UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 WASHINGTON,
D.C. 20549
 ____________________________________________________
 
 AMENDMENT NO. 1 TO
 
 (Mark
One)
 x
              ANNUAL
      REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
 
 For
The Fiscal Year Ended December 31, 2009
 
 o
              TRANSITION
      REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
 
 Commission
File No.  000-51886
 
 SO
      ACT NETWORK, INC.(Exact
      name of issuer as specified in its charter)Delaware
              26-3534190(State
      or other jurisdiction of incorporation or organization)
              (I.R.S.  Employer
      Identification No.)10685-B
      Hazelhurst Drive #6572
                Houston,
      TX
              77043(Address
      of principal executive offices)
              (Zip
      Code)Registrant’s
      telephone number, including area code:
      210-401-7667
 
 Securities
      registered under Section 12(b) of the Exchange Act:
              None.Securities
      registered under Section 12(g) of the Exchange Act:
              Common
      stock, par value $0.001 per share.(Title
      of class)
 
 Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.       
Yes o    No x
 
 Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 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 (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).
 Yes o   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 registrant’s knowledge, in definitive proxy or
information statements incorporated by reference Part III of this Form 10-K or
any amendment to this Form 10-K.   x
 
 
 
 Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
 
 Large
      accelerated filer
              o
              
              Accelerated
      filer
              oNon-accelerated
      filer
                (Do
      not check if a smaller reporting company)
              o
              
              Smaller
      reporting company
              x
 
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act). Yes o  No x
 
 As of the
last business day of the registrant’s most recently completed second fiscal
quarter, there was no public trading market for our common stock.
 
 As of
March 30, 2010, the registrant had 189,259,714 shares issued and outstanding,
respectively.
 
 Documents Incorporated by
Reference:
 None.
 
 
 
 This
amendment (Amendment No. 1) to the Annual Report on Form 10-K for the year
ended December 31, 2009 of So Act Networks, Inc. (the 2009 Annual Report on
Form 10-K) is being filed for the purpose of correcting a typographical error in
the cash flow amount contained in the Report Of Independent Registered Public
Accounting Firm, as well as, the addition of pictures in Part I, Item I under
the heading Description of
Business. Such revised disclosure has been made to enhance the
presentation of our Original Filing.
 
 Except
for the correction mentioned above, the information contained in the Original
Filing is not amended hereby and shall be as set forth in the Original
Filing.
  TABLE
OF CONTENTS
 
 PART
      IITEM
      1.
              BUSINESS
              1ITEM
      1A.
              RISK
      FACTORS
              4ITEM
      1B.
              UNRESOLVED
      STAFF COMMENTS
              4ITEM
      2.
              DESCRIPTION
      OF PROPERTIES
              4ITEM
      3.
              LEGAL
      PROCEEDINGS
              4ITEM
      4.
              SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY HOLDERS
              4PART
      IIITEM
      5.
              MARKET
      FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
              5ITEM
      6.
              SELECTED
      FINANCIAL DATA
              5ITEM
      7.
              MANAGEMENT’S
      DISCUSSION AND ANALYSIS OR PLAN OF
      OPERATIONS
              5ITEM
      7A.
              QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
              10ITEM
      8.
              FINANCIAL
      STATEMENTS AND SUPPLEMENTARY DATA
              F-ITEM
      9.
              CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE
              11ITEM
      9A.
              CONTROLS
      AND PROCEDURES
              11PART
      IIIITEM
      10.
              DIRECTORS,
      EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
              12ITEM
      11.
              EXECUTIVE
      COMPENSATION
              13ITEM
      12.
              SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
              14ITEM
      13.
              CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
      INDEPENDENCE
              14ITEM
      14.
              PRINCIPAL
      ACCOUNTANT FEES AND SERVICES
              14PART
      IVITEM
      15.
              EXHIBITS,
      FINANCIAL STATEMENT SCHEDULES
              15SIGNATURES
              
              16
 
 
 
 PART
I
 
 ITEM
1.          BUSINESS
 
 Description
of Our Business
 
 Overview
 
 We were
incorporated in the State of Delaware as of December 9, 2005 as 43010, Inc to
engage in any lawful corporate undertaking, including, but not limited to,
locating and negotiating with a business entity for combination in the form of a
merger, stock-for-stock exchange or stock-for-assets exchange. On October 7,
2008, pursuant to the terms of a stock purchase agreement, Mr. Greg Halpern
purchased a total of 100,000 shares of our common stock from Michael Raleigh for
an aggregate of $30,000 in cash. The total of 100,000 shares represents 100% of
our issued and outstanding common stock at the time of the transfer. As a
result, Mr. Halpern became our sole shareholder. As part of the acquisition, and
pursuant to the Stock Purchase Agreement, Michael Raleigh, our then President,
CEO, CFO, and Chairman resigned from all the positions he held in the company,
and Mr. Halpern was appointed as our President, CEO CFO and Chairman. The
current business model was developed by Mr. Halpern in September of 2008 and
began when he joined the company on October 7, 2008. In October 2008, we became
a development stage company focused on creating an Internet search engine and
networking web site.
 
 Our
website was beta tested until January 2010 at which time it was updated and is
now a consumer active site. We currently have several thousand public and
private members in our network utilizing the following operational features:
Online Operating System, Conversations (combining chat, text and email), Connect
with People, List People, Review People, Start New Groups, Communicate with
Group Members, View Groups, Join Groups, Interact with Groups, Web (Search
Engine), Build and Customize Profile, View Profiles, Media Drive, Web Drive,
File Share, File Preview, Private Internal Network, Alerts, Send Press Releases,
Review Press Releases, 1column, 2 column, 3 column, 4 column, Invite People and
iPhone Safari version. We are working on and expect the following portions of
the web site to be operational by mid-April 2010: Shared Desktop, Audio Video
Conferencing. Our website domain name is www.SoAct.net. The following are visual
images of our network and iPhone interface.
  
    
 1
 
 Now that
we have a growing membership, affiliate and reseller programs in place with
Globe Newswire, and many name brands such as Priceline, Fandango, Staples,
Payless and Turbo Tax, our revenue will begin to accrue in April 2010, the
Company’s second quarter.
 
 By the
3rd
quarter, we plan to begin generating revenue from low membership fees of between
$1 and $8 for members who upgrade to file storage size above the current free
two gigabyte space provided to all members. We believe there is a sizable
audience of people in the world who are actively working to solve problems,
expand their reach or grow their business in a spam free and ad free
environment. SoAct.Net aims to bring these people together.  As
evidenced by our growing number of affiliate and reseller programs, we believe
we can generate revenue with green, eco-friendly companies who could find
potential value in reaching the type of socially conscious consumers and problem
solvers that we believe currently use our network and its substantial
resources.
 
 We began
our operations on October 8, 2008 when we purchased the Form 10 company from the
previous owners.  Since that date, we have completed financing to
raise initial start-up money for the building of our network and to start our
operations.
 
 We have
also received three loans from Mr. Greg Halpern, in the amount of $9,500,
$15,000 or $16,700 on May 11, May 22, and May 26, 2009, respectively. Each of
the loans bears an interest at the primate rate. We have entered into three
Credit Line Agreements with Greg Halpern. The first two have been used by the
Company for $100,000 each and they will mature and expire in 2011. The third
Credit Line Agreement issued by Mr. Halpern in March 2010 is for an additional
$500,000. All three agreements accrue interest at the prime rate. The prime rate
of interest is the rate of interest that major banks charge their most
creditworthy customers. For the purposes of this agreement, we shall determine
the prime rate by using the prime rate reported by the Wall Street Journal on
the date funds are extended to the Company. Based on the current prime rate, it
is estimated that the prime rate shall be 3.25% but that may be subject to
adjustment based on market factors and the fluctuation of the prime rate.
Although we believe that the $200,000 already used and the $500,000 just issued
will be sufficient to cover the additional expense arising from maintenance of
our regulatory filings with the SEC, and the development of our network, the
Company anticipates pursuing additional financing in 2010 to expand the network
functionality and begin aggressively marketing the network to new potential
members.
 
 The
hosting needs of the company are paid in full until June 24, 2010. This
leaves only the cost of operations (which is primarily salary and the expense of
being public). This equals all salary abated until the company can afford to pay
Greg Halpern, its one employee, after all other expenses of the company are paid
and there is a surplus.
 
 Our
Product
 
 We have
developed a social network for individuals, businesses and
organizations.  Our network helps people find others who have the
similar interests and helps them work together in ways that are more
productive.
  Endorsed
by William Shatner as "a ray of hope amidst all the gloom," and by Ed Asner as
"the best place to make a difference," So Act Network (OTCBB:SOAN) is recognized
by many socially conscious celebrities and experts young and old as the place to
pursue and create social change to improve our world. http://soact.net/celebrities_experts.html.
In his book "What Are You Waiting For? So Act Already!" Social Media author Jon
Hansen calls So Act "The 60 minutes of Social Networks, where you engage,
mobilize and empower people into action." Whatever the mission, cause, product,
service, program, cure, or solution, So Act was designed to help everyone expand
their sphere of influence and crystallize forward thinking into positive action
on a larger scale, while harmoniously merging economic and socially conscious
goals. So Act Network membership is free to everyone. To make money the Company
provides partnerships, affiliate programs and profit-sharing opportunities for
companies and individuals seeking to increase their foothold in the Social
Networking space and increase business and customers. The Company recently added
an Insurance Network Group -- Cutter and Company, a Traveler Network Group --
Priceline and many retail brands including GoDaddy, Staples, Fandango, Payless
Shoes and Turbo Tax. The Company is in development of others for investing, real
estate, medical and legal, with plans to eventually have social networks or
affiliate groups for most categories of products and services that will offer
greater opportunities and benefits for its members.
  2
  The
Company’s technologies provide a global social network where its members are
able to build Communities of Purpose, and accomplish and promote all of their
important goals without being subjected to spam or ads, and without having
personal information used by marketers. The Network's communication platform
improves on the social networking theme by providing businesses and individuals
with project building tools, alerting, and secured network file sharing and
previewing, all in a personalized, private format that crosses global boundaries
to connect like-minded individuals, while allowing an unlimited number of
members to simultaneously participate in small, or large, online meetings. The
Network search engine includes a "top 10" filtered results, and the press club
allows members to share their important news with their followers and the media
at the most economically available rates. The So Act Network has a zero-spam
communication tool called “Conversations” that combines email, texting and
real-time chat with security and archiving in a format that cross-pollinates
people and their interests. Conversations empower and mobilize So Act members
into action. By cloning the “Conversation” tool, a user can have as many
simultaneous conversations going at one time as he or she wants. For
example, when such user is having a conference meeting with several likeminded
people, such user uses the “Clone” tool to create additional conversation boxes
to chat with other friends or family members. The “People” tool archives all the
people a user knows, meets and interacts with on the So Act Network. The “Group”
tool allows likeminded people to form unique groups focused on specific problems
or to promote their businesses, products, services, causes.
  Marketing
 
 We
currently draw our customer bases from two groups of audiences. The first group
is categorized as socially conscious innovators, inventors, scientists,
explorers, investors and creative thinkers developing legitimate world-improving
solutions. The second group is categorized as socially conscious, social
investing, social business, green and eco-friendly companies who can advertise
their existing solutions to targeted consumers within our network.
 
 Competition
 
 We are
not aware of any other specific web-based companies that closely resemble the
business model and features we are developing. Therefore, we see ourselves in a
niche market that has very few competitors.
 
 There are
other internet search engines and networking sites but they are all much larger
and cater to the broader market.  We are strictly focused on the
person who wants to develop a customized environment free from spam or ads that
allows our members to create, build and grow whatever is important to
them.  Most of our members currently use our Network in addition to
the other networks they frequent. Therefore, we do not expect to directly
compete with them.
 
 Intellectual
Property
 
 We
received Registered Trademark No. 3,626,525 on May 26, 2009 from the U.S. Patent
and Trademark Office, for the name So Act which is now reflected at our website
SoAct.net in the form of a circled R and throughout any of our web based
marketing materials whereever our logo appears.   Our Search Engine and
Network platform contain certain trade secrets, however, the Company has no
specific state or federal protections for its trade secrets. To the best of our
ability, we intend to keep certain proprietary aspects of our technology as
trade secrets that we believe are unique and may provide future market
advantages.  At this time, we do not plan to seek any other specific
Intellectual Property protections. Our intellectual property is not being relied
on as a protection against competition.
 
 At this
time, we do seek to obtain copyright protection on our name and certain other
parts of our website.  However, we do not expect to seek patents for
our platform or technologies.
 
 Research and
Development
 
 Over the
last two fiscal years, we have spent approximately 1512 hours on the development
of our website, network and business plan and have contributed over 3021 hours
to the development of the network platform.  We have not spent any time on
any research, except for the time we spend showing individuals our Network and
asking for feedback which consists of approximately 8 hours per
week.
 
 Employees
 
 Greg
Halpern is our sole employee.  We do not have any other full- or
part-time employees although the programming team which is full time through our
relationship with Gigablast consists of five individuals.  Until such
time as we begin generating revenues in the second quarter, we do not anticipate
a need to hire additional employees.
  3
  We are a
publicly reporting company under the Exchange Act and are required to file
periodic reports with the Securities and Exchange Commission.  The
public may read and copy any materials you file with the Commission at the SEC's
Public Reference Room at 100 F Street, NE., Washington, DC 20549, on official
business days during the hours of 10 a.m. to 3 p.m.  The public may
obtain information on the operation of the Public Reference Room by calling the
Commission at 1-800-SEC-0330.  The Commission maintains an Internet
site that contains reports, proxy and information statements, and other
information regarding issuers that file electronically with the Commission and
state the address of that site (http://www.sec.gov).  In addition, you
can obtain all of the current filings at our internet website at www.soact.net.
 
 Milestones for the Next
Twelve Months
 
 Over the
next twelve months, we expect to grow our member database substantially and
generating significant new revenue. We are continually improving our Network and
focusing on marketing what we offer to the world. We expect our financial
requirements to increase with those additional expenses funded by loans from Mr.
Halpern based on existing lines of credit and we are also considering various
private funding opportunities.
 
 In the
event that we are not able to obtain additional funding or Mr. Halpern either
fails to extend us more financing, declines to loan additional cash, declines to
fund the line of credit, declines to defer his salary payments, or seeks
repayment of his existing loans, we will no longer be able to continue to
operate and will have to cease operations unless we begin to generate sufficient
revenue to cover all our costs. Over the next twelve months, our focus is to:
(i) upgrade the website to provide more sales opportunities; (ii) generate more
revenue potential through adding more affiliate programs of known brands and as
a reseller; and (iii) and work to increase the network to one million
members.
 
