10-Q/A

QUARTELY REPORT JUNE 30, 2011

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A-2

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended June 30, 2013

Commission file number 000-51770

 CMG HOLDINGS GROUP, INC.

(Exact name of registrant as specified in its charter)

Nevada	87-0733770
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

333 Hudson Street, Suite 303
New York, New York	10013
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number including area code (646) 688-6381

---------------------------------------------------------------

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 is a large accelerated filer, an accelerated filer, a non-accelerated filer, or small reporting company. See the definition of "large accelerated filer," "accelerated filer" and "small reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company x

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

As of May 20, 2013, the aggregate market value of the Registrant’s voting and none-voting common stock held by non-affiliates of the registrant was approximately: $2,760,278 at $0.01 price per share, based on the closing price on the OTC Pink Sheets. As of May 20, 2013, there were 294,650,743 shares of common stock of the registrant issued and 294,650,743 outstanding.

Explanatory Note

CMG Holdings Group, Inc. (the “Company”) is filing this Amendment No. 2 on Form 10-Q/A (the “Amendment”) to the Company’s quarterly report on Form 10-Q/A Amendment No. 1 for the quarter ended June 30, 2013 (the “Form 10-Q/A”), filed with the Securities and Exchange Commission on August 28, 2013 (the “Original Filing Date”), solely to furnish Exhibit 101 to the Form 10-Q in accordance with Rule 405 of Regulation S-T. Exhibit 101 consists of the following materials from the Company’s Form 10-Q, formatted in XBRL (eXtensible Business Reporting Language):

101.INS	XBRL INSTANCE DOCUMENTS
101.SCH	XBRL TAXONOMY EXTENSION SCHEMA
101.CAL	XBRL TAXONOMY EXTENSION CALCULATION LINKBASE
101.DEF	XBRL TAXONOMY EXTENSION DEFINITION LINKBASE
101.LAB	XBRL TAXONOMY EXTENSION LABEL LINKBASE
101.PRE	XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE

No other changes have been made to the Form 10-Q/A. This Amendment speaks as of the Original Filing Date, does not reflect events that may have occurred subsequent to the Original Filing Date, and does not modify or update in any way disclosures made in the Form 10-Q/A.

Pursuant to Rule 406T of Regulation S-T, the interactive data files attached as Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

1

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, there unto duly authorized.

	CMG HOLDINGS GROUP, INC.
	(Registrant)
Date: September 3 , 2013	By: /s/ JEFFREY DEVLIN
	Jeffrey Devlin
	Chief Executive Officer, Chief Financial Officer and Chairman of the Board

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

SIGNATURE	NAME	TITLE	DATE
/s/Jeffrey Devlin	Jeffrey Devlin	CEO, CFO & Chairman of the Board	September 3 , 2013

2

XML

Note 1 - Basis of Presentation

6 Months Ended

Jun. 30, 2013

Notes

Note 1 - Basis of Presentation

NOTE 1 –BASIS OF PRESENTATION

The accompanying unaudited interim consolidated financial statements of CMG Holdings Group, Inc. (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes contained in its 2012 annual report on Form 10-K. In the opinion of management, these interim financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Our future results of operations may change materially from the historical results of operations reflected in our historical financial statements. The unaudited consolidated financial statements should be read in conjunction with the historical audited consolidated financial statements and footnotes of the Company and management’s discussion and analysis of financial condition and results of operations included in the Company’s Annual Report for the year ended December 31, 2012 as filed with the Securities and Exchange Commission on Form 10-K. Notes to the financial statements that would substantially duplicate the disclosure contained in the audited financial statements for fiscal year 2012, as reported in the Form 10-K, have been omitted.

Principles of Consolidation

The consolidated financial statements include the accounts of CMG Holdings Group, Inc., CMG Acquisition, Inc., CMGO Capital, Inc., XA The Experiential Agency, Inc., CMGO Logistics, Inc., USaveCT and USaveNJ, after elimination of all significant inter-company accounts and transactions.

Fair Value Measurements

In September 2006, the Financial Accounting Standards Board (“FASB”) issued ASC 820 which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The provisions of ASC 820 were effective January 1, 2008. ASC 820 delays the effective date for nonfinancial assets and liabilities, except for items that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis (at least annually), until fiscal years beginning after November 15, 2008.

