RAADR, INC. - Quarter Report: 2014 June (Form 10-Q)

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 June 30, 2014

Commission File Number 000-53991

PITOOEY!, Inc.

(Exact name of registrant as specified in its charter)

Nevada

(State or other jurisdiction of incorporation or organization)

20-4622782

(I.R.S. Employer Identification No.)

15685 N. Cave Creek Rd,, Suite 101,

Phoenix, Arizona 85032

(844) 748-6639

(Address and telephone number of principal executive offices)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the issuer (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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No p

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

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


Large accelerated filer p	Accelerated filer p
Non-accelerated filer p (Do not check if a smaller reporting company)	Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)

Yes p No x

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:


Common Stock, $0.001 par value	103,162,923 shares
(Class)	(Outstanding as at August 12, 2014)

PITOOEY!, Inc.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2014

Table of Contents

PART I - FINANCIAL INFORMATION			2
	Item 1. Financial Statements		2
		Condensed Consolidated Balance Sheets	3
		Condensed Consolidated Statements of Operations	4
		Condensed Consolidated Statements of Cash Flows	5
		Notes to Condensed Consolidated Financial Statements	6
	Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		20
	Item 3. Quantitative and Qualitative Disclosures About Market Risk		28
	Item 4. Controls and Procedures		28
PART II - OTHER INFORMATION			29
	Item 1. Legal Proceedings		29
	Item 1A. Risk Factors		29
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		29
	Item 3. Defaults Upon Senior Securities		29
	Item 4. Mine Safety Disclosures		29
	Item 5. Other Information		29
	Item 6. Exhibits and Reports on Form 8-K		30
SIGNATURES			31
Exhibit Index

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial reporting and pursuant to the rules and regulations of the Securities and Exchange Commission ("Commission"). While these statements reflect all normal recurring adjustments which are, in the opinion of management, necessary for fair presentation of the results of the interim period, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the financial statements and footnotes thereto, which are included in the Company's December 31, 2013, Annual Report on Form 10-K, previously filed with the Commission on April 14, 2014.

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PITOOEY!, Inc.
Condensed Consolidated Balance Sheets


		June 30,			December 31,
		2014			2013
		(unaudited)			(audited)
Assets
Current assets:
Cash and equivalents	$	37,910		$	142,029
Accounts receivable		-			-
Notes receivable		-			75,000
Merchant reserves		9,509			-
Deposits and prepaid expenses		10,698			200
Total current assets		58,117			217,229

Fixed assets:
Total fixed assets, net		502,608			29,627

Total assets	$	560,726		$	246,856

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	228,303		$	251,473
Accrued liabilities		210,508			180,217
Deferred revenue		-			-
Notes payable, net of discount of $108,466 and $234,185, respectively		846,958			616,023
Notes payable - related parties, net of discount of $50,270 and 101,482, respectively		148,934			109,844
Total current liabilities		1,434,702			1,157,557

Long-term liabilities:
Notes payable - long term		-			-
Total long-term liabilities		-			-

Total liabilities		1,434,702			1,157,557

Stockholders’ equity
Preferred stock:
Preferred stock, $0.001 par value, 80,000,000 shares authorized, no shares issued and outstanding as of June 30, 2014 and December 31, 2013, respectively					-
Preferred stock, Series A $0.001 par value, 20,000,000 shares authorized, no shares issued and outstanding as of June 30, 2014 and December 31, 2013, respectively					-
Preferred stock, Series B, $0.001 par value, 60,000,000 shares authorized,					-
121,900 shares and 0 shares issued and outstanding as of June 30, 2014 and December 31, 2013, resoectively		146			-
Common stock, $0.001 par value, 400,000,000 shares authorized,
103,162,923 and 102,766,923 shares issued and outstanding as of
June 30,2014 and December 31, 2013, respectively		103,163			102,818
Common stock, earned but not issued, 600,000 and 0 shares as of
June 30, 2014 and December 31, 2013,
respectively		600			-
Common stock, owed but not issued, 0 and 282,500 shares as of
June 30, 2014 and December 31, 2013,
respectively		31			283
Stock Subscribed					(20,400	)
Additional paid-in capital		3,434,055			2,780,482
Accumulated deficit		(4,411,971	)		(3,773,884	)
Total stockholders’ equity		(873,977	)		(910,701	)

Total liabilities and stockholders’ equity	$	560,726		$	246,856

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

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PITOOEY!, Inc.
Condensed Consolidated Statements of Operations
(unaudited)

	For the three months ended						For the six months ended
	June 30,						June 30,
	2014			2013			2014			2013

Revenue, net	$	43,197		$	64,065		$	80,546		$	116,687
Cost of goods sold		10,289			(20,496	)		(21,498	)		(26,231	)

Gross profit		53,485			43,569			59,047			90,456

Expenses:
Advertising and marketing		12,315			153,911			18,431			293,277
Depreciation		3,510			4,276			7,020			6,731
Executive compensation		23,458			108,168			57,658			217,972
General and administrative expenses		47,671			115,152			161,492			298,695
Management fees - related party		-			24,840			-			297,127
Professional fees		56,466			137,945			92,199			259,509
Salaries and wages		46,656			193,320			116,326			382,532
Total expenses		190,076			737,612			453,126			1,755,843

Loss before other expenses		(136,591	)		(694,043	)		(394,079	)		(1,665,387	)

Other expenses:
Interest expense		(95,575	)		(5,301	)		(259,944	)		(5,320	)
Loss on disposition of assets		-			-			-			-
Debt Forgiveness		14,392			-			15,478			-
Other Income (expense)		-			-			457			1
Total other expenses		(81,183	)		(5,301	)		(244,008	)		(5,319	)

Loss before provision for income taxes		(217,774	)		(699,344	)		(638,088	)		(1,670,706	)

Provision for income taxes		-			-			-			(50	)

Net loss	$	(217,774	)	$	(699,344	)	$	(638,088	)	$	(1,670,756	)


Weighted average number of		103,084,627			102,059,233			103,038,944			101,398,915
common shares outstanding - basic

Net loss per share - basic	$	(0.00	)	$	(0.01	)	$	(0.01	)	$	(0.02	)

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

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PITOOEY!, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)


	For the three months ended						For the six months ended
	June 30,			June 30,			June 30,			June 30,
	2014			2013			2014			2013
Operating activities
Net loss	$	(217,773	)	$	(699,344	)	$	(638,088	)	$	(1,670,706	)
Adjustments to reconcile net loss to
net cash used by operating activities:
Depreciation		3,510			4,276			7,019			6,731
Gain on debt forgiveness		14,392			-			15,478			-
Interest expense due to discount amortization		95,575			-			222,442			-
Shares issued for services		-			12,000			-			12,000
Amortization of stock and warrants issued for prepaid expenses		-			77,200			-			141,510
Loss on disposition of fixed assets		-			-			-			-
Non cash advertising & marketing expense		-			-			-			-
Changes in operating assets and liabilities:
Decrease (increase) in deposits and prepaid expenses		(10,498	)		(19,726	)		(10,498	)		(30,508	)
Decrease (increase) in accounts receivable		-			(6,159	)		—			(16,657	)
Decrease (increase) in merchant reserves		(9,509	)		-			(9,509	)		-
Increase (decrease) in accounts payable		10,232			88,809			(23,171	)		208,183
Increase (decrease) in accrued liabilities		(11,327	)		-			(22,689	)		-
Increase (decrease) in deferred revenue		-			49,034			—			59,034
Increase in accrued interest		-			-			37,502			-
Net cash used by operating activities		(125,398	)		(493,910	)		(421,513	)		(1,290,413	)

Investing activities:
Purchase of fixed assets		(30,000	)		-			(30,000	)		(56,910	)
Net cash provided by investing activities		(30,000	)		-			(30,000	)		(56,910	)

Financing activities:
Donated capital		-			50			-			50
Proceeds from Note receivable		-			-			75,000			-
Repayment of notes payable		(8,640	)		(50	)		(46,551	)		(137,119	)
Proceeds from notes payable		80,104			354,064			151,768			369,064
Repayment of notes payable - related parties		(55	)		-			(14,622	)		-
Proceeds from notes payable - related parties		-			22,929			2,500			80,875
Proceeds from stock subscription receivables		-			-			20,400			-
Issuances of preferred shares		121,900			-			121,900			-
Issuances of common stock		-			114,000			37,000			625,000
Net cash provided by financing activities		193,309			490,993			347,396			937,870