 ITEM
1A.      RISK FACTORS
 
 Not
applicable for smaller reporting companies.
 
 ITEM
1B.      UNRESOLVED STAFF COMMENTS
 
 Not
applicable for smaller reporting companies.
 
 ITEM
2.         DESCRIPTION OF
PROPERTY.
 
 Office
Arrangements and Operational Activities
 
 We do not
have a principal business office. We are renting our Texas location, located at
10685-B Hazelcrest Drive, #6572, Houston, TX 77043 from a business service
corporation on a month-to-month basis. The office provides us with general
office services such as mail, phone, fax, shipping and receiving capabilities.
We do not have a lease with the business service corporation. We plan to
eventually move our operation to a permanent office in Texas or New Mexico,
However, to date, we have not actively searched for an office location. The
day-to-day operations are conducted from a mobile RV office which Mr. Halpern
utilizes at his own expense to travel the continental United States following
the activities of various solution makers and opportunities that could
contribute to the expansion of the business. When Mr. Halpern is traveling
in his RV, there is no one who is occupying or working out of the principal
business office in Houston, Texas.
 
 Our
network platform was beta launched on June 30, 2009 and was built at and
located in Albuquerque, New Mexico. Gigablast, our third party hosting vendor
located in Albuquerque, New Mexico, is responsible for developing and
maintaining our Network pursuant to the previously filed Professional Service
Agreement. The platform is supported by minimal hardware for 100,000 servers
with databases scalable to 200 billion web pages which represents Gigablast
total capacity. We currently have no obligation to the New Mexico location to
lease servers or space. Upon completion of the development of our platform, we
will pay hosting for service to all users of our network on a bandwidth cost
basis commensurate with market rates.
 
 ITEM
3.         LEGAL
PROCEEDINGS.
 
 To the
best of our knowledge, there are no known or pending litigation proceedings
against us.
 
 ITEM
4.         SUBMISSION OF MATTERS TO
A VOTE OF SECURITY HOLDERS.
 
 On
October 7, 2008, in accordance with the majority vote of our shareholders in
lieu of a special meeting, we appointed Greg Halpern as the chairman of our
Board of Directors.
 
 On October
15, 2008, in accordance with the majority vote of our shareholders in lieu of a
special meeting, we changed our company name from 43010, Inc. to So Act Network,
Inc. by filing an amendment to the Articles of Incorporation with the Delaware
Secretary of State. The amendment was attached as Exhibit 3.1 to the current
report on Form 8-K filed on October 17, 2008 and is incorporated herewith by
reference.
   
 4
 
 PART
II
 
 ITEM
5.         MARKET FOR COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS.
 
 Market
Information
 
 Our
shares of common stock are traded on the OTC Bulletin Board under the symbol
SOAN.
 
 Holders
 
 As of
March 30, 2010, in accordance with our transfer agent records, we had 76 record
holders of our Common Stock.
 
 Dividends
 
 To date,
we have not declared or paid any dividends on our common stock. We currently do
not anticipate paying any cash dividends in the foreseeable future on our common
stock, when issued pursuant to this offering. Although we intend to retain our
earnings, if any, to finance the exploration and growth of our business, our
Board of Directors will have the discretion to declare and pay dividends in the
future.
 
 Payment
of dividends in the future will depend upon our earnings, capital requirements,
and other factors, which our Board of Directors may deem relevant.
 
 Stock
Option Grants
 
 To date,
we have not granted any stock options.
 
 ITEM
6.         SELECTED FINANCIAL
DATA.
 
 Not
applicable.
 
 ITEM
7.         MANAGEMENT’S DISCUSSION
AND ANALYSIS OR PLAN OF OPERATIONS
 
 The
following plan of operation provides information which management believes is
relevant to an assessment and understanding of our results of operations and
financial condition. The discussion should be read along with our financial
statements and notes thereto. This section includes a number of forward-looking
statements that reflect our current views with respect to future events and
financial performance. Forward-looking statements are often identified by words
like believe, expect, estimate, anticipate, intend, project and similar
expressions, or words which, by their nature, refer to future events. You should
not place undue certainty on these forward-looking statements. These
forward-looking statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from our
predictions.
 
 Overview
 
 We were
incorporated in the State of Delaware as of December 9, 2005 as 43010, Inc to
engage in any lawful corporate undertaking, including, but not limited to,
locating and negotiating with a business entity for combination in the form of a
merger, stock-for-stock exchange or stock-for-assets exchange. On October 7,
2008, pursuant to the terms of a stock purchase agreement, Mr. Greg Halpern
purchased a total of 100,000 shares of our common stock from Michael Raleigh for
an aggregate of $30,000 in cash. The total of 100,000 shares represents 100% of
our issued and outstanding common stock at the time of the transfer. As a
result, Mr. Halpern became our sole shareholder. As part of the acquisition, and
pursuant to the Stock Purchase Agreement, Michael Raleigh, our then President,
CEO, CFO, and Chairman resigned from all the positions he held in the company,
and Mr. Halpern was appointed as our President, CEO CFO and Chairman. The
current business model was developed by Mr. Halpern in September of 2008 and
began when he joined the company on October 7, 2008. In October 2008, we became
a development stage company focused on creating an Internet search engine and
networking web site.
 
 Our
website was beta tested until January 2010 at which time it was updated and is
now a consumer active site. We currently have several thousand public and
private members in our network utilizing the following operational features:
Online Operating System, Conversations (combining chat, text and email), Connect
with People, List People, Review People, Start New Groups, Communicate with
Group Members, View Groups, Join Groups, Interact with Groups, Web (Search
Engine), Build and Customize Profile, View Profiles, Media Drive, Web Drive,
File Share, File Preview, Private Internal Network, Alerts, Send Press Releases,
Review Press Releases, 1column, 2 column, 3 column, 4 column, Invite People and
iPhone Safari version. We are working on and expect the following portions of
the web site to be operational by mid-April 2010: Shared Desktop, Audio Video
Conferencing. Our website domain name is www.SoAct.net.
 
 5
  Now that
we have a growing membership, affiliate and reseller programs in place with
Globe Newswire, and many name brands such as Priceline, Fandango, Staples,
Payless and Turbo Tax revenue will begin to accrue in April 2010, the Company’s
second quarter.
 
 By the
3rd
quarter we plan to begin generating revenue from low membership fees of between
$1 and $8 for members who upgrade to file storage size above the current free
two gigabyte space provided to all members. We believe there is a sizable
audience of people in the world who are actively working to solve problems,
expand their reach or grow their business in a spam free and ad free
environment. SoAct.Net aims to bring these people together.  As
evidenced by our growing number of affiliate and reseller programs, we believe
we can generate revenue with green, eco-friendly companies who could find
potential value in reaching the type of socially conscious consumers and problem
solvers that we feel currently use our network and its substantial
resources.
 
 Plan
of Operation
 
 We began
our operations on October 8, 2008 when we purchased the Form 10 Company from the
previous owners.  Since that date, we have completed a financing to
raise initial start-up money for the building of our network and to start our
operations.
 
 We have
also received three loans from Mr. Greg Halpern, in the amount of $9,500,
$15,000 or $16,700 on May 11, May 22, and May 26, 2009, respectively. Each of
the loans bears an interest at the primate rate. We have entered into three
Credit Line Agreements with Greg Halpern. The first two have been used by the
Company for $100,000 each and they will mature and expire in 2011. The third
Credit Line Agreement issued by Mr. Halpern in March 2010 is for an additional
$500,000. All three agreements accrue interest at the prime rate. The prime rate
of interest is the rate of interest that major banks charge their most
creditworthy customers. For the purposes of this agreement, we shall determine
the prime rate by using the prime rate reported by the Wall Street Journal on
the date funds are extended to the Company. Based on the current prime rate, it
is estimated that the prime rate shall be 3.25% but that may be subject to
adjustment based on market factors and the fluctuation of the prime rate.
Although we believe that the $200,000 already used and the $500,000 just issued
will be sufficient to cover the additional expense arising from maintenance of
our regulatory filings with the SEC, and the development of our network, the
Company anticipates pursuing additional financing in 2010 to expand the network
functionality and begin aggressively marketing the network to new potential
members.
 
 The
hosting needs of the company are paid in full until June 24, 2010. This leaves
only the cost of operations (which is primarily salary and the expense of being
public). This equals all salary abated until the company can afford to pay Greg
Halpern, its one employee, after all other expenses of the company are paid and
there is a surplus.
 
 Over the
next twelve months, we expect to grow our member database substantially and
generating significant new revenue. We are continually improving our Network and
focusing on marketing what we offer to the world. We expect our financial
requirements to increase with those additional expenses funded by loans from Mr.
Halpern based on existing lines of credit and we are also considering various
private funding opportunities.
 
 In the
event that we are not able to obtain additional funding or Mr. Halpern either
fails to extend us more financing, declines to loan additional cash, declines to
fund the line of credit, declines to defer his salary payments, or seeks
repayment of his existing loans, we will no longer be able to continue to
operate and will have to cease operations unless we begin to generate sufficient
revenue to cover all our costs. Over the next twelve months, our focus is to:
(i) upgrade the website to provide more sales opportunities; (ii) generate more
revenue potential through adding more affiliate programs of known brands and as
a reseller; and (iii) and work to increase the network to one million
members.
 
 Results
of Operations
 
 The
following tables set forth key components of our results of operations for the
periods indicated, in dollars, and key components of our revenue for the period
indicated, in dollars.
 
 6
  
 For
      the Years Ended December 31,2009
              
              
              2008Operating
      ExpensesGeneral
      and Administrative
              
              $
              85,842
              
              
              $
              62,210Endorsement
      Fees
              
              
              1,534,882
              
              
              
              -Consulting
      Fees
              
              
              287,111
              
              
              
              -Professional
      Fees
              
              
              87,866
              
              
              
              11,325Website
      Development
              
              
              91,854
              
              
              
              -Compensation
              
              
              216,000
              
              
              
              43,549Total
      Operating Expenses
              
              
              2,303,555
              
              
              
              117,084Loss
      from Operations
              
              
              (2,303,555
              )
              
              
              (117,084
              )Other
      IncomeGain
      on extinguishment of debt
              
              
              6,643
              
              
              
              -Total
      Other Income
              
              
              6,643
              
              
              
              -Other
      ExpenseInterest
      Expense
              
              
              (1,640
              )
              
              
              (31
              )Total
      Other Expense
              
              
              (1,640
              )
              
              
              (31)Provision
      for Income  Taxes
              
              
              -
              
              
              
              -Net
      Loss
              
              $
              (2,298,552
              )
              
              $
              (117,115
              )Net
      Loss Per Share  - Basic and Diluted
              
              $
              (0.00
              )
              
              $
              (0.00
              )Weighted
      average number of shares outstandingduring
      the year Basic and Diluted
              
              
              183,097,488
              
              
              
              38,818,104
 
 For
the Fiscal Year Ended December 31, 2009 and for the Fiscal Year Ended December
31, 2008
 
 General and Administrative
Expenses: Our general and administrative expenses were $85,842 for the
fiscal year of 2009 and $62,210 for the fiscal year of 2008, representing an
increase of $23,632 or approximately 38%, as a result of our expenses on
advertising which include the cost of public relations activities, and other
expenses associated with the operation of the company.
 
 Endorsement
Fees:  Our endorsement fees were $1,534,882 for the fiscal year
of 2009 and $0 for fiscal year 2008, representing an increase of $1,534,882 as a
result of the expenses associated with having high profile individuals promote
and market our website.
 
 Consulting
Fees:  Our consulting fees were $287,111 for the fiscal year of
2009 and $0 for fiscal year 2008, representing an increase of $287,111 as a
result of the expenses associated with the additional consulting, promotional
and marketing services.
 
 Professional Fees: Our
professional fees were $87,866 for the fiscal year of 2009 and $11,325 for
fiscal year 2008, representing an increase of $76,541, or approximately 676% as
a result of the expenses associated with the preparation of our financial
statements and regulatory filings required for publicly traded
companies.
 
 Website Development:Our
website development expenses were $91,854 for the fiscal year of 2009 and $0 for
fiscal year 2008, representing an increase of $91,854 as a result of expenses
associated with continuous improvements and enhancements made to our website
throughout the fiscal year.
 
 Compensation: Our
compensation expenses were $216,000 for the fiscal year of 2009 and $43,549 for
the fiscal year 2008, representing an increase of $172,451 as a result of
our expensing of monthly compensation to Mr. Greg Halpern, our President
and CEO, pursuant to an employment agreement which we entered into with Mr. Greg
Halpern on October 13, 2008. A copy of the employment agreement was
attached as Exhibit 10.1 to the Form 8-K filed on October 17, 2008.
 
 Net Loss: Our net loss for
the fiscal year of 2009 was $2,298,552, compared to $117,115 for fiscal year of
2008. The increase in net loss was the result of the substantial increase in our
operating expenses.
 
 7
 
 Liquidity
and Capital Resources
 
 We are in
the development state with no revenue and have an accumulated deficit of
$2,555,372 for the period from December 9, 2005 (inception) to December 31,
2009, and have negative cash flow from operations of $177,428 from inception.
 
 Our
financial statements have been presented on the basis that it is a going
concern, which contemplates the realization of revenues from our subscriber base
and the satisfaction of liabilities in the normal course of business. We have
incurred losses from inception. These factors raise substantial doubt about our
ability to continue as a going concern.
 
 From our
inception through December 31, 2009, our primary source of funds has been
the proceeds of private offerings of our common stock and loans from
stockholders.  Our need to obtain capital from outside investors is
expected to continue until we are able to achieve profitable operations, if
ever.  There is no assurance that management will be successful in
fulfilling all or any elements of its plans.
  
 
 For the
fiscal year ended December 31, 2009, we received $41,200 from Mr. Greg Halpern,
our principal shareholder. Pursuant to the terms of the loan, the loan is
bearing an annual interest rate of 3.25% and due on demand. As of December 31,
2009, we owed $39,700 in principal and $495 in accrued
interest.
 
 For the
fiscal year ended December 31, 2009, we received $119,500 from Mr. Greg Halpern,
our principal shareholder, by way of two lines of credits.  Pursuant to the
lines of credit agreements, the lines of credits bear an annual interest
rate of 3.25% and are due on May 29, 2011 and November 11, 2011.  As of
December 31, 2009, we still owe $119,500 in principal and accrued interest
of  $1,176.
 
