eLayaway, Inc. (fka ELAY)

[Smilin_B]

TO ALL: concerning DILUTION

The Company has convertible notes with a potential of significant dilution to the current amount of common stock outstanding.

The Company has $974,615 of convertible notes which would convert into 1,269,756,363 shares of common stock based on the closing price as of December 31, 2013 ($0.0004).

The convertible notes have beneficial conversion features with a discount of 30% to 50% of the current market price.

The Company is in default with several of its noteholders as reflected below and disclosed with this report in Note 7 of the Notes to the
Consolidated Financial Statements dated December 31, 2013.


Notes and convertible notes, net of discounts
Gary Kline $ 56,000
Gary Kline 55,000
Gary Kline 75,000
Gary Kline 23,500
James E. Pumphrey 25,883
Evolution Capital, LLC 11,500
Evolution Capital, LLC 75,000
Evolution Capital, LLC 22,750
Evolution Capital, LLC 20,255
Evolution Capital, LLC 36,580
Evolution Capital, LLC 12,990
Hanson Capital, LLC 98,500
KAJ Capital, LLC 10,000
Robert Salie - Line of Credit 400,000
Salie Family Limited Partnership 50,000
Transfer Online, Inc. 15,400
Transfer Online, Inc. 25,000
Transfer Online, Inc. 35,000
Transfer Online, Inc. 45,000
Transfer Online, Inc. 55,000
Douglas Pinard 20,000
Richard St. Cyr 17,000
Susan Jones 58,333
Ventana Capital Partners, Inc. 20,000
Asher Enterprises, Inc. 650
Asher Enterprises, Inc. 39,850
Asher Enterprises, Inc. 32,500
Thomas Carluccio, Jr. 5,000
Thomas Carluccio, Jr. 5,000
Notes, convertible notes, and lines of credit payable to related parties, net of discounts
Bruce Harmon 157,260
Bruce Harmon 10,000
Bruce Harmon 52,010
Bruce Harmon 15,000
Bruce Harmon 15,000
Bruce Harmon 10,138
Bruce Harmon 5,000
Bruce Harmon 5,000
Sergio Pinon 5,000
Sergio Pinon 5,000
Lakeport Business Services, Inc. 45,000
Lakeport Business Services, Inc. 47,235
Lakeport Business Services, Inc. - Line of Credit 200,615
Total $ 1,918,949
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Now do some of you understand where all the dilution is coming from?

Is it a bit more transparent?

What you should all be doing right now, is trying to contact eLayaway's Management team (if one exists) by following the steps I laid out for you here:

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=99937689

Not sure why many traders/investors have yet to try to contact CEO Sergio Pinon yet.

I've contacted former CFO Bruce Harmon and he advised me that he stepped down as acting CFO back in August 2013.

Who is the acting CFO now?

Who is the acting CEO now?

Is this company even in business?

These are the questions you ALL need to ask when you contact eLayaway.

Report back here with your findings.

And below you will find some more information concerning our CEO , more dilution and legal proceedings that have led to continued dilution due to settlement agreements etc.

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Sergio A. Pinon, our chief executive officer and vice-chairman of our board of directors, beneficially owns a substantial portion of our
outstanding common stock and preferred stock, which enables him to influence many significant corporate actions and in certain circumstances
may prevent a change in control that would otherwise be beneficial to our stockholders.
Sergio A. Pinon beneficially owns, as of December 31, 2013, approximately 10.0% of our outstanding shares of common stock and 74.2% of our outstanding
shares of preferred stock (1,255 shares of Series E preferred stock and 5,000 shares of Series G preferred stock). As a percentage of votes, Mr. Pinon holds
approximately 10.1% of the total outstanding votes. The Series E preferred stock has super voting rights of fifteen votes for every one share. The Series G
preferred stock has super voting rights of ten thousand votes for every one share. Therefore, he controls 10.1% of the outstanding voting rights at December
31, 2013. As such, he has a substantial impact on matters requiring the vote of the stockholders, including the election of our directors and most of our
corporate actions. This control could delay, defer, or prevent others from initiating a potential merger, takeover or other change in our control, even if these
actions would benefit our stockholders and us. This control could adversely affect the voting and other rights of our other stockholders and could depress the
market price of our common stock.
Robert D. Salie, father of former officer and director Douglas Salie, a note holder of the Company, filed a lawsuit in January 2012 alleging
default on the two notes payable which could materially affect the Company.
The Company was served on January 30, 2013 in Robert D. Salie and Salie Family Limited Partnership v eLayaway, Inc. with claims on two notes
payable to Dr. Salie and an entity controlled by him. The two notes payable in principal are $450,000 plus accrued interest. The Company does not deny the
claim and has attempted to negotiate a payment arrangement prior to the lawsuit, which negotiations were unsuccessful. On August 30, 2013, a judgment was
awarded to Dr. Salie.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
We lease approximately 200 square feet of office space in Tallahassee pursuant to a lease that is month to month. This facility serves as our corporate
headquarters.
Item 3. Legal Proceedings
From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. As of March 15, 2014,
there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of our operations except as follows:
In 2008, a former employee who served as the CEO of the Company and was an original founder of the Company was terminated for alleged wrongdoings.
The Company alleges that this individual illegally deposited investor funds into company bank accounts not authorized by the board of directors and wrote
unauthorized checks, combined for approximately $371,000. Subsequently, this individual allegedly withdrew the deposited funds and deposited them into
accounts not controlled by the Company. The Board of Directors, upon knowledge of this activity, removed this individual from the Company. The Company
has turned this matter over to the Florida Department of Law Enforcement. In 2010, the Company determined that it does not believe that these funds are
recoverable.
In March 2011, Thomas R. Park, a former employee who served as the CFO of the Company from 2007 to 2008, contacted the Company demanding that the
Company issue additional stock of the Company to pay him additional ownership in the Company as a commission for investments made by third parties in
the Company during this timeframe. On April 25, 2011, Mr. Park filed a suit, Thomas R. Park v eLayawayCOMMERCE, Inc., et al , in the Circuit Court
for the Second Judicial Circuit in and for Leon County, Florida, Civil Division. The Company’s position is that the claim is without merit as a matter of law.
The demand by the former officer is material and potentially detrimental in the Company’s efforts to procure additional funding. The Company, prior to the
lawsuit being filed, had issued what it believes to be a fair settlement offer, even though the Company firmly believed that the former officer had no legitimate
grounds to substantiate his claims, and the former officer has responded with a counter-offer which is deemed to not be feasible as it was unreasonable. The
Company settled the lawsuit in June 2011 with the issuance of 600,000 warrants for common stock. The Company maintains that the claims were without
merit but opted to settle to avoid legal costs.

