UNITED STATES

SECURITIES AND
EXCHANGE COMMISSION

Washington, D.C.
20549



FORM 10-Q



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



For the quarterly period ended June 30,
2014



| ̈ | 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: 0-21537



|Grandparents.com,
    Inc.                            
|------------------------------------------------------
|(Exact name of registrant as specified in its charter)



|Delaware                                                                       |  | 93-1211114                          
|------------------------------------------------------------------------------ |  | ------------------------------------
|(State or other jurisdiction of
        incorporation
        or organization) |  | (I.R.S. Employer Identification No.)



|589 Eighth Avenue, 6th Floor
        New York, New York |  | 10018     
|------------------------------------------------------- |  | ----------
|(Address of principal executive offices)                |  | (Zip Code)



|(646) 839-8800                                          
|--------------------------------------------------------
|(Registrant’s
    telephone number, including area code)



|N/A                                                                                   
|--------------------------------------------------------------------------------------
|(Former name, former address and former fiscal year, if changed since
    last report)



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 Web site, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 or Regulation S-T 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 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 Exchange Act).

Yes   ̈  No  x



As of July 30, 2014, there were 119,807,029
shares of the registrant’s common stock, $.01 par value per share, outstanding.











GRANDPARENTS.COM,
INC.



QUARTERLY REPORT
ON FORM 10-Q

June 30, 2014



TABLE OF CONTENTS



|                                                         |                                                                                                                                            | PAGE
|-------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------ | ----
|Cautionary Note Regarding Forward-Looking
    Statements | 1                                                                                                                                         
|                                                         |                                                                                                                                            |     
|PART I—FINANCIAL INFORMATION                             |                                                                                                                                           
|                                                         |                                                                                                                                            |     
|Item 1.                                                  | Financial Statements.                                                                                                                      | 2   
|                                                         | Condensed Consolidated Balance Sheets as of June 30, 2014
    (unaudited) and December 31, 2013                                            | 2   
|                                                         | Condensed Consolidated Statements of Operations for the
    three- and six-month periods ended June 30, 2014 and June 30, 2013 (unaudited) | 3   
|                                                         | Condensed Consolidated Statements of Cash Flows for the
    six-month periods ended June 30, 2014 and June 30, 2013 (unaudited)            | 4   
|                                                         | Notes to Condensed Consolidated Financial Statements (unaudited)                                                                           | 5   
|Item 2.                                                  | Management’s Discussion and Analysis of Financial
    Condition and Results of Operations.                                                 | 14  
|Item 3.                                                  | Quantitative and Qualitative Disclosures About Market
    Risk.                                                                            | 24  
|Item 4.                                                  | Controls and Procedures.                                                                                                                   | 24  
|                                                         |                                                                                                                                            |     
|PART II—OTHER INFORMATION                                |                                                                                                                                           
|                                                         |                                                                                                                                            |     
|Item 1.                                                  | Legal Proceedings.                                                                                                                         | 25  
|Item 1A.                                                 | Risk Factors.                                                                                                                              | 25  
|Item 2.                                                  | Unregistered Sales of Equity Securities and Use of Proceeds.                                                                               | 25  
|Item 3.                                                  | Defaults Upon Senior Securities.                                                                                                           | 25  
|Item 4.                                                  | Mine Safety Disclosures.                                                                                                                   | 25  
|Item 5.                                                  | Other Information.                                                                                                                         | 25  
|Item 6.                                                  | Exhibits.                                                                                                                                  | 26  
|                                                         |                                                                                                                                            |     
|SIGNATURES                                               | 27                                                                                                                                        











CAUTIONARY NOTE
REGARDING FORWARD-LOOKING STATEMENTS



Certain information included in this Quarterly
Report on Form 10-Q (this “Report”) or in other materials we have filed or will file with the Securities and Exchange
Commission (“SEC”) (as well as information included in oral statements or other written statements made or to be made
by us) contains or may contain forward-looking statements. You can identify these statements by the fact that they do not relate
to matters of strictly historical or factual nature and generally discuss or relate to estimates or other expectations regarding
future events. In some cases, forward-looking statements may contain terms such as “anticipates,” “believes,”
“seeks,” “could,” “estimates,” “expects,” “intends,” “may,”
“plans,” “will,” “potential,” “predicts,” “projects,” “should,”
“would” and similar expressions intended to identify forward-looking statements. Such statements may include, but
are not limited to, information related to: anticipated operating results; relationships with our marketing partners and AGA members;
demand for our website and changes in AGA membership ranks; financial resources and condition; changes in revenues; changes in
profitability; changes in accounting treatment; cost of sales; selling, general and administrative expenses; interest expense;
the ability to produce the liquidity or enter into agreements to acquire the capital necessary to continue our operations and
take advantage of opportunities; legal proceedings and claims. Forward-looking statements reflect our current views with respect
to future events and are subject to known and unknown risks, uncertainties and other factors which may cause our actual results,
performance or achievements to be materially different from any future results, performances or achievements expressed or implied
by the forward-looking statements. These risks and uncertainties include, but are not limited to, the factors described in the
section captioned “Risk Factors” contained herein and in our Annual Report on Form 10-K for the year ended December
31, 2013 as filed with the Securities and Exchange Commission on April 10, 2014. Given these uncertainties, you should not place
undue reliance on these forward-looking statements.



Also, forward-looking statements represent
our estimates and assumptions only as of the date of this Report. You should read this Report and the documents that we reference
and file or furnish as exhibits to this Report completely and with the understanding that our actual future results may be materially
different from what we expect. Except as required by law, we assume no obligation to update any forward-looking statements publicly,
or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even
if new information becomes available in the future.



1







PART I—FINANCIAL
INFORMATION



|Item 1. | Financial Statements.
|------- | ---------------------



GRANDPARENTS.COM,
INC.

CONDENSED CONSOLIDATED BALANCE SHEETS



|                                                                                                                                                                         |  | June 30,    |             |   | December 31, |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ----------- | ----------- | - | ------------ | -
|                                                                                                                                                                         |  | 2014        |             |   | 2013         |  
|                                                                                                                                                                         |  | (unaudited) |             |   |              |  
|ASSETS                                                                                                                                                                   |  |             |             |   |              |  
|Current assets:                                                                                                                                                          |  |             |             |   |              |  
|Cash                                                                                                                                                                     |  | $           | 583,535     |   |              | $
|Restricted cash                                                                                                                                                          |  |             | -           |   |              |  
|Accounts receivable                                                                                                                                                      |  |             | 34,097      |   |              |  
|Prepaid expenses                                                                                                                                                         |  |             | 2,388,174   |   |              |  
|Total current assets                                                                                                                                                     |  |             | 3,005,806   |   |              |  
|                                                                                                                                                                         |  |             |             |   |              |  
|Property and equipment, net                                                                                                                                              |  |             | 35,584      |   |              |  
|                                                                                                                                                                         |  |             |             |   |              |  
|Other assets:                                                                                                                                                            |  |             |             |   |              |  
|Security deposits                                                                                                                                                        |  |             | 47,501      |   |              |  
|Intangibles, net                                                                                                                                                         |  |             | 3,860,600   |   |              |  
|Total other assets                                                                                                                                                       |  |             | 3,908,101   |   |              |  
|                                                                                                                                                                         |  |             |             |   |              |  
|Total assets                                                                                                                                                             |  | $           | 6,949,491   |   |              | $
|                                                                                                                                                                         |  |             |             |   |              |  
|LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)                                                                                                                           |  |             |             |   |              |  
|Current liabilities:                                                                                                                                                     |  |             |             |   |              |  
|Accounts payable                                                                                                                                                         |  | $           | 1,715,265   |   |              | $
|Accrued expenses                                                                                                                                                         |  |             | 324,094     |   |              |  
|Deferred revenue                                                                                                                                                         |  |             | 1,000,000   |   |              |  
|Deferred officer salary                                                                                                                                                  |  |             | 243,125     |   |              |  
|Notes payable                                                                                                                                                            |  |             | 1,374,957   |   |              |  
|Convertible bridge notes, net                                                                                                                                            |  |             | -           |   |              |  
|Total current liabilities                                                                                                                                                |  |             | 4,657,441   |   |              |  
|                                                                                                                                                                         |  |             |             |   |              |  
|Commitments and contingencies                                                                                                                                            |  |             |             |   |              |  
|                                                                                                                                                                         |  |             |             |   |              |  
|Stockholders’ equity (deficit):                                                                                                                                          |  |             |             |   |              |  
|Preferred stock, $0.01 par value, 5,000,000 shares
    authorized, 0 issued and outstanding at June 30, 2014                                                             |  |             | -           |   |              |  
|Common stock, $0.01 par value, 350,000,000 shares
    authorized, 118,589,382 and 99,219,304 issued and outstanding at June 30, 2014 and December 31, 2013, respectively |  |             | 1,185,894   |   |              |  
|Additional paid-in capital                                                                                                                                               |  |             | 32,349,707  |   |              |  
|Accumulated deficit                                                                                                                                                      |  |             | (31,243,551 | ) |              |  
|Total stockholders’ equity
    (deficit)                                                                                                                                 |  |             | 2,292,050   |   |              |  
|                                                                                                                                                                         |  |             |             |   |              |  
|Total liabilities and stockholders’
    equity (deficit)                                                                                                                 |  | $           | 6,949,491   |   |              | $



See accompanying notes to condensed consolidated
financial statements.



2







GRANDPARENTS.COM,
INC.

CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS

(unaudited)



|                                                                  |  | Three Months Ended |             |   | Six Months Ended |  
|----------------------------------------------------------------- |  | ------------------ | ----------- | - | ---------------- | -
|                                                                  |  | June 30,           |             |   | June 30,         |  
|                                                                  |  | 2014               |             |   | 2013             |  
|Revenue:                                                          |  |                    |             |   |                  |  
|Advertising revenue                                               |  | $                  | 57,346      |   |                  | $
|Total revenue                                                     |  |                    | 57,346      |   |                  |  
|                                                                  |  |                    |             |   |                  |  
|Operating expenses:                                               |  |                    |             |   |                  |  
|Selling and marketing                                             |  |                    | 70,783      |   |                  |  
|Salaries                                                          |  |                    | 569,054     |   |                  |  
|Rent                                                              |  |                    | 44,200      |   |                  |  
|Accounting, legal and filing fees                                 |  |                    | 347,637     |   |                  |  
|Consulting                                                        |  |                    | 304,510     |   |                  |  
|Equity-based compensation                                         |  |                    | 1,321,377   |   |                  |  
|Other general and administrative                                  |  |                    | 118,070     |   |                  |  
|Depreciation and amortization                                     |  |                    | 129,257     |   |                  |  
|Total operating expenses                                          |  |                    | 2,904,888   |   |                  |  
|                                                                  |  |                    |             |   |                  |  
|Other income (expense):                                           |  |                    |             |   |                  |  
|Interest income (expense), net                                    |  |                    | (281,267    | ) |                  |  
|Other income (expense), net                                       |  |                    | (10,000     | ) |                  |  
|                                                                  |  |                    |             |   |                  |  
|Total other expense                                               |  |                    | (291,267    | ) |                  |  
|                                                                  |  |                    |             |   |                  |  
|Net loss                                                          |  | $                  | (3,138,809  | ) |                  | $
|                                                                  |  |                    |             |   |                  |  
|Net loss per share-basic and
    diluted                          |  | $                  | (0.03       | ) |                  | $
|                                                                  |  |                    |             |   |                  |  
|Weighted average common shares
    outstanding, basic and diluted |  |                    | 111,830,785 |   |                  |  



See accompanying notes to condensed consolidated
financial statements.



3







GRANDPARENTS.COM,
INC.

CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS

(unaudited)



|                                                                                |  | Six Months Ended |           
|------------------------------------------------------------------------------- |  | ---------------- | ----------
|                                                                                |  | June 30,         |           
|                                                                                |  | 2014             |           
|Cash flows from Operating activities:                                           |  |                  |           
|Net loss                                                                        |  | $                | (6,045,045
|                                                                                |  |                  |           
|Adjustments to reconcile net loss to net cash used
    in operating activities: |  |                  |           
|                                                                                |  |                  |           
|Depreciation and amortization                                                   |  |                  | 239,751   
|Equity-based compensation                                                       |  |                  | 1,309,569 
|Prepaid consulting expense                                                      |  |                  | 1,392,584 
|Issuance of common stock for services                                           |  |                  | 46,875    
|Amortization of discount on bridge notes payable                                |  |                  | 60,364    
|Gain on settlement of accounts payable                                          |  |                  | 8,125     
|Accounts receivable, net                                                        |  |                  | 29,699    
|Other receivable                                                                |  |                  | -         
|Prepaid expenses                                                                |  |                  | (69,574   
|Accounts payable                                                                |  |                  | 201,217   
|Accrued expenses                                                                |  |                  | 335,021   
|Deferred officer salary                                                         |  |                  | 241,875   
|Advance receipts towards future
    royalties                                   |  |                  | 1,000,000 
|Net cash used in Operating activities                                           |  |                  | (2,249,539
|                                                                                |  |                  |           
|Cash flows from Investing activities:                                           |  |                  |           
|Capitalized website development costs                                           |  |                  | (155,232  
|Purchase of property and equipment                                              |  |                  | -         
|Net cash used in Investing activities                                           |  |                  | (155,232  
|                                                                                |  |                  |           
|Cash flows from Financing activities:                                           |  |                  |           
|Proceeds from private placement, net                                            |  |                  | 2,854,000 
|Proceeds from loans and short-term
    advances                                 |  |                  | 75,000    
|Net cash provided by Financing
    activities                                   |  |                  | 2,929,000 
|                                                                                |  |                  |           
|Net increase (decrease) in cash                                                 |  |                  | 524,229   
|Cash, beginning of period                                                       |  |                  | 59,306    
|Cash, end of period                                                             |  | $                | 583,535   
|                                                                                |  |                  |           
|Supplemental cash flow
    information:                                         |  |                  |           
|Fair value of warrants charged
    to capital                                   |  | $                | 2,655,215 
|Interest expense charged to capital                                             |  | $                | 135,411   
|Cash paid for interest                                                          |  | $                | -         
|Settlement of liabilities via
    issuance of equity                            |  | $                | 604,660   
|Conversion of convertible bridge
    notes to equity                            |  | $                | 1,002,800 
|Cashless exercise of warrants                                                   |  | $                | 598       
|Conversion of  accrued
    interest to convertible bridge notes                 |  | $                | -         



See accompanying notes to condensed consolidated
financial statements.



4







GRANDPARENTS.COM,
INC.



NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (UNAUDITED)



1. Description of Business



Grandparents.com, Inc., together with
its consolidated subsidiaries (the “Company”), is a family-oriented social media company that through its website,
www.grandparents.com, serves the age 50+ demographic market. The website offers activities, discussion groups, expert advice and
newsletters that enrich the lives of grandparents by providing tools to foster connections among grandparents, parents, and grandchildren.
In addition to operating the grandparents.com website, the Company’s membership association, the American Grandparents Association
(“AGA”), seeks to unite grandparents, boomers and seniors around the concept that the 50+ demographic faces issues
that are unique to them. The AGA is a resource for those seeking advice, information and discussion of these issues and grandparents
rights in general. Members of the AGA also enjoy access to its deals, discounts and products provided by third parties that the
AGA endorses or recommends or makes available to its members.



2. Basis of Presentation



The condensed consolidated financial statements
include the accounts of Grandparents.com, Inc. and its wholly-owned subsidiaries. All significant intercompany accounts and transactions
have been eliminated.



Certain prior period amounts have been
reclassified to conform to the current period presentation.



The accompanying unaudited condensed consolidated
interim financial statements reflect all adjustments, consisting of only normal recurring items, which, in the opinion of management,
are necessary for a fair statement of the results of operations for the periods shown. The results of operations for such periods
are not necessarily indicative of the results expected for the full year or for any future periods.



The preparation of condensed consolidated
financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States (“U.S.”)
requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, revenue,
and expenses and the related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates,
including those related to revenue, the useful lives of long-lived assets including property and equipment and intangible assets,
investment fair values, stock-based compensation, goodwill, income taxes, and contingencies. The Company bases its estimates of
the carrying value of certain assets and liabilities on historical experience and on various other assumptions that are believed
to be reasonable under the circumstances, when these carrying values are not readily available from other sources. Actual results
may differ from these estimates.



These condensed consolidated financial
statements and the related notes should be read in conjunction with the December 31, 2013 and 2012 financial statements and related
notes included in the Company’s Annual Report on Form 10-K filed April 10, 2014. Certain information and footnote disclosures
normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted in accordance
with the instructions to Form 10-Q and the rules and regulations of the Securities and Exchange Commission. The condensed consolidated
balance sheet as of December 31, 2013 was derived from the Company’s audited financial statements for the year ended December
31, 2013, but does not include all disclosures required by U.S. GAAP. However, the Company believes the disclosures are adequate
to make the information presented not misleading.



3. Departure of Officer and Director



On June 9, 2014, Joseph
Bernstein, the Company’s Co-Chief Executive Officer, Chief Financial Officer, Treasurer and a director, and the Company
entered into a Retirement Agreement (the “Retirement Agreement”), pursuant to which he agreed to resign from the
Company, effective on June 25, 2014. Pursuant to the terms of the Retirement Agreement, the Company agreed to issue to Mr.
Bernstein (and his affiliates) (i) 300,000 shares of common stock valued at $96,000 (charged to expense in the accompanying
consolidated financial statements) for continued services, and other promises and covenants, (ii) 400,000 shares and a
five-year warrant to purchase 275,000 shares at $0.25 exercisable immediately upon issuance (combined fair value of $120,634)
in exchange for the termination of the $78,543 note and (iii) 400,000 shares of common stock valued at $14,777 in
exchange for the termination of the $100,000 note. During the quarter ended June 30, 2014, the Company recorded
additional interest expense related to the cancellation of the indebtedness as described in (ii) and (iii) of $135,411. The
Company also agreed to provide Mr. Bernstein with a monthly payment of $3,000 for a period of 24 months starting as of July
1, 2014 for health insurance coverage.





5







4. Going Concern



The Company has incurred a net loss of
approximately $3.1 million and $6.0 million during the three- and six-months ended June 30, 2014, respectively, and used approximately
$1.4 million and $2.2 million in cash for operating activities during the three- and six-months ended June 30, 2014, respectively.
Without additional capital from existing or outside investors or further financing, the Company’s ability to continue to
implement its business plan may be limited. These conditions raise substantial doubt about the Company’s ability to continue
as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments that might result
from the outcome of this uncertainty.



Management’s plans to obtain such
resources for the Company include raising additional capital through sales of its equity or debt securities. In addition, management
continues to seek to streamline its operations and expand its revenue streams from recommendation of products, the initiation
of membership fees, endorsement of certain products including insurance policies and the Grand Card. However, management cannot
provide any assurances that the Company will be successful in accomplishing any of its plans.



5. Intangible Assets



Intangible assets consisted of the following
at June 30, 2014 and December 31, 2013:



|                                           |  | Estimated Useful |  | June 30, |            |   | December 31, |  
|------------------------------------------ |  | ---------------- |  | -------- | ---------- | - | ------------ | -
|                                           |  | Lives (in Years) |  | 2014     |            |   | 2013         |  
|URL and trademarks                         |  | 15               |  | $        | 5,000,000  |   |              | $
|Website and mobile application development |  | 3                |  |          | 941,282    |   |              |  
|Customer relationships                     |  | 3                |  |          | 1,000,000  |   |              |  
|                                           |  |                  |  |          | 6,941,282  |   |              |  
|Less: accumulated amortization             |  |                  |  |          | (3,080,682 | ) |              |  
|Intangible assets, net                     |  |                  |  | $        | 3,860,600  |   |              | $



Amortization expense related to intangible
assets amounted to $116,915 and $146,505 for the three-months ended June 30, 2014 and 2013, respectively, and $225,116 and $372,433
for the six-months ended June 30, 2014 and 2013, respectively. The future amortization expense for each of the five succeeding
years related to all finite lived intangible assets that are currently recorded in the balance sheets is estimated as follows
at June 30, 2014:



|For the Years Ending December 31, |  |   |          
|--------------------------------- |  | - | ---------
|2014                              |  | $ | 240,214  
|2015                              |  |   | 451,309  
|2016                              |  |   | 386,736  
|2017                              |  |   | 348,431  
|2018                              |  |   | 333,333  
|Thereafter                        |  |   | 2,100,577
|                                  |  | $ | 3,860,600



6. Notes Payable



Notes payable and convertible bridge notes,
net consisted of the following at June 30, 2014 and December 31, 2013:



|                                                |  | June 30, |           |  | December 31, |  
|----------------------------------------------- |  | -------- | --------- |  | ------------ | -
|                                                |  | 2014     |           |  | 2013         |  
|New 12% convertible note                        |  | $        | -         |  |              | $
|Promissory notes – February 2013                |  |          | 300,000   |  |              |  
|Promissory notes – January 2014                 |  |          | 75,000    |  |              |  
|Notes payable assumed February 2012             |  |          | 999,957   |  |              |  
|                                                |  |          | 1,374,957 |  |              |  
|Less: debt discount                             |  |          | -         |  |              |  
|Notes payable and convertible bridge notes, net |  | $        | 1,374,957 |  |              | $



Accrued interest expense included in accrued
expenses at June 30, 2014 and December 31, 2013 was $134,663 and $235,952 respectively.



6







12% Convertible Notes



In December 2012, January 2013 and February
2013, the Company issued five (5) separate 12% Secured Convertible Notes totaling $950,000 (the “Original 12% Secured Convertible
Notes”) pursuant to a note purchase agreement dated December 7, 2012 (the “Original Note Purchase Agreement”).
All of the Original 12% Secured Convertible Notes accrued interest at 12% per annum. The Original 12% Secured Convertible Notes
were contingently convertible into shares of the Company’s common stock at a conversion price of 75% of the price per share
issued by the Company in a Qualified Financing (defined as an equity financing of not less than $7,000,000). The difference between
the effective conversion price of the Original 12% Secured Convertible Notes into shares of the Company’s common stock,
and the fair value of the Company’s common stock on the date of issuance of the Original 12% Secured Convertible Notes,
resulted in a beneficial conversion feature in the amount of $287,500. In accordance with ASC 470-20, because the Original 12%
Secured Convertible Notes were convertible upon the occurrence of a contingent future event (the Qualified Financing), the contingent
beneficial conversion feature has been measured at the issuance date, but is not reflected in the statement of operations until
the occurrence of the contingent event.



In May 2013, the holders of the Original
12% Secured Convertible Notes transferred, in separate transactions, all of their respective rights, title and interests in the
Original 12% Secured Convertible Notes to a third party (the “Current Holder”) pursuant to various note purchase agreements
by and between each original holder and the Current Holder. Also in May 2013, immediately following the Current Holder’s
acquisition of the Original 12% Secured Convertible Notes, the Company and the Current Holder entered into an Amended and Restated
Note Purchase Agreement to amend and restate Original Note Purchase Agreement. Pursuant to the Amended and Restated Note Purchase
Agreement, all of the Original 12% Secured Convertible Notes were automatically deemed null and void. In addition, the Company
issued to the Current Holder a new convertible promissory note (the “New 12% Convertible Note”) in the original principal
amount of $1,002,800, which amount reflected the outstanding principal amount and unpaid accrued interest due under the Original
12% Secured Convertible Notes as of the date of the Amended and Restated Note Purchase Agreement. Pursuant to the terms of the
Amended and Restated Note Purchase Agreement, the New 12% Convertible Note was convertible into shares of the Company’s
common stock at any time at the option of the Current Holder for $0.1875 per share, was unsecured and accrued interest at the
rate of 12% per annum and was scheduled to mature on June 2, 2014. The May 2013 transaction was accounted for as an extinguishment
of the original 12% Secured Convertible Notes as all related costs were written off in the settlement including any unamortized
discount and deferred issuance costs.



On April 4, 2014, the Company entered
into a Note Conversion Agreement with the Current Holder of the New 12% Convertible Note pursuant to which the Current Holder
agreed to convert $1,223,795 in principal and interest due thereunder, as calculated through June 2, 2014, into 6,526,908 shares
of common stock at the conversion price set forth in the New 12% Convertible Note. The shares were issued on April 15, 2014.



Promissory Notes



In February 2013, the Company issued four
(4) promissory notes totaling $400,000 (the “February Notes”). The February Notes are unsecured, accrue interest at
a rate of 10% per annum and mature on the earlier of March 1, 2014 or the closing of a single transaction (whether debt, equity
or a combination of both) that results in aggregate gross proceeds to the Company of $10,000,000. On May 6, 2014 and July 8, 2014
the Company entered into amendments to the February Notes extending the stated maturity dates. Pursuant to the most recent amendments,
the maturity date of each promissory note was extended until the earlier of (i) August 29, 2014, (ii) the closing of a single
transaction (whether debt, equity or a combination of both) that results in aggregate gross proceeds to the Company of $1,500,000,
or (iii) the acceleration of the maturity of the promissory note upon the occurrence of an Event of Default (as defined in each
of the promissory notes). The most recent amendments became effective as of June 30, 2014. One of these notes and its accrued
interest was terminated effective June 25, 2014 in return for 400,000 shares of the Company’s common stock in connection
with the Retirement Agreement (See Note 3). An expense of $28,000 was recorded in connection with the termination of this note.
The Company accounted for these amendments as a modification with no resulting gain or loss as there were no related discount
or deferred issuance costs associated with the February Notes.



