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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2011

or

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

For the transition period from ____________ to ____________

Commission File Number 000-53976

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

|Nevada                                                     | 98-0513655                       
|---------------------------------------------------------- | ---------------------------------
|(State or other jurisdiction of incorporation or           | (IRS Employer Identification No.)
|organization)                                              |                                  
|                                                           |                                  
|711 S. Olive Street, Suite 504, Los Angeles, CA,
      USA | 90014                            
|(Address of principal executive offices)                   | (Zip Code)                       

(213) 221-7819(Registrants telephone number,
including area code)

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

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

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 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).[X] YES     [   ] NO

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

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

1

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Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act[   ] YES  
 [X] NO

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THEPRECEDING FIVE YEARS

Check whether the registrant has filed all documents and reports
required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court.[   ]
YES     [   ] NO

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the
issuers classes of common stock, as of the latest practicable
date.63,514,058 common shares issued and outstanding as of May 14, 2011

2

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TABLE OF CONTENTS

|Item
      1. | Financial
      Statements                                                                                 | 4 
|------------- | ---------------------------------------------------------------------------------------------------------- | --
|              |                                                                                                            |   
|              | Consolidated
      Balance Sheets  March 31, 2011 (Unaudited) and December 31, 2010                       | 5 
|              |                                                                                                            |   
|              | Consolidated
      Statements of Operations (Unaudited)  Three Months Ended March 31, 2011
      and 2010 | 6 
|              |                                                                                                            |   
|              | Consolidated
      Statements of Cash Flows (Unaudited)  Three Months Ended March 31, 2011
      and 2010 | 7 
|              |                                                                                                            |   
|              | Notes
      to Consolidated Financial Statements                                                           | 8 
|              |                                                                                                            |   
|Item
      2. | Managements
      Discussion and Analysis of Financial Condition and Results of Operations                | 13
|              |                                                                                                            |   
|Item
      3. | Risk
      Factors                                                                                         | 21
|              |                                                                                                            |   
|Item
      4. | Controls
      and Procedures Evaluation of Disclosure Controls and Procedures                             | 21
|              |                                                                                                            |   
|Item
      5. | Exhibits                                                                                                   | 22
|              |                                                                                                            |   
|Signatures    |                                                                                                            | 23

3

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Item 1. Financial Statements

The accompanying unaudited financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America and the rules of the Securities and Exchange Commission
("SEC"), and should be read in conjunction with the audited financial statements
and notes thereto contained in our Company's Form 10-K filed with the SEC on
April 8, 2011. In the opinion of management, all adjustments, consisting of
normal recurring adjustments, necessary for a fair presentation of financial
position and the results of operations for the periods presented have been
reflected herein. The results of operations for the periods presented are not
necessarily indicative of the results to be expected for the full year ending
December 31, 2011.

4

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HORIYOSHI WORLDWIDE, INC.

CONSOLIDATED BALANCE SHEETS AS OF

|                                                                                                                                                                           |   | March 31,   |   |   | December 31, |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ----------- | - | - | ------------ | -
|                                                                                                                                                                           |   | 2011        |   |   | 2010         |  
|                                                                                                                                                                           |   | (UNAUDITED) |   |   |              |  
|                                                                                                                                                                           |   |             |   |   |              |  
|ASSETS                                                                                                                                                                     |   |             |   |   |              |  
|                                                                                                                                                                           |   |             |   |   |              |  
|Current assets:                                                                                                                                                            |   |             |   |   |              |  
|                                                                                                                                                                           |   |             |   |   |              |  
|Cash and cash equivalents                                                                                                                                                  | $ | 3,561,670   |   | $ | 5,576,131    |  
|                                                                                                                                                                           |   |             |   |   |              |  
|Accounts receivable (net) of allowance for
      doubtful accounts of $5,238 and $1,696 as of March 31, 2011 and
      December 31, 2010, respectively                     |   | 161,071     |   |   | 70,442       |  
|                                                                                                                                                                           |   |             |   |   |              |  
|Prepaid expenses and other assets                                                                                                                                          |   | 1,744,590   |   |   | 1,037,251    |  
|                                                                                                                                                                           |   |             |   |   |              |  
|Total current assets                                                                                                                                                       |   | 5,467,331   |   |   | 6,683,824    |  
|                                                                                                                                                                           |   |             |   |   |              |  
|Property and equipment, net                                                                                                                                                |   | 27,228      |   |   | 19,724       |  
|                                                                                                                                                                           |   |             |   |   |              |  
|Total assets                                                                                                                                                               | $ | 5,494,559   |   | $ | 6,703,548    |  
|                                                                                                                                                                           |   |             |   |   |              |  
|LIABILITIES AND STOCKHOLDERS' DEFICIT                                                                                                                                      |   |             |   |   |              |  
|                                                                                                                                                                           |   |             |   |   |              |  
|Current liabilities:                                                                                                                                                       |   |             |   |   |              |  
|Accounts payable                                                                                                                                                           | $ | 17,718      |   | $ | 40,991       |  
|Deferred Revenue                                                                                                                                                           |   | 2,978       |   |   | 18,062       |  
|Accrued expenses                                                                                                                                                           |   | 27,492      |   |   | 45,377       |  
|Other payables                                                                                                                                                             |   | -           |   |   | 48,100       |  
|Due to shareholders                                                                                                                                                        |   | 1,538,323   |   |   | 2,368,409    |  
|Due to a director                                                                                                                                                          |   | -           |   |   | 18,480       |  
|Sales Returns and allowances                                                                                                                                               |   | 2,313       |   |   | -            |  
|Total current liabilities                                                                                                                                                  |   | 1,588,824   |   |   | 2,539,419    |  
|                                                                                                                                                                           |   |             |   |   |              |  
|Total liabilities                                                                                                                                                          | $ | 1,588,824   |   | $ | 2,539,419    |  
|                                                                                                                                                                           |   |             |   |   |              |  
|Preferred stock, $0.001 par value per
    share, 100,000,000 shares authorized, 0 shares issued and outstanding                                                            |   | -           |   |   | -            |  
|Common stock, $0.001 par value per share, 1,081,100,000
      shares authorized, 63,514,058 shares issued and outstanding as of
      March 31, 2011 and December 31, 2010 |   | 63,514      |   |   | 63,514       |  
|Additional Paid-in Capital                                                                                                                                                 |   | 5,059,955   |   |   | 4,937,776    |  
|Stock subscription receivable                                                                                                                                              |   | (516        | ) |   | (516         | )
|Accumulated deficit                                                                                                                                                        |   | (1,217,218  | ) |   | (836,645     | )
|                                                                                                                                                                           |   |             |   |   |              |  
|Total stockholders' equity                                                                                                                                                 |   | 3,905,735   |   |   | 4,164,129    |  
|                                                                                                                                                                           |   |             |   |   |              |  
|Total liabilities and stockholders' equity                                                                                                                                 | $ | 5,494,559   |   | $ | 6,703,548    |  

The accompanying notes are an integral part of the consolidated
financial statements

5

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HORIYOSHI WORLDWIDE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS(UNAUDITED)

|                                                          |   | Three Months |   |  | Three Months |  
|--------------------------------------------------------- | - | ------------ | - |  | ------------ | -
|                                                          |   | Ended        |   |  | Ended        |  
|                                                          |   | March 31,    |   |  | March 31,    |  
|                                                          |   | 2011         |   |  | 2010         |  
|Revenue, net                                              | $ | 228,828      |   |  | 152,176      |  
|Cost of sales                                             |   | 102,847      |   |  | 76,029       |  
|Gross profit                                              |   | 125,981      |   |  | 76,147       |  
|                                                          |   |              |   |  |              |  
|Operating Expenses                                        |   |              |   |  |              |  
|Selling
      expenses                                    |   | 49,163       |   |  | 8,340        |  
|General and administrative expenses                       |   | 457,390      |   |  | 128,017      |  
|Total operating expenses                                  |   | 506,553      |   |  | 136,357      |  
|Income (loss) from operations                             |   | (380,572     | ) |  | (60,210      | )
|Non-operating income (expenses)                           |   |              |   |  |              |  
|Other income                                              |   | -            |   |  | 5,766        |  
|Net (loss) before income taxes                            |   | (380,572     | ) |  | (54,444      | )
|Income taxes                                              |   | -            |   |  | -            |  
|                                                          |   |              |   |  |              |  
|Net (loss)                                                | $ | (380,572     | ) |  | (54,444      | )
|Earnings (loss) per share of common stock                 | $ | (0.01        | ) |  | (0.00        | )
|Weighted average shares of common stock
      outstanding |   | 63,514,058   |   |  | 30,000,000   |  

