**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**** 

**FORM 10-Q**

 

*(Mark One)*

    þ     Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended **June 30, 2011**.

 

    o     Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from                  to                 .

 

Commission file number: **000-26927**

                                                                                         

 

**WWA GROUP, INC.**

 (Exact name of registrant as specified in its charter)

 

 

| **Nevada**

(State or other jurisdiction of

incorporation or organization) | **77-0443643 **

 (I.R.S. Employer 

Identification No.) |
|-----------------------------------------------------------------------------|--------------------------------------------------------------------|

 

**404 W. Powell Lane, Suite 303-304, Austin, Texas  78753**

(Address of principal executive offices)    (Zip Code)

 

**(480) 505-0070**

 (Registrant’s telephone number, including area code)

 

**    n/a  **

(Former name or former address, if changed since last report)

 

Indicate by check mark whether the registrant: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 þ   No o.

 

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 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ   No o.

      

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company as defined by Rule 12b-2 of the Exchange Act:

Large accelerated filer o   Accelerated filer o   Non-accelerated filer o  Smaller reporting company þ

 

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

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. The number of shares outstanding of the issuer’s common stock, $0.001 par value (the only class of voting stock), at August 17, 2011, was 22,591,922.

 

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| **TABLE OF CONTENTS**

**PART 1- FINANCIAL INFORMATION** |
|----------------------------------------------------------|
| Item1.                                         | Financial Statements: | 3 |
|                                                     | Consolidated Balance Sheets for

June 30, 2011(unaudited) and December 31, 2010 (audited) | 4 |
|                                                     | Unaudited Consolidated Statements of Income for the

three and six month periods ended June 30, 2011 and June 30, 2010 | 5 |
|                                                     | Unaudited Consolidated Statements of Cash Flows for the

six month periods ended June 30, 2011 and June 30, 2010 | 6 |
|                                                     | Notes to Unaudited Consolidated Financial Statements | 7 |
| Item 2.                                             | Management's Discussion and Analysis of Financial Condition and Results of Operations | 12 |
| Item 3.                                                  | Quantitative and Qualitative Disclosures about Market Risk | 17 |
| Item 4.                                             | Controls and Procedures | 17 |
|  

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**PART II-OTHER INFORMATION**

  |   |
| Item 1.                                                  | Legal Proceedings | 18 |
| Item 1A.                                       | Risk Factors | 18 |
| Item 2.                                        | Unregistered Sales of Equity Securities and Use of Proceeds | 21 |
| Item 3.                                                  |   Defaults Upon Senior Securities | 22 |
| Item 4.                                                  | (Removed and Reserved) | 22 |
| Item 5.                                        | Other Information | 22 |
| Item 6.                                             | Exhibits | 22 |
|                                                     | Signatures | 23 |
|                                                     | Index to Exhibits | 24 |

 

 

 

 

|   |
|--------|

2

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**PART I – FINANCIAL INFORMATION**

**** 

**ITEM 1.          FINANCIAL STATEMENTS**

 

As used herein, the terms “WWA Group”, “we,” “our,” and “us” refer to WWA Group, Inc., a Nevada corporation, unless otherwise indicated.  In the opinion of management, the accompanying unaudited financial statements included in this Form 10-Q reflect all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of the results of operations for the periods presented.  The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year.

 

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3

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| **WWA GROUP, INC.**                                                                                                                                                             |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---|
| **Consolidated Balance Sheets**                                                                                                                                                 |   |
| ****                                                                                                                                                                       |   | **** 

**Unaudited** |  |  | ****  | **Audited** |  |
| **Assets**                                                                                                                                                                      |   | **June 30, 2011** |  |  |   | **December 31, 2010** |  |
|  

Current assets:                                                                                                                                                         |   |   |  |  |   | ****  |  |
| Cash                                                                                                                                                                            | $ | 1,805 |  |  | $ | 3,835 |  |
| Notes receivable                                                                                                                                                                |   | 0 |  |  |   | 2,932,003 |  |
| Other current assets                                                                                                                                                            |   | 264,835 |  |  |   | 264,835 |  |
| Total current assets                                                                                                                                                            |   | 266,640 |  |  |   | 3,200,673 |  |
|                                                                                                                                                                            |   |   |  |  |   |   |  |
| Investment in unconsolidated entity                                                                                                                                             |   | 834,369 |  |  |   | 1,219,219 |  |
| Notes receivable                                                                                                                                                                |   | 1,188,001 |  |  |   |   |  |
|                             Total assets | $ | 2,289,010 |  |  | $ | 4,419,892 |  |
|                                                                                                                                                                            |   |   |  |  |   |   |  |
| **Liabilities and Stockholders' Equity**                                                                                                                                        |   | ****  |  |  |   |   |  |
|  

Current liabilities:                                                                                                                                                    |   |   |  |  |   |   |  |
| Accrued expenses                                                                                                                                                                |   | 70,708 |  |  |   | 92,220 |  |
| Short term debt – notes payable                                                                                                                                            |   | 8,169 |  |  |   | 7,000 |  |
| Total current liabilities                                                                                                                                                       |   | 78,877 |  |  |   | 99,220 |  |
|                                                                                                                                                                            |   |   |  |  |   |   |  |
| Long-term debt                                                                                                                                                                  |   | 0 |  |  |   | 0 |  |
|                                                                                                                                                                            |   |   |  |  |   |   |  |
| Total liabilities                                                                                                                                                               |   | 78,877 |  |  |   | 99,220 |  |
|                                                                                                                                                                            |   |   |  |  |   |   |  |
| Stockholders' equity:                                                                                                                                                           |   |   |  |  |   |   |  |
| Common stock, $0.001 par value, 50,000,000 shares                                                                                                                               |   |   |  |  |   |   |  |
|   authorized; 22,591,922 shares                                                                                                                                            |   |   |  |  |   |   |  |
|   issued and outstanding                                                                                                                                                   |   | 22,592 |  |  |   | 22,592 |  |
| Additional paid-in capital                                                                                                                                                      |   | 4,449,080 |  |  |   | 4,449,080 |  |
| Retained earnings                                                                                                                                                               |   | (2,261,540 | ) |  |   | (151,000 | ) |
| Total stockholders' equity:                                                                                                                                                     |   | 2,210,133 |  |  |   | 4,320,672 |  |
|                                                                                                                                                                            |   |   |  |  |   |   |  |
| Total liabilities and stockholders’ equity                                                                                                                                 | $ | 2,289,010 |  |  | $ | 4,419,892 |  |

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying condensed notes to consolidated reviewed financial statements.

