Wild Craze 10Q 2013 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended:September 30, 2013

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

For the transition period from __________ to __________

Commission File No. 000-53161

WILD CRAZE, INC.

(Exact name of registrant as specified in its charter)

Nevada		37-1458557
(State or other jurisdiction of incorporation)		(IRS Employer Identification No.)

1560 Pine Island Rd.

Suite F

Myrtle Beach, SC 29577

(Address of principal executive offices)

(855) 639-9453

(Registrant’s telephone number, including area code)

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 past 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

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

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

Large accelerated filer	[ ]	Accelerated filer	[ ]

Non-accelerated filer	[ ]	Smaller reporting company	[X]

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

As of November 13, 2013, there were 32,885,201 shares outstanding of the registrant’s common stock.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements.	3

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	4

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	11

Item 4.	Controls and Procedures.	12

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings.	13

Item 1A.	Risk Factors.	13

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds.	13

Item 3	Defaults Upon Senior Securities.	13

Item 4.	Mine Safety Disclosures.	13

Item 5.	Other Information.	13

Item 6.	Exhibits.	13

Signatures		14

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

WILD CRAZE, INC.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2013

CONTENTS

		Page(s)

Condensed Consolidated Balance Sheets as of September 30, 2013 (unaudited) and December 31, 2012		F-1

Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2013 and 2012 (unaudited)		F-2

Condensed Consolidated Statement of Changes in Stockholders’ Equity (Deficit) for the Period January 1, 2012 to September 30, 2013 (unaudited)		F-3

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2013 and 2012 (unaudited)		F-4

Notes to Condensed Consolidated Financial Statements		F-5

Wild Craze, Inc.

Condensed Consolidated Balance Sheets

	September 30, 2013			December 31, 2012
	(unaudited)
Assets

Current Assets
Cash	$	118,373		$	12,772
Accounts receivable, net		110,220			-
Inventory		221,491			11,758
Prepaid expenses		50,381			10,000
Security deposits		1,482			-
Current portion - note receivable		6,058			-
Other current assets		13,827			-
Debt issue costs, net		84,164			-
Total Current Assets		605,996			34,530

Property and Equipment, net		54,033			-

Other Assets
Goodwill		1,585,142			-
Intangible assets, net		702,544			-
Note receivable		4,914			-
Deferred financing costs, net		43,000			-
Total Other Assets		2,335,600			-

Total Assets	$	2,995,629		$	34,530

Liabilities and Stockholders’ Equity (Deficit)

Current Liabilities:
Accounts payable and accrued liabilities	$	545,492		$	139,046
Liability to be settled in stock		70,966			10,146
Loan payable		-			20,000
Loans payable - related parties		775,106			237,018
Convertible notes payable, net of debt discount		214,831			-
Derivative liability -convertible notes payable		409,596			-
Convertible notes payable -related party		152,259			152,259
Total Current Liabilities		2,168,250			558,469

Other Liabilities:
Contingent stock		396,816			-

Total Liabilities		2,565,066			558,469

Commitments and Contingencies

Stockholders’ Equity (Deficit)

Series A, preferred stock, $0.001 par value; 51 shares authorized, 51 and 0 shares issued and outstanding, respectively		-			-

Undesignated preferred stock, $0.001 par value; 49,999,949 shares authorized; none issued or outstanding		-			-

Common stock, $0.001 par value; 500,000,000 shares authorized; 32,920,201 and 26,123,760 shares issued and outstanding, respectively		32,920			26,124
Additional paid in capital		4,522,917			66,681
Accumulated deficit		(4,125,274	)		(616,744	)
Total Stockholders’ Equity (Deficit)		430,563			(523,939	)

Total Liabilities and Stockholders’ Equity (Deficit)	$	2,995,629		$	34,530

See accompanying notes to condensed financial statements

F-1

Wild Craze, Inc.

Condensed Consolidated Statements of Operations

(unaudited)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2013			2012			2013			2012

Sales	$	231,523		$	-		$	514,756		$	2

Cost of sales		48,408			-			167,550			1

Gross Profit		183,115			-			347,206			1

Selling, general and administrative expenses		1,144,225			110,592			3,541,692			275,871

Loss from operations		(961,110	)		(110,592	)		(3,194,486	)		(275,870	)

Other income (expense):
Interest income		319			-			513			-
Interest expense		(38,088	)		(4,593	)		(103,450	)		(12,056	)
Interest expense - discount on notes		(85,184	)		-			(85,184	)		-
Change in fair value of derivative liabilities		42,548			-			42,548			-
Derivative expense		(171,471	)		-			(171,471	)		-
Gain on disposition of vehicle		-			-			3,000			-

Total other income (expense)		(251,876	)		(4,593	)		(314,044	)		(12,056	)

Net loss	$	(1,212,986	)	$	(115,185	)	$	(3,508,530	)	$	(287,926	)

Net loss per common share - basic and diluted	$	(0.04	)	$	(0.00	)	$	(0.11	)	$	(0.01	)


Weighted average common shares outstanding- basic and diluted		32,761,825			26,123,760			31,787,892			26,123,760

See accompanying notes to condensed financial statements

F-2

Wild Craze, Inc.

Consolidated Statement of Changes in Stockholders’ Equity (Deficit)

For the Period from January 1, 2012 to September 30, 2013

unaudited)

	Preferred Stock				Common Stock				Additional Paid-In		Accumulated			Stockholders’Equity
	Shares		Amount		Shares		Amount		Capital		Deficit			(Deficit)

Balance, January 1, 2012		-	$	-		26,123,760	$	26,124	$	66,681	$	(202,884	)	$	(110,079	)

Net loss, year ended December 31, 2012												(413,860	)		(413,860	)

Balance, December 31, 2012		-		-		26,123,760		26,124		66,681		(616,744	)		(523,939	)

Preferred stock issued for services		51		-		-		-		730,000					730,000

Common stock issued for services		-		-		3,143,941		3,144		1,770,097					1,773,241

Common stock issued to settle vendor liabilities		-		-		652,500		653		32,177					32,830

Common stock issued in asset acquisition		-		-		3,000,000		3,000		1,917,000					1,920,000

Stock options issued for services		-		-		-		-		2,932					2,932

Reclassification of conversion option relating to partial repayment of note payable		-		-		-		-		4,030		-			4,030

Net loss, nine months ended September 30, 2013												(3,508,530	)		(3,508,530	)

Balance, September 30, 2013		51	$	-		32,920,201	$	32,920	$	4,522,917	$	(4,125,274	)	$	430,563

See accompanying notes to condensed financial statements

F-3

Wild Craze, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)

	For the Nine Months Ended September 30,
	2013			2012
Cash Flows From Operating Activities:
Net loss	$	(3,508,530	)	$	(287,926	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization		33,068			-
Bad debt		8,439			-
Stock based compensation		2,465,792			-
Amortization of debt discount		85,184			-
Amortization of debt issuance costs		53,436			-
Derivative liability recognized as interest expense		171,471			-
Change in fair value of derivative liabilities		(42,548	)		-
Changes in operating assets and liabilities:
(Increase) decrease in:
Accounts receivable		(47,340	)		-
Prepaid and other		(15,309	)		-
Inventory		(15,656	)		(11,296	)
Increase (decrease) in:
Accounts payable and accrued liabilities		335,461			59,930
Net Cash Used In Operating Activities		(476,532	)		(239,292	)

Cash Flows From Investing Activities:
Related party loans repaid		-			30,525
Purchase of property and equipment		(6,500	)
Cash paid in asset acquisition		(100,000	)		-
Cash acquired through asset acquisition		504			-
Principal payments received on notes receivable		3,291			-
Net Cash Provided by (Used In) Investing Activities		(102,705	)		30,525

Cash Flows From Financing Activities:
Repayment of loan payable		(20,000	)		-
Proceeds from related party loans		338,088			111,182
Proceeds from convertible notes - related party		-			146,759
Repayment of related party loans		-			(46,759	)
Proceeds from convertible notes		431,000			-
Debt issue costs paid in cash		(47,600	)		-
Repayment of convertible notes		(16,650	)		-
Net Cash Provided By Financing Activities		684,838			211,182

Net change in cash		105,601			2,415

Cash at beginning of period		12,772			1,066

Cash at end of period	$	118,373		$	3,481

Supplemental disclosures of cash flow information:
Cash paid for interest	$	6,346		$	-
Cash paid for taxes	$	-		$	-

Supplemental disclosure of non-cash investing and financing activities:

Related party loan payable converted into related party convertible note	$	-		$	5,500
652,500 shares common stock issued to settle vendor liabilities	$	32,830		$	-
100,000 shares common stock issued for financing arrangement	$	43,000		$	-
352,941 shares common stock issued for debt issuance	$	90,000		$	-
Reclassification of derivative liability to additional paid in capital	$	4,030		$	-
Debt discount recorded on convertible debt accounted for as derivative liabilities	$	284,703		$	-
Assets acquired and liabilities assumed through assets acquisition as follows:
Accounts receivable	$	71,319		$	-
Inventory	$	194,077		$	-
Equipment	$	59,310		$	-
Goodwill	$	1,585,142		$	-
Intangible assets	$	723,835		$	-
Note receivable	$	14,263		$	-
Accounts payable	$	31,633		$	-
Note payable	$	200,000		$	-
Contingent stock	$	396,816		$	-

See accompanying notes to condensed financial statements

F-4

Wild Craze, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2013

Note 1 Nature of Operations

Business

Wild Craze, Inc. (formerly known as Wired Associates Solutions, Inc.) (the “Company”) was incorporated under the laws of the State of Nevada on February 14, 2003. The Company was originally formed as a multimedia/marketing company that specializes in the design and creation of effective marketing products and services, primarily internet based.

In December 2011, the Company ceased to engage in the multimedia and marketing industry and acquired the business of SnapTagz, LLC to engage in the production, distribution and marketing of fabric accessories.

On February 25, 2013, the Company and Crescent Moon Holdings, LLC, a South Carolina limited liability company (“Crescent Moon”) and Wild Creations, Inc.(“Wild Creations”), a wholly-owned subsidiary of Crescent Moon entered into an Asset Purchase Agreement (the “Agreement”); setting forth the acquisition of Wild Creations assets.

Further, also on February 25, 2013, the Company as parent, Wild Creations, as buyer, and FlipOutz, LLC, a Delaware limited liability company (“FlipOutz”) as seller, entered into an Asset Purchase Agreement pursuant to which Wild Creations acquired certain assets of FlipOutz.

Wild Creations products include mini eco-aquariums that feature live African Dwarf Frogs and toys that inspire play, imagination, and exploration.

