|                                   
|-----------------------------------
|UNITED
 STATES                     
|SECURITIES
 AND EXCHANGE COMMISSION
|WASHINGTON, D.C. 20549             
|                                   
|FORM 10-Q                          

(Mark One)

|                                              |                                                                                           
|--------------------------------------------- | ------------------------------------------------------------------------------------------
|x                                             | QUARTERLY
 REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
 SECURITIES EXCHANGE ACT OF 1934 
|                                              |                                                                                           
|For the
 quarterly period ended June 30, 2009
|                                             
|or                                           
|                                             
|o                                             | TRANSITION
 REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
 SECURITIES EXCHANGE ACT OF 1934

|                                                       |            |   
|------------------------------------------------------ | ---------- | --
|For the
 transition period from                        |            | To
|                                                       |            |   
|                                                      
|Commission
 File Number:                               | 333-140685
|                                                       |           
|                                                       |           
|WORLD SERIES OF GOLF, INC.                            
|                                                      
|(Exact name of registrant as specified in its charter)

|                                                                                    |                                     
|----------------------------------------------------------------------------------- | ------------------------------------
|Nevada                                                                              | 87-0719383                          
|                                                                                    |                                     
|(State
 or other jurisdiction of incorporation or organization)                     | (I.R.S. Employer Identification No.)
|                                                                                    |                                     
|10161
 Park Run Drive, Suite 150, Las Vegas, NV                                     | 89145                               
|                                                                                    |                                     
|(Address
 of principal executive offices)                                           | (Zip Code)                          
|                                                                                    |                                     
|702-740-1744                                                                       
|                                                                                   
|(Registrants telephone number, including area code)                               
|                                                                                   
|Not Applicable                                                                     
|                                                                                   
|(Former name, former address and former fiscal year, if changed since
 last report)

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

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

---



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

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

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

As
of August 13, 2009, 21,901,561 shares of the registrants common stock were
outstanding.

---



WORLD SERIES OF GOLF, INC.

FORM 10-Q

INDEX

|           |                       |                                                                                                                         |    |     
|---------- | --------------------- | ----------------------------------------------------------------------------------------------------------------------- | -- | ----
|           |                       |                                                                                                                         |    | Page
|           |                       |                                                                                                                         |    |     
|Part I     | Financial Information |                                                                                                                         | 1 
|           |                       |                                                                                                                         |    |     
|           | Item 1.               | Financial
      Statements:                                                                                             |    |     
|           |                       |                                                                                                                         |    |     
|           |                       | Condensed Consolidated Balance Sheets as of
 June 30, 2009 (unaudited) and December 31, 2008                            |    | 1   
|           |                       |                                                                                                                         |    |     
|           |                       | Condensed Consolidated Statements of
 Operations (unaudited) for the three and six months ended June 30, 2009 and
 2008 |    | 2   
|           |                       |                                                                                                                         |    |     
|           |                       | Condensed Consolidated Statement of
 Stockholders Equity (Deficit) (unaudited) for the six months ended June 30,
 2009 |    | 3   
|           |                       |                                                                                                                         |    |     
|           |                       | Condensed Consolidated Statements of Cash
 Flows (unaudited) for the three and six months ended June 30, 2009 and 2008  |    | 4   
|           |                       |                                                                                                                         |    |     
|           |                       | Notes to Condensed Consolidated Financial
 Statements (unaudited)                                                       |    | 5   
|           |                       |                                                                                                                         |    |     
|           | Item 2.               | Managements Discussion and Analysis of
 Financial Condition and Results of Operations                                  |    | 12  
|           |                       |                                                                                                                         |    |     
|           | Item 4T.              | Controls and Procedures                                                                                                 |    | 17  
|           |                       |                                                                                                                         |    |     
|Part II    | Other Information     |                                                                                                                         | 17
|           |                       |                                                                                                                         |    |     
|           | Item 1.               | Legal Proceedings                                                                                                       |    | 17  
|           |                       |                                                                                                                         |    |     
|           | Item 2.               | Unregistered Sales of Equity Securities and
 Use of Proceeds                                                            |    | 18  
|           |                       |                                                                                                                         |    |     
|           | Item 3.               | Defaults Upon Senior Securities                                                                                         |    | 18  
|           |                       |                                                                                                                         |    |     
|           | Item 4.               | Submission of Matters to a Vote of Security
 Holders                                                                    |    | 18  
|           |                       |                                                                                                                         |    |     
|           | Item 5.               | Other Information                                                                                                       |    | 18  
|           |                       |                                                                                                                         |    |     
|           | Item 6.               | Exhibits                                                                                                                |    | 18  
|           |                       |                                                                                                                         |    |     
|Signatures |                       |                                                                                                                         | 19

i

---



PART I 
FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

WORLD
SERIES OF GOLF, INC.CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

|                                                                                                                                                                    |  |                                      |         |                   |   |         |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------ | ------- | ----------------- | - | ------- | -
|                                                                                                                                                                    |  | June 30, 2009                        |         | December 31, 2008 |  
|                                                                                                                                                                    |  |                                      |         |                   |  
|                                                                                                                                                                    |  | (in thousands, except share amounts) |        
|ASSETS                                                                                                                                                             
|Current assets:                                                                                                                                                     |  |                                      |         |                   |   |         |  
|Cash                                                                                                                                                                |  | $                                    | 58      |                   | $ | 121     |  
|Prepaid expenses and other assets                                                                                                                                   |  |                                      | 306     |                   |   | 206     |  
|                                                                                                                                                                    |  |                                      |         |                   |   |         |  
|Total current assets                                                                                                                                                |  |                                      | 364     |                   |   | 327     |  
|Equipment, net                                                                                                                                                      |  |                                      | 25      |                   |   | 27      |  
|                                                                                                                                                                    |  |                                      |         |                   |   |         |  
|Total assets                                                                                                                                                        |  | $                                    | 389     |                   | $ | 354     |  
|                                                                                                                                                                    |  |                                      |         |                   |   |         |  
|                                                                                                                                                                    |  |                                      |         |                   |   |         |  
|LIABILITIES AND STOCKHOLDERS EQUITY
(DEFICIT)                                                                                                                     
|                                                                                                                                                                    |  |                                      |         |                   |   |         |  
|Current liabilities:                                                                                                                                                |  |                                      |         |                   |   |         |  
|Accounts payable                                                                                                                                                    |  | $                                    | 802     |                   | $ | 467     |  
|Unearned revenue and player deposits                                                                                                                                |  |                                      | 62      |                   |   | 54      |  
|Convertible note and interest payable to related
party                                                                                                              |  |                                      | 1,188   |                   |   | 1,062   |  
|Convertible notes payable                                                                                                                                           |  |                                      | 235     |                   |   | 235     |  
|Fair value liability for price adjustable
warrants                                                                                                                  |  |                                      | 33      |                   |   |        |  
|Due to related parties                                                                                                                                              |  |                                      | 945     |                   |   |        |  
|Other current liabilities                                                                                                                                           |  |                                      | 475     |                   |   | 424     |  
|                                                                                                                                                                    |  |                                      |         |                   |   |         |  
|Total current liabilities                                                                                                                                           |  |                                      | 3,740   |                   |   | 2,242   |  
|                                                                                                                                                                    |  |                                      |         |                   |   |         |  
|Commitments and contingencies                                                                                                                                       |  |                                      |         |                   |   |         |  
|                                                                                                                                                                    |  |                                      |         |                   |   |         |  
|Stockholders equity (deficit):                                                                                                                                     |  |                                      |         |                   |   |         |  
|Preferred stock, $0.001 par value; 10,000,000 shares
authorized: no
 shares issued and outstanding                                                                  |  |                                      |        |                   |   |        |  
|Common stock and additional paid in capital, $0.001
par value;
 90,000,000 shares authorized: 21,551,561 and 22,803,999 shares issued and
outstanding, respectively |  |                                      | 8,975   |                   |   | 8,890   |  
|Accumulated deficit                                                                                                                                                 |  |                                      | (12,326 | )                 |   | (10,778 | )
|                                                                                                                                                                    |  |                                      |         |                   |   |         |  
|Total stockholders equity (deficit)                                                                                                                                |  |                                      | (3,351  | )                 |   | (1,888  | )
|                                                                                                                                                                    |  |                                      |         |                   |   |         |  
|Total liabilities and stockholders equity
(deficit)                                                                                                                |  | $                                    | 389     |                   | $ | 354     |  
|                                                                                                                                                                    |  |                                      |         |                   |   |         |  

