UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 10-Q





þ 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 PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





FOR THE TRANSITION PERIOD FROM _____________ TO _____________





Commission File Number 333-146405





———————


GENERATION ZERO GROUP, INC.


(Exact name of registrant as specified in its charter)


———————





NEVADA
20-5465816(State or other jurisdiction of
(I.R.S. Employer Identification No.)incorporation or organization)20225 NE 34TH COURT,

UNIT #413

AVENTURA, FL
77058(Address of principal executive offices)
(Zip Code)





Registrant's telephone number, including area code: (786) 509-0312





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





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





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





Large accelerated filer   ̈
Accelerated filer    ̈Non-accelerated filer   ̈
Smaller reporting company  x





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





As of January 25, 2013, the issuer had 32,414,785 shares of common stock, $0.001 par value per share outstanding.





TABLE OF CONTENTS





PagePART IItem 1.
Consolidated Financial StatementsConsolidated Balance Sheets
F-1Consolidated Statements of Operations (unaudited)
F-2Consolidated Statements of Cash Flows (unaudited)
F-3Notes to Consolidated Financial Statements  (unaudited)
F-4Item 2.
Management’s Discussion And Analysis Of Financial Condition And Results Of Operations
1Item 3.
Quantitative And Qualitative Disclosures About Market Risk
11Item 4.
Controls and Procedures
11PART IIItem 1.
Legal Proceedings
12Item 1A:
Risk Factors
12Item 2.
Unregistered Sales Of Equity Securities And Use Of Proceeds
12Item 3.
Defaults Upon Senior Securities
14Item 4.
Mine Safety Disclosures
14Item 5.
Other Information
14Item 6.
Exhibits
15

















PART I – FINANCIAL INFORMATION


Item 1. Financial Statements





GENERATION ZERO GROUP, INC.


(FORMERLY VELOCITY OIL & GAS, INC.)


(A Development Stage Company)


CONSOLIDATED BALANCE SHEETS





Unaudited

March 31, 2011


AUDITED

December 31, 2010ASSETSCURRENT ASSETSCash
$
59,345


$
2,119Other
$
54,316



-Prepaid expensesTotal current assets
$
113,661


$
2,119Property, plant and equipment, net of accumulated depreciationIntangible asset, net of amortization
$
3,990,000


$
4,060,000TOTAL ASSETS
$
4,103,661


$
4,062,119LIABILITIES AND STOCKHOLDERS' DEFICITCURRENT LIABILITIESAccounts payable
$
20,597


$
17,806Accrued liabilities
$
418,605


$
253,409Deferred creditShort-term debt - related party
$
26,370


$
16,370Total current liabilities
$
465,572


$
287,585Notes payable, net of unamortized discount
$
1,578,971


$
1,379,912Total liabilities
$
2,044,543


$
1,667,497STOCKHOLDERS' EQUITY (DEFICIT)Preferred stock, $0.001 par value; 10,000,000 sharesauthorized; none issued and outstandingSeries A Preferred stock, $0.001 par value; 100,000,000
$
1


$
1shares authorized; 1,000 shares issued and outstandingSeries B Preferred stock, $0.001 par value; 2,000,000
$
-


$
-shares authorized; none issued and outstandingCommon stock, $0.001 par value; 100,000,000 shares
$
35,415


$
27,765authorized; 35,414,785 issued and outstandingAdditional paid-in capital
$
5,004,370


$
4,981,495Deficit accumulated during the development stage
$
(2,980,668
)

$
(2,614,640
)Total stockholders' deficit
$
2,059,118


$
2,394,622TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
$
4,103,661


$
4,062,119





See notes to consolidated financial statements.





F-1





GENERATION ZERO GROUP, INC.


(FORMERLY VELOCITY OIL & GAS, INC.)


(A Development Stage Company)


CONSOLIDATED STATEMENTS OF EXPENSES





(Unaudited)


(Unaudited)

May 16, 2006Three Months Ended March 31,


(Inception) Through2011


2010


March 31, 2011Revenues

$
86,953


$
-


$
86,953Cost of Sales

$
5,569


$
-


$
5,569Gross Profit

$
81,384


$
-


$
81,384Operating expenses:General, selling and administrative

$
87,385


$
19,891


$
598,652Impairment of oil and gas properties


-



-


$
32,520Impairment of intangible asset


-



-


$
1,100,000Depreciation and amortization

$
70,000


$
237


$
214,424Total operating expenses

$
157,385


$
20,128


$
1,945,596Operating loss

$
(76,001
)

$
(20,128
)

$
(1,864,212
)Other revenue and expensesLoss on abandonment of assets


-



-


$
(3,028
)Forgiveness of debt


-



-


$
6,232Interest expense

$
(360,190
)

$
(3,118
)

$
(1,189,821
)Net income (loss)

$
(436,191
)

$
(23,246
)

$
(3,050,829
)Basic and diluted net loss per common share

$
(0.01
)

$
(0.18
)Weighted average common shares outstanding


31,889,785



126,205





See notes to consolidated financial statements.





F-2


GENERATION ZERO GROUP, INC.


(FORMERLY VELOCITY OIL & GAS, INC.)


(A Development Stage Company)


CONSOLIDATED STATEMENTS OF CASH FLOWS





(Unaudited)


(Unaudited)

May 16, 2006Three Months Ended March 31,


Through March 31,2011


2010


(Inception)  2011CASH FLOWS FROM OPERATING ACTIVITIESNet loss

$
(436,191
)

$
(23,246
)

$
(3,050,830
)Adjustments to reconcile net loss to cash used:Depreciation


-



237



4,108Amortization of debt discount


237,584



2,942



1,049,789Amortization of intangible assets


70,000







210,000Debt used for interest


-



-



264Impairment of oil and gas properties


-



-



32,520Impairment of intangible assets


-



-



1,100,000Stock issued for services


-



-



31,300Warrant expense


-



-



19,119Donated services


-



-



65,000Changes in assets and liabilities:


-



-Prepaid expenses and other receivables


(54,319
)


2,718



(54,319
)Accounts payable


2,791



8,459



20,249Accrued liabilities


227,361



177



501,418NET CASH USED IN OPERATING ACTIVITIES

$
47,226


$
(8,713
)

$
(71,382
)CASH FLOWS FROM INVESTING ACTIVITIESPurchase of fixed assets


-



-



(7,453
)Purchase of intangible assets


-



-



(64,220
)Proceeds from sale of properties


-



-



29,980NET CASH PROVIDED BY INVESTING ACTIVITIES

$
-


$
-


$
(41,693
)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from related party debt

$
10,000


$
6,783


$
176,992Repayments of related party debt


-



-



(233,122
)Proceeds from issuance of preferred stock


-



-



157,500Proceeds from issuance of common stock


-



-



71,050NET CASH PROVIDED BY FINANCING ACTIVITIES

$
10,000


$
6,783


$
172,420NET CHANGE IN CASH

$
57,226


$
(1,930
)

$
59,345Cash, beginning of period

$
2,119


$
1,930


$
-Cash, end of period

$
59,345


$
-


$
59,345








See notes to consolidated financial statements.





F-3


GENERATION ZERO GROUP, INC.


(FORMERLY VELOCITY OIL & GAS, INC.)


(A Development Stage Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS





NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Nature of Business. Generation Zero Group, Inc. (“Generation Zero” or the “Company”) was incorporated in the State of Nevada on May 16, 2006. Since inception, the Company has operated as a start-up entity pursuing opportunities in oil and gas exploration and development with a geographic focus in Texas and Louisiana.





With the acquisition of Find.com, the Company has made a concerted effort to focus on growing Find.com into a profitable business and other new opportunities and businesses that will attempt to increase the value of the Company’s common stock.





Basis of Presentation. The consolidated financial statements of Generation Zero have been prepared by Generation Zero and have been audited, pursuant to the rules and regulations of the Securities and Exchange Commission and in accordance with accounting principles.





Use of Estimates. In preparing financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and expenses in the statement of expenses. Actual results could differ from those estimates.





Recently Issued Accounting Pronouncements. The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not expect the future adoption of any such pronouncements to have a significant impact on its results of operations, financial condition or cash flow.





NOTE 2 – GOING CONCERN





As shown in the accompanying financial statements, Generation Zero incurred a net loss of $436,191, for the quarter ended March 31, 2011, and had an accumulated deficit of $2,980,668 as of March 31, 2011. These conditions raise substantial doubt as to Generation Zero’s ability to continue as a going concern. The Company is trying to raise additional capital. The financial statements do not include any adjustments that might be necessary if Generation Zero is unable to continue as a going concern.





NOTE 3 - INTANGIBLE ASSETS





The intangible assets all relate to the URL www.Find.com and the related underlying technology driving the website at the time of acquisition. These intangibles are deemed to be amortized over a fifteen year period. During the quarter ended June 30, 2010, Generation Zero entered into three separate agreements to acquire two specific intangible assets.





www.Find.com Technology





During April 2010, Generation Zero entered into an Asset Purchase Agreement with Find.com Acquisition, Inc. to acquire all of Find.com Acquisition’s interest in and ownership of the technology assets that powered the operations of the www.Find.com website and all associated intellectual property rights necessary to enable Generation Zero to register the technology and intellectual property in Generation Zero’s name.  The purchase also included all service contracts related to the operations of the technology that at the time of acquisition related to the operation of www.Find.com, and other related domain names. The purchase did not include any liabilities of Find.com Acquisition or the Find.com URL. The purchase price paid to Find.com Acquisition in consideration for the Find.com Assets was 10,000,000 shares of Generation Zero’s restricted common stock. The asset was valued at $1.3 million based upon a fair market valuation report prepared by a third party valuation specialist.