In January 2014, the Company issued three
(3) demand promissory notes in the aggregate amount of $75,000. Each demand promissory note has an original principal amount of
$25,000, bears interest at a rate of ten percent (10%) per annum, is unsecured, and is payable upon demand. The notes were repaid
in full on August 6, 2014.



Notes Payable



In connection with the Asset Contribution
Agreement between the Company and Grandparents.com, LLC (“GP”), which became effective on February 23, 2012, the following
aggregate indebtedness of $1,078,500 with contingent maturities was assumed by the Company:



7







Two (2) notes payable, each in
the amount of $78,543, to certain officers, directors and beneficial owners of a majority of the capital stock of the
Company. The notes bear interest annually at 5% and are due and payable on the earlier of (i) the consummation of a debt or
equity financing with gross proceeds to the Company of at least $10,000,000 or (ii) the date subsequent to March 31, 2013
that the Company achieves EBITDA equal to or greater than $2,500,000. The note is subordinate to certain other debt
obligations of the Company. One of these notes and its accrued interest was terminated effective June 25, 2014 in return for
400,000 shares of the Company’s common stock and a five-year warrant to purchase 275,000 shares of the Company’s
common stock at $0.25 in connection with the Retirement Agreement (See Note 3). An additional interest expense of $49,457
plus the fair value of the warrants in the amount of $80,355 was recorded in connection with the termination of this
note.



One (1) note payable, in the amount of
$308,914, to a director and beneficial owner of a majority of the capital stock of the Company. The note bears interest annually
at 5% and is due and payable on the earlier of (i) the consummation of a debt or equity financing with gross proceeds to the Company
of at least $10,000,000 or (ii) April 1, 2013, if the Company achieves EBITDA equal to or greater than $2,500,000.



One (1) promissory note converted from
management fees accrued through the transaction date totaling $612,500 and payable to a GP member. The note bears interest annually
at 5% and is due and payable on the earlier of (i) the consummation of a debt or equity financing with gross proceeds to the Company
of at least $10,000,000 or (ii) the date subsequent to March 31, 2013 that the Company achieves EBITDA equal to or greater than
$2,500,000. The note is subordinate to certain other debt obligations of the Company.



Warrants Issued in connection with
Notes Payable



In connection with the issuances of the
Original 12% Secured Convertible Notes and the February Notes, the Company issued five-year warrants to purchase an aggregate
of 1,350,000 shares of the Company’s common stock at an exercise price of $0.50 per share. The Company has accounted for
the warrants issued in connection with the Original 12% Secured Convertible Notes and the February Notes in accordance with the
provisions of ASC 370-20 “Accounting for Convertible Debt and Debt Issued with Stock Purchase Warrants”. The warrants
were valued at their fair value of $0.15 to $0.27 per warrant using the Black-Scholes method with the following assumptions: share
price = $0.17 to $0.30, volatility = 156%, risk-free rate = 1.82%. The  fair values of the warrants, based on an allocation
of the value of the notes payable and the value of the warrants issued in connection with the notes payable, was recorded as a
debt discount (with a corresponding increase to additional paid-in capital) in the amount of $343,810 ($302,103 of which was recorded
in 2013), and is being amortized to interest expense over the expected term of the notes payable.



In connection with the issuance of the
New 12% Convertible Note, the Company issued five-year warrants to purchase an aggregate of 1,002,800 shares of the Company’s
common stock at an exercise price of $0.25 per share. The Company has accounted for the warrants in accordance with the provisions
of ASC 370-20 “Accounting for Convertible Debt and Debt Issued with Stock Purchase Warrants”. The warrants were valued
at their fair value of $0.20 per warrant using the Black-Scholes method with the following assumptions: share price = $0.22 volatility
= 155%, risk-free rate = 1.03%. The  fair values of the warrants, based on an allocation of the value of the New 12% Convertible
Note payable and the value of the warrants issued in connection with the New 12% Convertible Note payable, was recorded as a debt
discount (with a corresponding increase to additional paid-in capital) in the amount of $201,563, and was amortized to interest
expense over the term of the New 12% Convertible Note payable which was converted to equity effective April 4, 2014.



Interest expense for the three- and
six-months ended June 30, 2014 attributable to amortization of the debt discount related to the warrants was $33,989 and
$94,353 respectively.



Total interest expense charged to operations
amounted to $281,267 and $ $197,126 for the three-months and $ $403,598 and $416,664 for the six-months ended June 30, 2014 and
2013, respectively. The future principal maturities related to all notes payable obligations is estimated as follows at June 30,
2014 (excluding debt discount of $0 at June 30, 2014):



|For the Years Ending December 31, |  |   |          
|--------------------------------- |  | - | ---------
|2014                              |  | $ | 300,000  
|Contingent                        |  |   | 1,074,957
|                                  |  | $ | 1,374,957



7. Stockholders’ Equity



During 2013, the Company entered into
securities purchase agreements with several investors pursuant to which the Company sold, in private transactions, an aggregate
of 11,680,000 shares of its common stock and warrants to purchase an aggregate of 2,920,000 shares of its common stock for gross
proceeds to the Company of $2,920,000.  The warrants are exercisable for a period of five years at an exercise price of $0.25
per share, subject to customary adjustments.



8







During 2013, the Company issued a
total of 1,783,490 common shares for past or future services as follows: (i) 500,000 restricted shares of its common stock
valued at $150,000 to a consultant in exchange for services to be provided; (ii) 1,233,490 shares of its common stock valued
at $180,270 and five-year warrants valued at $3,598 to purchase an aggregate of 25,000 shares of its common stock at
an exercise price of $0.25 per share, in exchange for past services performed for the Company by the recipients thereof;
and (iii) 50,000 restricted shares of its common stock valued at $20,000, awarded in 2012 to an employee based on
performance under the 2012 Stock Incentive Plan. The aggregate fair value of the shares and warrants issued for services were
expensed over the requisite service periods.



During the six-months ended June 30, 2014,
the Company entered into securities purchase agreements with several investors pursuant to which the Company sold, in private
transactions, an aggregate of 11,540,000 shares of its common stock and warrants to purchase an aggregate of 2,885,000 shares
of its common stock for net proceeds to the Company of $2,854,000.  The warrants are exercisable for a period of five years
at an exercise price of $0.25 per share, subject to customary adjustments



In March 2014, the Company issued 105,681
shares of its common stock to consultants in exchange for fees and expenses incurred in connection with past services provided
to the Company. The aggregate fair value of the shares issued to the consultants was $34,875, which was expensed over the requisite
service periods.



In April 2014, the Company issued 6,526,908
shares of its common stock in connection with the conversion of the New 12% Convertible Note plus interest at the fixed rate of
$0.1875 for $1,223,795 (see Note 6).



In April and May 2014, the Company issued
37,715 shares of its common stock to consultants in exchange for fees and expenses incurred in connection with past services provided
to the Company. The aggregate fair value of the shares issued to the consultants was $12,000, which was expensed over the requisite
service periods. The Company also issued 59,774 shares of its common stock in connection with the cashless exercise of warrants.



In June 2014, the Company issued an
aggregate of 1,100,000 shares of its common stock and warrants exercisable for a period of five years to purchase an
aggregate of 275,000 shares of its common stock at an exercise price of $0.25 per share pursuant to the terms of the
Retirement Agreement (See Note 3  and Note 6).



Amendment to the Company’s Certificate
of Incorporation



In March 2014, the Company filed a Third
Amended and Restated Certificate of Incorporation to eliminate the Series A Preferred Stock and Series B Preferred Stock and to
increase the total number of authorized shares of the Company’s capital stock to 355,000,000, consisting of 350,000,000
shares of common stock, par value $.01 per share, and 5,000,000 shares of preferred stock, par value $.01 per share.



8. Stock Based Compensation



2012 Stock Incentive Plan

In February 2012, the Company adopted
the Grandparents.com, Inc. 2012 Stock Incentive Plan (the “Plan”), which originally provided for 10,317,691 shares
of the Company’s common stock to be eligible for issuance to employees, officers, directors, consultants, agents, advisors,
and independent contractors who provide services to the Company (”Eligible Persons”) under the Plan. In January 2014,
the Board of Directors and the holders of a majority of the voting securities of the Company approved, by written consent, the
amendment and restatement of the Plan to increase the number of shares of the Company’s common stock authorized for issuance
thereunder to 25,000,000 shares. The increase became effective on March 4, 2014.



During 2013, the Company granted 3,250,000
non-Plan options and 2,110,000 options to purchase shares of common stock under the Plan to Eligible Persons. The options had
exercise prices ranging from $0.13 to $0.25 per share and a grant date fair value ranging from $0.13 to $0.30 per option. The
options expire ten years from the date of grant.



During 2013, 50,000 options were forfeited,
30,000 options were cancelled and 5,475,000 options were re-priced from exercise prices ranging from $0.45 to $0.60 per share
to an exercise price of $0.25 per share. Re-priced options were treated as cancelled and reissued on the date of re-pricing, resulting
in a charge in the amount of $1,043.



During the three-months ended March 31,
2014, the Company granted 215,000 options to purchase shares of common stock under the Plan to Eligible Persons. The options had
exercise prices of $0.31 per share and a grant date fair value of $0.31 per option. The options expire ten years from the date
of grant.



9









During the three-months ended March 31,
2014, 250,000 options were re-priced from an exercise price of $0.60 per share to an exercise price of $0.33 per share. Re-priced
options were treated as cancelled and reissued on the date of re-pricing, resulting in a charge in the amount of $250.



During the three-months ended June 30,
2014, the Company granted 85,000 options to purchase shares of common stock under the Plan to Eligible Persons. The options had
exercise prices of $0.30 per share and a grant date fair value of $0.30 per option. The options expire ten years from the date
of grant.



The fair value of each option granted
since December 31, 2012 was estimated on the date of the grant using the Black-Scholes option pricing model with the assumptions
noted in the following table. Expected volatility was estimated using the volatility of the Company’s stock price. The expected
life of the options represents the period of time that options granted are expected to be outstanding and is derived from historical
terms.



|Risk-free interest rate |  |  | 0.34-1.73 | %
|----------------------- |  |  | --------- | -
|Expected life (years)   |  |  | 2-10      |  
|Expected volatility     |  |  | 146-213   | %
|Dividend yield          |  |  | -         |  



A summary of stock option activity for
the six-months ended June 30, 2014 and the year-ended December 31, 2013 is presented below:



|                                 |  | Number of Shares |            |   | Weighted Average Exercise Price |   |      | Weighted Average Remaining Contractual Term
    (Years) |  |  | Aggregate Intrinsic Value | 
|-------------------------------- |  | ---------------- | ---------- | - | ------------------------------- | - | ---- | ------------------------------------------------------- |  |  | ------------------------- | 
|Outstanding at December 31, 2012 |  |                  | 7,205,000  |   |                                 | $ | 0.56 |                                                         |  |  | 9.25                      | 
|Granted and reissued             |  |                  | 10,835,000 |   |                                 |   | 0.21 |                                                         |  |  |                           | 
|Forfeited and cancelled          |  |                  | (5,555,000 | ) |                                 |   | 0.59 |                                                         |  |  |                           | 
|Outstanding at December 31, 2013 |  |                  | 12,485,000 |   |                                 |   | 0.24 |                                                         |  |  | 8.86                      | 
|Granted and reissued             |  |                  | 550,000    |   |                                 |   | 0.32 |                                                         |  |  |                           | 
|Forfeited and cancelled          |  |                  | (250,000   | ) |                                 |   | 0.60 |                                                         |  |  |                           | 
|Outstanding at June 30, 2014     |  |                  | 12,785,000 |   |                                 |   | 0.24 |                                                         |  |  | 8.36                      | 
|                                 |  |                  |            |   |                                 |   |      |                                                         |  |  |                           | 
|Exercisable at June 30, 2014     |  |                  | 8,337,501  |   |                                 |   | 0.25 |                                                         |  |  | 8.12                      | 



The compensation expense recognized for
Plan and non-Plan options awarded for the three-months ended June 30, 2014 and 2013 was $454,650 and $436,066, respectively. The
compensation expense recognized for Plan and non-Plan options awarded for the six-months ended June 30, 2014 and 2013 was $753,731
and $757,622, respectively. Total unrecognized compensation costs related to non-vested equity-based compensation arrangements
was $969,448 and $1,822,927 as of June 30, 2014 and 2013, respectively. That cost is expected to be recognized over the remaining
vesting period of 36 months.



As of June 30, 2014 and 2013, the Company
had 300,000 options to purchase shares of the Company’s common stock which are outstanding under its predecessor’s
2005 Stock Incentive Plan and are fully vested and exercisable. The options have an exercise price of $0.30 and expire on September
15, 2014. There is no remaining unrecognized compensation charge related to these options and they are not included in the option
activity table above.