 We have
entered into an Amendment to Gigablast Professional Services Agreement, pursuant
to which, Gigablast agrees to reduce our outstanding balance from $34,325.00 to
$17,162.50, which represents a 50% discount to the fees arising from the
professional services provided by Gigablast in connection with developing the So
Act Search Engine and So Act Network and reduce their hourly rate of labor for
further development of the So Act Network from $150 per hour to $75 per hour.
For the aforementioned considerations received, we grant Gigablast the right to
use, for any purpose other than in the field of social action network, all work
or intellectual property that Gigablast has developed for the Company under the
Gigablast Professional Services Agreement.
 
 However,
additional expenses may arise from the maintenance of our regulatory filings and
responsibilities which include legal, accounting and electronic filing services.
It is anticipated that the cost to maintain these activities will be no less
than $76,000 and no more than $108,000. We have entered into a Credit Line
Agreement and Line of Credit Note with Greg Halpern who has agreed to establish
a revolving line of credit for us with a maximum amount of $100,000 that will
mature and expire on November 10, 2011. The Credit Line Agreement shall
accrue interest at the prime rate. The prime rate of interest is the rate of
interest that major banks charge their most creditworthy customers. For the
purposes of this agreement, we shall determine the prime rate by using the prime
rate reported by the Wall Street Journal on the date funds are extended to the
Company. Based on the current prime rate, it is estimated that the prime rate
shall be 3.25% but that may be subject to adjustment based on market factors and
the fluctuation of the prime rate.
 
 8
 
 Recent
Accounting Pronouncements
 
 In
June 2009, the FASB issued ASC 105 Accounting Standards
CodificationTMand the Hierarchy of
Generally Accepted Accounting Principles. The FASB Accounting Standards
CodificationTM (the
“Codification”) has become the source of authoritative accounting principles
recognized by the FASB to be applied by nongovernmental entities in the
preparation of financial statements in accordance with Generally Accepted
Accounting Principles (“GAAP”). All existing accounting standard documents are
superseded by the Codification and any accounting literature not included in the
Codification will not be authoritative. Rules and interpretive releases of the
SEC issued under the authority of federal securities laws, however, will
continue to be the source of authoritative generally accepted accounting
principles for SEC registrants. Effective September 30, 2009, all
references made to GAAP in our financial statements will include references to
the new Codification. The Codification does not change or alter existing GAAP
and, therefore, will not have an impact on our financial position, results of
operations or cash flows.
 
 In June
2009, the FASB issued changes to the consolidation guidance applicable to a
variable interest entity (VIE). FASB ASC Topic 810 (“ASC 810), "Consolidation,"
amends the guidance governing the determination of whether an enterprise is the
primary beneficiary of a VIE, and is, therefore, required to consolidate an
entity, by requiring a qualitative analysis rather than a quantitative analysis.
The qualitative analysis will include, among other things, consideration of who
has the power to direct the activities of the entity that most significantly
impact the entity's economic performance and who has the obligation to absorb
losses or the right to receive benefits of the VIE that could potentially be
significant to the VIE. This standard also requires continuous reassessments of
whether an enterprise is the primary beneficiary of a VIE. ASC 810 also requires
enhanced disclosures about an enterprise's involvement with a VIE. ASC 810 is
effective as of the beginning of interim and annual reporting periods that begin
after November 15, 2009. This will not have an impact on the Company’s financial
position, results of operations or cash flows.
 
 In June
2009, the FASB issued Financial Accounting Standards Codification No. 860 –
(“ASC 860”) Transfers and Servicing. ASC No. 860 improves the relevance,
representational faithfulness, and comparability of the information that a
reporting entity provides in its financial statements about a transfer of
financial assets; the effects of a transfer on its financial position, financial
performance, and cash flows; and a transferor's continuing involvement, if any,
in transferred financial assets. ASC  860 is effective as of the
beginning of each reporting entity's first annual reporting period that begins
after November 15, 2009, for interim periods within that first annual reporting
period and for interim and annual reporting periods thereafter. The Company is
evaluating the impact the adoption of ASC  860 will have on its
financial statements.
 
 Critical
Accounting Policies and Estimates
 
 Our
financial statements and related public financial information are based on the
application of accounting principles generally accepted in the United States
(“GAAP”). GAAP requires the use of estimates; assumptions, judgments and
subjective interpretations of accounting principles that have an impact on the
assets, liabilities, revenues and expense amounts reported. These estimates can
also affect supplemental information contained in our external disclosures
including information regarding contingencies, risk and financial condition. We
believe our use of estimates and underlying accounting assumptions adhere
to
 
 9
  GAAP and
are consistently and conservatively applied. We base our estimates on historical
experience and on various other assumptions that we believe to be reasonable
under the circumstances. Actual results may differ materially from these
estimates under different assumptions or conditions. We continue to monitor
significant estimates made during the preparation of our financial
statements.
 
 Use of Estimates:In preparing financial
statements in conformity with generally accepted accounting principles,
management is required to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of contingent
assets and liabilities at the date of the financial statements and revenues and
expenses during the reported period.  Actual results could differ from
those estimates.
 
 Revenue
Recognition:Revenue is recognized when persuasive evidence of
an arrangement exists, delivery has occurred, the fee is fixed or determinable
and collectability is assured.  We had no revenue for the twelve
months ended December 31, 2009 and 2008, respectively.
 
 Stock-Based
Compensation:
 
 In
December 2004, the FASB issued FASB Accounting Standards Codification No. 718,
Compensation – Stock
Compensation.  Under FASB Accounting Standards Codification No.
718, companies are required to measure the compensation costs of share-based
compensation arrangements based on the grant-date fair value and recognize the
costs in the financial statements over the period during which employees are
required to provide services. Share-based compensation arrangements include
stock options, restricted share plans, performance-based awards, share
appreciation rights and employee share purchase plans.  As such,
compensation cost is measured on the date of grant at their fair
value.  Such compensation amounts, if any, are amortized over the
respective vesting periods of the option grant.  The Company applies
this statement prospectively.
 
 Equity
instruments (“instruments”) issued to other than employees are recorded on the
basis of the fair value of the instruments, as required by FASB Accounting
Standards Codification No. 718.  FASB Accounting Standards Codification No.
505, Equity Based Payments to
Non-Employeesdefines the measurement date and recognition period for
such instruments.  In general, the measurement date is when either a (a)
performance commitment, as defined, is reached or (b) the earlier of (i) the
non-employee performance is complete or (ii) the instruments are vested. The
measured value related to the instruments is recognized over a period based on
the facts and circumstances of each particular grant as defined in the FASB
Accounting Standards Codification.
 
 Off-Balance Sheet
Arrangements
 
 We do not
have any off-balance sheet arrangements, financings, or other relationships with
unconsolidated entities or other persons, also known as “special purpose
entities” (SPEs).
 
 ITEM
7A.      QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK.
 
 We are
subject to certain market risks, including changes in interest rates and
currency exchange rates.  We have not undertaken any specific actions to
limit those exposures.
 
 ITEM
8.         FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA.
 
  10
 
 SO
ACT NETWORK, INC.
 (A
DEVELOPMENT STAGE COMPANY)
 
 
 CONTENTS
 
 
 PAGE
              F-1
              REPORT
      OF INDEPENDENT REGISTERED ACCOUNTING FIRMPAGE
              F-2
              BALANCE
      SHEETS AS OF DECEMBER 31, 2009 AND AS OF DECEMBER 31,
  2008.PAGE
              F-3
              STATEMENTS
      OF OPERATIONS FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2009 AND 2008 AND
      FOR THE PERIOD DECEMBER 9, 2005 (INCEPTION) TO DECEMBER 31,
      2009.PAGE
              F-4
              STATEMENT
      OF CHANGES IN STOCKHOLDERS’ DEFICIENCY FOR THE PERIOD FROM DECEMBER 9,
      2005 (INCEPTION) TO DECEMBER 31, 2009PAGE
              F-5
              STATEMENTS
      OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2009 AND 2008 AND FOR THE
      PERIOD DECEMBER 9, 2005 (INCEPTION) TO DECEMBER 31, 2009
  .PAGES
              F-6
      - F-24
              NOTES
      TO FINANCIAL STATEMENTS.
 
 
 F-
 
 ALAN
R. SWIFT, CPA, P.A.
 
 
 
 REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 To the
Board of Directors of: So Act Network, Inc.
 (A
Development Stage Company)
 
 We have
audited the accompanying balance sheets of So Act Network, Inc. (A Development
Stage Company) as of December 31, 2009 and 2008 and the related statements of
operations, changes in stockholders' deficiency and cash flows for the years
ended December 31, 2009 and 2008 and for the period from December 9,
2005(inception) to December 31, 2009. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these 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. The company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration or internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, 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 provides a
reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly inall material respects, the
financial position of So Act Network, inc. (.A Development Stage Company) as of
December 31, 2009 and 2008 and the results of its operations and its cash flows
for the years ended December 31, 2009 and 2008 and for the period December 9,
2005 (inception) through to December 31, 2009 in conformity with accounting
principles generally accepted in the United States of
America.
 
 The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 2 to the financial
statements, the Company is in the development stage with no operations, has an
accumulated deficit of $2,555,372 for the period from December 9, 2005
(Inception) to December 31. 2009, and has a negative cash flow from operations
of $ 177,428 from inception. These factors raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans concerning these matters are also described in Note 2. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
 
 /s/ Alan R. Swift CPA, P.A.
 Alan R.
Swift, CPA, P.A.
 Certified
Public Accountant and Consultant
 
 Palm
Beach Gardens, Florida
 March 15,
2010
 
 
 800
VILLAGE SQUARE CROSSING, SUITE 118, PALM BEACH GARDENS, FL
33410
 PHONE
(561) 656-0818 FAX (561) 658-0245
 www.aswiftcpa.com
 
 
 F-1
 
 So
      Act Network, Inc.(A
      Development Stage Company)Balance
      SheetsASSETSDecember
      31, 2009
              
              
              December
      31, 2008Current
      AssetsCash
              
              $
              5,390
              
              
              $
              33,950Prepaid
      Expenses
              
              
              6,714
              
              
              
              359Total  Current
      Assets
              
              
              12,104
              
              
              
              34,309Property
      and Equipment, net
              
              
              101,072
              
              
              
              2,437Intangible
      assets
              
              
              275
              
              
              
              275Total  Assets
              
              $
              113,451
              
              
              $
              37,021LIABILITIES AND STOCKHOLDERS'
      DEFICIENCYCurrent
      LiabilitiesAccounts
      payable
              
              $
              70,449
              
              
              $
              860Accrued
      Expenses
              
              
              221,431
              
              
              
              46,910Loan
      payable - related party
              
              
              159,200
              
              
              
              3,803Total
      Current Liabilities
              
              
              451,080
              
              
              
              51,573Commitments
      and ContingenciesStockholders'
      DeficiencyPreferred
      stock,  $0.001 par value; 10,000,000 shares
      authorized,No
      shares issued and outstanding
              
              
              -
              
              
              
              -Common
      stock,  $0.001 par value; 250,000,000 shares
      authorized,188,159,714
      and 181,940,000 shares issued and outstanding,
      respectively
              
              
              188,160
              
              
              
              181,940Deferred
      Compensation
              
              
              (7,587,284
              )
              
              
              -Additional
      paid-in capital
              
              
              9,616,867
              
              
              
              128,078Subscription
      receivable
              
              
              -
              
              
              
              (67,750
              )Deficit
      accumulated during the development stage
              
              
              (2,555,372
              )
              
              
              (256,820
              )Total
      Stockholders' Deficiency
              
              
              (337,629
              )
              
              
              (14,552
              )Total
      Liabilities and Stockholders' Deficiency
              
              $
              113,451
              
              
              $
              37,021
 
 See
accompanying notes to financial statements.
 
 F-2
  So
      Act Network, Inc.(A
      Development Stage Company)Statements
      of OperationsFor
      the Period FromFor
      the Year Ended,
              
              
              December
      9, 2005 (Inception)December
      31,
                2009
              
              
              December
      31,
                2008
              
              
              to
      December 31, 2009Operating
      ExpensesGeneral
      and Administrative
              
              $
              85,842
              
              
              $
              62,210
              
              
              $
              106,402Endorsement
      Fees
              
              
              1,534,882
              
              
              
              -
              
              
              
              1,534,882Consulting
              
              
              287,111
              
              
              
              -
              
              
              
              332,011Professional
      Fees
              
              
              87,866
              
              
              
              11,325
              
              
              
              99,191Website
      Development
              
              
              91,854
              
              
              
              -
              
              
              
              91,854Compensation
              
              
              216,000
              
              
              
              43,549
              
              
              
              259,549Total
      Operating Expenses
              
              
              2,303,555
              
              
              
              117,084
              
              
              
              2,423,889Loss
      from Operations
              
              
              (2,303,555
              )
              
              
              (117,084
              )
              
              
              (2,423,889
              )Other
      IncomeGain
      on entinguishment of debt
              
              
              6,643
              
              
              
              -
              
              
              
              6,643Total
      Other Income
              
              
              6,643
              
              
              
              -
              
              
              
              6,643Other
      ExpenseInterest
      Expense
              
              
              (1,640
              )
              
              
              (31
              )
              
              
              (1,671
              )Total
      Other Expense
              
              
              (1,640
              )
              
              
              (31
              )
              
              
              (1,671
              )Provision
      for Income  Taxes
              
              
              -
              
              
              
              -
              
              
              
              -Net
      Loss
              
              $
              (2,298,552
              )
              
              $
              (117,115
              )
              
              $
              (2,418,917
              )Net
      Loss Per Share  - Basic and Diluted
              
              
              (0.01
              )
              
              
              (0.00
              )Weighted
      average number of shares outstandingduring
      the year Basic and Diluted
              
              
              183,097,488
              
              
              
              38,818,104
 
 See
accompanying notes to financial statements.
 
