UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


WASHINGTON, D.C. 20549





FORM 10-K





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





For the Fiscal Year EndedAugust 31, 2010





Commission File Number 000-32923





CLICKER INC.


(Exact name of registrant as specified in its charter)





Nevada

33-0198542(State or other jurisdiction of incorporation or organization)

(IRS Employer Identification No.)





18952 MacArthur Blvd, Suite 210, Irvine, California
92612
(949) 486-3990(Address of principal executive office)
(Postal Code)
(Issuer's telephone number)





Securities registered pursuant to Section 12(b) of the Act:  None


Securities registered pursuant to Section 12(g) of the Act:





Title of each class

Name of each exchange on which registeredCommon Stock, $0.001 par value

Over-the-Counter Bulletin Board





Indicate by check mark if the registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act. Yes o     No x





Indicate by checkmark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes o     No x





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes 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 (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yeso   No o





Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. 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 definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.





Large accelerated filer o
Accelerated filer oNon-accelerated filer o

(Do not check if a smaller reporting company)
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





The aggregate market value of the voting common equity held by non-affiliates as of February 28, 2010, based on the closing sales price of the Common Stock as quoted on the Over-the-Counter Bulletin Board was $125,040. For purposes of this computation, all officers, directors, and five percent (5%) beneficial owners of the registrant are deemed to be affiliates. Such determination should not be deemed an admission that such directors, officers, or five percent (5%) beneficial owners are, in fact, affiliates of the registrant.





As of January 11, 2011, there were 61,747,355 shares of registrant’s common stock outstanding.









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CLICKER INC.


TABLE OF CONTENTS





PagePART IItem 1. Description of Business
3Item 1A. Risk Factors
8Item 1B. Unresolved Staff Comments
13Item 2. Properties
13Item 3. Legal Proceedings
14Item 4. {Removed and Reserved)
14PART IIItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
15Item 6. Selected Financial Data
16Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
17Item 7A. Quantitative and Qualitative Disclosures about Market Risk
24Item 8. Financial Statements and Supplementary Data
24Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
24Item 9A. Controls and Procedures
24Item 9B. Other Information
25PART IIIItem 10.  Directors, Executive Officers and Corporate Governance
26Item 11. Executive Compensation
29Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
31Item 13. Certain Relationships and Related Transactions; and Director Independence
32Item 14. Principal Accountant Fees and Services
32PART IVItem 15. Exhibits; Financial Statement Schedules
34Signatures
36










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PART I





Item 1. Description of Business





This Annual Report on Form 10-K includes the accounts of Clicker Inc. (FMG) and its wholly and majority-owned subsidiaries, WallStreet Direct, Inc. (“WallStreet”), Digital WallStreet, Inc. (“Digital WallStreet”), Financial Filings Corp, (“Financial Filings”), My WallStreet, Inc. (“My WallStreet”) and The Wealth Expo Inc. (“The Wealth Expo”), collectively “we”, us” or the "Company".





This Annual Report on Form 10-K (including the section regarding Management's Discussion and Analysis of Financial Condition and Results of Operations) contains forward-looking statements regarding our business, financial condition, results of operations and prospects. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates" and similar expressions or variations of such words are intended to identify forward-looking statements, but are not deemed to represent an all-inclusive means of identifying forward-looking statements as denoted in this Annual Report on Form 10-K.  Additionally, statements concerning future matters are forward-looking statements.





Although forward-looking statements in this Annual Report on Form 10-K reflect the good faith judgment of our Management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, without limitation, those specifically addressed under the heading "Risks Related to Our Business" below, as well as those discussed elsewhere in this Annual Report on Form 10-K. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this Annual Report on Form 10-K. We file reports with the Securities and Exchange Commission ("SEC"). You can read and copy any materials we file with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, DC 20549.  You can obtain additional information about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet site (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us.





We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this Annual Report on Form 10-K. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this annual Report, which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.





OVERVIEW





We are web publishers and internet brand builders focused on developing stand alone brands and properties that incorporate social networking and reward properties that leverage content, commerce and advertising for the next generation global internet user.  Clicker intends to build these properties and position them for sale to companies who desire to take the brands and proof of concept to next level of development.









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OUR WEB PROPERTIES





Forwant.com







ForWant.com is a free classified advertisements site with millions of ads posted by users.  The website allows users to post advertisements for and search a variety of specialized categories including, housing, merchandises, services, personal ads and employment listings in specialized communities in the United States and Canada, as well as other countries such as United Kingdom, India and Ireland.   The website also has paid premium content and sections, and the property has millions of listings throughout its network. The property is now incorporated under ForWant Inc and ready to begin operations as a standalone entity. Competitors for the property are Craigslist, kijiji (an eBay company), Hotjobs (yahoo), and Monster.





Cashclicker.com and C2we.com











Cashclicker.com is an e-reward site that will reward registered users on everyday consumption of content, commerce and search. C2we.com is the social network site that is affiliated with Cashclicker.com. Both sites are currently in design and expected to be launched in middle of 2011. Both sites have been delayed due to delay in funding. Management may sell the property at this stage of development. The model for this property is to provide a rewards program that incorporates Social Networking whereby users are paid to review offers, websites and fill out surveys. The platform for that is through a website with an added search component. Plans call for the revenue model for this property to be largely advertising driven model incorporating CPA (cost per action), CPM (cost per thousand), CPC (cost per click) type ad solutions. Plans also call for a premium membership whereby members can have added benefits.





Sippinit.com







Sippinit.com is an online pop, entertainment and gossip property that will incorporate social networking with entertainment gossip. The property is currently in design and expected to be launched in middle of 2011. The site has been delayed due to delay in funding. Management may sell the property at this stage of development.  Plans call for the property to be entertainment and gossip site that pulls entertainment feeds while users will be able to comment and gossip on the events. The platform will also call for users to be able to create a social networking pulse about a story or an event. The property will be advertising driven gathering to the entertainment ad market that will largely be in the event arenas. Users can promote its events through social network and anticipated to be paid on a cost per post type model. Additionally, plans call for conversational marketing to be also implemented.








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ItsMyLocal.com







ItsMyLocal.com is a reward property incorporates local search and rewards with local peer to peer social networking and rewards.  The site is in the concept stage and expected to launch middle of 2011 providing we can secure additional capital.. The strategic plan for the brand is to provide a social network and rewards to local search whereby users of local participating patrons can receive coupons from their local vendors. Plans call for these patrons to become members and rate the established while offering coupons or special offers to their friends within the network. Competitors included Local.com and yelp.com.





Sportsgulp.net







Sportsgulp.net is a social networking website and gossip channel for sports enthusiasts. The property is in development and expected to launch in third quarter 2011. Plans call for the property to pull conventional sports feeds while allowing users a more interactive social networking component whereby the sports community could be more interactive with each other by incorporating social networking tools.





Wallst.net and Mywallst.net








Wallst.net & Mywallst.net- A financial social community provides an open forum for likeminded investors to share and collaborate and mentor. The site offers message boards, quotes as well as in depth video interviews which have aired on both internet and/or television. Through its wholly owned subsidiary, Wallstreet Direct Inc, these properties have been the cornerstone and main focus for the company. And while the property is in itself been very successful having been the staple of revenue for the company over the years, the industry as a whole has suffered greatly and the company focus will be more development of the other brands.






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Financial Filings Corp.





Financial Filings Corp. was launched in March 2006 and provides news distribution and electronic document conversion services to public companies. for filing to the EDGAR website of the Securities and Exchange Commission (“SEC”).





WEB DEVELOPMENT





Based on our experience with developing our web properties, we have created a web development and programming business. We provide the following services to companies who are building web properties who have been “early stage” in their development. As a result, we may take all or a portion of payment in the form of stock or security interest when management feels that will be able to recoup or gain on our capital outlay.  Typically we provide services and  to include the following: help develop properties for client with high load usage and scalability in mind. We Develop hardware backbone which is typically run on Amazon Elastic Cloud Compute (EC2), which allows clients to dynamically scale CPU, storage and bandwidth usage for rapid growth while also being cost-effective in allowing the client company to use only what they need.  The main application code base is programmed in PHP.  Data is stored in a MySQL database.  Various other technologies such as CSS, XML, HTML, JavaScript, Flash, etc. are used to enrich the frontend user experience.





CORPORATE HISTORY





We were incorporated in Nevada in 1984 as Southern Development Company, Inc. In December 1994, we merged with Integrated Communications Access Network, Inc. In March 1996, we were renamed Southern Development Company, Inc., and in September 1998, we changed our name to EssxSport Corp. From September 1998 until August 31, 2004, we were primarily engaged in the manufacture and distribution of athletic equipment, primarily for pole vaulting and other track and field activities. Effective August 31, 2004, we sold, transferred, and delivered all of our assets relating to our pole vault and sports business to our former President and director, and subsequently changed our name to Giant Jr. Investments Corp.





On June 30, 2004, we filed with the SEC to become a business development company ("BDC") under the 1940 Act and on September 1, 2004, we began our BDC operations. On June 1, 2005, we terminated our BDC status and on August 1, 2005, our shareholders approved an amendment to the Articles of Incorporation changing our name to “Financial Media Group, Inc.”





On January 6, 2006, we acquired 100% of the equity of WallStreet in exchange for 19,998,707 shares or 82% of the issued and outstanding shares of our common stock at the time of the acquisition.  In connection with the reverse merger, we changed our fiscal year end to August 31.





On January 15, 2005, WallStreet acquired 100% of the assets and outstanding shares of Digital WallStreet in exchange for two promissory notes of $1,500,000 each, carrying interest at 6% per annum, due and payable on January 31, 2007 and January 31, 2010. On December 11, 2006, the payment due date of the promissory note due January 31, 2007 was extended to January 31, 2010. WallStreet is a full service financial media company focused on developing tools and applications that enable the retail investors to collaborate directly with publicly traded companies. WallStreet provides internet based media and advertising services through its network of Web sites.





On February 10, 2006, we established Financial Filings as a wholly-owned subsidiary. Financial Filings is a provider of news wire and compliance services to small and mid-sized publicly traded companies worldwide. Customer acquisitions are initially facilitated by WallStreet which provides media and advertising services to hundreds of publicly traded companies, many of which are seeking Financial Filings’ services, including the preparation review of registration statements, electronic filings for SEC documents (EDGAR), preparation of proxy materials, and news distribution.





On June 13, 2006, we established a wholly owned subsidiary, My WallStreet, Inc. and launched in January 2007, http://my.wallst.net is an online community for investors. The website offers free membership and provides social networking applications including messaging, blogs, message boards, video and audio uploads, and personal profile pages. In addition, members of MyWallSt can participate in the “Rookie Challenge,” a proprietary virtual stock trading simulator that allows members to compete against each other for a weekly cash prize. Members can also communicate with another, rate individual stocks, post comments on individual stocks, and compile their own Watchlist of stocks, which can be viewed and commented on by other members of the online community. Unlike other social network services, MyWallSt members have one interest in common: they want to become better investors. MyWallSt also provides a venue for investors to interact with public company executives, many of which have profiles on the website.








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In January 2007, we acquired the trade name “The Wealth Expo” and formed a wholly-owned subsidiary The Wealth Expo Inc. on June 12, 2007. The Wealth Expo is designed to provide a broad range of information on investing techniques, and tools to investors through workshops and exhibits held throughout the United States. Exhibitors at the Wealth Expo include public and private companies, franchises, financial newsletter publishers, investor education providers, and real estate companies. The Wealth Expo provides us several new revenue streams through exhibition sales, speaking presentation sales, collateral material sales, and advertising sales. Since its inception, The Wealth Expo has attracted hundreds of exhibitors and thousands of attendees from around the world.





As a result of a downturn in the economy and the outlook for financial services, we decided in 2009 to switch our corporate focus towards building websites to build up new brand identities.  In connection with this shift, we changed our name to CLICKER Inc. on May 12, 2009.





BUSINESS STRATEGY





We are attempting to build internet brands from the conceptual level to launch. Our strategy is to focus on the development of “big idea” type web properties. The strategy is to then develop these ideas from proof of concept to a developed website and then position the property to be sold to a larger managing principle and/or partner or continue to own and operate the entity.





The developments of these internet websites have four main stages of development:





Stage One:
The idea and concept stage of a potentially good idea. At this stage a budget and timeline for the property is developed. The size of the market and our plan for integration or exit is established. Additionally the business model is introduced at this level.





Stage Two:
The development of the property is laid out. Site layout and design is established. Logic and user flow and finally site architecture and design are established.





Stage Three:
The site is launched and the operational model is implemented in beta form. We begin to scale some web traffic and begin to test the model. The site is officially launched in the beta stage and can be in a few different versions





Stage Four:
Full operation stage and the property should now have gone though a couple stages of beta with the model pretty much established. The property is established for operation as a subsidiary while positioning for sale or executive control.





Competition





Generally, competitive factors within the internet and web development market include the range and depth of financial tools and dimensions of email offerings, the quality of web site content, and the reliability of reference information provided. We are aware of several companies which are much larger and have greater name recognition, that provide some level of presence and awareness in similar delivery formats.





Employees





As of January 1, 2011, we employed six full-time employees consisting of two management, three web developers, and one administrative person.








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Item 1A. Risk Factors





WE HAVE A HISTORY OF LOSSES WHICH MAY CONTINUE, WHICH MAY NEGATIVELY IMPACT OUR ABILITY TO ACHIEVE OUR BUSINESS OBJECTIVES.





We incurred net losses of $7,330,238 and $3,284,713 for the years ended August 31, 2010 and 2009, respectively. We cannot assure you that we can achieve or sustain profitability on a quarterly or annual basis in the future. Our operations are subject to the risks and competition inherent in the establishment of a business enterprise. There can be no assurance that future operations will be profitable. Revenues and profits, if any, will depend upon various factors, including whether we will be able to continue expansion of our revenue. We may not achieve our business objectives and the failure to achieve such goals would have an adverse impact on us. These losses are largely associated with the operation of our financial related properties.





OUR INDEPENDENT AUDITORS HAVE EXPRESSED SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN, WHICH MAY HINDER OUR ABILITY TO OBTAIN FUTURE FINANCING.





In their report dated January 7, 2011, our independent auditors stated that our financial statements for the year ended August 31, 2010 were prepared assuming that we would continue as a going concern. Our ability to continue as a going concern is an issue raised as a result of recurring losses from operations. We continue to experience net operating losses. Our ability to continue as a going concern is subject to our ability to generate a profit and/or obtain necessary funding from outside sources, including obtaining additional funding from the sale of our securities, increasing sales or obtaining loans and grants from various financial institutions where possible. Our continued net operating losses increase the difficulty in meeting such goals and there can be no assurances that such methods will prove successful.





WE HAVE A LIMITED OPERATING HISTORY AND IF WE ARE NOT SUCCESSFUL IN CONTINUING TO GROW OUR BUSINESS, THEN WE MAY HAVE TO SCALE BACK OR EVEN CEASE OUR ONGOING BUSINESS OPERATIONS.





Our company has a limited operating history. Our operations will be subject to all the risks inherent in the establishment of a developing enterprise and the uncertainties arising from the absence of a significant operating history. We have received a limited amount of revenues from operations and have limited assets. We have yet to generate positive earnings and there can be no assurance that we will ever operate profitably. If our business plan is not successful, and we are not able to operate profitably, investors may lose some or all of their investment in our company.





OUR FAILURE TO MANAGE GROWTH EFFECTIVELY COULD IMPAIR OUR BUSINESS.