F-4


Since the acquisition of the technology assets, the Company has been pursuing an alternative strategy for the Find.com URL. This strategy will use only certain aspects of the acquired technology assets going forward.  Generation Zero intends to utilize the full functionality of the technology assets on future initiatives unrelated to Find.com, and accordingly has recorded an impairment charge of $1,100,000 based on the current status of Find.com and the fact that the timing of the future initiatives is unknown and uncertain.





www.Find.com URL (“URL”)





On June 30, 2010 Generation Zero entered into a Share Exchange Agreement with various members of Find.com URL Holding LLC, a Georgia limited liability company. Find.com URL Holding LLC owned 100% of the URL known as www.find.com, which together with the technology assets acquired in April 2010, are the only assets of the Company.  The purchase price to the selling members in consideration for their membership interests was a total of 988,567 shares of restricted common stock plus notes in the aggregate principal amount of $3,070,250 (of which $49,219 was paid at closing in cash by Generation Zero). This share exchange resulted in Generation Zero obtaining over 99% of the ownership interest in URL Holding, LLC as of June 30, 2010 and the remaining interests were acquired subsequent to June 30, 2010.  Subsequent to the closing, additional shares were issued when 100% of the consents were received from URL Holdings’ selling members, accordingly, in total 1,000,000 shares were issued.  Also, on June 30, 2010, and concurrent with this acquisition, Generation Zero entered into an Asset Purchase Agreement with Scientigo, Inc. (“Scientigo”) to acquire an option held by Scientigo that allowed the holder to purchase a 40% interest in URL Holdings, LLC. The purchase price paid to Scientigo in consideration for the Option was 14,000,000 shares of restricted common stock plus $15,000 in cash, a delayed payment of $50,000 and a note for $55,000.  The delayed payment has no interest component and was due July 30, 2010. This payment was not made. The note was payable July 30, 2010 and bears total interest of $50. The note payment was not made.  Generation Zero has included the consideration for the option acquisition to be part of the cost of acquiring 100% of the intangible asset. The URL was valued at $4.0 million based upon a fair market valuation report prepared by a third party valuation specialist. The Company allocated this value to the consideration issued based on the relative fair value of the debt assumed and equity issued related to this purchase.  Fair value of the debt was based upon the face value of the instrument while the fair value of the common stock was based on the quoted market price of the stock on June 30, 2010.





The Company did not make the required payments under the Find.com notes to the holders thereof when due. The Collateral Agent for the Notes has declared the Notes in default. As a result of the Default, the balance of the Notes is accruing interest at the default rate of 14% per annum.   The Company paid $150,000 to an escrow agent in November 2010 in connection with the Default. The purpose of this payment was to affect forbearance from the Note Holders for four months through March 15, 2011 and to make a $50,000 payment toward the amount owed to Scientigo, satisfying the delayed payment.  The $55,000 Scientigo note is in Default.  Forbearance has been granted until January 1, 2014.





Pursuant to the terms and conditions of a Forbearance Agreement, the Collateral Agent would forbear from taking any action in connection with the Default until March 15, 2011 and the Notes would continue to bear interest at the rate of 14% per annum during the Forbearance Period. Additionally, the Company agreed to pay the Note Holders $100,000 of principal reduction from the amount held in escrow and issued an aggregate of 200,000 shares of common stock to the Note Holders; reimburse the Collateral Agent for attorney’s fees in connection with the preparation of the Forbearance Agreement; and pay the Note Holders, before the end of the Forbearance Period, $332,903 of accrued but unpaid interest and $249,837 of principal on the Notes (collectively, the “Cure Payment”), which if paid prior to the end of the Forbearance Period, would result in the waiver of the Default.





Finally, the Forbearance Agreement required that Matthew Krieg, the Company’s sole officer and Director and holder of the Company’s Series A Preferred Stock (which provides Mr. Krieg super-majority voting rights), enter into an agreement to cancel the shares of Series A Preferred Stock which he holds in exchange for an aggregate of 3,000,000 shares of common stock upon the payment in full of the Notes, among other things, which terms have since been amended by the March 2012 Forbearance Agreement, described in greater detail below under Note 9.





F-5


More than 90% of the Note Holders consented to the Forbearance Agreement which was enough to bind all Note Holders to the terms of the Forbearance. Payments pursuant to the Forbearance Agreement have not been paid.    A Forbearance extension has been granted until January 1, 2014.





NOTE 4 – ACQUISITION OF STAFFMD, INC.





On February 4, 2011, Generation Zero Group, Inc. entered into an Agreement and Plan of Merger (“Merger”) with StaffMD, Inc., a Georgia corporation.  Pursuant to the Merger Agreement, StaffMD was merged into MedicalWork, LLC, a newly formed Georgia limited liability company, and the Company’s wholly-owned subsidiary.  MedicalWork was the surviving entity in the Merger.  As a result of the closing of the Merger, the Company acquired StaffMD’s business, which was a leading online job board for physicians.  In consideration for ownership of StaffMD and in connection with the Merger, Generation Zero Group, Inc. (a) issued 6,000,000 shares of the Company’s restricted common stock; (b) paid $100,000 in cash at the closing of the Merger; (c) provided a secured, subordinated Seller Note in the amount of $3,950,000 to the founder of StaffMD; and (d) issued 250,000 shares of the Company’s restricted common stock in association with a Third Party Promissory Note of $250,000 for working capital of the subsidiary.  The founder of StaffMD was the sole operating manager of the MedicalWork subsidiary and has had exclusive control over all bank accounts, marketing, expenses and operations related to the MedicalWork assets since the Merger occurred.





This transaction was subsequently rescinded as discussed in Note 9.  As such, reflection of the associated debt and acquisition of intangible assets have not been presented in these quarterly financial presentations.





NOTE 5 – RELATED PARTY TRANSACTIONS





Generation Zero had borrowed from shareholders and Directors periodically in the past. The borrowings were non-interest bearing and due on demand with either ninety days or twelve months and one day’s notice. At March 31, 2011 and December 31, 2010, there was an outstanding balance of $26,370 and $16,370, respectively, due the shareholders and Directors.





NOTE 6 – THIRD PARTY TRANSACTIONS





Generation Zero borrowed $8,000 from a shareholder in June 2007. The note is due on demand with twelve months and one day’s notice and bears interest at 6% per annum. The loan was originally convertible into common shares at $0.10 per share. During 2007, the accrued interest of $264 was converted to debt and at December 31, 2008, the then outstanding balance on the note was $12,764. Generation Zero evaluated the original loan for derivative accounting consideration under FASB ASC 815-15 and FASB ASC 815-40. Generation Zero determined the embedded conversion option in the original convertible note met the criteria for classification in stockholders’ equity under FASB ASC 815-15 and FASB ASC 815-40. Therefore, derivative accounting was not applicable for the note. Generation Zero then evaluated the original conversion option under FASB ASC 470-20 for a beneficial conversion feature and determined none existed.





During August 2009, Generation Zero amended the conversion option of the above note whereby the conversion rate was changed from $0.10 to $0.001 per share. Generation Zero evaluated the modification under FASB ASC 470-50 and determined the modification to be substantial and thus qualify as an extinguishment of debt. Generation Zero evaluated the modified loan for derivative accounting consideration under FASB ASC 815-15 and FASB ASC 815-40. Generation Zero determined the embedded conversion option in the modified convertible note met the criteria for classification in stockholders’ equity under FASB ASC 815-15 and FASB ASC 815-40. Therefore, derivative accounting was not applicable for the note. Generation Zero then evaluated the modified conversion option under FASB ASC 470-20 for a beneficial conversion feature and determined the conversion option contained a beneficial conversion feature.





During August 2009, the holder of the modified note above elected to convert $1,000 of the loan to common stock. Generation Zero issued the note holder 10,000 common shares.





F-6


In November 2009, the holder sold this promissory note to two unrelated parties. As of March 31, 2010, the unpaid balance on the loan totaled $11,764 and was classified on the balance sheet as “Notes payable.”





On or around April 13, 2010, the unrelated parties entered into acknowledgments with the Company, whereby each holder agreed that they will not be able to convert the Convertible Note into a number of common shares that would result in them owning more than 4.99% of the issued and outstanding common stock of the Company and that neither holder would transfer or sell the Convertible Note to any third parties without the prior written consent of the Company, which consent will not be unreasonably withheld.





In May 2010, an aggregate of $1,100 of the promissory notes were converted to an aggregate of 550,000 shares of common stock.





In September 2010, the Company entered into an Exclusive Agreement (the “Exclusive Agreement”) with Talent Search and Rescue, LLC (“Talent”), an entity controlled by Caesar Capital LLC.  Pursuant to the Exclusive Agreement, Talent agreed to enter into an exclusive relationship with the Company pursuant to which the Company and Talent would attempt to staff certain independent contractor positions primarily in the technology field; and provide the Company rights to 50% of Talent’s net proceeds from any staffed positions.  The Company issued Talent an aggregate of 500,000 shares of its restricted common stock to Talent as consideration for Talent entering into the Exclusive Agreement.  A small number of positions were staffed in connection with the Exclusive Agreement, the funds generated pursuant to which were retained by Talent and the Exclusive Agreement and relationship between the Company and Talent has since been terminated.





On October 23, 2010, one of the related parties agreed to cancel and forgive its portion of the Promissory Note, representing a principal amount of $5,332 in its entirety as well as the related accrued interest.





In January 2011, $1,200 of the remaining Promissory Note was converted for issuance of 1,200,000 shares of common stock.  The Promissory Note had an outstanding principal balance of $4,132 as of March 31, 2011 with a potential conversion into 4,132,000 shares of common stock.





The outstanding amount of this note was subsequently satisfied by the Company in October 2012, as described below under Note 9.





A total of $150,000 was loaned to the Company in November 2010 by an individual, which was evidenced by a promissory note bearing interest at the rate of 12% per annum with a maturity date of November 4, 2011. Additionally, the Company’s sole officer and Director assigned an aggregate of $100,000 which the Company owed to the officer, evidencing an aggregate note value of $250,000. The Company agreed to issue 750,000 shares of restricted common stock in connection with this third party note. Forbearance has been extended on the note until June 2, 2014.





Additionally in November 2010, a third party loaned the Company $50,000, which was evidenced by a promissory note, bearing interest at the rate of 12% per annum with a maturity date of November 4, 2011. The Company agreed to issue the third party an aggregate of 300,000 shares of common stock in connection with this third party note. Forbearance has been extended on the note until June 2, 2014.





