REGO PAYMENT ARCHITECTURES, INC. - Quarter Report: 2011 March (Form 10-Q)

a51311110q.htm

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 March 31, 2011

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission file number 333-152050

	MOGGLE, INC.
	(Exact Name of Registrant as Specified in Its Charter)

Delaware		35-2327649
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

	15 West Highland Avenue Philadelphia, PA 19118-3322
	(Address of principal executive offices) (Zip Code)

	(215) 247-5500
	(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 preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days). YES __X_ NO_____

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 Regulations 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 ____ NO_____

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 ¨ Accelerated filer ¨

Non-accelerated filer ¨ Smaller reporting company ý

(Do not check if a smaller reporting company)

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 65,371,422 shares of common stock outstanding at May 12, 2011.

TABLE OF CONTENTS		Page No.


PART I	FINANCIAL INFORMATION

ITEM 1.	Financial Statements	2
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	3
ITEM 4.	Controls and Procedures	10

PART II	OTHER INFORMATION

ITEM 6.	Exhibits	11

PART I - FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS.

Moggle, Inc.

(A Development Stage Company)

CONTENTS

								PAGE

BALANCE SHEETS								F-1


STATEMENTS OF OPERATIONS								F-2


STATEMENT OF STOCKHOLDERS' EQUITY								F-3


STATEMENTS OF CASH FLOWS								F-4


NOTES TO FINANCIAL STATEMENTS								F-5 to F-16

Moggle, Inc.

(A Development Stage Company)

Balance Sheets

	March 31, 2011			December 31, 2010
	(Unaudited)			(Audited)
ASSETS

CURRENT ASSETS
Cash and cash equivalents	$	1,006,922		$	1,574,448
Accounts Receivable		326			-
Prepaid expenses		17,647			22,941

TOTAL CURRENT ASSETS		1,024,895			1,597,389

PROPERTY AND EQUIPMENT
Computer equipment		12,980			12,980
Less: accumulated depreciation		3,892			3,243
		9,088			9,737

OTHER ASSETS
Deposit		2,667			2,667

TOTAL ASSETS	$	1,036,650		$	1,609,793


LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable and accrued expenses	$	103,650		$	90,015

TOTAL CURRENT LIABILITIES		103,650			90,015

STOCKHOLDERS' EQUITY

Preferred stock, $.0001 par value; 2,000,000 shares authorized;
none issued and outstanding at March 31, 2011 and
December 31, 2010		-			-

Common stock, $ .0001 par value; 150,000,000 shares authorized;
65,371,422 shares issued and outstanding at March 31, 2011
and December 31, 2010		6,537			6,537

Additional paid in capital		6,357,519			6,222,793

Deficit accumulated during the development stage		(5,431,056	)		(4,709,552	)

STOCKHOLDERS' EQUITY		933,000			1,519,778

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,036,650		$	1,609,793

See accompanying notes to financial statements.

F-1

Moggle, Inc.

(A Development Stage Company)

Statements of Operations

For the period February 11, 2008 (Date of Inception) to March 31, 2011,

And For the Three Months Ended March 31, 2011 and 2010

(Unaudited)

				Three Months			Three Months
	Cumulative			Ended			Ended
	Since			March 31,			March 31,
	Inception			2011			2010

SALES	$	326		$	326		$	-

OPERATING EXPENSES
General and administrative		456,581			125,945			14,483
Consulting (a)		2,304,048			328,095			43,175
Payroll (b)		426,232			16,733			31,152
Professional fees		763,496			103,449			32,070
Research and development		323,103			77,726			-
Travel		756,955			70,927			67,321
Total operating expenses		5,030,415			722,875			188,201

OTHER INCOME (EXPENSE)
Interest income		2,272			1,045			1
Interest expense (c)		(403,239	)		-			-
		(400,967	)		1,045			1

NET LOSS	$	(5,431,056	)	$	(721,504	)	$	(188,200	)

BASIC AND DILUTED NET LOSS PER
COMMON SHARE				$	(0.01	)	$	(0.00	)

BASIC AND DILUTED WEIGHTED AVERAGE
COMMON SHARES OUTSTANDING					65,371,422			45,449,656

(a)	– includes share-based compensation of $1,697,516 cumulative, $117,993 and $4,829 for the three months ended March 31, 2011 and 2010.

(b)	– includes share-based compensation of $426,232 cumulative, $16,733 and $31,152 for the three months ended March 31, 2011 and 2010.

(c)	– includes amortization of deferred costs of $78,242 cumulative, and $0 for the three months ended March 31, 2011 and 2010. Also includes $322,500 accretion of discount on notes payable cumulative, and $0 for the three months ended March 31, 2011 and 2010.

See accompanying notes to financial statements.

F-2

Moggle, Inc.

(A Development Stage Company)

Statement of Changes in Stockholders’ Equity

For the Period February 11, 2008 (Date of Inception) to March 31, 2011

								Deficit
	Common							Accumulated
	Stock				Additional			During the
	Number of				Paid-In			Development
	Shares		Amount		Capital			Stage			Total

Issuance of initial 19,000,000 shares on February 11, 2008		19,000,000	$	1,900	$	17,100		$	-		$	19,000
Issuance of shares of common stock		13,788,276		1,379		483,681			-			485,060
Exercise of options		2,250,000		225		89,775			-			90,000
Exercise of warrants		250,000		25		9,975			-			10,000
Fair value of employee stock option grants		-		-		404,292			-			404,292
Fair value of non-employee stock option/warrant grants		-		-		108,777			-			108,777
Net loss		-		-		-			(983,886	)		(983,886	)

Balance, December 31, 2008		35,288,276		3,529		1,113,600			(983,886	)		133,243

Exercise of warrants		4,000,000		400		159,600			-			160,000
Exercise of options		2,750,000		275		109,725			-			110,000
Issuance of shares of common stock		600,000		60		599,940			-			600,000
Stock issuance costs		-		-		(65,000	)		-			(65,000	)
Fair value of common stock issued for services		1,180,427		118		1,280,309			-			1,280,427
Fair value of non-employee stock option/warrant grants		-		-		48,604			-			48,604
Net loss		-		-		-			(2,236,476	)		(2,236,476	)

Balance, December 31, 2009		43,818,703		4,382		3,246,778			(3,220,362	)		30,798

Exercise of warrants		6,892,858		689		275,025			-			275,714
Exercise of options		4,000,000		400		159,600			-			160,000
Issuance of shares of common stock		10,173,750		1,017		2,324,724			-			2,325,741
Fair value of common stock issued for services		111,111		11		99,989			-			100,000
Conversion of notes payable to common stock		375,000		38		74,962			-			75,000
Fair value of stock option grants		-		-		41,715			-			41,715
Net loss		-		-		-			(1,489,190	)		(1,489,190	)

Balance, December 31, 2010 (audited)		65,371,422		6,537		6,222,793			(4,709,552	)		1,519,778

Fair value of revalued warrants		-		-		88,601			-			88,601
Fair value of stock option grants		-		-		46,125			-			46,125
Net loss		-		-		-			(721,504	)		(721,504	)

Balance March 31, 2011 (unaudited)		65,371,422		6,537		6,357,519			(5,431,056	)		933,000

See accompanying notes to financial statements.

F-3

Moggle, Inc.

