UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

~~Form~~ FORM 10-K

~~[X]~~ ANNUAL REPORT ~~PURSUANT TO~~UNDER SECTION 13 OR 15 (dD) ~~OF THE SECURITIES EXCHANGE ACT OF 1934~~

~~For~~OF THE ~~the~~SECURITIES ~~fiscal~~EXCHANGE ~~year ended~~ACT ~~December~~OF ~~31, 2014~~1934

ORFOR THE FISCAL YEAR ENDED DECEMBER 31, 2015

~~[ ] TRANSITION~~COMMISSION ~~REPORT~~FILE ~~PURSUANT~~NO.: ~~TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~000-51688

~~For the transition period~~BITZIO, ~~from _____________ to _____________~~INC.

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.)
(State or other jurisdiction		(IRS Employer
9625 Cozycroft Ave. Suite A Chatsworth, CA 91311		91306
of incorporation or organization)		Identification No.)
9186 Independence Avenue, Chatsworth, CA 91311		91306
(Address of principal executive offices)		(Zip Code)

~~Registrant’s~~(818) ~~telephone number, including area code 213~~775-~~489-1377~~0339

~~Securities~~(Registrant’s ~~registered~~telephone ~~pursuant to Section 12(b~~number) ~~of the Act:~~

Title of each class Name of each exchange on which registered None None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 406 of the Securities Act.	Yes	[ ]	No	[X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.	Yes	[ ]	No	[X]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 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 prior 12 months (or for such shorter period that the registrant was required to submit and post such files).	Yes	[X]	No	[ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.	Yes	[ ]	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 filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [X]

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

As of June 28, 2015 (the last business day of the most recently completed second fiscal quarter) the aggregate market value of the common stock held by non-affiliates was approximately $516,000.

As of May 23, 2016, there were 7, 720,704,217 shares of common stock outstanding.

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, par value $0.001

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes [ ] No [X]

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 Website, 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 that the registrant was required to submit and post such files). Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]

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 definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [X]

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

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant, as of June 30, 2014, the last business day of the registrant’s most recently completed second fiscal quarter, was approximately $381,000 based upon the last sales price of the common stock as of such date. Solely for purposes of this disclosure, shares of common stock held by executive officers, directors and beneficial holders of 10% or more of the outstanding common stock of the registrant as of such date have been excluded because such persons may be deemed to be affiliates.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. As of April 15, 2015, there were 4,142,944,587 shares of common stock, par value $0.001, issued and outstanding.

BITZIO, INC.

ANNUAL REPORT ON FORM 10K

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2015

TABLE OF CONTENTS

			Page
		Page No
	PART I
Part I
Item 1	Business	3	3
Item 1A	Risk Factors	6	5
Item 1B	Unresolved Staff Comments		9
Item 2	Description of Properties	13
Item 2	Properties		9
Item 3	Legal Proceedings	13
Item 3	Legal Proceedings		9
Item 4	Mine Safety Disclosure	14
Item 4	Mine Safety Disclosures		9
Part II
	PART II
Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchase of Equity Securities	15
Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		10
Item 6	Selected Financial Data	16
Item 6	Selected Financial Data		10
Item 7	Management’s Discussion and Analysis	16
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations		11
Item 8	Financial Statements and Supplementary Schedules	20
Item 7A	Quantitative and Qualitative Disclosures About Market Risk		13
Item 9	Changes and Disagreements with Accountants on Accounting and Financial Disclosure	60
Item 8	Financial Statements and Supplementary Data		14
Item 9A	Controls and Procedures	60
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		15
Item 9B	Other Information	61
Item 9A	Controls and Procedures		15
Part III
Item 9B	Other Information		16
Item 10	Directors, Executive Officers and Corporate Governance	62
	PART III
Item 11	Executive Compensation	62
Item 10	Directors, Executive Officers and Corporate Governance		17
Item 12	Security Ownership of Certain Beneficial Owners, and Management and Related Stockholder Matters	62
Item 11	Executive Compensation		18
Item 13	Certain Relationships and Related Transactions and Director Independence	63
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		18
Item 14	Principal Accountant Fees and Services	64
Item 13	Certain Relationships and Related Transactions, and Director Independence		19
Part IV
Item 14	Principal Accounting Fees and Services		19
Item 15	Exhibits and Financial Statement Schedules	65
	PART IV
	Signatures	66
Item 15	Exhibits, Financial Statement Schedules		20
	SIGNATURES		21

PART I

~~ITEM~~CONVENTIONS 1USED –IN ~~BUSINESS~~THIS REPORT

~~Cautionary~~In ~~Statement~~this ~~Regarding~~Annual ~~Forward~~Report ~~Looking~~on ~~Statements~~Form 10-K, the terms “we,” “our,” “us,” “Bitzio”, or the “Company” refer to Bitzio, Inc., and its subsidiaries on a consolidated basis. The term “Bitzio, Inc.” refers to Bitzio, Inc. on a standalone basis only, and not its subsidiaries. The following is a list of the acronyms and other naming conventions used in this report, unless otherwise specified:

This Annual 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 possible or assumed future results of operations of the Company set forth under the heading “Management’s Discussion and Analysis of Financial Condition or Plan of Operation.” Forward-looking statements also include statements in which words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “consider” or similar expressions are used.

CARB	refers to the Air Resources Board of the California Environmental Protection Agency;

USEPA	refers to the U.S. Environmental Protection Agency;

EIA	refers to the U.S. Energy Information Association;

NBB	refers to the National Biodiesel Board;

RFA	refers to the Renewable Fuels Association;

RFS or RFS2	refers to the Renewable Fuel Standard published by the EPA

TJPC	refers to The Jacobsen Publishing Company;

TNS	refers to the Trade News Service;

USDA	refers to the U.S. Department of Agriculture;

SEC	refers to the U.S. Securities and Exchange Commission;

MMGY	refers to million gallons per year;

BGY	refers to billion gallons per year;

Btu	refers to British thermal units;

MMBtu	refers to million British thermal units; and,

gCO2	refers to grams of carbon dioxide.

~~Forward-looking~~MARKET ~~statements~~AND ~~are~~INDUSTRY ~~not~~DATA guarantees of future performance. They involve risks, uncertainties and assumptions. The Company’s 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.FORECASTS

~~Corporate~~This ~~History~~document includes data and forecasts that the Company has prepared based, in part, upon information obtained from industry publications. Third-party industry publications generally state that the information contained therein has been obtained from sources believed to be reliable, but do not guarantee the accuracy and completeness of such information. In particular, we have based much of our discussion of the biodiesel and ethanol industries, including government regulation relevant to the industry, on information published by the NBB, the national trade association for the U.S. biodiesel industry, and the RFA, the national trade association for the U.S. corn ethanol industry. Each is a trade organization for their respective industry and they may present information in a manner that is more favorable than would be presented by an independent source. We have also used data and other information in this document that was published by the TNS, TJPC, the EIA, the USEPA, the USDA, and CARB. Forecasts in particular are subject to a high risk of inaccuracy, especially forecasts projected over long periods of time.

Bitzio, Inc. started in 2011 as a mobile app development business leveraging celebrity and athlete followings. On April 4, 2013 the Company completed the sale of its wholly owned subsidiary, Thinking Drone LLC, to a third party. The transferred business and assets of Thinking Drone LLC have been presented as discontinued operations in the financial statements included in this Report, with a gain shown on disposal of discontinued operations. After the sale of this subsidiary, the Company shifted its business strategy toward a fashion incubation model.1

~~With~~CAUTIONARY ~~its~~INFORMATION ~~gained~~REGARDING ~~knowledge~~FORWARD ~~from~~LOOKING the celebrity market, in mid-2013, Bitzio shifted its focus to fashion with a Los Angeles-based apparel incubation model. Bitzio is a roll-up platform/apparel model that plans to acquire niche apparel businesses with current operations. Bitzio will accelerate these emerging brands with its extensive industry experience and centralized operations.STATEMENTS

~~Our~~The ~~Business~~SEC encourages companies to disclose forward-looking information so that investors can better understand a company’s future prospects and make informed investment decisions. This report contains such “forward-looking statements”. We make certain forward-looking statements in this Annual Report on Form 10-K and in documents that are incorporated herein by reference. These forward-looking statements relate to our outlook or expectations for earnings, revenues, expenses, asset quality or other future financial or business performance, strategies or expectations, or the impact of legal, regulatory or supervisory matters on our business, results of operations or financial condition. Specifically, forward-looking statements may include statements preceded by, followed by or that include the words “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “target” or similar expressions. These statements reflect our management’s judgment based on currently available information and involve a number of risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Future performance cannot be ensured. Actual results may differ materially from those in the forward-looking statements. Some factors that could cause our actual results to differ include:

~~BITZIO is~~- athe ~~fashion~~volatility ~~brand~~and ~~management~~uncertainty ~~company~~of commodity prices; - operational disruptions at ethanol production facilities; - the costs and business risks associated with developing new technologies; - our ability to develop and commercialize our technologies; - the impact of new, ~~engaged~~emerging and competing technologies on our business; - the possibility of one or more of the markets in ~~acquiring~~which we compete being impacted by political, ~~promoting~~legal and ~~marketing~~regulatory achanges ~~portfolio~~or other external factors over which they have no control; - the effects of ~~consumer~~mergers ~~brands.~~and Weconsolidations ~~intend~~ in the biofuels industry and unexpected announcements or developments from others in the renewable fuels industry; - our reliance on key management personnel; - changes in or elimination of governmental laws, tariffs, trade or other controls or enforcement practices; - limitations and restrictions contained in the instruments and agreements governing our indebtedness; - our ability to ~~grow~~raise additional capital and secure additional financing; - our ~~portfolio~~ability to implement additional financial and management controls, reporting systems and procedures and comply with Section 404 of ~~brands~~the bySarbanes-Oxley ~~acquiring~~Act, ~~multiple~~as ~~fashion~~amended; and ~~accessory~~- ~~brands~~other risks referenced from time to time in our filings with the SEC and ~~developing~~those ~~them~~factors ~~for~~listed ~~large~~in this Annual Report on Form 10-~~scale~~K ~~growth~~for the year ended December 31, 2015 under Item 1A, Risk Factors.

~~Our~~In ~~objective~~light isof tothese ~~build~~assumptions, arisks ~~diversified~~and ~~portfolio~~uncertainties, ofthe ~~lifestyle~~results ~~consumer~~and ~~brands~~events bydiscussed ~~acquiring~~in ~~emerging~~the ~~brands~~forward-looking ~~while~~statements ~~leveraging~~contained in ~~our~~this report or in~~-house brand~~ ~~management~~any ~~expertise~~document incorporated by reference might not occur. WeInvestors ~~also~~are ~~plan~~cautioned not to ~~consider~~place ~~entering~~undue ~~into~~reliance on ~~joint~~the ~~ventures~~forward-looking ~~and~~statements, ~~other~~which ~~partnerships~~speak toonly ~~acquire~~as ~~brands.~~of Tothe date of this report or the date of the document incorporated by ~~achieve~~reference in this ~~objective~~report. We are not under any obligation, and we ~~intend~~expressly disclaim any obligation, to: update or alter any forward-looking statements, whether as a result of new information, future events or otherwise.

● Increase distribution of brands by expanding the brands’ retail presence and optimizing sales through innovative marketing that increases consumer awareness and loyalty; ● Develop international expansion through partnerships and other arrangements with leading retailers and wholesalers worldwide; and ● Acquire consumer brands with broad appeal, applicability to a range of niche product categories, and an ability to diversify our portfolio. In assessing potential acquisitions or investments, we will primarily evaluate the strength of the targeted brand as well as the expected viability and sustainability of future royalty streams.2

~~Advertising~~ITEM 1 BUSINESS

Our advertising expenditures for our brands are dedicated largely to creating and developing creative advertising concepts, reaching appropriate arrangements with our strategic partners, other spokes people, advertisements and trade venues, and securing strong internet presence and product placement.OVERVIEW

~~Current~~Bitzio, ~~Businesses~~Inc. (“we,” “our,” “us,” or the “Company”), develops and commercializes clean technologies that facilitate the more efficient use of natural resources. We are focused on doing so primarily in three sectors: agriculture, energy and lifestyle.

~~From~~The ~~November 18, 2013 until July 18, 2014 Bitzio, Inc. served as the exclusive worldwide distributor for E-motion Apparel, Inc. E-motion Apparel is a women~~Company’s ~~contemporary~~portfolio ~~brand~~of ~~specializing~~patented inand ~~the resort~~patent-~~wear~~pending ~~market.~~technologies ~~E-motion~~covers ~~represents~~oil ~~equal~~extraction ~~parts~~and ~~fashion~~refining, ~~function~~ ~~and~~renewable ~~wearable~~fuels ~~art. E-motion apparel is every daywear for every woman. E-motion is a modern take on tie-dye to create comfortable,~~and ~~dynamic~~chemicals, ~~casual~~solar ~~wear~~energy ~~for~~and ~~today’s active lifestyle. The brand’s product line incudes maxi dresses~~fuels, ~~mini~~energy ~~dresses, skirts, tops~~ and ~~pants~~chemical indetection, ~~both~~wearables ~~hand tie-dye patterns~~ and ~~solid~~consumer ~~colors.~~products, ~~The~~among ~~brand currently uses mainly one fabric manufactured both domestically and overseas~~others. ~~The~~Our ~~styles~~plan ~~are made with the intention~~ to ~~appeal~~bring our totechnologies ~~most demographics from women in their 20s~~ to ~~women~~market ~~into~~involves ~~60s. The~~utilization ~~fabric,~~of ~~styles and hand tie~~strategically-~~dyed~~relevant ~~methods~~infrastructure ~~are what differentiate this brand from other similar brands~~ in ~~the~~targeted ~~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.

We also generate sales in our lifestyle group by producing and selling activewear and other apparel for women and children, an important early-adopter market for wearable technologies that we are developing. In addition, we are evaluating a number of investments and acquisitions in each of our targeted sectors, each with a view toward internalizing additional revenue, management, and infrastructure that we can leverage to bring our technologies to market.

Our Technologies

About one pound of ethanol is produced from three pounds of corn through the process of fermentation. The output of fermentation contains ethanol, water, protein, fiber and corn oil. This mixture is distilled to boil off the ethanol for purification in a molecular sieve, leaving the remainder of the mixture in the bottom of the distillation stage. The distillation bottom, or the whole stillage, is conventionally subjected to mechanical and then thermal dewatering to produce a co-product called distillers grain.

Our patented and patent-pending corn oil extraction technologies bolt-on to the back end of the dry mill ethanol production process, where they intercept the flow of the whole stillage at various points downstream of the distillation equipment and before final dewatering. We condition the stillage, extract the oil, and return the flow back to the production process of the host ethanol producer. The extracted oil is then stored and shipped for refining. We are developing additional technologies with a view towards separation and extraction of additional valuable co-products from the de-oiled portion of the flow after oil extraction.

Our extraction technologies enable licensed ethanol producers to increase sales with a new co-product while decreasing production costs. Increasing profitability and diversifying cash flows decreases risk by partially insulating licensed producers from the commodity price volatility they face. These benefits collectively converge to provide our licensees with a significant competitive advantage as compared to producers that have not licensed our patented and patent-pending corn oil extraction technologies.