See notes to condensed consolidated financial statements

1

---



WORLD
SERIES OF GOLF, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

|                                                                |  |                                                  |            |                          |   |            |   |      |            |   |   |            |  
|--------------------------------------------------------------- |  | ------------------------------------------------ | ---------- | ------------------------ | - | ---------- | - | ---- | ---------- | - | - | ---------- | -
|                                                                |  | Three Months Ended
 June 30,                     |            | Six Months EndedJune 30, |  
|                                                                |  |                                                  |            |                          |  
|                                                                |  | 2009                                             |            | 2008                     |   | 2009       |   | 2008 |           
|                                                                |  |                                                  |            |                          |   |            |   |      |           
|                                                                |  | (in thousands, except share
 and per share data) |           
|Revenue:                                                        |  |                                                  |            |                          |   |            |   |      |            |   |   |            |  
|Sponsorship and advertising                                     |  | $                                                | 479        |                          | $ | 864        |   | $    | 479        |   | $ | 864        |  
|Licensing                                                       |  |                                                  |           |                          |   | 200        |   |      |           |   |   | 797        |  
|Player entry fees                                               |  |                                                  | 790        |                          |   | 543        |   |      | 790        |   |   | 543        |  
|                                                                |  |                                                  |            |                          |   |            |   |      |            |   |   |            |  
|Total revenue                                                   |  |                                                  | 1,269      |                          |   | 1,607      |   |      | 1,269      |   |   | 2,204      |  
|                                                                |  |                                                  |            |                          |   |            |   |      |            |   |   |            |  
|Operating expenses:                                             |  |                                                  |            |                          |   |            |   |      |            |   |   |            |  
|Cost of revenue                                                 |  |                                                  | 1,456      |                          |   | 2,639      |   |      | 1,479      |   |   | 2,671      |  
|Sales and marketing                                             |  |                                                  | 60         |                          |   | 612        |   |      | 63         |   |   | 916        |  
|General and administrative                                      |  |                                                  | 747        |                          |   | 577        |   |      | 1,098      |   |   | 1,045      |  
|                                                                |  |                                                  |            |                          |   |            |   |      |            |   |   |            |  
|Total operating expenses                                        |  |                                                  | 2,263      |                          |   | 3,828      |   |      | 2,640      |   |   | 4,632      |  
|                                                                |  |                                                  |            |                          |   |            |   |      |            |   |   |            |  
|Loss from operations                                            |  |                                                  | (994       | )                        |   | (2,221     | ) |      | (1,371     | ) |   | (2,428     | )
|                                                                |  |                                                  |            |                          |   |            |   |      |            |   |   |            |  
|Other income (expense):                                         |  |                                                  |            |                          |   |            |   |      |            |   |   |            |  
|Interest expense                                                |  |                                                  | (30        | )                        |   | (320       | ) |      | (144       | ) |   | (349       | )
|Change in fair value liability for price adjustable
warrants    |  |                                                  | (22        | )                        |   |           |   |      | 69         |   |   |           |  
|                                                                |  |                                                  |            |                          |   |            |   |      |            |   |   |            |  
|Total other income (expense)                                    |  |                                                  | (52        | )                        |   | (320       | ) |      | (75        | ) |   | (349       | )
|                                                                |  |                                                  |            |                          |   |            |   |      |            |   |   |            |  
|Net loss                                                        |  | $                                                | (1,046     | )                        | $ | (2,541     | ) | $    | (1,446     | ) | $ | (2,777     | )
|                                                                |  |                                                  |            |                          |   |            |   |      |            |   |   |            |  
|Loss per common share  basic and diluted:                      |  |                                                  |            |                          |   |            |   |      |            |   |   |            |  
|Net loss per common share  basic and
diluted                   |  | $                                                | (0.05      | )                        | $ | (0.12      | ) | $    | (0.06      | ) | $ | (0.14      | )
|                                                                |  |                                                  |            |                          |   |            |   |      |            |   |   |            |  
|Shares used in computing net loss per share  basic and
diluted |  |                                                  | 22,419,866 |                          |   | 21,671,252 |   |      | 22,610,872 |   |   | 20,291,889 |  
|                                                                |  |                                                  |            |                          |   |            |   |      |            |   |   |            |  

See notes to condensed consolidated financial statements

2

---



WORLD
SERIES OF GOLF, INC.CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
(DEFICIT)
For the Six Months Ended June 30, 2009
(Unaudited)

|                                                                   |  |                                              |            |                        |   |                                        |  |   |         |   |   |        |  
|------------------------------------------------------------------ |  | -------------------------------------------- | ---------- | ---------------------- | - | -------------------------------------- |  | - | ------- | - | - | ------ | -
|                                                                   |  | Common Stock and Additional
 Paid-In Capital |            | Accumulated
 
 Deficit |   | Total
 Stockholders
 Equity (Deficit) | 
|                                                                   |  |                                              |            |                        |  
|                                                                   |  | Shares                                       |            | Amount                 |   |                                        | 
|                                                                   |  |                                              |            |                        |   |                                        |  |   |        
|                                                                   |  | (In
 thousands, except share data)           |           
|Balance
 December 31, 2008                                         |  |                                              | 22,803,999 |                        | $ | 8,890                                  |  | $ | (10,778 | ) | $ | (1,888 | )
|Cumulative effect of change in accounting principle                |  |                                              |           |                        |   |                                       |  |   | (102    | ) |   | (102   | )
|                                                                   |  |                                              |            |                        |   |                                        |  |   |         |   |   |        |  
|Balance January
 1, 2009                                           |  |                                              | 22,803,999 |                        | $ | 8,890                                  |  | $ | (10,880 | ) | $ | (1,990 | )
|Warrants issued pursuant to convertible notes due to related
party |  |                                              |           |                        |   | 11                                     |  |   |        |   |   | 11     |  
|Issuance of shares in settlement of liability                      |  |                                              | 112,500    |                        |   | 7                                      |  |   |        |   |   | 7      |  
|Cancellation of shares previously issued for services              |  |                                              | (1,364,938 | )                      |   |                                       |  |   |        |   |   |       |  
|Compensation related to stock options and warrants                 |  |                                              |           |                        |   | 67                                     |  |   |        |   |   | 67     |  
|Net loss                                                           |  |                                              |           |                        |   |                                       |  |   | (1,446  | ) |   | (1,446 | )
|                                                                   |  |                                              |            |                        |   |                                        |  |   |         |   |   |        |  
|Balance
 June 30, 2009                                             |  |                                              | 21,551,561 |                        | $ | 8,975                                  |  | $ | (12,326 | ) | $ | (3,351 | )
|                                                                   |  |                                              |            |                        |   |                                        |  |   |         |   |   |        |  

See notes to condensed consolidated financial statements

3

---



WORLD
SERIES OF GOLF, INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

|                                                                             |  |                             |        |      |   |        |  
|---------------------------------------------------------------------------- |  | --------------------------- | ------ | ---- | - | ------ | -
|                                                                             |  | Six Months
 Ended
 June 30, |       
|                                                                             |  |                             |       
|                                                                             |  | 2009                        |        | 2008 |  
|                                                                             |  |                             |        |      |  
|                                                                             |  | (In
 thousands)             |       
|Operating
 activities:                                                       |  |                             |        |      |   |        |  
|Net loss                                                                     |  | $                           | (1,446 | )    | $ | (2,777 | )
|Adjustments to reconcile net loss to net cash used
in operating
 activities: |  |                             |        |      |   |        |  
|Depreciation                                                                 |  |                             | 4      |      |   | 3      |  
|Amortization of debt discount                                                |  |                             | 11     |      |   | 285    |  
|Share-based payments of consulting and other
expenses                        |  |                             | 67     |      |   | 786    |  
|Change in fair value liability for price adjustable
warrants                 |  |                             | (69    | )    |   |       |  
|Changes in assets and liabilities:                                           |  |                             |        |      |   |        |  
|Accounts receivable                                                          |  |                             |       |      |   | (295   | )
|Prepaid expenses and other assets                                            |  |                             | (100   | )    |   | (136   | )
|Accounts payable                                                             |  |                             | 335    |      |   | 85     |  
|Player deposits                                                              |  |                             | 8      |      |   | (46    | )
|Accrued interest on related party note
payable                               |  |                             | 126    |      |   | 58     |  
|Other current liabilities                                                    |  |                             | 58     |      |   | 410    |  
|                                                                             |  |                             |        |      |   |        |  
|Net cash used in operating activities                                        |  |                             | (1,006 | )    |   | (1,627 | )
|                                                                             |  |                             |        |      |   |        |  
|Investing
 activities:                                                       |  |                             |        |      |   |        |  
|Purchases of property and equipment                                          |  |                             | (2     | )    |   | (21    | )
|                                                                             |  |                             |        |      |   |        |  
|Net cash used in investing activities                                        |  |                             | (2     | )    |   | (21    | )
|                                                                             |  |                             |        |      |   |        |  
|Financing
 activities:                                                       |  |                             |        |      |   |        |  
|Proceeds from issuance of convertible notes payable
and warrants             |  |                             |       |      |   | 1,135  |  
|Proceeds from advances from related
parties                                  |  |                             | 945    |      |   |       |  
|Proceeds from sale of common shares and warrants,
net                        |  |                             |       |      |   | 380    |  
|                                                                             |  |                             |        |      |   |        |  
|Net cash provided by financing activities                                    |  |                             | 945    |      |   | 1,515  |  
|                                                                             |  |                             |        |      |   |        |  
|Net decrease in cash and cash equivalents                                    |  |                             | (63    | )    |   | (133   | )
|Cash and cash equivalents  beginning of period                              |  |                             | 121    |      |   | 255    |  
|                                                                             |  |                             |        |      |   |        |  
|Cash and cash equivalents  end of period                                    |  | $                           | 58     |      | $ | 122    |  
|                                                                             |  |                             |        |      |   |        |  
|Supplemental disclosure:                                                     |  |                             |        |      |   |        |  
|Cash paid for interest                                                       |  | $                           |       |      | $ |       |  
|                                                                             |  |                             |        |      |   |        |  
|Non-cash investing and financing activities:                                 |  |                             |        |      |   |        |  
|Shares issued in settlement of liability                                     |  | $                           | 7      |      | $ |       |  
|                                                                             |  |                             |        |      |   |        |  

See notes to condensed consolidated financial statements

4

---



WORLD SERIES OF GOLF, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
For the three and six months ended June 30, 2009 and 2008 (Unaudited)

Note 1. Business and Organization

On
January 31, 2008, Innovative Consumer Products, Inc. (ICP), a public Nevada
shell corporation, acquired all of the outstanding capital stock of World
Series of Golf, Inc., a privately-held Nevada corporation (WSG-NV) engaged in
the sports entertainment industry.

The
acquisition was consummated pursuant to an Agreement and Plan of Merger, dated
January 31, 2008, whereby WSG-NV merged with and into WSG Acquisition, Inc. (Acquisition
    Sub), a newly formed wholly-owned Nevada subsidiary of ICP. This transaction
    is commonly referred to as a reverse acquisition in which all
    of the outstanding capital stock of WSG-NV was effectively exchanged for
    a controlling interest in ICP. This type of transaction is considered to
    be a recapitalization rather than a business combination. Accordingly, for
    accounting purposes, no goodwill or other intangible assets were recorded.
    On February 1, 2008, we merged with Acquisition Sub in a short form merger
    under Nevada law and changed our name to
World Series of Golf, Inc.

We
are a sports entertainment company that hosts amateur golf tournaments and
events and seeks to create branded products, games, media and entertainment
based on our proprietary golf tournament method of play which we call The
World Series of Golf. We have held three-day World Series of Golf tournaments
in Las Vegas, Nevada during May in 2007, 2008 and 2009. Through our media
partners, we broadcast our tournaments on domestic and international television
and via other media outlets, as live events or as a produced series. We also
sell sponsorships for our live tournaments and television coverage.