(A Development Stage Company)

Statements of Cash Flows

For the Period February 11, 2008 (Date of Inception) to March 31, 2011

And For the Three Months Ended March 31, 2011 and 2010

(Unaudited)

				Three Months			Three Months
	Cumulative			Ended			Ended
	Since			March 31,			March 31,
	Inception			2011			2010
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(5,431,056	)	$	(721,504	)	$	(188,200	)
Adjustments to reconcile net loss to net cash
used in operating activities
Fair value of warrants issued in exchange for services		88,601			88,601			-
Fair value of options issued in exchange for services		649,514			46,125			35,980
Fair value of stock issued in exchange for services		1,380,427			-			-
Amortization of deferred costs		78,243			-			-
Accretion of discount on notes payable		322,500			-			-
Depreciation		3,892			649			279
Provision for bad debt		42,768			-			-
Increase in assets
Accounts receivable		(326	)		(326	)		-
Other receivable		(42,768	)		-			-
Prepaid expenses		(17,647	)		5,294			-
Deposits		(2,667	)		-			-
Increase in liabilities
Accounts payable and accrued expenses		103,650			13,635			(24,998	)

Net cash used in operating activities		(2,824,869	)		(567,526	)		(176,939	)

CASH FLOWS FROM INVESTING ACTIVITIES
Puchase of equipment		(12,980	)		-			-

Net cash used in investing activities		(12,980	)		-			-

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from note payable - stockholders		247,500			-			20,000
Repayment of note payable - stockholders		(247,500	)		-			-
Proceeds from notes payable		75,000			-			-
Proceeds from issuance of common stock		3,029,057			-			-
Proceeds from exercise of options		360,000			-			75,714
Proceeds from exercise of warrants		445,714			-			40,000
Stock issuance costs		(65,000	)		-			-

Net cash provided by financing activities		3,844,771			-			135,714

NET INCREASE IN CASH AND
CASH EQUIVALENTS		1,006,922			(567,526	)		(41,225	)

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD		-			1,574,448			44,710

CASH AND CASH EQUIVALENTS - END OF PERIOD	$	1,006,922		$	1,006,922		$	3,485


SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING ACTIVITIES:

Fair value of common stock issued as discount for notes payable	$	400,744		$	-		$	-

Conversion of notes payable into common stock	$	75,000		$	-		$	-

See accompanying notes to financial statements.

F-4

Moggle, Inc.

(A Development Stage Company)

Notes to Financial Statements

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of the Business

The Company is a development stage enterprise incorporated in the state of Delaware on February 11, 2008. Since inception, the Company has concentrated its efforts on developing a business plan which was designed to allow it to create the massive multiplayer online gaming platform (the “Platform”) and massive multiplayer online games (“MMOGs”) for use on its Platform. Those activities included, but were not limited to, securing initial capital in order to fund the development of a demonstration model for portions of the Platform and working capital, securing a board of directors, management personnel and consultants who the Company believes will assist in developing the Platform and meet the business goals, conducting market research regarding the MMOG industry and the Platform and planned MMOGs, and other pre-marketing activities. Recently, in light of the Company’s belief that increased market interest towards the security aspects of online gaming and social networking have emerged, the Company has refocused its efforts towards delivering a platform technology designed to manage the under 17 age group’s online experience in a secure manner. The Company is attempting to develop and introduce to the marketplace over the next 12 months two U17 security management products: Virtual Piggy and Parent Match.

Virtual Piggy will be designed to provide an online Piggy Bank security service that allows parents to setup and control their children’s spending online. Parents and guardians will be able to determine who is allowed to contribute to their child’s account as well as providing notification mechanisms back to the contributors when the funds are spent. The parent can establish how much a child can spend in a single transaction and how much they can spend over time. The Virtual Piggy service tracks all spending and the parent can receive alerts and reports on spending patterns. A third-party site would prompt a child to enter their VirtualPiggy ID – when they attempt to make a transaction. This ID along with category, pricing and descriptive information about the purchase would be sent to the VirtualPiggy webservice. Based on the rules set out by the parent, VirtualPiggy would send back a Yes/No signal to the requesting service and either allow or prohibit the transaction.

ParentMatch, and its companion product, ParentPlayback, will be designed to provide the parent/guardian with a higher level of control than is currently provided by ‘nanny’ type services. In addition the ID follows the child whenever they are on a computer as opposed to traditional controls which are resident on a PC by PC basis. ParentMatch provides filtering for the parent to be able to control such areas as (i) sites a child may access; (ii) types of content they may view and (iii) who they can interact with online. ParentPlayback will provide the parent with a video transcript of their child’s online session. Since inception, substantially all of the efforts of the Company have been developing technologies for multiplayer online role playing games and the Virtual Piggy, ParentMatch and ParentPlayback platforms. The Company is in the development stage of raising capital, financial planning, establishing sources of supply, and acquiring property and equipment. The Company anticipates establishing global markets for its technologies.

Basis of Presentation

The financial statements are presented in accordance with Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) 915 for development stage entities. The accompanying unaudited financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The financial statements should be read in conjunction with the financial statements and notes included in the Company’s Annual Report on form 10-K for the year ended December 31, 2010 as filed with the Securities and Exchange Commission. Operating results for the three months ended March 31, 20110 are not necessarily indicative of the results that may be expected for the year ended December 31, 2011.

F-5

Moggle, Inc.

(A Development Stage Company)

Notes to Financial Statements

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 revenues and expenses during the reporting period. Actual results could differ from these estimates.

Comprehensive Income

The Company follows FASB ASC 220 in reporting comprehensive income. Comprehensive income is a more inclusive financial reporting methodology that includes disclosure of certain financial information that historically has not been recognized in the calculation of net income. Since the Company has no items of other comprehensive income (loss), comprehensive income (loss) is equal to net income (loss).

Fair Value of Financial Instruments

The Company’s financial instruments consist of cash, accounts receivable and accounts payable. The carrying value of cash, accounts receivable and accounts payable approximate fair value, because of their short maturity.

Concentration of Credit Risk Involving Cash

The Company may have deposits with a financial institution which at times exceed Federal Depository Insurance coverage of $250,000.

Cash and Cash Equivalents

For purposes of reporting cash flows, the Company considers all cash accounts, which are not subject to withdrawal restrictions or penalties, and certificates of deposit and commercial paper with original maturities of 90 days or less to be cash or cash equivalents.

Revenue Recognition

In accordance with Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) No. 104, Revenue Recognition (Codified in FASB ASC 605), the Company will recognize revenue when (i) persuasive evidence of a customer or distributor arrangement exists or acceptance occurs, (ii) a retailer, distributor or wholesaler receives the goods, (iii) the price is fixed or determinable, and (iv) collectibility of the sales revenues is reasonably assured. Subject to these criteria, the Company will generally recognize revenue from Virtual Piggy and Virtual Parent at the time of the sale of the associated product and will recognize revenue from the sale of role playing games when shipped.

Income Taxes

The Company follows FASB ASC 740 when accounting for income taxes, which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually for temporary differences between the financial statements and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities. Tax years from 2008 through 2010 remain subject to examination by major tax jurisdictions.

Loss Per Share

The Company follows FASB ASC 260 when reporting Earnings Per Share resulting in the presentation of basic and diluted earnings per share. Because the Company reported a net loss for three months ended March 31, 2011 and 2010, common stock equivalents, including stock options and warrants were anti-dilutive; therefore, the amounts reported for basic and dilutive loss per share were the same.