The accompanying notes are an integral part of the consolidated
financial statements

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HORIYOSHI WORLDWIDE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS(UNAUDITED)

|                                                                                           |   | Three Months |   |   | Three Months |  
|------------------------------------------------------------------------------------------ | - | ------------ | - | - | ------------ | -
|                                                                                           |   | Ended        |   |   | Ended        |  
|                                                                                           |   | March 31,    |   |   | March 31,    |  
|                                                                                           |   | 2011         |   |   | 2010         |  
|                                                                                           |   |              |   |   |              |  
|Cash flows from operating activities                                                       |   |              |   |   |              |  
|                                                                                           |   |              |   |   |              |  
|Net
      (loss)                                                                           | $ | (380,572     | ) | $ | (54,444      | )
|                                                                                           |   |              |   |   |              |  
|Adjustments to reconcile net income (loss)
      to net cash used in operating activities: |   |              |   |   |              |  
|                                                                                           |   |              |   |   |              |  
|Depreciation                                                                               |   | 2,699        |   |   | 103          |  
|                                                                                           |   |              |   |   |              |  
|Allowance for
      doubtful accounts                                                      |   | 5,238        |   |   | -            |  
|                                                                                           |   |              |   |   |              |  
|Warrants Issued
      for Services                                                         |   | 122,179      |   |   | -            |  
|                                                                                           |   |              |   |   |              |  
|Changes in operating assets and
      liabilities:                                         |   |              |   |   |              |  
|                                                                                           |   |              |   |   |              |  
|Accounts
      receivable                                                                  |   | (95,867      | ) |   | (78,045      | )
|                                                                                           |   |              |   |   |              |  
|Prepaid expenses
      and other assets                                                    |   | (707,339     | ) |   | (363,346     | )
|                                                                                           |   |              |   |   |              |  
|Accounts payable                                                                           |   | (23,273      | ) |   | -            |  
|                                                                                           |   |              |   |   |              |  
|Deferred revenue                                                                           |   | (15,084      | ) |   | (7,546       | )
|                                                                                           |   |              |   |   |              |  
|Accrued expenses                                                                           |   | (17,885      | ) |   | 76,974       |  
|                                                                                           |   |              |   |   |              |  
|Sales Returns
      and Allowances                                                         |   | 2,313        |   |   |              |  
|                                                                                           |   |              |   |   |              |  
|Other payables                                                                             |   | (48,100      | ) |   | 43,776       |  
|                                                                                           |   |              |   |   |              |  
|Net cash used in operating activities                                                      |   | (1,155,691   | ) |   | (382,528     | )
|                                                                                           |   |              |   |   |              |  
|Cash flows from investing activities                                                       |   |              |   |   |              |  
|                                                                                           |   |              |   |   |              |  
|Purchase of equipment                                                                      |   | (10,204      | ) |   | (2,063       | )
|                                                                                           |   |              |   |   |              |  
|Net cash used in investing activities                                                      |   | (10,204      | ) |   | (2,063       | )
|                                                                                           |   |              |   |   |              |  
|Cash flows from financing activities                                                       |   |              |   |   |              |  
|                                                                                           |   |              |   |   |              |  
|Proceeds of loan from
      shareholders                                                   |   | (848,566     | ) |   | 484,952      |  
|                                                                                           |   |              |   |   |              |  
|Repayment of loan from
      shareholder                                                   |   | -            |   |   | (1,400       | )
|                                                                                           |   |              |   |   |              |  
|Net cash flows provided by financing
      activities:                                     |   | (848,566     | ) |   | 483,552      |  
|                                                                                           |   |              |   |   |              |  
|Net increase in cash                                                                       |   | (2,014,461   | ) |   | 98,961       |  
|                                                                                           |   |              |   |   |              |  
|Cash- beginning of period                                                                  |   | 5,576,131    |   |   | 17,721       |  
|                                                                                           |   |              |   |   |              |  
|Cash- end of period                                                                        | $ | 3,561,670    |   | $ | 116,682      |  

The accompanying notes are an integral part of the consolidated
financial statements

7

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Organization and Business

Horiyoshi Worldwide, Inc. (HHWW) is a clothing and accessories design and distribution company whose products are inspired by the artwork of Japanese master tattoo artist Yoshihito Nakano - better known as Horiyoshi III.  The Horiyoshi name has been internationally recognized for decades and Horiyoshi III is considered by his peers and followers as a legend in his field.  The business was established September 1, 2008 to capitalize on the multi-generational legacy of the Tattoo Masters by offering consumers a unique collection of knitwear, t-shirts and accessory items. The company began selling its products in 2009.  The Collection retails at a suggested price point of approximately $140-160 for T-shirts, $480-945 for knits, $600-800 for hoodies, and $280-420 for scarves.  The rights to the Horiyoshi III design catalogue are exclusively licensed to Horiyoshi the Third, Inc. (HTT) a wholly owned subsidiary of HHWW (“the Company”).

We were incorporated as Kranti Resources, Inc. (Kranti), in the State of Nevada on November 3, 2006 to engage in the acquisition, exploration, and development of mineral deposits and reserves. The company discontinued its planned mining activities and eventually adopted a new strategy to pursue opportunities in the fashion apparel industry.  On May 18, 2010, Benny Gill and Rimpal Samra resigned as Directors of the company and Jaskarn Samra resigned as President.  On May 18, 2010, Mitsuo Kojima was appointed as President of Kranti Resources, Inc.

On June 21, 2010, Kranti effected a 2.1622 for one (1) forward stock split of outstanding stock. As a result, the company’s  outstanding share count increased from 43,875,000 shares of common stock to 94,866,525 shares of common stock, all with a par value of $0.001.  In addition, on June 21, 2010, the company changed its name to Horiyoshi Worldwide Inc. to coincide with the redirection of its business toward fashion apparel.  On September 1, 2010, the company entered into a share exchange agreement with Horiyoshi the Third Limited, a Hong Kong corporation, and the shareholders of Horiyoshi the Third Limited for purchase of the company.

On November 5, 2010, President Mitsuo Kojima affected a Share Cancellation Agreement with Kranti and surrendered for cancellation all 64,866,000 shares held by him in common stock which left a total of 30,000,526 shares outstanding.

The share exchange agreement with Horiyoshi the Third Limited was subsequently amended and on November 5, 2010 the acquisition of all of the issued and outstanding common shares of Horiyoshi the Third Limited occurred.  In accordance with the closing, Horiyoshi Worldwide, Inc. issued 30,000,000 shares of common stock to the former shareholders of Horiyoshi the Third Limited in exchange for the acquisition of all 10,000 Horiyoshi the Third Limited shares issued and outstanding.  Upon close of the acquisition   Horiyoshi Worldwide, Inc. had a total of 60,000,526 shares issued and outstanding.

Basis of presentation

The Company’s accounting policies used in the preparation of the accompanying consolidated financial statements conform to accounting principles generally accepted in the United States of America ("US GAAP") and have been consistently applied.

Going Concern, Liquidity and Management's Plan

As of March 31, 2011, our Company has accumulated losses of
$1,217,218 since inception and has earned no net income since inception. Our
Company intends to fund operations through equity financing arrangements, which
may be insufficient to fund its capital expenditures, working capital and other
cash requirements for the year ending December 31, 2011. In response to these
problems, management intends to raise additional funds through public or private
placement offerings. These factors, among others, raise substantial doubt about
our companys ability to continue as a going concern. The accompanying financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.

Note 2. Summary of Significant Accounting Policies

Principles of Consolidation and Basis of Presentation

The unaudited consolidated financial statements include the
accounts of Horiyoshi Worldwide, Inc. and its wholly-owned subsidiary. All
intercompany accounts and transactions have been eliminated upon consolidation.