NOTE 7 – COMMON STOCK





On February 12, 2010, Generation Zero implemented a 1 for 100 reverse stock split of the common stock. Pursuant to the reverse split, each 100 shares of common stock issued and outstanding as of the effective date were converted into 1 share of common stock. All share and per share data herein has been retroactively restated to reflect the reverse split.





As disclosed in Note 3, Generation Zero issued an aggregate of 24,988,567 shares of common stock valued at $4,566,912 based on the relative fair value to acquire the URL www.find.com and related technology.





F-7


As disclosed in Note 6, Generation Zero issued an additional 1,550,000 shares of restricted common stock in conjunction with Third Party Notes and vendor obligations during the fiscal year ending December 31, 2010.





During the fiscal year ended December 31, 2010 and the fiscal quarter ended March 31, 2011, the holders of the long-term convertible notes payable elected to convert $1,100 and $1,200 of the loan into 1,100,000 and 1,200,000 shares of common stock, respectively.





NOTE 8 – PREFERRED STOCK





Series A Preferred Stock


Generation Zero has authorized 1,000 shares of Series A Preferred Stock which has a par value of $0.001 per share. Each share has no dividend rights, no liquidation preference, and no conversion or redemption rights. The shares of Series A Preferred Stock have the right, voting in aggregate, to vote on all shareholder matters equal to fifty-one percent (51%) of the total vote. As of March 31, 2011, there were 1,000 shares of Series A preferred stock issued and outstanding.





Series B Preferred Stock


Generation Zero has authorized 2,000,000 shares of Series B Preferred Stock which has a par value of $2.50 per share. Each share has no dividend rights, no liquidation preference, no voting rights, and no conversion or redemption rights. As of March 31, 2011, there were no shares of Series B preferred stock issued and outstanding.





NOTE 9 – SUBSEQUENT EVENTS





Effective December 31, 2011, Generation Zero Group, Inc. assigned all of the membership interests in the wholly-owned subsidiary of MedicalWork to the original owner of StaffMD.  This assignment included all assets and associated debt and obligations created with the Merger. The Company has been indemnified by the assignee of the Medical Work membership interests from any obligations of the MedicalWork subsidiary with execution of the membership interest assignment, including full indemnification from the $250,000 Third Party Promissory Note issued at the time of the acquisition and the cancellation of the Seller Note.  The assignee has cancelled 3,000,000 shares of the restricted common stock issued and received at the time of the Merger as part of the agreement. These shares were not cancelled as of the date of the financials and have been included in the number of issued and outstanding shares disclosed in the attached financials, where applicable. The assignee has further agreed to place into escrow 500,000 shares of the remaining restricted common shares received at the time of the Merger as collateral against any indemnity claims arising from potential claims against the Company associated with the formerly held MedicalWork subsidiary.





Generation Zero Group, Inc. was not able to meet the terms of the Forbearance Agreement identified in Note 2 with the secured noteholders.  In March 2012, the secured noteholders, with over majority approval, authorized the Collateral Agent to forbear in the exercise of its rights and remedies under the Secured Notes, Security Agreements, Operating Agreement, Forbearance Agreement and applicable law during a Forbearance Period commencing on June 30, 2010 and ending on the earlier to occur of January 2, 2014 or the date that any Forbearance Default occurs.  The Secured Notes have been renegotiated to represent a face value of $2,920,250 and interest shall not accrue or be assessed during the Forbearance Period.  As a forbearance fee, Generation Zero Group, Inc. issued 1,460,125 shares of restricted common stock pro-rata with the outstanding principal amount of the Secured Notes held by each holder. The authorized amendment to the Forbearance Agreement also provides for the restructure of Generation Zero Group, Inc. and the replacement of current management.





In April 2012, several of the secured noteholders have participated in a non-interest bearing convertible bridge loan for $40,000, with a maturity date of January 2, 2014.  The Company issued 400,000 shares of restricted common stock in consideration of this funding.  In addition, on August 15, 2012, the Company issued a Convertible Promissory Note of $200,000 to a Third Party investor. The Note carries a 10% interest rate with maximum conversion to 2,500,000 shares of common stock and has a maturity date of August 15, 2014.  The funds raised will be used for working capital.





F-8


The principal balance of the Convertible Note identified in Note 6 above was $4,312 as of October 23, 2012.  The Company has not received any notice of an assignment of the Convertible Note which is required prior to any assignment.  On October 23, 2012, the Company has exercised its right to pay-off the note in full and has remitted payment to Cascata Equity Management of $5,860.93 in order to cancel the Convertible Note.  This amount is comprised of $4132 in unpaid principal plus interest in the amount of $1,728.92 computed at 6%, as no demand for payment was ever made to cause the 15% default interest rate to apply.  The payment terms have provided Cascata 30 days in order to dispute any error in the tendered payment amount, but the Company expects to resolve any payment amount disputes amicably. In any event, the Company intends to oppose any further attempts to convert all or any portion of the Convertible Note.































































F-9
 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations





CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION





Statements made in this Form 10-Q that are not historical or current facts are "forward-looking statements". These statements often can be identified by the use of terms such as "may," "will," "expect," "believe," "anticipate," "estimate," "approximate" or "continue," or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.  References in this Form 10-Q, unless another date is stated, are to March 31, 2011.





You should read the matters described in “Risk Factors” below and disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010, filed with the Commission on January 25, 2013,and the other cautionary statements made in this Report as being applicable to all related forward-looking statements wherever they appear in this Report. We cannot assure you that the forward-looking statements in this Report will prove to be accurate and therefore prospective investors are encouraged not to place undue reliance on forward-looking statements. Other than as required by law, we undertake no obligation to update or revise these forward-looking statements, even though our situation may change in the future.





Corporate History





Generation Zero Group, Inc. (“we,” the “Company,” and “us”) was formed as a Nevada corporation on May 16, 2006 under the name Velocity Oil & Gas, Inc.  The Company originally operated as a start-up entity with the intention of being involved in oil and gas exploration and development with a geographic focus in Texas and Louisiana.  We have since changed our business focus to Internet, technology and entertainment related businesses, and have closed on an acquisition of certain technologies and other proprietary information described below.





On or around November 10, 2009, Travel Engine Solutions, LLC (“Travel Engine”) subscribed for 1,000 shares of our Series A Preferred Stock (the “Series A Shares”, which include “Super Majority Voting Rights” (i.e., the right to vote 51% of the Company’s outstanding voting shares on any shareholder votes) for aggregate consideration of $175,000.


On or around January 21, 2010, Matthew Krieg, the sole Director of the Company and Mr. Krieg as the Manager and beneficial owner of Travel Engine, our majority shareholder as a result of the Series A Shares, which it held, which provided it the Super Majority Voting Rights, approved via a consent to action without meeting, the filing of a Certificate of Amendment to the Company’s Articles of Incorporation (the “Certificate”) to (a) authorize and approve a 1 for 100 reverse stock split (the “Stock Split”) of the Company’s authorized and outstanding common stock, effective as of the close of business on February 12, 2010, which Stock Split did not affect the authorized or outstanding shares of the Company’s preferred stock; (b) to change the Company’s name to “Generation Zero Group, Inc.” (the “Name Change”); (c) to reauthorize 100,000,000 shares of $0.001 par value per share common stock following the Stock Split; (d) to re-authorize 10,000,000 shares of “blank check”  preferred stock, $0.001 par value per share following the Stock Split (collectively with (c) the “Authorized Share Transactions”); and (e) to provide that the Company elects, pursuant to Section 78.434 of the Nevada Revised Statutes (the “NRS”), to not be governed by Sections 78.411 to 78.444 of the NRS, inclusive and Sections 78.378 to 78.3793, inclusive, of the NRS (the “Elections”).





1


The Certificate, the Stock Split, the Name Change, the Authorized Share Transactions and the Elections were effective with the Secretary of State of Nevada on February 12, 2010, and were effective with the Financial Industry Regulatory Authority (“FINRA”) on March 8, 2010.





Unless otherwise noted, the effect of the Stock Split and Name Change has been retroactively reflected throughout this report.





Find.com Technology Acquisition





On or around April 28, 2010, the Company entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Find.com Acquisition, Inc., a Delaware corporation (“Find.com Acquisition”).  Pursuant to the Purchase Agreement, we purchased all of Find.com Acquisition’s interest in and ownership of the assets associated with the technology and operations of the www.Find.com website and all intellectual property rights associated therewith, including technical documentation, source code, and files (collectively the “Technology Assets”).  As described below, we also subsequently purchased 100% of the ownership interests in URL Holdings, which owns the URL, Find.com.  The Technology Assets also include all service contracts related to the operations of the technology and certain unrelated domain names.  The purchase did not include any liabilities of Find.com Acquisition or the Find.com URL.  The purchase price paid to Find.com Acquisition in consideration for the Technology Assets was 10,000,000 shares of our restricted common stock, representing 98.8% of our then outstanding common stock, however, because Matthew Krieg, our sole officer and Director beneficially owns all of the outstanding shares of our Series A Preferred Stock, he retained super majority voting control over the Company.





Find.com URL Exchange Agreement





On or around June 30, 2010, we entered into a Share Exchange Agreement (the “Exchange Agreement”) with Find.com URL Holdings, LLC., a Georgia limited liability company (“URL Holdings”) and an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Scientigo, Inc. (“Scientigo”).





Pursuant to the Exchange Agreement, we purchased approximately 51 membership interests in URL Holdings totaling over 99% of the outstanding membership interests of URL Holdings (the “URL Holdings Members”); however that percentage has increased to 100% as of the date of this report. URL Holdings owns the domain name Find.com.  URL Holdings acquired the domain name through a consensual foreclosure process prior to the acquisition of the majority ownership of URL Holdings by the Company.  Scientigo was a party to the consensual foreclosure process and had an option to acquire 40% of the domain name in exchange for Scientigo’s consent to the foreclosure.  The Company acquired and extinguished Scientigo’s option rights in connection with the Asset Purchase Agreement in order to secure the maximum ownership the Company could acquire from URL Holdings, which as of this date stands at 100%.





