UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended: ~~June~~ September 30, 2015

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

For the transition period from:

Commission file number: 000-51688

BITZIO, INC.

(Exact name of registrant as specified in its charter)

Nevada		16-1734022
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

9625 Cozycroft Avenue, Suite A Chatsworth, CA		91311
(Address of principal executive offices)		(Zip Code)

Issuer’s telephone number (866) 824-7881

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

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 Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period than the registrant was required to submit and post such files). Yes [X ] No [ X]

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 filed,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] ~~Smasller~~Smaller reporting company [X] (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 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. As of ~~August~~November 1819, 2015 the number of shares of the registrant’s classes of common stock outstanding was 57,~~939~~320,~~277~~754,~~920~~217.

TABLE OF CONTENTS

		Page Numbers
Part I – Financial Information

	Proviso Regarding Forward-Looking Statements	3
Item 1.	Financial Statements (Unaudited)	F-1
	Consolidated Balance Sheets	F-1
	Consolidated Statements of Operations	F-2
	Consolidated Statements of Cash Flows	F-3
	Notes to Consolidated Financial Statements	F-4

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	7
Item 4.	Controls and Procedures	7

Part II – Other Information

Item 1.	Legal Proceedings	9
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	9
Item 3.	Defaults Upon Senior Securities	9
Item 4.	Mine Safety Disclosures	9
Item 5.	Other Information	9
Item 6.	Exhibits	9

	Signatures	10

PART I – FINANCIAL INFORMATION

Proviso Regarding Forward-Looking Statements

This Quarterly Report includes forward-looking statements within the meaning of the Securities Exchange Act of 1934 (the “Exchange Act”). These statements are based on management’s beliefs and assumptions, and on information currently available to management. Forward-looking statements include the information concerning our possible or assumed future results of operations set forth under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements also include statements in which words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “consider” or similar expressions are used.

Forward-looking statements are not guarantees of future performance. They involve risks, uncertainties and assumptions. Our future results and shareholder values may differ materially from those expressed in these forward-looking statements. Readers are cautioned not to put undue reliance on any forward-looking statements.

The results for the period ended ~~June~~ September 30, 2015 are not necessarily indicative of the results of operations for the full year. These financial statements and related footnotes should be read in conjunction with the financial statements and footnotes thereto included in the Company’s Form 10-K filed with the Securities and Exchange Commission on April 15, 2015.

ITEM 1. FINANCIAL STATEMENTS

BITZIO, INC

Consolidated Balance Sheets

	June 30, 2015			December 31, 2014
	September 30, 2015			December 31, 2014
		Unaudited
	(unaudited)
Assets
Current Assets
Cash and cash equivalents	$	~~20,134~~60		$	3,829
Accounts receivable, net		116,~~512~~690			24,538
Prepaid expenses and other current assets		~~335~~215,~~909~~808			560,631
Inventory		~~198~~215,~~919~~162			219,416
Total Current Assets		~~566~~437,~~474~~720			808,414
Other Assets
Intangible assets, net		~~615~~487,~~923~~765			589,044
Fixed assets, net		2524,~~000~~167			2,724
Other receivable		13,~~132~~540			1,192
Note receivable		25,979			25,979
Notes receivable		25,979			25,979
Total Other Assets		~~668~~541,~~034~~451			618,939
Total Assets	$	1979,~~234,508~~171		$	1,427,353
Liabilities and Stockholders’ Deficit
Current Liabilities:
Accounts payable and accrued liabilities		1,~~242~~282,~~990~~669			1,290,802
Related party payable		~~166~~169,~~290~~938			163,666
Notes payable, net of discount		~~319~~354,~~325~~810			327,681
Convertible notes, net of discount		~~988~~931,~~471~~939			756,982
Related party convertible notes, net of discount		450,000			150,000
Contingent liabilities		~~101~~74,000			101,000
Derivative liability		1886,~~073,078~~723			3,212,200
Total Current Liabilities		4,~~341~~150,~~154~~079			6,002,331
Long term notes payable, net of discount		-			-
Redeemable preferred stock series C, $0.001 par value; 999 shares authorized; 999 shares issued and outstanding		-			-
Total Liabilities		4,~~341~~150,~~154~~079			6,002,331
Stockholders’ Deficit:
Preferred stock series A, $0.001 par value; 25,000,000 shares authorized; 2,043,120 shares issued and outstanding		2,043			2,043
Preferred stock series B, $0.001 par value; 1,000,000 shares authorized; 1,000,000 and 1,000,000 shares issued and outstanding, respectively		1,000			1,000
Preferred stock series D, $0.001 par value; 1,000,000 shares authorized; nul shares issued and outstanding		-			-
Preferred stock series D, $0.001 par value; 1,000,000 shares authorized; 15,750 and nil shares issued and outstanding, respectively		-			-
Common stock, $0.001 par value; 10,000,000,000 shares authorized; 5,939,277,920 and 2,948,694,586 shares issued and outstanding, respectively		5,939,278			2,948,696
Common stock, $0.001 par value; 10,000 ,000,000 shares authorized; 7,320,754,217 and 2,948,694,586 shares issued and outstanding, respectively		7,320,754			2,948,696
Additional paid in capital		1715,~~028~~874,~~310~~782			19,199,481
Stock to be issued		~~158~~118,564			120,438
Stock subscriptions payable		181,074			181,074
Accumulated deficit		(26,~~400~~645,~~696~~556	)		(27,026,191	)
Total Bitzio, Inc. stockholders’ deficit		(3,~~090~~147,~~427~~339	)		(4,573,459	)
Non-controlling interest		(1623,~~219~~569	)		(1,519	)
Total stockholders’ deficit		(3,~~106~~170,~~646~~908	)		(4,574,978	)
Total Liabilities and Stockholders’ Deficit	$	1979,~~234,508~~171		$	1,427,353

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

F-1

BITZIO, INC

Consolidated ~~Statements~~ Statements of Operations

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Revenues	$	96117,~~010~~549		$	60207,~~551~~804		$	~~221~~339,~~459~~008		$	87295,~~254~~058
Cost of Good Sold		7675,~~009~~272			-48,696			~~139~~214,~~528~~800			-48,696
Gross profit		20,001			60,551			81,931			87,254
Gross Profit		42,277			159,108			124,208			246,362
Operating Expenses
Professional fees		4322,~~634~~554			~~199~~94,~~874~~842			~~104~~126,~~155~~709			~~361~~456,~~579~~421
General and administrative		~~366~~319,~~360~~779			87186,~~708~~843			~~735~~1,~~092~~054,871			~~220~~407,~~406~~249
Total operating expenses		~~409~~342,~~994~~333			~~287~~281,~~582~~685			~~839~~1,~~247~~181,580			~~581~~863,~~985~~670
Loss from Operations		(~~389~~300,~~993~~056	)		(~~227~~122,~~031~~577	)		(~~757~~1,~~316~~057,372	)		(~~494~~617,~~731~~308	)
Other Income (Expense)
Interest expense		(~~136~~48,~~697~~593	)		(85270,~~619~~660	)		(~~491~~540,~~822~~415	)		(~~342~~613,~~950~~610	)
Change in derivative liability		296,~~163~~557			~~657~~440,~~520~~137			2,~~823~~920,~~888~~445			~~(161~~278,~~258~~879	)
Foreign currency transaction gain (loss)		(~~6,071~~118	)		115,~~161~~611			13,~~921~~803			116,~~118~~729
Loss on extinguishment of debt		~~(31,194~~-	)		-(39,928	)		(977,876	)		(242,~~850~~778	)
Total other income (expense)		~~(171~~47,~~799~~846	)		~~573~~145,~~062~~160			1,~~368~~415,~~111~~957			(~~505~~360,~~940~~780	)
Income (Loss) Before Income Taxes		(~~561~~252,~~792~~210	)		~~346~~22,~~031~~583			~~610~~358,~~795~~585			(1978,~~000,672~~088	)
Provision For Income Taxes		-			-			-			-
Net Income (Loss) before Non-controlling Interest		(~~561~~252,~~792~~210	)		~~346~~22,~~031~~583			~~610~~358,~~795~~585			(1978,~~000,672~~088	)
Net Loss Attributable to Non-controlling Interest		(7,350	)		-(14,700	)		(1422,~~700~~050	)		(519,~~194~~894	)
Net Income (Loss) Attributable to Bitzio, Inc	$	(~~554~~244,~~442~~860	)	$	~~346~~37,~~031~~283		$	~~625~~380,~~495~~635		$	(~~995~~958,~~478~~194	)
Earnings (Loss) Per Share
Basic	$	(0.00	)	$	0.00		$	0.00		$	0.00
Diluted	$	(0.00	)	$	0.00		$	0.00		$	(0.00	)
Earnings (Loss) Per Share attributable to Bitzio shareholders
Basic	$	(0.00	)	$	0.00		$	0.00		$	(0.0100	)
Diluted	$	(0.00	)	$	0.00		$	0.00		$	(0.0100	)
Weighted Average Common Shares
Basic		56,~~158~~638,~~310~~901,~~887~~800			~~293~~888,~~459~~365,~~474~~195			45,~~444~~184,~~916~~281,~~042~~206			~~261~~472,~~497~~611,~~556~~362
Diluted		56,~~158~~638,~~310~~901,~~887~~800			12,~~342~~119,~~671~~294,~~471~~695			417,~~444~~575,~~916~~497,~~042~~712			~~261~~472,~~497~~611,~~556~~362

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

F-2

BITZIO, INC

Consolidated ~~Statements~~ Statements of Cash Flows

(Unaudited)

	Six Months Ended June 30,
	Nine Months Ended September 30,
	2015			2014
Cash Flows from Operating Activities
Net Income (Loss)		~~625~~380,~~495~~635			(~~995~~958,~~478~~194	)
Adjustments to reconcile net loss to net cash used in operating activities
Adjustments to reconcile net income (loss) to net cash used in operating activities
Net income attributable to non-controlling interest		(1422,~~700~~050	)		(519,~~194~~894	)
Depreciation and amortization		~~236~~365,~~535~~526			3032,~~000~~500
Common Stock issued for services		5781,821			-25,063
Loss on extinguishment of debt		977,876			242,~~850~~778
Loss (Gain) on Foreign currency transaction		(13,~~921~~803	)		(116,~~118~~729	)
Amortization of debt discounts on convertible notes		28,677			59,519
Gain on contingent liabilities		(27,000	)		-
Origination interest on convertible notes payable		493,026			230,356
Amortization of debt discounts on convertible notes		46,297			65,741
Change in derivative liabilities		(2,823,888	)		161,258
Amortization of debt discounts on notes payable		534			-
Accounts receivable		21,362			(57,278	)
Origination interest on convertible notes payable		493,026			466,605
Prepaid expenses and other current assets		235,216			9,600
Change in derivative liabilities		(2,920,445	)		(278,879	)
Inventory		20,497			-
Changes in operating assets and liabilities:
Accounts payable and accrued expenses		40,393			337,501
Accounts receivable		23,776			(33,107	)
Related party payables		2,624			7,439
Prepaid expenses and other current assets		355,317			(5,435	)
Net cash used in operating activities		(112,987	)		(220,545	)
Inventory		4,254			2,658
Accounts payable and accrued expenses		75,903			384,896
Related party payables		6,272			806
Net cash provided by operating activities		(172,061	)		(291,191	)
Cash Flows from Investing Activities
Cash invested in note receivable		-			(116,382	)
Net cash provided by investing activities		-			(116,382	)
Cash Flows from Financing Activities
Repayments on notes payable		(8,737	)		(94,500	)
Proceeds from notes payable		-			70,000
Repayments on convertible debenture		-			(52,500	)
Proceeds from convertible notes payable		120,000			107,500
Proceeds from notes payable		39,000			70,000
Proceeds from convertible notes payable		120,000			233,000
Proceeds from sale of preferred stock		-			250,050
Net cash provided by financing activities	$	~~111~~150,263		$	~~333~~406,050
Net increase in cash		(1,724	)		(3,877	)
Net decrease in cash		(21,798	)		(1,523	)
Cash acquired in acquisition		18,029			~~3,877~~170
Cash, beginning of period		3,829			3,877
Cash and Cash Equivalents, end of period	$	~~20,134~~60		$	32,~~877~~524
Cash Paid For:
Interest	$	-		$	-
Income taxes	$	-		$	-
Non-cash Financing and Investing Activities
Debt discounts on convertible notes payable	$	240,000		$	37107,500
Common stock issued for debt	$	652,973		$	~~137~~291,~~069~~801
Common stock issued for prepaid services	$	-		$	50,000
Common stock issued for acquisition	$	-		$	693,000
Common stock issued for debt issuance costs	$	-		$	2,500
Goodwill acquired in acquisition	$	-		$	1,037,864
Common stock issued for account payable				$	-
Related party payable acquired in acquisition	$	-		$	15,673
Account receivable acquired in acquisition	$	-		$	-794
Prepaid expense acquired in acquisition	$	10,494		$	-22,761
PPE acquired in acquisition	$	25,000		$	-
Inventory acquired in acquisition	$	-		$	230,690
Other receivable acquired in acquisition	$	8,276		$	-
PPE acquired in acquisition	$	25,000		$	3,324
Account payable and accrued liabilities acquired in acquisition	$	(8,185	)	$	-
Other receivable acquired in acquisition	$	8,276		$	1,192
Account payable and accrued liabilities acquired in acquisition	$	(8,185	)	$	453,122
Note payable acquired in acquisition	$	(14,302	)	$	-
Intangibles acquired in acquisition	$	260,689		$	-
Intangible acquired in acquisition	$	260,689		$	-
Contingent liabilities acquired in acquisition				$	135,000
Note Payable issued for acquisition	$	(300,000	)	$	-

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

F-3

BITZIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~JUNE~~ SEPTEMBER 30, 2015

(Unaudited)

NOTE 1 – ORGANIZATION

Bitzio, Inc. (“the Company”, “we”, “Bitzio”) was originally formed as Rocky Mountain Fudge Company, Inc. on January 4, 1990 as a Utah corporation. On July 28, 1998, the Company converted from a Utah corporation to a Nevada corporation. Effective June 10, 2011, the Company changed its name from Rocky Mountain Fudge Company, Inc. to Bitzio, Inc. Pursuant to this transaction, shares of the Company’s common stock are now trading under the Company’s new trading symbol, BTZO.

On July 27, 2011, Bitzio, Inc. and Bitzio, LLC entered into a share exchange agreement wherein Bitzio, Inc. issued 5,000,000 shares of the Company’s common stock in exchange for 100% of the members’ equity of Bitzio, LLC. Through this transaction Bitzio, LLC became a wholly owned subsidiary of Bitzio, Inc. The Company discontinued the business operations of Bitzio LLC at the end of 2013.

~~On February~~NOTE 112 ~~2014~~– ~~the~~GOING ~~Company entered into a Memorandum of Understanding with Angie Daza d/b/a Cleo VII (the “MOU”). The MOU provides that~~CONCERN

● The Company’s ~~will~~financial ~~organize~~statements aare prepared ~~subsidiary,~~using ~~which~~accounting ~~has~~principles ~~subsequently~~generally ~~been~~accepted ~~organized~~ in ~~Nevada as Cleo VII, Inc., and which is owned 51% by~~ the ~~Company~~United ~~and~~States ~~49%~~of byAmerica ~~Angie~~applicable ~~Daza.~~to ~~Angie~~a ~~Daza~~going ~~has~~concern, ~~contributed~~which contemplates the ~~product~~realization ~~designs~~of ~~owned~~assets ~~by Cleo VII to the subsidiary~~ and ~~agreed~~liquidation toof ~~provide~~liabilities ~~production~~in ~~financing~~the ~~for~~normal ~~orders~~course upof ~~to 2,500 units per month~~business. The Company has ~~committed~~not toyet ~~deposit~~established an ~~$12,000~~ongoing ~~into~~source ~~the bank account~~ of ~~Cleo~~revenues ~~VII,~~sufficient ~~Inc.~~ to becover ~~used~~its ~~for~~operating ~~production~~costs and toallow ~~share~~it ~~equally with Angie Daza the obligation~~ to ~~provide~~continue ~~production~~as ~~financing~~a ~~for~~going ~~orders in excess of 2~~concern,~~500~~ ~~units~~has ~~per~~an ~~month.~~accumulated deficit ~~● Angie Daza will serve as President~~ of ~~Cleo VII~~$26, ~~Inc.~~645,556 and ~~will~~a ~~provide~~net ~~warehousing~~working ~~and~~capital ~~fulfillment~~deficit ~~services~~of ~~at a location in Miami~~$3, ~~Florida~~712,359. The ~~Company~~ability ~~will~~of ~~develop marketing campaigns for~~ the ~~Cleo brand and provide administrative services. ● The~~ Company ~~immediately issued~~ to ~~Angie~~continue ~~Daza~~as ~~50,000,000 shares of its common stock, which shall vest quarterly over~~ a ~~two-year~~going ~~period.~~concern is Ifdependent ~~Cleo-branded~~on ~~products achieve $1 million in annual gross revenue,~~ the Company ~~will~~obtaining ~~issue~~adequate capital to ~~Angie~~fund ~~Daza~~operating ~~common~~losses ~~shares~~until ~~with~~it abecomes ~~market value of $100,000~~profitable. If ~~Cleo-branded products achieve $2 million in annual gross revenue,~~ the Company ~~will~~is unable ~~issue~~ to ~~Angie~~obtain ~~Daza~~adequate ~~additional~~capital, ~~common~~it ~~shares~~could ~~with~~be aforced ~~market~~to ~~value~~cease ~~of $100,000~~operations.