We are also developing apparel-based applications for our patent pending solar energy conversion technologies. Our objective in doing so is to utilize ambient radiation to provide power for garments and other electronic devices, with an initial emphasis on activewear.

OnOur ~~July~~Competitive 18, 2014 the Registrant entered into a Share Exchange Agreement with Marilu Brassington, Elaine Cunningham and Leticia Brito. Ms. Brassington is the Registrant’s Chief Financial Officer and a member of the Registrant’s board of directors.Strengths

~~The~~We ~~transactions~~believe ~~contemplated by the Share Exchange Agreement were completed on July 18, 2014. On~~ that ~~date,~~we ~~the~~have ~~three~~developed ~~counterparties transferred~~a tocore ~~the~~competency ~~Registrant~~in ~~all~~technology ~~of the capital stock of E-motion Apparel~~research, ~~Inc.~~development Inand ~~exchange~~commercialization, ~~the~~and ~~Registrant issued to them a total of 350,000,000 shares of its common stock. The Share Exchange Agreement provides~~ that ~~additional~~we ~~shares~~have ~~of common stock~~significant ~~will~~expertise beand ~~issued~~know-how toin ~~all parties if~~ the ~~annual~~design, ~~revenue~~integration ofand ~~E-Motion~~operation ~~Apparel for any~~ of ~~the~~our ~~current~~technologies. orOur ~~next two years exceeds the following threshholds: 2014 - $270~~expertise,~~000;~~ ~~2015~~ know- ~~$390~~how,~~000;~~ ~~2016~~technologies ~~- $540,000. The Share Exchange Agreement also provides that additional shares~~and ~~will~~patent beposition ~~issued~~collectively tocomprise ~~all~~our ~~parties~~primary ifcompetitive strength, ~~during~~and form the ~~next~~basis 24for ~~months,~~ the ~~Registrant~~value-added ~~completes~~solutions ~~a sale of equity securities at a per share~~that ~~price~~we ofoffer ~~less~~our ~~than $~~clients.~~0015 for aggregate gross proceeds of $750,000 or more.~~

OnWe ~~February~~generate ~~22,~~most ~~2014 the Company entered into a Memorandum~~ of ~~Understanding~~our ~~with~~revenue ~~Angie~~from ~~Daza~~royalties ~~d/b/a~~that ~~Cleo~~are ~~vii~~tied ~~(the “MOU”), pursuant~~ to ~~which~~extracted ~~Angie~~corn ~~Daza~~oil ~~has contributed the brand “Cleo VII” to a subsidiary, Cleo VII, Inc~~sales., ~~owned~~Our ~~51%~~success ~~by the Company and 49% by Ms. Daza. Cleo VII~~ is anbased ~~accessories~~on ~~brand that is produced under~~ the ~~Fair~~ongoing ~~Trade Model. Cleo VII accessories~~production ~~are~~and ~~produced~~sale ~~by women in small villages in Peru. By providing salaries to these women in payment for these accessories, these women are able to obtain a standard~~ of ~~living~~oil ~~that~~by ~~allows~~our ~~them to live~~licensees, ~~put~~at ~~their~~the ~~children~~least incost ~~school~~ and ~~have~~for ~~access~~the tohighest ~~medical care~~value. ~~Cleo~~In ~~VII~~contrast ~~accessories~~to ~~are~~our ~~handmade~~competitors, ~~silver~~we ~~and~~generate ~~gold~~sales when ~~plated,~~our ~~with~~licensees ~~semi~~make ~~previous~~money ~~stones~~from inusing ~~the~~our ~~shape of bracelets, earrings, anklets and more~~technologies. ~~Cleo~~We ~~VII~~believe ~~has~~that anour ~~exclusive~~royalty ~~Distribution~~model ~~Agreement~~provides us with ~~the~~a ~~manufacturers~~natural inand ~~Peru for the next 5 years for both~~competitively ~~North~~important ~~and~~incentive ~~South~~to ~~America.~~ensure ~~Angie~~that ~~Daza~~our ~~will~~licensees ~~serve as President and Designer for Cleo VII~~design, ~~Inc.,~~deploy and ~~will~~operate ~~provide~~the ~~warehousing~~best ~~and fulfillment~~extraction ~~services~~system ~~at a location in Miami, Florida. The Company will develop marketing campaigns~~ for ~~the~~their ~~Cleo~~specific ~~VII brand and~~needs ~~also provide administrative services. The marketing campaigns will be through traditional channels such as sale representatives, direct sales to wholesalers, trade shows, social media campaigns~~ and ~~online marketing and more~~goals.

On July 16, 2014 the Registrant entered into a Share Exchange Agreement with Hubert Blanchette, Paul Koros, Stella Koros, Michael John Koros, Gordon McDougall and Laura Fewtrell. 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.

The transactions contemplated by the Share Exchange Agreement were completed on July 16, 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. 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, 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 next 24 months, the Registrant completes a sale of equity securities at a per share price of less than $.0015 for aggregate gross proceeds of $750,000 or more.

Our growth strategy

A key component of our growth strategy is the acquisition of additional brands. Although we seek to temper our acquisition risks, acquisition, entail numerous risks, any of which could detrimentally affect our results of operations and/or the value of our equity. These risks include, among others:

● unanticipated costs associated with the target acquisition; ● negative effects on reported results of operations from acquisition related charges and amortization of acquired intangibles; ● diversion of management’s attention from other business concerns; ● the challenges of maintaining focus on, and continuing to execute, core strategies and business plans as our brand portfolio grows and becomes more diversified; ● potential difficulties associated with the retention of key employees, and the assimilation of any other employees, who may be retained by us in connection with or as a result of our acquisitions; and ● risks of entering new domestic and international markets (whether it be with respect to new product categories or new product distribution channels) or markets in which we have limited prior experience.

Our due diligence reviews are subject to inherent uncertainties and may not reveal all potential risks. We may therefore fail to discover or inaccurately assess undisclosed or contingent liabilities, including liabilities for which we may have responsibility as a successor to the seller or the target company. As a successor, we may be responsible for any past or continuing violations of law by the seller or the target company. Although we generally attempt to seek contractual protections through representations, warranties and indemnities, we cannot be sure that we will obtain such provisions in our acquisitions or that such provisions will fully protect us from all unknown, contingent or other liabilities or costs. Finally, claims against us relating to any acquisition may necessitate our seeking claims against the seller for which the seller may not, or may not be able to, indemnify us or that may exceed the scope, duration or amount of the sellers’ indemnification obligations.

Competition

Our ~~brands~~extraction ~~are~~technologies ~~subject~~remove tothe ~~competition~~oil ~~from~~at ~~various~~the ~~domestic~~back of ethanol production facilities, after production and ~~foreign~~removal ~~brands~~of ethanol. Our ~~Each~~view ~~brand~~is ~~has~~that ~~competitors~~retrofitting ~~within~~the ~~each~~front end of ~~its~~the ~~specific distribution~~dry ~~channels~~mill process introduces unnecessary risk. We believe that ~~span~~interrupting the aflow ~~broad~~of ~~variety~~starch is not the answer; there are cheaper, intrinsically better ways of ~~product~~getting ~~categories.~~more ~~These~~out ~~competitors~~of ~~have~~starch that do not risk the host facility’s ability to ~~compete~~produce inethanol. ~~terms of~~The ~~fashion~~cheaper, ~~quality~~better, ~~price~~safer ~~and/or~~path ~~advertising.~~is Weto ~~also~~intercept, ~~compete~~streamline ~~with~~and ~~traditional~~upgrade the ~~apparel~~co-product ~~and~~flow ~~consumer~~at ~~brand~~the ~~companies~~back ~~and~~end ~~with other~~– ~~brand~~after ~~management~~the ~~companies~~ethanol ~~for~~has ~~acquisitions~~been removed and sold.

Our preferred corn oil extraction system design uses components and equipment that have proven to maximize yield with less than 1% down time. A number of equipment suppliers offer different components and equipment to ethanol producers for use in a manner which we feel infringes our patented extraction technologies, while not having the capabilities and advantages of our preferred system design.

We have initiated several infringement actions involving suppliers and ethanol producers (see Note 10, Commitments and Contingencies, below, to our Consolidated Financial Statements). Executing a business model based on licensing requires us to invest in the protection of our intellectual property rights and the prosecution of infringement. We believe that litigation will be necessary, not to disrupt the availability of corn oil extraction technology, but rather to maximize its use by as many producers as possible on fair terms; to protect the competitive advantage of our licensees; to deter infringement; and, to ensure that we receive reasonable compensation for our proprietary technologies.

Our lifestyle group has historically focused on acquiring, promoting and marketing a portfolio of consumer apparel brands. Our brands are subject to competition from various domestic and foreign brands. Each brand has competitors within each of its specific distribution channels that span a broad variety of product categories. These competitors have the ability to compete in terms of fashion, quality, price and/or advertising. We also compete with traditional apparel and consumer brand companies and with other brand management companies for acquisitions.

Intellectual Properties

The Company’s subsidiaries hold a number of patents, patent applications and trademarks. GreenShift and GreenShift — Natural Solutions are registered trademarks of GreenShift Corporation, our majority owned subsidiary. We protect our intellectual properties through a combination of patents, patent applications, license and distribution agreements, common law copyrights and trade secrets. GS CleanTech Corporation, a subsidiary of GreenShift, holds patents numbered 7,601,858; 7,608,729; 8,008,516; 8,008,517; 8,283,484, 8,168,037, 8,679,353 and pending patents numbered 14/080,071, 13/450,997, 13/185,841, and 11/908,891 related to corn oil extraction (the ‘997, ‘841, and ‘891 applications were allowed by the U.S. Patent and Trademark Office in December 2014). The first of these oil extraction patents does not expire until 2027. We have also filed a number of patent applications for other technologies.

In October 2014, the District Court in Indiana ruled in favor of the defendants in our pending patent infringement matter on their motions for summary judgment alleging that our corn oil extraction patents were invalid, including US Pat. Nos. 7,601,858 and 8,168,037. In December 2014, the U.S. Patent and Trademark Office allowed three new corn oil extraction patent applications (U.S. Patent Application Nos.: 11/908,891, 13/185,841 and 13/450,997). Each application was examined and considered patentable by a different patent examiner, after each had considered the summary judgment decision. We cannot speak to the significance of the conflicting determinations. However, under applicable standards, a patent is not invalid until and unless a final judgment of invalidity is rendered after all available appeals have been exhausted. We believe in our intellectual property rights and the system of checks and balances designed to protect those rights – both in the patent office and the courts, and we will appeal the summary judgment ruling once the ruling is ripe for appeal, which we expect to occur during 2016. Diversification is important to mitigate the risk that we may not prevail in our ongoing patent infringement litigation. To that end, we will continue to develop and license systems based on our core technologies, including our remaining patents both old and new.

All of our technical employees enter into confidentiality, non-competition and invention assignment agreements. We also require our vendors, customers and others to enter into confidentiality agreements of varying scope and duration prior to being given access to our proprietary information regarding our technologies. There can be no assurance, however, that such measures will be adequate to fully protect our technologies.

Environment, Health And Safety Matters

Our design, engineering, licensing, installation, commissioning and maintenance services are subject to various federal, state and local environmental, health and safety laws and regulations, which require a standard of care to control potential pollution and limit actual or potential impacts to the environment and personnel involved. GreenShift has had no releases to the environment and no lost-time or recordable injuries in its history.

While our engineering and installation work regularly exceeds health, safety and environment requirements, a violation of these laws and regulations, or of permit conditions, can result in substantial fines, natural resource damage, criminal sanctions, permit revocations and/or facility shutdowns. We do not anticipate a material adverse effect on our business or financial condition as a result of our efforts to comply with these requirements. Operating expenses to meet regulatory requirements, including all environmental permits, will be an integral part of service costs. Costs for compliance with environmental laws include safety and health protection measures, controls limiting air emissions and effluent discharges, emergency response capabilities, storm water management, recordkeeping and training. We often assist our customers in environment, health and safety compliance issues, including new requirements concerning greenhouse gas emissions. It may not be possible to completely segregate our environment, health and safety responsibilities from those of our customers.

Government Regulation

We are subject to customs, truth-in-advertising and other laws, including consumer protection regulations. A portion of our products are manufactured outside the United States. These products are imported and are subject to U.S. customs laws, which impose tariffs as well as import quota restrictions for textiles and apparel. Some of our imported products are eligible for duty-advantaged programs. While importation of goods from foreign countries from which we buy our products may be subject to embargo by U.S. Customs authorities if shipments exceed quota limits, we closely monitor import quotas and believe we have the sourcing network to efficiently shift production to factories located in countries with available quotas. The existence of import quotas has, therefore, not had a material adverse effect on our business.

A portion of our products are manufactured outside the United States. These products are imported and are subject to U.S. customs laws, which impose tariffs as well as import quota restrictions for textiles and apparel. Some of our imported products are eligible for duty-advantaged programs. While importation of goods from foreign countries from which we buy our products may be subject to embargo by U.S. Customs authorities if shipments exceed quota limits, we closely monitor import quotas and believe we have the sourcing network to efficiently shift production to factories located in countries with available quotas. The existence of import quotas has, therefore, not had a material adverse effect on our business.Contingencies

Under GreenShift’s insurance programs, coverage is obtained for catastrophic exposures, as well as those risks required to be insured by law or contract. The deductible per occurrence for environmental impairments is $2,500. Environmental liability insurance is carried with policy limits of $1,000,000 per occurrence with a $5,000,000 umbrella. We also carry professional liability, pollution, auto and worker’s compensation insurances.

Employees

AsWe ofcurrently ~~the~~have ~~date~~13 offull-time ~~this~~employees. ~~Annual~~In ~~Report,~~addition weto ~~have~~its 3executive ~~employees~~officers, ~~and/or~~we ~~contractors~~employs ~~working~~sales ~~for~~personnel, ~~the~~staff ~~Bitzio~~engineers, ~~group. None of our employees~~process ~~are~~managers, ~~represented~~maintenance bymanagers, aadministrative ~~labor~~personnel ~~union~~and orgeneral isfacility ~~covered by a collective bargaining agreement~~technicians. WeThere ~~have~~is ~~never~~no ~~experienced~~union ~~any~~representation ~~employment-related~~for ~~work~~any ~~stoppages~~of ~~and consider relations with~~ our employees ~~to be good~~.

ITEM 1A – RISK FACTORS

Any investment in our common stock involves a high degree of risk. You should consider carefully the following information, together with the other information contained in this annual report, before you decide to buy our common stock. If one or more of the following events actually occurs, our business will suffer, and as a result our financial condition or results of operations will be adversely affected. In this case, the market price, if any, of our common stock could decline, and you could lose all or part of your investment in our common stock.

Risk Factors Related to the Business of the Company

We have a limited operating history and limited historical financial information upon which you may evaluate our performance.