As defined in ASC 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).

The three levels of the fair value hierarchy defined by ASC 820 are as follows:

Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities.

Level 2 – Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars.

Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value.

The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value as of September 30, 2012 and December 31, 2011. As required by ASC 820, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.

June 30, 2013	Level 1		Level 2		Level 3		Total
Marketable trading securities	$	1,800,350	$	-	$	-	$	1,800,350
Derivative Liabilities	$	-	$	-	$	215,101	$	241,101
December 31, 2012	Level 1		Level 2		Level 3		Total
Marketable trading securities	$	3,000	$	-	$	-	$	3,000
Derivative Liabilities	$	-	$	-	$	145,970	$	145,970

Investments in Debt and Equity Securities

The Company applies the provisions of Accounting Standards Codification 320, “Investments – Debt and Equity Securities”, regarding marketable securities. The Company invests in securities that are intended to be bought and held principally for the purpose of selling them in the near term, and as a result, classifies such investments as trading securities. Trading securities are recorded at fair value on the balance sheet with changes in fair value being reflected as unrealized gains or losses in the current period. In addition, the Company classifies the cash flows from purchases, sales, and maturities of trading securities as cash flows from operating activities.

Details of the Company's marketable trading securities as of June 30, 2013 and December 31, 2012 are as follows:

	June 30, 2013		December 31, 2012
Aggregate fair value	$	1,800,350	$	3,000
Gross unrealized holding gains		1,525,699		-
Gross unrealized holding losses		-		-
Transfer of Cost Method Investment to Marketable Securities		274,651		-
Proceeds from sales	$	-	$	--
Gross realized gains		-		--
Gross realized losses		-		--
Other than temporary impairment		-		--

Discontinued Operations

In accordance with ASC 205-20, Presentation of Financial Statements – Discontinued Operations, we reported the results of our subsidiary, AudioEye Inc., as a discontinued operation. The application of ASC 205-20 is discussed in Note 2 below.

XML

Note 1 - Basis of Presentation: Fair Value Measurements (Policies)

6 Months Ended

Jun. 30, 2013

Policies

Fair Value Measurements

Fair Value Measurements

In September 2006, the Financial Accounting Standards Board (“FASB”) issued ASC 820 which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The provisions of ASC 820 were effective January 1, 2008. ASC 820 delays the effective date for nonfinancial assets and liabilities, except for items that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis (at least annually), until fiscal years beginning after November 15, 2008.

As defined in ASC 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).

The three levels of the fair value hierarchy defined by ASC 820 are as follows:

Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities.

Level 2 – Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars.

Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value.

The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value as of September 30, 2012 and December 31, 2011. As required by ASC 820, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.

June 30, 2013	Level 1		Level 2		Level 3		Total
Marketable trading securities	$	1,800,350	$	-	$	-	$	1,800,350
Derivative Liabilities	$	-	$	-	$	215,101	$	241,101
December 31, 2012	Level 1		Level 2		Level 3		Total
Marketable trading securities	$	3,000	$	-	$	-	$	3,000
Derivative Liabilities	$	-	$	-	$	145,970	$	145,970

XML

Note 3 - Derivative Liabilities

6 Months Ended

Jun. 30, 2013

Notes

Note 3 - Derivative Liabilities

NOTE 4 - DERIVATIVE LIABILITIES

The Company has various convertible instruments outstanding more fully described in Note 2. Because the number of shares to be issued upon settlement cannot be determined under these instruments, the Company cannot determine whether it will have sufficient authorized shares at a given date to settle any other of its share-settleable instruments. As a result, under ASC 815-15 “Derivatives and Hedging”, all other share-settleable instruments must be classified as liabilities.

Embedded Derivative Liabilities in Convertible Notes

During the six months ended June 30, 2013 and the year ended December 31, 2012, the Company recognized new derivative liabilities of $65,597 and $734,839, respectively, as a result of new convertible debt issuances.  The Company recognized $29,690 as a loss on derivatives and $97,658 as a gain on derivatives due to change in fair value of the liability for the six months ended June 30, 2013 and 2012, respectively.  The fair value of the Company’s embedded derivative liabilities was $241,257 and $133,963 at June 30, 2013 and December 31, 2012, respectively.

