the shares and warrants to other securities dealers at such price less a concession of up to $      per share. After the offering to the public, the offering price and other selling terms may be changed by the representative without changing our proceeds from the underwriters’ purchase of the shares and warrants.

The following table summarizes the public offering price, underwriting commissions and proceeds before expenses to us assuming both no exercise and full exercise of the underwriters’ option to purchase additional shares and warrants. The underwriting commissions are equal to the public offering price per share less the amount per share the underwriters pay us for the shares and warrants.

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				Total
		Per Share and Warrant(1)		Without Over- Allotment		With Over- Allotment
Public offering price
Underwriting discounts and commissions
Proceeds, before expenses, to us

____________

 (1) The fees shown do not include the warrant to purchase shares of common stock issuable to the underwriters at closing.

We estimate that the total expenses of the offering, including registration, filing and listing fees, printing fees and legal and accounting expenses, but excluding underwriting discounts and commissions, will be approximately $    , all of which are payable by us.

Lock-Up Agreements

We and each of our officers, directors, and existing stockholders who own at least 2% of our outstanding shares have agreed, subject to certain exceptions, not to offer, issue, sell, contract to sell, encumber, grant any option for the sale of or otherwise dispose of any shares of our common stock or other securities convertible into or exercisable or exchangeable for shares of our common stock for a period of six (6) months after the effective date of the registration statement (of which this prospectus is a part) without the prior written consent of Maxim Group LLC.

Maxim Group LLC may, in its sole discretion and at any time without notice, release some or all of the shares subject to lock-up agreements prior to the expiration of the lock-up period. When determining whether or not to release shares from the lock-up agreements, the representative will consider, among other factors, the security holder’s reasons for requesting the release, the number of shares for which the release is being requested and market conditions at the time.

Right of First Refusal

We have agreed to grant Maxim Group LLC, for the six-month period following the closing of this offering, a right of first refusal to act as manager or co-manager for any public underwriting or private placement of debt or equity securities, except for offerings involving equity compensation to our employees, equity issued in connection with a strategic acquisition or joint venture or any commercial bank financing.

Price Stabilization, Short Positions and Penalty Bids

In connection with this offering, the underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of our common stock. Specifically, the underwriters may over-allot in connection with this offering by selling more shares and warrants than are set forth on the cover page of this prospectus. This creates a short position in our common stock for its own account. The short position may be either a covered short position or a naked short position. In a covered short position, the number of shares common stock or warrants over-allotted by the underwriters is not greater than the number of shares of common stock or warrants that they may purchase in the over-allotment option. In a naked short position, the number of shares of common stock or warrants involved is greater than the number of shares common stock or warrants in the over-allotment option. To close out a short position, the underwriters may elect to exercise all or part of the over-allotment option. The underwriters may also elect to stabilize the price of our common stock or reduce any short position by bidding for, and purchasing, common stock in the open market. Since the warrants will not be listed and are not expected to trade, the underwriters cannot purchase the warrants in the open market and, as a result, the underwriters cannot and will not enter into naked short positions.

The underwriters may also impose a penalty bid. This occurs when a particular underwriter or dealer repays selling concessions allowed to it for distributing a security in this offering because the underwriter repurchases that security in stabilizing or short covering transactions.

Finally, the underwriters may bid for, and purchase, shares of our common stock in market making transactions, including “passive” market making transactions as described below.

These activities may stabilize or maintain the market price of our common stock at a price that is higher than the price that might otherwise exist in the absence of these activities. The underwriters are not required to engage in these activities, and may discontinue any of these activities at any time without notice. These transactions may be effected on the NASDAQ Capital Market, in the over-the-counter market, or otherwise.

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In connection with this offering, the underwriters and selling group members, if any, or their affiliates may engage in passive market making transactions in our common stock immediately prior to the commencement of sales in this offering, in accordance with Rule 103 of Regulation M under the Exchange Act. Rule 103 generally provides that:

•      a passive market maker may not effect transactions or display bids for our common stock in excess of the highest independent bid price by persons who are not passive market makers;

•      net purchases by a passive market maker on each day are generally limited to 30% of the passive market maker’s average daily trading volume in our common stock during a specified two-month prior period or 200 shares, whichever is greater, and must be discontinued when that limit is reached; and

•      passive market making bids must be identified as such.

Other Terms

We have agreed to reimburse the underwriters for all reasonable out-of-pocket expenses up to $100,000, including but not limited to reasonable legal fees, incurred by the underwriters in connection with the offering. Any travel or lodging expenses in excess of $2,500 shall be subject to our prior approval. We will reimburse the underwriters for all such expenses regardless of whether the offering is consummated.

The underwriters and their affiliates may in the future provide various investment banking and other financial services for us, for which they may receive, in the future, customary fees.

Indemnification

We have agreed to indemnify the underwriters against liabilities relating to the offering arising under the Securities Act and the Exchange Act, liabilities arising from breaches of the representations and warranties contained in the underwriting agreement, and to contribute to payments that the underwriters may be required to make for these liabilities.

Electronic Distribution

A prospectus in electronic format may be made available on a website maintained by the representative of the underwriters and may also be made available on a website maintained by other underwriters. The underwriters may agree to allocate a number of shares to underwriters for sale to their online brokerage account holders. Internet distributions will be allocated by the representatives of the underwriters to underwriters that may make Internet distributions on the same basis as other allocations. In connection with the offering, the underwriters or syndicate members may distribute prospectuses electronically. No forms of electronic prospectus other than prospectuses that are printable as Adobe^® PDF will be used in connection with this offering.

The underwriters have informed us that they do not expect to confirm sales of shares and warrants offered by this prospectus to accounts over which they exercise discretionary authority.

Other than the prospectus in electronic format, the information on any underwriter’s website and any information contained in any other website maintained by an underwriter is not part of the prospectus or the registration statement (of which this prospectus forms a part), has not been approved and/or endorsed by us or any underwriter in its capacity as underwriter and should not be relied upon by investors.

Foreign Regulatory Restrictions on Purchase of Securities Generally

No action has been or will be taken in any jurisdiction (except in the United States) that would permit a public offering of the securities offered by this prospectus, or the possession, circulation or distribution of this prospectus or any other material relating to us or the securities offered hereby in any jurisdiction where action for that purpose is required. Accordingly, the securities offered hereby may not be offered or sold, directly or indirectly, and neither this prospectus nor any other offering material or advertisements in connection with the securities offered hereby may be distributed or published in or from any country or jurisdiction, except in compliance with any applicable rules and regulations of any such country or jurisdiction.

Each of the underwriters may arrange to sell securities offered by this prospectus in certain jurisdictions outside the United States, either directly or through affiliates, where they are permitted to do so.

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LEGAL MATTERS

Ellenoff Grossman & Schole LLP will pass upon the validity of the securities offered hereby. Certain legal matters in connection with this offering will be passed upon for the underwriters by Olshan Frome Wolosky LLP, New York, New York.

EXPERTS

The consolidated financial statements as of and for the years ended December 31, 2014 and 2013 included in this prospectus and have been so included in reliance on the report of MaloneBailey, LLP, an independent registered public accounting firm appearing elsewhere in the prospectus, given on the authority of said firm as experts in accounting and auditing.

On April 20, 2015, we dismissed MaloneBailey, LLP as our independent registered public accounting firm. During the fiscal years ended December 31, 2014 and 2013, MaloneBailey’s audit reports on our financial statements did not contain an adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles, other than an explanatory paragraph in such audit reports regarding our ability to continue as a going concern. During the fiscal years ended December 31, 2014 and 2013 and through the subsequent interim period preceding MaloneBailey’s dismissal, there were (i) no disagreements between us and MaloneBailey on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures, which disagreements, if not resolved to MaloneBailey’s satisfaction, would have caused MaloneBailey to make reference in connection with MaloneBailey’s opinion to the subject matter of the disagreement; and (ii) no “reportable events” as the term is described in Item 304(a)(1)(v) of Regulation S-K.

On April 21, 2015, we engaged RBSM LLP as our independent registered public accounting firm.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to this offering of our securities. This prospectus, which constitutes a part of the registration statement, does not contain all of the information set forth in the registration statement, some items of which are contained in exhibits to the registration statement as permitted by the rules and regulations of the SEC. For further information with respect to us and our securities, we refer you to the registration statement, including the exhibits and schedules thereto. Statements contained in this prospectus concerning the contents of any contract or any other document are not necessarily complete. If a contract or document has been filed as an exhibit to the registration statement, please see the copy of the contract or document that has been filed. Each statement in this prospectus relating to a contract or document filed as an exhibit is qualified in all respects by the filed exhibit. The exhibits to the registration statement should be referenced for the complete contents of these contracts and documents. You may obtain copies of this information by mail from the Public Reference Section of the SEC, 100 F Street, N.E., Room 1580, Washington, D.C. 20549, at prescribed rates. You may obtain information on the operation of the public reference rooms by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet website that contains reports, proxy statements and other information about issuers, like us, that file electronically with the SEC. The address of that website is www.sec.gov.

We are subject to the information and reporting requirements of the Exchange Act and, in accordance with this law, are required to file periodic reports, proxy statements and other information with the SEC. These periodic reports, proxy statements and other information are available for inspection and copying at the SEC’s public reference facilities and the website of the SEC referred to above. We also maintain a website at www.efactorgroup.com. You may access our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act with the SEC free of charge at our website as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. The information contained in, or that can be accessed through, our website is not part of this prospectus.

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EFACTOR GROUP CORP. AND SUBSIDIARIES

INDEX TO FINANCIAL STATEMENTS

Consolidated Financial Statements
for the Years Ended December 31, 2014 and 2013

		Page
Report of Independent Registered Public Accounting Firm		F-2
Consolidated Balance Sheets		F-3
Consolidated Statements of Operations and Other Comprehensive Loss		F-4
Consolidated Statements of Stockholders’ Equity (Deficit)		F-5
Consolidated Statements of Cash Flows		F-6
Notes to Consolidated Financial Statements		F-7

Consolidated Financial Statements
for the Three Months Ended March 31, 2015 and 2014 (unaudited)

		Page
Condensed Consolidated Balance Sheets (Unaudited) (as of March 31, 2015 and December 31, 2014)		F-28
Condensed Consolidated Statements of Operations and Other Comprehensive Loss (Unaudited)		F-29
Condensed Consolidated Statements of Cash Flows (Unaudited)		F-30
Notes to the Condensed Consolidated Financial Statements (Unaudited)		F-31

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors
EFactor Group Corp.
New York, New York

We have audited the accompanying consolidated balance sheets of EFactor Group Corp. and its subsidiaries (collectively, the “Company”) as of December 31, 2014 and 2013 and the related consolidated statements of operations and comprehensive loss, stockholders’ equity (deficit) and cash flows for each of the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of EFactor Group Corp and its subsidiaries as of December 31, 2014 and 2013, and the results of their operations and their cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has incurred recurring losses and has a working capital deficit, which raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to this matter are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ MaloneBailey, LLP
www.malonebailey.com
Houston, Texas
April 13, 2015

F-2

EFACTOR GROUP CORP. AND SUBSIDIARIES

Consolidated Balance Sheets

		December 31,
		2014				2013
ASSETS
CURRENT ASSETS:
Cash		$	111,878			$	43,377
Accounts receivable, net of allowance for doubtful accounts of $64,812 $6,318 at December 31, 2014 and 2013, respectively			419,664				75,071
Unbilled revenue			329,315				—
Other current assets			59,215				8,878
Total current assets			920,072				127,326
Property, website and equipment, net of accumulated depreciation of $1,419,215 and $1,102,939 at December 31, 2014 and 2013, respectively			856,030				461,499
Goodwill			25,544,581				3,646,994
Deferred financing costs			101,897				347,764
TOTAL ASSETS		$	27,422,580			$	4,583,583
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable		$	2,229,944			$	1,085,122
Accounts payable – related party			748,120				657,806
Contingent consideration			943,746				—
Accrued expenses and other current liabilities			2,050,070				1,517,763
Operating line of credit			475,000				475,000
Bank loans			148,006				—
Deferred revenue			55,382				71,836
Deferred rent			368,509				—
Current portion of note payable, net of discount			261,267				318,711
Current portion of convertible note payable, net of discount			1,042,904				650,762
Current portion of note payable – related parties, net of discount			281,644				285,860
Total current liabilities			8,604,592				5,062,860
Other long-term obligations			101,256				155,895
Contingent consideration			310,937				—
Non-current portion of note payable, net of discount			8,177				13,598
Total Non-Current Liabilities			420,370				169,493
TOTAL LIABILITIES			9,024,962				5,232,353
Commitments and contingencies			—				—
STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred stock, $0.001 par value, 20,000,000 shares authorized, 2,500,000 issued and outstanding as of December 31, 2014 and December 31, 2013 respectively.		$	2,500			$	2,500
Common stock, $0.001 par value, 175,000,000 shares authorized, 133,840,174 and 59,573,174 issued and outstanding at December 31, 2014 and December 31, 2013 respectively.			133,840				59,573
Subscription receivable			(168,000	)			—
Accumulated other comprehensive loss			(1,441,630	)			(5,244	)
Additional paid-in capital			65,819,434				16,978,361
Accumulated deficit			(45,948,526	)			(17,683,960	)
Total stockholders’ equity (deficit)			18,397,618				(648,770	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)		$	27,422,580			$	4,583,583

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

F-3

EFACTOR GROUP CORP. AND SUBSIDIARIES

Consolidated Statements of Operations and Other Comprehensive Loss

		For the Twelve months ended December 31,
		2014				2013
Net revenues		$	1,634,602			$	741,785
Operating expenses
Cost of revenue			472,941				219,931
Sales and marketing			400,137				422,138
General and administrative			9,496,653				3,946,635
Gain on forgiveness of liabilities			(303,114	)			—
Impairment loss			17,698,000				—
Depreciation and amortization			257,213				246,603
Total operating expenses			28,021,830				4,835,307
Loss from operations			(26,387,228	)			(4,093,522	)
Other income (expense):
Interest expense			(2,438,172	)			(911,527	)
Loss on conversion of debt			(585,961	)			(1,026,859	)
Derivative gain			1,188,041				—
Other income (expense)			(41,246	)			84,829
Total other income (expense), net			(1,877,338	)			(1,853,557	)
Net loss		$	(28,264,566	)		$	(5,947,079	)
Other comprehensive gain (loss):
Foreign currency translation adjustment			(1,436,386	)			(5,244	)
Comprehensive gain (loss)		$	(29,700,952	)		$	(5,952,323	)
Basic and diluted net loss per common share		$	(0.34	)		$	(0.15	)
Weighted average shares used in completing basic and diluted net loss per common share			82,746,526				40,101,081

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

F-4

EFACTOR GROUP CORP.

Consolidated Statement of Stockholders’ Equity (Deficit)
Period Ended December 31, 2014 and December 31, 2013

		Common Stock					Preferred Stock							Subscription Receivable				Comprehensive Loss				Additional Paid in Capital				Accumulated Deficit				Stockholders’ Deficit
		Shares		Amount			Shares			Amount
Balance, December 31, 2012		1,053,751		$	1,054		5,000,000			$	5,000			$	—			$	—			$	11,979,427			$	(11,736,881	)		$	248,600
Issuance of common stock for cash		10,394			10		—				—				—				—				166,992				—				167,002
Issuance of common stock for debt		612,923			613		—				—				—				—				531,951				—				532,564
Shares issued for debt discount		75,425			75		—				—				—				—				1,050,378				—				1,050,453
Shares issued for extinguishment of debt		3,011			3		—				—				—				—				1,014,056				—				1,014,059
Stock option expense		—			—		—				—				—				—				78,200				—				78,200
Foreign currency translation		—			—		—				—				—				(5,244	)			—				—				(5,244	)
Shares exchanged in merger Standard Drilling		53,466,081			53,467		(2,500,000	)			(2,500	)			—				—				(367,415	)			—				(316,448	)
Stock issued for acquisition of MCC		3,686,529			3,686		—				—				—				—				1,329,649				—				1,333,335
Issuance of common stock for services		665,060			665		—				—				—				—				1,195,123				—				1,195,788
Net loss		—			—		—				—				—				—				—				(5,947,079	)			(5,947,079	)
Balance, December 31, 2013		59,573,174		$	59,573		2,500,000			$	2,500			$	—			$	(5,244	)		$	16,978,361			$	(17,683,960	)		$	(648,770	)
Issuance of common stock for cash		1,478,509			1,479		—				—				(168,000	)			—				830,251				—				663,730
Issuance of common stock for debt		9,018,948			9,018		—				—				—				—				2,294,064				—				2,303,082
Shares issued for debt discount and interest		767,630			768		—				—				—				—				619,478				—				620,246
BCF for debt discount		—			—		—				—				—				—				860,967				—				860,967
Derivative liability recognized due to “tainting”		—			—		—				—				—				—				(2,274,454	)			—				(2,274,454	)
Termination of derivative liability		—			—		—				—				—				—				1,360,638				—				1,360,638
Shares issued for extinguishment of debt		2,547,195			2,547		—				—				—				—				469,481				—				472,028
Stock issued for acquisitions		49,881,600			49,882		—				—				—				—				39,775,398				—				39,825,280
Stock option expense		—			—		—				—				—				—				135,738				—				135,738
Warrants issued with debt		—			—		—				—				—				—				36,425				—				36,425
Foreign currency translation		—			—		—				—				—				(1,436,386	)			—				—				(1,436,386	)
Issuance of common stock for services		10,573,118			10,573		—				—				—				—				4,733,087				—				4,743,660
Net loss		—			—		—				—				—				—				—				(28,264,566	)			(28,264,566	)
Balance, December 31, 2014		133,840,174		$	133,840		2,500,000			$	2,500			$	(168,000	)		$	(1,441,630	)		$	65,819,434			$	(45,948,526	)		$	18,397,618