You should consider, among other factors, our prospects for success in light of the risks and uncertainties encountered by companies that, like us, are in their early stages of development. We may not successfully address these risks and uncertainties or successfully implement our existing and new products and services. If we fail to do so, it could materially harm our business and impair the value of our common stock. Even if we accomplish these objectives, we may not generate the positive cash flows or profits we anticipate in the future. Our current business plan involves acquiring and developing fashion brands. Our first association with a fashion brand, however, occurred in November 2013. Therefore, our ability to carry out our business plan successfully is completely untested. Unanticipated problems, expenses and delays are frequently encountered in establishing a new business and developing new products and services. These include, but are not limited to, inadequate funding, lack of consumer acceptance, competition, product development, and inadequate sales and marketing. Our failure to meet any of these conditions would have a materially adverse effect upon us and may force us to reduce or curtail operations. No assurance can be given that we can or will ever operate profitably.

If we are unable to meet our future capital needs, we will be required to reduce or curtail operations.

To date we have relied on debt and equity financing, as well as waivers of significant amounts of compensation by our executive team, to fund operations. We have extremely limited cash liquidity and capital resources. Our cash on hand as of December 31, 2014 was approximately $3,829, and our revenue for the year ended December 31, 2014 was $394,511. Based on our recurring expenses, estimated revenue from our product pipeline, and not including assumed liabilities from acquisitions and outstanding loans, our estimated monthly burn rate is approximately $50,000.

Our future capital requirements will depend on many factors, including our ability to market our products successfully, cash flow from operations, and competing market developments. Based on our current financial situation we will have difficulty continuing our operations at their current level, or at all, if we do not receive additional financing in the near future. Consequently, we intend to raise funds through private placements and other financings. Any equity financings would result in dilution to our then-existing stockholders.

~~Sources of~~ITEM ~~debt~~1A ~~financing~~RISK may result in higher interest expense. Any financing, if available, may be on unfavorable terms. If adequate funds are not obtained, we may be required to reduce or curtail operations. We anticipate that our existing capital resources will not be adequate to satisfy our operating expenses and capital requirements for any length of time. However, this estimate of expenses and capital requirements may prove to be inaccurate.FACTORS

~~Our~~Any ~~independent~~investment ~~registered~~in ~~public~~our ~~accounting~~common ~~firm~~stock ~~has~~involves ~~expressed~~a ~~doubts~~high ~~about~~degree ~~our~~of ~~ability~~risk. You should consider carefully the following information, together with the other information contained in this annual report, before you decide to ~~continue~~buy our common stock. If one or more of the following events actually occurs, our business will suffer, and as a ~~going~~result ~~concern~~our financial condition or results of operations will be adversely affected. In this case, the market price, if any, of our common stock could decline, and you could lose all or part of your investment in our common stock.

AsThere aare ~~result~~many ofimportant ~~our~~factors ~~financial~~that ~~condition, we~~ have ~~received~~affected, aand ~~report~~in ~~from~~the ~~our~~future ~~independent~~could ~~registered~~affect, ~~public accounting firm for~~ our ~~financial~~ ~~statements~~business, ~~for the years ended December 31~~including, ~~2014~~but ~~and~~not ~~2013~~limited ~~that~~to ~~includes an explanatory paragraph describing~~ the ~~uncertainty~~ asfactors todiscussed ~~our~~below, ~~ability~~which toshould ~~continue~~be asreviewed acarefully ~~going~~together ~~concern.~~with Inother ~~order~~information tocontained ~~continue~~in asthis areport. ~~going~~Some ~~concern~~of the ~~we must effectively balance many~~ factors ~~and~~ ~~increase~~are ~~our~~beyond ~~revenues to a point where we can fund~~ our ~~operations~~control ~~from our sales~~ and ~~revenues.~~future Iftrends we are ~~not~~difficult ~~able~~ to ~~do this we may not be able to continue as an operating company~~predict.

IfRISKS weRELATED ~~are~~TO ~~unable~~OUR toCOMMON identify and successfully acquire additional brands, our rate of growth may be reduced, and even if additional trademarks are acquired, we may not realize anticipated benefits due to integration or licensing difficulties.STOCK

A key component of our growth strategy is the acquisition of additional brands. However, we face extensive competition for new brand acquisitions, both from other brand management companies as well as traditional consumer brand companies, retailers and private equity groups, which could increase the price of the acquisitions and make it more difficult for us to find suitable acquisition targets. In addition, even if we successfully acquire additional brands or the rights to use additional brands, we may not be able to achieve or maintain profitability levels that justify our investment in, or realize planned benefits with respect to, those additional brands.

Although we seek to temper our acquisition risks, all acquisitions, whether they are of additional intellectual property assets or of the companies that own them, entail numerous risks, any of which could detrimentally affect our results of operations and/or the value of our equity. These risks include, among others:

● unanticipated costs associated with the target acquisition; ● negative effects on reported results of operations from acquisition related charges and amortization of acquired intangibles; ● diversion of management’s attention from other business concerns; ● the challenges of maintaining focus on, and continuing to execute, core strategies and business plans as our brand and license portfolio grows and becomes more diversified; ● adverse effects on existing licensing relationships; ● potential difficulties associated with the retention of key employees, and the assimilation of any other employees, who may be retained by us in connection with or as a result of our acquisitions; and ● risks of entering new domestic and international markets (whether it be with respect to new licensed product categories or new licensed product distribution channels) or markets in which we have limited prior experience.

In the event we acquire intellectual property assets or the companies that own them, our due diligence reviews are subject to inherent uncertainties and may not reveal all potential risks. We may therefore fail to discover or inaccurately assess undisclosed or contingent liabilities, including liabilities for which we may have responsibility as a successor to the seller or the target company. As a successor, we may be responsible for any past or continuing violations of law by the seller or the target company. Although we generally attempt to seek contractual protections through representations, warranties and indemnities, we cannot be sure that we will obtain such provisions in our acquisitions or that such provisions will fully protect us from all unknown, contingent or other liabilities or costs. Finally, claims against us relating to any acquisition may necessitate our seeking claims against the seller for which the seller may not, or may not be able to, indemnify us or that may exceed the scope, duration or amount of the sellers’ indemnification obligations.

Acquiring additional brands could also have a significant effect on our financial position and could cause substantial fluctuations in our quarterly and yearly operating results. Acquisitions could result in the recording of significant goodwill and intangible assets on our financial statements, the amortization or impairment of which would reduce our reported earnings in subsequent years. No assurance can be given with respect to the timing, likelihood or financial or business effect of any possible transaction. Moreover, as discussed above, our ability to grow through the acquisition of additional brands will also depend on the availability of capital to complete the necessary acquisition arrangements. In the event that we are unable to obtain debt financing on acceptable terms for a particular acquisition, we may elect to pursue the acquisition through the issuance by us of shares of our common stock (and, in certain cases, convertible securities) as equity consideration, which could dilute our common stock because it could reduce our earnings per share, and any such dilution could reduce the market price of our common stock unless and until we were able to achieve revenue growth or cost savings and other business economies sufficient to offset the effect of such an issuance. As a result, there is no guarantee that our stockholders will achieve greater returns as a result of any future acquisitions we complete.

We may face challenges integrating the operations of our recently acquired brands or any businesses we may acquire, which may negatively impact our business.

As part of our strategy of making selective acquisitions, we acquire new brands and product categories. Acquisitions have inherent risks, including the risk that the projected sales and net income from the acquisition may not be generated, the risk that the integration is more costly and takes longer than anticipated, risks of retaining key personnel, and risks associated with unanticipated events and unknown legal liabilities. Any of these and other risks may harm our business. We cannot assure you that any acquisition will not have a material adverse impact on our financial condition and results of operations.

With respect to previous acquisitions, we faced challenges in consolidating functions and integrating management procedures, personnel and operations in an efficient and effective manner, which if not managed as projected, could have negatively impacted our business. Some of these challenges included increased demands on management related to the significant increase in the size and diversity of our business after the acquisition, the dedication of management’s attention to implement our strategies for the business, the retention and integration of key employees, determining aspects of the acquired business that were to be kept separate and distinct from our other businesses, and difficulties in assimilating corporate culture and practices into ours.

We may not be able to anticipate consumer preferences and fashion trends, which could negatively affect acceptance of our products by retailers and consumers and result in a significant decrease in net sales.

Our failure to anticipate, identify and respond effectively to changing consumer demands and fashion trends could adversely affect acceptance of our products by retailers and consumers and may result in a significant decrease in net sales or leave us with a substantial amount of unsold inventory. We believe that our success depends on our ability to anticipate, identify and respond to changing fashion trends in a timely manner. Our products must appeal to a broad range of consumers whose preferences cannot be predicted with certainty and are subject to rapid change. We may not be able to continue to develop appealing styles or successfully meet constantly changing consumer demands in the future. In addition, any new products or brands that we introduce may not be successfully received by retailers and consumers. If our products are not successfully received by retailers and consumers and we are left with a substantial amount of unsold inventory, we may be forced to rely on markdowns or promotional sales to dispose of excess, slow-moving inventory. If this occurs, our business, financial condition, results of operations and prospects may be harmed.

Our business could be harmed if we do not deliver quality products in a timely manner.

Our sourcing, logistics and technology functions operate within substantial production and delivery requirements and subjects us to the risks associated with suppliers, transportation, distribution facilities and other risks. If we do not comply with customer product requirements or meet their delivery requirements, our customers could reduce our selling prices, require significant margin support, reduce the amount of business they do with us, or cease to do business with us, all of which could harm our business.

Our business is subject to risks and uncertainties of foreign manufacturing and the price, availability and quality of raw materials that could interrupt our operations or increase our operating costs, thereby affecting our ability to deliver goods to the market, reduce or delay our sales and decrease our potential revenues.

A significant portion of the products we will sell will be manufactured overseas. There are substantial risks associated with foreign manufacturing, including changes in laws relating to quotas, and the payment of tariffs and duties, fluctuations in foreign currency exchange rates, shipping delays and international political, regulatory and economic developments. Further, we may experience fluctuations in the price, availability and quality of fabrics and raw materials we use in our manufactured apparel or purchased finished goods. Any of these risks could increase our operating costs. We will also import finished products and assume all risk of loss and damage with respect to these goods once they are shipped by our suppliers. If these goods are destroyed or damaged during shipment, our revenues could be reduced as a result of our inability to deliver or our delay in delivering our products.

We may not be able to adequately protect our intellectual property rights.

The loss of or inability to enforce our proprietary rights could adversely affect our business. For instance, if any third party independently develops similar products to those marketed and distributed by our subsidiaries or manufactures knock-offs of such products, it may harm the reputation of our brands, decrease their value and/or cause a decline in our sales. Additionally, the laws of foreign countries may provide inadequate protection of intellectual property rights, making it difficult to enforce such rights in those countries.

We may need to bring legal claims to enforce or protect our intellectual property rights. Any litigation, whether successful or unsuccessful, could result in substantial costs and diversions of resources and negatively impact our business operations. In addition, notwithstanding the rights we have secured in our intellectual property, third parties may bring claims against us alleging that we have infringed on their intellectual property rights or that our intellectual property rights are not valid. Any claims against us, with or without merit, could be time consuming and costly to defend or litigate and therefore could have an adverse effect on our business.

Because of the intense competition within our markets and the strength of some of their competitors, we may not be able to compete successfully.

Our products are offered primarily in the apparel and fashion accessories markets, in which we face intense competition. In general, competitive factors include quality, price, style, name recognition and service. In addition, various fads and the limited availability of shelf space could affect competition for our products. Many of our competitors have greater financial, distribution, marketing and other resources than we have and many have achieved significant name recognition for their brand names. We may be unable to successfully compete in the markets for our products.

If we fail to maintain proper and effective internal controls or are unable to remediate the deficiencies in our internal controls, our ability to produce accurate and timely financial statements could be impaired and investors’ views of us could be harmed.

Ensuring that we have adequate internal financial and accounting controls and procedures in place so that we can produce accurate financial statements on a timely basis is a costly and time-consuming effort. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. We are in the process of documenting and reviewing our internal controls and procedures in order to comply with Section 404 of the Sarbanes-Oxley Act of 2002, which requires annual management assessment of the effectiveness of our internal control over financial reporting. Our compliance with Section 404 will require that we incur additional expense and expend management time on compliance-related issues. If we identify deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, the market’s confidence in our financial statements could decline and the market price of our common stock could be adversely impacted.

If we are unable to attract and retain key personnel, we may not be able to compete effectively in our market.

Our success will depend, in part, on our ability to attract and retain key management, design experts, and sales and marketing personnel. Our inability to retain employees and attract and retain sufficient additional employees, and design, drafting, and marketing support resources, could have a material adverse effect on our business, financial condition, results of operations and cash flows. The loss of key personnel could limit our ability to develop and market our products.

Because the holders of our Series C Preferred Stock control the majority of our shareholders’ voting power, they have the ability to control matters affecting our shareholders.

The two current members of our board of directors and one prior member, primarily due to their ownership of Series C Preferred Stock, have the ability to cast the majority of the votes at any meeting of our shareholders or to provide written consents of the majority of our shareholders. As a result, they have the ability to control matters affecting our shareholders, including the election of our directors, the acquisition or disposition of our assets, and the future issuance of our shares. Because they control such shares, investors may find it difficult to replace our management if they disagree with the way our business is being operated. Because the influence by these insiders could result in management making decisions that are in the best interest of those insiders and not in the best interest of the investors, you may lose some or all of the value of your investment in our common stock.

Risks Related To Our Common Stock

We do not intend to pay dividends in the foreseeable future.

We do not intend to pay any dividends in the foreseeable future. We do not plan on making any cash distributions in the manner of a dividend or otherwise. Our Board presently intends to follow a policy of retaining earnings, if any.

We have the right to issue additional common stock and preferred stock without consent of our stockholders. This would have the effect of diluting investors’ ownership and could decrease the value of their investment.

We have additional authorized, but unissued shares of our common stock that may be issued by us for any purpose without the consent or vote of our stockholders that would dilute our stockholders’ percentage ownership. In addition, our certificate of incorporation authorizes the issuance of shares of preferred stock, the rights, preferences, designations and limitations of which may be set by the Board of Directors. Our certificate of incorporation has authorized issuance of up to 25,000,000 shares of preferred stock in the discretion of our Board. The shares of authorized but undesignated preferred stock may be issued upon filing of an amended certificate of incorporation and the payment of required fees; no further stockholder action is required. If issued, the rights, preferences, designations and limitations of such preferred stock would be set by our Board and could operate to the disadvantage of the outstanding common stock. Such terms could include, among others, preferences as to dividends and distributions on liquidation.

In addition, our certificate of incorporation authorizes the issuance of shares of preferred stock, the rights, preferences, designations and limitations of which may be set by the Board of Directors. Our certificate of incorporation has authorized issuance of up to 25,000,000 shares of preferred stock in the discretion of our Board. The shares of authorized but undesignated preferred stock may be issued upon filing of an amended certificate of incorporation and the payment of required fees; no further stockholder action is required. If issued, the rights, preferences, designations and limitations of such preferred stock would be set by our Board and could operate to the disadvantage of the outstanding common stock. Such terms could include, among others, preferences as to dividends and distributions on liquidation.