4

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| **WWA GROUP, INC.**                                     |
|---------------------------------------------------------|
| **Unaudited Consolidated Statements of Income**

  |   |
|                                                    |   |   | **Three months ended June30** |   |   |   | **Six months ended June 30** |   |
|                                                    |   |   | **2011** |   |   |   | **2010** |   |   |   | **2011** |   |   |   | **2010** |   |
| Revenues from commissions and services                  |   | $ | 0 |   |   | $ | 1,707,327 |   |   | $ | 0 |   |   | $ | 2,581,956 |   |
| Revenues from sales of equipment                        |   |   | 0 |   |   |   | 9,047,957 |   |   |   | 0 |   |   |   | 13,810,408 |   |
| Revenues from Ship Charter                              |   |   | 0 |   |   |   | 165,000 |   |   |   | 0 |   |   |   | 330,000 |   |
|                                                    |   |
| Total revenues                                          |   |   | 0 |   |   |   | 10,920,284 |   |   |   | 0 |   |   |   | 16,722,364 |   |
|                                                    |   |
| Direct costs - commissions and services                 |   |   | 0 |   |   |   | 495,132 |   |   |   | 0 |   |   |   | 857,044 |   |
| Direct costs - sales of equipment                       |   |   | 0 |   |   |   | 8,954,809 |   |   |   | 0 |   |   |   | 13,967,241 |   |
|                                                    |   |
| Gross profit                                            |   |    | 0 |   |   |   | 1,470,343 |   |   |   | 0 |   |   |   | 1,898,080 |   |
| Operating expenses:                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| General and administrative expenses                     |   |   | 8,853 |   |   |   | 609,710 |   |   |   | 14,685 |   |   |   | 1,232,868 |   |
| Salaries and wages                                      |   |   | 0 |   |   |   | 381,028 |   |   |   | 0 |   |   |   | 816,234 |   |
| Selling expenses                                        |   |   | 0 |   |   |   | 2,243 |   |   |   | 0 |   |   |   | 32,821 |   |
| Depreciation and amortization expense                   |   |   | 0 |   |   |   | 213,974 |   |   |   | 0 |   |   |   | 430,398 |   |
|                                                    |   |
| Total operating expenses                                |   |   | 8,853 |   |   |   | 1,206,955 |   |   |   | 14,685 |   |   |   | 2,512,321 |   |
|                                                    |   |
| Income (loss) from operations                           |   |   | (8,853 | )  |   |   | 263,388 |   |   |   | (14,685 | ) |   |   | (614,241 | ) |
| Other income (expense):                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense                                        |   |   | 0 |   |   |   | (333,341 | ) |   |   | 0 |   |   |   | (726,339 | ) |
| Impairment of non-current assets                        |   |   | 0 |   |   |   | 0 |   |   |   | (1,711,003 | ) |   |   | 0 |   |
| Loss on equity investment                               |   |   | (384,850 | ) |   |   | (48,330 | ) |   |   | (384,850 | ) |   |   | (43,447 | ) |
| Interest income                                         |   |   | 0 |   |   |   | 21,502 |   |   |   | 0 |   |   |   | 53,023 |   |
| Other income (expense)                                  |   |   | 0 |   |   |   | 27,818 |   |   |   | (2 | ) |   |   | 1,842 |   |
|                                                    |   |
| Total other expense                                     |   |   | (384,850 | ) |   |   | (332,351 | ) |   |   | (2,095,854 | ) |   |   | (714,921 | ) |
|                                                    |   |
| Loss before income taxes                                |   |   | (393,702 | ) |   |   | (68,964 | ) |   |   | (2,110,539 | ) |   |   | (1,329,163 | ) |
| Provision for income taxes                              |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
|                                                    |   |
| Net Loss                                                |   | $ | (393,702 | ) |   | $ | (68,964 | ) |   | $ | (2,110,539 | ) |   | $ | (1,329,163 | )  |
| Basic earnings per common share                         |   | $ | 0.00 |   |   | $ | 0.00 |   |   | $ | ( 0.08 | ) |   | $ | (0.06) |   |
| Diluted earnings per common share                       |   | $ | 0.00 |   |   | $ | 0.00 |   |   | $ | ( 0.08 | ) |   | $ | (0.06) |   |
| Weighted average shares - basic                         |   |   | 22,591,922 |   |   |   | 22,591,922 |   |   |   | 22,591,922 |   |   |   | 22,591,922 |   |
| Weighted average shares - diluted                       |   |   | 22,591,922 |   |   |   | 22,591,922 |   |   |   | 22,591,922 |   |   |   | 22,591,922 |   |
|                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                    |   |   |

See accompanying condensed notes to consolidated reviewed financial statements.

5

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| **WWA GROUP, INC.**                                  |   |
|------------------------------------------------------|---|
| **Unaudited Consolidated Statements of Cash Flow**   |   |
| ****                                            |   | **** 