Note 2: Going Concern

We
have prepared our condensed consolidated financial statements assuming that we
will continue as a going concern, which contemplates realization of assets and
the satisfaction of liabilities in the normal course of business. As of June
30, 2009, we had an accumulated deficit of approximately $12.3 million,
negative cash flows from operations and expect to incur additional losses in
the future as we continue to develop and grow our business. We have funded our
losses primarily through sales of common stock and warrants in private
placements and borrowings from related parties and other investors and revenue
provided by our sponsorships and advertising contracts, licensing arrangements
and tournaments. The further development of our business will require capital.
At June 30, 2009, we had a working capital deficit (current assets less current
liabilities) of approximately $3.4 million and approximately $58,000 in cash.

We
are dependent on existing cash resources and external sources of financing to
meet our working capital needs. Current sources of liquidity are insufficient
to provide for budgeted and anticipated working capital requirements. We will
therefore be required to seek additional financing to satisfy our working
capital requirements. No assurances can be given that such capital will be
available to us on acceptable terms, if at all. In addition to equity financing
and strategic investments, we may seek additional related party loans. If we
are unable to obtain any such additional financing or if such financing cannot
be obtained on terms acceptable to us, we may be required to delay or scale
back our operations, including the development of our online game, which would
adversely affect our ability to generate future revenues and may force us to
curtail or cease our operating activities.

To
attain profitable operations, managements plan is to execute its strategy of
(i) increasing the number of tournaments; (ii) leveraging the existing
tournament to generate ancillary revenue streams via Internet TV or other
venues; (iii) continuing the ongoing development of the online game; and (iv)
continuing to build sponsorship, advertising and related revenue, including license
fees related to the sale of branded merchandise. We will continue to be
dependent on outside capital to fund our operations for the foreseeable future,
and continue to be involved in discussions and negotiations with investors in
order to raise additional funds to provide sufficient working capital for
operations with a near-term goal of generating positive cash flow from
operations. Any financing we obtain may further dilute or otherwise impair the
ownership interest of our current stockholders. If we fail to generate positive
cash flows or fail to obtain additional capital when required, we could modify,
delay or abandon some or all of our plans. These factors, among others, raise
substantial doubt about our ability to continue as a going concern. Our condensed
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

Note 3. Summary of Critical Accounting
Policies and Recently Issued Accounting Standards

Basis
of Preparation The accompanying unaudited condensed
consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America for
interim financial information and in

5

---



accordance
with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and note disclosures
required by U.S. generally accepted accounting principles for complete
financial statements. The accompanying unaudited financial information should
be read in conjunction with the audited consolidated financial statements,
including the notes thereto, as of and for the year ended December 31, 2008,
included in our 2008 Annual Report on Form 10-K filed with the Securities and
Exchange Commission (the SEC). The information furnished in this report
reflects all adjustments (consisting of normal recurring adjustments), which
are, in the opinion of management, necessary for a fair presentation of our
financial position, results of operations and cash flows for each period
presented. The results of operations for the interim periods ended June 30,
2009 are not necessarily indicative of the results for the year ending December
31, 2009 or for any future period.

Use of EstimatesThe preparation of financial
statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates. The more significant accounting estimates inherent in preparation of
our financial statements include estimates as to valuation of fair value for
goods and services received in barter transactions, valuation of equity related
instruments issued, and valuation allowance for deferred income tax assets.

Financial
InstrumentsOur financial instruments consist of cash,
accounts payable, accrued liabilities and other current liabilities, due to
related parties and convertible notes payable to a related party and certain
investors. The fair value of financial instruments other than convertible notes
payable to related party approximate the recorded value based on the short-term
nature of these financial instruments. The fair value of convertible note and
interest payable and due to related parties is presently undeterminable due to
the related party nature of the obligations.

Effective
January 1, 2008, we adopted Statement of Financial Accounting Standards
(SFAS) No. 157, Fair Value Measurements
(SFAS 157), for financial assets and liabilities. We currently measure and report
at fair value the liability for price adjustable warrants. The following table
summarizes our financial liabilities measured at fair value on a recurring
basis in accordance with SFAS 157 as of June 30, 2009 (in thousands):

|                                                    |  |                            |    |                                                               |  |                                              |  |                                          |   |  |   |    | 
|--------------------------------------------------- |  | -------------------------- | -- | ------------------------------------------------------------- |  | -------------------------------------------- |  | ---------------------------------------- | - |  | - | -- | 
|                                                    |  | Balance at
 June 30,
 2009 |    | Level 1Quoted prices in
 active markets for
 identical assets |  | Level 2Significant other
 observable
 inputs |  | Level 3Significant
 unobservable
 inputs |  
|                                                    |  |                            |    |                                                               |  |                                              |  |                                          |  
|Liabilities:                                        |  |                            |    |                                                               |  |                                              |  |                                          |   |  |   |    | 
|Fair value liability for price adjustable
 warrants |  | $                          | 33 |                                                               |  |                                             |  |                                          |  |  | $ | 33 | 
|                                                    |  |                            |    |                                                               |  |                                              |  |                                          |   |  |   |    | 
|Total financial liabilities at fair value           |  | $                          | 33 |                                                               |  |                                             |  |                                          |  |  | $ | 33 | 
|                                                    |  |                            |    |                                                               |  |                                              |  |                                          |   |  |   |    | 

The
following table is a roll forward for the six months ended June 30, 2009 of the
fair value liability of price adjustable warrants, as to which fair value is
determined by Level 3 inputs (in thousands):

|                                           |  |   |     |  
|------------------------------------------ |  | - | --- | -
|Beginning
 balance at January 1, 2009      |  | $ | 102 |  
|Change in
 fair value included in net loss |  |   | (69 | )
|                                           |  |   |     |  
|Ending
 balance at June 30, 2009           |  | $ | 33  |  
|                                           |  |   |     |  

Concentration
of Credit Risk and Significant Customers During 2009
and 2008, a significant portion of our revenue was derived from a small number
of customers, as follows (as a percentage of total revenue):

| |                          |  |                     |     |                   |  |      |   |      |     |   |  |     |  
| | ------------------------ |  | ------------------- | --- | ----------------- |  | ---- | - | ---- | --- | - |  | --- | -
| |                          |  | Three
 Months Ended |     | Six
 Months Ended | 
| |                          |  |                     |     |                   | 
| |                          |  | June
 30,           |     | June
 30,         | 
| |                          |  |                     |     |                   | 
| |                          |  | 2009                |     | 2008              |  | 2009 |   | 2008 |    
| |                          |  |                     |     |                   |  |      |   |      |    
| | Custom
 Group, Ltd.      |  |                     | 0   | %                 |  | 12   | % |      | 0   | % |  | 36  | %
| | Pocket
 Kings, Ltd.      |  |                     | 12  | %                 |  | 18   | % |      | 12  | % |  | 13  | %
| | The Mirage
 Casino Hotel |  |                     | 19  | %                 |  | 28   | % |      | 19  | % |  | 21  | %
| | Other                    |  |                     | 69  | %                 |  | 42   | % |      | 69  | % |  | 30  | %
| |                          |  |                     |     |                   |  |      |   |      |     |   |  |     |  
| |                          |  |                     | 100 | %                 |  | 100  | % |      | 100 | % |  | 100 | %
| |                          |  |                     |     |                   |  |      |   |      |     |   |  |     |  

6

---



Net
loss per common share Basic and diluted net loss per
common share is computed by dividing the net loss by the weighted average number
of common shares outstanding during the period. Diluted loss per share excludes
the effect of common stock equivalents (convertible notes and warrants) since
such inclusion in the computation would be anti-dilutive. The following numbers
of shares have been excluded (in thousands):

|                   |  |          |       |      |  |       | 
|------------------ |  | -------- | ----- | ---- |  | ----- | 
|                   |  | June 30, |      
|                   |  |          |      
|                   |  | 2009     |       | 2008 | 
|                   |  |          |       |      | 
|Convertible
 notes |  |          | 2,770 |      |  | 2,096 | 
|Stock
 options     |  |          | 2,265 |      |  |      | 
|Warrants           |  |          | 3,229 |      |  | 1,439 | 
|                   |  |          |       |      |  |       | 
|Total              |  |          | 8,264 |      |  | 3,535 | 
|                   |  |          |       |      |  |       | 

Share-Based
PaymentsWe have granted shares of our common stock
and stock options and warrants to purchase shares of our common stock to
various parties for services and in connection with financing activities. The
fair values of shares issued have been based on closing market prices for
periods after January 31, 2008 and at prices of recent cash transactions for
periods prior. Grants of stock options and stock purchase warrants to employees
and non-employees are accounted for in accordance with SFAS No. 123 (revised
2004), Share-Based Payment (SFAS
123R) and with the Emerging Issues Task Force (EITF) Issue No. 96-18, Accounting for Equity Instruments that are
Issued to
Other Than Employees for Acquiring, or in Conjunction with Selling, Goods and
Services (EITF 96-18). To calculate the value of share-based
payments, we used the Black-Scholes option-pricing model. The Black-Scholes
option pricing model requires the input of highly subjective assumptions, and
other reasonable assumptions could provide differing results. Our determination
of the fair value of stock-based awards on the date of grant using an option
pricing model is affected by our stock price as well as assumptions regarding a
number of highly complex and subjective variables. These variables include, but
are not limited to, the expected life of the award and expected stock price
volatility over the term of the award.

Recently
Issued Accounting PronouncementsIn April 2009, the
Financial Accounting Standards Board (FASB) issued Financial Staff Position
(FSP) FAS No. 107 and APB 28-1, Interim
Disclosures About Fair Value of Financial Instruments (FSP FAS No.
107 and APB 28-1), which amends
SFAS No. 107, Disclosures About Fair Value
of Financial Instruments, and Accounting Principles Board Opinion
No. 28, Interim Financial Reporting,
to require disclosures about the fair value of financial instruments for
interim reporting periods. We adopted FSP FAS No. 107 and APB 28-1 in the
current quarter.