Our common stock is governed under The Securities Enforcement and Penny Stock Reform Act of 1990.

The Securities Enforcement and Penny Stock Reform Act of 1990 requires additional disclosure relating to the market for penny stocks in connection with trades in any stock defined as a penny stock. The Commission has adopted regulations that generally define a penny stock to be any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. Such exceptions include any equity security listed on NASDAQ and any equity security issued by an issuer that has (i) net tangible assets of at least $2,000,000, if such issuer has been in continuous operation for three years, (ii) net tangible assets of at least $5,000,000, if such issuer has been in continuous operation for less than three years, or (iii) average annual revenue of at least $6,000,000, if such issuer has been in continuous operation for less than three years. Unless an exception is available, the regulations require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock market and the risks associated therewith. Because this situation limits the overall market for our common stock, the regulations reduce the liquidity of our common stock and may reduce its market value.

Because the holder of our Series F Preferred Stock controls the majority of our shareholders’ voting power, it has the ability to control matters affecting our shareholders.

Our majority shareholder, FLUX Carbon Corporation (“FCC”), an entity owned by our chief executive officer, Kevin Kreisler, controls 80% of the Company’s voting power, and has the ability to cast the majority of the votes at any meeting of our shareholders or to provide written consents of the majority of our shareholders. As a result, FCC has the ability to control matters affecting our shareholders, including the election of our directors, the acquisition or disposition of our assets, and the future issuance of our shares. Because it controls such shares, investors may find it difficult to replace our management if they disagree with the way our business is being operated. Because the influence by FCC could result in management making decisions that are in the best interest of those insiders and not in the best interest of the investors, you may lose some or all of the value of your investment in our common stock.

RISKS FACTORS RELATING TO OUR FINANCIAL CONDITION

Our external auditors have included an explanatory paragraph in their audit report raising substantial doubt as to the Company’s ability to continue as a going concern due to the Company’s history of losses, working capital deficiency and cash position.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company recorded a loss from operations of $1,682,011 for the year ended December 31, 2015. As of December 31, 2015, the Company had $1,929,832 in cash, and current liabilities exceeded current assets by about $17.3 million, which included derivative liabilities of $11,185,625 and $4,018,696 in convertible debentures and $3,730,000 in convertible notes, both net of discount. None of these items are required to be serviced out of the Company’s regular cash flows. The $2.5 million paid by the Company’s parent, Bitzio, Inc. (“Bitzio”), to the Company was drawn from a loan of $2.9 million made to Bitzio by TCA Global Credit Master Fund, LP (“TCA”). The loan was made on December 31, 2015, pursuant to a Senior Secured Revolving Credit Facility Agreement (the “Credit Agreement”), under which TCA may lend to Bitzio up to $5.0 million. The Company and each of its subsidiaries, as well as each of the other subsidiaries of Bitzio, has executed a Guaranty Agreement dated December 31, 2015, in favor of TCA. In the Guaranty Agreement, the Company and each of its subsidiaries guaranteed payment of all amounts due to TCA under the Credit Agreement. By separate agreements, the Company and each subsidiary pledged all of its assets to secure the guaranty to TCA. These matters raise substantial doubt about the Company’s ability to continue as a going concern.

The resale of shares acquired by our lenders is likely to reduce the market price of our common stock. We may be required to amend our certificate of incorporation to again reverse split our common stock.

Our lenders own convertible debentures issued by the Company, which permit our lenders to acquire Company common stock and resell it to the public. At the current market price, our lenders could collectively convert their debentures into over 90% of our outstanding common stock. It is likely that resale of shares by our lenders will continue to reduce the market price for our common stock and cause substantial dilution. It is possible, therefore, that reverse stock splits will be required in the future.

Existing shareholders may experience significant dilution from our issuance of shares to repay amounts due to holders of loans that are convertible into our common stock.

The issuance of shares on conversion of the convertible debentures held by our lenders will have a dilutive impact on our stockholders. As a result, if we achieve profitable operations in the future, our net income per share will be reduced because of the dilution, and the market price of our common stock could decline. In addition, the lower our stock price is, the more shares of common stock we will have to issue as the debentures are converted on the basis of the contemporaneous market price. If our stock price is lower, then our existing stockholders would experience greater dilution.

Our debt level could negatively impact our financial condition, results of operations and business prospects.

As of December 31, 2015, our total debt and accrued interest was about $14.9 million. Our level of debt could have significant consequences to our shareholders, including the following:

-	requiring the dedication of a substantial portion of cash flow from operations to make payments on debt, thereby reducing the availability of cash flow for working capital, capital expenditures and other general business activities;

-	requiring a substantial portion of our corporate cash reserves to be held as a reserve for debt service, limiting our ability to invest in new growth opportunities;

-	limiting the ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions and general corporate and other activities;

-	limiting the flexibility in planning for, or reacting to, changes in the business and industry in which we operate;

-	increasing our vulnerability to both general and industry-specific adverse economic conditions;

-	being at a competitive disadvantage against less leveraged competitors;

-	being vulnerable to increases in prevailing interest rates;

Our ability to make scheduled payments of principal and interest, or to refinance our indebtedness, depends on our future performance, which is subject to economic, financial, competitive and other factors. Our business may not generate cash flow in the future sufficient to service our debt because of factors beyond our control, including but not limited to the liquidity of our ethanol producers. If we are unable to generate sufficient cash flows, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional equity capital on terms that may be onerous or highly dilutive. Our ability to refinance our indebtedness will depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in an additional default on our debt obligations.

Our current indebtedness and any future indebtedness could adversely affect our business and may restrict our operating flexibility. We may be forced to incur additional indebtedness in the future.

Our existing debt agreements restrict our ability to incur additional debt. Our inability to incur additional debt could adversely affect our business and restrict our operating flexibility. While we have no current plans to do so, it is likely that the terms of any such new debt financing would include customary financial and other covenants, including liens on our subsidiaries and significant assets.

If our cash flow proves inadequate to service our debt and provide for our other obligations, we may be required to refinance all or a portion of our existing and future debt at terms unfavorable to us.

Our ability to make payments on and refinance our debt and to fund our operations and capital expenditures will depend on our ability to generate substantial operating cash flow. If our cash flows prove inadequate to meet our debt service obligations for future debt financings, we may be required to refinance all or a portion of our existing or future debt, to sell assets or to obtain additional financing. We cannot assure that any such refinancing or that any such sale of assets or additional financing would be possible on favorable terms, or at all. If we raise additional equity or equity-related securities in the future, it may be dilutive to holders of our common stock.

Future sales of shares of our common stock or the issuance of securities senior to our common stock could adversely affect the trading price of our common stock, the value of our debt securities and our ability to raise funds in new equity offerings.

In the future, we will issue additional common stock, preferred stock or securities convertible into or exchangeable for common stock. Future sales of substantial amounts of our common stock or equity-related securities in the public market or privately, or the perception that such sales could occur, and will more than likely have an adverse effect on prevailing trading prices of our common stock and the value of our debt securities and could impair our ability to raise capital through future offerings of equity or equity-related securities. No prediction can be made as to the effect, if any, that future sales of shares of common stock or the availability of shares of common stock for future sale will have on the trading price of our common stock or the value of our debt securities.

~~ITEM~~Our 1Bcommon –stock ~~UNRESOLVED~~qualifies ~~STAFF~~as ~~COMMENTS~~a “penny stock” under SEC rules which may make it more difficult for our stockholders to resell their shares of our common stock.

~~Not~~Our ~~applicable~~common stock is listed for quotation on the OTC market. As a result, the holders of our common stock may find it more difficult to obtain accurate quotations concerning the market value of the stock. Stockholders also may experience greater difficulties in attempting to sell the stock than if it were listed on a stock exchange or quoted on the NASDAQ Global Market or the NASDAQ Capital Market. Because our common stock does not trade on a stock exchange or on the NASDAQ Global Market or the NASDAQ Capital Market, and the market price of the common stock is less than $5.00 per share, the common stock qualifies as a “penny stock.” SEC Rule 15g-9 under the Securities Exchange Act of 1934 imposes additional sales practice requirements on broker-dealers that recommend the purchase or sale of penny stocks to persons other than those who qualify as an “established customer” or an “accredited investor.” This includes the requirement that a broker-dealer must make a determination on the appropriateness of investments in penny stocks for the customer and must make special disclosures to the customer concerning the risks of penny stocks. Application of the penny stock rules to our common stock affects the market liquidity of the shares, which in turn may affect the ability of holders of our common stock to resell the stock.

~~ITEM~~We 2will –be ~~PROPERTIES~~quoted on the OTC Pink market for the immediate future.

~~Since~~We ~~May~~currently ~~15,~~do ~~2014,~~not ~~E-motion~~meet ~~leases~~the ~~its~~eligibility ~~office~~requirements ~~space~~for listing on athe ~~month-to-month~~OTCQB, ~~basis~~NASDAQ atStock aMarket ~~fixed~~or ~~rate~~the ofNYSE ~~$1,750 per month~~MKT. ~~Lexi~~Until ~~Luu~~we ~~leases~~meet ~~its~~those ~~office~~standards ~~space~~and ~~since~~are ~~June~~accepted ~~15,~~into ~~2014,~~the atOTCQB ~~a rate~~or ofNASDAQ $2Stock Market,~~099~~ ~~per~~or ~~month,~~unless ~~with~~we anare ~~increase~~successful toin ~~$2,162~~securing ~~per~~a ~~month~~listing ~~starting~~on ~~September~~the 1,NYSE ~~2015,~~MKT ~~and~~or tosome $2other exchange,~~227~~ ~~starting~~our ~~September~~common 1,stock ~~2016~~will be quoted only on the OTC Pink. ~~The~~Such ~~agreement~~a ~~provides~~listing ~~for~~is $0considered ~~rent~~less ~~payment~~prestigious than ~~for~~an ~~the~~OTCQB, ~~months~~NASDAQ ofStock ~~June~~Market ~~2014~~or an exchange listing, and ~~July~~ ~~and~~many ~~August~~brokerage ~~2015.~~firms ~~Expiration~~will ~~date~~not ofrecommend ~~the~~OTC ~~lease~~Pink ~~agreement~~stocks isto ~~September~~their clients. ~~14,~~This ~~2017~~situation may limit the liquidity of your shares.

~~ITEM~~Our 3common –stock ~~LEGAL~~price ~~PROCEEDINGS~~may be volatile.

WeThe trading price of our common stock may fluctuate substantially. The price of the common stock may be higher or lower than the price paid for shares, depending on many factors, most of which are beyond our control and may not abe ~~party~~directly related to our operating performance. These factors include, but are not limited to, the following: stock dilution, price and volume fluctuations in the overall stock market from time to time; significant volatility in the market price and trading volume of securities traded on the OTC Pink; and, actual or ~~otherwise~~anticipated ~~involved~~changes in ~~any~~our ~~legal~~earnings ~~proceedings~~or fluctuations in our operating results.

~~ITEM~~RISKS 4RELATING –TO ~~MINE~~ECONOMIC ~~SAFETY~~CONDITIONS ~~DISCLOSURES~~AND THE FINANCIAL MARKETS

~~Not~~The ~~applicable~~market for renewable energy sources is undetermined, and may not be adequate to sustain prices at a profitable level.

We are involved in the development of renewable energy and we provide products and services to companies involved in the production of renewable energy. Success will depend on the level of market acceptance of renewable energy sources. The marketing of renewable energy sources on a national scale is a phenomenon new to this decade. The portion of U.S. energy represented by renewable energy sources is still small. It is not possible to predict with assurance how large the market for renewable energy sources will become. If it has not developed to a sufficient breadth when our licensees are ready to market product, the price at which renewable energy can be sold will be limited, which may make it impossible for us or one or more of our subsidiaries to operate profitably.

Our licensees rely on cash generated from operations and external financing to finance the operations of their business.

Continued volatility in capital markets reduces availability of capital for the ethanol industry. Volatility in the commodities market could affect our licensees’ cash position and ability to access lines of credit. Our financial results are dependent on the ability of our licensees to profitably operate their businesses and overall commodity market conditions.

Commodity price volatility could adversely affect the ability of our licensees and other producers to operate profitably.

Corn ethanol producers are generally unable to pass along increased corn costs to their customers since ethanol competes with fossil fuel and other fuels that are not derived from corn. At certain levels, corn prices may make ethanol uneconomical to produce. Corn supplies and prices could be adversely affected by rising prices for alternative crops, increasing input costs, changes in government policies, shifts in global markets, or damaging growing conditions such as plant disease or adverse weather.

~~PART~~The IIprices for and availability of natural gas are subject to volatile market conditions. These market conditions often are affected by factors beyond our control, such as weather conditions, overall economic conditions, and foreign and domestic governmental regulation and relations. Significant disruptions in the supply of natural gas could impair the ability of ethanol producers to manufacture ethanol.

~~ITEM~~Ethanol 5producer –revenues ~~MARKET~~are ~~FOR~~dependent ~~REGISTRANT’S~~on ~~COMMON~~market ~~EQUITY~~prices for ethanol, ~~RELATED~~which ~~STOCKHOLDER~~can ~~MATTERS~~be ~~AND~~volatile ~~ISSUER~~as ~~PURCHASES~~a OFresult ~~EQUITY~~of ~~SECURITIES~~a number of factors, including the availability and price of competing fuels, the overall supply and demand for ethanol and corn, the price of gasoline and corn, and the level of government support. Ethanol is marketed as a fuel additive to reduce vehicle emissions from gasoline, as an octane enhancer to improve the octane rating of the gasoline with which it is blended and, to a lesser extent, as a gasoline substitute. As a result, ethanol prices are influenced by the supply of and demand for gasoline. The financial position of ethanol producers may be materially harmed if the demand for, or the price of, gasoline decreases. Conversely, a prolonged increase in the price of, or demand for, gasoline could lead the U.S. government to relax import restrictions on foreign ethanol that currently benefit ethanol producers.

~~Market~~Distillers ~~Information~~grains compete with other protein-based animal feed products. The price of distillers grains may decrease when the prices of competing feed products decrease, as they are based in part on the prices of the commodities from which these products are derived. Downward pressure on commodity prices, such as soybeans, will generally cause the price of competing animal feed products to decline, resulting in downward pressure on the price of distillers grains. The price ethanol producers may receive for distillers grain may not rise as corn prices rise, thereby lowering the contribution of distillers grain to an ethanol producer’s profits.

~~Our~~Volatility ~~common~~in ~~stock is currently traded on~~ the ~~OTCQB~~price ~~under the symbol “BTZO.” The following table sets forth,~~ for the ~~periods indicated,~~corn ~~the~~oil ~~range~~produced ofby ~~high~~our ~~and~~licensees ~~low~~could ~~bid~~adversely ~~information~~affect ~~per share of~~ our ~~common stock~~profitability.

