UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



FORM 10-Q



x           QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

for the quarterly period ended June 30, 2012





o           TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

for the transition period from ______to _________.



Commission file number: 333-167077



FrogAds, Inc.

(Exact name of registrant
as specified in its charter)









|Nevada                                                         |  | 27-2028734                       
|-------------------------------------------------------------- |  | ---------------------------------
|(State or other jurisdiction of incorporation or organization) |  | (IRS Employer Identification No.)





|21820 Burbank Blvd., Suite 325
        Woodland Hills, CA |  | 91367     
|--------------------------------------------------------- |  | ----------
|(Address of principal executive offices)                  |  | (Zip Code)



(310) 281-6094

(Issuer’s telephone number)



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. 	Yesx Noo





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). Yesx Noo



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



|Large accelerated filer | o | Accelerated filer         | o
|----------------------- | - | ------------------------- | -
|Non-accelerated filer   | o | 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) Yeso
Nox



The number of shares outstanding
of the Registrant’s Common Stock on August 17, 2012 was 129,166,333.
















FROGADS, INC.

FORM 10-Q



|                                                  |                                                                                                                                                                                                        
|------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                  |                                                                                                                                                                                                        
|INDEX                                             | Page                                                                                                                                                                                                   
|                                                  |                                                                                                                                                                                                        
|SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS |                                                                                                                                                                                                        
|PART I. FINANCIAL INFORMATION                     | 3                                                                                                                                                                                                      
|Item 1.                                           | Financial Statements                                                                                                                                                                                   
|                                                  | Condensed Balance Sheets as of June 30, 2012 (Unaudited) and March 31, 2012                                                                                                                            
|                                                  | Condensed Statements of Operations for the Three Months ended June 30, 2012 and 2011 (Unaudited), and the period from July 1, 2011 (date of re-entry of development stage) to June 30, 2012 (Unaudited)
|                                                  | Condensed Statements of Cash Flows for the Three Months ended June 30, 2012 and 2011 (unaudited), and the period from July 1, 2011 (date of re-entry of development stage) to June 30, 2012 (Unaudited)
|                                                  | Notes to the Condensed Financial Statements (Unaudited)                                                                                                                                                
|                                                  |                                                                                                                                                                                                        
|Item 2.                                           | Management’s Discussion and Analysis of Financial Condition and Results of Operations                                                                                                                  
|Item 3.                                           | Quantitative and Qualitative Disclosures About Market Risk                                                                                                                                             
|Item 4.                                           | Controls and Procedures                                                                                                                                                                                
|                                                  |                                                                                                                                                                                                        
|PART II. OTHER INFORMATION                        | 20                                                                                                                                                                                                     
|Item 1.                                           | Legal Proceedings                                                                                                                                                                                      
|Item 1A.                                          | Risk Factors                                                                                                                                                                                           
|Item 2.                                           | Unregistered Sales of Equity Securities and Use of Proceeds                                                                                                                                            
|Item 3.                                           | Defaults Upon Senior Securities                                                                                                                                                                        
|Item 5.                                           | Other Information                                                                                                                                                                                      
|Item 6.                                           | Exhibits                                                                                                                                                                                               
|                                                  |                                                                                                                                                                                                        
|SIGNATURES                                        | 21                                                                                                                                                                                                     



2







PART I - FINANCIAL INFORMATION



Item 1 - Financial Statements



FROGADS, INC. (Formerly Imobolis, Inc.)

(A Development Stage Company)

CONDENSED BALANCE SHEETS



|                                                                                                        |  | June 30,    |            |   | March 31, |  
|------------------------------------------------------------------------------------------------------- |  | ----------- | ---------- | - | --------- | -
|                                                                                                        |  | 2012        |            |   | 2012      |  
|ASSETS                                                                                                  |  | (Unaudited) |            |   |           |  
|                                                                                                        |  |             |            |   |           |  
|Current assets:                                                                                         |  |             |            |   |           |  
|Cash                                                                                                    |  | $           | 667        |   |           | $
|Prepaid expenses                                                                                        |  |             | 867        |   |           |  
|Deposits                                                                                                |  |             | 7,407      |   |           |  
|Income tax receivable                                                                                   |  |             | 17,686     |   |           |  
|Total current assets                                                                                    |  |             | 26,627     |   |           |  
|                                                                                                        |  |             |            |   |           |  
|Property and equipment, net                                                                             |  |             | 7,271      |   |           |  
|                                                                                                        |  |             |            |   |           |  
|Total assets                                                                                            |  | $           | 33,898     |   |           | $
|                                                                                                        |  |             |            |   |           |  
|                                                                                                        |  |             |            |   |           |  
|LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                                                          |  |             |            |   |           |  
|                                                                                                        |  |             |            |   |           |  
|Current liabilities:                                                                                    |  |             |            |   |           |  
|Accounts payable                                                                                        |  | $           | 25,709     |   |           | $
|Accrued expenses                                                                                        |  |             | 40,050     |   |           |  
|Convertible notes payable, net of discounts of $314,134 and $205,165, respectively                      |  |             | 265,866    |   |           |  
|Notes payable                                                                                           |  |             | 96,000     |   |           |  
|Total current liabilities                                                                               |  |             | 427,625    |   |           |  
|                                                                                                        |  |             |            |   |           |  
|Stockholders' equity (deficit):                                                                         |  |             |            |   |           |  
|Preferred stock, $0.001 par value, 10,000,000 shares authorized, no shares issued and outstanding       |  |             | –          |   |           |  
|Common stock, $0.001 par value, 200,000,000 shares authorized, 99,833,000 shares issued and outstanding |  |             | 99,833     |   |           |  
|Additional Paid in Capital                                                                              |  |             | 1,168,347  |   |           |  
|Accumulated (deficit) prior to re-entry into development stage                                          |  |             | (35,446    | ) |           |  
|Accumulated (deficit) during development stage                                                          |  |             | (1,626,461 | ) |           |  
|Total stockholders' equity (deficit)                                                                    |  |             | (393,727   | ) |           |  
|                                                                                                        |  |             |            |   |           |  
|Total liabilities and stockholders' equity (deficit)                                                    |  | $           | 33,898     |   |           | $



See accompanying notes to financial statements.





3







FROGADS, INC. (Formerly Imobolis, Inc.)

(A Development Stage Company)

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)



|                                                                               |  | For the three months |            |   | July 1, 2011  |  
|------------------------------------------------------------------------------ |  | -------------------- | ---------- | - | ------------- | -
|                                                                               |  | Ended June 30,       |            |   | (re-entry) to |  
|                                                                               |  | 2012                 |            |   | 2011          |  
|                                                                               |  |                      |            |   |               |  
|Revenue                                                                        |  | $                    | 675        |   |               | $
|                                                                               |  |                      |            |   |               |  
|Operating expenses:                                                            |  |                      |            |   |               |  
|Advertising                                                                    |  |                      | 91,369     |   |               |  
|Depreciation                                                                   |  |                      | 531        |   |               |  
|General and administrative                                                     |  |                      | 99,573     |   |               |  
|Professional fees                                                              |  |                      | 613,995    |   |               |  
|Total operating expenses                                                       |  |                      | 805,468    |   |               |  
|                                                                               |  |                      |            |   |               |  
|Net operating loss                                                             |  |                      | (804,793   | ) |               |  
|                                                                               |  |                      |            |   |               |  
|Interest expense                                                               |  |                      | (171,937   | ) |               |  
|                                                                               |  |                      |            |   |               |  
|Net loss before provision for                                                  |  |                      |            |   |               |  
|income taxes                                                                   |  |                      | (976,730   | ) |               |  
|                                                                               |  |                      |            |   |               |  
|Provision for income taxes                                                     |  |                      | –          |   |               |  
|                                                                               |  |                      |            |   |               |  
|Net loss                                                                       |  | $                    | (976,730   | ) |               | $
|                                                                               |  |                      |            |   |               |  
|                                                                               |  |                      |            |   |               |  
|Weighted average number of common shares outstanding - basic and fully diluted |  |                      | 95,254,758 |   |               |  
|                                                                               |  |                      |            |   |               |  
|Net loss per share - basic and fully diluted                                   |  | $                    | (0.01      | ) |               | $



See accompanying notes to financial statements.





