UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-Q



Mark one:

xQUARTERLY
REPORT UNDER SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934



For Quarter Ended June 30, 2015



OR



oTRANSITION
REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE

SECURITIES EXCHANGE ACT OF 1934.



For the transition period from to _______



Commission File Number 000-32695



Amaru, Inc.

(Exact name of registrant as specified in its
charter.)



|Nevada                   | 88-0490089                       
|------------------------ | ---------------------------------
|(State of Incorporation) | (IRS Employer Identification No.)



35 Tai Seng l Street, #01-01 Tata Communications
Exchange, Singapore 534103

(Address of principal executive offices) (Zip
Code)



Registrant's telephone number, including area
code (65) 6309 3055



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. YesxNoo



Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No
o



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



|Large accelerated reporting filero    | Accelerated filero
|------------------------------------- | ------------------
|Non-accelerated filero                | Smaller companyx  
|(Do not check if a smaller reporting) |                   



Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. YesoNox



Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.



|Common Stock $0.001 par value | 203,911,303 shares            
|----------------------------- | ------------------------------
|(Class)                       | (Outstanding at June 30, 2015)













AMARU, INC. AND SUBSIDIARIES

Quarterly Report on Form 10-Q for the Period
Ended June 30, 2015

Table of Contents



|                                                                                               | PAGE       
|---------------------------------------------------------------------------------------------- | -----------
|PART I:  FINANCIAL INFORMATION                                                                 | F-1        
|                                                                                               |            
|ITEM 1:  CONSOLIDATED FINANCIAL STATEMENTS                                                     | F-1        
|Consolidated Balance Sheets                                                                    | F-1        
|Consolidated Statements of Operations                                                          | F-2        
|Consolidated Statement of Stockholders’ Deficit                                                | F-3        
|Consolidated Statements of Cash Flows                                                          | F-4        
|Notes to Consolidated Financial Statements                                                     | F-5 to F-11
|                                                                                               |            
|ITEM 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 1          
|                                                                                               |            
|ITEM 3:  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                            | 4          
|                                                                                               |            
|ITEM 4:  CONTROLS AND PROCEDURES                                                               | 5          
|                                                                                               |            
|                                                                                               |            
|PART II:  OTHER INFORMATION                                                                    | 7          
|                                                                                               |            
|ITEM 1:  LEGAL PROCEEDINGS                                                                     | 7          
|ITEM 1A: RISK FACTORS                                                                          | 7          
|ITEM 2:  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS                           | 11         
|ITEM 3:  DEFAULTS UPON SENIOR SECURITIES                                                       | 11         
|ITEM 4:  MINE SAFETY DISCLOSURES                                                               | 11         
|ITEM 5:  OTHER INFORMATION                                                                     | 11         
|ITEM 6:  EXHIBITS                                                                              | 11         
|                                                                                               |            
|SIGNATURES                                                                                     | 12         





i







PART I. FINANCIAL INFORMATION

Item 1. Financial Statements



AMARU, INC. AND SUBSIDIARIES



CONSOLIDATED BALANCE SHEETS (IN U.S. $)

JUNE 30, 2015 AND DECEMBER 31, 2014








|                                                                                                                                                                                                   |  | June 30, 2015 |             |   | December 31,  2014 |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ----------- | - | ------------------ | -
|                                                                                                                                                                                                   |  | (Unaudited)   |             |   |                    |  
|ASSETS                                                                                                                                                                                             |  |               |             |   |                    |  
|Current assets                                                                                                                                                                                     |  |               |             |   |                    |  
|Cash                                                                                                                                                                                               |  | $             | 13,477      |   |                    | $
|Accounts receivable, net of allowance of $243,818 and $244,863 at June 30, 2015 and December 31, 2014, respectively                                                                                |  |               | 65,129      |   |                    |  
|Other
    current assets, net of allowance of $119,439 at June 30, 2015 and December
    31, 2014, respectively                                                                                    |  |               | 59,743      |   |                    |  
|                                                                                                                                                                                                   |  |               |             |   |                    |  
|Total current assets                                                                                                                                                                               |  |               | 138,349     |   |                    |  
|                                                                                                                                                                                                   |  |               |             |   |                    |  
|Non-current assets                                                                                                                                                                                 |  |               |             |   |                    |  
|Property, plant and equipment, net                                                                                                                                                                 |  |               | 23,270      |   |                    |  
|                                                                                                                                                                                                   |  |               |             |   |                    |  
|TOTAL ASSETS                                                                                                                                                                                       |  | $             | 161,619     |   |                    | $
|                                                                                                                                                                                                   |  |               |             |   |                    |  
|LIABILITIES AND STOCKHOLDERS’ DEFICIT                                                                                                                                                              |  |               |             |   |                    |  
|                                                                                                                                                                                                   |  |               |             |   |                    |  
|Current liabilities                                                                                                                                                                                |  |               |             |   |                    |  
|Accounts payable and accrued expenses                                                                                                                                                              |  | $             | 1,832,646   |   |                    | $
|Advances from related parties                                                                                                                                                                      |  |               | 300,403     |   |                    |  
|Term loan – in default                                                                                                                                                                             |  |               | 1,499,750   |   |                    |  
|                                                                                                                                                                                                   |  |               |             |   |                    |  
|Total current liabilities                                                                                                                                                                          |  |               | 3,632,799   |   |                    |  
|                                                                                                                                                                                                   |  |               |             |   |                    |  
|Total liabilities                                                                                                                                                                                  |  |               | 3,632,799   |   |                    |  
|                                                                                                                                                                                                   |  |               |             |   |                    |  
|Stockholders’ deficit                                                                                                                                                                              |  |               |             |   |                    |  
|Preferred stock Series B Convertible (par value $0.001) 50,000,000 shares authorized; 23,687,478 and 20,167,478 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively |  |               | 23,687      |   |                    |  
|Common stock (par value $0.001) 1,000,000,000 shares authorized; 203,911,303 and 202,911,303 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively                    |  |               | 203,911     |   |                    |  
|Additional paid-in capital                                                                                                                                                                         |  |               | 44,566,528  |   |                    |  
|Accumulated deficit                                                                                                                                                                                |  |               | (44,368,489 | ) |                    |  
|                                                                                                                                                                                                   |  |               |             |   |                    |  
|Total Amaru Inc.’s stockholders’ equity                                                                                                                                                            |  |               | 425,637     |   |                    |  
|Non-controlling interests                                                                                                                                                                          |  |               | (3,896,817  | ) |                    |  
|                                                                                                                                                                                                   |  |               |             |   |                    |  
|Total stockholders’ deficit                                                                                                                                                                        |  |               | (3,471,180  | ) |                    |  
|                                                                                                                                                                                                   |  |               |             |   |                    |  
|TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT                                                                                                                                                        |  | $             | 161,619     |   |                    | $



See accompanying notes to the consolidated financial statements.





F-1







amaru,
Inc. and subsidiaries



CONSOLIDATED STATEMENTS OF OPERATIONS (IN
U.S. $)

FOR THE
THREE AND SIX MONTHS ENDED jUNE 30, 2015 and 2014 (Unaudited)



|                                                       |  | Three Months EndedJune 30, |             |   | Six Months EndedJune 30, |  
|------------------------------------------------------ |  | -------------------------- | ----------- | - | ------------------------ | -
|                                                       |  | 2015                       |             |   | 2014                     |  
|Revenues                                               |  | $                          | 26,330      |   |                          | $
|Cost of services                                       |  |                            | (29,137     | ) |                          |  
|                                                       |  |                            |             |   |                          |  
|Gross (loss)                                           |  |                            | (2,807      | ) |                          |  
|                                                       |  |                            |             |   |                          |  
|Operating expenses                                     |  |                            |             |   |                          |  
|Distribution costs                                     |  |                            | 7,093       |   |                          |  
|Administrative expenses                                |  |                            | 267,573     |   |                          |  
|                                                       |  |                            |             |   |                          |  
|Total expenses                                         |  |                            | 274,666     |   |                          |  
|                                                       |  |                            |             |   |                          |  
|(Loss) from operations                                 |  |                            | (277,473    | ) |                          |  
|                                                       |  |                            |             |   |                          |  
|Other income (expense)                                 |  |                            |             |   |                          |  
|Interest expenses                                      |  |                            | (25,568     | ) |                          |  
|Other                                                  |  |                            | 22,248      |   |                          |  
|                                                       |  |                            |             |   |                          |  
|Net (loss) before noncontrolling interests             |  |                            | (280,793    | ) |                          |  
|Noncontrolling interests                               |  |                            | (50,287     | ) |                          |  
|                                                       |  |                            |             |   |                          |  
|Net (loss) attributable to common stockholders         |  | $                          | (230,506    | ) |                          | $
|                                                       |  |                            |             |   |                          |  
|Loss per share, basic and diluted                      |  | $                          | (0.00       | ) |                          | $
|                                                       |  |                            |             |   |                          |  
|Weighted average shares outstanding, basic and diluted |  |                            | 203,911,303 |   |                          |  



See accompanying notes to the consolidated
financial statements.





