RVUE HOLDINGS, INC. - FORM 10-K

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EX-32.1 - EXHIBIT 32.1 SECTION 906 CERTIFICATION - RVUE HOLDINGS, INC.	f10k123115_ex32z1.htm
EX-31.1 - EXHIBIT 31.1 SECTION 302 CERTIFICATION - RVUE HOLDINGS, INC.	f10k123115_ex31z1.htm
EX-31.2 - EXHIBIT 31.2 SECTION 302 CERTIFICATION - RVUE HOLDINGS, INC.	f10k123115_ex31z2.htm

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

X .

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

For the fiscal year ended December 31, 2015

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

For the transition period from: _____________ to _____________

Commission file number: 000-54348

RVUE HOLDINGS, INC.

(Exact Name of Registrant as Specified in Its Charter)


Nevada		94-3461079
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

17W220 22^nd Street, Suite 200, Oakbrook Terrace, IL 60181

(Address of principal executive offices)

855-261-8370

(Registrant's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $.001 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes . No X .

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes . No X .

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232-405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files.) Yes X . No .

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. X .

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


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

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

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the closing price as of the last business day of the registrant’s most recently completed second quarter (2015) was approximately $3,724,652 (74,493,046 x $.05). For purposes of this disclosure, shares of Common Stock held by persons who hold more than 5% of the outstanding shares of Common Stock and shares held by executive officers and directors of the registrant have been excluded because such persons may be deemed to be affiliates. This determination of executive officer or affiliate status is not necessarily a conclusive determination for other purposes.

As of March 3, 2016 there were 193,900,925 shares of Common Stock, par value $0.001 per share, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None

TABLE OF CONTENTS


PART I
Item 1.	Business.	5
Item 1A.	Risk Factors.	10
Item 1B.	Unresolved Staff Comments.	19
Item 2.	Properties.	19
Item 3.	Legal Proceedings.	19
Item 4.	Mine Safety Disclosures.	20
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	20
Item 6.	Selected Financial Data.	21
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	21
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk.	27
Item 8.	Financial Statements and Supplementary Data.	27
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.	27
Item 9A.	Controls and Procedures.	27
Item 9B.	Other Information.	28
PART III
Item 10.	Directors, Executive Officers and Corporate Governance.	28
Item 11.	Executive Compensation.	33
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	34
Item 13.	Certain Relationships and Related Transactions, and Director Independence.	35
Item 14.	Principal Accounting Fees and Services.	36
PART IV
Item 15.	Exhibits and Financial Statement Schedules.	37

Special Note Regarding Forward-Looking Statements

This Annual Report on Form 10-K (“Form 10-K”) contains forward-looking statements that involve risks and uncertainties. Many of the forward-looking statements are located in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Forward-looking statements can also be identified by words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” and similar terms. Forward-looking statements are not guarantees of future performance and the Company’s actual results may differ significantly from the results discussed in the forward-looking statements. Forward-looking statements are only predictions based on our current expectations and projections, or those of third parties, about future events and involve risks and uncertainties. Factors that might cause such differences include, but are not limited to, those discussed in the subsection entitled “Risk Factors” under Part I, Item 1A of this Form 10-K. The Company assumes no obligation to revise or update any forward-looking statements for any reason, except as required by law.

All forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements included in this Annual Report on Form 10-K.

Part I

Item 1. Business.

Unless the context provides otherwise, when we refer to the “Company,” “we,” “our,” or “us” in this Form 10-K, we are referring to rVue Holdings, Inc. and its wholly-owned subsidiary, rVue, Inc.

Corporate History and Acquisition

We were incorporated as Rivulet International, Inc. in the State of Nevada on November 12, 2008. Our authorized capital stock consists of 240,000,000 shares of common stock, par value $0.001 per share (the “Common Stock”) and 10,000,000 of “blank check” preferred stock, par value $0.001 per share.

On May 13, 2010, we acquired all of the issued and outstanding capital stock and the business of rVue, Inc., a Delaware corporation ("rVue, Inc.") from Argo Digital Solutions, Inc., a Delaware corporation ("Argo"), as well as any and all assets related to the rVue business held by Argo, pursuant to an asset purchase agreement, dated as of May 13, 2010 (the "Asset Purchase Agreement"), by and between Argo, rVue, Inc. and the Company (the “Transaction”).

Our principal executive offices are located at 17W220 22^nd Street, Suite 200, Oakbrook Terrace, IL 60181, and our telephone number is 855-261-8370.

Our Business

Effective as of September 15, 2009, Argo contributed certain assets and liabilities to a newly formed Delaware corporation, rVue, Inc., and launched the rVue business in order to enable rVue's management team to focus on developing the rVue business operations and attract capital investment in the rVue business.

We are an advertising technology company and operate rVue, a demand-side platform (“DSP”) for planning, buying and managing Digital Place-Based Media Networks (DPBM). We provide media services, including an online, internet based DSP that connects advertisers and/or advertising agencies with third party DPBM networks, that allows rVue to create for the advertiser a targeted advertising campaign and media plan, and negotiate that media plan simultaneously with all the third-party networks selected. Through our strategic media services group, we execute campaigns on behalf of advertising clients or their agencies. For the year ended December 31, 2015, we had revenue of $1,099,589 from the rVue platform ($126,000 in non-core revenue and $973,589 in core revenue).

In connection with the Transaction, the Company acquired from Argo all of its assets related to the rVue business, which included all of the common stock of rVue, Inc. as well as software, contracts and technology. Such software and technology included the rVue DSP technology and software as well as legacy rVue client and server software, which allows an end user to manage and operate a DPBM network. The client software is used to manage each screen or site and the server software is used to manage the client software.

We provide monitoring and troubleshooting services on a 24/7 basis to a large advertiser for a private display network that they own on a month-to-month basis for which we received $10,500 per month. We entered into a one year contract to provide these services with the same large advertiser for $10,500 per month through September 30, 2016, but consider this non-core revenue. The primary forward strategy of our business is to earn transaction fees and margin from rVue technology and strategic media services, as discussed elsewhere herein.

Our Products and Services

We operate rVue, a DSP for planning, buying and managing DPBM and place-based media advertising. We provide an online, internet based DSP that connects advertisers and/or advertising agencies with third party DPBM media or networks, that allows the advertiser to create a targeted advertising campaign and media plan, and negotiate that media plan simultaneously with all the third-party networks selected. Through our strategic media services group, we execute complete campaigns on behalf of advertising clients or their agencies.

The rVue DSP is accessible via the internet. Through rVue, once an advertising campaign has been agreed to between the advertiser and the DPBM network owner, the DPBM networks receive the display advertising to be shown on their installed base of digital media displays. rVue allows programming and advertising to be customized for display in specific venues, at specific times, and for demographic targeting. We provide the tools for advertisers and advertising agencies to customize campaigns for details as specific as location, customer preference, product availability, current events and other needs. We provide Proof-of-Play analytics and the network statistics necessary to monitor advertising on the networks and assist in evaluating the performance or refinements required for an advertising campaign, in some cases real time. In addition, our, integrated analytics provide insight and opportunities for advertisers and agencies to extend the reach, impact and engagement of future campaigns.

As of December 31, 2015, approximately 175 networks comprising approximately 1,500,000 screens and delivering approximately over 250 million daily impressions representing the top market areas are accessible through rVue. Through our strategic media services group, we execute complete campaigns on behalf of advertising clients or their agencies.

We believe that consumers who are mobile are increasingly difficult to reach via traditional analog media platforms such as television, print and radio. Interaction with these consumers via multiple DPBM platforms has advantages. Advertisers desire, for example, to send pre-programmed, customized messages to specific geographic or demographic targets throughout the life of an advertising campaign. This can be achieved via the internet, and we believe will increasingly be achieved through digital displays located along roadsides, on trains and buses and train platforms and bus stations, in elevators, in government offices, schools, restaurants and bars. All of these DPBM platforms are aggregated for advertiser and advertising agencies via the rVue DSP.

Similar models have been successfully deployed for internet DSP’s, through internet ad networks and exchanges that utilize similar services to sell banner and other advertising by websites and internet publishers with excess inventory to monetize their assets. For example, Yahoo's Right Media Exchange leverages Yahoo's advertisers to assist publishers in monetizing available internet advertising inventory. Our services provide a digital advertising solution that streamlines the process of planning, buying and optimizing display advertising on DPBM display networks. rVue is designed to simplify the process of buying and selling digital display ads while connecting all the market players — networks, advertisers, agencies, partners and developers — from a unified platform to do business more efficiently and effectively.

Under a contractual arrangement with a large advertiser we provide technical services on a monthly basis for a fixed monthly payment resulting in total revenue of $126,000 in 2015. Under these arrangements, we provide technical services, including network monitoring, troubleshooting and maintenance, among other services. See the Revenue section for more information.

Targeting Specific Consumer Demographics

rVue employs sophisticated search tools to create a campaign. Campaigns may be generated by geographic areas, i.e. media market, radius, zip code or specific address. Demographic information such as sex, age, income and education can be selected, as can environment types, such as retail, malls, gas pumps, gyms, airports and sports stadiums. Unlike network TV or cable, the advertiser’s message can reach individually addressable screens, such as digital image displays in elevators and digital billboards, among others.

Our Approach

rVue allows advertisers to select as many or as few of the DPBM screens that are available through rVue when creating media plans and advertising campaigns. Offers can then be submitted to each of those networks and we negotiate the final campaign price. Networks may accept, reject or counter-offer. We act as a principal to purchase advertising on behalf of a client who issues a purchase order for the strategic media services we provide. We contract in our name with the networks to purchase the necessary space and time to execute the campaign. We assume the full financial risk of the campaign and are liable to the networks for the cost of network space and time.

Customers and Market

A DPBM network is an accumulation of Out of Home digital displays. rVue does not own any DPBM networks, but provides a platform that connects advertisers with networks. rVue’s customers are the advertisers who advertise on the DPBM displays. As an internet based platform for DPBM, rVue is a platform that intelligently connects the advertiser to these third-party networks providing an opportunity for displays and messages to be delivered to these screens and billboards. Information can be directed from advertisers, across our platform, to a single screen or a group of screens that are owned by one, or many, networks, and information such as frequency, location and timing of displayed advertisements can be fed back across our platform to advertisers.

rVue gathers traffic to its internet site from internet users who have a need for rVue’s services and who use internet based search tools to find companies like rVue. rVue promotes its business through direct contact with advertising agencies and media placement services that rVue has identified as representing advertisers that will likely advertise on DPBM networks, through word of mouth, and through inquiries received as a result of press that rVue has received in trade publications.

The DPBM media sector is one of the fastest growing advertising segments in the U.S. Furthermore, in 2014 the U.S. was the largest DPBM market among 28 countries reviewed by PQ Media, with $2.37 billion in revenues. This sector enables advertisers to engage target consumers in captive locations during their daily routines through video advertising networks, digital billboards and ambient ad platforms. The media platforms are further categorized by various venues and locations, including theaters, retail, offices, entertainment, transit, universities, roadside, and on various objects. rVue does not own any networks or displays. Instead, we rely on network companies connected to our platform who install and manage the physical digital signage.

According to PQ Media’s Global Digital Out-of-Home Media Forecast, as the global economy continues to improve, marketers have invested more heavily in DPBM and consequently network operators have invested in more digital screens and environments. PQ Media, a leading provider of global media econometrics and emerging media research, estimates global Digital Out of Home revenue growth in 2014 rising 11.3% to $9.87 billion. Specifically, PQ Media expects the U.S. market to also see the accelerated growth expanding 8.7% to $2.37 billion.

Based on information collected by the certified public accounting firm Miller, Kaplan, Arase from digital place-based networks – including both DPAA members and non-members -- advertising revenue for the digital place-based sector grew by 14.3% for the first half of 2015 versus the same period last year. This far surpassed the next closest growth media, radio, which gained 3.4% for the six-month period.

The 14.3% growth rate puts digital place-based media well on its way to equaling or surpassing estimated revenue of $1.015 billion for 2015, excluding cinema, as forecasted earlier this year by MyersBizNet.


First-Half 2015 Revenue Growth by Media Type
Digital Place-based	+ 14.3%
Radio	+ 3.4%
Outdoor	+ 2.6%
Cable TV	- 0.8%
Spot TV	- 4.4%
Network TV	- 4.8%
Online (Display)	- 7.0%
Magazine	- 8.2%
FSIs	- 9.7%
Newspaper	- 14.0%
Total Media:	-3.9%

DPBM will be one of the fastest-growing media segments around the world over the next five years, according to Magna Global’s latest advertising forecast, with a compounded annual growth rate of 16.9% through 2017, more than three times the overall media average. That puts DPBM behind only mobile, programmatic, and online video, which are estimated to grow at 30.6%, 25% and 20.3%, respectively. In contrast, overall growth across all media channels is 5.2%.

Advertisers and Agencies

rVue provides one central conduit for advertiser and agency DPBM needs. Once an advertiser or agency has determined the specific market they wish to target, rVue simplifies the complexities of a media buy. Using rVue's web-based interface, a “campaign” is created in six simple steps: (i) enter the campaign details; (ii) enter their target locations by media market, address, single point or multi-point location search; (iii) pick the desired demographics/audience; (iv) select the environment type; (v) create the offers, insertion orders and flight schedules; and (vi) submit the offers to the selected networks and negotiate acceptance with each network. Once a campaign is accepted and is ready to commence, the advertiser’s video content is uploaded to rVue's servers via the internet. We review the uploaded content to ensure quality control and then deploy the content to the networks. Once the advertisement is running, participating advertisers and agencies have access to reporting tools through the rVue website. rVue's progress reports provide analytics and proof of playback, so every broadcast is accounted for.

Networks

rVue is an IP-based DSP that connects to a network's digital signage to promote its business and sell advertising to outside companies. Affiliated networks have a network profile including specific information about their networks, which may or may not be verified or audited by one of the leading media and market research firms such as Nielsen Media Research or Arbitron, covering locations, number of screens, type of technology, demographics (e.g., age and sex of the audience) and the nature of the environment (e.g. retail, sports event, movie theater, etc.) and as advertisers enter campaigns and submit bids each selected network will be offered the opportunity to accept, reject or counter-offer some or all of the advertiser’s offer.

rVue’s platform makes loading content onto a network’s existing system as easy as copying music onto an mp3 player. Networks utilizing this software can click, drag and drop the creative content to incorporate it into their schedules. rVue does not require special manipulation of the content by the network; we do that processing for the network according to its profile. So, rVue-provided content will play seamlessly on the network, alongside in-house commercials or other outside advertising. Furthermore, rVue enables networks to manage multiple locations with ease. Networks may schedule ads for different days and times and preview the content in their browser, exactly as it will appear on their DPBM screens.

Revenue

Total revenue for the years ended December 31, 2015 and 2014 was $1,099,589 and $1,271,428 respectively.

Please note, rVue earns revenue from transactions executed through the rVue platform considered-core fees, and from network services fees considered – non-core fees.

rVue Revenue – Core fees

We generate advertising revenue from advertisers who engage us to execute campaigns through managed services. We act as a principal to purchase advertising on behalf of a client who issues a purchase order for the strategic media services we provide. We contract in our name with the networks to purchase the necessary space and time to execute the campaign. We assume the full financial risk of the campaign and are liable to the networks for the cost of network space and time.

This is the focus of our business. rVue revenue for the years ended December 31, 2015 and 2014 was $973,589 and $1,141,003, respectively. We believe that, as the rVue platform gains traction among advertisers and agencies, we may generate additional revenue in 2016 and beyond. However, there is no assurance that advertisers or agencies will accept the rVue platform as their platform of choice for placing advertising with DPBM networks.

Network Revenue – Non-core fees

We provide network services and receive fees, either under contract or on a monthly basis, to a large advertiser, which is more fully described below. Network revenue for the years ended December 31, 2015 and 2014 was $126,000 and $130,425, respectively.

We assist a large advertiser with the maintenance and troubleshooting of a private network they operate. We provide 24/7 services to ensure that the network operates without interruption. We expect to continue to receive revenue for these services of $10,500 per month from a large advertiser through September 2016, but we do not intend to pursue new network related service opportunities as the focus of our business is to earn transaction fees from rVue as discussed above.

Competition

We face competition from traditional media and advertising agencies, as well as other aggregators of DPBM networks. Aggregators, such as Vistar, database operators such as Domedia, ad networks such as Vukunet, and network operators, such as Gas Station TV, Captivate and Zoom, each of whom maintains internal sales forces and negotiates directly with advertisers, as well as other brokers and agencies who contract directly with individual DPBM networks, also compete with us. In addition, advertisers may seek out networks, which maintain internal sales forces and purchase or place ad content with them directly.

We distinguish our product line from our competitors' offerings by being a "one-stop shopping" source for our customers. Many competitors in our markets offer a far narrower choice of network operators than we offer. For example, some competitors resell only 20-30 networks, while we offer access to nearly 175 networks. We have developed an API to connect our technology to participating network operators, so that our network information for clients is as current as possible. We strive to meet every customer's needs at every level and partner with them across product lines and extensions.

Patents, Trademarks, and Licenses

Our policy is to be globally compliant with intellectual property rights. Advertisers and agencies are contractually obligated to advise us when they upload content for airing on networks via rVue for which they do not hold distribution rights. We rely on our advertisers to ensure that the content that they upload to us does not infringe on the intellectual property rights of others. We expect to pursue new intellectual property protection in 2016.

Regulation

Governments and regulatory authorities in some jurisdictions in which our affiliated networks or in which advertiser or agency content originates may impose rules and regulations requiring licensing for distribution of content over the internet.

Regulatory schemes can vary significantly from country to country. We may be subject to broadcasting or other regulations in countries from which we have affiliated networks or from which our advertisers or agencies upload their content to networks via rVue and may not be aware of those regulations or their application to rVue. Further, governments and regulatory authorities in many jurisdictions regularly review their broadcasting rules and policies, including the application of those rules and policies to new and emerging media.