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

F-5

EFACTOR GROUP CORP. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

		For the Twelve months ended December 31,
		2014				2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		$	(28,264,566	)		$	(5,947,079	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			257,284				246,603
Stock option expense			135,738				78,200
Amortization of debt discount and deferred financing fees			2,105,860				703,293
Shares issued for services			4,743,660				1,195,788
Impairment loss			17,698,000				—
(Gain) loss on forgiveness/settlement of liabilities			(270,336	)			(84,829	)
Loss on conversion of debt			553,182				1,026,859
Derivative gain			(1,188,041	)			—
Provision for bad debts			64,800				4,221
Changes in operating assets and liabilities:
Accounts receivable			83,362				(9,110	)
Unbilled revenue			(229,115	)			—
Prepaid expenses and other current assets			164,523				8,503
Accounts payable			595,370				463,925
Accounts payable – related party			131,053				640,771
Accrued expenses and other current liabilities			957,133				248,995
Deferred revenue			(16,455	)			(162,708	)
Deferred rent			68,684				—
NET CASH USED IN OPERATING ACTIVITIES:		$	(2,409,864	)		$	(1,586,568	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for acquisition of property, website and equipment			(65,704	)			(354,825	)
Cash acquired in reverse merger with acquisitions			—				851
Cash paid in advance of acquisitions, net of cash acquired			(51,339	)			23,593
Net cash used in investing activities		$	(117,043	)		$	(330,381	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings			1,926,950				1,712,300
Proceeds from borrowings – related parties			—				42,111
Proceeds from issuance of shares			831,730				167,002
Repayment of borrowings			(96,274	)			(2,713	)
Net cash provided by financing activities		$	2,662,406			$	1,918,700
Effect of foreign currency exchange rate on cash			(66,998	)			(5,244	)
Net increase (decrease) in cash			68,501				(3,493	)
Cash at beginning of period			43,377				46,870
Cash at the end of the period		$	111,878			$	43,377
Supplemental Disclosure of Cash Flows Information:
Cash paid for interest		$	51,936			$	144,053
Cash paid for income taxes		$	—			$	—
Non-cash Investing and Financing Activities:
Debt discount due to beneficial conversion feature		$	860,967			$	581,887
Debt discount due to shares and warrants issued with debt		$	656,671			$	361,816
Debt discount due to derivative liability		$	274,225			$	—
Deferred financing costs		$	—			$	475,000
Reclass of accounts payable – related party to debt		$	40,739			$	21,513
Derivative liability recognized due to “tainting”		$	2,274,454			$	—
Termination of derivative liability		$	1,360,638			$	—
Subscription receivable		$	168,000			$	—
Shares issued for conversion of debt and accrued interest		$	1,749,901			$	532,564
Shares issued for settlement of accounts payable		$	439,250			$	—
Shares issued for acquisitions		$	39,825,280			$	—

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

F-6

EFACTOR GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Organization and Basis of Presentation

The accompanying consolidated audited financial statements of EFactor Group Corp. (the “Company”, “we”, “our”), have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”). The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries The E-Factor Corporation, MCC International, HT Skills, Member Digital, GroupCard, ELEQT, and Robson Dowry, all inter-company accounts have been eliminated in consolidation.

Description of Business

We were originally formed as a Nevada corporation on July 27, 2001, under the name Online Holdings, Inc. Subsequently, on September 1, 2006, pursuant to an Agreement and Plan of Merger dated July 24, 2006 by and among our company, Standard Drilling Acquisition Co., a Delaware corporation (“Standard Drilling Acquisition”), and Standard Drilling, Inc., a Delaware corporation (“Standard Drilling Delaware”), Standard Drilling Acquisition was merged with and into Standard Drilling Delaware, and Standard Drilling Delaware became our wholly-owned subsidiary. As a result of the merger, our company, which previously had no material operations, acquired the business of Standard Drilling Delaware. In conjunction with the merger, we changed our name to Standard Drilling, Inc.

On February 1, 2013, we entered into an Acquisition and Share Exchange Agreement (which we refer to herein as the Exchange Agreement) with The E-Factor Corp., a Delaware corporation (which we refer to herein as EFactor), and certain shareholders of EFactor (such transaction, the “Share Exchange”), pursuant to which significantly all of the common stock sellers of EFactor agreed to transfer to us 6,580,250 shares of common stock of EFactor in exchange for the issuance of: (a) 50,000,000 shares of our common stock; (b) 5,000,000 shares of Series A Convertible Preferred Stock; and (c) an additional 22,231,155 shares of our common stock were issued upon the effectiveness of the 1:40 reverse stock split of our common stock. The Share Exchange closed on February 11, 2013.

As a result of the Share Exchange, EFactor became our majority-owned subsidiary. We are now a holding company with all of our operations conducted through EFactor Group Corp., which is the owner of a portfolio of entrepreneur-focused product and service companies which exist around and complement EFactor.com, a targeted social network providing content and resources for entrepreneurs worldwide. The EFactor network is designed to support our members as their business grow, along each step of the process.

EFactor was incorporated in the state of Delaware on October 30, 2007, and provides a full-featured social network for entrepreneurs. EFactor provides a platform that enables access to a network of contacts, registration for networking events, advisory consulting, various business tools and a broad range of services and information.

On October 31, 2012, EFactor merged with EQmentor, an online professional development company organized in 2007 that provides working professionals 24/7 access to a custom-matched mentor, a global cross-industry peer community, and repositories of knowledge to empower high performance in the workplace.

On February 14, 2013, EFactor acquired MCC International (“MCC”), a public relations and communications agency. MCC was founded in 1988. The agency is based in the United Kingdom and promotes through enhancement of company’s reputation utilizing print and social media news outlets, focusing on upper tier emerging technology and science companies, as well as professional service organizations, from entrepreneur start-ups and spin-offs to global consumer brands.

On July 1, 2014, the Company acquired HT Skills, based in London, which is a fully-accredited provider of apprenticeships and work-based vocational learning, and is also an experienced welfare-to-work job-broker. HT Skills has successfully delivered Government-funded contracts for Skills Funding Agencies (SFA), Department of Work and Pensions (DWP), and European Social Funds (ESF) and has secured sustainable employment for young people since 2006.

On July 1, 2014, the Company acquired Member Digital, a company that offers entrepreneurial solutions for niche interests — inspiring action, and increasing income. From subscription websites, to digital advocacy and simple CRM, Member Digital has many diverse solutions for entrepreneur’s.

F-7

EFACTOR GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Organization and Basis of Presentation (cont.)

On July 7, 2014, the Company acquired GroupCard BV, a full service organization helping local organizations (i.e. sport clubs, charities, student associations, family caregivers) create extra value for their members, sponsors and partners. Based on a combination of services, technology, partnerships and business models, GroupCard is a revenue-generating partner to create extra value while keeping clients focused on their core business.

On October 1, 2014, the Company acquired ELEQT, an exclusive social discovery network for trendsetters in style and business. ELEQT offers a trusted social network, via www.eleqt.com, where members can engage with fascinating people to meet, discover things to do, places to go and trends to follow. ELEQT also organizes hundreds of exclusive member-only events around the world.

On November 15, 2014, the Company acquired Robson Dowry, an independent branding and design group with a track record of over 30 years. Robson Dowry provides its clients with graphic design, marketing and corporate positioning to help improve their clients’ visual identity and packaging.

The Company currently maintains its corporate office in New York, New York.

Note 2. Going Concern

The Company’s financial statements are prepared using generally accepted accounting principles, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. Because the business is new and has no history and relatively few sales, no certainty of continuation can be stated. The accompanying consolidated financial statements for the twelve months ended December 31, 2014 and 2013 have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

The Company has suffered losses from operations and has a working capital deficit, which raises substantial doubt about its ability to continue as a going concern.

Management is taking steps to raise additional funds to address its operating and financial cash requirements to continue operations in the next twelve months. Management has devoted a significant amount of time in the raising of capital from additional debt and equity financing. However, the Company’s ability to continue as a going concern is dependent upon raising additional funds through debt and equity financing and generating revenue.

There are no assurances the Company will receive the necessary funding or generate revenue necessary to fund operations. The financial statements contain no adjustments for the outcome of this uncertainty.

Note 3. Summary of Significant Accounting Policies

Principles of consolidation — The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries as of December 31, 2014. Significant intercompany balances and transactions have been eliminated.

Stock-Based Compensation — The Company accounts for share-based awards issued to employees in accordance with FASB ASC 718. Accordingly, employee share-based payment compensation is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period. Additionally, share-based awards to non-employees are expensed over the period in which the related services are rendered at their fair value. The Company applies ASC 505-50, “Equity Based Payments to Non-Employees”, with respect to options and warrants issued to non-employees.

Fair Value of Financial Instruments — The carrying amounts reported in the consolidated balance sheets for the accounts receivable accounts payable and short-term notes are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and, if applicable, the stated rate of interest is equivalent to rates currently available.

F-8

EFACTOR GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 3. Summary of Significant Accounting Policies (cont.)

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, Financial Accounting Standards Board (“FASB”) ASC Topic 820-10-35 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques 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 measurements).

Level 1—Valuations based on quoted prices for identical assets and liabilities in active markets.

Level 2—Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3—Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

The following table presents the derivative financial instruments, the Company’s only financial liabilities measured and recorded at fair value on the Company’s consolidated balance sheets on a recurring basis, and their level within the fair value hierarchy as of December 31, 2014:

		Amount			Level 1			Level 2			Level 3
Contingent consideration		$	1,254,683		$	—		$	—		$	1,254,683
Total		$	1,254,683		$	—		$	—		$	1,254,683

The following table provides a summary of the changes in fair value, including net transfers in and/or out, of the derivative financial instruments, measured at fair value on a recurring basis using significant unobservable inputs:

Balance at December 31, 2013		$	—
Fair value of derivative liabilities at issuance charged to debt discount			274,225
Fair value of derivative liabilities at issuance charged to additional paid in capital			2,274,454
Termination of derivative liability			(1,360,638	)
Unrealized derivative gains included in other expense			(1,188,041	)
Contingent consideration recognized			1,254,683
Balance at December 31, 2014		$	1,254,683

Cash and Cash Equivalents — For purposes of financial statement presentation, the Company considers all highly liquid investments with a maturity of three months or less, from the date of purchase, to be cash equivalents. The Company had no cash equivalents at December 31, 2014 or 2013.

Concentration of Credit Risk — Financial instruments, which potentially subject us to concentrations of credit risk, consist principally of cash and trade receivables. Concentrations of credit risk with respect to trade receivables are limited due to the clients that comprise our customer base and their dispersion across different business and geographic areas. We estimate and maintain an allowance for potentially uncollectible accounts and such estimates have historically been within management’s expectations.

Our cash balances are maintained in accounts held by major banks and financial institutions located in the United States. The Company occasionally maintains amounts on deposit with a financial institution that are in excess of the federally insured limit of $250,000. The risk is managed by maintaining all deposits in high quality financial institutions. The Company had no deposits in excess of federally insured limits at December 31, 2014 and 2013.

F-9

EFACTOR GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 3. Summary of Significant Accounting Policies (cont.)

Accounts Receivable — The Company’s accounts receivable arise primarily from the sale of advertising, public relations services and promotional placements on its website and from advisory services. For the twelve months ended December 31, 2014 and 2013, we had six and five major customers respectively making up the full receivable balance. On a periodic basis, the Company evaluates each customer account and based on the days outstanding of the receivable, history of past write-offs, collections, and current credit conditions, writes off accounts it considers uncollectible. Invoices are typically due in 30 days. The Company does not accrue interest on past due accounts and the Company does not require collateral. Accounts become past due on an account-by-account basis. Determination that an account is uncollectible is made after all reasonable collection efforts have been exhausted.

Property and Equipment — Property and equipment are stated at cost less accumulated depreciation and amortization. Expenditures for maintenance and repairs are charged to expense as incurred. Additions, improvements and major replacements that extend the life of the asset are capitalized.

Depreciation and amortization is recorded using the straight-line method over the estimated useful lives of depreciable assets, which are generally three to five years.

Website and Software Development Costs — Internal use software development costs are accounted for in accordance with ASC Topic No. 350 which requires the capitalization of certain external and internal computer software costs incurred during the application development stage. The application development stage is characterized by software design and configuration activities, coding, testing and installation. Training costs and maintenance are expensed as incurred, while upgrades and enhancements are capitalized if it is probable that such expenditures will result in additional functionality. Such costs are amortized on a straight-line basis over the estimated useful life of the related asset of three years.

The Company capitalized website and internal-use software costs of $109,969 and $383,670 for the years ended December 31, 2014 and 2013, respectively. In addition, during 2014, the Company added $403,059 of website development costs in conjunction with its acquisition of ELEQT. The Company’s capitalized website and internal-use software amortization is included in depreciation and amortization in the Company’s statements of operations, and totaled $217,560 and $262,100 for the years ended December 31, 2014 and 2013, respectively.

Goodwill — In financial reporting goodwill is not amortized, but is tested for impairment annually in the fourth quarter of the fiscal year or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Events that result in an impairment review include significant changes in the business climate, declines in our operating results, or an expectation that the carrying amount may not be recoverable. We assess potential impairment by considering present economic conditions as well as future expectations.

We review goodwill for impairment by performing a two-step goodwill impairment test. The first step of the two-step goodwill impairment test is to compare the fair value of the reporting unit to its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its fair value, the second step of the two-step goodwill impairment test is required to measure the goodwill impairment loss.

The second step includes valuing all the tangible and intangible assets of the reporting unit as if the reporting unit had been acquired in a business combination. Then, the implied fair value of the reporting unit’s goodwill is compared to the carrying amount of that goodwill. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of the goodwill, we recognize an impairment loss in an amount equal to the excess, not to exceed the carrying amount.

Calculating the fair value of a reporting unit and the implied fair value of reporting unit goodwill requires significant judgment. The use of different assumptions, estimates or judgments in either step of the goodwill impairment testing process, such as the estimated future cash flows of reporting units, the discount rate used to discount such cash flows, or the estimated fair value of the reporting units’ tangible and intangible assets and liabilities, could significantly increase or decrease the estimated fair value of a reporting unit or its net assets.

F-10

EFACTOR GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 3. Summary of Significant Accounting Policies (cont.)

The Company recorded an impairment of its investment of $17,698,000 for the twelve months ended December 31, 2014 compared to $0 for the twelve months ended December 31, 2013. In the twelve months ended December 31, 2014, the Company evaluated the holding value of this investment based upon guidelines outlined in ASC 320 and concluded the fair value of the asset had declined by $17,698,000 from its value at acquisition.

Derivatives — All derivatives held by us are recognized in the consolidated balance sheets at fair value with changes in fair value reflected in other income (expense) in the consolidated statements of operations and comprehensive loss. We issued warrants on our own common stock in conjunction with the term loan discussed in Note 5 of our consolidated financial statements. These warrants meet the definition of a derivative and are reflected as a warrant liability at fair value in the consolidated balance sheets. Likewise, embedded conversion options in our convertible notes which qualify for derivative accounting are bifurcated and their corresponding fair values are recorded as derivative liabilities.

Embedded Conversion Features — The Company evaluates embedded conversion features within convertible debt under ASC 815 “Derivatives and Hedging” to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 “Debt with Conversion and Other Options” for consideration of any beneficial conversion features.

Foreign currency and foreign currency transactions — The functional currency of MCC International, HT Skills, Member Digital, and Robson Dowry is the pound sterling (GBP) while the functional currency of GroupCard BV is the Euro. Balance sheet accounts of these entities are translated from their functional currencies into U.S. dollars at period-end exchange rates, and income and expense accounts are translated at average exchange rates during the period. Translation gains or losses related to net assets are recorded as unrealized foreign currency translation adjustments within accumulated other comprehensive income (loss) in stockholders’ equity. Gains and losses resulting from foreign currency transactions (transactions denominated in a currency other than the entity’s functional currency) are included in other income and expense in the consolidated statements of operations and other comprehensive loss.

Revenue Recognition — Revenues are presented net of discounts. In general, the Company recognizes revenue when (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered to the customer, (iii) the fee is fixed or determinable, and (iv) collectability is reasonably assured. Where arrangements have multiple elements, revenue is allocated to the elements based on the relative selling price method and revenue is recognized based on the Company’s policy for each respective element.

The Company applies judgment with respect to whether it can establish a selling price based on third party evidence. The Company does not have any product offerings that would be considered multiple deliverables; therefore the pricing model is determined based on competitor prices for similar product offerings. When it is unable to establish selling price using this method, the Company determines its best estimate for deliverables by considering multiple factors including, but not limited to, its pricing practices, profit margin, prices it charges for similar offerings, sales volume, geographies, market conditions, and the competitive landscape.