The Exchange Agreement provided for (a) the issuance of an aggregate of 14,000,000 shares of the Company’s restricted common stock, and (b) the issuance of secured promissory notes (“Notes”) in an aggregate principal amount of approximately $3,620,410 (representing the aggregate amount of money owed to such URL Holdings Members pursuant to previously outstanding promissory notes) to the URL Holdings Members (the “Note Holders”).  The Notes are in favor of the selling members of URL Holdings and are secured by the assets of the Company including the URL Holdings membership units purchased by the Company.  The Exchange Agreement also required that the Company make a closing payment in an aggregate amount of $50,000 to the URL Holdings Members. Scientigo has since been merged with and into Phoenix Restructuring, Inc. (“Phoenix”), with Phoenix being the surviving entity in the merger.





URL Holdings Members Notes





The Notes, bear interest at the rate of 12% per annum, and are payable as follows: (a) $50,000 which was due on the closing of the Exchange Agreement (June 30, 2010, the “Closing Date”), and which was paid to the Note Holders on such date; (b) $250,000 which was due to the Note Holders within 30 days of the closing date of the Exchange Agreement (which has not been paid to date); (c) approximately $49,918.47 which is due at the end of each quarter for six quarters, due three months, six months, nine months, twelve months, sixteen months and twenty months after the Closing Date, each representing 1/6th of the Note Holder’s portion of an aggregate of $299,511 (which has not been paid to date); (d) by way of interest payments representing the accrued interest on the Notes which are due quarterly, beginning three months after the Closing Date and continuing until 18 months from the Closing Date (which has not been paid to date); and (e) by way of twelve monthly payments of principal and interest (which monthly principal payments will total approximately $2,450,000 or $204,000 per month) representing the then outstanding balance of the Notes, the last of which payment was due December 31, 2012 (the “Maturity Date”).  The Notes may be prepaid at any time without penalty.





2


Upon the occurrence of any event of default under the Notes (as defined and described therein) the Notes accrue interest at 14% per annum which rate the Notes are currently accruing interest as a result of our default in the payment of certain amounts due under the Notes.  If any event of default occurs and is not cured within sixty days of the date of occurrence of such event of default, the Note Holders may enforce their rights under the Notes, declare the entire amount of the Notes immediately due and payable and seek to enforce their security interests (as described below).  Additionally, pursuant to the Notes, the Company is required to provide the Note Holders prompt notice of their knowledge of the occurrence of any event of default.  The right to receive further Extensions was terminated by the parties’ entry into the Forbearance Agreement (described below).





The Company’s repayment of the Notes is secured by a security agreement providing the Note Holders a security interest in substantially all of the Company’s assets, personal property, and URL Holdings’ ownership of Find.com (the “Security Agreements”).  Scientigo previously served as collateral agent for the benefit of the Note Holders under the Security Agreements, provided that Phoenix Restructuring Inc. currently serves as collateral agent (the “Collateral Agent”).  Until the Notes are repaid in full, the Collateral Agent has the right to appoint two Managers of URL Holdings, solely for the purpose of protecting the collateral securing the Notes.  Matthew Krieg, the Company’s Chief Executive Officer and President, serves as President and Chief Executive Officer of URL Holdings.





The Company obtained the $50,000 which was due upon closing in the form of a loan, which does not bear interest or have a stated due date, from its Chief Executive Officer, Matthew Krieg.





Asset Purchase Agreement with Scientigo





Pursuant to the Asset Purchase Agreement, the Company purchased and extinguished Scientigo’s pre-existing option to purchase a 40% interest in URL Holdings (the “Option”).  In consideration for the Option, we issued Scientigo 14,000,000 shares of restricted common stock (representing approximately 39.7% of our then outstanding shares and agreed to pay Scientigo $120,000 in cash (the “Cash Payment”).  A total of $15,000 of the Cash Payment was paid at the closing of the Asset Purchase Agreement on June 30, 2010, and a total of $55,000 was due within 30 days of closing (i.e., prior to July 30, 2010); which payment has not been made as of the date of this filing and which the Company is in default in connection with as described below.   Scientigo has since been merged with and into Phoenix, with Phoenix being the surviving entity in the merger.





Scientigo also has the right pursuant to the Asset Purchase Agreement to name two members to the Company’s advisory board in order to oversee activities that may affect the collateral pledged to the Note Holders (as described above).





The Company obtained the $15,000 which was due upon closing in the form of a loan, which does not bear interest or have a stated due date, from its Chief Executive Officer, Matthew Krieg.





As described above, the Company did not make the required payment of $250,000 under the Notes to the Note Holders when due on July 30, 2010 (the “Default”) and did not made the required payments of $55,000 to Scientigo as provided in connection with the Cash Payment as of July 30, 2010, and has not made such required payments to date.  As such, Scientigo, as Collateral Agent for the Notes has declared the Notes and the Cash Payment in default.  As a result of the Default, the balance of the Notes began accruing interest at the default rate of 14% per annum.





3


Forbearance Agreement





Effective November 30, 2010, the Company, the Note Holders, Scientigo and URL Holdings formally executed and entered into a Forbearance Agreement (the “Forbearance Agreement”).  Pursuant to the Forbearance Agreement, the Collateral Agent agreed to forbear from taking any action in connection with the Default until March 15, 2011 (subject to any default occurring other than in connection with the Default)(the “Forbearance Period”) and that the Notes would continue to bear interest at the rate of 14% per annum during the Forbearance Period.  Additionally, the Company agreed to pay the Note Holders $100,000 of principal reduction from a total of $150,000 then held in escrow and issue such Note Holders an aggregate of 200,000 shares of common stock; reimburse the Collateral Agent for attorney’s fees in connection with the preparation of the Forbearance Agreement; and pay the Note Holders, before the end of the Forbearance Period, $332,903 of accrued but unpaid interest and $249,837 of principal on the Notes (collectively, the “Cure Payment”), which if paid prior to the end of the Forbearance Period, would result in the waiver of the Default, which Cure Payment was not made, but which requirement to make such Cure Payment was waived by the parties’ entry into the First Addendum, described below.
 
 The Forbearance Agreement also required the Company to pay one-half of the first $300,000 of any equity or debt capital raised by the Company moving forward (i.e., up to $150,000 of any funds raised) as follows (i) first to the Collateral Agent, for transaction related expenses (until $20,000 is paid) and thereafter (ii) two-thirds of each dollar to the holders of the Notes and one-third of each dollar to the Collateral Agent with respect to the unpaid balance of the required Cash Payment.   The Forbearance Agreement also amended the Notes to remove the right of the Company to obtain an Extension as discussed above, to reduce the percentage of Note Holders’ interests required to amend the Notes to holders of at least a majority of the outstanding principal amount of the Notes (instead of 85%); and provided for the Company to pay $50,000 of the amount owed to Scientigo from the funds then held in escrow.


The Company was not able to meet the terms of the Forbearance Agreement and in March 2012, the Note Holders, with majority approval, and the Company entered into a First Addendum to Forbearance Agreement (the “First Addendum”).  Pursuant to the First Addendum, the Note Holders authorized the Collateral Agent to forbear in the exercise of its rights and remedies under the Notes, security agreement securing the Notes, Forbearance Agreement and applicable law during a forbearance period commencing on June 30, 2010 and ending on the earlier to occur of (a) January 2, 2014 or (b) the date that any default (other than relating to the payment of funds under the Notes) occurs (the “Extended Forbearance Period”).  The Notes were also renegotiated to represent a face value of $2,920,250.  Accrued interest has been forgiven and no interest accrues on the Notes during the Extended Forbearance Period.  The First Addendum also provided that all shares issued to the Note Holders from time to time have piggy-back registration rights; and that the Company could borrow up to $1 million in the form of a bridge loan (in addition to up to $50,000 which could be borrowed from the Note Holders, of which a total of $40,000 was subsequently borrowed as discussed below). The agreement also requires that Mr. Krieg transfer ownership of the Series A Shares (or cancel such shares and have them reissued) to Cynthia S. White and Ronald L. Attkisson, as collateral agents for the notes (currently in default) associated with the Find.com acquisition, or their assigns within 10 days of notice of such requested transfer (or reissuance), which has not occurred or been requested to date, but which is expected to occur in the first quarter of 2013.   We also agreed to issue Mr. Krieg 3 million shares of common stock in connection with such cancellation or transfer.  We also agreed to pay the Note Holders up to 25% of our cash flow (in the discretion of the Board of Directors), in any fiscal year that revenues associated with Find.com exceed $1 million, in connection with the Notes, and the Note Holders agreed to further forbear from taking any action under the Notes and to extend the forbearance period so long as such requirements are met. As a forbearance fee, the Company issued 1,460,125 shares of restricted common stock pro-rata with the outstanding principal amount of the Notes held by each holder.





4


Four of the Note Holders provided the Company non-interest bearing bridge loans in the aggregate amount of $40,000 in March 2012, with a maturity date of the earlier of (a) the date the Company receives aggregate funding from any source in excess of $50,000 and (b) January 2, 2014, provided that the Company is currently in the process of obtaining waivers from the Note holders in order to allow the Company to raise additional funding for working capital purposes.  In consideration for providing the loan, the Company issued the participating Note Holders an aggregate of 400,000 shares of restricted common stock.  The loans are secured by a security interest in all of the Company’s properties and assets.





The Company raised the $150,000 paid in connection with and pursuant to the terms of the November 2010 Forbearance Agreement and funds used for working capital through the sale of promissory notes described in greater detail below under “Liquidity and Capital Resources.”





StaffMD, Inc. Acquisition





On February 4, 2011, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with StaffMD, Inc., a Georgia corporation (“StaffMD”), and the sole owner of StaffMD, Jeffrey Sisk, an individual.  Pursuant to the Merger Agreement, StaffMD was merged with and into MedicalWork, LLC, a newly formed Georgia limited liability company, and the Company’s then wholly-owned subsidiary (“MedicalWork” and the “Merger”), pursuant to which MedicalWork was the surviving entity in the Merger.  As a result of the closing of the Merger, the Company acquired StaffMD’s business known as PhysicianWork.com, which is a leading online job board for physicians.
 