Traditional over-the-air and cable television broadcasting businesses are generally subject to extensive government regulation and significant regulatory oversight in most jurisdictions in which we operate. Regulations typically govern the issuance, amendment, renewal, transfer and ownership of over-the-air broadcast licenses, cable franchise licenses, competition and cross ownership and sometimes also govern the timing and content of programming, the timing, content and amount of commercial advertising and the amount of foreign versus domestically produced programming. In many jurisdictions, including the United States and Canada, there are also significant restrictions on the ability of foreign entities to own or control traditional over-the-air television broadcasting businesses. We are not aware of any regulations in any of the jurisdictions in which our affiliated networks operate that would require us to be licensed to distribute content over the public internet.

While we are not aware of any proposed regulatory initiatives regulating the transfer of content over the internet in any of the jurisdictions in which we operate, we cannot assure you that regulations or orders will not be amended in the future in a manner that requires us to modify or block content in particular jurisdictions in order to continue distributing our clients' content to our affiliated networks in those jurisdictions or that otherwise affects our operations in a materially adverse manner.

Our business may be adversely affected by foreign import, export and currency regulations and global economic conditions. Our future development opportunities partly relate to geographical areas outside of the United States. There are a number of risks inherent in international business activities, including government policies concerning the import and export of goods and services, costs of localizing products and subcontractors in foreign countries, costs associated with the use of foreign agents, potentially adverse tax consequences, limits on repatriation of earnings, the burdens of complying with a wide variety of foreign laws, nationalization and possible social, labor, political and economic instability. There can be no assurance that such risks will not adversely affect our business, financial condition and results of operations.

Available Information

The Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (“Exchange Act”), are filed with the U.S. Securities and Exchange Commission (the “SEC”). Such reports and other information filed by the Company with the SEC are available free of charge on the Company’s website at http://ir.stockpr.com/rvue/sec-filings when such reports are available on the SEC website. The public may read and copy any materials filed by the Company with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Room 1580, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330 on official business days during the hours of 10:00 a.m. to 3:00 p.m. The SEC maintains an internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov. The contents of these websites are not incorporated into this filing or any registration statement that incorporates this Form 10-K by reference. Further, the Company’s references to the URLs for these websites are intended to be inactive textual references only.

Employees

As of December 31, 2015, we employed 7 full time employees. We consider our relationship with our employees to be satisfactory and have not experienced any interruptions of our operations as a result of labor disagreements. None of our employees are represented by labor unions or covered by collective bargaining agreements.

Item 1A. Risk Factors.

There are numerous and varied risks, known and unknown, that may prevent us from achieving our goals. If any of these risks actually occur, our business, financial condition or results of operations may be materially adversely affected. In such case, the trading price of our Common Stock could decline and investors could lose all or part of their investment.

Risks Relating to Our Business

Our independent registered public accounting firm has concluded that substantial doubt exists about our ability to continue as a going concern as a result of recurring net losses and negative cash flows from operations.

Since inception we have sustained recurring annual net losses and negative cash flows from operations and we expect to incur operating losses and negative cash flows from operations until rVue revenues increase. We will need to raise additional funds to finance our activities and we may never be able to achieve or sustain profitability. The consolidated financial statements included in this Form 10-K have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and discharge of liabilities in the normal course of business for the foreseeable future. However, our independent registered public accounting firm included an explanatory paragraph in their report indicating substantial doubt about our ability to continue as a going concern.

We may need additional capital to fund ongoing operations or unforeseen circumstances. If such capital is not available to us, our business, operating results and financial condition may be harmed.

At December 31, 2015, we had $67,069 of cash on hand and working capital deficit of $285,561. Our limited operating history makes it difficult to accurately forecast revenues, cash flow and cash requirements. If we are unsuccessful in raising additional capital to meet our obligations as they come due, we will have to further reduce our overhead expenses by the reduction of headcount and other available measures.

We have a limited operating history, incurred losses and past performance is no guarantee of future performance.

We incurred net losses of $1,404,083 and $921,633 for the years ended December 31, 2015 and 2014, respectively. There can be no assurance that our business will be profitable in the future and that losses and negative cash flows from operations will not continue to be incurred. If these situations occur in the future, it could have a material adverse effect on our financial condition.

rVue’s success is contingent on retaining senior management and our business may be adversely affected if we cannot retain them.

After years of significant losses, our board of directors made a decision to dismiss senior management in 2012 and hire new senior management which specializes in the advertising industry and has technical knowledge and/or industry relationships. We have an employment agreement with our Chief Executive Officer, Mr. Pacchini. We do not have key-man life insurance covering any of our employees.

If we fail to increase the number of our advertising clients or participating DPBM networks and if we fail to retain those clients, our revenues and our business will be harmed.

Our business plan is to derive a substantial portion of our revenue from advertisers and their agencies willing to offer to display their commercials on our participating DPBM networks. We launched rVue in September 2009 and in the year ended December 31, 2013 we had started to build a base business with several clients. Our growth depends in large part on increasing the number of our advertising clients and participating DPBM networks. Our customers may decide not to continue to use our solutions in favor of other means of placing advertising or because of budgetary constraints or other reasons.

To grow our base of advertising clients, we must convince prospective advertisers of the benefits of using rVue over the traditional methods of placing advertising to which they are likely accustomed. We need to convince prospective advertisers of the advantages of using rVue, including the ease of creating a campaign in rVue and the ability to deploy that campaign over multiple networks at one time rather than having to negotiate with each individual network. Due to the fragmented nature of the advertising industry, many prospective advertising clients may not be familiar with our solutions and will generally favor using more traditional methods of placing advertising.

To grow the base of DPBM networks that participate and make their screens available in rVue, we must convince them of the value of our solutions by demonstrating that we can deliver incremental advertising revenue to them. Our ability to do so is driven in large part by increasing the number of advertisers who participate in rVue.

We cannot assure you that we will be successful in attracting and expanding our advertising client base or participating DPBM networks. Our future sales and marketing efforts may be ineffective. If customers choose not to use our solutions or decrease their use of our solutions or we are unable to attract new advertisers or participating DPBM networks, the usefulness of rVue could be diminished and we will be unable to increase rVue revenues.

The market for advertising is highly competitive and we may be unable to compete successfully.

The market for advertising is very competitive. DPBM advertising is a small component of the overall United States advertising market and, thus, we must compete with established, larger and better known national and local media platforms and other emerging media platforms and technologies. We compete for advertising directly with all media platforms, including radio and television broadcasting, cable and satellite television services, various local print media, billboards and internet portals and search engines.

We also compete directly with other DPBM advertising companies. We expect these competitors to devote significant effort to maintaining and growing their respective positions in the DPBM advertising segment. We also expect existing competitors and new entrants to the DPBM advertising business to constantly revise and improve their business models in light of challenges from us or competing media platforms. If we cannot respond effectively to advances by our competitors, our business may be adversely affected.

The effects of any global economic downturn may adversely impact our business, operating results or financial condition.

Unfavorable changes in economic conditions, including declining consumer confidence, concerns about inflation or deflation, the threat of a continuing recession, increases in the rates of default and bankruptcy, may lead our customers to cease doing business with us or to reduce or delay that business or their payments to us, and our results of operations and financial condition could be adversely affected by these actions. These challenging economic conditions also may result in:

increased competition for less advertising;

pricing pressure that may adversely affect revenue;

difficulty forecasting, budgeting and planning due to limited visibility into the spending plans of current or prospective customers; and/or

customer financial difficulty and increased risk of doubtful accounts receivable.

Our limited operating history makes it difficult for us to accurately forecast revenues and appropriately plan our expenses.

We have a limited operating history. As a result, it is difficult to accurately forecast our revenues and plan our operating expenses. We base our current and future expense levels on our operating forecasts and estimates of future revenues on the level of advertising we expect to attract and on the number of participating networks that such advertising may be deployed over, all via rVue. Revenues and operating results are difficult to forecast due to the uncertainty of the volume and timing of obtaining new advertising clients and of the number of screens available through participating DPBM networks. Some of our expenses are fixed and, as a result, we may be unable to adjust our spending in a timely manner to compensate for any unexpected shortfall in revenues. This inability could cause our net income (or loss) in a given quarter to be lower (or higher) than expected.

We expect a number of factors to cause our operating results to fluctuate on a quarterly and annual basis, which may make it difficult to predict our future performance.

Our revenues and operating results could vary significantly from quarter to quarter and year-to-year because of a variety of factors, many of which are outside of our control. As a result, comparing our operating results on a period-to-period basis may not be meaningful. In addition to other risk factors discussed in this section, factors that may contribute to the variability of our quarterly and annual results include:

our ability to accurately forecast revenues and appropriately plan our expenses;

the impact of worldwide economic conditions, including the resulting effect on consumer spending;

our ability to maintain an adequate rate of growth;

our ability to effectively manage our growth;

our ability to attract new advertising clients and to retain existing advertising clients and encourage repeat usage of rVue;

our ability to attract and retain new participating DPBM networks;

our ability to provide a high-quality customer experience through our website and rVue;

our ability to successfully enter new markets and manage our international expansion;

the effects of increased competition in our business;

our ability to keep pace with changes in technology and our competitors;

our ability to successfully manage any future acquisitions of businesses, solutions or technologies;

the success of our marketing efforts;

changes in consumer behavior and any related impact on the advertising industry;

interruptions in service and any related impact on our reputation;

the attraction and retention of qualified employees and key personnel;

our ability to protect our intellectual property, including our proprietary rVue technology;

costs associated with defending intellectual property infringement and other claims;

the effects of natural or man-made catastrophic events;

the effectiveness of our internal controls; and

changes in government regulation affecting our business.

As a result of these and other factors, the results of any prior quarterly or annual periods should not be relied upon as indications of our future operating performance.

Growth may place significant demands on our management and our infrastructure.

We have forecasted growth in our business. This growth will place significant demands on our management and our operational and financial infrastructure. As our operations grow in size, scope and complexity, we will need to improve and upgrade our systems and infrastructure to offer an increasing number of clients and participating DPBM networks enhanced solutions, features and functionality. The expansion of our systems and infrastructure will require us to commit substantial financial, operational and technical resources in advance of an increase in the volume of business, with no assurance that the volume of business will increase. Continued growth could also strain our ability to maintain reliable service levels for our clients and participating DPBM networks, develop and improve our operational, financial and management controls, enhance our reporting systems and procedures and recruit, train and retain highly-skilled personnel.

Managing our growth will require significant expenditures and allocation of valuable management resources. If we fail to achieve the necessary level of efficiency in our organization as it grows, our business, operating results and financial condition would be harmed.

We may be unable to successfully execute our business strategy if we fail to continue to provide our customers with a high-quality customer experience.

A critical component of our strategy is to provide a high-quality customer experience for both advertisers and networks. Accordingly, the effective performance, reliability and availability of rVue, the rVue website and network infrastructure are critical to our reputation and our ability to attract and retain customers. In order to provide a high-quality customer experience, we have and will continue to have to invest substantial resources in rVue Inc., our rVue website development and functionality and customer service operations. If we do not continue to make such investments and as a result, or due to other reasons, fail to provide a high-quality customer experience, we may lose advertisers and networks from rVue, which could significantly decrease the value of our solutions to both groups. Moreover, failure to provide our customers with high-quality customer experiences for any reason could substantially harm our reputation and adversely affect our efforts to develop as a trusted website.

Future acquisitions could disrupt our business and harm our financial condition and operating results.

Our success will depend, in part, on our ability to expand our offerings and markets and grow our business in response to changing technologies, customer demands and competitive pressures. In some circumstances, we may determine to do so through the acquisition of complementary businesses, solutions or technologies rather than through internal development. The identification of suitable acquisition candidates can be difficult, time-consuming and costly, and we may not be able to successfully complete identified acquisitions. Furthermore, even if we successfully complete an acquisition, we may not be able to successfully assimilate and integrate the business, technologies, solutions, personnel or operations of the company that we acquired, particularly if key personnel of an acquired company decide not to work for us. In addition, we may issue equity securities to complete an acquisition, which would dilute our stockholders' ownership and could adversely affect the price of our Common Stock. Acquisitions may also involve the entry into geographic or business markets in which we have little or no prior experience. Consequently, we may not achieve anticipated benefits of the acquisitions, which could harm our operating results.

We rely on our marketing efforts to attract new customers and must do so in a cost-effective manner; otherwise our operations will be harmed.

A significant component of our business strategy is the promotion of rVue. We believe that the attractiveness of our solutions to our current and potential customers, both advertisers and networks, will increase as additional participating networks join rVue and advertisers increasingly use rVue to place advertising. If we do not continue to grow the use of rVue, we may fail to build the critical mass of both networks and advertisers required to substantially increase our revenues.

While our marketing efforts do not currently involve significant expenditures, we expect that we will invest more heavily in direct marketing or online or traditional advertising in 2016 and beyond. If we are unable to effectively market our solutions to new customers or are unable to do so in a cost-effective manner, our operating results could be adversely affected.

Misappropriation of our proprietary software and technology could materially affect our competitive position.

We believe our proprietary software and technology is central to our success and competitive position. Pending the findings from a comprehensive intellectual property review initiated in 2013, we will be seeking additional intellectual property protection for some of our proprietary software and technology. If we are unable to protect our proprietary software and technology against unauthorized use by others, or are unable to obtain requisite patents, our competitive position would be materially adversely affected.

Despite any precautions that we may take, a third party may copy or otherwise obtain and use our products, services, software or technology without authorization, or develop similar technology independently. In addition, effective patent, copyright, trademark and trade secret protection may be unavailable or limited. The law in this area is not fully developed. We may also not be able to enforce confidentiality agreements with our employees or third parties. There can be no assurance that the steps we take will prevent misappropriation or infringement of our software and technology. Litigation may be necessary in the future to enforce our intellectual property rights, to protect our trade secrets or to determine the validity and scope of the proprietary rights of others. This litigation could result in substantial costs and diversion of resources and could have a material adverse effect on our company.

In addition, our proprietary software may decline in value or our rights in our software may not be enforceable. Policing unauthorized use of our proprietary technology and other intellectual property rights could entail significant expense and could be difficult or futile, particularly given the fact that the laws of and enforcement by some other countries may afford us little or no effective protection of our intellectual property.

We could also lose the advantages of our proprietary technology as a result of the advent of new technologies that replace our technology. Without these proprietary technologies, our competitive advantage would be weakened. If we do not maintain our technological advantage, our business could fail to grow and revenue and operating margins could decline.

Failure to successfully or cost-effectively implement upgrades to rVue and our other software systems to maintain our technological competitiveness could limit our ability to increase our revenue and more effectively leverage rVue. Any failure by us to upgrade our technology to remain current with technological changes that may be adopted by other providers of advertising or other advertising platforms could hurt our ability to compete with those companies.

Our technology may infringe on rights owned by others, which may interfere with our ability to provide services, and our rVue web site may expose us to increased liability or expense under intellectual property, privacy or other law.

We may discover that the technology we use infringes patent, copyright, or other intellectual property rights owned by others. In addition, our competitors may claim rights in patents, copyrights, or other intellectual property that will prevent, limit or interfere with our ability to provide our services either in the United States or, as we expand, in international markets. Further, the laws of certain foreign countries may not protect our intellectual property rights to the same extent as do the laws of the United States.

We receive and deploy third-party content that could expose us to claims of infringement on the intellectual property rights of others, and the failure, or perceived failure, to comply with federal, state or international privacy or consumer protection-related laws or regulations or our posted privacy policies could result in actions against us by governmental entities or others. Any such claim or action could result in significant adverse effects on our business and financial results because of, for example, increased costs (such as legal defense, damages owing to third parties, and increased licensing fees to acquire third-party content) and reduction or elimination of content or features from our rVue web site. In addition, a number of other United States federal laws, including those referenced below, may impact our business as a result of our rVue web site. The Digital Millennium Copyright Act has provisions that limit, but do not necessarily eliminate, liability for posting, or linking to third-party web sites that include materials that infringe copyrights or other rights. Portions of the Communications Decency Act are intended to provide statutory protections to online service providers who distribute third-party content. The Children's Online Privacy Protection Act (COPPA) restricts the distribution of materials considered harmful to children and imposes additional restrictions on the ability of online services to collect information from minors. The costs of compliance with these and other laws and regulations may be significant and may increase in the future as a result of changes in the regulations or the interpretation of them. Any failure on our part to comply with these laws and regulations may subject us to additional liabilities.

Our business relies heavily on our technology systems, and any failures or disruptions may materially and adversely affect our operations.

The temporary or permanent loss of our computer equipment and software systems, through sabotage, operating malfunction, software virus, human error, natural disaster, power loss, terrorist attacks, or other catastrophic events, could disrupt our operations and cause a material adverse impact. These problems may arise in both internally developed systems and the systems of third-party service providers. If our technology systems were to fail and we were unable to recover in a timely way, we would be unable to fulfill critical business functions, which could lead to a loss of customers and could harm our reputation. Technological breakdowns could also interfere with our ability to comply with financial reporting and other regulatory requirements.

We may be unsuccessful in expanding our operations internationally, which could harm our business, operating results and financial condition.

Our ability to expand internationally involves various risks, including the need to invest significant resources in such expansion, the possibility that returns on such investments will not be achieved in the near future and competitive environments with which we are unfamiliar. Any future international expansion plans we choose to undertake will require management attention and resources and may be unsuccessful. We do not have any experience in selling our solutions in international markets or in conforming to the local cultures, standards or policies necessary to successfully compete in those markets, and if we do expand internationally, we must invest significant resources in order to build the operational infrastructure necessary to operate in such markets. Furthermore, in many international markets, we may not be the first entrant and there may exist greater competition with stronger brand names than we expect to compete with in North American markets. Our ability to expand internationally will also be limited by the demand for our solutions and the adoption of the internet in these markets. Different privacy, censorship and liability standards and regulations and different intellectual property laws in foreign countries may cause our business and operating results to suffer.