4







FROGADS, INC. (Formerly Imobolis, Inc.)

(A Development Stage Company)

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)



|                                                                           |  | For the three months |          |   | July 1, 2011  |  
|-------------------------------------------------------------------------- |  | -------------------- | -------- | - | ------------- | -
|                                                                           |  | Ended June 30,       |          |   | (re-entry) to |  
|                                                                           |  | 2012                 |          |   | 2011          |  
|                                                                           |  |                      |          |   |               |  
|CASH FLOWS FROM OPERATING ACTIVITIES                                       |  |                      |          |   |               |  
|Net loss                                                                   |  | $                    | (976,730 | ) |               | $
|Adjustments to reconcile net loss to net cash used in operating activities |  |                      |          |   |               |  
|Depreciation                                                               |  |                      | 531      |   |               |  
|Amortization of beneficial conversion feature                              |  |                      | 159,934  |   |               |  
|Common stock issued for services                                           |  |                      | 550,000  |   |               |  
|(Increase) decrease in assets:                                             |  |                      |          |   |               |  
|Prepaid expenses                                                           |  |                      | 37,755   |   |               |  
|Deposits                                                                   |  |                      | 860      |   |               |  
|Income tax receivable                                                      |  |                      | –        |   |               |  
|Increase (decrease) in liabilities:                                        |  |                      |          |   |               |  
|Accounts payable                                                           |  |                      | 12,841   |   |               |  
|Accrued expenses                                                           |  |                      | (3,339   | ) |               |  
|Net cash used in operating activities                                      |  |                      | (218,148 | ) |               |  
|                                                                           |  |                      |          |   |               |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                       |  |                      |          |   |               |  
|Proceeds from convertible notes payable                                    |  |                      | 210,000  |   |               |  
|Proceeds from notes payable                                                |  |                      | –        |   |               |  
|Repayment on notes payable                                                 |  |                      | –        |   |               |  
|Proceeds received from contributed capital                                 |  |                      | –        |   |               |  
|Net cash provided by financing activities                                  |  |                      | 210,000  |   |               |  
|                                                                           |  |                      |          |   |               |  
|NET CHANGE IN CASH                                                         |  |                      | (8,148   | ) |               |  
|                                                                           |  |                      |          |   |               |  
|CASH AT BEGINNING OF YEAR                                                  |  |                      | 8,815    |   |               |  
|                                                                           |  |                      |          |   |               |  
|CASH AT END OF YEAR                                                        |  | $                    | 667      |   |               | $
|                                                                           |  |                      |          |   |               |  
|SUPPLEMENTAL DISCLOSURES:                                                  |  |                      |          |   |               |  
|Interest paid                                                              |  | $                    | –        |   |               | $
|Income taxes paid                                                          |  | $                    | –        |   |               | $
|                                                                           |  |                      |          |   |               |  
|NON-CASH INVESTING AND FINANCING TRANSACTIONS:                             |  |                      |          |   |               |  
|Discount on beneficial conversion feature of convertible debt              |  | $                    | 268,903  |   |               | $
|Conversion of debts                                                        |  | $                    | 51,377   |   |               | $





See accompanying notes to financial statements.



5


FrogAds, Inc.(A Development Stage Company) Notes to Condensed Financial Statements(Unaudited)










Note 1 – Nature of Business and
Basis of Presentation



Nature of Business

FrogAds, Inc. (“The Company”)
was formed in the state of Nevada on February 11, 2010 to establish an internet bulletin board site whereby visitors can list items
for sale or trade, read news articles, or find service providers. FrogAds expects to generate a large inventory of classified ads.
The listings are free to the seller and buyer, however, FrogAds sells “advertisements’ or “banner ads”
on its internet site directed toward internet users and vehicle buyers. The Company generates its corporate revenue from the sale
of such advertisements.



These statements reflect all adjustments,
consisting of normal recurring adjustments, which in the opinion of management are necessary for fair presentation of the information
contained therein. The Company follows the same accounting policies in the preparation of interim reports.



The Company has adopted a fiscal year end of March 31st.



Development Stage
Company

The Company is currently
considered a development stage company. As a development stage enterprise, the Company discloses the deficit accumulated during
the development stage and the cumulative statements of operations and cash flows from inception to the current balance sheet date.
An entity remains in the development stage until such time as, among other factors, revenues have been realized. To date, the development
stage of the Company’s operations consists of developing the business model and marketing concepts. The Company was considered
a development stage company from inception until it commenced operations that resulted in the recognition of revenues beginning
on November 26, 2010. At that time the Company exited the development stage, but has re-entered the development stage on July 1,
2011 due to uncertainties with respect to our ability to generate future revenues.



Basis of Presentation

The interim condensed financial statements
included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars,
have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that
the disclosures are adequate to not make the information presented misleading.



These statements reflect all adjustments,
which in the opinion of management, are necessary for fair presentation of the information contained therein. Except as otherwise
disclosed, all such adjustments are of a normal recurring nature. It is suggested that these interim condensed financial statements
be read in conjunction with the financial statements of the Company for the fiscal year ended March 31, 2012 and notes thereto
included in the Company's 10-K annual report. The Company follows the same accounting policies in the preparation of interim reports.



Certain amounts in the prior periods presented
have been reclassified to conform to the current period financial statement presentation. These reclassifications have no effect
on previously reported net income.



Recent Accounting Pronouncements

In December 2011, the Financial Accounting
Standards Board (FASB) issued Accounting Standards Update (ASU) 2011-12, “Deferral of the Effective Date for Amendments to
the Presentation of Reclassifications of Items out of Accumulated Other Comprehensive Income in Accounting Standards Update No.
2011-05. This update defers the requirement to present items that are reclassified from accumulated other comprehensive income
to net income in both the statement of income where net income is presented and the statement where other comprehensive income
is presented. The adoption of ASU 2011-12 is not expected to have a material impact on our financial position or results of operations.



In December 2011, the FASB issued ASU No.
2011-11 “Balance Sheet: Disclosures about Offsetting Assets and Liabilities” (“ASU 2011-11”). This Update
requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements
to understand the effect of those arrangements on its financial position. The objective of this disclosure is to facilitate comparison
between those entities that prepare their financial statements on the basis of U.S. GAAP and those entities that prepare their
financial statements on the basis of IFRS. The amended guidance is effective for annual reporting periods beginning on or after
January 1, 2013, and interim periods within those annual periods. The Company is currently evaluating the impact, if any, that
the adoption of this pronouncement may have on its results of operations or financial position.