9. Warrants



During 2013 and the six-months ended June
30, 2014, the Board of Directors of the Company approved the grant and/or re-pricing of warrants in connection with the issuance
of Common Stock, the issuance of Notes Payable and for selected services rendered by officers, directors, employees and consultants.
Re-priced warrants were treated as cancelled and reissued on the date of re-pricing.



10







During 2013, the Company granted warrants
to purchase 2,920,000 shares of common stock in connection with Securities Purchase Agreements, 1,402,800 shares of common stock
in connection with the issuance of Notes Payable and 18,277,400 shares of common stock in connection with services to the Company.
The warrants had exercise prices ranging from $0.14 to $0.60 and they expire five years from the date of grant.



During 2013, 225,188 warrants expired
unexercised and 5,125,000 warrants were re-priced from exercise prices ranging from $0.30 to $0.60 per share to an exercise price
of $0.25 per share. Re-priced warrants were treated as cancelled and reissued on the date of re-pricing, resulting in a charge
in the amount of $12,255.



During the three-months ended March 31,
2014, the Company granted warrants to purchase 1,085,000 shares of common stock in connection with Securities Purchase Agreements
and 810,000 shares of common stock in connection with services to the Company. The warrants had exercise prices ranging from $0.25
to $0.31 and they expire five years from the date of grant.



During the three-months ended June 30,
2014, the Company granted warrants to purchase 1,800,000 shares of common stock in connection with Securities Purchase Agreements,
1,000,000 shares of common stock in connection with services to the Company and 275,000 shares of common stock in connection with
a retirement agreement. The warrants had exercise prices of $0.25 and they expire five years from the date of grant.



The fair value of each warrant granted
since December 31, 2012 was estimated on the date of the grant using the Black-Scholes option pricing model with the assumptions
noted in the following table. Expected volatility was estimated using the volatility of the Company’s stock price. The expected
life of the warrants represents the period of time that warrants granted are expected to be outstanding and is derived from historical
terms.



|Risk-free interest rate |  |  | 0.34-1.73 | %
|----------------------- |  |  | --------- | -
|Expected life (years)   |  |  | 5         |  
|Expected volatility     |  |  | 146-213   | %
|Dividend yield          |  |  | -         |  



A summary of warrant activity for the
six-months ended June 30, 2014 and the year-ended December 31, 2013 is presented below:



|                                 |  |          |            |   |                  |   |      | Weighted Average      |  |  |                               | 
|-------------------------------- |  | -------- | ---------- | - | ---------------- | - | ---- | --------------------- |  |  | ----------------------------- | 
|                                 |  |          |            |   | Weighted Average |   |      | Remaining Contractual |  |  |                               | 
|                                 |  | Warrants |            |   | Exercise Price   |   |      | Term (Years)          |  |  | Aggregate Intrinsic
    Value | 
|Outstanding at December 31, 2012 |  |          | 7,653,648  |   |                  | $ | 0.29 |                       |  |  | 4.09                          | 
|Granted and reissued             |  |          | 22,600,200 |   |                  |   | 0.26 |                       |  |  | -                             | 
|Expired                          |  |          | (225,188   | ) |                  |   | 1.60 |                       |  |  | -                             | 
|Forfeited and cancelled          |  |          | (5,125,000 | ) |                  |   | 0.54 |                       |  |  | -                             | 
|Outstanding at December 31, 2013 |  |          | 24,903,660 |   |                  |   | 0.26 |                       |  |  | 3.63                          | 
|Granted and reissued             |  |          | 4,970,000  |   |                  |   | 0.25 |                       |  |  |                               | 
|Exercised                        |  |          | (250,526   | ) |                  |   | 0.23 |                       |  |  |                               | 
|Outstanding at June 30, 2014     |  |          | 29,623,134 |   |                  |   | 0.26 |                       |  |  | 3.42                          | 
|                                 |  |          |            |   |                  |   |      |                       |  |  |                               | 
|Exercisable at June 30, 2014     |  |          | 28,204,933 |   |                  |   | 0.26 |                       |  |  | 3.44                          | 



In April 2013, the Company committed
to issuing Starr a warrant to acquire up to 21,438,951 shares of its common stock, subject to certain customary
adjustments which vests one-fourth (1/4th) of the warrant shares upon issuance and the remaining portion of the
warrant shares in three equal annual installments on March 1, 2014, 2015 and 2016, provided, however, that the warrant shall
automatically cease to vest upon termination or expiration of the Agreement. The warrant has not yet been issued and is not
included in the warrant activity table. The fair values of the first one-fourth (5,359,738 shares) and the second
one-fourth (5,359,738 shares) were calculated using Black-Scholes as $766,443 and $1,888,772, respectively. The $766,443 was
expensed in March 2014 and the $1,888,772 is being expensed over the period March 1, 2014 thru February 28, 2015, its
requisite service period.



11







10. Income Taxes



ASC 740-10 “Accounting for Uncertainty
in Income Taxes” (“ASC 740-10”) requires recognition and measurement of uncertain income tax positions using
a “more-likely-than-not” approach. Management evaluates Company tax positions on an annual basis and has determined
that as of June 30, 2014, no accrual for uncertain tax positions are necessary.



The Company provides for income taxes
at the end of each interim period based on the estimated effective tax rate for the full fiscal year. Cumulative adjustments to
the Company’s estimate are recorded in the interim period in which a change in the estimated annual effective rate is determined.



The difference between the federal statutory rate (34%) and
the Company’s effective rate (0%) is primarily attributable to the change in valuation allowance on its deferred tax assets.



Generally, the Company is no longer subject
to U.S. federal examinations by tax authorities for fiscal years prior to 2010.



11. Commitments



The Company leases an office facility
in New York, NY under a two-year extension of an operating lease which expires September 30, 2015. The lease requires monthly
payments of $14,733 in the first year and $15,167 in the second year. There are no further options in the lease for extending
the term beyond its current expiration. The Company also leases an apartment in New York, NY under a one-year operating lease
which expires June 30, 2015 and requires two six-month payments of $22,800. The future minimum lease payments required under the
two leases as of June 30, 2014, are as follows:



|For the Years Ending December 31, |  |   |        
|--------------------------------- |  | - | -------
|2014                              |  | $ | 112,500
|2015                              |  |   | 136,500
|                                  |  | $ | 249,000



In April 2012, the Company issued a letter
of credit totaling $40,000, which was held as collateral for performance under the office operating lease. The letter of credit
was secured by deposits at a financial institution, and was recorded as restricted cash in the balance sheet at December 31, 2013.
In March 2014, the Company voluntarily terminated the letter of credit and transferred the security deposit to the landlord, which
amount is reflected as a deposit on the Company’s balance sheet at June 30, 2014.



Rent expense recognized under operating
leases was $44,200 and $42,075 for the three-months ended June 30, 2014 and 2013, respectively, and $88,400 and $84,100 for the
six-months ended June 30, 2014 and 2013.



On January 8, 2013, the Company entered
into a Strategic Alliance Agreement (the “Starr Agreement”) with Starr Indemnity & Liability Company (“Starr”),
a wholly owned subsidiary of Starr International Company, Inc., under which Starr agreed to provide certain services to the Company,
including developing strategic business and investment relationships for the Company and providing business consulting services
to the Company. In exchange for the services, the Company agreed to pay Starr a monthly fee of $80,000 during the term of the
Starr Agreement, which commenced on March 1, 2013, as well as fees to be agreed upon by the Company and Starr for Starr’s
arranging agreements with insurance companies. On March 1, 2014, the Starr Agreement automatically renewed for a one-year period
and will automatically renew for subsequent one-year periods each year thereafter unless either party terminates the agreement
prior to the expiration of the then-current term. The Starr Agreement was amended in April, 2013 at which time, we committed to
issuing Starr a warrant to acquire up to 21,438,951 shares of our common stock, subject to certain customary adjustments which
vests one-fourth (1/4th) of the warrant shares upon issuance and the remaining portion of the warrant shares in three
equal annual installments on March 1, 2014, 2015 and 2016, provided, however, that the warrant shall automatically cease to vest
upon termination or expiration of the Agreement (see Note 9).



Effective as of March 28, 2013, Grand
Card, LLC (“Grand Card”), a wholly owned subsidiary of the Company, entered into an Alliance Agreement (the “Cegedim
Agreement”) with Cegedim Inc. (OPUS HEALTH Division) (“Cegedim”) pursuant to which the parties formed an exclusive
strategic alliance (the “Alliance”) to develop member benefit programs (the “Programs”) that provide cash
rebates and other rewards on the “Grand Card” debit card. The Cegedim Agreement provides that all costs for marketing
and promoting the Programs will be borne by Grand Card and that all other costs and funding of the Programs, subject to certain
exceptions, shall be borne 75% by Grand Card and 25% by Cegedim.  The Cegedim Agreement further provides that revenues derived
from the Alliance (after deduction for certain operating costs borne by the parties) shall be allocated 75% to Grand Card and
25% to Cegedim.   The term of the Cegedim Agreement commenced on March 28, 2013 and will continue for an initial term
of four (4) years and will automatically renew for successive four-year terms unless fewer than 500,000 cards have been issued
at the time of such renewal or either party provides written notice to the other party of its intent not to renew within 120 days
of the end of the then-current term.



12







In February 2014, the Company entered
into a marketing agreement with Aetna and Reader’s Digest (“RD”) pursuant to which RD has agreed to endorse
and promote the Aetna-issued group Medicare Supplement and other products as the parties may agree to offer in the future. The
agreement required Aetna to make a $1 million non-refundable marketing advance against future royalties to the Company and required
the Company to pay a $1 million royalty advance to RD. Both payments were made in February 2014. For financial statement presentation
purposes, the advances received have been reflected in deferred revenue and advances paid have been reflected in prepaid expenses
on the condensed consolidated balance sheet. Both advances will be recognized in earnings as future royalties are
earned.



12. Concentrations



As of June 30, 2014, three (3) customers
represented approximately 72% of the Company’s accounts receivable and four (4) customers represented approximately 64%
of the Company’s revenues earned during the period. As of December 31, 2013, four (4) customers represented approximately
84% of GP’s accounts receivable and two (2) customers represented approximately 39% of GP’s revenues earned during
2013.



13. Subsequent Events



On July 1, 2014, the Company appointed
Mel Harris to serve as a member of the Board of Directors to fill an open vacancy. The Company also entered a five-year consulting
agreement under which Mr. Harris will be paid $225,000 per year once the Company becomes cash flow positive. Mr. Harris also received
a five-year warrant to purchase 5 million shares of the Company’s common stock at an exercise price of $0.34, vesting half
immediately and the balance over two years. The vested portion of the warrant has a fair market value of approximately $766,000.



On July 1, 2014, the Company appointed
a new CFO under a five-year agreement that pays a base salary of $285,000 subject to increase at the discretion of the Board of
Directors. The CFO also received a ten-year option to purchase 5 million shares of the Company’s common stock at an exercise
price of $0.34, vesting over five years.



On July 1, 2014, the Company granted Steve
Leber, CEO, a ten-year option to purchase 5 million shares of the Company’s common stock at an exercise price of $0.34,
vesting over five years.



On July 8, 2014, the Company entered into
amendments to the February Notes. Pursuant to these amendments, the maturity date of each promissory note was extended until the
earlier of (i) August 29, 2014, (ii) the closing of a single transaction (whether debt, equity or a combination of both) that
results in aggregate gross proceeds to the Company of $1,500,000, or (iii) the acceleration of the maturity of the promissory
note upon the occurrence of an Event of Default (as defined in each of the promissory notes). The amendments became effective
as of June 30, 2014.



In July and August 2014, the Company issued
30,980 shares of its common stock to consultants in exchange for fees and expenses in the amount of $12,000 incurred in connection
with services provided to the Company.



In July 2014, the Company granted
five-year performance-based warrants to four consultants to purchase 1,250,000 shares of the Company’s common stock
at exercise prices of $0.34-$0.50 per share



During July 2014, the Company entered
into securities purchase agreements with several investors pursuant to which the Company sold, in private transactions, an aggregate
of 1,200,000 shares of its common stock and warrants to purchase an aggregate of 300,000 shares of its common stock for gross
proceeds to the Company of $300,000.  The warrants are exercisable for a period of five (5) years at an exercise price of
$0.25 per share, subject to customary adjustments.



During August 1 through August 5, 2014,
the Company entered into securities purchase agreements with several investors pursuant to which the Company sold, in private
transactions, an aggregate of 4,200,000 shares of its common stock and warrants to purchase an aggregate of 1,050,000 shares of
its common stock for gross proceeds to the Company of $1,050,000.  The warrants are exercisable for a period of five (5)
years at an exercise price of $0.35 per share, subject to customary adjustments.



On August 6, 2014, the
three January 2014 demand promissory notes for $25,000 each were all repaid in full.