	High		Low
Fiscal year ended December 31, 2014
For the quarter ended December 31, 2014	$	0.0005	$	0.0001
For the quarter ended September 30, 2014	$	0.0018	$	0.0004
For the quarter ended June 30, 2014	$	0.0039	$	0.0010
For the quarter ended March 31, 2014	$	0.0039	$	0.0007
Fiscal year ended December 31, 2013
For the quarter ended December 31, 2013	$	0.0030	$	0.0013
For the quarter ended September 30, 2013	$	0.0134	$	0.0015
For the quarter ended June 30, 2013	$	0.0340	$	0.0100
For the quarter ended March 31, 2013	$	0.1200	$	0.0251

Our business is highly impacted by commodity price volatility, primarily in the market for corn oil. While demand for extracted corn oil is strong in the biodiesel and multiple other markets, decreases in the price of corn oil will have a negative impact on the amount of cash we are able to produce from our operating activities. Any such decreases may adversely affect our results of operations and financial position.

~~The~~RISKS ~~above~~ATTENDANT ~~prices~~TO ~~are~~OUR ~~inter-dealer quotations, without retail markup, markdown or other fees or commissions, and may not represent actual transactions.~~BUSINESS

~~Holders~~If we receive an adverse decision in our current intellectual property litigation, our prospects for achieving profitable operations will be seriously diminished.

AsIn October 2014, the District Court in Indiana ruled in favor of ~~March~~the ~~31,~~defendants ~~2015,~~on ~~there~~their motions for partial summary judgment alleging that our corn oil extraction patents were 4invalid,~~142~~ including US Pat. Nos. 7,~~894~~601,~~587~~858 ~~shares~~and of8,168,037. ~~our~~We ~~common~~do ~~stock~~not ~~issued~~believe ~~and~~the ~~outstanding~~decision is supported in the law, and ~~held~~we byintend ~~100~~to ~~holders~~appeal ofthe ~~record~~decision. Nevertheless, if we are unable to successfully appeal the summary judgment ruling or otherwise settle the infringement matter, it would have a significant negative impact on our ability to be a going concern.

~~Dividends~~We are a developing company with a history of net losses, and we may not achieve or maintain profitability.

We have had a history of operating losses, and may in the future incur operating losses which could be substantial. Although our current licenses may provide sufficient revenue to bring us to profitability, we may not ~~declared~~be ~~cash~~able ~~dividends~~to onsustain or increase profitability thereafter, which could negatively affect the trading price of our common stock. ~~since~~During ~~our~~2015, ~~inception~~we ~~and~~had an operating loss of about $1.7 million. At December 31, 2015, we dohad ~~not~~a ~~anticipate~~stockholders’ ~~paying~~deficit ~~any~~of ~~cash~~about ~~dividends~~$14.3 inmillion, and a working capital deficit ~~the~~of ~~foreseeable~~about ~~future~~$17.3 million, including $9.1 million of current obligations convertible into Company stock.

Securities Authorized for Issuance Under Equity Compensation Plans

None.

ITEM 6 – SELECTED FINANCIAL DATA

As a smaller reporting company we are not required to provide the information required by this Item.

~~ITEM~~Future 7demand –for ~~MANAGEMENT’S~~ethanol ~~DISCUSSION~~is ~~AND~~uncertain ~~ANALYSIS~~and OFmay ~~FINANCIAL~~be ~~CONDITION~~affected ~~AND~~by ~~RESULTS~~changes OFto ~~OPERATION~~federal mandates, public perception and consumer acceptance, any of which could negatively affect demand for ethanol.

~~Change~~The Indomestic ~~Business~~market ~~Plan~~for ethanol is largely dictated by federal mandates for blending ethanol with gasoline. The mandate level for renewable fuels is constantly under review. Each year the US Environmental Protection Agency must set mandated use levels for renewable fuels under the Renewable Fuel Standard (“RFS”) that is part of the Energy Policy Act of 2005. We believe the RFS is a significant component of national energy policy that reduces dependence on foreign oil by the United States. The oil and gas industry, however, applies constant pressure to reduce or eliminate the mandates, in order to preserve its fuel market share. Our licensees and our license revenue could be adversely impacted if EPA reduces the renewable fuel mandates.

OnOur ~~April~~business 4,is ~~2013~~affected ~~the~~by ~~Company completed~~ the ~~sale~~regulation of ~~its~~greenhouse ~~wholly~~gases ~~owned~~(“GHG”) ~~subsidiary,~~and ~~Thinking~~climate ~~Drone LLC to a third party~~change. ~~The~~New ~~transferred business~~climate ~~and~~change ~~assets of Thinking Drone LLC have been presented as discontinued operations in these financial statements, with a~~regulations ~~gain~~could ~~shown~~impede onthe ~~disposal~~ability of ~~discontinued~~our ~~operations.~~licensees ~~After~~to ~~the~~successfully ~~sale~~operate oftheir ~~this~~businesses ~~subsidiary~~and, ~~the~~in ~~Company~~turn, ~~shifted~~adversely ~~its~~affect ~~business~~our ~~strategy toward a fashion incubation model~~revenues.

~~Effective~~Ethanol onplants ~~November~~emit ~~18,~~carbon ~~2013~~dioxide ~~Bitzio,~~as ~~Inc.~~a ~~entered~~by-product ~~into~~of athe ~~Distribution~~ethanol ~~Agreement~~production ~~with~~process. ~~E-motion~~In ~~Apparel~~2007, ~~Inc~~the U.,S. ~~which~~Supreme ~~designs~~Court ~~women’s~~classified carbon ~~apparel~~dioxide ~~and~~as ~~accessories.~~an ~~The~~air ~~agreement~~pollutant ~~granted~~under ~~Bitzio~~ the ~~exclusive~~Clean ~~worldwide~~Air ~~right~~Act toin ~~distribute~~a ~~E-motion~~case ~~Apparel’s~~seeking ~~products using~~to require the ~~E-motion~~EPA ~~Apparel~~to ~~trademarks,~~regulate ~~copyrights~~carbon ~~and~~dioxide ~~trade~~in ~~dress~~vehicle emissions. The ~~Company’s~~EPA ~~revenue~~rules may eventually require large stationary sources of carbon dioxide emissions, such as ethanol producers, to apply for ~~the~~additional ~~period~~permits ~~from~~for ~~November~~existing 18plants. Additionally, legislation may be re-introduced in Congress for EPA to develop ~~2013~~a ~~through~~comprehensive ~~July~~carbon 18dioxide regulatory scheme, ~~2014~~such ~~all~~as ~~arose~~a ~~from~~carbon ~~this~~tax ~~distribution~~or ~~arrangement~~cap-and-trade system.

~~During~~We ~~February~~may ~~2014~~not ~~the~~be ~~Company~~able ~~completed~~to ~~its~~anticipate ~~first~~consumer ~~acquisition~~preferences and trends, ~~taking~~which ~~control~~could negatively affect acceptance of ~~the~~our ~~Cleo~~products ~~VII~~by ~~brand~~retailers and consumers and result in a significant decrease in net sales.

OnOur ~~July~~failure ~~16,~~to ~~2014~~anticipate, weidentify ~~entered~~and ~~into~~respond aeffectively ~~sales~~to ~~purchase~~changing ~~agreement~~consumer todemands ~~acquire~~and ~~100%~~trends ofcould ~~the~~adversely ~~outstanding~~affect ~~shares~~ acceptance of ~~Lexi~~our ~~Luu~~products ~~Designs.~~by ~~Bitzio paid~~retailers ~~500,000,000~~and ~~restricted~~consumers ~~commons~~and ~~shares~~may ~~for~~result ~~this~~in ~~acquisition.~~a ~~300,000~~significant ~~shares~~decrease ~~valued~~in ~~$0.0014,~~net ~~the~~sales ~~market~~or ~~price~~leave ofus ~~the~~with ~~Company’s~~a substantial ~~stock~~amount onof ~~the~~unsold ~~day~~inventory. ofOur ~~acquisition,~~success ordepends ~~$420,000,~~on ~~was~~our ~~the~~ability ~~consideration~~to ~~given.~~anticipate, ~~The~~identify ~~other~~and ~~200,000~~respond ~~shares,~~to orchanging ~~$280,000~~trends ~~were~~in ~~recorded~~a timely asmanner. ~~pre-paid~~Our ~~compensation~~products ~~per~~must ~~the~~appeal ~~guidance~~to ata ~~ASC~~broad ~~805-10-55-25,~~range asof ~~they~~consumers ~~are~~whose ~~considered~~preferences ~~compensation~~cannot ~~for~~be ~~continuing~~predicted ~~employment~~with ~~of Mr.~~certainty ~~Blanchette.~~and ~~The~~are ~~value~~subject to ofrapid ~~the~~change. ~~shares~~We ~~will~~may not be ~~amortized~~able ~~over~~to ~~the~~continue ~~service~~to ~~period~~develop ofappealing ~~approximately~~styles 20or ~~months.~~successfully ~~Lexi~~meet ~~Luu~~constantly ~~shareholders~~changing consumer ~~are~~demands ~~able~~in tothe ~~earn~~future. anIn ~~additional $300~~addition,~~000~~ inany ~~restricted~~new ~~common~~products ~~shares~~or ~~over~~brands ~~the~~that ~~course~~we ofintroduce ~~years~~may innot anbe ~~earn~~successfully ~~out~~received ~~upon~~by ~~hitting certain~~retailers ~~revenue~~and ~~benchmarks~~consumers. ~~The~~If ~~Company~~our ~~recorded~~products anare ~~earnout~~not ~~contingent~~successfully ~~liability~~received ofby ~~$87,000~~retailers asand ~~part~~consumers ofand ~~the~~we ~~acquisition.~~are Weleft ~~accounted~~with ~~for~~a substantial amount ~~the~~of ~~transaction~~unsold asinventory, awe ~~business~~may ~~combination.~~be Offorced ~~the~~to ~~purchase~~rely ~~price~~on ~~paid~~markdowns asor ofpromotional ~~July~~sales ~~16,~~to ~~2014~~dispose ~~($183~~of excess,~~629)~~ ~~was~~slow-moving ~~allocated~~inventory. ~~among~~If this ~~the~~occurs, ~~assets and~~our ~~liabilities~~business, ~~and~~financial ~~the~~condition, ~~difference~~results ~~was~~of ~~assigned~~operations toand ~~intangible~~prospects ~~assets~~may be harmed.

OnOur ~~July~~business ~~18,~~could 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 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~~harmed ~~over~~if ~~the~~we ~~service~~do ~~period~~not ofdeliver ~~approximately 20 months. 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. The Company recorded an earnout contingent liability of $48,000 as part of the acquisition. We accounted for the transaction as a ~~business~~timely ~~combination~~manner. 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.

~~The~~Our ~~financial~~sourcing, ~~statements~~logistics ~~included~~and intechnology ~~this~~functions ~~report~~operate ~~reflect~~within substantial production and delivery requirements and subjects us to the ~~results~~risks ofassociated ~~Lexi~~with ~~Luu~~suppliers, ~~Designs~~transportation, distribution facilities and ~~E-motion~~other ~~Apparel~~risks. If we do not comply with customer product requirements or meet their delivery requirements, ~~Inc~~our ~~post~~customers ~~acquisition~~could reduce our selling prices, require significant margin assupport, ~~well~~reduce asthe ~~results~~amount ~~from~~of ~~our~~business ~~now-discontinued~~they ~~mobile~~do ~~app~~with ~~operations~~us, or cease to do business with us, all of which could harm our business.

~~Going~~Our ~~Concern~~business is subject to risks and uncertainties of foreign manufacturing and the price, availability and quality of raw materials that could interrupt our operations or increase our operating costs, thereby affecting our ability to deliver goods to the market, reduce or delay our sales and decrease our potential revenues.

AsA asignificant ~~result~~portion of ~~our~~the ~~financial~~products ~~condition,~~we ~~our~~sell ~~independent~~may ~~auditor~~be ~~has~~manufactured ~~expressed~~overseas. inThere ~~its~~are ~~opinion~~substantial onrisks ~~our~~associated ~~financial~~with ~~statements of December~~foreign 31manufacturing, ~~2014~~including ~~uncertainty~~changes asin laws relating to ~~our~~quotas, ~~ability~~and tothe ~~continue~~payment asof atariffs ~~going~~and ~~concern.~~duties, Influctuations ~~order~~in toforeign ~~continue~~currency exchange asrates, ashipping ~~going~~delays ~~concern~~and international political, regulatory and economic developments. Further, we ~~must~~may ~~effectively~~experience ~~balance~~fluctuations ~~many~~in ~~factors~~the price, availability and ~~begin~~quality toof ~~generate~~fabrics ~~revenue~~and soraw ~~that~~materials we ~~can~~use ~~fund~~in our ~~operations~~manufactured ~~from~~apparel or purchased finished goods. Any of these risks could increase our ~~sales~~operating costs. We will also import finished products and ~~revenues~~assume all risk of loss and damage with respect to these goods once they are shipped by our suppliers. If wethese goods are ~~not able~~destroyed toor dodamaged during ~~this~~shipment, weour ~~may~~revenues ~~not~~could be ~~able~~reduced as a result of our inability to ~~continue~~deliver asor anour ~~operating~~delay ~~company~~in delivering our products.

Results of Operations

Revenues

For the year ended December 31, 2014, we had revenues of $394,511, from continuing operations, compared to $5,823 for the year ended December 31, 2013. Sales grew in 2014, as a result of the acquisitions of Lexi Luu and E-motion.

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

	2014 Revenue		% of Total Revenue
E-Motion Apparel	$	79,919		20	%
Lexi Luu Designs	$	234,838		60	%
Cleo VII	$	-		-

~~Cost~~We may not be able to compete successfully due to intense competition and the strength of ~~Revenue~~our competitors.

~~For~~Our products are offered primarily in the ~~year~~apparel ~~ended~~and ~~December~~fashion 31markets, ~~2014,~~in ~~our~~which ~~cost~~we offace ~~revenue~~intense ~~was~~competition. ~~$209~~In general,~~329~~ competitive factors include quality, ~~compared~~price, tostyle, $0name ~~for~~recognition and service. In addition, various fads and the ~~year~~limited ~~ended~~availability ~~December~~of shelf ~~31,~~space ~~2013~~could affect competition for our products. ~~Gross profit~~Many ~~was~~of ~~$185~~our competitors have greater financial,~~182~~ distribution, marketing and ~~$5,823~~other resources than we have and many have achieved significant name recognition for ~~the~~their ~~years~~brand ~~ended~~names. ~~December~~We ~~31,~~may ~~2014~~be ~~and~~unable ~~2013,~~to successfully ~~respectively~~compete in the markets for our products.

~~Operating~~If ~~Expenses~~we are unable to attract and retain key personnel, we may not be able to compete effectively in our market.