~~On February~~In ~~18,~~order ~~2014~~to ~~the~~continue ~~Company~~as ~~executed~~ a ~~non-binding~~going ~~letter of intent to acquire ownership of Sahaja~~concern, ~~LLC. Sahaja is currently~~ ~~engaged~~the inCompany ~~the~~will ~~design~~need, ~~production~~among ~~and~~other ~~sale~~things, ofadditional ~~apparel~~capital resources. ~~The~~Management’s ~~Company~~plan ~~also~~is ~~agreed~~ to ~~provide~~obtain ~~loans~~such toresources ~~Sahaja,~~for the ~~LLC~~Company ~~totaling~~by upseeking ~~to $100,000~~equity asand/or ~~mutually~~debt ~~agreed~~financing. AsHowever ofmanagement ~~June~~cannot ~~30,~~provide ~~2015,~~any ~~$22,979~~assurances ~~has~~that ~~been~~the ~~loaned~~Company towill ~~Sahaja~~be successful ~~but~~in ~~the~~accomplishing ~~acquisition~~any ~~had~~of ~~not~~its ~~yet been completed~~plans.

~~On March~~The ~~24,~~ability ~~2014~~of the Company ~~executed~~to continue as a ~~non-binding~~going ~~letter~~concern ofis ~~intent~~dependent toupon ~~acquire~~its ~~ownership~~ability ofto ~~ZMJ~~successfully ~~Denim,~~accomplish ~~Inc.~~the ~~ZMJ~~plans ~~Denim,~~described ~~Inc is currently engaged~~ in the ~~design,~~preceding ~~production~~paragraph and eventually ~~sale~~secure ofother ~~apparel.~~sources ~~The~~of ~~Company~~financing ~~also~~and ~~agreed~~attain toprofitable ~~provide~~operations. ~~loans~~The toaccompanying ~~ZMJ~~financial ~~Denim,~~statements ~~Inc.~~do ~~totaling~~not upinclude toany ~~$100,000~~adjustments asthat ~~mutually~~might ~~agreed.~~be Asnecessary ofif ~~June 30, 2015,~~ the ~~acquisition~~Company ~~had~~is ~~not~~unable ~~yet been completed. As of June 30, 2015, $3,000 has been loaned~~ to ~~ZMJ~~continue ~~Denim~~as ~~Inc.,~~a ~~but~~going ~~the acquisition had not yet been completed~~concern.

~~On July~~NOTE ~~16,~~3 ~~2014~~– ~~the Registrant entered into a Share Exchange Agreement with Hubert Blanchette, Paul Koros, Stella Koros, Michael~~SUMMARY ~~John~~OF ~~Koros,~~SIGNIFICANT ~~Gordon~~ACCOUNTING McDougall and Laura Fewrtell. Hubert Blanchette was, on that date, a member of the Registrant’s board of directors. Gordon McDougall was, on that date, a member of the Registrant’s board of directors and the Registrant’s Chief Executive Officer. Laura Fewtrell is Mr. McDougall’s spouse.POLICIES

~~The transactions~~Basis ~~contemplated by the Share Exchange Agreement were completed on July 17, 2014. On that date, Mr. Blanchette and the Koros’s transferred to the Registrant all~~ of the capital stock of Lexi Luu Design, Inc. and released Lexi Luu Design, Inc. from all accrued liabilities owed to them- See Note 6. In exchange, the Registrant issued to them a total of 300,000,000 shares of its common stock. At the same time, Ms. Fewtrell and entities affiliated with Ms. Fewtrell and Mr. McDougall released Lexi Luu Design, Inc. from all liabilities owed to them, including liabilities for money loaned, and the Registrant issued to Ms. Fewtrell and to an affiliate of Mr. McDougall a total of 200,000,000 shares of its common stock. The Share Exchange Agreement provides that additional shares of common stock will be issued to all parties if the annual revenue for any of the current or next two years exceeds the following threshholds: 2014 - $420,000; 2015 - $660,000; 2016 - $780,000. The Share Exchange Agreement also provides that additional shares will be issued to all parties if, during the 24 months following the acquisition, the Registrant completes a sale of equity securities at a per share price of less than $.0014 for aggregate gross proceeds of $420,000 or more.Presentation

OnThe interim consolidated financial ~~July~~statements ~~17,~~of ~~2014~~Bitzio, ~~pursuant~~Inc. to(“Bitzio,” ~~the~~“we” ~~Share~~or ~~Exchange~~“us”) ~~Agreement,~~for the ~~Company~~three ~~entered~~and ~~into~~nine anmonths ~~Employment~~ended ~~Agreement~~September 30, ~~with~~2015 ~~Hubert~~and ~~Blanchette. The~~2014 ~~agreement~~are ~~provides~~not ~~that Mr~~audited. ~~Blanchette~~Our ~~will~~consolidated ~~serve~~financial asstatements ~~Chief~~are ~~Executive~~prepared ~~Officer~~in ofaccordance ~~Lexi~~with ~~Luu~~the ~~Design,~~requirements ~~Inc.~~ for ~~a term of five years.~~ Asunaudited ~~compensation~~interim ~~for~~periods, ~~these~~and ~~services~~consequently, ~~the~~do ~~Company~~not ~~agreed~~include toall ~~pay~~disclosures ~~Mr.~~required ~~Blanchette~~to abe ~~salary~~made ofin ~~$150,000~~conformity ~~per~~with ~~year,~~accounting principles ~~except~~generally ~~that~~accepted ~~for~~in the ~~period~~ ~~through~~United ~~May~~States ~~31,~~of ~~2015~~America. ~~sixty~~In ~~percent~~the opinion of management, the ~~salary~~accompanying ~~will~~consolidated befinancial statements ~~satisfied~~contain byall ~~issuance~~adjustments, consisting of ~~common~~normal ~~stock~~recurring ataccruals, anecessary ~~per~~for ~~share~~a ~~value~~fair presentation of ~~$.0015.~~ ~~The~~our ~~Registrant~~financial position ~~agreed~~as toof ~~issue~~September 5030,~~000,000~~ ~~common~~2015 ~~shares~~and toour ~~Mr.~~results ~~Blanchette upon his execution~~ of ~~the~~operations ~~agreement,~~and ~~which~~cash ~~will vest~~flows ~~quarterly~~for ~~over~~the ~~two~~three-month ~~years.~~and ~~The~~nine-month ~~agreement~~periods ~~also~~ended September ~~provides that Lexi Luu Design~~30, ~~Inc.~~2015 ~~will~~and ~~pay Mr~~2014. ~~Blanchette~~The 5%results of ~~the~~operations ~~contribution margin~~for ~~realized during~~ the ~~half~~three-month ~~year~~and ~~preceding~~nine-month ~~the~~periods ~~acquisition.~~ended ~~Lexi~~September ~~Luu~~30, is2015 ~~one~~are not ~~the~~necessarily ~~leading~~indicative ~~kids~~of ~~dance~~the ~~and~~results ~~gymnastic~~for ~~wear~~a ~~companies in~~full-year ~~the United States~~period. ~~Lexi~~These ~~Luu~~interim ~~Specializes~~consolidated infinancial ~~unique,~~statements ~~custom~~should ~~kids~~be ~~dance and gymnastic wear~~ read in ~~playfun~~conjunction ~~patterns,~~with ~~fun~~the ~~colors~~financial ~~that can~~statements goincluded ~~from~~in ~~dancing~~our toAnnual ~~dining~~Report ~~out.~~on ~~Their~~Form ~~product~~10-K ~~line~~for ~~includes~~the ~~yoga~~year ~~pants,~~ended ~~shorts,~~December ~~tops~~31, ~~sets,~~2014 ~~ruffle buttoms, tutus amongst its~~filed ~~major~~with ~~sellers.~~the ~~Lexi~~Securities ~~Luu manufactures its products in house at their facility in Arizona~~ and ~~has~~Exchange ~~national~~Commission ~~and~~(the ~~international distribution~~“SEC”).

~~F-4~~Principles of Consolidation

OnThe consolidated financial statements ~~July~~have ~~18,~~been ~~2014~~prepared ~~the~~in ~~Registrant~~accordance ~~entered~~with ~~into~~accounting aprinciples ~~Share~~generally ~~Exchange~~accepted ~~Agreement~~in ~~with~~the ~~Marilu~~United ~~Brassington,~~States ~~Elaine~~of ~~Cunningham~~America and ~~Leticia~~include ~~Brito.~~the ~~Ms.~~Company’s ~~Brassington~~wholly isowned ~~the~~subsidiaries ~~Registrant’s~~Lexi ~~Chief~~Luu, ~~Financial~~E-motion, ~~Officer~~Skipjack, and aPunkz ~~member~~Gear ofand ~~the~~its ~~Registrant’s~~51% ~~board~~owned ofsubsidiary ~~directors~~Cleo. All significant intercompany accounts and transactions have been eliminated in consolidation.

~~The transactions~~Use ~~contemplated by the Share Exchange Agreement were completed on July 18, 2014. On that date, the three counterparties transferred to the Registrant all~~ of the capital stock of E-motion Apparel, Inc. In exchange, the Company issued to them a total of 350,000,000 shares of its common stock- See Note 6. The Share Exchange Agreement provides that additional shares of common stock will be issued to all parties if the annual revenue of E-Motion Apparel for any of the current or next two years exceeds the following threshholds: 2014 - $270,000; 2015 - $390,000; 2016 - $540,000. The Share Exchange Agreement also provides that additional shares will be issued to all parties if, during the 24 months following the acquisition, the Registrant completes a sale of equity securities at a per share price of less than $.0013 for aggregate gross proceeds of $455,000 or more.Estimates

~~On July~~The ~~18,~~preparation ~~2014,~~of ~~pursuant~~financial tostatements in ~~the~~conformity ~~Share~~with ~~Exchange Agreement,~~ the ~~Registrant~~generally ~~entered~~accepted ~~into~~accounting anprinciples ~~Employment~~in ~~Agreement~~the ~~with~~United ~~Marilu~~States ~~Brassington~~(“U. ~~The agreement provides that Ms~~S. ~~Brassington~~GAAP”) ~~will~~requires ~~serve~~management to asmake ~~the~~estimates ~~Registrant’s Chief Financial Officer~~ and asassumptions ~~Chief~~in ~~Executive Officer~~certain ofcircumstances ~~E-motion~~that ~~Apparel,~~affect ~~Inc.~~the ~~for~~reported aamounts ~~term~~ of ~~five~~assets ~~years.~~and Asliabilities ~~compensation~~and ~~for these services, the Registrant agreed to pay Ms.~~disclosures ~~Brassington a salary~~ of ~~$150,000~~contingent ~~per~~assets ~~year,~~and ~~except~~liabilities ~~that~~at ~~for~~ the ~~period~~date ~~through May 31, 2015 68%~~ of the ~~salary~~financial ~~will~~statements beand ~~satisfied by~~the ~~issuance~~reported amounts of ~~common~~revenues ~~stock~~and atexpenses during athe ~~per~~reporting ~~share value of $~~period.~~0015.~~ The ~~Registrant~~more ~~agreed~~significant toestimates ~~issue 50~~include,~~000,000~~ ~~common~~but ~~shares~~are tonot ~~Ms.~~limited ~~Brassington upon~~to, ~~her~~valuation ~~execution~~ of ~~the~~intangible ~~agreement~~assets, ~~which~~goodwill and ~~will~~long-lived ~~vest~~asset ~~quarterly~~impairment ~~over~~charges, ~~two~~stock ~~years.~~based ~~The~~compensation, ~~agreement~~loss ~~also~~contingencies ~~provides~~and ~~that~~ the ~~Registrant will~~allowance ~~pay~~for Msdoubtful accounts receivable. ~~Brassington~~Actual 5%results ofcould ~~the~~differ ~~contribution~~from ~~margin~~those ~~realized on sales to current customers of E-motion Apparel~~estimates.

EF-motion Apparel, Inc. E-motion Apparel is a women’s contemporary brand specializing in the resort-wear market. E-motion represents equal parts fashion, function and wearable art. E-motion apparel is every daywear for every woman. E-motion is a modern take on tie-dye to create comfortable, dynamic casual wear for today’s active lifestyle. The brand’s product line incudes maxi dresses, mini dresses, skirts, tops and pants in both hand tie-dye patterns and solid colors. The brand currently uses mainly one fabric manufactured both domestically and overseas. The styles are made with the intention to appeal to most demographics from women in their 20s to women into 60s. The fabric, styles and hand tie-dyed methods are what differentiate this brand from other similar brands in the market. The brand will market its production through traditional channels such as trade shows, sales representatives, online marketing and social media. The product is manufactured primarily locally and shipped from our local facilities. E-motion Apparel is currently in high-end boutiques and resorts across the country and expanding both domestically and internationally.4

On February 26, 2015, the Company entered into and closed under a securities purchase agreement to acquire 100% of the outstanding shares of Skipjack Dive and Dancewear, Inc., in exchange for a 2% subordinate secured term note in the aggregate principal amount of $100,000. The note has a maturity date of September 30, 2015, and is convertible at the rate of $0.10 per share into 1,000,000 shares of common stock of the Company.Revenue Recognition

OnRevenues ~~March~~are 3,recognized ~~2015,~~from the ~~Company~~sale ~~entered~~of ~~into~~the ~~and~~Company’s ~~closed~~products ~~under~~when apersuasive ~~securities~~evidence ~~purchase~~of ~~agreement~~an toarrangement ~~acquire~~exists, ~~100% of~~ the ~~outstanding~~product ~~shares~~has ofbeen ~~Punkz Gear~~delivered, ~~Inc., in exchange for a 2% subordinate secured term note in~~ the ~~aggregate~~fee ~~principal~~is ~~amount~~fixed ofor ~~$200~~determinable,~~000.~~ ~~The note has a maturity date of September 30, 2015,~~ and ~~is convertible at~~ the ~~rate~~collection of ~~$0.10~~the ~~per~~resulting ~~share~~receivable ~~into~~is ~~2,000,000~~reasonably ~~shares of common stock of the Company~~assured.

~~On March~~Cash 5, 2015, the Company entered into a securities purchase agreement to acquire 100% of all outstanding shares of Koka Creative Corporation, conditional on completion of a $3,000,000 financing. The Company agreed to pay 800,000 shares of previously undesignated new Series F preferred stock for this acquisition. The terms of the agreement with Koka provide for (a) the completion of two equity financings by the Company, an initial $3,000,000 financing and aCash subsequent $6,000,000 financing; (b) the spin-out of the Company’s existing operations to the Company’s shareholders; (c) the restructuring of the Company’s outstanding debt and equity to eliminate the substantial majority of the Company’s debt and to prepare the Company to petition for up-listing; and (d) the appointment of Koka’s designees to the Company’s management and board of directors. The agreement provides for the closing of the Koka acquisition simultaneously with the completion of the first financing. The Company does not yet have a commitment for the first financing and has not yet designated the new Series F preferred stock.Equivalents

~~NOTE~~We consider all highly liquid investments 2with –remaining ~~GOING~~maturities ~~CONCERN~~of three months or less at the date of purchase to be cash and cash equivalents. Cash and cash equivalents consist primarily of money market funds and other short-term investments with original maturities of not more than nine months stated at cost, which approximates market value.

~~The~~Accounts ~~Company’s~~Receivable ~~financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets~~ and ~~liquidation of liabilities in the normal course of business. The Company has not yet established~~Allowance anfor ~~ongoing~~Doubtful source of revenues sufficient to cover its operating costs and allow it to continue as a going concern, has recurring net loss, an accumulated deficit of $26,400,696 and a net working capital deficit of $3,744,680. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.Accounts

InAccounts receivable are presented at ~~order~~their toface ~~continue~~amount, asless aan ~~going~~allowance ~~concern~~for doubtful accounts, on the ~~Company~~balance ~~will~~sheets. ~~need,~~Accounts ~~among~~receivable ~~other~~consist ~~things,~~of ~~additional~~revenue ~~capital~~earned and ~~resources~~currently due from customers. ~~Management’s plan~~We isevaluate tothe ~~obtain~~collectability ~~such~~of ~~resources~~accounts receivable based on a combination of factors. We recognize reserves for ~~the~~bad ~~Company~~debts bybased ~~seeking~~on ~~equity~~estimates developed using standard quantitative measures that incorporate historical write-offs and~~/or~~ ~~debt~~current ~~financing~~economic conditions. ~~However~~As ~~management~~of ~~cannot~~September ~~provide~~30, ~~any assurances~~2015 ~~that~~and ~~the~~December ~~Company~~31, ~~will~~2014, bethe ~~successful~~outstanding inbalance ~~accomplishing~~allowance for ~~any~~doubtful ofaccounts ~~its~~is ~~plans~~zero.

~~F-5~~The policy for determining past due status is based on the contractual payment terms of each customer, which are generally net 30 or net 60 days. Once collection efforts by the Company and its collection agency are exhausted, the determination for charging off uncollectible receivables is made.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.Inventory

~~NOTE~~The Company’s inventory is stated 3at –the ~~SUMMARY~~lower OFof ~~SIGNIFICANT~~cost ~~ACCOUNTING~~or ~~POLICIES~~estimated realizable value, with cost primarily determined on a weighted-average cost basis on the first-in, first-out (“FIFO”) method. The Company continuously evaluates the composition of its inventory, assessing slow-turning product. Estimated realizable value of inventory is determined based on an analysis of historical sales trends of our individual products and a forecast of future demand, giving consideration to the value of current orders in-house relating to the future sales of inventory. Estimates may differ from actual results due to quantity, quality, and mix of products in inventory, customer demand, and market conditions. The Company’s historical estimates of these costs and any provisions have not differed materially from actual results. As of September 30, 2015, an inventory reserve had not been deemed necessary, and therefore, not recorded. As of September 30, 2015 and December 31, 2014, inventory consisted of $23,574 and $121,513 in finished goods, $0 and $79,923 in work in process and $191,588 and $17,980 in raw materials.