F-2







AMARU, INC. AND SUBSIDIARIES



CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT (IN U.S. $)

FOR THE SIX MONTHS ENDED JUNE 30, 2015 (UNAUDITED)








|                                     |  | Preferred stock                                                                                 |            |  | Common stock                                                |   |        | Additional                                                                                         |  |  |                    |  |  | Non-           |         |  | Total               |  
|------------------------------------ |  | ----------------------------------------------------------------------------------------------- | ---------- |  | ----------------------------------------------------------- | - | ------ | -------------------------------------------------------------------------------------------------- |  |  | ------------------ |  |  | -------------- | ------- |  | ------------------- | -
|                                     |  | Number of
                                                                               shares |            |  | Par
                                         value
($0.001) |   |        | Number
                                         of
                                         shares |  |  | Par value
($0.001) |  |  | paid-incapital |         |  | Accumulated
deficit |  
|Balance at December 31, 2014         |  |                                                                                                 | 20,167,478 |  |                                                             | $ | 20,167 |                                                                                                    |  |  | 202,911,303        |  |  | $              | 202,911 |  |                     | $
|Issuance of preferred stock          |  |                                                                                                 | 3,520,000  |  |                                                             |   | 3,520  |                                                                                                    |  |  | –                  |  |  |                | –       |  |                     |  
|Issuance of common stock             |  |                                                                                                 | –          |  |                                                             |   | –      |                                                                                                    |  |  | 1,000,000          |  |  |                | 1,000   |  |                     |  
|Net loss                             |  |                                                                                                 | –          |  |                                                             |   | –      |                                                                                                    |  |  | –                  |  |  |                | –       |  |                     |  
|Balance at June 30, 2015 (unaudited) |  |                                                                                                 | 23,687,478 |  |                                                             | $ | 23,687 |                                                                                                    |  |  | 203,911,303        |  |  | $              | 203,911 |  |                     | $



See accompanying notes to the consolidated financial statements.





F-3







Amaru, Inc. and subsidiaries



CONSOLIDATED STATEMENTS OF CASH FLOWS (IN
U.S. $)

FOR THE
SIX months ENDED June 30, 2015 AND 2014
(unaudited)








|                                                                                         |  | Six Months Ended 
    June 30 |         
|---------------------------------------------------------------------------------------- |  | ----------------------------- | --------
|                                                                                         |  | 2015                          |         
|Cash flows from operating activities                                                     |  |                               |         
|Net loss                                                                                 |  | $                             | (436,514
|Adjustment to reconcile net loss to net cash provided by (used in) operating activities: |  |                               |         
|Depreciation                                                                             |  |                               | 6,484   
|Change in operating assets and liabilities                                               |  |                               |         
|(Increase) decrease in accounts receivable                                               |  |                               | (61,447 
|Decrease (Increase) in other current assets                                              |  |                               | 11,532  
|Increase in accounts payable and accrued
expenses                                        |  |                               | 68,158  
|                                                                                         |  |                               |         
|Net cash (used in) operating activities                                                  |  |                               | (411,787
|                                                                                         |  |                               |         
|                                                                                         |  |                               |         
|Cash flows from investing activities                                                     |  |                               |         
|Acquisition of equipment                                                                 |  |                               | (1,149  
|                                                                                         |  |                               |         
|Net cash (used in) financing activities                                                  |  |                               | (1,149  
|                                                                                         |  |                               |         
|                                                                                         |  |                               |         
|Cash flows from financing activities                                                     |  |                               |         
|Proceeds from sale of preferred stock                                                    |  |                               | 352,000 
|Proceeds from sale of common stock                                                       |  |                               | 50,000  
|                                                                                         |  |                               |         
|Net cash provided by financing activities                                                |  |                               | 402,000 
|                                                                                         |  |                               |         
|Net (decrease) increase in cash                                                          |  |                               | (10,936 
|Cash and cash equivalents at beginning of period                                         |  |                               | 24,413  
|                                                                                         |  |                               |         
|Cash and cash equivalents at end of period                                               |  | $                             | 13,477  
|                                                                                         |  |                               |         
|Supplemental disclosure of cash flow information                                         |  |                               |         
|Cash paid for interest                                                                   |  | $                             | –       
|Cash paid for income taxes                                                               |  | $                             | –       



See accompanying notes to the consolidated financial statements.





F-4







AMARU, INC. AND SUBSIDIARIES



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2015 AND 2014 (UNAUDITED)





1. ORGANIZATION



Amaru, Inc. and Subsidiaries (the "Company")
is developing the business of broadband entertainment-on-demand, streaming via computers, television sets, PDAs (personal digital
assistant) and the provision of broadband services. Its business includes channel and program sponsorship (advertising and branding);
online subscriptions, channel/portal development (digital programming services); content aggregation and syndication, broadband
consulting services, broadband hosting and streaming services.



The key business focus of the Company is to
establish itself as the provider and creator of a new generation of entertainment-on-demand and e-commerce channels on broadband,
and 3G and 4G devices.



The Company delivers both wire and wireless
solutions, streaming via computers, TV sets, PDAS and 3G and 4G devices.



The Company's business model in the area of
broadband entertainment includes e-services, which the Company believes will provide it with multiple streams of revenue. Such
revenues are derived from advertising and branding (channel and program sponsorship); on-line subscriptions; channel/portal development
(digital programming services); content aggregation and syndication; broadband consulting services; broadband hosting and streaming
services, and on-line dealerships and pay per view services.



2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Basis of accounting and presentation



The consolidated financial statements include
the financial statements of Amaru, Inc. and its majority owned subsidiaries. All significant intercompany balances and transactions
have been eliminated in consolidation.



The unaudited interim consolidated financial
statements of the Company as of June 30, 2015 and for the three and six months periods ended June 30, 2015 and 2014, have been
prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations
of the SEC which apply to interim financial statements. Accordingly, they do not include all of the information and footnotes normally
required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion
of management, such information contains all adjustments, consisting only of normal recurring adjustments, necessary for a fair
presentation of the results for the periods presented. The interim consolidated financial information should be read in conjunction
with the consolidated financial statements and the notes thereto, included in the Company’s Form 10-K filed with the SEC.
The results of operations for three and the six months ended June 30, 2015 are not necessarily indicative of the results to be
expected for future quarters or for the year ending December 31, 2015.



All consolidated financial statements and notes
to the consolidated financial statements are presented in United States dollars (“US Dollar” or “US$” or
“$”).



Presentation as a going concern



The accompanying condensed consolidated financial
statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which
contemplate continuation of the Company as a going concern. The Company has generated recurring losses from operations of approximately
$277,000 and $406,000 for the three months ended June 30, 2015 and 2014, respectively. And the Company has generated losses from
operations of approximately $483,000 and $621,000 for the six months ended June 30, 2015 and 2014, respectively. These continued
losses have created an accumulated deficit of approximately $44,368,000 as of June 30, 2015. The company is in default of its term
loan and is subject to the continued forbearance of the lender. The Company also has a working capital deficit of approximately
$3,494,000 at June 30, 2015. The Company has had and continues to have difficulty in raising adequate additional funding.



These factors raise substantial doubt about
the Company's ability to continue as a going concern. The Company will require additional financing in order to execute its operating
plan and continue as a going concern. The Company cannot predict whether this additional financing will be in the form of equity,
debt or another form. The Company may not be able to obtain the necessary additional capital on a timely basis, on acceptable terms,
or at all. The Company plans to attempt to address its working capital deficiency by increasing its sales, maintaining strict expense
controls and seeking strategic alliances.





F-5







In the event that these financing sources do
not materialize, or the Company is unsuccessful in increasing its revenues and achieving adequate profitable operations, the Company
will be forced to further reduce its costs, will be unable to repay its debt obligations currently in default or respond to competitive
pressures, any of which circumstances would have a material adverse effect on its business, prospects, financial condition and
results of operations.



The financial statements do not include any
adjustments relating to the recoverability and reclassification of recorded asset amounts or amounts and reclassification of liabilities
that might be necessary, should the Company be unable to continue as a going concern.



Use of estimates



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



Cash



The Company considers all demand and time deposits
and all highly liquid investments with an original maturity of three months or less to be cash equivalents.



Accounts receivable



Accounts receivable is stated at cost, net
of an allowance for doubtful accounts, if required. Receivables outstanding longer than the payment terms are considered past due.
The Company maintains an allowance for doubtful accounts for estimated losses when necessary resulting from the failure of customers
to make required payments. The Company reviews the accounts receivable on a periodic basis and makes allowances where there is
doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the
Company considers many factors, including the age of the balance, the customer’s payment history, its current credit-worthiness
and current economic trends.



Property and equipment



Property, plant and equipment are recorded
at cost, less accumulated depreciation. Cost includes the price paid to acquire or construct the asset, including capitalized interest
during the construction period, and any expenditures that substantially increase the assets value or extend the useful life of
an existing asset. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Major
repairs and betterments that significantly extend original useful lives or improve productivity are capitalized and depreciated
over the periods benefited. Maintenance and repairs are generally expensed as incurred. The estimated useful lives of the assets
range from 3 to 5 years.



Film library



The Company's film library includes movies,
dramas, comedies and documentaries in which the Company has acquired distribution rights from a third party.



The Company completed an impairment evaluation
in the fourth quarter 2009 and the film library was determined to be impaired. In conducting the analysis, the Company used a discounted
cash flow approach in estimating fair value as market values could not be readily determined given the unique nature of the respective
assets. Based upon the analysis the Company determined that carrying amount of the film library was fully impaired, as reflected
Note 6.