6


FrogAds, Inc.(A Development Stage Company) Notes to Condensed Financial Statements(Unaudited)






Note 2 – Going Concern



As shown in the
accompanying financial statements, the Company has incurred net losses of $976,730 and $70,139for
the three months ended June 30, 2012, and 2011, respectively, and has an accumulated deficit of 1,661,907 and$685,177
at June 30, 2012. Also, the Company’s current liabilities exceed its current assets by $400,998 as of June 30, 2012 and
2011. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management
is currently seeking additional sources of capital to fund short term operations. The Company, however, is dependent upon
its ability to secure equity and/or debt financing and there are no assurances that the Company will be successful,
therefore, without sufficient financing it would be unlikely for the Company to continue as a going concern.



The financial statements do not include
any adjustments that might result from the outcome of any uncertainty as to the Company’s ability to continue as a going
concern. The financial statements also do not include any adjustments relating to the recoverability and classification of recorded
asset amounts, or amounts and classifications of liabilities that might be necessary should the Company be unable to continue as
a going concern.





Note 3 – Related Party



On January 1, 2011, the Company entered
into an employment agreement with the Company’s founder and CEO, Julian Spitari. The initial term of the agreement covers
fifteen months, until March 31, 2012. This contract was amended on April 1, 2012 to increase the annual base salary to $180,000
with a three percent (3%) annual increase upon renewal. The agreement is automatically renewable for one year terms until terminated
by either party.



On February 14, 2010, the Company issued
90,000,000 founder’s shares, as adjusted to reflect a 5:1 stock split on October 14, 2011, at the par value of $0.001 in
exchange for a stock subscription receivable of $18,000. The Company subsequently received proceeds of $5,582 on March 18, 2010,
and the remaining $12,418 was received between May 27, 2010 and June 22, 2010.





Note 4 – Fair Value of Financial
Instruments



The Company adopted FASB ASC 820-10 upon
inception at February 11, 2010. Under FASB ASC 820-10-5, fair value is defined as the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price).
The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability
of fair value measurements and the related disclosures. Under GAAP, certain assets and liabilities must be measured at fair value,
and FASB ASC 820-10-50 details the disclosures that are required for items measured at fair value.



The Company doesn’t have any financial
instruments that must be measured under the new fair value standard. The Company’s financial assets and liabilities are measured
using inputs from the three levels of the fair value hierarchy. The three levels are as follows:



Level 1 - Inputs are unadjusted
quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement
date. The fair value of the Company’s cash is based on quoted prices and therefore classified as Level 1.



Level 2 - Inputs include quoted
prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets
that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield
curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means
(market corroborated inputs).



Level 3 - Unobservable inputs
that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.

7


FrogAds, Inc.(A Development Stage Company) Notes to Condensed Financial Statements(Unaudited)






The following schedule summarizes the valuation of financial instruments at fair value on a non-recurring
basis in the balance sheets as of June 30, 2012 and March 31, 2012



|                          |  | Fair Value Measurements at June 30, 2012 |  
|------------------------- |  | ---------------------------------------- | -
|                          |  | Level 1                                  |  
|Assets                    |  |                                          |  
|None                      |  | $                                        | –
|Total assets              |  |                                          | –
|Liabilities               |  |                                          |  
|Convertible notes payable |  |                                          | –
|Total liabilities         |  |                                          | –
|                          |  | $                                        | –



|                          |  | Fair Value Measurements at March 31, 2012 |  
|------------------------- |  | ----------------------------------------- | -
|                          |  | Level 1                                   |  
|Assets                    |  |                                           |  
|None                      |  | $                                         | –
|Total assets              |  |                                           | –
|Liabilities               |  |                                           |  
|Convertible notes payable |  |                                           | –
|Total liabilities         |  |                                           | –
|                          |  | $                                         | –





Note 5 – Property and Equipment



Property and Equipment consists of the
following:



|                              |  | June 30, |        |   | March 31, |  
|----------------------------- |  | -------- | ------ | - | --------- | -
|                              |  | 2012     |        |   | 2012      |  
|Computer equipment            |  | $        | 10,629 |   |           | $
|Less accumulated depreciation |  |          | (3,358 | ) |           |  
|                              |  | $        | 7,271  |   |           | $



Depreciation expense totaled $531 and $531
for the three months ended June 30, 2012, and 2011, respectively.





Note 6 – Accrued Expenses



As of June 30, 2012 and March 31, 2012
accrued expenses included the following:



|                          |  | June 30, |        |  | March 31, |  
|------------------------- |  | -------- | ------ |  | --------- | -
|                          |  | 2012     |        |  | 2012      |  
|Accrued Payroll, Officers |  | $        | 2,308  |  |           | $
|Accrued Payroll, Office   |  |          | 1,200  |  |           |  
|Accrued Payroll Taxes     |  |          | –      |  |           |  
|Accrued Interest          |  |          | 18,856 |  |           |  
|Accrued Income Taxes      |  |          | 17,686 |  |           |  
|                          |  | $        | 40,050 |  |           | $



8


FrogAds, Inc.(A Development Stage Company) Notes to Condensed Financial Statements(Unaudited)






Note 7 – Convertible Notes Payable



Note payable consists of the following
at June 30, 2012 and March 31, 2012, respectively:



|                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | June 30, |        |  | March 31, |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------- | ------ |  | --------- | -
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | 2012     |        |  | 2012      |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |          |        |  |           |  
|Unsecured convertible promissory note, carries an 8% interest rate, matures on December 29, 2012, convertible at the holder’s discretion into the greater of 55% of the average of the lowest three (3) trading prices over the ten (10) day trading period prior to the conversion date, or $0.05 per share. The fixed conversion price component was amended to $0.006 per share on May 22, 2012. All other terms remain unchanged.  |  | $        | 5,000  |  |           | $
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |          |        |  |           |  
|Unsecured convertible promissory note, carries an 8% interest rate, matures on December 18, 2012, convertible at the holder’s discretion into the greater of 55% of the average of the lowest three (3) trading prices over the ten (10) day trading period prior to the conversion date, or $0.05 per share. The fixed conversion price component was amended to $0.006 per share on May 22, 2012. All other terms remain unchanged.  |  |          | 10,000 |  |           |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |          |        |  |           |  
|Unsecured convertible promissory note, carries an 8% interest rate, matures on December 8, 2012, convertible at the holder’s discretion into the greater of 55% of the average of the lowest three (3) trading prices over the ten (10) day trading period prior to the conversion date, or $0.05 per share. The fixed conversion price component was amended to $0.006 per share on May 22, 2012. All other terms remain unchanged.   |  |          | 15,000 |  |           |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |          |        |  |           |  
|Unsecured convertible promissory note, carries an 8% interest rate, matures on November 25, 2012, convertible at the holder’s discretion into the greater of 55% of the average of the lowest three (3) trading prices over the ten (10) day trading period prior to the conversion date, or $0.05 per share. The fixed conversion price component was amended to $0.006 per share on May 22, 2012. All other terms remain unchanged.  |  |          | 10,000 |  |           |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |          |        |  |           |  
|Unsecured convertible promissory note, carries an 8% interest rate, matures on November 25, 2012, convertible at the holder’s discretion into the greater of 55% of the average of the lowest three (3) trading prices over the ten (10) day trading period prior to the conversion date, or $0.05 per share. The fixed conversion price component was amended to $0.006 per share on May 22, 2012. All other terms remain unchanged.  |  |          | 15,000 |  |           |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |          |        |  |           |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |          |        |  |           |  
|Unsecured convertible promissory note, carries an 8% interest rate, matures on October 30, 2012, convertible at the holder’s discretion into the greater of 55% of the average of the lowest three (3) trading prices over the ten (10) day trading period prior to the conversion date, or $0.05 per share. The fixed conversion price component was amended to $0.006 per share on May 22, 2012. All other terms remain unchanged.   |  |          | 25,000 |  |           |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |          |        |  |           |  
|Unsecured convertible promissory note, carries an 8% interest rate, matures on October 25, 2012, convertible at the holder’s discretion into the greater of 55% of the average of the lowest three (3) trading prices over the ten (10) day trading period prior to the conversion date, or $0.05 per share. The fixed conversion price component was amended to $0.006 per share on May 22, 2012. All other terms remain unchanged.   |  |          | 50,000 |  |           |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |          |        |  |           |  
|Unsecured convertible promissory note, carries an 8% interest rate, matures on October 17, 2012, convertible at the holder’s discretion into the greater of 55% of the average of the lowest three (3) trading prices over the ten (10) day trading period prior to the conversion date, or $0.05 per share. The fixed conversion price component was amended to $0.006 per share on May 22, 2012. All other terms remain unchanged.   |  |          | 25,000 |  |           |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |          |        |  |           |  
|Unsecured convertible promissory note, carries an 8% interest rate, matures on October 13, 2012, convertible at the holder’s discretion into the greater of 55% of the average of the lowest three (3) trading prices over the ten (10) day trading period prior to the conversion date, or $0.05 per share. The fixed conversion price component was amended to $0.006 per share on May 22, 2012. All other terms remain unchanged.   |  |          | 25,000 |  |           |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |          |        |  |           |  
|Unsecured convertible promissory note, carries an 8% interest rate, matures on October 2, 2012, convertible at the holder’s discretion into the greater of 55% of the average of the lowest three (3) trading prices over the ten (10) day trading period prior to the conversion date, or $0.05 per share. The fixed conversion price component was amended to $0.006 per share on May 22, 2012. All other terms remain unchanged.    |  |          | 30,000 |  |           |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |          |        |  |           |  
|Unsecured convertible promissory note, carries an 8% interest rate, matures on September 29, 2012, convertible at the holder’s discretion into the greater of 55% of the average of the lowest three (3) trading prices over the ten (10) day trading period prior to the conversion date, or $0.05 per share. The fixed conversion price component was amended to $0.006 per share on May 22, 2012. All other terms remain unchanged. |  |          | 25,000 |  |           |  

9


FrogAds, Inc.(A Development Stage Company) Notes to Condensed Financial Statements(Unaudited)




|                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |  |         |  |  |  |         | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | ------- |  |  |  | ------- | 
|Unsecured convertible promissory note, carries an 8% interest rate, matures on September 23, 2012, convertible at the holder’s discretion into the greater of 55% of the average of the lowest three (3) trading prices over the ten (10) day trading period prior to the conversion date, or $0.05 per share. The fixed conversion price component was amended to $0.006 per share on May 22, 2012. All other terms remain unchanged. |  |  | 30,000  |  |  |  | 30,000  | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |  |         |  |  |  |         | 
|Unsecured convertible promissory note, carries an 8% interest rate, matures on September 23, 2012, convertible at the holder’s discretion into the greater of 55% of the average of the lowest three (3) trading prices over the ten (10) day trading period prior to the conversion date, or $0.05 per share. The fixed conversion price component was amended to $0.006 per share on May 22, 2012. All other terms remain unchanged. |  |  | 30,000  |  |  |  | 30,000  | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |  |         |  |  |  |         | 
|Unsecured convertible promissory note, carries an 8% interest rate, matures on September 17, 2012, convertible at the holder’s discretion into the greater of 55% of the average of the lowest three (3) trading prices over the ten (10) day trading period prior to the conversion date, or $0.05 per share. The fixed conversion price component was amended to $0.006 per share on May 22, 2012. All other terms remain unchanged. |  |  | 30,000  |  |  |  | 30,000  | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |  |         |  |  |  |         | 
|Unsecured convertible promissory note, carries an 8% interest rate, matures on August 24, 2012, convertible at the holder’s discretion into the greater of 55% of the average of the lowest three (3) trading prices over the ten (10) day trading period prior to the conversion date, or $0.05 per share. The fixed conversion price component was amended to $0.006 per share on May 22, 2012. All other terms remain unchanged.    |  |  | 35,000  |  |  |  | 35,000  | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |  |         |  |  |  |         | 
|Unsecured convertible promissory note, carries an 8% interest rate, matures on February 12, 2013 convertible into common stock at $0.20 per share at the holder’s discretion. The conversion terms were amended on May 22, 2012 to be convertible into common stock at 55% of the average of the three lowest bid prices over the 10 days prior to conversion, or $0.006 whichever is greater.                                         |  |  | 80,000  |  |  |  | 80,000  | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |  |         |  |  |  |         | 
|Unsecured convertible promissory note, carries an 8% interest rate, matures on February 1, 2013, convertible into common stock at $0.20 per share at the holder’s discretion. The conversion terms were amended on May 22, 2012 to be convertible into common stock at 55% of the average of the three lowest bid prices over the 10 days prior to conversion, or $0.006 whichever is greater.                                         |  |  | 100,000 |  |  |  | 100,000 | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |  |         |  |  |  |         | 
|Unsecured convertible promissory note, carries an 8% interest rate, matures on January 25, 2013, convertible into common stock at $0.20 per share at the holder’s discretion. The conversion terms were amended on May 22, 2012 to be convertible into common stock at 55% of the average of the three lowest bid prices over the 10 days prior to conversion, or $0.006 whichever is greater.                                         |  |  | 15,000  |  |  |  | 15,000  | 



10


FrogAds, Inc.(A Development Stage Company) Notes to Condensed Financial Statements(Unaudited)




|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |   |         |  |  |   |         | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | - | ------- |  |  | - | ------- | 
|Unsecured convertible promissory note, carries an 8% interest rate, matures on January 22, 2013, convertible into common stock at $0.20 per share at the holder’s discretion. The conversion terms were amended on May 22, 2012 to be convertible into common stock at 55% of the average of the three lowest bid prices over the 10 days prior to conversion, or $0.006 whichever is greater                                                                                                      |  |   | 25,000  |  |  |   | 25,000  | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |   |         |  |  |   |         | 
|Unsecured convertible promissory note, carries an 8% interest rate, matures on January 10, 2013 convertible into common stock at $0.20 per share at the holder’s discretion. The debt and accrued interest was converted into 2,025,974 shares of common stock on June 1, 2012. The conversion terms were amended on May 22, 2012 to be convertible into common stock at 55% of the average of the three lowest bid prices over the 10 days prior to conversion, or $0.006 whichever is greater.   |  |   | –       |  |  |   | 25,000  | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |   |         |  |  |   |         | 
|Unsecured convertible promissory note, carries an 8% interest rate, matures on November 16, 2012, convertible into common stock at $0.20 per share at the holder’s discretion. The debt and accrued interest was converted into 2,307,026 shares of common stock on June 1, 2012. The conversion terms were amended on May 22, 2012 to be convertible into common stock at 55% of the average of the three lowest bid prices over the 10 days prior to conversion, or $0.006 whichever is greater. |  |   | –       |  |  |   | 25,000  | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  | $ | 580,000 |  |  | $ | 420,000 | 
|Less unamortized discount on beneficial conversion feature                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |   | 314,134 |  |  |   | 205,165 | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  | $ | 265,866 |  |  | $ | 214,835 | 



In addition, the Company recognized and
measured the embedded beneficial conversion feature present in the convertible debt by allocating a portion of the proceeds equal
to the intrinsic value of the feature to additional paid-in-capital. The intrinsic value of the feature was calculated on the commitment
date using the effective conversion price of the convertible debt. This intrinsic value is limited to the portion of the proceeds
allocated to the convertible debt.