FlipOutz products include bracelets you can wear and personalize, which can then be collected, traded, and tracked online.

Note 2 Summary of Significant Accounting Policies

Basis of Presentation

The condensed consolidated financial statements and accompanying footnotes are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation.

The unaudited financial information furnished herein reflects all adjustments, consisting solely of normal recurring items, which in the opinion of management are necessary to fairly state the financial position of the Company and the results of its operations for the periods presented. This report should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in the Company’s Form 10-K for the year ended December 31, 2012 filed on April 16, 2013. The Company assumes that the users of the interim financial information herein have read or have access to the audited financial statements for the preceding fiscal year and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. Accordingly, footnote disclosures, which would substantially duplicate the disclosure contained in the Company’s Form 10-K for the year ended December 31, 2012 have been omitted. The results of operations for the interim periods presented are not necessarily indicative of results for the entire year ending December 31, 2013.

F-5

Wild Craze, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2013

Principles of consolidation

All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity withU.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the condensed consolidated financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from estimates.

Risks and Uncertainties

The Company’s condensed consolidated operations are subject to significant risk and uncertainties including financial, operational, technological, and regulatory risks including the potential risk of business failure. See Note 3 regarding going concern matters.

Cash

The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. The Company held no cash equivalents at September 30, 2013 and December 31, 2012.

The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits.

Accounts receivable and allowance for doubtful accounts

Accounts receivable are stated at the amount management expects to collect from outstanding balances. The Company generally does not require collateral to support customer receivables. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. The Company determines if receivables are past due based on days outstanding, and amounts are written off when determined to be uncollectible by management. The maximum accounting loss from the credit risk associated with accounts receivable is the amount of the receivable recorded, which is the face amount of the receivable, net of the allowance for doubtful accounts. As of September 30, 2013 and December 31, 2012 the Company had an allowance for doubtful accounts of $5,800 and $0, respectively.

F-6

Wild Craze, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2013

Inventories

Inventories are stated at the lower of cost or market using the first-in, first-out (FIFO) valuation method.

Depreciation

Property and equipment are recorded at cost. Depreciation expense is computed using straight-line methods over the estimated useful lives.

Asset lives for financial statement reporting of depreciation are:

	Machinery and equipment		2-7 years
	Leasehold improvements		5 years

Goodwill

Goodwill is measured for impairment on an annual basis (December 1 for us) and between annual tests if events indicate that an impairment exists. The Company calculates impairment as the excess of the carrying value of its indefinite-lived assets over their estimated fair value. If the carrying value exceeds the estimate of fair value a write-down is recorded.

Intangibles

Intangibles are comprised of trade names and customer lists. In accordance with ASC 350, intangible assets with indefinite lives are not amortized but instead are measured for impairment at least annually (December 1 for us), or when events indicate that an impairment exists. The Company calculates impairment as the excess of the carrying value of its indefinite-lived assets over their estimated fair value. If the carrying value exceeds the estimate of fair value a write-down is recorded. The Company amortizes it’s intangibles with finite useful lives over their respective useful lives.

Long-Lived Assets

Management regularly reviews property and equipment and other long-lived assets, including certain definite-lived intangible assets, for possible impairment. This review occurs annually (December 1 for us), or more frequently if events or changes in circumstances indicate the carrying amount of the asset may not be recoverable. If there is indication of impairment, generally, management then prepares an estimate of future cash flows (undiscounted and without interest charges) expected to result from the use of the asset and its eventual disposition. If these cash flows are less than the carrying amount of the asset, an impairment loss is recognized to write down the asset to its estimated fair value. The fair value is estimated using the present value of the future cash flows discounted at a rate commensurate with management’s estimates of the business risks. Preparation of estimated expected future cash flows is inherently subjective and is based on management’s best estimate of assumptions concerning expected future conditions.

F-7

Wild Craze, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2013

Debt Issue Costs and Debt Discount

These items are amortized over the life of the debt to interest expense. If a conversion, extinguishment or repayment of the underlying debt occurs, a proportionate share of these amounts is immediately expensed.

Fair Value of Financial Instruments

The Company follows ASC 820-10 of the FASB Accounting Standards Codification to measure the fair value of its financial instruments and disclosures about fair value of its financial instruments. ASC 820-10 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820-10 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The three (3) levels of fair value hierarchy defined by ASC 820-10 are described below:

Level 1		Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

Level 2		Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

Level 3		Pricing inputs that are generally unobservable inputs and not corroborated by market data.

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

The carrying amounts of the Company’s financial assets and liabilities, such as cash, prepaid expenses, notes receivable and other current assets, accounts payable and accrued liabilities approximate their fair values because of the short maturity of these instruments.

F-8

Wild Craze, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2013

We have determined that it is not practical to estimate the fair value of our notes payable because of their unique nature and the costs that would be incurred to obtain an independent valuation. We do not have comparable outstanding debt on which to base an estimated current borrowing rate or other discount rate for purposes of estimating the fair value of the notes payable and we have not been able to develop a valuation model that can be applied consistently in a cost efficient manner. These factors all contribute to the impracticability of estimating the fair value of the notes payable. At September 30, 2013 and December 31, 2012, the carrying value of the notes payable and accrued interest was $1,287,392 and $405,926. Accrued interest is included on the Balance sheet in the accounts payable and accrued liabilities line item.

Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. It is not, however, practical to determine the fair value of loans payable –related parties due to their related party nature.

The Company’s Level 3 financial liabilities consist of the derivative conversion features issued in July 2013 and August 2013 for which there is no current market for this security such that the determination of fair value requires significant judgment or estimation. The Company valued the conversion features using a binomial model. These models incorporate transaction details such as the Company’s stock price, contractual terms, maturity, risk free rates, as well as assumptions about future financings, volatility, and holder behavior as of the date of issuance and each balance sheet date.

Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis

The Company uses Level 3 of the fair value hierarchy to measure the fair value of the derivative liabilities and revalues its derivative liability at every reporting period and recognizes gains or losses in the statements of operations that are attributable to the change in the fair value of the derivative liability.

Financial assets and liabilities measured at fair value on a recurring basis are summarized below and disclosed on the balance sheets as follows:

September 30, 2013			Fair Value Measurement Using

		Carrying Value		Level 1		Level 2		Level 3		Total

Derivative conversion features	$	409,596	$	-	$	-	$	409,596	$	409,596

December 31, 2012

Fair Value Measurement Using

Carrying Value

Level 1

Level 2

Level 3

Total

The Company adopted the disclosure requirements of ASU 2011-04, Fair Value Measurements, during the year ended December 31, 2012. The unobservable level 3 inputs used by the Company was the expected volatility assumption used in the option pricing model. Expected volatility is based on the historical stock price volatility of comparable companies’ common stock, as our stock does not have sufficient historical trading activity.

F-9

Wild Craze, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2013

The table below provides a summary of the changes in fair value, including net transfers in and/or out, of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the period December 31, 2011 through September 30, 2013:

	Fair Value Measurement Using Level 3 Inputs
		Derivative conversion features			Total

Balance, December 31, 2011	$	-		$	-
Purchases, issuances and settlements		-			-
Change in fair value		-			-
Balance, December 31, 2012		-			-
Purchases, issuances and settlements		456,174			456,174
Change in fair value		(42,548	)		(42,548	)
Reduction from repayment of debt		(4,030	)		(4,030	)
Balance, September 30, 2013	$	409,596		$	409,596

Changes in the unobservable input values could potentially cause material changes in the fair value of the Company’s Level 3 financial instruments. The significant unobservable inputs used in the fair value measurements is the expected volatility assumption. A significant increase (decrease) in the expected volatility assumption could potentially result in a higher (lower) fair value measurement.

Discount on Debt

The Company allocated the proceeds received from convertible debt instruments between the underlying debt instruments and has recorded the conversion feature as a liability in accordance with FASB Accounting Standard Codification 815-15 (ASC 815-15). The conversion feature and certain other features that are considered embedded derivative instruments, such as a conversion reset provision have been recorded at their fair value within the terms of ASC 815-15 as its fair value can be separated from the convertible note and its conversion is independent of the underlying note value. The value of the embedded derivative liability was bifurcated from the debt host contract and recorded as a derivative liability, which resulted in a reduction of the initial carrying amount (as unamortized discount) of the notes.The conversion liability is marked to market each reporting period with the resulting gains or losses shown in the statements of operations.

Derivative Instruments

The Company evaluates its convertible debt, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with ASC 815-15. The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statements of operations as other income or expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity.

F-10

Wild Craze, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2013

In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument.

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date.

Research and Development

Research and development is expensed as incurred. There was no such expense for the nine months ended September 30, 2013 and 2012.

Share-Based Payments

Generally, all forms of share-based payments, including stock option grants, warrants, restricted stock grants and stock appreciation rights are measured at their fair value on the awards’ grant date, based on the estimated number of awards that are ultimately expected to vest. Share-based compensation awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. The expense resulting from share-based payments is recorded as general and administrative expense. During the nine months ended September 30, 2013 the Company recorded an expense relating to 225,000 shares of common stock to be issued to consultants, for services rendered, at a fair value of $93,650 (range $0.176-$0.64/share). During the nine months ended September 30, 2013 the Company issued 2,791,000 shares of common stock to consultants, for services rendered, at a fair value of $1,773,240 (range $0.51-$0.64/share). During the nine months ended September 30, 2012 the Company recorded an expense relating to 240,000 shares of common stock to be issued to attorneys and consultants, for services rendered, at a fair value of $3,418 ($0.014/share).

On July 24, 2013 the Company issued 352,941 restricted shares of common stock to a creditor as compensation for financing costs of $90,000. The issuance of the 352,941 shares have been recorded at par value with a corresponding decrease to paid-in capital. Upon the sale of the shares by the creditor, the financing cost liability will be reduced by the amount of the proceeds with a corresponding increase to paid-in capital. The Company will still be liable for any shortfall from the proceeds realized by the creditor. The ultimate amount to be recorded in satisfaction of the debt will not exceed the balance of the financing cost recorded. As of September 30, 2013 the creditor did not sell any of these shares.

On August 16, 2013 the Company issued 51 shares of preferred stock to a related entity, for services rendered, at a fair value of $730,000 ($14,314/share) as determined by the independent third party appraisal company. The sole member of the Board of Directors and significant shareholder of the Company is a controlling shareholder of the related entity. (See Note 13)

F-11

Wild Craze, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2013

Income Taxes

Income taxes are provided in accordance with ASC No. 740, Accounting for Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carryforwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

For income tax benefits arising from uncertain income tax positions, a tax benefit arising from an uncertain tax position can only be recognized for financial reporting purposes if, and to the extent that, the position is more likely than not to be sustained in an audit by the applicable taxing authority.