Valuation of long-lived assets



The Company accounts for long-lived assets
under the Financial Accounting Standard Board (“FASB”) Accounting Standards Codification (“ASC”), ASC 360,
“Accounting for the Impairment or Disposal of Long-Lived Assets”. Management assesses the recoverability of its long-lived
assets, which consist primarily of fixed assets and intangible assets with finite useful lives, whenever events or changes in circumstance
indicate that the carrying value may not be recoverable. The following factors, if present, may trigger an impairment review: (i)
significant underperformance relative to expected historical or projected future operating results; (ii) significant negative industry
or economic trends; (iii) significant decline in the Company's stock price for a sustained period; and (iv) a change in the Company's
market capitalization relative to net book value. If the recoverability of these assets is unlikely because of the existence of
one or more of the above-mentioned factors, an impairment analysis is performed using a projected discounted cash flow method.
Management must make assumptions regarding estimated future cash flows and other factors to determine the fair value of these respective
assets. If these estimates or related assumptions change in the future, the Company may be required to record an impairment charge.
Impairment charges would be included in the Company's consolidated statements of operations, and would result in reduced carrying
amounts of the related assets on the Company's consolidated balance sheets.





F-6







Fair value of financial instruments



FASB ASC 820 establishes a fair value hierarchy
that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted
quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable
inputs (Level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described below:



Level 1 Inputs – Unadjusted quoted market
prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.



Level 2 Inputs – Quoted prices in markets
that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset
or liability.



Level 3 Inputs – Prices or valuation
techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or
no market activity).



FASB ASC 820 requires the use of observable
market data, when available, in making fair value measurements. When inputs used to measure fair value fall within different
levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that
is significant to the fair value measurements. Valuation techniques used need to maximize the use of observable inputs and minimize
the use of unobservable inputs. As of June 30, 2015 and December 31, 2014, none of the Company’s assets and liabilities were
required to be reported at fair value on a recurring basis. Carrying values of non-derivative financial instruments, including
cash, receivables and various payables, approximate their fair values due to the short term nature of these financial instruments.
There were no changes in methods or assumptions during the periods presented.



Advances from related party



Advances from a director and related party
of $300,403 at June 30, 2015 and December 31, 2014, are unsecured, non-interest bearing and payable on demand.



Foreign currency translation



Transactions in foreign currencies are measured
and recorded in the functional currency, U.S. dollars, using the Company's prevailing month exchange rate. The Company’s
reporting currency is also in U.S. dollars. Accordingly, the Company does not have any foreign currency conversion adjustments.



Revenues



The Company's primary sources of revenue are
from the sales of advertising space on interactive websites owned by the Company and subscription services.



The Company recognizes revenue in accordance
with FASB ASC 605-10, Revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement
exists, the service or product is performed or delivered and collectability of the resulting receivable is reasonably assured.



Website advertising revenue is recognized
on a cost per thousand impressions (CPM) or cost per click (CPC), and flat-fee basis. The Company earns CPM or CPC revenue from
the display of graphical advertisements. An impression is delivered when an advertisement appears in pages viewed by users. Revenue
from graphical advertisement impressions is recognized based on the actual impressions delivered in the period. Revenue from flat-fee
services is based on a customer's period of contractual service and is recognized on a straight-line basis over the term of the
contract. Proceeds from subscriptions are deferred and are included in revenue on a pro-rata basis over the term of the subscriptions.





F-7







Cost of services



The cost of services pertaining to advertising
and subscription and related services are the cost of bandwidth charges, channel design and alteration, copyright licensing, and
hardware hosting and maintenance costs. All these costs are accounted for in the period incurred.



Income taxes



Deferred income taxes are determined in accordance
with FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective
tax bases. Deferred income taxes are measured using enacted tax rates expected to apply to taxable income in years in which such
temporary differences are expected to be recovered or settled. In addition, deferred taxes are also recognized for operating losses
that are available to offset future taxable income. The effect on deferred income taxes of a change in tax rates is recognized
in the statement of operations in the period that includes the enactment date. A valuation allowance is established to reduce any
deferred tax asset for which it is determined that it is more likely than not that some portion of the deferred tax asset will
not be realized.



The Company files income tax returns in the
United States jurisdiction and certain states in the United States and certain other foreign jurisdictions. The Company is beyond
the statute of limitations subjecting it to U.S. state income tax examinations by tax authorities for years before 2011. No income
tax returns are currently under examination by any tax authorities.



(Loss) per share



The Company computes net income (loss) per
common share in accordance with FASB ASC 260, "Earnings Per Share" ("ASC 260") and SEC SAB 98. Under the provisions
of ASC 260 and SAB 98, basic net income (loss) per common share is computed by dividing the net income (loss) available to common
shareholders by the weighted average number of shares of common stock outstanding during the period. Diluted income per share includes
the effect of dilutive common stock equivalents from the assumed exercise of convertible preferred stock. The Company’s common
stock equivalents were excluded in the computation of diluted net (loss) per share since their inclusion would be anti-dilutive.
These common stock equivalents may dilute future earnings per share.



Advertising



The cost of advertising is expensed as incurred.
Advertising expenses were $2,193 and $44,615, respectively, for the three months ended June 30, 2015 and 2014, respectively, and
$2,193 and $47,798, for the six months ended June 30, 2015 and 2014, respectively.



3. RECENTLY ISSUED ACCOUNTING STANDARDS



In April 2015, the FASB issued ASU 2015-03,
Simplifying the Presentation of Debt Issuance Costs. The new standard will require debt issuance costs to be presented on the balance
sheet as a direct reduction of the carrying value of the associated debt liability, consistent with the presentation of debt discounts.
Currently, debt issuance costs are presented as a deferred asset. The recognition and measurement requirements will not change
as a result of this guidance. The standard is effective for the annual reporting periods beginning after December 15, 2015 and
will be applied on a retrospective basis. This amendment will not have a material impact on the Company’s financial statements.



In January 2015, the Financial Accounting Standards
Board ("FASB") issued Accounting Standards Update ("ASU") ASU 2015-01 – Income Statement – Extraordinary
and Unusual Items (Subtopic 225-20). This ASU addressed the simplification of income statement presentation by eliminating the
concept of extraordinary items. The objective of the Simplification Initiative is to identify, evaluate, and improve areas of generally
accepted accounting principles (GAAP) for which cost and complexity can be reduced while maintaining or improving the usefulness
of the information provided to the users of financial statements. The amendments in this Update are effective for fiscal years,
and interim periods within those fiscal years, beginning after December 15, 2015. A reporting entity may apply the amendments prospectively.
A reporting entity also may apply the amendments retrospectively to all prior periods presented in the financial statements. Early
adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The Company does
not expect a material impact on its consolidated statements of condition, results of operations, or cash flows.



In August 2014, the FASB issued authoritative
guidance that requires an entity’s management to evaluate whether there are conditions or events, considered in the aggregate,
that raise substantial doubt about the entity’s ability to continue as a going concern and requires additional disclosures
if certain criteria are met. This guidance is effective for fiscal periods ending after December 15, 2016, with early adoption
permitted. This accounting standard update is not expected to have any impact on the Company’s consolidated financial statements.





F-8







In June 2014, FASB issued ASU No. 2014-12,
“Accounting for Share-Based Payments When the terms of an award provide that a performance target could be achieved after
the requisite service period.” ASU 2014-12 requires a reporting entity to treat a performance target that affects vesting
and that could be achieved after the requisite service period as a performance condition. It is effective for annual periods, and
interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. This accounting standard
update is not expected to have a material impact on the Company’s consolidated financial statements.



In May 2014, the FASB issued ASU No. 2014-09,
“Revenue from Contracts with Customers,” which supersedes the revenue recognition requirements in ASC 605, “Revenue
Recognition.” The core principle of this updated guidance is that an entity should recognize revenue to depict the transfer
of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled
in exchange for those goods or services. The new rule also requires additional disclosures about the nature, amount, timing and
uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments
and assets recognized from costs incurred to obtain or fulfill a contract. This guidance is effective for annual reporting periods
beginning after December 15, 2016, including interim periods within that reporting period. The FASB has proposed deferred the effective
date to annual reporting periods beginning after December 15, 2017. Companies are permitted to adopt this new rule utilizing either
a full or modified retrospective approach. Early adoption is not permitted. The Company has not yet determined the potential impact
of this updated authoritative guidance on its consolidated financial statements.



4. OTHER CURRENT ASSETS



Other current assets consist of the following:



|                                                                                    |  | June 30, 
    2015 |        |  | December 31, 
2014 |  
|----------------------------------------------------------------------------------- |  | ------------------ | ------ |  | ------------------ | -
|                                                                                    |  | (Unaudited)        |        |  |                    |  
|                                                                                    |  |                    |        |  |                    |  
|Prepayments                                                                         |  | $                  | 29,204 |  |                    | $
|Deposits                                                                            |  |                    | 27,517 |  |                    |  
|Other
receivables, net of $119,439 allowance at June 30, 2015 and December 31, 2014 |  |                    | 3,022  |  |                    |  
|                                                                                    |  | $                  | 59,743 |  |                    | $



A $100,000 non-interest bearing loan that was
made to a third party has been included in other receivables as of June 30, 2015 and December 31, 2014. An allowance for the full
amount has been recorded due to the uncertainty of collection as of June 30, 2015 and December 31, 2014.