Our business strategy envisions a period of rapid growth that may put a strain on its administrative, operational resources and funding requirements. Our ability to effectively manage growth will require them to continue to expand the capabilities of its operational and management systems and to attract, train, manage and retain qualified editors, technicians, salespersons and other personnel. There can be no assurance that we will be able to do so, particularly if losses continue and we are unable to obtain sufficient financing. If we are unable to successfully manage growth, our business, prospects, financial condition, and results of operations could be adversely affected.





WE OPERATE WITHIN A HIGHLY COMPETITIVE AND COMPLEX MARKET THAT IS DIRECTLY OR INDIRECTLY AFFECTED BY MARKET RISKS AND REGULATIONS, WHICH COULD HAVE AN ADVERSE EFFECT ON OUR BUSINESS.





Website development and branding is an extremely competitive and fragmented industry. The industry can be significantly affected by many factors, including changes in local, regional, and national economic conditions, changes in consumer preferences, brand name recognition, marketing and the development of new and competing internet web publishers and media companies. We expect that existing businesses that compete with us and have greater financial resources than us will be able to undertake more extensive marketing campaigns and more aggressive advertising sales policies than us, thereby generating more attention to their companies and websites. These competitive pressures could have a material adverse effect on our business, prospects, financial condition, and results of operations.






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OUR DEPENDENCE ON THE CONTINUED GROWTH IN THE USE OF THE WEB, PARTICULARLY IN OUR INDUSTRIES, COULD ADVERSELY AFFECT OUR RESULTS OF OPERATIONS.





Our business depends on consumers continuing to increase their use of the web for obtaining news and financial information, social networking, classified ads, reward type offers as well as for conducting commercial transactions. The rapid growth and use of the Internet is a relatively recent phenomenon. As a result this acceptance and use may not continue to develop at historical rates. Web usage may be inhibited for a number of reasons, such as - Inadequate network infrastructure; security concerns; inconsistent quality of service; and availability of cost-effective, high-speed service.





If web usage grows, the Internet infrastructure may not be able to support the demands placed on it by this growth or its performance and reliability may decline. In addition, web sites have experienced interruptions in their service as a result of outages and other delays occurring throughout the Internet network infrastructure. If these outages or delays frequently occur in the future, web usage, as well as usage of our web site, could grow more slowly or decline, which could adversely affect our results of operations.





IF WE ARE UNABLE TO ESTALISH AND MAINTAIN STRATEGIC RELATIONSHIPS WITH OTHER WEB SITES TO ATTRACT USERS, ADVERTISERS AND CONTENT, OUR BUSINESS COULD BE ADVERSELY AFFECTED.





We depend on establishing and maintaining distribution relationships with high-traffic web sites for a significant portion of our traffic. There is intense competition for placements on these sites, and we may not be able to enter into such relationships on commercially reasonable terms or at all. Even if we enter into distribution relationships with these web sites, they themselves may not attract significant numbers of users. Therefore, our web site may not receive additional users from these relationships. Moreover, we may have to pay significant fees to establish these relationships.





Occasionally we enter into agreements with advertisers, content providers or other high traffic web sites that require us to exclusively feature these parties in certain sections of our web site. Existing and future exclusivity arrangements may prevent us from entering into other content agreements, advertising or sponsorship arrangements, or other strategic relationships. Many companies we may pursue for a strategic relationship also offer competing services. As a result, these competitors may be reluctant to enter into strategic relationships with us. Our business could be adversely affected if we do not establish and maintain additional strategic relationships on commercially reasonable terms or if any of our strategic relationships do not result in increased use of our web site.





DIFFICULTY ACCOMMODATING INCREASES IN THE NUMBER OF USERS OF OUR SERVICES AND INTERNET SERVICE PROBLEMS OUTSIDE OF OUR CONTROL ULTIMATELY COULD RESULT IN THE REDUCTION OF USERS OF OUR WEB PROPERTIES.





In the past, our Web site has experienced significant increases in traffic when there is noteworthy business or financial news stories. In addition, the number of our users has increased over time as we are seeking to further increases in our user base. Therefore, our Web site must accommodate a high volume of traffic and deliver frequently updated information. Our Web site has in the past, and may in the future experience slower response times or other problems for a variety of reasons.





Our web site could experience disruptions or interruptions in service due to the failure or delay in the transmission or receipt of this information. In addition, our users depend on Internet service providers, online service providers and other web site operators for access to our Web site. Each of them has experienced significant outages in the past, and could experience outages, delays and other difficulties due to system failures unrelated to our systems. These types of occurrences could cause users to perceive our Web site as not functioning properly, and therefore cause them to use other methods to obtain their business and financial news and other information.








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IF WE DO NOT DEVELOP NEW AND ENHANCED SERVICES AND FEATURES FOR OUR WEB PROPERTIES, WE MAY NOT BE ABLE TO ATTRACT AND RETAIN A SUFFICIENT NUMBER OF USERS.





We believe that our Web site will be more attractive to advertisers if we develop a larger audience comprised of demographically favorable users. Accordingly, we intend to introduce additional or enhanced services in the future in order to retain its current users and attract new users. If we introduce a service that is not favorably received, the current users may not continue using our service as frequently. New users could also choose a competitive service over ours.





We may also experience difficulties that could delay or prevent us from introducing new services. Furthermore, these services may contain errors that are discovered after the services are introduced. We may need to significantly modify the design of these services on its Web site to correct these errors. Our business could be adversely affected if it experiences difficulties in introducing new services or if users do not accept these new services.





THERE IS INTENSE COMPETITION FOR OUR WEB-BASED BUSINESSES AND FINANCIAL CONTENT AND WE MAY NOT BE ABLE TO COMPETE SUCCESSFULLY.





Many web sites compete for consumers' and advertisers' attention and spending, particularly in the business and financial information and news area. We expect this competition to continue to increase. We compete for advertisers, users, and content providers and e commerce customers with many types of companies, including:





·
Publishers and distributors of traditional media (television, radio and print), such as The Wall Street Journal, CNN and CNBC;·
General purpose consumer online services such as Craigslist, Kijiji (an Ebay company); Classifieds and  Backpage;


·
Online services or web sites targeted to business, finance and investing needs, such as Monster and Yahoo’s Hot jobs; and·
Affiliate and Multi-level Marketing  and other companies, such as Herbalife and Amway, Infoseek, Lycos, and Yahoo!





Increased competition could result in price reductions, reduced margins, or loss of market share, any of which would adversely affect our business.





THE DIMINUTION OR LOSS, MISAAPROPRIATION OR LEGAL CLAIMS ON THE BRAND NAME "WALLST.NET" “FORWANT”, “CASHCLICKER”, “ITSMYLOCAL” AND OUR OTHER DEVELOPING PROPERTIES WOULD HAVE A MATERIAL ADVERSE AFFECT ON OUR BUSINESS.





We are highly dependent on our brand names for the success of our venture. We believe the diminution or loss, misappropriation of our existing proprietary rights or claims of infringement or legal actions related to intellectual property of these brand names, or any other negative market or industry perception arising from these, would have a material adverse effect on our business.





We currently rely on contractual rights, copyrights, trademarks, and trade secrets to protect our intellectual property rights. We do not hold any patents. We cannot assure you that our means of protecting our proprietary rights will be adequate or that our competitors will not independently develop comparable or superior technologies or obtain unauthorized access to our proprietary technologies.





We hold the Internet domain names “www.forwant.com”, “www.cashclicker.com”, “www.itsmylocal.com”, “www.sippinit.com”, www.sportsgulp.net” and “www.wallst.net”. Under current domain name registration practices, no one else can obtain an identical domain name, but someone might obtain a similar name, or the identical name with a different suffix, such as ".org,” or with a country designation. The regulation of domain names in the United States and in foreign countries is subject to change, and we could be unable to prevent third parties from acquiring domain names that infringe or otherwise decrease the value of our domain names.








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WE COULD FACE LIABILITY FOR THE INFORMATION DISPLAYED ON OUR WEB PROPERTIES, WHICH COULD ADVERSELY AFFECT OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS.





We may be subjected to claims for defamation, negligence, and copyright or trademark infringement or based on other theories relating to the information we publish on our web site. These types of claims have been brought, sometimes successfully, against online services as well as other print publications in the past. We could also be subjected to claims based upon the content that is accessible from its Web site through links to other web sites. Defending such claims could be costly and could distract management from concentrating on other aspects of our business, which could adversely affect our financial condition and results of operations.





A SIGNIFICANT PORTION OF OUR PREVIOUS REVENUE AND EARNINGS CONSISTED OF SECURITIES THAT ARE NOT FREELY TRANSFERABLE, WHICH COULD HAVE AN ADVERSE AFFECT ON OUR FINANCIAL CONDITION.





In connection with our services as a former financial services-centered company, we accepted the major, and sometimes the entire, portion of our fee for our services in the form of shares of our clients’ common stock which were “restricted securities” as that term is defined in Rule 144 under the Securities Act and are not freely transferable without registration or an exemption from registration. We accepted this as a form of payment because our clients were usually “small-cap” publicly held companies that did not otherwise have the cash to pay for the services that we provided.  The market for these securities is sometimes volatile and at other times there may only be a limited trading volume. Therefore, we may be unable to sell or distribute such securities at the times we would like if at all, which could adversely affect our financial condition.





A SIGNIFICANT PORTION OF OUR ASSETS CONSISTS OF STOCK ISSUED BY SMALL, UNPROVEN ISSUERS, WHICH STOCK MAY PROVE TO BE OF LIMITED OR NO VALUE.





In connection with our services as a former financial services-centered company, many of our clients were primarily “small-cap” public companies and are subject to all of the risks of small businesses. They frequently depend on the management talents and efforts of one person or a small group of persons for their success, and the death, disability or resignation of one or more of these persons could have a material adverse impact on our clients and their ability to grow. In addition, small businesses often have narrower product lines and smaller market shares than their competition. Such companies may also experience substantial variations in operating results. These companies may be more vulnerable to customer preferences, market conditions or economic downturns. Because of these factors, most of which are beyond our control, we cannot assure you that the securities we received will have any value when we are able to dispose of them.





VALUATION OF OUR MARKETABLE SECURITIES MAY BE SUBJECT TO MATERIAL IMPAIRMENTS WHICH REDUCE THEIR VALUE AND AFFECT OUR FINANCIAL STATEMENTS.





Marketable securities are classified as trading securities, which are carried at their fair value based upon quoted market prices of those securities at the end of each of our quarters. Accordingly, net realized and unrealized gains and losses on trading securities are included in net income. The marketable securities that we hold are traded on the Pink Sheets and the OTCBB. The market price for these securities is subject to wide fluctuations from period to period, which may cause fluctuations in our net income.





IF WE ARE UNABLE TO RETAIN THE SERVICES OF MR. AIMERS OR IF WE ARE UNABLE TO SUCCESSFULLY RECRUIT SKILLED PERSONNEL, WE MAY NOT BE ABLE TO CONTINUE OUR OPERATIONS.





Our success depends to a significant extent upon the continued services of Mr. Albert Aimers, our Chief Executive Officer and Chairman of the Board of Directors. We do not maintain key-man insurance on the life of Mr. Aimers. In addition, in order to successfully implement and manage our business plan, we will be dependent upon, among other things, successfully recruiting qualified skilled personnel. Competition for qualified individuals is intense. There can be no assurance that we will be able to find, attract and retain existing employees or that we will be able to find, attract and retain qualified personnel on acceptable terms.








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Our future success also depends on the continuing ability to retain and attract highly qualified technical, editorial, and managerial personnel. We anticipate that the number of employees will increase in the next 12 months. We have experienced difficulty from time to time in attracting the personnel necessary to support the growth of our business, and there can be no assurance that we will not experience similar difficulty in the future. The inability to attract and retain the technical and managerial personnel necessary to support the growth of our business could have a material adverse effect upon our business, results of operations and financial condition.





Risks Relating to Our Common Stock:





IF WE FAIL TO REMAIN CURRENT IN OUR REPORTING REQUIREMENTS, WE COULD BE REMOVED FROM THE OTC BULLETIN BOARD WHICH WOULD LIMIT THE ABILITY OF BROKER-DEALERS TO SELL OUR SECURITIES AND THE ABILITY OF STOCKHOLDERS TO SELL THEIR SECURITIES IN THE SECONDARY MARKET.





Companies trading on the OTC Bulletin Board, such as us, must be reporting issuers under Section 12 of the Securities Exchange Act of 1934, as amended, and must be current in their reports under Section 13, in order to maintain price quotation privileges on the OTC Bulletin Board. If we fail to remain current on our reporting requirements, we could be removed from the OTC Bulletin Board. As a result, the market liquidity for our securities could be severely adversely affected by limiting the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market.





OUR COMMON STOCK IS SUBJECT TO THE "PENNY STOCK" RULES OF THE SEC AND THE TRADING MARKET IN OUR SECURITIES IS LIMITED, WHICH MAKES TRANSACTIONS IN OUR STOCK CUMBERSOME AND MAY REDUCE THE VALUE OF AN INVESTMENT IN OUR STOCK.





The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a "penny stock," for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:


·
that a broker or dealer approve a person's account for transactions in penny stocks; and·
the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.





In order to approve a person's account for transactions in penny stocks, the broker or dealer must:


·
obtain financial information and investment experience objectives of the person; and·
make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.





The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the Commission relating to the penny stock market, which, in highlight form:





·
sets forth the basis on which the broker or dealer made the suitability determination; and·
that the broker or dealer received a signed, written agreement from the investor prior to the transaction.





Generally, brokers may be less willing to execute transactions in securities subject to the "penny stock" rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock.





Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.








12





FINRA SALES PRACTICE REQUIREMENTS MAY ALSO LIMIT A SHAREHOLDER’S ABILITY TO BUY AND SELL OUR STOCK.





In addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.





Item 1B. Unresolved Staff Comments





None.





Item 2. Properties





Corporate Offices





Our corporate offices consist of 2,359 sq. feet of office space in Irvine, California. We have a month to month lease basis at a monthly rental of $3,888.  We believe that our existing facilities are suitable and adequate to meet our current business requirements for the next six months.





Intellectual Property, Proprietary Rights and Domain Names





We own the domain names “www.forwant.com”, “www.cashclicker.com”, “www.itsmylocal.com”, “www.sippinit.com”, www.sportsgulp.net” and “www.wallst.net”, and “www.financialfilings.com” as well as the phone number 1-800-4WALLST. We believe our ownership of these domain names gives us adequate protection over them and we intend to keep them in our possession.





Other intellectual property is protected through a combination of trademark law, trade secret protection, and confidentiality agreements with our employees, customers, independent contractors, agents, and vendors. We pursue the registration of our domain names, trademarks, and service market in the United States. Effective trademark, service mark, copyright, and trade secret protection may not be available in every country in which we provide services and products are made available online. We create some of our own content and obtain the balance of our content from third parties. It is possible that it could become subject to infringement actions based upon the content obtained by third parties. In addition, others may use this content and we may be subject to claims from our licensors. We currently have no patents or patents pending and do not anticipate that patents will become a significant part of our intellectual property in the future. We have entered into confidentiality agreements with our employees and independent consultants and have instituted procedures to control access to and distribution of our technology, documentation and other proprietary information and the proprietary information of others from who we licenses content. The steps we take to protect our proprietary rights may not be adequate and third parties may infringe or misappropriate the trademarks, service marks, and similar proprietary rights. In addition, other parties may assert claims of infringement of intellectual property or alter proprietary rights against us. The legal status of intellectual property on the Internet is currently subject to various uncertainties as legal precedents have not been set and are still to be determined in many areas of Internet law.









13







Item 3. Legal Proceedings





Except as disclosed below, there are no legal proceedings to which we are a party or to which any of our property is subject, and to the best of our knowledge, no such actions against us is contemplated or threatened.