The Company generates revenue primarily from sales of the following services:

•      Member Fees — We have a VIP package which offers members access to premium services such as all our events, airport lounges, VIP lounges and VIP content on the site. We also hold a variety of networking and informational events for our members to which members can gain a subscription and provide varying other membership packages to our members that allow them access to premium services via our website. Revenue from member services is recognized ratably over the contractual period, generally from one to 12 months.

•      Sponsorships — The Company generates revenues from Sponsors in a variety of ways. Sponsors can gain exposure to the Company’s members, either through placement or short write-ups in newsletters, on event invitations or by participating as a sponsor at one of the Company’s Events where a Sponsor may provide access to its products or

F-11

EFACTOR GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 3. Summary of Significant Accounting Policies (cont.)

service (booth/stall) or by being a speaker or panelist at an event that fits in their industry. This revenue is recognized over the specific event timeline, which varies from a single day event or a longer-term promotional event over a series of weeks.

•      Public Relations — We provide market and brand awareness consulting services, targeting high and emerging technology and science companies, as well as professional service organizations that help get recognition within the practiced community and provide an explicit company identity. This revenue is recognized when the services are complete.

•      Advertising — Visitor demographics and time spent on a website are the primary drivers behind advertising-based revenue models for internet properties. When a user clicks an advertisement (CPC basis), views an advertisement impression (CPM basis), registers for an external website via an advertisement clicked on through the Company’s application (CPA basis). Proceeds from such contracts are recognized over the period in which the advertisements are displayed on the websites.

•      Advisory Services — The Company promotes and makes available advisory and consulting services to members for the purpose of support, introduction guidance and general mentoring of members in their pursuit of their entrepreneurial objectives, for which fees are charged. These revenues are recorded when services for the transactions are determined to be concluded, generally as set forth under the terms of the engagement or when the sundry milestones have been completed after the defined services are performed. Transaction-related expenses, primarily consisting of costs directly associated with the transaction, are deferred and recognized in the same period as the transaction revenue.

Amounts billed or collected in excess of revenue recognized are recorded as deferred revenue.

Unbilled revenue represents revenues recognized in excess of the amounts billed for completed services.

Impairment of Long-lived Assets — The Company accounts for long-lived assets in accordance with the provisions of FASB Topic 360, “Accounting for the Impairment of Long-Lived Assets”. This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when the estimated future cash flows from the use of the asset are less than the carrying amount of that asset. During 2014 and 2013, there have been no impairment losses.

Comprehensive Loss — There are components of comprehensive loss other than net loss that the Company has incurred as it relates to foreign currency, and accordingly the Company now presents a comprehensive income and loss for the periods presented.

Net Loss per Common Share — Basic net loss per share of common stock excludes dilution and is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding for the period. Diluted net loss per share of common stock reflects the potential dilution that could occur if securities or other contracts to issue shares of common stock were exercised or converted into shares of common stock. For all periods presented, potentially dilutive securities are excluded because their effect is anti-dilutive.

Advertising Costs — Advertising costs are expensed when incurred and are included in sales and marketing expense in the accompanying statements of operations. The Company incurred advertising costs of $400,137 and $422,139 for the years ended December 31, 2014 and 2013, respectively.

Nonmonetary transactions — Based on guidance provided in accordance with ASC No. 845 Nonmonetary Transactions (“ASC 845”), barter transactions with commercial substance are recorded at the estimated fair value of the products exchanged, unless the products received have a more readily determinable estimated fair value. The fair value of the product and services received during the twelve months ended December 31, 2014 was $68,685.

F-12

EFACTOR GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 3. Summary of Significant Accounting Policies (cont.)

Reclassifications — Certain comparative amounts from prior periods have been reclassified to conform to the current year’s presentation. These changes did not affect previously reported net loss.

Use of Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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.

Income Taxes — The Company accounts for income taxes under the provisions issued by the FASB which requires recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

The Company computes tax asset benefits for net operating losses carried forward. The potential benefit of net operating losses has not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.

Recent Accounting Pronouncements — The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new pronouncements that have been issued that might have a material impact on its financial position or results of operations.

Note 4. Property and Equipment

Property and equipment, net consisted of the following:

		2014				2013
Computer equipment		$	139,363			$	29,843
Furniture and fixtures			92,367				14,369
Automobiles			48,336				38,075
Capitalized website and internal use software			1,995,179				1,482,151
Total property, web site and computer equipment			2,275,245				1,564,438
Less: accumulated depreciation and amortization			(1,419,215	)			(1,102,939	)
Total property, web site and computer equipment, net		$	856,030			$	461,499

Depreciation and amortization expense on property and equipment was $257,284 and $246,603 for the years ended December 31, 2014 and 2013, respectively.

Note 5. Notes Payable and Line of Credit

Notes payable

During the years ended December 31, 2014 and 2013 the Company issued unsecured convertible notes payable to individuals totaling $1,916,950 and $1,004,410, respectively. These notes bear annual interest of 0%-12%, mature within a period ranging from six (6) months to one (1) year from issuance and are convertible into common shares at prices ranging from $0.20 to $3 per common share. The Company also issued five unsecured short-term notes payable to individuals totaling $223,488 in 2013. These notes bear annual interest of 12% and mature within a period of six (6) months from issuance.

The Company issued a total of 767,630 common shares and 100,000 warrants in 2014 and 75,425 common shares in 2013, with the notes and the relative fair value of the shares and warrants amounting to $656,671 in 2014 and $361,816 in 2013 were recognized as debt discounts and amortized over the term of the notes. The warrants issued with the 2014 convertible notes have

F-13

EFACTOR GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 5. Notes Payable and Line of Credit (cont.)

a term of 36 months and an exercise price of Euro 0.45 per share. The Company evaluated the embedded conversion features within the convertible debt under ASC 815 “Derivatives and Hedging” and determined that the embedded conversion feature of certain notes issued in 2014 qualified for derivative accounting. See Note 7. Additionally, the instruments were evaluated under ASC 470-20 “Debt with Conversion and Other Options” for consideration of any beneficial conversion features. The Company determined the beneficial conversion feature for all convertible notes to be $860,697 and $581,887 in 2014 and 2013, respectively, which was recognized as a debt discount and amortized over the term of the notes.

During the years ended December 31, 2014 and 2013, the Company made principal repayments totaling $61,537 and $1,876, respectively. Likewise, 9,018,948 and 612,923 common shares were issued to convert $1,749,901 and $532,564 of convertible debt and accrued interest in 2014 and 2013, respectively. A loss on conversion of debt amounting to $553,182 was recognized for the twelve months ended December 31, 2014.

On September 19, 2013, the Company amended a convertible note dated January 14, 2013 to extend the maturity date to December 31, 2013 and to remove the convertible feature of the note. The Company issued 3,011 common shares as consideration for the amendment, the noteholder has subsequently converted his note in January of 2014. The modification of the convertible note was considered substantial under ASC 470-50 and the rules on debt extinguishment were applied. Consequently, a loss on extinguishment of debt was recorded for the twelve months ended December 31, 2013 amounting to $50,109 in connection with this amendment.

During the years ended December 31, 2014 and 2013, the Company recognized $1,855,290 and $841,362, respectively, of interest expense due to the amortization of debt discounts on all convertible and unsecured short-term notes.

A summary of activity for notes payable during the years ended December 31, 2014 and 2013 is set forth below:

		Twelve months ended December 31,
		2014				2013
Balance, beginning		$	983,071				397,285
Proceeds from convertible notes			1,916,950				1,004,410
Proceeds from notes payable			—				223,488
Payable converted to notes			40,739				7,171
Repayments of notes payable			(61,537	)			(1,876	)
Conversion of convertible notes to equity			(1,630,302	)			(532,559	)
Debt discount on new convertible notes and shares issued with debt			(1,791,863	)			(626,904	)
Amortization of debt discount			1,855,290				512,056
Balance, end		$	1,312,348			$	983,071
Less:
Convertible notes payable			(1,042,904	)			(650,762	)
Current portion of notes payable – third parties			(261,267	)			(318,711	)
Non-current portion of notes payable – third parties		$	8,177			$	13,598

Odom Line of Credit

On June 7, 2013, the Company entered into a Revolving Line of Credit Agreement (the “Odom Agreement”) with Charles Odom, the lender, in the amount of $750,000. Pursuant to the Agreement, the lender shall make loans to the Company from time to time commencing on the date of the Agreement and shall continue for a period of twenty four (24) months thereafter ending June 7, 2015.

As of December 31, 2014, the Company has drawn $475,000 from the line leaving a current available balance of $275,000. As required by the Odom Agreement, the Company also issued 118,750 shares to the lender, proportionate to amounts drawn,

F-14

EFACTOR GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 5. Notes Payable and Line of Credit (cont.)

which was recognized as deferred financing fees of $475,000 and amortized over the term of the line of credit. For the twelve months ended December 31, 2014, $245,867 has been amortized into interest expense. All amounts drawn from the line of credit are subject to annual interest of 15% and will mature within a period of 12 months or within 14 days after the Company has a capital raise with proceeds of $10 million, whichever is earlier. The line of credit is secured by all of the assets of the Company. As of March 31, 2015, we had received advances under the line of credit totaling $475,000 and have completed a first repayment of $75,000. We have been advised by the lender that, due to extenuating circumstances, it is not currently able, nor is it likely to provide us with additional advances under the line of credit in the future.

Bank loans

Through the acquisition of the HT Skills entity on July 1, 2014 the Company also assumed three separate banking activities where the former principal owner of HT Skills has continued to guarantee the amount of the funds provided whether in an overdraft or outstanding balance position. As of December 31, 2014, HT Skills has an outstanding balance on their overdraft facility of $63,030 (GBP39,981) which is included in accounts payable in the consolidated balance sheets. As of December 31, 2014, HT Skills has outstanding balances for two term loans totaling to $148,006 (GBP86,500). These loans mature on May 31, 2015, are subject to annual interest at a rate of 8% over the prevailing Bank of England Base Rate (the Bank of England base rate is currently 0.5% a year, but may change from time to time) and are secured by the assets of HT Skills.

Note 6. Other Liabilities

Justice Obligation

As part of the acquisition of EQmentor, Inc., the Company entered into an employment agreement with the former majority shareholder of EQmentor, Inc. where the latter is entitled to receive a quarterly bonus in an amount equivalent to $103,333 (net of payment of all payroll taxes and other withholdings), in cash or common stock. The purpose of the obligation was to allow the former majority shareholder to repay certain debts that he had personally secured during the course of his ownership of EQmentor, Inc. As of December 31, 2014 and 2013, this obligation has an outstanding balance of $661,333 which is included in accrued liabilities and other current liabilities in the consolidated balance sheets. The obligation accrues interest of 3.5% per annum. The Company is anticipating payments to begin on a quarterly basis during the second quarter in 2015.

MCC Obligation

As a component of the MCC acquisition the Company acquired a long-term liability related to a previous recapitalization of MCC. Specifically, MCC entered into an arrangement with its creditors during 2010, in what is referred as a “Company Voluntary Arrangement” (“CVA”), in order to protect MCC from any unreceptive creditor action. In connection with the arrangement, the Company is required to make monthly fixed payments to a trustee of $2,275 (£1,500 GBP). These payments are scheduled to end in February 2019. This obligation is reported as other long-term obligations in the consolidated balance sheets.

Note 7. Derivative Instruments

Two notes issued during the twelve months ended December 31, 2014 included reset provisions on the conversion price if certain events occur. Specifically, the terms of the notes provided that the conversion price of $1.00 will reset to $0.50 if the Company’s securities offering falls below $1.00 per share or if the securities offering is not completed by February 28, 2014. This resulted in a derivative liability being recognized at the issuance date amounting to $525,632 with a corresponding charge to debt discount for the full amount of the notes amounting to $267,417 and the balance of $258,215 to derivative loss. On February 28, 2014, the reset provisions in these notes were triggered and the conversion price reset to $0.50 per share. Consequently, the derivative liability was marked to market on such date and an additional derivative loss of $301,677 was recognized. The fair value of the derivative liability at the re-measurement date amounting to $827,309 was credited to additional paid in capital.

Two notes issued during the twelve months ended December 31, 2014 included reset provisions on the conversion price if certain events occur. Specifically, the terms of the notes provided that the conversion price of $1.00 will reset to $0.50 if the

F-15

EFACTOR GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 7. Derivative Instruments (cont.)

Company’s securities offering falls below $1.00 per share or if the securities offering is not completed by May 31, 2014. This resulted in a derivative liability being recognized at the issuance date amounting to $6,808 with a corresponding charge to debt discount. On May 30, 2014, the reset provisions in these notes were triggered and the conversion price reset to $0.50 per share. Consequently, the derivative liability was marked to market and a derivative loss of $16,251 was recognized. The fair value of the derivative liability at the re-measurement date amounting to $23,059 was credited to additional paid-in capital.

A convertible note issued in October 2014 amounting to $63,102 contained a variable conversion rate which qualified for derivative accounting. This tainted other outstanding convertible notes which resulted to the conversion option on these notes to be bifurcated and accounted for as derivative liabilities. A derivative liability of $2,274,454 was recognized and debited to additional paid in capital. The convertible note with the variable conversion rate was converted in November 2014. Consequently, the derivative liability was marked to market as of the conversion date and a derivative gain of $1,764,184 was recognized. The fair value of the derivative liability at the re-measurement date amounting to $510,270 was credited to additional paid-in capital.

The derivative liabilities were valued using the Black-Scholes model using the following assumptions:

		At issuance date			At termination date
Market value of stock on measurement date		$0.08–2.25			$0.08–1.90
Risk-free interest rate		0.01%–0.04%			0.01–0.15%
Dividend yield		0%			0%
Volatility factor		146%–1,731%			171–319%
Term		0.07–1.01 years			0.09–0.25 years

Note 8. Related Parties and Related Party Transactions

Accounts Payable – Related Party

As of December 31, 2014, two of our executive officers, Adriaan Reinders and Marion Freijsen had unreimbursed expenses and unpaid management fees of $309,063 and $249,901, respectively. The remaining balance of $189,156 represents amounts due to our board of directors for board meeting fees, out of pocket expenses and consulting fees.

Notes Payable – Related Parties

A summary of activity for notes payable – related parties for the years months ended December 31, 2014 and 2013 are set forth below:

		Twelve months ended December 31,
		2014				2013
Balance, beginning		$	285,860			$	163,675
Related party notes assumed from the reverse merger			—				2,000
Related party payables converted to notes			—				21,513
Borrowings from related parties			10,000				42,110
Amortization of debt discount			4,703				64,001
Repayment of related party notes			(18,919	)			(837	)
Debt discount on shares issued with note			—				(6,602	)
Balance, end		$	281,644			$	285,860

The notes payable-related parties include a $200,000 short-term note obtained from Linge Beleggingen in 2012 including the issuance of 9,012 shares of the Company’s common stock. The discount on this note was fully amortized as of September 30, 2013. On July 9, 2013 the note agreement was amended modifying certain terms and conditions for which an additional 240,988 shares of common stock were agreed to be issued. The modification of the note was considered substantial under

F-16

EFACTOR GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 8. Related Parties and Related Party Transactions (cont.)

ASC 470-50 and the rules on debt extinguishment were applied. Consequently, a loss on extinguishment of debt was recorded for the twelve months ended December 31, 2013 amounting to $976,750 in connection with this amendment. As of December 31, 2014, the balance on this note was $181,081.

In 2014, the Company issued a $10,000 unsecured note to a director with annual interest of 12% and a maturity date of January 5, 2015.

During the twelve months ended December 31, 2013 the Company issued notes to two related parties totaling $42,110 which are subject to annual interest of 12% and have a term of 1 year. The Company issued 476 common shares in connection with these notes and the related fair value of the shares amounting to $6,602 was recorded as a debt discount and amortized over the term of the notes.

The remaining balance as of December 31, 2014 includes $42,490 of notes payable, $800 and $4,000 advance due to related parties associated with Marion Freijsen and Adriaan Reinders, respectively, plus an outstanding advance due to David Rector, the former chief executive officer and sole board member of Standard Drilling, Inc. of $1,162.

Note 9. Commitments and Contingencies

In the normal course of business, we may, from time to time, be subject to pending and threatened legal actions and proceedings. While the results of any litigation or other legal proceedings are uncertain, management does not believe the ultimate resolution of any pending legal matters is likely to have a material adverse effective on our financial position, results of operations or cash flows. We accrue for loss contingencies when it is both probable that we will incur the loss and when the amount of the loss can be reasonably estimated. As of December 31, 2014, there were no material pending or threatened legal actions or proceedings against us.

Note 10. Stockholders’ Equity

The Company’s Amended and Restated Articles of Incorporation were amended on September 20, 2013 to increase the authorized $0.001 par value common stock from 100,000,000 to 175,000,000 shares.

The Company also on September 20, 2013 amended its Articles of Incorporation to increase the authorized $0.001 par value Preferred Stock from 10,000,000 to 20,000,000 shares, there currently are 2,500,000 outstanding. The preferred stock has certain preferences over the common stock holders including the right to vote 25 votes per preferred share.

Common Stock

During the twelve months ended December 31, 2014:

•      the Company issued 1,478,509 shares of common stock for cash proceeds of $663,730.

•      the Company issued 9,018,948 shares of common stock to convert $2,303,082 of convertible debt and accrued interest.