~~Basis of Presentation~~F-5

~~The accompanying~~Long-lived consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).Assets

~~Principles~~Long-lived assets include equipment and intangible assets other than those with indefinite lives. We assess the carrying value of ~~Consolidation~~our long-lived asset groups when indicators of impairment exist and recognize an impairment loss when the carrying amount of a long-lived asset is not recoverable when compared to undiscounted cash flows expected to result from the use and eventual disposition of the asset.

~~The consolidated~~Indicators ~~financial~~of ~~statements~~impairment ~~have~~include ~~been~~significant underperformance ~~prepared~~relative into ~~accordance~~historical ~~with~~or ~~accounting~~projected ~~principles~~future ~~generally~~operating ~~accepted~~results, significant changes in our use of the ~~United~~assets or ~~States~~in our business strategy, loss of ~~America~~or changes in customer relationships and ~~include~~significant negative industry or economic trends. When indications of impairment arise for a particular asset or group of assets, we assess the ~~Company’s~~future ~~wholly~~recoverability ~~owned~~of ~~subsidiaries~~the ~~Lexi~~carrying value ~~Luu~~of the asset (or asset group) based on an undiscounted cash flow analysis. If carrying value exceeds projected, ~~E-motion~~net, ~~Skipjack~~undiscounted cash flows, ~~and~~an ~~Punkz~~additional ~~Gear~~analysis ~~and~~is ~~its 51%~~performed ~~owned~~to ~~subsidiary~~determine ~~Cleo.~~the ~~All~~fair ~~significant~~value ~~intercompany~~of ~~accounts~~the asset (or asset group), typically a discounted cash flow analysis, and ~~transactions~~an ~~have~~impairment ~~been~~charge ~~eliminated~~is inrecorded ~~consolidation~~for the excess of carrying value over fair value.

~~Use of~~Property ~~Estimates~~and equipment

~~The preparation~~Property ~~of financial statements in conformity with the generally accepted accounting principles in the United States (“U.S. GAAP”) requires management to make estimates~~ and ~~assumptions~~equipment inare ~~certain circumstances that affect the reported amounts of~~recorded ~~assets~~at ~~and~~historical ~~liabilities~~cost ~~and~~less ~~disclosures~~accumulated ofdepreciation, ~~contingent~~unless ~~assets~~impaired. ~~and~~Depreciation ~~liabilities~~is atcharged ~~the~~to ~~date~~operations ofover the ~~financial~~estimated ~~statements and the reported~~useful ~~amounts~~lives of ~~revenues and expenses during~~ the ~~reporting period. The more significant estimates include, but are not limited to, valuation of intangible~~ assets, ~~goodwill~~using ~~and~~the ~~long~~straight-~~lived~~line ~~asset impairment charges, stock based compensation, loss contingencies and the allowance for doubtful accounts receivable~~method. ~~Actual results could differ from those estimates.~~

~~Revenue~~Upon retirement or sale, the historical ~~Recognition~~cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized.

~~We derive~~Expenditures ~~our~~for ~~revenues~~repairs ~~from~~and ~~the sale of products. We recognize revenue when the following conditions~~ maintenance are ~~satisfied:~~charged ~~(i)~~to ~~delivery of~~expense ~~the~~as ~~product has occurred and (ii) collection is reasonably assured~~incurred.

~~Cash and~~Intangible ~~Cash Equivalents~~assets

We ~~consider~~ ~~all~~evaluate ~~highly~~the ~~liquid~~recoverability ~~investments~~of ~~with~~intangible assets ~~remaining~~periodically ~~maturities~~and oftake ~~six~~into ~~months~~account events or ~~less~~circumstances atthat ~~the~~warrant ~~date~~revised estimates of ~~purchase~~useful tolives beor ~~cash~~that ~~and~~indicate ~~cash~~that ~~equivalents~~impairment exists. ~~Cash~~All ~~and~~of ~~cash~~our ~~equivalents~~intangible ~~consist~~assets ~~primarily~~are ofsubject ~~money~~to ~~market~~amortization. ~~funds~~Intangible ~~and~~assets ~~other~~are ~~short-term~~amortized ~~investments~~on ~~with~~a ~~original~~straight-line ~~maturities~~basis ofover ~~not~~their ~~more~~useful ~~than six months stated at cost, which approximates market value~~lives.

~~Accounts Receivable~~Shipping and ~~Allowance~~Handling ~~for Doubtful Accounts~~Costs

~~Accounts receivable~~For ~~are~~product ~~presented at their face amount~~sales, ~~less~~shipping anand ~~allowance~~handling costs ~~for~~are ~~doubtful~~included ~~accounts,~~as ona ~~the~~component ~~balance sheets. Accounts receivable consist~~ of ~~revenue~~general ~~earned~~ and ~~currently~~administrative ~~due from customers~~expenses. WeFor ~~evaluate~~ the ~~collectability~~nine ofmonths ~~accounts~~ended ~~receivable~~September based on a combination of factors. We recognize reserves for bad debts based on estimates developed using standard quantitative measures that incorporate historical write-offs and current economic conditions. As of June 30, 2015 and ~~December 31,~~ 2014, ~~the outstanding balance allowance~~ ~~for~~such ~~doubtful~~expenses ~~accounts~~totaled is$14,645 ~~zero~~and $0, respectively.

~~The policy~~Advertising for determining past due status is based on the contractual payment terms of each customer, which are generally net 30 or net 60 days. Once collection efforts by the Company and its collection agency are exhausted, the determination for charging off uncollectible receivables is made.Expense

~~Inventory~~The Company expenses marketing, promotions and advertising costs as incurred. For the nine months ended September 30, 2015 and 2014, such costs totaled $33,738 and $138,367, respectively. Such costs are included in general and administrative expense in the accompanying consolidated statements of operations.

~~The~~Business Company’s inventory is stated at the lower of cost or estimated realizable value, with cost primarily determined on a weighted-average cost basis on the first-in, first-out (“FIFO”) method. The Company continuously evaluates the composition of its inventory, assessing slow-turning product. Estimated realizable value of inventory is determined based on an analysis of historical sales trends of our individual products and a forecast of future demand, giving consideration to the value of current orders in-house relating to the future sales of inventory. Estimates may differ from actual results due to quantity, quality, and mix of products in inventory, customer demand, and market conditions. The Company’s historical estimates of these costs and any provisions have not differed materially from actual results. As of June 30, 2015, an inventory reserve had not been deemed necessary, and therefore, not recorded. As of June 30, 2015 inventory consisted of $167,361 in finished goods and $31,558 in raw materials.Acquisitions

~~F-6~~Business acquisitions are accounted for under the purchase method of accounting. Under that method, assets and liabilities of the business acquired are recorded at their estimated fair values as of the date of the acquisition, with any excess of the cost of the acquisition over the estimated fair value of the net tangible and intangible assets acquired recorded as goodwill. We make significant judgments and assumptions in determining the fair value of acquired assets and assumed liabilities, especially with respect to acquired intangibles. Using different assumptions in determining fair value could materially impact the purchase price allocation and our financial position and results of operations. Results of operations for acquired businesses are included in the financial statements from the date of acquisition.

~~Long-lived~~Accumulated Other Comprehensive ~~Assets~~Income

~~Long-lived assets~~Comprehensive ~~include~~loss ~~equipment~~includes ~~and~~net ~~intangible~~loss as ~~assets~~currently ~~other~~reported ~~than~~under ~~those~~U.S. ~~with~~GAAP ~~indefinite~~and ~~lives~~other comprehensive loss. WeOther ~~assess~~comprehensive ~~the~~loss ~~carrying~~considers ~~value~~the effects of ~~our long-lived~~additional ~~asset~~economic ~~groups~~events, ~~when~~such ~~indicators~~as offoreign ~~impairment~~currency ~~exist~~translation ~~and~~adjustments, ~~recognize~~that anare ~~impairment~~not ~~loss~~required ~~when~~to ~~the~~be ~~carrying~~recorded ~~amount~~in ofdetermining anet ~~long-lived asset~~loss, isbut ~~not~~rather ~~recoverable~~are ~~when~~reported ~~compared~~as toa ~~undiscounted~~separate ~~cash~~component ~~flows~~of ~~expected~~stockholders’ toequity ~~result~~(deficit). ~~from~~Currently the ~~use~~Company ~~and~~has ~~eventual~~no ~~disposition~~other ~~of the asset~~comprehensive income.

~~Indicators of~~Stock ~~impairment~~Based include significant underperformance relative to historical or projected future operating results, significant changes in our use of the assets or in our business strategy, loss of or changes in customer relationships and significant negative industry or economic trends. When indications of impairment arise for a particular asset or group of assets, we assess the future recoverability of the carrying value of the asset (or asset group) based on an undiscounted cash flow analysis. If carrying value exceeds projected, net, undiscounted cash flows, an additional analysis is performed to determine the fair value of the asset (or asset group), typically a discounted cash flow analysis, and an impairment charge is recorded for the excess of carrying value over fair value.Compensation

~~Property~~We measure and recognize stock based compensation expense using a fair value based method for all share based awards made to employees and ~~equipment~~nonemployee directors, including grants of stock options and other stock based awards. The application of this standard requires significant judgment and the use of estimates, particularly with regard to Black Scholes assumptions such as stock price volatility and expected option lives to value equity based compensation. We recognize stock compensation expense using a straight-line method over the vesting period of the individual grants.

Property and equipment are recorded at historical cost less accumulated depreciation, unless impaired. Depreciation is charged to operations over the estimated useful lives of the assets using the straightF-~~line method.~~6

~~Upon retirement~~Income ~~or sale, the historical cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized.~~Taxes

~~Expenditures~~We utilize the balance sheet method of accounting for ~~repairs~~income ~~and~~taxes. ~~maintenance~~Accordingly, we are ~~charged~~required to ~~expense~~estimate our income taxes in each of the jurisdictions in which we operate as ~~incurred~~part of the process of preparing our financial statements. This process involves estimating our actual current tax exposure, including assessing the risks associated with tax audits, together with assessing temporary differences resulting from the different treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities. Due to the evolving nature and complexity of tax rules, it is possible that our estimates of our tax liability could change in the future, which may result in additional tax liabilities and adversely affect our results of operations, financial condition and cash flows.

~~Intangible~~Basic and Diluted Net Loss per ~~assets~~Common Share

WeBasic and diluted net loss per share attributable ~~evaluate~~to common stockholders is computed by dividing net income (loss) attributable to common stockholders by the ~~recoverability~~weighted average number of ~~intangible~~common ~~assets~~shares ~~periodically~~outstanding ~~and~~during ~~take~~the ~~into~~period. ~~account~~Our ~~events~~potentially ordilutive ~~circumstances~~shares, ~~that~~which ~~warrant~~include ~~revised~~outstanding common stock options, ~~estimates~~common ofstock ~~useful~~warrants, ~~lives~~convertible orpreferred ~~that~~stock ~~indicate~~and ~~that~~convertible ~~impairment~~debentures, ~~exists.~~have ~~All~~not been included in the computation of ~~our~~diluted net ~~intangible~~loss ~~assets~~per share attributable to common stockholders for all periods for which there is a net loss, as the results would be antidilutive. Such potentially dilutive shares are ~~subject~~excluded when the effect would be to ~~amortization~~reduce net loss per share. ~~Intangible~~There were ~~assets~~12,391,216,506 ~~are~~such ~~amortized~~potentially ondilutive ashares ~~straight-line~~excluded ~~basis~~for ~~over~~the ~~their~~three ~~useful~~months ~~lives~~ended September 30, 2015.

~~Shipping and~~Concentration ~~Handling~~of ~~Costs~~Credit Risk

~~For product~~Financial ~~sales,~~instruments ~~shipping~~that ~~and~~potentially subject ~~handling~~us ~~costs~~to ~~are~~concentrations ~~included~~of ascredit arisk ~~component~~consist primarily of ~~general~~cash and ~~administrative~~cash ~~expenses.~~equivalents, ~~For~~to the ~~six~~extent ~~months ended~~balances ~~June~~exceed ~~30,~~limits that ~~2015~~are ~~and~~insured ~~2014,~~by ~~such~~the ~~expenses~~Federal ~~totaled~~Deposit $8Insurance Corporation,~~974~~ and ~~$0,~~accounts ~~respectively~~receivable.

~~Advertising~~Derivative ~~Expense~~Liabilities

~~The~~In connection with the Company’s ~~expenses~~Convertible ~~marketing~~Notes beginning in November 2013, ~~promotions and~~the ~~advertising~~Company ~~costs~~became ascontingently ~~incurred.~~obligated ~~For~~to ~~the~~issue ~~six~~shares in ~~months~~excess ~~ended~~of ~~June~~the ~~30,~~10 ~~2015~~billion ~~and~~authorized ~~2014~~by shareholders. Consequently, ~~such~~the ~~costs~~ability ~~totaled~~to ~~$30,858~~settle ~~and~~these ~~$145,059,~~obligations ~~respectively.~~with shares would ~~Such~~be ~~costs~~unavailable ~~are~~causing ~~included~~these inobligations ~~general~~to ~~and~~potentially ~~administrative~~be ~~expense~~settled in ~~the~~cash. ~~accompanying~~This ~~consolidated~~condition ~~statements~~creates ofa ~~operations~~derivative liability.

~~Business~~The Company ~~Acquisitions~~has a sequencing policy regarding share settlement wherein instruments with the earliest issuance date would be settled first. The sequencing policy also considers contingently issuable additional shares, such as those issuable upon a stock split, to have an issuance date to coincide with the event giving rise to the additional shares.

~~Business~~Using this ~~acquisitions~~sequencing ~~are accounted for under the purchase method of accounting. Under that method~~policy, ~~assets~~all ~~and~~instruments ~~liabilities~~convertible ofinto ~~the~~common ~~business acquired are recorded at their estimated fair values as of the date of the acquisition~~stock, ~~with~~including ~~any~~warrants ~~excess of the cost of the acquisition over the estimated fair value of the net tangible~~ and ~~intangible assets acquired recorded as goodwill. We make significant judgments and assumptions in determining~~ the ~~fair~~conversion ~~value~~feature of ~~acquired~~notes ~~assets and assumed liabilities~~payable, issued ~~especially~~subsequent ~~with respect~~ to ~~acquired intangibles.~~November ~~Using~~18, ~~different~~2013 ~~assumptions in determining fair value could materially impact the purchase price allocation and our financial position and results of operations. Results of operations for acquired businesses~~ are ~~included~~derivative ~~in the financial statements from the date of acquisition~~liabilities.

~~Accumulated~~The Company ~~Other~~also ~~Comprehensive~~has ~~Income~~certain notes payable with elements that qualify as derivatives. The warrants have anti-dilution clauses that prevent calculation of the ultimate number of shares that may be issued upon exercise, and two of the notes payable had a variable conversion feature that similarly prevented the calculation of the number of shares into which they were convertible.

~~Comprehensive~~The Company ~~loss~~values ~~includes~~these ~~net~~warrants ~~loss as currently reported under U.S. GAAP~~ and ~~other~~notes ~~comprehensive~~payable ~~loss.~~using ~~Other comprehensive loss considers~~ the ~~effects~~binomial oflattice ~~additional~~method. ~~economic~~The ~~events,~~resulting ~~such~~liability asis ~~foreign~~valued ~~currency~~at ~~translation~~each ~~adjustments,~~reporting date ~~that~~and ~~are~~the ~~not~~change ~~required to be recorded~~ in ~~determining~~the ~~net~~liability ~~loss,~~is ~~but~~reflected ~~rather are reported~~ as achange ~~separate~~in ~~component~~derivative ofliability ~~stockholders’~~in ~~equity (deficit). Currently~~ the ~~Company~~ ~~has~~statement noof ~~other comprehensive income~~operations.

~~Stock Based~~Fair ~~Compensation~~Value Measurements

~~We measure~~The ~~and~~fair ~~recognize~~value ~~stock~~of ~~based~~a ~~compensation~~financial ~~expense~~instrument is ~~using~~the aamount ~~fair~~that ~~value~~could ~~based~~be ~~method~~received ~~for~~upon ~~all~~the ~~share~~sale ~~based~~of ~~awards~~an ~~made~~asset or paid to ~~employees and~~transfer ~~nonemployee~~a ~~directors,~~liability ~~including~~in ~~grants~~an oforderly ~~stock~~transaction ~~options~~between market ~~and~~participants ~~other~~at ~~stock~~the ~~based~~measurement ~~awards~~date. ~~The~~Financial ~~application~~assets ofare ~~this~~marked ~~standard~~to ~~requires significant~~bid ~~judgment~~prices and ~~the~~financial ~~use~~liabilities ofare ~~estimates,~~marked ~~particularly~~to offer ~~with~~prices. ~~regard~~Fair tovalue ~~Black~~measurements ~~Scholes~~do ~~assumptions~~not ~~such~~include astransaction ~~stock~~costs. ~~price~~A ~~volatility~~fair value hierarchy is used to prioritize the quality and ~~expected~~reliability ~~option~~of ~~lives~~the toinformation ~~value~~used ~~equity~~to ~~based~~determine ~~compensation~~fair values. WeCategorization ~~recognize~~within ~~stock~~the ~~compensation~~fair ~~expense~~value ~~using~~hierarchy ais ~~straight-line~~based ~~method over~~on the lowest ~~vesting~~level ~~period~~ of input that is significant to the ~~individual~~fair ~~grants~~value measurement. The fair value hierarchy is defined into the following three categories:

F-7

	Level 1:	Quoted market prices in active markets for identical assets or liabilities.

	Level 2:	Observable market-based inputs or inputs that are corroborated by market data.

	Level 3:	Unobservable inputs that are not corroborated by market data.