PR Newswire Association, Inc. vs. Financial Filings Corporation, Digital Wall Street, Inc. and WallStreet Direct, Inc., Superior Court of New Jersey, Hudson County, Civil Division #5, Docket No. L-878-09.On February 12, 2009, PR Newswire filed litigation against us and our subsidiaries to pay $74,194.60 for services provided by PR Newswire. The balance has been included in current liability on the accompanying consolidated financial statements. We are in negotiations to settle the judgment.





Adon Networks, Inc. vs. Wall Street Direct, Inc., Superior Court of Arizona in and for the County of Maricopa County Civil Action  #CV2009-00035.On February 4, 2009, Adon Networks filed a action to collect $41,966 in amounts due for services provided to Wall Street Direct.  The amount has not yet been paid and our subsidiary is in negotiations for settlement. The balance has been included in current liability on the accompanying consolidated financial statements.





Renaissance Hotel Management Company, LLC vs. Financial Media Group, Inc., Cook County Court, Illinois, First Municipal District, Case No. 08M110495.On January 22, 2008, litigation claiming $20,250 from us was commenced under the above-entitled action. On September 10, 2008, a judgment was entered against us in the amount of $14,371.87 and said amount remains unpaid and the company is in negotiations to settle the amount. The balance has been included in current liability on the accompanying consolidated financial statements.





CBS Outdoors, Inc. vs. Financial Media Group, Inc., New York City Civil Court Index No. CV-003947-08/NY.On March 27, 2008, a Stipulation of Settlement was entered between CBS Outdoors and us for a sum of $16,800. A default judgment in the amount of $17,794.85 was entered against us on October 16, 2008. The balance has been included in current liability on the accompanying consolidated financial statements.





Dow Jones & Company, Inc. DBA Dow Jones Marketwatch as successor in interest to Marketwatch, Inc. vs. Financial Media Group, Inc. Et. Al., Superior Court of California, County of Orange, Case No. 30-2208 00112726.On September 30, 2008, Dow Jones filed a complaint for a breach of contract against us for failing to pay $42,000 in licensing fees for using Marketwatch’s financial information and analytical tools relating to securities pursuant to the terms as required by the License and Service Agreement. On March 4, 2009, a judgment for $48,162.40 was awarded in favor of Dow Jones, and said amount remains unpaid. The balance has been included in current liability on the accompanying consolidated financial statements. On November 15, 2010, we agreed to settle the judgment and paying $2,000 per month until the amount is paid in full.





Item 4. (Removed and Reserved)






14










PART II





Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities





Our common stock is traded on the Over-the-Counter Bulletin Board under the symbol CLKZ. The following table sets forth, for the period indicated, the range of high and low closing prices reported by the Over-the-Counter Bulletin Board. Such quotations represent prices between dealers and may not include markups, markdowns, or commissions and may not necessarily represent actual transactions.





Fiscal Year Ending August 31, 2009

Day High

Day LowQuarter Ending November 30, 2008


24.00000



21.00000Quarter Ending February 28, 2009


15.00000



7.50000Quarter Ending May 31, 2009


1.08000



0.90000Quarter Ending August 31, 2009


1.38000



1.38000Fiscal Year Ending August 31, 2010

Day High

Day LowQuarter Ending November 30, 2009


2.55000



1.80000Quarter Ending February 28, 2010


0.36000



0.24000Quarter Ending May 31, 2010


0.15000



0.15000Quarter Ending August 31, 2010


0.36000



0.52000


Holders





On January 11, 2011 the closing price for our common stock on the Over-the-Counter Bulletin Board was $0.045 per share. On January 11, 2011, there were 1,780 shareholders of record of our common stock.





Dividends





We have never paid any cash dividends on our capital stock and do not anticipate paying any cash dividends on our common stock in the foreseeable future.   We intend to retain future earnings to fund ongoing operations and future capital requirements of our business. Any future determination to pay cash dividends will be at the discretion of the Board and will be dependent upon our financial condition, results of operations, capital requirements and such other factors as the Board deems relevant.





Recent Sales of Unregistered Securities





On June 2, 2010, we issued 2,582,272 shares of our common stock upon conversion of $32,020 of an outstanding convertible debenture held by Greystone Capital Partners, Inc. The securities were issued in a private placement transaction pursuant to Regulation D under the Securities Act.





On June 3, 2010 we issued 1,611,679 shares of our common stock upon conversion of $10,153 of an outstanding convertible debenture held by Lotus Funding Group, LLC. The securities were issued in a private placement transaction pursuant to Regulation D under the Securities Act.





On June 7, 2010, we issued 2,853,517 shares of our common stock upon conversion of $90,742 of an outstanding convertible debenture held by Greystone Capital Partners, Inc. The securities were issued in a private placement transaction pursuant to Regulation D under the Securities Act.





On June 21, 2010, we issued 37,488 shares of our common stock upon conversion of $4,000 of an outstanding convertible debenture held by Asher Enterprises, Inc. The securities were issued in a private placement transaction pursuant to Regulation D under the Securities Act.






15







On July 7, 2010, we issued 34,618 shares of our common stock upon conversion of $15,000 of an outstanding convertible debenture held by Asher Enterprises, Inc. The securities were issued in a private placement transaction pursuant to Regulation D under the Securities Act.





On July 16, 2010, we issued 16,545 shares of our common stock upon conversion of $7,500 of an outstanding convertible debenture held by Asher Enterprises, Inc. The securities were issued in a private placement transaction pursuant to Regulation D under the Securities Act.





On July 20, 2010, we sold 250,000 shares of restricted common stock to investors pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933 for total proceeds of $100,000 cash.





On August 6, 2010, we issued 100,000 shares of restricted common stocks to one consultant pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933.  The shares were issued to the consultant at a price of $1.00 per share for total of $100,000 worth of services.





On August 6, 2010, we issued 50,000 shares of common stock to consultant for $50,000 worth of services and the shares were issued under 2010 Incentive Stock Plan filed on July 13, 2010.





On August 6, 2010, we issued 350,000 shares of common stock to six consultants for $175,000 worth of services provided at 50% market value of closing price on August 6, 2010; the shares were issued under 2010 Incentive Stock Plan filed on July 13, 2010.





On July 28, 2010, we issued 17,309 shares of our common stock upon conversion of $7,500 of an outstanding convertible debenture held by Asher Enterprises, Inc. The securities were issued in a private placement transaction pursuant to Regulation D under the Securities Act.





On August 10, 2010, we issued 18,750 shares of our common stock upon conversion of $7,500 of an outstanding convertible debenture held by Asher Enterprises, Inc. The securities were issued in a private placement transaction pursuant to Regulation D under the Securities Act.





On August 11, 2010, we issued 26,582 shares of our common stock upon conversion of $10,500 of an outstanding convertible debenture held by Asher Enterprises, Inc. The securities were issued in a private placement transaction pursuant to Regulation D under the Securities Act.





Item 6. Selected Financial Data





Not required under Regulation S-K for “smaller reporting companies.”








16








Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations





This Management's Discussion and Analysis of Financial Condition and Results of Operations includes a number of forward-looking statements that reflect Management's current views with respect to future events and financial performance. You can identify these statements by forward-looking words such as “may,” “will,” “expect,” “anticipate,” “believe,” “estimate” and “continue,” or similar words.  Those statements include statements regarding the intent, belief or current expectations of us and members of its management team as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risk and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements.





Readers are urged to carefully review and consider the various disclosures made by us in this report and in our other reports filed with the Securities and Exchange Commission.  Important  factors  currently  known  to Management  could  cause  actual  results  to differ  materially  from  those in forward-looking  statements.  We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in the future operating results over time. We believe that our assumptions are based upon reasonable data derived from and known about our business and operations.  No assurances are made that actual results of operations or the results of our future activities will not differ materially from its assumptions.  Factors that could cause differences include, but are not limited to, expected market demand for our services, fluctuations in pricing for materials, and competition.





Overview





On May 12, 2009, we changed our name from Financial Media Group, Inc. to Clicker, Inc.  (the “Company,” "We," or "Clicker"). We are a web publisher brand builder focused on developing stand alone brands that incorporate social networking and reward properties that leverage content, commerce and advertising for the next generation global internet users.




Results of Operations





Our consolidated results of operations for the twelve months ended August 31, 2010 and 2009 include our wholly-owned subsidiaries WallStreet, Financial Filings, Corp., My WallStreet, Inc., and The Wealth Expo Inc.





We reported net losses of $7,501,738 and $3,284,713 for the years ended August 31, 2010 and 2009, respectively. The increase in loss was due to debts redemption on convertible notes converted at market discount and reduction in sales due to current economic downturn.





Revenues





Revenues for the twelve months ended August 31, 2010 were $766,466 compared to $1,337,310 for the same period in 2009. Revenues decreased by $570,864 (43%) during the year ended August 31, 2010 due to a significant reduction in advertisements on our website.  The reduction in our business was primarily due to current economic conditions and a downturn in financial markets which caused our clients to spend significantly less money on internet advertising.





Operating Expenses





Selling, general, and administrative expenses (S,G&A) for the twelve month ended August 31, 2010 were $2,683,727 compared to $2,527,993 for the same period in 2009. S,G&A expenses decreased by $155,734 (6%) during the twelve month period ended August 31, 2010 as compared to the same period in 2009, primarily due to a reduction in headcount and our general effort to reduce administrative, sales and marketing, personnel and legal costs.








17





Impairment of marketable securities for the twelve months period ended August 31, 2010 was $139,970 compared to $1,582,395 for the same period ended in 2009. During the fiscal year ended 2010, we received fewer marketable securities in form of payment and marketable securities on hands that we liquidated, resulting in the decrease in impairment in marketable securities.Impairment expense was recorded because the market value of certain securities we received as compensation for our services declined in excess of 50% of their market value. When the fair value of a security declines below its original cost, we consider all available evidence to evaluate whether the decline is other-than-temporary. Among other things, we consider the duration and extent of the decline and economic factors influencing the markets. If a decline in fair value is judged to be other-than-temporary, the cost basis of the individual security is written off to fair value as a new cost basis and the amount of the write-down is included in earnings (that is, accounted for as a realized loss). The new cost basis is not to be changed for subsequent recoveries in fair value.





Depreciation expense for the twelve months ended August 31, 2010 was $29,830 compared to $45,438 for the same period in 2009. The decrease in depreciation expense resulted from some equipment having been fully depreciated. We use straight line depreciation methods for three years useful life on any electronic equipment and five years of useful life on office furniture purchased.





Interest expense for the twelve months period ended August 31, 2010 was $835,695 compared to$112,306 for the same period in 2009. The increase in interest expense resulted from amortization of the beneficial conversion feature interest on convertible notes issued during the year.





Realized gain on sale of marketable securities for the twelve months ended August 31, 2010 was $317,589 gain compared to $607,835 loss for the same period in 2009. During the fiscal year ended August 31, 2010, we sold marketable securities that had greater value than their carrying costs, which resulted in a gain on the sale of those securities, compared to the fiscal year ended August 31, 2009, when we sold non-performing marketable securities held in our possession and realized losses on their sales to better manage our portfolio.  Unrealized gain at August 31, 2010 was $37,194 compared to $89,913 for the same period in 2009. Unrealized gain resulted from the increase in market value of the marketable securities held at August 31, 2010 and August 31, 2009. We recorded less on unrealized gain account because we sold some marketable securities during the year ended August 31, 2010, which reduce in marketable securities available on hand, to receive cash for operating expenses.





During the year ended August 31, 2010, we recorded a $5,732,895 loss on debt redemption compared to zero loss for the same year in 2009. The loss on debt redemption was recorded because the market value of common stocks is highly fluctuating on the date of issuance of shares to redeem outstanding convertible notes and the notes are converted at discount rate. The closing price on date of shares issuance to redeem our debts on convertible notes is used to compute the actual fair market value of our common stocks when shares were issued.  The different on market value of our common stocks compared to the amount of notes being converted is recorded in loss on debt redemption account.





Other income for the twelve months ended August 31, 2010 was $20,800 compared to 258,690 for the same period of 2009. The other income was recorded for additional marketable securities received from clients when the market value of securities reduced over 50% of its value. We were not able to collect any additional marketable securities during the fiscal year ended August 31, 2010.





Liquidity and Capital Resources





As of August 31, 2010, we had $44,700 in cash and cash equivalents and $3,579 in account receivable.





Our current liabilities exceeded our current assets by $3,032,654 at August 31, 2010 and net cash used in operating activities for the twelve months ended August 31, 2010 was $1,196,352. These factors and our ability to meet our debt obligations from current operations, and the need to raise additional capital to accomplish our objectives raises substantial doubt about our ability to continue as a going concern.





We expect significant capital expenditures during the next 12 months, contingent upon raising capital. These anticipated expenditures are for web development, assets additions, administrative overheads and working capital requirements. We have sufficient funds to conduct our operations for a few months, but not for 12 months or more.  We anticipate that we will need an additional investment to fund our anticipated operations for the next 12 months, depending on revenues from operations.  We have no contracts or commitments for additional funds and there can be no assurance that financing will be available in amounts or on terms acceptable to us, if at all.





We presently do not have any available credit, bank financing or other external sources of liquidity. Due to our historical operating losses, our operations have not been a source of liquidity. We will need to obtain additional capital in order to expand operations and become profitable. In order to obtain capital, we may need to sell additional shares of our common stock or borrow funds from private lenders. There can be no assurance that we will be successful in obtaining additional funding.






18







To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities may result in dilution to existing stockholders. If additional funds are raised through the issuance of debt securities, these securities may have rights, preferences and privileges senior to holders of common stock and the terms of such debt could impose restrictions on our operations. Regardless of whether our cash assets prove to be inadequate to meet our operational needs, we may seek to compensate providers of services by issuance of stock in lieu of cash, which may also result in dilution to existing shareholders. Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses, fail to collect significant amounts owed to us, or experience unexpected cash requirements that would force us to seek alternative financing.





Whereas we have been successful in the past in raising capital, no assurance can be given that these sources of financing will continue to be available to us and/or that demand for our equity/debt instruments will be sufficient to meet our capital needs, or that financing will be available on terms favorable to us. If funding is insufficient at any time in the future, we may not be able to take advantage of business opportunities or respond to competitive pressures, or may be required to reduce the scope of our planned service development and marketing efforts, any of which could have a negative impact on our business and operating results. In addition, insufficient funding may have a material adverse effect on our financial condition, which could require us to:




-
curtail operations significantly;-
sell significant assets;-
seek arrangements with strategic partners or other parties that may require the company to relinquish significant rights to products, technologies or markets; or-
explore other strategic alternatives including a merger or sale of our company.





November 2009 Financing





On November 18, 2009, we entered into a securities purchase agreement with SBCH Charitable Foundation, an accredited investor (“SBCH”), providing for the sale by us to SBCH of a 10% convertible debenture in the principal amount of $120,000 (the “SBCH Debenture”).





The SBCH Debenture matures on the first anniversary of the date of issuance and bears interest at the annual rate of 10%.  SBCH may convert, at any time, the outstanding principal and accrued interest on the SBCH Debenture into shares of our common stock at a conversion price per share equal to the lesser of (i) forty percent (40%) of the average of the closing bid price of our common stock during the five (5) trading days immediately preceding the conversion date as quoted by Bloomberg, LP or (ii) $0.00192.