 In consideration for Mr. Sisk’s ownership of StaffMD and in connection with the Merger, we agreed to (a) issue Mr. Sisk 6,000,000 shares of the Company’s restricted common stock (the “Sisk Shares”); (b) pay Mr. Sisk $100,000 in cash at the closing of the Merger (the “Closing”); and (c) provide Mr. Sisk a secured, subordinated promissory note in the amount of $3,950,000 (the “Seller Note”).  A required closing condition of the Merger was that the Company contributed $100,000 to MedicalWork, which contribution was made in connection with the Closing.  The Merger Agreement also provided that Mr. Sisk would serve as the Manager and President and Chief Executive Officer of MedicalWork.  MedicalWork and Mr. Sisk entered into an Employment Agreement with MedicalWork in connection with the Closing, described in greater detail below (the “Employment Agreement”). The Sisk Shares were also granted piggy-back registration rights.
 
 Geronimo Note
 
 The funds paid in connection with the Merger were financed through the entry by MedicalWork into a Senior Secured Promissory Note in the amount of $250,000 with Geronimo Property Trust (“Geronimo”) on February 1, 2011 (the “Geronimo Note”).  The Geronimo Note bears interest at the rate of 12% per annum, and has a default interest rate of 18% per annum.  Monthly interest-only payments are due on the Geronimo Note, which was originally due February 1, 2012, but has since been extended until February 1, 2013. The Geronimo Note was secured by a security interest in all of MedicalWork’s assets, pursuant to a Security Agreement.  The Company was also an obligor on the Geronimo Note and remained as an obligor following the parties’ entry into the Rescission Agreement, described below.   The Company also agreed to issue Geronimo an aggregate of 250,000 shares of the Company’s restricted common stock in consideration for agreeing to enter into the Geronimo Note.
 
 Of the $250,000 of proceeds the Company received from the Geronimo Note, $90,000 was allocated to Physicianwork.com marketing, $10,000 was reserved for interest on the Geronimo Note, and the balance was paid to Mr. Sisk in connection with the consideration due pursuant to the terms of the Merger Agreement and in reimbursement for Mr. Sisk’s attorney’s fees in connection with such Merger.
 
 5


Seller Note
 
 The Seller Note accrued interest at the rate of 8% per annum, and had a default rate of interest of 14% per annum.  The Seller Note was previously due and payable on February 4, 2012, but has since been forgiven as described below.





Rescission of StaffMD Acquisition





Effective as of December 31, 2011, we entered into an Assignment of Membership Interests Agreement (the “Rescission Agreement”) with Mr. Sisk.  Pursuant to the Rescission Agreement, we agreed to transfer and assign all right, title and interest which we held in MedicalWork (including any and all interests in PhysicianJobs.com or the other URL’s owned by MedicalWork) to Mr. Sisk; Mr. Sisk agreed to cancel and terminate the Seller Note and an Employment Agreement we had entered into with Mr. Sisk; Mr. Sisk agreed to indemnity and hold us harmless from any claims, costs, expenses or causes of action relating to the Geronimo Note (the “Indemnification Obligations”), provided that we remain as a secondary obligor under the Geronimo Note; and Mr. Sisk agreed to return 3,000,000 shares of our common stock (which shares were issued in connection with the Merger Agreement) to us for cancellation, which shares have been cancelled to date and to further pledge to us 500,000 of the shares originally issued in connection with the Merger Agreement as collateral for the Indemnification Obligations pursuant to the parties entry into a Pledge Agreement.  Finally, as part of the Rescission Agreement, Mr. Sisk agreed to release us and our agents from and against any liability associated with the operations of MedicalWork; provided that the 3,000,000 shares of common stock retained by Mr. Sisk (including the 500,000 shares) still have piggy-back registration rights.  As a result of the Rescission Agreement, we no longer hold any rights to MedicalWork or its assets, including PhysicanJobs.com.





Description of Business Activities





Our current primary business focus is to monetize the find.com URL.





Find.com, which we acquired ownership of pursuant to our purchase of 100% of the outstanding membership interests of URL Holdings, pursuant to the transactions above, is a domain name and website. The website had been powered by certain technology assets that the Company acquired on or about April 28, 2010, as described in greater detail above.  The Find.com strategy is in the development stage.   Find.com is a URL that the Company believes has tremendous attributes as a domain name for purposes of search engine maximization and marketing.  The Find.com website, which is currently not operational, is in the process of being upgraded and redesigned by the Company, with the goal of redeploying the website in the first quarter of 2013.





The Company believes that it will be able to manage and operate the domain name in a manner that will create value for the Company.  This management and operation may involve strategic partnerships and revenue sharing relationships as is common in the operation of domain names.  The Company believes that Find.com has a broad reach and can be used for a variety of purposes.  To date Find.com has not generated any significant revenue, but the Company believes that the domain name can be grown into a significant Internet based business.  However, the success of the Find.com asset is subject to the availability of necessary financing for operations and to service the Notes.  The Company is currently in negotiations with a private company in internet marketing and search engine optimization services to potentially form a joint venture and undertake a business plan to execute a commercialization of www.find.com.  The joint venture, which has not been finalized or agreed to, would create an internet market place environment for the sale and purchase of products and services.  The Company hopes to finalize a comprehensive business plan and plan of operations for Find.com during the first quarter of 2013.





6


Description of the Technology Assets:





The Technology Assets described above are comprised primarily of the technology that powered the www.Find.com website.  Four letter URL’s that spell an easy to understand word are all privately owned or reserved.  Short URL’s are preferable for marketing purposes as they are easier to remember and in the case of Find.com, the URL sends a clear message as to what the website is about so it should be easier to brand.





We believe that the Find.com URL name lends itself to being used as a search engine or for a variety of other uses as the e-commerce world continues to develop and become more focused and refined.  The Company understands that Google and other large players such as Bing and Ask.com are dominant in the search space.  The Company has no intention or belief that it will overtake or even compete with these large players.





The Company intends to partner through a revenue sharing agreement with other search engines and through lead generation agreements with various businesses, and selling direct products and services.   The Company expects to develop certain verticals within Find.com and other websites and create revenue sharing opportunities, of which there can be no assurance.





The Company also intends to use and improve the technology assets acquired in the acquisition to develop other websites through marketing and providing information, products and services that create revenue sharing opportunities for the Company.  Previously, www.Find.com and the Technology Assets have not generated significant revenues but we believe that the technology that has been developed has proven to work effectively.  Through continued use, the Company hopes to build a revenue base from revenue sharing, licensing, and by using the Technology Assets in connection with other websites it hopes to acquire and market in the future, funding and opportunities permitting.





We believe that the Technology Assets have many proprietary qualities that make them effective for online marketing and that the Technology Assets are versatile so they can be used for other websites and related applications.  Our Chief Executive Officer, Matthew Krieg, has significant experience in online travel and other Internet based businesses and his experience and training should be beneficial to the Company and allow it to move forward with this new strategy without having to add employees before revenues are achieved.





Plan of Operation





Our goal is to expand or build our business through a variety of efforts.  We are considering ongoing offerings of securities under private placements, acquisitions, and joint ventures with other public and private companies and other activities to either build sales or generate much needed capital to grow and undertake our business plan (for example, obtain, if possible, loans). We currently have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds of the private placement of equity and debt securities and loans from our shareholders.





We have not generated any significant revenues to date and do not anticipate being able to generate significant revenues until such time as we can raise substantial additional capital and our websites are further developed and marketed.





In connection with our business plan, management will try and delay additional increases in operating expenses. We have undertaken certain actions and continue to implement changes designed to improve our financial results and operating cash flows. The actions involve certain cost-saving initiatives and growing strategies. For example, we do not have a seasoned staff of public company officers beyond the extent of experience and abilities of our Chief Executive Officer.





Our financial statements contain information expressing substantial doubt about our ability to continue as a going concern. The consolidated financial statements have been prepared "assuming that we will continue as a going concern," which contemplates that we satisfy our liabilities and commitments in the ordinary course of business.





7


RESULTS FROM OPERATIONS





FOR THE THREE MONTHS ENDED MARCH 31, 2011 COMPARED TO THE THREE MONTHS ENDED MARCH 31, 2010





We had total revenues of $86,953 for the three months ended March 31, 2011, which revenues were due to revenues generated by the Company’s then subsidiary, MedicalWork, which has since been transferred back to its original owner, as described above, compared to no revenues for the three months ended March 31, 2010.





We had total cost of sales of $5,569 for the three months ended March 31, 2011, compared to no cost of sales for the three months ended March 31, 2010.





We had general and administrative expenses of $87,385 for the three months ended March 31, 2011, compared to general and administrative expenses of $19,891 for the three months ended March 31, 2010, an increase of $67,494 or 339% from the prior period.  The increase in general and administrative expenses was mainly due to increased expenses due to the operations of the Company’s then subsidiary, MedicalWork, which has since been transferred back to its original owner, as described above.





We had $70,000 in amortization and depreciation expense for the three months ended March 31, 2011 compared with amortization and depreciation expense of $237 for the three months ended March 31, 2010.  Amortization and depreciation expenses increased in connection with the acquisition of the Find.com assets in fiscal 2010, which increased our depreciable asset base.





We had a total operating loss of $76,001 for the three months ended March 31, 2011, compared to a total operating loss of $20,128 for the three months ended March 31, 2010, an increase in total operating loss of $55,873 from the prior period due to the reasons stated above.





We had interest expense of $360,190 for the three months ended March 31, 2011, compared to interest expense of $3,118 for the three months ended March 31, 2010, an increase in interest expense of $357,072 from the prior period, which increase was in connection with interest on the secured loans associated with the Notes issued in connection with the Exchange Agreement, described above.





We had a total net loss of $436,191 for the three months ended March 31, 2011, compared to a total net loss of $23,246 for the three months ended March 31, 2010, an increase in net loss of $412,945 from the prior period, which was mainly due to the $357,072 increase in interest expense.