 F-3
  So
      Act Network, Inc.(A
      Development Stage Company)Statement of Changes
      in Stockholders' DeficiencyFor
      the Period from December 9, 2005 (Inception) to December 31,
      2009
 
 Preferred
      stock
                
                
                Common
      stock
                
                
                Additional
                
                
                
                
                
                
                
                
                
                
                
                Totalpaid-in
                
                
                Accumulated
                
                
                Subscription
                
                
                Deferred
                
                
                Stockholder'sShares
                
                
                Amount
                
                
                Shares
                
                
                Amount
                
                
                capital
                
                
                Deficit
                
                
                Receivable
                
                
                Compensation
                
                
                (Deficiency)Balance,
      December 9, 2005 (Inception)
                
                
                -
                
                
                $
                -
                
                
                
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -Stock
      issued on acceptance of incorporation expenses
                
                
                -
                
                
                
                -
                
                
                
                100,000
                
                
                
                100
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                100Net
      loss for the period December 9, 2005 (Inception) to December 31,
      2005
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (400
                )
                
                
                -
                
                
                
                -
                
                
                
                (400
                )Balance,
      December 31, 2005
                
                
                -
                
                
                
                -
                
                
                
                100,000
                
                
                
                100
                
                
                
                -
                
                
                
                (400
                )
                
                
                -
                
                
                
                -
                
                
                
                (300
                )Net
      loss
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (1,450
                )
                
                
                -
                
                
                
                -
                
                
                
                (1,450
                )Balance,
      December 31, 2006
                
                
                -
                
                
                
                -
                
                
                
                100,000
                
                
                
                100
                
                
                
                -
                
                
                
                (1,850
                )
                
                
                -
                
                
                
                -
                
                
                
                (1,750
                )Net
      loss
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (1,400
                )
                
                
                -
                
                
                
                
                
                
                
                (1,400
                )Balance,
      December 31, 2007
                
                
                -
                
                
                
                -
                
                
                
                100,000
                
                
                
                100
                
                
                
                -
                
                
                
                (3,250
                )
                
                
                -
                
                
                
                -
                
                
                
                (3,150
                )Common
      stock issued for services to founder ($0.001/sh)
                
                
                -
                
                
                
                -
                
                
                
                44,900,000
                
                
                
                44,900
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                44,900Common
      stock issued for cash ($0.25/sh)
                
                
                -
                
                
                
                -
                
                
                
                473,000
                
                
                
                473
                
                
                
                117,777
                
                
                
                -
                
                
                
                (67,750
                )
                
                
                -
                
                
                
                50,500Common
      stock issued for services ($0.25/sh)
                
                
                -
                
                
                
                -
                
                
                
                12,000
                
                
                
                12
                
                
                
                2,988
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                3,000Shares
      issued in connection with stock dividend
                
                
                -
                
                
                
                -
                
                
                
                136,455,000
                
                
                
                136,455
                
                
                
                -
                
                
                
                (136,455
                )
                
                
                -
                
                
                
                -
                
                
                
                -In
      kind contribution of rent - related party
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                2,913
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                2,913Accrued
      expenses payment made by a former shareholder
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                4,400
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                4,400Net
      loss
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (117,115
                )
                
                
                -
                
                
                
                -
                
                
                
                (117,115
                )Balance,
      December 31, 2008
                
                
                -
                
                
                
                -
                
                
                
                181,940,000
                
                
                
                181,940
                
                
                
                128,078
                
                
                
                (256,820
                )
                
                
                (67,750
                )
                
                
                -
                
                
                
                (14,552
                )Common
      stock issued for cash ($0.25/sh)
                
                
                -
                
                
                
                -
                
                
                
                62,000
                
                
                
                62
                
                
                
                15,438
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                15,500Common
      stock issued for services ($0.25/sh)
                
                
                -
                
                
                
                -
                
                
                
                24,000
                
                
                
                24
                
                
                
                5,976
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                6,000Common
      stock issued for services ($0.35/sh)
                
                
                -
                
                
                
                -
                
                
                
                1,700,000
                
                
                
                1,700
                
                
                
                593,300
                
                
                
                -
                
                
                
                -
                
                
                
                (499,333
                )
                
                
                95,667Common
      stock issued for services ($0.0625/sh)
                
                
                -
                
                
                
                -
                
                
                
                935,714
                
                
                
                936
                
                
                
                57,546
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                58,482Warrants
      issued for services
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                823,077
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                823,077Common
      stock issued for services ($1.50/sh)
                
                
                -
                
                
                
                -
                
                
                
                30,000
                
                
                
                30
                
                
                
                44,970
                
                
                
                -
                
                
                
                -
                
                
                
                (39,699
                )
                
                
                5,301Common
      stock issued for services ($1.77/sh)
                
                
                -
                
                
                
                -
                
                
                
                30,000
                
                
                
                30
                
                
                
                53,070
                
                
                
                -
                
                
                
                -
                
                
                
                (53,100
                )
                
                
                -Common
      stock issued for services ($1.78/sh)
                
                
                -
                
                
                
                -
                
                
                
                100,000
                
                
                
                100
                
                
                
                177,900
                
                
                
                -
                
                
                
                -
                
                
                
                (166,052
                )
                
                
                11,948Common
      stock issued for services ($1.80/sh)
                
                
                -
                
                
                
                -
                
                
                
                100,000
                
                
                
                100
                
                
                
                179,900
                
                
                
                -
                
                
                
                -
                
                
                
                (168,904
                )
                
                
                11,096Common
      stock issued for services ($1.93/sh)
                
                
                -
                
                
                
                -
                
                
                
                2,830,000
                
                
                
                2,830
                
                
                
                5,459,070
                
                
                
                -
                
                
                
                -
                
                
                
                (5,459,098
                )
                
                
                2,802Common
      stock issued for services ($1.94/sh)
                
                
                -
                
                
                
                -
                
                
                
                30,000
                
                
                
                30
                
                
                
                58,170
                
                
                
                -
                
                
                
                -
                
                
                
                (58,200
                )
                
                
                -Common
      stock issued for services ($1.95/sh)
                
                
                -
                
                
                
                -
                
                
                
                920,000
                
                
                
                920
                
                
                
                1,793,080
                
                
                
                -
                
                
                
                -
                
                
                
                (1,135,808
                )
                
                
                658,192Common
      stock issued for services ($2.00/sh)
                
                
                -
                
                
                
                -
                
                
                
                300,000
                
                
                
                300
                
                
                
                599,700
                
                
                
                -
                
                
                
                -
                
                
                
                (506,423
                )
                
                
                93,577Return
      of common stock issued for services ($0.35/sh)
                
                
                -
                
                
                
                -
                
                
                
                (1,100,000
                )
                
                
                (1,100
                )
                
                
                (383,900
                )
                
                
                -
                
                
                
                -
                
                
                
                385,000
                
                
                
                -Shares
      issued in connection with stock dividend
                
                
                -
                
                
                
                -
                
                
                
                258,000
                
                
                
                258
                
                
                
                (258
                )
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -Stock
      offering costs
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (850
                )
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (850
                )Collection
      of subscription receivable
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                67,750
                
                
                
                -
                
                
                
                67,750In
      kind contribution of rent - related party
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                12,600
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                12,600Deferred
      compensation realized
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                114,333
                
                
                
                114,333Net
      loss for the year ended December 31, 2009
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (2,298,552
                )
                
                
                -
                
                
                
                -
                
                
                
                (2,298,552
                )Balance
      December 31, 2009
                
                
                -
                
                
                $
                -
                
                
                
                188,159,714
                
                
                $
                188,160
                
                
                $
                9,616,867
                
                
                $
                (2,555,372
                )
                
                $
                -
                
                
                $
                (7,587,284
                )
                
                $
                (337,629
                )
  See
accompanying notes to financial statements.
  F-4
  
 So
      Act Network, Inc.(A
      Development Stage Company)Statements
      of Cash FlowsFor
      the Period FromFor
      the Year Ended
              
              
              December
      9, 2005 (Inception)December
      31,
                2009
              
              
              December
      31,
                2008
              
              
              to
      December 31, 2009Cash
      Flows From Operating Activities:Net
      Loss
              
              $
              (2,298,552
              )
              
              $
              (117,115
              )
              
              $
              (2,418,917
              )Adjustments
      to reconcile net loss to net cash used in operationsDepreciation/Amortization
              
              
              13,058
              
              
              
              127
              
              
              
              13,185In
      kind contribution of rent - related party
              
              
              12,600
              
              
              
              2,913
              
              
              
              15,513Stock
      issued for services
              
              
              1,766,142
              
              
              
              47,900
              
              
              
              1,814,142Bluesky
      Fees
              
              
              (850
              )
              
              
              -
              
              
              
              (850
              )Amortization
      of Stock Based Compensation
              
              
              114,333
              
              
              
              -
              
              
              
              114,333Changes
      in operating assets and liabilities:Increase
      in prepaid expenses
              
              
              (6,355
              )
              
              
              (359
              )
              
              
              (6,714
              )Increase
      accounts payable
              
              
              69,589
              
              
              
              860
              
              
              
              70,449Increase
      in accrued expenses
              
              
              174,521
              
              
              
              43,760
              
              
              
              221,431Net
      Cash Used in Operating Activities
              
              
              (155,514
              )
              
              
              (21,914
              )
              
              
              (177,428
              )Cash
      Flows From Investing Activities:Register
      of trademark
              
              
              -
              
              
              
              (275
              )
              
              
              (275
              )Purchase
      of equipment
              
              
              (111,693
              )
              
              
              (2,564
              )
              
              
              (114,257
              )Net
      Cash Used in Investing Activities
              
              
              (111,693
              )
              
              
              (2,839
              )
              
              
              (114,532
              )Cash
      Flows From Financing Activities:Proceeds
      from stockholder loans
              
              
              165,700
              
              
              
              18,803
              
              
              
              184,203Repayment
      of stockholder loans
              
              
              (10,303
              )
              
              
              (15,000
              )
              
              
              (25,003
              )Accrued
      expenses payment made by a former shareholder
              
              
              -
              
              
              
              4,400
              
              
              
              4,400Proceeds
      from issuance of stock, net of subscriptions
    receivable
              
              
              15,500
              
              
              
              50,500
              
              
              
              133,750Proceeds
      from collection of stock subscription
              
              
              67,750
              
              
              
              -
              
              
              
              -Net
      Cash Provided by Financing Activities
              
              
              238,647
              
              
              
              58,703
              
              
              
              297,350Net
      Increase / (Decrease) in Cash
              
              
              (28,560
              )
              
              
              33,950
              
              
              
              5,390Cash
      at Beginning of Period
              
              
              33,950
              
              
              
              -
              
              
              
              -Cash
      at End of Period
              
              $
              5,390
              
              
              $
              33,950
              
              
              $
              5,390Supplemental disclosure of cash flow
      information:Cash
      paid for interest
              
              $
              -
              
              
              $
              -
              
              
              $
              -Cash
      paid for taxes
              
              $
              -
              
              
              $
              -
              
              
              $
              -Supplemental disclosure of non-cash investing and
      financing activities:Shares
      issued in connection with stock dividend
              
              $
              -
              
              
              $
              136,455
              
              
              $
              136,455Stock
      sold for subscription
              
              $
              -
              
              
              $
              67,750
              
              
              $
              67,750
 
 See
accompanying notes to financial statements.
 
 F-5
 SO
ACT NETWORK, INC.
 (A DEVELOPMENT STAGE
COMPANY)
 NOTES
TO FINANCIAL STATEMENTS
 AS OF DECEMBER 31, 2009 AND
2008
 
 NOTE
      1
              SUMMARY OF SIGNIFICANT
      ACCOUNTING POLICIES AND
ORGANIZATION
  (A)
Organization
 
 So Act
Network, Inc. Inc.  (f/k/a 43010, Inc.) (the “Company”) was
incorporated in Delaware on December 9, 2005. The Company is currently in the
development stage and plans to create search technologies within an online
networking platform.
 
 On
October 15, 2008 the Company changed its name to So Act Network,
Inc.
 
 (B) Use of
Estimates
 
 In
preparing financial statements in conformity with generally accepted accounting
principles, management is required to make estimates and assumptions that affect
the reported amounts of assets and liabilities and the disclosure of contingent
assets and liabilities at the date of the financial statements and revenues and
expenses during the reported period.  Actual results could differ from
those estimates.
 
 (C) Cash and Cash
Equivalents
 
 For
purposes of the cash flow statements, the Company considers all highly liquid
investments with original maturities of three months or less at the time of
purchase to be cash equivalents.
 
 (D) Property and
Equipment
 
 Property
and equipment are stated at cost, less accumulated
depreciation.  Expenditures for maintenance and repairs are charged to
expense as incurred.  Depreciation is provided using the straight-line
method over the estimated useful life of three to five years.
 
 (E) Research and
Development
 
 The
Company has adopted the provisions of FASB Accounting Standards Codification No.
350, Intangibles – Goodwill
& Other.  Costs incurred in the planning stage of a website
are expensed as research and development while costs incurred in the development
stage are capitalized and amortized over the life of the asset, estimated to be
three years.  Expenses subsequent to the launch have been expensed as
website development expenses.
 
 (F) Revenue
Recognition
 
 The
Company recognized revenue on arrangements in accordance with FASB Codification
Topic 605, “Revenue
Recognition” (“ASC Topic 605”).  Under ASC Topic 605, revenue
is recognized only when the price is fixed and determinable, persuasive evidence
of an arrangement exists, the service is performed and collectability of the
resulting receivable is reasonably assured.
 
 F-6
  SO
ACT NETWORK, INC.
 (A DEVELOPMENT STAGE
COMPANY)
 NOTES
TO FINANCIAL STATEMENTS
 AS OF DECEMBER 31, 2009 AND
2008
 
 (G) Advertising
Costs
 
 Advertising
costs are expensed as incurred and include the costs of public relations
activities.  These costs are included in consulting and general and
administrative expenses and totaled $8,731and $867 for the years ended December
31, 2009 and 2008, respectively.
 
 (H) Identifiable Intangible
Assets
 
 As of
December 31, 2009 and 2008, $275 and $275, respectively of costs related to
registering a trademark has been capitalized.  It has been determined
that the trademark has an indefinite useful life and not subject to
amortization.  However, the trademark will be reviewed for impairment
annually or more frequently if impairment indicators arise.
 
 (I) Loss Per
Share
 
 In
accordance with accounting guidance now codified as FASB ASC Topic 260, “Earnings per
Share,”Basic earnings per share (“EPS”) is computed by
dividing net loss available to common stockholders by the weighted average
number of common shares outstanding during the period, excluding the effects of
any potentially dilutive securities. Diluted EPS gives effect to all dilutive
potential of shares of common stock outstanding during the period including
stock options or warrants, using the treasury stock method (by using the average
stock price for the period to determine the number of shares assumed to be
purchased from the exercise of stock options or warrants), and convertible debt
or convertible preferred stock, using the if-converted method. Diluted EPS
excludes all dilutive potential of shares of common stock if their effect is
anti-dilutive.   Because of the Company’s net losses, the effects
of stock warrants would be anti-dilutive and accordingly, is excluded from the
computation of earnings per share.  The number of such warrants
excluded from the computations of diluted loss per share totaled 500,000 in 2009
and 0 in 2008.
 