Warrants

During the fiscal year 2011, 899,000 A Warrants and 899,000 B warrants were issued to individuals. The Company determined that the instruments embedded in the warrants should be classified as liabilities.  Under ASC 815-15 “Derivatives and Hedging” the liabilities were subsequently measured at fair value at the end of each reporting period with the change in fair value recorded to earnings. The fair value of all outstanding warrants as of June 30, 2013 and December 31, 2012 was $5,935 and $12,007, respectively.  The Company recognized $6,072 and $4,532 as gain on derivative related to the warrants for the six months ended June 30, 2013 and 2012, respectively.

The following table summarizes the derivative liabilities included in the consolidated balance sheet:

Derivative Liabilities

Balance at December 31, 2012	$           145,970
ASC 815-15 additions	98,097
Change in fair value	67,384
ASC 815-15 deletions	(80,226)
Balance at June 30, 2013	$           231,225

The following table summarizes the derivative gain or loss recorded as a result of the derivative liabilities above:

Gain/(Loss) on Derivative Liability

	For the Six Months Ended June 30,
	2013	2012
Change in fair value	$                 67,384	$             494,630
	(80,226)	-
Excess of fair value of liabilities over note payable	-	98,576
Total	$              (12,842)	$             593,163

The Company values its warrant derivatives and all other share settable instrument using the Black-Scholes option pricing model. Assumption used include (1) 0.01% to 1.96% risk-free interest rate, (2) life is the remaining contractual life of the instrument (3) expected volatility 71% to 426%, (4) zero expected dividends, (5) exercise price as set forth in the agreements, (6) common stock price of the underlying share on the valuation date, and (7) number of shares to be issued if the instrument is converted.

XML

Note 6 - Subsequent Events

6 Months Ended

Jun. 30, 2013

Notes

Note 6 - Subsequent Events

NOTE 6 - SUBSEQUENT EVENTS

During August 2013, the Company entered into a Termination Agreement and Release (the “Agreement”) with Continental Investments Group (Continental), the holder of a $85,000 convertible note payable of the Company and the holder of 2,500,000 shares of restricted common stock.  The Agreement calls for the termination and cancellation of a Sale and Purchase agreement, whereby the Company agreed to issue 50,000 Series B Convertible Preferred Stock in exchange for 20,000 cartoon animated Cels. The Agreement also calls for the cancellation of the $85,000 convertible note and related interest and the Continental to return the 2,500,000 shares of restricted common stock.

XML

Note 1 - Basis of Presentation: Discontinued Operations (Policies)

6 Months Ended

Jun. 30, 2013

Policies

Discontinued Operations

Discontinued Operations

In accordance with ASC 205-20, Presentation of Financial Statements – Discontinued Operations, we reported the results of our subsidiary, AudioEye Inc., as a discontinued operation. The application of ASC 205-20 is discussed in Note 2 below.

XML

Note 1 - Basis of Presentation: Principles of Consolidation (Policies)

6 Months Ended

Jun. 30, 2013

Policies

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements include the accounts of CMG Holdings Group, Inc., CMG Acquisition, Inc., CMGO Capital, Inc., XA The Experiential Agency, Inc., CMGO Logistics, Inc., USaveCT and USaveNJ, after elimination of all significant inter-company accounts and transactions.

XML

Statements of Operations (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Operating (Loss)
Revenue	$ 4,369,640	$ 6,159,910	$ 5,392,809	$ 7,143,059
Operating Expenses
Cost of Revenue	3,261,774	4,465,668	3,803,808	4,933,747
Depreciation and Amortization Expense		266		74,850
General and Administrative Expense	716,835	905,387	1,347,173	1,957,866
Total Operating Expenses	3,978,609	5,371,321	5,150,981	6,966,463
Other Operating Income	391,031	788,589	241,828	176,596
Other Income (Expense)
Gain on Derivative Liability	69,771	(695,353)	12,842	(593,163)
Other Income (Expense)	(5,400)	13,655	(5,400)	13,655
Marketable Securities, Unrealized Gain (Loss)	1,525,699		1,525,699
Gains (Losses) on Settlement of Debt	610,400		610,400
Interest Expense	(116,472)	(372,910)	(199,086)	(701,480)
Other Income (Expense)	2,083,998	(1,054,608)	1,944,455	(1,280,988)
Income (Loss) from Continuing Operations	2,475,029	(266,019)	2,186,283	(1,104,392)
Gain (Loss) on Discontinued Operations		(167,487)		(356,928)
Net (Loss)	$ 2,475,029	$ (433,506)	$ 2,186,283	$ (1,461,320)
Earnings Per Share
Basic and Diluted Loss Per Common Share for Contnuing Operations				$ (0.01)
Total Basic Income (Loss) Per Common Share				$ (0.01)
Basic Weighted Average Common Shares Outstanding	294,650,743	210,246,724	294,650,743	191,499,288