Note 4. Convertible Notes

Convertible
notes payable at June 30, 2009 and December 31, 2008 consist of the following
(in thousands):

| |                                                     |  |          |       |               |   |       | 
| | --------------------------------------------------- |  | -------- | ----- | ------------- | - | ----- | 
| |                                                     |  | June 30, |       | December
 31, |  
| |                                                     |  | 2009     |       | 2008          |  
| |                                                     |  |          |       |               |  
| | Convertible
 note payable to related party          |  | $        | 1,150 |               | $ | 961   | 
| | Convertible
 notes payable due to certain investors |  |          | 235   |               |   | 235   | 
| |                                                     |  |          |       |               |   |       | 
| | Total                                               |  | $        | 1,385 |               | $ | 1,196 | 
| |                                                     |  |          |       |               |   |       | 

Convertible
Note payable to related party In January 2008, the
original promissory note due to the chairman of our board of directors in the
amount of $985,000 was replaced by a second promissory note issued in the
principal amount of $961,000, bearing interest at a rate of 12% per annum, with
monthly payments of $9,606.87 due on the first day of each month beginning
February 1, 2008. The second promissory note was due on January 1, 2009. The
note (principal and accrued interest) was convertible at the sole option of the
holder into common shares at a conversion price of $1.00 per common share,
subject to customary adjustments. The conversion price was changed to $0.50 per
share in November 2008. Obligations under the second promissory note were
collateralized by all of the tangible and intangible assets of our company.
During the three and six months ended June 30, 2008, we recorded interest
expense of approximately $29,000 and $58,000, respectively, related to the
second promissory note.

In
February 2009, the existing obligations under the second promissory note were
replaced by a third promissory note in the principal amount of $1,150,000. In
connection with the refinancing of the obligations under the second promissory
note, we recorded interest expense of $78,000 in February 2009 as a financing
fee. The new note is payable within five days after the demand of the

7

---



holder, and
bears interest at 8% per annum. The note is convertible at the option of the
holder, and conversion is at $0.50 per share. In addition, in connection with
the third promissory note, we issued the holder warrants to purchase 1,150,000
shares of our common stock at an exercise price of $0.50 per share, exercisable
through February 15, 2015. The fair value of the warrants of $11,000 was
computed using the Black-Scholes option pricing model with the following
assumptions: expected term of 6 years (contractual term), volatility of 400%
(based on historical volatility), 0% dividend rate and interest rate of 2.3%.
In the first quarter 2009, we recorded interest expense of $11,000 to fully
amortize the discount on the convertible notes payable related to the
allocation of value to the warrants. Obligations under the third promissory
note are collateralized by all of our tangible and intangible assets, including
intellectual property. During the three and six months ended June 30, 2009, we
recorded interest expense of approximately $23,000 and $137,000, respectively,
related to our obligations under the third promissory note. As of June 30,
2009, we have recorded accrued interest payable of approximately $38,000
related to this convertible note payable to related party.

Convertible
notes payable due to certain investors In May and
June 2008, we issued convertible promissory notes in an aggregate amount of
$1,135,000 to certain investors in a private placement. The notes bore interest
at 6% per annum and are repayable on or before October 31, 2008. The notes and
related accrued interest were convertible into shares of our common stock at
$1.00 per share at the option of the holder. The convertible promissory notes
were issued together with warrants to purchase 1,135,000 shares of our common
stock at an original exercise price of $1.05 per share, exercisable for three
years. Terms of the convertible notes and warrants provide that the conversion
price of the notes and the exercise price of the warrant will be reduced in the
event of subsequent financings at an effective price per share less than the
conversion or exercise price, subject to certain exceptions. The convertible
notes when issued included a beneficial conversion feature because they allowed
the holders to acquire common shares of the company at an effective conversion
price that was less than their fair value per common share of $2.05 on May 15,
2008 and of $1.51 on June 9, 2008. The discount on the convertible notes
payable related to the allocation of value of the warrants and the beneficial
conversion feature was valued at $635,000 and $500,000 in May and June 2008
based on the effective conversion price of $0.328 and $0.399, respectively. The
fair value of the warrants was computed using the Black-Scholes option pricing
model with the following assumptions: expected term of three years (contractual
term), volatility of 400% (based on historical volatility), 0% dividend rate
and interest rate of approximately 3%.

In
September 2008, the conversion price of certain of the convertible notes in an
aggregate principal amount of $235,000 was reduced from $1.00 to $0.50. In
addition, the conversion price of certain of the warrants to purchase an
aggregate of 235,000 shares of our common stock was reduced from $1.05 to $0.50.
On September 4, 2008, the fair value of the companys stock was $0.50, so the
beneficial conversion feature was not reset. We recognized interest expense
related to the amortization of the beneficial conversion feature of $285,000
during the three and six months ended June 30, 2008. In addition, we have
recorded accrued interest of approximately $59,000 related to the convertible
notes, which remain unpaid, as of June 30, 2009.

In
December 2008, $900,000 of the convertible notes were converted into common
stock at $1.00 per share.

Note 5. Stockholders Equity (Deficit)

Preferred
Stock Our board of directors has the authority,
without action by the stockholders, to designate and issue up to 10,000,000
shares of preferred stock in one or more series and to designate the rights,
preferences and privileges of each series, any or all of which may be greater
than the rights of our common stock. No shares of preferred stock have been
designated or issued.

Common
Stock  Holders of our common stock are entitled to
one vote for each share held of record on all matters submitted to a vote of
the holders of our common stock. Subject to the rights of the holders of any
class of our capital stock having any preference or priority over our common
stock, the holders of shares of our common stock are entitled to receive
dividends that are declared by our board of directors out of legally available
funds. In the event of our liquidation, dissolution or winding-up, the holders
of common stock are entitled to share ratably in our net assets remaining after
payment of liabilities, subject to prior rights of preferred stock, if any,
then outstanding. Our common stock has no preemptive rights, conversion rights,
redemption rights or sinking fund provisions, and there are no dividends in
arrears or default. All shares of our common stock have equal distribution,
liquidation and voting rights, and have no preferences or exchange rights.

Common
Stock Issuances  In February, March and May 2008, we
raised net proceeds of approximately $380,000 through the issuance of 304,000
units at $1.25 per unit, with each unit comprised of one share of common stock
and one three-year warrant to purchase one share of common stock at an exercise
price of $2.00 per share.

We
evaluated the warrants under the guidance set forth in EITF 00-19, Accounting
for Derivative Financial Instruments Indexed to, and Potentially Settled in, a
Companys Own Stock and determined that the warrants do not contain any
provisions equivalent to net-cash settlement provisions and accordingly are
accounted for as equity.

8

---



In
May 2009, we issued 112,500 shares of our common stock to a consultant in
settlement of a disputed contract. The fair value of the shares of $7,000 was
included in accrued expenses at December 31, 2008.

During
2007, we issued 2.0 million shares of our common stock for marketing-related
services to be provided during 2007 by the Custom Group under an operating
agreement. In June 2009, we cancelled 1.2 million shares previously treated as
issued to the Custom Group as services were not provided. The value related to
the uncancelled shares was $800,000 based on the fair value of our common stock
of $1.00 per share as determined by recent stock sales and is recorded as sales
and marketing expense in 2007 in the consolidated financial statements, and no
value was recorded related to the canceled shares as no services were
performed.

Stock
Incentive Plans  In May 2008, our stockholders
adopted and approved our 2007 Stock Option Plan (the 2007 Plan). In April
2009, we terminated the 2007 Plan and adopted our 2009 Equity Incentive Plan
(2009 Plan), which allows for awards of qualified and non-qualified stock
options for up to 3,000,000 shares of our common stock.

At
June 30, 2009, options to purchase up to 2,265,000 shares of our common stock
were outstanding and 735,000 shares were available for future grants or awards
under our 2009 Plan.

Stock-based Compensation  The following
table summarizes stock-based compensation expense (benefit) (in thousands):

|                               |  |                               |    |                          |   |      |  |      |    |  |   |   | 
|------------------------------ |  | ----------------------------- | -- | ------------------------ | - | ---- |  | ---- | -- |  | - | - | 
|                               |  | Three Months ended 
 June 30, |    | Six Months endedJune 30, |  
|                               |  |                               |    |                          |  
|                               |  | 2009                          |    | 2008                     |   | 2009 |  | 2008 |   
|                               |  |                               |    |                          |   |      |  |      |   
|Stock-based compensation:      |  |                               |    |                          |   |      |  |      |    |  |   |   | 
|Cost of sales                  |  | $                             | 12 |                          | $ |     |  | $    | 12 |  | $ |  | 
|Sales and marketing            |  |                               | 5  |                          |   |     |  |      | 5  |  |   |  | 
|General and administrative     |  |                               | 50 |                          |   |     |  |      | 50 |  |   |  | 
|                               |  |                               |    |                          |   |      |  |      |    |  |   |   | 
|Total stock-based compensation |  | $                             | 67 |                          | $ |     |  | $    | 67 |  | $ |  | 
|                               |  |                               |    |                          |   |      |  |      |    |  |   |   | 

Non-cash
compensation expense is recognized on a straight-line basis over the applicable
vesting periods of one to three years, based on the fair value on the grant
date. The vesting period is deemed to be the requisite service period. Certain
option and share awards provide for accelerated vesting if there is a change in
control (as defined in the applicable plan and certain employment agreements we
have with key officers).

The
fair value of stock-based option awards was estimated at the date of grant
using the Black-Scholes option valuation model with the following weighted
average assumptions for the periods presented as follows:

|                              |  |                              |           |                            |  |      |  |      |           |   |  |   | 
|----------------------------- |  | ---------------------------- | --------- | -------------------------- |  | ---- |  | ---- | --------- | - |  | - | 
|                              |  | Three months ended
 June 30, |           | Six months ended
 June 30, | 
|                              |  |                              |           |                            | 
|                              |  | 2009                         |           | 2008                       |  | 2009 |  | 2008 |          
|                              |  |                              |           |                            |  |      |  |      |          
|Expected dividend yield       |  |                              | 0         | %                          |  | *    |  |      | 0         | % |  | * | 
|Risk free interest rate       |  |                              | 2.5       | %                          |  | *    |  |      | 2.5       | % |  | * | 
|Expected stock volatility     |  |                              | 400       | %                          |  | *    |  |      | 400       | % |  | * | 
|Expected option life          |  |                              | 5.5 years |                            |  | *    |  |      | 5.5 years |   |  | * | 
|Fair value of options granted |  | $                            | 0.09      |                            |  | *    |  | $    | 0.09      |   |  | * | 

Stock
Options Stock options to purchase shares of our
common stock are granted under our 2009 Plan to certain employees, at prices at
or above the fair market value on the date of grant. In addition, in April
2009, pursuant to a consulting agreement, we granted options to purchase
350,000 shares of our common stock, at an exercise price of $0.02 per share,
under the 2009 Plan. The consultant exercised the options in July 2009.