•      the Company issued 767,630 shares of common stock as an enticement to enter into a transaction to lend money to the Company, resulting in a debt discount and interest of $620,246.

•      the Company issued 2,547,195 shares of common stock in connection with the extinguishment of debt totaling $472,028.

•      the Company issued 49,881,600 shares of common stock for related acquisitions.

•      The Company issued 10,573,118 shares of common stock for services with a fair value of $4,743,660.

•      The Company has outstanding subscription receivables of $168,000 resulting from the acquisition of ELEQT.

F-17

EFACTOR GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 10. Stockholders’ Equity (cont.)

During the twelve months ended December 31, 2013:

•      the Company issued 10,394 shares of common stock for cash proceeds of $167,002.

•      the Company issued 612,923 shares of common stock to convert 532,564 of convertible debt.

•      the Company issued 75,425 shares of common stock as an enticement to enter into a transaction to lend money to the Company, resulting in a debt discount of $1,050,453.

•      the Company issued 3,011 shares of common stock in connection with the loss on extinguishment of debt totaling $1,014,059.

•      the Company exchanged 53,446,081shares of common stock in the merger of Standard Drilling.

•      the Company issued 3,686,524 shares of common stock for the acquisition of MCC International.

•      The Company issued 665,060 shares of common stock for services with a fair value of $1,195,788.

Employee Stock Options

In September 2011, the Company adopted the 2010 Stock Option Plan pursuant to which stock options to acquire 10,228,844 shares of the Company’s common stock were available for issuance. The Company subsequently reduced the plan by 6,401,303 on November 12, 2012 to 3,827,541 of common stock available for issuance. Under the Plan, non-statutory stock options and stock purchase rights may be granted to employees and consultants. Incentive stock options may be granted only to employees.

The Company also issued 3,827,541 options to purchase common shares to employees. These options had terms of 4 to 5 years; exercise prices of $0.53-$0.59, and had vesting dates from immediately to October 1, 2011. The options were valued using the Black-Scholes pricing model. Significant assumptions used in the valuation include the following:

The grant date fair value of the options was determined to be $2,574,788. During the twelve months ended December 31, 2014 and 2013, stock option expense related to the options totaled $135,738 and $78,200, respectively.

		Options			Weighted Average Exercise Price			Weighted Average Remaining Life
Outstanding as of December 31, 2012		5,370,250			$	0.56		3.7
Granted		—				—		—
Exercised		—				—		—
Expired/Cancelled		(1,542,709	)			0.53		—
Outstanding as of December 31, 2013		3,827,541			$	0.57		2.7
Granted		—				—		—
Exercised		—				—		—
Expired/Cancelled		—				—		—
Outstanding as of December 31, 2014		3,827,541				0.57		1.7

F-18

EFACTOR GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 10. Stockholders’ Equity (cont.)

During the years ended December 31, 201 and 2013, the Company recognized a net benefit of $0 and $145,455, respectively due to the forfeiture of options of terminated employees and an expense of $135,738 and $41,165, respectively, for stock option expense related to options granted in prior periods.

Note 11. Income Taxes

The Company’s income tax expense for the periods presented in the statements of operations represents minimum California franchise taxes. The items accounting for the difference between income taxes computed at the federal statutory rate and the provision for income taxes were as follows:

		December 31, 2014			December 31, 2013
U.S. income taxes at statutory federal rate		35.0	%		34	%
State and local income taxes, net of federal tax benefit		6.0			6
Earnings of foreign subsidiaries		2.2			—
Goodwill impairment		(21.8	)		—
Non-deductible items		(1.0	)		(1	)
Valuation allowance		(20.4	)		(39	)
Effective income tax rate		0.0	%		0.0	%

The Company may not be able to utilize the net operating loss carry forwards for its U.S. income taxes in future periods should it experience a change in ownership as defined in Section 382 of the Internal Revenue Code (“IRC”). Under section 382, should the Company experience a more than 50% change in its ownership over a 3-year period, the Company would be limited based on a formula as defined in the IRC to the amount per year it could utilize in that year of the net operating loss carry forwards. Section 382 of the Internal Revenue Code (“IRC”) imposes limitations on the use of NOL’s and credits following changes in ownership as defined in the IRC. The limitation could reduce the amount of benefits that would be available to offset future taxable income each year, starting with the year of an ownership change. The Company has not completed the complex analysis required by the IRC to determine if an ownership change has occurred.

The tax effects of the temporary differences and carry forwards that give rise to deferred tax assets consist of the following:

		December 31, 2014				December 31, 2013
Deferred tax assets		$	5,994,532			$	4,186,483
Valuation allowance			(5,994,532	)			(4,186,483	)
Total deferred tax assets, net		$	—			$	—

At December 31, 2014 and 2013, the Company had net operating loss carry forwards available to offset future taxable income of approximately $17,130,000and and $12,390,000, respectively. These carry forwards will begin to expire in the year ending December 31, 2032. Utilization of the net operating loss carry forwards may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended and similar state provisions. The Company has not performed a change in ownership analysis since its inception in 2007 and, accordingly, some or all of its net operating loss carry forwards may not be available to offset future taxable income. Even if the loss carry forwards are available, they may be subject to substantial annual limitations resulting from past ownership changes, and ownership changes occurring after December 31, 2014, that could result in the expiration of the loss carry forwards before they are utilized.

The nature of the components of the deferred tax assets are attributable to the Net operating loss carry-forwards incurred by the Company and temporary differences that maybe used in future years to offset future tax liabilities. We believe that it is more likely than not that the benefit from these deferred tax assets will not be realized. In recognition of this risk, we have provided a valuation allowance of $5,994,532 on the deferred tax assets relating to these NOL carryforwards.

F-19

EFACTOR GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 11. Income Taxes (cont.)

The Company periodically evaluates the likelihood of the realization of deferred tax assets, and adjusts the carrying amount of the deferred tax assets by the valuation allowance to the extent the future realization of the deferred tax assets is not judged to be more likely than not. The Company considers many factors when assessing the likelihood of future realization of its deferred tax assets, including its recent cumulative earnings experience by taxing jurisdiction, expectations of future taxable income or loss, the carry-forward periods available to the Company for tax reporting purposes, and other relevant factors. At December 31, 2014 and 2013, deferred tax assets have been fully offset by a valuation allowance.

The Company files income tax returns in the U.S. federal jurisdiction, which encompasses the foreign owned entities filing requirements, along with the State of California. The Company is subject to U.S. federal and state income tax examinations by tax authorities for tax years 2007 through 2014 due to net operating losses that are being carried forward for tax purposes. The Company does not have any uncertain tax positions or unrecognized tax benefits at December 31, 2014 or 2013. The Company’s policy is to recognize interest and penalties related to income taxes as components of interest expense and other expense, respectively.

Note 12. Acquisitions

Acquisition of HT Skills Ltd

On July 1, 2014, the Company entered into an Exchange Agreement by and among the Company, HT Skills Ltd., an entity organized under the laws of England and Wales (“HT Skills”), and Five5Five PTE Ltd., the sole shareholder of HT Skills (“HT Seller”). On the same date, the parties consummated the transaction, pursuant to which the HT Seller sold, and the Company purchased, all of HT Skills’ outstanding capital stock, in exchange for 13,319,100 unregistered shares of the Company’s common stock.

The following table summarizes the preliminary allocation of the acquisition purchase price based on the estimated fair value of the acquired assets and assumed liabilities:

While the Company uses its best estimates and assumptions as part of the purchase price allocation process to value the assets acquired and liabilities assumed as of July 1, 2014, the purchase price allocation will be solidified for any change in existing, assets and liabilities during the measurement period.

F-20

EFACTOR GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 12. Acquisitions (cont.)

The following is the unaudited pro forma information for the years ended December 31, 2014 and 2013 assuming the acquisition of HT Skills occurred on January 1, 2013:

		2014				2013
Sales		$	2,050,906			$	2,116,637
Operating expenses			28,480,532				6,114,519
Operating loss			(26,429,626	)			(3,997,882	)
Non-operating expense			1,888,404				1,945,323
Net loss		$	(28,318,030	)		$	(5,943,205	)
Basic and diluted net income per common share		$	(0.34	)		$	(0.11	)

Acquisition of Member Digital

On July 1, 2014, the Company entered into an Exchange Agreement by and among the Company, Member Digital Ltd., an entity organized under the laws of England and Wales (“Member Digital”), and the shareholders of Member Digital (the “MD Sellers”). On the same date, the parties consummated the transaction, pursuant to which the MD Sellers sold, and the Company purchased, all of Member Digital’s outstanding capital stock, in exchange for 1,250,000 unregistered shares of the Company’s common stock.

The following table summarizes the preliminary allocation of the acquisition purchase price based on the estimated fair value of the acquired assets and assumed liabilities:

While the Company uses its best estimates and assumptions as part of the purchase price allocation process to value the assets acquired and liabilities assumed as of July 1, 2014, the purchase price allocation will be solidified for any change in existing, assets and liabilities during the measurement period.

The following is the unaudited pro forma information for the twelve months ended December 31, 2014 and 2013 assuming the acquisition of Member Digital occurred on January 1, 2013:

		2014				2013
Sales		$	1,747,738			$	903,459
Operating expenses			28,224,312				4,951,812
Operating loss			(26,476,574	)			(4,048,353	)
Non-operating expense			1,877,338				1,853,557
Net loss		$	(28,353,912	)		$	(5,901,910	)
Basic and diluted net income per common share		$	(0.34	)		$	(0.16	)

F-21

EFACTOR GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 12. Acquisitions (cont.)

Acquisition of GroupCard

On July 7, 2014, the Company entered into an Exchange Agreement by and among the Company, GroupCard BV, an entity organized under the laws of the Netherlands (“GroupCard”), and the shareholders of GroupCard (the “GC Sellers”). On the same date, the parties consummated the transaction, pursuant to which the GC Sellers sold, and the Company purchased, all of GroupCard’s outstanding capital stock, in exchange for 2,812,500 unregistered shares of the Company’s common stock. In addition, the Company agreed to pay the GC Sellers four semi-annual earn-out payments of shares of Common Stock (“Earn-Out Shares”), commencing on January 1, 2015.

In the event 20,000 or more members are added by GroupCard during a semi-annual period (each, an “Earn-Out Period”), the Company shall issue to the GC Sellers the number of Earn-Out Shares equal to (i) $25.00 per member added by GroupCard during such Earn-Out Period, divided by (ii) $0.80. In the event less than 20,000 members are added during an Earn-Out Period, the Company will not issue any Earn-Out Shares to the Sellers for such period; however, any members added during such Earn-Out Period will be counted towards the subsequent Earn-Out Period. The Company has evaluated the potential contingencies associated with this Exchange Agreement and determined that as of December 31, 2014 there was a liability for contingent consideration of approximately $875,000 which will be settled in common stock.

The following table summarizes the preliminary allocation of the acquisition purchase price based on the estimated fair value of the acquired assets and assumed liabilities:

While the Company uses its best estimates and assumptions as part of the purchase price allocation process to value the assets acquired and liabilities assumed as of July 7, 2014, the purchase price allocation will be solidified for any change in existing, assets and liabilities during the measurement period.

The following is the unaudited pro forma information for the years ended December 31, 2014 and 2013 assuming the acquisition of GroupCard occurred on January 1, 2013:

		2014				2013
Sales		$	1,905,715			$	834,287
Operating expenses			10,883,177				4,990,728
Operating loss			(8,977,462	)			(4,156,441	)
Non-operating expense			3,102,396				1,853,381
Net loss		$	(12,079,858	)		$	(6,009,822	)
Basic and diluted net income per common share		$	(0.15	)		$	(0.15	)

F-22

EFACTOR GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 12. Acquisitions (cont.)

Acquisition of ELEQT Ltd

On October 1, 2014, the Company entered into an Exchange Agreement by and among the Company, ELEQT Ltd., an entity organized under laws of the England and Wales (“ELEQT”), and the shareholders of ELEQT. On the same date, the parties consummated the transaction, pursuant to which the Sellers sold, and the Company purchased, all of ELEQT’s outstanding capital stock, in exchange for 31,000,000 unregistered shares of the Company’s common stock.

The Company also agreed to pay the Sellers an earn-out payment of shares of Common, commencing on October 1, 2015. The amount of shares to be distributed is based on ELEQT’s subsidiary achievement of various financial and operating metrics including revenue growth, gross profit margin improvement, membership growth amount and member spend growth. In the event ELEQT achieves all or a portion of these targets for the twelve months ended October 1, 2015, the Company will issue to the Sellers up to a maximum of 3,633,333 Earn-Out Shares. As of December 31, 2014, the Company has recognized a contingent consideration of approximately $380,000 related to the Earn-Out Shares.

The following table summarizes the preliminary allocation of the acquisition purchase price based on the estimated fair value of the acquired assets and assumed liabilities:

While the Company uses its best estimates and assumptions as part of the purchase price allocation process to value the assets acquired and liabilities assumed as of October 1, 2014, the purchase price allocation will be solidified for any change in existing, assets and liabilities during the measurement period.

The following is the unaudited pro forma information for the years ended December 31, 2014 and 2013 assuming the acquisition of ELEQT occurred on January 1, 2013:

		2014				2013
Sales		$	2,209,801			$	2,031,533
Operating expenses			28,920,179				6,473,865
Operating loss			(26,710,378	)			(4,442,332	)
Non-operating expense			1,877,338				1,855,906
Net loss		$	(28,587,716	)		$	(6,298,238	)
Basic and diluted net income per common share		$	(0.35	)		$	(0.09	)

F-23

EFACTOR GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 12. Acquisitions (cont.)

Acquisition of Robson Dowry

On November 15, 2014, the Company entered into an Exchange Agreement by and among the Company, Robson Dowry Associates Ltd., an entity organized under the laws of the England and Wales (“Robson Dowry”), and the shareholders of Robson Dowry Associates Ltd. On the same date, the parties consummated the transaction, pursuant to which the Sellers sold, and the Company purchased, all of Robson Dowry’s outstanding capital stock, in exchange for 1,500,000 unregistered shares of the Company’s common.

The following table summarizes the preliminary allocation of the acquisition purchase price based on the estimated fair value of the acquired assets and assumed liabilities:

While the Company uses its best estimates and assumptions as part of the purchase price allocation process to value the assets acquired and liabilities assumed as of November 15, 2014, the purchase price allocation will be solidified for any change in existing, assets and liabilities during the measurement period.

The following is the unaudited pro forma information for the years ended December 31, 2014 and 2013 assuming the acquisition of Robson Dowry occurred on January 1, 2013:

		2014				2013
Sales		$	2,209,371			$	1,641,655
Operating expenses			28,538,270				5,654,285
Operating loss			(26,328,899	)			(4,012,630	)
Non-operating expense			1,877,338				1,853,557
Net loss		$	(28,206,237	)		$	(5,866,187	)
Basic and diluted net income per common share		$	(0.34	)		$	(0.14	)

Note 13. Business Segment information

The Company’s reportable segments are defined by their service or revenue sources. The Company’s reportable segments are Social Networks, Education and Mentoring, and Business Services. EFactor, GroupCard, Member Digital, and ELEQT are included in the Social Networks segment. EQMentor and HT Skills are included in the Education and Mentoring segment. Robson Dowry and MCC are included in the Business Services segment.

F-24

EFACTOR GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 13. Business Segment information (cont.)

The Company measures the performance of its segments based on their operating income excluding administrative and general expenses. The accounting policies of the operating segments are the same as those described in Note 3 Summary of Significant Accounting Policies. Other income, interest expense, and income taxes are not allocated to individual operating segments, and assets not identifiable to an individual segment are included as corporate assets. Segment information is reported consistent with the Company’s management reporting structure.

Business segment information is as follows:

		For the years ended December 31,
		2014				2013
SOCIAL NETWORKS
Sales		$	744,245			$	68,994
Operating income			(17,933,074	)			(2,386,594	)
Assets			14,331,565				472,689
Capital expenditures			155,481				354,825
Depreciation and amortization			221,782				242,625
EDUCATION AND MENTORING
Sales		$	490,310			$	315,989
Operating income			(1,896,329	)			(194,464	)
Assets			10,853,975				2,189,592
Capital expenditures			—				—
Depreciation and amortization			34,939				525
BUSINESS SERVICES
Sales		$	400,047			$	356,802
Operating income			(31,689	)			20,952
Assets			1,974,518				1,614,306
Capital expenditures			—				—
Depreciation and amortization			563				3,453
REPORTABLE SEGMENTS TOTAL
Sales		$	1,634,602			$	741,785
Operating income			(19,861,092	)			(2,560,106	)
Assets			27,160,058				4,276,587
Capital expenditures			155,481				354,825
Depreciation and amortization			257,284				246,603
CORPORATE & OTHER
Operating (loss) from administrative expenses		$	(6,526,136	)		$	(1,533,416	)
Assets			262,522				306,996
Capital expenditures			—				—
Depreciation and amortization			—				—
TOTAL COMPANY
Sales		$	1,634,602			$	741,785
Operating income			(26,387,228	)			(4,093,522	)
Assets			27,422,580				4,583,583
Capital expenditures			155,481				354,825
Depreciation and amortization			257,284				246,603

F-25

EFACTOR GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 13. Business Segment information (cont.)