 (J) Income
Taxes
 
 The
Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC
740-10-25”)Income Taxes.  Under ASC 740-10-25, deferred tax assets and
liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases.  Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled.  Under ASC 740-10-25, the effect on deferred
tax assets and liabilities of a change in tax rates is recognized in income in
the period that includes the enactment date.
  F-7
  
 SO
ACT NETWORK, INC.
 (A DEVELOPMENT STAGE
COMPANY)
 NOTES
TO FINANCIAL STATEMENTS
 AS OF DECEMBER 31, 2009 AND
2008
 
 The net
deferred tax liability in the accompanying balance sheets includes the following
amounts of deferred tax assets and liabilities:
 
 Years
      Ended December,2009
              
              
              2008Deferred
      tax liability:
              
              $
              -
              
              
              $
              -Deferred
      tax assetNet
      Operating Loss Carryforward
              
              
              199,766
              
              
              
              23,100Valuation
      allowance
              
              
              (199,766)
              
              
              
              (23,100)Net
      deferred tax asset
              
              
              -
              
              
              
              -Net
      deferred tax liability
              
              $
              -
              
              
              $
              -
 
 The
provision for income taxes has been computed as follows:
 
 2009
              
              
              2008Expected
      income tax recovery (expense) at the statuary rate of
      34%
              
              $
              781,508
              
              
              $
              39,819Tax
      effect of expenses that are not deductible for income tax
                  purposes
      (net of other amounts deductible for tax purposes)
              
              
              (4354
              )
              
              
              (16,999
              )Tax
      effect of differences in the timing of deductibility of items for income
      tax purposes:
              
              
              (600,488
              )
              
              
              -Utilization
      of non-capital tax losses to offset current taxable
      income
              
              
              -
              
              
              
              -Change
      in valuation allowance
              
              
              (176,666
              )
              
              
              ( 22,820
              )Provision
      for income taxes
              
              $
              -
              
              
              $
              -
 
 The
valuation allowance was established to reduce the deferred tax asset to the
amount that will more likely than not be realized. This is necessary due to
the Company’s continued operating losses and the uncertainty of the Company’s
ability to utilize all of the net operating loss carryforwards before they will
expire through the year 2029 and 2008, respectively.
 
 The net
change in the valuation allowance for the year ended December 31, 2009 and 2008
was an increase of $176,666 and $22,820, respectively.
 
 The
components of income tax expense related to continuing operations are as
follows:
 
 2009
              
              
              2008FederalCurrent
              
              $
              -
              
              
              $
              -Deferred
              
              
              -
              
              
              
              -$
              -
              
              
              $
              -State
      and LocalCurrent
              
              $
              -
              
              
              $
              -Deferred
              
              
              -
              
              
              
              -$
              -
              
              
              $
              -
 
 F-8
  SO
ACT NETWORK, INC.
 (A DEVELOPMENT STAGE
COMPANY)
 NOTES
TO FINANCIAL STATEMENTS
 AS OF DECEMBER 31, 2009 AND
2008
 
 (K) Business
Segments
 
 The
Company operates in one segment and therefore segment information is not
presented.
 
 (L) Recent Accounting
Pronouncements
 
 In
June 2009, the FASB issued ASC 105 Accounting Standards
CodificationTMand the Hierarchy of
Generally Accepted Accounting Principles. The FASB Accounting Standards
CodificationTM (the
“Codification”) has become the source of authoritative accounting principles
recognized by the FASB to be applied by nongovernmental entities in the
preparation of financial statements in accordance with Generally Accepted
Accounting Principles (“GAAP”). All existing accounting standard documents are
superseded by the Codification and any accounting literature not included in the
Codification will not be authoritative. Rules and interpretive releases of the
SEC issued under the authority of federal securities laws, however, will
continue to be the source of authoritative generally accepted accounting
principles for SEC registrants. Effective September 30, 2009, all
references made to GAAP in our financial statements will include references to
the new Codification. The Codification does not change or alter existing GAAP
and, therefore, will not have an impact on our financial position, results of
operations or cash flows.
 
 In June
2009, the FASB issued changes to the consolidation guidance applicable to a
variable interest entity (VIE). FASB ASC Topic 810 (“ASC 810), "Consolidation,"
amends the guidance governing the determination of whether an enterprise is the
primary beneficiary of a VIE, and is, therefore, required to consolidate an
entity, by requiring a qualitative analysis rather than a quantitative analysis.
The qualitative analysis will include, among other things, consideration of who
has the power to direct the activities of the entity that most significantly
impact the entity's economic performance and who has the obligation to absorb
losses or the right to receive benefits of the VIE that could potentially be
significant to the VIE. This standard also requires continuous reassessments of
whether an enterprise is the primary beneficiary of a VIE. ASC 810 also requires
enhanced disclosures about an enterprise's involvement with a VIE. ASC 810 is
effective as of the beginning of interim and annual reporting periods that begin
after November 15, 2009. This will not have an impact on the Company’s financial
position, results of operations or cash flows.
 
 In June
2009, the FASB issued Financial Accounting Standards Codification No. 860 –
(“ASC 860”) Transfers and Servicing. ASC No. 860 improves the relevance,
representational faithfulness, and comparability of the information that a
reporting entity provides in its financial statements about a transfer of
financial assets; the effects of a transfer on its financial position, financial
performance, and cash flows; and a transferor's continuing involvement, if any,
in transferred financial assets. ASC  860 is effective as of the
beginning of each reporting entity's first annual reporting period that begins
after November 15, 2009, for interim periods within that first annual reporting
period and for interim and annual reporting periods thereafter. The Company is
evaluating the impact the adoption of ASC  860 will have on its
financial statements.
 
 (M) Fair Value of Financial
Instruments
  The
carrying amounts on the Company’s financial instruments including accounts
payable accrued expenses, and stockholder loans, approximate fair value due to
the relatively short period to maturity for this instrument.
  F-9
 
 SO
ACT NETWORK, INC.
 (A DEVELOPMENT STAGE
COMPANY)
 NOTES
TO FINANCIAL STATEMENTS
 AS OF DECEMBER 31, 2009 AND
2008
 
 (N) Stock-Based
Compensation
 
 In
December 2004, the FASB issued FASB Accounting Standards Codification No. 718,
Compensation – Stock
Compensation.  Under FASB Accounting Standards Codification No.
718, companies are required to measure the compensation costs of share-based
compensation arrangements based on the grant-date fair value and recognize the
costs in the financial statements over the period during which employees are
required to provide services. Share-based compensation arrangements include
stock options, restricted share plans, performance-based awards, share
appreciation rights and employee share purchase plans.  As such,
compensation cost is measured on the date of grant at their fair
value.  Such compensation amounts, if any, are amortized over the
respective vesting periods of the option grant.  The Company applies
this statement prospectively.
 
 Equity
instruments (“instruments”) issued to other than employees are recorded on the
basis of the fair value of the instruments, as required by FASB Accounting
Standards Codification No. 718.  FASB Accounting Standards Codification No.
505, Equity Based Payments to
Non-Employeesdefines the measurement date and recognition period for
such instruments.  In general, the measurement date is when either a (a)
performance commitment, as defined, is reached or (b) the earlier of (i) the
non-employee performance is complete or (ii) the instruments are vested. The
measured value related to the instruments is recognized over a period based on
the facts and circumstances of each particular grant as defined in the FASB
Accounting Standards Codification.
 
 (O)
Reclassification
 
 Certain
amounts from prior periods have been reclassified to conform to the current
period presentation.
 
 NOTE
      2
              GOING
      CONCERN
  As
reflected in the accompanying financial statements, the Company is in the
development stage with no operations, has an accumulated deficit of $2,555,372
for the period from December 9, 2005 (inception) to December 31, 2009, and has
negative cash flow from operations of $177,428 from inception. This raises
substantial doubt about its ability to continue as a going concern. The ability
of the Company to continue as a going concern is dependent on the Company’s
ability to raise additional capital and implement its business plan. The
financial statements do not include any adjustments that might be necessary if
the Company is unable to continue as a going concern.
 
 F-10
  SO
ACT NETWORK, INC.
 (A DEVELOPMENT STAGE
COMPANY)
 NOTES
TO FINANCIAL STATEMENTS
 AS OF DECEMBER 31, 2009 AND
2008
 
 
 Management
believes that actions presently being taken to obtain additional funding and
implement its strategic plans provide the opportunity for the Company to
continue as a going concern.
 
 
 NOTE
      3
              NOTE PAYABLE
      –  PRINCIPAL STOCKHOLDER
  On May
26, 2009 the Company received $16,700 from a principal stockholder. Pursuant to
the terms of the loan, the loan is bearing an annual interest rate of 3.25% and
is due on demand (See Note 8).
 
 On May
22, 2009 the Company received $15,000 from a principal stockholder. Pursuant to
the terms of the loan, the loan is bearing an annual interest rate of 3.25% and
is due on demand (See Note 8).
 
 On May
11, 2009 the Company received $9,500 from a principal stockholder. During the
year ended December 31. 2009, the Company repaid $1,500 in principal to the
principal stockholder. Pursuant to the terms of the loan, the loan is bearing an
annual interest rate of 3.25% and is due on demand (See Note 8).
 
 For the
year ended December 31, 2009, the Company owes $39,700 in principal and $495 of
accrued interest to the principal stockholder related to these principal
stockholder loans (See Note 8).
 
 For the
year ended December 31, 2008 the Company received $18,803 from a principal
stockholder. Pursuant to the terms of the loan, the loan is bearing an annual
interest rate of 3.25% and due on demand. As of December 31, 2008, the Company
still owes $3,803 in principal to the principal stockholder and accrued interest
of $31.  For the year ended December 31, 2009, the principal portion
of this principal stockholder loan balance was repaid and the Company still owes
accrued interest of $31 (See Note 8).
 
 NOTE
      4
              LINE OF CREDIT –
      PRINCIPAL STOCKHOLDER
 
 On
November 10, 2009, the Company entered into a two year line of credit agreement
with the principal stockholder in the amount of $100,000.  The line of
credit carries an interest rate of 3.25%.  As of December 31, 2009,
the principal stockholder has advanced $19,500 to the Company under this line of
credit agreement (See Note 8).
 
 On May
28, 2009, the Company entered into a two year line of credit agreement with a
principal stockholder in the amount of $100,000.  The line of credit
carries an interest rate of 3.25%.  For the year ended December 31,
2009, the principal stockholder advanced the Company $100,000 under the terms of
the line of credit agreement (See Note 8).
 
 F-11
 
 SO
ACT NETWORK, INC.
 (A DEVELOPMENT STAGE
COMPANY)
 NOTES
TO FINANCIAL STATEMENTS
 AS OF DECEMBER 31, 2009 AND
2008
 
 For the
year ended December 31, 2009 the Company owes $1,176 of accrued interest on the
lines of credit (See Note 8).
 
 NOTE
      5
              PROPERTY AND
      EQUIPMENT
  At
December 31, 2009 and 2008, respectively, property and equipment is as
follows:
 
 December
      31, 2009
              
              
              December
      31, 2008Network
      Development
              
              $
              112,722
              
              
              $
              1,860Software
              
              
              400
              
              
              
              -Office
      Equipment
              
              
              1,135
              
              
              
              704Less
      accumulated depreciation and amortization
              
              
              (13,185
              )
              
              
              (127
              )$
              101,072
              
              
              $
              2,437
 
 Depreciation/amortization
expense for year ended December 31, 2009 and 2008 was $13,058 and $127,
respectively.
  NOTE
      6
              STOCKHOLDERS’
      DEFICIENCY
  (A) Common Stock Issued for
Cash
 
 On
December 31, 2005 the Company issued 100,000 shares of common stock for cash of
$100 in exchange for acceptance of the incorporation expenses for the Company
($0.001/share).   As a result of the forward split, the 100,000 shares
were increased to 400,000 shares ($0.00025/share) (See Note
6(D)).
 
 For the
year ended December 31, 2008 the Company issued 473,000 shares of common stock
for cash of $118,250 ($0.25/share), of which $67,750 was a subscription
receivable.   During the month of January 2009, $67,750 of stock
subscription receivable was collected.  As a result of the forward
split, the 473,000 shares were increased to 1,892,000 shares ($0.0625/share).
(See Note 6(D)).
 
 On
January 2, 2009, the Company entered into stock purchase agreements to issue
20,000 shares of common stock for cash of $5,000 ($0.25/share).   As a
result of the forward split, the 20,000 shares were increased to 80,000 shares
($0.0625/share) (See Note 6(D)).
 
 F-12
 
 SO
ACT NETWORK, INC.
 (A DEVELOPMENT STAGE
COMPANY)
 NOTES
TO FINANCIAL STATEMENTS
 AS OF DECEMBER 31, 2009 AND
2008
 
 On
January 3, 2009, the Company entered into stock purchase agreements to issue
2,000 shares of common stock for cash of $500 ($0.25/share).  As a
result of the forward split, the 2,000 shares were increased to 8,000 shares
($0.0625/share) (See Note 6(D)).
 
 On
January 3, 2009, the Company entered into stock purchase agreements to issue
2,000 shares of common stock for cash of $500 ($0.25/share).  As a
result of the forward split, the 2,000 shares were increased to 8,000 shares
($0.0625/share) (See Note 6(D)).
 
 On
January 11, 2009, the Company entered into stock purchase agreements to issue
32,000 shares of common stock for cash of $8,000 ($0.25/share).  As a
result of the forward split, the 32,000 shares were increased to 128,000 shares
($0.0625/share) (See Note 6(D)).
 
 On
January 12, 2009, the Company entered into stock purchase agreements to issue
2,000 shares of common stock for cash of $500 ($0.25/share).   As a
result of the forward split, the 2,000 shares were increased to 8,000 shares
($0.0625/share) (See Note 6(D)).
 
 On
January 15, 2009, the Company entered into stock purchase agreements to issue
4,000 shares of common stock for cash of $1,000 ($0.25/share).  As a
result of the forward split, the 4,000 shares were increased to 16,000 shares
($0.0625/share) (See Note 6(D)).
 
 In
February of 2009, the Company paid direct offering costs of $850 related to the
securities sold.
 