F-6

Moggle, Inc.

(A Development Stage Company)

Notes to Financial Statements

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Start-up Costs

In accordance with FASB ASC 720, start-up costs are expensed as incurred.

Research and Development Costs

In accordance with FASB ASC 730, research and development costs are expensed when incurred.

Recently Issued Accounting Pronouncements Not Yet Adopted

As of March 31, 2011, there are no recently issued accounting standards not yet adopted which would have a material effect on the Company’s financial statements.

Recently Adopted Accounting Pronouncements

In July 2010, the FASB issued ASU No. 2010-20, Receivables (Topic 310). This update requires new disclosures and enhances current disclosures about the allowance for credit losses and the credit quality of financing receivables. However, the following receivables are excluded from the scope of this amendment: receivables measured at fair value with changes included in earnings and receivables measured at lower of cost or market and trade receivables with contractual maturities of one year or less that arose from the sale of goods or services. This standard is effective for interim and annual periods ending on or after December 15, 2010. The Company adopted the disclosure requirements effective January 1, 2011.

In January 2010, FASB issued ASU No. 2010-06, Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements. This update provides amendments to ASC Topic 820 that provide disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The Company adopted the disclosure requirements effective January 1, 2011.

In December 2010, FASB issued ASU No. 2010-29, Business Combinations (Topic 805): Disclosure of Supplementary Pro Forma Information for Business Combinations. The amendments in this Update specify that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. The amendments also expand the supplemental pro forma disclosures to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The amendments in this Update are effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. The Company will adopt the disclosure requirements for any business combinations in 2011.

NOTE 2 – GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred significant losses and experienced negative cash flow from operations during the development stage. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The Company is in the development stage at March 31, 2011. Successful completion of the Company’s development program and ultimately, the attainment of profitable operations is dependent upon future events, including obtaining adequate financing to fulfill its development activities and achieving a level of sales adequate to support the Company’s cost structure. However, there can be no assurances that the Company will be able to secure additional equity investment or achieve an adequate sales level.

F-7

Moggle, Inc.

(A Development Stage Company)

Notes to Financial Statements

NOTE 3 – NOTES PAYABLE

On February 3, 2010 the manager of corporate development loaned the Company $20,000 in return for a promissory note with an interest rate of 4.5% in the same amount. The promissory note was paid in full on April 19, 2010.

On May 20, 2010 the Company issued a promissory note to an investor in the amount of $22,500 with an interest rate of 6% in return for a loan of the same amount. The promissory note also required that the Company issue 33,750 shares of the Company’s common stock to the investor. The fair value of the common stock was $30,228 and was recorded as a discount to the note payable, with the excess recorded as a deferred cost, in accordance with FASB ASC 835-30-25 Interest. The note was repaid on August 12, 2010 and interest was fully accreted on the note payable in the amount of $22,500 as of August 12, 2010 and the deferred costs of $7,728 were fully amortized as of August 12, 2010.

On June 30, 2010 the Company issued a promissory note to a third party in the amount of $100,000 with an interest rate of 6% in return for a loan of the same amount. The promissory note also required that the Company issue 150,000 shares of the Company’s common stock to the third party. The fair value of the common stock was $146,495 and was recorded as a discount to the note payable, with the excess recorded as a deferred cost, in accordance with FASB ASC 835-30-25 Interest. The note was repaid on August 18, 2010 and interest was accreted on the note payable in the amount of $100,000 as of August 18, 2010 and the deferred costs of $46,495 were fully amortized as of August 18, 2010.

On July 16, 2010 the Company issued a promissory note to a third party in the amount of $25,000 with an interest rate of 6% in return for a loan of the same amount. The promissory note also required that the Company issue 37,500 shares of the Company’s common stock to the third party. The fair value of the common stock was $33,681 and was recorded as a discount to the note payable, with the excess recorded as a deferred cost, in accordance with FASB ASC 835-30-25 Interest. The note was assumed by a third party who, on November 1, 2010, converted the note payable into 125,000 shares of common stock at $.20 per share, fair value. Interest was fully accreted on the note payable in the amount of $25,000 as of November 1, 2010 and the deferred costs of $8,681 were fully amortized as of November 1, 2010.

On August 4, 2010 the Company issued a promissory note to a third party in the amount of $50,000 with an interest rate of 6% in return for a loan of the same amount. The promissory note also required that the Company issue 75,000 shares of the Company’s common stock to the third party. The fair value of the common stock was $54,509 and was recorded as a discount to the note payable, with the excess recorded as a deferred cost, in accordance with FASB ASC 835-30-25 Interest The note was assumed by a third party who, on November 1, 2010, converted the note payable into 250,000 shares of common stock at $.20 per share, fair value. Interest was fully accreted on the note payable in the amount of $50,000 as of November 1, 2010 and the deferred costs of $4,509 were fully amortized as of November 1, 2010.

On August 6, 2010 the Company issued a promissory note to a third party in the amount of $125,000 with an interest rate of 6% in return for a loan of the same amount. The promissory note also required that the Company issue 187,500 shares of the Company’s common stock to the third party. The fair value of the common stock was $135,831 and was recorded as a discount to the note payable, with the excess recorded as a deferred cost, in accordance with FASB ASC 835-30-25 Interest. The note was repaid on August 18, 2010. Interest was fully accreted on the note payable in the amount of $125,000 as of August 18, 2010 and the deferred costs of $10,831 were fully amortized as of August 18, 2010.

F-8

Moggle, Inc.

(A Development Stage Company)

Notes to Financial Statements

NOTE 4 - INCOME TAXES

Income tax expense was $0 for the three months ended March 31, 2011 and 2010.

As of January 1, 2011, the Company had no unrecognized tax benefits, and accordingly, we have not recognized interest or penalties during 2011 related to unrecognized tax benefits. There has been no change in unrecognized tax benefits during the three months ended March 31, 2011, and there was no accrual for uncertain tax positions as of March 31, 2011. Tax years from 2008 through 2010 remain subject to examination by major tax jurisdictions.

There is no income tax benefit for the losses for the three months ended March 31, 2011 and 2010, since management has determined that the realization of the net tax deferred asset is not assured and has created a valuation allowance for the entire amount of such benefits.

NOTE 5 – STOCKHOLDERS’ EQUITY

In February 2008, the Company issued 19,000,000 founders shares at $.001 per share or $19,000.

In February 2008, the Company commenced a private placement of up to 7 million units at a price of $.035 per unit to accredited investors. One unit consists of one share of the Company’s common stock and two warrants. Each warrant entitles the holder to purchase one additional share of common stock at a price of $.04 per share and is exercisable for a three year period. From February through June 2008, 7,142,858 units were sold, raising $250,000 in proceeds and resulting in 14,285,716 warrants being issued.

On May 8, 2008, 500,000 options were exercised, which raised proceeds $20,000. During the three months ended September 30, 2008, 1,750,000 options were exercised, which raised proceeds of $70,000.

On May 27, 2008, the Company commenced a private placement of up to 6 million units at a price of $.035 per unit to accredited investors. One unit consists of one share of the Company’s common stock and one warrant. Ten of these warrants entitle the holder to purchase one additional share of common stock at a price of $.75 per share and is exercisable for a three year period. During the three months ended June 30, 2008, 6,142,858 units were sold with warrants exercisable at a price of $.75 per share, raising $215,000 in proceeds and resulting in 614,286 warrants being issued. During the three months ended September 30, 2008 500,000 units were sold with warrants at a price of $.75, raising $17,500 and resulting in 50,000 warrants being issued.