Net increase (decrease) in cash		37,909			(2,917	)		(104,119	)		(409,453	)
Cash - beginning of the period		1			11,568			142,029			418,104
Cash - ending of the period	$	37,910		$	8,651		$	37,910		$	8,651
Supplemental disclosures:
Interest paid	$	462		$	-			13,715		$	-
Income taxes paid	$	-		$	-			-		$	-

Non-cash transactions:
Warrants issued for services	$	-		$	697,045		$	-		$	697,045
Number of warrants issued in connection with Notes payable		40,000			-			130,000			-
Number of warrants issued for services		-			1,100,000			-			1,100,000
Number of shares issued for services		-			-			-			-
Note payable converted to stock	$	-		$	-		$	-		$	-
Number of shs owed but not issued for note conversion		-			-			-			-
Shares issued for prepaid expenses	$	-		$	236,000		$	-		$	236,000
Number of shares issued for prepaid expenses		-			590,000			-			590,000
Shares issued for services	$	-		$	12,000		$	-		$	12,000
Number of shares issued for services		-			30,000			-			30,000

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

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PITOOEY!, Inc.

Notes to Condensed Consolidated Financial Statements

Note 1 - History and Organization

The Company was organized March 29, 2006 (Date of Inception) under the laws of the State of Nevada, as White Dental Supply, Inc. The Company is authorized to issue 100,000,000 shares of its $0.001 par value common stock and 100,000,000 shares of its $0.001 par value preferred stock. On January 7, 2013, our Board of Directors authorized, and a majority of the stockholders ratified, by written consent, resolutions to change our corporate name to PITOOEY!, Inc. and to increase the number of shares we are authorized to issue to 400,000,000 shares of $0.001 par value common stock and 100,000,000 shares of $0.001 par value preferred stock. The name change and increase in authorized capital became effective with the State of Nevada on February 7, 2013.

On December 27, 2012, the Company formed a wholly owned subsidiary, Choice One Mobile, Inc., under the laws of the State of Nevada.

On December 27, 2012, the Company formed a wholly owned subsidiary, PITOOEY! Mobile, Inc., under the laws of the State of Nevada.

On February 6, 2013, the Company formed a wholly owned subsidiary, Rockstar Digital, Inc., under the laws of the State of Nevada.

On October 31, 2013, the Company, as part of its settlement agreement with the employees of Rockstar Digital (See Footnote 9 - Commitments and Contingencies), ceased operations of its wholly owned subsidiary, Rockstar Digital, Inc.

Note 2 - Summary of Significant Accounting Policies

Principles of consolidation

For the periods ended in 2014, the consolidated financial statements include the accounts of PITOOEY! Inc., Choice One Mobile, Inc., and PITOOEY! Mobile, Inc. For the periods ended in 2013, the consolidated financial statements include the accounts of PITOOEY! Inc., Choice One Mobile, Inc., PITOOEY! Mobile, Inc. and Rockstar Digital, Inc. All significant intercompany balances and transactions have been eliminated. For 2014, PITOOEY!, Inc., Choice One Mobile, Inc., and PITOOEY! Mobile, Inc. will be collectively referred herein to as the “Company”. For 2013, PITOOEY!, Inc., Choice One Mobile, Inc., PITOOEY! Mobile, Inc. and Rockstar Digital, Inc. will be collectively referred herein to as the “Company”.

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ significantly from those estimates.

Cash and cash equivalents

For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. The carrying value of these investments approximates fair value.

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PITOOEY!, Inc.

Notes to Condensed Consolidated Financial Statements

Note 2 - Summary of Significant Accounting Policies (continued)

Accounts receivable

Accounts receivable are stated at the amount the Company expects to collect from outstanding balances and do not bear interest. The Company provides for probable uncollectible amounts through an allowance for doubtful accounts, if an allowance is deemed necessary. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable, however, changes in circumstances relating to accounts receivable may result in a requirement for additional allowances in the future. On a periodic basis, management evaluates its accounts receivable and determines the requirement for an allowance for doubtful accounts based on its assessment of the current and collectible status of individual accounts with past due balances over 90 days. Account balances are charged against the allowance after all collection efforts have been exhausted and the potential for recovery is considered remote.

Subscriptions receivable

Once the Company receives a firm commitment from an investor to provide either a loan or an equity investment the Company records that commitment as a subscription receivable and a credit to the related liability or equity account. Subscription receivables for stock purchases are carried in the equity section. Subscriptions for Debentures are carried as Notes Receivable – current. Commitments are evidenced by signed Note or Stock Subscription Agreements.

Intangible assets

Management regularly reviews property, equipment, intangibles and other long-lived assets for possible impairment. This review occurs quarterly, 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, then management prepares an estimate of future cash flows 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. Management believes that the accounting estimate related to impairment of its property and equipment, is a “critical accounting estimate” because: (1) it is highly susceptible to change from period to period because it requires management to estimate fair value, which is based on assumptions about cash flows and discount rates; and (2) the impact that recognizing an impairment would have on the assets reported on our balance sheet, as well as net income, could be material. Management’s assumptions about cash flows and discount rates require significant judgment because actual revenues and expenses have fluctuated in the past and are expected to continue to do so.

The Company capitalizes the costs associated with the development of the Company’s website pursuant to ASC Topic 350. Other costs related to the maintenance of the website are expensed as incurred. Amortization is provided over the estimated useful lives of 3 years using the straight-line method for financial statement purposes. The Company will commence amortization once the economic benefits of the assets began to be consumed.

The Company reviews the carrying value of intangible assets for impairment whenever events and circumstances indicate that the carrying value may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to the amount by which the carrying value exceeds the fair value. The factors considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the property is used, and the effects of obsolescence, demand, competition and other economic factors. During the years ended December 31, 2013 and 2012, there was no impairment necessary.

Property and equipment

Property and equipment is recorded at cost. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are charged to expense as incurred. When property and equipment is retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method for financial statement purposes. The Company uses other depreciation methods (generally accelerated) for tax purposes where appropriate. The estimated useful lives for significant property and equipment categories are as follows:

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PITOOEY!, Inc.

Notes to Condensed Consolidated Financial Statements

Note 2 - Summary of Significant Accounting Policies (continued)


Computer equipment	3 years
Furniture and Equipment	5 years

The Company reviews the carrying value of property and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the property is used, and the effects of obsolescence, demand, competition and other economic factors. Based on this assessment there was no impairment as December 31, 2013 and 2012. Depreciation expense for the years ended December 31, 2013 and 2012 totaled $14,148 and $0, respectively.

Revenue recognition

The Company recognizes revenue when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the service has been provided to the customer; (3) the amount of fees to be paid by the customer is fixed or determinable; and (4) the collection of our fees is probable.

Sales related to long-term contracts for services (such as programming, website development and maintenance) extending over several years are accounted for under the percentage-of-completion method of accounting. Sales and earnings under these contracts are recorded based on the ratio of actual costs incurred to total estimated costs expected to be incurred related to the contract under the cost-to-cost method based budgeted milestones or tasks as designated per each contract. Anticipated losses on contracts are recognized in full in the period in which losses become probable and estimable.

For all other sales of product or services the Company recognizes revenues based on the terms of the customer agreement. The customer agreement takes the form of either a contract or a customer purchase order and each provides information with respect to the product or service being sold and the sales price. If the customer agreement does not have specific delivery or customer acceptance terms, revenue is recognized on the date of the customer agreement, invoice or purchase order.

Merchant Reserves

The Company processes sales through a third-party credit card merchant processor. A percentage of all sales is deducted and held by the merchant in a reserve account in the event of chargeback, refunds or customer voids. As of June 30, 2014 and December 31, 2013 there was $9,509 and $0 held in the merchant reserve account, respectively.

Cost of Revenue

The Company’s cost of revenue primarily consists of credit card processing fees, direct labor installation costs and client-specific dedicated Internet service costs.

Stock-based compensation

The Company records stock based compensation in accordance with the guidance in ASC Topic 505 and 718 which requires the Company to recognize expenses related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award.

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PITOOEY!, Inc.

Notes to Condensed Consolidated Financial Statements

Note 2 - Summary of Significant Accounting Policies (continued)

The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 718-10 and the conclusions reached by the FASB ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC 505-50.