XML

Note 3 - Derivative Liabilities: Derivative Instruments, Gain (Loss) (Tables)

6 Months Ended

Jun. 30, 2013

Tables/Schedules

Derivative Instruments, Gain (Loss)

	For the Six Months Ended June 30,
	2013	2012
Change in fair value	$                 67,384	$             494,630
	(80,226)	-
Excess of fair value of liabilities over note payable	-	98,576
Total	$              (12,842)	$             593,163

XML

Note 2 - Notes Payable

6 Months Ended

Jun. 30, 2013

Notes

Note 2 - Notes Payable

NOTE 3 – NOTES PAYABLE

Asher Enterprises, Inc.

On October 16, 2012 the company issued a convertible promissory note for $32,500 to Asher. The convertible promissory note bears interest at 8% and is due on July 18, 2013 and any amount not paid by July 18, 2013 will incur a 22% interest rate. The note is convertible at 50% of the average of the lowest three trading prices for the Company’s common stock during the ten trading day period prior to the conversion date after 180 days. The Company analyzed the conversion option for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the instrument should be classified as liabilities once the conversion option becomes effective after 180 days due to their being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options.

In conjunction with the issuance of the promissory note, $2,500 was recorded as debt discount. The discount is being amortized over the term of the note to interest expense. During April 2013, the Company paid off the $32,500 note and accrued interest and penalties of $10,000.  The discount balance was $0 and $1,809 as of June 30, 2013 and December 31, 2012, respectively.  Amortization of $34,909 was recognized as interest expense as of June 30, 2013.

On May 20, 2013 the company issued a convertible promissory note for $53,000 to Asher. The convertible promissory note bears interest at 8% and is due on February 24, 2014 and any amount not paid by the due date will incur a 22% interest rate. The note is convertible at 58% of the average of the lowest three trading prices for the Company’s common stock during the ten trading day period prior to the conversion date after 180 days. The Company analyzed the conversion option for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the instrument should be classified as liabilities once the conversion option becomes effective after 180 days due to there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options.

Paul Sherman Agreement

On May 12, 2012, the Company modified its July 24, 2011 agreement with Paul Sherman into a $9,943 convertible promissory note bearing interest at 2% and due on May 15, 2013. The convertible promissory note is convertible at a price equal to the close price on the day prior to Paul Sherman’s request for conversion, but not to go below $.001. The Company analyzed the conversion option for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the instrument should be classified as a liability. The fair value of the embedded conversion option resulted in a discount of $8,875 on the date of the note. The discount is being amortized over the term of the note to interest expense. The discount balance was $0 and $3,376 as of June 30, 2013 and December 31, 2012, respectively.  Amortization of $3,376 was recognized as interest expense as of June 30, 2013. The convertible promissory note has an outstanding balance of $9,943 and $9,943 as of June 30, 2013 and December 31, 2012, respectively.

Continental Equities, LLC

On September 7, 2012 the company issued a convertible promissory note for $50,000 to Continental Equities, LLC (“Continental”) for the assignment of an equivalent amount of the Company’s account payable to Continental. The convertible promissory note bears interest at 12% and is due on May 15, 2013, any amount not paid by May 15, 2013 will incur a 22% interest rate.

On September 7, 2012 the company issued a convertible promissory note for $20,000 to Continental Equities, LLC for the assignment of an equivalent amount of the Company’s accrued interest to Continental. The convertible promissory note, plus accrued interest and penalties totaling $15,000 were repaid during April 2013.

The remaining convertible promissory note is convertible at 50% of the average of the lowest three trading prices for the Company’s common stock during the ten trading day period prior to the conversion date. The Company analyzed the conversion options for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the instruments should be classified as liabilities. The fair value of the embedded conversion option resulted in a discount of $65,597 on the date of the note. The discount balance was fully amortized  as of June 30, 2013.  Amortization of $65,597 was recognized as interest expense as of June 30, 2013. The convertible promissory notes have an outstanding balance of $50,000 and $70,000 as of June 30, 2013 and December 31, 2012, respectively.