5. PROPERTY, PLANT AND EQUIPMENT



Property, plant and equipment consist of the following:



|                                |  | June 30, 
    2015 |            |   | December 31, 
2014 |  
|------------------------------- |  | ------------------ | ---------- | - | ------------------ | -
|                                |  | (Unaudited)        |            |   |                    |  
|                                |  |                    |            |   |                    |  
|Office equipment                |  | $                  | 968,057    |   |                    | $
|Motor vehicle                   |  |                    | 11,000     |   |                    |  
|Furniture, fixture and fittings |  |                    | 87,082     |   |                    |  
|Pony set-top boxes              |  |                    | 843,946    |   |                    |  
|                                |  |                    | 1,910,085  |   |                    |  
|Less: accumulated depreciation  |  |                    | (1,886,815 | ) |                    |  
|                                |  | $                  | 23,270     |   |                    | $



Depreciation expense was $3,239 and $2,046,
for the three months ended June 30, 2015 and 2014, respectively, $6,484 and $2,925 for the six months ended June 30, 2015 and 2014,
respectively.





F-9







6. FILM LIBRARY



The valuation of the film library is as follows:



|                           |  | June 30,
    2015 |             |   | December 31,
2014 |  
|-------------------------- |  | ----------------- | ----------- | - | ----------------- | -
|                           |  |                   | (Unaudited) |   |                   |  
|Acquired film library      |  | $                 | 23,686,731  |   |                   | $
|Accumulated amortization   |  |                   | (4,520,325  | ) |                   |  
|                           |  |                   | 19,166,406  |   |                   |  
|Impairment of film library |  |                   | (19,166,406 | ) |                   |  
|Film library               |  | $                 | –           |   |                   | $



There was no amortization expense was incurred for the three and
six months ended June 30, 2015 or 2014.



7. COMMITMENTS



Operating Lease



The Company leases office space on a month
to month basis at a monthly rental of approximately $9,000 under operating leases. Total rental expense was $26,696 and $26,731,
for the three months ended June 30, 2015 and 2014, respectively, $53,504 and $55,082 for the six months ended June 30, 2015 and
2014, respectively.



8. INCOME TAXES



The Company files separate tax returns for
Singapore and the United States of America.



The Company had available approximately $9,900,000
of unused U.S. net operating loss carry-forwards at June 30, 2015, that may be applied against future taxable income. These net
operating loss carry-forwards expire for U.S. income tax purposes beginning in 2033. There is no assurance the Company will realize
the benefit of the net operating loss carry-forwards.



The Company had approximately $5,274,000 in
deferred tax assets as of June 30, 2015 and the Company provided a full valuation allowance as of June 30, 2015.



The Company had available approximately $12,536,000
of unused Singapore tax losses and capital allowance carry-forwards at June 30, 2015 and December 31, 2014, respectively, that
may be applied against future Singapore taxable income indefinitely, provided the Company satisfies the shareholdings test for
the carry-forward of tax losses and capital allowances.



The Company requires
a valuation allowance to be recorded when it is more likely than not that some or all of the deferred tax assets will not be realized.
As of June 30, 2015, the Company maintained a full valuation allowance for the U.S. and Singapore deferred tax asset due to uncertainties
as to the amount that will be realized.



9. ACCOUNTS PAYABLE AND ACCRUED EXPENSES



Accounts payable and accrued expenses consist of the following:



|                                    |  | June 30, 
    2015 |           |  | December 31, 
2014 |  
|----------------------------------- |  | ------------------ | --------- |  | ------------------ | -
|                                    |  | (Unaudited)        |           |  |                    |  
|                                    |  |                    |           |  |                    |  
|Accounts payable                    |  | $                  | 557,904   |  |                    | $
|Accrued expenses                    |  |                    | 79,878    |  |                    |  
|Interest payable on term loan       |  |                    | 542,807   |  |                    |  
|Payroll payable                     |  |                    | 139,832   |  |                    |  
|Deposits and advance from customers |  |                    | 6,647     |  |                    |  
|Professional fees                   |  |                    | 335,797   |  |                    |  
|Other payable                       |  |                    | 169,781   |  |                    |  
|                                    |  | $                  | 1,832,646 |  |                    | $





F-10







10. TERM LOAN



|          |  | June 30,
        2015 |           |  | December 31, 
2014 |  
|--------- |  | --------------------- | --------- |  | ------------------ | -
|          |  | (Unaudited)           |           |  |                    |  
|          |  |                       |           |  |                    |  
|Term loan |  | $                     | 1,499,750 |  |                    | $
|          |  |                       |           |  |                    |  

The
convertible loan represented a two year convertible loan drawn down by a subsidiary Company, M2B World Asia Pacific Pte. Ltd.
It bears interest at a fixed rate of 5.0% per annum. The due date of this loan was July 7, 2010 and was convertible into shares
of the subsidiary at $0.942 per share through June 29, 2012. This loan is currently in default. M2B World Asia Pacific Pte. Ltd.
is negotiating to obtain a further extension on the loan. Interest expense was $25,568 and $24,324 for the three months ended
Jun 30, 2015 and 2014, respectively, $50,819 and $48,346 for the six months ended June 30, 2015 and 2014, respectively.



11. PREFERRED STOCK- SERIES B CONVERTIBLE



Each share of the company’s series B preferred stock is convertible
into 10 shares of common stock and entitles the holder to 10 votes. As of June 30, 2015 and December 31, 2014, there are outstanding
23,687,478 and 20,167,478 shares, respectively.





F-11







ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS



PRELIMINARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS



ALL FORWARD-LOOKING STATEMENTS CONTAINED HEREIN
ARE DEEMED BY THE COMPANY TO BE COVERED BY AND TO QUALIFY FOR THE SAFE HARBOR PROTECTION PROVIDED BY THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995. PROSPECTIVE SHAREHOLDERS SHOULD UNDERSTAND THAT SEVERAL FACTORS GOVERN WHETHER ANY FORWARD - LOOKING STATEMENT
CONTAINED HEREIN WILL BE OR CAN BE ACHIEVED. ANY ONE OF THOSE FACTORS COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
PROJECTED HEREIN. THESE FORWARD - LOOKING STATEMENTS INCLUDE PLANS AND OBJECTIVES OF MANAGEMENT FOR FUTURE OPERATIONS, INCLUDING
PLANS AND OBJECTIVES RELATING TO THE PRODUCTS AND THE FUTURE ECONOMIC PERFORMANCE OF THE COMPANY. ASSUMPTIONS RELATING TO THE FOREGOING
INVOLVE JUDGMENTS WITH RESPECT TO, AMONG OTHER THINGS, FUTURE ECONOMIC, COMPETITIVE AND MARKET CONDITIONS, FUTURE BUSINESS DECISIONS,
AND THE TIME AND MONEY REQUIRED TO SUCCESSFULLY COMPLETE DEVELOPMENT PROJECTS, ALL OF WHICH ARE DIFFICULT OR IMPOSSIBLE TO PREDICT
ACCURATELY AND MANY OF WHICH ARE BEYOND THE CONTROL OF THE COMPANY. ALTHOUGH THE COMPANY BELIEVES THAT THE ASSUMPTIONS UNDERLYING
THE FORWARD - LOOKING STATEMENTS CONTAINED HEREIN ARE REASONABLE, ANY OF THOSE ASSUMPTIONS COULD PROVE INACCURATE AND, THEREFORE,
THERE CAN BE NO ASSURANCE THAT THE RESULTS CONTEMPLATED IN ANY OF THE FORWARD - LOOKING STATEMENTS CONTAINED HEREIN WILL BE REALIZED.
BASED ON ACTUAL EXPERIENCE AND BUSINESS DEVELOPMENT, THE COMPANY MAY ALTER ITS MARKETING, CAPITAL EXPENDITURE PLANS OR OTHER BUDGETS,
WHICH MAY IN TURN AFFECT THE COMPANY'S RESULTS OF OPERATIONS. IN LIGHT OF THE SIGNIFICANT UNCERTAINTIES INHERENT IN THE FORWARD
- LOOKING STATEMENTS INCLUDED THEREIN, THE INCLUSION OF ANY SUCH STATEMENT SHOULD NOT BE REGARDED AS A REPRESENTATION BY THE COMPANY
OR ANY OTHER PERSON THAT THE OBJECTIVES OR PLANS OF THE COMPANY WILL BE ACHIEVED.



General



The Company is in the business of broadband
entertainment-on-demand, streaming content via computers, Smart television sets, Smart Phones (3G and 4G), wireless mobile devices
like iPads/tablets and Over-The-Top (OTT) devices. Its business includes channel and program sponsorship (advertising); online
subscriptions, channel/portal development (digital programming services); mobile applications development, Smart TV/Connected TV
applications development, content aggregation and syndication, broadband/IPTV consulting services, broadband and streaming services.



The following discussion should be read in
conjunction with the financial statements and notes to the consolidated financial statements.



OVERVIEW



The business focus of the Company is Entertainment-on-Demand
and E-Commerce Channels on Broadband, and 3G and 4G devices.



For the broadband, the Company delivers both
wire and wireless solutions, streaming via computers, TV sets, PDAs and 3G and 4G devices.



The Company's business model in the area of
broadband entertainment includes focuses on e-services, which would provide the Company with multiple streams of revenue. Such
revenues would be derived from advertising and branding (channel and program sponsorship); on-line subscriptions; channel/portal
development (digital programming services); content aggregation and syndication; broadband consulting services; broadband hosting
and streaming services; and on-line dealerships; and pay per view services.



In fiscal 2008, the business was reorganized
under the following entities to spearhead the expansion of the Company's business and focus on specific growth areas and territories.



M2B WORLD PTE. LTD.



M2B World Pte. Ltd. was incorporated on April
3, 2003. This subsidiary used to oversee the management and operation of the Company as a whole and oversees the Asian business.
With effect from September 1, 2006, the Company's Asian business was overseen by another subsidiary, M2B World Asia Pacific Pte.
Ltd. As of June 30, 2015, this subsidiary is dormant.