Advertising and marketing costs

The Company expenses all costs of advertising as incurred. During the six months ended June 30, 2014 and 2013, advertising and marketing costs were $38,431 and $153,911, respectively.

Application development costs

The Company will evaluate the treatment of costs related to the development of apps not yet publicly launched. Such costs will be capitalized or expensed, as directed by the Company’s outside auditors and as appropriate to comply with generally accepted accounting principles.

Loss per common share

Net loss per share is provided in accordance with ASC Subtopic 260-10. The Company presents basic loss per share (“EPS”) and diluted EPS on the face of statements of operations. Basic EPS is computed by dividing reported losses by the weighted average shares outstanding. Except where the result would be anti-dilutive to income from continuing operations, diluted earnings per share has been computed assuming the conversion of the convertible long-term debt and the elimination of the related interest expense, and the exercise of stock warrants. Loss per common share has been computed using the weighted average number of common shares outstanding during the year.

Fair Value of Financial Instruments

The carrying amounts reflected in the balance sheets for cash, accounts payable and accrued expenses approximate the respective fair values due to the short maturities of these items. The Company does not hold any investments that are available-for-sale.

As required by the Fair Value Measurements and Disclosures Topic of the FASB ASC, fair value is measured based on a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The three levels of the fair value hierarchy are described below:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2: Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability;

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

All values for the Company are based on Level 1 observations.

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PITOOEY!, Inc.

Notes to Condensed Consolidated Financial Statements

Note 2 - Summary of Significant Accounting Policies (continued)

Income Taxes

The Company follows FASB Codification Topic 740-10-25 (ASC 740-10-25) for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change.

Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse.

Dividends

The Company has not yet adopted any policy regarding payment of dividends. No dividends have been paid or declared since inception.

Recent Accounting Pronouncements

On June 10, 2014, The Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, consolidation removes all incremental financial reporting requirements from GAAP for development stage entities, including the removal of Topic 915 from the FASB Accounting Standards Codification. For the first annual period beginning after December 15, 2014, the presentation and disclosure requirements in Topic 915 will no longer be required for the public business entities. The revised consolidation standards are effective one year later, in annual periods beginning after December 15, 2015. Early adoption is permitted. The Company has adopted the amendment.

Note 3 - Going Concern

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As shown in the accompanying financial statements, the Company has an accumulated deficit of $4,411,971 as of June 30, 2014, and had net sales of $43,197 and $80,546 during the three and six months ended June 30, 2014.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. The Company is significantly dependent upon its ability, and will continue to attempt, to secure equity and/or additional debt financing. The Company is currently conducting a private placement of its preferred stock to raise proceeds to finance its plan of operation. There are no assurances that the Company will be successful and without sufficient financing it would be unlikely for the Company to continue as a going concern.

The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence. These conditions raise substantial doubt about the Company's ability to continue as a going concern. These financial statements do not include any adjustments that might arise from this uncertainty.

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PITOOEY!, Inc.

Notes to Condensed Consolidated Financial Statements

Note 4 - Notes Receivable

Notes receivable consist of receivables for commitments to invest for one Debenture purchase which had been committed to but not paid for as of December 31, 2013.

Detail on notes receivable is as follows:

	June 30,		December 31,
Notes Receivable	2014		2013
			(audited)
Note payable	$	-	$	75,000

Total subscriptions receivable	$	-	$	75,000

This Note was non-interest bearing.

Note 5 – Fixed Assets

Fixed assets consisted of the following at:


		June 30,			December 31,
		2014			2013
					(audited)
Computer equipment	$	29,779		$	29,778
Work in Process-Software development		480,000			-
Furniture and equipment		13,997			13,997
Fixed assets, total		523,775			43,775
Less: accumulated depreciation		(21,167	)		(14,148	)
Fixed assets, net	$	502,608		$	29,627

Work in Process-Software Development consists of $30,000 in cash payments and the balance as cost of 600,000 shares of common stock earned but not issued due to contractors involved in the software development.

Depreciation expense for the three and six months ended June 30, 2014 were $3,510 and $7,019, respectively.

Note 6 - Deferred Revenue

As of June 30, 2014 and December 31, 2013, the Company had $0 and $0 in deferred revenue related to projects paid in advance of fulfillment.

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PITOOEY!, Inc.

Notes to Condensed Consolidated Financial Statements

Note 7 – Accrued Liabilities

Accrued liabilities as of June 30, 2014 and December 31, 2013 consisted of:

	June 30,		December 31,
	2014		2013
Accrued payroll	$	56,722	$	47,622
Accrued payroll taxes		50,000		61,334
Executive compensation		38,000		38,000
Accrued rent		10,971		-
Deferred rent		-		11,273
Accrued interest		45,774		21,987
Other		9,041		-
	$	210,508	$	180,217

Note 8 - Debt and Interest Expense

On April 29, 2013, the Company entered into an Investment Agreement, in which an investor agreed to purchase debentures up to a total principal amount of $1,100,000. This commitment was increased to $2,000,000 based on an agreement modification entered into on December 2, 2013. Each debenture will accrue interest on the unpaid principal of each individual debenture at the rate of 8% per year from the date each Debenture is issued until paid. As of December 31, 2013, the principal balance owed on this loan is $443,441 plus accrued interest. As of June 30, 2014, the principal balance owed on this loan is $512,431 plus accrued interest. During the three and six months ended June 30, 2014, a total of $10,484 and $19,415, respectively has been recorded as interest expense. In connection with the April 29, 2013 Agreement and as modified by the December 2, 2013 Agreement, the Company also agreed to issue and sell to the investor, from time to time and subject to certain terms and conditions set forth in the Agreement, up to $25,000,000 of the Company’s common stock. As of the date of these financial statements, no shares of common stock have been issued pursuant to the Agreement.

Notes issued under this Investment Agreement are:

				Note	Note	2014
Note	Issuance	Maturity	Interest	Balance	Balance	Interest
Amount	Date	Date	Rate	12/31/13	6/30/14	Expense
60,000	5/6/14	5/6/15	8.0%	-	1,000	1,460
3,000	3/11/14	3/11/15	8.0%	-	3,000	73
1,000	3/7/14	3/7/15	8.0%	-	1,000	25
20,000	2/28/14	2/28/15	8.0%	-	20,000	532
5,000	2/19/14	2/19/15	8.0%	-	5,000	144
443,431	4/29/13	4/29/14	8.0%	443,431	443,431	17,713
472,431				443,431	472,431	10,023

Convertible promissory notes issued to third parties:

				Note	Note	2014	2014	Discount
Note	Issuance	Maturity	Interest	Balance	Balance	Interest	Prepayment	Amount
Amount	Date	Date	Rate	12/31/13	6/30/14	Expense	Penalty	6/30/14
32,500	8/19/13	5/21/14	8%	32,500	-	11,709	392
32,500	10/7/13	7/9/14	8%	32,500	32,500	1,298	-	2,605
65,000				65,000	32,500	13,007	392	2,605

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PITOOEY!, Inc.

Notes to Condensed Consolidated Financial Statements

Note 8 - Debt and Interest Expense (continued)

The convertible loans and accrued interest are due and payable in full on the maturity date. The notes are convertible into shares of the Company’s par value common stock at the later of (a) maturity or (b) prepayment prior to the maturity date at a variable conversion price calculated as 58% of the average of the lowest three trading prices during the ten trading days prior to the conversion date. Resultantly, a discount of 42% of the face value of the Note was attributed to the beneficial conversion feature of the note, which amounts are being amortized over the maturity periods. As of December 31, 2013, a total of $28,720 has been amortized and recorded as interest expense, leaving a balance of $16,430 in discounts related to the beneficial conversion feature of these notes. As of June 30, 2014, a total of $42,545 has been amortized and recorded as interest expense, leaving a balance of $2,605 in discounts related to the beneficial conversion feature of these notes.