Any future international operations may also fail to succeed due to other risks inherent in foreign operations, including:

difficulties or delays in acquiring participating DPBM network customers in one or more international markets;

different advertising preferences and patterns than those in North America;

varied, unfamiliar and unclear legal and regulatory restrictions;

unexpected changes in international regulatory requirements and tariffs;

legal, political or systemic restrictions on the ability of United States companies to market services or otherwise do business in foreign countries;

less extensive adoption of the internet as a commerce medium or information source and increased restriction on the content of websites;

difficulties in staffing and managing foreign operations;

greater difficulty in accounts receivable collection;

currency fluctuations;

potential adverse tax consequences;

lack of infrastructure to adequately conduct electronic commerce transactions; and

price controls or other restrictions on foreign currency.

As a result of these obstacles, we may find it impossible or prohibitively expensive to expand internationally or we may be unsuccessful in our attempt to do so, which could harm our business, operating results and financial condition.

Confidentiality agreements with employees and others may not adequately prevent disclosure of trade secrets and other proprietary information.

We have devoted substantial resources to the development of our proprietary technology, including the proprietary software component of rVue, and related processes. In order to protect our proprietary technology and processes, we rely in part on confidentiality agreements with our employees, licensees, independent contractors and other advisors. These agreements may not effectively prevent disclosure of confidential information and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. In addition, others may independently discover trade secrets and proprietary information, and in such cases, we could not assert any trade secret rights against such parties. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could adversely affect our competitive business position.

Our business is subject to the risks of hurricanes, fires, floods and other natural catastrophic events and to interruption by man-made problems such as computer viruses or terrorism.

Our systems and operations are vulnerable to damage or interruption from hurricanes, fires, floods, power losses, telecommunications failures, terrorist attacks, acts of war, human errors, break-ins and similar events. For example, a significant natural disaster, such as a hurricane, fire or flood, could have a material adverse impact on our business, operating results and financial condition, and our insurance coverage may be insufficient to compensate us for losses that may occur. In addition, acts of terrorism, which may be targeted at metropolitan areas that have higher population density than rural areas, could cause disruptions in our or our customers' businesses or the economy as a whole. Our servers may also be vulnerable to computer viruses, break-ins and similar disruptions from unauthorized tampering with our computer systems, which could lead to interruptions, delays, loss of critical data or the unauthorized disclosure of confidential customer data. We may not have sufficient protection or recovery plans in certain circumstances, and our business interruption insurance may be insufficient to compensate us for losses that may occur. As we rely heavily on our servers, computer and communications systems and the internet to conduct our business and provide high quality customer service, such disruptions could negatively impact our ability to run our business and either directly or indirectly disrupt our customers' businesses, which could have an adverse effect on our business, operating results and financial condition.

As a public company, we incur significant increased costs, which may adversely affect our operating results and financial condition.

As a public company, we have an obligation to continue to comply with the applicable reporting requirements of the Exchange Act, which includes the filing with the SEC of periodic reports and other documents relating to our business, financial condition and other matters, even though compliance with such reporting requirements is economically burdensome. We expect to incur, and continue to incur, significant accounting, legal and other expenses, including the expenses related to management’s annual evaluation report of its internal control over financial reporting included in this Form 10-K, associated with our public company reporting requirements.

If we fail to establish and maintain an effective system of internal controls, we may not be able to report our financial results accurately or to prevent fraud. Any inability to report and file our financial results accurately and timely could harm our reputation and adversely impact the trading price of our Common Stock.

Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud. If we cannot provide reliable financial reports or prevent fraud, we may not be able to manage our business as effectively as we would if an effective control environment existed, and our business and reputation with investors may be harmed. As a result, our small size and any current internal control deficiencies may adversely affect our financial condition, results of operation and access to capital.

A tight credit market may have an adverse effect on our ability to obtain short-term debt financing.

The deterioration of the global economy has caused a tightening of the credit markets, particularly for smaller reporting companies such as the Company, and despite some improvement in the condition of the credit markets overall lending standards for businesses such as the Company remain strict. Persistence of these conditions could have a material adverse effect on our access to short-term debt and the terms and cost of that debt. As a result, we may not be able to secure additional financing in a timely manner, or at all, to meet our future capital needs which may have an adverse effect on our business, operating results and financial condition.

We are party to convertible note arrangements.

During 2015, we entered into two convertible note financings. These financings provided us with urgently needed financing, but they require that we repay the notes in cash on equity, in some cases at the option of the lender. We may be unable to repay the notes within terms if we do not have sufficient cash on hand. In addition, if we must repay the notes by issuing equity, the repayment will be dilutive of existing shareholders. The convertible notes also carry potentially onerous default terms, which could result in our being required to pay substantial penalties. This could place additional financial strain on us. We may also be required to issue substantial additional amounts of equity at a deep discount to market price, which could result in further dilution and downward pressure on the price of our common stock.

We may be unable to raise sufficient capital through sales of equity.

Although we were successful in raising additional capital through the sale of equity to Acorn Composite Corp. (“Acorn”) in January 2016, we continue to incur operating losses and there can be no assurance that the Acorn financing will be sufficient to execute our business plan. We are likely to require additional capital within nine months and there can be no assurance that we will be successful in raising this capital.

Risks Related to Our Industry

If use of the internet, particularly with respect to the placement of online advertising, does not increase as rapidly as we anticipate, our business will be harmed.

Our future net profits are substantially dependent upon the continued use of the internet as an effective medium of business and communication by our target customers. internet use may not continue to develop at historical rates, and our customers may not continue to use the internet and other online services as a medium for commerce. In addition, the internet may not be accepted as a viable long-term marketplace or resource for a number of reasons, including:

actual or perceived lack of security of information or privacy protection;

possible disruptions, computer viruses or other damage to internet servers or to users' computers; and

excessive governmental regulation.

Our success will depend, in large part, upon third parties maintaining the internet infrastructure to provide a reliable network backbone with the speed, data capacity, security and hardware necessary for reliable internet access and services. Our business, which relies on a contextually rich website that requires the transmission of substantial data, is also significantly dependent upon the availability and adoption of broadband internet access and other high-speed internet connectivity technologies.

Government regulation of the internet is evolving, and unfavorable changes could substantially harm our business and operating results.

We are subject to general business regulations and laws as well as regulations and laws specifically governing the internet. Existing and future laws and regulations may impede the growth of the internet or other online services. These regulations and laws may cover taxation, tariffs, user privacy, data protection, pricing, content, copyrights, distribution, electronic contracts and other communications, consumer protection, broadband residential internet access and the characteristics and quality of services. In some respects, it is not clear how existing laws governing issues such as property ownership, sales and other taxes, libel and personal privacy apply to the internet. Unfavorable resolution of these issues may substantially harm our business and operating results.

Seasonality may cause fluctuations in our financial results.

Our revenue is subject to seasonal fluctuations because advertisers generally place fewer advertisements during the first and third calendar quarters of each year. Expenditures by advertisers also tend to vary in cycles that reflect overall economic conditions as well as budgeting and buying patterns. Because some advertisers may discontinue or reduce advertising on our networks from time to time with little or no notice, we may experience fluctuations in operating results. In particular, because advertisers generally reduce their spending during economic downturns, we would be materially adversely affected by a recession.

Risks Related to our Common Stock

Because we became public by means of a reverse merger, we may not be able to attract the attention of major brokerage firms.

There may be risks associated with us becoming public through a “reverse merger.” Securities analysts of major brokerage firms may not provide coverage of us since there is no incentive to brokerage firms to recommend the purchase of our Common Stock. No assurance can be given that brokerage firms will, in the future, want to conduct any offerings on behalf of our post-transaction company.

Our stock price may be volatile.

The market price of our Common Stock is likely to be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control, including the following:

changes in our industry;

competitive pricing pressures;

our ability to obtain future working capital financing, if required;

additions or departures of key personnel;

limited "public float" in the hands of a small number of persons whose sales or lack of sales could result in positive or negative pricing pressure on the market price for our Common Stock;

sales of our Common Stock;

our ability to execute our business plan;

operating results that fall below expectations;

loss of any strategic relationship;

regulatory developments;

economic and other external factors;

period-to-period fluctuations in our financial results; and

our inability to develop or acquire new or needed technology.

In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our Common Stock.

We have not paid dividends in the past and do not expect to pay dividends in the future. Any return on investment may be limited to the value of our Common Stock.

We have never paid cash dividends on our Common Stock and do not anticipate doing so in the foreseeable future. The payment of dividends on our Common Stock will depend on earnings, financial condition and other business and economic factors affecting us at such time as our board of directors may consider relevant. If we do not pay dividends, our Common Stock may be less valuable because a return on an investment in our Common Stock will only occur if our stock price appreciates.

There is currently a limited trading market for our Common Stock and we cannot ensure that a more liquid one will ever develop or be sustained.

To date there has been an illiquid trading market for our Common Stock. We cannot predict how liquid the market for our Common Stock might become. Our Common Stock is quoted for trading on the Over-the-Counter Bulletin Board (the "OTC Bulletin Board"). The trading price of our Common Stock could suffer and the trading market for our Common Stock may be less liquid and our Common Stock price may be subject to increased volatility if we are not able to up list our securities to a national exchange.

Furthermore, for companies whose securities are traded in the OTC Bulletin Board, it is more difficult (i) to obtain accurate quotations, (ii) to obtain coverage for significant news events because major wire services generally do not publish press releases about such companies, and (iii) to obtain needed capital.

Our Common Stock may be deemed a "penny stock," which would make it more difficult for our investors to sell their shares.

Our Common Stock may be subject to the "penny stock" rules adopted under Section 15(h) of the Exchange Act. The penny stock rules generally apply to companies whose common stock is not listed on The Nasdaq Stock Market or other national securities exchange and trades at less than $5.00 per share, other than companies that have had average revenue of at least $6,000,000 for the last three years or that have tangible net worth of at least $5,000,000 ($2,000,000 if the company has been operating for three or more years). These rules require, among other things, that brokers who trade penny stock to persons other than "established customers" complete certain documentation, make suitability inquiries of investors and provide investors with certain information concerning trading in the security, including a risk disclosure document and quote information under certain circumstances. Many brokers have decided not to trade penny stocks because of the requirements of the penny stock rules and, as a result, the number of broker-dealers willing to act as market makers in such securities is limited. If we remain subject to the penny stock rules for any significant period, it could have an adverse effect on the market, if any, for our securities. If our securities are subject to the penny stock rules, investors will find it more difficult to dispose of our securities.

Offers or availability for sale of a substantial number of shares of our Common Stock may cause the price of our Common Stock to decline.

If our stockholders sell substantial amounts of our Common Stock in the public market, including shares issued in the past private placements, or upon the expiration of any statutory holding period under Rule 144, or issued upon the exercise of outstanding options or warrants, it could create a circumstance commonly referred to as an "overhang" and in anticipation of which the market price of our Common Stock could fall. The existence of an overhang, whether or not sales have occurred or are occurring, also could make more difficult our ability to raise additional financing through the sale of equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate.

Because our directors and executive officers are among our largest stockholders, they can exert significant control over our business and affairs.

Our directors and executive officers own or control a significant percentage of the Common Stock of the Company. Additionally, the holdings of our directors and executive officers may increase in the future upon vesting or other maturation of exercise rights under any of the options or warrants they may hold or in the future be granted or if they otherwise acquire additional shares of our Common Stock. The interests of such persons may differ from the interests of our other stockholders. As a result, in addition to their board seats and offices, such persons will have significant influence over and control all corporate actions requiring stockholder approval, irrespective of how the Company's other stockholders may vote, including the following actions:

to elect or defeat the election of our directors;

to amend or prevent amendment of our Certificate of Incorporation or By-laws;

to effect or prevent a transaction, sale of assets or other corporate transaction; and

to control the outcome of any other matter submitted to our stockholders for vote.

Such persons' stock ownership may discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of the Company, which in turn could reduce our stock price or prevent our stockholders from realizing a premium over our stock price.

Exercise of options and warrants may have a dilutive effect on our Common Stock.

If the price per share of our Common Stock at the time of exercise of any options, or any other convertible securities is in excess of the various exercise or conversion prices of such convertible securities, exercise or conversion of such convertible securities would have a dilutive effect on our Common Stock. As of December 31, 2015, we had (i) outstanding options to purchase 20,140,000 shares of our Common Stock at a weighted average exercise price of $.05 per share, and (ii) outstanding warrants to purchase 14,432,661 shares of our Common Stock at a weighted average exercise price of $.69 per share. Further, any additional financing that we secure may require the granting of rights, preferences or privileges senior to those of our Common Stock and result in additional dilution of the existing ownership interests of our common stockholders.

Our amended and restated articles of incorporation allows for our board to create new series of preferred stock without further approval by our stockholders, which could adversely affect the rights of the holders of our Common Stock.

Our board of directors has the authority to fix and determine the relative rights and preferences of preferred stock. Our board of directors also has the authority to issue preferred stock without further stockholder approval. As a result, our board of directors could authorize the issuance of a series of preferred stock that would grant to holders the preferred right to our assets upon liquidation, the right to receive dividend payments before dividends are distributed to the holders of Common Stock and the right to the redemption of the shares, together with a premium, prior to the redemption of our Common Stock. In addition, our board of directors could authorize the issuance of a series of Preferred Stock that has greater voting power than our Common Stock or that is convertible into our Common Stock, which could decrease the relative voting power of our Common Stock or result in dilution to our existing stockholders.

Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties.

Our corporate headquarters are now located in Oakbrook Terrace, IL, where we occupy approximately 3,109 square feet of office space under a lease that expires on October 31, 2016, at a rate of approximately $3,200 a month. This facility accommodates our principal sales, marketing, operations, finance and administrative activities. Previously we were in Elmhurst, IL where we occupied 2,700 square feet of office space under a lease that expired on September 30, 2015, at a rate of approximately $3,100 a month. We also previously occupied space in Fort Lauderdale, FL (where part of our key technology group resided) consisting of approximately 140 square feet– which we leased at a rate of approximately $1,300 a month. We closed our Fort Lauderdale office in the third quarter of 2014.

Item 3. Legal Proceedings.

From time to time, we may become involved in litigation relating to claims arising out of our operations in the normal course of business.

On or about March 8, 2011, Viewpoint Securities, Inc. commenced an action in the Circuit Court of the 17th Judicial District in Broward County, Florida, alleging that we owe them a placement agent fee of $210,000 and warrants to purchase 175,167 shares of our common stock for purported services rendered in connection with our December 2010 private placement. On July 29, 2011, we answered their Second Amended Complaint and asserted various defenses to the claims asserted therein. Additionally, we filed a Counterclaim for rescission of the Agreement. On January 9, 2012, Viewpoint filed an amended answer to our counterclaim. We believe the case is without merit and are vigorously defending ourselves in connection therewith. On January 5, 2016 a Default Final Judgment was entered by the Circuit Court of the 17th Judicial District in Broward County, Florida in favor of rVue. Pursuant to the judgment, the Court rescinded the Placement Agent Agreement entered into by Viewpoint Securities and rVue Holdings and awarded rVue attorney fees and costs in the amount of $31,715 from Viewpoint Securities. rVue is currently exploring its post-judgment options, including the likelihood of collection on the judgment.

On June 4, 2014, rVue, Inc. filed suit against former rVue director and officer Michael Mullarkey, who left the company on May 31, 2013. The complaint alleged claims of fraud, constructive fraud and conversion. rVue also submitted a claim for employee theft to its insurer, CNA, for the amount misappropriated by Mr. Mullarkey. In November, 2014, CNA approved the claim for employee theft in the amount of $249,459. rVue received $249,459 in November 2014. In November 2015 CNA approved the reimbursement of a portion of the legal fees incurred in the legal complaint with Mr. Mullarkey. rVue received $13,726 in November 2015.

To the best of our knowledge, no governmental authority is contemplating any proceeding to which we are a party or to which any of our properties is subject, which would reasonably be likely to have a material adverse effect on our business, financial condition and operating results.

Item 4. Mine Safety Disclosures.

Not Applicable.

PART II

Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities.

Our Common Stock is quoted on the Over-the-Counter Bulletin Board (OTC Bulletin Board) under the symbol “RVUE”. The following table sets forth the high and low sales prices for our Common Stock for the periods indicated, as reported by the OTC Bulletin Board. The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions.


	Fourth Quarter		Third Quarter		Second Quarter		First Quarter

Fiscal 2015 price range per common share	$	.06 - .02	$	.06 - .03	$	.10 - .04	$	.11 - .09

Fiscal 2014 price range per common share	$	.16 - .08	$	.14 - .10	$	.13 - .04	$	.12 - .06

__________

The last reported sales price of our Common Stock on the OTC Bulletin Board on December 31, 2015 was $.04 and on March 3, 2016 the last reported sales price was $.02.

Holders

According to the records of our transfer agent, as of December 31, 2015, there were 69 holders of record of our Common Stock, which number does not reflect beneficial stockholders who hold their stock in nominee or “street” name through various brokerage firms.

Dividend Policy

We have never declared or paid cash dividends on our Common Stock, and we do not intend to pay any cash dividends on our Common Stock in the foreseeable future. Rather, we expect to retain future earnings (if any) to fund the operation and expansion of our business and for general corporate purposes.

Securities Authorized for Issuance under Equity Compensation Plans

The following table presents information regarding options outstanding under our compensation plans as of December 31, 2015:


	Equity Compensation Plan Information
	Number of Securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights		Number of securities available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Plan Category	(a)	(b)		(c)
Equity compensation plans approved by security holders	20,140,000	$	.05	1,503,120
Equity compensation plans not approved by security holders	-	$	-	-
Total	20,140,000	$	.05	1,503,120

Recent Sales of Unregistered Securities/Recent Purchase of Securities.