**For six months ended June 30** |  |
| ****                                            |   | **2011** |  |  |   | **2010** |  |
| **Cash flows from operating activities:**            |   | ****  |  |  |   | ****  |  |
| Net income (loss)                                    | $ | (2,110,539 | ) |  | $ | (1,329,163 | ) |
| Adjustments to reconcile net income to net cash      |   |   |  |  |   |   |  |
| provided by operating activities                     |   |   |  |  |   |   |  |
| Depreciation and amortization                        |   | 0 |  |  |   | 430,398 |  |
| (Gain) Loss on disposition of assets                 |   | 0 |  |  |   | 27,493 |  |
| Loss (Gain) on equity investment                     |   | 384,850 |  |  |         | 43,447 |  |
| Changes in operating assets and liabilities:         |   |   |  |  |   |   |  |
| Decrease (Increase) in:                              |   |   |  |  |   |   |  |
| Accounts receivable                                  |   | 0 |  |  |   | (3,353,342 | ) |
| Advance to suppliers                                 |   | 0 |  |  |   | (81,685 | ) |
| Inventories                                          |   | 0 |  |  |   | 636,666 |  |
| Prepaid expenses                                     |   | 0 |  |  |   | (216,680 | ) |
| Other current assets                                 |   | 0 |  |  |   | 68,945 |  |
| Impairment of notes receivable                       |   | 1,711,003 |  |  |   | 0 |  |
| Increase (Decrease) in:                              |   |   |  |  |   |   |  |
| Auction proceeds payable                             |   | 0 |  |  |   | (949,885 | ) |
| Accounts payable                                     |   | 0 |  |  |   | 2,994,258 |  |
| Accrued liabilities                                  |   | (21,512 | ) |  |   | (40,830 | ) |
| Net cash provided by (used in) operating activities  |   | (36,199 | ) |  |   | (1,770,378 | ) |
|                                                 |   |   |  |  |   |   |  |
| **Cash flows from investing activities:**            |   | ****  |  |  |   | ****  |  |
| Purchase of property and equipment                   |   | 0 |  |  |   | (940,415 | ) |
| (Increase) Decrease in note receivable               |   | 33,000 |  |  |   | (183,370 | ) |
| Proceeds from sale of fixed assets                   |   | 0 |  |  |   | 118,131 |  |
| Net cash provided by (used in) investing activities  |   | 33,000 |  |  |   | (1,005,654 | ) |
|                                                 |   |   |  |  |   |   |  |
| **Cash flows from financing activities:**            |   | ****  |  |  |   | ****  |  |
| Increase (Decrease) in line of credit                |   | 0 |  |  |   | (1,844,954 | ) |
| Proceeds from short-term notes payable               |   | 1,169 |  |  |   | 355,238 |  |
| Payments/Proceeds- long-term debt                    |   | 0 |  |  |   | 213,171 |  |
| Net cash provided by (used in) financing activities  |   | 1,169 |  |  |   | (1,276,545 | ) |
|                                                 |   |   |  |  |   |   |  |
| Net increase (decrease) in cash and cash equivalents |   | (2,030 | ) |  |   | (4,052,577 | ) |
|                                                 |   |   |  |  |   |   |  |
| Cash and cash equivalents at beginning of year       |   | 3,835 |  |  |   | 8,636,411 |  |
|                                                 |   |   |  |  |   |   |  |
| Cash and cash equivalents at end of period           | $ | 1,805 |  |  | $ | 4,583,835 |  |

 

 

 

 

 

 

 

 

See accompanying condensed notes to consolidated reviewed financial statements.

## 

6

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**WWA GROUP, INC**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**June 30, 2011**

## **Note A – Organization**

 

WWA Group, Inc., (“WWA Group”) is a Nevada corporation with operations primarily consisting of developing its subsidiary and assisting in the growth of its investment entity. 

 

Prior to October 31, 2010, WWA Group operated in Jebel Ali, Dubai, United Arab Emirates (U.A.E) under a trade license from the Jebel Ali Free Zone Authority. Operations consisted of auctioning used and new heavy construction equipment, transportation equipment and marine equipment, the majority of which on a consignment basis. On October 31, 2010, WWA Group sold its 100% interest in its wholly owned subsidiaries, World Wide Auctioneers, Ltd, and Crown Investments, Ltd., to Seven International Holdings, Ltd. (“Seven”), a Hong Kong based investment company,for an assumption by Seven of all the assets and liabilities of the World Wide subject to certain exceptions. The disposition did not affect WWA Group’s interest in Asset Forum, LLC, its ownership of proprietary on-line auction software, or its equity interest or debt position in Infrastructure Developments Corp. (“Infrastructure”) in which it currently holds an unconsolidated 17.75% equity position. 

 

On April 14, 2010, Intelspec International, Inc. (“Intelspec”), our minority owned unconsolidated subsidiary, concluded an share exchange agreement with Infrastructure, a publicly traded company, pursuant to which Intelspec became a subsidiary of Infrastructure. WWA Group acquired an approximately 22% interest in Infrastructure as a result of the transaction. In July 2010, WWA Group sold 4 million shares of Infrastructure at a value of $320,000 reducing WWA Group’s investment to 17.75%.

 

 

**NOTE B – Going Concern**

 

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liabilities in the normal course of business. Accordingly, they do not include any adjustments relating to the realization of the carrying value of assets or the amounts and classification of liabilities that might be necessary should WWA Group be unable to continue as a going concern. WWA Group has accumulated losses and cash flows from operations are negative which raises doubt as to the validity of the going concern assumptions. These financials include impairments to the carrying value of the assets but do not include any adjustments to the carrying value of liabilities, the reported revenues and expenses and balance sheet classifications used that would be necessary if the going concern assumption were not appropriate; such adjustments could be material. 

 

 

**NOTE C - Summary of Significant Accounting Policies**

 

This summary of significant accounting policies of WWA Group and its subsidiaries is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management who is responsible for the integrity and objectivity of the financial statements. These accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the financial statements.

 

 

 

 

 

 

7

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**WWA GROUP, INC**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**June 30, 2011**

 

**NOTE C - Summary of Significant Accounting Policies – (continued)**

** 

*Basis of Presentation*

 

The consolidated financial statements present the financial position, results of operation, changes in stockholder’s equity and cash flows of WWA Group and its subsidiaries. All significant inter-company  balances and transactions have been eliminated. Investments in entities in which the Company can exercise significant influence, but does not own a majority equity interest or otherwise control, are accounted for using the equity method and are included as investments in equity interests on the consolidated balance sheets. Effective July 1, 2009, the Company adopted the Accounting Standards Codification (the “Codification”), as issued by the FASB. The Codification became the single source of authoritative generally accepted accounting principles (“GAAP”) in the U.S.

 

*Cash and Cash Equivalents*

 

WWA Group considers all highly liquid investments purchased with maturity of three months or less to be cash equivalents.

 

*Accounts Receivable and Allowance for Doubtful Accounts*

 

WWA Group grants credit terms in the normal course of business to its customers. Accounts receivables are stated at the amount management expects to collect from outstanding balances after discounts and bad debts, taking into account credit worthiness of customers and history of collection. 

 

The allowance for doubtful accounts is based on specifically identified amounts that management believes to be uncollectible. If actual collections experience changes, revisions to the allowance may be required. No allowance for doubtful accounts is provided as company is collecting amount without default. 

 

*Inventory*

 

Inventories consist of equipment to be sold in auctions and otherwise, stated at the lower of cost or market. The cost is determined by specific identification method. Cost includes purchase price, freight, insurance, duties and other incidental expenses incurred in bringing inventories to their present location and condition. The Company records a reserve if the fair value of inventory is determined to be less than the cost.

 

## *Property and Equipment*

 

Property and equipment are stated at cost less depreciation and provision for impairment where appropriate. Depreciation expense is computed using the straight-line method over estimated useful lives of three to five years except for the vessel in which case the estimated useful life is twenty years. All repair and maintenance costs are expensed as incurred. 