Option
activity was as follows during the six-month period ended June 30, 2009:

|                              |  |                |       |                                    |   |                                                 |  |                             |           |  |   |   | 
|----------------------------- |  | -------------- | ----- | ---------------------------------- | - | ----------------------------------------------- |  | --------------------------- | --------- |  | - | - | 
|                              |  | Options        |       | Weighted
 Average
 Exercise
 Price |   | Weighted
 Average
 Remaining
 Contractual
 Life |  | Aggregate
 Intrinsic
 Value |          
|                              |  |                |       |                                    |   |                                                 |  |                             |          
|                              |  | (in thousands) |       |                                    |   |                                                 |  | (in thousands)              |          
|Outstanding December 31, 2008 |  |                |      |                                    | $ |                                                |  |                             |           |  |   |   | 
|Options granted               |  |                | 2,265 |                                    |   | 0.08                                            |  |                             |           |  |   |   | 
|Options exercised             |  |                |      |                                    |   |                                                |  |                             |           |  |   |   | 
|Options expired               |  |                |      |                                    |   |                                                |  |                             |           |  |   |   | 
|Options forfeited             |  |                |      |                                    |   |                                                |  |                             |           |  |   |   | 
|Options cancelled             |  |                |      |                                    |   |                                                |  |                             |           |  |   |   | 
|                              |  |                |       |                                    |   |                                                 |  |                             |           |  |   |   | 
|Outstanding at June 30, 2009  |  |                | 2,265 |                                    | $ | 0.08                                            |  |                             | 9.8 years |  | $ | 4 | 
|                              |  |                |       |                                    |   |                                                 |  |                             |           |  |   |   | 
|Exercisable at June 30, 2009  |  |                | 771   |                                    | $ | 0.05                                            |  |                             | 9.8 years |  | $ | 4 | 
|                              |  |                |       |                                    |   |                                                 |  |                             |           |  |   |   | 

9

---



As
of June 30, 2009, we had approximately $131,000 of total unrecognized
compensation cost related to unvested stock options. Total unrecognized
compensation cost will be adjusted for future changes in estimated forfeitures.
We expect to recognize this cost over a weighted average period of
approximately three years.

The
intrinsic value of stock options outstanding and exercisable at June 30, 2009
is based on the $0.03 closing market price of our common stock on that date,
and is calculated by aggregating the difference between $0.03 and the exercise
price of each of the outstanding vested and unvested stock options which have
an exercise price less than $0.03. No options were exercised during the three
and six-month periods ended June 30, 2009 and 2008. The total fair value of
options that vested during the three and six-month periods ended June 30, 2009
was approximately $64,000. There were no options which vested during the three
and six-month periods ended June 30, 2008.

Non-Employee
Option Grants  As discussed above, in April 2009, we
granted non-qualified options under our 2009 Plan to purchase 350,000 shares of
our common stock at an exercise price of $0.02 per share to a consultant
engaged in providing accounting and advisory services to our company. The
options were fully vested on the date of grant and have a ten year term. The
options were exercised in July 2009.

Warrants
 We issued warrants in connection with our 2008 private placements and our
convertible notes. Effective January 1, 2009, we adopted EITF 07-5, Determining Whether an Instrument (or Embedded
Feature) Is Indexed to an Entitys Own Stock (EITF 07-5).In
connection with warrants issued together with the convertible notes in 2008,
the financial reporting (non-cash) effect of initial adoption of this
accounting requirement for future financial statements resulted in a cumulative
effect of change in accounting principle of approximately $0.1 million, based
on a per share price of $0.09 per share at January 1, 2009, which increased
accumulated deficit and recorded a fair value liability for price adjustable
warrants. The fair value liability is revalued quarterly utilizing
Black-Scholes valuation model computations with the increase or decrease in
fair value being reported in the condensed consolidated statement of operations
as other income (expense). At June 30, 2009, the weighted average assumptions
used in our Black Scholes calculation were: expected life of 1.90 years,
volatility equal to 400%, risk-free rate of 2.5% and dividend rate of 0%.
During the three months ended June 30, 2009, the fair value increased
approximately $22,000, based on a per share price of our common stock of $0.03
at June 30, 2009, which was recorded as other expense. During the six months
ended June 30, 2009, the fair value decreased by approximately $69,000, which
was recorded as other income.

As
discussed in Note 6, in May 2009, we granted warrants to purchase 50,000 shares
of our common stock at an exercise price of $0.05 to our Chief Executive
Officer (CEO). The warrants expire in May 2014. The warrants were recorded at
their fair value of $1,500, which was determined using the Black-Scholes model
using the following assumptions: stock price of $0.03, volatility of 400%, risk
free rate of 2.5%, expected term of five years, dividend yield of 0.0%.

As
discussed in Note 6, pursuant to the terms of his consulting agreement, in June
2009, we granted warrants to the chairman of our board of directors to purchase
540,000 shares of our common stock at an exercise price of $0.50 per share,
which warrants vest in 1/36 monthly installments beginning on the first month
anniversary of the date of the consulting agreement. The warrants have a three
year term. The warrants were recorded at their fair value of approximately
$2,000, which was determined using the Black-Scholes model using the following
assumptions: stock price of $0.03, volatility of 400%, risk free rate of 2.5%,
expected term of three years, dividend yield of 0.0%.

The
following summarizes warrant activity during the six months ended June 30, 2009
(in thousands):

|                                                |  |   |       | 
|----------------------------------------------- |  | - | ----- | 
|Warrants outstanding, December 31, 2008         |  |   | 1,489 | 
|Warrants issued                                 |  |   | 1,740 | 
|Warrants exercised                              |  |   |      | 
|Warrants expired                                |  |   |      | 
|                                                |  |   |       | 
|Warrants outstanding, June 30, 2009             |  |   | 3,229 | 
|                                                |  |   |       | 
|Weighted average exercise price, June 30,
 2009 |  | $ | 0.79  | 
|                                                |  |   |       | 

10

---



Note 6. Related Party Transactions

As
further described in Note 4, in 2007, we borrowed $985,000 from the chairman of
our board of directors, pursuant to terms of a promissory note, subsequently
replaced in 2008 by a second promissory note in the principal amount of
$961,000 and subsequently replaced in 2009 by a third promissory note in the
principal amount of $1,150,000.

In
February 2009, we entered into a three-year consulting agreement with the
chairman of our board of directors, pursuant to which we will pay him monthly
cash payments of $15,000, and in June 2009, we granted warrants to purchase
540,000 shares of our common stock at an exercise price of $0.50 per share,
which warrants vest in 1/36 monthly installments beginning on the first month
anniversary of the date of the consulting agreement. The warrants have a three
year term. Upon a change of control of our company, all obligations under the
consulting agreement become immediately due and payable. In addition, the
chairman of our board of directors has advanced us $905,000 during the six
months ended June 30, 2009.

Pursuant
to the terms of a consulting agreement, we are obligated to pay aggregate cash
consulting fees of $75,000 in consideration for the services our CEO provided
to us during the period from January 1, 2009 in his capacity as a consultant
until his appointment as an officer of our company on April 21, 2009. To date,
such amounts remain unpaid. In addition, our CEO has advanced us $40,000 during
the three months ended June 30, 2009.

In
April 2009, we entered into an employment agreement with our CEO, pursuant to
which, among other things, the officer will be entitled to annual base
compensation of $240,000. In April 2009, we also issued incentive options under
the 2009 Plan to purchase 1,000,000 shares of our common stock at an exercise
price of $0.09 per share to our CEO pursuant to his employment agreement. The
options vest in 1/36 monthly installments beginning on the first month anniversary
of the grant date, over a period of three years. The options have a term of ten
years.

As
described in Note 5, in May 2009, we granted warrants to purchase 50,000 shares
of our common stock at an exercise price of $0.05 to our CEO. The warrants
expire in May 2014.

Note 7. Income Taxes

We
continue to record a valuation allowance in the full amount of deferred tax
assets since realization of such tax benefits has not been determined by our
management to be more likely than not. At the end of each interim period, we
make our best estimate of the effective tax rate expected to be applicable for
the full fiscal year, and the rate so determined is used in providing for
income taxes on a current year-to-date basis. The difference between the
expected provision or benefit computed using the statutory tax rate and the
recorded provision or benefit of zero, is primarily due to the estimated change
in valuation allowance more likely to result due to taxable losses anticipated
for the applicable fiscal year.

Note 8. Commitments and Contingencies

Operating
leases We entered into a new six-month operating
lease under which we lease space for our corporate office in Las Vegas, Nevada
effective January 2009. Our obligations under our operating leases are not
material.

Consulting
Agreements  As discussed in Note 6, in February 2009,
we entered into a three-year consulting agreement with the chairman of our
board of directors, pursuant to which we will pay him monthly cash payments of
$15,000, and in June 2009, we granted warrants to purchase 540,000 shares of
our common stock at an exercise price of $0.50 per share, which warrants vest
in 1/36 monthly installments beginning on the first month anniversary of the
date of the consulting agreement. The warrants have a three year term. Upon a
change of control of our company, all obligations under the consulting
agreement become immediately due and payable.

Contingencies
 We are subject to various legal proceedings and claims that arise in the
ordinary course of business. Our management currently believes that resolution
of such legal matters will not have a material adverse impact on our
consolidated financial position, results of operations or cash flows.

11

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Note 9  Subsequent Events through August
14, 2009

There
were no significant events that have occurred from June 30, 2009 through August
14, 2009, which is the date this Quarterly Report on Form 10-Q was submitted for
filing with the SEC.