Debentures with warrants attached issued to third parties:

				Note	Warrant		Note	Note	2014	Discount
Note	Issuance	Interest	Warrants	Due	Expiration	Exercise	Balance	Balance	Interest	Net
Amount	Date	Rate	Attached	Date	Date	Price	12/31/13	6/30/14	Expense	6/30/14
20,000	4/22/14	8%	40,000	4/22/15	4/22/17	0.50	-	20,000	378	3,487
2,500	2/24/14	8%	5,000	2/24/15	2/24/17	0.50	-	2,500	69	1,316
40,164	2/24/14	8%	80,000	2/24/15	2/24/17	0.50	-	40,164	1,109	21,053
75,000	12/30/13	8%	150,000	12/30/14	12/30/16	0.50	75,000	75,000	2,996	48,520
10,000	11/20/13	20%	20,000	11/20/14	11/20/16	0.50	10,000	10,000	999	3,804
20,000	10/24/13	20%	40,000	10/24/14	10/24/16	0.50	20,000	20,000	1,997	5,078
10,000	10/24/13	20%	20,000	10/24/14	10/24/16	0.50	10,000	10,000	999	2,538
20,000	10/24/13	20%	40,000	10/24/14	10/24/16	0.50	20,000	20,000	1,997	5,078
20,000	10/24/13	20%	40,000	10/24/14	10/24/16	0.50	20,000	20,000	1,997	5,078
20,000	9/11/13	15%	40,000	9/11/14	9/11/16	0.50	20,000	20,000	1,498	2,713
100,000	7/29/13	8%	200,000	7/29/14	7/29/16	0.50	100,000	100,000	3,995	5,828
30,000	7/23/13	8%	60,000	7/23/14	7/23/16	0.50	30,000	30,000	1,198	1,369
367,664			735,000				305,000	367,664	19,232	105,862

As of June 30, 2014 and December 31, 2013, the principal balances owed on these loans are $367,644 and $305,000, respectively. Based on a valuation of the warrants using the Black-Sholes method, as of June 30, 2014 and December 31, 2013, discounts of $319,000 and $275,499, respectively, were attributed to the warrants being given in return for loans, which amount is being amortized over the respective twelve month maturity periods of the Notes. As of June 30, 2014 and December 31, 2013, a total of $213,138 and $65,455, respectively, has been amortized and recorded as interest expense, leaving a balance of $105,862 and $360,343, respectively, in discounts related to the attached warrants.

Noninterest-bearing promissory notes issued to related parties:

			Note	Note
Note	Issuance	Maturity	Balance	Balance
Amount	Date	Date	12/31/13	6/30/14
10,000	various	on demand	-	-
6,231	various	on demand	6,231	6,231
12,323	various	on demand	9,242	9,242
23,329	various	on demand	23,329	23,329
74,315	10/31/2013	on demand	72,956	72,956
126,198			111,759	111,759

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PITOOEY!, Inc.

Notes to Condensed Consolidated Financial Statements

Note 8 - Debt and Interest Expense (continued)

Debentures with warrants attached issued to related parties:

				Note	Warrant		Note	Note	2014	Discount
Note	Issuance	Interest	Warrants	Due	Expiration	Exercise	Balance	Balance	Interest	Net
Amount	Date	Rate	Attached	Date	Date	Price	12/31/13	6/30/14	Expense	6/30/14
2,500	2/24/14	8%	5,000	2/24/15	2/24/17	0.50	-	2,500	69	434
75,000	12/30/13	8%	150,000	12/30/14	12/30/16	0.50	75,000	75,000	2,996	48,520
10,127	7/22/13	8%	20,000	7/22/14	7/22/16	0.50	10,000	10,000	399	1,316
87,627			175,000				85,000	87,500	3,464	50,270

As of June 30, 2014 and December 31, 2013, the principal balances owed on these loans are $87,500 and $85,000, respectively. Based on a valuation of the warrants using the Black-Sholes method, as of June 30, 2014 and December 31, 2013, discounts of $107,065 and $105,055, respectively, were attributed to the warrants being given in return for loans, which amount is being amortized over the respective twelve month maturity periods of the Notes. As of June 30, 2014 and December 31, 2013, a total of $56,795 and $3,573, respectively, has been amortized and recorded as interest expense, leaving a balance of $50,270 and $103,475, respectively, in discounts related to the attached warrants.

Other promissory notes issued:

				Note	Note	2014
Note	Issuance	Maturity	Interest	Balance	Balance	Interest
Amount	Date	Date	Rate	12/31/13	6/30/14	Expense
50,000*	4/8/13	5/31/14	10%	28,778	14,727	1,124
8,000	various	2/28/13	0%	8,000	8,000	-
8,000				36,778	22,727	1,124

* Shareholder - payments of principle and interest due at the end of each month

The securities were issued without registration in reliance on the exemption from registration in section 4(a)(2) of the Securities Act of 1933 because the offer and sale was made only to accredited investors as defined in Rule 501 of Regulation D without general solicitation or advertising; and the purchasers given access to information about our business and the opportunity to ask questions and receive answers about our business prior to making any investment decision.

For the three months and six months ended June 30, 2014 quarter ended no executive salaries were deferred. During the year ended December 31, 2013, two of the Company’s officers had been deferring salaries earned. As of June 30, 2014 and December 31, 2013, the Company has accrued executive compensation to these two officers totaling $38,000.

Note 9 - Commitments and Contingencies

Office Facility Lease - The Company leases its office facility under an operating lease agreement that expires May 31, 2016. The Company recognizes rent expense on a straight-line basis over the lease period.

Equipment Lease - The Company has leases on two pieces of equipment under an operating lease that expires April 28, 2016. The Company recognizes rent expense on a straight-line basis over the lease period.

Rental expense was $17,753 and $32,106 for the three and six months ended June 30, 2014. As of the end of June, rent has been reduced to $2,594, inclusive of tax, each month, as of July 1, 2014.

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PITOOEY!, Inc.

Notes to Condensed Consolidated Financial Statements

Note 9 - Commitments and Contingencies (continued)

The Company’s minimum payments under non-cancelable operating leases for equipment and office space having initial terms in excess of one year are as follows at June 30, 2014:

Year Ending		Operating
December 31,		Leases
2014	$	50,100
2015		34,728
2016		1,200
Thereafter		0
Total minimum lease payments	$	86,028

On March 18, 2013, the Company received a lawsuit brought by a former employee who claimed wrongful discharge and requesting payment of $282,692 in base salary and payment for 3,975,000 shares of the Company’s common stock that he was awarded a part of his employment agreement. The Company is attempting to recover these shares based on its determination that the employee was terminated for cause. On December 23, 2013, the Company commenced litigation against the claimant for defamation, intentional interference with prospective business relations, misappropriation of trade secrets, civil conspiracy, and seeking an injunction against harassment. The claimant responded to the complaint by filing a motion to dismiss dated March 17, 2014. Although the claimant has made no formal, legal claims against the Company, it is anticipated that he may make one or more of his previously-threatened claims as a counterclaim in the case. To the extent the claims are based on his previous allegations, the Company views them as frivolous and unsupported and, therefore, has made no accrual provisions for potential losses.

On October 31, 2013, the Company entered into a settlement agreement with certain former employees to assume responsibility for certain payroll taxes of Rockstar Digital, Inc. (“Rockstar”) and assign its ownership of Mobile Application and Transition Services intellectual property rights to Rockstar. In addition, the Company agreed to not assert a claim against certain computer equipment (cost of $28,307) in use at Rockstar. The Company agreed to assume liability for any payroll taxes owed on payroll paid by the Company on behalf of Rockstar’s employees. The Company estimated this liability at $30,000 which they have recorded in accrued liabilities.

On July 29, 2014, a default judgment was issued against the company in Circuit Court of the 11^th Judicial Circuit in and for Miami-Dade County, Florida.

This judgment stems from a legal filing by a consulting firm, with which the Company entered into an agreement for consulting services, on February 20, 2013. On June 25, 2013, the Company cancelled the agreement because it determined that services had not been provided by consulting firm, as promised per the agreed-upon contract terms.

As of this filing, parties are discussing possible terms, with a reasonable expectation of an out-of-court settlement. The amount of the legal action is $12,000 plus a small amount of legal and court fees. The Company estimates that the likely settlement will cost $4,800 for which an accrual has been made in professional fees.