During the three months ended September 30, 2008, the Company sold 2,560 shares, which raised proceeds of $2,560. The Company filed a registration statement to register 2,560 shares of the Company, which became effective on September 3, 2008.

During the three months ended September 30, 2008, 250,000 warrants were exercised, which raised proceeds of $10,000.

During the three months ended March 31, 2009, 1 million options were exercised, which raised proceeds of $40,000.

During the three months ended March 31, 2009, the Company issued 100,000 shares of common stock, which were valued at the fair market value of $200,000 for consulting services.

During the three months ended June 30, 2009, the Company sold 400,000 shares, which raised proceeds of $348,000, net of commissions of $52,000.

During the three months ended September 30, 2009, 1 million warrants and 1.5 million options were exercised, which raised proceeds of $100,000. In addition, the Company sold 100,000 shares, which raised proceeds of $87,000, net of commissions of $13,000.

F-9

Moggle, Inc.

(A Development Stage Company)

Notes to Financial Statements

NOTE 5 – STOCKHOLDERS’ EQUITY (Continued)

On October 9, 2009, the Company was listed on the German stock exchange. As a result the Company was required to issue 1,080,427 shares of common stock under a consulting agreement. These shares were valued at the fair market value of $1,080,427.

On October 21, 2009, the Company sold 100,000 shares to an investor, which raised proceeds of $100,000.

On October 22, 2009, an investor exercised 1,000,000 warrants which raised proceeds of $40,000.

On December 2, 2009, two investors exercised 500,000 warrants each (total of 1,000,000 warrants), which raised total proceeds of $40,000.

On December 10, 2009 and December 31, 2009 an investor exercised 250,000 options and 1,000,000 warrants respectively, which raised total proceeds of $50,000.

On January 5, 2010 an investor exercised 1,000,000 options, which raised proceeds of $40,000.

On February 22, 2010 an investor exercised 892,858 warrants, which raised proceeds of $35,714.

On March 5, 2010 an investor exercised 500,000 warrants, which raised proceeds of $20,000.

On March 8, 2010 an investor exercised 500,000 warrants, which raised proceeds of $20,000.

On April 13, 2010 an investor exercised 1,000,000 warrants, which raised proceeds of $40,000.

On April 16, 2010 an investor exercised 1,500,000 warrants, which raised proceeds of $60,000.

In August 2010, the Company retired 400,000 non-employee options with exercise prices of $.04 in exchange for the issuance of 65,000 shares to the option holders. No additional compensation expense was recorded as the fair value of the options exceeded the value of the stock that was issued.

On August 17, 2010, the Company sold 2,000,000 shares of common stock to investors, which raised proceeds of $400,000.

During November and December 2010, the Company sold 7,625,000 shares of common stock to investors, which raised proceeds of $1,525,000.

On November 19, 2010, the Company issued 111,111 shares of common stock , which were valued at the fair market value of $100,000, for consulting services.

On December 2, 2010, an investor exercised 3 million options, which raised proceeds of $120,000.

In December 2010, two investors exercised a total of 2.5 million warrants, which raised proceeds of $100,000.

F-10

Moggle, Inc.

(A Development Stage Company)

Notes to Financial Statements

NOTE 6 – STOCK OPTIONS AND WARRANTS

During 2008, the Board of Directors (“Board”) of the Company adopted an Equity Incentive Plan (“Plan”). Under the Plan, the Company is authorized to grant options to purchase up to 25,000,000 shares of common stock to any officer, other employee or director of, or any consultant or other independent contractor who provides services to the Company. The Plan is intended to permit stock options granted to employees under the Plan to qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended (“Incentive Stock Options”). All options granted under the Plan, which are not intended to qualify as Incentive Stock Options are deemed to be non-qualified options (“Non-Statutory Stock Options”). As of December 31, 2010, 7,445,000 options have been issued and are unexercised, and 8,555,000 options that are available to be issued under the Plan. Of the 7,445,000 options that have been issued and are unexercised, 1,100,000 options were granted to employees and 6,345,000 options were granted to non employees.

The Plan is administered by the Board, which determines the persons to whom awards will be granted, the number of awards to be granted and the specific terms of each grant, including the vesting thereof, subject to the terms of the Plan.

In connection with Incentive Stock Options, the exercise price of each option may not be less than 100% of the fair market value of the common stock on the date of the grant (or 110% of the fair market value in the case of a grantee holding more than 10% of the outstanding stock of the Company).

Volatility in all instances presented is the Company’s estimate of volatility that is based on the volatility of other public companies that are in closely related industries to Moggle, Inc.

During 2008, the Company issued the Secretary of the Company 500,000 options, which were valued at $8,825 and expensed immediately. The Company uses the Black-Scholes option pricing model to calculate the grant-date fair value of the options, with the following assumptions: no dividend yield, expected volatility of 51.8%, risk free interest rate of 2.5% and expected option life of 5 years. The options expire five years from the date of issuance.

During 2008, the Company entered into an employment agreement with its President and Chief Executive Officer, whereby, the President and Chief Executive Officer was issued 1,000,000 options, which were valued at $71,871 and expensed immediately. The Company uses the Black-Scholes option pricing model to calculate the grant-date fair value of the options, with the following assumptions: no dividend yield, expected volatility of 51.8%, risk free interest rate of 3.3% and expected option life of 5 years. The options expire five years from the date of issuance.

During 2008, the Company entered into an employment agreement with its Director of Corporate Development whereby, the Director of Corporate Development was issued 2,750,000 options, which were valued at $197,645 and expensed immediately. The Company uses the Black-Scholes option pricing model to calculate the grant-date fair value of the options, with the following assumptions: no dividend yield, expected volatility of 51.8%, risk free interest rate of 3.3% and expected option life of 5 years. The options expire five years from the date of issuance.

During 2008, the Company entered into an agreement with a member of the Company’s Board of Directors whereby, the member of the Board of Directors was issued 1,250,000 options, which were valued at $89,838 and expensed immediately. The Company uses the Black-Scholes option pricing model to calculate the grant-date fair value of the options, with the following assumptions: no dividend yield, expected volatility of 51.8%, risk free interest rate of 3.3% and expected option life of 5 years. The options expire five years from the date of issuance.

F-11

Moggle, Inc.

(A Development Stage Company)

Notes to Financial Statements

NOTE 6 – STOCK OPTIONS AND WARRANTS (Continued)

On June 23, 2008, 500,000 options were issued to a member of the Board of Directors, which were valued at $36,113 and expensed immediately. The Company uses the Black-Scholes option pricing model to calculate the grant-date fair value of the options, with the following assumptions: no dividend yield, expected volatility of 51.8%, risk free interest rate of 3.7% and expected option life of 5 years. The options expire five years from the date of issuance.

On March 12, 2010 the Company entered into a three year employment agreement with the Senior Vice President of Marketing and Licensing for €150,000 annually. The agreement also includes an option to purchase 2 million warrants at $1.00 per share. These options were valued at $1,829,756. The Company uses the Black-Scholes option pricing model to calculate the grant-date fair value of the options, with the following assumptions: no dividend yield, expected volatility of 41.6%, risk free interest rate of 2.4% and expected option life of five years. The options expire five years from the date of issuance. Options granted under the agreements are expensed when the related service is provided. In December 2010, this employment agreement was terminated, the options were terminated and any expense relative to the options that was previously recorded was reversed.