~~Income Taxes~~Recent Accounting Pronouncements

~~We utilize~~ASU ~~the~~2015-03: ~~balance~~In ~~sheet~~April ~~method~~2015 ofthe Financial ~~accounting~~Accounting ~~for~~Standards ~~income~~Board ~~taxes.~~(“FASB”) ~~Accordingly,~~issued weAccounting ~~are~~Standards ~~required~~Update (“ASU”) 2015-03 to ~~estimate~~simplify the ~~our~~presentation ~~income~~of ~~taxes~~debt ~~in each~~issuance ofcosts. ~~the~~The ~~jurisdictions~~amendments in ~~which~~this weASU ~~operate~~require asthat ~~part~~debt ofissuance ~~the~~costs ~~process~~related ofto ~~preparing~~a ~~our~~recognized ~~financial~~debt liability ~~statements.~~be ~~This~~presented ~~process~~in ~~involves estimating~~the ~~our~~balance ~~actual~~sheet ~~current~~as ~~tax~~a ~~exposure,~~direct ~~including~~deduction ~~assessing~~from the ~~risks~~carrying ~~associated~~amount ~~with~~of ~~tax~~that ~~audits~~debt liability, ~~together~~ consistent with ~~assessing temporary~~debt ~~differences~~discounts ~~resulting~~and ~~from~~premiums. ~~the~~The ~~different~~ASU ~~treatment~~also ofrequires ~~items~~that ~~for~~the ~~tax~~amortization ~~and~~of ~~accounting~~debt ~~purposes.~~issuance ~~These~~costs ~~differences~~be ~~result in~~reported ~~deferred~~as ~~tax~~interest ~~assets~~expense. For ~~and~~public ~~liabilities.~~companies, ~~Due~~this toASU ~~the~~is ~~evolving~~effective ~~nature~~for ~~and~~fiscal ~~complexity~~years, ofand ~~tax~~interim ~~rules,~~periods itwithin isthose ~~possible~~years, ~~that~~beginning ~~our~~after ~~estimates~~December of15, ~~our~~2015 ~~tax~~(early ~~liability~~adoption ~~could~~is ~~change~~permitted). inThe ~~the~~adoption ~~future,~~of ~~which~~this ~~may~~ASU ~~result~~will inimpact ~~additional~~the ~~tax~~presentation ~~liabilities~~of ~~and~~the ~~adversely~~Company’s ~~affect~~financial statements ~~our~~in ~~results of~~future ~~operations,~~periods ~~financial~~should ~~condition~~it ~~and~~be ~~cash~~successful ~~flows~~in raising funds.

~~Basic and Diluted Net Loss per Common Share~~F-7

~~Basic and~~ASU ~~diluted~~No. ~~net~~2014-09: ~~loss~~In ~~per~~May ~~share~~2014, the ~~attributable~~FASB toissued ~~common~~ASU ~~stockholders~~No. is2014-09, ~~computed~~Revenue byfrom ~~dividing~~Contracts ~~net~~with ~~loss~~Customers. ~~attributable~~The torevenue ~~common~~recognition ~~stockholders by~~standard ~~the~~affects ~~weighted~~all ~~average~~entities that ~~number~~have ofcontracts ~~common~~with ~~shares~~customers, ~~outstanding~~except ~~during~~for ~~the~~certain ~~period~~items. ~~Our~~The ~~potentially~~new ~~dilutive~~revenue ~~shares,~~recognition ~~which~~standard ~~include~~eliminates the transaction-and ~~outstanding~~industry-specific ~~common~~revenue ~~stock~~recognition ~~options,~~guidance ~~common~~under ~~stock~~current ~~warrants,~~generally ~~convertible~~accepted ~~preferred~~accounting ~~stock~~principles (“GAAP”) and replaces ~~convertible~~it ~~debentures,~~with ~~have~~a ~~not~~principle-based ~~been included~~approach infor ~~the~~determining ~~computation~~revenue ofrecognition. ~~diluted~~Public ~~net~~entities ~~loss~~are ~~per~~required ~~share~~to ~~attributable~~adopt tothe ~~common~~revenue recognition ~~stockholders~~standard for ~~all~~reporting periods ~~presented~~beginning after December 15, as2016, ~~the results~~and ~~would~~interim beand ~~antidilutive~~annual reporting periods thereafter. Early ~~Such~~adoption ~~potentially~~is ~~dilutive~~not ~~shares~~permitted ~~are~~for ~~excluded~~public ~~when~~entities. The Company has reviewed the ~~effect~~applicable ~~would~~ASU beand tohas ~~reduce~~not, ~~net~~at ~~loss~~the ~~per~~current ~~share.~~time, ~~There~~quantified ~~were~~the 17effects of this pronouncement. However,~~248,090,635~~ ~~such~~it ~~potentially~~believes ~~dilutive~~that ~~shares~~there ~~excluded~~will ~~for~~be ~~the~~no ~~six~~material ~~months~~effect ~~ended~~on ~~June~~the ~~30,~~financial ~~2015~~statements.

~~Concentration~~ASU No. 2014-15: In August 2014, FASB issued ASU No. 2014-15 Preparation of ~~Credit~~Financial ~~Risk~~Statements – Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. Under GAAP, continuation of a reporting entity as a going concern is presumed as the basis for preparing financial statements unless and until the entity’s liquidation becomes imminent. Preparation of financial statements under this presumption is commonly referred to as the going concern basis of accounting. If and when an entity’s liquidation becomes imminent, financial statements should be prepared under the liquidation basis of accounting in accordance with Subtopic 205-30, Presentation of Financial Statements – Liquidation Basis of Accounting. Even when an entity’s liquidation is not imminent, there may be conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern. In those situations, financial statements should continue to be prepared under the going concern basis of accounting, but the amendments in this Update should be followed to determine whether to disclose information about the relevant conditions and events. The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company will evaluate the going concern considerations in this ASU. However, at the current period, management does not believe that it has met conditions which would subject these financial statements for additional disclosure.

ASU No. 2014-08: In April 2014, FASB issued ASU No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): ~~instruments~~Reporting ~~that~~Discontinued ~~potentially~~Operations ~~subject~~and usDisclosures toof ~~concentrations~~Disposals of ~~credit~~Components ~~risk~~of ~~consist~~an ~~primarily~~Entity. ofThe ~~cash~~amendments ~~and~~in ~~cash~~the ~~equivalents,~~ASU tochange the ~~extent~~criteria ~~balances~~for ~~exceed~~reporting ~~limits~~discontinued ~~that~~operations ~~are~~while ~~insured~~enhancing bydisclosures ~~the~~in ~~Federal~~this ~~Deposit~~area. ~~Insurance~~It ~~Corporation,~~also addresses sources of confusion and ~~accounts~~inconsistent ~~receivable~~application related to financial reporting of discontinued operations guidance in U.S. GAAP.

~~Derivative~~Under the new guidance, only disposals ~~Liabilities~~representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have a major effect on the organization’s operations and financial results. Examples include a disposal of a major geographic area, a major line of business, or a major equity method investment.

In ~~connection~~ ~~with the Company’s Convertible Notes beginning in November 2013~~addition, the ~~Company~~new ~~became~~guidance ~~contingently obligated to~~requires ~~issue~~expanded ~~shares~~disclosures inabout ~~excess~~discontinued ofoperations ~~the~~that ~~4.2~~will ~~billion~~provide ~~authorized~~financial bystatement ~~shareholders.~~users ~~Consequently,~~with ~~the~~more ~~ability~~information toabout ~~settle these obligations with~~the ~~shares~~assets, ~~would~~liabilities, beincome, ~~unavailable~~and ~~causing~~expenses ~~these~~of ~~obligations~~discontinued ~~to potentially be settled in cash~~operations. ~~This condition creates a derivative liability.~~

The ~~Company~~ ~~has~~new aguidance ~~sequencing~~also ~~policy~~requires ~~regarding~~disclosure of ~~share settlement wherein instruments with~~ the ~~earliest~~pre-tax ~~issuance~~income ~~date~~attributable ~~would~~to bea ~~settled first.~~disposal ~~The~~of ~~sequencing~~a ~~policy~~significant ~~also~~part ~~considers~~of ~~contingently~~an ~~issuable~~organization ~~additional~~that ~~shares,~~does ~~such~~not asqualify ~~those~~for ~~issuable~~discontinued operations ~~upon~~reporting. aThis ~~stock~~disclosure ~~split, to~~will ~~have~~provide anusers ~~issuance~~with ~~date~~information toabout ~~coincide~~the ~~with~~ongoing ~~the~~trends ~~event~~in ~~giving~~a ~~rise~~reporting toorganization’s results ~~the~~from ~~additional~~continuing ~~shares~~operations.

~~Using~~The amendments in ASU No. 2014-08 enhance ~~this~~convergence ~~sequencing~~between ~~policy,~~GAAP ~~all~~and ~~instruments~~the ~~convertible~~International ~~into~~Financial ~~common~~Reporting ~~stock,~~Standards ~~including~~(IFRS). ~~warrants~~Part ~~and~~of the ~~conversion~~new ~~feature~~definition of ~~notes~~discontinued ~~payable,~~operation ~~issued~~is ~~subsequent~~based toon ~~November~~elements 18of the definition of discontinued operations in IFRS 5, ~~2013~~Non-Current ~~are~~Assets ~~derivative~~Held ~~liabilities~~for Sale and Discontinued Operations.

The ~~Company~~ ~~also~~amendments ~~has~~in ~~certain~~ASU ~~notes payable with elements that qualify as derivatives~~No. ~~The warrants have anti~~2014-~~dilution~~08 ~~clauses that~~are ~~prevent~~effective ~~calculation~~beginning of the ~~ultimate~~first ~~number~~quarter of ~~shares~~2015 ~~that~~for ~~may~~public beorganizations ~~issued~~with ~~upon~~calendar ~~exercise,~~year ~~and~~ends. ~~two~~For ofmost ~~the~~nonpublic ~~notes~~organizations, it ~~payable~~becomes ~~had~~effective afor ~~variable conversion~~financial ~~feature~~statements ~~that~~with ~~similarly~~fiscal ~~prevented~~years ~~the~~beginning ~~calculation~~on ofor ~~the~~after ~~number~~December of15, ~~shares~~2014. ~~into~~Early ~~which~~adoption ~~they~~is ~~were convertible~~permitted.

~~The Company~~NOTE ~~values~~4 ~~these~~– ~~warrants~~PROPERTY ~~and~~AND notes payable using the binomial lattice method. The resulting liability is valued at each reporting date and the change in the liability is reflected as change in derivative liability in the statement of operations.EQUIPMENT

~~Fair~~Property and equipment consisted of ~~Value~~the ~~Measurements~~following as of September 30, 2015 and December 31, 2014:

The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories:

	September 30, 2015			December 31, 2014
Machinery and equipment	$	29,471		$	4,470
Computer and Furniture		1,404			1,404
Less: accumulated depreciation	$	(6,708	)		(3,150	)
Total	$	24,617		$	2,724

	Level 1:	Quoted market prices in active markets for identical assets or liabilities.
	Level 2:	Observable market-based inputs or inputs that are corroborated by market data.
	Level 3:	Unobservable inputs that are not corroborated by market data.

F-8

~~Recent Accounting~~NOTE ~~Pronouncements~~5 – ACQUISITIONS

~~The Company~~On ~~has~~February ~~evaluated~~26, ~~recent~~2015, ~~pronouncements~~Lexi Luu entered into and ~~does~~closed ~~not~~under ~~expect~~a ~~their~~securities ~~adoption~~purchase agreement to ~~have~~acquire 100% of all outstanding shares of Skipjack Dive and Dancewear, Inc. (Skipjack acquisition), in exchange for a ~~material~~2% ~~impact~~subordinate onsecured term note in the ~~Company’s~~aggregate principal amount of $100,000. ~~financial~~The ~~position~~note has a maturity date of September 30, or2015, ~~statements~~and is convertible at the rate of $0.10 per share into 1,000,000 shares of common stock of the Company. This note is due on demand as of September 30, 2015.

~~F-8~~On March 3, 2015, Lexi Luu entered into and closed under a securities purchase agreement to acquire 100% of all outstanding shares of Punkz Gear, Inc. (Punkz Gear acquisition), in exchange for a 2% subordinate secured term note in the aggregate principal amount of $200,000. The note has a maturity date of September 30, 2015, and is convertible at the rate of $0.10 per share into 2,000,000 shares of common stock of the Company. This note is due on demand as of September 30, 2015.

~~NOTE~~For Skipjack Dive and Dancewear, Inc. 4and –Punkz ~~PROPERTY~~Gear, ~~AND~~Inc. ~~EQUIPMENT~~acquisitions the accounting for the business combination is based on provisional amounts and the allocation of the excess purchase price is not final, the amounts allocated to intangibles, are subject to change pending the completion of final valuations of certain assets and liabilities. The statements of operations reflect the results of Skipjack Dive and Dancewear, Inc. and Punkz Gear, Inc., since the date of acquisition.

~~Property and~~The ~~equipment~~total ~~consisted~~purchase ofprice for the ~~following~~Skipjack acquisition aswas ofallocated ~~June~~as ~~30, 2015 and December 31, 2014~~follows:

	June 30, 2015			December 31, 2014
Assets
Machinery and equipment	$	29,471		$	4,470
Cash		1,502
Computer and Furniture		1,404			1,404
Other assets		10,494
Less: accumulated depreciation	$	(5,875	)		(3,150	)
Intangible assets-Customer relationships		84,751
Total	$	25,000		$	2,724
Property and equipment		25,000
Liabilities
Accounts payable and accrued liabilities		(7,445	)
Due to shareholder		(14,302	)
Net assets acquired	$	100,000

~~NOTE~~The total purchase price for the Punkz 5Gear –acquisition ~~ACQUISITIONS~~was allocated as follows:

On February 26, 2015, Lexi Luu entered into and closed under a securities purchase agreement to acquire 100% of all outstanding shares of Skipjack Dive and Dancewear, Inc., in exchange for a 2% subordinate secured term note in the aggregate principal amount of $100,000. The note has a maturity date of September 30, 2015, and is convertible at the rate of $0.10 per share into 1,000,000 shares of common stock of the Company.

Assets
Cash		16,526
Other assets		8,276
Intangible assets-Customer relationships		175,938
Liabilities
Accounts payable and accrued liabilities		(740	)
Net assets acquired	$	200,000

~~On March~~The 3,customer ~~2015,~~relationships ~~Lexi~~will ~~Luu entered into and closed under a securities purchase agreement to acquire 100% of all outstanding shares~~be ofamortized ~~Punkz~~over ~~Gear,~~their ~~Inc.,~~estimated inuseful ~~exchange~~lives ~~for a 2% subordinate secured term note in the aggregate principal amount~~ of ~~$200,000. The note has a maturity date of September 30, 2015, and is convertible at the rate of $0.10 per share into~~ 2~~,000,000~~ ~~shares of common stock of the Company~~years.

~~For Skipjack~~NOTE ~~Dive~~6 ~~and~~– ~~Dancewear,~~INTANGIBLE Inc. and Punkz Gear, Inc. acquisitions the accounting for the business combination is based on provisional amounts and the allocation of the excess purchase price is not final, the amounts allocated to intangibles, are subject to change pending the completion of final valuations of certain assets and liabilities. The statements of operations reflect the results of Skipjack Dive and Dancewear, Inc. and Punkz Gear, Inc., since the date of acquisition.ASSETS

~~The total~~Intangible ~~purchase price for the Skipjack acquisition was allocated as follows:~~Assets

Assets
Cash		1,502
Other assets		10,494
Intangible assets-Customer relationships		84,751
Property and equipment		25,000
Liabilities
Accounts payable and accrued liabilities		(7,445	)
Due to shareholder		(14,302	)
Net assets acquired	$	100,000

On July 16, 2014, we entered into a sales purchase agreement in 100% acquisition of all outstanding shares of Lexi Luu. Designs. Bitzio paid 500,000,000 restricted common shares for this acquisition. Lexi Luu shareholders are able to earn an additional $300,000 in restricted common shares over the course of years in an earn out upon hitting certain revenue benchmarks. We accounted for the transaction as an equity purchase. Of the purchase price paid as of July 16, 2014 ($183,629) was allocated among the assets and liabilities and difference was taken to intangible assets in amount of $690,629. As of September 30, 2015, the net carrying amount is $273,414. This intangible assets will be amortized over life of 2 years, estimated remaining amortization expense for 2015 and 2016 are $87,038 and $186,376 respectively.

~~The~~On July 18, 2014, we entered into a ~~total~~sales purchase ~~price~~agreement in 100% acquisition of all outstanding shares of E-motion Apparel. Designs. Bitzio paid 350,000,000 restricted common shares for this acquisition. E-motion Apparel shareholders are able to earn an additional $300,000 in restricted common shares over the ~~Punkz~~course ~~Gear~~of ~~acquisition~~years in an earn out upon hitting certain revenue benchmarks. We accounted for the transaction as an equity purchase. Of the purchase price paid as of July 18, 2014 ($26,235) was allocated asamong ~~follows:~~the assets and liabilities and difference was taken to intangible assets in amount of $74,235. As of September 30, 2015, the net carrying amount is $29,592. This intangible assets will be amortized over life of 2 years, estimated remaining amortization expense for 2015 and 2016 are $9,356 and $20,236 respectively.

Assets
Cash		16,526
Other assets		8,276
Intangible assets-Customer relationships		175,938
Liabilities
Accounts payable and accrued liabilities		(740	)
Net assets acquired	$	200,000

In the Skipjack acquisition (see note 5), of the purchase price paid as of February 26, 2015 ($15,249) was allocated among the assets and liabilities and difference was taken to intangible assets in amount of $84,751. As of September 30, 2015, the net carrying amount is $59,674. This intangible assets will be amortized over life of 2 years, estimated remaining amortization expense for 2015, 2016, and 2017 are $10,681 and $42,492, and $6,501 respectively.