Penalties related to uncertain tax positions are recorded as a component of general and administrative expenses. Interest relating to uncertain tax positions is recorded as a component of interest expense. The Company has not recorded any uncertain tax positions at September 30, 2013 and December 31, 2012.

Penalties and interest assessed by income taxing authorities are included in general and administrative expenses.

Revenue

The Company records revenue for products when all of the following have occurred: (1) persuasive evidence of an arrangement exists, (2) the product is delivered, (3) the sales price to the customer is fixed or determinable, and (4) collectability of the related customer receivable is reasonably assured. There is no stated right of return for products.

The Company meets these criteria upon shipment.

Advertising

The Company expenses advertising when incurred. Advertising expense for the nine months ended September 30, 2013 and 2012 was $35,055 and $0, respectively.

F-12

Wild Craze, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2013

Basic Earnings per Share

Basic earnings (loss) per share is computed by dividing net income (loss) by weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss), adjusted for changes in income or loss that resulted from the assumed conversion of convertible debt, exercise of stock options and warrants, by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period.

The Company had the following potential common stock equivalents at September 30, 2013:

On January 23, 2012, the Company issued a senior secured convertible promissory note in the principal amount of $102,259 (the “Note”) in favor of Omega Global Enterprises, LLC, a Delaware limited liability company (“Omega”). The Note is due on demand and bears interest at a rate of twelve percent (12%) per annum. The Note is convertible into shares of the Company’s common stock at a price equal to the average of the immediately preceding three volume weighted average prices prior to receipt by the Company of a notice of conversion delivered by the holder. On February 24, 2012, Omega advanced the Company $50,000 and on March 2, 2012 the note was amended and the note principal was increased to $152,259.			1,045,256

In July 2013 the Company issued a convertible note in the principal amount of $68,000 to an investor. The convertible note has a term of nine months, maturing March 27, 2014, and accrues interest at 8% per annum. The holder of the convertible note has the right from 180 days after the issuance thereof until such time as the convertible note is fully paid, to convert any outstanding and unpaid principal portion thereof into shares of common stock. The conversion price is adjustable, based on a 42% discount to the average of the lowest three trading prices during the ten trading day period ending on the latest complete trading day prior to the conversion date, in each case subject to the note-holder not being able to beneficially own more than 9.99% of our outstanding common stock upon any conversion.			962,310

On July 23, 2013, Wild Craze, Inc. (the “Company”) closed a Credit Agreement (the “Credit Agreement”) by and among the Company, Wild Creations, Inc. and SnapTagz LLC (the “Borrowers”) and TCA Global Credit Master Fund, LP, a Cayman Islands limited partnership, as lender (“TCA”). Pursuant to the Credit Agreement, TCA agreed to loan the Company up to a maximum of $2 million for general operating expenses. An initial amount of $300,000 was funded by TCA at the closing of the Credit Agreement. Any increase in the amount extended to the Borrowers shall be at the discretion of TCA. TCA may convert all or any portion of the outstanding principal, accrued and unpaid interest, and any other sums due and payable under the Revolving Note into shares of the Company’s common stock at a conversion price equal to 85% of the lowest daily volume weighted average price of the Company’s common stock during the five trading days immediately prior to such applicable conversion date, in each case subject to TCA not being able to beneficially own more than 4.99% of our outstanding common stock upon any conversion.			2,426,146

F-13

In August 2013 the Company issued a convertible note in the principal amount of $63,000 to an investor. The convertible note has a term of nine months, maturing May 30, 2014, and accrues interest at 8% per annum. The holder of the convertible note has the right from 180 days after the issuance thereof until such time as the convertible note is fully paid, to convert any outstanding and unpaid principal portion thereof into shares of common stock. The conversion price is adjustable, based on a 42% discount to the average of the lowest three trading prices during the ten trading day period ending on the latest complete trading day prior to the conversion date, in each case subject to the note-holder not being able to beneficially own more than 9.99% of our outstanding common stock upon any conversion.			891,552

Stock options, with exercise price of $0.75 per share			30,000
Liability to be settled in stock			285,000
Total common stock equivalents			5,640,264

Since the Company reflected a net loss for the three and nine months ended September 30, 2013, the inclusion of any common stock equivalents, would have been anti-dilutive. A separate computation of diluted earnings (loss) per share is not presented.

The Company had the following potential common stock equivalents at December 31, 2012:

On January 23, 2012, the Company issued a senior secured convertible promissory note in the principal amount of $102,259 (the “Note”) in favor of Omega Global Enterprises, LLC, a Delaware limited liability company (“Omega”). The Note is due on demand and bears interest at a rate of twelve percent (12%) per annum. The Note is convertible into shares of the Company’s common stock at a price equal to the average of the immediately preceding three volume weighted average prices prior to receipt by the Company of a notice of conversion delivered by the holder. On February 24, 2012, Omega advanced the Company $50,000 and on March 2, 2012 the note was amended and the note principal was increased to $152,259.			10,722,465

Liability to be issued in stock			712,500
Total common stock equivalents			11,434,965

Since the Company reflected a net loss in 2012, the inclusion of any common stock equivalents, would have been anti-dilutive. A separate computation of diluted earnings (loss) per share is not presented.

F-14

Wild Craze, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2013

Recent Accounting Pronouncements

On July 18, 2013, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists” (“ASU 2013-11”). ASU 2013-11 states that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward, except as follows. The unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets to the extent (a) a net operating loss carry forward, a similar tax loss or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position, or (b) the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax assets for such purpose. The amendments in ASU 20103-11 are effective prospectively for interim and annual reporting periods beginning after December 15, 2013. The adoption of ASU 2013-11 is not expected to have a material impact on our financial position, results of operations or cash flows.

Management does not believe there would have been a material effect on the accompanying financial statements had any other recently issued, but not yet effective, accounting standards been adopted in the current period.

Note 3 Going Concern

As reflected in the accompanying consolidated financial statements, the Company has a net loss and net cash used in operations of$3,508,530 and $476,532, respectively, for the nine months ended September 30, 2013 and an accumulated net loss totaling$4,125,274. In addition, the company has a working capital deficit of approximately $1,562,254 at September 30, 2013. These factors raise substantial doubt about our ability to continue as a going concern.

The ability of the Company to continue its operations is dependent on Management’s plans, which include the raising of capital through debt and/or equity markets with some additional funding from other traditional financing sources, including term notes, until such time that funds provided by operations are sufficient to fund working capital requirements. The Company may need to incur additional liabilities with certain related parties to sustain the Company’s existence.

The Company will require additional funding to finance the growth of its current and expected future operations as well as to achieve its strategic objectives. The Company believes its current available cash along with anticipated revenues may be insufficient to meet its cash needs for the near future. There can be no assurance that financing will be available in amounts or terms acceptable to the Company, if at all.

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

F-15

Wild Craze, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2013

Note 4 Acquisitions

(A)

Wild Creations

On February 25, 2013, the Company entered into a Purchase Agreement with Crescent Moon Holdings, LLC, a South Carolina limited liability company (“Crescent Moon”) and Wild Creations, Inc.(“Wild Creations”), a wholly-owned subsidiary of Crescent Moon; setting forth the acquisition of Wild Creations assets and assumption of liabilities.

Pursuant to the terms of the Purchase Agreement, the Company acquired all of the assets of Wild Creations in exchange for $100,000, the issuance of 2,000,000 shares of our common stock, $0.001 par value, and assumption of a note, including accrued interest, in the amount of $231,165. Total price paid for Wild Creations assets in the acquisition was $1,611,165.

The following sets forth the components of the purchase price:

Purchase Price:
Cash	$	100,000
2,000,000 shares of common stock, ($0.64/share), based upon the fair value of the shares issued		1,280,000
Assumed Note		231,165
Total Purchase Price		1,611,165
Assets acquired
Cash		234
Accounts Receivable		70,974
Inventory		179,291
Fixed Assets		59,310
Note Receivable		14,263
Total assets acquired		324,072
Liabilities assumed
Accounts payable		468
Total liabilities assumed		468
Net assets acquired		323,604
Excess purchase price	$	1,287,561

Based on a preliminary independent appraisal, the Company has tentatively allocated the excess purchase price to intangible assets and Goodwill as follows:

Customer List	$	350,951
Trade Name	$	298,104
Goodwill	$	638,506

F-16

Wild Craze, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2013

The purchase price allocation will be adjusted if necessary upon the Company receiving the final valuation report from the independent appraisal company.

The intangible assets subject to amortization have been assigned useful lives as follows:

Customer list

11 years


(B)	FlipOutz

On February 25, 2013, the Company as parent, Wild Creations (a wholly-owned subsidiary of the Company), as buyer, entered into a Purchase Agreement with FlipOutz, LLC, a Delaware limited liability company (“FlipOutz”); setting forth the acquisition of FlipOutz assets and assumption of liabilities.

Pursuant to the terms of the Purchase Agreement, Wild Creations acquired all of the assets of FlipOutz in exchange for the issuance of 1,000,000 shares of our common stock, $0.001 par value, and contingent stock consideration with a fair value at date of purchase of $396,816. Total price paid for FlipOutz assets in the acquisition was $1,036,816.

The following sets forth the components of the purchase price:

Purchase Price:
1,000,000 shares of common stock, ($0.64/share), based upon the fair value of the shares issued		640,000
Contingent stock consideration		396,816
Total Purchase Price		1,036,816
Assets acquired
Cash		270
Accounts Receivable		345
Inventory		14,785
Total assets acquired		15,400
Liabilities assumed
Total liabilities assumed		-
Net assets acquired		15,400
Excess purchase price	$	1,021,416

Based on a preliminary independent appraisal, the Company has tentatively allocated the excess purchase price to intangible assets and Goodwill as follows:

Customer List	$	50,544
Trade Name	$	24,236
Goodwill	$	946,636

F-17

Wild Craze, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2013

The purchase price allocation will be adjusted if necessary upon the Company receiving the final valuation report from the independent appraisal company.

The intangible assets subject to amortization have been assigned useful lives as follows:

Customer list

11 years

The following table summarizes, on an unaudited pro forma basis, the results of operations of the Company as though the acquisitions had occurred as of January 1, 2012. The pro forma amounts give effect to appropriate adjustments of amortization of intangible assets. The pro forma amounts presented are not necessarily indicative of the actual operation results had the acquisition transactions occurred as of January 1, 2012.