Note 10 - Income Taxes

For the three and six months ended June 30, 2014, and for the year ended December 31, 2013 the Company incurred net operating losses and, accordingly, no provision for income taxes has been recorded. In addition, no benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets. At June 30, 2014 and December 31, 2013, the Company had approximately $4,360,850 and $3,682,360 of federal net operating losses, respectively. At June 30, 2014 and December 31, 2013, the Company had approximately $4,298,350 and $3,622,254 of state net operating losses, respectively. The federal net operating loss carryforwards, if not utilized, will begin to expire in 2027. The state net operating loss carryforwards have started to expire. The provision for income taxes consisted of the following components as of June 30, 2014 and December 31, 2013:

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PITOOEY!, Inc.

Notes to Condensed Consolidated Financial Statements

Note 10 - Income Taxes (continued)

In assessing the recovery of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible. Management considers the scheduled reversals of future deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. As a result, management determined it was more likely than not the deferred tax assets would not be realized as of June 30, 2014 and December 31, 2013, and recorded a full valuation allowance.

Reconciliation between the statutory and the effective rate is as follows:

	2014	2013
Federal statutory tax rate	(34.0)%	(34.0)%
State statutory tax rate	(6.97)%	(6.97)%
Permanent difference and other	34.0%	34.0%

Note 11 - Stockholders’ Equity

The Company is authorized to issue 400,000,000 shares of its $0.001 par value common stock and 100,000,000 shares of its $0.001 par value preferred stock.

In January, 2014, the Company issued 252,500 shares of its common stock that had been paid for as of December 31, 2013.

In January, 2014, the Company received $20,400 in Subscriptions Receivable for 51,000 shares that were committed to be purchased as of December 31, 2013.

In March, 2014, the Company sold 92,500 shares of common stock, at $0.40 per share, to four investors for $37,000.

In May and June, 2014 the Company sold 146,125 shares of the Company’s Preferred Series B shares for $121,900. These shares were unissued as of June 30, 2014.

As of June 30, 2014 the Company owes 600,000 shares of restricted common stock for consulting services which shares have not yet been issued. These shares were valued at $400,500, which cost was capitalized as Work in Process – Software Development.

Note 12 - Warrants and Options

Warrants issued in 2014:

	Debenture	Warrant
Issuance	Associated	Expiration	Exercise
Date	Warrants	Date	Price
4/22/14	40,000	4/22/17	0.50
2/24/14	5,000	2/24/17	0.50
2/24/14	5,000	2/24/17	0.50
2/24/14	80,000	2/24/17	0.50
	130,000

See “Note 8 - Debt and Interest Expense” for additional discussion regarding warrants issued in connection with debenture issuances.

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PITOOEY!, Inc.

Notes to Condensed Consolidated Financial Statements

Note 12 - Warrants and Options (continued)

The following is a summary of the status of all of the Company’s stock warrants as of June 30, 2014.

		WARRANTS OUTSTANDING
		Weighted-Average
	Number of	Remaining		Weighted-
Range of	Shares	Contractual		Average
Exercise Price	Outstanding	Life in Years		Exercise Price
$ 0.50 - $1.75	2,010,000	1.28	$	0.96
	2,010,000	1.28	$	0.96

The following tables summarize information about warrants outstanding and exercisable at June 30, 2014:

		WARRANTS EXERCISABLE
	Number of			Weighted-
Range of	Shares			Average
Exercise Price	Exercisable			Exercise Price
$ 0.50 - $1.75	2,010,000		$	0.96
	2,010,000		$	0.96

Note 13 - Agreements

On July 25, 2012, the Company entered into and closed an Intellectual Property Assignment Agreement (“July IP Agreement”) by and between the Company and Mr. Sebastian Barr, an individual (“Seller”). In accordance with the July IP Agreement, the Company acquired certain patents, prototypes and technical information from the Seller (“Assets”), pertaining to child safety devices. In exchange for the Assets, the Company agreed to pay the Seller an aggregate of $42,500, pursuant to the following schedule:

An initial payment of $10,000 paid to Sunbeam Packing Services, LLC upon execution of the July IP Agreement;

$24,500 paid to the Seller upon execution of the July IP Agreement;

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PITOOEY!, Inc.

Notes to Condensed Consolidated Financial Statements

Note 13 - Agreements (continued)

The balance of $8,000 was to be paid in two installments: $4,000 upon the first anniversary date of the July IP Agreement and $4,000 upon the second anniversary date of the July IP Agreement.

The Company has since decided to complete the purchase of this intellectual property and but has not yet made payments against this Note. The Company does not yet own this intellectual property and is delinquent on payment of this Note.

On February 28, 2014 effecvtive March 3, 2014, the Company entered into an agreement with a consultant to design and develop the Company’s Legal 420 mobile app the purpose of which is to create share information regarding the current changes in the medical marijuana marketplace. Compensation for this project is comprised of $25,000 in cash and issuance of 300,000 shares of the Company’s common stock.

On April 17, 2014 effective May 1, 2014, the Company entered into an agreement with a consultant to design and develop the Company’s RAADR mobile app, the purpose of which is to provide customers a mobile application system to allow monitoring of various forms of social media. Compensation for this project is comprised of $25,000 in cash and issuance of 300,000 shares of the Company’s common stock. See Note 15 – Subsequent Events for additional information regarding this agreement.

On April 22, 2014, Richard M. Hybner was appointed Chief Executive Officer of the Company. Jacob DiMartino, Founder, will remain with the Company as President, Chief Financial Officer, and Principal Accounting Officer.

Note 14 - Related Party Transactions

During the year ended December 31, 2013, two of the Company’s officers have been deferring salaries earned. As of December 31, 2013, the Company has accrued executive compensation to these two officers totaling $38,000. This amount remains outstanding as of June 30, 2014.

On February 24, 2014, the Company issued a debenture to a related party for $2,500, paying 8% interest. The debenture included 5,000 warrants exercisable until February 24, 2017 at an exercise price of $0.50 per share.

Note 15 - Subsequent Events

The following debenture, with warrants attached, was issued to a third party:

				Note	Warrant
Note	Issuance	Interest	Warrants	Due	Expiration	Exercise
Amount	Date	Rate	Attached	Date	Date	Price
20,000	7/14/14	10%	40,000	7/14/15	7/14/17	0.50

On July 18, 2014 the Company sold 37,500 shares of Preferred (Series B) stock for $30,000

The securities were issued without registration in reliance on the exemption from registration in section 4(a)(2) of the Securities Act of 1933

because the offer and sale was made only to accredited investors as defined in Rule 501 of Regulation D without general solicitation or advertising; and the purchasers given access to information about our business and the opportunity to ask questions and receive answers about our business prior to making any investment decision.

The Company’s Management has reviewed all other material events through the date of this report in accordance with ASC 855-10, and believes there are no further material subsequent events to report.

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PITOOEY!, INC.

Notes to Condensed Consolidated Financial Statements

Note 15 - Subsequent Events (continued)

On July 7, 2014, the Company terminated an agreement with one of its consultants to develop the Company’s RAADR mobile app. The terms included receiving $10,000 from the consultant and rescission of the issuance of 300,000 shares of the Company’s common stock.

On June 19, 2014, sole board member, Jacob DiMartino, authorized paperwork for the transfer of 10,000,000 shares of his personal Company stock (OTC: PTOO) to CEO, Richard M. Hybner, effective immediately, in accordance with the terms of Mr. Hybner’s Employment Agreement and Amended and Restated Employment Agreement, dated May 2, 2014 and June 26, 2014, respectively.

On July 29, 2014 (the “Effective date”), the Company entered into an agreement with cmdR Consulting, to develop the Company’s RAADR mobile app, the purpose of which is to develop a subscriber-like mobile application to allow the monitoring of a variety of forms of social mention in social media. Contractual details call for an initial payment of $40,000, an additional payment of $30,000 in December, 2014 and five monthly payments of $10,000 commencing in January, 2015. In addition, stock options of up to 1,120,000 shares, with a strike price of 15% of the common share price as of the Effective date, were granted for achieving certain milestones including an expected launch date in Fall 2014, with pre-registration to begin early September, 2014. In addition, a user-based bonus of $0.20 per user will be paid if the platform exceeds 330,000 users by December 31, 2014.

On July 29, 2014, a default judgment was issued against the company in Circuit Court of the 11^th Judicial Circuit in and for Miami-Dade County, Florida.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operation

Forward-Looking Statements

The statements contained in all parts of this document that are not historical facts are, or may be deemed to be, "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements include, but are not limited to, those relating to the following: the Company's ability to secure necessary financing; expected growth; future operating expenses; future margins; fluctuations in interest rates; ability to continue to grow and implement growth, and regarding future growth, cash needs, operations, business plans and financial results and any other statements that are not historical facts.