December 2009 Debt Conversion





On December 16, 2009, we entered into an exchange agreement with Thalia Woods Management (“Thalia”), pursuant to which Thalia exchanged a $158,534.44 promissory note for a $158,534.44 convertible debenture (the “Thalia Debenture”).  The Thalia Debenture does not accrue interest and matures on December 16, 2010.  Thalia has the right to convert all or a portion of the principal into shares of our common stock at a conversion price equal to fifty percent (50%) of the average of the closing bid price of our common stock during the five (5) trading days immediately preceding the conversion date as quoted by Bloomberg, LP.





February 2010 Debt Conversion





On February 1, 2010, we entered into an exchange agreement with Greystone Capital Partners, Inc. (“Greystone”), pursuant to which Greystone exchanged a $491,400 promissory note for a $491,400 convertible debenture (the “Greystone Debenture”).  The Greystone Debenture does not accrue interest and matures on February 1, 2011.  Greystone has the right to convert all or a portion of the principal into shares of our common stock at a conversion price equal to fifty percent (50%) of the average of the closing bid price of our common stock during the five (5) trading days immediately preceding the conversion date as quoted by Bloomberg, LP.







19







April 2010 Debt Conversion





On April 23, 2010, we entered into an exchange agreement with Cortell Communications, Inc. (“Cortell”), which was amended on April 27, 2010, pursuant to which Cortell exchanged an outstanding promissory note in the face amount of $70,000, which had accrued interest of $2,100, for a $72,100 convertible debenture (the “Cortell Debenture”).  The Cortell Debenture does not accrue interest and matures on April 23, 2011.  Cortell has the right to convert all or a portion of the principal into shares of our common stock at a conversion price per share equal to the lesser of (i) forty percent (40%) of the average of the closing bid price of our common stock during the five (5) trading days immediately preceding the conversion date as quoted by Bloomberg, LP or (ii) forty percent (40%) of the closing price of our common stock on April 23, 2010.





July 2010 Greystone Financing





On July 2, 2010, we entered into two securities purchase agreements with Greystone, providing for the sale by us to Greystone of (i) a convertible debenture in the principal amount of $50,000 (the “First Debenture”) and (ii) a convertible debenture in the principal amount of $20,000 (the “Second Debenture”, and together with the First Debenture, the “Greystone Debentures”).





The Greystone Debentures mature on the first anniversary of the date of issuance and bear interest at the annual rate of 10%.  Greystone may convert, at any time, the outstanding principal and accrued interest on the First Debenture into shares of our common stock at a conversion price per share equal to the lesser of (i) forty percent (40%) of the lowest closing price of the Common Stock during the 10 trading days immediately preceding the conversion date as quoted by Bloomberg, LP or (ii) forty percent (40%) of the closing price of our common stock on July 2, 2010.





Greystone may convert, at any time, the outstanding principal and accrued interest on the Second Debenture into our common stock at a conversion price per share equal to the lesser of (i) thirty-five percent (35%) of the lowest closing price of our common stock during the 10 trading days immediately preceding the conversion date as quoted by Bloomberg, LP or (ii) thirty-five percent (35%) of the closing price of our common stock on July 2, 2010.





July 2010 IIG Financing





On July 26, 2010, we entered into a securities purchase agreement, as amended on January 5, 2011, with IIG Management LLC, an accredited investor (“IIG”), providing for the sale by us to IIG of a 10% convertible debenture in the principal amount of $205,000 (the “IIG Debenture”).





The IIG Debenture matures on the first anniversary of the date of issuance and bears interest at the annual rate of 10%.  IIG may convert, at any time, the outstanding principal and accrued interest on the IIG Debenture into shares of our common stock at a conversion price per share equal to the lesser of (i) thirty-five percent (35%) of the lowest closing price of the Common Stock during the 10 trading days immediately preceding the Conversion Date as quoted by Bloomberg, LP or such other quotation service as mutually agreed to by the parties or (ii) $0.3465.





December 2010 Financing





On December 10, 2010, we entered into a securities purchase agreement with Assurance Funding Solutions, LLC, an accredited investor (“Assurance”), providing for the sale by us to Assurance of a 10% convertible debenture in the principal amount of $55,000 (the “Assurance Debenture”).





The Assurance Debenture matures on the first anniversary of the date of issuance and bears interest at the annual rate of 10%.   Assurance may convert, at any time, the outstanding principal and accrued interest on the Assurance Debenture into shares of our common stock at a conversion price per share equal to the lesser of (i) thirty five percent (35%) of the average of the closing bid price of our common stock during the five (5) trading days immediately preceding the conversion date as quoted by Bloomberg, LP or (ii) $0.0336.







20







January 2011 Financing





On January 5, 2011, we entered into a securities purchase agreement with IIG providing for the sale by us to IIG of a 10% convertible debenture in the principal amount of $55,000 (the “Second IIG Debenture”).





The Second IIG Debenture matures on the first anniversary of the date of issuance and bears interest at the annual rate of 10%.  IIG may convert, at any time, the outstanding principal and accrued interest on the Second IIG Debenture into shares of our common stock at a conversion price per share equal to the lesser of (i) thirty-five percent (35%) of the lowest closing price of our common stock during the 10 trading days immediately preceding the conversion date as quoted by Bloomberg, LP or such other quotation service as mutually agreed to by the parties or (ii) $0.0175.





Operating Activities





In addition to our net losses, the key drivers of cash used in operating activities were sales of convertible debentures in which we incurred significant loss on debt redemption related to fair market value of Company’s common stocks.  We recorded the loss on debt redemption of 5,732,894, accrued expenses and derivative liabilities of 1,114,188, and amortization of shares issued for services $348,908 which are resulted substantially loss in operating activities. Options for services represents stock based compensation of $108,331 for the year ended August 31, 2010 as well as shares of the Company’s common stock valued at $348,908, given to vendors in exchange for services.







For the Year EndedAugust 31, 2010


August 31, 2009(in thousands)Key Drivers of Cash Used in OperationsNet loss

$
(7,330
)

$
(3,284
)Non-cash derivative liability in connection with notes payable


(331
)


117Non-cash activities in marketable securitiesRevenues in form of marketable securities


(297
)


(1,067
)Impairment of marketable securities


140



1,582Loss on sale of marketable securities


(318
)


608(475
)


1,123Increase (decrease) in current liabilities:Accounts payable, accrued expenses and other liabilities


(717
)


756Deferred revenue


0



(404
)(717
)


352Issuance of options, warrants and shares of common stock for services


457



393Net other cash activities


7,200



39Net cash used in operating activities

$
(1,196
)

$
(1,231
)
    21


Investing Activities





Net cash provided by investing activities for the twelve month periods ended August 31, 2010 and 2009 was $320,412 and $659,291, respectively, consisting primarily of proceeds from the liquidation of the marketable securities which we obtain from our clients in exchange for our services.





Financing Activities





Net cash provided by financing activities for the twelve months ended August 31, 2010 and 2009 was $888,259 and $530,397, respectively, representing cash primarily received from the sale of convertible debentures and shares of common stock, respectively.





As a result of the above activities, we experienced a net increase in cash of $12,320 for the twelve months ended August 31, 2010. Our ability to continue as a going concern is still dependent on our success in obtaining additional financing from investors through the sale of our securities.





Application of Critical Accounting Policies





Marketable Securities and Impairments





Our investments in securities are classified as available-for-sale and, as such, are carried at fair value based on quoted market prices. Securities classified as available-for-sale may be sold in response to changes in interest rates, liquidity needs, and for other purposes.





Unrealized holding gains and losses for available-for-sale securities are excluded from earnings and reported as a separate component of stockholder’s equity. Realized and unrealized gains and losses for securities classified as available-for-sale are included in the statement of operations and comprehensive gain, respectively.





We review, on a quarterly basis or more frequently if warranted by circumstances, the carrying value of the marketable securities we receive from our customers for providing services. We record impairment expense each quarter when the market value of the securities received show a consistent decline over 90 to 180 days, and the carrying amount of the marketable securities exceeds its fair value by 50% or more, and is deemed not recoverable. As such, we record on a quarterly basis in our financial statements the impairment loss for the difference between the carrying amount of the marketable securities and their fair value.





At the end of each quarter, we evaluate the marketable securities that show a consistent decline in market value than the cost over a period of 90 to 180 days for any possible impairment. We evaluate various factors relating to the securities one of which is the length of the time and the extent to which the market value has been less than cost. Our accounting policy is consistent with ASC 320 and SAB Topic 5M, whereby we record impairment expense each quarter when the market value of the securities show a consistent decline over 90 to 180 days, and the cost of the marketable securities exceeds its fair value by a material amount (50% or more), and is deemed not recoverable. In those instances where impairment charges have been taken, the cost of the marketable securities on a quarterly basis is brought down to the market value of securities in our financial statements. The marketable securities are written down to zero only if the marketable securities are either de-listed or not traded. However, after an impairment for certain securities is recorded in a period, further impairment is recorded if the fair value of the securities in future period falls substantially (more than 50%) below the cost (after impairment adjustment) and if the decline in market value is consistent for a period of time. Accordingly, after the first impairment, we may record an unrealized loss for some period till we are convinced that there is further impairment in the marketable securities.





Revenue Recognition





We recorded revenues on the basis of services provided to our client for a fixed determinable fee pursuant to a contractual agreement. In lieu of providing services, we received from our clients’ cash and/or securities, as compensation for providing such services.





Our primary source of revenue was generated from building and developing stand alone brands that incorporate social networking, and providing internet based media and advertising services. The services included web designs, integrated social media network, text and display advertising, press releases, e-mail marketing, and promotion across our network of web sites. Revenues from Internet based media and advertising services were recognized and recorded when the performance of such services completed. We adhere to the guidelines established under Staff Accounting Bulletin 104 whereby, we executed a contractual agreement with the client for a fixed fee to perform services, delivery of services had occurred when we performed the contracted services, and collectability of the fees had occurred when we received cash and/or marketable securities in satisfaction for services provided.






22







Payments received in advance of services provided, were recorded as deferred revenue.





Stock-Based Compensation





We adopted ASC 718 under the modified-prospective transition method on January 1, 2006. ASC 718 requires companies to measure and recognize the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value. Share-based compensation recognized under the modified-prospective transition method of ASC 718 includes share-based compensation based on the grant-date fair value determined in accordance with the original provisions of SFAS No. 123, Accounting for Stock-Based Compensation,for all share-based payments granted prior to and not yet vested as of January 1, 2006 and share-based compensation based on the grant-date fair-value determined in accordance with ASC 718 for all share-based payments granted after January 1, 2006. ASC 718 eliminates the ability to account for the award of these instruments under the intrinsic value method prescribed by Accounting Principles Board (“APB”) Opinion No. 25, Accounting for Stock Issued to Employees, and allowed under the original provisions of SFAS No. 123. Prior to the adoption of ASC 718, the Company accounted for our stock option plans using the intrinsic value method in accordance with the provisions of APB Opinion No. 25 and related interpretations.





Issuance of Shares for Service





We account for the issuance of equity instruments to acquire goods and services based on the fair value of the goods and services or the fair value of the equity instrument at the time of issuance, whichever is more reliably measurable.





Recent Accounting Pronouncements





In January 2010, FASB issued ASU No. 2010-06 – Improving Disclosures about Fair Value Measurements. This update provides amendments to Subtopic 820-10 that requires new disclosure as follows: 1) Transfers in and out of Levels 1 and 2. A reporting entity should disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers. 2) Activity in Level 3 fair value measurements. In the reconciliation for fair value measurements using significant unobservable inputs (Level 3), a reporting entity should present separately information about purchases, sales, issuances, and settlements (that is, on a gross basis rather than as one net number). This update provides amendments to Subtopic 820-10 that clarifies existing disclosures as follows: 1) Level of disaggregation. A reporting entity should provide fair value measurement disclosures for each class of assets and liabilities. A class is often a subset of assets or liabilities within a line item in the statement of financial position. A reporting entity needs to use judgment in determining the appropriate classes of assets and liabilities. 2) Disclosures about inputs and valuation techniques. A reporting entity should provide disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements. Those disclosures are required for fair value measurements that fall in either Level 2 or Level 3. The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. These disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The Company is currently evaluating the impact of this ASU, however, the Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements.





In April 2010, the FASB issued Accounting Standards Update 2010-13 (ASU 2010-13), "Compensation - Stock Compensation (Topic 718)." This Update provides amendments to Topic 718 to clarity that an employee share-based payment award with an exercise price denominated in the currency of a market in which a substantial portion of the entity's equity securities trades should not be considered to contain a condition that is not a market, performance, or service condition. Therefore, an entity would not classify such an award as a liability if it otherwise qualifies as equity. The amendments in ASU 2010-13 are effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010. The provisions of ASU 2010-13 are not expected to have a material effect on the Company's consolidated financial statements.







23






In July 2010, the FASB issued an accounting update to provide guidance to enhance disclosures related to the credit quality of a company's financing receivables portfolio and the associated allowance for credit losses. Pursuant to this accounting update, a company is required to provide a greater level of disaggregated information about its allowance for credit loss with the objective of facilitating users' evaluation of the nature of credit risk inherent in the company's portfolio of financing receivables, how that risk is analyzed and assessed in arriving at the allowance for credit losses, and the changes and reasons for those changes in the allowance for credit losses. The revised disclosures as of the end of the reporting period are effective for the Company beginning in the second quarter of fiscal 2011, and the revised discourses related to activities during the reporting period are effective for the Company beginning in the third quarter of fiscal 2011. The Company is currently evaluating the impact of this accounting update on its financial disclosures.





Off Balance Sheet Arrangements





None.





Item 7A. Quantitative and Qualitative Disclosures about Market Risk





Not required under Regulation S-K for “smaller reporting companies.”





Item 8. Financial Statements and Supplementary Data





Financial statements are filed and included elsewhere herein as a part of this Annual Report on Form 10-K.





Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure





None.





Item 9A. Controls and Procedures





Evaluation of disclosure controls and procedures.We maintain "disclosure controls and procedures," as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.





As of August 31, 2010, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective in ensuring that information required to be disclosed by us in our periodic reports is recorded, processed, summarized and reported, within the time periods specified for each report and that such information is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.





Management’s Annual Report on Internal Control Over Financial Reporting.Management is responsible for establishing and maintaining an adequate system of internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP.






24







Our internal control over financial reporting includes those policies and procedures that:





•
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and dispositions of our assets;•
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures are being made only in accordance with authorizations of our management and directors; and


•
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.





Management has conducted, with the participation of our Chief Executive Officer and our Chief Financial Officer, an assessment, including testing of the effectiveness of our internal control over financial reporting as of August 31, 2010. Management’s assessment of internal control over financial reporting was based on the framework in Internal Control over Financial Reporting – Guidance for Smaller Public Companiesissued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, Management concluded that our system of internal control over financial reporting was effective as of August 31, 2010.





The effectiveness of our internal control over financial reporting as of August 31, 2010 has not been audited by Kabani & Company, Inc., an independent registered public accounting firm. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.





Changes in Internal Control Over Financial Reporting.There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or Rule 15d-15 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.





Item 9B. Other Information





None.








25





PART III





Item 10. Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act





Our directors and executive officers and their ages as of the date hereof are as follows:





NAME

AGE

POSITIONS HELDAlbert Aimers

48

Chairman of the Board, Chief Executive Officer and Chief Financial OfficerTyson Le

29

SecretaryTom Hemingway

52

Director





Albert Aimers, Chief Executive Officer, Chief Financial Officer and Chairman of the Board of Directors





Albert Aimers was elected Chairman of the Board and Chief Executive Officer in January 2006 and Chief Financial Officer in September 2009. From 2003-2006, Mr. Aimers was President and CEO of Digital WallStreet, Inc. and the founder of Wallst.net and Financial Publishing company. From 1999-2003, Mr. Aimers was Chairman and one of the founders of iLive Inc (LIVE), a streaming media company. Mr. Aimers has been in the financial industry for over 15 years specializing in such areas as merchant and investment banking, mergers and acquisitions, investor awareness and investor relations and financial and media relations and strategic investor. Mr. Aimers was a former Board member of Envoy Communications (ECGI-NASDAQ). Mr. Aimers attended University of Guelph Ont (B.Sc) and also Wilfred Lauier University (Business) BBA.  Mr. Aimers was selected to serve as a director due to his deep familiarity with our business and his substantial financial experience.