	For the Nine Months Ended
	September 30, 2013			September 30, 2012
Revenues	$	621,919		$	847,844
Net loss		(3,539,412	)		(524,828	)
Loss per share of common stock		(0.11	)		(0.02	)
Basic and diluted		32,018,295			29,123,760

Note 5 Property, Plant and Equipment

Property, plant and equipment on September 30, 2013 and December 31, 2012 are as follows:

	September 30, 2013			December 31, 2012
Machinery and Equipment	$	61,310	$	-
Leasehold Improvements		4,500		-
Total		65,810		-
Less: Accumulated Depreciation		11,777		-
	$	54,033	$	-

Depreciation expense charged to income for the nine months ended September 30, 2013 and 2012 amounted to $11,777 and $0 respectively.

Note 6 Note Receivable

As of September 30, 2013 the Company had a note receivable in the amount of $10,972. The note accrues interest at 9.00% per annum with monthly installments of $566.67. The note matures on June 5, 2015. The Company acquired the note on February 25, 2013 upon entering into an asset purchase agreement with Crescent Moon. (See Note 4) The note is secured by real estate.

F-18

Wild Craze, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2013

Note 7 Goodwill

There were no balances or activity for Goodwill during 2012. The following table summarizes changes in our Goodwill as of September 30, 2013:

December 31, 2012

Acquisitions

Impairment

Charges

September 30, 2013

Goodwill

1,585,142

Note 8 Intangible Assets

There were no balances or activity for intangible assets during 2012. The following table summarizes changes in our intangible assets as of September 30, 2013:

		December 31, 2012	Acquisitions		Accumulated Amortization			Impairment Charges		September 30, 2013
Customer List	$	-	$	401,495	$	(21,291	)	$	-	$	380,204
Trade Name		-		322,340		-			-		322,340
	$	-	$	723,835	$	(21,291	)	$	-	$	702,544

The intangible assets useful lives are as follows:

	Estimated Life
Customer List	11 years
Trade Name	Indefinite

Amortization expense related to the customer list totaled $21,291 for the nine months ended September 30, 2013.

F-19

Wild Craze, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2013

Amortization expense for the next five years is as follows:

Year ending December 31:

	2013 (remainder of the year)	$	9,126

	2014		36,500

	2015		36,500

	2016		36,500

	2017		36,500

	Thereafter		225,078

		$	380,204

Note 9 Accounts payable and accrued liabilities

Accounts payable and accrued liabilities consist of the following:

	September 30, 2013		December 31, 2012
Accounts payable	$	287,832	$	112,355

Sales tax payable		6,785		-

Accrued expenses		91,680		10,042

Accrued payroll		14,000		-

Accrued interest convertible notes		2,120		-

Accrued interest – related party		143,076		16,649
	$	545,492	$	139,046

Note 10 Convertible Notes Payable

Debt Offering (A)

In July 2013 the Company issued a convertible note in the principal amount of $68,000 to an investor. The convertible note has a term of nine months, maturing March 27, 2014, and accrues interest at 8% per annum. The holder of the convertible note has the right from 180 days after the issuance thereof until such time as the convertible note is fully paid, to convert any outstanding and unpaid principal portion thereof into shares of common stock. The conversion price is adjustable, based on a 42% discount to the average of the lowest three trading prices during the ten trading day period ending on the latest complete trading day prior to the conversion date, in each case subject to the note-holder not being able to beneficially own more than 9.99% of our outstanding common stock upon any conversion. The conversion price will be subject to an adjustment to reduce dilution in the event that the Company issues additional equity securities. The conversion price is subject to anti-dilution protection in the event that the Company issues additional equity securities at a price less than the conversion price.

F-20

Wild Craze, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2013

Due to the fact that these convertible notes have an option to convert at a variable amount, they are subject to derivative liability treatment. The Company has applied ASC No. 815, due to the potential for settlement in a variable quantity of shares. The convertible notes have been measured at fair value using a binomial model at period end with gains and losses from the change in fair value of derivative liabilities recognized on the statements of operations.

The convertible notes, when issued, gave rise to a derivative liability of $236,922 of which $68,000 was recorded as a discount to the notes and $168,922 was expensed immediately as it exceeded the gross proceeds of the offering.

The embedded derivative of the convertible notes was re-measured at September 30, 2013 yielding a gain on change in fair value of the derivatives of $125,875 for the nine months ended September 30, 2013. The derivative value of the convertible notes at September 30, 2013 yielded a derivative liability at fair value of $111,047.

As of September 30, 2013, accrued and unpaid interest under the Note was $1,163.

Debt Offering (B)

On July 23, 2013, Wild Craze, Inc. (the “Company”) closed a Credit Agreement (the “Credit Agreement”) by and among the Company, Wild Creations, Inc. and SnapTagz LLC (the “Borrowers”) and TCA Global Credit Master Fund, LP, a Cayman Islands limited partnership, as lender (“TCA”). Pursuant to the Credit Agreement, TCA agreed to loan the Company up to a maximum of $2 million for general operating expenses. An initial amount of $300,000 was funded by TCA at the closing of the Credit Agreement. Any increase in the amount extended to the Borrowers shall be at the discretion of TCA.

The amounts borrowed pursuant to the Credit Agreement are evidenced by a Revolving Note (the “Revolving Note”) and the repayment of the Revolving Note is secured by a first position security interest in substantially all of the Company’s assets in favor of TCA, as evidenced by a Security Agreement by and among the Borrowers and TCA (the “Security Agreement”). The Revolving Note is in the original principal amount of $300,000 is due and payable, along with interest thereon, on January 22, 2014, and bears interest at the rate of 12% per annum, increasing to the highest rate permitted by law upon the occurrence of an event of default. The Credit Agreement calls for the establishment of a lock-box account. In addition, the Credit Agreement calls for a reserve amount equal to 15% of the revolving loan commitment. Following the collection of the reserve amount in full and payment of all items and fees as required, a minimum of 15% of all amounts collected into the lock-box account shall be paid to the Lender to reduce the then outstanding principal balance of the revolving loans.

During September 2013 note principal in the amount of $16,650 was repaid. The principal balance on the note as of September 30, 2013 was $283,350.

F-21

Wild Craze, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2013

TCA may convert all or any portion of the outstanding principal, accrued and unpaid interest, and any other sums due and payable under the Revolving Note into shares of the Company’s common stock at a conversion price equal to 85% of the lowest daily volume weighted average price of the Company’s common stock during the five trading days immediately prior to such applicable conversion date, in each case subject to TCA not being able to beneficially own more than 4.99% of our outstanding common stock upon any conversion.The conversion price is subject to anti-dilution protection in the event that the Company issues additional equity securities at a price less than the conversion price.

As consideration for TCA entering into and structuring the Credit Agreement, the Company shall pay to TCA 352,941 shares of the Company’s common stock. It is the intention of the Company and TCA that the value of the Shares shall equal $90,000. In the event the value of the Shares issued to TCA and net proceeds received by TCA for the sale thereof do not equal $90,000, the Credit Agreement provides for an adjustment provision allowing for necessary action to adjust the number of shares issued. The issuance of the 352,941 shares have been recorded at par value with a corresponding decrease to paid-in capital. Upon the sale of the shares by TCA, the financing cost liability will be reduced by the amount of the proceeds with a corresponding increase to paid-in capital. The Company will still be liable for any shortfall from the proceeds realized by TCA. The ultimate amount to be recorded in satisfaction of the debt will not exceed the balance of the financing cost recorded. As of September 30, 2013 TCA did not sell any of these shares.

The convertible notes, when issued, gave rise to a derivative liability of $153,703 which was recorded as a discount to the notes.

The embedded derivative of the convertible notes was re-measured at September 30, 2013 yielding a loss on change in fair value of the derivatives of $90,564 for the nine months ended September 30, 2013. The derivative value of the convertible notes at September 30, 2013 yielded a derivative liability at fair value of $193,616.

As of September 30, 2013, accrued and unpaid interest under the Note was $472.

F-22

Wild Craze, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2013

Make-Whole Rights

Upon liquidation by TCA of the Shares issued pursuant to a Conversion Notice, provided that TCA realizes a net amount from such liquidation equal to less than the Conversion Amount specified in the relevant Conversion Notice (such net realized amount, the “Realized Amount”), the Company shall issue to the TCA additional shares “Make-Whole Shares” of the Company’s Common Stock equal to: (i) the Amount specified in the relevant Conversion Notice; minus (ii) the Realized Amount. In the event that TCA received net proceeds from the sale of Make-Whole Shares in excess of the Conversion Amount specified in the relevant Conversion Notice, such excess amount shall be applied to satisfy any and all amounts owed hereunder in excess of the Conversion Amount specified in the relevant Conversion Notice.

Penalties

Prepayment penalty

If the Company elects to terminate the Credit Agreement within the first three months after the closing date, the Company shall pay a prepayment penalty of 2.50% of the outstanding balance of the loan.

Inability to timely submit required reporting

If the Company fails to timely submit the required post-closing reporting, the Company, at TCA’s discretion, will be required to monetize 8.33% of the investment banking advisory fee. This penalty will be paid in cash by the Company at the time of the assessment. Multiple violations may lead to a default on the Credit Agreement, at the Lender’s sole discretion.

Event of Default

Default Interest Rate

Upon the occurrence of a default, the interest rate on all outstanding obligations of the Company to the Lender shall automatically be increased to the maximum interest rate allowable by law.

Conversion Provision

Upon an event of default and in its sole discretion TCA may convert all or any portion of the outstanding principal, accrued and unpaid interest, and any other sums due and payable under the Revolving Note into shares of the Company’s common stock at a conversion price equal to 85% of the lowest daily volume weighted average price of the Company’s common stock during the five trading days immediately prior to such applicable conversion date. At no time, unless the Company is in default on the Credit Agreement, shall TCA beneficially own more than 4.99% of our outstanding common stock upon any conversion.

F-23

Wild Craze, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2013

Default and Potential Violation

Under the terms of the Credit Agreement, the Company is required to comply with several financial ratios and restrictive financial covenants as described in the Credit Agreement. At September 30, 2013, the Company was not in compliance with certain covenants contained in the Credit Agreement. TCA may, at its option, upon the occurrence and during the continuance of an Event of Default, declare its commitments to the Company to be terminated and all obligations to be immediately due and payable. As of September 30, 2013, the Company has not received notice from TCA declaring this action.