As inducement for entering into the convertible promissory notes, the Company issued 600,000 shares, which were recorded as a debt discount of $11,486, which represents the relative fair value of the shares with the note principal. The discount balance was $0 and $7,657 as of June 30, 2013 and December 31, 2012, respectively.  Amortization of $7,657 was recognized as interest expense as of June 30, 2013.

Connied, Inc.

On April 11, 2011 the Company assigned $135,000 of its account payable from a third party to Connied, Inc. (“Connied”). On May 3, 2011, the Company amended the assigned account payable to add a conversion feature. The new note was convertible at 50% of the average of the five lowest closing prices for the Company's stock during the previous 30 trading days. On the same date, the Company issued 1,388,889 shares of common stock with a fair value of $97,222 to settle $50,000 of the note. The difference between the fair value of the common stock and the debt was recorded as a loss on settlement of debt during the year ended December 31, 2011. The remaining balance of $85,000 was recorded as short term debt. The note bears interest at 20% and is due on May 2, 2013.

The Company analyzed the conversion option for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the embedded conversion feature should be classified as a liability due to their being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options. The embedded conversion feature was measured at fair value at inception and on the date of conversion with the change in fair value recorded to earnings. The addition of the embedded conversion option resulted in a full discount to the note of $85,000 on May 3, 2011. The discount is being amortized over the term of the note to interest expense. The discount balance was $0 and $34,170 as of June 30, 2013 and December 31, 2012, respectively.  Amortization of $23,637 and $3,963 was recognized as interest expense as of June 30, 2013 and 2012, respectively.  The convertible promissory note has an outstanding balance of $85,000 and $85,000 as of June 30, 2013 and December 31, 2012, respectively.

Alan Morell

On September 26, 2012, the Company issued two convertible promissory notes for $112,000 and $525,000 to Alan Morell for outstanding amounts owed for the Company’s line of credit and accrued salary, respectively. The notes bear interest at 2% and are due on April 4, 2013 and April 26, 2014, respectively. The notes became convertible at $0.04 and $0.06, respectively, as of November 15, 2012.

The Company analyzed the conversion options for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the embedded conversion feature should be classified as a liability due to their being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options. The embedded conversion feature was measured at fair value at inception and on the date of conversion with the change in fair value recorded to earnings.  The addition of the embedded conversion options resulted in a discount to the notes of $27,573 on November 15, 2012. The discounts are being amortized over the terms of the notes to interest expense. The discount balances were $2,974 and $7,739 as of June 30, 2013 and December 31, 2012, respectively.  Amortization of $4,764 was recognized as interest expense as of June 30, 2013.  The convertible promissory notes have an outstanding balance of $637,000 and $637,000 as of June 30, 2013 and December 31, 2012, respectively.

Infinite Alpha

On April 29, 2013 the company issued a promissory note for $51,500 to Infinite Alpha. The promissory note is unsecured, bears interest at 20%, and is due on demand. Any amounts not paid on demand will incur a 24% interest rate.

XML

Balance Sheets (USD $)	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2012	Dec. 31, 2011
Assets, Current
Cash	$ 536,332	$ 238,124	$ 604,184	$ 337,779
Marketable Securities	1,800,350	274,651
Accounts Receivable, Net of allowance	199,864	252,567
Prepaid and Other Current Assets	2,561	15,000
Assets, Current	2,539,107	780,342
Assets, Noncurrent
Other Assets, Noncurrent	58,153	57,833
Assets, Noncurrent	58,153	57,833
Assets	2,597,260	838,175
Liabilities, Current
Accounts Payable	420,274	546,852
Accounts Payable, Related Party	71,600	19,625
Accrued Liabilities	791,322	722,549
Deferred Revenue	13,370	13,370
Derivative Liabilities	231,225	145,970
Short-term Convertible Debt, net of unamortized discount	246,469	150,431
Liabilities, Current	1,774,260	1,598,797
Liabilities, Noncurrent
Long Term Convertible Debt, net of debt discount		629,261
Liabilities, Noncurrent		629,261
Liabilities	1,774,260	2,228,058
Stockholders' Equity
Preferred Stock, Series B Convertible	50	50
Common Stock	297,414	294,614
Additional Paid in Capital	14,493,141	14,469,341
Treasury Stock	37	37
Accumulated Deficit	(13,967,642)	(16,153,925)
Stockholders' Equity	823,000	(1,389,883)
Liabilities and Equity	2,597,260	838,175
Stockholders' Equity, Number of Shares, Par Value and Other Disclosures
Preferred Stock, Shares Authorized	5,000,000	5,000,000
Preferred Stock, Shares Issued & Outstanding	50,000	50,000
Common Stock, Shares Authorized	450,000,000	450,000,000
Common Stock, Shares Issued	297,487,917	294,687,917
Common Stock, Value, Outstanding	$ 2,826,135	$ 2,946,879
Treasury Stock, Shares	37,174	37,174