LIQUIDITY AND CAPITAL RESOURCES





We had total assets of $4,103,661 as of March 31, 2011, consisting of intangible assets, net of accumulated amortization of $3,990,000 and total current assets of $113,661, consisting of cash of $59,345 and other of $54,316.  We have not included intangible assets associated with the MedicalWork rescission described above.





We had total liabilities as of March 31, 2011 of $2,044,543, consisting of total current liabilities of $465,572; which included $20,597 of accounts payable, $418,605 of accrued liabilities and $26,370 of accounts payable related party, which amount was owed to Matthew Krieg, the Company’s sole officer and Director in connection with certain loans made to the Company by Mr. Krieg, as described below; and non-current liabilities consisting of $1,578,971 of long-term notes payable as described below, net of unamortized discount (which does not include debt relating to MedicalWork, which has since been transferred back to Mr. Sisk, its original owner as described above).





8


We had a working capital deficit of $351,912 and a total deficit accumulated during the development stage of $2,980,668 as of March 31, 2011.





We incurred a net loss of $436,191 for the three months ended March 31, 2011, and had an accumulated deficit of $2,980,668 as of March 31, 2011.  These conditions raise substantial doubt as to our ability to continue as a going concern.  Management is trying to raise additional capital through sales of common and preferred stock.  The financial statements do not include any adjustments that might be necessary if Generation Zero is unable to continue as a going concern.





We had $47,226 of net cash provided by operating activities for the three months ended March 31, 2011, which was mainly due to a net loss of $436,191 offset by $237,584 of increase in amortization of debt discount and $227,361 of accrued liabilities.





We had $10,000 of net cash provided by financing activities for the three months ended March 31, 2011, which included $10,000 of proceeds from related party debt.





On June 1, 2007, we issued Capersia Pte. Ltd. (“Capersia”) an $8,000 Promissory Note to evidence an $8,000 loan we received from Capersia, which had an interest rate of 6% per annum, and was payable on demand; provided that we were required to receive one (1) year and one (1) day notice prior to the due date of such note, and any amounts not paid when due accrued interest at the rate of 15% per annum.  The note had the right to convert into common stock at the option of the holder (subject to the holder not holding more than 4.99% of our outstanding common stock upon conversion) at a conversion rate of $0.001 per share. On or around November 7, 2008, the Capersia Note was amended to reflect an increased amount owed to the Company of $12,764. On or around August 20, 2009, Capersia converted $1,000 of the amount owed under the note into 10,000 1:100 post-reverse split shares of our common stock.  On or around November 10, 2009, Capersia sold its entire interest in the note to Cascata Equity Management, Inc. (50%) (“Cascata”) and Seven Palm Investments, LLC. (50%) (“Seven Palm”), who each subsequently converted $550 of the note into 550,000 shares of common stock each in May 2010. Additionally, in January 2011, Cascata converted an aggregate of $1,200 owed under the Capersia Note into 1,200,000 shares of common stock.





On October 23, 2010, Seven Palm agreed to cancel and forgive its portion of the Capersia Note then owned by the Company (representing a principal amount of $5,332 in its entirety prior to the accrual of any interest thereon, which accrued interest was also forgiven in connection with the Termination Agreement).





On October 23, 2012, the Company exercised its right to pay-off the note in full and remitted payment to Cascata of $5,861 in order to cancel the Capersia Note.  This amount is comprised of $4,132 in unpaid principal plus interest in the amount of $1,729 computed at 6% per annum.





In December 2009, the Company borrowed $5,000 from its sole officer and Director, Matthew Krieg. Between February and March 2010, the Company borrowed a total of $6,720 from Mr. Krieg. The amount loaned bears zero interest and is due on demand with 90 days’ notice.  As of December 31, 2010, 2011 and November 15, 2012, a total of $16,370, $30,168 and $30,168, respectively was owed to Mr. Krieg.  As of March 31, 2011, a total of 26,370 was owed to Mr. Kreig.





The Company raised the $150,000 provided to the escrow agent in connection with and pursuant to the terms of the Forbearance Agreement (described above) through the sale of promissory notes. A total of $150,000 was loaned to the Company in November 2010 by Gerald Modesitt, an individual, which was evidenced by a promissory note, which bears interest at the rate of 12% per annum (with interest payable monthly until maturity) and a maturity date, as extended of June 2, 2014.  Additionally, Matthew Krieg, the Company’s sole officer and Director agreed to assign Mr. Modesitt an aggregate of $100,000 which the Company owed to Mr. Krieg as of the date of the Modesitt Note, which Modesitt Note evidenced a principal amount of $250,000 (representing the $150,000 loaned by Mr. Modesitt and the rights to the $100,000 assigned to Mr. Modesitt by Mr. Krieg).  The Company agreed to issue Mr. Modesitt 750,000 shares of restricted common stock in connection with the Modesitt Note.  As of December 31, 2010, 2011 and November 15, 2012, a total of $254,833, $317,885 and $350,671, respectively, including accrued and unpaid interest thereon, was owed under the Modesitt Note.  As of March 31, 2011, a total of $262,478 was owed under the Modesitt Note.


9
 Additionally in November 2010, a third party loaned the Company $50,000, which was evidenced by a promissory note, which bears interest at the rate of 12% per annum (with interest payable monthly until maturity) and a maturity date, as extended of June 2, 2014.  The Company agreed to issue the third party an aggregate of 300,000 shares of common stock in connection with the Third Party Note. As of December 31, 2010, 2011 and November 15, 2012, a total of $50,967, $63,580 and $70,138, respectively, including accrued and unpaid interest thereon, was owed under the Third Party Note. As of March 31, 2011, a total of $52,490 was owed under the Third Party Note.





As described above, on February 4, 2011, we entered into a Merger Agreement with StaffMD and Jeffrey Sisk, an individual, and acquired ownership of MedicalWork, which held ownership of over 60 URLs including PhysicianWork.com. Part of the consideration paid for the acquisition was the issuance of the Geronimo Note in the amount of $250,000, which bears interest at the rate of 12% per annum, and has a default interest rate of 18% per annum. Monthly interest-only payments are due on the Geronimo Note, which was originally due February 1, 2012, but has since been extended until February 1, 2013  The Company also agreed to issue Geronimo an aggregate of 250,000 shares of the Company’s restricted common stock in consideration for agreeing to enter into the Geronimo Note.  The Geronimo Note was secured by a security interest in all of MedicalWork’s assets, pursuant to a Security Agreement.  The Company was also an obligor on the Geronimo Note and remained as a secondary obligor following the parties’ entry into the Rescission Agreement, described below.   The Company also agreed to issue Geronimo an aggregate of 250,000 shares of the Company’s restricted common stock in consideration for agreeing to enter into the Geronimo Note, which shares have been issued to date.





We also provided Mr. Sisk the Seller Note, a secured, subordinated promissory note in the amount of $3,950,000, which accrued interest at the rate of 8% per annum, had a default rate of interest of 14% per annum and was due and payable on February 4, 2012. The Seller Note was subsequently forgiven by Mr. Sisk effective December 31, 2011, pursuant to the Revision Agreement described in greater detail above.  As of March 31, 2011, the balance on the Seller Note was $3,737,872, which included accrued interest thereon, provided that such note has since been forgiven in connection with the Rescission Agreement.





Additionally, as part of the Rescission Agreement with Mr. Sisk, and effective December 31, 2011, pursuant to which we released ownership of MedicalWork and its assets to Mr. Sisk, and Mr. Sisk, among other things, agreed to cancel and terminate the Seller Note and his Employment Agreement and to indemnify and hold us harmless from any claims, costs, expenses or causes of action relating to the Geronimo Note (which is secured by 500,000 shares of our common stock).   As of December 31, 2010, 2011 and November 15, 2012, there was $0, $252,500 and $280,275 outstanding under the Geronimo Note, respectively, including accrued and unpaid interest thereon.  As of March 31, 2011, there was a total of $250,000 outstanding under the Geronimo Note.





Four of the Note Holders provided the Company non-interest bearing convertible bridge loans in the aggregate amount of $40,000 in March 2012, with a maturity date of the earlier of (a) the date the Company receives aggregate funding from any source in excess of $50,000 and (b) January 2, 2014, provided that the Company is currently in the process of obtaining waivers from the Note holders in order to allow the Company to raise additional funding for working capital purposes. In consideration for providing the loan, the Company issued the participating Note Holders an aggregate of 400,000 shares of restricted common stock.  The loans are secured by a security interest in all of the Company’s properties and assets.





On August 15, 2012, the Company issued a subordinated Convertible Promissory Note to John Strickland and Kimberly Ann Griffith, joint tenants, in the amount of $200,000 for the specific purpose of bringing the Company current in SEC filings in preparation of raising additional funds to launch the strategic plan. The Convertible Promissory Note accrues interest at the rate of 10% per annum (payable monthly in arrears) and is due and payable on August 15, 2014.  The Convertible Promissory Note is convertible into shares of the Company’s common stock at the option of the holder at a conversion price of $0.08 per share.





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As of the date of this filing, the Company owes $2,920,250 to the Note Holders in connection with the acquisition of Find.com, the payment of which is secured by a security interest in substantially all of our assets.  The Company is in default in connection with the payment of the Notes, provided that pursuant to the terms of a Forbearance Agreement and a First Addendum thereto, described in greater detail above, the Note Holders have agreed to forbear from taking any action in connection with the default during a forbearance period ending on the earlier to occur of (a) January 2, 2014 or (b) the date that any default (other than relating to the payment of funds under the Notes) occurs (the “Extended Forbearance Period”).  No interest accrues on the Notes during the Extended Forbearance Period.  The First Addendum also provided that all shares issued to the Note Holders from time to time have piggy-back registration rights; and that the Company could borrow up to $1 million in the form of a bridge loan (in addition to up to $50,000 which could be borrowed from the Note Holders, of which a total of $40,000 was subsequently borrowed).The agreement also requires that Mr. Krieg transfer ownership of the Series A Shares (or cancel such shares and have them reissued) to Cynthia S. White and Ronald L. Attkisson, as collateral agents for the notes (currently in default) associated with the Find.com acquisition, or their assigns within 10 days of notice of such requested transfer (or reissuance), which has not occurred or been requested to date, but is expected to occur in the first quarter of 2013.   We also agreed to issue Mr. Krieg 3 million shares of common stock in connection with such cancellation or transfer. We also agreed to pay the Note Holders up to 25% of our cash flow (in the discretion of the Board of Directors), in any fiscal year that revenues associated with Find.com exceed $1 million, in connection with the Notes, and the Note Holders agreed to further forebear from taking any action under the Notes and to extend the forbearance period so long as such requirements are met.