The table below sets forth the amount and geographic location of revenues we have recognized for the years ended December 31, 2014 and 2013:

		Twelve months ended December 31,
		2014			2013
United States		$	167,732		$	384,983
Europe			500,268			—
United Kingdom			966,602			356,802
		$	1,634,602		$	741,785

Revenues generated in the United States consist of EFactor and EQMentor, the Company’s European revenue consists of GroupCard and ELEQT, and the Company’s United Kingdom revenue consists of MCC, Member Digital, HT Skills, and Robson Dowry.

Note 14. Subsequent Events

On January 6th 2015, the Company issued 2,610,162 common shares to convert $417,736 of convertible debt and accrued interest.

In January 2015, the Company sold 50,000 common shares for cash for a total consideration of $7,500.

In January 2015, the outstanding 100,000 warrants were exercised for $15,000 and 100,000 common shares were issued to the holder.

In January 2015, the Company issued a convertible note amounting to $78,750. The note is subject to annual interest of 8%, has a term of one (1) year and is convertible to common stock at a price equal to 58% of the lowest closing bid prices for the last 15 trading days prior to conversion.

In January and February 2015, the Company convertible notes to an investor group up to an amount of $250,000. The proceeds from the notes will be advanced in three tranches, as follows: $125,000 by January 6, 2015, $75,000 by February 15, 2015 and $50,000 by April 15, 2015. The Company only received proceeds of $150,000 to date.

The notes have a maturity of one (1) year and interest rate of 10% per annum and are convertible at a price of 50% of the average closing bid prices on the primary trading market on which the Company’s Common Stock is then listed. In conjunction with the notes the Company may issue up to 3,000,000 warrants to the investors with a strike price of $0.10 per share. The warrants are cashless and exercisable for a period of five (5) years from closing. The Company also issued a banking advisory fee of 700,000 shares of common stock of the Company to the investors.

During February and March 2015, pursuant to a Securities Purchase Agreement (the “Securities Purchase Agreement”) between the Company and Magna Equities II, LLC (“Magna Equities II”), the Company issued to Magna Equities II a convertible promissory note (the “Magna Equities II Note”) in the aggregate principal amount of $175,000. $100,000 was funded on February 27, 2015 and $75,000 was funded on March 2, 2015. The principal due under the Magna Equities II Note accrues interest at a rate of 12% per annum. All principal and accrued interest under the Magna Equities II Note must be repaid one year from the funding set forth above. All principal and accrued interest under the Magna Equities II Note is convertible into shares of Common Stock at a conversion price equal to the lesser of (i) a 40% discount from the lowest daily trading price in the five (5) trading days prior to conversion, or (ii) a fixed price of $0.25.

On March 16, 2015 the Company issued a convertible promissory note (the “Magna Equities II Note”) in the aggregate principal amount of $44,500 under the same terms as the previous note.

F-26

EFACTOR GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 14. Subsequent Events (cont.)

On March 2, 2015 (the “Issue Date”), pursuant to a Securities Exchange Agreement (the “Securities Exchange Agreement”) between the Company and Magna Equities I, LLC (“Magna Equities I”), the Company issued to Magna Equities I a convertible promissory note (the “Magna Equities I Note”) in the aggregate principal amount of $200,000, in exchange for $200,000 of existing debt of the Company that Magna Equities I purchased from third parties. The Magna Equities I Note accrues interest at a rate of ten percent per annum. All principal and accrued interest under the Magna Equities I Note is due on March 2, 2016. All principal and accrued interest under the Magna Equities I Note is convertible into shares of common stock of the Company, par value $0.001 per share (the “Common Stock”), at a conversion price equal to a 40% discount from the lowest daily trading price in five (5) trading days prior to conversion. At any time during the period beginning on the Issue Date and ending on the date which is ninety (90) days thereafter, the Company may prepay any portion of the principal amount and accrued interest at 135% of such amount upon three (3) days’ written notice to Magna Equities I. In addition, beginning on the date which is thirty (30) calendar days after the Issue Date, Magna Equities I shall be obligated to purchase an additional $200,000 of Magna Equities I Notes every thirty (30) calendar days, up to a total of $1 million in additional purchases.

In April 2015, the Company sold to an accredited investor 800,000 common shares and 200,000 warrants for cash for a total consideration of $100,000. That warrants have a strike price of $0.25 per share and a cashless exercise provision for a period of three (3) years from closing. In the event Company shall reach a minimum total market capitalization of $100,000,000 on a major U.S. stock exchange, and maintain such minimum for five (5) consecutive trading days, then the investor shall also receive a grant of 100,000 additional common shares.

F-27

EFACTOR GROUP CORP. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)

		March 31, 2015				December 31, 2014
ASSETS
CURRENT ASSETS:
Cash		$	38,607			$	111,878
Accounts receivable, net of allowance for doubtful accounts of $64,812 $64,812 at March 31, 2015 and December 31, 2014, respectively			432,692				419,664
Unbilled revenue			552,023				329,315
Other current assets			181,454				59,215
Total current assets			1,204,776				920,072
Property, website and equipment, net of accumulated depreciation of $1,446,929 and $1,419,215 at March 31, 2015 and December 31, 2014, respectively			805,579				856,030
Goodwill			25,792,720				25,544,581
Deferred financing costs			43,670				101,897
TOTAL ASSETS		$	27,846,745			$	27,422,580
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable		$	2,098,318			$	2,229,944
Accounts payable – related party			932,381				748,120
Bank overdraft			42,697				—
Contingent consideration			943,746				943,746
Accrued expenses and other current liabilities			2,132,147				2,050,070
Operating line of credit			400,000				475,000
Bank loans			202,667				148,006
Deferred revenue			293,370				55,382
Deferred rent			360,119				368,509
Derivative liability			967,002				—
Current portion of note payable			7,443				261,267
Current portion of convertible note payable, net of discount			841,964				1,042,904
Current portion of note payable – related parties			230,398				281,644
Total current liabilities			9,452,252				8,604,592
Other long-term obligations			82,731				101,256
Contingent consideration			310,937				310,937
Non-current portion of note payable, net of discount			7,255				8,177
Total Non-Current Liabilities			400,923				420,370
TOTAL LIABILITIES			9,853,175				9,024,962
Commitments and contingencies			—				—
STOCKHOLDERS’ EQUITY
Preferred stock, $0.001 par value, 20,000,000 shares authorized, 2,500,000 issued and outstanding as of March 31, 2015 and December 31, 2014 respectively.			2,500				2,500
Common stock, $0.001 par value, 300,000,000 shares authorized, 145,658,700 and 133,840,174 issued and outstanding at March 31, 2015 and December 31, 2014 respectively.			145,658				133,840
Subscription receivable			(168,000	)			(168,000	)
Accumulated other comprehensive loss			(1,225,839	)			(1,441,630	)
Additional paid-in capital			67,442,739				65,819,434
Accumulated deficit			(48,203,488	)			(45,948,526	)
Total stockholders’ equity			17,993,570				18,397,618
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	27,846,745			$	27,422,580

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

F-28

EFACTOR GROUP CORP. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations and Other Comprehensive Loss

(Unaudited)

		Three Months Ended March 31,
		2015				2014
Net revenues		$	1,003,641			$	116,545
Operating expenses:
Cost of revenue			162,413				31,206
Sales and marketing			194,694				55,326
General and administrative			2,125,407				2,286,532
Depreciation and amortization			98,536				55,638
Total operating expenses			2,581,050				2,428,702
Loss from operations			(1,577,409	)			(2,312,157	)
Other income (expense):
Interest expense			(238,352	)			(987,935	)
Derivative loss			(119,578	)			(559,892	)
Loss on change in FV of derivative liability			(309,174	)			—
Amortization of warrants			(14,723	)			—
Other income (expense)			—				(49,926	)
Total other income (expense), net			(681,827	)			(1,597,753	)
Net loss		$	(2,259,236	)		$	(3,909,910	)
Other comprehensive gain (loss):
Foreign currency translation adjustment			215,791				(19,979	)
Comprehensive loss		$	(2,043,445	)		$	(3,929,889	)
Basic and diluted net loss per common share		$	(0.02	)		$	(0.06	)
Weighted average shares used in completing basic and diluted net loss per common share			141,591,611				62,326,733

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

F-29

EFACTOR GROUP CORP. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

		For the Three Months Ended March 31,
		2015				2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		$	(2,259,236	)		$	(3,909,910	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			98,536				55,638
Stock option expense			3,973				33,935
Amortization of debt discount and deferred finance cost			177,563				939,686
Stock compensation expense			848,199				1,355,598
Loss on change in fair value of derivative liability			309,174				559,892
Derivative related to interest expense			119,578				—
Loss on conversion of debt			—				49,926
Warrant expense			14,723				—
Changes in operating assets and liabilities:
Accounts receivable			(13,028	)			29,008
Unbilled revenue			(222,708	)			—
Other current assets			(122,239	)			(18,929	)
Accounts payable			(150,972	)			34,397
Accounts payable – related party			184,261				(64,531	)
Accrued expenses			110,508				154,973
Deferred revenue			237,988				—
Deferred rent			(8,390	)			(4,613	)
Net cash used in operating activities			(672,070	)			(784,930	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for acquisition of property, website and equipment			(48,085	)			(59,850	)
Net cash used in investing activities			(48,085	)			(59,850	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Bank overdraft			42,697				—
Proceeds from borrowings			448,250				885,282
Proceeds from issuance of shares			169,950				—
Proceeds from exercise of warrants			14,060				—
Net cash provided by financing activities			674,957				885,282
Effect of foreign currency exchange rate on cash			(28,073	)			(19,979	)
Net increase (decrease) in cash			(73,271	)			20,523
Cash at beginning of period			111,878				43,377
Cash at the end of the period		$	38,607			$	63,900
Supplemental Disclosure of Cash Flows Information:
Cash paid for interest		$	416			$	5,392
Cash paid for income taxes		$	—			$	—
Non-cash Investing and Financing Activities:
Debt discount due to beneficial conversion feature		$	538,250			$	389,674
Debt discount due to shares and warrants issued with debt		$	—			$	233,904
Debt discount credited to derivative liability			—				267,417
Shares issued for conversion of debt and accrued interest		$	584,218			$	677,735
Shares issued for settlement of accounts payable		$	—			$	20,000

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

F-30

EFACTOR GROUP CORP. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 1 — Organization and Basis of Presentation

The accompanying unaudited condensed consolidated interim financial statements of EFactor Group Corp. (the “Company,” “we” or “our”) have been prepared by the Company’s management in conformity with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited consolidated financial statements and notes thereto of the Company contained in this prospectus for the twelve months ended December 31, 2014 (“Form 10-K”), which was filed on April 14, 2015.The condensed consolidated financial statements are prepared in accordance with the requirements for unaudited interim periods, and consequently, do not include all disclosures required to be made in conformity with accounting principles generally accepted in the United States of America.

In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements that would substantially duplicate the disclosures contained in the audited financial statements for the twelve months ended December 31, 2014 as reported in the Form 10-K have been omitted.

Description of Business

The Company is the premier business network for entrepreneurs designed to provide a variety of tools and business services to help drive business success. Through its wholly owned business services subsidiaries, EFactor Group provides its growing entrepreneurial community of over 1.7 million members with social networking, education and mentoring, business services, and financing opportunities including crowd funding. The Company also employs a proprietary selection and matching algorithm to offer specific content and resources tailored to each entrepreneur’s unique business needs. With members in every country in the world (196 countries) across 240 industry groups, EFactor Group has built a comprehensive entrepreneurial community that serves as a source of inspiration and ideas while providing a one-stop-shop for essential services to foster business growth. EFactor Group’s operations are categorized by the following divisions:

Social Networks

•      EFactor.com provides a full-featured social network for entrepreneurs. EFactor.com provides a platform that enables access to a network of contacts, registration for live events in entrepreneurial education, pitch-it-in person events and other networking opportunities, advisory, consulting and various business tools along with a broad range of services and information.

•      Member Digital, Inc. (“Member Digital”) is a United Kingdom based company that offers entrepreneurial solutions that help entrepreneurs build their business through two distinct member-centric service offerings. These are SubHub – a solution for building and managing paid subscription and membership websites, and MemberCore – an easy-to-build database and CRM for organizations and associations to manage and record member data. A third service, Campaign Huddle, is a digital advocacy platform that enables charities, not-for-profits, businesses and organizations to build and manage digital advocacy campaigns in order to influence a political or social cause. Member Digital offers an advanced group functionality including e-commerce capability for EFactor.com members. Member Digital has a membership base of approximately 50,000 members.

•      GroupCard B.V. (“GroupCard”) is a European based marketing and communication firm founded in 2010 with the goal of helping local sporting clubs and associations create additional revenue streams. GroupCard encourages fan spending and loyalty of select and participating sponsors. GroupCard is activating these communities, which currently consists of a to approximately 90,000 members, via websites, e-mail marketing, apps, posters, flyers and in-store advertising and then compensating local clubs for the frequency of GroupCard use.

•      ELEQT is an exclusive social discovery network for trendsetters in style and business. ELEQT offers a trusted social network, via www.eleqt.com, where members can engage with fascinating people to meet, discover things to do, places to go and trends to follow. ELEQT also organizes hundreds of exclusive member-only events around the world.

F-31

EFACTOR GROUP CORP. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 1 — Organization and Basis of Presentation (cont.)

Business Services

•      MCC International (“MCC”), a public relations and communications agency, was founded in 1988. The agency is based in the United Kingdom and promotes through enhancement of company’s reputation utilizing print and social media news outlets, focusing on upper tier emerging technology and science companies, as well as professional service organizations, from entrepreneur start-ups and spin-offs to global consumer brands. MCC has launched a PR package aimed specifically at EFactor.com members.

•      On November 15, 2014, the Company acquired Robson Dowry, an independent branding and design group with a track record of over 30 years. Robson Dowry provides its clients with graphic design, marketing and corporate positioning to help improve their clients’ visual identity and packaging.

•      HT Skills, Ltd (“HT Skills”) is a United Kingdom based provider of high-quality apprenticeships and work-based vocational learning, and is also an experienced welfare-to-work job-broker. HT Skills is a fully-accredited and internationally-recognized by awarding bodies including City & Guilds, the Institute of Leadership and Management and others. HT Skills has delivered a number of government-funded contracts for the Skills Funding Agency, the Department of Work and Pensions and the European Social Fund.

•      EQmentor is an online professional development company organized in 2007 that provides working professionals 24/7 access to a custom-matched mentor, a global cross-industry peer community, and repositories of knowledge to empower high performance in the workplace. EQmentor delivers mentoring to corporate clients and the EFactor.com members.

Funding

•      With questions on funding being the one of the main categories for our members, education on funding and ideas about different types of financing have always been key to the Company. It is our intention to add services in this division that are purely related to this topic of interest to every entrepreneur.

The Company currently maintains its corporate office in New York, New York.

Principles of consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries as of March 31, 2015. Significant intercompany balances and transactions have been eliminated.

Note 2 — Going Concern

The Company’s financial statements are prepared using generally accepted accounting principles in the United States, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. Because the Company is new, has limited history and relatively few sales, no certainty of continuation can be stated. The accompanying condensed consolidated financial statements for the three month period ended March 31, 2015 and 2014 have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

The Company has suffered losses from operations and has a working capital deficit, which raises substantial doubt about its ability to continue as a going concern. Management is taking steps to raise additional funds to address its operating and financial cash requirements to continue operations. The Company’s ability to continue as a going concern is dependent upon raising additional funds through debt and equity financing and generating revenue. There are no assurances the Company will receive the necessary funding or generate revenue necessary to fund operations. The financial statements contain no adjustments for the outcome of this uncertainty.

F-32

EFACTOR GROUP CORP. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 3 — Summary of Significant Accounting Policies

Principles of consolidation — The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries as of September 30, 2014. Significant intercompany balances and transactions have been eliminated.

Stock-Based Compensation — The Company accounts for share-based awards issued to employees in accordance with FASB ASC 718. Accordingly, employee share-based payment compensation is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period. Additionally, share-based awards to non-employees are expensed over the period in which the related services are rendered at their fair value. The Company applies ASC 505-50, “Equity Based Payments to Non-Employees”, with respect to options and warrants issued to non-employees.

Fair Value of Financial Instruments — The carrying amounts reported in the consolidated balance sheets for the accounts receivable accounts payable and short-term notes are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and, if applicable, the stated rate of interest is equivalent to rates currently available.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, Financial Accounting Standards Board (“FASB”) ASC Topic 820-10-35 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques 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 measurements).

Level 1—Valuations based on quoted prices for identical assets and liabilities in active markets.

Level 2—Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3—Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

Cash and Cash Equivalents — For purposes of financial statement presentation, the Company considers all highly liquid investments with a maturity of three months or less, from the date of purchase, to be cash equivalents. The Company had no cash equivalents at March 31, 2015 or December 31, 2014.

Concentration of Credit Risk — Financial instruments, which potentially subject us to concentrations of credit risk, consist principally of cash and trade receivables. Concentrations of credit risk with respect to trade receivables are limited due to the clients that comprise our customer base and their dispersion across different business and geographic areas. We estimate and maintain an allowance for potentially uncollectible accounts and such estimates have historically been within management’s expectations.

Our cash balances are maintained in accounts held by major banks and financial institutions located in the United States. The Company occasionally maintains amounts on deposit with a financial institution that are in excess of the federally insured limit of $250,000. The risk is managed by maintaining all deposits in high quality financial institutions. The Company had no deposits in excess of federally insured limits at March 31, 2015 and December 31, 2014.