The aforementioned accounting treatment
resulted in a total debt discount equal to $500,832. The discount is amortized from the dates of issuance until the stated redemption
date of the debt, consisting of either six months or one year.





During the three months ended June 30,
2012 and 2011, the Company recorded financial expenses in the amount of $159,934and $-0-, respectively,
attributed to the amortization of the aforementioned debt discount. Of these amounts, $6,820 and $-0- was accelerated due to conversions
of the underlying debts into shares of common stock for the three months ended June 30, 2012 and 2011, respectively.





The Company recorded interest expense in
the amount of $10,322 and $-0- related to the convertible notes payable for the three months ended June 31, 2012, and 2011, respectively.





Note 8 – Notes Payable



Notes payable consists of the following
at June 30, 2012 and March 31, 2012, respectively:



|                                                                                                                                                                          |  | June 30, |         |   | March 31, |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------- | ------- | - | --------- | -
|                                                                                                                                                                          |  | 2012     |         |   | 2012      |  
|                                                                                                                                                                          |  |          |         |   |           |  
|Unsecured promissory note, carries a 7% interest rate, payable on the first day of January and the first day of June each year until repaid, matures on December 29, 2012 |  |          | 6,000   |   |           |  
|                                                                                                                                                                          |  |          |         |   |           |  
|Unsecured promissory note, carries a 7% interest rate, payable on the first day of January and the first day of June each year until repaid, matures on February 12, 2013 |  |          | 45,000  |   |           |  
|                                                                                                                                                                          |  |          |         |   |           |  
|Unsecured promissory note, carries a 7% interest rate, payable on the first day of January and the first day of June each year until repaid, matures on March 22, 2013    |  |          | 25,000  |   |           |  
|                                                                                                                                                                          |  |          |         |   |           |  
|Unsecured promissory note, carries a 7% interest rate, payable on the first day of January and the first day of June each year until repaid, matures on March 31, 2013    |  |          | 20,000  |   |           |  
|                                                                                                                                                                          |  |          |         |   |           |  
|Total notes payable                                                                                                                                                       |  |          | 96,000  |   |           |  
|Less current portion of long term debts                                                                                                                                   |  |          | (96,000 | ) |           |  
|Total long term portion of notes payable                                                                                                                                  |  | $        | –       |   |           | $









11


FrogAds, Inc.(A Development Stage Company) Notes to Condensed Financial Statements(Unaudited)




The Company recorded interest expense in
the amount of $1,681 and $199 related to the notes payable for the three months ended June 30, 2012 and 2011, respectively.





Note 9 – Changes in Stockholders’
Equity (Deficit)



The Company has authorized 200,000,000
shares of common stock, and 10,000,000 shares of preferred stock.



Common Stock

On June 2, 2012, the Company issued 2,307,026
shares of common stock pursuant to a debt holder’s request to convert an outstanding debt in the amount of $26,000, which
consisted of $25,000 of principal and $1,000 of accrued interest. The note was converted in accordance with the conversion terms,
therefore no gain or loss has been recorded.



On June 1, 2012, the Company issued 2,025,974
shares of common stock pursuant to a debt holder’s request to convert an outstanding debt in the amount of $25,377, which
consisted of $25,000 of principal and $377 of accrued interest. The note was converted in accordance with the conversion terms,
therefore no gain or loss has been recorded.



On May 1, 2012, the Company granted 4,000,000
shares of S-8 common stock for consulting services. The fair value of the common stock was $110,000 based on the closing price
of the Company’s common stock on the date of grant.



On May 1, 2012, the Company granted 1,000,000
shares of S-8 common stock for consulting services. The fair value of the common stock was $440,000 based on the closing price
of the Company’s common stock on the date of grant.



On January 31, 2012, the Company granted
500,000 shares of restricted common stock for advertising services. The fair value of the common stock was $145,000 based on the
closing price of the Company’s common stock on the date of grant.



On October 7, 2011 the Board of Directors
approved a 5:1 stock split effective October 14, 2011 and increased the number of shares of common stock authorized from 90,000,000
to 200,000,000. The resulting stock split increased the Company’s issued and outstanding shares from 18,000,000 to 90,000,000
shares. The common stock split has been applied retrospectively as presented in these interim financial statements.



On February 14, 2010, the Company issued
90,000,000 founder’s shares, as adjusted to reflect the 5:1 stock split on October 14, 2011, at the par value of $0.001 in
exchange for proceeds of $18,000.





Note 10 – Income Taxes



The Company accounts for income taxes under
FASB ASC 740-10, which provides for an asset and liability approach of accounting for income taxes. Under this approach, deferred
tax assets and liabilities are recognized based on anticipated future tax consequences, using currently enacted tax laws, attributed
to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts
calculated for income tax purposes.



For the three months ended June 30, 2012
and the year ended March 31, 2012, respectively, the Company produced net operating losses before provision for income taxes of
$976,730, and $719,870 respectively, accordingly, a provision for income taxes of $-0- and $17,686 has been recorded at June 30,
2012 and March 31, 2012, respectively. The Company had approximately $1,527,000 of federal and state net operating loss carry forwards
at June 30, 2012. The net operating loss carry forwards, if not utilized, will begin to expire in 2030.

12


FrogAds, Inc.(A Development Stage Company) Notes to Condensed Financial Statements(Unaudited)




The federal and state income tax provision
(benefit) is summarized as follows:



|                                                        |  | June 30, |          |   | March 31, |  
|------------------------------------------------------- |  | -------- | -------- | - | --------- | -
|                                                        |  | 2012     |          |   | 2012      |  
|Current:                                                |  |          |          |   |           |  
|Federal income tax                                      |  | $        | –        |   |           | $
|State income tax                                        |  |          | –        |   |           |  
|                                                        |  | $        | –        |   |           | $
|Deferred tax assets, net operating loss carry forwards: |  |          |          |   |           |  
|Federal income tax                                      |  | $        | 397,020  |   |           | $
|State income tax                                        |  |          | 137,430  |   |           |  
|                                                        |  |          | 534,450  |   |           |  
|Less: Income tax receivable                             |  |          | –        |   |           |  
|Less: Valuation allowance                               |  |          | (534,450 | ) |           |  
|Net deferred tax assets                                 |  | $        | –        |   |           | $



Based on the available objective evidence,
including the Company’s taxable income during the three months ended June 30, 2012, management believes it is more likely
than not that the net deferred tax assets will be fully realizable through the use of NOL carryback provisions.