During November 2010, the Company issued two directors options to purchase an aggregate of 600,000 shares of the Company’s common stock at $.90 per share. These options have been valued at $5,207. The Company uses the Black-Scholes option pricing model to calculate the grant-date fair value of the options, with the following assumptions: no dividend yield, expected volatility of 40.8%, risk free interest rate of 1.5% and expected option life of five years. The options expire five years from the date of issuance. Options granted are expensed when the service is provided.

In 2008, the Company issued 14,950,002 warrants as part of the units included in the private placements, which were to expire three years from the date of issuance. The expiration date for unexpired and unexercised warrants was extended on January 24, 2011 to six years from the date of issuance. As of January 24, 2011, there were two directors that had in total, warrants to purchase 3,142,858 shares of the Company’s common stock at $.04 per share and warrants to purchase 100,000 shares of the Company’s common stock at $.75 per share. The warrants to purchase 3,242,858 shares of the Company’s common stock were reclassified from non-employee warrants to incentive stock warrants, because the recipients had become directors subsequent to the date of original issuance. These warrants were revalued and the incremental cost charged to expense was $16,733. There were also seven consultants that had in total warrants to purchase 564,286 shares of the Company’s common stock at $.75 per share. These warrants were revalued and the incremental cost charged to expense was $71,868. The Company uses the Black-Scholes option pricing model to calculate the grant-date fair value of the warrants, with the following assumptions: no dividend yield, expected volatility of 32.3%, risk free interest rate of 1.05% and expected warrant life of 3 to 3.5 years. The warrants expire 6 years from date of original issuance. The incremental fair value of the warrants was expensed immediately.

For the three months ended March 31, 2011 and 2010, the Company expensed $16,733 and $31,152 relative to employee options/warrants granted. As of March 31, 2011, there was no unrecognized compensation expense related to non-vested market-based share awards.

F-12

Moggle, Inc.

(A Development Stage Company)

Notes to Financial Statements

NOTE 6 – STOCK OPTIONS AND WARRANTS (Continued)

A summary of incentive stock option/warrant transactions for employees from February 11, 2008 (date of inception) to March 31, 2011 is as follows:

						Weighted Average
	Option/Warrants			Exercise		Exercise
	Shares			Price		Price
Outstanding, February 11, 2008 (Date of Inception)		-		$	-	$	-

Granted		6,000,000			0.04		0.04
Exercised		(1,750,000	)		0.04		0.04
Expired		-			-		-

Outstanding, December 31, 2008		4,250,000		$	0.04	$	0.04

Granted		-			-		-
Exercised		(2,750,000	)		0.04		0.04
Expired		-			-		-

Outstanding, December 31, 2009		1,500,000		$	0.04	$	0.04

Granted		2,600,000		.90 to 1.00			0.83
Exercised		(1,000,000	)		0.04		0.04
Terminated		(2,000,000	)		1.00		1.00

Outstanding, December 31, 2010		1,100,000		$	.04 to .90	$	0.51

Granted		-		$	-	$	-
Reclassified		3,242,858		.04 to .75			0.05
Exercised		-			-		-
Expired		-			-		-

Outstanding, March 31, 2011		4,342,858		$	.04 to .90	$	0.18

Exercisable, March 31, 2011		4,342,858		$	.04 to $.90	$	0.18

Weighted Average Remaining Life,
Exercisable, March 31, 2011 (years)		3.1

On August 18, 2009, 100,000 options were issued to a consultant, which were valued at $30,689. Another consultant also received 25,000 options on August 18, 2009, which were valued at $7,672. The Company uses the Black-Scholes option pricing model to calculate the grant-date fair value of the options, with the following assumptions: no dividend yield, expected volatility of 58.3%, risk free interest rate of 2.4% and expected option life of 5 years. The options expire five years from the date of issuance. Options granted under the agreements are expensed when the related service or product is provided.

F-13

Moggle, Inc.

(A Development Stage Company)

Notes to Financial Statements

NOTE 6 – STOCK OPTIONS AND WARRANTS (Continued)

On August 20, 2010 the Company issued the Chief Financial Officer an option to purchase 250,000 shares of the Company’s common stock at $.75 per share. These options have been valued at $2,012. The Company uses the Black-Scholes option pricing model to calculate the grant-date fair value of the options, with the following assumptions: no dividend yield, expected volatility of 36.7%, risk free interest rate of 1.5% and expected option life of five years. The options expire five years from the date of issuance. Options granted are expensed when the service is provided.

On September 13, 2010 the Company issued the Chief Executive Officer an option to purchase 250,000 shares of the Company’s common stock at $.75 per share. These options have been valued at $1,676. The Company uses the Black-Scholes option pricing model to calculate the grant-date fair value of the options, with the following assumptions: no dividend yield, expected volatility of 35.2%, risk free interest rate of 1.5% and expected option life of five years. The options expire five years from the date of issuance. Options granted are expensed when the service is provided.

On September 13, 2010 the Company issued a consultant an option to purchase 100,000 shares of the Company’s common stock at $.75 per share. These options have been valued at $670. The Company uses the Black-Scholes option pricing model to calculate the grant-date fair value of the options, with the following assumptions: no dividend yield, expected volatility of 35.2%, risk free interest rate of 1.5% and expected option life of five years. The options expire five years from the date of issuance. Options granted are expensed when the service is provided.

During October and November 2010, the Company issued various consultant option to purchase an aggregate of1,020,000 shares of the Company’s common stock at $.75, $.78 and $.90 per share. These options have been valued at $7,397. The Company uses the Black-Scholes option pricing model to calculate the grant-date fair value of the options, with the following assumptions: no dividend yield, expected volatility of 34.2% to 40.8%, risk free interest rate of 1.1% to 1.5% and expected option life of five years. The options expire five years from the date of issuance. Options granted are expensed when the service is provided.

On January 24, 2011 the Company issued four consultants options to purchase a total of 230,000 shares of the Company’s common stock at $1.00 per share. These options have been valued at $46,019. The Company uses the Black-Scholes option pricing model to calculate the grant-date fair value of the options, with the following assumptions: no dividend yield, expected volatility of 33.5%, risk free interest rate of 2.03% and expected option life of five years. The options expire five years from the date of issuance. Options granted are expensed when the service is provided.

For the three months ended March 31, 2011 and 2010, the Company expensed $46,125 and $4,829 relative to non employee options granted. As of March 31, 2011, there was $3,041 of unrecognized compensation expense related to non-vested market-based share awards.

F-14

Moggle, Inc.