1







M2B WORLD, INC.



M2B World, Inc., a California corporation,
was incorporated on January 24, 2005. This subsidiary handled and oversaw the Company's business in the U.S in the past. The Company
currently does not maintain an office space in the US. and currently has no operations.



On May 27, 2005, M2B World, Inc. entered into
an agreement with Indie Vision Films, Inc., a California corporation, to purchase 20% of the beneficial ownership of Indie Vision
Films, Inc. which provided to M2B World, Inc. access the library of programs of Indie Vision Films, Inc. The Company entered into
an agreement on December 22, 2009 with Indie Vision Films, Inc to convert its investment into content rights, thereby giving up
its 20% share of beneficial ownership in lieu of library rights that the Company could exploit commercially for international use.



M2B WORLD ASIA PACIFIC PTE. LTD.



M2B World Asia Pacific Pte Ltd was incorporated
in the Republic of Singapore on 1 August 2006 for the purposes of handling all the business operations of the Company in the Asia
Pacific region. This Company had taken over the Asian business operations as well as the assets and liabilities of M2B World Pte.
Ltd. from September 1, 2006.



On January 3, 2007, M2B World Asia Pacific
Pte Ltd, issued 7,778,014 shares of common stock through a private placement at a price of $0.77 a share for a total amount of
$6,000,000. This had effectively reduced the Company's effective equity interest in M2B World Asia Pacific Pte. Ltd from 100% to
81.6%.



On July 8, 2008, M2B World Asia Pacific Pte
Ltd signed a two year convertible loan agreement with a third party for $2,500,000 in funding. Prior to 2014, the Company made
repayments bringing the balance to $1,499,750. The convertible loan represented a two year convertible loan drawn by this subsidiary.
It bears interest at a fixed rate of 5.0% per annum. The loan allowed the borrower to convert the loan into shares of the Company
at the issue price of $0.942 per share at the end of the two year period. The loan bears an interest rate of 5.0% per annum, and
will mature in July 7, 2010. The note was obtained from a company in which a board member is the Joint Company Secretary of the
lender. The conversion period of the convertible loan was extended for an additional twelve months commencing July 8, 2010 and
was further extended to November 30, 2011.  The loan was further granted extension to June 29, 2012 and an extension
of the due date is being negotiated.



M2B COMMERCE LIMITED



M2B Commerce Limited, a company incorporated
in the British Virgin Islands on July 25, 2002, focused on e-commerce and digit gaming and had a branch in Cambodia that oversaw
the digit gaming operation in Cambodia.



On March 25, 2009, the Company was notified
that the digit games were suspended by the Cambodia Government as part of the suspension of all lotteries in Cambodia. At this
time, the Company believes that the suspension of the digit game is permanent as the Government of Cambodia has closed the gaming
business by the order of its Ministry of Economy and Finance.



The Company had entered into an investment
agreement on January 12, 2006, with Khoo Kim Leng, the beneficial owner of Dai Long Co., Ltd, which holds a valid casino license
and freehold land and operates an integrated resort in the Kingdom of Cambodia. The resort features a hotel, guest house, shopping
arcade, entertainment and amusement center and some gaming tables. The resort was completed and commenced operations in 2006. As
of December 31, 2011, the company had invested $2,802,613 in relation to this investment. This investment had been fully impaired
as of March 31, 2014. This investment had been written off as of December 31, 2014.



M2B AUSTRALIA PTY LTD



M2B Australia Pty Ltd was incorporated on June
15, 2005 to handle and oversee the Company's business in Australia. As of June 30, 2015, this subsidiary is dormant.



AMARU HOLDINGS LIMITED AND M2B WORLD HOLDINGS
LIMITED



Amaru Holdings Limited and M2B World Holdings
Limited were incorporated in the British Virgin Islands on February 21, 2005 and June 15, 2006, respectively. Amaru Holdings Limited
focuses on content syndication and distribution in areas other than Asia Pacific region. M2B World Holdings Limited focuses on
content syndication and distribution in the Asia Pacific region and is a subsidiary of M2B World Asia Pacific Pte. Ltd.





2







TREMAX INTERNATIONAL LIMITED AND M2B WORLD
TRAVEL LIMITED



Tremax International Limited and M2B World
Travel Limited are both incorporated in the British Virgin Islands on June 8, 2006 and May 3, 2005 respectively. Both companies
are investment holdings companies. As of June 30, 2015, both companies are dormant .



RESULTS OF OPERATIONS



REVENUE



Financial Statement



| | · | Revenue for the three months ended June
30, 2015 was $26,330 compared with $7,005 for the same period in 2014. Revenue for the six months ended June 30, 2015 was $35,047
compared with $14,806 for the same period in 2014.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | The Company's cash balance was $13,477
at June 30, 2015 compared with $24,413 at December 31, 2014.
| | - | ---------------------------------------------------------------------------------------------------



Revenue



Revenue for the three and six months ended
June 30, 2015 at $26,330 and $35,047 were higher than revenue of $7,005 and $14,806 for the three and six months ended June 30,
2014, respectively. It was mainly due to an increase in advertising revenue from new customers for the three and six months ended
June 30, 2015.



Cost of Services



Cost of services for the three and six months
ended June 30, 2015 were $29,137 and $52,534 which decreased from $55,909 and $88,681 for the three and six months ended June 30,
2014, respectively. The decrease was mainly due to cost spending on web video movies and other related production costs during
the three and six months ended June 30, 2015.



DISTRIBUTION EXPENSES



Distribution expenses for the three and six
months ended June 30, 2015 were $7,093 and $12,448 compared to $69,466 and $83,985 incurred for the three and six months ended
June 30, 2014, respectively.



The lower distribution expenses were due to
decreased spending on advertising and marketing costs during the three and six months ended June 30, 2015.



GENERAL AND ADMINISTRATIVE EXPENSES



General and administrative expenses for the
three and six months ended June 30, 2015 were $267,573 and $453,338 as compared to $287,303 and $463,479 for the three and six
months ended June 30, 2014, respectively.



The decrease in general and administrative
expenses for the period ended June 30, 2015 was attributed mainly to the decrease in legal and professional costs for the period
ended June 30, 2015.



(LOSS) FROM OPERATIONS



The Company incurred a loss from operations
of $277, 473 and $483,273 for the three and six months ended June 30, 2015 as compared to the loss from operations of $405,673
and $621,339 for the three and six months ended June 30, 2014, respectively, mainly due to decrease in cost of services and distribution
costs.



NET LOSS BEFORE NON-CONTROLLING INTERESTS



Net loss before non-controlling interests for
the three months ended June 30, 2015, was $280,793 which decreased by $97,215 (26%) from net loss of $378,008 for the three months
ended June 30, 2014, it was mainly due to the decrease in cost of services and distribution costs for the three months ended June
30, 2015, income had increased by $19,325 (276%) from $7,005 for the three months ended June 30, 2014 to $26,330 for the three
months ended June 30, 2015.



Net loss before non-controlling interests for
the six months ended June 30, 2015, was $436,514 which decreased by $155,322 (26%) from net loss of $591,836 for the six months
ended June 30, 2014, it was mainly due to the decrease in cost of services and distribution costs for the six months ended June
30, 2015, income had increased by $20,241 (137%) from $14,806 for the six months ended June 30, 2014 to $35,047 for the six months
ended June 30, 2015.





3







LIQUIDITY AND CAPITAL RESOURCES



The Company had cash at $13,477 at June 30,
2015 as compared to cash of $24,413 at December 31, 2014.



Our operations have been financed by the proceeds
from its private placements of shares.



During the three and six months ended June
30, 2015, the Company had not entered into any transactions using derivative financial instruments or derivative commodity instruments.
Accordingly the Company believes its exposure to market interest rate risk is not material.



Cash generated from operations will not be
able to cover the Company's intended growth and expansion. The Company has plans in 2015 to expand its broadband coverage by launching
new broadband sites in Asia Pacific region and Australia. No assurances can be made that such plans will be carried out in a timely
manner.



The Company intends to raise additional funds,
to fund its current operations and planned business expansion; however no assurances can be made that the Company will raise sufficient
funds as planned.



ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



The Company does not believe that it faces
material market risk with respect to its cash and cash equivalents which totaled $13,477 and $24,413 at June 30, 2015 and December
31, 2014, respectively.



The Company has no other material long-term
obligations or hedging activities other than the term loan with an outstanding balance of $1,499,750 as of June 30, 2015. The term
loan represents a two year convertible loan drawn down by a subsidiary company, M2B World Asia Pacific Pte. Ltd.. It bears interest
at a fixed rate of 5.0% per annum. The loan allowed the lender the option to convert the loan into shares of the subsidiary company
at the issue price of $0.942 per share at the end of the two year period. The due date of the loan was July 7, 2010. The conversion
period of the convertible loan was extended for an additional twelve months commencing July 8, 2010 and was further extended to
June 29, 2012. M2B World Asia Pacific Pte. Ltd. is negotiating to obtain a further extension on the loan. .