We have not sold any unregistered securities, which sales were not previously disclosed in an Annual Report on Form 10-K, a Quarterly Report on Form 10-Q or Current Report on Form 8-K.

We did not repurchase any shares of our Common Stock during the year ended December 31, 2015.

Item 6. Selected Financial Data.

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

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this report on Form 10-K. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including but not limited to those set forth under “Risk Factors” in Item 1A in this report.

Overview

We are an advertising technology company and operate rVue, a demand-side platform (“DSP”) for planning, buying and managing Digital Place-Based Media Networks (DPBM). We provide media services, including an online, internet based DSP that connects advertisers and/or advertising agencies with third party DPBM networks, that allows the advertiser to create a targeted advertising campaign and media plan, and negotiate that media plan simultaneously with all the third-party networks selected. As of December 31, 2015, approximately 175 networks comprising over approximately 1,200,000 screens and delivering over 250 million daily impressions representing the top market areas accessible through rVue. Through our strategic media services group, we execute complete campaigns on behalf of advertising clients or their agencies.

In connection with the Transaction, we acquired from Argo all of its assets related to the rVue business, which included all of the common stock of rVue, Inc. as well as software, contracts and technology. Such software and technology included the rVue DSP technology and software as well as the rVue client and server software which allows an end user to manage and operate a DPBM network. The client software is used to manage each screen or site and the server software is used to manage the client software. rVue had licensed the client and server software to Levoip Corporation for installation in Italy. Under the terms of the contract, Levoip was required to pay rVue: (1) a one-time initial site commissioning fee for first-time sites; (2) a recurring monthly license fee at a fixed dollar per site for each month a site utilized the software; and (3) a 25% share of the gross third-party advertising displayed on the sites. The contract was terminated effective October 6, 2010. Presently, we do not have any plans to license our software.

Throughout 2015 we provided Network services and received fees, under contract, from a large advertiser. We provide monitoring and troubleshooting services on a 24/7 basis to a large advertiser for a private display network that they own and operate. We provide 24/7 services to ensure that the network operates without interruption. We received $10,500 per month for the twelve months of 2015.

The contract to provide these services with the same large advertiser for $10,500 per month auto-renewed through September 30, 2016, but consider this non-core revenue. As the rVue platform gains traction among advertisers and agencies, we expect to earn more transaction fees from rVue related transactions in 2016.

Results of Operations

Our results of operations for the years ended December 31, 2015 and 2014 were as follows:


	2015		2014
Revenue
rVue fees	$	973,589	$	1,141,003
Network		126,000		130,425
		1,099,589		1,271,428
Costs and expenses
Cost of revenue		880,159		974,779
Selling, general and administrative expenses		1,395,306		1,376,248
Depreciation and amortization		138,206		91,493
Interest expense		81,110		-
Change in fair value of derivative instruments		22,616		-
Other income		(13,725)		(249,459)
		2,503,672		2,193,061
Loss before provision for income taxes		(1,404,083)		(921,633)
Provision for income taxes		-		-
Net loss	$	(1,404,083)	$	(921,633)
Net loss per common share - basic and diluted	$	(0.01)	$	(0.01)
Shares used in computing net loss per share:
Basic and diluted		144,429,639		137,638,146

Revenue

Revenue was $1,099,589 for the year ended December 31, 2015 compared to $1,271,428 for the year ended December 31, 2014, a $171,839 or 13.5% decrease. We earned revenue in two categories as follows:

rVue fees - Core fees

rVue fees were $973,589 for the year ended December 31, 2015, a $167,414 or 14.7% decrease over the $1,141,003 for the year ended December 31, 2014. While the majority of our revenue historically has been from network services and license fees, the development of the rVue platform and generating revenue and fees is the focus of our business. As the rVue platform gains traction with advertisers and agencies, we expect to generate additional revenue and fees in 2016 from advertisers and agencies for placing advertising with DPBM networks through rVue. This is the focus of our business and the area in which we expect to generate the majority of our revenue in 2016 and beyond. We cannot offer any assurance that advertisers or agencies will accept the rVue platform as their platform of choice for placing advertising with DPBM networks.

Network - Non Core fees

Network revenue was $126,000 for the year ended December 31, 2015, a $4,425 or 3.4% decrease compared to the $130,425 for the year ended December 31, 2014.

We assist a large advertiser with the maintenance and troubleshooting of a private network they operate. We provide 24/7 services to ensure that the network operates without interruption. We received $10,500 per month for the twelve months of 2015 and will continue to receive this monthly income through September 2016.

Cost of revenue

Cost of revenue was comprised of:


	2015		2014		Change		%
Temporary labor	$	12,908	$	11,415	$	1,493	13.1%
rVue operations		867,251		963,364		(96,113)	-10.0%
Total	$	880,159	$	974,779	$	(94,620)	-9.7%

Temporary labor increased $1,493 or 13.1% due to an increase in the work performed by our outside contractor this year. The decrease in rVue operations of $96,113 or 10.0% is a direct result of the decrease in core revenue. Costs include amounts payable to networks and other fixed operating expenses.

Selling, general and administrative expenses (“SG&A”)

SG&A were $1,395,306 for the year ended December 31, 2015 compared to $1,376,248 for the year ended December 31, 2014, a $19,058 increase or 1.4%. Changes by major component of SG&A are:


	2015		2014		Change		%
Communications	$	72,805	$	70,986	$	1,819	2.6%
Compensation and benefits		361,090		578,924		(217,834)	-37.6%
Facility expense		45,893		58,457		(12,564)	-21.5%
Marketing and investor relations expenses		123,643		83,875		39,768	47.4%
Office support and supply expense		273,462		233,289		40,173	17.2%
Professional and consulting fees		415,231		263,557		151,674	57.5%
Travel expense		41,641		30,091		11,550	38.4%
Stock based compensation expense		61,541		57,069		4,472	7.8%
	$	1,395,306	$	1,376,248	$	19,058	1.4%

Compensation and benefits was $361,090 for the year ended December 31, 2015, compared to $578,924 for the year ended December 31, 2014 a decrease of $217,834, or 37.6%. The decrease is due to a decrease in our personnel, which was partially offset by an increase in our vacation accrual and a decrease in the amount of payroll capitalized for software development. Some of the full time personnel were replaced with outsourced consultants. See discussion related to increase in professional and consulting fees below.

Facility expense decreased by $12,564 or 21.5% due to the move of the corporate headquarters to Oak Brook Terrace, IL and the closing of our Fort Lauderdale office in the third quarter of 2014.

Marketing and investor relations expense was $123,643 in 2015 compared to $83,875 in 2014, a $39,768 increase, or 47.4%. The increase is attributable to an approximate $58,000 increase in expense for 2015 due to an eight-month investor relations program to attract investors to rVue that began in November 2014 and was completed in May 2015. This increase was offset by an approximate $20,000 decrease in web development related expenses, while all of the other marketing and advertising expenses remained consistent with the prior year.

Office support and supply expense was $273,462 in 2015 compared to $233,289 in 2014, an increase of $40,173 or 17.2%. The increase is the result of a $34,202 in outside services for the information technology and production department and $11,056 increase in insurance offset by a decrease in office supplies, postage and administrative fees.

Professional and consulting fees were $415,231 in 2015 compared to $263,557 in 2014, a $151,674 increase, or 57.5%. This increase is due to an increase in $53,100 for a sales consultant, $55,248 for our outsourced Chief Technology Officer, $24,585 paid to consultants for the derivative notes, an increase of $18,611 in legal fees, an increase of $2,658 in accounting fees offset by a $2,529 decrease in filing fees.

Travel expense was $41,641 in 2015 compared to $30,091 in 2014, an $11,550 increase, or 38.4%. Increase in travel was mainly attributable to an increase in the amount of sales related travel in 2015.

Depreciation and amortization

Depreciation and amortization was $138,206 for the year ended December 31, 2015 compared to $91,493 for the year ended December 31, 2014, a $46,713 increase, or 51.1%. The majority of depreciation and amortization expense is for the amortization of software development costs. Software development costs are amortized over an 18 month period. In the 18 months prior to December 31, 2015 there was a 40.7% increase in the amount of capitalized software costs compared to the same period of time prior to December 31, 2014.

Interest expense

There was $81,110 in interest expense for the year ended December 31, 2015 and no interest expense for the year ended December 31, 2014. $1,240 of the interest expense is due to financing an insurance premium and $79,870 is attributable to the interest expense related to the convertible notes.

Change in fair value of derivative instruments

The increase in the change in the fair value of derivative instruments is due to the issuance of convertible notes in July 2015, which resulted in an increase in the expense of $22,616 for the year ended December 31, 2015 compared to no expense for the year ended December 31, 2014.

Other income

There was $13,725 in other income for the year ended December 31, 2015 compared to $249,459 in other income for the year ended December 31, 2014 a $236,184 decrease or 94.7%. The other income in 2015 was the result of the recovery of legal fees related to a legal complaint. The other income in 2014 was due to an insurance settlement related to a legal complaint.

Liquidity and Capital Resources

As of December 31, 2015, we had cash and cash equivalents totaling $67,069. Since our inception through December 31, 2015, we have incurred net losses, and at December 31, 2015, we had an accumulated deficit of $14,072,559 and total stockholders’ deficit of $158,783. We expect to incur losses in fiscal 2016. There is no guarantee that we will ultimately be able to generate sufficient revenue or reduce our costs in the anticipated time frame to achieve and maintain profitability and have sustainable cash flows.

We did not have any material commitments for capital expenditures at December 31, 2015. We have budgeted capital expenditures of $150,000 in 2016, primarily capitalized labor for software development. Any required expenditure will be completed through internally generated funding or from proceeds from the sale of common or preferred stock, or borrowings.

On June 4, 2014, rVue, Inc. filed suit against former rVue director and officer Michael Mullarkey, who left the company on May 31, 2013. The complaint alleged claims of fraud, constructive fraud and conversion. rVue also submitted a claim for employee theft to its insurer, CNA, for the amount misappropriated by Mr. Mullarkey. In November, 2014, CNA approved the claim for employee theft in the amount of $249,459. rVue received $249,459 in November 2014 and recorded the amount as other income. In November 2015 CNA approved the reimbursement of a portion of the legal fees incurred in the legal complaint with Mr. Mullarkey. rVue received $13,725 in November 2015 related to the legal complaint with Mr. Mullarkey.

We did not have any significant elements of income or loss not arising from continuing operations in the years ended December 31, 2015 or 2014. While our business is seasonal, we do not expect this seasonality to have a material adverse effect on our results of operations or cash flows.

So far in 2016, we converted $79,840 of debt with the issuance of the Company’s Common Stock. We intend to raise an additional $1,000,000 to $2,000,000 through the sale of Common Stock to investors in 2016, but no assurance of this can be made.

Cash used in operating activities

Net cash used in operating activities totaled $901,672 for the year ended December 31, 2015 compared to $788,079 for the year ended December 31, 2014. In the year ended December 31, 2015, cash was used to fund a net loss of $1,404,083, reduced by depreciation and amortization of $138,206, non-cash interest expense of $70,532 stock-based compensation expense of $61,541, common stock issued for services valued at $85,645, change in the fair value of derivative instruments of $22,616, impairment charge of $18,506, and decreased by changes in operating assets and liabilities totaling $105,365.

In the year ended December 31, 2014, cash was used to fund a net loss of $921,633, reduced by non-cash depreciation of $91,493, stock-based compensation expense of $57,069, common stock issued for services valued at $15,000 and increased by changes in operating assets and liabilities totaling $30,008.

Cash used in investing activities

Net cash used in investing activities totaled $142,932 for the year ended December 31, 2015 compared to $137,707 for the year ended December 31, 2014. In the year ended December 31, 2015, cash used in investing activities consisted of $142,873 for software development costs plus a $59 increase in deposits. In the year ended December 31, 2014, cash used in investing activities consisted of $145,207 for software development costs less a $7,500 decrease in deposits.

Cash from financing activities

Net cash provided by financing activities totaled $692,870 for the year ended December 31, 2015 compared to $500,000 for the year ended December 31, 2014. In the year ended 2015 we received proceeds from the issuance of common stock of $565,000, $175,000 from the issuance of debt and convertible instruments and reduced by $47,130 for payments on debt. In the year ended December 31, 2014 we received proceeds from issuance of common stock in the amount of $500,000.

Financial condition

As of December 31, 2015, we had a working capital deficit of $285,561, an accumulated deficit of $14,072,559 and total stockholders’ deficit of $158,783, compared to working capital of $437,555, an accumulated deficit of $12,668,476 and total stockholders’ equity of $578,114 at December 31, 2014. The decrease in our financial condition was due to an increase in our net loss and the use of cash on hand. So far in 2016, we converted $79,840 of debt with the issuance of Company’s Common Stock. We intend to raise an additional $1,000,000 to $2,000,000 through the sale of Common Stock to investors, but no assurance of this can be made.

We believe that with the cash we have on hand, and the cash we may raise through future securities issuances, that we will have sufficient funds available to cover our cash requirements through the next twelve months.

At December 31, 2015 our registered independent public accounting firm expressed substantial doubt as to our ability to continue as a going concern because, since inception, we have incurred substantial losses and negative cash flows from operations. Management intends to address this concern by focusing on revenue growth in the coming months. We raised $565,000 in 2015 through the issuance of common stock to investors and $175,000 through the issuance of convertible notes.

Off-Balance Sheet Arrangements

Since our inception, except for standard operating leases, we have not engaged in any off-balance sheet arrangements, including the use of structured finance, special purpose entities or variable interest entities.

Critical Accounting Policies

Management is responsible for the integrity of the financial information presented herein. Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. Where necessary, they reflect estimates based on management's judgment. When selecting or evaluating accounting alternatives, management focuses on those that produce, from among the available alternatives, information most useful for decision-making. We believe that the critical accounting policies discussed below involve additional management judgment due to the sensitivity of the methods, assumptions and estimates necessary in determining the related asset, liability, revenue and expense amounts.

Derivative Instruments

In July 2015 we entered into two Promissory Note Purchase Agreements and issued notes which are convertible into shares of our common stock that have conversion features which are embedded derivatives as defined in FASB Accounting Standards Codification (ASC) 815. Derivative financial instruments are initially measured at their fair value and then are re-valued at each reporting date, with changes in fair value reported as charges or credits to income. Embedded derivatives that are not clearly and closely related to the host contract (the notes) are bifurcated and recognized at fair value with changes in fair value recognized as either a gain or loss in earnings. We determined the fair value of the embedded derivative based on available market data using a binomial lattice valuation model, giving consideration to all of the rights and obligations of the instrument.

Software Development Costs

We capitalize costs incurred for the production of computer software that generates the functionality of our DSP. Capitalized software development costs typically include direct labor and related overhead for software produced by the Company, as well as the cost of software purchased from third parties. Costs incurred for a product prior to the determination that the product is technologically feasible (i.e., research and development costs), as well as maintenance costs for established products, are expensed as incurred. Once technological feasibility has been established, development costs are capitalized until the software has completed testing and is released for use by the public. We also capitalize eligible costs to acquire or develop internal-use software (such as billing and accounting) that are incurred subsequent to the preliminary project stage.

Revenue Recognition

Our revenues are derived from advertising campaigns placed through rVue, the maintenance of certain private networks, and the production and distribution of network programming. Revenue is recognized as follows:

Advertising revenue is recognized in the period in which the advertising impressions occur. Revenue arrangements are evidenced by a fully executed insertion order (“IO”). Generally, IO’s state the number and type of advertising impressions (cost-per-thousand) to be delivered, the agreed upon rate for each delivered impression, and a fixed period of time for delivery.

In the normal course of business, the Company frequently contracts with advertising agencies on behalf of their advertiser clients. The determination of whether revenue should be reported on a gross or net basis is based on an assessment of whether the Company is acting as the principal or an agent in the transaction. In determining whether the Company acts as the principal or an agent, the Company follows the accounting guidance for principal-agent considerations. While none of the factors identified in this guidance is individually considered presumptive or determinative, because the Company is the primary obligator and is responsible for (i) fulfilling the advertisement delivery, (ii) establishing the selling prices for delivery of the advertisements, and (iii) performing all billing and collection activities including retaining credit risk, the Company acts as the principal in these arrangements and therefore reports revenue and costs incurred on a gross basis.

Revenue from the maintenance of private networks, and the production and distribution of network programming content, either under contract or on a piece by piece or monthly basis, is recognized ratably over the term of the related service period if the fees are fixed and determinable, delivery has occurred and collection is probable.

We record deferred revenue when we receive payment in advance of the performance of services.

Stock Based Compensation

We account for stock-based payment transactions in which we receive employee services in exchange for equity instruments of the Company. Stock-based compensation cost for stock options is estimated at the grant date based on each option’s fair-value as calculated by the Black-Scholes-Merton option-pricing model. We recognize stock-based compensation cost as expense ratably on a straight-line basis over the requisite service period. We will recognize a benefit from stock-based compensation in equity if an incremental tax benefit is realized by following the ordering provisions of the tax law.

We also use the provisions of ASC 505-50, Equity Based Payments to Non-Employees, to account for stock-based compensation awards issued to non-employees for services. Such awards for services are recorded at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the measurement date guidelines enumerated in ASC 505-50.

Income Taxes

The provision for income taxes is computed using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets are expected to be realized or settled. We record a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. We recognize the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured to determine the actual amount of benefit to recognize in our financial statements.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk.

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

Item 8. Financial Statements and Supplementary Data.