Debt Offering (C)

In August 2013 the Company issued a convertible note in the principal amount of $63,000 to an investor. The convertible note has a term of nine months, maturing May 30, 2014, and accrues interest at 8% per annum. The holder of the convertible note has the right from 180 days after the issuance thereof until such time as the convertible note is fully paid, to convert any outstanding and unpaid principal portion thereof into shares of common stock. The conversion price is adjustable, based on a 42% discount to the average of the lowest three trading prices during the ten trading day period ending on the latest complete trading day prior to the conversion date, in each case subject to the note-holder not being able to beneficially own more than 9.99% of our outstanding common stock upon any conversion. The conversion price is subject to anti-dilution protection in the event that the Company issues additional equity securities at a price less than the conversion price.

The convertible notes, when issued, gave rise to a derivative liability of $65,549 of which $63,000 was recorded as a discount to the notes and $2,549 was expensed immediately as it exceeded the gross proceeds of the offering.

The embedded derivative of the convertible notes was re-measured at September 30, 2013 yielding a loss on change in fair value of the derivatives of $39,385 for the nine months ended September 30, 2013. The derivative value of the convertible notes at September 30, 2013 yielded a derivative liability at fair value of $104,933.

As of September 30, 2013, accrued and unpaid interest under the Note was $207.

F-24

Wild Craze, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2013

Convertible notes payable consisted of the following at September 30, 2013 and December 31, 2012:

	September 30, 2013			December 31, 2012

Convertible notes payable	$	431,000		$	-
Discount on convertible notes		(199,519	)		-
Repayments		(16,650	)		-
Convertible notes payable, net		214,831			-

Long-term portion		-			-

Current maturities	$	214,831		$	-

The fair value of the Company’s derivative liabilities at the commitment and re-measurement dates were based upon the following management assumptions as of the commitment date and September 30, 2013:

	Commitment Date			September 30, 2013

Expected dividends		0	%		0	%
Expected volatility		133%-144%			133%-144	%
Expected term:		5.9 months -8.4 months			3.6 months – 8 months
Risk free interest rate		0.07% - 0.13	%		0.02% - 0.10	%

Debt Discount

The debt discounts recorded in 2013 pertain to the derivative liability classification of the embedded conversion option.

The following is a summary of the Company’s debt discount:

	September 30, 2013			December 31, 2012

Debt discount	$	284,703		$	-
Amortization of debt discount		(85,184	)		-
Debt discount - net	$	199,519		$	-

Note 11 Debt Issuance Costs

Debt issuance costs, net are as follows:

Balance December 31, 2012	$	-
Debt issuance costs – 2013 financings		137,600
Amortization of debt issue costs during the nine months ended September 30, 2013		(53,436	)
Balance – September 30, 2013	$	84,164

F-25

Wild Craze, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2013

Note 12 Related Party Transactions

(A)

Convertible notes payable – related parties

On January 23, 2012, the Company issued a senior secured convertible promissory note in the principal amount of $102,259 (the “Note”) in favor of Omega Global Enterprises, LLC, a Delaware limited liability company (“Omega”). The Note is due on demand and bears interest at a rate of twelve percent (12%) per annum. The Note is convertible into shares of the Company’s common stock at a price equal to the average of the immediately preceding three volume weighted average prices prior to receipt by the Company of a notice of conversion delivered by the holder. The Note may be prepaid in whole or in part at the Company’s option without penalty. Further, the Note grants to Omega a continuing, first priority security interest in all of the Company’s assets, wheresoever located and whether now existing or hereafter arising or acquired.

On February 24, 2012, Omega advanced the Company $50,000 and on March 2, 2012 the note was amended and the note principal was increased to $152,259.

As of September 30, 2013, accrued and unpaid interest under the Note was $30,314.

As of December 31, 2012, accrued and unpaid interest under the Note was $16,649.

Accrued interest is included on the Balance sheet in the accounts payable and accrued liabilities line item.

Related Party convertible notes payable consisted of the following at September 30, 2013 and December 31, 2012:

	September 30, 2013		December 31, 2012
Convertible note payable, originally entered into on January 23, 2012, due on demand, with interest at 12% per annum with interest due on the demand date. Note was amended on March 2, 2012 due to a principal increase.	$	152,259	$	152,259

	$	152,259	$	152,259

The Company recorded $13,665 and $12,056 interest expense on the convertible note for the nine months ended September 30, 2013 and 2012, respectively.

F-26

Wild Craze, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2013

(B)

Loans payable-related parties

As of September 30, 2013 the Company owed $569,631 to a related entity relating to monies advanced to the Company to fund operating expenses and to fund acquisitions. The sole member of the Board of Directors and significant shareholder of the Company is a controlling shareholder of the related entity. The loan accrues interest at 12.00% per annum. The loan is unsecured and is due on demand. Accrued and unpaid interest on the note at September 30, 2013 was $52,402 and is included on the Balance sheet in the accounts payable and accrued liabilities line item.

The Company recorded $52,402 and $0 interest expense on the loan for the nine months ended September 30, 2013 and 2012, respectively.

ii)

As of September 30, 2013 the Company has a senior secured promissory note in the principal amount of $200,000 to a related entity. The sole member of the Board of Directors and significant shareholder of the Company is a controlling shareholder of the related entity. The Company assumed the note, along with accrued interest, on February 25, 2013 upon entering into an asset purchase agreement with Crescent Moon. (See Note 4) The note accrues interest at 16.00% per annum. The note is due on demand and secured by all assets of the Company. Accrued and unpaid interest on the note at September 30, 2013 was $60,360 and is included on the Balance sheet in the accounts payable and accrued liabilities line item..

The Company recorded $29,195 and $0 interest expense on the note for the nine months ended September 30, 2013 and 2012, respectively.

iii)	As of September 30, 2013 the Company owed $5,475 to an officer of the Company relating to monies advanced to the Company to fund operating expenses. The loan is unsecured and is due on demand.

iv)

On August 16, 2013 the Company issued 51 shares of preferred stock to a related entity, for services rendered, at a fair value of $730,000 ($14,314/share). The sole member of the Board of Directors and significant shareholder of the Company is a controlling shareholder of the related entity. (See Note 13)

Note 13 Stockholders’ Equity

Stock Transactions

Issuance of Series A Preferred Stock

On August 16, 2013, by unanimous written consent of the Board of Directors, the Company issued 51 shares of the Company’s Series A Preferred Stock, par value $0.001 per share (the “Preferred Stock”), to Park Investment Holdings, LLC. Steven Spiegel, Director, has beneficial ownership of the Preferred Stock because Mr. Spiegel has a 5% ownership interest in Park Investment Holdings, LLC and Mr. Spiegel is the trustee for a trust that has a 95% ownership interest in Park Investment Holdings, LLC.

F-27

Wild Craze, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2013

The rights of the Series A Preferred Stock are as follows:

Dividend rights – Initially, there will be no dividends due or payable on the Series A Preferred. Any future terms with respect to dividends shall be determined by the Board consistent with the Corporation’s Articles of Incorporation. Any and all such future terms concerning dividends shall be reflected in an amendment to this Certificate of Designation, which the Board shall promptly file or cause to be filed.

Voting rights – Each one (1) share of the Series A Preferred shall have voting rights equal to(x) 0.019607 multiplied by the total issued and outstanding shares of Common Stock eligible to vote at the time of the respective vote (the “Numerator”), divided by (y) 0.49, minus (z) the Numerator. With respect to all matters upon which stockholders are entitled to vote or to which stockholders are entitled to give consent, the holders of the outstanding shares of Series A Preferred Stock shall vote together with the holders of Common Stock without regard to class, except as to those matters on which separate class voting is required by applicable law or the Articles of Incorporation or bylaws.

Liquidation rights – The holders of Series A Preferred Stock shall have no rights (whether in the form of distributions or otherwise) in respect of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, and shall be subordinate to all other classes of the Corporation’s capital stock in respect thereto.

Protection Provisions – So long as any shares of Series A Preferred are outstanding, the Corporation shall not, without first obtaining the unanimous written consent of the holders of Series A Preferred, (i) alter or change the rights, preferences or privileges of the Series A Preferred so as to affect adversely the holders of Series A Preferred or (ii) create Pari Passu Shares or Senior Shares.

During the nine months ended September 30, 2013 the Company issued common stock for the following:

The Company issued a total of 3,000,000 shares of common stock in conjunction with an asset acquisition.

The Company issued a total of 2,491,000 shares of common stock to various consultants, for services rendered, at a fair value of $1,594,240 ($0.64/share).

The Company issued a total of 502,500 shares of common stock to attorneys and consultants to settle liabilities in the amount of $7,156.

The Company issued 200,000 shares of common stock to attorneys, for services rendered, at a fair value of $128,000 ($0.64/share).

F-28

Wild Craze, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2013

The Company issued 150,000 shares of common stock to a consultant to settle liabilities in the amount of $25,673.

The Company issued 352,941 restricted shares of common stock to a creditor as compensation for financing costs of $90,000. The issuance of the 352,941 shares have been recorded at par value with a corresponding decrease to paid-in capital. Upon the sale of the shares by the creditor, the financing cost liability will be reduced by the amount of the proceeds with a corresponding increase to paid-in capital. The Company will still be liable for any shortfall from the proceeds realized by the creditor. The ultimate amount to be recorded in satisfaction of the debt will not exceed the balance of the financing cost recorded. As of September 30, 2013 the creditor did not sell any of these shares.

The Company issued 100,000 shares of common stock to three consultants, for services rendered, at a fair value of $51,000 ($0.51/share).

There was no stock issued during the nine months ended September 30, 2012.

Stock to be issued

During January 2012 the Company accrued a liability relating to 90,000 shares of common stock to be issued to attorneys, for services rendered, at a fair value of $1,282 ($0.014/share), based upon a third party valuation of the Company.

During March 2012 the Company accrued a liability relating to 25,000 shares of common stock to be issued to a consultant, for services rendered, at a fair value of $356 ($0.014/share), based upon a third party valuation of the Company.

During June 2012 the Company accrued a liability relating to 25,000 shares of common stock to be issued to a consultant, for services rendered, at a fair value of $356 ($0.014/share), based upon a third party valuation of the Company.

During September 2012 the Company accrued a liability relating to 100,000 shares of common stock to be issued to consultants, for services rendered, at a fair value of $1,424 ($0.014/share), based upon a third party valuation of the Company.

During December 2012 the Company accrued a liability relating to 50,000 shares of common stock to be issued to consultants, for services rendered, at a fair value of $712 ($0.014/share), based upon a third party valuation of the Company.

During March 2013 the Company accrued a liability relating to 50,000 shares of common stock to be issued to consultants, for services rendered, at a fair value of $32,000 ($0.64/share).

During May 2013 the Company accrued a liability relating to 25,000 shares of common stock to be issued to consultants, for services rendered, at a fair value of $8,250 ($0.33/share).