ABILITY TO EXPAND CUSTOMER BASE



The Company's future operating results depend
on our ability to expand our customer base for broadband services and e-commerce portals. An increase in total revenue depends
on our ability to increase the number of broadband and e-commerce portals, principally focusing on Asia. The degree of success
of this depends on:



| | · | our efforts to establish independent broadband
sites in countries where conditions are suitable and attract paying users.
| | - | -------------------------------------------------------------------------------------------------------------------------



| | · | our ability to expand our offerings of
content in entertainment and education, to include more niche channels and offerings.
| | - | ----------------------------------------------------------------------------------------------------------------------------



| | · | our ability to provide content not only
to personal computers but to encompass television, wireless application devices and 3G and 4G mobile devices.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------



ABILITY TO ACQUIRE NEW MEDIA CONTENT



The continued ability of the Company to acquire
rights to new media content, at competitive rates, is crucial to grow and maintain the Company's business.



AVAILABILITY OF TECHNOLOGICALLY RELIABLE NEW
GENERATION OF BROADBAND DEVICES



The growth of demand for broadband services
is dependent on the wide availability of technologically reliable new generation of broadband devices, at affordable prices to
prospective customers of broadband services. The early and widespread availability and market adoption of new generation broadband
devices, will significantly impact demand for broadband services and the growth of the Company's business.



CAPITAL INVESTMENT IN BROADBAND INFRASTRUCTURE
BY GOVERNMENT AND TELCOS



The growth of demand for broadband services
is dependent on the capital investment in broadband infrastructure by governments and Telcos. A significant source of demand for
the Company's broadband services could be from homes and enterprises with access to high-speed broadband connections. The ability
of countries to invest in public broadband infrastructure to offer public accessibility is subject to countries' economic health,
political and social status. The Company's prospects for business growth in Asia especially would be impacted by overall economic
conditions in the territories that we seek to expand into.





4







COMPETITION FROM BROADBAND CABLE AND TV NETWORKS
OPERATORS



The competition of our services is provided
by broadband cable network operators and TV networks. As traditional TV networks and cable TV operators provide an alternate supply
of entertainment and on-demand broadband services, they are in competition with the Company, for market share. The Company, nevertheless,
will continue to leverage on its advantage of ownership rights to its own portfolio of media content and its ability to provide
broadband services over both cable and wireless networks, at competitive rates.



The Company's business is reliant on complex
information technology systems and networks. Any significant system or network disruption could have a material adverse impact
on our operations and operating results. The Company's nature of business is highly dependent on the efficient and uninterrupted
operation of complex information technology systems networks, may they, either be that of ours, or our Telco/ ISP partners.

All information technology systems are potentially
vulnerable to damage or interruption from a variety of sources, including but not limited to computer viruses, security breaches,
energy blackouts, natural disasters and terrorism, war and telecommunication failures.



System or network disruptions may arise if
new systems or upgrades are defective or are not installed properly. The Company has implemented various measures to manage our
risks related to system and network disruptions, but a system failure or security breach could negatively impact our operations
and financial results.



LAW AND REGULATIONS GOVERNING INTERNET



Increased regulation of the Internet or differing
application of existing laws might slow the growth of the use of the Internet and online services, which could decrease demand
for our services. The added complexity of the law may lead to higher compliance costs resulting in higher costs of doing business.



UNAUTHORIZED USE OF PROPRIETARY RIGHTS



Our copyrights, patents, trademarks, including
our proprietary rights to certain domain names are very important to M2B's brand and success. While we make every effort to protect
and stop unauthorized use of our proprietary rights, it may still be possible for third parties to obtain and use the intellectual
property without authorization. The validity, enforceability and scope of protection of intellectual property in Internet-related
industries remain uncertain and still evolving. Litigation may be necessary in the future to enforce these intellectual property
rights. This will result in substantial costs and diversion of the Company's resources and could disrupt its business, as well
as have a material adverse effect on its business.



LAW AND REGULATIONS GOVERNING BUSINESS



As the Company expands its business internationally
across different geographical locations there are risks inherent including:



1) Trade barriers and changes in trade regulations

2) Local labor laws and regulations

3) Currency exchange rate fluctuations

4) Political, social or economic unrest

5) Potential adverse tax regulation

6) Changes in governmental regulations



OUTBREAK OF N1H1 VIRUS FLU PANDEMIC OR SIMILAR PUBLIC HEALTH DEVELOPMENTS



Any future outbreak of the N1H1 flu pandemic
or similar adverse public health developments may have a material adverse effect on the Company's business operations, financial
condition and results of operations.



ITEM 4: CONTROLS AND PROCEDURES



Evaluation of Disclosure
Controls and Procedures



A system of disclosure controls and procedures
(as defined in Rule 13a-15(e) and 15d-l5(e)) under the Securities Exchange Act of 1934,as amended [the "Exchange Act"])
are controls and other procedures that are designed to provide reasonable assurance that the information that the Company is required
to disclose in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Company's
management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding
required disclosure. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including
the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective
disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives, and management
necessarily is required to use its judgment in evaluating the cost-benefit relationship of possible controls and procedures. In
addition, the design of any system of controls is based in part upon certain assumptions about the likelihood of future events,
and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Moreover, over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies
or procedures may deteriorate. Because of the inherent limitations in a control system, misstatements due to error or fraud may
occur and not be detected.





5







The Company's Chief Executive Officer and Chief
Financial Officer are responsible for establishing and maintaining disclosure controls and procedures for the Company, and have
concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were
not effective as of the end of the period covered by this report, based on their evaluation of these controls and procedures required
by paragraph (b) of Rules 13a-15(f) and 15d-15(f), due to certain material weaknesses in our internal control over financial reporting
as discussed below.

Internal Control Over Financial Reporting



The Company’s management is responsible
for establishing and maintaining adequate internal controls over financial reporting for the Company.  Due to limited
resources, Management conducted an evaluation of internal controls based on criteria established in Internal Control - Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). The results of this
evaluation determined that our internal control over financial reporting was ineffective as of June 30, 2015, due to material weaknesses.  A
material weakness in internal control over financial reporting is defined as a deficiency, or a combination of deficiencies, in
internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's
annual or interim financial statements will not be prevented or detected on a timely basis.  A significant deficiency
is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material
weakness, yet important enough to merit attention by those responsible for oversight of our financial reporting.



Management’s assessment identified the
following material weaknesses in internal control over financial reporting:



| | · | The small size of our Company limits our ability to achieve the desired level of separation of internal controls and financial reporting.  We do not have a separate CEO and CFO, to review and oversee the financial policies and procedures of the Company, which does achieve a degree of separation.  Until such time as the Company is able to hire a separate CFO, we do not believe we meet the full requirement for separation.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | · | We do not have a functional audit committee since our Board of Directors acts as the audit committee.                                                                                                                                                                                                                                                                                                                                  
| | · | We have not achieved the desired level of documentation of our internal controls and procedures.  When the Company obtains sufficient funding, this documentation will be strengthened through utilizing a third party consulting firm to assist management with its internal control documentation and further help to limit the possibility of any lapse in controls occurring.                                                      



As a result of the material weaknesses in internal
control over financial reporting described above, the Company’s management has concluded that, as of June 30, 2015, the Company's
internal control over financial reporting was not effective based on the criteria in Internal Control - Integrated Framework issued
by the COSO.



To date, the Company has not been able to create
an Audit Committee due its limited financial resources and lack of independent directors. When the Company obtains sufficient funding,
Management intends to create and appoint members to the Audit Committee and charge them with assisting the Company in addressing
the material weaknesses noted above. The Company’s lack of current financial resources makes it impossible for the Company
to hire the appropriate personnel needed to overcome these weaknesses and ensure that appropriate controls and separation of responsibilities
of a larger organization exist. We also will continue to follow the standards for the Public Company Accounting Oversight
Board (United States) for internal control over financial reporting to include procedures that:



| | · | Pertain to the maintenance of records
in reasonable detail accurately that fairly reflect the transactions and dispositions of the Company's assets;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Provide reasonable assurance that transactions
are recorded as necessary to permit preparation of the financial statements in accordance with generally accepted accounting principles,
and that receipts and expenditures are being made only in accordance with authorizations of management and the Board of Directors;
and
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material
effect on the financial statements.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Changes In InternalControl
Over Financial Reporting



Our management determined that there were no
changes made in our internal controls over financial reporting during the quarter ended June 30, 2015 that have materially affected,
or are reasonably likely to materially affect our internal control over financial reporting.



This report does not include an
attestation report of the Company’s registered public accounting firm regarding internal control over financial
reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm
pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s report
in this report.





6







PART II: OTHER INFORMATION



ITEM 1: LEGAL PROCEEDINGS



None



ITEM 1A: RISK FACTORS



An investment in the Company's common stock
involves a high degree of risk. One should carefully consider the following risk factors in evaluating an investment in the Company's
common stock. If any of the following risks actually occurs, the Company's business, financial condition, results of operations
or cash flow could be materially and adversely affected. In such case, the trading price of the Company's common stock could decline,
and one could lose all or part of one's investment. One should also refer to the other information set forth in this report, including
the Company's consolidated financial statements and the related notes.



THE COMPANY CONTINUES TO USE SIGNIFICANT AMOUNTS
OF CASH FOR ITS BUSINESS OPERATIONS, WHICH COULD RESULT IN US HAVING INSUFFICIENT CASH TO FUND THE COMPANY'S OPERATIONS AND EXPENSES
UNDER OUR CURRENT BUSINESS PLAN.



The Company's liquidity and capital resources
remain limited. There can be no assurance that the Company's liquidity or capital resource position would allow us to continue
to pursue its current business strategy. The Company's quoted equity securities held as assets are dependent on the market value.
Any fluctuations or downturn in the securities market could adversely affect the value of these equity securities held. As a result,
without achieving growth in its business along the lines it has projected, it would have to alter its business plan or further
augment its cash flow position through cost reduction measures, sales of assets, additional financings or a combination of these
actions. One or more of these actions would likely substantially diminish the value of its common stock.