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

Statements
contained herein may be forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, an amended (the Securities Act),
and Section 21E of the Securities Exchange Act of 1934, as amended (the
Exchange Act). These forward-looking statements reflect our current views
with respect to future events or our financial performance, and involve certain
known and unknown risks, uncertainties and other factors, including those
identified below, which may cause our or our industrys actual or future
results, levels of activity, performance or achievements to differ materially
from those expressed or implied by any forward-looking statements or from
historical results. We intend such forward-looking statements to be covered by
the safe harbor provisions for forward-looking statements contained in Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. The following factors, among others, could cause our or our
industrys future results to differ materially from historical results or those
anticipated: (1) the availability of additional funds to enable us to
successfully pursue our business plan; (2) the uncertainties related to the
appeal and acceptance of our proprietary method of play and our planned online
products; (3) the success or failure of our development of additional products
and services; (4) our ability to maintain, attract and integrate management
personnel; (5) our ability to secure suitable broadcast and sponsorship
agreements; (6) our ability to effectively market and sell our services to
current and new customers; (7) changes in the rules and regulations governing
our business; (8) the intensity of competition; and (9) general economic
conditions. As a result of these and other factors, we may experience material
fluctuations in future operating results on a quarterly or annual basis, which
could materially and adversely affect our business, financial condition,
operating results and stock price. Additional factors that would cause actual
results to differ materially from those projected or suggested in any
forward-looking statements are contained in our filings with the Securities and
Exchange Commission, including those factors discussed under the caption
Forward-Looking Information in our most recent Annual Report on Form 10-K, as
may be supplemented or amended from time to time, which we urge investors to
consider. We have no duty to update, supplement or revise any forward-looking
statements after the date of this report or to conform them to actual results,
new information, future events or otherwise. The following discussion and
analysis should be read in conjunction with our condensed consolidated
financial statements and notes appearing elsewhere in this Report.

General

On
  January 31, 2008, Innovative Consumer Products, Inc. (ICP), a public Nevada
  shell corporation, acquired all of the outstanding capital stock of World
  Series of Golf, Inc., a privately-held Nevada corporation (WSG-NV)
  engaged in the sports entertainment industry.

The
acquisition was consummated pursuant to an Agreement and Plan of Merger, dated
January 31, 2008, whereby WSG-NV merged with and into WSG Acquisition, Inc.
(Acquisition Sub), a newly formed wholly-owned Nevada subsidiary. This
transaction is commonly referred to as a reverse acquisition in which all of
the outstanding capital stock of WSG-NV was effectively exchanged for a
controlling interest in ICP. This type of transaction is considered to be a
recapitalization rather than a business combination. Accordingly, for accounting
purposes, no goodwill or other intangible assets were recorded and WSG-NV was
considered to be the acquirer for financial reporting purposes. Our historical
financial statements for any period prior to January 31, 2008 are those of
WSG-NV. On February 1, 2008, we merged with Acquisition Sub in a short form
merger under Nevada law and changed our name to World Series of Golf, Inc.

We
are a sports entertainment company that hosts amateur golf tournaments and
events and seeks to create branded products, games, media and entertainment
based on our proprietary golf tournament method of play which we call The
World Series of Golf. We believe our unique method of play enhances the
entertainment value of the skilled game of golf by incorporating elements of
strategy similar to those found in Texas Hold Em, a popular style of the
card game poker.

We
have held a three-day World Series of Golf tournament in Las Vegas, Nevada
during May in each of 2007, 2008 and 2009. Through our media partners, we
broadcast our tournaments on domestic and international television and via
other media outlets, as live events or as a produced series. We also sell
sponsorships for our live tournaments and television coverage. Beginning in the
latter part of 2009 with full deployment in the first quarter of 2010, we plan
to offer through our website, www.worldseriesofgolf.com,

12

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a
multi-player, online video game based on our unique method of play and a social
network/web community where interested players can communicate with one
another.

We
generate revenue primarily through sponsorship and advertising fees, brand
licensing fees and entry fees paid by the amateur players entering our
tournaments. Once we fully implement our online game strategy, management
expects revenue from subscription fees for online games and sponsorship fees to
become a material percentage of our total revenue.

Cash Position, Going Concern and Recent
Financing Activities

We
have prepared our condensed consolidated financial statements assuming that we
will continue as a going concern, which contemplates realization of assets and
the satisfaction of liabilities in the normal course of business. As of June
30, 2009, we had an accumulated deficit of approximately $12.3 million,
negative cash flows from operations and expect to incur additional losses in
the future as we continue to develop and grow our business. We have funded our
losses primarily through sales of common stock and warrants in private
placements and borrowings from related parties and other investors and revenue
provided by our sponsorships and advertising contracts, licensing arrangements
and tournaments. The further development of our business will require capital.
At June 30, 2009, we had a working capital deficit (current assets less current
liabilities) of approximately $3.4 million and approximately $58,000 in cash.
Our operating expenses will consume a material amount of our cash resources.

We
are still in the early stages of executing our business strategy. Our current
cash levels, together with the cash flows we generate from operating
activities, are not sufficient to enable us to execute our business strategy.
We require additional financing to execute our business strategy and to satisfy
our near-term working capital requirements. In the event that we cannot obtain
additional funds, on a timely basis or our operations do not generate
sufficient cash flow, we may be forced to curtail or cease our activities,
which would likely result in the loss to investors of all or a substantial
portion of their investment. We are actively seeking to raise additional
capital through the sale of shares of our capital stock to institutional
investors and through strategic investments. If management deems necessary, we
might also seek additional loans from related parties. However, there can be no
assurance that we will be able to consummate any of these transactions, or that
these transactions will be consummated on a timely basis or on terms favorable
to us.

Discussion of Cash Flows

We
used cash of approximately $1.0 million and $1.6 million in our operating
activities in the first half of 2009 and 2008, respectively. Cash used in
operating activities relates primarily to funding net losses and the change in
prepaid and other assets and accounts receivable, partially offset by the
change in accounts payable and other current liabilities and share-based
payments of consulting and other expenses. We expect to use cash for operating
activities in the foreseeable future as we continue our operating activities.

Our
investing activities used cash of approximately $2,000 and $21,000 in the first
half of 2009 and 2008, respectively. Changes in cash from investing activities
are due to purchases of equipment.

Our
financing activities provided cash of approximately $945,000 and $1.5 million
in the first half of 2009 and 2008, respectively. Changes in cash from
financing activities are proceeds from related party advances, proceeds from
issuance of common stock and warrants and proceeds from issuance of convertible
notes payable and warrants.

Recent Financing Activities

In
February 2009, the existing obligations under our promissory note with the
chairman of our board of directors were replaced by another promissory note in
the principal amount of $1,150,000. In connection with the refinancing of the
obligations under the promissory note, we recorded interest expense of $78,000
in February 2009. The new note, as amended and restated in May 2009, is payable
within five days after the demand of the holder, and bears interest at 8% per
annum. The principal amount of the note is convertible into shares of our
common stock at a conversion price of $0.50 per share. In addition, in
connection with the promissory note, we issued the holder a six-year warrant to
purchase 1,150,000 shares of our common stock at an exercise price of $0.50 per
share. Obligations under the promissory note are secured by all of our tangible
and intangible assets, including intellectual property.

In
May and June 2008, we issued convertible promissory notes in an aggregate
amount of $1,135,000. The notes bore interest at 6% per annum and are repayable
on or before October 31, 2008. The notes and related accrued interest were
convertible into shares of our common stock at $1.00 per share at the option of
the holder. The convertible promissory notes were issued together with warrants
with an exercise price of $1.05 per share, exercisable for three years. Terms
of the convertible notes and warrants provide that the conversion price of the
notes and the exercise price of the warrant will be reduced in the event of
subsequent financings at an effective price per share less than the conversion
or exercise price, subject to certain exceptions. In September 2008, the
conversion price of certain of the convertible notes in an aggregate principal
amount of $235,000 was reduced from $1.00 to

13

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$0.50. In
addition, the conversion price of certain of the warrants to purchase an
aggregate of 235,000 shares of common stock was reduced from $1.05 to $0.50. In
December 2008, $900,000 of the convertible notes were converted into common
stock at $1.00 per share. The remaining $235,000 convertible notes are currently
in default and are classified as current on the accompanying condensed
consolidated balance sheet.

In
February, March and May 2008, we raised net proceeds of approximately $380,000
through the issuance of 304,000 units at $1.25 per unit, each unit comprised of
one share of common stock and one three-year warrant to purchase one share of
common stock at an exercise price of $2.00 per share. In addition, in October
2008, we issued 120,000 shares of our common stock to a consultant in
connection with the offering.

Going Concern

In
our Annual Report on Form 10-K for the year ended December 31, 2008, our
independent auditors included an explanatory paragraph in its report relating
to our consolidated financial statements for the years ended December 31, 2008
and 2007, which states that we have experienced recurring losses from
operations and have a substantial accumulated deficit. These conditions give
rise to substantial doubt about our ability to continue as a going concern. Our
ability to expand operations and generate additional revenue and our ability to
obtain additional funding will determine our ability to continue as a going
concern. Our condensed consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

Summary

We
are dependent on existing cash resources and external sources of financing to
meet our working capital needs. Current sources of liquidity are insufficient
to provide for budgeted and anticipated working capital requirements. We will
therefore be required to seek additional financing to satisfy our working
capital requirements. No assurances can be given that such capital will be
available to us on acceptable terms, if at all. In addition to equity financing
and strategic investments, we may seek additional related party loans. If we
are unable to obtain any such additional financing or if such financing cannot
be obtained on terms acceptable to us, we may be required to delay or scale
back our operations, including the development of our online game, which would
adversely affect our ability to generate future revenues and may force us to
curtail or cease our operating activities.

To
attain profitable operations, managements plan is to execute its strategy of
(i) increasing the number of tournaments; (ii) leveraging the existing
tournament to generate ancillary revenue streams via Internet TV or other
venues; (iii) continuing the ongoing development of the online game; and (iv)
continuing to build sponsorship, advertising and related revenue, including
license fees related to the sale of branded merchandise. We will continue to be
dependent on outside capital to fund our operations for the foreseeable future.
Any financing we obtain may further dilute or otherwise impair the ownership
interest of our current stockholders. If we fail to generate positive cash
flows or fail to obtain additional capital when required, we could modify,
delay or abandon some or all of our plans. These factors, among others, raise
substantial doubt about our ability to continue as a going concern.