During June 2013 the Company accrued a liability relating to 25,000 shares of common stock to be issued to consultants, for services rendered, at a fair value of $6,000 ($0.24/share).

During July 2013 the Company accrued a liability relating to 100,000 shares of common stock to be issued to consultants, for services rendered, at a fair value of $43,000 ($0.43/share).

During September 2013 the Company accrued a liability relating to 25,000 shares of common stock to be issued to consultants, for services rendered, at a fair value of $4,400 ($0.176/share).

The following is a summary of the Company’s liability to be settled in stock:

	September 30, 2013			December 31, 2012
Beginning balance, January 1	$	10,146		$	6,016
Liability accrued during the period		93,650			4,130
Liability settled during the period		(32,830	)		-
Liability to be settled in stock	$	70,966		$	10,146

Note 14 Commitments and Contingencies

Litigations, Claims and Assessments

The Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise that may harm its business. The Company is currently not aware of any such legal proceedings or claims that they believe will have, individually or in the aggregate, a material adverse affect on its business, financial condition or operating results.

F-29

Wild Craze, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2013

Assignment and Assumption Agreements

On May 18, 2011, the Company entered into an assignment and assumption agreement (the “Assignment Agreement #1”) with a member of SnapTagz, LLC and a third party. The member assigned the exclusive right to a patent to the Company. In exchange, the Company assumed the obligation to pay a 3% royalty on all net profits realized from the monetization of the patent, not to exceed $310,000. The royalty payments are payable quarterly. In addition, the Company was required to pay a $10,000 royalty prepaid upon execution of the Assignment Agreement #1.

In addition, on May 18, 2011, the Company entered into a second assignment and assumption agreement (the “Assignment Agreement #2”) with a member of SnapTagz, LLC and a third party. The member assigned the exclusive right to a patent to the Company. In exchange, the Company assumed the obligation to pay a 3% royalty on all net profits realized from the monetization of the patent within the United States of America and territories controlled by the United States of America. The royalty payments are payable quarterly. The Company is required to pay a minimum royalty of $3,000 for all quarters ended during the 2011 calendar year, $4,000 for all quarters ended during the 2012 calendar year, and $5,000 per quarter thereafter.

License and Distribution Agreement

On February 17, 2012, Wired Associates Solutions, Inc. a Nevada corporation (the “Licensor”), entered into a definitive product license and distribution agreement (the “Agreement”) by and between the Licensor and Crescent Moon Holdings, LLC., a South Carolina limited liability company that focuses on toy development and distribution (the “Licensee”). Upon execution of the Agreement, the Company ceased being a “shell company” (as such term is defined in Rule 12b-2 under the Exchange Act).

Pursuant to the terms of the Agreement, for a one year period the Licensee will market, sell and distribute the Licensor’s consumer product, SnapTagz, for the benefit of the Licensor (the “Product Line”). As consideration for entering into the Agreement, Licensee agrees to pay the Licensor 6% of the gross sales of any items of the Product Line which are marketed, sold and distributed by the Licensee (the “Royalties”). Licensee will make payment to Licensor within thirty days after the end of each calendar quarter. Additionally, during the one year period commencing on February 17, 2012, Licensee shall pay to Licensor the minimum sum of $10,000, said amount being payable on the one year anniversary thereof and shall be creditable towards Royalties due to Licensor.

As part of the asset purchase agreement with Crescent Moon (Note 4), this licensing agreement was assigned to the Company on February 25, 2013.

F-30

Wild Craze, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2013

Operating Leases

The Company currently leases office and warehouse space in Oakville Ontario, Canada and office and warehouse space in Myrtle Beach, SC.

The lease for office space in Oakville Ontario, Canada is on a month to month basis and calls for monthly payments of $1,380 plus a portion of the operating expenses.

The lease for office and warehouse space in Myrtle Beach, SC is presently on a month to month basis and calls for monthly payments of $2,405.

Consulting Agreements

On May 13, 2012, the Company entered into a one year consulting agreement with Sandra R. Danon to provide product development services, guidance on manufacturing logistics, and sales development. The Company will compensate Ms. Danon a base consulting fee of $5,000 per month relating to this agreement. After the second month, Ms. Danon’s fee shall be increased periodically based on incoming revenues due to her performance. In addition, the Company will issue 150,000 shares of restricted common stock, of which 50,000 shares vested immediately and the remaining shares shall vest quarterly over the initial term of the agreement.

On December 1, 2012, the Company entered into one year consulting agreement with Josh Ketroser to provide general business consulting services. The Company will compensate Mr. Ketroser $5,000 per month relating to this agreement.

On January 3, 2013, the Company entered into a month to month consulting agreement with MFI Industries (“MFI”) to provide sales consulting services. The Company will compensate MFI $1,500 per month relating to this agreement.

On March 12, 2013, the Company entered into a one year consulting agreement with Wave Consulting, Inc. (“WC”) to solicit potential customers to purchase the Company’s SnapTagz product. The Company will compensate WC as follows;

●	WC shall be paid a commission of 5% of the gross sales revenues, less all discounts, allowances and returns generated by WC.

●	Monthly fee of $2,500 for the first 3 months of the agreement starting March 12, 2013.

●	Starting the fourth month of the agreement, at the Consultant’s request, advances on commissions of $2,500 per month, starting July 12, 2013.

●	5,000 common stock options monthly, immediately exercisable with an exercise price of $0.75 and a term of 24 months.

●	The Company shall issue additional common stock options as a bonus to WC, based on Marketing and Branding milestones.

On July 16, 2013, the Company entered into a one year consulting agreement with Garden State Securities, Inc. (“GSS”) as a non-exclusive financial advisor. The Company will compensate GSS as follows;

●	100,000 restricted shares of common stock of the Company

During the nine months ended September 30, 2013, 100,000 shares of common stock were issued relating to this agreement. These shares were valued at $0.51 per share the quoted closing trading price, or $51,000.

F-31

Wild Craze, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2013

Employment Agreements

On February 25, 2013, the Company entered into a two year employment agreement with Peter Gasca, Jr. as its Chief Executive Officer of Wild Creations, Inc. The Company will compensate Mr. Gasca as follows;

●	Monthly salary of $7,000 per month.

●	Stock incentive - 750,000 shares of common stock upon the Company achieving Gross Revenue of $10,000,000.

●	An additional 750,000 shares of common stock upon the Company achieving Gross Revenue of $15,000,000.

●	The executive shall only be eligible to receive such incentive shares if one or both milestones are achieved during the two year employment agreement

On February 25, 2013, the Company entered into a two year employment agreement with Rhett Power as its Chief Marketing Officer of Wild Creations, Inc. The Company will compensate Mr. Power as follows;

●	Monthly salary of $7,000 per month.

●	Stock incentive - 750,000 shares of common stock upon the Company achieving Gross Revenue of $10,000,000.

●	An additional 750,000 shares of common stock upon the Company achieving Gross Revenue of $15,000,000.

●	The executive shall only be eligible to receive such incentive shares if one or both milestones are achieved during the two year employment agreement.

Investment Agreement

On July 30, 2013, Wild Craze, Inc. (the “Company”) entered into an Investment Agreement (the “Investment Agreement”) with KVM Capital Partners (“KVM”), whereby the parties also agreed to enter into a registration rights agreement (the “Registration Rights Agreement”). Pursuant to the terms of the Investment Agreement, for a period of thirty-six (36) months commencing on the trading day immediately following date of effectiveness of the Registration Statement (as defined below), KVM shall commit to purchase up to $2,800,000 of the Company’s common stock, par value $0.001 per share (the “Shares”), pursuant to Puts (as defined below), covering the Registrable Securities (as defined below). The purchase price of the Shares under the Investment Agreement is equal to a twenty-two and one half (22.5%) percent discount to the average of the three lowest closing bids as calculated using the average of the three lowest closing bids during the last seven trading days after the Company delivers to KVM a Put notice in writing requiring KVM to purchase shares of the Company, subject to the terms of the Investment Agreement.

F-32

Wild Craze, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2013

The “Registrable Securities” include (i) the Shares and (ii) any shares of capital stock issued or issuable with respect to the Shares, if any, as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise, which have not been (x) included in the Registration Statement that has been declared effective by the SEC, or (y) sold under circumstances meeting all of the applicable conditions of Rule 144 (or any similar provision then in force) under the 1933 Act.

As further consideration for KVM entering into and structuring the Investment Agreement, the Company shall pay to KVM a facility fee by issuing to KVM 100,000 shares of the Company’s common stock.

The Company accrued a liability relating to 100,000 shares of common stock to be issued to KVM, at a fair value of $43,000 ($0.43/share). The Company recorded deferred financing costs of $43,000 and will amortize the costs to stock issuance as shares are purchased over the term of the agreement.

Registration Rights Agreement

On July 30, 2013, the Company entered into the Registration Rights Agreement with KVM. Pursuant to the terms of the Registration Rights Agreement, the Company is obligated to file a registration statement (the “Registration Statement”) with the U.S. Securities and Exchange Commission (the “SEC’) to cover the Registrable Securities within twenty-one (21) days of closing. The Company must use its commercially reasonable efforts to cause the Registration Statement to be declared effective by the SEC. In the event that the Registration Statement is not declared effective by the SEC within 180 days of the date of the Registration Rights Agreement, the Company shall issue to the Investor $25,000 of restricted shares of the Company’s Common Stock as calculated using the average of the three lowest closing bids during the last seven trading days of the period ending 180 days after the date of the Registration Rights Agreement.

Note 15 Subsequent Events

The Company has evaluated all events that occurred after the balance sheet date through the date when the consolidated financial statements were issued to determine if they must be reported. The Management of the Company determined that there were no reportable subsequent events to be disclosed.

F-33

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

This quarterly report on Form 10-Q and other reports filed by Wild Craze, Inc. (the “Company”) from time to time with the SEC contain or may contain forward-looking statements and information that are (collectively, the “Filings”) based upon beliefs of, and information currently available to, the Company’s management as well as estimates and assumptions made by Company’s management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the Filings, the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan,” or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks contained in the “Risk Factors” section of the Company’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2012, filed with the SEC, relating to the Company’s industry, the Company’s operations and results of operations, and any businesses that the Company may acquire. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates and actual results. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result. The following discussion should be read in conjunction with our consolidated financial statements and notes thereto appearing elsewhere in this report.