 

 

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8

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**WWA GROUP, INC**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**June 30, 2011**

**NOTE C - Summary of Significant Accounting Policies – (continued)**

**** 

*Investment in Unconsolidated Entities*

The Company accounts for its approximate 17.75% equity investment in an unconsolidated subsidiary under the equity method of accounting whereby the Company records its proportionate share of the net income or loss of the equity interest. For the quarter ended June 30, 2011 the loss on equity investment amounted to $384,850.

*Investment in Related Party Entity*

WWA Group did not have any investment in a related party as of June 30, 2011. On October 31, 2010 WWA Group sold all related party investments as a part of sale of Dubai operations. Until October 31, 2010 WWA Group accounted for its equity investment in a foreign affiliate using the fair value measurement principles. WWA Group reviews its investments annually for impairment and records permanent impairments as a loss on the income statement.

*Income Taxes*

 

Deferred income taxes are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. WWA Group records a valuation allowance against particular deferred income tax assets if it is more likely than not that those assets will not be realized. The provision for income taxes comprises WWA Group’s current tax liability and change in deferred income tax assets and liabilities. 

 

Significant judgment is required in evaluating WWA Group’s uncertain tax positions and determining its provision for income taxes. WWA Group establishes reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These reserves are established when WWA Group believes that certain positions might be challenged despite its belief that its tax return positions are in accordance with applicable tax laws. WWA Group adjusts these reserves in light of changing facts and circumstances, such as the closing of a tax audit, new tax legislation, or the change of an estimate. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made. The provision for income taxes includes the effect of reserve provisions and changes to reserves that are considered appropriate, as well as the related net interest and penalties.

** 

*Share-Based Compensation*

 

For stock-based awards granted on or after January 1, 2006, WWA Group records stock-based compensation expense based on the grant date fair value, estimated in accordance with the provisions of ASC 718 and ASC 505-50.

 

WWA Group issued no compensatory options to its employees during the six months ended June 30, 2011.

 

** 

 

 

9

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**WWA GROUP, INC**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**June 30, 2011**

**NOTE C - Summary of Significant Accounting Policies – (continued)**

** 

*Use of Estimates*

 

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

 

*Recent Accounting Pronouncements*

 

In June 2011, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2011-05, “Presentation of Comprehensive Income” (“ASU 2011-05”).  ASU 2011-05 requires entities to report components of comprehensive income in either a continuous statement of comprehensive income or two separate but consecutive statements.  Under the continuous statement approach, the statement would include the components and total of net income, the components and total of other comprehensive income and the total of comprehensive income.  Under the two statement approach, the first statement would include the components and total of net income and the second statement would include the components and total of other comprehensive income and the total of comprehensive income.  ASU 2011-05 does not change the items that must be reported in other comprehensive income.  ASU 2011-05 is effective retrospectively for interim and annual periods beginning after December 15, 2011, with early adoption permitted.  We are currently evaluating the impact of the adoption of ASU 2011-05 on our financial statements.

 

In May 2011, the FASB issued ASU No. 2011-04, “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirement in U.S. GAAP and IFRSs” (“ASU 2011-04”).  ASU 2011-04 does not extend the use of fair value but, rather, provides guidance about how fair value should be applied where it already is required and permitted under IFRS or U.S. GAAP.  For U.S. GAAP, most of the changes are clarifications of existing guidance or wording changes to align with IFRS 13.   ASU 2011-04 is effective on a prospective basis for interim and annual periods beginning after December 15, 2011, with early adoption not permitted.  In the period of adoption, a reporting entity will be required to disclose a change, if any, in valuation technique and related inputs that result from applying ASU 2011-04 and to quantify the total effect, if practicable.  We are currently evaluating the impact of the adoption of ASU 2011-04 on our financial position, results of operations and disclosures.

 

Other pronouncements issued by the FASB or other authoritative accounting standards groups with future effective dates are either not applicable or are not expected to be significant to WWA Group’s financial statements.

**** 

**** 

**Note D – Non-Current Notes Receivable**

 

Non-current notes receivable include $1,188,001 in advances provided to Intelspec, which operates an international project management company in Thailand and rock crushing and stone quarry in UAE.  These notes bore no interest and were payable on demand. During the period the notes were renegotiated into a note payable at 6% interest per annum due in two years. Accordingly the notes were reclassified as a non-current note receivable.

 

10

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**WWA GROUP, INC**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**June 30, 2011**

 

**Note E – Asset Impairment**

 

At December 31, 2010, WWA Group had notes receivable of $2,932,003 which consisted of $2,442,000 to Intelspec and $490,000 to WWA Group’s Australian customers.

 

During the six months period ended June 30, 2011, the valuation of the Intelspec notes were reduced by one half due to Intelspec’s historical inability to pay the amounts due and the valuation of notes due from WWA Group’s Australian associates were eliminated due to their own insolvency issues. 

These “triggering events” necessitated the evaluation of notes receivable from these organizations. In assessing impairments for long-lived assets we follow the provisions of *SFAS No. 144,* “Accounting for the Impairment or Disposal of Long-Lived Assets.”

In performing the test, we determined that the total of the expected future undiscounted cash flows directly related to the existing notes receivable was less than the carrying value of the asset; therefore, an impairment charge was required. The impairment charges of $1,711,003 represented the difference between the fair values of the asset and its carrying values and are included within asset impairment in the consolidated statements of operations. 

 

**Note F – Subsequent Events**

 

The Company evaluated its June 30, 2011 financial statements for subsequent events through the date the financial statements were issued. The Company is not aware of any subsequent events which would require recognition or disclosure in the financial statements. 

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**Item 2****.         ****MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

 

This *Management’s Discussion and Analysis of Financial Condition and**Results of Operations* and other parts of this quarterly report contain forward-looking statements that involve risks and uncertainties. Forward-looking statements can be identified by words such as “anticipates,” “expects,” “believes,” “plans,” “predicts,” and similar terms. Forward-looking statements are not guarantees of future performance and our actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include but are not limited to those discussed in the subsection entitled *Forward-Looking Statements and Factors That May Affect Future Results and Financial Condition* below. The following discussion should be read in conjunction with our financial statements and notes hereto included in this report. Our fiscal year end is December 31.

 

**Discussion and Analysis**

 

WWA Group’s business strategy is to develop Asset Forum LLC (“Asset Forum”), and assist in the growth of Infrastructure Developments Corp. (“Infrastructure”), and acquire or merge with an operating business.