Tyson Le, Secretary





Tyson Le was appointed as Secretary in January 2006. Mr. Le joined us in March 2005 in the position of Controller. From March 2004 to December 2004, Mr. Le worked for United Parcel Service and designed back-end documentation to aid in supply chain management. From June 2002 to February 2004, Mr. Le worked for iNet Corporation in office administration. Mr. Le received his education at Orange Coast College in Costa Mesa, California.





Tom Hemingway, Director





Tom Hemingway became a director in November 2004. Mr. Hemingway is currently the Chairman and CEO of Redwood Investment Group, a position he has held since its inception. Since December 2006, Mr. Hemingway has been a Director of NextPhase Wireless, a next-generation connectivity company that specializes in delivering integrated Internet, voice and data communication solutions to its customers. Between December 2006 and June 2009, Mr. Hemingway was the Chief Operating Officer of NextPhase Wireless. Since June 2009, Mr. Hemingway has been the CEO and CFO of NextPhase Wireless.  Between 2004 and 2006, Mr. Hemingway was the Chief Executive Officer and Chairman of Oxford Media Corp., a developer of electronic digital distribution technology. Mr. Hemingway has also served as CEO and Chairman of Esynch Corporation (1998 to 2003), a publicly traded company, and Chairman and CEO of Intermark Corporation (1995 to 1998), a software developer and publisher in the entertainment markets. Prior, Mr. Hemingway was President and CEO of Omni Advanced Technologies and Intellinet Information Systems. In addition, Mr. Hemingway has been a consultant to several NASDAQ and privately held companies, including Smart House /LV, Great American Coffee Company (GACC), Redwood Investment Group, CBC, Pure Bioscience, and Smart OnLine. He has a Bachelor’s Degree from the State University of New York.  Mr. Hemingway’s extensive entrepreneurial background and many years of senior management experience led to the Board's conclusion that he should serve as a director.





No family relationships exist between any of our executive officers or directors.








26








BOARD MEETINGS AND COMMITTEES





During the year ended August 31, 2010, the Board of Directors held four board meetings to conduct business. The Board also approved certain actions by unanimous written consent.





Audit Committee





In January 2006, the Board of Directors formed an Audit Committee. Currently Tom Hemmingway, an independent director, serves as the sole member of the Audit Committee. We are formulating and developing a formal written Audit Committee charter, however, the Audit Committee's responsibilities include: (i) reviewing the independence, qualifications, services, fees, and performance of the independent auditors, (ii) appointing, replacing and discharging the independent auditors, (iii) pre-approving the professional services provided by the independent auditors, (iv) reviewing the scope of the annual audit and reports and recommendations submitted by the independent auditors, and (v) reviewing our financial reporting and accounting policies, including any significant changes, with management and the independent auditors. Mr. Hemingway has been identified by the Board as the Audit Committee financial expert.





The Audit Committee reviewed and discussed our audited financial statements as of and for the year ended August 31, 2010 with the Board of Directors. The Audit Committee reviewed and discussed with representatives of Kabani & Company, Inc., our independent registered public accounting firm, the matters required to be discussed by Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1. AU §380). The Audit Committee has also received and reviewed the written disclosures and the letter from Kabani & Company, Inc. required by Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees, as amended by the Independence Standards Board, and has discussed with Kabani & Company, Inc. their independence. Based on the review and discussions referred to in this paragraph, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in our Annual Report on Form 10–K for filing with the SEC.





Compensation and Stock Option Committee





In January 2006, the Board of Directors formed a Compensation and Stock Option Committee. Currently, Tom Hemingway and Albert Aimers serve as its members. The Compensation and Stock Option Committee is formulating and developing a written charter for its members describing their functions and responsibilities, and procedures for the consideration and determination of executive and director compensation. This committee currently recommends to the Board of Directors policies under which compensation will be paid or awarded to our directors, officers and certain other personnel. Among other things, the committee recommends to the Board of Directors the amount of compensation to be paid or awarded to our directors, officers and other personnel, including salary, bonuses, stock option grants, other cash or stock awards under any of our incentive compensation and stock option plans as in effect from time to time, retirement and other compensation.





Nominating Committee





We do not currently have a Nominating Committee. Our entire Board of Directors acts as the Nominating Committee and evaluates and recommends nominees for membership on our Board of Directors and its committees. Our Board of Directors is responsible for (1) reviewing suggestions of candidates for director made by directors and others; (2) identifying individuals qualified to become Board members, and recommending the director nominees for the next annual meeting of stockholders; (3) recommending director nominees for each committee of the Board; (4) recommending corporate governance principles; and (5) overseeing the annual evaluation of the Board and management. There is no difference in the manner in which a nominee is evaluated based on whether the nominee is recommended by a stockholder or otherwise.





The Board of Directors determines the required selection criteria and qualifications of director nominees based upon our needs at the time nominees are considered. In general, directors should possess the highest personal and professional ethics, integrity and values, and be committed to representing the long-term interests of our stockholders. In addition to the foregoing considerations, the Board of Directors will consider criteria such as strength of character and leadership skills; general business acumen and experience; broad knowledge of the industry; age; number of other board seats; and willingness to commit the necessary time to ensure an active board whose members work well together and possess the collective knowledge and expertise required by the Board. The Board of Directors considers these same criteria for candidates regardless of whether the candidate was identified by the Board of Directors, by stockholders, or any other source.






27





The Board of Directors considers qualified candidates for possible nomination that are submitted by our stockholders. Stockholders wishing to make such a submission may do so by sending the following information to the Board of Directors c/o Chief Executive Officer at the address indicated on the Notice of Annual Meeting of Stockholders. Any recommendations submitted to the Chief Executive Officer should be in writing and should include whatever supporting material the stockholder considers appropriate in support of that recommendation, but must include the information that would be required under the rules of the SEC in a proxy statement soliciting proxies for the election of such candidate and a signed consent of the candidate to serve as a director of the Company, if elected. As permitted by SEC rules, stockholders who wish to submit a proposal or nominate a person as a candidate for election to our Board of Directors at an annual meeting must follow certain procedures. These procedures require that timely, written notice of such proposal or nomination be received by our Chief Executive Officer at our principal executive offices prior to the first anniversary of the preceding year’s annual meeting.





The Board of Directors conducts a process of making a preliminary assessment of each proposed nominee based upon the resume and biographical information provided, an indication of the candidate’s willingness to serve and other background information, business experience, and leadership skills, all to the extent available and deemed relevant by the Board of Directors. This information is evaluated against the criteria set forth above and the Company’s specific needs at that time. Based upon a preliminary assessment of the candidate(s), those who appear best suited to meet our needs may be invited to participate in a series of interviews, which are used as a further means of evaluating potential candidates. On the basis of information learned during this process, the Board of Directors determines which candidate(s) to recommend to the Board to submit for election at the next stockholder meeting. The Board of Directors uses the same process for evaluating all candidates, regardless of the original source of the nomination.





Our goal is to seek to achieve a balance of knowledge and experience on our Board. To this end, we seek nominees with the highest professional and personal ethics and values, an understanding of our business and industry, diversity of business experience and expertise, a high level of education, broad-based business acumen, and the ability to think strategically. Although we use the criteria listed above as well as other criteria to evaluate potential nominees, we do not have a stated minimum criteria for nominees. The Board does not use different standards to evaluate nominees depending on whether they are proposed by our directors and management or by our stockholders. To date, we have not paid any third parties to assist us in finding director nominees.





Code of Ethics





We have adopted a Code of Ethics that are designed to deter wrongdoing and to promote honest and ethical conduct, full, fair, accurate, timely and understandable disclosure in our SEC reports and other public communications. The Code of Ethics promotes compliance with applicable governmental laws, rules and regulations.





COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT





Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors, executive officers and holders of more than 10% of our common stock to file with the SEC reports regarding their ownership and changes in ownership of our securities. Except as disclosed below, we believe that, during fiscal 2010, our directors, executive officers and 10% stockholders complied with all Section 16(a) filing requirements.





·
A late Form 4 was filed by Albert Aimers relating to the acquisition on April 12, 2010 of 26,666,666 shares of common stock by an entity that Mr. Aimers is the majority shareholder and sole officer and director.  The shares were issued for the retirement of $800,000 in accrued debt and compensation owed to Mr. Aimers.·
A late Form 3 was filed by Junior Capital, Inc. relating to the acquisition on April 12, 2010 of 26,666,666 shares of common stock.  The shares were issued for the retirement of $800,000 in accrued debt and compensation owed to Mr. Aimers.









28







Item 11. Executive Compensation





The following tables set forth certain information regarding our CEO and each of our most highly-compensated executive officers whose total annual salary and bonus for the fiscal years ending August 31, 2010 and 2009 exceeded $100,000.





SUMMARY COMPENSATION TABLE


Name and Principal Position
Year Ended August 31,

Salary ($)

Bonus ($)

Stock Awards ($)


Option Awards ($)

Non-Equity Incentive Plan Compensation

Nonqualified Deferred Compensation Earnings $

All Other Compensation $

Total ($)Albert Aimers
2010

$
316,250


$
-


$
20,000



(1
)

$
-


$
-


$
-


$
21,510



(2
)

$
337,760President and CEO
2009

$
295,000


$
-


$
20,000



(1
)

$
20,250


$
-


$
-


$
73,750



(2
)

$
368,750Manu Ohri
2009

$
140,156


$
-


$
20,000



(1
)

$
20,250


$
-


$
-


$
21,717






$
209,249


(1)
The Board of Directors approved the quarterly compensation of our directors with $5,000 worth of restricted common shares valued at the closing market price of the common shares on first day of each month of each fiscal quarter. The quarterly compensation to the Board members became effective July 1, 2008.(2)
Includes 25% of compensation being our contribution towards pension plan until December 14, 2009.














29








Employment Agreements with Executive Officers





Albert Aimers





Effective December 14, 2009, the Company entered into a new two year employment agreement with Albert Aimers, Chief Executive Officer.  Mr. Aimers is to receive a base salary of $325,000 per year with scheduled increases of 10% each year under the agreement.  In addition to bonus eligibility, medical insurance and other employee benefits, the Company designated a class of Series A preferred stock which is non-convertible and is entitled to cast such number of votes equal to 51% of all votes cast at a meeting of all common shareholders and issued 100% of the Series A preferred stock to Mr. Aimers.





Directors’ Compensation Policy





The Board of Directors approved the quarterly compensation of our directors with $5,000 worth of restricted common shares valued at the closing market price of the common shares on first day of each month of each fiscal quarter. The quarterly compensation to the Board members became effective July 1, 2008. We will also reimburse the Board members for their actual expenses in attending the Board meetings.





Name

Fees Earned or Paid in Cash


Stock Awards ($)


Total ($)Each Director (1)


-



20,000



20,000Total:


-



20,000



20,000





(1)
Each director is entitled to $5,000 worth of stock per quarter of our fiscal year, however, the actual stock certificates have not yet been issued.





Outstanding Equity Awards at August 31, 2010





Option Awards

Stock AwardsName


Number

of

Securities

Underlying

Unexercised

Options

(#)

Exercisable



Number

of

Securities

Underlying

Unexercised

Options

(#)

Unexercisable


Equity

Incentive

Plan

Awards:

Number

of

Securities Underlying

Unexercised

Unearned

Options

(#)



Option

Exercise

Price

($)

Option

Expiration

Date

Number

of Shares

or Units

of Stock

That Have

Not

Vested

(#)


Market

Value of

Shares or

Units of

Stock

That Have

Not

Vested

($)


Equity Incentive

Plan Awards: Number

of Unearned

Shares, Units or Other Rights That Have Not

Vested

(#)


Equity Incentive

Plan Awards: Market or Payout

Value of Unearned

Shares, Units or Other Rights That Have Not Vested

($)Albert Aimers


2,250



2,250






0.015

12/20/2017Tyson Le


667



-



-


$
0.300

12/20/2017


-



-



-



-Tyson Le


917



917



-


$
0.015

12/20/2017


-



-



-



-TOTAL


3,834



3,167






30










Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters





The following table sets forth certain information regarding beneficial ownership of our common stock as of January 11, 2011.





-
by each person who is known by us to beneficially own more than 5% of our common stock;-
by each of our officers and directors; and-
by all of our officers and directors as a group.


Name

Number of Shares

Percentage ofBeneficially Owned (1)

Outstanding Shares (2)Albert Aimers, Chairman and CEO


108,878
(3)(4)


*Tyson Le, Secretary


22,042
(5)


*Tom Hemingway, Director


107,749



*Junior Capital Inc.


26,666,666
(3)


43
%





(1)
Beneficial Ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of common stock subject to options or warrants currently exercisable or convertible, or exercisable or convertible within 60 days of January 11, 2011 are deemed outstanding for computing the percentage of the person holding such option or warrant but are not deemed outstanding for computing the percentage of any other person.(2)
Based upon 61,747,355 shares issued and outstanding on January 11, 2011.(3)
Shares are owned by Junior Capital Inc. and AMC Capital Group, Inc., two corporations of which Mr. Aimers is an officer, director and shareholder.(4)
Includes 4,500 shares issuable upon presently exercisable options.(5)
Includes 2,042 shares issuable upon presently exercisable options.





EQUITY COMPENSATION PLAN INFORMATION





The following table sets forth information about the shares of our common stock that may be issued upon the exercise of options granted to employees under the 2007 Equity Plan and the 2009 Non-Qualified Stock Option Plan, which were approved by the Board of Directors, and the 2010 Equity Incentive Plan approved by the Board of Directors and shareholders.











31





(a)


(b)


(c)Plan Category

Number of securities to be issued upon exercise of outstanding options, warrants and rights


Weighted-average exercise price of outstanding options, warrants and rights


Number of securities remaining available for future issuance under equity compensation plans excluding securities reflected in column (a) (1)Equity compensation plan approved by security holders (1)


16,083


$
0.08



7,250Equity compensation plan  approved by security holders (2)


6,667


$
-



6,667Equity compensation plan  approved by security holders (3)


4,000,000


$
-



3,600,000Total


4,022,750


$
-



3,613,917


(1)
We established an equity compensation plan pursuant to which options to acquire a maximum of 23,333 shares of our common stock were reserved for grant (the “2007 Equity Plan”).  As of August 31, 2010, included above in the 2007 Equity Plan are 16,083 shares issuable upon exercise of options granted to employees and directors.





(2)
We established a nonqualified stock option plan pursuant to which options to acquire a maximum of 6,667 shares of our common stock were reserved for grant (the “2009 Non-Qualified Plan”). As of August 31, 2010, no options under the 2009 Non-Qualified Plan were issued or outstanding.





(3)
We established 2010 Incentive Stock Plan pursuant to which options to acquire a maximum of 4,000,000 shares of our common stock were reserved for grant (the “2010 Incentive Stock Plan”). As of August 31, 2010, under the 2010 Incentive Stock Plan 400,000 shares were issued to consultants for $225,000 worth of services.





Item 13. Certain Relationships and Related Transactions; and Director Independence





Except as disclosed below, there have been no transactions, or proposed transactions, which have materially affected or will materially affect us in which any director, executive officer or beneficial holder of more than 5% of the outstanding common stock, or any of their respective relatives, spouses, associates or affiliates, has had or will have any direct or material indirect interest. We have no policy regarding entering into transactions with affiliated parties.