13







|Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|------- | --------------------------------------------------------------------------------------



In this Report, the terms “Company,”
“we,” “us” and “our” refer to Grandparents.com, Inc. and its subsidiaries, unless the context
otherwise requires. In addition, the term “Annual Report” refers to the Company’s Annual Report on Form 10-K
for the year ended December 31, 2013 as filed with the SEC on April 10, 2014.



The following discussion and analysis
is based on, should be read with, and is qualified in its entirety by, the accompanying unaudited condensed consolidated financial
statements and related notes thereto included in this Report. The following discussion and analysis should also be read in conjunction
with the disclosure under “Cautionary Note Regarding Forward-Looking Statements” and the risk factors contained in
our Annual Report.



Overview



We own and operate the grandparents.com
website. We primarily serve the approximately 70 million grandparents in the U.S., but our audience also includes “boomers”
and seniors that are not grandparents. We believe that our website is one of the leading online communities for our market and
that our website is the premier social media platform targeting active, involved grandparents. Our website provides content and
forum groups on subjects that concern boomers and as of the date of this Report, there were nearly 2 million registered users
of the website with approximately 575,000 monthly unique visitors.



In addition to our website, we have established
the American Grandparents Association (“AGA”) which is a membership association that seeks to unite grandparents,
boomers and seniors around the concept that the age 50+ demographic faces issues that are unique to them. In addition to the services
offered to registered users, members pay $15 annually to the AGA to enjoy certain benefits such as access to deals and discounts
on products and services provided by third parties which are not available to those who are solely registered users. Some of these
products and services are endorsed or recommended by the AGA.



To date, we have generated revenue primarily
from advertising. However, we continue to focus on creating additional revenue streams from other sources such as recommendation
of products, the initiation of membership fees, endorsement of certain products including insurance, and the Grand Card. Although
to date we have not been able to generate significant revenue other than from advertising, we expect to begin generating additional
revenue from at least one of these sources in 2014.



Like most developing companies, we face
substantial financial challenges particularly in regard to revenue generation, cost control and capital requirements. Revenue
for the six months ended June 30, 2014 was $92,621, which reflected a decrease of $164,392, or 64%, compared to revenue of $257,013
for the comparable period in 2013. The decrease is mostly due to fewer ads placed by several advertisers. We increased our total
operating expenses by $1,040,888, or 22%, to $5,742,199 for the six months ended June 30, 2014 compared to $4,701,311 for the
comparable period in 2013 mainly as a result of an increase in equity-based compensation expense used to pay various parties in
lieu of cash. We increased our net loss by $1,184,121, or 24%, to $6,045,045 for the six months ended June 30, 2014 compared to
$4,860,924 for the comparable period in 2013.



We used $2,249,539 in cash for operating
activities and $155,232 in cash for investing activities during the six months ended June 30, 2014, offset by $2,929,000 in cash
provided by financing activities during this period. We had a working capital deficit of $1,651,635 as of June 30, 2014. We continue
to seek capital to fund ongoing operations. During the first half of 2014, we raised $2,854,000 from the issuance of our common
stock and warrants to accredited investors in private placement transactions. Going forward, we will need to raise significant
capital in order to successfully implement our business plans. See “Liquidity and Capital Resources” below for additional
information regarding our capital raising activities and use of cash.



Without additional capital from existing
or outside investors or further financing, our ability to continue to implement our business plan may be limited. These conditions
raise substantial doubt about our ability to continue as a going concern and to execute on our business model. Our consolidated
financial statements included in this Report do not include any adjustments that might result from the outcome of this uncertainty.



Our Website



Our website offers advice on health and
wellbeing, relationships and finances as well as recipes, travel tips and recommended activities for grandparents, boomers and
seniors. Historically, we have generated substantially all of our revenue through the sale of advertisements on our website. We
believe the sale of advertisements will become a smaller percentage of total revenue on a going forward basis as other Company
revenue streams are initiated.



14







American Grandparents Association



The AGA is our membership association.
Members of the AGA have access to a range of benefits including groups, discussions, blogs, games and contests as well as access
to our deals and group discounts on other products and services that are offered exclusively to AGA members. AGA members also
have the right to participate in our “Grand Corps” giving them the opportunity to volunteer for charitable and philanthropic
causes in different areas including health, education and wellbeing. Registered users of the website have access to the website’s
content and forum groups, but do not have access to the AGA membership benefits. The AGA charges $15 for an annual membership.



Grand Deals Transition to Grand
Giveaways and Premium Member Benefits



With the introduction of a paid membership
to the AGA, we have separated the offers formerly available in the Grand Deals portion of our website into two separate areas:
Grand Giveaways and Member Benefits. Grand Giveaways will continue to offer giveaways to registered users of the website and Member
Benefits will offer curated discounted products and services exclusively to members of the AGA.



We offer our promotion providers exposure
for their giveaways through various touch points: on our website, via our e-newsletter, and through social media channels. Grand
Giveaways consist of consumer goods and services in the areas of travel, entertainment, food and dining, health and wellness,
children’s entertainment and education products.



Member Benefits are significantly discounted
products and services provided by third parties appropriate for the 50+ demographic and their families. Member Benefits include
deals and discounts on gifts, jewelry, toys, apparel, vitamins, eyewear, flowers, travel (hotels, cruise ships, car rentals),
entertainment (theaters, circuses, and amusement parks), education services (for both adults and children), and insurance. Member
Benefits providers also have their promotions featured on our website, highlighted in our e-newsletter and promoted through our
social channels.



We seek to maintain direct relationships
with our promotion providers and regularly have discussions about potential new giveaways, deals, and additional ways they can
cross-promote the AGA. Each Grand Giveaway and Member Benefit is subject to the terms provided by the promotion provider which
may seek to change, retract, or cancel any giveaway or deal offered in Grand Giveaways and Member Benefits or otherwise to registered
users or AGA members.



Royalty Arrangements



We also seek to derive revenue by endorsing
or recommending products and services provided by third parties in return for royalty payments. We have endorsed an online course
entitled “Timeless You” created by Deepak Chopra, a Health and Wellbeing advisor to the Company. This online course
consists of six different classes to help participants redefine their age, eliminate stress, maximize energy and find joy in life.
The online course is marketed to AGA members and third parties and we receive a royalty for each person who orders the course.
The online course first became available in 2014. We have entered into an agreement with Aetna pursuant to which Aetna will offer
a group Medicare Supplement to AGA members. In exchange for our endorsement, a license to use our intellectual property and access
to the AGA membership, Aetna will pay a royalty to the Company. The agreement requires Aetna to design, price and manage the policies.
We are not required to perform any insurance producer services under the Agreement. As of the date of this Report, Aetna is in
the process of filing its policy forms with various state insurance departments.



In February 2014, we entered into a marketing
agreement with Aetna and Reader’s Digest pursuant to which Reader’s Digest has agreed to endorse and promote the Aetna-issued
group Medicare Supplement and other products as the parties may agree to offer in the future. The agreement required Aetna to
make a $1 million non-refundable marketing advance against future royalties to us and required us to pay a $1 million royalty
advance to Reader’s Digest. Both payments were made in February 2014. For financial statement presentation purposes, the
advances received have been reflected in deferred revenue and advances paid have been reflected in prepaid expenses on our condensed
consolidated balance sheet. Both advances will be recognized in earnings as future royalties are earned.



There can be no guarantee that we will
be able to enter into similar agreements or other royalty arrangements with other third parties or that, if we are, the terms
of such arrangements will be on terms advantageous to us. To the extent we are able to enter into royalty arrangements, revenues,
if any, from such arrangements may be limited in the near term.



Grand Card ®



In late 2011, the “Grand Card”
was conceptualized as a cardholder rewards program that will provide cash rebate benefits on a debit card when cardholders purchase
pharmaceutical products and consumer goods and services offered by participating merchants. In March 2013, we entered into a definitive
agreement with Cegedim, Inc. (U.S. subsidiary of Cegedim, S.A.) regarding the formation of an alliance for the purpose of developing
the Grand Card. To date, development of the Grand Card remains in the early stages and we have not generated any revenue from
this program. There can be no guarantee that we will be able to further develop this concept or, that if we are able to do so,
that we will be able to generate revenue from it.



15







Strategic Partnerships



We have entered into several strategic
partnerships which we will believe will help us to generate future revenue. By entering into such arrangements, we seek to leverage
the knowledge of others to help us develop our business.



As discussed above, we have formed an
alliance with Cegedim for the purposes of developing the Grand Card. Cegedim has developed proprietary processes and technologies
which will be customized and adapted to the Grand Card for rebate programs.



In January 2013, we entered into an alliance
agreement (the “Starr Agreement”) with Starr Indemnity & Liability Company (“Starr”), a wholly owned
subsidiary of Starr International Company, Inc., under which Starr agreed to provide certain services to us, including developing
strategic business and investment relationships and other business consulting services. In exchange for the services, we agreed
to pay Starr a monthly fee of $80,000 as well as certain fees to be agreed upon by us and Starr for Starr’s arranging agreements
with insurance and finance companies. The Starr Agreement was amended in April 2013, pursuant to which we committed to issuing
Starr a warrant to acquire up to 21,438,951 shares of our common stock, subject to certain customary adjustments which vests one-fourth
(1/4th) of the warrant shares upon issuance and the remaining portion of the warrant shares in three equal annual installments
on March 1, 2014, 2015 and 2016, provided, however, that the warrant shall automatically cease to vest upon termination or expiration
of the Starr Agreement. The warrant has not yet been issued. The initial term of the Starr Agreement was for one year and automatically
renewed on March 1, 2014 and will continue to do so for subsequent one-year periods unless either party terminates the Starr Agreement
prior to the expiration of the then-current term.



Recent Developments



Change in Control



On June 9, 2014, GP.com Holding Company
LLC (the “LLC”), the former beneficial owner of 51.1% of the Company’s common stock distributed substantially
all of its assets to its members, certain of their affiliates and other parties, which consisted of shares of common stock of
the Company, in exchange for membership units in the LLC. Messrs. Steven Leber, the Company’s Co-Chief Executive Officer
and Chairman, Joseph Bernstein, the Company’s former Co-Chief Executive Officer, Chief Financial Officer, Treasurer and
a former director, and Dr. Robert Cohen, one of the Company’s directors, served as the members of the LLC’s board
of managers, which exercised shared voting and investment power with respect to the shares of common stock owned by the LLC. As
a result of this distribution, the LLC was no longer the Company’s largest stockholder and therefore no longer has voting
control of the Company’s equity securities. Among the members and others who received distributions by the LLC were Messrs.
Leber, Bernstein, Cohen and/or certain affiliated entities.



Starr Investment and other Capital
Investments



On June 16, 2014, the Company received
a $1,000,000 investment from CV Starr & Company, Inc. In exchange for the investment, the Company issued 4,000,000 shares
of its common stock and a warrant to purchase 1,000,000 shares of its common stock to CV Starr. The warrant issued in connection
with this equity purchase is exercisable for a period of five years at an exercise price of $0.25 per share, subject to customary
adjustments.



New Employment Agreement with Steve
Leber



On June 25, 2014, we entered into a new
employment agreement with Steve Leber to continue to serve as our Chief Executive Officer. The principal terms of his employment
agreement are set forth in Item 5 of this Report.



Retirement of Joseph Bernstein



On June 9, 2014, Joseph
Bernstein, the Company’s Co-Chief Executive Officer, Chief Financial Officer, Treasurer and a director, and the Company
entered into a Retirement Agreement (the “Retirement Agreement”), pursuant to which he agreed to resign from the
Company, effective on June 25, 2014. Pursuant to the terms of the Retirement Agreement, the Company agreed to issue to Mr.
Bernstein (and his affiliates) (i) 300,000 shares for continued services, and other promises and covenants, (ii) 400,000
shares and a five-year warrant to purchase 275,000 shares at $0.25 exercisable immediately upon issuance in exchange for the
termination of the $78,543 note and (iii) 400,000 shares in exchange for the termination of the $100,000 note. During the
quarter ended June 30, 2014, the Company recorded additional interest expense related to the cancellation of indebtedness as
described in (ii) and (iii) of $135,411. The Company also agreed to provide Mr. Bernstein with a monthly
payment of $3,000 for a period of 24 months starting as of July 1, 2014 for health insurance coverage.



16







Hiring of Riaz Latifullah



Effective July 1, 2014, we appointed Riaz
Latifullah as our Chief Financial Officer following the retirement of Joseph Bernstein. The Company and Mr. Latifullah have entered
into an employment agreement pursuant to which Mr. Latifullah will serve in such capacity for an initial term of five years. Mr.
Latifullah joined us from AARP, a Washington, DC-based non-profit membership organization that advocates on behalf of mature Americans,
where he spent the last 13 years. He most recently served as Director of Brand Operations at AARP and previously served as Vice
President, Financial Management for AARP Services (AARP’s for-profit subsidiary). He brings to the position a deep understanding
of and keen insights into issues affecting the powerful 50-plus demographic.