~~The customer relationships will be amortized over their estimated useful lives of 2 years.~~F-9

~~NOTE~~In the Punkz acquisition (see note 5), of 6the –purchase ~~INTANGIBLE~~price ~~ASSETS~~paid as of March 3, 2015 ($24,062) was allocated among the assets and liabilities and difference was taken to intangible assets in amount of $175,938. As of September 30, 2015, the net carrying amount is $125,085. This intangible assets will be amortized over life of 2 years, estimated remaining amortization expense for 2015, 2016, and 2017 are $22,173, and $88,210, and $14,702 respectively.

~~Intangible~~Amortization of intangible assets is ~~Assets~~computed using the straight-line method and is recognized over the estimated useful lives of the intangible assets. Amortization expense was $104,877 and $0 for the nine months ended September 30, 2015 and 2014, respectively.

OnEstimated ~~July~~amortization ~~16,~~expense ~~2014, we entered into a sales purchase agreement in 100% acquisition of all outstanding shares of Lexi Luu. Designs. Bitzio paid 500,000,000 restricted commons shares~~ for ~~this acquisition. Lexi Luu shareholders are able to earn an additional $300,000 in restricted common shares over the~~ ~~course of years in an earn out upon hitting certain revenue benchmarks. We accounted for~~ the ~~transaction as an equity purchase. Of the purchase price paid as of July 16, 2014 ($183,629) was allocated among the assets and liabilities and difference was taken to~~ intangible assets infor ~~amount of $690,629. As of June 30, 2015,~~ the ~~net~~next ~~carrying~~five ~~amount~~years isconsists ~~$360,452. This intangible assets will be amortized over life~~ of 2the ~~years, estimated amortization expense for 2015 and 2016 are $174,076 and $186,376 respectively.~~following:

On July 18, 2014, we entered into a sales purchase agreement in 100% acquisition of all outstanding shares of E-motion Apparel. Designs. Bitzio paid 350,000,000 restricted commons shares for this acquisition. E-motion Apparel shareholders are able to earn an additional $300,000 in restricted common shares over the course of years in an earn out upon hitting certain revenue benchmarks. We accounted for the transaction as an equity purchase. Of the purchase price paid as of July 18, 2014 ($26,235) was allocated among the assets and liabilities and difference was taken to intangible assets in amount of $74,235. As of June 30, 2015, the net carrying amount is $38,795. This intangible assets will be amortized over life of 2 years, estimated amortization expense for 2015 and 2016 are $18,712 and $20,236 respectively.

Year ending December 31,
2015	$	129,248
2016		337,314
2017		21,203

~~F-9~~NOTE 7 – RELATED PARTY TRANSACTIONS

~~On February~~Related ~~26,~~party 2015, Lexi Luu entered into and closed under a securities purchase agreement to acquire 100% of all outstanding shares of Skipjack Dive and Dancewear, Inc., in exchange for a 2% subordinate secured term note in the aggregate principal amount of $100,000. The note has a maturity date of September 30, 2015, and is convertible at the rate of $0.10 per share into 1,000,000 shares of common stock of the Company. Of the purchase price paid as of February 26, 2015 ($15,249) was allocated among the assets and liabilities and difference was taken to intangible assets in amount of $84,751. As of June 30, 2015, the net carrying amount is $70,355. This intangible assets will be amortized over life of 2 years, estimated amortization expense for 2015, 2016, and 2017 are $21,362 and $42,492, and $6,501 respectively.payables

~~On March~~At 3, 2015, Lexi Luu entered into and closed under a securities purchase agreement to acquire 100% of all outstanding shares of Punkz Gear, Inc., in exchange for a 2% subordinate secured term note in the aggregate principal amount of $200,000. The note has a maturity date of September 30, 2015, ~~and is convertible at the rate of~~ $~~0.10 per share into 2~~5,~~000,000~~717 ~~shares of common stock of the Company. Of the purchase price paid as of March 3, 2015 ($24,062)~~ was ~~allocated among the assets and liabilities and difference~~due ~~was taken~~ to ~~intangible~~chief ~~assets~~financial inofficer ~~amount of $175,938. As of June 30, 2015, the net carrying amount is $147,740. This intangible assets will be amortized over life of 2 years, estimated amortization expense~~ for ~~2015,~~an ~~2016,~~advance ~~and 2017 are $44,346, and $88,210, and $14,702 respectively~~loan.

~~Amortization~~At September 30, 2015, $123,000 was ofdue ~~intangible~~for ~~assets~~services isrendered ~~computed~~by ~~using~~a company owned by Bitzio’s former chief executive officer. During 2013, the ~~straight-line~~Company ~~method~~borrowed $150,000 ~~and~~from isrelated ~~recognized~~party ~~over~~through a convertible promissory note bearing interest at 10% with a maturity date of January 1, 2014. The note contains a conversion feature wherein the ~~estimated~~note ~~useful~~may ~~lives~~be converted to shares of the ~~intangible assets.~~Company’s ~~Amortization~~common ~~expense~~stock ~~was~~at ~~$104,877~~the lower ~~and~~of $0.05 per common share or 20% discount to market for last 30 trading days prior to the ~~six~~conversion. ~~months~~As ~~ended~~of ~~June~~September 30, 2015, ~~and~~the ~~2014~~Company had principal outstanding in the note of $150,000, ~~respectively~~and accrued interest of $41,221.

~~Estimated~~On February 26, 2015, the Company entered ~~amortization~~into ~~expense~~and ~~for~~closed under a securities purchase agreement to acquire 100% of the ~~intangible~~outstanding ~~assets~~shares of Skipjack Dive and Dancewear, Inc., in exchange for a 2% subordinate secured term note in the ~~next~~aggregate ~~five~~principal ~~years~~amount ~~consists~~of $100,000 owed to chief executive officer. The note has a maturity date of September 30, 2015, and is convertible at the ~~following:~~rate of $0.10 per share into 1,000,000 shares of common stock of the Company. As of September 30, 2015, the Company had principal outstanding in the note of $100,000.

Year ending December 31
2015	$	386,339
2016		337,314
2017		21,203

On March 3, 2015, the Company entered into and closed under a securities purchase agreement to acquire 100% of the outstanding shares of Punkz Gear, Inc., in exchange for a 2% subordinate secured term note in the aggregate principal amount of $200,000 owed to chief executive officer. The note has a maturity date of September 30, 2015, and is convertible at the rate of $0.10 per share into 2,000,000 shares of common stock of the Company. As of September 30, 2015, the Company had principal outstanding in the note of $200,000.

NOTE 7 8 – ~~RELATED~~CONVERTIBLE ~~PARTY TRANSACTIONS~~NOTES PAYABLE

~~Related party~~Exchange ~~payables~~of Convertible Debentures

AtImmediately subsequent to its purchase ~~June~~of 30500,000 ~~2015~~shares of Series B Preferred Stock on November 18, $52013,~~960~~ 112359 Factor Fund, LLC (“Factor Fund”) entered into assignment agreements with seven holders of eight convertible promissory notes issued by the Registrant in 2012 and 2013. The aggregate of the principal balance and accrued interest on the notes was $779,591, and all of the notes were past due and otherwise in default. The assignment agreements provided that Factor Fund transferred the 500,000 shares of Series B Preferred Stock to ~~chief~~the ~~financial~~note ~~officer~~holders, ~~for~~and anthe ~~advance~~note ~~loan~~holders assigned the eight notes to Factor Fund.

~~At June~~Immediately 30thereafter, ~~2015,~~Factor ~~$123,000~~Fund entered ~~was~~into ~~due~~eight ~~for~~Exchange ~~services~~Agreements ~~rendered~~with bythe aRegistrant. ~~company~~The ~~owned~~Exchange byAgreements ~~Bitzio’s~~provided ~~former~~that ~~chief~~Factor ~~executive~~Fund ~~officer.~~would ~~During~~surrender ~~2013,~~ the ~~Company~~eight ~~borrowed $150,000 from related party through a~~ convertible promissory ~~note~~notes ~~bearing~~and ~~interest~~receive atin ~~10%~~exchange ~~with~~eight aAmended ~~maturity date~~and ofRestated ~~January~~Convertible 1,Debentures ~~2014~~(“A&R Debentures”). The ~~note~~principal ~~contains~~amount ~~a conversion feature wherein the note may be converted to shares~~ of ~~the~~each ~~Company’s common~~A&R ~~stock~~Debenture atequaled ~~the~~approximately ~~lower of $0~~128.~~05 per common share or 20~~3% ~~discount~~of toaggregate ~~market~~principal ~~for~~and ~~last 30 trading days prior to the conversion.~~accrued Asinterest ofsurrendered ~~June~~in ~~30,~~exchange ~~2015,~~for the ~~Company~~A&R ~~had~~Debenture. ~~principal~~The ~~outstanding~~primary interms ~~the note~~ of ~~$150,000,~~the ~~and~~A&R ~~accrued~~Debentures ~~interest of $37,440.~~are

~~On February~~● ~~26,~~Interest ~~2015,~~will accrue on the ~~Company~~principal ~~entered~~balance ~~into~~at the lesser of 8% per annum or the applicable federal rate. ● Principal and ~~closed~~interest ~~under~~are adue ~~securities~~on ~~purchase~~December ~~agreement~~31, to2015. ~~acquire~~● ~~100%~~The ofCompany may prepay the ~~outstanding shares~~A&R ofDebentures ~~Skipjack~~at ~~Dive~~any ~~and~~time, ~~Dancewear~~but must issue, ~~Inc.~~as a prepayment penalty, incommon ~~exchange~~stock ~~for~~with a 2%market ~~subordinate~~value ~~secured~~equal ~~term~~to ~~note~~5% inof the ~~aggregate~~ principal amount of ~~$100,000~~prepaid. ● The ~~note~~holder ~~has~~may aconvert ~~maturity~~the ~~date~~principal ofand ~~September~~interest ~~30,~~accrued ~~2015,~~on ~~and~~the isA&R ~~convertible~~Debentures into common stock at a conversion price equal to 100% of the ~~rate~~average of ~~$0.10~~the ~~per~~five ~~share~~(5) ~~into~~lowest ~~1,000,000 shares~~closing ofmarket prices for the common stock offor the ~~Company.~~thirty Astrading ofdays ~~June~~preceding 30conversion, ~~2015,~~but may not convert into a number of shares that would result in the ~~Company~~holder ~~had~~owning ~~principal~~beneficially more than 4.99% of the Registrant’s outstanding inshares. ● The holder may not sell the ~~note~~shares issued on conversion at a rate that exceeds 20% of ~~$100,000~~the average monthly trading volume for the Company’s Common Stock.

On March 3, 2015, the Company entered into and closed under a securities purchase agreement to acquire 100% of the outstanding shares of Punkz Gear, Inc., in exchange for a 2% subordinate secured term note in the aggregate principal amount of $200,000. The note has a maturity date of September 30, 2015, and is convertible at the rate of $0.F-10 ~~per share into 2,000,000 shares of common stock of the Company. As of June 30, 2015, the Company had principal outstanding in the note of $200,000.~~

~~NOTE~~The Company determined per ASC 470-50-40-10a, 8that –the ~~CONVERTIBLE~~fair ~~NOTES~~value ~~PAYABLE~~of the embedded conversion option in the reissued convertible notes as a result of the change in conversion price and term, increased by more than 10% from the original notes. Therefore, debt extinguishment accounting rules apply. Accordingly, the reissued convertible notes payable were initially recorded at fair value, with a loss on extinguishment of debt of $220,408 for the difference in the fair value of the new notes compared to the carrying value of the old notes.

~~Exchange~~During the nine months ended September 30, 2015 $82,500 of ~~Convertible~~principal ~~Debentures~~was converted into 825,000,000 shares of the Company’s common stock. On February 26, 2015, the balance of the note of $534,888 was transferred to several note holders as following:

Immediately subsequent to its purchase of 500,000 shares of Series B Preferred Stock on November 18, 2013, 112359 Factor Fund, LLC (“Factor Fund”) entered into assignment agreements with seven holders of eight convertible promissory notes issued by the Registrant in 2012 and 2013. The aggregate of the principal balance and accrued interest on the notes was $779,591, and all of the notes were past due and otherwise in default. The assignment agreements provided that Factor Fund transferred the 500,000 shares of Series B Preferred Stock to the note holders, and the note holders assigned the eight notes to Factor Fund.

	●	$267,444 was transferred to Five Nine Group LLC, During the nine months ended September 30, 2015 $108,560 of principal was converted into 1,085,559,500 shares of the Company’s common stock.

	●	$267,444 was transferred to Flux Carbon Starter Fund LLC, of which $108,560 principal balance plus $16,440 accrued interest was transferred to Long Side Ventures LLC on June 4, 2015. During the nine months ended September 30, 2015 $65,592 of principal of Flux Carbon Starter Fund LLC was converted into 655,916,797 shares of the Company’s common stock, and $40,000 of principal of Long Side Ventures LLC was converted into 400,000,000 shares of the Company’s common stock.

~~Immediately thereafter,~~All ~~Factor~~primary ~~Fund~~terms ~~entered~~of ~~into eight Exchange Agreements with~~ the ~~Registrant. The Exchange Agreements provided that Factor Fund would surrender the eight convertible promissory notes and receive in exchange eight Amended and Restated Convertible Debentures (“~~A&R Debentures~~”). The principal amount of each A&R Debenture equaled approximately 128.3% of aggregate principal~~ ~~and~~stayed ~~accrued~~unchanged ~~interest~~except ~~surrendered in exchange for~~ the ~~A&R Debenture. The primary terms of the A&R Debentures are~~following:

~~F-10~~● The holder may convert the principal and interest accrued on the A&R Debentures into common stock at a conversion price equal to 100% of the average of the five (5) lowest closing market prices for the common stock for the sixty trading days preceding conversion, but may not convert into a number of shares that would result in the holder owning beneficially more than 4.99% of the Registrant’s outstanding shares.

~~● Interest will accrue on the principal balance at the lesser of 8% per annum or the applicable federal rate. ● Principal and interest are due on December 31, 2015. ●~~ The Company ~~may~~accounted ~~prepay~~for the ~~A&R Debentures at any time, but must issue,~~ transfer as aan ~~prepayment~~extinguishment ~~penalty, common stock with a market value equal to 5%~~ of ~~the~~debt ~~principal amount prepaid. ● The holder may convert the principal~~ and ~~interest~~recorded ~~accrued on the A&R Debentures into common stock at~~ a ~~conversion~~loss ~~price~~on ~~equal~~extinguishment ~~to 100%~~ of ~~the average of the five (5) lowest closing market prices for the common stock for the thirty trading days preceding conversion~~$509, ~~but may not convert into a number of shares that would result in the holder owning beneficially more than 4~~476.99% of the Registrant’s outstanding shares. ● The holder may not sell the shares issued on conversion at a rate that exceeds 20% of the average monthly trading volume for the Company’s Common Stock.

~~The~~ On May 5, 2014, the Company ~~determined~~issued an ~~per~~8% ~~ASC~~convertible ~~470-50-40-10a,~~promissory ~~that~~note in the ~~fair~~aggregate ~~value~~principal amount of ~~the~~$32,500 ~~embedded~~to ~~conversion~~an ~~option~~accredited ininvestor. ~~the~~The ~~reissued~~note ~~convertible~~has ~~notes~~a maturity asdate aof ~~result~~February 9, 2015. The note is convertible into shares of ~~the~~our ~~change~~common instock at a conversion price ~~and~~of ~~term,~~59% ~~increased~~of bythe ~~more~~average of ~~than~~the ~~10%~~three ~~from~~(3) lowest per share market values during the ~~original~~ten ~~notes.~~(10) ~~Therefore,~~trading ~~debt~~days ~~extinguishment accounting~~immediately ~~rules~~preceding ~~apply.~~a ~~Accordingly,~~conversion date. During the ~~reissued~~nine ~~convertible~~months ~~notes~~ended ~~payable~~September ~~were~~30, ~~initially~~2015, the Company recorded atan ~~fair~~interest ~~value~~expense of $1,635. ~~with~~The aCompany ~~loss~~accounted for the conversion onfeature ~~extinguishment~~as ofa ~~debt~~derivative valued at $36,411, of which $~~220~~32,~~408~~500 ~~for~~was ~~the~~recorded ~~difference~~as ina ~~the~~debt ~~fair~~discount ~~value~~to be amortized over the life of the note. ~~new~~The ~~notes~~remaining ~~compared~~$3,911 was expensed immediately to ~~the~~interest ~~carrying~~expense. ~~value~~As of September 30, 2015, the ~~old~~note ~~notes~~and accrued interest was fully repaid.

~~During~~On August 5, 2014 the Registrant entered into a Securities Purchase Agreement with 112359 Factor Fund, LLC (“Factor Fund”), pursuant to which the ~~six~~Registrant sold ~~months~~to ~~ended~~Factor ~~June~~Fund 30a Secured Convertible Debenture. The Securities Purchase Agreement provides that Factor Fund will make ten payments, ~~2015~~commencing with a payment of $8280,~~500~~000 ofon ~~principal~~August ~~was~~5, ~~converted~~2014, ~~into~~followed ~~825~~monthly by eight payments of $25,000 each and one $20,000 payment ~~shares~~(i.e. total payments of ~~the~~$300,000). ~~Company’s~~In ~~common~~exchange ~~stock. On~~for ~~February~~each 26payment, ~~2015,~~an obligation in the ~~balance~~principal ofamount equal to twice the ~~note~~payment will accrue and be represented by the Debenture. In addition, a premium of $~~534~~50,~~888~~000 ~~was~~will ~~transferred~~be added to ~~Five~~the ~~Nine~~initial ~~Group~~obligation, resulting ~~LLC~~in ~~and~~a ~~Flux~~total ~~Carbon~~principal ~~Starter~~obligation ~~Fund LLC.~~accruing ~~All~~over ~~primary~~the ~~terms~~next year of ~~the~~$650,000. ~~A&R~~The ~~Debentures~~primary ~~stayed~~terms ~~unchanged~~of ~~except~~ the ~~following~~Debentures are:

● Interest will accrue on the principal balance at the lesser of 8% per annum or the applicable federal rate. ● Principal and interest on each tranche will be due on the second anniversary of the payment date for that tranche. ● The Registrant may prepay the principal amount of the Debenture, in whole or in part, at any time without penalty, and interest that has accrued on the prepaid amount will be waived. ● The holder may convert the principal and interest accrued on the ~~A&R~~Debenture ~~Debentures~~ into common stock at a conversion price equal to 100% of the average of the five (5) lowest closing market prices for the common stock for the sixty trading days preceding conversion, but may not convert into a number of shares that would result in the holder owning beneficially more than 49.99% of the Registrant’s outstanding shares.