Our Business and Plan of Operation

Wild Craze, Inc. is an innovative consumer brands company focused on strategic acquisitions of existing products or companies that have a proof of concept or currently have revenues in the market. The Company’s initial target acquisitions will be of small privately held companies which have established brands as well as new ready to market brands that have already incurred R&D and product development and testing costs, thereby reducing both the expense and time required to bring product to market. The Company focuses on identifying existing companies that have demonstrated early success, but lack necessary management expertise, distribution network, or critical mass sufficient to successfully reach the next growth phase.

Wild Craze’s vision is to build a diversified portfolio of the most innovative products and services that are unique, proprietary, and on-trend to successfully develop into household brand names in the U.S. and global marketplace. The Company intends to retain top talent and employees of the targeted acquisition companies in order to prevent a disruption of the proven success that the product, company and management team has already shown. The Company currently owns SnapTagz^®, a new and innovative toy and fabric accessory. Additionally, we are currently advertising SnapTagz^® through the use of our website,http://www.snaptagz.com. The company is looking to engage in aggressive marketing campaigns surrounding SnapTagz and will incorporate into celebrity and musicians marketing efforts. During the remainder of 2013, we are seeking to secure additional partnerships with different celebrities and athletes, along with identifying strategic licensing opportunities. The Company continues to pursue strategic relationships with celebrities and athletes to help build brand awareness for the SnapTagz® product and is continuing to pursue strategic licensing opportunities.

On February 25, 2013 the Company closed purchase agreements for respective assets of Crescent Moon Holdings, LLC (“Crescent Moon”) and Flipoutz, LLC and the Company is currently integrating the products of such companies into its plans. The Company acquired from Crescent Moon products designed to expand young minds with smart ways to play and bring people closer to nature, foster personal engagement, and encourage the pursuit of adventure and knowledge, including the award-winning EcoAquarium™, a low maintenance, self-sustaining aquarium and eco environment that comes with two African Dwarf Frogs, and the E-bird, a remote controlled bird with realistic flight simulation. The Company acquired from FlipOutz, LLC the FlipOutz product, bracelets that can be worn and personalized with FlipOutz coins and also allow users to create custom online profiles, share, and socially network with other FlipOutz users. The Company is implementing a new online marketing strategy for the EcoAquarium product by advertising on social media outlets such as Facebook, Google Adwords and other outlets. The company is also working on a new boxed concept which would allow for EcoAquariums to be purchased in a brick and mortar retailer, in which consumers could then login online to order frogs to be shipped to their homes. The Company has also opened an office in Canada, in order to capitalize on additional market share opportunities and will also plan to launch its RC Bird and RC Snake into the Canadian market. The Company has also contracted with a third party national sales force firm to provide a national presence for the full suite of products within the Company’s portfolio. The Flipoutz product line is pending granted status of its patent and the Company is looking to identify strategic licensing opportunities with its online platform. The Company will continue to look for strategic product acquisition targets that will expand the product portfolio.

On July 23, 2013, the Company closed a Credit Agreement (the “Credit Agreement”) by and among the Company, Wild Creations, Inc. and SnapTagz LLC (the “Borrowers”) and TCA Global Credit Master Fund, LP, a Cayman Islands limited partnership, as lender (“TCA”). Pursuant to the Credit Agreement, TCA agreed to loan the Company up to a maximum of $2 million for general operating expenses. An initial amount of $300,000 was funded by TCA at the closing of the Credit Agreement. Any increase in the amount extended to the Borrowers shall be at the discretion of TCA. The amounts borrowed pursuant to the Credit Agreement are evidenced by a Revolving Note (the “Revolving Note”) and the repayment of the Revolving Note is secured by a first position security interest in substantially all of the Company’s assets in favor of TCA, as evidenced by a Security Agreement by and among the Borrowers and TCA (the “Security Agreement”). The Revolving Note is in the original principal amount of $300,000 is due and payable, along with interest thereon, on January 22, 2014, and bears interest at the rate of 12% per annum, increasing to the highest rate permitted by law upon the occurrence of an event of default. The Credit Agreement calls for a lock-box account. In Addition, the Credit Agreement calls for a reserve amount equal to 15% of the revolving loan committment. Following collection of the reserve amount in full and payment of all items and fees required, a minimum of 15% of all amounts collected into the lock-box Account shall be paid to the lender to reduce the then outstanding principal balance of the revolving loans. TCA may convert all or any portion of the outstanding principal, accrued and unpaid interest, and any other sums due and payable under the Revolving Note into shares of the Company’s common stock at a conversion price equal to 85% of the lowest daily volume weighted average price of the Company’s common stock during the five trading days immediately prior to such applicable conversion date, in each case subject to TCA not being able to beneficially own more than 4.99% of our outstanding common stock upon any conversion. The conversion price is subject to anti-dilution protection in the event that the company issues additional equity securities at a price less than the conversion price. As further consideration for TCA entering into and structuring the Credit Agreement, the Company shall pay to TCA an advisory fee by issuing to TCA 352,941 shares of the Company’s common stock (the “Advisory Fee Shares”). It is the intention of the Company and TCA that the value of the Advisory Fee Shares shall equal $90,000. In the event the value of the Advisory Fee Shares issued to TCA and net proceeds received by TCA for the sale thereof do not equal $90,000, the Credit Agreement provides for an adjustment provision allowing for necessary action to adjust the number of shares issued.

The Agreement also includes “Make whole Rights” and penalty provisions as follows:

Make-Whole Rights

Penalties

Prepayment penalty

Inability to timely submit required reporting

EffectiveAugust 2, 2013, Wild Craze, Inc. (the “Company”) entered into an Investment Agreement (the “Investment Agreement”) with KVM Capital Partners (“KVM”), whereby the parties also agreed to enter into a registration rights agreement (the “Registration Rights Agreement”). Pursuant to the terms of the Investment Agreement, for a period of thirty-six (36) months commencing on the trading day immediately following date of effectiveness of the Registration Statement (as defined below), KVM shall commit to purchase up to $2,800,000 of the Company’s common stock, par value $0.001 per share (the “Shares”), pursuant to Puts (as defined below), covering the Registrable Securities (as defined below). The purchase price of the Shares under the Investment Agreement is equal to a twenty-two and one half (22.5%) percent discount to the average of the three lowest closing bidsas calculated using the average of the three lowest closing bids during the last seventrading days after the Company delivers to KVM a Put notice in writing requiring KVM to purchase shares of the Company, subject to the terms of the Investment Agreement. The “Registrable Securities” include (i) the Shares and (ii) any shares of capital stock issued or issuable with respect to the Shares, if any, as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise, which have not been (x) included in the Registration Statement that has been declared effective by the SEC, or (y) sold under circumstances meeting all of the applicable conditions of Rule 144 (or any similar provision then in force) under the 1933 Act.As further consideration for KVM entering into and structuring the Investment Agreement, the Company shall pay to KVM a facility fee by issuing to KVM100,000shares of the Company’s common stock.

EffectiveAugust 2, 2013, the Company entered into the Registration Rights Agreement with KVM. Pursuant to the terms of the Registration Rights Agreement, the Company is obligated to file a registration statement (the “Registration Statement”) with the U.S. Securities and Exchange Commission (the “SEC’) to cover the Registrable Securities within twenty-one (21) days of closing. The Company must use its commercially reasonable efforts to cause the Registration Statement to be declared effective by the SEC. In the event that the Registration Statement is not declared effective by the SEC within 180 days of the date of the Registration Rights Agreement, the Company shall issue to the Investor $25,000 of restricted shares of the Company’s Common Stock as calculated using the average of the three lowest closing bids during the last seventradingdays of the period ending 180 days after the date of theRegistration Rights Agreement.

Results of Operations

	For the Three Months Ended September 30,
	2013			2012
Net sales	$	231,523		$	-
Gross profit	$	183,115		$	-
Selling, general and administrative expenses	$	1,144,225		$	110,592
Loss from operations	$	(961,110	)	$	(110,592	)
Other income (expense), net	$	(251,876	)	$	(4,593	)
Net loss	$	(1,212,896	)	$	(115,185	)
Loss per common share – basic and diluted	$	(0.04	)	$	(0.00	)

The Company was originally formed in 2003 as a multimedia/marketing company that specializes in the design and creation of effective marketing products and services, primarily internet based.

Change in Business Model

During December 2011 we ceased to engage in the multimedia and marketing industry and acquired the business of SnapTagz, LLC to engage in the production, distribution and marketing of fabric accessories.

In February 2013, in-order to further expand and diversify its product lines, the Company acquired assets of Crescent Moon Holdings, LLC and FlipOutz, LLC. Crescent Moon products include mini eco-aquariums that feature live African Dwarf Frogs and toys that inspire play, imagination, and exploration. FlipOutz products include bracelets you can wear and personalize, which can then be collected, traded, and tracked online.

Revenue

Net sales for the three months ended September 30, 2013 were $231,523 as compared to $0 during the corresponding three months ended September 30, 2012. The increase in sales is primarily related to the Company acquiring two new businesses in February 2013. During the nine months ended September 30, 2012 the Company had just begun to market a new product line that was acquired in December 2011.

Gross Profit

Gross profit for the three months ended September 30, 2013 was $183,115 as compared to $0 during the corresponding three months ended September 30, 2012. The increase in gross profit is primarily related to the Company acquiring two new businesses in February 2013.

General and Administrative Expenses

Selling, general and administrative expenses for the three months ended September 30, 2013 were $1,144,225 as compared to $110,592 during the corresponding three months ended September 30, 2012. The increase in selling, general and administrative expenses is primarily related to approximate increases in expenses as follows: legal and professional fees of $24,500 due primarily to the increased cost of being a public reporting company, bank fees of $5,000 due to loans entered into during the period and; payroll and payroll related expenses of $108,500, increase in rent, insurance and overhead expenses of $30,500, depreciation and amortization of $14,000,advertising and trade show expenses of $9,500, bad debt of $3,600, and shipping charges of $19,000; all primarily due to the Company acquiring two new businesses. The Company also had an increase in stock based compensation expense of $743,552 during the three months ended September 30, 2013. The Company issued various stock compensation awards to consultants and a director during the period.

Loss from Operations

Loss from operations for the three months ended September 30, 2013 was $961,110 as compared to $110,592 during the corresponding three months September 30, 2012. The increase in loss was primarily attributable to the increase in selling, general and administrative expenses as detailed above, partially offset by an increase in gross profit.

Other Income (Expense)-net:Other income (expenses) consist primarily of gains and losses on the change in fair value of derivative liabilities, derivative expense, and interest expense all primarily related to the Company’s convertible promissory notes and related party loans.