Certain Factors Affecting our Performance



In addition to the Risk Factors discussed
in our Annual Report, we consider the following to be significant factors affecting our future performance and financial results.



Our Ability to Attract and Retain Advertisers.
Substantially all of our revenues to date derive from advertisements on our website. Advertisers may from time to time choose
to discontinue, reduce the amount they spend on, or reduce the prices they are willing to pay for advertising on our website.
Advertisers may choose to do so if they do not believe our website is effective in reaching their target market or if they believe
advertising through other means will generate a better return. Likewise, advertising revenue may be affected by the number of
users of our website, the level of user engagement with our website, website design changes we may make that change how and the
extent to which we make advertisements available to our users, reductions in advertising budgets, advertising price changes and
general economic conditions and conditions in the advertising industry in general.



Our Ability to Increase Visitor Traffic
and Attract and Retain AGA Members. We believe increasing our website traffic and attracting and retaining members to the
AGA are important to our success. Specifically, increased website traffic will allow us to generate additional revenue from advertisements.
In addition, we hope new visitors to our website will join the AGA. The AGA must attract and retain members in order for us to
increase revenue and achieve profitability. We expect to derive revenue in part from the purchase of products and services by
AGA members and, potentially, from membership fees. If we are unable to attract and retain AGA members, we may not be able to
attract third parties to their promote products and services to AGA members.



Our Ability to Enter into Agreements
with Third Parties. We must attract, retain and enter agreements with third parties that generate revenue for the Company.
As mentioned above, we expect revenue to be derived, in part, from products and services offered by third parties and from royalties
earned by licensing our name and other intellectual property to third parties who we endorse or recommend. If third parties do
not find our website or endorsements effective or do not believe that utilizing our website or obtaining our endorsement provides
them with increases in customers, revenue or profit, they may not make, or continue to make, their products and services available
on our website or seek our endorsement or recommendation.



Market Price and Acceptance of Third
Party Products and Services. We expect to derive royalties from third parties who offer their products and services to AGA
members. Accordingly, such royalties are dependent on prices charged by these third parties, some of which may be priced too high
for market acceptance. Certain products and services, including insurance and financial services, are cyclical in nature and may
vary widely based on market conditions so our revenues and profitability can be volatile or remain depressed for significant periods
of time.



Competition. We compete with companies
in the social networking industry such as Facebook, Twitter and Google and other companies that specifically target the age 50+
market, in particular AARP. These competitors compete with us for visitor traffic, members, advertisers and partners. Many of
our competitors have financial and other competitive advantages over us. It is also possible that new competitors may emerge and
acquire significant market share.



Additional Financing. To effectively
implement our business plan, we need to obtain additional financing. If we obtain financing, we would expect to accelerate our
business plan and increase our advertising and marketing budget, hire additional staff members and increase our office space and
operations all of which we believe would result in the generation of revenue and development of our business. Inability to obtain
additional financing may delay the implementation of our business plan and may cause us to reduce our budget and capital expenditures.



17







Critical Accounting Policies and Estimates



The discussion and analysis of our financial
condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance
with generally accepted accounting principles in the United States (“GAAP”). The preparation of these financial statements
requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and
related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates including, among others,
those affecting revenue, the allowance for doubtful accounts, equity-based compensation, and the useful lives of tangible and
intangible assets. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable
under the circumstances, the results of which form our basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or
conditions, or if management made different judgments or utilized different estimates.



We have identified below some of our accounting
policies that we consider critical to our business operations and the understanding of our results of operations. For detailed
information and discussion on our critical accounting policies and estimates, see our financial statements and the accompanying
notes included in this Report. Many of our estimates or judgments are based on anticipated future events or performance, and as
such are forward-looking in nature, and are subject to many risks and uncertainties, including those discussed below and elsewhere
in this Report. We do not undertake any obligation to update or revise this discussion to reflect any future events or circumstances.
See “Cautionary Note Regarding Forward-Looking Statements” contained in this Report.



Included in our Annual Report, we identified
four of our accounting policies that we consider critical to our business operations and an understanding of our results of operations:



| | · | revenue
                                         recognition;
| | - | -------------------------------------------------------------

| | · | fair
                                         value measurements;
| | - | -----------------------------------------------------------------

| | · | equity-based
                                         compensation; and
| | - | -----------------------------------------------------------------------

| | · | impairment
                                         of long-lived assets.
| | - | -------------------------------------------------------------------------



We included in our Annual Report a brief
discussion of some of the judgments, estimates and uncertainties that can impact the application of these policies and the specific
dollar amounts reported on our financial statements. This is neither a complete list of all of our accounting policies, nor does
it include all the details surrounding the accounting policies we identified, and there are other accounting policies that are
significant to us. For detailed information and discussion on our critical accounting policies and estimates, see our financial
statements and the accompanying notes included in this Report and in our Annual Report. Many of our estimates or judgments are
based on anticipated future events or performance, and as such are forward-looking in nature, and are subject to many risks and
uncertainties, including those discussed below and elsewhere in this Report and in our Annual Report. We do not undertake any
obligation to update or revise this discussion to reflect any future events or circumstances. See “Cautionary Note Regarding
Forward-Looking Statements” contained in this Report.



Certain amounts in the 2013 condensed
consolidated financial statements have been reclassified for comparative purposes to conform to the presentation in the current
period condensed consolidated financial statements. These reclassifications had no effect on previously reported results.



Results of Operations



Comparison of the Three Months Ended
June 30, 2014 and 2013



Revenue



Revenue for the three months ended June
30, 2014 decreased by $76,808, or 57%, to $57,346 compared to $134,154 for the comparable period in 2013. Revenue for each period
was derived primarily from advertisements on our website. The decrease is due, in part, to fewer advertisements placed, with two
of our advertisers accounting for $75,000 or 98% of the decrease. The decrease in number of advertisements was due primarily to
the non-renewal of branding campaigns that contributed to advertising revenue in the prior year period. In addition, the decrease
in revenue was due to a decrease in CPM (cost-per-impression) compared to the prior year period. The decrease in CPM means advertisers
paid less in the second quarter of 2014 for advertising on our website than they did in the comparable period in 2013.



We believe the decline in advertising
revenue is indicative of the overall digital advertising marketplace and certain industry forces that are affecting online advertising
businesses generally. There is a trend toward programmatic ad buying, with the industry moving toward a more automated buy-sell
online advertising environment that is dependent on scale. In this environment, websites with lesser traffic have a significantly
more difficult task of attracting advertisers. In addition, CPMs in the industry are generally in decline. In an effort to counteract
these trends, we believe we will need to increase membership in the AGA and the number of registered users of, and visitors to,
our website, which, in turn we believe will increase traffic and potentially attract advertising dollars. We also plan to seek
partnerships with other content publishers which will allow us to combine our traffic with theirs. We believe this will enable
us to increase visibility with automated systems and advertisers in general. We also plan to market directly to advertisers, which
may necessitate significant investment to increase our marketing capabilities.



18







However, due to the attractiveness of
our target market to advertisers in general, we remain optimistic about our long-term ability to generate revenue from advertisements
in spite of these industry trends. Also, as discussed elsewhere in this Report, we do not expect that advertising revenue will
be our sole source of revenue in the long term.



Operating Expenses



Total operating expenses for the three
months ended June 30, 2014 increased by $851,320, or 41%, to $2,904,888 compared to $2,053,568 for the comparable period in 2013.
The increase was due to an increase in salaries and equity-based compensation awards partially offset by a decrease in other general
and administrative expenses during the second quarter of 2014.



Selling and marketing.Selling
and marketing expense for the three months ended June 30, 2014 increased by $18,959, or 37%, to $70,783 compared to $51,824 for
the comparable period in 2013 due to an increase in public relations partially offset by a decrease in membership marketing.



Salaries.Salary expense for the
three months ended June 30, 2014 increased by $168,417, or 42%, to $569,054 compared to $400,637 for the comparable period in
2013 due to the net impact of new hires and staff departures, and the recording of deferred compensation during the period.



Rent.Rent expense for the three
months ended June 30, 2014 increased by $2,125, or 5%, to $44,200 compared to $42,075 for the comparable period in 2013.



Accounting, legal and filing fees.Accounting, legal and filing fees expense for the three months ended June 30, 2014 increased by $94,973, or 38%, to $347,637
compared to $252,664 for the comparable period in 2013. The increase was due to increases in legal expenses in the second quarter
of 2014.



Consulting.Consulting expense
for the three months ended June 30, 2014 increased by $19,737, or 7%, to $304,510 compared to $284,773 for the comparable period
in 2013. The increase was due to payments of consulting fees to Starr for three months in 2014 versus only one month in 2013 offset
by the engagement of fewer other consultants in 2014 than in 2013.



Equity-based compensation.Equity-based
compensation for the three months ended June 30, 2014 increased by $632,177, or 92%, to $1,321,377 compared to $689,200 for the
comparable period in 2013. The increase was due to an expense of $470,899 for the Starr warrant and an increase in options granted
in the second quarter of 2014 versus 2013, one of which accounted for $140,000 of the increase.



As discussed above, in April, 2013, we
entered into an amendment to the Starr Agreement under which Starr provides certain services to us. We committed to issuing to
Starr a warrant to acquire up to 21,438,954 shares of our common stock, subject to certain customary adjustments at an exercise
price of the warrant of $0.05 per share, subject to certain customary adjustments. The warrant will vest as follows: (i) one-fourth
of the warrant will vest upon issuance, and (ii) the unvested portion of the warrant will vest in three equal annual installments
on March 1, 2014, 2015 and 2016, provided, that the unvested portion of the warrant will immediately cease to vest upon the termination
or expiration of the Starr Agreement. 5,359,739 warrants were deemed to have vested upon the execution of the amended Starr Agreement
(valued at $766,443 using the Black Scholes method and have been fully expensed) and 5,359,739 warrants were deemed to have vested
on March 1, 2014 (valued at $1,888,772 using the Black Scholes method and are being ratably charged to expense over the one-year
period commencing March 1, 2014). The remaining fair value of the warrant will be determined as each installment vests and will be expensed over the
respective annual installment period.



Other general and administrative.Other
general and administrative expense for the three months ended June 30, 2014 decreased by $65,607, or 36%, to $118,070 compared
to $183,677 for the comparable period in 2013 The change was due to decreases in commissions of $50,000 resulting from lower advertising
revenues and travel of $14,000.



Depreciation and amortization.Depreciation
and amortization for the three months ended June 30, 2014 decreased by $19,461, or 13%, to $129,257 compared to $148,718 for the
comparable period in 2013. The decrease was due to certain intangibles becoming fully amortized in 2013.



19







Other Expense



We had other expense consisting mainly
of interest expense, of $291,267 for the three months ended June 30, 2014 compared to other expense of $197,110 for the comparable
period in 2013. The increase of $94,157, or 48%, was due to an increase of $84,141 in interest expense related to extinguishment
of debt offset by a decrease of $10,000 in other income.



Net Loss



Net loss for
the three months ended June 30, 2014 was $3,138,809 compared to $2,116,524 for the comparable period in 2013, an increase of $1,022,285,
or 48%.



Comparison of the Six Months Ended
June 30, 2014 and 2013



Revenue



Revenue for the six months ended June
30, 2014 decreased by $164,392, or 64%, to $92,621 compared to $257,013 for the comparable period in 2013. Revenue for each period
was derived primarily from advertisements on our website. The decrease is due, in part, to fewer advertisements placed, with three
of our advertisers accounting for $125,000 or 76% of the decrease. The decrease in number of advertisements was due primarily
to the non-renewal of branding campaigns that contributed to advertising revenue in the prior year period. In addition, the decrease
in revenue was due to a decrease in CPM (cost-per-impression) compared to the prior year period. The decrease in CPM means advertisers
paid less during the six months ended June 30, 2014 for advertising on our website than they did in the comparable period in 2013.



We believe the decline in advertising
revenue is indicative of the overall digital advertising marketplace and certain industry forces that are affecting online businesses
in general. There is a trend toward programmatic ad buying, with the industry moving toward a more automated buy-sell online advertising
environment that is dependent on scale. In this environment, websites with lesser traffic have a significantly more difficult
task of attracting advertisers. In addition, CPMs in the industry are generally in decline. In an effort to counteract these trends,
we believe we will need to increase membership in the AGA, which, in turn we believe will increase traffic and potentially attract
advertising dollars. We also plan to seek partnerships with other content publishers which will allow us to combine our traffic
with theirs. We believe this will enable us to increase visibility with automated systems and advertisers in general. We also
plan to market directly to advertisers, which may necessitate significant investment to increase our marketing capabilities.



However, due to the attractiveness of
our target market to advertisers in general, we remain optimistic about our long-term ability to generate revenue from advertisements
in spite of these industry trends. Also, as discussed elsewhere in this Report, we do not expect that advertising revenue will
be our sole source of revenue in the long term.