Accounts Receivable — The Company’s accounts receivable arise primarily from the sale of advertising, public relations services and promotional placements on its website and from advisory services. For the three months ended March 31, 2015 and 2014, we had six and five major customers respectively making up the full receivable balance. On a periodic basis, the Company evaluates each customer account and based on the days outstanding of the receivable, history of past write-offs, collections, and current credit conditions, writes off accounts it considers uncollectible. Invoices are typically due in 30 days. The Company does not accrue interest on past due accounts and the Company does not require collateral. Accounts become past due on an account-by-account basis. Determination that an account is uncollectible is made after all reasonable collection efforts have been exhausted.

F-33

EFACTOR GROUP CORP. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 3 — Summary of Significant Accounting Policies (cont.)

Property and Equipment — Property and equipment are stated at cost less accumulated depreciation and amortization. Expenditures for maintenance and repairs are charged to expense as incurred. Additions, improvements and major replacements that extend the life of the asset are capitalized.

Depreciation and amortization is recorded using the straight-line method over the estimated useful lives of depreciable assets, which ae generally three to five years.

Website and Software Development Costs — Internal use software development costs are accounted for in accordance with ASC Topic No. 350 which requires the capitalization of certain external and internal computer software costs incurred during the application development stage. The application development stage is characterized by software design and configuration activities, coding, testing and installation. Training costs and maintenance are expensed as incurred, while upgrades and enhancements are capitalized if it is probable that such expenditures will result in additional functionality. Such costs are amortized on a straight-line basis over the estimated useful life of the related asset of three years.

The Company capitalized website and internal-use software costs of $482,802 and $383,670 for the three months ended March 31, 2015 and 2014 respectively. The Company’s capitalized website and internal-use software amortization is included in depreciation and amortization in the Company’s statements of operations, and totaled $50,249 and $52,203 for the three months ended March 31, 2015 and 2014, respectively.

Goodwill — In financial reporting goodwill is not amortized, but is tested for impairment annually in the fourth quarter of the fiscal year or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Events that result in an impairment review include significant changes in the business climate, declines in our operating results, or an expectation that the carrying amount may not be recoverable. We assess potential impairment by considering present economic conditions as well as future expectations.

We review goodwill for impairment by performing a two-step goodwill impairment test. The first step of the two-step goodwill impairment test is to compare the fair value of the reporting unit to its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its fair value, the second step of the two-step goodwill impairment test is required to measure the goodwill impairment loss.

The second step includes valuing all the tangible and intangible assets of the reporting unit as if the reporting unit had been acquired in a business combination. Then, the implied fair value of the reporting unit’s goodwill is compared to the carrying amount of that goodwill. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of the goodwill, we recognize an impairment loss in an amount equal to the excess, not to exceed the carrying amount.

Calculating the fair value of a reporting unit and the implied fair value of reporting unit goodwill requires significant judgment. The use of different assumptions, estimates or judgments in either step of the goodwill impairment testing process, such as the estimated future cash flows of reporting units, the discount rate used to discount such cash flows, or the estimated fair value of the reporting units’ tangible and intangible assets and liabilities, could significantly increase or decrease the estimated fair value of a reporting unit or its net assets.

Derivatives — All derivatives held by us are recognized in the consolidated balance sheets at fair value with changes in fair value reflected in other income (expense) in the consolidated statements of operations and comprehensive loss. We issued warrants on our own common stock in conjunction with the term loan discussed in Note 3 of our consolidated financial statements. These warrants meet the definition of a derivative and are reflected as a warrant liability at fair value in the consolidated balance sheets. Likewise, embedded conversion options in our convertible notes which qualify for derivative accounting are bifurcated and their corresponding fair values are recorded as derivative liabilities.

Embedded Conversion Features — The Company evaluates embedded conversion features within convertible debt under ASC 815 “Derivatives and Hedging” to determine whether the embedded conversion feature(s) should be bifurcated from

F-34

EFACTOR GROUP CORP. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 3 — Summary of Significant Accounting Policies (cont.)

the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 “Debt with Conversion and Other Options” for consideration of any beneficial conversion features.

Foreign currency and foreign currency transactions — The functional currency of MCC International, HT Skills, Member Digital, and Robson Dowry is the pound sterling (GBP) while the functional currency of GroupCard BV is the Euro. Balance sheet accounts of these entities are translated from their functional currencies into U.S. dollars at period-end exchange rates, and income and expense accounts are translated at average exchange rates during the period. Translation gains or losses related to net assets are recorded as unrealized foreign currency translation adjustments within accumulated other comprehensive income (loss) in stockholders’ equity. Gains and losses resulting from foreign currency transactions (transactions denominated in a currency other than the entity’s functional currency) are included in other income and expense in the consolidated statements of operations and other comprehensive loss.

Revenue Recognition — Revenues are presented net of discounts. In general, the Company recognizes revenue when (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered to the customer, (iii) the fee is fixed or determinable, and (iv) collectability is reasonably assured. Where arrangements have multiple elements, revenue is allocated to the elements based on the relative selling price method and revenue is recognized based on the Company’s policy for each respective element.

The Company applies judgment with respect to whether it can establish a selling price based on third party evidence. The Company does not have any product offerings that would be considered multiple deliverables; therefore the pricing model is determined based on competitor prices for similar product offerings. When it is unable to establish selling price using this method, the Company determines its best estimate for deliverables by considering multiple factors including, but not limited to, its pricing practices, profit margin, prices it charges for similar offerings, sales volume, geographies, market conditions, and the competitive landscape.

The Company generates revenue primarily from sales of the following services:

•      Member Fees — We have a VIP package which offers members access to premium services such as all our events, airport lounges, VIP lounges and VIP content on the site. We also hold a variety of networking and informational events for our members to which members can gain a subscription and provide varying other membership packages to our members that allow them access to premium services via our website. Revenue from member services is recognized ratably over the contractual period, generally from one to 12 months.

•      Sponsorships — The Company generates revenues from Sponsors in a variety of ways. Sponsors can gain exposure to the Company’s members, either through placement or short write-ups in newsletters, on event invitations or by participating as a sponsor at one of the Company’s Events where a Sponsor may provide access to its products or service (booth/stall) or by being a speaker or panelist at an event that fits in their industry. This revenue is recognized over the specific event timeline, which varies from a single day event or a longer-term promotional event over a series of weeks.

•      Public Relations — We provide market and brand awareness consulting services, targeting high and emerging technology and science companies, as well as professional service organizations that help get recognition within the practiced community and provide an explicit company identity. This revenue is recognized when the services are complete.

•      Advertising — Visitor demographics and time spent on a website are the primary drivers behind advertising-based revenue models for internet properties. When a user clicks an advertisement (CPC basis), views an advertisement impression (CPM basis), registers for an external website via an advertisement clicked on through the Company’s application (CPA basis). Proceeds from such contracts are recognized over the period in which the advertisements are displayed on the websites.

F-35

EFACTOR GROUP CORP. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 3 — Summary of Significant Accounting Policies (cont.)

•      Advisory Services — The Company promotes and makes available advisory and consulting services to members for the purpose of support, introduction guidance and general mentoring of members in their pursuit of their entrepreneurial objectives, for which fees are charged. These revenues are recorded when services for the transactions are determined to be concluded, generally as set forth under the terms of the engagement or when the sundry milestones have been completed after the defined services are performed. Transaction-related expenses, primarily consisting of costs directly associated with the transaction, are deferred and recognized in the same period as the transaction revenue.

Amounts billed or collected in excess of revenue recognized are recorded as deferred revenue.

Unbilled revenue represents revenues recognized in excess of the amounts billed for completed services.

Impairment of Long-lived Assets — The Company accounts for long-lived assets in accordance with the provisions of FASB Topic 360, “Accounting for the Impairment of Long-Lived Assets”. This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when the estimated future cash flows from the use of the asset are less than the carrying amount of that asset. During the three months ended 2015 and 2014, there have been no impairment losses.

Comprehensive Loss — There are components of comprehensive loss other than net loss that the Company has incurred as it relates to foreign currency, and accordingly the Company now presents a comprehensive income and loss for the periods presented.

Net Loss per Common Share — Basic net loss per share of common stock excludes dilution and is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding for the period. Diluted net loss per share of common stock reflects the potential dilution that could occur if securities or other contracts to issue shares of common stock were exercised or converted into shares of common stock. For all periods presented, potentially dilutive securities are excluded because their effect is anti-dilutive.

Nonmonetary transactions — Based on guidance provided in accordance with ASC No. 845 Nonmonetary Transactions (“ASC 845”), barter transactions with commercial substance are recorded at the estimated fair value of the products exchanged, unless the products received have a more readily determinable estimated fair value. The fair value of the product and services received during the three months ended March 31, 2015 was $31,750.

Reclassifications — Certain comparative amounts from prior periods have been reclassified to conform to the current year’s presentation. These changes did not affect previously reported net loss.

Use of Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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.

Income Taxes — The Company accounts for income taxes under the provisions issued by the FASB which requires recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

The Company computes tax asset benefits for net operating losses carried forward. The potential benefit of net operating losses has not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.

F-36

EFACTOR GROUP CORP. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 3 — Summary of Significant Accounting Policies (cont.)

Recent Accounting Pronouncements — The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new pronouncements that have been issued that might have a material impact on its financial position or results of operations.

Note 4 — Notes Payable and Line of Credit

Notes payable

During February and March 2015, pursuant to a Securities Purchase Agreement between the Company and Magna Equities II, LLC (“Magna Equities II”), the Company issued to Magna Equities II a convertible promissory note (the “Magna Equities II Note”) in the aggregate principal amount of $175,000. $100,000 was funded on February 27, 2015 and $75,000 was funded on March 2, 2015. The principal due under the Magna Equities II Note accrues interest at a rate of 12% per annum. All principal and accrued interest under the Magna Equities II Note must be repaid one year from the funding set forth above. All principal and accrued interest under the Magna Equities II Note is convertible into shares of Common Stock at a conversion price equal to the lesser of (i) a 40% discount from the lowest daily trading price in the five (5) trading days prior to conversion, or (ii) a fixed price of $0.25.

On March 15th and on March 27th, 2015 the Company issued a convertible promissory note (the “Magna Equities II Note”) in the aggregate principal amount of $15,000 and $29,500 respectively under the same terms as the previous note issue initially.

On March 2, 2015, pursuant to a Securities Exchange Agreement between the Company and Magna Equities I, LLC (“Magna Equities I”), the Company issued to Magna Equities I a convertible promissory note (the “Magna Equities I Note”) in the aggregate principal amount of $200,000, in exchange for $200,000 of existing debt of the Company that Magna Equities I purchased from third parties. The Magna Equities I Note accrues interest at a rate of ten percent per annum. All principal and accrued interest under the Magna Equities I Note is due on March 2, 2016. All principal and accrued interest under the Magna Equities I Note is convertible into shares of common stock of the Company, par value $0.001 per share, at a conversion price equal to a 40% discount from the lowest daily trading price in five (5) trading days prior to conversion. At any time during the period beginning on the Issue Date and ending on the date which is ninety (90) days thereafter, the Company may prepay any portion of the principal amount and accrued interest at 135% of such amount upon three (3) days’ written notice to Magna Equities I. In addition, beginning on the date which is thirty (30) calendar days after the Issue Date, Magna Equities I shall be obligated to purchase an additional $200,000 of Magna Equities I Notes every thirty (30) calendar days, up to a total of $1 million in additional purchases.

On January 9, 2015 the Company issued $125,000 in convertible notes to an investor group and an additional $25,000 in February 2015. The notes have a maturity of one (1) year and interest rate of 10% per annum and are convertible at a price of 50% of the average closing bid prices on the primary trading market on which the Company’s Common Stock is then listed for the five (5) trading days immediately prior to conversion. In conjunction with the notes the Company issued 2,000,000 Warrants to the Investors with a strike price of $0.10 per share. The warrants are cashless and exercisable for a period of five (5) years from closing. The Company also issued a banking advisory fee of 700,000 shares of common stock of the Company to the investors valued at $50,090.

On January 26, 2015, the Company issued a convertible note amounting to $78,750. The note is subject to annual interest of 8%, has a term of one (1) year and is convertible to common stock at a price equal to 58% of the lowest closing bid prices for the last 15 trading days prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. Also on January 26, 2015, the Company issued a second convertible note amounting to $78,750 referenced as a backend note in which the proceeds are only available at the option of the Company and then only if the initial note for $78,750 has been satisfied. This note is subject to annual interest of 8%, has a term of one (1) year and is convertible to common stock at a price equal to 58% of the lowest closing bid prices for the last 15 trading days prior to conversion.

F-37

EFACTOR GROUP CORP. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 4 — Notes Payable and Line of Credit (cont.)

The fair value of the derivative liability at the re-measurement date amounting to $967,002 was credited to additional paid in capital. The derivative liability was valued using the Black-Scholes model using the following assumptions:

		At issuance date		At termination date
Market value of stock on measurement date		$0.08–2.25		$0.08–1.90
Risk-free interest rate		0.01%–0.04%		0.05%
Dividend yield		0%		0%
Volatility factor		269%–655%		319%
Term		0.07–0.16 years		0.25 years

During the three months ended March 31, 2015, the Company issued 4,376,498 shares to convert $584,218 of convertible debt which includes accrued interest of $24,186. A loss on conversion of debt amounting to $0 was recognized for the three months ended March 31, 2015.

During the three months ended March 31, 2015 the Company recognized $119,336 of related to the amortization of debt discounts on all convertible and unsecured short term notes.

A summary of activity for notes payable during the three months ended March 31, 2015 is set forth below:

Balance at December 31, 2014		$	1,312,348
Proceeds from convertible notes			448,250
Assignment of debt from line of credit			75,000
Conversion of convertible notes to equity – principal			(560,032	)
Debt discount on new convertible notes and shares issued with debt			(538,250	)
Amortization of debt discount			119,336
Balance at March 31, 2015			856,652
Less:
Current notes payable/capital lease			(7,443	)
Current portion of notes payable – third parties			(841,964	)
Non-current portion of capital lease – third parties		$	7,255

Odom – Line of Credit

On June 7, 2013, the Company entered into a Revolving Line of Credit Agreement (the “Odom Agreement”) with Charles Odom, the lender, in the amount of $750,000. Pursuant to the Agreement, the lender agreed to make loans to the Company from time to time commencing on the date of the Agreement for a period of twenty four (24) months thereafter ending June 7, 2015.

As of March 31, 2015, the Company has drawn $475,000 from the line $75,000 was assigned during March of 2015 leaving a current outstanding balance of $400,000 as of March 31, 2015. As required by the Agreement in 2013, the Company also issued 118,750 shares to the lender, proportionate to amounts that had been drawn, which was recognized as deferred financing fees of $475,000 and amortized over the term of the line of credit. For the three months ended March 31, 2015, $58,227 has been amortized into interest expense and the remaining balance amounts to $43,670. All amounts drawn from the line of credit are subject to annual interest of 15% and will mature within a period of 12 months or within 14 days after the Company has a capital raise with proceeds of $10 million, whichever is earlier. The line of credit is secured by all of the assets of the Company.

Bank loans

Through the acquisition of the HT Skills entity on July 1, 2014 the Company also assumed three separate banking activities where the former principal owner of HT Skills has continued to guarantee the amount of the funds provided whether in an

F-38

EFACTOR GROUP CORP. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 4 — Notes Payable and Line of Credit (cont.)

overdraft or outstanding balance position. As of March 31, 2015, HT Skills has an outstanding balance on their overdraft facility of $60,908 (£40,331) which is included in accounts payable in the consolidated balance sheets. As of March 31, 2015, HT Skills has outstanding balances for two term loans totaling to $141,759 (£93,833). These loans mature on May 31, 2015, are subject to annual interest at a rate of 8% over the prevailing Bank of England Base Rate (the Bank of England base rate is currently 0.5% a year, but may change from time to time) and are secured by the assets of HT Skills. These Bank Loans per the Company’s Purchase Agreement with the Shareholders of HTSkills, are the obligation of the former owner of HT Skills and will be reimbursed to the Company.

Note 5 — Other Liabilities

Justice Obligation

As part of the acquisition of EQmentor, Inc., the Company entered into an employment agreement with the former majority shareholder of EQmentor, Inc. where the latter is entitled to receive a quarterly bonus in an amount equivalent to $103,333 (net of payment of all payroll taxes and other withholdings), in cash or common stock. The purpose of the obligation was to allow the former majority shareholder to repay certain debts that he had personally secured during the course of his ownership of EQmentor, Inc. As of March 31, 2015, this obligation has an outstanding balance of $664,710 which is included in accrued liabilities and other current liabilities in the consolidated balance sheets. The obligation accrues interest of 3.5% per annum. The Company is anticipating payments to begin on a quarterly basis during the third quarter in 2015.

MCC Obligation

As a component of the MCC acquisition the Company acquired a long-term liability related to a previous recapitalization of MCC. Specifically, MCC entered into an arrangement with its creditors during 2010, in what is referred as a “Company Voluntary Arrangement” (“CVA”), in order to protect MCC from any unreceptive creditor action. In connection with the arrangement, the Company is required to make monthly fixed payments to a trustee of $2,265 (£1,500 GBP). These payments are scheduled to end in February 2019. This obligation is reported as other long-term obligations in the consolidated balance sheets.