The accompanying unaudited Horiyoshi Worldwide, Inc.
consolidated financial statements have been prepared by the Company in
accordance with accounting principles generally accepted in the United States
(GAAP) for interim financial information and are presented in accordance with
the requirements of Form 10-Q and Article 8 of Regulation S-X. Accordingly,
these unaudited consolidated financial statements do not include all of the
information and notes required by GAAP for complete financial statements and
should be read in conjunction with the consolidated financial statements and
notes thereto for the fiscal year ended December 31, 2010 included in the
Company's Annual Report on Form 10-K. In the opinion of management, the interim
unaudited consolidated financial statements included herein contain all
adjustments, including normal recurring adjustments, considered necessary to
present fairly the Company's financial position, the results of operations and
cash flows for the periods presented.

Use of Estimates

The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the reported
amounts of assets, liabilities and disclosures of contingent assets and
liabilities at the date of the financial statements and reported amounts of
revenues and expenses during the reporting period. Management bases its
estimates on historical experience and on various assumptions that are believed
to be reasonable under the circumstances, the results of which form the basis
for making judgments about the carrying values of assets and liabilities that
are not readily apparent from other sources. The most significant estimates
include: revenue recognition; sales returns and other allowances; allowance for
doubtful accounts; valuation and recoverability of long-lived assets; property
and equipment; contingencies; and income taxes.

On a regular basis, management reviews its estimates utilizing
currently available information, changes in facts and circumstances, historical
experience and reasonable assumptions. After such reviews, and if deemed
appropriate, those estimates are adjusted accordingly. Actual results could
differ from those estimates.

8

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Cash and cash equivalents

The Company includes in cash and cash equivalents all
short-term, highly liquid investments that mature within three months of their
acquisition date. Cash equivalents consist principally of investments in
interest-bearing demand deposit accounts and liquidity funds with financial
institutions and are stated at cost, which approximates fair value. The
Companys main banking relationship is with HSBC Bank at branches in Los Angeles
and Hong Kong. For cash management purposes the company concentrates its cash
holdings in accounts at HSBC Bank. The balances in these accounts may exceed the
federally insured limit of $250,000 per account by the Federal Deposit Insurance
Corporation (FDIC). In case of bank failure, it would have a significantly
negative impact on the companys ability to continue operations.

Revenue recognition

Our revenue recognition policy is in accordance with generally
accepted accounting principles, which requires the recognition of sales when
there is evidence of a sales agreement, the delivery of goods has occurred, the
sales price is fixed or determinable and the collectability of revenue is
reasonably assured. We generally record sales upon shipment of product to
customers and transfer of title under standard commercial terms.

Return policy

Customers have the right to return merchandise and the return
policy is set by senior management and consistent among all of our client
relationships. Based on historical experience, actual returns by our clients
have been rare and immaterial across our client base. Management monitors
returns by clients carefully as we increase the number of retail outlets within
our distribution network. Reserves are established to reflect actual and
anticipated losses resulting from the returns of defected and unsold merchandise
based on historical information. Currently we estimate returns to be 1% of our
sales and reserves have been made accordingly each reporting period. The percentage of sales used in the reserve calculation is based on management’s best estimate.

Cost of sales

Cost of goods sold consists of cost of purchases for resale to stores located in Australia, Canada, Dubai, France, the French West Indies, Italy, Japan, Kuwait, Mexico, the United Kingdom, and the United States. The Company purchased 100% of its merchandise for the year ended December 31, 2010 from Stone Corporation Inc. Stone Corporation Inc. is organized and operates in Japan, and is 80% owned by Lone Star Capital Limited, a Hong Kong company and our principal shareholder and 20% owned by Master Horiyoshi III. Stone manages the process of contracting manufacturers and purchasing the materials that are used to produce our clothing and other products. Stone is invoiced by the producers and suppliers and those charges pass through to Horiyoshi Worldwide, Inc. Historically our cost of goods sold has been approximately 45-50% of our product list prices. Our clients are required to pay all shipping costs for the delivery of their orders. As we increase product sales and require larger production runs we believe that our cost of goods sold as a percentage of revenue will diminish due to economies of scale.

Accounts receivable and allowance for doubtful accounts

Accounts receivable are uncollateralized customer obligations due under normal trade terms requiring payment within 30 days from the invoice date. Customer accounts with balances over 90 days old are considered delinquent. The carrying amount of accounts receivable are reduced by an allowance for doubtful accounts that reflects our Company's best estimate of the amounts that will not be collected. Our Company reviews outstanding accounts and based on an assessment of current creditworthiness, estimates the portion, if any, of the balance that will not be collected. Our Company provides for probable uncollectible amounts through a charge to earnings and a credit to a valuation allowance based on its assessment of the current status of individual accounts. Currently we estimate doubtful accounts to be 3% of our sales and reserves have been made accordingly each reporting period. Balances that are still outstanding after reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable.

9

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Earnings (Loss) per Share

The Company presents earnings (loss) per share (EPS) in
accordance with Accounting Standards Codification ASC 260  Earnings per Share
(ASC 260). ASC 260 requires dual presentation of basic and diluted EPS. Basic
EPS includes no dilution and is computed by dividing net loss available to
common stockholders by the weighted average number of common shares outstanding
for the period. Diluted EPS includes the potential dilution that could occur if
securities or other contracts to issue common stock were exercised or converted
into common stock. At March 31, 2011 there were 400,000 stock options that could dilute future earnings.

Foreign Currency

Foreign currency exposures arise from transactions, including
firm commitments and anticipated contracts, denominated in a currency other than
an entity's functional currency and from foreign-denominated revenues translated
into U.S. dollars. Changes in currency exchange rates may affect the relative
prices at which we and our foreign competitors sell products in the same market
and collect receivables from such sales.

Changes in currency rates may affect prices at which we conduct
business with our vendors and our employees. Payments subject to foreign
currency translation are executed at our deposit bank currency spot rate at the
time of payment, generally at each months end.

We generally sell our products and conduct business with our
vendors and employees in U.S. dollars but from time to time conduct business
transactions in a currency other than U.S. dollars. The company does not
currently hedge for the fluctuation of foreign currencies due to the diminutive
nature of transactions of this nature.

Income Taxes

The Company recognizes deferred tax liabilities and assets for
the expected future tax consequences of events that have been included in the
financial statements or tax returns. Deferred tax assets and liabilities are
determined based on the difference between the financial statement and tax basis
of assets and liabilities using enacted tax rates in effect for the year in
which the differences are expected to reverse. The Company estimates the degree
to which tax assets and credit carry-forwards will result in a benefit based on
expected profitability by tax jurisdiction. A valuation allowance for such tax
assets and loss carry-forwards is provided when it is determined that such
assets will more likely than not go unrealized. If it becomes more likely than
not that a tax asset will be realized, the related valuation allowance on such
assets would be reversed.

The Company accounts for income taxes in accordance with the
FASB Codification Topic 740-10-25 (ASC 740-10-25), which requires that
deferred tax assets and liabilities be recognized for future tax consequences
attributable to differences between financial statement carrying amounts of
existing assets and liabilities and their respective tax bases. In addition, it
requires recognition of future tax benefits, such as carry forwards, to the
extent that realization of such benefits is more likely than not and that a
valuation allowance be provided when it is more likely than not that some
portion of the deferred tax asset will not be realized.

Inventory

In general due to the startup nature of Horiyoshi Worldwide,
Inc. (HHWW) and the manufacturing relationship with Stone Corporation, the
Company carries no salable inventory on a quarter to quarter basis and ships
manufactured goods related to purchase orders directly from Stone Corporation.
The Company categorizes its inventory profile as producing garments just in
time for delivery. On a season to season basis the garments that the Company
does carry are marketing samples and not intended for sale. These garments are
manufactured solely for introductory purposes at fashion shows and are expensed
when used. Once the fashion shows are completed these samples are used for media
interactions, marketing and production quality control purposes.