Index to Consolidated Financial Statements		Page
Report of RubinBrown LLP, Independent Registered Public Accounting Firm		F-2
Consolidated Balance Sheets as of December 31, 2015 and 2014		F-3
Consolidated Statements of Operations for the years ended December 31, 2015 and 2014		F-4
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2015 and 2014		F-5
Consolidated Statements of Cash Flows for the years ended December 31, 2015 and 2014		F-6
Notes to Consolidated Financial Statements		F-7 – F22

All financial statement schedules have been omitted, since the required information is not applicable or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements and notes thereto.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls And Procedures

Evaluation of Disclosure Controls and Procedures

Based on an evaluation under the supervision and with the participation of the Company’s management, the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act were effective as of December 31, 2015 to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission (“SEC”) rules and forms, and (ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Inherent Limitations Over Internal Controls

The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles (“GAAP”). The Company’s internal control over financial reporting includes those policies and procedures that:

(i)

pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets;

(ii)

provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that the Company’s receipts and expenditures are being made only in accordance with authorizations of the Company’s management and directors; and

(iii)

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

Management, including the Company’s principal executive officer and principal financial officer, does not expect that the Company’s internal controls will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, any evaluation of the effectiveness of controls in future periods are subject to the risk that those internal controls may become inadequate because of changes in business conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management’s Annual Report on Internal Control Over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting based on the criteria set forth in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on the Company’s assessment, management has concluded that its internal control over financial reporting was effective as of December 31, 2015 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP.

This Annual Report on Form 10-K does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm as such report is not required for non-accelerated filers such as us pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act that Congress enacted in July 2010, and the rules thereunder, which exempt smaller reporting companies from the requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002 requiring an outside auditor to attest annually to a firm’s internal-control evaluations.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the quarter ended December 31, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information.

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

The following is a list of our executive officers and directors. All directors serve one-year terms or until each of their successors are duly qualified and elected. The officers are elected by the Board of Directors (the “Board”). There are no family relationships between any director or executive officer.


Name	Age	Positions with the Company

Mark Pacchini	59	Chief Executive Officer, President, acting Chief Financial Officer and Director
David Esser	48	Chief Technology Officer and Executive Vice President of Technology and Operations
Robert Roche	53	Director
Peter Emerson	65	Director
Thomas Harrison	68	Director
Raymond Roman	48	Director

Mark Pacchini, Chief Executive Officer, President, acting Chief Financial Officer and Director

Mr. Pacchini has served as our Chief Executive Officer, President and acting Chief Financial Officer since April 11, 2013 and has served as a director of ours since February 16, 2013. He retired from Draftfcb in 2012, after 32 years with the advertising and communications company. During that time, Mr. Pacchini held several key positions. Most recently, Mr. Pacchini served as President of the Asia Pacific Region (2009-2012) and led a period of significant growth (both revenue and profit) in China. This growth was driven by strict cost control and new business wins on Beiersdorf, Kraft, Shanghai GM, Haier, SCJ and the expansion of its digital operations. He was also President of the firm's West Coast operations (from 2006-2012) that covered San Francisco, Seattle and Orange County. This group saw its revenue and profit increase fourfold over those six years. That growth came via organic and new business wins on Taco Bell, Dockers, EA Sports, Del Monte, Pet Co and Pacific Gas & Electric. Mr. Pacchini was President of Global Accounts (2006-2009), working with a roster of global clients including Beiersdorf (Nivea), Boeing, Coors, Dow, Kraft, Moneygram, SC Johnson and Yum (Pizza Hut, Taco Bell and KFC). In 2005-2006 when FCB and its sister agency Draft were combined to form Draftfcb, Mr. Pacchini was a member of the executive team that lead the merger. He remained on the Executive Committee until he retired. From 2001-2008, Mr. Pacchini was co-general manager and then co-president of FCB Chicago, which was the largest office in the FCB/IPG network. During this seven-year period, the office registered unprecedented revenue and profit levels and had over 1,200 employees. In 1995, Mr. Pacchini co-lead a team that won the SC Johnson global business. As a result, the account went from a handful of brands in 12 countries to over 20 brands in 80+ countries. In order to provide world-class service across the planet, Mr. Pacchini and his team opened offices in Brazil and set up "affiliates" in Eastern Europe including Russia. From 1995 to 2011, SCJ grew to be the largest global account at Draftfcb and one of the top 5 at IPG. At its peak, the account brought in approximately $100 million in annual revenue and had over 425 full time equivalents (FTEs).

Mr. Pacchini earned his Master's Degree in Advertising from Northwestern University and was presented with the Harrington Award as the program's top student. He also received a Bachelor's Degree in Business Administration from Western Michigan University. He graduated Magna Cum Laude with majors in both Business and Communications.

David Esser, Chief Technology Officer and Executive Vice President of Technology and Operations

David Esser has served as our Chief Technology Officer since July 20, 2015. He is responsible for leading the technology platform development and operations and building out the IP portfolio. Prior to rVue, Mr. Esser co-founded multiple internet and mobile technology startups, serving as VP of Technology, VP of Operations, CTO, and COO. He managed all aspects of technology and product development, as well as the creation of organizations for Product Management, Professional Services, Customer Support, Data Operations, and Sales. Mr. Esser has also served as an Entrepreneur in Residence for Instant Systems and Industrial Innovation Partners, helping in the assessment and growth of technology companies. Prior to the above, Mr. Esser was a Senior Project Manager at Fort Point Partners, helping to build the first ecommerce for Nike, Intel, The North Face, Seagate, and others. Mr. Esser has 15 years’ experience managing all aspects of technology startup technology and business operations development. He has a degree from Stanford University.

Robert Roche, Director

Robert Roche has served as a director of ours since March 9, 2012. He is an entrepreneur, attorney and private equity investor and conducts numerous business operations throughout Asia and the United States. He is a co-founder and Chairman of the Board of Directors of Acorn International, Inc. (NYSE: ATV), a multi-platform media and branding company and one of the first companies in China to use TV direct sales programs, often referred to as TV infomercials, in combination with non-TV direct sales platforms and a nationwide distribution network to market and sell consumer products. He is also the co-founder and Chairman of Oak Lawn Marketing, one of the largest infomercial companies in Japan. He has lived in Japan and China for more than 27 years. Mr. Roche received his bachelor's degree in Economics and Japanese Studies from Illinois State University in 1985 and a J.D. degree from the University of Denver in 1988. Mr. Roche was selected as a director because of his extensive experience in executive capacities with two large international corporations and his extensive experience in TV direct sales.

Peter Emerson, Director

Peter Emerson has served as a director of ours since March 6, 2013. Mr. Emerson is an entrepreneur in business, social investment and public policy. He is the founding partner of Emerson Associates International and KAPE International, LLC, firms that provide creative and successful strategies across multiple platforms for a wide range of clients and industries. Mr. Emerson serves as a director and the chairman of the Government Relations and Ethics Committee for the Southern African Enterprise Development Fund, a $100 million fund operating in ten African countries. President Clinton appointed him and he is the Co-Chair of the International Advisory Board of Business Forward, an organization that advises and facilitates input from investors, small business owners and senior executives to policymakers on a wide range of critical national and international issues. Mr. Emerson graduated from New York University with a BA, magna cum laude, and from Harvard Kennedy School of Government with a MPA.

Thomas Harrison, Director

Thomas Harrison has served as a director of ours since September 20, 2013. Mr. Harrison is Chairman Emeritus of Diversified Agency Services (DAS), the world’s largest group of marketing services companies. A division of the Omnicom Group, DAS provides a broad range of marketing communications services including public relations, crisis management, branding, sales promotion, customer relationship management and specialty communications including health care advertising. With over 5,000 worldwide clients, the DAS division has annual revenues of over $6.0 billion and is the largest unit within Omnicom. Under Mr. Harrison’s watch, the DAS division has more than quadrupled in size and now accounts for over 50% of the total revenues of Omnicom. Mr. Harrison’s multi-faceted career brought him to Omnicom in 1992 when the firm he co-founded in 1987, Harrison & Star Business Group, a rapidly growing agency in the healthcare industry at the time, was acquired. Mr. Harrison served as Chairman of the Harrison & Star Group and Chairman of Diversified Healthcare Communications, a group of eight healthcare agencies within Omnicom, until his appointment as President of DAS in 1997. He was named Chairman and Chief Executive of DAS in 1998. With an advanced degree in cell biology and physiology, Mr. Harrison began his business career at Pfizer Laboratories in 1974 as a professional sales representative and later as marketing director from 1978 to 1981. He then joined a mid-sized healthcare advertising agency before starting, The Harrison & Star Business Group. While at the helm he started two healthcare advertising agencies, a medical education company, a direct-to-consumer healthcare company and a medical PR group as well as acquiring a managed care consultancy. He is a member of the Executive Committee of the Montefiore Hospital and is a Fellow of the New York Academy of Medicine. Mr. Harrison became partner and board member of Dipexium Pharmaceuticals in 2013. He served as co-chairman of the New York Chapter of the U.S. Olympic Committee and raised funding to support U.S. Olympic Athletes. A frequent speaker at business forums and at universities across the U.S. on the subject of entrepreneurialism, lectures on business strategies, the “Success Promoters” and corporate leadership in the economic upturn. Mr. Harrison has appeared on CNBC, CNNI, Bloomberg and Forbes.com.

Raymond Roman, Director

Raymond Roman is currently President and CEO of Brightstar, and, has served as Senior Executive at Dell, Motorola and Ameritech. Prior to joining Brightstar, Mr. Roman served as Chief Operating Officer of Leap Wireless International, Inc., from January of 2011 to December of 2012. Earlier in his career, Mr. Roman held various key positions at Motorola, including Co-Head of the Mobile Device business, Head of Global Sales and General Manager of Mobile Devices North America, from 2001 to 2007. After demonstrating his success at Motorola, Mr. Roman served in senior executive positions at Dell, Inc. from 2007 to January 2011. Additionally, from 1993 to 2000, Mr. Roman served in various senior operating and finance roles at companies including the Ameritech Corporation and Kraft Foods. In recognition of his impact and influence, Mr. Roman was named to Crain's Chicago Business "40 Under 40" in 2005. He has been a Director of rVue Holdings, Inc. since May 21, 2014. Mr. Roman holds a B.S in Finance from the University of Illinois and an MBA in Marketing and Finance from the University of Chicago.

Director or Officer Involvement in Certain Legal Proceedings

Our directors and executive officers were not involved in any legal proceedings as described in Item 401(f) of Regulation S-K in the past ten years.

Directors’ and Officers’ Liability Insurance

We have directors’ and officers’ liability insurance insuring our directors and officers against liability for acts or omissions in their capacities as directors or officers, subject to certain exclusions. Such insurance also insures us against losses, which we may incur in indemnifying our officers and directors. In addition, we have entered into indemnification agreements with key officers and directors and such persons shall also have indemnification rights under applicable laws, and our certificate of incorporation and bylaws.

Corporate Governance

Board Responsibilities and Structure

The Board oversees, counsels, and directs management in the long-term interest of rVue and its shareholders. The Board’s responsibilities include establishing broad corporate policies and reviewing the overall performance of rVue. The Board is not, however, involved in the operating details on a day-to-day basis.

Board Committees and Charters

The Board, and its Committees, meet throughout the year and act by written consent from time to time as appropriate. The Board has formed Audit, Compensation and Nominating and Governance Committees. Committees regularly report on their activities and actions to the Board. The Board appoints members to its Audit Committee, Compensation Committee and Nominating and Governance Committee. The Audit Committee, Compensation Committee and the Nominating and Governance Committee each have a written charter approved by the Board. The following table identifies the independent and non-independent current Board and Committee members:


Name	Independent	Audit	Compensation	Nominating and Governance
Robert Roche			X
Thomas Harrison	X	X
Peter Emerson	X		X	X
Mark Pacchini		X		X
Raymond Roman	X	X		X

Our Board has determined that Messrs. Emerson and Harrison are independent under the NASDAQ Stock Market Listing Rules.

Audit Committee

The members of the Audit Committee are Messrs. Thomas Harrison (Chair), Mark Pacchini and Raymond Roman. The Audit Committee’s duties are to recommend to our board of directors the engagement of independent auditors to audit our financial statements. The Audit Committee reviews the scope, timing and fees for the annual audit and the results of audit examinations performed by independent public accountants, including their recommendations to improve the system of accounting and internal controls. The Audit Committee oversees the independent auditors, including their independence and objectivity. However, the committee members are not acting as professional accountants or auditors, and their functions are not intended to duplicate or substitute for the activities of management and the independent auditors. The Audit Committee is empowered to retain independent legal counsel and other advisors, as it deems necessary or appropriate to assist the Audit Committee in fulfilling its responsibilities, and to approve the fees and other retention terms of the advisors. Our Audit Committee members possess an understanding of financial statements and generally accepted accounting principles. Our Board has determined that Mr. Harrison is qualified as an Audit Committee Financial Expert, as that term is defined by the rules of the SEC and in compliance with the Sarbanes-Oxley Act of 2002. The Board has determined that Mr. Harrison is independent in accordance with the NASDAQ Stock Market independence standards for audit committees.

Compensation Committee

The members of the Compensation Committee are Messrs. Roche (Chair) and Emerson. The Compensation Committee has certain duties and powers as described in its charter, including but not limited to periodically reviewing and approving our salary and benefits policies, compensation of executive officers, administering our stock option plans and recommending and approving grants of stock options under such plans.

Nominating and Governance Committee

The members of the Nominating and Governance Committee are Messrs. Emerson (Chair), Pacchini and Roman. The Nominating and Governance Committee considers and makes recommendations on matters related to the practices, policies and procedures of the Board and takes a leadership role in shaping our corporate governance. As part of its duties, the Nominating and Governance Committee assesses the size, structure and composition of the board and its committees, coordinates evaluation of Board performance and reviews Board compensation. The Nominating and Governance Committee also acts as a screening and nominating committee for candidates considered for election to the Board.

Changes in Nominating Process

There are no material changes to the procedures by which security holders may recommend nominees to our Board.

Board Meetings and Committees; Annual Meeting Attendance

The Board held regular meetings during the year ended December 31, 2015. All directors were present for at least 75% of the Board meetings. The Board acted by unanimous written consent 3 times during the year ended December 31, 2015. The Audit Committee held 4 meetings during the year ended December 31, 2015. All members were present for at least 75% of the Audit Committee meetings.

The Company does not have a policy with respect to Board member attendance at the annual meeting of stockholders.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires that our officers and directors and persons who own more than 10% of our Common Stock file reports of ownership and changes in ownership with the SEC and furnish us with copies of all such reports. We believe, based on our stock transfer records and written representations from certain reporting persons, that all reports required under Section 16(a) were timely filed during 2015.

Codes of Business Conduct and of Ethics

Our Board has approved, and we have adopted, a Code of Business Conduct and Ethics, or the Code of Conduct, which applies to all of our directors, officers and employees. Our Board has also approved, and we have adopted, a Code of Ethics for Senior Financial Officers, or the Code for SFO, which applies to our chief executive officer and chief financial officer. The audit committee of our Board is responsible for overseeing the Code of Conduct and the Code for SFO. Our audit committee must approve any waivers of the Code of Conduct for directors and executive officers and any waivers of the Code for SFO. The Code of Conduct and the Code for SFO are available free of charge upon written request to rVue Holdings, Inc., 17W220 22^nd Street, Suite #200, Oakbrook Terrace, IL 60181, Attention: Chief Financial Officer. We have posted our Codes of Conduct and our Code for the SFO on our website at http://ir.stockpr.com/rvue/governance-docs.

Board Diversity

While we do not have a formal policy on diversity, our Board considers diversity to include the skill set, background, reputation, type and length of business experience of our Board members as well as a particular nominee’s contributions to that mix. Although there are many other factors, the Board seeks individuals with experience on public company boards as well as experience with advertising, marketing, legal and accounting skills.

Board Assessment of Risk

Our risk management function is overseen by our Board. Through our policies, our Code of Conduct and Ethics and our Board committees’ review of financial and other risks, our management keeps our Board apprised of material risks and provides our directors access to all information necessary for them to understand and evaluate how these risks interrelate, how they affect rVue, and how management addresses those risks. Mr. Pacchini, our chief executive officer, president and acting chief financial officer works closely with the Board once material risks are identified on how to best address such risk. If the identified risk poses an actual or potential conflict with management, our independent directors may conduct the assessment. Presently, the primary risks affecting rVue include our ability to (i) gain acceptance and the adoption of rVue as a demand side platform, (ii) increase market share in an intensely competitive DPBM advertising market, (iii) successfully execute our business strategy and deploy a differentiated technology solution, and (iv) effectively raise sufficient capital as we scale our business. The Board focuses on these key risks and interfaces with management on seeking solutions.

Item 11. Executive Compensation.

EXECUTIVE COMPENSATION

The following information is related to the compensation paid, distributed or accrued by us for the years ended December 31, 2015 and 2014 to those individuals who served as our chief executive officer (principal executive officer) during 2015 and 2014 and the Company’s other executive officers serving at the end of the last fiscal year whose compensation exceeded $100,000 (the “Named Executive Officers”).

Summary Compensation Table


Name and Principal Position	Year	Salary	Bonus	Stock Awards	Option Awards	All Other Compensation	Total
(a)	(b)	$(c)	$(d)	($)(e)⁽¹⁾	($)(f)⁽¹⁾	($)(i)	($)(j)

Mark Pacchini	2014	48,000	-	-	-	-	48,000
Chief Executive Officer⁽²⁾	2015	36,000	-	-	-	-	36,000

Eric Kristoff⁽²⁾	2014	150,000	-	-	-	-	150,000
Chief Technology Officer	2015	67,917	-	-	-	-	67,917

David Esser	2015	55,248	-	-	43,055	-	98,303
Chief Technology Officer⁽³⁾

Steve Schildwachter	2014	150,000	-	-	-	-	150,000
Chief Marketing Officer⁽⁴⁾	2015	57,540	-	-	-	-	57,540

__________

⁽¹⁾

The amount in this column represent the fair value of the award as of the grant date as computed in accordance with FASB ASC Topic 718. These amounts represent options to purchase shares of our Common Stock and do not reflect the actual amounts that may be realized by the Named Executive Officers.