Note 6 — Derivative Instruments

During the three months ended March 31, 2015, the Company recognized a derivative liability associated with the convertible notes discussed in Note 3. The resulting derivative liability being recognized at the issuance date amounting to $657,828 with a corresponding charge to debt discount for the full amount of the notes amounting of $538,250 and the balance of $119,578 to derivative expense.

On March 31, 2015, the derivative instruments were revalued to $967,002 resulting in a loss on the change in value of $309,174 and a corresponding increase in derivative liability. Also on March 31, 2015, the Company amortized $66,089 in debt discount resulting in a net discount balance of $472,160 for these derivative instruments.

The derivative liabilities were valued using the Black-Scholes model using the following assumptions:

		At issuance date		At termination date
Market value of stock on measurement date		$0.08–2.25		$0.08–1.90
Risk-free interest rate		0.01%–0.04%		0.01–0.15%
Dividend yield		0%		0%
Volatility factor		146%–1,731%		171–319%
Term		0.07–1.01 years		0.09–0.25 years

F-39

EFACTOR GROUP CORP. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 7 — Acquisitions

Description of the Transactions

HT Skills Ltd.

On July 1, 2014, the Company entered into an Exchange Agreement by and among the Company, HT Skills Ltd., an entity organized under the laws of England and Wales (“HT Skills”), and Five5Five PTE Ltd., the sole shareholder of HT Skills (“HT Seller”). On the same date, the parties consummated the transaction, pursuant to which the HT Seller sold, and the Company purchased, all of HT Skills’ outstanding capital stock, in exchange for 13,319,100 unregistered shares of the Company’s common stock.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition:

Member Digital Ltd.

On July 1, 2014, the Company entered into an Exchange Agreement by and among the Company, Member Digital Ltd., an entity organized under the laws of England and Wales (“Member Digital”), and the shareholders of Member Digital (the “MDSellers”). On the same date, the parties consummated the transaction, pursuant to which the MD Sellers sold, and the Company purchased, all of Member Digital’s outstanding capital stock, in exchange for 1,250,000 unregistered shares of the Company’s common stock.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition:

F-40

EFACTOR GROUP CORP. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 7 — Acquisitions (cont.)

GroupCard BV

On July 7, 2014, the Company entered into an Exchange Agreement by and among the Company, GroupCard BV, an entity organized under the laws of the Netherlands (“GroupCard”), and the shareholders of GroupCard (the “GC Sellers”). On the same date, the parties consummated the transaction, pursuant to which the GC Sellers sold, and the Company purchased, all of GroupCard’s outstanding capital stock, in exchange for 2,812,500 unregistered shares of the Company’s common stock. In connection with the transaction, the Company agreed to loan GroupCard, within 120 days of the closing of the transaction, $400,000 at six percent interest per annum for working capital purposes. In addition, the Company agreed to pay the GC Sellers four semi-annual earn-out payments of shares of Common Stock (“Earn-Out Shares”), commencing on January 1, 2015. In the event 20,000 or more members are added by GroupCard during a semi-annual period (each, an “Earn-Out Period”), the Company shall issue to the GC Sellers the number of Earn-Out Shares equal to (i) $25.00 per member added by GroupCard during such Earn-Out Period, divided by (ii) $0.80. In the event less than 20,000 members are added during an Earn-Out Period, the Company will not issue any Earn-Out Shares to the Sellers for such period; however, any members added during such Earn-Out Period will be counted towards the subsequent Earn-Out Period. The Company has evaluated the potential contingencies associated with this Exchange Agreement and determined that there is no additional contingent liability required as of March 31, 2015.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition:

ELEQT Ltd.

On October 1, 2014, the Company entered into an Exchange Agreement by and among the Company, ELEQT Ltd., an entity organized under laws of the England and Wales (“ELEQT”), and the shareholders of ELEQT (the “ELEQT Sellers”). On the same date, the parties consummated the transaction, pursuant to which the ELEQT Sellers sold, and the Company purchased, all of ELEQT’s outstanding capital stock, in exchange for 31,000,000 unregistered shares of the Company’s common stock.

F-41

EFACTOR GROUP CORP. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 7 — Acquisitions (cont.)

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition:

Robson Dowry Ltd.

On November 15, 2014, the Company entered into an Exchange Agreement by and among the Company, Robson Dowry Associates Ltd., an entity organized under the laws of the England and Wales (“Robson Dowry”), and the shareholders of Robson Dowry Associates Ltd. (the “Robson Dowry Sellers”). On the same date, the parties consummated the transaction, pursuant to which the Sellers sold, and the Company purchased, all of Robson Dowry’s outstanding capital stock, in exchange for 1,500,000 unregistered shares of the Company’s common stock.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition:

F-42

EFACTOR GROUP CORP. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 7 — Acquisitions (cont.)

Basis of Presentation

These acquisitions have been accounted for using the purchase method of accounting. Under the purchase method of accounting, the total purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, including identifiable intangible assets which either arise from a contractual or legal right or are separable from goodwill. The excess of purchase price over the estimated fair value assigned to the net tangible and identifiable intangible assets acquired and liabilities assumed is considered goodwill. The Company’s results of operations included the activities of Member Digital, HT Skills, GroupCard, ELEQT, and Robson Dowry from the date of the acquisition.

Purchase Price Allocation

In accordance with ASC 805, Business Combinations, the Company recorded the assets acquired and liabilities assumed at their respective estimated fair values as of their respective acquisition dates. The total estimated purchase prices were allocated to the assets acquired and liabilities assumed based on their estimated fair values. The fair value allocation is preliminary and is subject to change based on evaluations of the assets currently being performed by the Company.

Note 8 — Business Division Information and Geographical Segments

The Company’s reportable segments are defined by their service or revenue sources. The Company’s reportable divisions are Social Networks, Business Services, including Education and Mentoring, and Funding. Social Networks comprises EFactor, GroupCard, Member Digital, and ELEQT. The Business Services division is made up of EQMentor, HT Skills, Robson Dowry, and MCC. The Funding division is specific to the Company’s recent acquisition of RocketHub.

The Company measures the performance of its divisions based on their operating income excluding administrative and general expenses. The accounting policies of the operating segments are the same as those described in Note 3 Summary of Significant Accounting Policies. Other income, interest expense, and income taxes are not allocated to individual operating segments, and assets not identifiable to an individual segment are included as corporate assets. Segment information is reported consistent with the Company’s management reporting structure.

The table below sets forth our revenue based on our business segments for the three months ended March 31, 2015 and 2014:

		Three Months Ended March 31,
		2015			2014
		(Unaudited)			(Unaudited)
Social Networks		$	485,157		$	23,009
Business Services			518,484			93,536
		$	1,003,641		$	116,545

For the three months ended March 31, 2015 and 2014, the Company generated revenues in the U.S., Europe and the U.K. as follows:

		Three Months Ended March 31,
		2015			2014
		(Unaudited)			(Unaudited)
United States		$	11,490		$	24,446
Europe			426,618			—
United Kingdom			565,533			92,099
		$	1,003,641		$	116,545

F-43

EFACTOR GROUP CORP. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 8 — Business Division Information and Geographical Segments (cont.)

As of March 31, 2015 and December 31, 2014, the Company has assets in the U.S., Europe and the U.K.:

		March 31, 2015			December 31, 2014
		(Unaudited)
Total assets in the U.S.		$	1,950,367		$	2,129,289
Total assets in Europe			13,271,177			13,033,559
Total assets in the U.K.			12,625,201			12,259,732
Total assets		$	27,846,745		$	27,422,580

As of March 31, 2015 and December 31, 2014, the Company has liabilities in the U.S., Europe and the U.K.:

		March 31, 2015			December 31, 2014
		(Unaudited)
Total liabilities in the U.S.		$	6,247,653		$	5,764,898
Total liabilities in Europe			2,449,276			2,204,411
Total liabilities in the U.K.			1,156,246			1,055,653
Total liabilities		$	9,853,175		$	9,024,962

The following unaudited pro forma consolidated results of operations have been prepared as if the acquisition of HT Skills Ltd, Member Digital Ltd., GroupCard BV, ELEQT Ltd and Robson Dowry Ltd occurred on January 2014:

		For the three months ended March 31, 2014
Net Revenues		$	677,882
Net (loss) income from continuing operations			(4,036,059	)
Net (loss) income per share from continuing operations			(0.06	)
Weighted average number of shares – Basic and diluted			62,326,733

Note 9 — Related Parties and Related Party Transactions

Accounts Payable – Related Party

As of March 31, 2015, two of our executive officers, Adriaan Reinders, and Marion Freijsen had unreimbursed expenses, unpaid management fees and salaries of $354,790 and $300,399, respectively. The remaining balance of the Accounts Payable Related Party of $369,881 represents amounts primarily due to our board of directors for board meeting fees, out of pocket expenses and consulting fees.

Notes Payable – Related Parties

A summary of activity for notes payable – related parties for the three months ended March 31, 2015 are set forth below:

Balance at December 31, 2014		$	281,644
Amortization of debt discount			4,251
Repayment of notes payable			(55,497	)
Balance at March 31, 2015		$	230,398

F-44

EFACTOR GROUP CORP. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 10 — Stockholders’ Equity

Common Stock

During the three months ended March 31, 2015:

•      the Company issued 1,258,098 shares of common stock for cash proceeds of $169,950.

•      the Company issued 4,376,498 shares of common stock to convert $584,218 of convertible debt.

•      the Company issued 100,000 shares of common stock for cash proceeds of $14,060 from the exercise of warrants.

•      the Company issued 6,083,930 shares of common stock for services with a fair value of $848,199.

Stock Options

During the three months ended March 31, 2015, the Company recognized $3,973 of stock option expense related to options granted in prior periods. As of March 31, 2015, there are 3,827,541 options outstanding with a weighted average exercise price of $0.57 and an expected life of 1.4 years.

Warrants

As of March 31, 2015 there are 2,302,323 warrants outstanding with an aggregate exercise price of $275,581.

Note 11 — Subsequent Events

There are no subsequent events required to be disclosed in the Notes to Financial Statements through the date of the report, except as follows:

On April 15, 2015, the Company entered into an Agreement and Plan of Merger with EFactor Merger Sub Inc., a New York corporation and wholly owned subsidiary of the Company (“Merger Sub”), RocketHub Inc., a New York corporation (“RocketHub”), the shareholders of RocketHub (the “RocketHub Sellers”) and Eric Schneider in his capacity thereunder as the representative of the RocketHub Sellers. Pursuant and subject to the terms and conditions of the Merger Agreement, Merger Sub was merged with and into RocketHub, with RocketHub surviving as a wholly owned subsidiary of the Company. As consideration for the Merger, the Sellers received 21,428,571 shares of common stock, par value $0.001, of the Company, at a purchase price of $0.70 per share, for an aggregate purchase price valued at $15 million. RocketHub launched in January 2010, and is considered one of America’s largest crowdfunding platforms.

In April 2015, the Company sold to accredited investors 1,600,000 common shares and 400,000 warrants for cash for a total consideration of $200,000. That warrants have a strike price of $0.25 per share and a cashless exercise provision for a period of three (3) years from closing. In the event Company shall reach a minimum total market capitalization of $100,000,000 on a major U.S. stock exchange, and maintain such minimum for five (5) consecutive trading days, then the investors shall also receive a grant of 200,000 additional common shares. Also, the Company issued 100,000 shares associated with a 2014 bonus award and issued 1,049,568 shares as payment for past services totaling $152,815.

On April 8, 2015, pursuant to a Securities Exchange Agreement between the Company and Magna Equities I, LLC, the Company issued to Magna Equities I a convertible promissory note in the aggregate principal amount of $200,000, in exchange for $200,000 of existing debt of the Company that Magna Equities I purchased from third parties. The Magna Equities I Note accrues interest at a rate of ten percent per annum. All principal and accrued interest under the Magna Equities I Note is due on March 2, 2016. All principal and accrued interest under the Magna Equities I Note is convertible into shares of common stock of the Company, par value $0.001 per share, at a conversion price equal to a 40% discount from the lowest daily trading price in five (5) trading days prior to conversion.

F-45

EFACTOR GROUP CORP. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 11 — Subsequent Events (cont.)

On May 1, 2015 the Company issued to Magna Equities II, LLC a convertible promissory note in the aggregate principal amount of $53,000 under the same terms as the previous note.

In April 2015, the Company sold 6,000,000 shares of its common stock to 5 accredited investors for an aggregate of $750,000. In addition to the common stock the investors received 2,400,000 three year warrants with a strike price of $0.25.

On April 28, 2015, the Company amended their Articles of Incorporation to increase the authorized common stock of the Company from 175,000,000 to 300,000,000.

On May 6, 2015, the Company issued 3,200,000 and 2,425,340 shares of the Company’s common stock to Adriaan Reinders and Marion Freijsen respectively to convert certain indebtedness aggregating to $703,167 of the Company related party liabilities. In addition to the common stock the investors received 1,406,335 three year warrants with a strike price of $0.25.

F-46

Until,         2015 (25 days after the date of this prospectus), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to their unsold allotments or subscriptions.

SHARES OF COMMON STOCK AND

WARRANTS TO PURCHASE         SHARES OF COMMON STOCK

___________________________

PROSPECTUS

____________________________

Sole Book-Running Manager

Maxim Group LLC

 

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution

The following table sets forth the costs and expenses in connection with the issuance and distribution of the securities being registered (excluding the underwriting discounts and commissions), all of which are being borne by us.

SEC Registration Fee		$	4,169.26
FINRA Filing Fee		$	3,087.50
NASDAQ Filing Fee		$		*
Printing and Engraving Expenses		$		*
Transfer Agent Fees and Expenses		$		*
Legal Fees and Expenses		$		*
Accountants’ Fees and Expenses		$		*
Miscellaneous Costs		$		*
Total		$		*

____________

*      To be filed by amendment

Item 14. Indemnification of Directors and Officers

Charter and Bylaws

Our articles of incorporation limit the liability of our directors to us and our stockholders to the fullest extent Nevada law permits. Specifically, no director will be personally liable for monetary damages for any breach of the director’s fiduciary duty as a director, except for liability:

•      for any breach of the director’s duty of loyalty to us or our stockholders;

•      for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;

•      for unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the NGCL; and

•      for any transaction from which the director derived an improper personal benefit.

This provision could have the effect of reducing the likelihood of derivative litigation against our directors and may discourage or deter our stockholders or management from bringing a lawsuit against our directors for breach of their duty of care, even though such an action, if successful, might otherwise have benefited us and our stockholders. Our bylaws provide indemnification to our officers and directors and other specified persons with respect to their conduct in various capacities.

Nevada Law

We are incorporated under the laws of the State of Nevada. Section 78.7502 of the Nevada Revised Statutes provides that a Nevada corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, except an action by or in the right of the corporation, by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with the action, suit or proceeding if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, does not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not

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opposed to the best interests of the corporation, and that, with respect to any criminal action or proceeding, he had reasonable cause to believe that his conduct was unlawful.

Section 78.7502 further provides a Nevada corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, including amounts paid in settlement and attorneys’ fees actually and reasonably incurred by him in connection with the defense or settlement of the action or suit if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation. Indemnification may not be made for any claim, issue or matter as to which such a person has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable to the corporation or for amounts paid in settlement to the corporation, unless and only to the extent that the court in which the action or suit was brought or other court of competent jurisdiction determines upon application that in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.

Section 78.751 of the Nevada Revised Statutes provides that discretionary indemnification under Section 78.7502 unless ordered by a court or advanced pursuant to subsection 2 of section 78.751, may be the corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances. The determination must be made by:

•      By the stockholders;

•      By the board of directors by majority vote of a quorum consisting of directors —who were not parties to the action, suit or proceeding;

•      If a majority vote of a quorum consisting of directors who were not parties to the action, suit or proceeding so orders, by independent legal counsel in a written opinion; or

•      If a quorum consisting of directors who were not parties to the action, suit or proceeding cannot be obtained, by independent legal counsel in a written opinion.

The Articles of Incorporation, the Bylaws or an agreement made by the corporation may provide that the expenses of officers and directors incurred in defending a civil or criminal action, suit or proceeding must be paid by the corporation as they are incurred and in advance of the final disposition of the action, suit or proceeding, upon receipt of an undertaking by or on behalf of the director or officer to repay the amount if it is ultimately determined by a court of competent jurisdiction that he is not entitled to be indemnified by the corporation. The provisions of this subsection do not affect any rights to advancement of expenses to which corporate personnel other than directors or officers may be entitled under any contract or otherwise by law.

The indemnification and advancement of expenses authorized in or ordered by a court pursuant to NRS Section 78.751 does not exclude any other rights to which a person seeking indemnification or advancement of expenses may be entitled under the articles of incorporation or any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, for either an action in his official capacity or an action in another capacity while holding his office, except that indemnification, unless ordered by a court pursuant to section 78.7502 or for the advancement of expenses made pursuant to subsection 2 of section 78.751, may not be made to or on behalf of any director or officer if a final adjudication establishes that his acts or omissions involved intentional misconduct, fraud or a knowing violation of the law and was material to the cause of action; and continues for a person who has ceased to be a director, officer, employee or agent and inures to the benefit of the heirs, executors and administrators of such a person.