Operating Expenses



Total operating expenses for the six months
ended June 30, 2014 increased by $1,040,888, or 22%, to $5,742,199 compared to $4,701,311 for the comparable period in 2013. The
increase was due to an increase in equity-based compensation, salaries and legal expense, partially offset by a decrease in amortization
expense during the first half of 2014.



Selling and marketing.Selling
and marketing expense for the six months ended June 30, 2014 increased by $25,108, or 18%, to $165,161 compared to $140,053 for
the comparable period in 2013 due to an increase in public relations partially offset by a decrease in membership marketing.



Salaries.Salary expense for the
six months ended June 30, 2014 increased by $160,905, or 18%, to $1,053,549 compared to $892,644 for the comparable period in
2013 due to the net impact of new hires and staff departures, and the recording of deferred compensation during the period.



Rent.Rent expense for the six
months ended June 30, 2014 increased by $4,300, or 5%, to $88,400 compared to $84,100 for the comparable period in 2013.



Accounting, legal and filing fees.Accounting, legal and filing fees expenses for the six months ended June 30, 2014 increased by $234,018, or 61%, to $620,365
compared to $386,347 for the comparable period in 2013. The increase was due to increases in legal expenses of $187,000 and increases
in accounting expenses of $32,000.



20







Consulting.Consulting expense
for the six months ended June 30, 2014 increased by $147,560, or 33%, to $588,168 compared to $440,608 for the comparable period
in 2013. The increase was due to payments of cash consulting fees to Starr for six months in 2014 versus only four months in 2013.
This increased consulting expense by $160,000 and was offset by the engagement of fewer other consultants in 2014 than in 2013.



Equity-based compensation.Equity-based
compensation for the six months ended June 30, 2014 increased by $634,406, or 31%, to $2,702,154 compared to $2,067,748 for the
comparable period in 2013. The increase was due to a net increase in stock, options and warrants expensed as compensation, with
one 2013 warrant and one issuance of shares for services accounting for a decrease $953,000 offset by one 2014 option accounting
for an increase of $146,100 combined with non-cash compensation to Starr of $1,392,584 recorded during the first half of 2014.



As discussed above, in April, 2013, we
entered into an amendment to the Starr Agreement under which Starr provides certain services to us. We committed to issuing to
Starr a warrant to acquire up to 21,438,954 shares of our common stock, subject to certain customary adjustments at an exercise
price of the warrant of $0.05 per share, subject to certain customary adjustments. The warrant will vest as follows: (i) one-fourth
of the warrant will vest upon issuance, and (ii) the unvested portion of the warrant will vest in three equal annual installments
on March 1, 2014, 2015 and 2016, provided, that the unvested portion of the warrant will immediately cease to vest upon the termination
or expiration of the Starr Agreement. 5,359,739 warrants were deemed to have vested upon the execution of the amended Starr Agreement
(valued at $766,443 using the Black Scholes method and have been fully expensed) and 5,359,739 warrants were deemed to have vested
on March 1, 2014 (valued at $1,888,772 using the Black Scholes method and are being ratably charged to expense over the one-year
period commencing March 1, 2014). The warrant has not yet been issued. The remaining fair value of the warrant will be determined as each installment vests and will be expensed over the
respective annual installment period.



Other general and administrative.Other
general and administrative expense for the six months ended June 30, 2014 decreased by $28,301, or 9%, to $284,651 compared to
$312,952 for the comparable period in 2013.



Depreciation and amortization.Depreciation
and amortization for the six months ended June 30, 2014 decreased by $137,108, or 36%, to $239,751 compared to $376,859 for the
comparable period in 2013. The decrease was due to certain intangibles becoming fully amortized in 2013.



Other Expense



We had other expense consisting mainly
of interest expense, of $395,467 for the six months ended June 30, 2014 compared to other expense of $416,626 for the comparable
period in 2013. The decrease of $21,159, or 5%, was due to a decrease of $13,066 in interest expense combined with an increase
of $8,125 in other income.



Net Loss



Net loss for
the six months ended June 30, 2014 was $6,045,045 compared to $4,860,924 for the comparable period in 2013, an increase of $1,184,121,
or 24%.



Liquidity and Capital Resources



As of June 30, 2014, we had unrestricted
cash of $583,535. We expect to finance our operations over the next twelve months primarily through our existing cash and offerings
of our equity or debt securities or through bank financing. Our operations have not yet generated positive cash flows. To effectively
implement our business plan, we will need to obtain additional financing. If we obtain financing, we would expect to accelerate
our business plan and increase our advertising and marketing budget, hire additional staff members and increase our office space
and operations all of which we believe would result in the generation of revenue and development of our business. We cannot be
certain that financing will be available on acceptable terms or available at all. To the extent that we raise additional funds
by issuing debt or equity securities or through bank financing, our stockholders may experience significant dilution. If we are
unable to raise funds when required or on acceptable terms, we may have to significantly scale back, or discontinue, our operations.



Recent Capital Raising Efforts



Since January 2013, we have primarily
funded our operations through the issuance of our equity and debt securities.



21







Equity Offerings



During 2013, we entered into securities
purchase agreements with several investors pursuant to which we sold, in private transactions, an aggregate of 11,680,000 shares
of our common stock and warrants to purchase an aggregate of 2,920,000 shares of our common stock for gross proceeds of $2,920,000.
The warrants are exercisable for a period of five years at an exercise price of $0.25 per share, subject to customary adjustments.



Since January 1, 2014 and through the
filing of this Report (which includes transactions that occurred after the second quarter of 2014), we have sold an aggregate
of 16,940,000 shares of our common stock at a price per share of $0.25 in separate private transactions with several accredited
investors for an aggregate purchase price of $4,235,000. In connection with such sales, we issued five-year warrants to purchase
an aggregate of 4,235,000 shares of our common stock at an exercise price of $0.25-$0.35 per share, subject to customary adjustments.



Debt Issuances



In December 2012 ($850,000), January 2013
($50,000) and February 2013 ($50,000), we issued an aggregate of $950,000 of 12% secured convertible promissory notes (the “Original
Bridge Notes”) and warrants to purchase an aggregate of 950,000 shares of our common stock (the “Original Bridge Warrants”)
in a private offering to accredited investors (the “Original Investors”). On May 31, 2013 (the “Effective Date”),
the Original Investors transferred, in separate transactions, all of their respective rights, title and interest in the Original
Bridge Notes to a third party (the “Current Holder”) pursuant to various note purchase agreements by and between each
Original Investor and the Current Holder. Also on the Effective Date, and immediately following the Current Holder’s purchase
of the Original Bridge Notes, we entered into an Amended and Restated Note Purchase Agreement with the Current Holder pursuant
to which all of the Original Bridge Notes were automatically deemed null and void. In addition, we issued to the Current Holder
a convertible promissory note, which was subsequently amended and restated (the “New 12% Convertible Note”), in the
original principal amount of $1,002,800, which amount reflected the outstanding principal amount and unpaid accrued interest due
under the Original Bridge Notes on the Effective Date. The New 12% Convertible Note was unsecured and accrued interest at the
rate of 12% per annum and was to mature on June 2, 2014 (the “Maturity Date”). On April 4, 2014, we entered into a
Note Conversion Agreement with the Current Holder pursuant to which the Current Holder agreed to convert $1,223,795 in principal
and interest due thereunder, as calculated through the Maturity Date, into 6,526,908 shares of common stock based at the conversion
price set forth in the New 12% Convertible Note. The shares were issued on April 15, 2014.



In February 2013, we entered into promissory
notes (the “February Notes”) with each of Steven Leber, our Chairman and Chief Executive Officer, Joseph Bernstein,
our former Co-Chief Executive Officer, Chief Financial Officer and Treasurer, Dr. Robert Cohen, a member of our Board of Directors,
and Mel Harris, a current security holder of and recent appointee to the Company’s Board of the Directors, evidencing loans
made by each lender to us to fund operations. Each promissory note was issued in the original principal amount of $100,000. Accordingly,
we received an aggregate of $400,000 from the lenders upon issuance of the February Notes. The February Notes are unsecured, accrue
interest at a rate of 10% per annum and mature on the earlier of June 30, 2014 or the closing of a single transaction (whether
debt, equity or a combination of both) that results in aggregate gross proceeds of $1,500,000. In connection with the issuance
of the February Notes, we issued to each lender a five-year warrant to purchase 100,000 shares of our common stock at an exercise
price of $0.50 per share. One of these notes and its accrued interest was terminated effective June 25, 2014 in return for 400,000
shares of the Company’s common stock in connection with the Joseph Bernstein retirement agreement.



In June 2013, we entered into demand promissory
notes with each of Messrs. Leber and Harris and Dr. Cohen. Each demand promissory note was issued in the original principal amount
of $25,000. Accordingly, we received an aggregate of $75,000 from the lenders upon issuance of these demand promissory notes.
The demand promissory notes were unsecured, accrued interest at a rate of 10% per annum and were payable upon demand by the lender.
In July 2013, the demand promissory notes were repaid in full upon demand of the lenders.



In January 2014, we entered into demand
promissory notes with each of Messrs. Leber, Lazarus and Harris. Each demand promissory note was issued in the original principal
amount of $25,000. Accordingly, we received an aggregate of $75,000 from the lenders upon issuance of these demand promissory
notes. The demand promissory notes are unsecured, accrue interest at a rate of 10% per annum and are payable upon demand by the
lender.



22







Other Indebtedness



In addition to the debt instruments described
above, we have promissory notes outstanding in favor of Mr. Leber in the principal amount of $78,543 (the “Leber Note”),
Mr. Bernstein in the principal amount of $78,543 (the “Bernstein Note”), Meadows Capital, LLC, in the principal amount
of $308,914 (the “Meadows Note”) and Leber-Bernstein Group, LLC, which is an entity controlled by Messrs. Leber and
Bernstein, in the principal amount of $612,500 (the “LBG Note”). Such promissory notes reflect indebtedness assumed
by us in connection with the reverse acquisition with our predecessor in February 2012. Each of these promissory notes accrue
interest at the rate of 5% per annum and mature upon the earlier of (i) the Company having EBITDA of at least $2,500,000 as reflected
on its quarterly or annual financial statements filed with the SEC, or (ii) the Company closing a financing with gross proceeds
to the Company of at least $10,000,000. The Leber Note, Bernstein Note and LBG Note are subordinate in right of payment to the
Meadows Note and rank pari passu with each other. The Bernstein Note and its accrued interest was terminated effective June 25,
2014 in return for 400,000 shares of the Company’s common stock and a five-year warrant to purchase 275,000 shares of the
Company’s common stock at $0.25 in connection with the Joseph Bernstein retirement agreement.



Cash Flow



Net cash flow from operating, investing
and financing activities for the periods below were as follows:



|                                 |  | Six Months Ended June 30, |           
|-------------------------------- |  | ------------------------- | ----------
|                                 |  | 2014                      |           
|Cash provided by (used in):      |  |                           |           
|Operating Activities             |  | $                         | (2,249,539
|Investing Activities             |  |                           | (155,232  
|Financing Activities             |  |                           | 2,929,000 
|Net increase (decrease) in cash: |  | $                         | 524,229   



Cash Used In Operating Activities



For the six months ended June 30, 2014,
net cash used in operating activities of ($2,249,539) consisted of net loss of ($6,045,045) offset by ($4,319,899) in non-cash
adjustments for depreciation, amortization, equity-based compensation, issuance of common stock for services, and gains on settlement
of liabilities, combined with ($524,393) in cash provided by changes in working capital and other activities.



For the six months ended June 30, 2013,
net cash used in operating activities of ($1,646,458) consisted of net loss of ($4,860,924) offset by non-cash adjustments for
amortization of warrants related to bridge notes payable ($309,430), depreciation and amortization ($376,859) and equity-based
compensation ($2,067,748), combined with ($460,429) in cash provided by changes in working capital and other activities.



Cash Used In Investing Activities



For the six months ended June 30, 2014,
the net cash used in investing activities of $155,232 was entirely for website development.



For the six months ended June 30, 2013,
net cash used in investing activities of $15,058 consisted of $14,143 for development of intangible assets and $915 for purchases
of property and equipment.



Cash Provided By Financing Activities



For the six months ended June 30, 2014,
net cash provided by financing activities of $2,929,000 consisted of $2,854,000 in net proceeds from private placements and $75,000
from loans and short-term advances.



For the six months ended June 30, 2013,
net cash provided by financing activities of $1,560,000 consisted of $985,000 in net proceeds from private placements and $575,000
from loans and short-term advances.



Off-Balance Sheet Arrangements



None.