⁽²⁾

Mr. Kristoff left the Company on June 30, 2015.

⁽³⁾

Mr. Esser joined the Company in July, 2015.

⁽⁴⁾

Mr. Schildwachter left the Company on September 15, 2015.

Table below for 2015

Outstanding Equity Awards At 2015 Fiscal Year-End

There are no unexercised options held by the Named Executive Officer as of December 31, 2015. There are no outstanding stock awards held by the Named Executive Officers:


OPTION 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
(a)	(b)	(c)	(#)(d)	($)(e)	(f)

Mark Pacchini	-	9,750,000	-	0.04	8/10/15
David Esser	-	800,000	-	0.03	10/22/15
David Esser	-	750,000	-	0.04	12/03/15

Our Board has approved that directors will not be compensated for their services on the Board beginning January 1, 2014. Directors have the ability to receive up to 500,000 shares of Common Stock upon joining the Board as a new member, subject to their purchasing an equal number of shares of Common Stock.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

See Part II, Item 5, under the heading, “Securities Authorized for Issuance under Equity Compensation Plans” for information on compensation plans under which our equity securities are authorized for issuance.

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth the number of shares of our Common Stock beneficially owned as of March 3, 2016, by (i) those persons known by us to be owners of more than 5% of our Common Stock, (ii) each director (iii) our named executive officers, and (iv) our executive officers and directors as a group. Except as otherwise indicated, the address of each stockholder listed below is: c/o rVue Holdings, Inc., 17W220 22^nd Street, Oakbrook Terrace, IL 60181.


Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership	Percent of Class⁽¹⁾

Directors and Executive Officers:

Mark Pacchini	2,428,571	1.3%
Robert Roche	79,999,566⁽²⁾	40.0%
Peter Emerson	250,000	*
Thomas Harrison	1,500,000	*

All directors and executive officers as a group (5 persons)	84,178,137	42.1%

5% Shareholders:

Acorn Composite Corp.	79,632,900⁽³⁾	39.9%
5605 Riggins Court, Second Floor
Reno, NV 89502

iVue Holdings, LLC	18,007,217⁽⁴⁾	9.2%
5605 Riggins Court, Second Floor
Reno, NV 89502

__________

Less than 1%.

⁽¹⁾

Applicable percentages are based on 193,900,925 shares of Common Stock outstanding as of March 3, 2016. Beneficial ownership is determined under the rules of the SEC and generally includes voting or investment power with respect to securities. A person is deemed to be the beneficial owner of securities that can be acquired by such person within 60 days whether upon the exercise of options or otherwise. Shares of Common Stock subject to options and warrants currently exercisable, or exercisable within 60 days after the date of this report, are deemed outstanding for computing the percentage of the person holding such securities but are not deemed outstanding for computing the percentage of any other person. Unless otherwise indicated in the footnotes to this table, rVue believes that each of the shareholders named in the table has sole voting and investment power with respect to the shares of Common Stock indicated as beneficially owned by them.

⁽²⁾

Includes (i) 166,666 shares of Common Stock that are owned by Robert Roche, (ii) 73,799,567 shares of Common Stock that are owned by Acorn Composite Corp., an entity owned 100% by Mr. Roche (“Acorn”), (ii) 5,833,333 shares of Common Stock issuable upon the exercise of warrants that are exercisable within 60 days hereof that are owned by Acorn, and (iii) 200,000 shares of Common Stock issuable upon the exercise of options that are exercisable within 60 days hereof that are owned by Mr. Roche. This information is based on a Schedule 13D filed with the SEC on February 11, 2016.

⁽³⁾

Includes (i) 73,799,567 shares of Common Stock that are owned by Acorn and (ii) 5,833,333 shares of Common Stock issuable upon the exercise of warrants that are exercisable within 60 days hereof that are owned by Acorn. This information is based on a Schedule 13D filed with the SEC on February 11, 2016.

⁽⁴⁾

Includes 1,625,000 shares of Common Stock issuable upon exercise of warrants that are exercisable within 60 days hereof.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

There has not been, and there is not currently proposed any transaction or series of similar transactions in which the amount involved exceeded or will exceed the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years and in which any related person, including any director, executive officer, holder of more than 5% of our capital stock during such period, or entities affiliated with them, had a material interest, other than as described in the transactions set forth below.

Review, Approval or Ratification of Transactions with Related Parties

Our audit committee’s charter requires review and discussion of any transactions or courses of dealing with parties related to us that are significant in size or involve terms or other aspects that differ from those that would be negotiated with independent parties. Our nominating and governance committee’s charter requires review of any proposed related party transactions, conflicts of interest and any other transactions for which independent review is necessary or desirable to achieve the highest standards of corporate governance. It is also our unwritten policy, which policy is not otherwise evidenced, for any related party transaction that involves more than a de minimis obligation, expense or payment, to obtain approval by our Board of Directors prior to our entering into any such transaction. In conformity with our various policies on related party transactions, each of the below transactions discussed in this Item 13, “Certain Relationships and Related Transactions, and Director Independence,” has been reviewed and approved by our Board of Directors.

Investment by Acorn

On November 22, 2013, in connection with a private placement offering of shares of Common Stock by the Company, the Company sold 9,285,714 shares to Acorn Composite Corporation (“Acorn”) for an aggregate purchase price of $650,000. Robert Roche, one of our directors, owns 100% of Acorn.

On January 26, 2016 the Company entered into a subscription agreement with Acorn. The Company has the right, but not the obligation, to issue shares of common stock to Acorn, up to $90,000 per month over a period of twelve (12) months, for a total of $1,080,000, if the Company certifies in writing to Acorn that it has an operational need for such funds (“Regular Purchases”). In addition, the Company has the right, but not the obligation, to issue additional shares of common stock to Acorn up $396,100 in the aggregate, for use in retiring the Company’s current convertible financings (“Take-Out Purchases”). Acorn would have the option to purchase any such shares not required to be purchased by the Company, in all cases with a price per share for Regular Purchases of $0.013 per share, and a price per share for Take-Out Purchases of $0.011 per share. To date Acorn has made Regular Purchases of 27,692,308 shares of common stock, resulting in proceeds to the Company of $360,000.

Director Independence

See Part III, Item 10, under the heading “Corporate Governance” for information on director independence.

Item 14. Principal Accounting Fees and Services

Our Audit Committee reviews and pre-approves audit and permissible non-audit services performed by our independent registered public accounting firm RubinBrown LLP (“RubinBrown”) as well as the fees charged for such services. Pre-approval is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. The independent auditors and management are required to periodically report to our Board of Directors regarding the extent of services provided by the independent auditors in accordance with this pre-approval, and the fees for the services performed to date. The Board of Directors may also pre-approve particular services on a case-by-case basis.

In its review of non-audit service and its appointment of RubinBrown as our independent registered public accounting firm, the Audit Committee considered whether the provision of such services is compatible with maintaining independence.

The following table shows the fees for services provided by RubinBrown for the years ended December 31, 2015 and 2014:


	2015		2014
Audit Fees⁽¹⁾	$	90,962	$	81,000
Tax Fees (tax-related services)		-		7,000
Total Fees	$	90,962	$	88,000

__________

⁽¹⁾

Audit fees — these fees relate to the audit of our annual financial statements and the review of our interim quarterly financial statements.

All services provided by and all fees paid to RubinBrown in fiscal 2015 and 2014 were pre-approved by our audit committee, in accordance with its policy. None of the services described above were approved pursuant to the exception provided in Rule 2-01(c)(7)(i)(C) of Regulation S-X promulgated by the SEC.

PART IV

Item 15. Exhibits, Financial Statement Schedules

(a)

Documents filed as part of this report

(1)

All financial statements


Index to Consolidated Financial Statements		Page
Report of RubinBrown LLP, Independent Registered Public Accounting Firm		F-2
Consolidated Balance Sheets as of December 31, 2015 and 2014		F-3
Consolidated Statements of Operations for the years ended December 31, 2015 and 2014		F-4
Consolidated Statements of Stockholders’ Equity (Deficit) for the years ended December 31, 2015 and 2014		F-5
Consolidated Statements of Cash Flows for the years ended December 31, 2015 and 2014		F-6
Notes to Consolidated Financial Statements		F-7

(2)

Financial Statement Schedules

(b)

Exhibits required by Item 601 of Regulation S-K


		Incorporated by Reference
Exhibit No.	Exhibit Description	Form	Filing Date/Period End Date	Number
3.1	Amended and Restated Articles of Incorporation.	8-K	09/01/11	3.1
3.2	Amended and Restated Bylaws.	8-K	09/01/11	3.2
3.3	Amendment to Amended and Restated Articles of Incorporation.	8-K	10/31/13	3.1
10.1	Form of Directors and Officers Indemnification Agreement.	8-K	05/19/10	10.5
10.2	Agreement of Conveyance, Transfer and Assignment of Assets and Assumption of Obligations dated as of May 13, 2010, by and between rVue Holdings, Inc. and Rivulet International Holdings, Inc.	8-K	05/19/10	10.6
10.3	rVue Holdings, Inc. 2010 Equity Incentive Plan (Amended as of August 30, 2011). *	8-K	09/01/11	10.10
10.4	Form of Incentive Stock Option Grant. *	8-K	05/19/10	10.11
10.5	Form of Non-Qualified Stock Option Grant. *	8-K	05/19/10	10.12
10.6	rVue Holdings, Inc. Audit Committee Charter.	8-K	05/19/10	10.13
10.7	rVue Holdings, Inc. Compensation Committee Charter.	8-K	05/19/10	10.14
10.8	rVue Holdings, Inc. Nominating Committee Charter.	8-K	05/19/10	10.15
10.9	Convertible Note – Carebourn Capital	10-Q	11/12/15	10.1
10.10	Securities Purchase Agreement – Carebourn Capital	10-Q	11/12/15	10.2
10.11	Convertible Note – Typenex Co-Investment.	8-K	7/14/15	4.1
10.12	Securities Purchase Agreement – Typenex Co-Investment.	8-K	7/14/15	4.2
10.13	Subscription Agreement dated as of January 26, 2016 by and between the Company and Acorn Composite Corporation	8-K	1/2/16	4.1
14.1	Code of Conduct.	10-K	03/01/11	14.1
14.2	Code of Ethics for Senior Financial Officers.	10-K	03/01/11	14.2
21.1	List of Subsidiaries.	10-K	03/30/12	21.1
24.1**	Power of Attorney (included on the Signature Page of this Annual Report on Form 10-K).
31.1**	Rule 13a-14(a) / 15d-14(a) Certification of Chief Executive Officer.
31.2**	Rule 13a-14(a) / 15d-14(a) Certification of Chief Financial Officer.
32.1***	Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer.


101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

* Indicates management contract or compensatory plan or arrangement.

** Filed herewith.

*** Furnished herewith.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, this 3rd day of March, 2016.

RVUE HOLDINGS, INC.

By:

/s/ Mark Pacchini

Mark Pacchini

Chief Executive Officer

Power of Attorney

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Mark Pacchini with the power of substitution, for him in any and all capacities, to sign any amendments to this Annual Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


Name	Title	Date

/s/ Mark Pacchini Mark Pacchini	President, Chief Executive Officer, Chief Financial Officer and Director (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)	March 3, 2016

/s/ Peter Emerson Peter Emerson	Director	March 3, 2016

/s/ Thomas Harrison Thomas Harrison	Director	March 3, 2016

/s/ Robert Roche	Director	March 3, 2016
Robert Roche

/s/ Raymond Roman	Director	March 3, 2016
Raymond Roman


Index to Consolidated Financial Statements		Page
Report of RubinBrown LLP, Independent Registered Public Accounting Firm		F-2
Consolidated Balance Sheets as of December 31, 2015 and 2014		F-3
Consolidated Statements of Operations for the years ended December 31, 2015 and 2014		F-4
Consolidated Statements of Stockholders’ Equity (Deficit) for the years ended December 31, 2015 and 2014		F-5
Consolidated Statements of Cash Flows for the years ended December 31, 2015 and 2014		F-6
Notes to Consolidated Financial Statements		F-7

F-1

Report of Independent

Registered Public Accounting Firm

To the Board of Directors and Stockholders

rVue Holdings, Inc.

We have audited the accompanying consolidated balance sheets of rVue Holdings, Inc. and subsidiary (the Company) as of December 31, 2015 and 2014, and the related consolidated statements of operations, stockholders’ equity (deficit), and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated 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 the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. 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 consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2015 and 2014, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has incurred recurring losses and negative cash flows from operations that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ RubinBrown LLP

RubinBrown LLP

St. Louis, Missouri

March 3, 2016

F-2

rVUE HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS


	December 31,
	2015		2014
Assets

Current assets:
Cash	$	67,069	$	418,803
Accounts receivable net of allowance of nil in 2015 and 2014		21,390		332,563
Prepaid expenses		30,700		70,101
Total current assets		119,159		821,467

Property and equipment, net		14		662
Software development costs, net		123,525		136,717
Deposits		3,239		3,180
	$	245,937	$	962,026

Liabilities and Stockholders' Equity (Deficit)

Current liabilities:
Accounts payable	$	71,792	$	168,591
Accrued expenses		33,231		204,821
Interest payable		9,339		-
Note payable		11,710		-
Convertible notes		144,293		-
Derivative liability		123,855		-
Deferred revenue		10,500		10,500
Total current liabilities		404,720		383,912

Commitments and contingencies (Note 10)

Stockholders' equity (deficit):
Preferred stock, $0.001 par value per share; 10,000,000 shares authorized; none issued or outstanding		-		-
Common stock, $0.001 par value per share; 240,000,000 shares authorized at December 31, 2015 and 2014, respectively 173,507,292 and 140,872,727 shares issued and outstanding at December 31, 2015 and 2014, respectively		173,507		140,873
Additional paid-in capital		13,740,269		13,105,717
Accumulated deficit		(14,072,559)		(12,668,476)
Total stockholders' equity (deficit)		(158,783)		578,114
	$	245,937	$	962,026

F-3

rVUE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS


	For the Year Ended
	December 31,
	2015		2014
Revenue
rVue fees	$	973,589	$	1,141,003
Network		126,000		130,425
		1,099,589		1,271,428
Costs and expenses
Cost of revenue		880,159		974,779
Selling, general and administrative expenses		1,395,306		1,376,248
Depreciation and amortization		138,206		91,493
Interest expense		81,110		-
Change in fair value of derivative instruments		22,616		-
Other income		(13,725)		(249,459)
		2,503,672		2,193,061
Loss before provision for income taxes		(1,404,083)		(921,633)
Provision for income taxes		-		-
Net loss	$	(1,404,083)	$	(921,633)
Net loss per common share - basic and diluted	$	(0.01)	$	(0.01)
Shares used in computing net loss per share:
Basic and diluted		144,429,639		137,638,146

F-4

rVUE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014


	Preferred Stock			Common Stock			Additional Paid-In		Accumulated
	Shares	Amount		Shares	Amount		Capital		Deficit		Total
Balance, January 1, 2014	-	$	-	132,221,476	$	132,222	$	12,418,899	$	(11,746,843)	$	804,278
Shares Issued for Services	-		-	1,198,871		1,199		112,201		-		113,400
Stock based compensation expense	-		-	-		-		57,069		-		57,069
Shares Issued	-		-	7,452,380		7,452		517,548		-		525,000
Net loss	-		-	-		-		-		(921,633)		(921,633)
Balance, December 31, 2014	-	$	-	140,872,727	$	140,873	$	13,105,717	$	(12,668,476)	$	578,144

Shares Issued for Services	-		-	1,016,129		1,016		39,629		-		40,645
Stock based compensation expense	-		-	-		-		61,541		-		61,541
Shares Issued	-		-	31,618,436		31,618		533,382		-		565,000
Net loss	-		-	-		-		-		(1,404,083)		(1,404,083)
Balance, December 31, 2015	-	$	-	173,507,292		173,507		13,740,269		(14,072,559)		(158,783)

F-5

rVUE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS


	For The Year Ended December 31,
	2015		2014
Operating activities
Net loss	$	(1,404,083)	$	(921,633)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		138,206		91,493
Impairment charge		18,506		-
Non-cash interest		70,532		-
Stock-based compensation expense		61,541		57,069
Common stock issued for services		85,645		15,000
Change in fair value of derivative instruments		22,616		-
Changes in operating assets and liabilities:
Accounts receivable		311,174		(207,571)
Prepaid expenses		53,241		(14,245)
Accounts payable		(96,799)		78,470
Accrued expenses		(171,590)		102,838
Deferred revenue		-		10,500
Accrued interest payable		9,339		-
Cash used in operating activities		(901,672)		(788,079)

Investing activities
Payments for property, equipment and software development		(142,873)		(145,207)
Changes in deposits		(59)		7,500
Cash used in investing activities		(142,932)		(137,707)

Financing activities
Proceeds from issuance of Common Stock		565,000		500,000
Proceeds from convertible notes		175,000		-
Payments on debt		(47,130)		-
Cash provided by financing activities		692,870		500,000

Decrease in cash		(351,734)		(425,786)
Cash, beginning of year		418,803		844,589
Cash, end of year	$	67,069	$	418,803

See supplemental non-cash information at Note 16

F-6

rVUE HOLDINGS, INC.

Notes to Consolidated Financial Statements

Note 1 – Summary of Significant Accounting Policies

rVue Holdings, Inc., formerly known as Rivulet International, Inc. (“We”, “rVue” or the “Company”), was incorporated in the State of Nevada on November 12, 2008. We are an advertising technology company that has developed and operates an integrated advertising exchange and digital distribution platform for the Digital Out-of-Home (“DPBM”) industry. Prior to May 13, 2010, we were a shell company in the development stage, had no revenue, and our efforts were devoted to entering the automobile export business.