When used in this document, the words "anticipate," "estimate," "expect," "may," "plans," "project," and similar expressions are intended to be among the statements that identify forward-looking statements. PITOOEY!, Inc.’s results may differ significantly from the results discussed in the forward-looking statements. Such statements involve risks and uncertainties, including, but not limited to, those relating to costs, delays and difficulties related to the Company’s dependence on its ability to attract and retain skilled managers and other personnel; the uncertainty of the Company's ability to manage and continue its growth and implement its business strategy; its vulnerability to general economic conditions; accuracy of accounting and other estimates; the Company's future financial and operating results, cash needs and demand for services; and the Company's ability to maintain and comply with permits and licenses; as well as other risk factors described in this Annual Report. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those projected.

Management’s Discussion and Analysis

We were originally incorporated in the State of Nevada on March 29, 2006, under the name “White Dental Supply, Inc.” We were authorized to issue 100,000,000 shares of our $0.001 par value common stock and 100,000,000 shares of our $0.001 par value preferred stock. On February 7, 2013, we changed our corporate name to PITOOEY!, Inc. and increased the number of shares we are authorized to issue to 400,000,000 shares of $0.001 par value common stock and 100,000,000 shares of $0.001 par value preferred stock.

PITOOEY!, Inc., is a complete digital marketing agency offering an array of products and services that will enhance communication between our clients and their target audience. Through our unique service packages, we offer businesses a comprehensive set of tools that focuses on engaging with the rapidly growing number of social and mobile-centric consumers. These social and mobile marketing products and services are served up via our two wholly -owned subsidiaries:

Choice One Mobile, Inc., which provides mobile and social media marketing and advertising solutions.

PITOOEY! Mobile, Inc., which retains all intellectual property related to our PITOOEY! ^TMiPhone ^®app, including patents, trademarks, software and trade processes.

Results of Operations

Due to the recent addition of new business operations and service lines, comparisons of operating results between the three and six month periods ended June 30, , 2014 and 2013 may not be materially reflective of our continuing and future operations.

Revenue

How we generate revenues

During the current fiscal year, 2014, we generated sales from our wholly owned subsidiary, Choice One Mobile, Inc., a provider of mobile and social media marketing and advertising services. Choice One Mobile assists clients build a strategy to attract and engage with customers using social media outlets including, but not limited to, Facebook, Twitter and YouTube. In addition to social media marketing, we offer complementary services customized to meet the needs of each client, including mobile and desktop website development, search engine optimization, text message marketing, content writing and video creation.

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Through the periods covered in this report, our PITOOEY! Mobile subsidiary has not generated any revenues.

Three months ended June, 2014 compared to the three months ended June 30, 2013

Revenue was comprised, as follows:

				Three months ended
				June 30,			Increase (Decrease)
	2014			2013			$			%
Revenue, gross	$	43,346		$	108,788			(65,442	)		-60	%
Less: Discounts and refunds		(149	)		(44,723	)		44,574			-100	%

Revenue, net	$	43,197		$	64,065			(20,868	)		-33	%

Six months ended June 30, 2014 compared to the six months ended June 30, 2013


				Six months ended
				June 30,			Increase (Decrease)
	2014			2013			$			%
Revenue, gross	$	87,419		$	176,723			(89,304	)		-51	%
Less: Discounts and refunds		(6,873	)		(60,036	)		53,163			-89	%

Revenue, net	$	80,546		$	116,687			(36,141	)		-31	%

In the normal course of our business, the bulk of our sales are paid and rendered either immediately or on a monthly basis. These sales are recognized as revenue at the time of the transaction. Periodically, we enter into longer-term arrangements with clients, whereby they pay for three to 12 months of service up-front. These sales are recorded as deferred revenue and recognized as revenue over the actual life of the arrangement. During the three and six months ended June 30, 2014, we recorded $0 and $0, respectively, in deferred revenue and recognized $0 and $0, respectively as revenue earned during the period.

Costs of sales consist primarily of credit card merchant fees, commissions paid to sales staff and fees paid to contractors directly attributable to specific clients. A vast majority of our services incur few direct, unique and immediately identifiable costs per client. During the three and six months ended June 30, 2014, costs of sales totaled ($140) and $38,371, respectively as compared to $20,496 and $26,231 for the same periods ended June 30, 2013. Cost of sales declined in the second quarter due to cessation of development costs for our software. After accounting for costs of sales, we realized a gross profit of $43,485 and $49,047 during the three and six months ended June 30, 2014 as compared to $43,569 and $90,456 for the same periods ended June 30, 2013.

Factors Affecting Future Growth

We are continuously refining our services to maximize revenue, while providing a rate of return to business customers greater than they would be able to obtain advertising or marketing through traditional media outlets. Blending the two disparate objectives is an art form that we are attempting to master and slight dips in revenue may occur in future periods, as a result. We are actively pursuing the following operational objectives:

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Choice One Mobile recently launched the C1M affiliate program to allow credit card processing companies to provide its agents an additional revenue stream by selling C1M's mobile and social media services to existing merchant clientele. The benefits for Choice One Mobile include greater market penetration, with lower overhead and customer acquisition costs. We began negotiations with several large credit card processing companies and independent sales organizations. As of the date of this quarterly report, we have not entered into any contractual relationships.

The PITOOEY!^TM iPhone ^® app is a preference based, searchable ad network. The PITOOEY! app provides businesses with a unique engagement tool while serving consumers deals, valuable content, and location-based information. Our third party development team has been engaged in refining the consumer experience, as well as the back-end mechanics, to ensure adoption of Version 2 of the app. We have experienced delays in the release of our app and are currently working internally to assure a timely launch of the best software product we can possibly construct. As a result, we are currently unable to disclose a specific time frame the release of Version 2.

RAADR. The Company considers the completion of the development of this app and the subsequent launch a key strategic initiative in 2014. As such, Company management is working to develop and refine RAADR functionality and focus on revenue generation for RAADR through strategic alliances, revenue-share opportunities, and stand-alone mobile app subscription agreements.

Legal 420. The Company is currently evaluating the appropriate market positions of this app in its strategic plan. Company management expects to make further investments in app development, with a focus on primary revenue generation from advertising sources and subsequent user subscriptions as early as Q1 2015.

Costs and Operating Expenses

Three months ended June 30, 2014 compared to the three months ended June 30, 2013

For the three months ended June 31, 2014 and 2013, the components of our operating expenses were, as follows:

	Three months ended
	June 30,						Increase (Decrease)
Operating Expenses:	2014			2013			$			%
Advertising and marketing	$	12,315		$	153,911		$	(141,596	)		N/A
Depreciation		3,510			4,276			(766	)		N/A
Executive compensation		23,458			108,168			(84,710	)		78	%
General and administrative		47,671			115,152			(67,481	)		59	%
Management fees - related party		-			24,840			(24,840	)		N/A
Professional fees		56,466			137,945			(81,479	)		59	%
Salaries and wages		46,656			193,320			(146,664	)		N/A
Total operating expenses		190,076			737,612			(547,536	)		74	%

Operating loss		(136,590	)		(694,043	)		557,453			80	%

Other expenses:
Interest expense		(95,575	)		(5,301	)		(90,274	)		-1703	%
Interest income		-						-			N/A
Foregivenss of debt		14,392			-			14,392			N/A
Other income		0			-			0			N/A
Total other expenses		(81,183	)		(5,301	)		(75,882	)		-1431	%

Provision for income taxes		-			-			-			N/A

Net Loss	$	(217,774	)	$	(699,344	)	$	481,570			-69	%

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Advertising and Marketing. We are a young company attempting to establish brand recognition and have engaged third parties to assist us. Our advertising and marketing activities cost was $12,315 during the three months ended June 30, 2014. In the comparable period ended June 30, 2013, we incurred $153,911 in advertising and marketing expenses. We expect to increase our advertising and marketing budget to coincide with the launch of Version 2 of the PITOOEY! app, although the timing of such increase cannot yet be determined.

Depreciation. Depreciation expense related to our computers, furniture and office equipment was $3,510 during the quarter ended June 30, 2014. In the comparable period ended June 30, 2013, it was $4,276.