(A Development Stage Company)

Notes to Financial Statements

NOTE 6 – STOCK OPTIONS AND WARRANTS (Continued)

The following table summarizes non-employee stock option/warrant of the Company from February 11, 2008 (date of inception) to March 31, 2011 as follows:

						Weighted Average
	Option/Warrant			Exercise		Exercise
	Shares			Price		Price
Outstanding, February 11, 2008 (Date of Inception		-		$	-	$	-

Granted		23,450,002		.04 to .75			0.07
Exercised		(750,000	)		0.04		0.04
Expired		-			-		-

Outstanding, December 31, 2008		22,700,002		$	.04 to $.75	$	0.07

Granted		125,000			2.30		0.01
Exercised		(4,000,000	)		0.04		0.04
Expired		-			-		-

Outstanding, December 31, 2009		18,825,002		$	0.04 to $2.30	$	0.09

Granted		1,620,000		.75 to .90			0.13
Exercised		(9,892,858	)		0.04		0.04
Retired		(400,000	)		0.04		0.04

Outstanding, December 31, 2010		10,152,144		$	0.04 to $2.30	$	0.25

Granted		230,000		$	1.00	$	0.03
Reclassified		(3,242,858	)	.04 to .75		$	.04 to $.75
Exercised		-			-		-
Expired		-			-		-

Outstanding, March 31, 2011		7,139,286		$	.04 to $2.30	$	0.36

Exercisable, March 31, 2011		7,139,286		$	0.04 to $2.30	$	0.36

Weighted Average Remaining Life,
Exercisable, March 31, 2011 (years)		2.7

NOTE 7 – OPERATING LEASES

For the three months ended March 31, 2011 and 2010 total rent expense under leases amounted to $8,603 and $8,530. At March 31, 2011, the Company was obligated under various non-cancelable operating lease arrangements for offices as follows:

2011	$	24,531
2012		10,932

	$	35,463

F-15

Moggle, Inc.

(A Development Stage Company)

Notes to Financial Statements

NOTE 8 – RELATED PARTY TRANSACTIONS

From inception through December 1, 2010, the Company has utilized offices leased by affiliates of certain of the Company’s board members without charge.

During the three months ended March 31, 2011 and 2010, the former manager of corporate development of the Company advanced expenses on behalf of the Company in connection with research of the Company’s business plans and the implementation of the Company’s business plans. Expenses totaling $44,764 and $11,903 were incurred and reimbursed during the three months ended March 31, 2011 and 2010.

NOTE 9 – SUBSEQUENT EVENTS

On May 5, 2011, the Company entered into a consulting agreement, which is to be effective April 15, 2011, expiring on October 15, 2012. Under the terms of the agreement the Company shall pay the consultant $15,000 per month and provide additional compensation as follows:

On the earlier of (i) six months after the date of the agreement and (ii) the date on which the Company has entered into a total of ten Merchant Accounts as the direct result of the services of Consultant, provided that at least one of such Merchant Account is with a Major Name Merchant or Merchant Processor, consultant shall be entitled to purchase 2 million shares of common stock of the Company at a purchase price of $.20 per share. These options expire April 15, 2016.

On the earlier of (i) nine months after the date of the agreement and (ii) the date on which the Company has entered into a total of twenty Merchant Accounts as the direct result of the services of Consultant, provided that at least three of such Merchant Account are with Major Name Merchants or Merchant Processors, consultant shall be entitled to purchase 2 million shares of common stock of the Company at a purchase price of $.20 per share. These options expire April 15, 2016.

On the earlier of (i) twelve months after the date of the agreement and (ii) the date on which the Company has entered into a total of thirty Merchant Accounts as the direct result of the services of Consultant, provided that at least five of such Merchant Accounts are with Major Name Merchants or Merchant Processors, consultant shall be entitled to purchase 2 million shares of common stock of the Company at a purchase price of $.40 per share. These options expire April 15, 2016.

F-16

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS.

Cautionary Statements Regarding Forward-Looking Statements

This report contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements other than statements of historical facts included or incorporated by reference in this quarterly report on Form 10-Q, including without limitation, statements regarding our future financial position, business strategy, budgets, projected revenues, projected costs and plans and objective of management for future operations, are forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "will," "expects," "intends," "plans," "projects," "estimates," "anticipates," or "believes" or the negative thereof or any variation there on or similar terminology or expressions.

We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are not guarantees and are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially from our expectations include, but are not limited to: our ability to raise additional capital, the absence of any operating history or revenue, our ability to attract and retain qualified personnel, our dependence on third party developers who we cannot control, our ability to develop and introduce a new service to the market in a timely manner, market acceptance of our services, our limited experience in a relatively new industry, the ability to successfully develop licensing programs and generate business, rapid technological change in relevant markets, unexpected network interruptions or security breaches, changes in demand for current and future intellectual property rights, legislative, regulatory and competitive developments, intense competition with larger companies, general economic conditions, as well as other factors set forth under the caption "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2010 filed with the Securities and Exchange Commission, and “Item 2 — Management’s Discussions and Analysis of Financial Condition and Results of Operation” below.

All subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the foregoing. Except as required by law, we assume no duty to update or revise our forward-looking statements.

Overview

Moggle, Inc. (the “Company,” “we”, or “us”) was incorporated in Delaware on February 11, 2008 under the name Chimera International Group, Inc. On April 4, 2008, we amended our certificate of incorporation and changed our name to Moggle, Inc. We are a development stage company and have had limited business operations. For the period from inception through March 31, 2011, we have concentrated our efforts on developing a business plan which was initially focused on creating a massive multiplayer online gaming platform and massive multiplayer online games. We recently changed our business model to focus on the development of online security services.

We are a technology development company that delivers an online security platform, which currently is composed of three separate products (which we refer to herein as the “Platform”), designed for the management of the “Under 18” age group’s online experience. Our overarching mission is to deliver solutions to meet the exponential growth of the “Under 18” age group transacting in the global online market. Our Platform is designed to enable online businesses to interact with “tweens” or children between the ages of 8-14 in compliance with the Children’s Online Privacy Protection Act, which we refer to herein as “COPPA”, and other similar international children’s privacy laws.

Our Platform currently consists of three separate security management products targeted at the Under 18 market:

·	Virtual Piggy;

·	ParentMatch ParentPlayback; and

·	Age Verification Service.

Our Virtual Piggy product, which has just been launched in the market, enables online businesses to interact and transact with the “Under 18” market in a manner consistent with “COPPA” and other similar international children’s privacy laws. Virtual Piggy provides an online payment profile that allows parents to set up, monitor and control their children’s online spending. Parents can establish how much a child can spend in a single transaction, or over time, and also control the merchants with which the child can transact business. Parents also have the ability to set up approval rules and notification methods.

Our ParentMatch and Age Verification Services are currently under development and are designed to provide the parent/guardian with a higher level of control than is currently provided by ‘nanny’ type services. In addition, the web service ID will follow the child whenever he or she is on a computer, as opposed to traditional controls that are resident on a PC by PC basis.

Age Check will be a persistent software system and service designed to provide a verification mechanism for the age of a person online. The system and service will provide a rapid secure checking mechanism to determine a person’s age. The main purpose of this system and service is to determine whether setup information supplied by a person to gain access to a social network or other online site is correct.

Our Plan of Operation

A phased approach to the introduction of our Platform is planned. We expect that each module of the technology will be released as a web-service substantially in accordance with the schedule outlined below:

Technology	Patent(s) Filed	Design	Prototype	Full System	Market Introduction	Revenue
Virtual Piggy	Sept. 2009	Complete	Complete	Jan. 2011	Feb. 2011	1st Quarter 2011
Parent Match and Playback	Sept. 2009	In-Progress	In-Progress	June 2011	Sept. 2011	End-2011
Age Verification Service	Sept. 2009	In-Progress	Jun. 2011 Start	Jan. 2012	Mar. 2012	Mid-2012

As of the date of this report, we have completed the design and development of Virtual Piggy. We announced the release of Virtual Piggy in January 2011 and commenced marketing and distribution efforts in February 2011.