A reconciliation between the amounts of
income tax benefit determined by applying the applicable U.S. and State statutory income tax rate to pre-tax loss is as follows:



|                                                     | June 30, |  | March 31,
|---------------------------------------------------- | -------- |  | ---------
|                                                     | 2012     |  | 2012     
|                                                     |          |  |          
|Federal and state statutory rate                     | 35%      |  | 35%      
|Change in valuation allowance on deferred tax assets | (35%)    |  | (35%)    



In accordance with FASB ASC 740, the Company
has evaluated its tax positions and determined there are no uncertain tax positions as of any date on or before December 31, 2011.





Note 12 – Subsequent Events



Amendment to Articles of Incorporation

On July 25, 2012, a closely held voting
majority of the shareholders approved an amendment to the Company’s Articles of Incorporation which increased the number
of authorized shares of common stock from 200,000,000 shares to 900,000,000 shares of its $0.001 par value common stock.



Convertible Promissory Notes

On July 10, 2012, the Company received
proceeds of $30,000 in exchange for an unsecured convertible promissory note, which carries an 8% interest rate, matures on January
10, 2013, convertible at the holder’s discretion into the greater of 55% of the average of the lowest three (3) trading prices
over the ten (10) day trading period prior to the conversion date, or $0.006 per share.



On July 12, 2012 the Company issued an
unsecured convertible promissory note, for proceeds of $5,000, which carries an 8% interest rate, matures on January 12, 2013,
and is convertible at the holder’s discretion into the greater of 55% of the average of the lowest three (3) trading prices
over the ten (10) day trading period prior to the conversion date, or $0.006 per share.



On July 20, 2012 the Company issued an
unsecured convertible promissory note, for proceeds of $15,000, which carries an 8% interest rate, matures on January 12, 2013,
and is convertible at the holder’s discretion into the greater of 55% of the average of the lowest three (3) trading prices
over the ten (10) day trading period prior to the conversion date, or $0.006 per share.

13


FrogAds, Inc.(A Development Stage Company) Notes to Condensed Financial Statements(Unaudited)






On August 6, 2012 the Company issued an
unsecured convertible promissory note, for proceeds of $20,000, which carries an 8% interest rate, matures on February 7, 2013,
and is convertible at the holder’s discretion into the greater of 55% of the average of the lowest three (3) trading prices
over the ten (10) day trading period prior to the conversion date, or $0.001 per share.



On August 6, 2012 the Company issued another
unsecured convertible promissory note, for proceeds of $20,000, which carries an 8% interest rate, matures on February 7, 2013,
and is convertible at the holder’s discretion into the greater of 55% of the average of the lowest three (3) trading prices
over the ten (10) day trading period prior to the conversion date, or $0.001 per share.





Common Stock Issuances





On August 13, 2012, the Company issued
1,500,000 shares of common stock pursuant to a debt holder’s request to convert $1,500 of principal on an original $20,000
convertible note. The note was converted in accordance with the conversion terms, therefore no gain or loss has been recorded.



On August 7, 2012, the Company issued 5,000,000
shares of common stock pursuant to a debt holder’s request to convert $5,000 of principal on an original $20,000 convertible
note. The note was converted in accordance with the conversion terms, therefore no gain or loss has been recorded.



On August 7, 2012, the Company issued another
5,000,000 shares of common stock pursuant to another debt holder’s request to convert $5,000 of principal on an original
$20,000 convertible note. The note was converted in accordance with the conversion terms, therefore no gain or loss has been recorded.



On July 30, 2012, the Company issued 5,000,000
shares of common stock pursuant to a debt holder’s request to convert $5,000 of principal on an original $20,000 convertible
note. The note was converted in accordance with the conversion terms, therefore no gain or loss has been recorded.



On July 30, 2012, the Company issued 4,000,000
shares of common stock pursuant to a debt holder’s request to convert $4,000 of principal on an original $20,000 convertible
note. The note was converted in accordance with the conversion terms, therefore no gain or loss has been recorded.



On July 19, 2012, the Company issued 8,333,333
shares of common stock pursuant to a debt holder’s request to convert $8,333 of principal on a convertible note. The note
was converted in accordance with the conversion terms, therefore no gain or loss has been recorded.





14









Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.



SPECIAL NOTE REGARDING FORWARD—LOOKING
STATEMENTS



On one or more occasions, we may make forward-looking
statements in this Quarterly Report on Form 10-Q regarding our assumptions, projections, expectations, targets, intentions or beliefs
about future events. Words or phrases such as “anticipates,” “may,” “will,” “should,”
“believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,”
“projects,” “targets,” “will likely result,” “will continue” or similar expressions
identify forward-looking statements. Readers are cautioned that these forward-looking statements are only predictions and are subject
to risks, uncertainties, and assumptions that are difficult to predict, including those identified in our Annual Report on Form
10-K. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. We
undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future
events or otherwise. However, your attention is directed to any further disclosures made on related subjects in our subsequent
annual and periodic reports filed with the Securities and Exchange Commission on Forms S-1, 10-K, 10-Q and 8-K and Proxy Statements
on Schedule 14A.



Unless the context requires otherwise,
references to “we,” “us,” “our,” and the “Company” refer specifically to FrogAds
Inc.



OVERVIEW AND OUTLOOK



FrogAds was formed in the state of Nevada
on February 11, 2010 to establish an internet bulletin board site whereby visitors can list items for sale or trade, read news
articles, or find service providers. FrogAds expects to generate a large inventory of classified ads. On November 26, 2010 we purchased
a software platform which gave the company the ability to offer online posting of classified ads free to the public, where you
can find automobiles, boats, jobs and services of all kinds. We are offering free online classified ads that we believe is redefining
the way consumers buy and sell products and services. For consumers, the goal is to provide the most effective and economical posting
of classified ads. Consumers can post classified ads for free on the FrogAds.com website for products and services. Consumers can
also view all posted classified ads at no charge. Companies pay to post banner advertisements on the website. We expect to generate
a large inventory of product and service ads over the next year. The listings are free to the seller and buyer, however, we sell
“advertisements’ or “banner ads” on our internet site directed towards the internet users. We generate
our revenue from the sale of such advertisements. On October 12, 2011 we changed our name to FrogAds, Inc. as it more accurately
reflects the business operations of the company.



We are a development stage company with
a limited history of operations. We plan to market FrogAds through a combination of direct sales, referrals and networking within
the industry.



Over the next twelve months, we plan to
build our reputation and develop a network in the internet based bulletin board service which will provide free listings of products
and services for sale to the general public thereby attracting new advertisers to the bulletin board.



Management feels the Company’s continuation
as a going concern depends upon its ability to obtain additional sources of capital and financing. Specifically, management intends
to raise additional permanent capital through debt instruments such as bank loans, or private financing. The goal of this effort
is to provide working capital for the next year. Our twelve month operating plan is dependent on raising additional permanent capital
through debt instruments such as bank loans, or private financing. Presently we do not have any existing sources or plans for financing.