23







|Item 3. | Quantitative and Qualitative Disclosures About Market Risk.
|------- | -----------------------------------------------------------



Smaller reporting companies are not required
to provide the information required by this item.



|Item 4. | Controls and Procedures.
|------- | ------------------------



We maintain disclosure controls and procedures
designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act
of 1934, as amended (the “Exchange Act”) is (i) recorded, processed, summarized and reported within the time periods
specified in the SEC’s rules and forms and (ii) accumulated and communicated to management, including our principal executive
officers and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding
required disclosure. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance
that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of
controls can provide absolute assurance that all control issues if any, within a company have been detected.



As of the end of the period covered
by this Report, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and
procedures pursuant to Exchange Act Rule 13a-15. This evaluation was carried out under the supervision and with the
participation of management, including our principal executive officers and principal financial officer. Based upon that
evaluation, our principal executive officers and principal financial officer concluded that our disclosure controls and
procedures were not effective as of the end of the period covered by this Report due to material weaknesses in our internal
control over financial reporting. The material weaknesses primarily consisted of the following: (i) we do not have written
documentation of our internal control policies and procedures; (ii) we do not have sufficient segregation of duties within
accounting functions; (iii) we do not have adequate staff and supervision within our accounting function; and (iv) we lack a
sufficient process for periodic financial reporting, including timely preparation and review of financial reports and
statements which resulted in a restatement of the Company’s interim financial statements.



We intend to remediate the material weaknesses
discussed above. While we have engaged an experienced consultant on a part-time basis late in 2013 to assist with our filings
and our internal controls, as of the end of the period covered by this Report, we have not taken substantive steps in this regard.
We intend to begin the process documenting internal controls and procedures in 2014. We also intend to implement procedures to
ensure timely filing of our periodic financial reports filed with the SEC in the future. However, due to our size and nature,
segregation of duties within our internal control system may not always be possible or economically feasible. Likewise, we may
not be able to engage sufficient resources to enable us to have adequate staff and supervision within our accounting function.



A material weakness is a control deficiency,
or combination of control deficiencies, in internal control over financial reporting, such that there is a reasonable possibility
that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.



During the period covered by this Report,
there were no changes in our internal controls or in other factors that have materially affected, or are reasonably likely to
materially affect our internal controls over financial reporting.



24







PART II—OTHER
INFORMATION



|Item 1. | Legal Proceedings.
|------- | ------------------



Currently there are no material legal
proceedings pending against us. However, from time to time, we may become involved in various lawsuits and legal proceedings which
arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other
matters may arise from time to time that may harm our business.



|Item 1A. | Risk Factors.
|-------- | -------------



The risks described in Part I, Item 1A,
“Risk Factors” in our Annual Report for the year ended December 31, 2013, could materially and adversely affect our
business, financial condition and results of operations. These risk factors do not identify all risks that we face. Our operations
could also be affected by factors that are not presently known to us or that we currently consider to be immaterial to our operations.
For the three months ended March 31, 2014, there are no material changes in our risk factors as previously described in our Annual
Report.



|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds.
|------- | ------------------------------------------------------------



Reference is made to our Current Reports
on Form 8-K dated February 13, 2014 (filed on February 21, 2014) and April 4, 2014 (filed on April 10, 2014) for information regarding
unregistered sales of equity securities during the period covered by this Report.



|Item 3. | Defaults Upon Senior Securities.
|------- | --------------------------------



None.



|Item 4. | Mine Safety Disclosures.
|------- | ------------------------



Not applicable.



|Item 5. | Other Information.
|------- | ------------------



Employment Agreement with Steven Leber



Effective June 25, 2014 (the “Effective
Date”), Grandparents.com, Inc. (the “Company”) and Steve Leber entered into an employment agreement (the “Agreement”)
pursuant to which Mr. Leber will continue to serve as Chief Executive Officer of the Company.



The Agreement will continue in full force
and effect until the fifth anniversary of the Effective Date, at which time the Agreement will automatically renew for additional
five-year terms unless either party provides written notice of its intention not to renew the Agreement no later than sixty days
prior to the end of the then current term, or unless the Agreement is terminated earlier in accordance with its terms.



Pursuant to the Agreement, Mr. Leber will
be paid a base salary of $300,000, which will increase annually by 5% on each anniversary of the Effective Date (“Base Salary”).
The Agreement also provides that the Company will pay Mr. Leber an amount equal to $125,000 on the date the Company receives capital
investments that, in the aggregate, equal $8,000,000, provided that Mr. Leber is employed by the Company on such date. Mr. Leber
is also entitled to participate in all bonus, incentive, pension or profit sharing plans or other types of benefit plans provided
by the Company for the benefit of its officers or regular employees.



In connection with the Agreement, Mr.
Leber received a ten-year option (the “Initial Grant”) to purchase 5,000,000 shares of the Company’s common
stock pursuant to the Company’s Amended and Restated 2012 Stock Incentive Plan (the “Plan”). The exercise price
of the Initial Grant is $0.34 per share, subject to certain customary adjustments. Fifty percent of the shares subject to the
Initial Grant were vested as of July 1, 2014, the date of grant, and the remaining fifty percent of such shares will vest thereafter
in quarterly installments of 312,500 shares commencing on the first quarterly anniversary of the date of grant. The Agreement
also provides that Mr. Leber shall be entitled to receive two additional option grants for 2,650,000 shares each (the “Subsequent
Grants”) for 2015 and 2016, based on the Company’s performance in such years. The Subsequent Grants will be initially
unvested and will become vested and exercisable in equal monthly installments over the three (3) year period following the date
of grant. The Initial Grant and Subsequent Grants will vest in full upon the occurrence of a merger, consolidation or similar
corporate transaction of the Company, provided that Mr. Leber is employed with the Company on the date of such merger or consolidation.



25







The Company may terminate Mr. Leber’s
employment for “Cause” (as defined in the Agreement) upon thirty days’ advanced written notice to Mr. Leber,
subject to Mr. Leber’s right to cure the event or events giving rise to such termination within thirty days of his receipt
of such notice. Mr. Leber may terminate the Agreement at his discretion, with or without “Good Reason” (as defined
in the Agreement), upon thirty days’ advanced notice to the Company.



In the event Mr. Leber’s employment
is terminated by the Company with Cause, or due to Mr. Leber’s death or upon expiration of the Agreement due to Mr. Leber’s
election not to renew the Agreement, the Company will pay Mr. Leber his accrued but unpaid Base Salary, his accrued but unused
vacation and any approved but unreimbursed business expenses as of the date of such termination (the “Accrued Obligations”).



In the event Mr. Leber’s employment
is terminated by Mr. Leber with Good Reason or upon expiration of the Agreement due to the Company’s election not to renew
the Agreement, the Company will pay Mr. Leber on the date of such termination: (i) the Accrued Obligations, (ii) a lump sum cash
payment equal to Mr. Leber’s Base Salary, (iii) a lump sum cash payment equal to any awarded but unpaid bonuses and (iv)
the monthly premium required to be paid to continue Mr. Leber’s participation in the Company’s healthcare plans for
one year. In addition, to the extent not previously vested, the Initial Grants and Subsequent Grants will automatically vest.
Mr. Leber will have until the earlier of the last day of the term of such grants or three years following the date of his termination
to exercise such grants. Also, all restricted shares then held by Mr. Leber, and all shares obtained by Mr. Leber via exercise
of warrants and options, shall immediately, without any further condition or qualification, be registered by the Company if they
were not previously registered.



The Agreement also provides that Mr. Leber
will be subject to confidentiality provisions and, for a period of one year following his termination with Cause or without Good
Reason, non-competition and non-solicitation restrictions.



The foregoing description of the Agreement
does not purport to be complete and is qualified in its entirety by reference to the Agreement, a copy of which the Company will
file as an exhibit to its Quarterly Report on Form 10-Q for the quarter ended June 30, 2014.



Increase in Ellen Breslau’s,
Editor-in-Chief Base Salary



On July 1, 2014, the Company’s
Board of Directors approved an increase in Ellen Breslau’s, Editor-in-Chief annual base salary from $185,000 per year
to $200,000 per year.



|Item 6. | Exhibits.
|------- | ---------



Certain of the agreements filed as exhibits
to this Report contain representations and warranties by the parties to the agreements that have been made solely for the benefit
of the parties to the agreement. These representations and warranties:



| | · | may have been qualified by disclosures that were made to the other parties in connection
            with the negotiation of the agreements, which disclosures are not necessarily reflected in the agreements;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | may apply standards of materiality that differ from those of a reasonable investor;
            and
| | - | ---------------------------------------------------------------------------------------------------

| | · | were made only as of specified dates contained in the agreements and are subject to
            subsequent developments and changed circumstances.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------



Accordingly, these representations and
warranties may not describe the actual state of affairs as of the date that these representations and warranties were made or
at any other time. Investors should not rely on them as statements of fact.



26







|Exhibit
        Number |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                   
|---------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1                   |  | Form of Second Amendment to Promissory Notes, by and between
Grandparents.com, Inc. and each of Steven Leber, Joseph Bernstein, Meadows Capital LLC and Mel Harris, dated May 6, 2014 and
effective as of April 30, 2014 [Incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form
10-Q for the quarter ended March 31, 2014 and filed with the Securities and Exchange Commission on May 15, 2014]
|10.2                   |  | Retirement Agreement, by and between Grandparents.com, Inc., Joseph Bernstein and Bernstein-Nasser
    Investors, LLC, dated June 9, 2014 [Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form
    8-K dated June 9, 2014 and filed with the Securities and Exchange Commission on June 13, 2014]                                                                                               
|10.3                   |  | Form of Transition Services Consulting Letter, by and between Grandparents.com, Inc. and Joseph
    Bernstein, to be dated as of the Effective Date. [Incorporated by reference to Exhibit 10.2 to the Company’s Current
    Report on Form 8-K dated June 9, 2014 and filed with the Securities and Exchange Commission on June 13, 2014]                                                                                    
|10.4                   |  | Form of June 2014 Securities Purchase Agreement [Incorporated
by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 and
filed with the Securities and Exchange Commission on November 19, 2013]                                                                                                                                                                
|10.5                   |  | Form of Warrant issued pursuant to June 2014 Securities Purchase
Agreement [Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter
ended September 30, 2013 and filed with the Securities and Exchange Commission on November 19, 2013]                                                                                                                                     
|10.6 *                 |  | Employment Agreement, by and between Grandparents.com, Inc. and Steven Leber, dated June 25,
    2014 (1)                                                                                                                                                                                                                                                                                                                     
|10.7 *                 |  | Employment Agreement, by and between Grandparents.com, Inc. and Riaz Latifullah, dated April
    29, 2014 (1)                                                                                                                                                                                                                                                                                                                 
|10.8 *                 |  | Form of Third Amendment to Promissory Notes, by and between
Grandparents.com, Inc. and each of Steven Leber, Joseph Bernstein, Meadows Capital LLC and Mel Harris, dated May 6, 2014 and
effective as of April 30, 2014                                                                                                                                                                                                       
|31.1 *                 |  | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2002                                                                                                                                                                                                                                                                                                                    
|31.2 *                 |  | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2002                                                                                                                                                                                                                                                                                                                    
|32.1 **                |  | Certification of Principal Executive Officer and Principal Financial Officer of the Registrant
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                  
|101.INS ***            |  | XBRL Instance Document                                                                                                                                                                                                                                                                                                                                                                                                        
|101.SCH ***            |  | XBRL Taxonomy Schema                                                                                                                                                                                                                                                                                                                                                                                                          
|101.CAL ***            |  | XBRL Taxonomy Calculation Linkbase                                                                                                                                                                                                                                                                                                                                                                                            
|101.DEF ***            |  | XBRL Taxonomy Definition Linkbase                                                                                                                                                                                                                                                                                                                                                                                             
|101.LAB ***            |  | XBRL Taxonomy Label Linkbase                                                                                                                                                                                                                                                                                                                                                                                                  
|101.PRE ***            |  | XBRL Taxonomy Presentation Linkbase                                                                                                                                                                                                                                                                                                                                                                                           



(1) Portions of this exhibit containing
confidential information have been omitted pursuant to a request for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Exchange Act. Confidential information has been omitted from the exhibit in places
marked “[***]”and has been filed separately with the Commission.



* Filed herewith.

** Furnished herewith in accordance with
SEC Release 33-8238.

*** Furnished herewith. Pursuant to Rule
406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Report shall not be deemed to be “filed”
for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed
part of a registration statement, prospectus or other document filed under the Securities Act or the Exchange Act, except as shall
be expressly set forth by specific reference in such filings.



SIGNATURES



Pursuant to the requirements
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.



|Dated:  August 19, 2014 | GRANDPARENTS.COM, INC.
|----------------------- | ----------------------



| | /s/ Steven E. Leber                          | 
| | -------------------------------------------- | 
| | Steven E. Leber                              | 
| | Chief Executive Officer                      | 
| | (Principal Executive Officer)                | 
| |                                              | 
| | /s/ Riaz Latifullah                          | 
| | Riaz Latifullah                              | 
| | Chief Financial Officer                      | 
| | (Principal Financial and Accounting Officer) | 



27