We expect to complete the design and development of ParentMatch and ParentPlayback during the second half of 2011. These technologies are currently in the design and prototyping phases, but we expect that they will be developed and released as a single application that provides both sets of functionality. Our plan is to market this technology to customers of our Virtual Piggy platform and the mobile market.

The last component of our solution is Age Verification Service. We expect to complete the design and development of Age Verification in 2012. This service is still in the design phase and, therefore, our commercialization strategy for this service is still in the preliminary stages and has yet to be finalized.

Our ability to execute on our current plan is dependent on raising approximately $3,000,000 of additional capital. In the event that we are unsuccessful in these efforts, we will utilize our cash to attempt to complete a limited demonstration model of our platform. The foregoing projected implementation plan was prepared by us in good faith based upon assumptions that we believe to be reasonable. No assurance can be given, however, regarding the attainability of the projections or the reliability of the assumptions on which they are based.

Strategic Outlook

We believe that the online gaming market and virtual goods market will continue to grow over the long term. Within the market, we intend to provide services to the online industry to allow them to transact with children in compliance with COPPA and similar international privacy laws. We believe that this particular opportunity is relatively untapped and expect to be a leading provider of online transactions for children.

Sustained spending on technology, our ability to raise additional financing, the continued growth of the online market, and compliance with regulatory and reporting requirements are all external conditions that may affect our ability to execute our business plan. In addition, the online payment industry is intensely competitive, and most participants have longer operating histories, significantly greater financial, technical, marketing, customer service and other resources, and greater name recognition. In addition, certain potential customers, particularly large organizations, may view our small size and limited financial resources as a negative even if they prefer our offering to those of our competitors.

Our primary strategic objective over the next 12-24 months is to fully develop and implement our Platform and generate revenue that is sufficient to cover our operating expenses and support additional growth over the next several years. We plan to achieve this objective by completing the development and implementation of the Platform in a timely and efficient manner and supplementing the roll-out of each phase of our service with an extensive, layered marketing approach. As our service grows, we intend to hire additional information technology professionals to maintain our product offerings and develop new products to increase our market share.

We believe that our near-term success will depend particularly on our ability to develop customer awareness and confidence in our service. Since we have limited capital resources, we will need to closely manage our expenses and conserve our cash by continually monitoring any increase in expenses and reducing or eliminating unnecessary expenditures. Our prospects must be considered in light of the risks, expenses and difficulties encountered by companies at an early stage of development, particularly given that we operate in new and rapidly evolving markets, that we have limited financial resources, and face an uncertain economic environment. We may not be successful in addressing such risks and difficulties.

Results of Operations

Comparison of the Three Months Ended March 31, 2011 and 2010

The following discussion analyzes our results of operations for the three months ended March 31, 2011 and 2010. The following information should be considered together with our financial statements for such periods and the accompanying notes thereto.

Net Loss for Three Months Ended March 31, 2011 and 2010

We incurred a net loss of $721,504 for the three months ended March 31, 2011 as compared to a net loss of $188,200 for the three months ended March 31, 2010 on $326 and $0 of net revenue for the three months ended March 31, 2011 and 2010, respectively. The following is a summary of the components of such losses:

	Three Months			Three Months
	Ended			Ended
	March 31,			March 31,
	2011			2010

Revenues	$	326		$	-

General and administrative		125,945			14,483

Consulting		328,095			43,175

Payroll		16,733			31,152

Professional fees		103,449			32,070

Research and development		77,726			-

Travel		70,927			67,321

Interest income		(1,045	)		(1	)

NET LOSS	$	721,504		$	188,200

Basic and Diluted Net Loss Per Share	$	0.01		$	0.00

Basic and Diluted Weighted Average
Outstanding Shares		65,371,422			45,449,656

Compensation Expense of Stock Options	$	134,726		$	35,980

Revenue: We had minimal revenue of $326 and $0 for the three months ended March 31, 2011 and 2010, respectively. During such time we devoted our efforts to formalizing our business plan and raising initial capital to commence our operations. During the three months ended March 31, 2011, we began testing our Virtual Piggy platform and were able to realize minimal revenues.

Expenses: The following amounts represent the most significant components of expenses for the three months ended March 31, 2011 and 2010:

a) General and Administrative expenses: For the three months ended March 31, 2011 general and administrative expenses were $125,945, an increase of $111,462 from $14,483 for the three months ended March 31, 2010. The increase resulted from approximate increases in insurance of $9,600, board fees of $25,000, office expenses of $10,500, and miscellaneous expenses of $13,000. These increases were the result of establishing the infrastructure of a growing organization. In addition, marketing expenses increased approximately $52,000 in connection with the introduction of Virtual Piggy to the marketplace, which included presenting at an industry event in New York City.

b) Consulting Expense: For the three months ended March 31, 2011, consulting expenses were $328,095, an increase of $284,920 from $43,175 for the three months ended March 31, 2010. This increase resulted from an increase in payments to consultants related to marketing and infrastructure, as well as stock based compensation related to consultant agreements.

c) Payroll Expenses: During the three months ended March 31, 2011 we incurred $16,733 of compensation expenses as compared to $31,152 for the three months ended March 31, 2010, a decrease of $14,419. The Company extended the expiration date of unexpired, unexercised warrants that were initially issued in 2008 for three years from the initial expiration date. This required that the warrants be revalued and any incremental increase in fair market value be expensed. The decrease of $14,419 was the result of compensation expense related to the fair market value of options and grants to purchase shares of our common stock during the three months ended March 31, 2010 exceeding the incremental increase in the fair market value of the revalued warrants.

d) Professional Fees: During the three months ended March 31, 2011, we incurred $103,449 of professional fees as compared to $32,070 for the three months ended March 31, 2010, an increase of $71,379. The professional fees were for legal, accounting, and other professional fees, as well as retaining in-house counsel.

e) Research and Development: During the three months ended March 31, 2011, we incurred $77,726 of research and development expenses as compared to $0 for the three months ended March 31, 2010, an increase of $77,726. The increase was due to the development costs of our Virtual Piggy, ParentMatch, and ParentPlayback applications.

f) Travel: For the three months ended March 31, 2011, travel expenses were $70,927, an increase of $3,606 from $67,321 for the three months ended March 31, 2010. The expenses incurred were primarily associated with corporate development and capital raising activities.

Liquidity and Capital Resources

As of March 31, 2011, we had cash on hand of $1,006,922.

Net cash used in operating activities for the three months ended March 31, 2011 increased $390,587 to $567,526 from $176,939 for the three months ended March 31, 2010 as a result of expanded operations and establishing the infrastructure of the Company.

Net cash used in investing activities was $0 for the three months ended March 31, 2011 and 2010.

Net cash provided by financing activities was $0 for the three months ended March 31, 2011, as compared to $135,714 for the three months ended March 31, 2010. The cash provided during the three months ended March 31, 2010 consisted of proceeds from the issuance of debt securities and the exercise of options and warrants.