15







Results of Operations for the Three Months Ended June 30,
2012 and 2011:



|                                           |  | For the three |          |   | For the three |   |         |            | 
|------------------------------------------ |  | ------------- | -------- | - | ------------- | - | ------- | ---------- | 
|                                           |  | months ended  |          |   | months ended  |   |         | Increase / | 
|                                           |  | June 30, 2012 |          |   | June 30, 2011 |   |         | (Decrease) | 
|                                           |  |               |          |   |               |   |         |            | 
|Revenue                                    |  | $             | 675      |   |               | $ | –       |            | 
|                                           |  |               |          |   |               |   |         |            | 
|Operating expenses:                        |  |               |          |   |               |   |         |            | 
|Advertising                                |  |               | 91,369   |   |               |   | 17,583  |            | 
|Depreciation                               |  |               | 531      |   |               |   | 531     |            | 
|General and administrative                 |  |               | 99,573   |   |               |   | 38,109  |            | 
|Professional fees                          |  |               | 613,995  |   |               |   | 13,717  |            | 
|                                           |  |               |          |   |               |   |         |            | 
|Total operating expenses                   |  |               | 805,468  |   |               |   | 69,940  |            | 
|                                           |  |               |          |   |               |   |         |            | 
|Net operating loss                         |  |               | (804,793 | ) |               |   | (69,940 | )          | 
|                                           |  |               |          |   |               |   |         |            | 
|Interest expense                           |  |               | (171,937 | ) |               |   | (199    | )          | 
|                                           |  |               |          |   |               |   |         |            | 
|Net loss before provision for income taxes |  |               | (976,730 | ) |               |   | (70,139 | )          | 
|                                           |  |               |          |   |               |   |         |            | 
|Provision for income taxes                 |  |               | –        |   |               |   | –       |            | 
|                                           |  |               |          |   |               |   |         |            | 
|Net loss                                   |  | $             | (976,730 | ) |               | $ | (70,139 | )          | 



Revenues:



For the three months ended June 30 2012
and 2011, we received revenues of $675 and $-0-, respectively, from selling banner ads on our website. This represents a decrease
of $675 or 100%. The increase was a result of the receipt of advertising revenues recognized during the three months ended June
30, 2012 that were not realized during the comparative three months ended June 30, 2011. As a result of our lack of revenues we
re-entered the development stage on July 1, 2011.



Advertising:



Advertising expenses were $91,369 for the
three months ended June 30, 2012 compared to $17,583 for the three months ended June 30, 2011, an increase of $73,786 or 420%.
Our advertising expenses consisted primarily of costs associated with marketing our Company through television and internet advertising,
as well as, local advertising campaigns utilizing automobile graphics. The increase was due to an increase in advertising spending
in the three months ended June 30, 2012 compared to the three months ended June 30, 2011 as the resources were unavailable at that
time. We have begun to increase our advertising focus and anticipate increased advertising expenses in the future.



Depreciation:



Depreciation expenses for the three months
ended June 30, 2012 and 2011 was $531 and $531 respectively, representing an increase of $0 or 0%. Depreciation was the same for
both periods as there were no new assets put into service and the assets are not yet fully depreciated.



General and Administrative:



General and administrative expenses for
the three months ended June 30, 2012 and 2011 was $99,573 and $38,109 respectively, representing an increase of $61,464 or 161%.
The increase in general and administrative expenses consisted primarily of compensation to employees, rent and other costs associated
with opening additional offices during the three months ended June 30, 2012 that were not present during the comparative three
months ended June 30, 2011. Officer compensation also increased from $30,000 per quarter until April 1, 2012 when it increases
to $45,000 per quarter, or $180,000 on an annualized basis.

16







Professional Fees:



Professional fees for the three months
ended June 30, 2012 and 2011 was $613,995 and $13,717 respectively, representing an increase of $600,278 or 4,376%. The increase
was primarily due to professional fees related to consulting agreements that were not incurred during the three months ended June
30, 2011.



Net Operating Loss:



Net operating loss for the three months
ended June 30, 2012 was $804,793 compared to a net operating loss of $69,940 for the three months ended June 30, 2011, an increase
of $734,853, or 1,051%. Net operating loss increased primarily as a result of our consulting agreements and the opening of additional
offices.



Total Other Expense:



Total other expense was $171,937 for the
three months ended June 30, 2012 compared to $199 for three months ended June 30, 2011, an increase of $171,738, or 86,301%. The
increase in total other expense was due to interest expenses incurred on additional promissory notes payable that were present
during the three months ended June 30, 2012 that were not present in the comparative three month period ended June 30, 2011.



Net Loss:



The net loss for the three months ended
June 30, 2012 was $976,730, compared to a net loss of $70,139 for the three months ended June 30, 2011, an increased net loss of
$906,591, or 1,293%. Net loss increased primarily as a result of our consulting agreements, the establishment of additional offices,
along with additional interest expense incurred on promissory notes that existed on June 30, 2012 were not realized during the
comparative three months ended June 30, 2011.



17







LIQUIDITY AND CAPITAL RESOURCES



The following table summarizes total assets, total liabilities,
retained earnings, accumulated deficit, stockholders’ equity (deficit) and working capital at June 30, 2012 compared to March
31, 2012.



|                               |  | June 30, |            |   | March 31, |  
|------------------------------ |  | -------- | ---------- | - | --------- | -
|                               |  | 2012     |            |   | 2012      |  
|Total Assets                   |  | $        | 33,898     |   |           | $
|                               |  |          |            |   |           |  
|Total Liabilities              |  | $        | 427,625    |   |           | $
|                               |  |          |            |   |           |  
|Retained Earnings (Deficit)    |  | $        | (1,661,907 | ) |           | $
|                               |  |          |            |   |           |  
|Stockholders’ Equity (Deficit) |  | $        | (393,727   | ) |           | $
|                               |  |          |            |   |           |  
|Working Capital                |  | $        | (400,998   | ) |           | $



Our principal source of operating capital
has been derived from private sales of our common stock, loans from our officer and others, and revenues from operations. At June
30, 2012 we had a working capital deficit of $400,998. As we continue to implement our business plan and attempt to expand operational
activities, we expect to continue to experience net negative cash flows from operations in amounts not
now determinable, and will be required to obtain additional financing to fund operations through common stock offerings and debt
borrowings to the extent necessary to provide working capital. We have, and expect to continue to have, substantial capital expenditure
and working capital needs. We do not now have funds sufficient to fund our operations at their current level for the next twelve
months. We need to raise additional cash to fund our operations and implement our business plan. We expect that the additional
financing will (if available) take the form of a private placement of equity, although we may be constrained to obtain additional
debt financing in lieu thereof. We are maintaining an on-going effort to locate sources of additional funding, without which we
will not be able to remain a viable entity. No financing arrangements are currently under contract, and there are no assurances
that we will be able to obtain adequate financing. If we are able to obtain the financing required to remain in business, eventually
achieving operating profits will require substantially increasing revenues or drastically reducing expenses from their current
levels or both. If we are able to obtain the required financing to remain in business, future operating results depend upon a number
of factors that are outside of our control.



We received a total of $96,000 from four
individuals in exchange for unsecured promissory notes, carrying a 7% interest rate, payable eighteen months from the origination
dates between July 29, 2011 and September 30, 2011. Interest is payable on the first day of January and the first day of June each
year until repaid.