On April 12, 2010, we issued 26,666,666 shares of our common stock to Junior Capital Inc., of which Albert Aimers, our Chief Executive Officer,  is the majority shareholder and sole officer and director, for the retirement of $800,000 in accrued debt and compensation we owed to Mr. Aimers.





Item 14. Principal Accounting Fees and Services





Audit Fees





The aggregate fees billed by our previous auditors, for professional services rendered for the audit of our annual financial statements during the years ended August 31, 2010 and 2009, and for the reviews of the financial statements included in our Quarterly Reports on Form 10-QSB during the fiscal years, were $48,000 and $48,000, respectively.





Audit-Related Fees





Our independent registered public accounting firm did not bill us during the years ended August 31, 2010 and 2009 for audit related services.







32







Tax Fees





Our independent registered public accounting firm did not bill us for tax related work during the fiscal years ended August 31, 2010 and 2009.





All Other Fees





Our independent registered public accounting firm did not bill us during fiscal years ended August 31, 2010 or 2009 for other services.





The Board of Directors and Audit Committee have considered whether the provision of non-audit services is compatible with maintaining the principal accountant's independence.  The Audit Committee requires that prior to the engagement of our principal accountant to audit our financial statements or to perform other Audit Related or Non-Audit Related services, the engagement be reviewed to consider the scope of services to be rendered and the expected fees to be charged by the principal accountant in connection with rendering such services.






33










PART IV





Item 15. Exhibits and Financial Statement Schedules





Exhibit Index





3.01
Certificate of Incorporation, filed as an exhibit to the Registration Statement on Form 10SB-12G, filed with the Securities Exchange Commission on June 25, 2001 and incorporated herein by reference.3.02
Certificate of Amendment, filed with the Nevada Secretary of State on May 21, 2004, filed as an exhibit to the annual report on Form 10-K, filed with the Securities Exchange Commission on December 12, 2008 and incorporated herein by reference.





3.03
Certificate of Amendment, filed with the Nevada Secretary of State on November 30, 2004, filed as an exhibit to the annual report on Form 10-K, filed with the Securities Exchange Commission on December 12, 2008 and incorporated herein by reference.





3.04
Certificate of Amendment, filed with the Nevada Secretary of State on September 9, 2005, filed as an exhibit to the annual report on Form 10-K, filed with the Securities Exchange Commission on December 12, 2008 and incorporated herein by reference.





3.05
Bylaws, filed as an exhibit to the Registration Statement on Form 10SB-12G, filed with the Securities Exchange Commission on June 25, 2001 and incorporated herein by reference.





3.06
Plan and Agreement of Reorganization, filed as an exhibit to the Current Report on Form 8-K, filed with the Securities Exchange Commission on September 23, 2005 and incorporated herein by reference.





3.07
Amendments to Plan and Agreement of Reorganization, filed as an exhibit to the Current Report on Form 8-K, filed with the Securities Exchange Commission on January 12, 2006 and incorporated herein by reference.





10.01
Employment Agreement, dated as of December 14, 2009, by and between CLICKER Inc. and Albert Aimers, filed as an exhibit to the annual report on Form 10-K, filed with the Securities and Exchange Commission on December 21, 2009 and incorporated herein by reference.




10.02
2007 Nonqualified Stock Option Plan, filed as an exhibit to the Registration Statement on Form S-8, filed with the Securities Exchange Commission on January 19, 2007 and incorporated herein by reference.





10.03
2007 Equity Incentive Plan, filed as an exhibit to the Annual Report on Form 10-KSB, filed with the Securities Exchange Commission on December 7, 2007 and incorporated herein by reference.





10.04
2009 Nonqualified Stock Option Plan, filed as an exhibit to the annual report on Form 10-K, filed with the Securities Exchange Commission on December 12, 2008 and incorporated herein by reference.10.05
Exchange Agreement, dated as of August 11, 2009, by and between CLICKER Inc. and Lotus Funding Group, LLC, filed as an exhibit to the current report on Form 8-K, filed with the Securities and Exchange Commission on August 17, 2009 and incorporated herein by reference.10.06
Form of Convertible Debenture, issued August 11, 2009, filed as an exhibit to the current report on Form 8-K, filed with the Securities and Exchange Commission on August 17, 2009 and incorporated herein by reference.10.07
Securities Purchase Agreement, dated as of November 18, 2009, by and between CLICKER Inc. and SBCH Charitable Foundation, filed as an exhibit to the current report on Form 8-K, filed with the Securities and Exchange Commission on November 20, 2009 and incorporated herein by reference.10.08
Form of Convertible Debenture, issued November 18, 2009, filed as an exhibit to the current report on Form 8-K, filed with the Securities and Exchange Commission on November 20, 2009 and incorporated herein by reference.10.09
Exchange Agreement, dated as of December 16, 2009, by and between CLICKER Inc. and Thalia Woods Management, Inc., filed as an exhibit to the current report on Form 8-K, filed with the Securities and Exchange Commission on December 22, 2009 and incorporated herein by reference.10.10
Form of Convertible Debenture, issued December 16, 2009, filed as an exhibit to the current report on Form 8-K, filed with the Securities and Exchange Commission on December 22, 2009 and incorporated herein by reference.10.11
Exchange Agreement, dated as of February 1, 2010, by and between CLICKER Inc. and Greystone Capital Partners, Inc., filed as an exhibit to the current report on Form 8-K, filed with the Securities and Exchange Commission on February 5, 2010 and incorporated herein by reference.   34
   10.12
Form of Convertible Debenture, issued February 1, 2010, filed as an exhibit to the current report on Form 8-K, filed with the Securities and Exchange Commission on February 5, 2010 and incorporated herein by reference.10.13
Exchange Agreement, dated as of April 23, 2010, by and between CLICKER Inc. and Cortell Communications, Inc., filed as an exhibit to the current report on Form 8-K, filed with the Securities and Exchange Commission on July 16, 2010 and incorporated herein by reference.10.14
Form of $72,100 Convertible Debenture, issued April 23, 2010, filed as an exhibit to the current report on Form 8-K, filed with the Securities and Exchange Commission on July 16, 2010 and incorporated herein by reference.10.15
Amendment Agreement, dated as of April 27, 2010, by and between CLICKER Inc. and Cortell Communications, Inc., filed as an exhibit to the current report on Form 8-K, filed with the Securities and Exchange Commission on July 16, 2010 and incorporated herein by reference.10.16
Securities Purchase Agreement, dated as of July 2, 2010, by and between CLICKER Inc. and Greystone Capital Partners, Inc., filed as an exhibit to the current report on Form 8-K, filed with the Securities and Exchange Commission on July 16, 2010 and incorporated herein by reference.10.17
Form of $50,000 Convertible Debenture, issued July 2, 2010, filed as an exhibit to the current report on Form 8-K, filed with the Securities and Exchange Commission on July 16, 2010 and incorporated herein by reference.10.18
Securities Purchase Agreement, dated as of July 2, 2010, by and between CLICKER Inc. and Greystone Capital Partners, Inc., filed as an exhibit to the current report on Form 8-K, filed with the Securities and Exchange Commission on July 16, 2010 and incorporated herein by reference.10.19
Form of $20,000 Convertible Debenture, issued July 2, 2010, filed as an exhibit to the current report on Form 8-K, filed with the Securities and Exchange Commission on July 16, 2010 and incorporated herein by reference.10.20
Securities Purchase Agreement, dated as of July 26, 2010, by and between CLICKER Inc. and IIG Management LLC, filed as an exhibit to the current report on Form 8-K, filed with the Securities and Exchange Commission on July 28, 2010 and incorporated herein by reference.10.21
Form of Convertible Debenture, issued July 26, 2010, filed as an exhibit to the current report on Form 8-K, filed with the Securities and Exchange Commission on July 28, 2010 and incorporated herein by reference.10.22
Securities Purchase Agreement, dated as of December 10, 2010, by and between CLICKER Inc. and Assurance Funding Solutions, LLC, filed as an exhibit to the current report on Form 8-K, filed with the Securities and Exchange Commission on December 10, 2010 and incorporated herein by reference.10.23
Form of Convertible Debenture, issued December 10, 2010, filed as an exhibit to the current report on Form 8-K, filed with the Securities and Exchange Commission on December 10, 2010 and incorporated herein by reference.10.24
Securities Purchase Agreement, dated as of January 5, 2011, by and between CLICKER Inc. and IIG Management LLC, filed as an exhibit to the current report on Form 8-K, filed with the Securities and Exchange Commission on January 10, 2011 and incorporated herein by reference.10.25
Form of Convertible Debenture, issued January 5, 2011, filed as an exhibit to the current report on Form 8-K, filed with the Securities and Exchange Commission on January 10, 2011 and incorporated herein by reference.10.26
Amendment No. 1, dated as of January 5, 2011, by and between CLICKER Inc. and IIG Management LLC, filed as an exhibit to the current report on Form 8-K, filed with the Securities and Exchange Commission on January 10, 2011 and incorporated herein by reference.





14.01
Code of Ethics, filed as an exhibit to the annual report on Form 10-K, filed with the Securities and Exchange Commission on December 21, 2009 and incorporated herein by reference.





21.01
List of Subsidiaries of the Registrant, filed as an exhibit to the annual report on Form 10-K, filed with the Securities Exchange Commission on December 12, 2008 and incorporated herein by reference.





23.01
Consent of Kabani & Company, Inc., Independent Registered Public Accounting Firm





31.01
Certification of Chief Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended





31.02
Certification of Chief Financial Officer pursuant to Rule 13a-14 and Rule 15d 14(a), promulgated under the Securities and Exchange Act of 1934, as amended





32.01
Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.











35











SIGNATURES








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





CLICKER INC.Date:  January 13, 2011
By:
/s/ ALBERT AIMERSAlbert AimersChief Executive Officer(Principal Executive Officer)

and Chief Financial Officer (Principal Accounting Officer)




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








Name

Position

Date/s/ ALBERT AIMERS

Albert Aimers

Chairman of the Board

January 13, 2011/s/ TOM HEMINGWAY

Tom Hemingway

Director

January 13, 2011








36








CLICKER INC.


AND SUBSIDIARIES








TABLE OF CONTENTS











PageREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
38CONSOLIDATED BALANCE SHEETS AS OF AUGUST 31, 2010 and 2009
39CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED AUGUST 31, 2010 and 2009
40CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE YEARS ENDED AUGUST 31, 2010 and 2009
41CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED AUGUST 31, 2010 and 2009
42NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
43 – 55









37










REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM








To the Board of Directors of


Clicker Inc.








We have audited the accompanying consolidated balance sheets of Clicker Inc.( formerly, Financial Media Group) and Subsidiaries as of August 31, 2010 and 2009, and the related consolidated statements of operations, changes in stockholders’ deficit and cash flows for the years ended August 31, 2010 and 2009. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.





We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.





In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Clicker Inc. and Subsidiaries as of August 31, 2010 and 2009 and the results of its operations, changes in stockholders’ deficit and cash flows for the years ended August 31, 2010 and 2009 in conformity with accounting principles generally accepted in the United States of America.





The Company's financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has accumulated deficit of $23,322,990 as of August 31, 2010 and has incurred net loss of $7,501,738 for the year ended August 31, 2010. These factors as discussed in notes to the financial statements raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in the Note 14 to the consolidated financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.








/s/ KABANI & COMPANY, INC.CERTIFIED PUBLIC ACCOUNTANTSLos Angeles, CaliforniaJanuary 11, 2011











38











CLICKER INC. AND SUBSIDIARIES


(Formerly, Financial Media Group)


CONSOLIDATED BALANCE SHEETS


AS OF AUGUST 31, 2010 AND 2009





As of


As ofAugust 31, 2010


August 31, 2009CURRENT ASSETS:Cash & cash equivalents

$
44,700


$
32,380Accounts receivable, net


3,579



27,172Marketable securities


135,400



280,566Loan and other current assets


95,822



4,152Total current assets


279,501



344,270PROPERTY & EQUIPMENT, net


7,298



37,128Total assets

$
286,800


$
381,398LIABILITIES AND STOCKHOLDERS' DEFICITCURRENT LIABILITIES:Accounts payable

$
1,301,510


$
1,093,436Accrued expenses


773,410



819,398Deferred revenue


-



20,800Derivative liability


364,327



116,752Due to related parties


401,921



1,048,662Note payable


170,000



760,000Convertible note payble, net


308,285



13,043Total current liabilities


3,319,453



3,872,091STOCKHOLDERS' DEFICIT:Common stock, $0.001 par value, 300,000,000 shares authorized,59,697,688 and 282,292 shares issued and outstanding atAug 31, 2010 and August 31, 2009, respectively


59,698



282Paid in capital


20,200,737



12,240,363Prepaid consulting


(7,292
)


-Unrealized gain on marketable securities


37,194



89,913Accumulated deficit


(23,322,990
)


(15,821,251
)Total stockholders' deficit


(3,032,653
)


(3,490,693
)Total liabilities and stockholders' deficit

$
286,800


$
381,398


The accompanying notes are an integral part of these audited consolidated financial statements.








39





CLICKER INC. AND SUBSIDIARIES


(Formerly, Financial Media Group)


CONSOLIDATED STATEMENTS OF OPERATIONS


FOR THE YEARS ENDED AUGUST 31, 2010 AND 2009





2010


2009RevenuesRevenues realizable in cash

$
469,446


$
270,328Revenues realizable in the form of marketable securities


297,000



1,066,982Net revenues


766,446



1,337,310Operating expensesSelling, general & administrative


2,683,727



2,527,993Depreciation


29,830



45,439Impairments


139,970



1,582,395Total operating expenses


2,853,527



4,155,827Loss from operations


(2,087,081
)


(2,818,517
)Non-Operating Income (Expense):Interest expense


(835,695
)


(112,306
)Other Income


20,800



54Gain/(Loss) on sale of marketable securities


317,589



(607,835
)Other Incomes


-



258,690Change in derivative liability


820,344



-Loss on debt redemption


(5,732,895
)


-Total non-operating income (expense)


(5,409,857
)


(461,397
)Loss before income taxes


(7,496,938
)


(3,279,913
)Provision for income tax


4,800



4,800Net loss


(7,501,738
)


(3,284,713
)Other comprehensive gain (loss):Unrealized gain (loss) on marketable securities


(32,919
)


(1,175,640
)Reclassification adjustment


(19,800
)


986,424Comprehensive loss

$
(7,554,457
)

$
(3,473,929
)Basic and diluted net loss per share

$
(0.38
)

$
(13.28
)Basis weighted average shares of common stock outstanding


19,835,327



247,354
  Weighted average number of shares used to compute basic and diluted loss per share is the same since the effect of dilutive securities is anti-dilutive.








The accompanying notes are an integral part of these audited consolidated financial statements.