Basis of Presentation and Preparation

The consolidated financial statements include the accounts of the Company and our wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated.

The preparation of consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from these estimates. On an ongoing basis, we evaluate our estimates, including those related to accounts receivable, fair values of financial instruments, useful lives of capitalized software developments costs and property and equipment, fair values of stock-based awards, income taxes, and contingent liabilities, among others. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

Cash and Cash Equivalents

We consider all highly liquid investments with original maturities of three months or less to be cash equivalents.

Accounts Receivable

We record accounts receivable at the invoiced amount and we do not charge interest. We maintain an allowance for doubtful accounts to reserve for potentially uncollectible receivables. We review the accounts receivable by amounts due by customers which are past due to identify specific customers with known disputes or collectability issues. In determining the amount of the reserve, we make judgments about the creditworthiness of significant customers based on ongoing credit evaluations.

Property and Equipment

We account for property and equipment at cost less accumulated depreciation and amortization. We compute depreciation using the straight-line method over the estimated useful lives of the assets, generally two to five years. Depreciation for equipment commences once it is placed in service and depreciation for leasehold improvements, if any, commences once they are ready for their intended use and are amortized over their estimated useful lives, or the term of the lease, whichever is shorter. Maintenance and repair costs are expensed as incurred.

Debt Issuance Costs

In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs ("ASU 2015-03"). ASU 2015-03 requires entities to present debt issuance costs as a direct adjustment to the carrying value of the debt instead of as an asset. ASU 2015-03 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, and early adoption is permitted. The Company adopted ASU 2015-03 as of December 31, 2015. The adoption of ASU 2015-03 did not have an impact on the consolidated balance sheet as of December 31, 2014.

F-7

rVUE HOLDINGS, INC.

Notes to Consolidated Financial Statements

Derivative Instruments

Software Development Costs

We capitalize costs incurred for the production of computer software that generates the functionality of our demand-side platform (“DSP”). Capitalized software development costs typically include direct labor and related overhead for software which we produce, as well as the cost of software purchased from third parties. Costs incurred for a product prior to the determination that the product is technologically feasible (i.e. research and development costs), as well as maintenance costs for established products, are expensed as incurred. Once technological feasibility has been established, development costs are capitalized until the software has completed testing and is released for use by the public. We also capitalize eligible costs to acquire or develop internal-use software (such as billing and accounting) that are incurred subsequent to the preliminary project stage.

Revenue Recognition

We record deferred revenue when we receive payment in advance of the performance of services.

Stock Based Compensation

We have elected to use the Black-Scholes-Merton (“BSM”) option-pricing model to determine the fair value of stock options on the grant dates. We recognize stock-based compensation cost as expense ratably on a straight-line basis over the requisite service period. We will recognize a benefit from stock-based compensation in equity if an incremental tax benefit is realized by following the ordering provisions of the tax law. We also use the provisions of ASC 505-50, Equity Based Payments to Non-Employees, to account for stock-based compensation awards issued to non-employees for services. Such awards for services are recorded at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the measurement date guidelines enumerated in ASC 505-50. Further information regarding stock-based compensation can be found in Note 11, “Stockholders’ Equity and Stock Based Compensation”.

F-8

rVUE HOLDINGS, INC.

Notes to Consolidated Financial Statements

Income Taxes

We recognize income taxes under the liability method. We recognize deferred income taxes for differences between the financial reporting and tax bases of assets and liabilities at enacted statutory tax rates in effect for the years in which differences are expected to reverse. We recognize the effect on deferred taxes of a change in tax rates in income in the period that includes the enactment date. We record a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured to determine the actual amount of benefit to recognize in our financial statements. See Note 12, “Income Taxes” for additional information.

Fair Value Measurements

The carrying amounts of our financial instruments, including cash, accounts receivable, accounts payable and accrued liabilities, approximate fair value because of their generally short maturities. The carrying value of convertible notes approximated their fair value based on the recentness of the transaction. At December 31, 2015 the embedded derivative liability is reported at fair value calculated using a binomial lattice model.

Advertising and Marketing Expenses

We expense advertising and marketing costs in the period in which they are incurred. For the years ended December 31, 2015 and 2014 advertising and marketing expenses totaled $123,643 and $83,875, respectively.

Note 2 – Going Concern

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We have sustained losses and experienced negative cash flows from operations since inception, and have an accumulated deficit of $14,072,559 at December 31, 2015. These factors raise substantial doubt about our ability to continue to operate in the normal course of business. We have funded our activities to date almost exclusively from equity and debt financings.

We will continue to require substantial funds to continue development of our core business. Management’s plans in order to meet our operating cash flow requirements includes financing activities such as private placements of common stock and the continued establishment of strategic relationships which we expect will lead to the generation of additional revenue opportunities.

While we believe that we should be successful in obtaining the necessary financing to fund our operations, there are no assurances that such additional funding will be achieved or that we will succeed in our future operations. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

F-9

rVUE HOLDINGS, INC.

Notes to Consolidated Financial Statements

Note 3 - Loss Per Common Share

Basic and diluted loss per common share is computed by dividing the loss by the weighted average number of common shares outstanding for the period. Since we incurred losses attributable to common stockholders during the years ended December 31, 2015 and 2014, diluted loss per common share has not been computed by giving effect to all potentially dilutive common shares that were outstanding during the years ended December 31, 2015 and 2014. Dilutive common shares consist of incremental shares issuable upon the exercise of stock options and warrants to the extent that the average fair value of our common stock for each period is greater than the exercise price of the derivative securities.

The following table sets forth the computation of basic and diluted loss per common share:


	Year Ended December 31,
	2015		2014
Numerator:
Net loss	$	(1,404,083)	$	(921,633)
Denominator:
Weighted-average shares outstanding		144,429,639		137,638,146
Effect of dilutive securities⁽¹⁾		-		-
Weighted-average diluted shares		144,429,639		137,638,146
Basic and diluted loss per share	$	(0.01)	$	(0.01)

⁽¹⁾

The following stock options, warrants outstanding and convertible notes as of December 31, 2015 and 2014 were not included in the computation of dilutive loss per share because the net effect would have been anti-dilutive:


	2015		2014
Stock options		1,606,000		-
Warrants		-		82,020
Convertible Notes		6,703,700		-
		8,309,700		82,020

Note 4 - Financial Instruments

Accounts Receivable

We sell our services directly to our customers. We generally do not require collateral from our customers; however, we will require collateral in certain instances to limit credit risk. Accounts receivable from two of our customers accounted for 100% of accounts receivable as of December 31, 2015. Accounts receivable from three of our customers accounted for 99.4% of accounts receivable as of December 31, 2014. We had no allowance for doubtful accounts at December 31, 2015 and 2014. There were no bad debt expenses for the years ended December 31, 2015 and 2014. See Note 15 “Concentrations” for additional information.

Note 5 – Property and Equipment


	Estimated Useful Lives (Years)	2015		2014
Computers and software	2-5	$	91,083	$	91,083
Equipment	3		22,977		22,977
			114,060		114,060
Less accumulated depreciation and amortization			(114,046)		(113,398)
Property and equipment, net		$	14	$	662

Depreciation expense was $648 and $2,403 for the years ended December 31, 2015 and 2014, respectively.

F-10

rVUE HOLDINGS, INC.

Notes to Consolidated Financial Statements

Note 6 – Software Development Costs


	Estimated Useful Lives (Years)	2015		2014
Software development costs	18	$	1,418,287	$	1,293,920
Less accumulated amortization			(1,294,762)		(1,157,203)
Software development costs, net		$	123,525	$	136,717

Amortization expense was $137,558 and $89,090 for the years ended December 31, 2015 and 2014, respectively. During 2015, the Company recognized an impairment charge of $18,506 relating to the software development costs that were not planned to be utilized by the Company.

Note 7 – Accrued Expenses


	2015		2014
Personnel costs	$	11,407	$	9,497
Professional fees		12,000		-
Network costs		324		166,211
Other		9,500		29,113
	$	33,231	$	204,821

Note 8 – Convertible Note Financing

Typenex Convertible Note Financing

On July 8, 2015 (the “Closing Date”), the Company entered into a Securities Purchase Agreement dated July 7, 2015 but effective July 8, 2015 (the “Typenex SPA”) with Typenex Co-Investment, LLC (“Typenex”). Pursuant to the Typenex SPA, the Company issued to Typenex a convertible promissory note (the “Typenex Note”) in the principal amount of $252,500, deliverable in four tranches as described below.

The Typenex Note has a term of 17 months, an interest rate of 10% per annum and an original issue discount (OID) of $22,500. The commitment to the Company from the Typenex Note were $225,000, in the form of: (a) an initial tranche of $75,000 in cash (gross proceeds of $87,500, less $7,500 in OID and $5,000 in expense reimbursements), and a (b) future commitment of three promissory notes of $55,000 each (each consisting of $55,000 in gross proceeds, less $5,000 in OID (the “Investor Notes”)). Typenex may elect, in its sole discretion, to fund one or more of the Investor Notes. Absent such an election by Typenex, the Investor Notes will not result in cash proceeds to, or an obligation to repay on the part of, the Company.

Beginning on the date that is six (6) months after the Closing Date and on the same day of each month thereafter until the maturity date of the Typenex Note, so long as any amount is outstanding thereunder, the Company is required to pay to Typenex installments of principal equal to $21,041 (or such lesser principal amount as is then outstanding), plus the sum of any accrued and unpaid interest. Payments of each installment amount may be made in cash. Alternatively, Typenex or the Company may elect to convert an installment amount into Common Stock as described below.

Beginning six (6) months after the Closing Date, Typenex may convert the balance of the Typenex Note, or any installment or portion thereof, utilizing the conversion price calculation set forth below. Generally, the “Lender Conversion Price” shall be $0.08. However, in the event that the Company’s market capitalization falls below $3,000,000 at any time, then in such event (a) the conversion price for all lender conversions occurring after the first date of such occurrence shall equal the lower of the Lender Conversion Price and the “Market Price” as of any applicable date of conversion. The Market Price is calculated by applying a discount of 30% to the average of the three (3) lowest closing bid prices during the twenty (20) trading days immediately preceding the applicable conversion. The Company may also elect to make payment of installments in the form of equity, subject to the terms and conditions of the Typenex Note.

F-11

rVUE HOLDINGS, INC.

Notes to Consolidated Financial Statements

Carebourn Convertible Note Financing

On July 30, 2015 (the “Closing Date”), the Company entered into a Securities Purchase Agreement dated July 30, 2015 (the “Carebourn SPA”) with Carebourn Capital, L.P. (“Carebourn”). Pursuant to the Carebourn SPA, the Company issued to Carebourn a convertible promissory note (the “Carebourn Note”) in the principal amount of $115,000.

The Carebourn Note has a term of 9 months and an interest rate of 10% per annum. The net proceeds to the Company from the Carebourn Note were $100,000, consisting of gross proceeds of $115,000, less $10,000 in OID and $5,000 in expense reimbursements. The entire principal balance of the Carebourn Note, together with all accrued interest, is due and payable on April 30, 2016.

Beginning on the date that is ninety (90) days after the Closing Date, so long as any amount is outstanding under the Carebourn Note, Carebourn may convert all or any portion of the balance of the Carebourn Note into shares of the Company’s common stock Generally, the conversion price will be calculated by applying a discount of 40% to the average of the three (3) lowest closing bid prices for the common stock during the twenty (20) trading days immediately preceding the applicable conversion. Carebourn is generally prohibited from acquiring more than 4.99% of the Company’s outstanding shares pursuant to the Carebourn Note.

Derivatives

The Typenex Note and the Carebourn Note described above have conversion features which are embedded derivatives as defined in FASB ASC 815. The key factors in this analysis included: (i) determining that the conversion features met the definition of a derivative, and (ii) that a scope exception was not applicable to the Company, as the conversion features were not considered indexed to the Company’s own stock, due to the various potential adjustments to the conversion price.

Derivative financial instruments are initially measured at their fair value and then are re-valued at each reporting date, with changes in fair value reported as charges or credits to income.

At inception, we valued the derivative instruments in the Typenex and Carebourn notes at $25,370 and $75,869, respectively. At December 31, 2015, we valued the derivative instruments at $123,855, recognizing a $22,616 change in fair value. We determined the fair value of the two embedded conversion features based on available data using a binomial lattice valuation model given all the rights and obligations of the instruments.

The initial fair value of the derivative was recorded as a reduction of the Typenex and Carebourn notes. The effective interest rate of the Typenex and Carebourn notes were 78% and 238%, respectively. This original issue discount will be amortized as interest expense over the term of the Notes. At December 31, 2015, the Notes are carried as follows:


	December 31, 2015
Principal	$	202,500
Original issue discount and debt issuance costs		(27,500)
Derivative liability at inception		(101,239)
Amortization of discount on notes		70,532
	$	144,293

Note 9 – Fair Value Measurements

Fair value is the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following fair value hierarchy is used in selecting inputs, with the highest priority given to Level 1, as these are the most transparent or reliable:

Level 1 - Quoted prices for identical instruments in active markets.

Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable directly or indirectly.

Level 3 - Valuations derived from valuation techniques in which one or more significant inputs are unobservable.

F-12

rVUE HOLDINGS, INC.

Notes to Consolidated Financial Statements

We are responsible for the valuation process and as part of this process we used data from an outside source to establish fair value. We performed due diligence to understand the inputs used or how the data was calculated or derived, and we corroborated the reasonableness of external inputs in the valuation process. The carrying amounts of our financial instruments, including cash, accounts receivable, accounts payable and accrued liabilities, approximate fair value because of their generally short maturities.

Assets and liabilities measured at fair value on a recurring basis at December 31, 2015 and December 31, 2014 were as follows:


	Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
December 31, 2015
Liabilities:
Derivative liability	$	-	$	-	$	123,855	$	123,855
December 31, 2014
Liabilities:
Derivative liability	$	-	$	-	$	-	$	-

The fair value of the derivative liability, classified as Level 3, utilized a simulation analysis using a binomial lattice model and other unobservable inputs (Note 8).

Rollforward of Level 3 Net Liability

The table below sets forth a summary of changes in the fair value of the Company’s Level 3 liabilities for the year ended December 31, 2015:


Balance, January 1, 2015	$	-
Issuances		101,239
Settlements		-
Realized and unrealized (gains) losses included in earnings		22,616
Transfers into or out of level 3		-
Balance, December 31, 2015	$	123,855

The Typenex Note derivative liability has been measured at fair value at December 31, 2015 using a binomial model. The inputs into the binomial model are as follows:


	December 31 2015
Closing share price	$	0.0384
Conversion price	$	0.0800
Risk free rate		0. 673%
Expected volatility		75%
Dividend yield		0%
Expected life		0. 94 years
Lattice steps		244
Conversion rest price		0.0211
Base conversion factor		70%
Conversion factor trigger	$	0.0200
Interest rate on note		10%

F-13

rVUE HOLDINGS, INC.

Notes to Consolidated Financial Statements

The Carebourn Note derivative liability has been measured at fair value at December 31, 2015 using a binomial model. The inputs into the binomial model are as follows:


	December 31 2015
Closing share price	$	0.0384
Conversion price	$	0.0800
Risk free rate		0.486%
Expected volatility		75%
Dividend yield		0%
Expected life		0.33 years
Lattice steps		86
Variable conversion factor		60%
Conversion factor trigger	$	0.0200
Interest rate on note		10%

Note 10 - Commitments and Contingencies

Lease Commitments

In 2014, we leased office space with approximately 140 square feet at a rate of $1,300 per month. We closed our Fort Lauderdale office in the third quarter of 2014.

On October 4, 2013 we moved our corporate headquarters to Elmhurst, IL, where we occupied approximately 2,700 square feet of office space from Real Capital, LLC under a lease contract that expired on September 30, 2015 at a rate of approximately $3,100 a month thru September 30, 2014 and then increased to $3,193 thru September 30, 2015. In October, 2015, we moved our corporate headquarters to Oakbrook Terrace, IL, where we sub-lease approximately 3,109 square feet of office space from Midwest Disability P.A. at a rate of approximately $3,239 per month thru October 31, 2015. This facility accommodates our principal sales, marketing, operations, finance and administrative activities.

Future minimum lease payments under these non-cancellable leases at December 31, 2015 are as follows:


Year ending December 31,

2016	$	32,835
Total future minimum payments	$	32,835

Rent expense was $38,407 and $46,989 for the years ended December 31, 2015 and 2014, respectively.

Contracts with Customers

In the normal course of business we enter into contracts with customers, which outline the terms of the relationship. The terms include, among other things, the method of computing our revenue, the quantity, type and specifications of services, software and products to be provided and penalties we would incur in the case of not performing. The period of the contracts is defined either by project or time.

Contract with Consultant

In November 2014, we entered into an eight month consulting agreement that compensated the consultant with 483,871 shares of rVue common stock. The agreement requires rVue to provide price protection on the shares which resulted in the Company issuing additional shares to the consultant if the share price in May 2015 falls below the share price at issuance. In October 2015, rVue issued consultant 1,016,129 shares as final payment under this agreement. Total expense recognized in the consolidated financial statements under the contract was $89,032 and $31,613 for the years ended December 31, 2015 and 2014, respectively.

F-14

rVUE HOLDINGS, INC.

Notes to Consolidated Financial Statements

Retirement Plan

We have a 401(k) plan that covers all eligible employees. We are not required to contribute to the plan, and we did not make any employer contributions during the years ended December 31, 2015 or 2014.

Legal Matters

From time to time, we may become involved in litigation relating to claims arising out of our operations in the normal course of business.