We have also received $270,000 from two
different organizations in exchange for six unsecured convertible promissory note, carrying an 8% interest rate, convertible into
common stock at $0.20 per share at the holder’s discretion, maturing on various dates between November 16, 2012 and February
12, 2013. $50,000 of these convertible notes, along with accrued interest have been converted into 4,333,000 shares common stock
on May 1, 2012



We have also received $410,000 from two
different organizations in exchange for eighteen unsecured convertible promissory note, carrying an 8% interest rate, convertible
into common stock at 55% of the average of the three lowest bid prices over the 10 days prior to conversion, or $0.05 per share
whichever is greater, maturing on various dates between August 24, 2012 and December 29, 2012.



Satisfaction of our Cash Obligations
for the Next 12 Months



As of June 30, 2012, our cash balance was
$667. Our plan for satisfying our cash requirements for the next twelve months is through sales-generated income, sale of shares
of our common stock, third party financing, and/or traditional bank financing. We anticipate sales-generated income during that
same period of time, but do not anticipate generating sufficient amounts of revenues to meet our working capital requirements.
Consequently, we intend to make appropriate plans to secure sources of additional capital in the future to fund growth and expansion
through additional equity or debt financing or credit facilities.



Going Concern





Our financial statements are prepared
using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplate
the realization of assets and liquidation of liabilities in the normal course of business. We have produced net losses of $976,730
and $70,139 for the three months ended June 30, 2012 and 2011, respectively, has retained earnings (deficit) of ($1,661,907) and
($685,177) at June 30, 2012 and March 31, 2012, respectively. The Company’s cash on hand is insufficient to sustain operations
for the next twelve months. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
Management is currently seeking additional sources of capital to fund short term operations. The Company, however, is dependent
upon its ability to secure equity and/or debt financing and there are no assurances that the Company will be successful, therefore,
without sufficient financing it would be unlikely for the Company to continue as a going concern. The Company’s ability
to continue as a going concern must be considered in light of the problems, expenses, and complications frequently encountered
by entrance into established markets and the competitive nature in which we operate.







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Our ability to continue as a going concern
is dependent on our ability to generate sufficient cash from operations to meet our cash needs and/or to raise funds to finance
ongoing operations and repay debt. There can be no assurance, however, that we will be successful in our efforts to raise additional
debt or equity capital and/or that our cash generated by our future operations will be adequate to meet our needs. These factors,
among others, indicate that we may be unable to continue as a going concern for a reasonable period of time.





Item 3. Quantitative and Qualitative Disclosures About Market
Risks



Not applicable.





Item 4. Controls and Procedures



Evaluation of Disclosure Controls and Procedures



Our CEO, Julian
Spitari, carried out an evaluation, under the supervision and with the participation of our management, including our principal
executive officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a –
15(c) and 15d – 15(e)). Based upon that evaluation, our principal executive officer concluded that, as of the end of the
period covered in this report, our disclosure controls and procedures were not effective to ensure that information required to
be disclosed in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within
the required time periods and is accumulated and communicated to our management, including our principal executive officer, as
appropriate to allow timely decisions regarding required disclosure.Based on the evaluation, Mr. Spitari concluded that
our disclosure controls and procedures are not effective in timely alerting him to material information relating to us (including
our consolidated subsidiaries) required to be included in our periodic SEC filings and ensuring that information required to be
disclosed by us in the reports we file or submit under the Act is accumulated and communicated to our management, including our
chief financial officer, or person performing similar functions, as appropriate to allow timely decisions regarding required disclosure,
for the following reasons:



|· | The Company does not have an independent board of directors or audit committee or adequate segregation of duties.
|- | -----------------------------------------------------------------------------------------------------------------



|· | We do not have an independent body to oversee our internal controls over financial reporting and lack segregation of duties due to the limited nature and resources of the Company.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Inherent Limitations of Internal Controls



Our Principal Executive Officer does not
expect that our disclosure controls or internal controls will prevent all error and all fraud. Although our disclosure controls
and procedures were designed to provide reasonable assurance of achieving their objectives, a control system, no matter how well
conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the system are met. Further,
the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be
considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide
absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent
limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple
error or mistake. Additionally, controls can be circumvented if there exists in an individual a desire to do so. There can be no
assurance that any design will succeed in achieving its stated goals under all potential future conditions.



Changes in Internal Control over Financial Reporting



There were no changes in our internal control
over financial reporting, other than those stated above, during our most recent fiscal quarter that have materially affected, or
are reasonably likely to materially affect, our internal control over financial reporting.



19







PART II OTHER INFORMATION



Item 1. Legal Proceedings



From time to time, we may become involved
in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent
uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are not
presently a party to any material litigation, nor to the knowledge of management is any litigation threatened against us, which
may materially affect us.





Item 1A. Risk Factors



Not applicable.





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



On June 2, 2012, the Company issued 2,307,026
shares of common stock pursuant to a debt holder’s request to convert an outstanding debt in the amount of $26,000, which
consisted of $25,000 of principal and $1,000 of accrued interest. The note was converted in accordance with the conversion terms,
therefore no gain or loss has been recorded.



On June 1, 2012, the Company issued 2,025,974
shares of common stock pursuant to a debt holder’s request to convert an outstanding debt in the amount of $25,377, which
consisted of $25,000 of principal and $377 of accrued interest. The note was converted in accordance with the conversion terms,
therefore no gain or loss has been recorded.



On May 1, 2012, the Company granted 4,000,000
shares of S-8 common stock for consulting services. The fair value of the common stock was $110,000 based on the closing price
of the Company’s common stock on the date of grant.



On May 1, 2012, the Company granted 1,000,000
shares of S-8 common stock for consulting services. The fair value of the common stock was $440,000 based on the closing price
of the Company’s common stock on the date of grant.





Item 3. Defaults Upon Senior Securities



None





Item 5. Other Information



On July 25, 2012, a closely held voting
majority of the shareholders approved an amendment to the Company’s Articles of Incorporation which increased the number
of authorized shares of common stock from 200,000,000 shares to 900,000,000 shares of its $0.001 par value common stock.





Item 6. Exhibits



|Exhibit |  | Description                                                                     
|------- |  | --------------------------------------------------------------------------------
|        |  |                                                                                 
|3.1 *   |  | Certificate of Amendment to Articles of Incorporation, July 25, 2012            
|31.1 *  |  | Section 302 Certification of Chief Financial Officer and Chief Financial Officer
|32.1 *  |  | Section 906 Certification of Chief Executive Officer and Chief Financial Officer





|101.INS ** |  | XBRL Instance Document             
|---------- |  | -----------------------------------
|101.SCH ** |  | XBRL Schema Document               
|101.CAL ** |  | XBRL Calculation Linkbase Document 
|101.DEF ** |  | XBRL Definition Linkbase Document  
|101.LAB ** |  | XBRL Label Linkbase Document       
|101.PRE ** |  | XBRL Presentation Linkbase Document







* Filed herewith.



** Pursuant to Rule 405(a)(2) of Regulation S-T, the
Company will furnish the XBRL Interactive Data Files with detailed footnote tagging as Exhibit 101 in an amendment to this
Form 10-Q within the permitted 30-day grace period granted for the first quarterly period in which detailed footnote tagging
is required.





20







SIGNATURES



In accordance with the requirements of the Exchange Act, the
registrant caused this Report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.



Date: August 20, 2012



| | FrogAds, Inc.                                                
| | -------------------------------------------------------------
| |                                                              
| | /s/ Julian Spitari                                           
| | Julian Spitari                                               
| | Chief Executive Officer                                      
| | (Principal Executive Officer and Principal Financial Officer)















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