The Registrant’s obligations under the Debenture are secured by a pledge of all of the Registrant’s assets. In addition, Hubert Blanchette and Marilu Brassington, who are officers and directors of the Registrant, have pledged a total of 666 shares of Series C Preferred Stock and 362,500,000 shares of common stock to secure the Registrant’s obligations under the Debenture. The Company accounted for the ~~transfer~~conversion features as ana ~~extinguishment~~derivative valued at $407,504, of ~~debt~~which ~~and~~$396,370 was recorded as a ~~loss~~debt ondiscount ~~extinguishment~~to be amortized over the life of the note, the remaining $~~509~~11,~~476~~134 was expensed immediately to interest expense.

On May 5, 2014, the Company issued an 8% convertible promissory note in the aggregate principal amount of $32,500 to an accredited investor. The note has a maturity date of February 9, 2015. The note is convertible into shares of our common stock at a conversion price of 59% of the average of the three (3) lowest per share market values during the ten (10) trading days immediately preceding a conversion date. During the six months ended June 30, 2015, the Company recorded an interest expense of $1,635. The Company accounted for the conversion feature as a derivative valued at $36,411, of which $32,500 was recorded as a debt discount to be amortized over the life of the note. The remaining $3,911 was expensed immediately to interest expense. As of June 30, 2015, the note and accrued interest was fully repaid.F-11

On August 5, 2014 the Registrant entered into a ~~Securities~~letter ~~Purchase~~agreement ~~Agreement~~ with ~~112359~~ Factor Fund, ~~LLC~~that ~~(“Factor~~modified ~~Fund”), pursuant~~the toterms ~~which~~of the ~~Registrant~~Secured ~~sold~~Amended to& ~~Factor~~Restated ~~Fund a Secured~~ Convertible ~~Debenture.~~Debentures issued ~~The~~by ~~Securities~~the ~~Purchase~~Registrant ~~Agreement~~to ~~provides that~~ Factor Fund ~~will make ten payments, commencing with a payment of $80,000~~ on ~~August~~November 518, ~~2014,~~2013 ~~followed monthly by eight payments of $25,000 each and one $20,000 payment~~ (~~i.e.~~the ~~total~~“A&R ~~payments of $300,000~~Debentures”). In exchange for each payment, an obligation in the principal amount equal to twice the payment will accrue and be represented by the Debenture. In addition, a premium of $50,000 will be added to the initial obligation, resulting in a total principal obligation accruing over the next year of $650,000. The ~~primary~~ ~~terms of the Debentures are~~modifications:

● ~~Interest~~increased ~~will accrue on~~ the ~~principal~~maximum ~~balance~~number ~~at the lesser~~ of 8%shares ~~per~~that ~~annum~~Factor orFund ~~the~~can ~~applicable~~hold ~~federal~~upon ~~rate.~~conversion ~~● Principal and interest on each tranche will be due on the second anniversary~~ of the ~~payment~~A&R ~~date~~Debentures ~~for~~from ~~that tranche~~4.99% ~~● The Registrant may prepay the principal amount~~ of the ~~Debenture,~~outstanding into ~~whole or in part, at any time without penalty, and interest that has accrued on the prepaid amount will be waived~~9.99%. ● ~~The~~changed ~~holder may convert~~ the ~~principal~~period ~~and~~over ~~interest~~which ~~accrued on~~ the ~~Debenture into common stock at a~~ conversion price ~~equal~~will tobe ~~100%~~measured offrom the ~~average~~30 oftrading ~~the~~days ~~five~~preceding ~~(5)~~conversion ~~lowest~~to ~~closing market prices for~~ the ~~common~~60 ~~stock for the sixty~~ trading days preceding conversion,. ~~but~~● ~~may~~eliminated ~~not~~the ~~convert~~restriction ~~into~~on athe number of shares ~~that~~of ~~would~~common ~~result~~stock inthat ~~the~~Factor ~~holder~~Fund ~~owning~~can ~~beneficially~~sell ~~more~~in ~~than~~a 9month.~~99% of the Registrant’s outstanding shares.~~

~~The Registrant’s~~On ~~obligations~~February ~~under the Debenture are secured by a pledge of all of the Registrant’s assets. In addition~~26, ~~Hubert~~ ~~Blanchette and Marilu Brassington~~2015, ~~who~~the ~~are~~balance ~~officers and directors~~ of the ~~Registrant,~~note ~~have pledged a total~~ of ~~666 shares of Series C Preferred Stock and 362~~$650,~~500,~~000 ~~shares~~was oftransferred ~~common stock~~ to ~~secure~~Five ~~the~~Nine ~~Registrant’s~~Group ~~obligations~~LLC ~~under~~and ~~the~~Flux ~~Debenture. The~~Carbon ~~Company~~Starter ~~accounted~~Fund ~~for~~LLC. ~~the~~On ~~conversion~~June ~~features~~23, as2015, ~~a derivative valued at~~ $~~407~~40,~~504,~~000 principal balance of ~~which $396~~325,~~370~~000 was ~~recorded~~transferred asfrom aFlux ~~debt discount~~Carbon Starter Fund LLC to bean ~~amortized~~individual. ~~over~~All ~~the~~primary ~~life~~terms of the ~~note,~~A&R ~~the~~Debentures stayed ~~remaining~~unchanged ~~$11,134~~except ~~was~~the ~~expensed immediately to interest expense.~~following:

~~F-11~~● The holder may convert the principal and interest accrued on the A&R Debentures into common stock at a conversion price equal to 100% of the average of the five (5) lowest closing market prices for the common stock for the sixty trading days preceding conversion, but may not convert into a number of shares that would result in the holder owning beneficially more than 4.99% of the Registrant’s outstanding shares.

~~On August~~The 5,Company ~~2014~~accounted ~~the~~for ~~Registrant entered into a letter agreement with Factor Fund that modified~~ the ~~terms of the Secured Amended~~transfer &as ~~Restated~~an ~~Convertible~~extinguishment ~~Debentures~~of ~~issued~~debt byand ~~the~~recorded ~~Registrant~~a toloss ~~Factor Fund~~ on ~~November~~extinguishment ~~18,~~of ~~2013 (the “A&R Debentures”)~~$437,206. ~~The modifications:~~

●On ~~increased~~August 20, 2014, the ~~maximum~~Company ~~number~~issued an of8% ~~shares~~convertible ~~that~~promissory ~~Factor~~note ~~Fund~~in ~~can~~the ~~hold~~aggregate ~~upon~~principal ~~conversion~~amount of ~~the~~$20,500 ~~A&R~~to ~~Debentures~~an ~~from~~accredited 4investor.~~99%~~ ofThe ~~the~~note ~~outstanding~~has toa 9maturity date of May 15, 2015.~~99%.~~ ●The ~~changed~~note ~~the~~is ~~period~~convertible ~~over~~into ~~which~~shares ~~the~~of our common stock at a conversion price ~~will~~of be59% ~~measured~~of ~~from~~the average of the three 30(3) ~~trading~~lowest ~~days~~per ~~preceding~~share ~~conversion~~market tovalues during the 60ten (10) trading days immediately preceding a conversion date. ●During ~~eliminated~~the nine months ended September 30, 2015, the ~~restriction~~Company onrecorded an interest expense of $606. The Company accounted for the ~~number~~conversion feature as a derivative valued at $31,689, of ~~shares~~which $20,500 was recorded as a debt discount to be amortized over the life of ~~common~~the note. ~~stock~~The ~~that~~remaining ~~Factor~~$11,189 ~~Fund~~was ~~can~~expensed ~~sell~~immediately into ainterest ~~month~~expense. As of September 30, 2015, the note and accrued interest was fully repaid.

~~On February~~NOTE ~~26,~~9 ~~2015,~~– ~~the balance of the note of $650,000 was transferred to Five Nine Group LLC and Flux Carbon Starter Fund LLC.~~DERIVATIVE ~~All primary terms of the A&R Debentures stayed unchanged except the following:~~LIABILITY

●Effective July 31, 2009, the Company adopted ASC 815 which defines determining whether an instrument (or embedded feature) is solely indexed to an entity’s own stock. The ~~holder~~conversion ~~may~~price ~~convert~~of ~~the~~our ~~principal~~outstanding ~~and~~convertible ~~interest~~notes ~~accrued~~are onsubject to “reset” provisions in the ~~A&R~~event ~~Debentures~~the Company ~~into~~subsequently issues common stock, atstock warrants, stock options or convertible debt with a stock price, exercise price or conversion price ~~equal~~lower tothan ~~100%~~conversion price of ~~the~~these ~~average~~notes. ofIf ~~the~~these ~~five~~provisions ~~(5)~~are ~~lowest~~triggered, ~~closing~~the ~~market~~conversion ~~prices~~price ~~for~~of the note ~~common~~will ~~stock~~be ~~for~~reduced. As a result, the ~~sixty~~Company ~~trading~~has ~~days~~determined ~~preceding~~that the conversion, ~~but~~feature ~~may~~is not ~~convert~~considered ~~into~~to abe ~~number~~solely ofindexed to ~~shares~~the ~~that~~Company’s ~~would~~own ~~result~~stock inand ~~the~~is ~~holder~~therefore ~~owning~~not ~~beneficially~~afforded ~~more~~equity ~~than 4~~treatment.~~99%~~ In accordance with ASC 815, the Company has bifurcated the conversion feature of the ~~Registrant’s~~note ~~outstanding~~and ~~shares~~recorded a derivative liability.

~~The~~ ASC 815 requires Company ~~accounted~~management to ~~for~~assess the ~~transfer~~fair asmarket anvalue ~~extinguishment~~ of ~~debt~~certain derivatives at each reporting period and ~~recorded~~recognize aany ~~loss~~change in the fair market value as another income or expense item. The Company’s only asset or liability measured at fair value on ~~extinguishment~~a ofrecurring ~~$437,206~~basis is its derivative liability associated with convertible notes payable.

~~On August~~At 20origination, ~~2014,~~ the Company ~~issued~~valued the anconversion 8%features ~~convertible~~using ~~promissory note in~~ the ~~aggregate~~following ~~principal~~assumptions: ~~amount~~dividend yield of ~~$20~~zero,~~500~~ years to anmaturity ~~accredited investor.~~of ~~The~~between ~~note~~1.00 ~~has~~and a2.02 ~~maturity~~years, risk ~~date~~free rates of ~~May~~between ~~15, 2015~~0.18 ~~The~~and ~~note~~0.27 ispercent, ~~convertible~~and ~~into~~annualized ~~shares~~volatility of ~~our~~between ~~common~~149% ~~stock~~and at172%. aAt ~~conversion price~~September of30, ~~59%~~2015, of the Company ~~average~~revalued of the ~~three~~conversion ~~(3)~~features ~~lowest~~using ~~per~~the ~~share~~following ~~market~~assumptions: ~~values~~dividend ~~during~~yield ~~the~~of ~~ten~~zero, ~~(10)~~years ~~trading~~to ~~days~~maturity ~~immediately~~of ~~preceding~~between a0.25 ~~conversion~~and ~~date~~1.59 ~~During the six months ended June 30~~years, ~~2015,~~risk ~~the~~free ~~Company~~rates ~~recorded an interest expense~~ of ~~$606~~0.08 ~~The~~to ~~Company~~0.64 ~~accounted for~~percent, ~~the~~and ~~conversion~~annualized ~~feature~~volatility asof abetween ~~derivative~~279 ~~valued~~and at390 ~~$31,689,~~percent ofand ~~which $20~~determined that,~~500~~ ~~was~~during ~~recorded~~the asnine amonths ~~debt~~ended ~~discount~~September to30, be2015, ~~amortized over~~ the ~~life~~Company’s ofderivative ~~the~~liability ~~note.~~decreased ~~The~~by ~~remaining~~ $112,~~189~~920,445 ~~was expensed immediately~~ to ~~interest expense~~$886,723. The AsCompany ofrecognized ~~June~~a ~~30,~~corresponding ~~2015,~~gain ~~the~~on ~~note~~derivative ~~and accrued~~liability ~~interest~~in ~~was~~conjunction ~~fully~~with ~~repaid~~this revaluation.

NOTE 9 10 – ~~DERIVATIVE~~COMMITMENTS ~~LIABILITY~~AND CONTINGENCIES

~~Effective July~~Since 31May 15, ~~2009~~2014, ~~the~~E-motion ~~Company~~leases its ~~adopted~~office ~~ASC~~space ~~815~~on ~~which~~a ~~defines~~month-to-month ~~determining~~basis ~~whether~~at ana ~~instrument~~fixed ~~(or~~rate ~~embedded~~of ~~feature)~~$1,750 isper ~~solely indexed to an entity’s own stock~~month. ~~The~~Lexi ~~conversion~~Luu ~~price~~leases ofits ~~our~~office ~~outstanding~~space ~~convertible~~since ~~notes~~June ~~are subject to “reset” provisions~~15, in2014, ~~the~~at ~~event~~a ~~the~~rate ~~Company~~of ~~subsequently issues common stock~~$2,099 ~~stock~~per ~~warrants~~month, ~~stock options or convertible debt~~ with aan ~~stock~~increase ~~price~~to $2, ~~exercise~~162 ~~price~~per ormonth ~~conversion~~starting ~~price~~September ~~lower~~1, ~~than~~2015, ~~conversion~~and ~~price~~to ~~of these notes. If these provisions are triggered~~$2,227 ~~the~~starting ~~conversion~~September ~~price~~1, ~~of the note will be reduced~~2016. AsThe aagreement ~~result,~~provides ~~the~~for ~~Company~~$0 ~~has~~rent ~~determined~~payment ~~that~~for the ~~conversion~~months ~~feature~~of isJune ~~not~~2014, ~~considered~~July to2015 ~~be solely indexed to the Company’s own stock~~ and isAugust ~~therefore not afforded equity treatment~~2015. InExpiration ~~accordance~~date ~~with ASC 815, the~~of ~~Company has bifurcated~~ the ~~conversion~~lease ~~feature~~agreement ofis ~~the~~September ~~note~~14, ~~and recorded a derivative liability~~2017.

~~ASC 815~~NOTE ~~requires~~11 ~~Company~~– ~~management to assess the fair market value of certain derivatives at each reporting period and recognize~~NOTES any change in the fair market value as another income or expense item. The Company’s only asset or liability measured at fair value on a recurring basis is its derivative liability associated with convertible notes payable.PAYABLE

~~At origination,~~From ~~the~~February ~~Company~~to ~~valued~~April ~~the~~2014, ~~conversion features using~~ the ~~following assumptions: dividend yield of zero, years to maturity~~Company ofentered ~~between~~into ~~1.00~~a ~~and~~marketing ~~2.02~~agreement ~~years,~~with ~~risk~~Echo ~~free rates of between 0.18 and 0.27 percent~~Factory, ~~and annualized volatility of between 149% and 172%~~Inc. AtThe ~~June~~agreement ~~30,~~provides ~~2015,~~that the Company ~~revalued~~will ~~the~~issue ~~conversion~~three ~~features~~promissory notes ~~using~~to ~~the~~Echo ~~following~~Factory ~~assumptions:~~in ~~dividend~~an ~~yield~~amount ofequal ~~zero, years~~ to ~~maturity~~$7,500 offor ~~between~~service ~~0.75~~provided ~~and~~on ~~1.93~~February ~~years~~14, ~~risk~~March ~~free~~14 ~~rates~~and ofApril ~~0.26~~14, ~~to 0~~2014.56 ~~percent,~~The ~~and~~Promissory Note ~~annualized~~shall ~~volatility~~have of12 ~~between 303~~month ~~and~~term ~~396 percent~~ and ~~determined~~bear ~~that,~~8% ~~during~~interest ~~the~~and ~~six~~be ~~months~~unsecured. ~~ended~~As ~~June~~of September 30, 2015, the Company’s ~~derivative~~had ~~liability~~principal ~~decreased~~outstanding byin ~~$2,823,888~~the topromissory note of $122,~~073~~500,~~078.~~ ~~The~~and ~~Company~~accrued ~~recognized~~interest aof ~~corresponding gain on derivative liability in conjunction with this revaluation~~$2,752.

~~NOTE~~During 2012, the Company borrowed $55,000 through an unsecured promissory note bearing interest at 10% –with ~~COMMITMENTS~~a ~~AND~~maturity ~~CONTINGENCIES~~date of March 10, 2014. During 2013, the Company borrowed additional $43,214, and converted $8,062 into 8,062,000 shares of common stock. As of September 30, 2015, the Company had principal outstanding in the promissory note of $90,152, and accrued interest of $27,545.