Executive Compensation. Executive compensation paid to our corporate officers and directors was $23,458 during the three months ended June 30, 2014 and $108,168 in the comparable period ended June 30, 2013.

General and Administrative. In the course of our operations, we incur operating expenses composed primarily of computer and internet expenses, professional fees, payroll, and other general and administrative costs. General and administrative expenses are essentially the cost of doing business, and encompass, without limitation, the following: business and operating licenses; taxes; general office expenses, such as postage, supplies and printing; utilities; bank charges; website costs; and other miscellaneous expenditures not otherwise classified. During the three month ended June 30, 2014, general and administrative expenses were $47,671. Comparatively, general and administrative expenses were $115,152 in the period ended June 30, 2013. Management Fees Paid to a Related Party. On December 27, 2012, we entered into a professional service agreement with a related entity for use of client services staff, human resource functions, administrative support and office space and equipment. During the three months ended June 30, 2014 and 2013, total management fees paid to the related entity was $0 and $24,840, respectively. As of December 30, 2013 we have terminated this relationship. As a result, we don’t expect future expenses in this category to be incurred.

Professional Fees. We expect to continue to incur professional fees in relation to maintaining our public reporting status with the Securities and Exchange Commission and significant increases in research and development expenses related to our proprietary PITOOEY! ^TMapp, which will have an adverse effect on our operating results for the foreseeable future. During the period ended June 30, 2014, we incurred $56,466 in professional fees as compared to $137,945 for the period ended June 30, 2013.

Salaries and Wages. As of June 30, 2014, we have 4 employees. Salaries and wages paid during the quarters ended June 30, 2014 and 2013 were $46,655 and $193,320, respectively. Our staffing levels tend to fluctuate substantially from month-to-month; therefore, it is difficult to forecast changes in salaries and wages from period to period.

Interest Expense. During the three months ended June 30, 2014, we incurred $95,575 of interest expense related to our notes payable. In the period ended June 30, 2013, interest expense was $5,301.

Six months ended June 30, 2014 compared to the six months ended June 30, 2013

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For the six months ended June 30, 2014 and 2013, the components of our operating expenses were, as follows:

	Six months ended
	June 30,						Increase (Decrease)
Operating Expenses:	2014			2013			$			%
Advertising and marketing	$	18,431		$	293,277		$	(274,846	)		N/A
Depreciation		7,020			6,731			289			N/A
Executive compensation		57,658			217,972			(160,314	)		74	%
General and administrative		161,492			298,695			(137,203	)		46	%
Management fees - related party		—			297,127			(297,127	)		N/A
Professional fees		92,199			259,509			(167,310	)		64	%
Salaries and wages		116,326			382,532			(266,206	)		N/A
Total operating expenses		453,126			1,755,843			(1,302,717	)		74	%

Operating loss		(394,079	)		(1,665,387	)		1,271,308			76	%

Other expenses:
Interest expense		(259,944	)		(5,320	)		(254,624	)		-4786	%
Interest income		—			1			(1	)		-100	%
Foregivenss of debt		15,478			—			15,478			N/A
Other income		457			—			457			N/A
Total other expenses		(244,008	)		(5,319	)		(238,689	)		-4487	%

Provision for income taxes		—			(50	)		50			N/A

Net Loss	$	(638,088	)	$	(1,670,756	)	$	1,032,668			-62	%

Advertising and Marketing. We are a young company attempting to establish brand recognition and have engaged third parties to assist us. Our advertising and marketing activities cost $18,431 during the six months ended June 30, 2014. In the comparable period ended June 30, 2013, we incurred $293,277 in advertising and marketing expenses. We expect to increase our advertising and marketing budget to coincide with the launch of Version 2 of the PITOOEY! app, although the timing of such increase cannot yet be determined.

Depreciation. Depreciation expense related to our computers, furniture and office equipment was $7,020 during the quarter ended June 30, 2014. In the comparable period ended June 30, 2013, it was $6,731.

Executive Compensation. Executive compensation paid to our corporate officers and directors was $57,658 during the six months ended June 30, 2014 and $217,972 in the comparable period ended June 30, 2013.

Management Fees Paid to a Related Party. On December 27, 2012, we entered into a professional service agreement with a related entity for use of client services staff, human resource functions, administrative support and office space and equipment. This agreement terminated in December 2013. During the six months ended June 30, 2014 and 2013, total management fees paid to the related entity was $0 and $297,127, respectively.

Professional Fees. We expect to continue to incur professional fees in relation to maintaining our public reporting status with the Securities and Exchange Commission and significant increases in research and development expenses related to our proprietary PITOOEY! ^TM app, which will have an adverse effect on our operating results for the foreseeable future. During the period ended June 30, 2014, we incurred $92,199 in professional fees as compared to $259,509 for the period ended June 30, 2013.

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Salaries and Wages. As of June 30, 2014, we have 4 employees. Salaries and wages paid during the quarters ended June 30, 2014 and 2013 were $116,326 and $382,532, respectively. Our staffing levels tend to fluctuate substantially from month-to-month; therefore, it is difficult to forecast changes in salaries and wages from period to period.

Interest Expense. During the six months ended June 30, 2014, we incurred $259,944 of interest expense related to our notes payable. In the period ended June 30, 2013, interest expense was $5,320.

Net Loss

Our net loss for the three and six months ended June 30, 2014 was $217,774 and $638,088, respectively, compared to net losses of $699,344 and $1,670,756, respectively, for the same periods ended June 30, 2013. We expect to continue to incur net losses for the foreseeable future and cannot assure you when, if ever, we will be able to mitigate our losses or begin to achieve profitability. Our management believes that expansion of our operations and continued global economic uncertainty are likely to continue to adversely affect our operating results and will lead to net losses for at least the next 12 months of operations.

Liquidity and Capital Resources

As of June 30, 2014, we had $37,910 in cash and $698 in prepaid expenses and deposits. To date, we have financed our operations through the issuance of stock and debt securities, in addition to sales-generated revenue. The following table provides detailed information about our net cash flow for all financial statement periods presented in this Report.

	Three months ended
	June 30,
	2014			2013
Net cash used by operating activities	$	(125,398	)	$	(493,910	)
Net cash used by investing activities		(30,000	)		-
Net cash provided by financing activities		193,309			490,993
Net increase (decrease) in cash		37,909			(2,917	)
Cash at the beginning of period		1			11,568
Cash at the end of period	$	37,910		$	8,651

Operating Activities. Net cash used in operating activities was $125,398 for the three months ended June 30, 2014. In comparison, our net cash used during the three months ended June 30, 2013 was $493,910, the bulk of which was attributable to increased expenditures, in 2013,related to our initial entry into the digital media marketing space and development of our PITOOEY!^TMapp. Our management expects to continue to experience net cash outflows related to operating activities for at least the next fiscal year, related primarily to continued PITOOEY!^TMapp development, expansion of our service offerings and continued growth of our base of operations.

Investing Activities. During the three months ended June 30, 2014 and the three months ended June 30, 2013, we purchased $30,000 and $0, respectively, of Work in Process-Software. We do expect to make material investments in software development, furniture, fixtures and equipment during the next 12 months of operations.

Financing Activities. Net cash provided by financing activities for the three months ended June 30, 2014 was $193,309, as compared to $490,993 for the comparable period ended June 30, 2013. During 2013, we obtained significant financing in an effort to expand our operations and pursue new business opportunities. To that end, for the three months ended June 30, 2014 and 2013, we obtained financing in the form of loans totaling $80,104 and $354,064, respectively, from third party sources. Also during the three month periods ended June 30, 2014 and 2013, we repaid $8,640 and $50 respectively, of our third party notes payable and $55 and $0, respectively, of related party notes payable. In addition to issuing debt securities, during the three months ended June 30, 2014 and 2013, we sold a total of $0 and $114,000, respectively, of common stock and $121,900 and $0, respectively, of preferred stock. We expect to use future sources of cash to invest in our core businesses, including new product and service innovations, advertising and marketing, as well as the capital expenditures in the expansion of our business.

-25-

Net Change in Cash. During the three months ended June 30, 2014, we experienced a net increase in cash on hand of $37,709. Comparatively, we had a net decrease in cash of $2,917 during the three months ended June 30, 2013.