On or about March 8, 2011, Viewpoint Securities, Inc. commenced an action in the Circuit Court of the 17th Judicial District in Broward County, Florida, alleging that we owe them a placement agent fee of $210,000 and warrants to purchase 175,167 shares of our common stock for purported services rendered in connection with our December 2010 private placement. On July 29, 2011, we answered their Second Amended Complaint and asserted various defenses to the claims asserted therein. Additionally, we filed a Counterclaim for rescission of the Agreement. On January 9, 2012, Viewpoint filed an amended answer to our counterclaim. We believe the case is without merit and are vigorously defending ourselves in connection therewith. In the opinion of management, we do not believe that we have a probable liability related to this legal proceeding that would materially adversely affect our financial condition or operating results. However, the results of legal proceedings cannot be predicted with certainty. If we fail to prevail in this legal matter, the operating results of a particular reporting period could be materially adversely affected. On January 5, 2016 a judge in the Circuit Court of the 17th Judicial District in Broward County, Florida rescinded the Placement Agent Agreement entered into by Viewpoint Securities and rVue Holdings and awarded rVue attorney fees and costs of $31,715 from Viewpoint Securities.

On June 4, 2014, we filed suit against former rVue director and officer Michael Mullarkey, who left the company on May 31, 2013. The complaint alleged claims of fraud, constructive fraud and conversion. We also submitted a claim for employee theft to its insurer, CNA, for the amount misappropriated by Mr. Mullarkey. In November, 2014, CNA approved the claim for employee theft resulting in the Company receiving $249,459 in 2014.

Note 11 - Stockholders’ Equity and Stock Based Compensation

Preferred Stock

We have 10,000,000 shares of authorized preferred stock, $0.001 par value, none of which is issued or outstanding. Under the terms of our Restated Articles of Incorporation, our board of directors is authorized to determine or alter the rights, preferences, privileges and restrictions of our authorized but unissued shares of preferred stock.

Common Stock

We have 240,000,000 shares of authorized common stock, $0.001 par value, of which 173,507,292 and 140,872,727 shares were issued and outstanding at December 31, 2015 and 2014, respectively. All shares have equal voting rights, are non-assessable and have one vote per share. Voting rights are not cumulative and, therefore, the holders of more than 50% of the common stock could, if they choose to do so, elect all of our directors.

F-15

rVUE HOLDINGS, INC.

Notes to Consolidated Financial Statements

Common Stock Warrants

We have issued warrants, all of which are fully vested and available for exercise, as follows:


Class of Warrant	Issued in connection with or for	Number	Exercise Price		Date of Issue	Date of Expiration
Series A	Private Placement	8,624,995	$	1.00	December 2010	December 2022
Series B	Investor Relations Services	50,000	$	0.37	May 2011	May 2016
Series B	Investment Banking Services	1,000,000	$	0.35	June 2011	June 2016
Series C	Convertible Debt	3,057,666	$	0.20	January 2012	January 2017
Series C	Convertible Debt	750,000	$	0.20	May 2012	May 2017
Series C	Convertible Debt	500,000	$	0.20	July 2012	July 2017
Series D	Investment Banking Services	450,000	$	0.07	January 2013	January 2023

No warrants were issued in 2015 or 2014.

Stock Incentive Plans

2010 rVue Holdings Equity Incentive Plan

The 2010 rVue Holdings Equity Incentive Plan (the “Plan”) has reserved 23,000,000 shares of our common stock for issuance pursuant to awards under the Plan. The Plan is intended as an incentive, to retain in the employ of and as directors, our officers, employees, consultants and advisors, and to attract new officers, employees, directors, consultants and advisors whose services are considered valuable, to encourage the sense of proprietorship and to stimulate the active interest of such persons in the development and financial success of the Company and its subsidiaries.

No option grants were issued during 2014. The following table summarizes options granted in the year ended December 31, 2015:


Grant Date	Number	Exercise Price		Fair Value		Period over which compensation expense is recognized
January 12, 2015	850,000	$	0.10	$	63,251	36 months
August 6, 2015	9,750,000		0.04		264,605	36 months
October 22, 2015	3,250,000		0.03		88,009	36 months
December 3, 2015	2,750,000		0.04		89,033	36 months
December 15, 2015	2,000,000		0.04		72,416	36 months
December 16, 2015	1,000,000		0.06		54,311	36 months

F-16

rVUE HOLDINGS, INC.

Notes to Consolidated Financial Statements

The following table presents the weighted-average assumptions used to estimate the fair value of stock options granted during 2015:


	2015
Expected life (years)		6.5
Expected volatility		128.3%
Risk-free interest rate		2.1%
Dividend yield		0.0%
Weighted-average estimated fair value of options granted during the year	$	0.04

Stock-based compensation cost for stock options is estimated at the grant date based on the fair-value as calculated by the Black-Scholes-Merton (“BSM”) option-pricing model. The BSM option-pricing model incorporates various assumptions including expected volatility, expected life and interest rates.

Our computation of expected life is determined based on the simplified method as we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term due to the limited period of time its equity shares have been publicly traded. Our computation of expected volatility was based on the historical volatility of comparable companies’ average historical volatility. Beginning in October 2015, our computation of expected volatility is based on the company’s average historical volatility. The interest rate is based on the U.S. Treasury Yield curve in effect at the time of grant. We do not expect to pay dividends. While we believe these estimates are reasonable, the estimated compensation expense would increase if the expected life was increased or a higher expected volatility was used.

Stock-based compensation expense included in our Consolidated Statements of Operations is as follows:


	Year Ended December 31,
	2015		2014
Selling, general and administrative expenses	$	61,541	$	57,069
	$	61,541	$	57,069

As of December 31, 2015, $304,322 of total unrecognized compensation expense related to stock based awards is expected to be recognized over a weighted average period of 2.35 years.

F-17

rVUE HOLDINGS, INC.

Notes to Consolidated Financial Statements

Stock Option Activity

The following table summarizes the activities for our options for the year ended December 31, 2015:


	Number of Options	Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding on January 1, 2014	2,640,000	$	0.17	8.41		-
Granted	-		-
Exercised	-		-
Forfeited	(300,000)	$	0.25
Expired	-		-
Outstanding on December 31, 2014	2,340,000	$	0.16	7.55		-
Granted	19,600,000	$	0.04
Exercised	-		-
Forfeited	(1,800,000)	$	0.12
Expired	-		-
Outstanding on December 31, 2015	20,140,000	$	0.05	9.50		.01
Exercisable at December 31, 2015	1,033,332	$	0.21	5.06		-
Expected to vest after December 31, 2015	19,106,668	$	0.02	9.79		-

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock price of $.04 of our common stock on December 31, 2015. The aggregate intrinsic value includes the effect of stock options that have a $32,500 intrinsic value.

The following table summarized additional information regarding outstanding and exercisable stock options at December 31, 2015:


	Outstanding Stock Options				Exercisable Stock Options
Exercise Prices	Shares	Weighted-Average Remaining Contractual Life (years)	Weighted-Average Exercise Price Per Share		Shares	Weighted-Average Exercise Price Per Share
$0.20	670,000	4.45	$	0.20	670,000	$	0.20
$0.30	200,000	4.98	$	0.30	200,000	$	0.30
$0.14	170,000	7.59	$	0.14	113,332	$	0.14
$0.10	50,000	7.84	$	0.10	50,000	$	0.10
$0.10	300,000	9.04	$	0.10	-	$	0.10
$0.03	3,250,000	9.82	$	0.03	-	$	0.03
$0.04	14,500,000	9.73	$	0.04	-	$	0.04
$0.06	1,000,000	9.97	$	0.06	-	$	0.06
	20,140,000	9.50	$	0.05	1,033,332	$	0.21

The Company entered into an employment agreement with Mark Pacchini, our CEO and acting CFO, on July 1, 2013. The agreement term is three years and includes mandatory bonuses payable in the Company’s common stock if specific revenue targets are achieved in a twelve month calendar year. On January 1, 2014, the revenue targets for this employment agreement were amended.

The Company entered into a new employment agreement with Mark Pacchini, our CEO, on August 4, 2015. The agreement term is three years and includes mandatory bonuses payable in stock options if specific revenue goals are achieved in the Company’s fiscal year. The revenue goals for this agreement remained the same as those set forth in Mr. Pacchini’s previous employment agreement dated as of the January 1, 2014 which was replaced by the August 4,2015 employment agreement. As of December 31, 2015 the performance conditions in the agreement were not achieved. As a result, there was no stock based compensation expense recognized related to this new agreement. The Company will reassess the probability of the Company achieving the revenue goals included in the agreement on a quarterly basis.

F-18

rVUE HOLDINGS, INC.

Notes to Consolidated Financial Statements

In December 2015, the Company granted in aggregate 3,000,000 stock options to a salesperson and two sales representatives that vest upon the salesperson and sales representatives achieving certain performance conditions. The Company recognizes compensation expense for options granted to employees which vest upon achievement of the performance condition, over the requisite service period if it is probable that the performance condition will be satisfied. The Company recognizes compensation expense for options granted to non-employees which vest upon achievement of the performance condition, prior to measurement date at the current lowest aggregated fair value at each financial reporting date.

Note 12 - Income Taxes

The provision for income taxes for the years ended December 31, 2015 and 2014 consisted of the following:


	2015		2014
Current tax expense
Federal	$	-	$	-
State		-		-
Total current taxes		-		-
Deferred taxes:
Federal		-		-
State		-		-
Total deferred taxes		-		-
Provision for income taxes	$	-	$	-

We recognize deferred tax assets and liabilities for both the expected impact of differences between the financial statements and the tax basis of assets and liabilities, and for the expected future tax benefit to be derived from tax loss carry forwards. We have established a valuation allowance to reflect the likelihood of realization of deferred tax assets. There is no income tax benefit for the losses for the years ended December 31, 2015 and 2014, since management has determined that the realization of the net deferred tax asset is not more likely than not to be realized and has created a valuation allowance for the entire amount of such benefit.

At December 31, 2015 and 2014, the significant components of our deferred tax assets and liabilities were as follows:


	2015		2014
Net operating loss	$	4,372,608	$	3,915,262
Stock option expense		64,463		80,205
Accrued expenses		12,505		70,489
Capitalized software		37,262		33,465
Net deferred tax asset		4,486,838		4,099,421
Less: Valuation Allowance		(4,486,838)		(4,099,421)
Net deferred taxes	$	-	$	-

A reconciliation of the provision for income taxes, with the amount computed by applying the federal statutory income tax rate to income before provision for income taxes for the years ended December 31, 2015 and 2014, is as follows:


	2015		2014
Federal tax benefit, at statutory rate of 34%		(477,388)		(313,355)
State income taxes		(50,547)		(33,179)
Meals and entertainment		903		926
Stock options		192,704		(129,114)
Change in valuation allowance		334,328		474,722
Provision for income taxes		-		-

F-19

rVUE HOLDINGS, INC.

Notes to Consolidated Financial Statements

At December 31, 2015, we had federal net operating loss carry forwards of approximately $11,626,491 will expire beginning in 2030. Based upon the change in ownership rules under Internal Revenue Code Section 382, our net operating loss carry forwards are limited as to the amount of use in any particular year as a result of a more than 50% ownership change during the year ended December 31, 2012.

Our policy is to record interest and penalties associated with unrecognized tax benefits as additional income taxes in the Consolidated Statements of Operations. As of January 1, 2014, we had no unrecognized tax benefits, or any tax related interest of penalties. There were no changes in our unrecognized tax benefits during the year ended December 31, 2015. We did not recognize any interest or penalties during 2015 or 2014 related to unrecognized tax benefits. Tax years from 2012 through 2015 remain subject to examination by major tax jurisdictions.

Note 13- Other income

On June 4, 2014, rVue, Inc. filed suit against former rVue director and officer Michael Mullarkey, who left the company on May 31, 2013. The complaint alleged claims of fraud, constructive fraud and conversion. rVue also submitted a claim for employee theft to its insurer, CNA, for the amount misappropriated by Mr. Mullarkey. In November, 2014, CNA approved the claim for employee theft in the amount of $249,459. rVue received $249,459 in November 2014 and recorded the amount as other income. In November of 2015, rVue received $13,725 as a settlement for a portion of the legal fees paid in the Mullarkey complaint.

Note 14- Related Party Transactions

In 2015, the Company issued 20,769,231 shares of common stock to Acorn for $270,000.

In 2014, the Company had sales of $9,907 to a customer that the Company's chief executive officer is a board member.

Note 15 - Concentrations

Concentrations of Credit Risk

Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and accounts receivable.

We maintain deposit balances at a financial institution that, from time to time, may exceed federally insured limits. The Company maintains this balance with a high quality financial institution, which the Company believes limits this risk.

Concentrations of Revenues

For the year ended December 31, 2015, three customers accounted for 51.6%, 17.5% and 12.9% of total revenues. For the year ended December 31, 2014, three customers accounted for 54.1%, 19.9% and 10.1% of total revenues.

F-20

rVUE HOLDINGS, INC.

Notes to Consolidated Financial Statements

Note 16 – Supplemental Non-Cash Information

In 2014, the Company issued common stock totaling $42,000 to a vendor for accounting services performed in 2013 and issued common stock totaling $11,400 in the settlement of a law suit. In 2014, the Company issued $60,000 of common stock to a consultant for services to be performed over an eight month period. At December 31, 2014 $45,000 was included in prepaid expenses.

The Company issued $45,000 of stock to a consultant for services performed. In 2015, the Company recognized debt discounts and debt issuance costs of $26,807 related to the issuance of the convertible notes. In addition, the Company entered into a $57,600 financing agreement for directors and officers insurance.

Note 17 - Subsequent Events

In preparing these consolidated financial statements, we have evaluated events and transactions for potential recognition or disclosure through the date of filing.

On January 26, 2016 the Company entered into a subscription agreement with Acorn. Under the agreement, the Company has the right, but not the obligation, to issue shares of common stock to Acorn, up to $90,000 per month over a period of twelve (12) months, for a total of $1,080,000, if the Company certifies in writing to Acorn that it has an operational need for such funds (“Regular Purchases”). In addition, the Company has the right, but not the obligation, to issue additional shares of common stock to Acorn up $396,100 in the aggregate, for use in retiring the Company’s current convertible financings (“Take-Out Purchases”). Acorn also has the option to purchase any such shares not required to be purchased by the Company, in all cases with a price per share for Regular Purchases of $0.013 per share, and a price per share for Take-Out Purchases of $0.011 per share. Acorn’s option to make the Regular Purchases is any time commencing on November 1, 2016 until October 31, 2020 and option to make Take-Out Purchases is any time commencing on January 1, 2017 until September 30, 2020. To date Acorn has made regular purchases of 27,692,308 shares and the Company has received $360,000 for those such shares.

The Company elected to exercise the Borrower Offset Right under the agreement with Typenex to cancel the three Investor Notes of $50,000 each. This enabled the Company to deduct and offset the $150,000 owed under the Investor Notes.

In January and February 2016, the Company elected to issue 8,870,556 shares to Typenex as a scheduled payment of $50,630 under their convertible note financing agreement.

In February 2016 Carebourn elected to convert $29,210 of their convertible note with the Company for 4,600,000 shares of the Company stock.

As a result of the voluntary issuances of stock subsequent to December 31, 2015, the number of the Company’s authorized shares is insufficient to satisfy the maximum number of shares that the Company could be required to settle under all other contracts.

F-21

EXHIBIT INDEX


		Incorporated by Reference
Exhibit No.	Exhibit Description	Form	Filing Date/Period End Date	Number
3.1	Amended and Restated Articles of Incorporation.	8-K	09/01/11	3.1
3.2	Amended and Restated Bylaws.	8-K	09/01/11	3.2
3.3	Amendment to Amended and Restated Articles of Incorporation.	8-K	10/31/13	3.1
10.1	Form of Directors and Officers Indemnification Agreement.	8-K	05/19/10	10.5
10.2	Agreement of Conveyance, Transfer and Assignment of Assets and Assumption of Obligations dated as of May 13, 2010, by and between rVue Holdings, Inc. and Rivulet International Holdings, Inc.	8-K	05/19/10	10.6
10.3	rVue Holdings, Inc. 2010 Equity Incentive Plan (Amended as of August 30, 2011). *	8-K	09/01/11	10.10
10.4	Form of Incentive Stock Option Grant. *	8-K	05/19/10	10.11
10.5	Form of Non-Qualified Stock Option Grant. *	8-K	05/19/10	10.12
10.6	rVue Holdings, Inc. Audit Committee Charter.	8-K	05/19/10	10.13
10.7	rVue Holdings, Inc. Compensation Committee Charter.	8-K	05/19/10	10.14
10.8	rVue Holdings, Inc. Nominating Committee Charter.	8-K	05/19/10	10.15
10.9	Convertible Note – Carebourn Capital	10-Q	11/12/15	10.1
10.10	Securities Purchase Agreement – Carebourn Capital	10-Q	11/12/15	10.2
10.11	Convertible Note – Typenex Co-Investment.	8-K	7/14/15	4.1
10.12	Securities Purchase Agreement – Typenex Co-Investment.	8-K	7/14/15	4.2
10.13	Subscription Agreement dated as of January 26, 2016 by and between the Company and Acorn Composite Corporation	8-K	1/2/16	4.1
14.1	Code of Conduct.	10-K	03/01/11	14.1
14.2	Code of Ethics for Senior Financial Officers.	10-K	03/01/11	14.2
21.1	List of Subsidiaries.	10-K	03/30/12	21.1
24.1**	Power of Attorney (included on the Signature Page of this Annual Report on Form 10-K).
31.1**	Rule 13a-14(a) / 15d-14(a) Certification of Chief Executive Officer.
31.2**	Rule 13a-14(a) / 15d-14(a) Certification of Chief Financial Officer.
32.1***	Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

* Indicates management contract or compensatory plan or arrangement.

** Filed herewith.

*** Furnished herewith.

RVUE HOLDINGS, INC. - FORM 10-K - March 3, 2016

Attached files

RVUE HOLDINGS, INC. Reports