 

Effective October 31, 2010, WWA Group concluded a Share Purchase Agreement to sell World Wide Auctioneers, Ltd. (“World Wide”) to Seven International Holdings, Ltd. WWA Group will assist in the management of World Wide during an ongoing transitional period. WWA Group will (i) train new management, (ii) promote operating efficiencies at the primary auction location in Dubai, UAE, and (iii) consult as to the use of lower cost venues including on-line auctions and smaller equipment auctions. The disposition of World Wide did not affect WWA Group’s interest in Asset Forum, its ownership of proprietary on-line auction software, or its equity interest or debt position in Infrastructure in which it currently holds an unconsolidated 17.75% equity position. 

 

WWA Group intends to focus its efforts on marketing and building Asset Forum’s business. We also expect to expand the application of our proprietary on-line auction system software to other asset segments. Infrastructure is currently pursuing larger projects with greater returns in expanded markets which we anticipate will provide a return of on our investment. We are also targeting operating businesses and assets that will provide us an opportunity for development into near term revenues.

 

Our financial condition and results of operations will depend primarily on prospective income generated from Asset Forum and any return on our investment in Infrastructure. Meanwhile, our continued operation is tied to our ability to realize debt or equity financing. Since WWA Group is currently without income it can provide no assurance that income will be forthcoming or in the event revenue is realized that such return will provide sufficient cash flows to sustain our operations. WWA Group has no commitments for additional debt or equity financing at this time.

 

WWA Group’s business development strategy is prone to significant risks and uncertainties which are having an immediate impact on our efforts to realize net cash flow. We have a limited history of generating income from our equity investments and are yet to generate income from the operations of Asset Forum. Should we be unable to generate income or reduce expenses to the point where we meet operating expenses, WWA Group’s ability to continue its business operations will be in jeopardy.

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**Results of Operations**

 

During the six month period ended June 30, 2011, WWA Group (i) continued early development of Asset Forum, (ii) sought construction management projects for the benefit of Infrastructure, (iii) began the search for a business opportunity for development, merger or acquisition, (iv) continued discussion with Office of Foreign Assets Control regarding International Emergency Economic Powers Act, 50 U.S.C. §§ 1701 et seq. in connection with the facilitation of auction related services to Iran and Sudan (see *Legal Proceedings*, below), and (v) satisfied continuous public disclosure requirements.

 

***Net**********Loss***

 

Net loss for the three months ended June 30, 2011 increased to $393,702 from $68,964 for the period ended June 30, 2010. Net loss for the six months ended June 30, 2011 increased to $2,110,539 from $1,329,163 for the period ended June 30, 2010. The increase in net loss over the comparative three month periods can be attributed to losses from our equity investment in Infrastructure. The increase in net loss over the comparative six month periods can be primarily attributed to the impairment of notes receivable from Infrastructure’s subsidiary and our Australian associates as well as losses from our equity investment in Infrastructure. WWA Group anticipates that it will continue to realize net losses through 2011 or until such time as Asset Forum realizes revenue or WWA Group realizes a return on its equity investment in Infrastructure. 

***Revenue***

 

Revenue for the three months ended June 30, 2011 was $0 as compared to $10,920,284 for the three months ended June 30, 2010. Revenue for the six months ended June 30, 2011 decreased to $0 from $16,722,364 for the six months ended June 30, 2010.The decrease in revenues over the comparative periods can be attributed to the sale of World Wide at October 31, 2010. WWA Group expects revenue to remain at $0 until such time as it realizes revenue from Asset Forum.

 

# ***Gross Profit***

 

Gross profit for the three months ended June 30, 2011 was $0 as compared to $1,470,343 for the three months ended June 30, 2010. Gross profit for the six months ended June 30, 2011 decreased to $0 from 1,898,080 for the six months ended June 30, 2010. The decrease in gross profit over the comparative periods can be attributed to the sale of World Wide at October 31, 2010. WWA Group does not expect gross profit in the near term.

 

# ***Operating Expenses***

 

Operating expenses for the three months ended June 30, 2011 was $8,853 as compared to operating expenses of $1,206,955 for the three months ended June 30, 2010. Operating expenses for the six months ended June 30, 2011 decreased to 14,685 from $2,512,321 for the six months ended June 30 2010. The decrease in expenses over the comparative periods is attributed to the sale of World Wide at October 31, 2010. The major components of operating expenses are (i) general and administrative expenses, including professional fees, rent expense, travel and entertainment, representation expense, insurance, bank charges, and maintenance expenses, (ii) salaries and wages, (iii) selling expenses, and (iv) depreciation and amortization. WWA Group anticipates that operating expenses may increase if capital becomes available to focus on the activities of Asset Forum. 

 

 

 

 

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Depreciation and amortization expenses decreased to $0 from $213,974 over the comparable three months period ended June 30, 2011 and 2010. Depreciation and amortization expenses for the six months ended June 30, 2011 decreased to $0 from $430,398 for the six months ended June 30, 2010. Depreciation and amortization expenses are expected to continue to remain at $0 through 2011. 

 

***Other Expenses***

 

Other expenses for the three months ended June 30, 2011 increased to $384,850 from $332,351 for the three months ended June 30, 2010. Other expenses for the six months ended June 30, 2011 increased to $2,095,854 from $714,921 for the six months ended June 30, 2010. The increase in other expenses over the comparative three month periods can be attributed to losses from our equity investment in Infrastructure. The increase in other expenses over the comparative six month periods can be primarily attributed to the impairment of notes receivable from Infrastructure’s subsidiary Intelspec and our Australian associates as well as losses from our equity investment in Infrastructure.

# **** 

# **Income Tax Expense (Benefit)**

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WWA Group has a prospective income tax benefit resulting from a net operating loss carry-forward and start up costs that will offset any future operating profit.

  

**Impact of Inflation**

 

WWA Group believes that inflation has had a negligible effect on operations over the past three years. 

 

**Liquidity and Capital Resources**

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We had a working capital surplus of $185,958 as of June 30, 2011. At June 30, 2011, our current assets were $264,835, which consisted of $1,805 in cash and $264,835 in other current assets. Our total assets were $2,289,010 which included current assets, non-current notes receivable, and investments in equity interests. Our current and total liabilities were $78,877. Our total stockholders’ equity at June 30, 2011, was $2,210,133

**** 

Cash flows used in operating activities for the six months ended June 30, 2011 was $36,199 as compared to $1,770,378 for the period ended June 30, 2010. The difference in cash flow provided by operating activities between the periods can be attributed to the sale of World Wide which made up the bulk of our operating activities in the prior period. We do not expect to provide cash flows from operations in 2011.

 

Cash flows provided by investing activities for the six months ended June 30, 2011 were $33,000 as compared to cash flow used in investing activities $1,005,654 for the six months ended June 30, 2010. Investing activities in the current period relate to a decrease in note receivable amounts. We do expect to use cash flows in investing activities going forward as funds become available to expand the operations of Asset Forum.