Property and Equipment

Property and equipment are recorded at cost and valued at
$27,228 for the quarter ending March 31, 2011. Property and equipment consists
of computer technology, software, furniture and office furnishings. Depreciation
was $2,699 for the quarter ending March 31, 2011 and $1,696 for the year ending
December 31, 2010.

10

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Prepaid Expenses and Other Current Assets

The Company accrued a significant increase in prepaid expense for the quarter ended March 31, 2011 attributed to the manufacturing of goods by our supplier, Stone Corporation, a related party, for goods sold and to be sold in 2011.

Stone Corporation is the sole manufacturing supplier and important design and development resource to Horiyoshi Worldwide, Inc. Stone Corporation, a Japanese corporation, is 80% owned by Lone Star Capital Limited, a Hong Kong company and principal shareholder of the company, and 20% owned by Yoshihito Nakano, Master Horiyoshi III, also a significant shareholder of the company.

The services rendered by Stone Corporation encompass design, development and production services.  The increase in prepaid expenses can be attributed to the new nature of our business which require primarily upfront payment, timing issues that arise between the design and development cycle and the fashion season sales cycle, and anticipation of significant growth in sales stemming from our established operations as well as expansion into new business channels in the apparel industry. These expenses occur before or early in the sales and marketing cycle and are diminished as the company sells its products.  Prepaid expenses are netted against payments subsequently owed to Stone Corporation. The Company expects to receive and utilize benefits resulting from these upfront costs within the next 6 to 12 months. Prepaid expense for the quarter ended March 31, 2011 were $1,744,590 and $1,037,251 for the year ended December 31, 2010.

Accrued Expenses and Other Current Liabilities

Accounts payable are those funds owed to our business partners
for goods and services rendered which are related to our business operations.
Our accounts payable for the quarter ended March 31, 2011 were $17,718 and our
accounts payable for the year ended December, 31, 2010 were $40,991.

The company accrues expenses related to business travel,
professional services rendered but not yet paid for and various office expenses
and reimbursements. As a result of the limited number of employees and short
term nature of their employment it has not been necessary for the Company to
separately accrue for vacation or payroll time for the quarter ended March 31,
2011. Our accrued expenses were $27,492 for the quarter ended March 31, 2011 and
$45,377 for the year ended December 31, 2010.

Fair Value of Financial Instruments

The carrying amount reported in the accompanying condensed
consolidated balance sheets for cash, accounts receivable, accounts payable and
accrued expenses approximates fair value because of the short-term maturity of
those instruments. The Company believes the fair value of the revolving credit
loan with Stone Corporation approximates fair value because of the accelerating
nature of the sales cycle and the related party aspect of the Stone
relationship. It was not practicable to estimate the fair value of notes payable
to related parties.

Note 3. Subordinated Notes Payable to Related Party

As of March 31, 2011, our Company was obligated to Mr. Kitsuo
Kojima, a Director and CEO of Horiyoshi Worldwide, Inc., for a non-interest
bearing demand loan with a balance of $38,384.

As of March 31, 2011, our Company was obligated to Steve Suk, a
Director of Horiyoshi the Third Limited, for a non-interest bearing demand loan
with a balance of $133,219.

As of March 31, 2011, our Company was obligated to Lone Star
Capital Limited, for a non-interest bearing demand loan with a balance of
$1,366,722.

Note 4. Related Party Transactions

On September 17, 2008, Horiyoshi III Worldwide Ltd. (as we then
were) entered into a License Agreement with Stone Corporation Inc. d/b/a Stone
Japan, a Japanese corporation that is 80% owned by Lone Star Capital Limited, (a
Hong Kong company and our principal shareholder) and 20% owned by Yoshihito
Nakano, Master Horiyoshi III. Pursuant to the license agreement we hold an
exclusive, worldwide, 35 year license, effective September 17, 2008, to use all
copyright and trademark rights associated with our products and brand, and to
exclusively manufacture and distribute apparel, beauty products, and other
products related to our business. No third party is permitted to use the IP
licensed to us for the production of non-apparel merchandise. We paid
consideration of $10 in respect of the licensed rights. In the event that Stone
Japan intends to sell the intellectual property rights licensed to us, we shall
have a first right of purchase for those rights so long as the license agreement
is in effect to purchase those rights at any time in the seven (7) years
preceding the termination of the license agreement. The purchase price shall be
equal to two (2) times the average annual gross sales turnover of our products
based on the licensed rights during the three years preceding the date of
exercise of the right of purchase.

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Note 5. Share-Based Compensation and Warrants

Stock Awards

On January 1, 2011, we entered into a consulting agreement with
Raymond A. Catroppa, CFA. Pursuant to the terms of the consulting agreement, we
provided Mr. Catroppa with 400,000 warrants to purchase equity shares at $0.50
per share. The consulting agreement is for a period of twelve months.

The fair value of each warrant granted is estimated on the date
of the grant using the Black-Scholes Model. The Black-Scholes Model has
assumptions for risk free interest rates, dividends, stock volatility and
expected life of an option grant. The risk free interest rate is based on the
U.S. Treasury Bill rate with a maturity based on the expected life of the
options and on the closest day to an individual stock option grant. Dividend
rates are based on the Companys dividend history. The stock volatility factor
is based on historical market prices of the Companys common stock. The expected
life of an option grant is based on managements estimate. The fair value of
each option grant is recognized as a compensation expense over the vesting
period of the option on a straight line basis. The quarterly warrant expense
related to the warrants issued using this estimate is $122,179 for the quarter
ending March 31, 2011.  The  following weighted-average assumptions were utilized in the fair value  calculations for warrants granted:

Three months
        EndedMarch 31,
        2011Exercise price
      $
      .50Expected dividend yield
      
      0
      **%**Expected stock price volatility
      
      230
      **%**Risk-free interest rate
      
      .29
      **%**


Note 6. Commitments and Contingencies

Operating Leases

Our executive offices, sales showroom and support staff are in
the Mandel Building located at 711 S. Olive Street, #504 Los Angeles, CA 90014.
The Company conducts operations under operating leases, which expire in
November, 2011. Operating lease rent expense (including real estate taxes and
common area maintenance costs) was approximately $6,300 for the three months
ended March 31, 2011. Rent expense is allocated to operating expenses in the
accompanying condensed consolidated statements of operations.

Note 7. Seasonality

To date, with the majority of the  Company’s revenues coming from the luxury segment there is seasonality in the  revenue steam. The Company attends important design shows that are focused on  the Women’s and Men’s spring season and Women’s and Men’s fall season which  occur in March and September. This translates into the company booking a large  portion of orders and corresponding revenues in the first and third quarter on  a yearly basis. As the company introduces line extensions targeting different  customers and retailers, consummates licensing partnerships and completes  development of an online store it will serve to smooth out earnings on a yearly  basis.

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

The following discussion should be read in conjunction with our
consolidated financial statements and the related notes that appear elsewhere in
this quarterly report. The following discussion contains forward-looking
statements that reflect our plans, estimates and beliefs. Our actual results
could differ materially from those discussed in the forward looking statements.
Factors that could cause or contribute to such differences include, but are not
limited to those discussed below and elsewhere in this quarterly report.

Our consolidated financial statements are stated in United
States Dollars and are prepared in accordance with United States Generally
Accepted Accounting Principles.

Overview

Horiyoshi Worldwide, Inc., the Company, is a clothing and
accessories design and distribution company whose products are inspired by the
artwork of Japanese master tattoo artist Yoshihito Nakano - better known as
Horiyoshi III. The Horiyoshi name has been internationally recognized for
decades and Horiyoshi III is considered by his peers and followers as a legend
in his field. The business was established September 1, 2008 to capitalize on
the multi-generational legacy of the Tattoo Masters by offering consumers a
unique collection of knitwear, t-shirts and accessory items. The Company began
selling its products in 2009. The Collection retails at a suggested price point
of approximately $140-160 for T-shirts, $480-945 for knits, $600-800 for
hoodies, and $280-420 for scarves. The rights to the Horiyoshi III design
catalogue are exclusively licensed to Horiyoshi the Third, Inc. (HTT) a wholly
owned subsidiary of HHWW (the Company).