XML

Note 3 - Derivative Liabilities: Derivative Liabilities (Tables)

6 Months Ended

Jun. 30, 2013

Tables/Schedules

Derivative Liabilities

Derivative Liabilities

Balance at December 31, 2012	$           145,970
ASC 815-15 additions	98,097
Change in fair value	67,384
ASC 815-15 deletions	(80,226)
Balance at June 30, 2013	$           231,225

XML

Note 3 - Derivative Liabilities: Embedded Derivative Liabilities in Convertible Notes (Policies)

6 Months Ended

Jun. 30, 2013

Policies

Embedded Derivative Liabilities in Convertible Notes

Embedded Derivative Liabilities in Convertible Notes

During the six months ended June 30, 2013 and the year ended December 31, 2012, the Company recognized new derivative liabilities of $65,597 and $734,839, respectively, as a result of new convertible debt issuances.  The Company recognized $29,690 as a loss on derivatives and $97,658 as a gain on derivatives due to change in fair value of the liability for the six months ended June 30, 2013 and 2012, respectively.  The fair value of the Company’s embedded derivative liabilities was $241,257 and $133,963 at June 30, 2013 and December 31, 2012, respectively.

XML

Note 5 - Earnings Per Share

6 Months Ended

Jun. 30, 2013

Notes

Note 5 - Earnings Per Share

NOTE 5 – EARNINGS PER SHARE

A reconciliation of the components of basic and diluted net income per common share is presented in the tables below:

	For the six months ended						For the three months ended
	June 30, 2013						June 30, 2013
			Weighted						Weighted
			Average						Average
			Shares		Per				Shares		Per
	Income		Outstanding		Share		Income		Outstanding		Share
Basic:
Income attributable to common stock		2,186,283		294,650,743		0.01		2,475,029		294,650,743		0.01
Effect of Dilutive Securities:
Convertible Debt		-		18,746,005				-		18,746,005
Diluted:
Income attributable to common stock, including assumed conversions		2,186,283		313,396,748		0.01		2,475,029		313,396,748		0.01

Potentially dilutive securities excluded from the computation of weighted average diluted shares of common stock because the impact of these potentially dilutive securities was anti dilutive totaled 1,798,000 for the three and six month period ended June 30, 2013.

XML

Note 5 - Earnings Per Share: Schedule of Earnings Per Share, Basic and Diluted (Tables)

6 Months Ended

Jun. 30, 2013

Tables/Schedules

Schedule of Earnings Per Share, Basic and Diluted

	For the six months ended						For the three months ended
	June 30, 2013						June 30, 2013
			Weighted						Weighted
			Average						Average
			Shares		Per				Shares		Per
	Income		Outstanding		Share		Income		Outstanding		Share
Basic:
Income attributable to common stock		2,186,283		294,650,743		0.01		2,475,029		294,650,743		0.01
Effect of Dilutive Securities:
Convertible Debt		-		18,746,005				-		18,746,005
Diluted:
Income attributable to common stock, including assumed conversions		2,186,283		313,396,748		0.01		2,475,029		313,396,748		0.01

XML

Document and Entity Information (USD $)	6 Months Ended
	Jun. 30, 2013
Document and Entity Information:
Entity Registrant Name	CMG Holdings Group, Inc.
Document Type	10-Q
Document Period End Date	Jun. 30, 2013
Amendment Flag	false
Entity Central Index Key	0001346655
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding	297,450,743
Entity Public Float	$ 2,826,135
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2