The following summarizes our cash flows for the three months ended March 31, 2011 and 2010:

	Three Months			Three Months
	Ended			Ended
	March 31,			March 31,
	2011			2010

Net loss	$	(721,504	)	$	(188,200	)
Adjustments to reconcile net loss to net cash
used in operating activities

Compensation expense of stock and stock options		134,726			35,980

Depreciation		649			279

Accounts receivable		(326	)		-

Prepaid expenses		5,294			-

Accounts payable and accrued expenses		13,635			(24,998	)

Net cash used in operating activities		(567,526	)		(176,939	)

Cash flows from Financing Activities

Proceeds from notes payable, net		-			20,000

Proceeds from exercise of options/warrants		-			115,714

Net cash provided by financing activities		-			135,714

Net decrease in cash and cash equivalents	$	(567,526	)	$	(41,225	)

As we have not generated any meaningful revenues, since our inception we have financed our operations through public and private offerings of debt and equity securities. We do not currently maintain a line of credit or term loan with any commercial bank or other financial institution. The following sets forth our primary sources of capital during the previous two years.

In September 2009, we commenced a second public offering of 12,000,000 shares of our common stock at $1.00 per share. However, we raised only $100,000 of proceeds in this offering through the sale of 100,000 shares of common stock and deregistered the remaining 11,900,000 shares of common stock in November 2010.

During 2009, we realized aggregate gross proceeds of $160,000 and $110,000, respectively, from the exercise of options and warrants to purchase an aggregate of 4,000,000 and 2,750,000 shares of our common stock, respectively. In addition, we also raised gross proceeds of $500,000 through the sale of 500,000 shares of common stock in a private placement transaction to accredited investors.

Between August 2010 and December 2010, we raised gross proceeds of $2,000,000 through the sale of 10,000,000 shares of common stock in a private placement transaction to accredited investors.

During 2010, we realized aggregate gross proceeds of $160,000 and $240,000, respectively, from the exercise of options and warrants to purchase an aggregate of 4,000,000 and 6,892,858 shares of our common stock, respectively.

During 2010, we issued a series of unsecured promissory notes to certain of our affiliates and other investors in the aggregate principal amount of $342,500. All of the notes were repaid in 2010 either with cash, shares of common stock, or a combination of cash and shares of common stock.

Since our inception, we have focused on developing and implementing our business plan. We have not paid any salaries to management and have utilized offshore programmers on a work for hire basis to assist in developing the demonstration model. We believe that our existing cash resources will not be sufficient to sustain our operations during the next twelve months. We are currently in need of approximately $3,000,000 of additional capital to enable us to pay our ongoing costs and expenses as they are incurred, finance the continued development of our Platform, and execute our business plan. We intend to raise such financing through the sale of debt and equity securities. The issuance of additional equity would result in dilution to our existing shareholders. If we are unable to obtain additional funds when they are needed or if such funds cannot be obtained on terms favorable to us, we may be unable to execute upon our business plan or pay our costs and expenses as they are incurred, which could have a material, adverse effect on our business, financial condition and results of operations.

Even if we are successful in raising sufficient capital in order to complete the development of our Virtual Piggy and ParentMatch products, our ability to continue in business as a viable going concern can only be achieved when our revenues reach a level that sustains our business operations. We raised approximately $2.7 million during the year ended December 31, 2010. We project that our Virtual Piggy and ParentMatch products will not be ready for full scale introduction to the marketplace until the third quarter of 2011. Accordingly, we do not project that significant revenue will be generated until late 2011 at the earliest. While it is impossible to predict the amount of revenues, if any, that we may receive from our Virtual Piggy and ParentMatch products, we presently believe, based solely on our internal projections, that we will generate revenues sufficient to fund our planned business operations if the Virtual Piggy and ParentMatch products are developed in accordance with our plans. There can be no assurance that we will raise sufficient proceeds, or any proceeds, for us to implement fully our proposed business plan to aggressively develop, complete, and market our Virtual Piggy and ParentMatch products. Moreover, there can be no assurance that even if our Virtual Piggy and ParentMatch products are developed, that we will generate revenues sufficient to fund our operations. In either such situation, we may not be able to continue our operations and our business might fail.

The foregoing project implementation and projections were prepared by us in good faith based upon assumptions that we believe to be reasonable. No assurance can be given, however, regarding the attainability of the projections or the reliability of the assumptions on which they are based. The projections are subject to the uncertainties inherent in any attempt to predict the results of our operations, especially where new products and services are involved. Certain of the assumptions used will inevitably not materialize and unanticipated events will occur. Actual results of operations are, therefore, likely to vary from the projections and such variations may be material and adverse to us. Accordingly, no assurance can be given that such results will be achieved. Moreover due to changes in technology, new product announcements, competitive pressures, system design and/or other specifications, we may be required to change the current plans for our Virtual Piggy and ParentMatch products.

Off-Balance Sheet Arrangements

As of March 31, 2011, we did not have any relationships with unconsolidated entities or financial partners, such as entities often referred to as structured finance or special purpose entities, established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As such, we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in such relationships.

Critical Accounting Policies

Our financial statements are impacted by the accounting policies used and the estimates and assumptions made by management during their preparation. A complete summary of these policies is included in note 2 of the notes to our financial statements. We have identified below the accounting policies that are of particular importance in the presentation of our financial position, results of operations and cash flows and which require the application of significant judgment by management.

Stock-based Compensation

We have adopted the fair value recognition provisions Financial Accounting Standard Board Accounting Standards Codification (“FASB ASC”) 718. In addition, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 107 “ Share-Based Payment ” (“SAB 107”) in March, 2005, which provides supplemental FASB ASC 718 application guidance based on the views of the SEC. Under FASB ASC 718, compensation cost recognized includes compensation cost for all share-based payments granted beginning January 1, 2006, based on the grant date fair value estimated in accordance with the provisions of FASB ASC 718.

We have used the Black-Scholes option-pricing model to estimate the option fair values. The option-pricing model requires a number of assumptions, of which the most significant are, expected stock price volatility, the expected pre-vesting forfeiture rate and the expected option term (the amount of time from the grant date until the options are exercised or expire).

Compensation expense for unvested options granted to non-employees in previous periods is being amortized over the vesting period of the options, or the term of the consulting agreement, whichever is longer.

Revenue Recognition

In accordance with Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin) No. 104, Revenue Recognition (Codified in FASB ASC 605), we will recognize revenue when (i) persuasive evidence of a customer or distributor arrangement exists or acceptance occurs, (ii) a retailer, distributor or wholesaler receives the goods, (iii) the price is fixed or determinable, and (iv) collectability of the sales revenues is reasonably assured. Subject to these criteria, we will generally recognize revenue from Virtual Piggy and ParentMatch at the time of the sale of the associated product and will recognize revenue from the sale of role playing games when shipped.

Recently Issued Accounting Pronouncements

Recently issued accounting pronouncements are discussed in Note 1 of the Notes to Financial Statements contained elsewhere in this report.

ITEM 4.

CONTROLS AND PROCEDURES

As of March 31, 2011, we carried out the evaluation of the effectiveness of our disclosure controls and procedures required by Rule 13a-15(e) under the Exchange Act under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2011, our disclosure controls and procedures were effective to ensure that information we are required to disclose in reports that we file or submit 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 management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

There has been no change in our internal control over financial reporting identified in connection with this evaluation that occurred during our fiscal quarter ended March 31, 2011 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 6.

EXHIBITS

31.1

Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1

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

32.2

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

SIGNATURE

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

	MOGGLE, INC.


Date: May 13, 2011	By:	/s/ Ernest Cimadamore
		Ernest Cimadamore
		Chief Executive Officer