40





CLICKER INC. AND SUBSIDIARIES


(Formerly, Financial Media Group)


CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT


FOR THE YEARS ENDED AUGUST 31, 2010 AND 2009








Common Stock


Additional


Prepaid


Unrealized


Accumulated


Stockholders'Shares


Par Value


Paid in Capital


Consulting


Gain (Loss)


Deficit


DeficitBalance, August 31, 2008


219,090


$
219


$
11,404,973


$
-


$
279,130


$
(12,536,538
)

$
(852,216
)Common stock issued for cash


2,852



3



302,461



-



-



-



302,464Options issued for services


-



-



242,173



-



-



-



242,173Conversion of note payable to common stock


50,308



50



139,948



-



-



-



139,998Shares issued to vendors for services


2,244



2



42,483



-



-



-



42,485Shares issued to directors and employees for services


7,798



8



108,325



-



-



-



108,333Unrealized loss on marketable securities


-



-



-



-



(189,216
)


-



(189,216
)Net loss


-



-



-



-



-



(3,284,713
)


(3,284,713
)Balance, August 31, 2009


282,292



282



12,240,362



-



89,914



(15,821,252
)


(3,490,692
)Shares issued for Sales of Common Stocks


250,000



250



99,750



-



-



-



100,000Shares issued for Services


455,000



455



356,095



(7,292
)


-



-



349,258Conversion of Note Payable to Common Stock


31,893,731



31,894



6,548,015



-



-



-



6,579,908“Shares issued for CEO & Consultants Accrued Salaries”


26,816,666



26,817



848,183



-



-



-



875,000Options issued for services


-



-



108,331



-



-



-



108,331Unrealized gain on marketable securities


-



-



-



-



(52,719
)


-



(52,719
)Net loss


-



-



-



-



-


$
(7,501,738
)

$
(7,501,739
)Balance, Aug 31, 2010


59,697,688


$
59,698


$
20,200,737


$
(7,292
)

$
37,194


$
(23,322,990
)

$
(3,032,653
)


The accompanying notes are an integral part of these audited consolidated financial statements.








41






CLICKERS INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF CASH FLOWS  FOR THE YEARS ENDED AUGUST 31, 2010 AND 2009


2010


2009CASH FLOWS FROM OPERATING ACTIVITIES:Net loss

$
(7,501,738
)

$
(3,284,713
)Adjustments to reconcile net loss to net cashused in operating activities:Bad debts


371,772



14,348Depreciation and amortization


29,830



45,438Revenues in form of marketable securities


(297,000
)


(1,066,982
)Write off of liabilities


(20,800
)


-Impairment of marketable securities


139,970



1,582,395(Gain)/Loss on sale of marketable securities


(317,589
)


607,835Change in derivative liability


(820,344
)


116,752Loss on debt redemption


5,732,894



-Issuance of options and warrants for services


108,331



242,173Amortization of shares issued for services


348,908



150,818(Increase) decrease in current assets:Receivables


(101,178
)


12,198Loan and other current assets


(91,670
)


(2,359
)Increase (decrease) in current liabilities:Accounts payable


208,074



479,506Accrued expenses and other liabilities


1,014,188



276,003Deferred revenue


-



(404,032
)Net cash used in operating activities


(1,196,352
)


(1,230,620
)CASH FLOWS FROM INVESTING ACTIVITIES:Liquidation of deposit


-



34,671Cash received from sale marketable securities


320,412



624,620Net cash provided by investing activities


320,412



659,291CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from officer


228,259



227,933Cash proceeds from convertible note


560,000



-Cash received from sale of common stock


100,000



302,464Net cash provided by financing activities


888,259



530,397NET INCREASE/(DECREASE) IN CASH & CASH EQUIVALENTS


12,320



(40,932
)CASH & CASH EQUIVALENTS, BEGINNING BALANCE


32,380



73,312CASH & CASH EQUIVALENTS, ENDING BALANCE

$
44,700


$
32,380Supplemental disclosure for cash flow information:Cash and cash equivalents paid for interest

$
4,200


$
-Cash and cash equivalents paid for taxes

$
-


$
-Supplemental disclosure of non-cash flow investing and  financing activity:Conversion of convertible note

$
831,471


$
-Issuance of shares for accrued salaries

$
875,000


$
-


The accompanying notes are an integral part of these audited consolidated financial statements.





42








CLICKER INC. AND SUBSIDIARIES


(Formerly, Financial Media Group)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


AS OF AUGUST 31, 2010 AND 2009





NOTE 1      NATURE OF BUSINESS AND BASIS OF PRESENTATION





Clicker Inc. (the “Company,” "We," or "Clicker"), a corporation incorporated in the State of Nevada, is a web publisher brand builder focused on developing stand alone brands that incorporate social networking and reward properties that leverage content, commerce and advertising for the next generation global internet users.





Clicker, Inc., formerly, Financial Media Group, Inc. (“FMG”) acquired on May 12, 2009, all of the outstanding capital stock of Clicker, Inc. in exchange for the issuance of 219,900 shares of common stock to the Clicker Shareholders. Such shares are restricted in accordance with Rule 144 of the 1933 Securities Act. Based upon same, Clicker became our wholly-owned subsidiary. As if the date of the merger, Financial Media Group, Inc. changed its name to Clicker, Inc.





The exchange of shares with Clicker was accounted for as a reverse acquisition under the purchase method of accounting since the stockholders of Clicker obtained control of the consolidated entity. Accordingly, the merger of the two companies was recorded as a recapitalization of Clicker, with Clicker, Inc. being treated as the continuing entity. The historical financial statements presented are those of Clicker. The continuing company has retained December 31 as its fiscal year end.


Basis of Presentation




The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America.





Principles of Consolidation





The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries WallStreet Direct, Inc., Digital Wall Street, Inc., Financial Filings, Corp., My WallStreet, Inc. and Wealth Expo Inc. All significant inter-company accounts and transactions have been eliminated.





NOTE 2      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Use of Estimates





The preparation of financial statements in conformity with generally accepted accounting principles in the United States (“GAAP”) requires management to make certain 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 the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include collectability of accounts receivable, accounts payable, sales returns and recoverability of long-term assets. Actual results could differ from our estimates.





Cash and Cash Equivalents





The Company considers all liquid investments with a maturity of three months or less from the date of purchase that are readily convertible into cash to be cash equivalents.





Accounts Receivable





The Company maintains reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Reserves are recorded primarily on a specific identification basis. Allowance for doubtful debts amounted to $572,099 and $201,872 as of August 31, 2010 and 2009, respectively.






43







Marketable Securities





The Company’s investments in securities are classified as available-for-sale and, as such, are carried at fair value based on quoted market prices. Securities classified as available-for-sale may be sold in response to changes in interest rates, liquidity needs, and for other purposes.





Unrealized holding gains and losses for available-for-sale securities are excluded from earnings and reported as a separate component of stockholder’s equity. Realized and unrealized gains and losses for securities classified as available-for-sale are included in the statement of operations and comprehensive gain, respectively.




The Company reviews, on a quarterly basis or more frequently if warranted by circumstances, the carrying value of the marketable securities it receives from its customers for providing services. The Company records impairment expense each quarter when the market value of the securities received show a consistent decline over 90 to 180 days, and the carrying amount of the marketable securities exceeds its fair value by 50% or more, and is deemed not recoverable. As such, the Company records on a quarterly basis in its financial statements the impairment loss for the difference between the carrying amount of the marketable securities and their fair value.





To safeguard the Company with impairments of marketable securities, the Company has revised its contractual terms on its agreements with its clients which provides that, in the event during the term of the agreement, the share bid price declines by more than ten per cent (10%) of the share bid price on the date of execution of the agreement, the Client would agree to issue additional shares of their common stock to the Company in order to make up the deficiency caused by the reduction in the value of their stock.




FAIR VALUE OF FINANCIAL INSTRUMENTS





Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are categorized based on whether or not the inputs are observable in the market and the degree that the inputs are observable. The categorization of financial assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.





The Company's financial instruments primarily consist of cash and cash equivalents, accounts receivable, marketable securities, and accounts payable.





As of the balance sheet dates, the estimated fair values of the financial instruments were not materially different from their carrying values as presented on the balance sheet. This is primarily attributed to the short maturities of these instruments.





Property and Equipment





Property and equipment are carried at cost less accumulated depreciation. Depreciation is provided using the straight-line method over the estimated useful life of the assets from three to five years. Expenditures for maintenance and repairs are charged to expense as incurred.




IMPAIRMENT OF LONG-LIVED ASSETS




The Company tests long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair market values are reduced for the cost of disposal.








44






DERIVATIVES




Derivative instruments are recognized as either assets or liabilities and are measured at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation.





Revenue Recognition





Revenue is recorded on the basis of services provide to our clients, and is recognized when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, no other significant obligations of the Company exist and collectability is reasonably assured. Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as unearned revenue.





Our primary source of revenue was generated from building and developing stand alone brands that incorporate social networking, and providing internet based media and advertising services. The services included web designs, integrated social media network, text and display advertising, press releases, e-mail marketing, and promotion across our network of web sites. Revenues from Internet based media and advertising services were recognized and recorded when the performance of such services completed.





Advertising and Marketing Costs





The Company expenses costs of advertising and marketing as incurred. Advertising and marketing expense for the years ended August 31, 2010 and 2009 amounted to $88,942 and $56,854, respectively.





Income Taxes





The Company accounts for income taxes using an asset and liability approach which allows for the recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain.





Basic and Diluted Net Loss Per Share





Basic earnings per share are computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.





Weighted average number of shares used to compute basic and diluted loss per share is the same since the effect of dilutive securities is anti-dilutive. The following number of potential shares of common stock has been excluded from the computation of diluted net loss per share for the year ended August 31, 2010 and 2009, respectively as effect is anti-dilutive.





August 31,2010


2009Stock options


16,083



14,283Stock warrants


-



7,60016,083



21,883




45








STOCK BASED COMPENSATION




The costs of all employee stock options, as well as other equity-based compensation arrangements, are reflected in the consolidated financial statements based on the estimated fair value of the awards on the grant date. That cost is recognized over the period during which an employee is required to provide service in exchange for the award—the requisite service period (usually the vesting period). Stock compensation for stock granted to non-employees is determined as the fair value of the consideration received or the fair value of equity instruments issued, whichever is more reliably measured.




COMPREHENSIVE INCOME




Comprehensive income is defined to include all changes in equity, except those resulting from investments by owners and distributions to owners. The unrealized loss as of August 31, 2010 and 2009 was $32,919 and $1,175,640, respectively. Net comprehensive gain for the year ended August 31, 2010 and 2009 was $52,719 and $189,216, respectively.




CONTINGENCIES




Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management and legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought.





If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material would be disclosed. Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantee would be disclosed.




RISKS AND UNCERTAINTIES




The Company is subject to substantial risks from, among other things, intense competition associated with the industry in general, other risks associated with financing, liquidity requirements, rapidly changing customer requirements, limited operating history, and the volatility of public markets.





Concentration of Credit Risk





Financial instruments which potentially subject the Company to concentrations of credit risk are cash, accounts receivable and marketable securities. The Company places its cash with financial institutions deemed by management to be of high credit quality. The amount on deposit in any one institution that exceeds federally insured limits is subject to credit risk. All of the Company’s investment in marketable securities are considered “available-for-sale” and are carried at their fair value, with unrealized gains and losses (net of income taxes) that are temporary in nature recorded in accumulated other comprehensive income (loss) in the accompanying balance sheets. The fair values of the Company’s investments in marketable sureties are determined based on market quotations. Exposure to losses on receivables is principally dependent on each customer's financial condition. The Company monitors its exposure for credit losses and maintains allowances for anticipated losses, as required.




SEGMENT REPORTING




The Company reports segment information using the “management approach” model. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company. The Company allocates its resources and assesses the performance of its sales activities based upon its products and services.






46







For the year ended August 31, 2010, substantially all of the Company's operations are conducted in one primary industry segment i.e. providing Internet based media and advertising services and a full array of customized investor awareness programs to small and medium sized companies..





Recent Accounting Pronouncements





In January 2010, FASB issued ASU No. 2010-06 – Improving Disclosures about Fair Value Measurements. This update provides amendments to Subtopic 820-10 that requires new disclosure as follows: 1) Transfers in and out of Levels 1 and 2. A reporting entity should disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers. 2) Activity in Level 3 fair value measurements. In the reconciliation for fair value measurements using significant unobservable inputs (Level 3), a reporting entity should present separately information about purchases, sales, issuances, and settlements (that is, on a gross basis rather than as one net number). This update provides amendments to Subtopic 820-10 that clarifies existing disclosures as follows: 1) Level of disaggregation. A reporting entity should provide fair value measurement disclosures for each class of assets and liabilities. A class is often a subset of assets or liabilities within a line item in the statement of financial position. A reporting entity needs to use judgment in determining the appropriate classes of assets and liabilities. 2) Disclosures about inputs and valuation techniques. A reporting entity should provide disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements. Those disclosures are required for fair value measurements that fall in either Level 2 or Level 3. The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. These disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The Company is currently evaluating the impact of this ASU, however, the Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements.





In April 2010, the FASB issued Accounting Standards Update 2010-13 (ASU 2010-13), "Compensation - Stock Compensation (Topic 718)." This Update provides amendments to Topic 718 to clarity that an employee share-based payment award with an exercise price denominated in the currency of a market in which a substantial portion of the entity's equity securities trades should not be considered to contain a condition that is not a market, performance, or service condition. Therefore, an entity would not classify such an award as a liability if it otherwise qualifies as equity. The amendments in ASU 2010-13 are effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010. The provisions of ASU 2010-13 are not expected to have a material effect on the Company's consolidated financial statements.





In July 2010, the FASB issued an accounting update to provide guidance to enhance disclosures related to the credit quality of a company's financing receivables portfolio and the associated allowance for credit losses. Pursuant to this accounting update, a company is required to provide a greater level of disaggregated information about its allowance for credit loss with the objective of facilitating users' evaluation of the nature of credit risk inherent in the company's portfolio of financing receivables, how that risk is analyzed and assessed in arriving at the allowance for credit losses, and the changes and reasons for those changes in the allowance for credit losses. The revised disclosures as of the end of the reporting period are effective for the Company beginning in the second quarter of fiscal 2011, and the revised discourses related to activities during the reporting period are effective for the Company beginning in the third quarter of fiscal 2011. The Company is currently evaluating the impact of this accounting update on its financial disclosures.





NOTE 3      MARKETABLE SECURITIES





The Company receives cash and/or securities of client companies as payment in full for services rendered. The numbers of shares the Company receives for services is based on contract amount, and the number of shares is determined based on the bid price at the time of signing the agreement. The securities received from clients are classified as available-for-sale and, as such, are carried at fair value based on the quoted market prices. The securities comprised of shares of common stock of third party customers and securities purchased. Securities classified as available-for-sale may be sold in response to changes in interest rates, liquidity needs, and for other purposes. The Company does not currently have any held-to-maturity or trading securities.






47







Marketable securities classified as available for sale consisted of the following as of August 31, 2010:




Equity Securities

Name and Symbol

Number of shares held at August 31, 2010


Cost


Market Value at August 31, 2010


Accumulated Unrealized Gain


Accumulated Unrealized Loss

Traded on Pink Sheets (PK) or Bulletin Board (BB)Sunrise Consulting Group SNRS


515,000,000


$
51,500


$
51,500


$
-


$
-

PKVOIP PAL.com, Inc. VPLM


2,500,000



15,000



50,000



35,000



-

PKOthers - Less than $10,000 cost


98,211,723



31,580



33,900



5,544



3,224$
98,080


$
135,400


$
40,544


$
3,224
  Marketable securities classified as available for sale consisted of the following as of August 31, 2009:





Equity Securities Name and Symbol

Number of shares held at August 31, 2009


Cost


Market Value at August 31, 2009


Accumulated Unrealized Gain


Accumulated Unrealized Loss

Traded on Pink Sheets (PK) or Bulletin Board (BB)Sunrise Consulting Group (SNRS.pk)


515,000,000


$
51,500


$
51,500


$
-


$
-

PKFIMA, Inc fima


357,000



14,994



10,674







(4,320
)
PKGENCO Corp GNCC


294,118



17,647



8,824







(8,823
)
PKGeneThera Inc (GTHR)


261,000



14,355



23,229









PKOneScreen Inc (VidShadow Inc) OSCN


14,705



44,115



73,562



29,411





PKMade in America Entertainment, Inc. (MAEI)


312,578



250,000



-









PKVOIP PAL.com, Inc. VPLM


2,500,000



15,000



25,000



10,000Others - Less than $10,000 cost


89,659,900



36,040



87,777



66,773



(3,127
)$
443,651


$
280,566


$
106,184


$
(16,270
)


As of August 31, 2010, the Company evaluated its marketable securities holdings by valuing the securities according to the quoted price of the securities on the stock exchange.