THE MARKET MAY NOT BROADLY ACCEPT THE COMPANY'S
BROADBAND WEBSITES AND SERVICES, WHICH WOULD PREVENT THE COMPANY FROM OPERATING PROFITABLY.



The Company must be able to achieve broad market
acceptance for its Broadband websites and services, at a price that provides an acceptable rate of return relative to the Company-wide
costs in order to operate profitably. There is no assurance that the market will develop sufficiently to enable the Company to
operate its Broadband business profitably. Furthermore, there is no assurance that any of the Company's services will become generally
accepted, nor is there any assurance that enough paying users and advertisers will ultimately be obtained to enable us to operate
these business profitably.



BROADBAND USERS MAY FAIL TO ADOPT THE COMPANY'S
BROADBAND SERVICES.



The Company's Broadband services are targeted
to the growing market of Broadband users worldwide to deliver content and E-commerce in an efficient, economical manner over the
Broadband networks. The challenge is to make the Company's business attractive to consumers, and ultimately, profitable. To do
so has required, and will require, the Company to invest significant amounts of cash and other resources. There is no assurance
that enough paying users and advertisers will ultimately be obtained to enable the Company to operate the business profitably.



FAILURE TO SIGNIFICANTLY INCREASE THE COMPANY'S
USERS AND ADVERTISERS MAY RESULT IN FAILURE TO ACHIEVE CRITICAL MASS AND REVENUE TO BUILD A SUCCESSFUL BUSINESS.



The Company incurs significant up-front costs
in connection with the acquisition of content, and bandwidth and network charges. The plan is to obtain recurring revenues in the
form of subscription and advertising fees to use the Broadband services, either paid by the users or advertisers.



There is no assurance as to whether the Company
will be able to maintain, or whether and how quickly the Company will be able to increase its user base, or whether the Company
will be able to generate recurring subscription and advertising fees to such a level that would enable this line of business to
achieve profitably. If the Company is not successful in these endeavors, the Company could be required to revise its business model,
exit or reduce the scale of the business, or raise additional capital.





7







COMPETITION IN THE BROADBAND BUSINESS IS EXPECTED
TO INCREASE, WHICH COULD CAUSE THE BUSINESS TO FAIL.



The Company's Broadband services are targeted
to the end user market. As the Broadband penetration rates increase globally, an increasing number of well-funded competitors have
entered the market. Companies that compete with the Company's business include telecommunications, cable, content management and
network delivery companies.



The Company may face increased competition
as these competitors partner with others or develop new Broadband websites and service offerings to expand the functionality that
they can offer to their customers. These competitors may, over time, develop new technologies and acquire content that are perceived
as being more secure, effective or cost efficient than the Company. These competitors could successfully garner a significant share
of the market, to the exclusion of the Company. Furthermore, increased competition could result in pricing pressures, reduced margins,
or the failure of the business to achieve or maintain market acceptance, any one of which could harm the business.



THE INABILITY TO SUCCESSFULLY EXECUTE TIMELY
DEVELOPMENT AND INTRODUCTION OF NEW AND RELATED SERVICES AND TO IMPLEMENT TECHNOLOGICAL CHANGES COULD HARM THE BUSINESS.



The evolving nature of the Broadband business
requires the Company to continually develop and introduce new and related services and to improve the performance, features, and
reliability of the existing services, particularly in response to competitive offerings.

The Company has under development new features
and services for its businesses. The Company may also introduce new services. The success of new or enhanced features and services
depends on several factors - primarily market acceptance. The Company may not succeed in developing and marketing new or enhanced
features and services that respond to competitive and technological developments and changing customer needs. This could harm the
business.



CAPACITY LIMITS ON THE COMPANY'S TECHNOLOGY
AND NETWORK HARDWARE AND SOFTWARE MAY BE DIFFICULT TO PROJECT, AND THE COMPANY MAY NOT BE ABLE TO EXPAND AND/OR UPGRADE ITS SYSTEMS
TO MEET INCREASED USE, WHICH WOULD RESULT IN REDUCED REVENUES.



While the Company has ample through-put capacity
to handle its customers' requirements for the medium term, at some point it may be required to materially expand and/or upgrade
its technology and network hardware and software. The Company may not be able to accurately project the rate of increase in usage
of its network. In addition, it may not be able to expand and/or upgrade its systems and network hardware and software capabilities
in a timely manner to accommodate increased traffic on its network. If the Company does not appropriately expand and/or upgrade
our systems and network hardware and software in a timely fashion, it may lose customers and revenues.



INTERRUPTIONS TO THE DATA CENTERS AND BROADBAND
NETWORKS COULD DISRUPT BUSINESS, AND NEGATIVELY IMPACT CUSTOMER DEMAND FOR THE COMPANY.



The Company's business depends on the uninterrupted
operation at the data centers and the broadband networks run by the various service providers. The data centers may suffer for
loss, damage, or interruption caused by fire, power loss, telecommunications failure, or other events beyond the Company. Any damage
or failure that causes interruptions in the Company's operations could materially harm business, financial conditions, and results
of operations.



In addition, the Company's services depend
on the efficient operation of the Internet connections between customers and the data centers. The Company depends on Internet
service providers efficiently operating these connections. These providers have experienced periodic operational problems or outages
in the past. Any of these problems or outages could adversely affect customer satisfaction and customers could be reluctant to
use our Internet related services.



THE COMPANY MAY NOT BE ABLE TO ACQUIRE NEW
CONTENT, OR MAY HAVE TO DEFEND ITS RIGHTS IN INTELLECTUAL PROPERTY OF THE CONTENT THAT IS USED FOR ITS SERVICES WHICH COULD BE
DISRUPTIVE AND EXPENSIVE TO ITS BUSINESS.



The Company may not be able to acquire new
content, or may have to defend its intellectual property rights or defend against claims that it is infringing the rights of others,
where its content rights are concerned. Intellectual property litigation and controversies are disruptive and expensive. Infringement
claims could require us to develop non-infringing services or enter into royalty or licensing arrangements. Royalty or licensing
arrangements, if required, may not be obtainable on terms acceptable to the Company. The business could be significantly harmed
if the Company is not able to develop or license new content. Furthermore, it is possible that others may license substantially
equivalent content, thus enabling them to effectively compete against us.



THE COMPANY DEPENDS ON KEY PERSONNEL.



The Company depends on the performance of its
senior management team. Its success depends on its ability to attract, retain, and motivate these individuals. There are no binding
agreements with any of its employees that prevent them from leaving the Company at any time. There is competition for these people.
The loss of the services of any of the key employees or failure to attract, retain, and motivate key employees could harm the business.





8







THE COMPANY RELIES ON THIRD PARTIES.



If critical services and products that the
Company sources from third parties, such as content and network services, were to no longer available to the Company or at a considerably
higher price than it currently pays for them, and suitable alternatives could not be found, the business could be harmed.



THE COMPANY COULD BE AFFECTED BY GOVERNMENT
REGULATION.



The list of countries to which our solutions
and services could not be exported could be revised in the future. Furthermore, some countries may in the future impose restrictions
on streaming of broadband contents and related services. Failure to obtain the required governmental approvals would preclude the
sale or use of services in international markets and therefore, harm the Company's ability to grow sales through expansion into
international markets. While regulations in almost all countries in which our business currently operates generally permit the
broadband services, such regulations in future may not be as favorable and may impede our ability to develop business.



THE COMPANY COULD BE AFFECTED BY PIRACY IN
ASIA.



The Company is in the process of expanding
its services globally, and in particular is entering specific countries in Asia with customized country sites. These country sites
are designated to suit viewership patterns and styles in the countries they are launched in, and make use of the Company's content
and intellectual property rights to the content. The piracy of content is a significant problem in many Asian countries, and it
is not uncommon to see movies and television dramas appearing on illegal internet sites, and sold as pirated DVDs and VCDs. The
extent of this piracy of content in the specific countries that the Company is launching its sites will adversely affect to a certain
degree the amount of advertising and subscription revenues that the Company could earn.



THE COMPANY COULD BE AFFECTED BY ECONOMIC DOWNTURNS



The global economy underwent a massive downturn
in 2009, which commenced in the second half of 2008. Many countries were faced with negative growth rates.. Where the media industry
was concerned, major corporations reduced their advertising expenditures or even cut back substantially all advertising and promotional
expenditures towards the latter half of 2008. The Company is heavily reliant on advertising and syndication revenues. Any future
downturns in any one country that the Company operates its WOWtv service would significantly affect the Company's revenues.



OUR COMMON STOCK IS CONSIDERED A "PENNY
STOCK". THE APPLICATION OF THE "PENNY STOCK" RULES TO OUR COMMON STOCK COULD LIMIT THE TRADING AND LIQUIDITY OF
THE COMMON STOCK, ADVERSELY AFFECT THE MARKET PRICE OF OUR COMMON STOCK AND INCREASE THE TRANSACTION COSTS TO SELL THOSE SHARES.