 

Cash flows provided by financing activities were $1,169 for the six months ended June 30, 2011 as compared to cash flow used in financing activities  of $1,276,545 for the six months ended June 30, 2010. Financing activities in the current period relate to payments on short-term notes. We do not expect to generate cash flows provided by financing activities in the near term.

 

 

 

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Our current assets are insufficient to conduct business over the next 12 months. We will have to seek at least $250,000 in debt or equity financing over the next twelve months to fund the development of Asset Forum. WWA Group has no current commitments or arrangements with respect to, or immediate sources of this funding. Further, no assurances can be given that funding is available. Our shareholders are the most likely source of new funding in the form of loans or equity placements though none have made any commitment for future investment and we have no agreement formal or otherwise. Our inability to obtain sufficient funding to develop Asset Forum will have a material adverse affect on our ability to generate revenue and our ability to continue operations.

 

WWA Group does not intend to pay cash dividends in the foreseeable future.

WWA Group had no commitments for future capital expenditures that were material at June 30, 2011 

WWA Group has no defined benefit plan or contractual commitment with any of its officers or directors. 

WWA Group had no lines of credit or other bank financing arrangements as of June 30, 2011.

 

WWA Group has no current plans for the purchase or sale of any plant or equipment.

 

WWA Group has no current plans to make any changes in the number of employees.

 

***Off Balance Sheet**********Arrangements*******

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As of June 30, 2011, WWA Group has no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to stockholders.

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***Critical Accounting Policies***

 

In Note B to the audited consolidated financial statements for the years ended December 31, 2010 and 2009 included in WWA Group’s Form 10-K, we discuss those accounting policies that are considered to be significant in determining the results of operations and our financial position. We believe that the accounting principles utilized by us conform to accounting principles generally accepted in the United States of America.

 

The preparation of financial statements requires management to make significant estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. By their nature, these judgments are subject to an inherent degree of uncertainty. On an on-going basis, WWA Group evaluates its estimates, including those related to bad debts, inventories, intangible assets, warranty obligations, product liability, revenue, and income taxes. We base our estimates on historical experience and other facts and circumstances that are believed to be reasonable, and the results form the basis for making judgments about the carrying value of assets and liabilities. The actual results may differ from these estimates under different assumptions or conditions. With respect to revenue recognition, we apply the following critical accounting policies in the preparation of its financial statements 

 

 

 

 

 

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***Forward Looking Statements and Factors That May Affect Future Results and Financial Condition***

** 

The statements contained in the section titled *Management’s Discussion and Analysis of Financial Condition and**Results of Operations* and elsewhere in this current report, are forward looking statements. Forward looking statements reflect our current expectations and beliefs regarding our future results of operations, performance, and achievements. These statements are subject to risks and uncertainties and are based upon assumptions and beliefs that may or may not materialize. These statements include, but are not limited to, statements concerning: 

 

·         our anticipated financial performance;

·         the sufficiency of existing capital resources;

·         uncertainties related to the growth of our business and the acceptance of our products and services;

·         our ability to achieve and maintain an adequate customer base to generate sufficient revenues to maintain and expand operations;

·         the volatility of the stock market and;

·         general economic conditions.

 

We wish to caution readers that our operating results are subject to various risks and uncertainties that could cause our actual results to differ materially from those discussed or anticipated; including the factors set forth in the section entitled “*Risk Factors*” included elsewhere in this report. We also wish to advise readers not to place any undue reliance on the forward looking statements contained in this report, which reflect our beliefs and expectations only as of the date of this report. We assume no obligation to update or revise these forward looking statements to reflect new events or circumstances or any changes in our beliefs or expectations, other than as required by law.

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***Going Concern***

 

WWA Group’s auditors have expressed an opinion as to its ability to continue as a going concern as a result of recurring losses from operations. WWA Group’s ability to continue as a going concern is subject to its ability to realize a profit from operations and /or obtain funding from outside sources.  Management’s plan to address WWA Group’s ability to continue as a going concern includes: (i) obtaining funding from the private placement of debt or equity; (ii) realizing revenues from the activities of Asset Forum; and (iii) obtaining loans and grants from financial or government institutions.  Management believes that it will be able to obtain funding to enable WWA Group to continue as a going concern through the methods discussed above, though there can be no assurances that such methods will prove successful.

 

# ***Recent Accounting Pronouncements***

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Please see Note C to our consolidated financial statements for recent accounting pronouncements.

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###### ***Stock-Based Compensation***

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We have adopted Accounting Standards Codification Topic (“ASC”) 718, Share-Based Payment, which addresses the accounting for stock-based payment transactions in which an enterprise receives employee services in exchange for (a) equity instruments of the enterprise or (b) liabilities that are based on the fair value of the enterprise’s equity instruments or that may be settled by the issuance of such equity instruments.

 

 

 

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We account for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with ASC 505. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services.

 

 

**ITEM 3.         QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

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Not required.

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**ITEM 4.          CONTROLS AND PROCEDURES**

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***Evaluation of Disclosure Controls and Procedures***

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In connection with the preparation of this report on Form 10-Q, an evaluation was carried out by WWA Group’s management, with the participation of the chief executive officer and the chief financial officer, of the effectiveness of WWA Group’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”)). Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Commission’s rules and forms and that such information is accumulated and communicated to management, including the chief executive officer and the chief financial officer, to allow timely decisions regarding required disclosures.

 

Based on that evaluation, WWA Group’s management concluded, as of the end of the period covered by this report, that WWA Group’s disclosure controls and procedures were effective in recording, processing, summarizing, and reporting information required to be disclosed, within the time periods specified in the Commission’s rules and forms, and that such information was accumulated and communicated to management, including the chief executive officer and the chief financial officer, to allow timely decisions regarding required disclosures.

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***Changes in Internal Control over Financial Reporting***

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There have been no changes in internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the period ended June 30, 2011, that materially affected, or are reasonably likely to materially affect, WWA Group’s internal control over financial reporting.

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**PART II – OTHER INFORMATION**

 

**ITEM 1.          LEGAL PROCEEDINGS**

 

On August 5, 2009 WWA Groupnreceived a Pre-Penalty Notice (“Notice’) from the Office of Foreign Assets Control (“OFAC”). The Notice was issued based on OFAC’s belief that WWA Group has engaged in certain transactions prohibited by Executive Order(s) and or Regulations promulgated pursuant to the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701 *et seq.*in connection with the facilitation of auction related services to Iran and Sudan. The perceived violations have caused OFAC to propose a civil monetary penalty be imposed on WWA Group.Due to the passage of statute of limitations and mitigating factors, the base penalty OFAC seeks to impose is $3,438,600, which amount may be reduced by an additional 10% if WWA Group enters into a settlement agreement with OFAC. WWA Group continues the process of negating the basis for the proposed penalty and is in discussions to further mitigate the proposed penalty.