We do not currently have any formal commitments or identified sources of additional capital from third parties or from our officer, Director or majority shareholders. We can provide no assurance that additional financing will be available on favorable terms, if at all. If we are not able to raise the capital necessary to continue our business operations, we may be forced to abandon or curtail our business plan and/or suspend our exploration activities.





In the future, we may be required to seek additional capital by selling additional debt or equity securities, selling assets, if any, or otherwise be required to bring cash flows in balance when we approach a condition of cash insufficiency. The sale of additional equity or debt securities, if accomplished, may result in dilution to our then shareholders. We provide no assurance that financing will be available in amounts or on terms acceptable to us, or at all.





Item 3. Quantitative and Qualitative Disclosures about Market Risk





Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).





Item 4. Controls and Procedures





Evaluation of Disclosure Controls and Procedures





Our management, with the participation of our Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this Quarterly Report on Form 10-Q. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.




11





Based on our evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were not designed at a reasonable assurance level and are not effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.This conclusion was based on the existence of the material weaknesses in our internal control over financial reporting discussed below.





A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. We have identified and continue to have the following material weaknesses in our internal controls over financial reporting: we currently do not have an internal audit group, and we will need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge. Additionally, due to the fact that we have only one officer and Director, such lack of experienced personnel and segregation of duties may impair our ability to maintain effective internal controls over financial reporting and disclosure controls and procedures, which may result in material misstatements to our financial statements and an inability to provide accurate and timely financial information to our stockholders.





To address the need for more effective internal controls, management has plans to improve the existing controls and implement new controls as our financial position and capital availability improves.





Changes in Internal Control Over Financial Reporting





We regularly review our system of internal control over financial reporting to ensure we maintain an effective internal control environment. There were no changes in our internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.






Part II. OTHER INFORMATION





Item 1. Legal Proceedings





From time to time, we may become party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our business. We are not currently involved in legal proceedings that could reasonably be expected to have a material adverse effect on our business, prospects, financial condition or results of operations. We may become involved in material legal proceedings in the future.





Item 1A. Risk Factors





There have been no material changes from the risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010, filed with the Commission on January 25, 2013, and investors are encouraged to review such risk factors prior to making an investment in the Company.





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





In January 2011, Cascata converted an aggregate of $1,200 owed under the Capersia Note into 1,200,000 shares of common stock.





On October 23, 2010, pursuant to a Note Termination Agreement (the “Termination Agreement”), Seven Palm agreed to cancel and forgive its portion of the Capersia Note then owned by the Company (representing a principal amount of $5,332 in its entirety prior to the accrual of any interest thereon, which accrued interest was also forgiven in connection with the Termination Agreement).  On October 23, 2012, the Company exercised its right to pay-off the note in full and remitted payment to Cascata of $5,861 in order to cancel the Capersia Note.  This amount is comprised of $4,132 in unpaid principal plus interest in the amount of $1,729 computed at 6% per annum.





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On or around April 28, 2010, the Company entered into an Asset Purchase Agreement with Find.com Acquisition, Inc., a Delaware corporation pursuant to which we purchased all of Find.com Acquisition’s interest in and ownership of the assets associated with the technology and operations of the www.Find.com website and all intellectual property rights associated therewith for an aggregate of 10,000,000 shares of our restricted common stock.





On or around June 30, 2010, we entered into a Share Exchange Agreement with Find.com URL Holdings, LLC., a Georgia limited liability company, and an Asset Purchase Agreement with Scientigo, Inc. pursuant to which we purchased 100% of the outstanding membership interests of URL in consideration for among other things, the issuance of an aggregate of 14,000,000 shares of the Company’s restricted common stock.  Scientigo has since been merged with and into Phoenix, with Phoenix being the surviving entity in the merger.





In September 2010, the Company entered into an Exclusive Agreement with Talent Search and Rescue, LLC.  Pursuant to the Exclusive Agreement, Talent agreed to enter into an exclusive relationship with the Company pursuant to which the Company and Talent would attempt to staff certain independent contractor positions primarily in the technology field; and provide the Company rights to 50% of Talent’s net proceeds from any staffed positions.  Talent has experience in this area and was able to secure a very strong arrangement whereby many staffing opportunities should be available for staffing.  The Company agreed to issue Talent an aggregate of 500,000 shares of restricted common stock to an assign of Talent in consideration for Talent entering into the Exclusive Agreement.  A small number of positions were staffed in connection with the Exclusive Agreement, the funds generated pursuant to which were retained by Talent and the Exclusive Agreement and relationship between the Company and Talent has since been terminated.





In November 2010, in connection with our entry into a Forbearance Agreement we agreed to issue the Note Holders an aggregate of 200,000 restricted shares of our common stock, which shares were issued in December 2010.





A total of $150,000 was loaned to the Company in November 2010 by Gerald Modesitt, an individual, which was evidenced by a promissory note, which bears interest at the rate of 12% per annum (with interest payable monthly until maturity) and a maturity date of November 4, 2011.  Additionally, Matthew Krieg, the Company’s sole officer and Director agreed to assign Mr. Modesitt an aggregate of $100,000 which the Company owed to Mr. Krieg as of the date of the Modesitt Note, which Modesitt Note evidences an aggregate of $250,000 (representing the $150,000 loaned by Mr. Modesitt and the rights to the $100,000 assigned to Mr. Modesitt by Mr. Krieg).  The Company agreed to issue Mr. Modesitt 750,000 shares of restricted common stock in connection with the Modesitt Note.  The Modesitt Note was amended in April 2012 and June 2012, to extend the maturity date of the Modesitt Note to June 2, 2014.





Additionally in November 2010, a third party loaned the Company $50,000, which was evidenced by a promissory note, which bears interest at the rate of 12% per annum (with interest payable monthly until maturity) and a maturity date of November 4, 2011.  The Company agreed to issue the third party an aggregate of 300,000 shares of common stock in connection with the Third Party Note.  The Third Party Note was amended in April 2012 and June 2012, to extend the maturity date of the Third Party Note to June 2, 2014.





In January 2011, Find.com Acquisition distributed the 10,000,000 shares which it then held of our common stock to its shareholders.





On February 4, 2011, we entered into an Agreement and Plan of Merger with StaffMD, Inc., a Georgia corporation, and the sole owner of StaffMD, Jeffrey Sisk, an individual pursuant to which StaffMD was merged with and into MedicalWork, LLC, a newly formed Georgia limited liability company, and the Company’s then wholly-owned subsidiary, resulting in our acquisition of StaffMD.  In partial consideration for the acquisition we issued Mr. Sisk 6,000,000 shares of our restricted common stock (of which 3,000,000 shares were subsequently cancelled by Mr. Sisk in connection with the rescission of the Agreement and Plan of Merger).  The Company also agreed to issue Geronimo an aggregate of 250,000 shares of the Company’s restricted common stock in consideration for agreeing to enter into the Geronimo Note.
 
 13


In March 2012, as a forbearance fee in connection with a First Addendum to the Forbearance Agreement described above, the Company issued 1,460,125 shares of restricted common stock pro-rata with the outstanding principal amount of the Notes held by each holder.





Four of the Note Holders provided the Company non-interest bearing convertible bridge loans in the aggregate amount of $40,000 in March 2012, with a maturity date of the earlier of (a) the date the Company receives aggregate funding from any source in excess of $50,000 and (b) January 2, 2014, provided that the Company is currently in the process of obtaining waivers from the Note holders in order to allow the Company to raise additional funding for working capital purposes. In consideration for providing the loan, the Company issued the participating Note Holders an aggregate of 400,000 shares of restricted common stock.  The loans are secured by a security interest in all of the Company’s properties and assets.





On August 15, 2012, the Company issued a subordinated Convertible Promissory Note to John Strickland and Kimberly Ann Griffith, joint tenants, in the amount of $200,000 for the specific purpose of bringing the Company current in SEC filings in preparation of raising additional funds to launch the strategic plan. The Convertible Promissory Note accrues interest at the rate of 10% per annum (payable monthly in arrears) and is due and payable on August 15, 2014.  The Convertible Promissory Note is convertible into shares of the Company’s common stock at the option of the holder at a conversion price of $0.08 per share.





The Company claims an exemption from registration afforded by Section 4(2) of the Securities Act of 1933, as amended (the “Act”) since the foregoing issuances did not involve a public offering, the recipients took the shares for investment and not resale, the Company took appropriate measures to restrict transfer, and the recipients were either (a) “accredited investors” and/or (b) had access to similar documentation and information as would be required in a Registration Statement under the Act. No underwriters or agents were involved in the foregoing issuances and the Company paid no underwriting discounts or commissions.





We claim an exemption from registration afforded by Section 3(a)(9) of the Act for the above conversions, as the securities were exchanged by the Company with its existing security holders exclusively in transactions where no commission or other remuneration was paid or given directly or indirectly for soliciting such exchange.





Item 3.  Defaults Upon Senior Securities





None.





Item 4.  Mine Safety Disclosures





Not applicable.





Item 5.  Other Information.





None.