It is the Company’s policy to assess its marketable securities for impairment on a quarterly basis, or more frequently if circumstances indicate that losses may be other-than-temporary. The Company recognized impairment losses on marketable securities of $139,970 and $1,582,395 for the year ended August 31, 2010 and 2009, respectively.





The Company recognized realized gains of $317,589 and $607,835 of realized losses during the years ended August 31, 2010 and 2009, respectively.







48







NOTE 4     PROPERTY AND EQUIPMENT





As of August 31, 2010 and 2009,property and equipment consisted of the following:





August 31,2010


2009Office and computer equipment

$
191,653


$
191,653Less accumulated depreciation


(184,355
)


(154,525
)$
7,298


$
37,128


Depreciation expense for the years ended August 31, 2010 and 2009 was $29,830 and $45,439, respectively.





NOTE 5    LOAN AND OTHER ASSETS





As of August 31, 2010 and 2009, other assets consisted of the following:




August 31,2010


2009Loan Receivable

$
91,670Rent deposit


4,152



4,152Total


95,822



4,152


Loan to others are due on demand, interest free, and unsecured.





NOTE 6     DEFERRED REVENUES





The Company receives marketable securities and cash for services to be provided in future periods. The Company recognizes revenue on a pro-rata basis over the term of the agreement. The Company recorded $0 and $20,800 in deferred revenues at August 31, 2010 and 2009, respectively.





NOTE 7     ACCRUED EXPENSES





Accrued expenses consisted of the following:





August 31,2010


2009Accrued consulting fees

$
126,700


$
161,837Accrued interest


18,232



72,709Accrued salaries and payroll taxes


447,508



539,852Other


180,970



45,000$
773,410


$
819,398








49







NOTE 8    DUE TO OFFICERS





Due to officers consisted of the following:





August 31,2010


2009Accrued officer’s compensation

$
153,548


$
796,140Accrued consulting fees


-



4,149Accrued interest


248,373



248,373$
401,921


$
1,048,662


The Company recorded an expense of $337,760 and $368,750 for the years ended August 31, 2010 and 2009 for compensation to the Chief Executive Officer of the Company.  The balances were interest free, due on demand, and unsecured.





NOTE 9      NOTE PAYABLE





On March 5, 20010, the Company executed a promissory note of $170,000 to a third party, unsecured, non-interest bearing and due on September 5, 2010.





NOTE 10  CONVERTIBLE NOTE





In 2009 and 2010 (the “Dates of Issuance”),  the Company issued multiple secured convertible notes to related and unrelated parties (the “Holders”), in the total amount of $1,432,034 (the “Secured Convertible Notes” or the “Notes”). The Secured Convertible Notes have various maturity dates  ranging from 9 to 12 months and have annual interest rates ranging from of 0% to 10% per annum. The Holders have the right from and after the Date of Issuance, and until any time until the Secured Convertible Notes are fully paid, to convert any outstanding and unpaid principal portion of the Secured Convertible Notes, and accrued interest, into fully paid and nonassessable shares of Common Stock with an ownership limit of 4.99%. The Secured Convertible Notes have a variable conversion price and no reset feature. The percentage of market conversion rates range from 20% to 50% of the average closing trading price of the Company’s common stock on consecutive trading days immediately preceding the date of conversion, which in the terms of the note agreements range from 3 days to 10 days. The Holders were not issued warrants with the Secured Convertible Notes. In the event of default for the Notes, the amount of principal and interest not paid when due bear interest at the rate of 18% per annum and the notes become immediately due and payable. Should that occur, the Company is liable to pay 105% of the then outstanding principal and interest.




The Company has recorded the embedded conversion feature in the Secured Convertible Notes as derivative liabilities due to the full reset provisions.





During the year ended August 31, 2010, the note due to the former Chief Financial Officer was amended into convertible note with accrued interest rate at 10%. The Company accrued interest on the outstanding balance on February 22, 2010 at 10% annually.  The note is derivative instrument because the agreement does not contain an explicit limit on the number of shares to be delivered in a share settlement. It is also tainted by the other derivative instruments the company has issued. However, because of the terms detailed in Section 3 in which the value of the shares issued is capped to the amount of principal and interest, the derivative liability is zero.





The Company valued the derivative liability based on a probability weighted discounted cash flow model. These models are based on future projections of the various potential outcomes. The features in the note that were analyzed and incorporated into the model included the conversion feature with the reset provisions and the call/redemption options.




The Company analyzed the underlying economic factors that influenced which of these events would occur, when they were likely to occur, and the specific terms that would be in effect at the time (i.e. interest rates, stock price, conversion price, etc.). Projections were then made on these underlying factors which led to a set of potential scenarios. Probabilities were assigned to each of these scenarios over the remaining term of the note based on management projections. This led to a cash flow projection over the life of the note and a probability associated with that cash flow. A discounted weighted average cash flow over the various scenarios was completed, and it was compared to the discounted cash flow of the note without the embedded features, thus determining a value for the derivative liability at the date of valuation.






50







The notes issued in 2009 and 2010 were valued with the following assumptions:





·
The projected volatility curve for each valuation period was based on the historical volatility of the Company


·
An event of default would occur 1% of the time, increasing 1.00% per quarter and would occur 90% of the time at maturity;


·
Conversion (at 20%, 40% or 50% of market price) to stock would be limited by the average trading volume and the holder would convert throughout the period;


·
The Company would have funds available to redeem the notes 0% of the time, increasing 0.0 % per quarter and


·
The Holders would convert up to the maximum ownership limit on a monthly basis.


·
The derivative liability of the notes issued in 2009 and 2010 were valued at issuance amounted to $1,167,919





The fair values for the derivative liabilities related to the Convertible Notes at August 31, 2010 and 2009 are summarized as follows:





Valuation Date:

8/31/2009


8/31/2010Notes


100,000



702,563Derivative Value - Notes


116,752



364,327





NOTE 11      COMMITMENTS





Operating Lease





The Company leases its corporate office facilities in California from a third party under month to month lease with monthly rental on the facility is $3,888.




Contingencies





From time to time, the Company may be involved in various claims, lawsuits, and disputes with third parties, actions involving allegations of discrimination or breach of contract actions incidental to the normal operations of the business. Company is not currently involved in any litigation which it believes could have a material adverse effect on its financial position or results of operations.








51








NOTE 12INCOME TAXES





Income tax for the years ended August 31, 2010 and 2009 is summarized as follows:





August 31,2010


2009Current:Federal

$
-


$
-State


4,800



4,800Deferred taxes


-



-Income tax expense (benefit)

$
4,800


$
4,800


The following is a reconciliation of the provision for income taxes at the U.S. federal income tax rate to the income taxes reflected in the Consolidated Statements of Operations:





August 31,2009


2008Tax expense (credit) at statutory rate-federal


(34
%)


(34
%)State tax expense net of federal tax


(6
%)


(6
%)Valuation allowance


40
%


40
%Net deferred tax assets

$
-


$
-


The tax effects of temporary differences that gave rise to significant portions of deferred tax assets and liabilities at August 31, 2010 and 2009 are as follows:





August 31,2010


2009Deferred tax assets:Net operating loss carry forward

$
4,265,107


$
1,658,489Total gross deferred tax assets


4,265,107



1,658,489Less valuation allowance


(4,265,107
)


(1,658,489
)Net deferred tax assets

$
-


$
-


At August 31, 2010, the Company had net operating loss carry forwards of $23,322,990 for U.S. federal income tax purposes available to offset future taxable income expiring on various dates through 2030. The Company has recorded a 100% valuation allowance on the deferred tax assets due to the uncertainty of its realization.





The Company’s Digital Wallstreet Inc. subsidiary is delinquent in the payment of federal employment taxes.  As of August 31, 2010 amounts due to the Internal Revenue Service (IRS) and the Employment Development Department of the State of California (EDD) were $174,496 and $175,303, respectively.  The amounts are included in the Company’s balance of accrued expenses.  The Company is currently negotiating with the IRS and the EDD to develop plans for the orderly payment of delinquent balances.





NOTE 13     EQUITY TRANSACTIONS





Common Stock




We affected the 300 for 1 reverse stock split of our common stock on April 1, 2010, as a result of which every 300 issued and outstanding shares of common stock has been combined into one share.  Any fractional share as result of the reverse stock split received a whole share in lieu of any fractional share to which they might otherwise have been entitled. The reverse stock split retroactively affected all of our then issued and outstanding shares of common stock, as well as the number of shares issuable upon the exercise of the outstanding stock options and warrants.








52







This reverse stock split reduced the total number of issued and outstanding common shares from 155,729,507 to 521,000. As a result of the reduction in the number of common shares, the market price per common share increased. However, there is no assurance that the post-reverse stock split price will be equal to or greater than the consolidation ratio multiplied by the pre-reverse stock split price on a going forward basis.




On April 13, 2010 and August 13, 2010, the Company issued 26,666,666 and 150,000 shares of the company's common stock for retirement of $800,000 indebted on behalf of Chief Executive Officer and three consultants at 50% discount of fair market value.





On July 20, 2010, the Company issued 100,000 shares of restricted common stocks to one consultant pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933.  The shares were issued to the consultant at a price of $1.00 per share for total of $100,000 worth of services.





During the year ended August 31, 2010, the company issued 455,000 shares of common stock to consultants valued at $356,550 in exchange for their services. As of August 31, 2010, the remaining prepaid consulting fees of $7,292 were included in the financial statements.





From September 2009 to August 2010, the company issued 31,891,829 shares of common stock at conversion price from $.12 to $1.80 per shares for redemption of $831,471 convertible notes payable. The company recorded a loss amounted of $5,731,895 due to highly fluctuating on the date of issuance of shares to redeem outstanding convertible notes and the notes are converted at discount rate





During the year ended August 31, 2009, the Company issued 673,249 shares to consultants valued at $42,485 in full settlement of their services, 10,639,998 shares to a third party in settlement of a promissory note and accrued interest valued at $139,998, 71,500 shares to an employee valued at $25,000 in full settlement of his services, and 6,720,058 shares to directors valued at $83,333 for their services. The shares were valued at their fair value on the date of issuance.





Outstanding Warrants:





The company has no warrants outstanding at August 31, 2010




2007 Non-Qualified Stock Option Plan (“2007 Non-Qualified Plan”):




On January 5, 2007, the Company adopted the 2007 Non-Qualified Plan and reserved a maximum of 10,000 shares of common stock as Options to grant to employees, non-employee directors, consultants and advisors. The stock subject to Options granted under the Non-Qualified Plan shall be shares of the Company’s Common Stock, par value $0.001 per share. The 2007 Non-Qualified Plan shall terminate within ten (10) years from the date of adoption by the Board of Directors or sooner, and no Options shall be granted after termination of the plan. The Options have been granted to certain employees and consultants to purchase Common Shares at prices equal to fair market value on the date of grant.


As of August 31, 2010, there are no stock options outstanding under the 2007 Non-Qualified Plan.




2008 Non-Qualified Stock Option Plan (“2008 Non-Qualified Plan”):




On July 2, 2008, the Company adopted the 2008 Non-Qualified Plan and the Board of Directors approved the reservation of 6,667 shares of the Company’s authorized but unissued common stock for issuance under the plan. As of August 31, 2010, no options have been granted under the 2008 Non-Qualified Plan.





2007 Equity Incentive Plan (“2007 Equity Plan”):





On February 6, 2007, the Company adopted the 2007 Equity Plan which was approved by the shareholders on April 11, 2007, and reserved 10,000 shares of the Company’s authorized common stock as Options to grant to employees, directors and officers. On August 28, 2008, the shareholders approved reserving an additional 13,333 common shares for issuance under the 2007 Equity Plan for a total of 23,333 common shares. The stock subject to Options granted under the 2007 Equity Plan shall be the Common Shares of the Company’s common stock, par value $0.001 per share. The 2007 Equity Plan shall become effective and shall remain in effect until all Common Shares subject to the 2007 Equity Plan have been purchased or acquired according to the terms of the 2007 Equity Plan or the 2007 Equity Plan is terminated by the Board or January 4, 2017, whichever is earlier. No stock Options shall be granted after termination of the plan. The Options have been granted to certain employees to purchase Common Shares at prices equal to fair market value on the date of grant.The number and weighted average exercise prices of stock Options granted by the Company at August 31, 2010 are as follows:






53






Options

Outstanding


Weighted

Average

Exercise Price


Aggregate

Intrinsic ValueOutstanding - August 31, 2009


16,083


$
0.08


$
-Granted


-



-



-Exercised


-



-



-Expired/forfeited


-



-



-Outstanding – August 31, 2010


16,083


$
0.08


$
6,684





Following is a summary of the status of stock Options outstanding at August 31, 2010:





Range of

Exercise Prices


Total

Options

Outstanding


Weighted

Average

Remaining

Life (Years)


Total

Weighted

Average

Life


Options

Exercisable


Weighted

Average

Exercise Price$
0.015 - $0.30



16,083



6.89


$
6.68



15,709


$
0.0716,083



6.89


$
6.68



15,709


$
0.07





2010 Incentive Stock Plan





On June 18, 2010, the Company adopted the 2010 Incentive Stock Plan which was approved by the shareholders and reserved 4,000,000 common shares of the Company’s authorized common stock to grant to employees, directors, officers and consultants for services. The stock granted under the 2010 Incentive Stock Plan shall be the Common Shares of the Company’s common stock, par value $0.001 per share. As of August 31, 2010, under the 2010 Incentive Stock Plan, the Company issued 400,000 shares to consultants in exchange $225,000 worth of services.





NOTE 14GOING CONCERN





The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. This basis of accounting contemplates the recovery of the Company's assets and the satisfaction of its liabilities in the normal course of business. The Company had accumulated deficit of $23,322,990 as of August 31, 2010 and has incurred net loss of $7,501,738 or the year ended August 31, 2010. In view of the matters described in the preceding paragraph, recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheet is dependent upon continued operations of the Company, which in turn is dependent upon the Company's ability to raise additional capital, obtain financing and to succeed in its future operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.





Management has taken the following steps to revise its operating and financial requirements, which it believes are sufficient to provide the Company with the ability to continue as a going concern. Management devoted considerable effort during the period ended August 31, 2010 towards (i) obtaining additional equity financing, (ii) evaluation of its distribution and marketing methods, and (iii) further streamlining and reducing costs.









54







NOTE 15       SUBSEQUENT EVENTS





On September 2, 2010, the Company granted a non-statutory stock option to purchase 780,000 shares of common stock of the Company.  The Option shall terminate with five (5) years from the date of adoption by the Board of Directors or sooner, and no Option shall be granted after termination of the plan.  The Options have been granted to employees and consultants to purchase common shares at prices of $0.45 on the date of grant.





On October 4, 2010, the Company granted to a non-statutory stock option to purchase 750,000 shares of common stock of the Company.  The Option shall terminate with five (5) years from the date of adoption by the Board of Directors or sooner, and no Option shall be granted after termination of the plan.  The Options have been granted to employees and consultants to purchase common shares at prices of $0.34 on the date of grant.