~~The~~Our ~~primary~~success ~~component~~will ofdepend, ~~our~~in ~~operating~~part, ~~expenses~~on ~~for~~our ~~the~~ability ~~year~~to ~~ended~~attract ~~December~~and 31retain key management, ~~2014~~design ~~consisted~~experts, ofand ~~general~~sales and ~~administrative~~marketing ~~expenses~~personnel. ofOur ~~$944~~inability to retain employees and attract and retain sufficient additional employees,~~420.~~ ~~During~~in ~~the~~both ~~year~~our ~~ended~~clothing ~~December~~sales 31industry which includes design, ~~2013~~drafting, and marketing support resources, as well as in our ~~general~~ethanol production and ~~administrative~~technology ~~expenses~~industry which ~~totaled~~includes ~~$187~~individuals with experience in biofuels production,~~751.~~ ~~General~~engineers, process managers, sales personnel, etc, could have ~~and~~a ~~administrative~~material ~~expenses~~adverse ~~are~~effect ~~increased~~on byour ~~$756~~business,~~669~~ ~~due~~financial tocondition, ~~increased~~results ~~sale~~of operations and ~~marking~~cash ~~cost,~~flows. ~~management~~The ~~salaries~~loss ~~and~~of ~~expense~~key personnel ~~related~~could limit our ability to ~~newly~~develop ~~acquired~~and ~~subsidiaries~~market our products.

~~The~~We ~~remainder~~will ofrely ~~our~~on ~~operating~~technology ~~expenses~~to ~~for~~conduct ~~the~~our ~~year~~business ~~ended December 31, 2014 consisted of professional fees of $428,122. The primary components of professional fees during year ended December 31, 2014, were consulting fees of $186,986,~~ and ~~legal fees of $70,288, all of which was generally related to~~ our ~~efforts~~technology tocould ~~gain~~become ~~access~~ineffective toor ~~potential sources of financing~~obsolete. ~~During the year ended December 31, 2013, our professional fees totaled $814,540. Professional fees fell year-to-year due to the change in our business plan and management practices.~~

~~Loss~~We ~~from~~will ~~Operations~~be required to continually enhance and update our technology to maintain its efficacy and to avoid obsolescence. The costs of doing so may be substantial and may be higher than the costs that we anticipate for technology maintenance and development. If we are unable to maintain the efficacy of our technology, our ability to manage our business and to compete may be impaired. Even if we are able to maintain technical effectiveness, our technology may not be the most efficient means of reaching our objectives, in which case we may incur higher operating costs than we would if our technology were more effective. The impact of technical shortcomings could have a material adverse effect on our prospects, business, financial condition, and results of operations.

~~Due~~Development toof ~~our~~replacement ~~significant~~technologies ~~increase~~may result in ~~general~~the ~~and~~obsolescence ~~administrative~~of ~~expenses,~~ our ~~loss from operations increased from $996,468 for the year ended December 31, 2013 to $1,187,360 for the year ended December 31, 2014~~technologies.

~~Other~~New ~~Expense~~ethanol process technologies may emerge that reduce the effectiveness of our technologies or that render our technologies obsolete. The development of such process technologies could place us and our licensees at a competitive disadvantage and would have a material adverse effect on our operations, cash flows and financial position.

~~During~~We ~~the~~may ~~year~~not ~~ended~~be ~~December~~able ~~31,~~to ~~2014~~protect ~~we incurred interest charges of $791,681 as a result of financing transactions during the period. Our interest expense for the year ended December 31, 2014 was less than~~ our ~~interest~~intellectual ~~expense~~property ~~for the comparable period of 2013, although our overall debt is considerably greater than it was one year ago~~rights.

WeOur ~~accounted~~success ~~for~~will depend on our ~~convertible~~ability ~~debt~~to insuccessfully ~~accordance~~prosecute ~~with~~our ~~ASC~~current ~~815,~~patent ~~Derivatives~~litigation and ~~Hedging,~~to asobtain ~~the~~and/or ~~conversion~~maintain ~~feature~~and ~~embedded~~enforce inpatent ~~the~~and ~~convertible~~other ~~debentures~~intellectual ~~could~~property ~~result~~protection infor ~~the~~our ~~note~~technologies. ~~principal~~We ~~and~~have ~~related~~obtained ~~accrued~~or ~~interest~~developed ~~being~~rights ~~converted~~ to apatents ~~variable~~and ~~number~~patent ofapplications ~~our~~in ~~common~~the ~~shares.~~United ~~The~~States ~~conversion~~and ~~feature~~ on ~~these~~a ~~debentures~~case isby ~~variable~~case basis internationally, and ~~based~~may, onin ~~trailing~~the ~~market~~future, ~~prices.~~seek Itrights ~~therefore~~from third ~~contains~~parties anto ~~embedded~~other ~~derivative.~~patent ~~The~~applications ~~fair~~or ~~value~~patented oftechnology. ~~the~~There ~~conversion~~can ~~feature~~be ~~was~~no ~~calculated~~assurance, ~~when~~however, ~~the~~that ~~debentures~~patents ~~were~~will ~~issued,~~issue ~~and~~from wethe ~~recorded~~patent aapplications ~~derivative~~filed ~~liability~~or ~~for~~to ~~the~~be ~~calculated~~filed ~~value.~~or ~~The~~that ~~conversion~~the ~~liability~~scope isof ~~valued~~any atclaims ~~the~~granted ~~end~~in ofany ~~each~~patent ~~reporting~~will ~~period and~~provide ~~results~~us inwith aproprietary protection. ~~gain~~If orthe ~~loss~~scope ~~for~~of the ~~change~~claim granted in ~~fair~~a ~~value.~~patent ~~Due~~is not sufficient to ~~the~~afford ~~volatile~~us ~~nature~~with ofprotection ~~our~~against ~~stock~~competitors with similar technology, ~~the~~our ~~change~~investment in the ~~derivative liability~~patented ~~and~~technology ~~the~~may ~~resulting~~provide ~~gain~~us limited or ~~loss~~no ~~will~~competitive ~~usually~~advantage. In most situations we will be ~~material~~engaged toin legal proceedings and competition with entities whose financial resources are greater than our ~~results~~own. ~~During~~Any failure ~~the~~to ~~year~~maintain ~~ended~~patent ~~December~~or ~~31,~~other ~~2014,~~intellectual ~~we recorded~~property aprotection ~~loss~~on ofour ~~$2,044,298,~~technologies ascould ~~the~~have ~~value~~a ofmaterial adverse effect on our ~~derivative~~operations, ~~liabilities~~cash ~~increased~~flows byand ~~that~~financial ~~amount~~position.

~~During~~We ~~the~~may ~~year~~be ~~ended~~faced ~~December~~by ~~31,~~claims ~~2014~~that we ~~incurred~~have ~~foreign~~infringed ~~currency transaction gain of $24,476, compared to loss of $7,914 during~~ the ~~year~~ ~~ended~~intellectual ~~December~~property ~~31,~~rights ~~2013. We also incurred loss on extinguishment~~ of ~~debt~~our ~~of $42,778 and $431,379 for the years ended December 31, 2014 and 2013, respectively~~competitors.

WeIt ~~acquired~~is apossible ~~51%~~for ~~ownership~~third ~~interest~~parties into ~~Cleo~~claim ~~VII~~that our technologies infringe on patents or other intellectual property rights owned by others, ~~Inc~~even though we know of no such circumstances. ~~The~~In ~~net~~addition, ~~loss~~our ~~attributable~~assertion of intellectual property rights will often result in the other party seeking to ~~non-controlling~~assert ~~interest~~alleged intellectual property rights of ~~$1,519~~its ~~reflects~~own ~~operations~~or assert other claims against us, which could harm our business. If we are not ultimately successful in ~~Cleo~~defending ~~VII~~ourselves against these claims in litigation, ~~Inc~~we may not be able to sell a particular product or service due to an injunction, we may have to incur the expense of altering our processes, or we may incur licensing fees. ~~attributable~~There can be no assurance that a license will be available to us, if at all, upon terms and conditions acceptable to us. In the ~~non-controlling~~worst ~~interest~~case, ~~holder~~an ~~for~~adverse determination of a claim that our technologies infringe the ~~year~~rights ~~ended~~of ~~December~~others 31may cause us to incur an obligation to pay damages that could, ~~2014~~in turn, overwhelm our financial resources.

Net Loss

As a result of the foregoing, during the year ended December 31, 2014, we recorded a net loss of $4,040,122 compared to $2,710,437 for the year ended December 31, 2013.

Liquidity and Capital Resources

Our principal needs for liquidity have been to fund operating losses, working capital requirements, acquisitions, and debt service. Unfortunately, at December 31, 2014 we had low liquidity, with current assets consisting of $3,829 in cash, $560,631 in prepaid expenses, $219,416 in inventory, and $24,538 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.

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 $612,520 for the year ended December 31, 2014, compared to $68,273 for the year ended December 31, 2013.

~~Cash~~We ~~Used~~may inincur ~~Investing~~substantial ~~Activities~~costs enforcing or acquiring intellectual property rights and defending against third-party claims as a result of litigation or other proceedings.

~~Our~~In ~~net~~connection ~~cash~~with ~~used~~the byenforcement ~~continuing~~of ~~investing~~our ~~activities~~own ~~was~~intellectual ~~$25~~property rights,~~979~~ ~~for~~the acquisition of third-party intellectual property rights, or disputes relating to the ~~year~~validity ~~ended~~or ~~December~~alleged 31infringement of third-party intellectual property rights, ~~2014~~including patent rights, ~~compared~~we are currently and may in the future be subject to ~~$75~~claims,~~000~~ ~~received~~negotiations or complex, protracted litigation. Intellectual ~~for~~property disputes and litigation are typically very costly and can be disruptive to our business operations by diverting the ~~year~~attention and ~~ended~~energies ~~December~~of 31management and key technical personnel. Litigation and regulatory proceedings are subject to inherent uncertainties, and ~~2013~~unfavorable rulings could occur, which could include monetary damages or, in cases for which injunctive relief is sought, an injunction prohibiting us from marketing one or more products or services, precluding particular business practices, or requiring other remedies, such as compulsory licensing of intellectual property. If we were to receive an unfavorable ruling in an intellectual property dispute, our business and results of operations could be materially harmed.

~~Cash~~The ~~Provided~~absence byof ~~Financing~~independent ~~Activities~~directors on our board of directors may limit the quality of management decision making.

~~Our~~One ~~net~~of ~~cash~~our ~~provided~~board bymember ~~financing~~is ~~activities~~also ~~was~~an ~~$638,451~~employee ~~for~~of ~~the~~GreenShift ~~year~~Corporation. ~~ended~~There ~~December~~is ~~31,~~no ~~2014,~~audit ~~compared~~committee toof ~~$290,000~~the ~~for~~board. ~~the~~This ~~year~~situation means ~~ended~~that ~~December~~the ~~31,~~Board ~~2013.~~will ~~For~~determine the ~~year~~direction ~~ended~~of ~~December~~our ~~31,~~company ~~2014,~~without ~~our~~the ~~cash~~benefit ~~provided~~of byan ~~financing~~objective ~~activities~~perspective ~~consisted~~and ~~primarily~~without ofthe contribution ~~net~~of ~~proceeds~~insights from ~~sale~~outside ofobservers. ~~preferred~~This ~~stock~~may oflimit ~~$155,451,~~the ~~and~~quality ~~proceeds, net~~ of ~~repayments,~~the ~~from~~decisions ~~notes~~that ~~payable~~are ~~of $410,500~~made.

~~Contractual obligations~~ITEM ~~and~~2 ~~other~~DESCRIPTION ~~commitments~~OF PROPERTIES

~~The~~Our ~~following~~agriculture ~~table~~group ~~summarized~~headquarters ~~our~~is ~~contractual~~located ~~obligations~~in asAlpharetta, ofGeorgia. ~~December~~The ~~31,~~Alpharetta ~~2014~~lease had a one year term that terminated on January 2016, ~~and~~at which time the ~~effect~~lease ~~these~~was ~~obligations~~extended ~~are~~by ~~expected~~another year. The monthly lease payment is $1,664. Our apparel operations toare ~~have~~based onin ~~our~~Chatsworth, ~~liquidity~~California. ~~and~~The ~~cash~~Chatsworth ~~flows~~lease has a three year term that terminates in ~~future~~January ~~periods~~2019. The monthly lease payment is $4,300.

			Payments due by period
	Total		Less than 1 Year		1-2 Years		3-4 Years		5+ Years
Related party debts	$	303,001	$	303,001	$	-	$	-	$	-
Notes payable		268,037		268,037		-		-		-
Convertible notes		756,982		756,982		-		-		-
Total	$	1,328,020	$	1,328,020	$	-	$	-	$	-

ITEM 3

LEGAL PROCEEDINGS

~~Off~~On October 13, 2009, the U.S. Patent and Trademark Office (“PTO”) issued U.S. Patent No. 7,601,858, titled “Method of Processing Ethanol Byproducts and Related Subsystems” (the ‘858 Patent) to GS CleanTech Corporation, a wholly-~~balance~~owned ~~sheet~~subsidiary ~~arrangements~~of GreenShift Corporation. On October 27, 2009, the PTO issued U.S. Patent No. 7,608,729, titled “Method of Freeing the Bound Oil Present in Whole Stillage and Thin Stillage” (the ‘729 Patent) to GS CleanTech. Both the ‘858 Patent and the ‘729 Patent relate to the Company’s subsidiary’s corn oil extraction technologies. GS CleanTech Corporation, our wholly-owned subsidiary, subsequently filed legal actions in multiple jurisdictions alleging infringement by various persons and entities. Multiple additional related suits and countersuits were filed. On May 6, 2010, we submitted a “Motion to Transfer Pursuant to 28 U.S.C. § 1407 for Consolidated Pretrial Proceedings” to the United States Judicial Panel on Multidistrict Litigation (the “Panel”) located in Washington, D.C. In this motion, we moved the Panel to transfer and consolidate all pending suits involving infringement of our patents to one federal court for orderly and efficient review of all pre-trial matters. On August 6, 2010, the Panel ordered the consolidation and transfer of all pending suits in the U.S. District Court, Southern District of Indiana for pretrial proceedings (the “MDL Case”). In October 2014, the District Court in Indiana ruled in favor of the defendants in our pending patent infringement matter on their motions for summary judgment alleging that our corn oil extraction patents were invalid, including US Pat. Nos. 7,601,858 and 8,168,037. The summary judgment ruling was not final and there are additional issues in the MDL Case that can be expected to be resolved this year. We disagree with the court’s ruling and intend to mount a vigorous appeal at the appropriate time. A bench trial on Defendants’ inequitable conduct claim was held from October 5 to October 15, 2015 in the Southern District of Indiana. The matter was taken under advisement by the Court and a ruling will likely issue during 2016.

As of December 31, 2014, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, or capital resources.

ITEM 7A – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company we are not required to provide the information required by this Item.

~~ITEM~~The 8Company’s subsidiary is party to an action entitled Max v. –GS ~~FINANCIAL~~AgriFuels ~~STATEMENTS~~Corp., ~~AND~~et ~~SUPPLEMENTARY~~al. ~~DATA~~in the Supreme Court, New York County, in which the plaintiffs are asserting claims to money damages against the Company’s subsidiary and other defendants, arising from a series of Share Purchase Agreements dated March 6, 2007, under which the individual plaintiffs sold their shares in Sustainable Systems, Inc., to GS AgriFuels Corporation, a former subsidiary of the Company. In their Amended Complaint, plaintiffs asserted claims for breach of contract, fraud and negligent misrepresentation, and sought money damages in the amount of $6 million. On March 19, 2013, the Court granted in part the defendants’ motion to dismiss the Amended Complaint, and dismissed all but the breach of contract claims asserted against the Company and certain other corporate defendants. On April 1, 2015, the Company’s subsidiary entered into a settlement agreement pursuant to which the plaintiff s are to receive $25,000 in cash and a convertible debenture in the amount of $300,000. In the event that the plaintiffs have not converted the debenture in full at the expiration of three years, the plaintiffs may request the remaining amount be paid in full at that time. While the settlement agreement has not yet been implemented by the payment of the specified cash and the issuance of the specified debenture, the action has been marked “disposed” by the court.