	Six months ended
	June 30,
	2014			2013
Net cash used by operating activities	$	(421,513	)	$	(1,290,413	)
Net cash used by investing activities		(30,000	)		(56,910	)
Net cash provided by financing activities		347,396			937,870
Net increase (decrease) in cash		(104,119	)		(409,453	)
Cash at the beginning of period		142,029			418,104
Cash at the end of period	$	37,910		$	8,651

Operating Activities. Net cash used in operating activities was $421,513 for the six months ended June 30, 2014. In comparison, our net cash used during the six months ended June 30, 2013 was $409,453 the bulk of which was attributable to increased expenditures, in 2013, related to our initial entry into the digital media marketing space and development of our PITOOEY!^TMapp. Our management expects to continue to experience net cash outflows related to operating activities for at least the next fiscal year, related primarily to continued PITOOEY!^TMapp development, expansion of our service offerings and continued growth of our base of operations.

Investing Activities. During the six months ended June 30, 2014 and the six months ended June 30, 2013, we purchased $10,000 and $56,910, respectively of Work in Process-Software Development, computers, furniture and office equipment. We do expect to make material investments in software development, furniture, fixtures and equipment during the next 12 months of operations.

Financing Activities. Net cash provided by financing activities for the six months ended June 30, 2014 was $347,396, as compared to $937,870 for the comparable period ended June 30, 2013. During 2013, we obtained significant financing in an effort to expand our operations and pursue new business opportunities. To that end, for the six months ended June 30, 2014 and 2013, we obtained financing in the form of loans totaling $151,768 and $369,064, respectively, from third party sources. Also during the six month periods ended June 30, 2014 and 2013, we repaid $46,551 and $137,119 respectively, of our third party notes payable and $14,622 and $0, respectively, of related party notes payable. For the six months ended June 30, 2014 and 2013, we obtained financing in the form of related party loans totaling $2,500 and $80,875, respectively. In addition to issuing debt securities, during the six months ended June 30, 2014 and 2013, we sold a total of $37,000 and $625,000 respectively, of common stock and $121,900 and $0, respectively, of preferred stock. We expect to use future sources of cash to invest in our core businesses, including new product and service innovations, advertising and marketing, as well as the capital expenditures in the expansion of our business.

Net Change in Cash. During the six months ended June 30, 2014, we experienced a net decrease in cash on hand of $104,119. Comparatively, we had a net decrease in cash of $409,453 during the six months ended June 30, 2013.

Factors Affecting Future Growth

We expect to require significant capital to continue to fund research and development activities related to development of the PITOOEY! ^TM app. Without sufficient cash flow from operations we will require additional cash resources, including the sale of equity or debt securities, to meet our planned capital expenditures and working capital requirements for the next 12 months. We will require additional cash resources due to changed business conditions, implementation of our strategy to successfully expand our operations. If our own financial resources and then current cash-flows from operations are insufficient to satisfy our capital requirements, we may seek to sell additional equity or debt securities or obtain additional credit facilities. The sale of additional equity securities will result in dilution to our stockholders. The incurrence of indebtedness will result in increased debt service obligations and could require us to agree to operating and financial covenants that could restrict our operations or modify our plans to grow the business. Financing may not be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds on terms favorable to us, or at all, will limit our ability to expand our business operations and could harm our overall business prospects.

-26-

We only recently began to venture into the mobile and social media marketing space. We are experiencing significant changes to our corporate and operational structures and have been expanding our base of employees. Over the next 12 months, we expect the number of full- and part-time employees to fluctuate substantially, though we are unable to predict the amount of such fluctuations.

We anticipate that as our level of maturity and sophistication in the mobile app space grows, through our experience and the engaging of external app developers and user marketing individuals and firms, that our future topline growth estimates will become more predictable. This should provide more stable estimates of future revenue and expense projections, as well as a better gauge of ongoing gross and net margins.

There are no known trends, events or uncertainties that have had or that are reasonably expected to have a material impact on our revenues from continuing operations. However, we may not adequately encapsulate unforeseen economic or industry specific factors that may be beyond our control. These external forces may restrict growth and advertising spending by our clients, which could, in turn, adversely affect our operations.

We currently do not own any significant plant or equipment that we would seek to sell in the near future.

We have not paid for expenses on behalf of our directors. Additionally, we believe that this fact shall not materially change.

Hiring and Retaining Key Personnel

Our ability to compete and grow depends in large part on the efforts and talents of our employees. During the first nine months of 2013, in addition to experiencing employee attrition, we also implemented, and continue to implement, certain cost reduction initiatives to better align our operating expenses with our revenue, including reducing our headcount and consolidating certain facilities. These cost reduction initiatives could negatively impact our ability to attract, hire and retain key employees which is critical to our ability to grow our business and execute on our business strategy.

Off Balance Sheet Arrangements

We do not have any off balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity or capital expenditures or capital resources that is material to an investor in our securities.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in our consolidated financial statements and related notes. Our significant accounting policies are described in Note 3 to our consolidated financial statements included in our Annual Report on Form 10- K for the year ended December 30, 2012. We have identified below our critical accounting policies and estimates that we believe require the greatest amount of judgment. These estimates and judgments have a significant impact on our consolidated financial statements. Actual results could differ materially from those estimates. The accounting policies that reflect our more significant estimates and judgments and that we believe are the most critical to fully understand and evaluate our reported financial results include the following:

1. Intangible assets

2. Merchant reserves

3. Property and equipment

4. Revenue recognition

5. Stock-based compensation

-27-

Item 3. Quantitative and Qualitative Disclosures About Market Risk

This item is not applicable to smaller reporting companies, such as PITOOEY!, Inc.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Both our Chief Executive Officer and President and Chief Financial Officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Interim Report on Form 10-Q, have concluded that, based on such evaluation, our disclosure controls and procedures were not effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in internal controls over financial reporting

There were no changes in our internal controls over financial reporting that occurred during the period covered by this report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

On July 29, 2014, a default judgment was issued against the company in Circuit Court of the 11^th Judicial Circuit in and for Miami-Dade County, Florida.

Item 1A. Risk Factors

Our significant business risks are described in Item 1A to our Form 10-K for the year ended December 30, 2013, to which reference is made herein.

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

On April 22, 2014 we issued a 10% debenture, totaling a principal amount of $20,000 payable on or before the 22nd day of April, 2015 with attached warrants to purchase up to 40,000 shares of the Company’s common stock at a price of $.50 per share at any time prior to the 22nd day of April, 2017.

In May and June, 2014 we issued 146,125 shares of Preferred (Series B) shares of Company stock for $121,900.The securities were issued without registration in reliance on the exemption from registration in section 4(a)(2) of the Securities Act of 1933 because the offer and sale was made only to accredited investors as defined in Rule 501 of Regulation D without general solicitation or advertising; and the purchasers given access to information about our business and the opportunity to ask questions and receive answers about our business prior to making any investment decision.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers.

Effective November 23, 2013 Patrick Deparini resigned all positions with the registrant, including Director, Chief Financial Officer and Principal Accounting Officer. Jacob DiMartino, a Director and Chief Executive Officer, assumed the positions of Chief Financial Officer and Principal Accounting Officer.

On April 22, 2014, Richard M. Hybner assumed the position of Chief Executive Officer of the Company. Jacob DiMartino holds the position of President and, on an interim basis, serves as the Company’s Chief Financial Officer and Principal Accounting Officer.

-29-

Item 6. Exhibits and Reports on Form 8-K


Exhibit Number	Name and/or Identification of Exhibit
30	Rule 13a-14(a)/15d-14(a) Certifications

32	Certification under Section 906 of the Sarbanes-Oxley Act (18 U.S.C. Section 1350)

101	Interactive Data File

	(INS) XBRL Instance Document
	(SCH) XBRL Taxonomy Extension Schema Document
	(CAL) XBRL Taxonomy Extension Calculation Linkbase Document
	(DEF) XBRL Taxonomy Extension Definition Linkbase Document
	(LAB) XBRL Taxonomy Extension Label Linkbase Document
	(PRE) XBRL Taxonomy Extension Presentation Linkbase Document

-30-

SIGNATURES

Pursuant to the requirements of the Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


PITOOEY!, Inc.
(Registrant)

Signature	Title	Date

/s/ Richard M. Hybner	Chief Executive Officer	August 15, 2014
Richard M. Hybner