 (B) Stock Issued for
Services
 
 On
October 14, 2008, the Company issued 44,900,000 shares of common stock to its
founder having a fair value of $44,900 ($0.001/share) in exchange for services
provided.  As a result of the forward split, the 44,900,000 shares
were increased to 179,600,000 shares and its purchase price was similarly
adjusted to $0.00025((See Note 6(D) and 8).
 
 On
November 24, 2008, the Company issued 4,000 shares of common stock having a fair
value of $1,000 ($0.25/share) in exchange for consulting services.  As
a result of the forward split, the 4,000 shares were increased to 16,000 shares
and its purchase price was similarly adjusted to $0.0625/share(See Note
6(D)).
 
 On
December 5, 2008, the Company issued 4,000 shares of common stock having a fair
value of $1,000 ($0.25/share) in exchange for consulting services.  As
a result of the forward split, the 4,000 shares were increased to 16,000 shares
and its purchase price was similarly adjusted to $0.0625/share (See Note
6(D)).
 
 On
December 20, 2008, the Company issued 4,000 shares of common stock having a fair
value of $1,000 ($0.25/share) in exchange for consulting services.  As
a result of the forward split, the 4,000 shares were increased to 16,000 shares
and its purchase price was similarly adjusted to $0.0625/share (See Note
6(D)).
 
 F-13
 
 SO
ACT NETWORK, INC.
 (A DEVELOPMENT STAGE
COMPANY)
 NOTES
TO FINANCIAL STATEMENTS
 AS OF DECEMBER 31, 2009 AND
2008
 
 On
January 12, 2009, the Company issued 4,000 shares of common stock having a fair
value of $1,000 ($0.25/share) in exchange for consulting services.  As
a result of the forward split, the 4,000 shares were increased to 16,000 shares
and its purchase price was similarly adjusted to $0.0625/share (See Note
6(D)).
 
 On
January 14, 2009, the Company issued 20,000 shares of common stock having a fair
value of $5,000 ($0.25/share) in exchange for services related to a development
services agreement entered on January 19, 2009.  As a result of the
forward split, the 20,000 shares were increased to 80,000 shares and its
purchase price was similarly adjusted to $0.0625/share (See Note 6(D) and Note
7(B)).
 
 On August
25, 2009, the Company issued 50,000 shares of common stock having a fair value
of $3,125 ($0.0625/share), based upon the fair value on the date of grant, in
exchange for professional services.
 
 On August
31, 2009, the Company issued 885,714 shares of common stock in exchange for
services valued at $62,000 related to the development services agreement entered
into on January 19, 2009.  Based on the most recent fair market value at
that time, the shares were valued at $55,357 ($0.0625/share), resulting in the
recognition of a gain on the extinguishment of debt of $6,643 (See Note
7(B)).
 
 On
September 18, 2009, the Company issued 500,000 shares of common stock as
compensation pursuant to the terms of a consulting agreement, having a fair
value of $175,000 ($0.35/share) based upon fair value on the date of
grant.  On November 11, 2009 the Company cancelled the agreement and
300,000 shares of common stock were returned to the Company. As of December 31,
2009, $70,000 is recorded as consulting expense and $105,000 of deferred
compensation was reclassed to $0 (See Note 7(B)).
 
 On
September 18, 2009, the Company issued 600,000 shares of common stock as
compensation pursuant to the terms of a consulting agreement, having a fair
value of $210,000 ($0.35/share) based upon fair value on the date of
grant.  On November 18, 2009, the Company cancelled the agreement and
400,000 shares of common stock were returned to the Company.  As of
December 31, 2009, $70,000 is recorded as consulting expense and $140,000 of
deferred compensation was reclassed to $0 (See Note 7 (B)).
 
 On
September 21, 2009, the Company issued 600,000 shares of common stock as
compensation pursuant to the terms of a consulting agreement, having a fair
value of $210,000 ($0.35/share) based upon fair value on the date of
grant.  On December 18, 2009 the Company terminated the consulting
agreement and 400,000 shares were returned to the Company.  As of
December 31, 2009, $70,000 is recorded as consulting expense and $140,000 of
deferred compensation was reclassed to $0 (See Note 7 (B)).
 
 F-14
 
 SO
ACT NETWORK, INC.
 (A DEVELOPMENT STAGE
COMPANY)
 NOTES
TO FINANCIAL STATEMENTS
 AS OF DECEMBER 31, 2009 AND
2008
 
 
 On
November 12, 2009, the Company issued 100,000 shares of common stock as
compensation pursuant to the terms of the consulting agreement, having a fair
value of $178,000 ($1.78/share) based upon fair value on the date of
grant.  As of December 31, 2009, $11,948 is recorded as consulting
expense and $166,052 is recorded as deferred compensation (See Note
7(B)).
 
 On
November 12, 2009, the Company issued 200,000 shares of common stock as
compensation pursuant to the terms of the consulting agreement, having a fair
value of $400,000 ($2.00/share) based upon fair value on the date of
grant.  As of December 31, 2009, $22,466 is recorded as consulting
expense and $377,534 is recorded as deferred compensation (See Note
7(B)).
 
 On
November 16, 2009, the Company issued 100,000 shares of common stock as
compensation pursuant to the terms of the consulting agreements, having a fair
value of $180,000 ($1.80/share) based upon fair value on the date of
grant.  As of December 31, 2009, $11,096 is recorded as consulting
expense and $168,904 is recorded as deferred compensation (See Note 7
(B)).
 
 On
November 18, 2009, the Company issued 30,000 shares of common stock as
compensation pursuant to the terms of the consulting agreement, having a fair
value of $45,000 ($1.50/share) based upon fair value on the date of
grant.  As of December 31, 2009, $5,301 is recorded as consulting
expense and $39,699 is recorded as deferred compensation (See Note
7(B)).
 
 On
November 21, 2009, the Company issued 30,000 shares of common stock as
compensation pursuant to the terms of the marketing agreement, having a fair
value of $53,100 ($1.77/share) based upon fair value on the date of
grant.  As of December 31, 2009, $53,100 is recorded as deferred
compensation (See Note 7(B)).
 
 On
December 3, 2009, the Company issued 240,000 shares of common stock as
compensation pursuant to the terms of the consulting agreement, having a fair
value of $468,000 ($1.95/share) based upon fair value on the date of
grant.  As of December 31, 2009, $468,000 is recorded as consulting
expense (See Note 7 (B)).
 
 On
December 3, 2009, the Company issued 35,000 shares of common stock as
compensation pursuant to the terms of the commission agreement, having a fair
value of $68,250 ($1.95/share) based upon fair value on the date of
grant.  As of December 31, 2009, $68,250 is recorded as consulting
expense (See Note 7 (B)).
 
 F-15
  SO
ACT NETWORK, INC.
 (A DEVELOPMENT STAGE
COMPANY)
 NOTES
TO FINANCIAL STATEMENTS
 AS OF DECEMBER 31, 2009 AND
2008
 
 
 On
December 3, 2009, the Company issued 35,000 shares of common stock as
compensation pursuant to the terms of the consulting agreement, having a fair
value of $68,250 ($1.95/share) based upon fair value on the date of
grant.  As of December 31, 2009, $68,250 is recorded as consulting
expense (Note 7 (B)).
 
 On
December 3, 2009, the Company issued 10,000 shares of common stock as
compensation pursuant to the terms of the commission agreement, having a fair
value of $19,500 ($1.95/share) based upon fair value on the date of
grant.  As of December 31, 2009, $19,500 is recorded as consulting
expense (See Note 7(B)).
 
 On
December 15, 2009, the Company issued 100,000 shares of common stock as
compensation pursuant to the terms of the consulting agreement, having a fair
value of $200,000 ($2/share) based upon fair value on the date of
grant.  As of December 31, 2009, $71,111 is recorded as consulting
expense and $128,889 is recorded as deferred compensation (See Note
7(B)).
 
 On
December 27, 2009, the Company issued 10,000 shares of common stock as
compensation pursuant to the terms of the consulting agreement, having a fair
value of $19,400 ($1.94/share) based upon fair value on the date of
grant.  As of December 31, 2009, $19,400 is recorded as deferred
compensation (See Note 7(B)).
 
 On
December 27, 2009, the Company issued 10,000 shares of common stock as
compensation pursuant to the terms of the consulting agreement, having a fair
value of $19,400 ($1.94/share) based upon fair value on the date of
grant.  As of December 31, 2009, $19,400 is recorded as deferred
compensation (See Note 7(B)).
 
 On
December 27, 2009, the Company issued 10,000 shares of common stock as
compensation pursuant to the terms of the consulting agreement, having a fair
value of $19,400 ($1.94/share) based upon fair value on the date of
grant.  As of December 31, 2009, $19,400 is recorded as deferred
compensation (See Note 7 (B)).
 
 On
December 30, 2009, the Company issued 500,000 shares of common stock as
compensation pursuant to the terms of the advertising agreement, having a fair
value of $965,000 ($1.93/share) based upon fair value on the date of
grant.  As of December 31, 2009, $965,000 is recorded as deferred
compensation (See Note 7 (B)).
 
 On
December 30, 2009, the Company issued 1,000,000 shares of common stock as
compensation pursuant to the terms of the advertising agreement, having a fair
value of $1,930,000 ($1.93/share) based upon fair value on the date of
grant.  As of December 31, 2009, $1,930,000 is recorded as deferred
compensation (See Note 7(B)).
 
 On
December 31, 2009, the Company issued 75,000 shares of common stock as
compensation pursuant to the terms of the consulting agreement, having a fair
value of $144,750 ($1.93/share) based upon fair value on the date of
grant.  As of December 31, 2009, $144,750 is recorded as deferred
compensation (See Note 7 (B)).
  F-16
 
 SO
ACT NETWORK, INC.
 (A DEVELOPMENT STAGE
COMPANY)
 NOTES
TO FINANCIAL STATEMENTS
 AS OF DECEMBER 31, 2009 AND
2008
 
 
 On
December 31, 2009, the Company issued 75,000 shares of common stock as
compensation pursuant to the terms of the consulting agreement, having a fair
value of $144,750 ($1.93/share) based upon fair value on the date of
grant.  As of December 31, 2009, $144,750 is recorded as deferred
compensation (See Note 7(B)).
 
 On
December 31, 2009, the Company issued 500,000 shares of common stock as
compensation pursuant to the terms of the consulting agreement, having a fair
value of $965,000 ($1.93/share) based upon fair value on the date of
grant.  As of December 31, 2009, $965,000 is recorded as deferred
compensation (See Note 7(B)).
 
 During
December, 2009, the Company issued 680,000 shares of common stock as
compensation pursuant to the terms of the consulting agreements, having a fair
value of $1,312,400 ($1.93/share) based upon fair value on the date of
grant.  As of December 31, 2009, $2,802 is recorded as consulting
expense and $1,309,598 is recorded as deferred compensation (See Note
7(B)).
 
 During
December, 2009, the Company issued 600,000 shares of common stock as
compensation pursuant to the terms of the consulting agreements, having a fair
value of $1,170,000 ($1.95/share) based upon fair value on the date of
grant.  As of December 31, 2009, $34,192 is recorded as consulting
expense and $1,135,808 is recorded as deferred compensation (See Note
7(B))
 .
 (C) Common Stock
Warrants
 
 On
December 30, 2009 the Company issued 500,000 warrants under a consulting
agreement. The Company recognized an expense of $823,077 for the year ended
December 31, 2009.  The Company recorded the fair value of the
warrants  based on the fair value of each warrant grant estimated on
the date of grant using the Black-Scholes option pricing model with the
following weighted average assumptions used for grants in 2009, dividend yield
of zero, expected volatility of 112.80%; risk-free interest rates of 1.65%,
expected life of three years. The warrants vested
immediately.   The warrants expire in three years from the date
of issuance and have an exercise price of $0.52 per share.
 
 The
following table summarizes information about warrants for the Company as of
December 31, 2009.
 
 F-17
 
 SO
ACT NETWORK, INC.
 (A DEVELOPMENT STAGE
COMPANY)
 NOTES
TO FINANCIAL STATEMENTS
 AS OF DECEMBER 31, 2009 AND
2008
 
 2009 Warrants
      Outstanding
              
              
              Warrants ExercisableRange
      of Exercise Price
              
              
              Number
                Outstanding
      at
                December
      31, 2009
              
              
              Weighted
      Average Remaining Contractual Life
              
              
              Weighted
      Average Exercise Price
              
              
              Number
                Exercisable
      at
                December
      31, 2009
              
              
              Weighted
      Average Exercise Price$
              0.52
              
              
              
              500,000
              
              
              
              3
              
              
              $
              0.52
              
              
              
              500,000
              
              
              $
              0.52
 
 (D) Stock Split Effected in
the Form of a Stock Dividend
 
 On
January 16, 2009, the Company's Board of Directors declared a four-for-one stock
split to be effected in the form of a stock dividend.  The stock split
was distributed on January 16, 2009 to shareholders of record.  A
total of 136,713,000 shares of common stock were issued.  All basic
and diluted loss per share and average shares outstanding information has been
adjusted to reflect the aforementioned stock dividend.
 
 (E) Amendment to Articles of
Incorporation
 
 On
January 27, 2009 the Company amended its Articles of Incorporation to provide
for an increase in its authorized share capital. The authorized capital stock
increased to 250,000,000 common shares at a par value of $0.001 per share, and
10,000,000 preferred shares at a par value of $0.001 with class and series
designations, voting rights, and relative rights and preferences to be
determined by the Board of Directors of the Company from time to
time.
 
 (F) In Kind
Contribution
 
 During
the fourth quarter of 2008, a former stockholder of the Company paid $4,400 of
operating expenses on behalf of the Company.
 
 During
the fourth quarter of 2008, the principal stockholder contributed office space
with a fair market value of $2,913 (See Note 8).
 
 For the
year ended December 31, 2009, the principal stockholder contributed office space
with a fair market value of $12,600 (See Note 8).
 
 NOTE
      7
              COMMITMENTS
 
 (A) Employment
      Agreement
 
 On
October 13, 2008 the Company executed an employment agreement with its President
and CEO.  The term of the agreement is for ten years.  As
compensation for services, the President will receive a monthly compensation of
$18,000 beginning October 13, 2008.  In addition, to the base salary,
the employee is entitled to receive a 10% commission of all sales of the
Corporation.  The agreement also calls for the employee to receive
health benefits (See Note 8).
 