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Item 6. Exhibits





Exhibit Number
Description of Exhibit2.1(1)
Agreement and Plan of Merger by and Between the Company, StaffMD, Inc., Jeffrey Sisk and MedicalWork, LLC3.1(2)
Articles of Incorporation3.2(3)
Certificate of Designations of Series A Preferred Stock3.3(3)
Certificate of Designations of Series B Preferred Stock3.4(4)
Certificate of Amendment to Articles of Incorporation3.5(2)
Bylaws10.1(2)
Acquisition & Participation Agreement with Polaris Holdings, Inc.10.2(2)
$8,000 Promissory Note with Capersia Pte. Ltd.10.3(5)
Amended Promissory Note with Capersia10.4(6)
Second Amendment to Promissory Note with Capersia10.5(6)
Third Amendment to Promissory Note with Capersia10.6(7)
Acknowledgement of Promissory Note Terms - Cascata Equity Management, Inc.10.7(7)
Acknowledgement of Promissory Note Terms – Seven Palm Investments, LLC10.8(8)
Asset Purchase Agreement with Find.com Acquisition, Inc.10.9(9)
Share Exchange Agreement with the Members of URL Holdings10.10(9)
Asset Purchase Agreement with Scientigo, Inc.10.11(9)
Security Agreement executed by the Company in favor of Scientigo as collateral agent for the holders of the Notes10.12(9)
Form of Secured Promissory Notes10.13(9)
$55,000 Promissory Note with Scientigo10.14(10)
Note Termination Agreement dated October 23, 2010 by and between Generation Zero Group, Inc. and Seven Palm Investments, LLC10.15(11)
Promissory Note $250,000 with Gerald Modesitt  dated November 4, 201010.16(14)
Amendments to Promissory Note $250,000 with Gerald Modesittdated April 16, 2012 and June 15, 201210.17(11)
Promissory Note $50,000 with Equity Trust Company Custodian FBO Larry Gantz IRA 110591  dated November 4, 201010.18(14)
Amendments to Promissory Note $50,000 with Equity Trust Company Custodian FBO Larry Gantz IRA 110591  dated April 16, 2012 and June 15, 201210.19(11)
Assignment of Exclusive Agreement by Talent Search and Rescue, LLC in favor of Generation Zero Group, Inc. dated September 30, 2010   15
  10.20(12)
Forbearance and Note Amendment Agreement10.21(13)
Promissory Note ($3,950,000 – Jeffrey Sisk)10.22(13)
Promissory Note ($250,000 – Geronimo Property Trust)10.23(13)
Employment Agreement with Jeffrey Sisk10.24(13)
Security Agreement with Geronimo Property Trust10.25(13)
Subordination Agreement with Collateral Agent for Senior Noteholder10.26(14)
Revision of Payment Terms of Promissory Note with Jeffrey Sisk10.27(14)
Employment Agreement Compensation Waiver with Jeffrey Sisk (effective April 16, 2011)10.28(14)
Assignment of Membership Interests Agreement with Jeffrey Sisk (December 31, 2011)10.29(14)
Pledge Agreement with Jeffrey Sisk (December 31, 2011)10.30(14)
Convertible Promissory Note – John Strickland and Kimberly Ann Griffith (August 15, 2012)10.31(14)
First Addendum to Forbearance and Note Amendment Agreement31.1*
Certificate of the Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1*
Certificate of the Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002





*   Filed herewith.





(1) Filed as an exhibit to our Form 8-K Current Report, filed with the Commission on February 14, 2011, and incorporated herein by reference.





(2) Filed as an exhibit to our Form SB-2 Registration Statement filed with the Commission on October 1, 2007, and incorporated herein by reference.





(3) Filed as an exhibit to our Form 8-K filed with the Commission on June 19, 2009, and incorporated herein by reference.





(4) Filed as an exhibit to our Form 8-K filed with the Commission on March 5, 2010, and incorporated herein by reference.





(5) Filed as an exhibit to our Form S-1 Registration Statement filed with the Commission on March 21, 2008, and incorporated herein by reference.





(6) Filed as an exhibit to our Post-Effective Amended Form S-1 Registration Statement, filed with the Commission on October 28, 2009, and incorporated herein by reference.





16


(7) Filed as an exhibit to our Form 10-K Annual Report, filed with the Commission on April 14, 2010, and incorporated herein by reference.





(8) Filed as an exhibit to our Form 10-Q Quarterly Report, filed with the Commission on May 24, 2010, and incorporated herein by reference.





(9) Filed as an exhibit to our Form 8-K Current Report, filed with the Commission on July 12, 2010, and incorporated herein by reference.





(10) Filed as an exhibit to our Form 8-K Current Report, filed with the Commission on November 22, 2010, and incorporated herein by reference.





(11) Filed as an exhibit to our Form 8-K Current Report, filed with the Commission on November 24, 2010, and incorporated herein by reference.





(12) Filed as an exhibit to our Form 8-K Current Report, filed with the Commission on December 10, 2010, and incorporated herein by reference.





(13) Filed as an exhibit to our Form 8-K Current Report, filed with the Commission on February 14, 2011, and incorporated herein by reference.





(14) Filed as an exhibit to our Form 10-K Annual Report, filed with the Commission on January 25, 2013, and incorporated herein by reference.








SIGNATURES





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





Generation Zero Group, Inc.Dated: January 25, 2013
By:
/s/ Matthew KriegMatthew KriegPresident, Chief Executive Officer (Principal Executive Officer), Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer), Treasurer, Secretary and Director











17


EXHIBIT INDEX





Exhibit Number
Description of Exhibit2.1(1)
Agreement and Plan of Merger by and Between the Company, StaffMD, Inc., Jeffrey Sisk and MedicalWork, LLC3.1(2)
Articles of Incorporation3.2(3)
Certificate of Designations of Series A Preferred Stock3.3(3)
Certificate of Designations of Series B Preferred Stock3.4(4)
Certificate of Amendment to Articles of Incorporation3.5(2)
Bylaws10.1(2)
Acquisition & Participation Agreement with Polaris Holdings, Inc.10.2(2)
$8,000 Promissory Note with Capersia Pte. Ltd.10.3(5)
Amended Promissory Note with Capersia10.4(6)
Second Amendment to Promissory Note with Capersia10.5(6)
Third Amendment to Promissory Note with Capersia10.6(7)
Acknowledgement of Promissory Note Terms - Cascata Equity Management, Inc.10.7(7)
Acknowledgement of Promissory Note Terms – Seven Palm Investments, LLC10.8(8)
Asset Purchase Agreement with Find.com Acquisition, Inc.10.9(9)
Share Exchange Agreement with the Members of URL Holdings10.10(9)
Asset Purchase Agreement with Scientigo, Inc.10.11(9)
Security Agreement executed by the Company in favor of Scientigo as collateral agent for the holders of the Notes10.12(9)
Form of Secured Promissory Notes10.13(9)
$55,000 Promissory Note with Scientigo10.14(10)
Note Termination Agreement dated October 23, 2010 by and between Generation Zero Group, Inc. and Seven Palm Investments, LLC10.15(11)
Promissory Note $250,000 with Gerald Modesitt  dated November 4, 201010.16(14)
Amendments to Promissory Note $250,000 with Gerald Modesittdated April 16, 2012 and June 15, 201210.17(11)
Promissory Note $50,000 with Equity Trust Company Custodian FBO Larry Gantz IRA 110591  dated November 4, 2010   18
   10.18(14)
Amendments to Promissory Note $50,000 with Equity Trust Company Custodian FBO Larry Gantz IRA 110591  dated April 16, 2012 and June 15, 201210.19(11)
Assignment of Exclusive Agreement by Talent Search and Rescue, LLC in favor of Generation Zero Group, Inc. dated September 30, 201010.20(12)
Forbearance and Note Amendment Agreement10.21(13)
Promissory Note ($3,950,000 – Jeffrey Sisk)10.22(13)
Promissory Note ($250,000 – Geronimo Property Trust)10.23(13)
Employment Agreement with Jeffrey Sisk10.24(13)
Security Agreement with Geronimo Property Trust10.25(13)
Subordination Agreement with Collateral Agent for Senior Noteholder10.26(14)
Revision of Payment Terms of Promissory Note with Jeffrey Sisk10.27(14)
Employment Agreement Compensation Waiver with Jeffrey Sisk (effective April 16, 2011)10.28(14)
Assignment of Membership Interests Agreement with Jeffrey Sisk (December 31, 2011)10.29(14)
Pledge Agreement with Jeffrey Sisk (December 31, 2011)10.30(14)
Convertible Promissory Note – John Strickland and Kimberly Ann Griffith (August 15, 2012)10.31(14)
First Addendum to Forbearance and Note Amendment Agreement31.1*
Certificate of the Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1*
Certificate of the Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002





*   Filed herewith.





(1) Filed as an exhibit to our Form 8-K Current Report, filed with the Commission on February 14, 2011, and incorporated herein by reference.





(2) Filed as an exhibit to our Form SB-2 Registration Statement filed with the Commission on October 1, 2007, and incorporated herein by reference.





(3) Filed as an exhibit to our Form 8-K filed with the Commission on June 19, 2009, and incorporated herein by reference.





(4) Filed as an exhibit to our Form 8-K filed with the Commission on March 5, 2010, and incorporated herein by reference.





(5) Filed as an exhibit to our Form S-1 Registration Statement filed with the Commission on March 21, 2008, and incorporated herein by reference.





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(6) Filed as an exhibit to our Post-Effective Amended Form S-1 Registration Statement, filed with the Commission on October 28, 2009, and incorporated herein by reference.





(7) Filed as an exhibit to our Form 10-K Annual Report, filed with the Commission on April 14, 2010, and incorporated herein by reference.





(8) Filed as an exhibit to our Form 10-Q Quarterly Report, filed with the Commission on May 24, 2010, and incorporated herein by reference.





(9) Filed as an exhibit to our Form 8-K Current Report, filed with the Commission on July 12, 2010, and incorporated herein by reference.





(10) Filed as an exhibit to our Form 8-K Current Report, filed with the Commission on November 22, 2010, and incorporated herein by reference.





(11) Filed as an exhibit to our Form 8-K Current Report, filed with the Commission on November 24, 2010, and incorporated herein by reference.





(12) Filed as an exhibit to our Form 8-K Current Report, filed with the Commission on December 10, 2010, and incorporated herein by reference.





(13) Filed as an exhibit to our Form 8-K Current Report, filed with the Commission on February 14, 2011, and incorporated herein by reference.





(14) Filed as an exhibit to our Form 10-K Annual Report, filed with the Commission on January 25, 2013 and incorporated herein by reference.



















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