The companys design teams are passionate about the art work of
Horiyoshi III and take great care integrating the imagery into the companys
garments. HHWWs management feels that it is positioning the company to take
advantage of the increasing inflection of design, art and culture in todays
fashion world. By introducing quality clothes that infuse the internationally
recognized art work of Horiyoshi III the company believes it is at the vanguard
of a growing interest in unique aspects of the art and cultural imagery of the
Far East. The Companys strategy includes the development of a line extension
marketed at a lower price point and focused on larger markets. In conjunction a
number of new distribution channels are under development. Our goal is to build
a brand that is recognized throughout the world for creating quality products
with universal appeal.

Corporate History

We were incorporated as Kranti Resources,
  Inc., in the State of Nevada on November 3, 2006 to engage in the acquisition,
  exploration, and development of mineral deposits and reserves. Our company
  discontinued its planned mining activities and eventually adopted a new strategy
  to pursue opportunities in the fashion apparel industry.

On June 21, 2010, our company effected a 2.1622 for 1 forward
stock split of outstanding stock. As a result, our companys outstanding share
count increased from 43,875,000 shares of common stock to 94,866,525 shares of
common stock, all with a par value of $0.001. In addition, on June 21, 2010, our
company changed its name to Horiyoshi Worldwide Inc. to coincide with the
redirection of its business toward fashion apparel.

On September 1, 2010, we entered into a share exchange
agreement with Horiyoshi the Third Limited, a Hong Kong corporation, and the
shareholders of Horiyoshi the Third Limited for purchase of the company.

On November 5, 2010, our president, Mitsuo Kojima entered into
a share cancellation agreement with our company and surrendered for cancellation
all 64,866,000 shares held by him in common stock which left a total of
30,000,526 shares outstanding.

The share exchange agreement with Horiyoshi the Third Limited
was subsequently amended and on November 5, 2010 the acquisition of all of the
issued and outstanding common shares of Horiyoshi the Third Limited occurred. In
accordance with the closing, we issued 30,000,000 shares of our common stock to
the former shareholders of Horiyoshi the Third Limited in exchange for the
acquisition of all 10,000 Horiyoshi the Third Limited shares issued and
outstanding. Upon close of the acquisition we had a total of 60,000,526 shares
issued and outstanding.

13

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On November 29, 2010 we entered in a share issuance agreement
with Zyndy Trade Corp., pursuant to which Zyndy has agreed to acquire up to $5
million of our shares of common stock through periodic draw downs at the request
of our company. The price per share to be issued on any draw down shall be set
at 75% of the volume weighed average closing prices for the ten days preceding
any draw down notice. This agreement is to remain in effect until December 31,
2011.

On January 1, 2011 we entered in a consulting agreement with
Raymond A. Catroppa as the companys chief financial officer and corporate
development executive on an interim basis. The consulting agreement provides for
the basic remuneration of Mr. Catroppa at the rate of US$60,000 per annum
payable in equal monthly installments. The term of the agreement began on
January 1, 2011 and continues through January 1, 2012 at which time the
employment contract will be re-negotiated unless terminated by either party.

Our fiscal year end is December 31.

Executive Summary

For the three months ended March 31, 2011, we reported net
sales of $228,828, an increase of $76,652, or 50%, over the $152,176 reported
for the quarter ended March 31, 2010. Gross margin increased to 55% for the
quarter ended March 31, 2011 compared to 50% for the quarter ended March 31,
2010. Operating expenses, which include all selling, general and administrative
costs, increased $370,196, or 271%, to $506,553 for the quarter ended March 31,
2011 as compared to $136,357 for the quarter ended March 31, 2010. Net loss for
the quarter ended March 31, 2011 was $380,572 compared to net loss of $54,444
for the quarter ended March 31, 2010.

Results of Operations

The following summary of our results of operations should be
read in conjunction with our consolidated financial statements for the quarters
ended March 31, 2011 and March 31, 2010.

Our operating results for the quarters ended March 31, 2011 and
March 31, 2010 are summarized as follows:

| |              |   | Three Months Ended |  
| | ------------ | - | ------------------ | -
| |              |   | March 31           |  
| |              |   | 2011               |  
| | Revenue      | $ | 228,828            |  
| | COGS         | $ | 102,847            |  
| | Gross Profit | $ | 125,981            |  
| | Expenses     | $ | 506,553            |  
| | Net Loss     | $ | (380,572           | )

Revenue

We earned revenues of $228,828 for the quarter ended March 31,
2011 compared to revenues of $152,176 for the three months ended March 31, 2010.
Increased revenues in the quarter can be attributed to increased awareness of
Horiyoshi the Third products, intensified participation in fashion and trade
shows and expansion of our sales effort to new customers. We anticipate earning
increased revenues in fiscal year 2011.

Cost of Goods Sold

Cost of goods sold for the quarter ended March 31, 2011 were
$102,847 compared to $76,029 for the quarter ended March 31, 2010. Cost of goods
sold represented 45% of sales for the quarter ended March 31, 2011 as compared
to 50% for the quarter ended March 31, 2010. This decrease in COGS as a
percentage of sales can be attributed to lower costs associated with higher
volume runs during production.

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Expenses

Our total expenses for the quarters ended March 31, 2011 and
March 31, 2011 are outlined in the table below:

| |                            |   | Three Months Ended | 
| | -------------------------- | - | ------------------ | 
| |                            |   | March 31           | 
| |                            |   | 2011               | 
| | Selling                    | $ | 49,163             | 
| | General and administrative | $ | 457,390            | 
| | Total                      | $ | 506,553            | 

Expenses for the quarters ended March 31, 2011, increased by
271% as compared to the comparative period in 2010 primarily as a result of a
significant increase in sales revenue, increases in sales and marketing
activities, development of new clothes lines and distribution channels. A
significant portion of expenses for the quarter ended March 31, 2011, $122,179,
results from the estimated fair value of warrants issued on January 1, 2011.

Liquidity and Financial Condition

|Working Capital           |   |           |  |   |              |  |   |            |  
|------------------------- | - | --------- |  | - | ------------ |  | - | ---------- | -
|                          |   | At        |  |   | At           |  |   |            |  
|                          |   | March 31, |  |   | December 31, |  |   | Increase/  |  
|                          |   | 2011      |  |   | 2010         |  |   | Decrease   |  
|Current Assets            | $ | 5,467,331 |  | $ | 6,683,824    |  | $ | (1,216,493 | )
|Current Liabilities       | $ | 1,588,824 |  | $ | 2,539,419    |  | $ | (950,595   | )
|Working Capital (deficit) | $ | 3,878,507 |  | $ | 4,144,405    |  | $ | (265,898   | )

|Cash Flows                                  |   |                    |   |   |                    |  
|------------------------------------------- | - | ------------------ | - | - | ------------------ | -
|                                            |   | Three Months Ended |   |   | Three Months Ended |  
|                                            |   | March 31,          |   |   | March 31,          |  
|                                            |   | 2011               |   |   | 2010               |  
|Net Cash Used in Operating
      Activities | $ | (1,155,691         | ) | $ | (382,528           | )
|Net Cash Used by Investing Activities       | $ | (10,204            | ) | $ | (2,063             | )
|Net Cash Provided by Financing Activities   | $ | (848,566           | ) | $ | 483,552            |  
|Net Increase in Cash During the Period      | $ | (2,014,461         | ) | $ | 98,961             |  

We will require additional funds to fund our budgeted expenses
in the future. These funds may be raised through equity financing, debt
financing, or other sources, which may result in further dilution in the equity
ownership of our shares. There is no assurance that we will be able to maintain
operations at a level sufficient for an investor to obtain a return on their
investment in our common stock. Further, we may continue to be unprofitable. We
may need to raise additional funds in the future in order to proceed with our
budgeted expenses. Additionally, there is no assurance that any party will
advance additional funds to us in order to enable us to sustain our plan of
operations or to repay our liabilities.

Liquidity and Capital Resources

Growth of our operations will be based on our ability to
internally finance from cash flow, raise equity and/or debt to increase sales
and production. Our primary sources of liquidity are: (i) cash from sales of our
products; and (ii) financing activities. We received a total of $5,000,000 in
financing activities which was comprised of the sale of two equity tranches in
December 2010. Our cash balance as of March 31, 2011 is $3,561,670.