Other Income (expense), net for the three months ended September 30, 2013 was $(251,876) as compared to $(4,593) during the corresponding three months ended September 30, 2012. For the three months ended September 30, 2013 other income (expenses) consisted of $319 in interest income, $(123,272) in interest expense, a gain on change in fair value of derivative liabilities of $42,548, and derivative expense of $(171,471). For the three months ended September 30, 2012 other income (expenses) consisted of $(4,593) in interest expense.

Net Loss

Net Loss for the three months ended September 30, 2013 was $(1,212,986) as compared to $(115,185) during the corresponding three months ended September 30, 2012. The increase in net loss was primarily attributable to the increase in selling, general and administrative and other expenses as detailed above, partially offset by an increase in gross profit.

Inflation did not have a material impact on the Company’s operations for the period. Other than the foregoing, management knows of no trends, demands, or uncertainties that are reasonably likely to have a material impact on the Company’s results of operations.

Results of Operations

	For the Nine Months Ended September 30,
	2013			2012
Net sales	$	514,756		$	2
Gross profit	$	347,206		$	1
Selling, general and administrative expenses	$	3,541,692		$	275,871
Loss from operations	$	(3,194,486	)	$	(275,870	)
Other income (expense), net	$	(314,044	)	$	(12,056	)
Net loss	$	(3,508,530	)	$	(287,926	)
Loss per common share – basic and diluted	$	(0.11	)	$	(0.01	)

The Company was originally formed in 2003 as a multimedia/marketing company that specializes in the design and creation of effective marketing products and services, primarily internet based.

Change in Business Model

Revenue

Net sales for the nine months ended September 30, 2013 were $514,756 as compared to $2 during the corresponding nine months ended September 30, 2012. The increase in sales is primarily related to the Company acquiring two new businesses in February 2013. During the nine months ended September 30, 2012 the Company had just begun to market a new product line that was acquired in December 2011.

Gross Profit

Gross profit for the nine months ended September 30, 2013 was $347,206 as compared to $1 during the corresponding nine months ended September 30, 2012. The increase in gross profit is primarily related to the Company acquiring two new businesses in February 2013.

General and Administrative Expenses

Selling, general and administrative expenses for the nine months ended September 30, 2013 were $3,541,692 as compared to $275,871 during the corresponding nine months ended September 30, 2012. The increase in selling, general and administrative expenses is primarily related approximate increases in expenses as follows: legal and professional fees of $248,000due primarily to the increased cost of being a public reporting company and bank fees of $5,000 due to loans entered into during the period and; payroll related expenses of $246,000, increase in rent, insurance and overhead expenses of $101,000, depreciation and amortization of $33,000, advertising and trade shows expenses of $35,000, bad debt of $8,400 and shipping charges of $36,000; all primarily due to the Company acquiring two new businesses. The Company also had an increase in stock based compensation expense of $2,465,792 during the nine months ended September 30, 2013. The Company issued various stock compensation awards to consultants and a director during the period.

Loss from Operations

Loss from operations for the nine months ended September 30, 2013 was $3,194,486 as compared to $275,870 during the corresponding nine months ended September 30, 2012. The increase in loss was primarily attributable to the increase in selling, general and administrative expenses as detailed above, partially offset by an increase in gross profit.

Other Income (expense), net for the nine months ended September 30, 2013 was $(314,044) as compared to $(12,056) during the corresponding nine months ended September 30, 2012. For the nine months ended September 30, 2013 other income (expenses) consisted of $513 in interest income, $(188,634) in interest expense, a gain on change in fair value of derivative liabilities of $42,548, derivative expense of $(171,471) and a gain on disposition of vehicle of $3,000. For the nine months ended September 30, 2012 other income (expenses) consisted of $(12,056) in interest expense.

Net Loss

Net Loss for the nine months ended September 30, 2013 was $(3,508,530) as compared to $(287,926) during the corresponding nine months ended September 30, 2012. The increase in net loss was primarily attributable to the increase in selling, general and administrative and other expenses as detailed above, partially offset by an increase in gross profit.

Liquidity and Capital Resources

The following table summarizes total current assets, liabilities and working capital at September 30, 2013 and December 31, 2012.

	September 30, 2013			December 31, 2012
Current Assets	$	605,996		$	34,530
Current Liabilities	$	(2,168,250	)	$	(558,469	)
Working Capital Deficit	$	(1,562,254	)	$	(523,939	)

At September 30, 2013 we had a working capital deficit of $(1,562,254), as compared to a working capital deficit of $(523,939), at December 31, 2012, an increase of $1,038,315. The increase is primarily related to an increase in related party loans in order to fund operating activities, an increase in accrued legal and professional fees related to asset acquisitions and public reporting costs and derivative liabilities recorded on convertible notes entered into during the nine months ended September 30, 2013.

Going Concern

As reflected in the accompanying condensed consolidated financial statements, the Company had a net loss and net cash used in operations for the nine months ended September 30, 2013, and a working capital deficit at September 30, 2013. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

The Company expects its current resources to be insufficient for a period of approximately 2 months unless additional financing is received. Management has determined that additional capital will be required in the form of equity or debt securities. In addition, if we cannot raise additional short term capital we will be forced to continue to further accrue liabilities due to our limited cash reserves. There are no assurances that management will be able to raise capital on terms acceptable to the Company. If we are unable to obtain sufficient amounts of additional capital, we may be required to reduce the scope of our planned development, which could harm our business, financial condition and operating results. If we obtain additional funds by selling any of our equity securities or by issuing common stock to pay current or future obligations, the percentage ownership of our stockholders will be reduced, stockholders may experience additional dilution, or the equity securities may have rights preferences or privileges senior to the common stock. If adequate funds are not available to us when needed on satisfactory terms, we may be required to cease operating or otherwise modify our business strategy.

Our ability to continue as a going concern is dependent upon our ability to generate future profitable operations and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. Our management has no formal plan in place to address this concern but considers that we will be able to obtain additional funds by equity financing and/or related party advances; however there is no assurance of additional funding being available.

For the nine Months Ended September 30, 2013 and 2012

Net cash used in operating activities for the nine months ended September 30, 2013 and 2012 was $(476,532) and $(239,292), respectively. The net loss for the nine months ended September 30, 2013 and 2012 was $(3,508,530) and $(287,926), respectively. Cash used in operating activities for the nine months September 30, 2013 was primarily for legal and professional fees, inventory purchases, payroll and payroll related expenses, travel related expenses and royalty expenses. Cash used in operating activities for the nine months September 30, 2012 was primarily for legal and professional fees, travel related expenses and royalty expenses.

Net cash provided by (used in) all investing activities for the nine months ended September 30, 2013 and 2012, was $(102,705) and $30,525, respectively. Cash obtained through investing activities for nine months September 30, 2013 consisted of repayments of notes receivable of $3,291 and cash acquired in an asset acquisition of $504. Cash used through investing activities for the nine months September 30, 2013 consisted of cash paid of $(100,000) in the acquisition of the assets of Crescent Moon and $6,500 for the purchase of property and equipment. Cash obtained through investing activities for nine months September 30, 2013 consisted of repayments of related party loans of $30,525.

Net cash obtained through all financing activities for the nine months September 30, 2013 and 2012, was $684,838 and $211,182, respectively. Cash obtained through financing activities for nine months September 30, 2013 consisted of net proceeds from related party loans to the company of $338,088 and net proceeds from convertible notes of $383,400. Cash obtained through financing activities for nine months ended September 30, 2012 consisted of net proceeds from related party convertible notes and related party loans to the company of $146,759 and $111,182, respectively.

During the nine months September 30, 2013 loans in the amount of $20,000 and convertible notes in the amount of $16,650 were repaid.

During the nine months September 30, 2012 related party loans in the amount of $46,759 were repaid.

Off-Balance Sheet Arrangements

As of September 30, 2013, the Company had no off-balance sheet arrangements.

Critical Accounting Policies

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 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.

Our significant accounting policies are summarized in Note 2 of our financial statements. While all these significant accounting policies impact our financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our consolidated results of operations, financial position or liquidity for the periods presented in this report.

We believe the following critical accounting policies and procedures, among others, affect our more significant judgments and estimates used in the preparation of our consolidated financial statements:

Principles of consolidation

All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes.

Fair Value of Financial Instruments

Level 1

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Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

Level 2		Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

Level 3		Pricing inputs that are generally unobservable inputs and not corroborated by market data.

Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated.

It is not, however, practical to determine the fair value of advances from stockholders due to their related party nature.

Share-Based Payments

Revenue

The Company meets these criteria upon shipment.

Recent Accounting Pronouncements

There are no recent accounting pronouncements that are expected to have an effect on our condensed consolidated financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We do not hold any derivative instruments and do not engage in any hedging activities.

Item 4. Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures.

In connection with the preparation of this Quarterly Report on Form 10-Q for the quarter ended September 30, 2013, our Principal Executive Officer (“PEO”) and Principal Financial Officer (“PFO”) evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our PEO and PFO concluded that our disclosure controls and procedures as of the end of the period covered by this report were not effective such that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our Chief Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

(b) Changes in Internal Control over Financial Reporting.

There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

Item 1A. Risk Factors.

We believe there are no changes that constitute material changes from the risk factors previously disclosed in our Annual Report on Form 10-K/A for the fiscal year ended December 31, 2012, filed with the SEC on April 24, 2013.

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

There were no unregistered sales of the Company’s equity securities during the quarter ended September 30, 2013, other than those previously reported in a Current Report on Form 8-K.

Item 3. Defaults Upon Senior Securities.

There has been no default in the payment of principal, interest, sinking or purchase fund installment, or any other material default, with respect to any indebtedness of the Company.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

There is no other information required to be disclosed under this item which has not been previously disclosed.

Item 6. Exhibits.

Exhibit No.		Description

31.1		Certification of Principal Executive Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 302 of 2002*

31.2		Certification of Principal Financial Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 302 of 2002*

32.1		Certification of Principal Executive Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

32.2		Certification of Principal Financial Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

101.INS		XBRL Instance Document**
101.SCH		XBRL Taxonomy Extension Schema Document**
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document**
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document**
101.LAB		XBRL Taxonomy Extension Label Linkbase Document**
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document**

*filed herewith

** In accordance with Regulation S-T, the XBRL-formatted interactive data files that comprise Exhibit 101 in this Quarterly Report on Form 10-Q shall be deemed “furnished” and not “filed”.

SIGNATURES

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

	WILD CRAZE, INC.

Date: November 14, 2013	By:	/s/ Justin Jarman
	Name:	Justin Jarman
	Title:	Chief Executive Officer
		(Principal Executive Officer) (Principal Financial Officer) (Principal Accounting Officer)

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Wild Craze (WILD) Inactive 10-Q2013 Q3 Quarterly report

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