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**ITEM 1A.       RISK FACTORS**

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WWA Group’s operations and securities are subject to a number of risks. Below we have identified and discussed the material risks that we are likely to face. Should any of the following risks occur, they will adversely affect our operations, business, financial condition and/or operating results as well as the future trading price and/or the value of our securities.

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**Risks Related to WWA Group’s Business**

 

***Sales of equipment from our auctions may have ultimately ended up in Iran, Sudan or Syria.***

 

Due to the proximity of Iran, Sudan and Syria to our auction site, sales records, and statistics on regional spending for used construction equipment, there is reason to believe that some percentage of the equipment sold at our auctions prior to May 2007 may have ultimately ended up in Iran, Sudan or Syria. Although we have never sold equipment to Iran, Sudan or Syria, countries which the U.S. State Department and OFAC have identified as state sponsors of terrorism, and we have never made any effort to attract consignors or bidders from any country recognized as a state sponsor of terrorism, it is possible that some equipment purchased at our auctions was sold to persons or entities that re-exported such equipment to these countries, particularly to Iran. Our records indicate as follows: 

 

 

| ***Sales between March 2001 and May 2007 to persons or entities with addresses in countries deemed State Sponsors of Terrorism by the U.S. State Department and OFAC*** |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| *Address of registered bidder*                                                                                                                                          | *Sales* | *Percentage of total sales** |
| Iran                                                                                                                                                                    | $7,300,000 | 1.40% |
| Sudan                                                                                                                                                                   | $1,847,950 | 0.37% |
| Syria                                                                                                                                                                   |   $202,300 |   0.03% |
| TOTAL                                                                                                                                                                   | $9,350,250 | 1.8% |

                                        

* Total gross auction sales and private sales by WWA Group were approximately 

$519,600,000 between 2001 and May of 2007

 

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Our records indicate that approximately 1.8% of our total gross auction sales and private sales were to persons or entities with address in Iran, Sudan or Syria between March 2001 and May 2007.We do not believe that this percentage of sales had any impact on our operations, reputation or on shareholder value. However, despite the fact that WWA Group has no knowledge of delivery of equipment purchased at its auctions to Iran, Sudan or Syria, OFAC has proposed that a fine of $3,438,600 be imposed on WWA Group. Although WWA group is in the process of negating the basis for the proposed fine the imposition of such a penalty could diminish WWA Group’s ability to continue as a going concern.

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***A significant percentage of corporate control lies in the hands of one shareholder.***

 

Asia8, Inc. owns and controls voting power over nearly 32% of WWA Group’s issued and outstanding stock. The concentration of such a large percentage of our stock in the hands of one shareholder may have a disproportionate effect on the voting power of minority shareholders on any and all matters presented to WWA Group’s shareholders.

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***Our chief executive officer does not offer his undivided attention to WWA Group due to his dual responsibilities*****.***** ***

 

Our chief executive officer does not offer his undivided attention to our business as he also serves as the chief executive officer of Asia8, Inc. His responsibilities cause him to divide his time between the two entities. The division of time however does not necessarily indicate a division of interests since Asia8, Inc., owns approximately 32% of the outstanding shares of WWA Group. Nonetheless, his dual responsibilities may compromise WWA Group’s ability to successfully conduct its business operations.

 

***WWA Group is dependent upon key personnel.***

 

WWA Group’s performance and operating results are substantially dependent on the continued service and performance of our officers and directors. We intend to hire additional technical, sales, managerial and other personnel as we move forward with our business model. Competition for such personnel is intense, and there can be no assurance that we can retain our key sales employees, or that we will be able to attract or retain highly qualified sales and managerial personnel in the future. The loss of the services of any of our key employees or the inability to attract and retain the necessary personnel could have a material adverse effect upon our business, financial condition, operating results, and cash flows. 

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***Our******business is subject to governmental regulations.***

 

International, national and local standards set by governmental regulatory authorities set the regulations by which products are certified across respective territories. Further, climate change legislation and greenhouse gas regulation is becoming increasingly ubiquitous. The products that we intend to distribute are subject to such regulation in addition to national, state and local taxation. Although we believe that we can successfully distribute our products within current governmental regulations it is possible that regulatory changes could negatively impact our operations and cause us to diminish or cease operations.

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***Climate change legislation or regulations restricting emissions of “greenhouse gases” could result in increased operating costs related to reducing the emission of the green house gases.*** 

On December 15, 2009, the U.S. Environmental Protection Agency (“EPA”) officially published its findings that emissions of carbon dioxide, methane and other “greenhouse gases” present an endangerment to human health and the environment because emissions of such gases are contributing to warming of the Earth’s atmosphere and other climatic changes. These findings by the EPA allow the agency to proceed with the adoption and implementation of regulations that would restrict emissions of greenhouse gases under existing provisions of the federal Clean Air Act. In late September 2009, the EPA had proposed two sets of regulations in anticipation of finalizing its findings that would require a reduction in emissions of greenhouse gases from motor vehicles and that could also lead to the imposition of greenhouse gas emission limitations in Clean Air Act permits for certain stationary sources. In addition, on September 22, 2009, the EPA issued a final rule requiring the reporting of greenhouse gas emissions from specified large greenhouse gas emission sources in the United States beginning in 2011 for emissions occurring in 2010. The adoption and implementation of any regulations over greenhouse gases could require us to incur costs to reduce emissions of greenhouse gases that may be associated with our operations.

 

**Risks Related to WWA Group’s Stock**

 

***The market for our stock is limited and our stock price may be volatile.***

 

The market for our common stock has been limited due to low trading volume and the small number of brokerage firms acting as market makers. Because of the limitations of our market and volatility of the market price of our stock, investors may face difficulties in selling shares at attractive prices when they want to. The average daily trading volume for our stock has varied significantly from week to week and from month to month, and the trading volume often varies widely from day to day.