Prior to the $5,000,000 in equity financing in December, 2010,
our Company funded some of its operations through debt financing with related
party transactions.

15

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As of March 31, 2011, our Company was obligated to Mr. Kitsuo
Kojima, a Director and CEO of Horiyoshi Worldwide, Inc., for a non-interest
bearing demand loan with a balance of $38,384.

As of March 31, 2011, our Company was obligated to Steve Suk, a
Director of Horiyoshi the Third Limited, for a non-interest bearing demand loan
with a balance of $133,219.

As of March 31, 2010, our Company was obligated to Lone Star
Capital Limited, for a non-interest bearing demand loan with a balance of
$1,366,722.

As of March 31, 2011, Stone Corporation, our sole supplier,
received prepaid expenses from Horiyoshi Worldwide, Inc. in the amount of
$1,744,590 and $1,037,251 for the year ended December 31, 2010.. This increase
is a result of significantly higher anticipated levels of production in
2011.

Plan of Operation and Cash Requirements

Our wholly-owned subsidiary, Horiyoshi the Third Limited, began
selling its products in 2009. We intend to continue sales and distribution of
the Horiyoshi Collection through the public company Horiyoshi Worldwide, Inc.
Our plan of action over the next twelve months is to continue to market and sell
the Horiyoshi Luxury Collection, develop a line extension to be sold at a lower
price point and focused on a larger market and raise additional capital
financing as necessary, to grow operations.

The success of our operations will be based on our ability to
grow by financing the operation through internal cash flow or to raise funds
through equity and/or debt financing to invest in marketing, sales and
distribution of our product line. The challenging markets for credit and for the
sale of luxury apparel resulting from the recent financial crisis and current
period of economic stagnation have negatively affected the markets for many
luxury goods. The availability of equity and/or debt financings remains
uncertain.

Contractual Obligations

As a smaller reporting company, we are not required to
provide tabular disclosure obligations.

Going Concern

As of March 31, 2011, our Company has a quarterly loss of
$380,572 and an accumulated deficit of $1,217,218. Our Company intends to fund
operations through operational cash flow and equity/debt financing arrangements.
These sources may be insufficient to fund its capital expenditures, working
capital and other cash requirements for the future. In response to these
problems, management intends to raise additional funds through public or private
placement offerings. These factors, among others, raise substantial doubt about
our Companys ability to continue as a going concern. The accompanying financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.

Off-Balance Sheet Arrangements

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

Seasonality

To date, with the majority of the Companys revenues coming
from the luxury segment there is seasonality in the revenue steam. The Company
attends important design shows that are focused on the Womens and Mens spring
season and Womens and Mens fall season which occur in March and September.
This translates into the company booking a large portion of orders and corresponding revenues in
the first and third quarter on a yearly basis. As the company introduces line
extensions targeting different customers and retailers, consummates licensing
partnerships and completes development of an online store it will serve to
smooth out earnings on a yearly basis.

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Critical Accounting Policies

Use of estimates

The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the reported
amounts of assets, liabilities and disclosures of contingent assets and
liabilities at the date of the financial statements and reported amounts of
revenues and expenses during the reporting period. Management bases its
estimates on historical experience and on various assumptions that are believed
to be reasonable under the circumstances, the results of which form the basis
for making judgments about the carrying values of assets and liabilities that
are not readily apparent from other sources. The most significant estimates
include: revenue recognition; sales returns and other allowances; allowance for
doubtful accounts; valuation and recoverability of long-lived assets; property
and equipment; contingencies; and income taxes.

On a regular basis, management reviews its estimates utilizing
currently available information, changes in facts and circumstances, historical
experience and reasonable assumptions. After such reviews, and if deemed
appropriate, those estimates are adjusted accordingly. Actual results could
differ from those estimates.

Significant Estimates

Our financial statements include some amounts that are based on
our management's best estimates and judgments. The most significant estimates
relate to the valuation allowance for accounts receivable, returns, deferred
taxes and various contingent liabilities. It is reasonably possible that the
above-mentioned estimates and others may be adjusted as more current information
becomes available, and any adjustment could be significant in future reporting
periods.

Revenue recognition

Our revenue recognition policy is in accordance with generally
accepted accounting principles, which requires the recognition of sales when
there is evidence of a sales agreement, the delivery of goods has occurred, the
sales price is fixed or determinable and the collectability of revenue is
reasonably assured. We record sales upon shipment of product to customers and
transfer of title under standard commercial terms.

Deferred revenue as of March 31, 2011 and December 31, 2010
were $2,978 and $18,062 respectively. Deferred revenue represents prepayments
and deposits required from certain customers before delivery of Horiyoshi the
Third products.

Return policy

Customers have the right to return  merchandise and the return policy is set by senior management and consistent  among all of our client relationships.   Based on historical experience, actual returns by our clients have been  rare and immaterial across our client base. Management monitors returns by  clients carefully as we increase the number of retail outlets within our  distribution network.  Reserves are  established to reflect actual and anticipated losses resulting from the returns  of defected and unsold merchandise based on historical information. Currently  we estimate returns to be 1% of our sales and reserves have been made  accordingly each reporting period.  The  percentage of sales used in the reserve calculation is based on management’s  best estimate.

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Accounts receivable and allowance for doubtful accounts

Accounts receivable are uncollateralized customer obligations
due under normal trade terms requiring payment within 30 days from the invoice
date. Customer accounts with balances over 90 days old are considered
delinquent. The carrying amount of accounts receivable are reduced by an
allowance for doubtful accounts that reflects our Company's best estimate of the
amounts that will not be collected. Our Company reviews outstanding accounts and
based on an assessment of current creditworthiness, estimates the portion, if
any, of the balance that will not be collected. Our Company provides for
probable uncollectible amounts through a charge to earnings and a credit to a
valuation allowance based on its assessment of the current status of individual
accounts. Currently we estimate doubtful accounts to be 3% of our sales and
reserves have been made accordingly each reporting period. Balances that are
still outstanding after reasonable collection efforts are written off through a
charge to the valuation allowance and a credit to accounts receivable. Our
Company has assessed accounts receivable and determined that a reserve is
necessary and at March 31, 2011 the allowance for doubtful accounts was
$5,238.

Cost of goods sold

Cost of goods sold consists of cost of purchases for resale to
stores located in Australia, Canada, Dubai, France, the French West Indies,
Italy, Japan, Kuwait, Mexico, the United Kingdom, and the United States. The
Company purchased 100% of its merchandise for the year ended December 31, 2010
from Stone Corporation Inc. Stone Corporation Inc. is organized and operates in
Japan, and is 80% owned by Lone Star Capital Limited, a Hong Kong company and
our principal shareholder and 20% owned by Master Horiyoshi III. Stone manages
the process of contracting manufacturers and purchasing the materials that are
used to produce our clothing and other products. Stone is invoiced by the
producers and suppliers and those charges pass through to Horiyoshi Worldwide,
Inc. Historically our cost of goods sold has been approximately 50% of our
product list prices. Our clients are required to pay all shipping costs for the
delivery of their orders. As we increase product sales and require larger
production runs we believe that our cost of goods sold as a percentage of
revenue will diminish due to economies of scale.

Inventory

In general due  to the startup nature of Horiyoshi Worldwide, Inc. (HHWW) and the manufacturing  relationship with Stone Corporation, the Company carries no salable inventory  on a quarter to quarter basis and ships manufactured goods related to purchase  orders directly from Stone Corporation. The Company categorizes its inventory  profile as producing garments “just in time” for delivery. On a season to  season basis the garments that the Company does carry are marketing samples and  not intended for sale. These garments are manufactured solely for introductory  purposes at fashion shows and are expensed when used. Once the fashion shows  are completed these samples are used for media interactions, marketing and  production quality control purposes.