~~Since May 15, 2014, E~~F-motion leases its office space on a month-to-month basis at a fixed rate of $1,750 per month. Lexi Luu leases its office space since June 15, 2014, at a rate of $2,099 per month, with an increase to $2,162 per month starting September 1, 2015, and to $2,227 starting September 1, 2016. The agreement provides for $0 rent payment for the months of June 2014, and July and August 2015. Expiration date of the lease agreement is September 14, 2017.12

~~NOTE~~On 11June –4, ~~NOTES~~2012, ~~PAYABLE~~Bitzio, Inc. and ACT entered into a share purchase agreement wherein Bitzio acquired all of the issued and outstanding member’s equity in exchange for 3,300,000 Series A Convertible Redeemable Preferred shares of the Company. On February 22, 2013, the two parties agreed to unwind the transaction by Bitzio returning the ACT shares acquired and ACT returning the Bitzio preferred share consideration for cancellation. In addition, Bitzio agreed to pay an aggregate of 147,000 Euros ($194,447 USD) to ACT. The Company re-measured the amount due in U.S. dollars as of September 30, 2015 and recorded a gain on foreign currency transaction of $13,803. The amount due as of September 30, 2015 is $164,082.

~~From~~On ~~February~~March to1, ~~April 2014~~2013, ~~the~~Lexi-Luu ~~Company~~borrowed ~~entered into a marketing agreement with Echo Factory~~$20,000 ~~Inc.~~through ~~The~~an ~~agreement~~unsecured ~~provides that the Company will issue three~~ promissory ~~notes~~note tobearing ~~Echo~~interest ~~Factory in an amount equal to $7~~36%,~~500~~ ~~for~~due ~~service provided~~ on ~~February 14, March 14 and April 14, 2014~~demand. ~~The Promissory Note shall have 12 month term and bear 8% interest and be unsecured.~~ As of ~~June~~ September 30, 2015, the Company had principal outstanding in the promissory note of $2220,~~500,~~000 and accrued interest of $218,~~298~~600.

~~During~~On ~~2012~~July 1, ~~the~~2013, ~~Company~~Lexi-Luu borrowed $5510,000 through an unsecured promissory note bearing interest at$1,076 ~~10% with a~~ maturity date of ~~March~~January 101, 2014. ~~During~~This ~~2013,~~note ~~the~~is ~~Company~~currently ~~borrowed~~at ~~additional $43~~default,~~214,~~ and ~~converted~~bearing ~~$8,062~~45% ~~into 8,062,000 shares of common stock~~interest. As of ~~June~~September 30, 2015, the Company had principal outstanding in the promissory note of $90 5,~~152,~~128 and accrued interest of $254,~~273~~097.

On ~~June~~March 420, ~~2012~~2015, ~~Bitzio,~~Lexi-Luu ~~Inc.~~borrowed ~~and~~$10,100 ~~ACT~~through ~~entered~~an ~~into~~unsecured apromissory ~~share~~note ~~purchase~~bearing ~~agreement~~interest ~~wherein~~20% ~~Bitzio~~starting ~~acquired~~from ~~all~~April ~~of the issued and outstanding member’s equity in exchange for 3~~1,~~300,000~~ ~~Series A Convertible Redeemable Preferred shares of the Company. On February 22~~2015, ~~2013,~~due ~~the~~on ~~two parties agreed to unwind the transaction by Bitzio returning the ACT shares acquired and ACT returning the Bitzio preferred share consideration for cancellation~~demand. InAs ~~addition, Bitzio agreed to pay an aggregate~~ of ~~147~~September 30,~~000~~ ~~Euros ($194~~2015,~~447~~ ~~USD) to~~the ~~ACT. The~~ Company ~~re-measured~~had ~~the~~principal ~~amount~~outstanding ~~due~~ in ~~U.S.~~the ~~dollars~~promissory asnote of ~~June 30~~$10,100 ~~2015~~ and ~~recorded~~accrued ~~a gain on foreign currency transaction~~interest of $61,~~071~~010. ~~The amount due as of June 30, 2015 is $163,964.~~

~~F-12~~On September 30, 2015, the Company borrowed $66,000 through a promissory note from a third party bearing 6% interest, with a 50% debt discount and a maturity of 5 years. As of September 30, 2015, the Company had principal outstanding in the promissory note of $66,000, and accrued interest of $11. $452 of the debt discount was amortized during nine months ended September 30, 2015.

On ~~July~~September 130, ~~2013~~2015, ~~Lexi-Luu~~the Company borrowed $1011,~~000~~999 through ana ~~unsecured~~ promissory note ~~bearing~~from ~~interest~~a ~~$1,076~~third ~~maturity~~party ~~date~~bearing of6% ~~January 1~~interest, ~~2014.~~with ~~This~~a ~~note~~50% debt isdiscount ~~currently~~and ata ~~default,~~maturity ~~and~~of ~~bearing~~5 ~~45% interest~~years. As of ~~June~~September 30, 2015, the Company had principal outstanding in the promissory note of $ 511,~~222~~999, and accrued interest of $2. $82 of the debt discount was amortized during nine months ended September 30,~~273~~ 2015.

NOTE 12 – PREFERRED STOCK

The Company is authorized to issue 25,000,000 shares of preferred stock, of which 2,500,000 shares are designated as Series A Convertible Redeemable Preferred Stock, 1,000,000 shares are designated as Series B Convertible Preferred Stock, 999 shares are designated as Series C Preferred Stock, par value of $0.001, and 35,750 shares are designated as Series D Preferred Stock.

Series A Preferred Stock

As of ~~June~~September 30, 2015 and December 31, 2014, there were 2,043,120 shares of Series A Convertible Redeemable Preferred Stock issued and outstanding. The shares have the following provisions:

	●	Series A Convertible Redeemable Shares have no dividend rights.

	●	In the event of liquidation, following the sale or disposition of all or substantially all of the Company’s assets, the holders of the Series A Convertible Redeemable Preferred Stock shall be entitled to receive an amount equal to the per share price of the stock ($0.0025 per share).

	●	Series A Convertible Redeemable shares have no voting rights.

	●	Each share of Series A Convertible Redeemable Preferred Stock is convertible, at the option of the holder, at any time prior to January 2, 2017, and upon payment of $0.40 per share, into two fully paid and non-assessable shares of the Company’s common.

	●	At any time after January 2, 2017, the Company may redeem, at the discretion of the Board of Directors, any or all of the series A convertible redeemable preferred stock for the per share price of the stock ($0.0025 per share).

Designation and Sale of Series B Preferred Stock

On November 18, 2013 the Company filed with the Nevada Secretary of State a Certificate of Designation of 1,000,000 shares of Series B Convertible Preferred Stock, which had been designated by the Company’s Board of Directors as authorized by the Registrant’s Articles of Incorporation. The holders of shares of Series B Preferred Stock will have the following rights:

	●	The holder may convert the Series B Preferred Stock into common stock. All 1,000,000 shares of Series B Preferred Stock are convertible into 19.8% of the common stock outstanding after the conversion, measured on the date of each conversion.

	●	The holder will have voting rights equivalent to the number of shares of common stock into which the holders Series B Preferred Stock is convertible.

	●	In the event of a liquidation of the Registrant, the holder of each share of Series B Preferred Stock will be entitled to a liquidation preference of $1.50.

	●	The holder will participate in any dividend payable to the holders of the common stock on an as-converted basis.

The Company will have the right to redeem the Series B Preferred Stock for a payment of $1.50 per share.

On November 18, 2013 the Company sold 500,000 shares of Series B Preferred Stock to 112359 Factor Fund, LLC (“Factor Fund”) for a total of $250,000. The Company and Factor Fund also agreed that in each of the five months commencing February 2014 Factor Fund will purchase an additional 100,000 shares of Series B Preferred Stock for $50,000 - i.e. a total of 500,000 shares sold during those five months for a total of $250,000. During the year ended December 31, 2014, Factor Fund purchased 500,000 additional shares of Series B Preferred Stock for $250,000.

F-13

Designation and Sale of Series C Preferred Stock

On December 3, 2013 the Company filed with the Nevada Secretary of State a Certificate of Designation of 999 shares of Series C Preferred Stock, which had been designated by the Company’s Board of Directors as authorized by the Registrant’s Articles of Incorporation. The holders of shares of Series C Preferred Stock will have the following rights:

	●	The holder of each share will have the right to cast the number of votes that equals the product obtained by dividing (a) the number of votes that the holders of all voting securities other than Series C Preferred Stock outstanding on the record date for the stockholder action are entitled to cast by (b) nine hundred ninety-eight (998), with the result that all 999 shares of Series C Preferred Stock together will have 50.1% of the voting power of the Registrant.

	●	In the event of a liquidation of the Registrant, the holder of each share of Series B Preferred Stock will be entitled to a liquidation preference of $.01.

	●	The holder will not participate in any dividend payable to the holders of the common stock on an as-converted basis.

	●	On November 29, 2015, each outstanding share of Series C Preferred Stock shall be deemed to have been automatically redeemed by the Corporation. No redemption price shall be payable.

On December 3, 2013 the Board of Directors sold 333 shares of Series C Preferred Stock to each of Gordon McDougall, Marilu Brassington and Hubert Blanchette for a price of $.01 per share. The three shareholders were the members of the Registrant’s Board of Directors at that time. The Company valued the shares at $99, but immediately revalued the shares to the amount to be paid at settlement or $0.

Designation and Sale of Series D Preferred Stock

On August 5, 2014 the Registrant filed with the Nevada Secretary of State a Certificate of Designation of 35,750 shares of Series D Preferred Stock, which had been designated by the Registrant’s Board of Directors as authorized by the Registrant’s Articles of Incorporation. The holders of shares of Series D Preferred Stock will have the following rights:

	●	The holder of each share will have the right to cast the number of votes that equals the votes that could be cast by the holder of 10,000 shares of common stock.

	●	In the event of a liquidation of the Registrant, the holder of each share of Series D Preferred Stock will be entitled to a liquidation preference of $.01.

	●	The holder will not participate in any dividend payable to the holders of the common stock

During the ~~six~~nine months ended ~~June~~ September 30, 2015 the Company issued 15,750 shares of Series D preferred shares in exchange for the return of 157,500,000 shares of its common stock. Subsequently, on May 28, 2015, 15,750 shares of Series D preferred shares were converted back into 157,500,000 shares of common stock. As of ~~June~~September 30, 2015 0 shares of Series D preferred stock ~~have~~were ~~been~~ outstanding.

NOTE 13 – COMMON STOCK

On January 13, 2014 the Company filed with the Nevada Secretary of State a Certificate of Amendment to Articles of Incorporation. The Certificate of Amendment increased the number of authorized shares of common stock from 250 million to 2 billion. On September 12, 2014 the Company filed with the Nevada Secretary of State a Certificate of Amendment to Articles of Incorporation. The Certificate of Amendment increased the number of authorized shares of common stock from 2 billion to 4.2 billion. On April 9, 2015 the Company filed with the Nevada Secretary of State a Certificate of Amendment to Articles of Incorporation. The Certificate of Amendment increased the number of authorized shares of common stock from 4.2 billion to 10 billion. There were 57,~~939~~320,~~277~~754,~~920~~217 shares issued and outstanding as of ~~June~~September 30, 2015. The activity surrounding the issuances of the Common Stock is as follows:

During the ~~six~~nine months ended ~~June~~ September 30, 2015 the Company issued 23,~~351~~493,~~750~~226,~~001~~298 shares in conversion of notes payable of $~~652~~288,~~973~~256, and ~~638~~1,~~833~~036,333 ,333 shares for accrued ~~salaried~~ salaries.

NOTE 14 – STOCK OPTIONS AND WARRANTS

The following table summarizes all stock option and warrant activity for the ~~six~~nine months ended ~~June~~September 30, 2015:

	Number of Warrants			Weighted Average Exercise Price
Balance outstanding, December 31, 2014		14,588,616		$	0.35
Granted		-			-
Exercised		-			-
Forfeited		-			-
Expired		(744,000	)	$	0.40
Balance outstanding, June 30, 2015		13,844,616		$	0.35
Balance outstanding, September 30, 2015		13,844,616		$	0.35
Exercisable, June 30, 2015		13,844,616		$	0.35
Exercisable, September 30, 2015		13,844,616		$	0.35

F-14

The following table discloses information regarding outstanding and exercisable options and warrants at ~~June~~September 30, 2015:

~~Outstanding~~

Outstanding

~~Exercisable~~

Exercisable

Range of Exercise Prices

~~Number of Option Shares~~

Number of Option Shares

~~Weighted Average Exercise Price~~

Weighted Average Exercise Price

~~Remaining Weighted Average Contractual Term (Years)~~

Remaining Weighted Average Contractual Term (Years)

~~Number of Option Shares~~

Number of Option Shares

~~Weighted Average Exercise Price~~

Weighted Average Exercise Price

~~$ 0.20 - $0.29~~

$ 0.20 - $0.29

~~2,000,000~~

2,000,000

~~0.20~~

0.20

~~1.42~~

1.17

~~2,000,000~~

2,000,000

~~0.20~~

0.20

~~$ 0.30 - $0.39~~

$ 0.30 - $0.39

~~11,774,616~~

11,774,616

~~0.37~~

0.37

~~1.22~~

0.97

~~11,774,616~~

11,774,616

~~0.37~~

0.37

~~$ 0.40 - $0.50~~

$ 0.40 - $0.50

~~70,000~~

70,000

~~0.40~~

0.40

~~1.50~~

1.25

~~814,000~~

814,000

~~0.40~~

0.40

~~13,844,616~~

13,844,616

~~0.54~~

0.33

~~1.25~~

1.00

~~13,844,616~~

13,844,616

~~0.33~~

0.33

NOTE 15 – FAIR VALUE MEASUREMENTS

Our financial assets and (liabilities) carried at fair value measured on a recurring basis as of ~~June~~September 30, 2015 and December 31, 2014 consisted of the following:

Fair Value Measurements Using

Total Fair

Quoted prices in

Significant other

Significant

Value at

active markets

observable inputs

Unobservable inputs

Description

~~June~~September 30, 2015

(Level 1)

(Level 2)

(Level 3)

Derivative liability (1)

(1886,~~073,078~~723

)

—

(1886,~~073,078~~723

)

—

	Fair Value Measurements Using
	Total Fair			Quoted prices in		Significant other			Significant
	Value at			active markets		observable inputs			Unobservable inputs
Description	December 31, 2014			(Level 1)		(Level 2)			(Level 3)
Derivative liability (1)	$	(3,212,200	)	$	—	$	(3,212,200	)	$	—

(1) The derivative is calculated using the Black Scholes Pricing Model

NOTE 16 – CONCENTRATION OF RISK

For the ~~six~~nine months ended ~~June~~ September 30, 2015, we derived approximately 3032 % of our sales from contracts with ~~two~~three customers. Our standard contract with customers is for an initial one year term, and renews automatically for successive one-month terms, unless either party terminates upon 30 days’ written notice to the other party.

NOTE 17 – SUBSEQUENT EVENTS

None.

F-15

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Current Business Plan

From November 18, 2013 until July 18, 2014 Bitzio, Inc. served as the exclusive worldwide distributor for E-motion Apparel, Inc. E-motion ~~Apparel~~ Apparel is a women’s contemporary brand specializing in the resort-wear market. E-motion represents equal parts fashion, ~~function~~ function and wearable art. E-motion apparel is every daywear for every woman. E-motion is a modern take on tie-dye to create comfortable, dynamic casual wear for today’s active lifestyle. The brand’s product line incudes maxi dresses, mini dresses, skirts, tops and pants in both hand tie-dye patterns and solid colors. The brand currently uses mainly one fabric manufactured both domestically and overseas. The styles are made with the intention to appeal to most demographics from women in their 20s to women into 60s. The fabric, styles and hand tie-dyed methods are what differentiate this brand from other similar brands in the market. The brand will market its production through traditional channels such as trade shows, sales representatives, online marketing and social media. The product is manufactured primarily locally and shipped from our local facilities. E-motion Apparel is currently in high-end boutiques and resorts across the country and expanding both domestically and internationally.

During ~~February~~ February 2014 the Company completed its first acquisition, taking control of the Cleo VII brand.

On July 16, 2014, we entered into a sales purchase agreement to acquire 100% of the outstanding shares of Lexi Luu Designs. Bitzio paid 500,000,000 restricted commons shares for this acquisition. 300,000 shares valued $0.0014, the market price of the Company’s stock on the day of acquisition, or $420,000, was the consideration given. The other 200,000 shares, or $280,000 were recorded as pre-paid compensation per the guidance at ASC 805-10-55-25, as they are considered compensation for continuing employment of Mr. Blanchette. The value of the shares will be amortized over the service period of approximately 20 months. Lexi Luu shareholders are able to earn an additional $300,000 in restricted common shares over the course of years in an earn out upon hitting certain revenue benchmarks. The Company recorded an earnout contingent liability of $87,000 as part of the acquisition. We accounted for the transaction as a business combination. Of the purchase price paid as of July 16, 2014 ($183,629) was allocated among the assets and liabilities and the difference was assigned to intangible assets.

On July 18, 2014, we entered into a sales purchase agreement to acquire 100% of the outstanding shares of E-motion Apparel. Designs. Bitzio paid 350,000,000 restricted commons shares for this acquisition. All 350,000 shares, or $455,000 were recorded as pre-paid ~~compensation~~ compensation per the guidance at ASC 805-10-55-25, as they are considered compensation for continuing employment of Ms. Brassington, Ms. Cunningham and Ms. Brito. The value of the shares will be amortized over the service period of approximately 20 months. E-motion ~~Apparel~~ Apparel shareholders are able to earn an additional $300,000 in restricted common shares over the course of years in an earn out ~~upon~~ upon hitting certain revenue benchmarks. The Company recorded an earnout contingent liability of $48,000 as part of the acquisition. We accounted for the transaction as a business combination. Of the purchase price paid as of July 18, 2014 ($26,235) was allocated among the assets and liabilities and the difference was assigned to intangible assets. This License Agreement between Bitzio and E-motion Apparel was cancelled on July 18, 2014 and was replaced with the sales purchase agreement.