Consolidated Results of Operations

Percentage
comparisons have been omitted within the following table where they are not
considered meaningful. All amounts, except amounts expressed as a percentage,
are presented in thousands in the following table.

|                             |  |                              |       |        |   |                            |  |        |        |      |  |      |    |   |       |   |   |       |  |   |        |   |  |      |   
|---------------------------- |  | ---------------------------- | ----- | ------ | - | -------------------------- |  | ------ | ------ | ---- |  | ---- | -- | - | ----- | - | - | ----- |  | - | ------ | - |  | ---- | --
|                             |  | Three Months Ended
 June 30, |       | Change |   | Six Months Ended
 June 30, |  | Change |       
|                             |  |                              |       |        |   |                            |  |        |       
|                             |  | 2009                         |       | 2008   |   | $                          |  | %      |        | 2009 |  | 2008 |    | $ |       | % |  
|                             |  |                              |       |        |   |                            |  |        |        |      |  |      |    |   |       |   |  
|Revenue                      |  |                              |       |        |   |                            |  |        |        |      |  |      |    |   |       |   |   |       |  |   |        |   |  |      |   
|Sponsorship
 and advertising |  | $                            | 479   |        | $ | 864                        |  | $      | (385   | )    |  | (45  | )% | $ | 479   |   | $ | 864   |  | $ | (385   | ) |  | (45  | )%
|                             |  |                              |       |        |   |                            |  |        |        |      |  |      |    |   |       |   |   |       |  |   |        |   |  |      |   
|Licensing                    |  |                              |      |        |   | 200                        |  |        | (200   | )    |  | (100 | )% |   |      |   |   | 797   |  |   | (797   | ) |  | (100 | )%
|                             |  |                              |       |        |   |                            |  |        |        |      |  |      |    |   |       |   |   |       |  |   |        |   |  |      |   
|Player entry
 fees           |  |                              | 790   |        |   | 543                        |  |        | 247    |      |  | 45   | %  |   | 790   |   |   | 543   |  |   | 247    |   |  | 45   | % 
|                             |  |                              |       |        |   |                            |  |        |        |      |  |      |    |   |       |   |   |       |  |   |        |   |  |      |   
|                             |  |                              |       |        |   |                            |  |        |        |      |  |      |    |   |       |   |   |       |  |   |        |   |  |      |   
|Total
 revenue               |  |                              | 1,269 |        |   | 1,607                      |  |        | (338   | )    |  | (21  | )% |   | 1,269 |   |   | 2,204 |  |   | (935   | ) |  | (42  | )%
|                             |  |                              |       |        |   |                            |  |        |        |      |  |      |    |   |       |   |   |       |  |   |        |   |  |      |   
|                             |  |                              |       |        |   |                            |  |        |        |      |  |      |    |   |       |   |   |       |  |   |        |   |  |      |   
|Operating expenses           |  |                              |       |        |   |                            |  |        |        |      |  |      |    |   |       |   |   |       |  |   |        |   |  |      |   
|Cost of
 revenue             |  |                              | 1,456 |        |   | 2,639                      |  |        | (1,183 | )    |  | (45  | )% |   | 1,479 |   |   | 2,671 |  |   | (1,192 | ) |  | (45  | )%

14

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|                                                              |  |                              |        |        |   |                            |   |        |        |      |  |      |    |   |        |   |   |        |   |   |        |   |  |     |   
|------------------------------------------------------------- |  | ---------------------------- | ------ | ------ | - | -------------------------- | - | ------ | ------ | ---- |  | ---- | -- | - | ------ | - | - | ------ | - | - | ------ | - |  | --- | --
|                                                              |  | Three Months Ended
 June 30, |        | Change |   | Six Months Ended
 June 30, |   | Change |       
|                                                              |  |                              |        |        |   |                            |   |        |       
|                                                              |  | 2009                         |        | 2008   |   | $                          |   | %      |        | 2009 |  | 2008 |    | $ |        | % |  
|                                                              |  |                              |        |        |   |                            |   |        |        |      |  |      |    |   |        |   |  
|Sales and
 marketing                                          |  |                              | 60     |        |   | 612                        |   |        | (552   | )    |  | (90  | )% |   | 63     |   |   | 916    |   |   | (853   | ) |  | (93 | )%
|                                                              |  |                              |        |        |   |                            |   |        |        |      |  |      |    |   |        |   |   |        |   |   |        |   |  |     |   
|General and
 administrative                                   |  |                              | 747    |        |   | 577                        |   |        | 170    |      |  | 29   | %  |   | 1,098  |   |   | 1,045  |   |   | 53     |   |  | 5   | % 
|                                                              |  |                              |        |        |   |                            |   |        |        |      |  |      |    |   |        |   |   |        |   |   |        |   |  |     |   
|                                                              |  |                              |        |        |   |                            |   |        |        |      |  |      |    |   |        |   |   |        |   |   |        |   |  |     |   
|Total
 operating expenses                                     |  |                              | 2,263  |        |   | 3,828                      |   |        | (1,565 | )    |  | (41  | )% |   | 2,640  |   |   | 4,632  |   |   | (1,992 | ) |  | (43 | )%
|                                                              |  |                              |        |        |   |                            |   |        |        |      |  |      |    |   |        |   |   |        |   |   |        |   |  |     |   
|                                                              |  |                              |        |        |   |                            |   |        |        |      |  |      |    |   |        |   |   |        |   |   |        |   |  |     |   
|Loss from operations                                          |  |                              | (994   | )      |   | (2,221                     | ) |        | 1,227  |      |  | 55   | %  |   | (1,371 | ) |   | (2,428 | ) |   | 1,057  |   |  | 44  | % 
|Interest
 expense                                             |  |                              | (30    | )      |   | (320                       | ) |        | 290    |      |  | 91   | %  |   | (144   | ) |   | (349   | ) |   | 205    |   |  | 59  | % 
|Change in fair value liability for price
 adjustable warrants |  |                              | (22    | )      |   |                           |   |        | (22    | )    |  |      |    |   | 69     |   |   |       |   |   | 69     |   |  |     |   
|                                                              |  |                              |        |        |   |                            |   |        |        |      |  |      |    |   |        |   |   |        |   |   |        |   |  |     |   
|                                                              |  |                              |        |        |   |                            |   |        |        |      |  |      |    |   |        |   |   |        |   |   |        |   |  |     |   
|Net loss                                                      |  | $                            | (1,046 | )      | $ | (2,541                     | ) | $      | 1,495  |      |  | 59   | %  | $ | (1,446 | ) | $ | (2,777 | ) | $ | 1,331  |   |  | 48  | % 
|                                                              |  |                              |        |        |   |                            |   |        |        |      |  |      |    |   |        |   |   |        |   |   |        |   |  |     |   

Comparison of the
Three and Six Months Ended June 30, 2009 to the Three and Six Months Ended June
30, 2008

Revenue.
We generate revenue primarily through a combination of (i) the sale of
sponsorships and advertising in connection with our tournaments, (ii) the
license of our proprietary marks/brands, and (iii) entry fees paid by the
players entering our golf tournaments. During 2009 and 2008, a significant
portion of our revenue was derived from a small number of customers, as follows
(as a percentage of total revenue):

|                         |  |                    |     |                  |  |      |   |      |     |   |  |     |  
|------------------------ |  | ------------------ | --- | ---------------- |  | ---- | - | ---- | --- | - |  | --- | -
|                         |  | Three Months Ended |     | Six Months Ended | 
|                         |  |                    |     |                  | 
|                         |  | June 30,           |     | June 30,         | 
|                         |  |                    |     |                  | 
|                         |  | 2009               |     | 2008             |  | 2009 |   | 2008 |    
|                         |  |                    |     |                  |  |      |   |      |    
|Custom
 Group, Ltd.      |  |                    | 0   | %                |  | 12   | % |      | 0   | % |  | 36  | %
|Pocket
 Kings, Ltd.      |  |                    | 12  | %                |  | 18   | % |      | 12  | % |  | 13  | %
|The Mirage
 Casino Hotel |  |                    | 19  | %                |  | 28   | % |      | 19  | % |  | 21  | %
|Other                    |  |                    | 69  | %                |  | 42   | % |      | 69  | % |  | 30  | %
|                         |  |                    |     |                  |  |      |   |      |     |   |  |     |  
|                         |  |                    | 100 | %                |  | 100  | % |      | 100 | % |  | 100 | %
|                         |  |                    |     |                  |  |      |   |      |     |   |  |     |  

In
2008, approximately 70% of our annual revenue was earned in the second quarter
of the year due to the fact that we hold our tournament during the month of May.

Sponsorship
and advertising revenue. Sponsorship and advertising
revenue is comprised of in-kind barter and trade revenue and advertising
revenue from our sponsors. We record barter and in-kind revenue at gross, and
record the related sponsorship expenses to cost of sales when used. Revenue
from our sponsorship partners decreased in the three and six months ended June
30, 2009 compared to the three and six months ended June 30, 2008.

Sponsorship
and advertising revenue in the three and six months ended June 30, 2009
primarily represented the fair value of our sponsorship and advertising package
with The Mirage Casino and Hotel (The Mirage), which we recorded at $243,600,

15

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$100,000 for the player positions
portion of our contract with Pocket Kings, Ltd., recognition of $50,000 in
amortization of a $100,000 up-front payment from Pocket Kings, Ltd. in the
second quarter of 2009 and $85,000 in additional barter revenue recorded in
trade for vendor credits. During the three and six months ended June 30, 2008,
we recognized revenue of approximately$454,000 related to our sponsorship and
advertising package with The Mirage and $295,000 related to our contract with
Pocket Kings, Ltd.

Licensing revenue. During the first half
of 2008, we recorded revenue related to our licensing contract with the Custom
Group. In the second
quarter 2009, we terminated this contract due to the Custom Groups default.

Player
entry fees revenue.
Player entry fees revenue is comprised of the tournament entry fees paid by the
amateur players in our live events, which were $10,000 per player for our 2009
and 2008 events. Revenue related to player entry fees is recorded during the
second quarter as the tournament takes place in May. We record player entry
fees revenue on a net basis, in that we do not record gifted or sponsored
buy-ins to player entry fees revenue with an offset to expense. Revenue from
player entry fees increased in the six months ended June 30, 2008 compared to
the six months ended June 30, 2008. In 2009, we had 125 playing
positions, with 73 players paying the full entry fee and 17 sponsored players. In 2008, we had 80 playing
positions, with 54 players paying the full entry fee and 23 sponsored players.