~~FINANCIAL~~On ~~STATEMENTS~~September 10, 2012, Long Side Ventures commenced an action entitled Long Side Ventures and Sunny Isles Ventures, LLC, LLC v. GreenShift et. al., in the United States District Court for the Southern District of New York, alleging breach of contract and other causes of action for which the plaintiff seeks damages of about $250,000 plus costs. On February 24, 2015, the Company’s subsidiary entered into a settlement agreement pursuant to which the plaintiff is to receive $150,000 in cash and securities in the amount of $250,000. The Company’s subsidiary accrued the entire $400,000 judgment on its books as of the year ended December 31, 2014. During the six months ended June 30, 2015, the Company’s subsidiary issued a debenture to Long Side Ventures in the amount of $250,000 (see Note 9, Debt Obligations, below). The Company’s subsidiary has already paid the entire $150,000 due in cash under the settlement agreement. Nevertheless, there is a current dispute with the plaintiffs as to whether the Company’s subsidiary and the other defendants have performed their obligations under the settlement agreement, and whether the plaintiffs have the right to declare a default under the settlement agreement. The Company’s subsidiary has taken the position that it has fully performed and intends to vigorously contest any alleged default. Upon the performance of the terms of the Settlement Agreement, the Action will be dismissed against the Company’s subsidiary and the other defendants.

~~BITZIO~~On October 10, 2013, Golden Technology Management, LLC, and other plaintiffs commenced an action entitled Golden Technology Management, ~~INC~~LLC, et al. v. NextGen Acquisition, Inc. et al. in the Supreme Court of the State of New York, County of New York, alleging breach of contract and other causes of action against the Company’s subsidiary in connection with the acquisition of NextGen Fuel, Inc. by a former subsidiary. Plaintiffs seek damages in excess of $5,200,000 plus prejudgment interest and costs. On December 22, 2014, the court granted summary judgment as to the former subsidiary’s liability for payment of the sum of $3.2 million, plus prejudgment interest and costs. The plaintiffs’ have asserted a claim for alter ego liability for that amount against the Company and the other defendants. The litigation is proceeding and the Company’s subsidiary intends to vigorously defend this action. At this stage of the proceedings, we cannot evaluate the likelihood of an unfavorable outcome in excess of the amounts previously accrued.

~~December~~The ~~31,~~Company ~~2014~~is also involved in various collection matters for which vendors are seeking payment for services rendered and ~~2013~~goods provided. The Company and its subsidiaries are party to numerous matters pertaining to outstanding amounts alleged to be due. Management is unable to characterize or evaluate the probability of any outcome at this time.

Report of Independent Registered Public Accounting Firm		F-1
Consolidated Balance Sheets		F-2
Consolidated Statements of Operations		F-3
Consolidated Statement of Changes in Stockholders’ Equity (Deficit)		F-4
Consolidated Statements of Cash Flows		F-5
Notes to the Financial Statements		F-6

ITEM 4

MINE SAFETY DISCLOSURE

Not applicable.

PART II

ITEM 5

MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

Our common stock is currently traded on the OTC Pink Market under the symbol “BTZO.” The following table sets forth, for the periods indicated, the range of high and low closing bid prices for Bitzio’s common stock as reported by the OTC Markets. The reported bid quotations reflect inter-dealer prices without retail markup, markdown or commissions, and may not necessarily represent actual transactions.

Period	High		Low

2014 First Quarter		0.0039		0.0007
2014 Second Quarter		0.0039		0.0010
2014 Third Quarter		0.0018		0.0004
2014 Fourth Quarter		0.0005		0.0001

2015 First Quarter		0.0004		0.0001
2015 Second Quarter		0.0002		0.0001
2015 Third Quarter		0.0002		0.0001
2015 Fourth Quarter		0.0001		0.0001

Title of Class		Approximate Number of Holders of Record as of March 31, 2016
Common Stock, $0.001 par			104

The above prices are inter-dealer quotations, without retail markup, markdown or other fees or commissions, and may not represent actual transactions. The number of holders does not give effect to beneficial ownership of shares held in the street name by stock brokerage houses or clearing agents.

DIVIDENDS

We have not declared cash dividends on our common stock since our inception and we do not anticipate paying any cash dividends in the foreseeable future.

SALE OF UNREGISTERED SECURITIES

On December 31, 2015, the Company issued EXO Opportunity Fund LLC (“EXO”) 200,000 shares of Series E Preferred Stock in exchange for 187,029 shares of GreenShift Series D Preferred Stock. On December 31, 2015, the Company issued TCA Global Credit Master Fund, L.P., 320,000 shares of Series E Preferred Stock in exchange for $3.2 million in financing costs. On December 31, 2015, Bitzio acquired Viridis Capital LLC (“Viridis”) from FLUX Carbon Corporation (“FCC”), an entity owned by Kevin Kreisler, the Company’s chairman, in exchange for 800,000 shares of Bitzio’s Series F Preferred Stock.

REPURCHASE OF EQUITY SECURITES

The Company did not repurchase any of its equity securities that were registered under Section 12 of the Securities Act during the fourth quarter of 2015.

ITEM 6

SELECTED FINANCIAL DATA

Not applicable.

ITEM 7

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATION

The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of our consolidated financial condition and results of operations. This discussion should be read in conjunction with the consolidated financial statements included herewith and notes to the consolidated financial statements thereto and the risk factors contained herein.

OVERVIEW

Bitzio, Inc. (“we,” “our,” “us,” or the “Company”), develops and commercializes clean technologies that facilitate the more efficient use of natural resources. We are focused on doing so primarily in three sectors: agriculture, energy and lifestyle.

The Company’s portfolio of patented and patent-pending technologies covers oil extraction and refining, renewable fuels and chemicals, solar energy and fuels, energy and chemical detection, wearables and consumer products, among others. Our plan to bring our technologies to market involves utilization of strategically-relevant infrastructure in targeted channels.

We believe that the first, best and most cost-effective way to achieve positive environmental change of any magnitude is to develop technology-driven economic incentives that motivate large groups of people and companies to make incremental environmental contributions that are collectively very significant – contributions that cumulate to catalyze disruptive environmental gains.

We invented, developed, and commercialized technologies that integrate into the back-end of existing dry mill corn ethanol plants to extract and recover a historically-overlooked natural resource – inedible crude corn oil, a valuable feedstock for use in the production of advanced carbon-neutral liquid fuels and other biomass-derived alternatives to fossil fuel-based products. We estimate that over 80% of the U.S. dry mill ethanol industry is producing corn oil using at least one of the inventions claimed in our issued extraction patents. That adoption rate corresponds to an estimated industry-wide output capable of offsetting more than about 20 million barrels of fossil fuel-derived crude oil per year, while saving trillions of cubic feet per year of natural gas, eliminating tens of millions of metric tons per year of greenhouse gas emissions, and infusing more than an estimated $1 billion per year of increased income into the corn ethanol industry – the foundation of North America’s renewable fuel production capability.

Those are globally-meaningful gains, and they are repeatable. To that end, we have developed a portfolio of new patented and patent-pending technologies capable of significantly expanding on our work to date in the ethanol industry. Those technologies involve new uses and products for extracted corn oil as well as other components of various ethanol process streams. We are also actively evaluating diversification opportunities, including applications of our technologies in other industries and potential acquisitions of companies with assets, customers, operations or other resources that are strategic to the commercialization of our technologies in targeted industries.

Diversification is important to mitigate the risk that we may not prevail in our ongoing patent infringement litigation. In October 2014, the District Court in Indiana ruled in favor of the defendants on their motions for summary judgment alleging that our corn oil extraction patents were invalid, including US Pat. Nos. 7,601,858 and 8,168,037. In December 2014, the U.S. Patent and Trademark Office allowed three new corn oil extraction patent applications (U.S. Patent Application Nos.: 11/908,891, 13/185,841 and 13/450,997). Each application was examined and considered patentable by a different patent examiner and after each had considered the summary judgment decision. We cannot speak to the significance of the conflicting determinations, however, under applicable standards, a patent is not invalid until and unless a final judgment of invalidity is rendered after all available appeals have been exhausted. We believe in our intellectual property rights and the system of checks and balances designed to protect those rights – both in the patent office and the courts, and we will appeal the summary judgment ruling at the appropriate time. Nevertheless, diversification of our revenue mix is key goal for 2016.

PLAN OF OPERATIONS

We will continue our work with our licensees in our agriculture group to maximize the benefits and minimize the costs of recovering as much oil as possible with our technologies, and we remain focused on winning new business and increasing our licensed penetration. To do so moving forward, we will continue to provide our licensees with exceptional services, the highest-performing systems available, and access to new technologies for further gains in licensee profitability and competitive advantage. We will also continue to expand our patent portfolio. We have many additional patents pending and we remain committed to developing new technologies to further enhance the profitability of our licensees. And, we will stay the course in our ongoing infringement litigation with a view towards enhancing and protecting the significant competitive advantage of our licensees.

Our lifestyle group has historically focused on acquiring, promoting and marketing a portfolio of consumer apparel brands. Our plan for this group in 2016 involves the acquisition of a strategic activewear brand, followed by the marketing of the new brand along with our existing activewear brands, with an objective of increasing apparel sales by 20% by year end as compared to last year. Moreover, we plan to complete development of commercial prototypes based on our energy conversion wearable technology during 2016.

Our financial performance for 2016 and beyond can be expected to be most significantly impacted by the amount of oil that our licensees produce, the market price for that oil, the extent to which we collect reasonable royalties, and the costs incurred in our ongoing litigation for infringement of our patents. In addition, future results may be improved by the significant interest in our engineering and other services in connection with the design, construction, integration and modification of corn oil extraction systems and other new systems for existing and prospective licensees. We expect that these activities will contribute to revenue during 2016.

We additionally expect to continue to incur substantial costs in connection with our ongoing litigation for infringement of our patented oil extraction technologies. These costs decreased during 2015 but are expected to continue through 2016 in advance of trial. These expenses may delay or otherwise adversely affect our ability to achieve our profitability and debt reduction goals. We hope to eventually eliminate our litigation expense, but we must and will take all necessary steps to bring infringement of our patents to an end.

Our brands are subject to competition from various domestic and foreign brands. Each brand has competitors within each of its specific distribution channels that span a broad variety of product categories. These competitors have the ability to compete in terms of fashion, quality, price and/or advertising. We also compete with traditional apparel and consumer brand companies and with other brand management companies for acquisitions.

COMPONENTS OF REVENUES AND EXPENSES

On December 31, 2015, we acquired an 80% interest in GreenShift Corporation (“GreenShift”), the operations of which comprised all of our efforts in our agriculture group during 2015. We accounted for that transaction on the basis that the Company and GreenShift were under common control, and accordingly consolidated the results of GreenShift’s operations with ours for the full year ended December 31, 2015, such that total revenues for 2015 derived from our agriculture and lifestyle segments, in the form of license royalties and related products and services (agriculture), and activewear apparel sales (lifestyle)). Total revenues for 2014 derived solely from our lifestyle group.

Our revenues related to our agriculture segment are derived from royalty-bearing licenses issued to ethanol producers that use our patented and patent-pending technologies. In return, we receive ongoing royalty fees under our license agreements that are based on the market value of the corn oil produced by our licensees. Our license agreements also call for our provision of technical services to our licensees, which we provide to maximize the benefit of our technologies to our clients and, derivatively, us by way of increased royalty income. These services include design, procurement, integration and ongoing support services. In these cases, our royalty payments were equal to the gross profit realized upon sale of corn oil, or the difference between the market price of the corn oil produced and our discounted purchase price in each relevant license.

Selling, general and administrative expenses consist of payroll, office expenses, insurance and professional fees for accounting, legal, consulting and investor relations activities. Payroll, including employee salaries, incentives and benefits, are the largest single category of expenditures in selling, general and administrative expenses. Other income (expense) includes interest earned, interest expenses, amortization expenses, income or expenses relating to the changing value of the conversion benefit embedded into our convertible debentures and other non-operating items. Notably, our agreements with our lenders provide for the accrual of our interest expenses pending conversion or other payment.

RESULTS OF OPERATIONS

Year Ended December 31, 2015 Compared to Year Ended December 31, 2014

We accounted for the GreenShift acquisition on the basis that the Company and GreenShift were under common control as of December 31, 2015, and accordingly consolidated the results of GreenShift’s operations with ours for the full year ended December 31, 2015 (see Note 3 to the Company’s consolidated financial statements, below). Our results of operations for the year ended December 31, 2015, consequently included Bitzio and its consolidated subsidiaries, including GreenShift and its subsidiaries. Results of operations for the year ended December 31, 2014, include Bitzio and its subsidiaries, but exclude GreenShift and its subsidiaries since those entities were acquired on December 31, 2015.

Revenues for the year ended December 31, 2015, were $9.9 million as compared to $395,000 generated during the year ended December 31, 2014. Revenue for the year ended December 31, 2015, was $9.5 million in agriculture segment revenue and $403,000 in lifestyle segment revenue. In the comparable period of the prior year, total revenue was $395,000, which amount was produced entirely from apparel sales in our lifestyle segment.

The increase in sales during 2015 from the lifestyle segment included increased sales by the Company’s lifestyle subsidiaries (Lexi Luu and E-motion). In regards to the agriculture segment, revenue in future periods will remain subject to variance in connection with a number of factors, including the rate at which our licensees commence production, the amount of corn oil that our licensees produce, the market price for that corn oil, the extent to which we collect reasonable royalties, and the degree to which we provide event-driven systems integration services to our licensees involving the design, construction, integration and modification of licensed technologies.

Costs of sales for the year ended December 31, 2015 were $3.5 million, including $3.2 million from our agriculture segment and about $325,000 from our lifestyle segment. These amounts compared to about $210,000 in total for the year ended December 31, 2014, all of which were attributable to our lifestyle segment. Our 2015 costs of sales included about $237,000 for a write-down of inventory in our agriculture segment.

We generated $6.4 million in gross profit for the year ended December 31, 2015, as compared to $185,000 for the year ended December 31, 2014. Increased economies of scale with respect to our costs of sales and gross profit can be expected moving forward in both segments during 2016 given our stated growth plans for the year.

Operating expenses for the years ended December 31, 2015, and December 31, 2014, were about $8.1 million and $1.4 million, respectively. Operating expenses during 2015 included about $358,000 in research and development costs, and $4.9 million in professional fees, of which about $3.0 million associated with our agriculture segment was accrued and not paid during the year, and written off as of December 31, 2015. General and administrative expenses increased by $2.7 million due to the acquisition of GreenShift Corporation.