On February 26, 2015, the Company entered into and closed under a securities purchase agreement to acquire 100% of all outstanding shares of Skipjack Dive and Dancewear, Inc., in exchange for a 2% subordinate secured term note in the aggregate principal amount of $100,000. The note has a maturity date of September 30, 2015, and is convertible at the rate of $0.10 per share into 1,000,000 shares of common stock of the Company.

On March 3, 2015, the Company entered into and closed under a securities purchase agreement to acquire 100% of all outstanding shares of Punkz Gear, Inc., in exchange for a 2% subordinate secured term note in the aggregate principal amount of $200,000. The note has a maturity date of September 30, 2015, and is convertible at the rate of $0.10 per share into 2,000,000 shares of common stock of the Company.

The financial statements included in this report reflect the results of Skipjack and Punkz Gear post acquisition.

Going Concern

As a result of our financial condition, our independent auditor has expressed in its opinion on our financial statements of December 31, 2014 uncertainty as to our ability to continue as a going concern. In order to continue as a going concern we must effectively ~~balance~~ balance many factors and begin to generate revenue so that we can fund our operations from our sales and revenues. If we are not ~~able~~ able to do this we may not be able to continue as an operating company.

Results of Operations

Three months ended ~~June~~September 30, 2015 compared to three months ended ~~June~~September 30, 2014

Revenues

For the three months ended ~~June~~ September 30, 2015, we had revenues of $96117,~~010~~549, compared to $60207,~~551~~804 for the three months ended ~~June~~ September 30, 2014. Sales ~~grew~~decreased in 2015, ~~as a~~mainly ~~result~~due ofto ~~the~~declining ~~acquisitions~~orders asfrom ~~described~~our ~~above~~top customer, and lack of capital to boost sales.

The following table shows the contribution to revenue of our subsidiaries:

	Q2 2015 Revenue		% of Total Revenue
	Q3 2015 Revenue		% of Total Revenue
E-Motion Apparel	$	4149,~~946~~372		4442	%
Lexi Luu Designs	$	4862,~~005~~509		5053	%
Cleo VII	$	-		-	%
Skipjack	$	~~945~~220		1	%
Punkz Gear	$	5,~~114~~448		54	%

Cost of Revenue

For the three months ended ~~June~~ September 30, 2015, our cost of revenue was $7675,~~009~~272, compared to $048,696 for the three months ended ~~June~~September 30, 2014. Gross profit was $2042,~~001 and~~277 and $60159,~~551~~108 for the three months ended ~~June~~September 30, 2015 and 2014, respectively. The decrease of $116,831 in gross profit is due to decreased sales. The gross profit margin decrease from 77% for three months ended September 2015 to 36% for three months ended September 2014 is due to increased costs of production labor.

Operating Expenses

The primary component of our operating expenses for the three months ended ~~June~~September 30, 2015 consisted of general and administrative expenses of $~~366~~319,~~360~~799. During the three months ended ~~June~~September 30, 2014, our general and administrative expenses totaled $87186,~~708~~843. General and ~~administrative~~ administrative expenses increased by $~~278~~132,~~652~~936 mainly due to ~~increased~~the ~~sale~~amortization ~~and~~of ~~marking~~intangible ~~cost,~~assets ~~management~~and ~~salaries~~prepaid ~~and~~management ~~expense~~wages related to newly acquired subsidiaries.

The remainder of our operating expenses for the three months ended ~~June~~September 30, 2015 consisted of professional fees of $4322,~~634~~554. During the three months ended ~~June~~September 30, 2014, our professional fees totaled $~~199~~94,~~874~~842. Professional fees fell year-to-year due to the change in our business plan and management practices.

Loss from Operations

Due to our significant increase in general and administrative expenses, our loss from operations increased from $~~227~~122,~~031~~577 for the three months ended ~~June~~September 30, 2014 to $~~389~~300,~~993~~056 for the three months ended ~~June~~September 30, 2015.

Other Expense

During the three months ended ~~June~~September 30, 2015 we incurred interest charges of $~~136~~48,~~697~~ 593 as a result of financing transactions during the period. Our interest expense for the three months ended ~~June~~September 30, 2014 was $85270,~~619~~660. The decrease is attributable to the initial valuation of convertible debt.

We accounted for our convertible debt in accordance with ASC 815, Derivatives and Hedging , as the conversion feature embedded in the convertible debentures could result in the note principal and related accrued interest being converted to a variable number of our common shares. The conversion feature on these debentures is variable and based on trailing market prices. It therefore contains an embedded derivative. The fair value of the conversion feature was calculated when the debentures were issued, and we recorded a derivative liability for the calculated value. The conversion liability is valued at the end of each reporting period and results in a gain or loss for the change in fair value. Due to the volatile nature of our stock, the change in the derivative liability and the resulting gain or loss will usually be material to our results. During the three months ended ~~June~~September 30, 2015, we recorded a gain of $296,~~163~~557, as the value of our derivative liabilities decreased by that amount. During the three months ended ~~June~~ September 30, 2014, we recorded a gain of $~~657~~440,~~520~~137, as the value of our derivative liabilities decreased by that amount.

During the three months ended ~~June~~September 30, 2015 we incurred foreign currency transaction loss of $6118,~~071,~~ compared to gain of $115,~~161~~611 during ~~the~~ the three months ended ~~June~~September 30, 2014. We also incurred loss on extinguishment of debt of $~~31,194~~0 for the three months ended ~~June~~September 30, 2015, compared to loss on extinguishment of debt of $39,928 during the three months ended September 30, 2014.

We acquired a 51% ownership interest in Cleo VII, Inc. The net loss attributable to non-controlling interest of $7,350 and $014,700 reflects ~~operations~~ operations in Cleo VII, Inc. attributable to the non-controlling interest holder for the three months ended ~~June~~September 30, 2015 and 2014, respectively.

Net Loss

As a result of the foregoing, during the three months ended ~~June~~September 30, 2015, we recorded a net loss of $~~554~~252,~~442~~210 compared to a net income of $~~346~~22,~~031~~583 for the three months ended ~~June~~September 30, 2014.

~~Six months ended June 30, 2015 compared to six months ended June 30, 2014~~5

~~Revenues~~Nine months ended September 30, 2015 compared to nine months ended September 30, 2014

~~For the six months ended June 30, 2015, we had revenues of $221,459, compared to $87,254 for the six months ended June 30, 2014. Sales grew in 2015, as a result of the acquisitions as described above.~~Revenues

5For the nine months ended September 30, 2015, we had revenues of $339,008, compared to $295,058 for the nine months ended September 30, 2014. Sales grew in 2015, as a result of the acquisitions as described above.

The following table shows the contribution to revenue of our subsidiaries:

	Six months 2015 Revenue		% of Total Revenue
	Nine months 2015 Revenue		% of Total Revenue
E-Motion Apparel	$	72121,~~262~~633		3336	%
Lexi Luu Designs	$	~~134~~196,~~000~~510		6158	%
Cleo VII	$	-		-	%
Skipjack	$	4,~~276~~497		21	%
Punkz Gear	$	1016,~~921~~368		5	%

Cost of Revenue

For the ~~six~~nine months ended ~~June~~ September 30, 2015, our cost of revenue was $~~139~~214,~~528~~800, compared to $048,696 for the ~~six~~nine months ended ~~June~~ September 30, 2014. Gross profit was $81124,~~931~~ 208 and $87246,~~254~~362 for the ~~six~~nine months ended ~~June~~September 30, 2015 and 2014, respectively. The gross profit margin decrease from 83% for the nine months ended September 2014 to 37% for three months ended September 2015 is due to increased costs of production labor.

Operating Expenses

The primary component of our operating expenses for the ~~six~~nine months ended ~~June~~September 30, 2015 consisted of general and administrative expenses of $~~735~~1,~~092~~054,871. During the ~~six~~nine months ended ~~June~~September 30, 2014, our general and administrative expenses totaled $~~220~~407,~~406~~249. General and ~~administrative~~ administrative expenses ~~are~~ increased by $~~514~~647,~~686~~622 mainly due to ~~increased~~the ~~sale~~amortization ~~and~~of ~~marking~~intangible ~~cost,~~assets and management ~~salaries~~prepaid ~~and~~wage ~~expense~~ related to newly acquired subsidiaries.

The remainder of our operating expenses for the ~~six~~nine months ended ~~June~~September 30, 2015 consisted of professional fees of $~~104~~126,~~155~~709. During the ~~six~~ nine months ended ~~June~~September 30, 2014, our professional fees totaled $~~361~~456,~~579~~421. Professional fees ~~fell~~decrease ~~year-to-year~~ due to the change in our business plan and management practices.

Loss from Operations

Due to our significant increase in general and administrative expenses, our loss from operations increased from $~~494~~617,~~731~~308 for the ~~six~~ nine months ended ~~June~~ September 30, 2014 to $~~757~~1,~~316~~057,372 for the ~~six~~nine months ended ~~June~~September 30, 2015.

Other Expense

During the ~~six~~ nine months ended ~~June~~September 30, 2015 we incurred interest charges of $~~491~~540,~~822~~415 as a result of financing transactions during the period. Our interest expense for the ~~six~~nine months ended ~~June~~September 30, 2014 was $~~342~~613,~~950~~610.

We accounted for our convertible debt in accordance with ASC 815, Derivatives and Hedging , as the conversion feature embedded in the convertible debentures could result in the note principal and related accrued interest being converted to a variable number of our common shares. The conversion feature on these debentures is variable and based on trailing market prices. It therefore contains an embedded derivative. The fair value of the conversion feature was calculated when the debentures were issued, and we recorded a derivative liability for the calculated value. The conversion liability is valued at the end of each reporting period and results in a gain or loss for the change in fair value. Due to the volatile nature of our stock, the change in the derivative liability and the resulting gain or loss will usually be material to our results. During the ~~six~~nine months ended ~~June~~September 30, 2015, we recorded a gain of $2,~~823~~920,~~888~~445, as the value of our derivative liabilities decreased by that amount. During the ~~six~~nine months ended ~~June~~ September 30, 2014, we recorded a ~~loss~~gain of $~~161~~278,~~258~~879, as the value of our derivative liabilities increased by that amount.

During the ~~six~~ nine months ended ~~June~~September 30, 2015 we incurred a foreign currency transaction gain of $13,~~921~~803, compared to $116,~~118~~729 during the ~~six~~nine months ended ~~June~~September 30, 2014. We also incurred loss on extinguishment of debt of $977,876 and $242,~~850~~778 for the ~~six~~nine months ended ~~June~~ September 30, 2015 and 2014, respectively.

We acquired a 51% ownership interest in Cleo VII, Inc. The net loss attributable to non-controlling interest of $1422,~~700~~050 and $519,~~194~~ 894 reflects operations in Cleo VII, Inc. attributable to the non-controlling interest holder for the ~~six~~nine months ended ~~June~~September 30, 2015 and 2014, respectively.

Net Loss

As a result of the foregoing, during the ~~six~~nine months ended ~~June~~September 30, 2015, we recorded a net income of $~~625~~358,~~495~~585 compared to a net loss $~~995~~978,~~478~~ 088 for the ~~six~~nine months ended ~~June~~September 30, 2014.

~~Liquidity and Capital Resources~~6

~~Our~~Liquidity ~~principal needs for liquidity have been to fund operating losses, working capital requirements, acquisitions,~~ and ~~debt~~Capital service. Unfortunately, at June 30, 2015 we had low liquidity, with current assets consisting of $20,134 in cash, $335,909 in prepaid expenses, $198,919 in inventory, and $11,512 in accounts receivable. We expect that working capital requirements and acquisitions will continue to be our principal needs for liquidity over the near term. Working capital requirements are expected to increase as a result of our anticipated growth, both organically and through future acquisitions. Accordingly, we will be working aggressively to secure sources of financing.Resources

Our principal need for liquidity have been to fund operating losses, working capital requirements, acquisitions, and debt service. Unfortunately, at September 30, 2015 we had low liquidity, with current assets consisting of $60 in cash, $215,808 in prepaid expenses, $215,162 in inventory, and $6,690 in accounts receivable. We expect that working capital requirements will continue to be our principal need for liquidity over the near term. Working capital requirements are expected to increase as a result of our anticipated growth, both organically and through future acquisitions. Accordingly, we will be working aggressively to secure sources of financing.

We have not yet established an ongoing source of revenues sufficient to cover our operating costs and allow us to continue as a going concern. Our ability to continue as a going concern is dependent on obtaining adequate capital to fund operating losses until we become profitable. If we are unable to obtain adequate capital, we could be forced to cease operations. Management’s plan is to seek equity and/or debt financing. However management cannot provide any assurances that we will be successful in accomplishing any of our plans.

Cash Used in Operations

Our net cash used in ~~continuing~~ operating activities was $~~112~~172,~~987~~061 for the ~~six~~nine months ended ~~June~~September 30, 2015, compared to $~~220~~291,~~545~~191 for the nine months ended September 30, 2014. The increase of $360,752 in prepaid expense for nine months ended September 30, 2015 from $5,435 for the ~~six~~nine months ended ~~June~~September 30, 2014, is related to the valuation of customer relations for acquisitions. Loss on extinguishment of debt is $977,876 and $42,778 for nine months ended September 30, 2015 and 2014, the increase changes is related to several debt assignments. The net changes in accounts payable and accrued payable is $75,903 for the nine months ended September 30, 2015 compared to $384,896 for the nine months ended September 30, 2014, which included increases liabilities related to consulting expense during nines months ended September 30, 2014 and liabilities related to Lexi Luu acquisition.

Cash Used in Investing Activities

Our net cash used by investing activities was $0 and $116,382 for the ~~six~~nine months ended ~~June~~September 30, 2015 and 2014.

Cash Provided by Financing Activities

Our net cash provided by financing activities was $~~111~~150,263 for the ~~six~~nine months ended ~~June~~September 30, 2015, compared to $~~333~~406,050 for the ~~six~~ nine months ended September ~~June~~ 30, 2014. For the ~~six~~nine months ended ~~June~~September 30, 2015, our cash provided by financing activities consisted primarily of ~~proceed~~proceeds from convertible notes payable of $120,000 and $39,000 from notes payable.

Contractual obligations and other commitments

The following table summarized our contractual obligations as of ~~June~~September 30, 2015, and the effect these obligations are expected to have on our liquidity and cash flows in future periods.

Payments due by period

Total

Less than 1 Year

1-2 Years

~~3-4 Years~~

3-4 Years

~~5+ Years~~

5+ Years

Related party debts

~~616~~619,~~290~~938

Notes payable

~~319~~347,~~325~~651

Convertible notes

~~988~~931,~~471~~939

Total

1,~~924~~899,~~086~~528

Off-balance sheet arrangements

As of ~~June~~ September 30, 2015, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future ~~material~~ material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, or or capital resources.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information ~~required~~ required by this Item.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We conducted an evaluation, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities ~~Exchange~~ Exchange Act of 1934, as amended, as of ~~June~~September 30, 2015, to ensure that information required to be disclosed by us in the reports ~~filed~~ filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in in the Securities Exchange Commission’s rules and forms. The evaluation disclosed the following material weaknesses in our disclosure controls and procedures:

1. We do not have written documentation of our internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act. Management evaluated the impact of our failure to have written documentation of our internal controls and procedures on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

2. We do not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.7

72. We do not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

3. We outsource the bookeeping operations of our company. Because we have no bookkeeping staff, we outsource most of the basic accounting functions of our Company to an independent consultant. This consultant is self-directed, and is not directly answerable to the Company’s management. This is a material weakness because it could result in a disjunction between the accounting policies adopted by our Board of Directors and the accounting practices applied by the consultant.

Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of ~~June~~September 30, 2015, our disclosure ~~controls~~ controls and procedures were not effective.

Changes in Internal Control over Financial Reporting

No change in our system of internal control over financial reporting occurred during the fiscal quarter ended ~~June~~September 30, 2015 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1 – LEGAL PROCEEDINGS

There are presently no pending legal proceedings to which the Company or any of its subsidiaries is a party or to which any of their property is subject.

ITEM 1A – RISK FACTORS.

There have been no material changes from the risk factors included in the Annual Report on Form 10-K for the year ended December 31, 2014.

ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Unless ~~otherwise~~ otherwise noted, the issuances noted below are all considered exempt from registration by reason of Section 4(a)(2) of the Securities ~~Act~~ Act of 1933, as amended.

During the three months ended ~~June~~September 30, 2015 the Company issued 1,~~000~~141,~~000~~476,~~000~~297 shares in conversion of notes payable of $~~100~~214,~~000~~151.

ITEM 3 – DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4 – MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5 – OTHER INFORMATION

None.

ITEM 6 – EXHIBITS

The following exhibits are filed as part of this quarterly report on Form 10-Q:

Exhibit No.		Description
31.1		Rule 13a-14(a) Certification - CEO*
31.2		Rule 13a-14(a) Certification - CFO*
32.1		Rule 13a-14(b) Certification - CEO*
32.2		Rule 13a-14(b) Certification - CFO*
101.INS		XBRL Instance Document**
101.SCH		XBRL Taxonomy Extension Schema Document**
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document**
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document**
101.LAB		XBRL Taxonomy Extension Label Linkbase Document**
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document**

*Filed Herewith

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

SIGNATURES

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

	Bitzio, Inc.
Dated: August 18, 2015	By:	/s/ Hubert Blanchette
Dated: November 20, 2015	By:	/s/ Hubert Blanchette
	Name:	Hubert Blanchette, Chief Executive Officer
Dated: August 18, 2015	By:	/s/ Marilu Brassington
Dated: November 20, 2015	By:	/s/ Marilu Brassington
	Name:	Marilu Brassington, Chief Financial and Accounting Officer

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