 F-18
 
 SO
ACT NETWORK, INC.
 (A DEVELOPMENT STAGE
COMPANY)
 NOTES
TO FINANCIAL STATEMENTS
 AS OF DECEMBER 31, 2009 AND
2008
 
 
 (B)
      Consulting
      Agreement
 
 On
January 19, 2009, the Company entered into a development services agreement to
construct social network software for a fee of $150 and $375 an
hour.  The contract will remain in place until either party desires to
cancel.  A retainer fee of $20,000 has been paid upon the execution of
the agreement and will be used towards the services provided.  In
addition, on January 14, 2009 the Company issued 20,000 shares in exchange for
services valued at $5,000 ($0.25/share).  As a result of the forward
split, the 20,000 shares were increased to 80,000 shares and its purchase price
was similarly adjusted to $0.0625 (See Note 6(B) and Note 6(D)).  On
May 29, 2009 the Company amended the consulting agreement by reducing the hourly
rate to $75 an hour and reducing the outstanding balance due by $17,163. On
August 31, 2009, the Company issued 885,714 shares of common stock in exchange
for services valued at $62,000 related to the development services agreement
entered into on January 19, 2009.  Based on the most recent fair market
value at that time, the shares were valued at $55,357 ($0.0625/share), resulting
in the recognition of a gain on the extinguishment of debt of $6,643 (See
Note 6(B)).
 
 On
January 20, 2009, the Company entered into a service agreement with a transfer
agent to become the Company's transfer agent for the purpose of maintaining
stock ownership and transfer records for the Company.
 
 On
September 17, 2009, the Company entered into a six month consulting agreement
with an unrelated third party to provide public relations
services.  In exchange for the services provided, on September 18,
2009 the Company issued 500,000 shares of common stock having a fair value of
$175,000 ($0.35/share) based upon fair value on the date of
grant.  The Company has an option to cancel the contract during the
first ninety days of the agreement and 200,000 shares will be returned back to
the Company.  On November 11, 2009 the Company cancelled the agreement
and 300,000 shares of common stock were returned to the
Company.   As of December 31, 2009, $70,000 is recorded as
consulting expense and $105,000 of deferred compensation was reclaseed to $0
(See Note 6(B)).
 
 On
September 18, 2009, the Company entered into a six month consulting agreement
with an unrelated third party to provide public relations
services.  In exchange for the services provided the Company issued
600,000 shares of common stock having a fair value of $210,000 ($0.35/share)
based upon fair value on the date of grant.  Shares will be issued on
or before December 18, 2009 in six 100,000 increments.  The Company
has an option to cancel the contract at any time, in such event; the consultant
will return a prorated amount of shares based on the months remaining in the
consulting agreement.   On November 18, 2009 the Company
cancelled the agreement and 400,000 shares of common stock were returned to the
Company.  As of December 31, 2009 $70,000 is recorded as consulting
expense and $140,000 of deferred compensation was reclassed to $0(See Note
6(B)).
 
 F-19
 
 SO
ACT NETWORK, INC.
 (A DEVELOPMENT STAGE
COMPANY)
 NOTES
TO FINANCIAL STATEMENTS
 AS OF DECEMBER 31, 2009 AND
2008
 
 On
September 21, 2009, the Company entered into an eight month consulting agreement
with an unrelated third party to provide public relations
services.  In exchange for the services provided, the Company issued
600,000 shares of common stock having a fair value of $210,000 ($0.35/share)
based upon fair value on the date of grant.  Shares will be issued on
or before September 18, 2009, December 18, 2009 and March 18, 2010 in 200,000
increments.  The Company has an option to cancel the contract at any
time and no additional stock issuances will be due.   On December
18, 2009 the Company cancelled the agreement and 400,000 shares of common stock
were returned to the Company.  As of December 31, 2009, $70,000 is
recorded as consulting expense and $140,000 of deferred compensation was
reclassed to $0 (See Note 6(B)).
 
 On
October 20, 2009, the Company entered into a marketing agreement with an
unrelated third party.  In exchange for the services provided, on
November 21, 2009, the Company issued 30,000 shares of common stock having a
fair value $53,100 ($1.77/share) based upon fair value on the date of grant, and
compensation of $5,000, of which $2,500 was paid upon the execution of the
agreement and the remaining balance due upon completion (See Note 6
(B)).
 
 During
the months of November and December 2009, the Company entered into celebrity
endorsement agreements for a period of one to two years of
service.  In total, 1,710,000 shares of common stock were issued
having a fair value of $3,285,400 based upon fair value on the respective date
of grant.  Consulting expense of $87,805 and deferred compensation of
$3,197,595 was recorded as of December 31, 2009 (See Note 6(B)).
 
 On
December 3, 2009, the Company entered into a commission agreement with an
unrelated third party.  The company will pay a 10% commission in
shares of common stock for every passive endorsement.  In exchange for
the services provided the Company issued 35,000 shares of common stock having a
fair value $68,250 ($1.95/share) based upon fair value on the date of grant (See
Note 6 (B)).
 
 On
December 3, 2009, the Company entered into a commission agreement with an
unrelated third party.  The company will pay a 10% commission in
shares of common stock for every passive endorsement.  In exchange for
the services provided the Company issued 240,000 shares of common stock having a
fair value $468,000 ($1.95/share) based upon fair value on the date of grant
(See Note 6 (B)).
 
 On
December 3, 2009, the Company entered into a commission agreement with an
unrelated third party.  The company will pay a 10% commission in
shares of common stock for every passive endorsement.  In exchange for
the services provided the Company issued 10,000 shares of common stock having a
fair value $19,500 ($1.95/share) based upon fair value on the date of grant (See
Note 6 (B)).
 
 F-20
  SO
ACT NETWORK, INC.
 (A DEVELOPMENT STAGE
COMPANY)
 NOTES
TO FINANCIAL STATEMENTS
 AS OF DECEMBER 31, 2009 AND
2008
 
 
 On
December 3, 2009, the Company entered into a commission agreement with an
unrelated third party.  The company will pay a 10% commission in
shares of common stock for every passive endorsement.  In exchange for
the services provided the Company issued 35,000 shares of common stock having a
fair value $68,250 ($1.95/share) based upon fair value on the date of grant (See
Note 6 (B)).
 
 On
December 15, 2009, the Company entered into a consulting agreement with an
unrelated third party to provide investor services.  The Company will
receive a 10% of the gross receipts from the investor relations revenue for a
two year period.  In exchange for the satisfactory services provided,
on December 15, 2009, the Company issued 100,000 shares of common stock having a
fair value of $200,000 ($2/share) based upon fair value on the date of grant
(See Note 6(B)).
 
 On
December 27, 2009, the Company entered into a consulting agreement with an
unrelated third party to provide film work.  In exchange for the
services provided the Company issued 10,000 shares of common stock having a fair
value $19,400 ($1.94/share) based upon fair value on the date of grant (See Note
6 (B)).
 
 On
December 27, 2009, the Company entered into an endorsement agreement with an
unrelated third party to provide film work.  In exchange for the
services provided the Company issued 10,000 shares of common stock having a fair
value $19,400 ($1.94/share) based upon fair value on the date of grant (See Note
6 (B)).
 
 On
December 27, 2009, the Company entered into a consulting agreement with an
unrelated third party to provide film scripting, editing and production
work.  .  In exchange for the services provided the Company
issued 10,000 shares of common stock having a fair value $19,400 ($1.94/share)
based upon fair value on the date of grant (See Note 6 (B)).
 
 On
December 30, 2009, the Company entered into a marketing agreement with an
unrelated third party for a period from January 2010 to December
2010.  In exchange for the services provided the Company issued
500,000 shares of common stock having a fair value of $965,000 ($1.93/share)
based upon fair value on the date of grant.  An additional 1,000,000
shares of common stock having a fair value of $1,930,000 ($1.93/share) based
upon fair value on the date of grant, will be issued for an additional
sponsorship commitment. The additional 1,000,000 shares will be held in escrow
until June 30, 2010, at which point the unrelated party will have 15 days to
accept or decline the additional shares (See Note 6 (B)).
 
 F-21
  SO
ACT NETWORK, INC.
 (A DEVELOPMENT STAGE
COMPANY)
 NOTES
TO FINANCIAL STATEMENTS
 AS OF DECEMBER 31, 2009 AND
2008
 
 
 On
December 31, 2009, the Company entered into a consulting agreement with an
unrelated third party for a period from December 31, 2009 through March 30,
2011.  In exchange for the services provided, the Company issued
75,000 shares of common stock having a fair value of $144,750 ($1.93/sh) based
upon fair value on the date of grant, and deliverable in three increments of
25,000 shares of common stock each. The first 25,000 shares will be delivered
upon the execution of the agreement and the other two increments will be
delivered in six and twelve months upon the successful fulfillment of the
agreement (See Note 6(B)).
 
 On
December 31, 2009, the Company entered into a consulting agreement with an
unrelated third party for a period from December 31, 2009 through March 30,
2011.  In exchange for the services provided the Company issued 75,000
shares of common stock having a fair value of $144,750 ($1.93/sh) based upon
fair value on the date of grant, and deliverable in three increments of 25,000
each. The first 25,000 shares will be delivered upon the execution of the
agreement and the other two will be delivered in six and twelve months upon the
successful fulfillment of the agreement (See Note 6(B)).
 
 On
December 31, 2009, the Company entered into a consulting agreement with an
unrelated third party for a period from December 31, 2009 through December 31,
2010.  In exchange for the services provided the Company issued
500,000 shares of common stock having a fair value of $965,000 ($1.93/sh) based
upon fair value on the date of grant (See Note 6(B)).
 
 NOTE
      8
              RELATED PARTY
      TRANSACTIONS
 
 On
November 10, 2009, the Company entered into a two year line of credit agreement
with a principal stockholder in the amount of $100,000.  The line of
credit carries an interest rate at 3.25%.  As of December 31, 2009,
the principal shareholder has advanced $19,500 to the Company under this line of
credit agreement (See Note 4).
 
 On May
28, 2009, the Company entered into a two year line of credit agreement with a
principal stockholder in the amount of $100,000.  The line of credit
carries an interest rate at 3.25%.  For the year ended December 31,
2009, the principal shareholder advanced the Company $100,000 under the terms of
the line of credit agreement (See Note 4)
 .
 For the
year ended December 31, 2009, the Company owes $1,176 of accrued interest on the
lines of credit total of $119,500 (See Note 4).
 
 On May
26, 2009 the Company received $16,700 from a principal stockholder. Pursuant to
the terms of the loan, the loan is bearing an annual interest rate of 3.25% and
is due on demand (See Note 3).
 
 On May
22, 2009 the Company received $15,000 from a principal stockholder. Pursuant to
the terms of the loan, the loan is bearing an annual interest rate of 3.25% and
is due on demand (See Note 3).
 
 F-22
 
 SO
ACT NETWORK, INC.
 (A DEVELOPMENT STAGE
COMPANY)
 NOTES
TO FINANCIAL STATEMENTS
 AS OF DECEMBER 31, 2009 AND
2008
 
 
 On May
11, 2009 the Company received $9,500 from a principal stockholder. During the
year ended December 31, 2009, the Company repaid $1,500 in principal to the
principal stockholder.  Pursuant to the terms of the loan, the loan is
bearing an annual interest rate of 3.25% and is due on demand (See Note
3).
 
 For the
year ended December 31, 2009, the Company owes $39,700 in principal and $495 of
accrued interest to the principal stockholder related to these principal loans
(See Note 3).
 
 On
October 14, 2008, the Company issued 44,900,000 shares of common stock to its
founder having a fair value of $44,900 ($0.001/share) in exchange for services
provided.  As a result of the forward split, the 44,900,000 shares
were increased to 179,600,000 shares and its purchase price was similarly
adjusted to $0.00025 (See Note 6(B) and Note 6(C)).
 
 On
October 13, 2008 the Company executed an employment agreement with its President
and CEO.  The term of the agreement is ten years.  As
compensation for services, the President will receive a monthly compensation of
$18,000 beginning October 13, 2008.  In addition, to the base salary,
the employee is entitled to receive a 10% commission of all sales of the
Corporation.  The agreement also calls for the employee to receive
health benefits (See Note 7(A)).
 
 For the
year ended December 31, 2008 the Company received $18,803 from a principal
stockholder. Pursuant to the terms of the loan, the loan is bearing an annual
interest rate of 3.25% and is due on demand. As of December 31, 2008, the
Company still owes $3,803 in principal to the principal stockholder and accrued
interest of $31.  For the year ended December 31, 2009, the principal
portion of the  of this principal stockholder loan balance was repaid
and the Company still owes accrued interest of $31 (See Note 3).
 
 During
the fourth quarter of 2008, the principal stockholder contributed office space
with a fair market value of $2,913 (See Note 6(F)).
 
 For the
year ended December 31, 2009, the principal stockholder contributed office space
with a fair market value of $12,600 (See Note 6(F)).
 
 NOTE
      9
              SUBSEQUENT
      EVENTS
 
 In
preparing these financial statements, the Company has evaluated events and
transactions for potential recognition or disclosure through March 15, 2010, the
date the financial statements were issued.
 
 On
January 11, 2010, the Company entered into a twelve month agreement with an
unrelated third party for investor relations press release service for an annual
fee for $14,250 and an initial onetime fee of $250.
 
 F-23
  SO
ACT NETWORK, INC.
 (A DEVELOPMENT STAGE
COMPANY)
 NOTES
TO FINANCIAL STATEMENTS
 AS OF DECEMBER 31, 2009 AND
2008
 
    On
February 1, 2010, the Company entered into a twelve month consulting agreement
effective February 5, 2010.  The agreement can be renewed for up to
two additional years for a fee of $500 for the first renewal year and $750 for
the second renewal year.
  On
February 8, 2010, the majority stockholder advanced the Company $6,000 under the
line of credit agreement dated November 10, 2009 (See Note 4 and
8).
  On
February 17, 2010, the Company entered into a twelve month consulting agreement
with an unrelated third party effective February 17, 2010.  In
exchange for the services provided the Company issued 1,000,000 shares of common
stock having a fair value of $1,240,000 ($1.24/sh) based upon fair value on the
date of grant.
 
 On March
1, 2010, the majority stockholder advanced the Company $150 under the line of
credit agreement dated November 10, 2009 (See Note 4 and 8).
 
 On March
3, 2010, the majority stockholder advanced the Company $20,000 under the line of
credit agreement dated November 10, 2009 (See Note 4 and 8).
 
 On March
3, 2010, the majority stockholder loaned the Company $50,000 under the line of
credit agreement dated November 10, 2009 (See Note 4 and 8).  The
funds were subsequently used by the Company to reduce its
liabilities.
 