In December 2011, the Board of Directors and the majority of the shareholders of the Company terminated for cause, Douglas Salie, the CEO, Chairman and
member of the Board of Directors. Mr. Salie has indicated that he believes his termination was wrongful. The Company firmly believes that its actions were
justified and defendable. The Company does not believe that litigation in this matter is pending.
In October 2012, Douglas Pinard, a former owner of CSP (see Note 2), resigned from the Company. Certain monies were due to Mr. Pinard related to accrued
payroll and notes payable. Mr. Pinard threatened litigation, and both parties agreed upon a settlement requiring the Company to pay Mr. Pinard a settlement of
$40,000 for those liabilities. The Company paid Mr. Pinard $20,000 according to the conditions of the settlement agreement. The Company then notified Mr.
Pinard that in its opinion, Mr. Pinard had breached the settlement agreement by not returning all of the Company’s assets which Mr. Pinard had in his
possession at the time of termination. Therefore, the final $20,000 was not paid to Mr. Pinard. Due to the nonpayment, Mr. Pinard alleges that the Company
breached the settlement agreement. Mr. Pinard indicated that he would seek legal recourse. To the Company’s knowledge, no further actions has been taken
by Mr. Pinard.
In January of 2013, Dr. Robert Salie, father of former chief executive officer and chairman, Douglas Salie, who was terminated for cause, filed a suit, Robert
D. Salie and Salie Family Limited Partnership v eLayaway, Inc. , in the Circuit Court for the Second Judicial Circuit in and for Leon County, Florida, Civil
Division. The lawsuit is in regards to notes payable with claims of approximately $565,000 in principal and accrued interest. In October 2012, the
Company offered Dr. Salie a principal and interest repayment plan utilizing a third party, but Dr. Salie rejected the Company’s offer. On August 30, 2013, a
judgment was awarded to Dr. Salie.
In March 2013, ASC Recap, LLC (“ASC”) filed a Joint Motion for Approval of Settlement Agreement and Stipulation, and Request for Fairness Hearing in the
Circuit Court of the Second Judicial Circuit in and for Leon County, Florida, Case No. 2012-CA-4074. ASC has contracted with various note holders of the
Company to acquire approximately $1,481,830 of Company debt and subsequently converting the debt to common stock of the Company pursuant to Section
3(a)(10) of the Securities Act of 1933, which allows the exchange of claims, securities, or property for stock when the arrangement is approved for fairness by
a court proceeding. The Company has agreed to these terms as the acquisition of these debts and subsequent conversion would alleviate a significant portion
of the Company’s liabilities. A fairness hearing was held on May 14, 2013 and the arrangement was approved.
On October 31, 2013, the Company entered into a settlement with Dr. Jason Cohen in regards to the guaranteed value associated with his purchase in 2011 of a
convertible note and simultaneous conversion into common stock. The guarantee was for $25,000. As Dr. Cohen had not realized the agreed upon value, the
Company and Dr. Cohen agreed to release the guarantee with the issuance of an additional 25,000,000 shares of common stock to Dr. Cohen which was
subsequently issued to Dr. Cohen.
There are no other proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.