Income Taxes

The Company accounts for income taxes in accordance with the
FASB Codification Topic 740-10-25 (ASC 740-10-25), which requires that
deferred tax assets and liabilities be recognized for future tax consequences
attributable to differences between financial statement carrying amounts of
existing assets and liabilities and their respective tax bases. In addition, it
requires recognition of future tax benefits, such as carry forwards, to the
extent that realization of such benefits is more likely than not and that a
valuation allowance be provided when it is more likely than not that some
portion of the deferred tax asset will not be realized.

Risks Related to Our Business

Dependence on Key Personnel

The future success of our company depends largely on the
talents and efforts of our principal designer, Master Horiyoshi III, as well as
on the talents and abilities of other key members of our team, including our
Director and Chief Executive Officer and our independent contractors. Although
we believe that our continued operation and growth might be sustained without
the ongoing contributions of Master Horiyoshi III or of other personnel; no
assurance can be given that our business would not be adversely affected if
certain key members of our production team or management ceased to be active in
our business. Master Horiyoshi III is also integral to our marketing efforts and his absence would have a material adverse effect on
our business. We do not currently maintain key-person life insurance on the life
of Master Horiyoshi III.

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Fashion and Apparel Industry Risks

We believe that our success depends in substantial part on our
ability to stimulate and capture consumer interest with appealing designs, as
well as to anticipate and react to changing consumer demands in a timely manner.
Although, judging by the industry and media response to our first collections,
we have been successful in this regard, there can be no assurance that our
success will continue. Because our products have been produced in low volume,
limited production runs, we have thus far been immune to losses caused by a
failure to sell produced goods caused by changing fashion trends and ensuing
rejection of our products at wholesale or retail. However, as we expand our
production and distribution, we will be required increasingly to anticipate
orders for our products. Although we intend to mitigate the risks of unsold
products by securing pre-orders for the bulk of our products, we will
nevertheless be required to produce a certain surplus volume of goods in order
to anticipate subsequent order and re-orders. Accurately gauging and maximizing
the size of our production runs will allow us to minimize our per-unit
production costs by maximizing production efficiencies. For example, the cost of
producing 1,000 t-shirts in a single run may be significantly lower than the
cost of producing two staggered runs of 500 t-shirts. However, if we misjudge
the market for our productions, we may be faced with a significant amount of
unused fabrics and other materials, or a surplus of unsold finished goods.

We anticipate that the demand for our products will follow the
cyclical patterns typical of the fashion and apparel industry. Demand for
fashion and apparel products is cyclical and tends to decline in recessionary or
politically or economically unstable periods, whether on a global, national or
regional level. We believe that the introduction of our products to the retail
market in 2009, although critically successful, was undoubtedly hampered by a
stagnant, recessionary global retail environment.

Consumer demand for our products is invariably affected by the
demand for the products of our competitors. The segment of the fashion apparel
industry in which we operate is highly competitive, with numerous regional,
national and multi-national designers of apparel and accessories operating
worldwide. While none of these designers or manufacturers accounts for a
significant percentage of total industry sales, many are significantly larger
and have substantially greater resources than we do. In addition, with adequate
financial support, appealing independent designers can become competitors within
several years of establishing a new label. We believe that the appeal of brands
associated with lower market segment products are frequently short-lived or
cyclical, often succumbing to the novelty of new competitors in the marketplace.
Meanwhile the appeal of exclusive luxury brands tend to withstand shifting
fashion trends and competition. Accordingly, we intend to establish and maintain
a competitive industry position by maintaining the exclusivity, quality, and
longevity of our brand. We intend to achieve this by diligently scrutinizing and
monitoring the scope and quality of our product line and retail
distribution.

However, there can be no assurance that we will achieve any
growth in revenues or earnings, achieve profitability, or sustain or operations.
particularly if the current retail environment remains stagnant or further
declines, if we fail to accurately gauge our products and production to
accommodate shifting retail demand, or if our brand or products fail to achieve
or maintain a competitive appeal in the marketplace.

Dependence on and protection of Intellectual Property
Rights

On September 17, 2008, Horiyoshi the Third Limited entered into
a License Agreement with Stone Corporation Inc. d/b/a Stone Japan, for the grant
of an exclusive, worldwide, 35 year license to use, and to sublicense the right
to use, the trademarks "Horiyoshi," "Horiyoshi III," "Horiyoshi the Third", all
current and future variations thereof, and certain artwork and graphic
catalogues produced by Master Horiyoshi III (collectively, the "Licensed
Intellectual Property"), and to use, and sublicense the right to use, the name
and likeness of Master Horiyoshi III, in connection with the design,
manufacture, distribution, sale, advertising, marketing, and promotion of
products and offering of store services. Stone Japan is a Japanese corporation
that is 80% owned by Lone Star Capital Limited, (a Hong Kong company and our
principal shareholder), and 20% owned by Yoshihito Nakano, Master Horiyoshi
III.

There is no restriction on the transferability of shares of
Stone Japan. We consider our rights under the License Agreement to be material,
and as a result, termination of the License Agreement and the loss of the right
to use the Licensed Intellectual Property would have a material adverse
effect upon our company. We intend to devote substantial resources to the
registration, maintenance, and protection of our intellectual property rights
(including the Licensed Intellectual Property). However, there can be no
assurance that any protective action taken by us will prevent imitation of our
products or infringement of our intellectual property rights by others, or
prevent an ensuing loss of revenue or other damages. Furthermore, as we expand
our intellectual property rights by producing new products, creating new
trademarks, and distributing our collections in new jurisdictions, our efforts
may attract third party claims that question the validity of our intellectual
property rights. There can be no assurance that any such claims will not succeed
in frustrating, restricting, or blocking our ability to produce certain designs
or to use certain trademarks in certain countries.

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Changes in the Retail Industry could have a material adverse
impact on our business

The retail industry periodically experiences business
consolidations, restructurings, reorganizations and other ownership changes. Any
of the retailers that carry our products may undergo such changes in the future,
which could result in a significant contraction of the retail outlets carrying
our products, which in turn could have a material adverse impact on our
business.

Our ability to continue as a going concern is in substantial
doubt

The ability of our company to continue as a going concern is in
substantial doubt and is dependent on achieving profitable operations and
obtaining the necessary financing in order to develop our business. The outcome
of these matters cannot be predicted at this time. Our future operations are
dependent on the markets acceptance of our products in order to ultimately
generate future profitable operations, and our ability to secure sufficient
financing to fund future expansion or operations. There can be no assurance that
our products will be able to secure market acceptance. Management plans to raise
additional equity financing to enable our company to complete our development
plans. However, there can be no assurance that we will be successful in raising
additional financing. Our financial statements do not include any adjustments
that might result from the outcome of these uncertainties.

We have limited financial and management resources to pursue
our growth strategy

Our growth strategy may place a significant strain on our
management, operational and financial resources. We have negative cash flow from
operations and continue to seek additional capital. We will have to obtain
additional capital either through debt or equity financing. There can be no
assurance, however, that we will be able to obtain such financing on terms
acceptable to our company.

If we raise additional funds through the issuance of equity or
convertible securities, these new securities may contain certain rights,
preferences or privileges that are senior to those of our common shares.
Additionally, the percentage of ownership of our company held by existing
shareholders will be reduced.

Risks Associated with Our Common Stock

Trading on the OTC Bulletin Board may be volatile and
sporadic, which could depress the market price of our common stock and make it
difficult for our stockholders to resell their shares

Our common stock is quoted on the OTC Bulletin Board service of
the Financial Industry Regulatory Authority. Trading in stock quoted on the OTC
Bulletin Board is often thin and characterized by wide fluctuations in trading
prices, due to many factors that may have little to do with our operations or
business prospects. This volatility could depress the market price of our common
stock for reasons unrelated to operating performance. Moreover, the OTC Bulletin
Board is not a stock exchange, and trading of securities on the OTC Bulletin
Board is often more sporadic than the trading of securities listed on a
quotation system like NASDAQ or a stock exchange like Amex. Accordingly,
shareholders may have difficulty reselling any of their shares.