Cost
of revenue. Cost of revenue primarily consists of barter transactions,
player payout (tournament prizes), media production costs and other event
costs. Cost of revenue decreased in the three and six months ended June 30,
2009 compared to the three and six months ended June 30, 2008 due to our cost
reduction efforts.

| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Barter transactions were approximately $329,000 in the
 three and six months ended June 30, 2009 compared to approximately $531,000
 in the three and six months ended June 30, 2008.                                                                                                                                                                                                                                                   
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |  | Player payouts increased to $671,000 in the current three
 and six month period compared to $580,000 in the prior year comparable
 periods due to (i) an increase in the prize money
 awarded to the first and second place finishers in our May 2009 tournament
 and (ii) an increase in the number of players in our 2009 tournament, which
 increased the prize money awarded to players advancing into the second and
 third rounds.
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |  | Media and production costs were $150,000 in the three and
 six months ended June 30, 2009 compared to approximately $883,000 in the
 prior year comparable periods, due to cost reductions.                                                                                                                                                                                                                                             
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |  | Other event costs, which are primarily comprised of golf
 course management fees and signage, were $0.3 million in 2009 compared to
 $0.7 million in 2008.                                                                                                                                                                                                                                                                              

Sales and marketing.
Sales and marketing expense consists primarily of consulting, public relations,
sales materials and advertising. Sales and marketing decreased significantly in
the three and six months ended June 30, 2009 compared to the three and six
months ended June 30, 2008 due to cost reductions in the current year and the
inclusion in the three and six months ended June 30, 2008 of $150,000 and
$300,000, respectively, of fair value of shares of our common stock issued to a
consulting group which provided public relations and promotional services.

General and administrative. General and administrative
expense
consists primarily of salaries and other personnel-related expenses to support
our tournament operations, non-cash stock-based compensation for general and
administrative personnel, professional fees, such as accounting and legal,
corporate insurance and facilities costs. The increase in general and
administrative expenses in the three and six months ended June 30, 2009
compared to the three and six months ended June 30, 2008 resulted primarily
from an overall increase in 2009 as compared to 2008 in consulting fees and
salaries paid to administrative personnel in support of tournament operations.

Interest Expense.
In January 2008, the original promissory note due to the chairman of our board
of directors in the amount of $985,000 was replaced by a second promissory note
in the principal amount of $961,000, bearing interest at a rate of 12% per
annum. This new note was due on January 1, 2009. During the three and six
months ended June 30, 2008, we recorded interest expense of approximately
$29,000 and $58,000, respectively, related to this note.

In
February 2009, the existing obligations under our promissory note with the
chairman of our board of directors were replaced by another promissory note for
$1,150,000. In connection with the refinancing of the obligations under the
promissory note, we recorded interest expense of $78,000 in February 2009 as a
financing fee. The new note, as amended and restated in May 2009, is payable
within five days after the demand of the holder, and bears interest at 8% per
annum. During the three and six months ended June 30, 2009, we recorded
interest expense of approximately $23,000 and $137,000, respectively, related
to this note.

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In
addition, during the six months ended June 30, 2009 we recorded interest
expense of approximately $7,000 related to the $235,000 aggregate principal
amount of convertible notes issued to certain investors.

Change
in Fair Value Liability Related to Price Adjustable Warrants.Effective
January 1, 2009, we adopted EITF 07-5. In connection with warrants issued
together with the convertible notes in 2008, the financial reporting (non-cash)
effect of initial adoption of this accounting requirement for future financial
statements resulted in a cumulative effect of change in accounting principle of
approximately $102,000, based on a per share price of our common stock of $0.09
at January 1, 2009, which increased accumulated deficit and recorded a fair
value liability for price adjustable warrants. The fair value liability is
revalued quarterly utilizing Black-Scholes valuation
model computations with the increase or decrease in fair value being reported
in the statement of operations as other income (expense). During the three
months ended June 30, 2009, the fair value increased approximately $22,000,
based on a per share price of our common stock of $0.03 at June 30, 2009, which
was recorded as other expense. During the six months ended June 30, 2009, the
fair value decreased by approximately $69,000, which was recorded as other
income.

Off-Balance Sheet Arrangements

As
of June 30, 2009, we did not have any off-balance sheet arrangements, as
defined in Item 303(a)(4)(ii) of SEC Regulation S-K.

ITEM
4T.CONTROLS AND PROCEDURES.

(a)
Disclosure Controls and Procedures. As of the end of the period covered by this
Quarterly Report on Form 10-Q, we carried out an evaluation, under the
supervision and with the participation of senior management, including Mr.
Joseph F. Martinez, our Chief Executive Officer (CEO) and Chief Financial
Officer (CFO), of the effectiveness of the design and operation of our
disclosure controls and procedures (as such term is defined in Rules 13a-15(f)
and 15d-15(f) under the Securities Exchange Act of 1934, as amended (the
Exchange Act). Based upon that evaluation, our CEO/CFO concluded that our
disclosure controls and procedures were not effective in recording, processing,
summarizing and reporting, on a timely basis, information required to be
disclosed by us in the reports that we file or submit under the Exchange Act.
As previously reported under Item 9A(T) in our Annual
Report on Form 10-K for the year ended December 31, 2008 (the Annual Report),
we had numerous deficiencies in our disclosures controls as of December 31,
2008. In the Annual Report we described the remediation efforts we have begun
to undertake in order to correct such deficiencies. As of June 30, 2009, the
deficiencies described in the Annual Report still existed since the remediation
efforts had not yet been fully implemented as of such date.

(b)
Internal Control over Financial Reporting. There have been no changes in our
internal controls over financial reporting or in other factors during the
second fiscal quarter ended June 30, 2009 that materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting subsequent to the date we carried out our most recent evaluation. As
previously reported in Item 9A(T) of the Annual
Report, we had numerous material weaknesses in our internal control over
financial reporting as of December 31, 2008. In the Annual Report we described
the remediation efforts we have begun to undertake in order to correct such
material weaknesses. As of June 30, 2009, the material weaknesses described in
the Annual Report still existed since the remediation efforts had not yet been
fully implemented as of such date.

PART II  OTHER
INFORMATION

ITEM 1.LEGAL PROCEEDINGS

A summons
and complaint was filed with the Supreme Court of the State of New York, County
of New York by Rooney & Associates, LLC (Rooney) in January 2009 with
regard to a consulting agreement dated January 23, 2007 we entered into with
Rooney wherein we agreed to pay Rooney a six month base retainer of $48,000,
payable in $8,000 monthly installments. The complaint was in the amount of
$32,000, which Rooney alleges was due pursuant to the consulting agreement,
plus interest and costs. In April, 2009, Rooney filed a motion for an order of
default judgment in the sum of $32,000 plus interest. In May 2009, the Supreme
Court of the State of New York, County of New York granted Rooneys motion for
default judgment in the amount of $32,000 plus interest from April 2008.

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

The
following sets forth certain information for all securities we sold during the
quarter ended June 30, 2009 without registration under the Securities Act of
1933, as amended (the Securities Act), other than those sales previously
reported in a Current Report on Form 8-K:

In
April 2009, we issued to an executive officer and director options to purchase
1,000,000 shares of our common stock at an exercise price of $0.09 per share
pursuant to our 2009 Equity Incentive Plan. Such issuance was exempt from
registration pursuant to Section 4(2) of the Securities Act.

In
April 2009, we issued to a consultant options to purchase 350,000 shares of our
common stock at an exercise price of $0.02 per share pursuant to our 2009
Equity Incentive Plan. Such issuance was exempt from registration pursuant to
Section 4(2) of the Securities Act.

In
April 2009, we issued to employees options to purchase an aggregate of 915,000
shares of our common stock at an exercise price of $0.08 per share pursuant to
our 2009 Equity Incentive Plan. Such issuance was exempt from registration
pursuant to Section 4(2) of the Securities Act.

In
April 2009, we issued to a consultant 112,500 shares of our common stock
pursuant to the terms of settlement and release agreement. Such issuance was
exempt from registration pursuant to Section 4(2) of the Securities Act.

In
May 2009, we issued to an executive officer and director (i)
a convertible promissory note in the principal amount of $1,150,000, the
principal amount of which is convertible into shares of our common stock at
$0.50 per share, and (ii) a warrant to purchase 1,150,000 shares of our common
stock at an exercise price of $0.50 per share. Such issuances were exempt from
registration pursuant to Section 4(2) of the Securities Act.

In
June 2009, we issued to an executive officer and director a warrant to purchase
50,000 shares of our common stock at an exercise price of $0.05 per share,
pursuant to the terms of a professional services consulting agreement. Such
issuance was exempt from registration pursuant to Section 4(2) of the
Securities Act.

In
June 2009, we issued to an executive officer and director a warrant to purchase
540,000 shares of our common stock at an exercise price of $0.50 per share,
pursuant to the terms of a consulting agreement. Such issuance was exempt from
registration pursuant to Section 4(2) of the Securities Act.

In
July 2009, we issued 350,000 shares of our common stock to a consultant upon
the exercise of an option to purchase 350,000 shares of our common stock at an
exercise price of $0.02 per share. This transaction was exempt from
registration provided by Section 3(9) of the Securities Act.

ITEM
3.DEFAULTS UPON SENIOR SECURITIES

None.

ITEM
4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No
matters have been submitted to our security holders for a vote, through the
solicitation of proxies or otherwise, during the period ended June 30, 2009.

ITEM
5.OTHER INFORMATION

None.

ITEM 6.EXHIBITS

The
exhibits required by this item are set forth on the Exhibit Index attached
hereto.

18

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SIGNATURES

In
accordance with the requirements of the Exchange Act, the registrant has caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

|                       |                            |                                         
|---------------------- | -------------------------- | ----------------------------------------
|Dated: August 14, 2009 | WORLD SERIES OF GOLF, INC.
|                       |                            |                                         
|                       | By:                        | /s/ Joseph F. Martinez                  
|                       |                            |                                         
|                       |                            | Joseph F. Martinez                      
|                       |                            | Chief Executive Officer, Chief Financial
|                       |                            | Officer and Principal Accounting Officer

19

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EXHIBIT INDEX

|            |  |                                                                                                                                     
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------
|            |  |                                                                                                                                     
|Exhibit No. |  | Description of Exhibit                                                                                                              
|            |  |                                                                                                                                     
|            |  |                                                                                                                                     
|31.1        |  | Certification of our Chief Executive Officer and Chief
 Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|            |  |                                                                                                                                     
|32.1        |  | Certification of our Chief Executive Officer and Chief
 Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



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