Other

Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (the “Securities Act”), may be permitted to directors, officers and controlling persons of our company under Nevada law or otherwise, we have been advised that the opinion of the Securities and Exchange Commission is that such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event a claim for indemnification against such liabilities (other than payment by us for expenses incurred or paid by a director, officer or controlling person of our company in successful defense of any action, suit, or proceeding) is asserted by a director, officer or controlling person in connection with the securities being

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registered, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction, the question of whether such indemnification by it is against public policy in the Securities Act and will be governed by the final adjudication of such issue.

Item 15. Recent Sales of Unregistered Securities

In the three years preceding the filing of this Registration Statement, we have sold the following securities that were not registered under the Securities Act.

On or about March 7, 2013, pursuant to the Share Exchange, we issued 1,250,000 shares of our common stock to eighteen shareholders of E-Factor in exchange for 6,580,250 shares of E-Factor common stock. Also as part of this transaction, 5,000,000 shares of our Series A Convertible Preferred Stock were exchanged for an aggregate of 2,333,946 shares of common stock of E-Factor owned by Adriaan Reinders and Marion Freijsen, each of whom is our officer and director. The issuances were exempt from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) of the Securities Act, due to the fact these shareholders were either accredited or sophisticated investors and familiar with our operations.

Pursuant to the Share Exchange, on or about March 7, 2013, we issued 162,500 shares of our common stock to David S. Rector and 87,500 to Keith Gilmour, in exchange for services rendered to us. The issuances were exempt from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) of the Securities Act, due to the fact these shareholders were either accredited or sophisticated investors and familiar with our operations.

Pursuant to the agreement and plan of merger with MCC International, on February 14, 2013, we issued 196,249 shares of our common stock to the sole shareholder of MCC to acquire 100% of the shares of MCC International. The relative value associated with this transaction was $1,333,335. The issuances were exempt from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) of the Securities Act, due to the fact that the shareholder was either an accredited or sophisticated investor and familiar with our operations.

During the three months ended September 30, 2013, we issued 182,822 shares of our common stock to 8 non-affiliate investors in connection with promissory notes that were entered into during the quarter. These issuances were exempt from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) of the Securities Act, due to the fact these shareholders were accredited investors and familiar with our operations.

On November 13, 2013, we issued an aggregate of 41,172,924 shares of common stock as follows: (i) 12,906,223 shares of common stock were issued in exchange for 2,500,000 shares of our preferred stock, (ii) 19,383,180 additional shares were issued to holders of The E-Factor Corp. (the “Original Sellers”) and (iii) 8,883,521 shares of common stock were issued to other shareholders of E-Factor in exchange for their shares. The issuance of the shares was exempt from the registration requirements of the Securities Act, pursuant to Regulation S promulgated thereunder. All purchasers of the shares represented and warranted, among other things, that they were non-U.S. persons within the meaning of Regulation S. Neither us nor any of our representatives directed any selling efforts to U.S. investors.

In January 2014, we issued an aggregate of 11,527,257 shares of common stock as follows: (i) 2,580,702 shares were issued to the Original Sellers and (ii) 3,016,453 shares of common stock were issued to other shareholders of E-Factor and (iii) 5,930,102 shares of our common stock were issued to various persons for debt conversions and services provided to us. The issuances were exempt from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) of the Securities Act, due to the fact these shareholders were either accredited or sophisticated investors and familiar with our operations.

In February 2014, we issued an aggregate of 5,481,385 shares of common stock as follows: (i) 267,273 shares were issued to one of the Original Sellers, (ii) 4,493,571 shares of common stock were issued to other shareholders of E-Factor and (iii) 720,541 shares of common stock were issued to various persons for debt conversions and for services provided to us. The issuances were exempt from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) of the Securities Act, due to the fact these shareholders were either accredited or sophisticated investors and familiar with our operations.

In April 2014, we issued an aggregate of 1,622,671 shares of common stock as follows: (i) 55,298 shares of common stock were issued to other shareholders of E-Factor, and (ii) 1,567,373 shares of common stock were issued to various persons for debt conversions and for services provided to us. The issuances were exempt from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) of the Securities Act, due to the fact these shareholders were either accredited or sophisticated investors and familiar with our operations.

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In June 2014, we issued an aggregate of 1,406,985 shares of common stock as follows: (i) 360,064 shares of common stock were issued to investors in connection with promissory notes that were entered into during the quarter ended June 30, 2014, (ii) 146,605 shares of common stock were issued to various persons for debt conversions and for services provided to us, and (iii) 900,316 shares of common stock were issued for approximately $559,566 in cash. The issuances were exempt from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) of the Securities Act, due to the fact these investors were either accredited or sophisticated investors and familiar with our operations.

In July and August 2014, we issued 78,649 shares of our common stock to two non-affiliate investors in connection with the sundry promissory notes that were entered into during the quarter. These issuances were exempt from registration pursuant to Section 4(a)(2) of the Securities Act, due to the fact these shareholders are accredited investors and are familiar with our operations.

On July 11, 2014, we issued 3,150,000 shares of our common stock for investment banking services. This issuance was exempt from registration pursuant to Section 4(a)(2) of the Securities Act, due to the fact that this was a private transaction with an accredited investor.

In September 2014, we issued 1,571,000 shares of its common stock for services. These issuances were exempt from registration pursuant to Section 4(a)(2) of the Securities Act, due to the fact that this was a private transaction with an accredited investor.

In September 2014, we issued 13,319,100 shares of our common stock related to the acquisitions of HT Skills. These issuances were exempt from registration pursuant to Section 4(a)(2) of the Securities Act, due to the fact these shareholders are accredited investors and are familiar with our operations.

In September 2014, we issued 1,250,000 shares of our common stock related to the acquisitions of Member Digital. These issuances were exempt from registration pursuant to Section 4(a)(2) of the Securities Act, due to the fact these shareholders are accredited investors and are familiar with our operations.

In September 2014, we issued 2,812,500 shares of our common stock related to the acquisitions of GroupCard. These issuances were exempt from registration pursuant to Section 4(a)(2) of the Securities Act, due to the fact these shareholders are accredited investors and are familiar with our operations.

In October 2014, we issued 31,000,000 shares of our common stock related to the acquisitions of ELEQT. These issuances were exempt from registration pursuant to Section 4(a)(2) of the Securities Act, due to the fact these shareholders are accredited investors and are familiar with our operations.

In October 2014 we issued 35,241 shares of our common stock to two non-affiliate investors in connection with the sundry promissory notes that were entered into during the quarter. These issuances were exempt from registration pursuant to Section 4(a)(2) of the Securities Act, due to the fact these shareholders are accredited investors and are familiar with our operations.

In October 2014 we issued 438,241 shares of our common stock were issued for approximately $328,480 in cash. The issuances were exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) of the Securities Act, due to the fact these shareholders were either accredited or sophisticated investors and familiar with our operations.

In October 2014, we issued 66,667 shares of our common stock for services. These issuances were exempt from registration pursuant to Section 4(a)(2) of the Securities Act, due to the fact that this was a private transaction with an accredited investor.

In October 2014, we issued 825,000 shares of our common stock valued at approximately $205,225 were issued related to the extinguishment of debt. The issuances were exempt from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) of the Securities Act, due to the fact these shareholders were either accredited or sophisticated investors and familiar with our operations.

In January 2015, we issued an aggregate of 7,306,628 shares of our common stock as follows: (i) 6,906,628 shares of common stock were issued to various persons for debt conversions and for services provided to us, and (ii) 400,000 shares of common stock were issued for approximately $21,760 in cash. The issuances were exempt from the registration requirements of the Securities Act of 1933, pursuant to Section 4(a)(2) of the Securities Act, due to the fact these shareholders were either accredited or sophisticated investors and familiar with our operations.

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In February 2015, we issued an aggregate of 1,378,167 shares of our common stock as follows: (i) 170,069 shares of common stock were issued to various persons for debt conversions and for services provided to us, and (ii) 1,208,098 shares of common stock were issued for approximately $162,450 in cash. The issuances were exempt from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) of the Securities Act, due to the fact these shareholders were either accredited or sophisticated investors and familiar with our operations.

In March 2015, we issued an aggregate of 11,818,523 shares of our common stock as follows: (i) 10,210,425 shares of common stock were issued to various persons for debt conversions and for services provided to us, and (ii) 1,608,098 shares of common stock were issued for approximately $184,210 in cash. The issuances were exempt from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) of the Securities Act, due to the fact these shareholders were either accredited or sophisticated investors and familiar with our operations.

In April 2015, we issued an aggregate of 6,918,303 shares of common stock as follows: (i) 2,518,403 shares of common stock were issued to various persons for debt conversions and for services provided to us, and (ii) 4,400,000 shares of common stock were issued for approximately $550,000 in cash. The issuances were exempt from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) of the Securities Act, due to the fact these shareholders were either accredited or sophisticated investors and familiar with our operations.

On May 6, 2015, we issued 3,200,000 and 2,425,340 shares of our common stock to Adriaan Reinders and Marion Freijsen, respectively, to convert certain indebtedness aggregating to $703,167 of our related-party liabilities. In addition to the common stock, Mr. Reinders and Mr. Freijsen received 1,406,335 three year warrants to purchase our common stock with an exercise price of $0.25. The issuances were exempt from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) of the Securities Act, due to the fact that these issuances did not involve a public offering.

On May 29, 2015, we issued an aggregate of 4,975,928 shares of common stock as follows: (i) 4,175,928 shares of common stock were issued to various persons for indebtness conversions and for services provided to us, and (ii) 800,000 shares of common stock were issued for approximately $100,000 in cash. The issuances were exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act, due to the fact these shareholders were either accredited or sophisticated investors and familiar with our operations.

Item 16. Exhibits and Financial Statement Schedules

(a) Exhibits. The list of exhibits following the signature page of this registration statement is incorporated herein by reference.

(b) Financial Statements. See page F-1 for an index to the financial statements included in the registration statement.

Item 17. Undertakings

The undersigned registrant hereby undertakes:

(1)   To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i)    To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;

(ii)   To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.

(iii)  To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

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(2)   That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3)   To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4)   That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:

(i)    If the registrant is relying on Rule 430B:

(A)  Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and

(B)  Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.

(5)   That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:

The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i)    Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

(ii)   Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

(iii)  The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

(iv)  Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

(6)   Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

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(7)   The undersigned registrant hereby undertakes that:

(1)   For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b) (1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(2)   For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement on Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on this 11th day of June, 2015.

		EFACTOR GROUP CORP.
		By:		/s/ Adriaan Reinders
				Adriaan Reinders
				President and Chief Executive Officer
				(Principal Executive Officer)

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Adriaan Reinders and Marion Freijsen, and each of them acting individually, as his true and lawful attorneys-in-fact and agents, each with full power of substitution, for him in any and all capacities, to sign any and all amendments to this registration statement including post-effective amendments to this registration statement, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated below.

By:		/s/ Adriaan Reinders		June 11, 2015
		Adriaan Reinders President, Chief Executive Officer and Director (Principal Executive Officer)
By:		/s/ Marion Freijsen		June 11, 2015
		Marion Freijsen Chief Operating Officer and Director
By:		/s/ Mark V. Noffke		June 11, 2015
		Mark V. Noffke Chief Financial Officer and Director (Principal Financial Officer and Principal Accounting Officer)
By:		/s/ Thomas Trainer		June 11, 2015
		Thomas Trainer Director, Chairman of the Board
By:		/s/ Brian Banmiller		June 11, 2015
		Brian Banmiller Director
By:		/s/ Ruud Smeets		June 11, 2015
		Ruud Smeets Director and President, Social Network Division
By:		/s/ Mark Stanich		June 11, 2015
		Mark Stanich Managing Director and Director

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EXHIBIT INDEX

Exhibit Number		Description
1.1*		Form of Underwriting Agreement
2.1		Agreement and Plan of Merger dated July 27, 2006 by and among Online Holdings, Inc., a Nevada corporation, Standard Drilling Acquisition Corp., a Delaware corporation, and Standard Drilling, Inc., a Delaware corporation(1)
3.1		Amended and Restated Articles of Incorporation(2)
3.2		Certificate of Amendment to the Articles of Incorporation, filed with the Secretary of State of the State of Nevada on October 11, 2013(3)
3.3		Certificate of Change filed with the Secretary of State of the State of Nevada on October 15, 2013(4)
3.4		Certificate of Amendment to the Amended and Restated Articles of Incorporation of EFactor Group Corp., filed with the Secretary of State of the State of Nevada on April 28, 2015(5)
3.5		Bylaws(6)
4.1*		Specimen Warrant Certificate
4.2*		Form of Representative’s Warrant
4.3		Form of Convertible Promissory Note issued to Magna Equities I, LLC(7)
4.4		Form of Convertible Promissory Note issued to Magna Equities II, LLC(8)
5.1*		Opinion of Ellenoff Grossman & Schole LLP
10.1		Acquisition and Share Exchange Agreement by and between the Company and The E-Factor Corp. and Certain of its Shareholders, dated February 1, 2013(9)
10.2		Sale and Purchase Agreement between The E-Factor Corp. and DASPV, PTE Ltd, dated August 17, 2012, as amended(10)
10.3		Share Exchange Agreement between The E-Factor Corp. and Five5Five PTE Ltd, dated January 8, 2013(11)
10.4		Agreement and Plan of Merger between The E-Factor Corp. and EQmentor, Inc., dated June 30, 2012, as amended(12)
10.5		Amendment No. 1 to Exchange Agreement between Home Training Initiative Ltd, Five5Five PTE Ltd., The E-Factor Corp. and Standard Drilling, Inc., dated May 7, 2013(13)
10.6		Employment Agreement between the Company and Adriaan Reinders(14)
10.7		Employment Agreement between the Company and Marion Freijsen(15)
10.8		Share Exchange Agreement(16)
10.9		The E-Factor Corporation 2010 Stock Option Plan(17)
10.10		Agreement and Plan of Merger, dated as of April 15, 2015, by and among EFactor Group Corp., EFactor Merger Sub Inc., RocketHub Inc., the stockholders of RocketHub Inc. named therein, and Eric Schneider in his capacity as the Seller Representative thereunder.(18)
10.11		Employment Agreement between the Company and Mark Stanich(19)
10.12		Form of Securities Exchange Agreement between the Company and Magna Equitiies I, LLC(20)
10.13		Form of Securities Exchange Agreement between the Company and Magna Equitiies II, LLC(21)
14.1*		Code of Ethics
21.1*		List of subsidiaries
23.1		Consent of MaloneBailey, LLP
23.2*		Consent of Ellenoff Grossman & Schole LLP (included in Exhibit 5.1)
24.1		Power of Attorney (included in signature page)
101.INS*		XBRL Instance Document
101.SCH*		XBRL Taxonomy Extension Schema Document
101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		XBRL Taxonomy Extension Calculation Definition Linkbase Document
101.LAB*		XBRL Taxonomy Extension Calculation Label Linkbase Document
101.PRE*		XBRL Taxonomy Extension Calculation Presentation Linkbase Document

____________

*        To be filed by amendment.

 

(1)     Incorporated by reference to Exhibit 2 in our Current Report on Form 8-K, filed on July 27, 2006.

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(2)     Incorporated by reference to Exhibit 3.1 in our Current Report on Form 8-K, filed on September 6, 2006.

(3)     Incorporated by reference to Exhibit 3.1 in our Current Report on Form 8-K, filed on October 18, 2013.

(4)     Incorporated by reference to Exhibit 3.2 in our Current Report on Form 8-K, filed on October 18, 2013.

(5)     Incorporated by reference to Exhibit 3.1 in our Current Report on Form 8-K, filed on April 30, 2015.

(6)     Incorporated by reference to Exhibit 3.2 in our Registration Statement on Form SB-2 (File Number 333-75434), filed on December 19, 2001.

(7)     Incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K, filed on March 3, 2015.

(8)     Incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K, filed on March 3, 2015.

(9)     Incorporated by reference to Exhibit 10.1 in our Current Report on Form 8-K, filed on February 14, 2013.

(10)  Incorporated by reference to Exhibit 10.2 in our Current Report on Form 8-K, filed on February 14, 2013.

(11)  Incorporated by reference to Exhibit 10.3 in our Current Report on Form 8-K, filed on February 14, 2013.

(12)  Incorporated by reference to Exhibit 10.4 in our Current Report on Form 8-K, filed on February 14, 2013.

(13)  Incorporated by reference to Exhibit 10.1 in our Registration Statement on Form S-1 (File Number 333-183098), initially filed on May 10, 2013.

(14)  Incorporated by reference to Exhibit 99.1 in our Current Report on Form 8-K, filed on October 18, 2013.

(15)  Incorporated by reference to Exhibit 99.2 in our Current Report on Form 8-K, filed on October 18, 2013.

(16)  Incorporated by reference to Exhibit 10.8 to our Registration Statement on Form S-1 (File Number 333-192574), filed on January 29, 2014.

(17)  Incorporated by reference to Exhibit 10.9 to our Annual Report on Form 10-K, filed on March 10, 2014.

(18)  Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K, filed on April 16, 2015.

(19)  Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K, filed on December 23, 2014.

(20)  Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K, filed on March 3, 2015.

(21)  Incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K, filed on March 3, 2015.

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