 
 F-24
 
 ITEM
9.         CHANGES IN AND
DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
 
 Our
accountant is Alan R. Swift, CPA, P.A. Independent Registered Public
Accounting Firm. We do not presently intend to change accountants. At no time
have there been any disagreements with such accountants regarding any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure.
 
 ITEM
9A.      CONTROLS AND PROCEDURES
 
 Evaluation
of Disclosure Controls and Procedures
 
 Pursuant
to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”),
the Company carried out an evaluation, with the participation of the Company’s
management, including the Company’s Chief Executive Officer (“CEO”) and Chief
Financial Officer (“CFO”) (the Company’s principal financial and accounting
officer), of the effectiveness of the Company’s disclosure controls and
procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the
end of the period covered by this report. Based upon that evaluation, the
Company’s CEO and CFO concluded that the Company’s disclosure controls and
procedures are effective to ensure that information required to be disclosed by
the Company in the reports that the Company files or submits under the Exchange
Act, is recorded, processed, summarized and reported, within the time periods
specified in the SEC’s rules and forms, and that such information is accumulated
and communicated to the Company’s management, including the Company’s CEO and
CFO, as appropriate, to allow timely decisions regarding required
disclosure.
 
 Management's
Annual Report on Internal Control Over Financial Reporting.
 
 The
management of the Company is responsible for establishing and maintaining
adequate internal control over financial reporting for the
Company.  Our internal control system was designed to, in general,
provide reasonable assurance to the Company’s management and board regarding the
preparation and fair presentation of published financial statements, but because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements.  Also, projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
 
 Our
management assessed the effectiveness of the Company’s internal control over
financial reporting as of December 31, 2009.  The framework used by
management in making that assessment was the criteria set forth in the document
entitled “ Internal Control – Integrated Framework” issued by the Committee of
Sponsoring Organizations of the Treadway Commission. Based on that assessment,
our CEO and CFO have determined and concluded that, as of December 31, 2009, the
Company’s internal control over financial reporting was effective.
 
 This
annual report does not include an attestation report of the Company’s registered
public accounting firm regarding internal control over financial reporting.
Management's report was not subject to attestation by the Company's registered
public accounting firm pursuant to 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
 
 No change
in our system of internal control over financial reporting occurred during the
period covered by this report, fourth quarter of the fiscal year ended December
31, 2009 that has materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting.
 
 
 11
 
 PART
III
 
 ITEM
10.       DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
AND CONTROL PERSONS: COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE
ACT
 
 Our sole
executive officer and director and their respective age as of March 29, 2010 is
as follows:
 
 NAME
              AGE
              POSITIONGreg
      Halpern
              52
              President,
      Chief Executive Officer, Chief Financial
  Officer
 
 Set forth
below is a brief description of the background and business experience of our
executive officers and directors for the past five years.
 
 Greg
Halpern
 
 Greg
Halpern is the founder of So Act Network, Inc. From 1997 to 2001 Mr. Halpern was
the CEO of Circle Group Internet, Inc. (CRGQ: OTCBB). From 2002 to 2005, Mr.
Halpern was the Chief Executive Officer of Circle Group Holdings Inc. (AMEX:
CXN, formerly CRGQ.OB) and continued to be the CEO after it changed its name to
Z-Trim Holdings Inc. (AMEX: ZTM) from 2006 - 2007. Circle Group was a venture
capital firm for emerging technology companies which provided small business
infrastructure, funding and intellectual capital to bring timely life-changing
technologies to market through all early phases of the commercialization
process. Mr. Halpern’s efforts there were focused on acquiring life improving
technologies and bringing these products to the marketplace. In 2003, Mr.
Halpern and his wife founded an unincorporated non-profit organization “People
for Ultimate Kindness Toward All Living Creatures on Earth” whose purpose is and
has been to identify problems on earth and those who are working to solve them.
The Ultimate Kindness is a non-profit organization independent from the So Act
Nework. The Ultimate Kindness and the So Act Network share no financial interest
or otherwise. In 2007, Mr. Halpern resigned from his position at Z-Trim Holdings
and took a one (1) year sabbatical from business touring the Continental United
States in his RV with his family. Currently, Mr. Halpern serves as the
president, Chief Executive Officer and Chief Financial Officer of So Act
Network, Inc, and devotes approximately 50 hours each week to the management and
operations of So Act Network.
 
 Term
of Office
 
 Our
directors are appointed for a one-year term to hold office until the next annual
general meeting of our shareholders or until removed from office in accordance
with our bylaws. Our officers are appointed by our board of directors and hold
office until removed by the board
 
 Current
Issues and Future Management Expectations
 
 No board
audit committee has been formed as of the filing of this Annual
Report.
 
 Compliance
With Section 16(A) Of The Exchange Act.
 
 Section
16(a) of the Exchange Act requires the Company’s officers and directors, and
persons who beneficially own more than 10% of a registered class of the
Company’s equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission and are required to
furnish copies to the Company. To the best of the Company’s knowledge, any
reports required to be filed were timely filed in fiscal year ended December 31,
2009.
 
 Code
of Ethics
 
 The
Company has adopted a Code of Ethics applicable to its Chief Executive Officer
and Chief Financial Officer. This Code of Ethics is filed herewith as an
exhibit.
 
 12
  ITEM
11.       EXECUTIVE COMPENSATION
 
 The
following summary compensation table sets forth all compensation awarded to,
earned by, or paid to the named executive officer during the years ended
December 31, 2009, and 2008 in all capacities for the accounts of our
executive, including the Chief Executive Officer (CEO) and Chief Financial
Officer (CFO):
 
 
 SUMMARY
COMPENSATION TABLE
 
 Name
      and Principal Position
              Year
              
              Salary
                  ($)
              
              Bonus
                  ($)
              
              Stock
                  Awards
                  ($)
              
              Option
      Awards
                  ($)
              
              Non-Equity
      Incentive Plan Compensation ($)
              
              Non-Qualified
      Deferred Compensation Earnings
                  ($)
              All
      Other Compensation
                  ($)
              
              Totals
                  ($)Greg
      Halpern,
              2009
              
              $
              
              
              0
              
              
              
              
              0
              
              
              0
              
              0
              0
              
              $CEO&CFO
              2008
              
              $
              43,548
              
              0
              
              $
              44,900
              
              0
              
              
              0
              
              0
              0
              
              $
              88,448
 
 (1)
              The
      salary stated has been accrued and remains unpaid. In addition to the base
      salary, Mr. Greg Halpern shall be entitled to a monthly commission equal
      to 10% of all of our sales.
 
 Option Grants
Table.There were
no individual grants of stock options to purchase our common stock made to the
executive officer named in the Summary Compensation Table through December 31,
2009.
 
 Aggregated Option Exercises and Fiscal
Year-End Option Value Table.There were no stock options
exercised during period ending December 31, 2009 by the executive officer named
in the Summary Compensation Table.
 
 Long-Term Incentive Plan
(“LTIP”) Awards Table.There were no awards made to a named executive officer in the last
completed fiscal year under any LTIP
 
 Compensation of
Directors
 
 Directors
are permitted to receive fixed fees and other compensation for their services as
directors. The Board of Directors has the authority to fix the compensation of
directors. No amounts have been paid to, or accrued to, directors in such
capacity.
 
 Employment
Agreements
 
 Mr. Greg
Halpern, our President, CEO and CFO, entered into an Employment Agreement with
us on October 13, 2008.  Pursuant to the Employment Agreement, the
term of the employment shall be for a period of ten (10) years commencing on
October 13, 2008. The term of this Employment Agreement shall automatically be
extended for additional terms of one (1) year each unless either party gives
prior written notice of non-renewal to the other party no later than sixty (60)
days prior to the expiration of the end of the 10 years. Subject to the terms of
the Employment Agreement, we shall pay Mr. Halpern eighteen thousand dollars per
month as compensation for his services rendered as provided in the Employment
Agreement. In addition to the base salary, Mr. Halpern shall be entitled to a
monthly commission equal to 10% of all of our sales. The Employment Agreement
was attached as Exhibit 10.1 to the Form 8-K filed on October 17, 2008, and is
incorporated here within by reference.
 
 Other
than Greg Halpern, we do not have any other employees.
 
 We have
not had a promoter at any time during our past five fiscal years.
 
 13
  ITEM
12.       SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
 
 The
following table provides the names and addresses of each person known to us to
own more than 5% of our outstanding shares of common stock as of March 29,
2010 and by the officers and directors, individually and as a group. Except as
otherwise indicated, all shares are owned directly.
 
 Title
      of Class
              Name
      and Address
                  of
      Beneficial Owner
              Amount
      and Nature
                  of
      Beneficial Owner
              Percent
      of
                  Class
      (1)Common
      Stock
              Greg
      Halpern
                  Address:
      10685-B Hazelcrest Drive
                  Houston,
      TX 77043
              174,850,000
              92.38%Common
      Stock
              All
      executive officers and directors as a group
              174,850,000
              92.38%
 
 Stock Option
Grants
 
 We have
not granted any stock options to our executive officer since our
incorporation.
 
 ITEM 13.       CERTAIN
RELATIONSHIPS AND RELATED TRANSACTION, AND DIRECTOR INDEPENDENCE
 
 On
December 20, 2008, we issued 4,000 shares of common stock to Serena Halpern for
the web design services provided to us in late 2008. These shares were issued
pursuant to an exemption from registration under Section 4(2) of the Securities
Act of 1933, as amended. After the completion of a 4 for 1 forward split of our
common stock on January 16, 2009, the 4,000 shares were increased to 16,000
shares.  Serena Halpern is the daughter of Greg Halpern. The services
provided were preparation of the Company Logo design which is now a registered
Trademark, and all three designs and redesigns of the Company web site including
the current version in use by So Act and its members. The Company believes the
fee to Ms. Halpern, which consisted of $1,000 paid in restricted stock at $0.25
cents per share is comparable to third party providers of web services of
comparable experience and expertise.
 
 During
the fourth quarter of 2008, Greg Halpern contributed office space with a fair
value of $2,913. On October 14, 2008, we issued 44,900,000 shares of common
stock of to Mr. Greg Halpern for his services rendered.  The shares
were issued as founder’s shares for running the business and beginning its
operations.  These shares were issued pursuant to an exemption from
registration under Section 4(2) of the Securities Act of 1933, as
amended.  After the completion of a 4 for 1 forward split of our
common stock on January 16, 2009, the 44,900,000 shares were increased to
179,600,000 shares.
 
 On
October 13, 2008, we executed an employment agreement with Mr. Greg Halpern, our
President and CEO. The term of the agreement is ten (10) years. As compensation
for services, Mr. Halpern will receive a monthly compensation of $18,000
beginning October 13, 2008. In addition, to the base salary, Mr. Halpern is
entitled to receive a 10% commission of all of our sales.
 
 For the
year ended December 31, 2009, we received $41,200  from Mr. Greg
Halpern, our principal shareholder. During the year ended December 31,
2009, the Company repaid $1,500 to Greg Halpern our principal shareholder. 
Pursuant to the loan agreement, the loan bears an annual interest rate of 3.25%
and is due on demand. As of December 31, 2009, we still owe
$39,700  in principal and accrued interest of $495.
 
 For the
year ended December 31, 2009, we received $119,500 from Mr. Greg Halpern, our
principal shareholder, by way of two lines of credits.  Pursuant to the
lines of credit agreements, the lines of credits bear an annual interest
rate of 3.25% and are due on May 29, 2011 and November 11, 2011.  As of
December 31, 2009 we still owe $119,500 in principal and accrued interest of
$1,176.
 
 ITEM
14.       PRINCIPAL ACCOUNTANT FEES AND
SERVICES
 
 Audit
Fees
 
 For the
Company’s fiscal years ended December 31, 2009 and 2008, we were billed
approximately $23,768 and $1,200 for professional services
rendered for the audit and review of our financial statements.
 
 14
 
 Audit Related
Fees
 
 There
were no fees for audit related services for the years ended December 31, 2009
and 2008.
 
 Tax Fees
 
 For the
Company’s fiscal years ended December 31, 2009 and 2008, we were not billed for
professional services rendered for tax compliance, tax advice, and tax
planning.
 
 All Other
Fees
 
 The
Company did not incur any other fees related to services rendered by our
principal accountant for the fiscal years ended December 31, 2009 and
2008.
 
 Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
 
 Effective
May 6, 2003, the Securities and Exchange Commission adopted rules that require
that before our auditor is engaged by us to render any auditing or permitted
non-audit related service, the engagement be:
 
 -approved
by our audit committee; or
 
 -entered
into pursuant to pre-approval policies and procedures established by the audit
committee, provided the policies and procedures are detailed as to the
particular  service,  the  audit committee is
informed of each service, and such policies and procedures do not include
delegation of the audit committee's responsibilities to management.
 
 We do not
have an audit committee.  Our entire board of directors pre-approves
all services provided by our independent auditors.
 
 The
pre-approval process has just been implemented in response to the new rules.
Therefore, our board of directors does  not have  records
of  what percentage of the above fees were
pre-approved.  However, all of the above services and fees were
reviewed and approved by the entire board of directors either before or after
the respective services were rendered.
 
 PART
IV
 
 ITEM
15.       EXHIBITS, FINANCIAL STATEMENT
SCHEDULES.
 
 a)
Documents filed as part of this Annual Report
 
 1.
Consolidated Financial Statements
 
 2.
Financial Statement Schedules
 
 3.
Exhibits
 
 14.1
              Code
      of Ethics3.1*
              Amendment
      to the Articles of Incorporation Filed on October 15, 2008 with
      the Delaware State of Secretary31.1
              Rule
      13a-14(a)/ 15d-14(a) Certification of Chief Executive Officer and Chief
      Financial Officer32.1
              Section
      1350 Certification of Chief Executive Officer and Chief Financial
      Officer
 
 *Filed
as Exhibit 3.1 to the Form 8-K filed on October 17, 2009 and incorporated herein
by reference.
 
 15
 
 SIGNATURES
 
 In
accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this Annual Report to be signed on its
behalf by the undersigned, thereunto duly authorized.
 
 Dated: 
April 1 , 2010
 
 By/s/Greg
Halpern
 Greg
Halpern,
 Chief
Executive Officer,
 Chief
Financial Officer (Principal Accounting Officer)
 
 
 In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
 
 Signature
              
              Title
              
              Date/s/
      Greg Halpern
              
              Chief
      Executive Officer,
              
              April 1 , 2010Greg
      Halpern
              
              Chief
      Financial Officer (Principal Accounting Officer)
 
 
 16