 

***We incur significant expenses as a result of the Sarbanes-Oxley Act of 2002, which expenses may continue to negatively impact our financial performance.***

 

We incur significant legal, accounting and other expenses as a result of the Sarbanes-Oxley Act of 2002, as well as related rules implemented by the Commission, which control the corporate governance practices of public companies. Compliance with these laws, rules and regulations, including compliance with Section 404 of the Sarbanes-Oxley Act of 2002, as discussed in the following risk factor, has substantially increased our expenses, including legal and accounting costs, and made some activities more time-consuming and costly. 

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***Our internal controls over financial reporting may not be considered effective in the future, which could result in a loss of investor confidence in our financial reports and in turn have an adverse effect on our stock price.***

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Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 we are required to furnish a report by our management on our internal controls over financial reporting. Such report must contain, among other matters, an assessment of the effectiveness of our internal controls over financial reporting as of the end of the year, including a statement as to whether or not our internal controls over financial reporting are effective. This assessment must include disclosure of any material weaknesses in our internal controls over financial reporting identified by management. If we are unable to continue to assert that our internal controls are effective, our investors could lose confidence in the accuracy and completeness of our financial reports, which in turn could cause our stock price to decline.

 

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***WWA Group does not pay dividends.***

 

WWA Group does not pay dividends. We have not paid any dividends since inception and have no intention of paying any dividends in the foreseeable future. Any future dividends would be at the discretion of our board of directors and would depend on, among other things, future earnings, our operating and financial condition, our capital requirements, and general business conditions. Therefore, shareholders should not expect any type of cash flow from their investment.

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***WWA Group will require additional capital funding.***

 

WWA Group will require additional funds in the form of additional equity offerings or debt placements, to maintain operations. Such additional capital may result in dilution to our current shareholders. Further, our ability to meet short-term and long-term financial commitments will depend on future cash. There can be no assurance that future income will generate sufficient funds to enable us to meet our financial commitments.

 

***If the market price of our common stock declines as the selling security holders sell their stock, selling security holders or others may be encouraged to engage in short selling, depressing the market price.***

 

The significant downward pressure on the price of the common stock as the selling security holders sell material amounts of common stock could encourage short sales by the selling security holders or others. Short selling is the selling of a security that the seller does not own, or any sale that is completed by the delivery of a security borrowed by the seller. Short sellers assume that they will be able to buy the stock at a lower amount than the price at which they sold it short. Significant short selling of a company’s stock creates an incentive for market participants to reduce the value of that company’s common stock. If a significant market for short selling our common stock develops, the market price of our common stock could be significantly depressed.

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***WWA Group’s common stock is currently deemed to be “penny stock”, which makes it more difficult for investors to sell their shares.***

 

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

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

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None.

 

 

 

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**ITEM 3.          DEFAULTS ON SENIOR SECURITIES**

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None.

 

**ITEM 4.          (REMOVED AND RESERVED)**

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Removed and reserved

 

**ITEM 5.          OTHER INFORMATION**

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None.

 

**ITEM 6.          EXHIBITS**

 

Exhibits required to be attached by Item 601 of Regulation S-K are listed in the Index to Exhibits on page 24 of this Form 10‐Q, and are incorporated herein by this reference.

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**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.

 

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***WWA Group, Inc.                                                                    Date***

 

 

 

/s/ Eric Montandon                                                                  August 17, 2011

By: Eric Montandon

Its: Chief Executive Officer

 

 

 

/s/ Digamber Naswa                                                                 August 17, 2011

By: Digamber Naswa

Its: Chief Financial Officer and Principal Accounting Officer                                     

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**EXHIBITS**

 

***Exhibit             Description***

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3(i)(a)*                    Articles of Incorporation of WWA Group (Conceptual Technologies, Inc.) filed with the Nevada Secretary of State on November 26, 1996 (incorporated herein by reference from the Form SB-2 filed with the Commission on December 26, 2007).

3(i)(b)*                    Certificate of Amendment of the Articles of Incorporation of WWA Group (Conceptual Technologies, Inc.) filed with the Nevada Secretary of State on August 29, 1997 (incorporated herein by reference from the Form SB-2 filed with the Commission on December 26, 2007).

3(i)(c)*                    Certificate of Amendment of the Articles of Incorporation of WWA Group (NovaMed Inc.) filed with the Nevada Secretary of State on May 8, 1998 (incorporated herein by reference from the Form SB-2 filed with the Commission on December 26, 2007).

 

3(i)(d)*                    Certificate of Amendment to the Articles of Incorporation of WWA Group filed with the Nevada Secretary of State on September 25, 2003 (incorporated herein by reference from the Form SB-2 filed with the Commission on December 26, 2007).

 

3(ii)*                       Bylaws of WWA Group adopted on November 12, 1996 (incorporated herein by reference from the Form SB-2 filed with the Commission on December 26, 2007). 

10(i)*                      Stock Exchange Agreement between WWA Group and World Wide Auctioneers, Inc. dated August 5, 2003 (incorporated herein by reference from the Form 8-K filed with the Commission on August 25, 2003).

 

10(ii)*                     Purchase Agreement between World Wide Auctioneers, Ltd., Geoffrey Greenless and Crown Diamond Holdings, Inc. dated June 30, 2006 (incorporated herein by reference from the Form 8-K filed with the Commission on July 19, 2006).

 

10(iii)*                    Share Purchase Agreement between World Wide Auctioneers, Ltd. and Steven Edward Rogers dated December 20, 2006 (incorporated herein by reference from the Form 8-K filed with the Commission on February 15, 2007).

10(iv)*                    Share Purchase Agreement by and between WWA Group and Seven International Holdings, Ltd., dated effective October 31, 2010 (incorporated herein by reference from the Form 8-K filed with the Commission on November 12, 2010).    

14*                          Code of Ethics adopted March 28, 2004 (incorporated herein by reference from the Form 10-KSB filed with the Commission on March 30, 2005). 

21*                          Subsidiaries of WWA Group (incorporated herein by reference from the Form 10-K filed with the Commission on April 10, 2008).

31(a)                        Certification of the Chief Executive Officer pursuant to Rule 13a-14 of the Securities and Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (attached).

31(b)                       Certification of the Chief Financial Officer pursuant to Rule 13a-14 of the Securities and Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (attached).

32(a)                        Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (attached).

32(b)                       Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (attached).

101. INS                 XBRL Instance Document†

101. PRE                 XBRL Taxonomy Extension Presentation Linkbase†

101. LAB                XBRL Taxonomy Extension Label Linkbase†

101. DEF                XBRL Taxonomy Extension Label Linkbase†

101. CAL                XBRL Taxonomy Extension Label Linkbase†

101. SCH                XBRL Taxonomy Extension Schema†

 

*                              Incorporated by reference from previous filings of WWA Group.

 

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

 

 

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