Our common stock is a "low-priced"
security or "penny stock" under rules promulgated under the Securities Exchange Act of 1934, as amended. In accordance
with these rules, broker-dealers participating in transactions in low-priced securities must first deliver a risk disclosure document
which describes the risks associated with such stocks, the broker-dealer's duties in selling the stock, the customer's rights and
remedies and certain market and other information. Furthermore, the broker-dealer must make a suitability determination approving
the customer for low-priced stock transactions based on the customer's financial situation, investment experience and objectives.
Broker-dealers must also disclose these restrictions in writing to the customer, obtain specific written consent from the customer,
and provide monthly account statements to the customer. The effect of these restrictions will likely decrease the willingness of
broker-dealers to make a market in our common stock, will decrease liquidity of our common stock and will increase transaction
costs for sales and purchases of our common stock as compared to other securities.



THE STOCK MARKET IN GENERAL HAS EXPERIENCED
VOLATILITY THAT OFTEN HAS BEEN UNRELATED TO THE OPERATING PERFORMANCE OF LISTED COMPANIES. THESE BROAD FLUCTUATIONS MAY BE THE
RESULT OF UNSCRUPULOUS PRACTICES THAT MAY ADVERSELY AFFECT THE PRICE OF OUR STOCK, REGARDLESS OF OUR OPERATING PERFORMANCE.



Shareholders should be aware that, according
to SEC Release No. 34-29093 dated April 17, 1991, the market for penny stocks has suffered in recent years from patterns of fraud
and abuse. Such patterns include (1) control of the market for the security by one or a few broker-dealers that are often related
to the promoter or issuer; (2) manipulation of prices through prearranged matching of purchases and sales and false and misleading
press releases; (3) boiler room practices involving high-pressure sales tactics and unrealistic price projections by inexperienced
sales persons; (4) excessive and undisclosed bid-ask differential and markups by selling broker-dealers; and (5) the wholesale
dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with
the resulting inevitable collapse of those prices and with consequent investor losses. The occurrence of these patterns or practices
could increase the volatility of our share price.





9







WE DO NOT EXPECT TO PAY DIVIDENDS FOR THE FORESEEABLE
FUTURE, AND WE MAY NEVER PAY DIVIDENDS. INVESTORS SEEKING CASH DIVIDENDS SHOULD NOT PURCHASE OUR COMMON STOCK.



We currently intend to retain any future earnings
to support the development of our business and do not anticipate paying cash dividends in the foreseeable future. Our payment of
any future dividends will be at the discretion of our Board of Directors after taking into account various factors, including but
not limited to our financial condition, operating results, cash needs, growth plans and the terms of any credit agreements that
we may be a party to at the time. In addition, our ability to pay dividends on our common stock may be limited by Nevada state
law. Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only
way to realize a return on their investment. Investors seeking cash dividends should not purchase our common stock.



FUTURE SALES OF OUR COMMON STOCK COULD PUT
DOWNWARD SELLING PRESSURE ON OUR COMMON STOCK, AND ADVERSELY AFFECT THE PER SHARE PRICE. THERE IS A RISK THAT THIS DOWNWARD PRESSURE
MAY MAKE IT IMPOSSIBLE FOR AN INVESTOR TO SELL SHARES OF COMMON STOCK AT ANY REASONABLE PRICE, IF AT ALL.



Future sales of substantial amounts of our
common stock in the public market or the perception that such sales could occur, could put downward selling pressure on our common
stock and adversely affect its market price.



THE OVER THE COUNTER BULLETIN BOARD IS A QUOTATION
SYSTEM, NOT AN ISSUER LISTING SERVICE, MARKET OR EXCHANGE. THEREFORE, BUYING AND SELLING STOCK ON THE OTC BULLETIN BOARD IS NOT
AS EFFICIENT AS BUYING AND SELLING STOCK THROUGH AN EXCHANGE. AS A RESULT, IT MAY BE DIFFICULT FOR YOU TO SELL YOUR COMMON STOCK
OR YOU MAY NOT BE ABLE TO SELL YOUR COMMON STOCK FOR AN OPTIMUM TRADING PRICE.



The Over the Counter Bulletin Board (the "OTC
BB") is a regulated quotation service that displays real-time quotes, last sale prices and volume limitations in over-the-counter
securities. Because trades and quotations on the OTC Bulletin Board involve a manual process, the market information for such securities
cannot be guaranteed. In addition, quote information, or even firm quotes, may not be available. The manual execution process may
delay order processing and intervening price fluctuations may result in the failure of a limit order to execute or the execution
of a market order at a significantly different price. Execution of trades, execution reporting and the delivery of legal trade
confirmations may be delayed significantly. Consequently, one may not be able to sell shares of our common stock at the optimum
trading prices.



When fewer shares of a security are being traded
on the OTC Bulletin Board, volatility of prices may increase and price movement may outpace the ability to deliver accurate quote
information. Lower trading volumes in a security may result in a lower likelihood of an individual's orders being executed, and
current prices may differ significantly from the price one was quoted by the OTC Bulletin Board at the time of the order entry.
Orders for OTC Bulletin Board securities may be canceled or edited like orders for other securities. All requests to change or
cancel an order must be submitted to, received and processed by the OTC Bulletin Board. Due to the manual order processing involved
in handling OTC Bulletin Board trades, order processing and reporting may be delayed, and an individual may not be able to cancel
or edit his order. Consequently, one may not be able to sell shares of common stock at the optimum trading prices.



The dealer's spread (the difference between
the bid and ask prices) may be large and may result in substantial losses to the seller of securities on the OTC Bulletin Board
if the common stock or other security must be sold immediately. Further, purchasers of securities may incur an immediate "paper"
loss due to the price spread. Moreover, dealers trading on the OTC Bulletin Board may not have a bid price for securities bought
and sold through the OTC Bulletin Board. Due to the foregoing, demand for securities that are traded through the OTC Bulletin Board
may be decreased or eliminated.



WE GENERATED A NET LOSS OF $280,793 AND $378,008
BEFORE TAXES FOR THE THREE MONTHS ENDED JUNE 30, 2015 AND JUNE 30, 2014, RESPECTIVELY, $436,514 AND $591,836 BEFORE TAXES FOR THE
SIX MONTHS ENDED JUNE 30, 2015 AND JUNE 30, 2014, RESPECTIVELY. WE MAY BE UNABLE TO CONTINUE AS A GOING CONCERN.



Our consolidated financial statements have
been prepared on a going concern basis which assumes that we will be able to realize our assets and discharge our liabilities in
the normal course of business for the foreseeable future. We generated a consolidated net loss before taxes of $280,793 and $436,514
for the three and six months ended June 30, 2015 compared to a consolidated net loss before taxes of $378,008 and $591,836 during
2014, respectively. We realized a deficit cash flow from operating activities of $411,787 and $651,007 for the six months ended
June 30, 2015 and 2014 respectively. For the three and six months ended June 30, 2015, we had an accumulated deficit of $44,368,489
and a working capital deficiency of $3,494,450 compared to an accumulated deficit of $43,986,761 and a working capital deficiency
of $3,465,271 for the year ended December 31, 2014. On June 30, 2015, we had a stockholders' deficit of $3,471,180 compared to
a stockholders' deficit of $3,436,666 as at December 31, 2014. Our ability to continue as a going-concern is in substantial doubt
as it is dependent on a number of factors including, but not limited to, the receipt of continued financial support from our investors,
our ability to raise equity or debt financing as we need it, and whether we will be able to use our securities to meet certain
of our liabilities as they become payable. The outcome of these matters is dependent on factors outside of our control and cannot
be predicted at this time.





10







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



As of April 23, 2015 to June 3, 2015, the Company
issued a total of 3,120,000 shares of Series B Convertible Preferred Stock ("Preferred Stock") through its private placement
of shares of Preferred Stock at a purchase price of $0.10 per share for a total amount of $312,000, to "accredited investors",
as that term is defined in Regulation D of the Securities Act of 1933. Each share of Series B Convertible Preferred Stock is convertible
into ten (10) shares of common stock. The proceeds of the private placements were used for working capital.



The shares of the Company's preferred stocks
in above private placements were issued and sold in reliance upon the exemption provided by Section 4(a)(2) and/or Regulation D/Regulation
S of the Securities Act of 1933. Appropriate investment representations were obtained and the securities were issued with restrictive
legends



ITEM 3: DEFAULTS UPON SENIOR SECURITIES



None



ITEM 4: MINE SAFETY DISCLOSURES



None



ITEM 5: OTHER INFORMATION



None



ITEM 6: EXHIBITS:



|Exhibit 31.1 | CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT
|------------ | ------------------------------------------------------------------------------------------
|             |                                                                                           
|Exhibit 31.2 | CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT
|             |                                                                                           
|Exhibit 32.1 | CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT
|             |                                                                                           
|Exhibit 32.2 | CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT
|             |                                                                                           
|101.INS*     | XBRL Instance Document                                                                    
|             |                                                                                           
|101.SCH*     | XBRL Taxonomy Extension Schema Document                                                   
|             |                                                                                           
|101.CAL*     | XBRL Taxonomy Extension Calculation Linkbase Document                                     
|             |                                                                                           
|101.DEF*     | XBRL Taxonomy Extension Definition Linkbase Document                                      
|             |                                                                                           
|101.LAB*     | XBRL Taxonomy Extension Labels Linkbase Document                                          
|             |                                                                                           
|101.PRE*     | XBRL Taxonomy Extension Presentation Linkbase Document                                    



* To be filed by amendment.





11







SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.





|                | Amaru, Inc.
        (Registrant) |                                                              
|--------------- | -------------------------------- | -------------------------------------------------------------
|                |                                  |                                                              
|August 19, 2015 | By:                              | /s/ Chua Leong Hin                                           
|                |                                  | President, Chief Executive Officer andChief Financial Officer

































12