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Our stock is a penny stock. Trading of our stock may be
restricted by the SECs penny stock regulations and FINRAs sales practice
requirements, which may limit a stockholders ability to buy and sell our stock

Our stock is a penny stock. The Securities and Exchange
Commission has adopted Rule 15g-9 which generally defines penny stock to be
any equity security that has a market price (as defined) less than $5.00 per
share or an exercise price of less than $5.00 per share, subject to certain
exceptions. Our securities are covered by the penny stock rules, which impose
additional sales practice requirements on broker-dealers who sell to persons
other than established customers and accredited investors. The term
accredited investor refers generally to institutions with assets in excess of
$5,000,000 or individuals with a net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock
rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from the rules, to deliver a standardized risk disclosure
document in a form prepared by the SEC which provides information about penny
stocks and the nature and level of risks in the penny stock market. The
broker-dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the transaction and monthly account statements showing the market
value of each penny stock held in the customers account. The bid and offer
quotations, and the broker-dealer and salesperson compensation information, must
be given to the customer orally or in writing prior to effecting the transaction
and must be given to the customer in writing before or with the customers
confirmation. In addition, the penny stock rules require that prior to a
transaction in a penny stock not otherwise exempt from these rules, the
broker-dealer must make a special written determination that the penny stock is
a suitable investment for the purchaser and receive the purchasers written
agreement to the transaction. These disclosure requirements may have the effect
of reducing the level of trading activity in the secondary market for the stock
that is subject to these penny stock rules. Consequently, these penny stock
rules may affect the ability of broker-dealers to trade our securities. We
believe that the penny stock rules discourage investor interest in, and limit
the marketability of, our common stock.

In addition to the penny stock rules promulgated by the
Securities and Exchange Commission, the Financial Industry Regulatory Authority
has adopted rules that require that in recommending an investment to a customer,
a broker-dealer must have reasonable grounds for believing that the investment
is suitable for that customer. Prior to recommending speculative low priced
securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customers financial status,
tax status, investment objectives and other information. Under interpretations
of these rules, the Financial Industry Regulatory Authority believes that there
is a high probability that speculative low-priced securities will not be
suitable for at least some customers. The Financial Industry Regulatory
Authority requirements make it more difficult for broker-dealers to recommend
that their customers buy our common stock, which may limit your ability to buy
and sell our stock.

Item 3. Quantitative and Qualitative Disclosures about
Market Risk

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

Item 4. Controls and Procedures

We maintain disclosure controls and procedures that are
designed to ensure that information required to be disclosed in our reports
filed under the Securities Exchange Act of 1934, as amended, is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms, and that such information
is accumulated and communicated to our management, including our president and
chief executive officer (our principal executive officer) and our chief
financial officer (our principal financial officer and principal accounting
officer), to allow for timely decisions regarding required disclosure.

As of the end of the fiscal quarter covered by this report, we
carried out an evaluation, under the supervision and with the participation of
our president and chief executive officer (our principal executive officer) and
our chief financial officer (our principal financial officer and principal
accounting officer), of the effectiveness of the design and operation of our
disclosure controls and procedures. Based on the foregoing, our president and
chief executive officer (our principal executive officer) and our chief
financial officer (our principal financial officer and principal accounting
officer) concluded that our disclosure controls and procedures were effective as
of the end of the period covered by this quarterly report. Changes in Internal
Control Over Financial Reporting

There were no changes in our internal control over financial
reporting that occurred during the quarter ended March 31, 2011 that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.

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PART II  OTHER INFORMATION

Item 1. Legal Proceedings

We know of no material, existing or pending legal proceedings
against our company, nor are we involved as a plaintiff in any material
proceeding or pending litigation. There are no proceedings in which any of our
directors, officers or affiliates, or any registered or beneficial shareholder,
is an adverse party or has a material interest adverse to our interest.

Item 1A. Risk Factors.

There have been no material changes to any risk factors
affecting our Company as disclosed by us in our Annual Report on Form 10-K for
the year ended December 31, 2010.

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

None.

Item 3. Defaults upon Senior Securities

None.

Item 4. [Removed and Reserved]

Item 5. Other Information

None.

|Exhibit | Description                                                                                                                                                                                                                                                                     
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  |                                                                                                                                                                                                                                                                                 
|        |                                                                                                                                                                                                                                                                                 
|(3)     | (i) Articles
        of Incorporation and (ii) Bylaws                                                                                                                                                                                                                           
|        |                                                                                                                                                                                                                                                                                 
|3.1     | Certificate
        of Amendment filed with the Nevada Secretary of State on June 17, 2010,
        effective June 21, 2010. (Incorporated by reference from our Current
        Report on Form 8-K filed on July 20, 2010).                                                    
|        |                                                                                                                                                                                                                                                                                 
|(10)    | Material
        Contracts                                                                                                                                                                                                                                                      
|        |                                                                                                                                                                                                                                                                                 
|10.1    | License Agreement
        dated September 17, 2008 between Horiyoshi III Worldwide Ltd. and Stone
        Corporation Inc. (Incorporated by reference from our Current Report
        on Form 8-K filed on November 8, 2010).                                                   
|        |                                                                                                                                                                                                                                                                                 
|10.2    | Share Exchange
        Agreement among the company, Horiyoshi the Third Limited and the Shareholders
        of Horiyoshi the Third Limited dated September 1, 2010. (Incorporated
        by reference from our Current Report on Form 8-K filed on September
        3, 2010).
|        |                                                                                                                                                                                                                                                                                 
|10.3    | Amendment
        to Share Exchange Agreement dated November 5, 2010 with Horiyoshi the
        Third Limited. (Incorporated by reference from our Current Report
        on Form 8-K filed on November 8, 2010).                                                               
|        |                                                                                                                                                                                                                                                                                 
|10.4    | Share Cancellation
        Agreement dated November 5, 2010 with Mitsuo Kojima. (Incorporated by
        reference from our Current Report on Form 8-K filed on November 8,
        2010).                                                                                      
|        |                                                                                                                                                                                                                                                                                 
|10.5*   | Share
        Issuance Agreement dated November 29, 2010 with Zyndy Trade Corp.                                                                                                                                                                                                 
|        |                                                                                                                                                                                                                                                                                 
|10.6    | Consulting
        Agreement dated January 1, 2011 with Raymond A. Catroppa (Incorporated
        by reference from our Current Report on Form 8-K filed on February
        28, 2011).                                                                                         
|        |                                                                                                                                                                                                                                                                                 
|(21)    | Subsidiaries
        of the Registrant                                                                                                                                                                                                                                          

22

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Exhibit
      DescriptionNumber21.1
      Horiyoshi
          the Third Limited(31)
      Rule
          13a-14(a)/15d-14(a) Certifications31.1*
      Section
          302 Certification under the Sarbanes-Oxley
          Act of 2002 of the Principal Executive Officer31.2*
      Section
          302 Certification under the Sarbanes-Oxley
          Act of 2002 of the Principal Financial Officer and Principal
          Accounting Officer(32)
      Section
          1350 Certifications32.1*
      Section
          906 Certification under the Sarbanes-Oxley Act of 2002
          of the Principal Executive Officer32.2*
      Section
          906 Certification under the Sarbanes-Oxley
          Act of 2002 of the Principal Financial Officer and Principal
          Accounting Officer


* Filed herewith.

SIGNATURES

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

|                    | HORIYOSHI WORLDWIDE INC.                       
|------------------- | -----------------------------------------------
|                    | (Registrant)                                   
|Dated: May 14, 2011 |                                                
|                    |                                                
|                    | /s/ Mitsuo Kojima                              
|                    | Mitsuo Kojima                                  
|                    | President, Chief Executive Officer and Director
|                    | (Principal Executive Officer)                  
|                    |                                                
|                    |                                                
|Dated: May 14, 2011 | /s/Raymond A. Catroppa                         
|                    | Raymond A. Catroppa, CFA                       
|                    | Chief Financial Officer and Secretary          
|                    | (Principal Financial Officer and Principal     
|                    | Accounting Officer)                            

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

|Dated: May 14, 2011 |                                                
|------------------- | -----------------------------------------------
|                    |                                                
|                    | /s/ Mitsuo Kojima                              
|                    | Mitsuo Kojima                                  
|                    | President, Chief Executive Officer and Director
|                    | (Principal Executive Officer)                  

23

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