We had a total operating loss of about $1.7 million during 2015 as compared to an operating loss of about $1.2 million in 2014 for the lifestyle segment. Other income for the year ended December 31, 2015, was about $18.2 million, while other expenses for the year ended December 31, 2014, was about $2.9 million for the lifestyle segment. We realized a debt extinguishment gain of about $21.8 million in 2015, of which about $22.1 million was from our agriculture segment and netted against a $300,000 loss on debt extinguishment from the lifestyle segment, and which amounts were offset by about $5.8 million in interest expense and $1.0 million in other expenses from the agriculture segment. Our operating expenses in 2014 included about $792,000 in interest expense, all of which were attributable to our lifestyle segment.

The debt extinguishment gain in the agriculture segment during 2015 was realized in connection the Company’s completion of a $2.9 million debt financing transaction with TCA Global Credit Master Fund, LP (“TCA”), followed by the acquisition of GreenShift on December 31, 2015. $2.0 million of the TCA loan proceeds were paid by the Company to GreenShift’s senior lender as part of the consideration the Company paid to acquire equity in GreenShift. While that payment resulted in the $22.1 debt extinguishment gain noted above, and GreenShift is no longer the direct obligor of the corresponding liability, GreenShift is a guarantor of the Company’s loan to TCA, as well as the primary source of the cash flow the Company relies upon to service its debt with TCA. Net income for the year ended December 31, 2015, was about $13.0 million. Net loss for the year ended December 31, 2014, was about $4.0 million, all of which was attributable to our lifestyle segment.

Derivatives

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 note discount and derivative liability for the calculated value. We recognize interest expense for accretion of the note discount over the term of the note. 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. The principal amount on our convertible obligations was $13.0 million as of December 31, 2015, and the unamortized note discount was $4.5 million. For the year ended December 31, 2015, a gain for the change in fair value of the derivative of about $3.9 million was recognized for these debentures. The total derivative liability as of December 31, 2015, was about $11.2 million.

LIQUIDITY AND CAPITAL RESOURCES

Our primary source of liquidity during 2015 was cash produced by our operations. During the year ended December 31, 2015, we produced about $2.1 million in net cash from our operating activities, used $590,000 in net cash from our investing activities, and used about $225,000 in net cash from our financing activities, primarily to repay debt to YA Global Investments, L.P. (“YA Global”). During the year ended December 31, 2014, lifestyle group financing activities produced about $638,000 of net cash, of which we used about $613,000 and $26,000 in our lifestyle group operating and financing activities, respectively. Our cash balances at December 31, 2015, and December 31, 2014, were about $1.9 million and $3,800, respectively. The Company had a working capital deficit of about $17.3 million at December 31, 2015, about $9.1 million of which was attributable to current obligations convertible into Company common stock.

Our financial position and liquidity moving forward will be based on our ability to generate cash flows from our operations, as well as the level of our outstanding indebtedness and our debt service obligations. Our business is highly impacted by commodity price volatility, primarily in the market for corn oil. While demand for extracted corn oil is strong in the biodiesel and multiple other markets, decreases in the price of corn oil will have a negative impact on the amount of cash we are able to produce from our operating activities.

The Company completed $2.9 million in debt financing with TCA Global Credit Master Fund, LP (“TCA”) on December 31, 2015. $2.0 million of the TCA loan proceeds were paid by the Company to GreenShift’s senior lender as part of the consideration the Company paid to acquire equity in GreenShift. While GreenShift is no longer the direct obligor of the corresponding liability, GreenShift is a guarantor of the Company’s loan to TCA, as well as the primary source of the cash flow the Company relies upon to service its debt with TCA.

As of December 31, 2015, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, or capital resources.

ITEM 8

FINANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULES

	Page No

FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm	21

Consolidated Balance Sheets	23

Consolidated Statements of Operations	24

Consolidated Statements of Stockholders’ Equity	25

Consolidated Statements of Cash Flows	28

Notes to Consolidated Financial Statements	29

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of Bitzio, Inc. & Subsidiaries

We have audited the accompanying consolidated balance sheet of Bitzio, Inc. & Subsidiaries (“the Company”) as of December 31, 2015, and the related consolidated statements of operations, stockholders’ equity (deficit), and cash flows for the year ended December 31, 2015. The Company’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Bitzio, Inc. & Subsidiaries as of December 31, 2015, and the results of its operations and its cash flows for the year ended December 31, 2015, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As more fully discussed in Note 2 to the financial statements, the Company had a loss from operations, and current liabilities exceeded current assets by about $17.3 million as of December 31, 2015. In addition, the Company is subject to a guaranty agreement with a significant creditor. These conditions raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Rosenberg Rich Baker Berman & Company

Somerset, New Jersey

May 23, 2016

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and shareholders’ of

Bitzio, Inc.

We have audited the accompanying consolidated balance ~~sheets~~sheet of Bitzio, Inc. (the Company) as of December 31, 2014 and ~~2013 and~~ the related consolidated statements of operations, stockholders’ equity (deficit) and cash flows for the ~~years~~year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our ~~audits~~audit.

We conducted our ~~audits~~audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the ~~audits~~audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our ~~audits~~audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our ~~audits~~audit ~~provide~~provides a reasonable basis for our opinion.

In our opinion the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Bitzio, Inc. as of December 31, 2014 ~~and 2013~~, and the results of their operations and cash flows for the ~~years~~year then ended, in conformity with accounting principles generally accepted in the United States of America.

~~The accompanying financial statements~~As ~~have~~mentioned ~~been prepared assuming that the Company will continue as a going concern. As discussed~~ in ~~the~~ Note 218, to the accompanying financial statements~~, the~~ ~~Company~~have ~~has~~been ~~recurring~~restated ~~net~~for ~~losses,~~the ancorrection ~~accumulated deficit~~ of ~~$27,026,191~~an ~~and~~error arelating ~~working capital deficit, all of which raises substantial doubt about its ability~~ to ~~continue as a going concern. Management~~the Company’s ~~plans~~overstatement ~~concerning~~of ~~these~~prepaid ~~matters~~expenses ~~are~~as ~~also described~~of inDecember ~~the~~31, ~~Note 2 to the financial statements~~2014. ~~The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.~~

/s/ Sadler, Gibb & Associates, LLC

Salt Lake City, UT

April 15, 2015, except for Notes 14, 16, 17 and 18, as to which the date is May 23, 2016

~~F-1~~22

BITZIO, INC. AND SUBSIDIARIES

~~Consolidated~~CONSOLIDATED ~~Balance~~BALANCE ~~Sheets~~SHEETS

	December 31, 2014			December 31, 2013
Assets
Current Assets
Cash and cash equivalents	$	3,829		$	3,877
Accounts receivable, net		24,538			2,234
Prepaid expenses and other current assets		560,631			-
Inventory		219,416			-
Total Current Assets		808,414			6,111
Other Assets
Intangible assets, net		589,044			292,931
Property and equipment		2,724			-
Other receivable		1,192			-
Note receivable		25,979			75,000
Total Other Assets		618,939			367,931
Total Assets	$	1,427,353		$	374,042
Liabilities and Stockholders’ Deficit
Current Liabilities:
Accounts payable and accrued liabilities		1,290,802			652,006
Related party payable		163,666			138,000
Notes payable, net of discount		327,681			367,513
Convertible notes, net of discount		756,982			1,037,684
Related party convertible notes, net of discount		150,000			150,000
Contingent liabilities		101,000			-
Derivative liability		3,212,200			827,158
Total Current Liabilities		6,002,331			3,172,361
Long term notes payable, net of discount		-			225,000
Redeemable preferred stock series C, $0.001 par value; 999 shares authorized; 999 shares issued and outstanding		-			-
Total Liabilities		6,002,331			3,397,361
Stockholders’ Deficit:
Preferred stock series A, $0.001 par value; 2,500,000 shares authorized; 2,043,120 shares issued and outstanding, respectively		2,043			2,043
Preferred stock series B, $0.001 par value; 1,000,000 shares authorized; 1,000,000 and 500,000 shares issued and outstanding, respectively		1,000			500
Preferred stock series D, $0.001 par value; 35,750 shares authorized; nil shares issued and outstanding		-			-
Common stock, $0.001 par value; 10,000,000,000 shares authorized; 2,948,694,586 and 175,916,617 shares issued and outstanding, respectively		2,948,696			175,917
Additional paid in capital		19,199,481			19,603,216
Common stock to be issued		120,438			-
Common stock subscriptions payable		181,074			181,074
Accumulated deficit		(27,026,191	)		(22,986,069	)
Total Bitzio, Inc. stockholders’ deficit		(4,573,459	)		(3,023,319	)
Non-controlling interest		(1,519	)		-
Total stockholders’ deficit		(4,574,978	)		(3,023,319	)
Total Liabilities and Stockholders’ Deficit	$	1,427,353		$	374,042

AS OF DECEMBER 31, 2015 and 2014

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

	12/31/2015			12/31/2014
				(Restated)
ASSETS

Current Assets:
Cash	$	1,929,832		$	3,829
Accounts receivable, net of doubtful accounts		311,763			24,538
Deposits, current		400,000			—
Inventories, net		635,482			219,416
Due from affiliates		180,865			—
Deferred financing costs		3,537,257			—
Loans receivable		160,500			—
Prepaid expenses and other assets		28,558			32,407
Total current assets		7,184,257			280,190

Other Assets:
Intangible assets, net		224,589			589,044
Fixed assets, net		23,333			2,724
Notes receivable		—			25,979
Other receivables		—			1,192
Minority investment in subsidiary		3,360,355			—
Costs in excess of billings		9,107			—
Deposits		69,730			—
Total other assets		3,687,113			618,939

TOTAL ASSETS		10,871,370			899,129

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

Accounts payable		1,866,785			554,475
Accrued expenses		1,454,020			619,658
Income tax payable		151,020			—
Accrued interest		820,654			116,669
Accrued interest – related parties		378,267			—
Notes payable, net		354,981			491,347
Notes payable – related party		310,100
Current portion of convertible notes, net		3,730,000			756,982
Current portion of convertible notes, net – related party		—			150,000
Current portion of convertible debentures, net		2,366,426			—
Current portion of convertible debentures, net – related party		1,652,270			—
Derivative liability		11,185,625			3,212,200
Contingent liability		41,000			101,000
Amounts due to minority shareholders		158,284			—
Total current liabilities		24,469,432			6,002,331

Convertible debentures		400,586			—
Convertible debentures – related parties		325,000			—
Redeemable preferred stock series C, $0.001 par value; 999 shares authorized; 0 and 999 shares issued and outstanding, respectively		—			—
Total long term liabilities		725,586			—

Total Liabilities		25,195,018			6,002,331

Redeemable preferred stock series E, $0.001 par value; 520,000 shares authorized; 320,000 and 0 shares issued and outstanding		8,767			—

Stockholders’ Equity (Deficit):
Preferred Series A stock: $0.001 par value; 2,500,000 shares authorized; 2,043,120 and 2,043,120 shares issued and outstanding, respectively		2,043			2,043
Preferred Series B stock: $0.001 par value; 1,000,000 shares authorized; 0 and 1,000,000 shares issued and outstanding, respectively		—			1,000
Preferred Series D stock: $0.001 par value; 15,750 shares authorized; in 2015, 15,750 and 0 shares issued and outstanding, respectively		—			—
Preferred Series E stock: $0.001 par value; 520,000 shares authorized; 200,000 and 0 shares issued and outstanding, respectively		200			—
Preferred Series F stock: $0.001 par value; 800,000 shares authorized; 800,000 and 0 shares issued and outstanding, respectively		800			—
Common Stock: $0.0001 par value, 10,000,000,000 shares authorized; 7,320,754,217 and 2,948,694,586 shares issued and outstanding, respectively		7,320,755			2,948,696
Additional paid in capital		12,472,555			18,791,695
Common stock subscriptions payable		181,074			181,074
Accumulated deficit		(29,502,937	)		(27,026,191	)
Bitzio, Inc. stockholders’ equity (deficit)		(9,525,510	)		(5,101,683	)

Non-controlling interest		(4,798,138	)		(1,519	)

Total stockholders’ equity (deficit)		(14,323,648	)		(5,103,202	)

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	10,871,370		$	899,129

~~F-2~~The accompanying notes to the Consolidated Financial Statements are an integral part of these statements.

~~BITZIO, INC~~23

~~Consolidated~~BITZIO, ~~Statements~~INC. ofAND ~~Operations~~SUBSIDIARIES

	For the Years Ended December 31,
	2014			2013
Revenues	$	394,511		$	5,823
Cost of Good Sold		209,329			-
Gross Profit		185,182			5,823
Operating Expenses
Professional fees		428,122			814,540
General and administrative		944,420			187,751
Total operating expenses		1,372,542			1,002,291
Loss from Operations		(1,187,360	)		(996,468	)
Other Income (Expense)
Interest expense		(791,681	)		(953,532	)
Change in derivative liability		(2,044,298	)		(633,802	)
Foreign currency transaction gain		24,476			(7,914	)
Loss on extinguishment of debt		(42,778	)		(431,379	)
Total other income (expense)		(2,854,281	)		(2,026,627	)
Loss Before Income Taxes		(4,041,641	)		(3,023,095	)
Provision For Income Taxes		-			-
Net Loss From Continuing Operations		(4,041,641	)		(3,023,095	)
Gain on disposal of discontinued operations		-			312,658
Net Loss before Non-controlling Interest		(4,041,641	)		(2,710,437	)
Net Loss Attributable to Non-controlling Interest		(1,519	)		-
Net Loss Attributable to Bitzio, Inc	$	(4,040,122	)	$	(2,710,437	)
Earnings (Loss) Per Share from Continuing Operations
Basic & Diluted	$	(0.01	)	$	(0.03	)
Earnings (Loss) Per Share from Discontinued Operations
Basic & Diluted	$	(0.00	)	$	0.00
Earnings (Loss) Per Share attributable to Bitzio shareholders
Basic & Diluted	$	(0.01	)	$	(0.03	)
Weighted Average Common Shares
Basic & Diluted		856,939,107			103,981,585

CONSOLIDATED STATEMENTS OF OPERATIONS

~~The~~FOR ~~accompanying~~THE ~~notes~~YEARS ~~are~~ENDED anDECEMBER ~~integral~~31, ~~part~~2015 ofAND ~~these consolidated financial statements.~~2014

F-3

	Year Ended
	12/31/2015			12/31/2014

Revenue:
Agriculture Segment	$	9,466,988		$	—
Lifestyle Segment		402,818			394,511
Total revenue		9,869,806			394,511

Cost of goods sold:
Agriculture Segment		2,940,418			—
Lifestyle Segment		325,191			209,329
Loss on inventory valuation		236,896			—
Gross profit		6,367,301			185,182

Operating expenses:
Sales, general and administrative expenses		7,690,373			944,420
Research and development		358,939			428,122
Total operating expenses		8,049,312			1,372,542

Income (loss) from operations		(1,682,011	)		(1,187,360	)

Other Income (Expense):
Gain (loss) on extinguishment of debt		21, 815,177			(42,778	)
Other income (expense)		(1,005,116)			24,476
Impairment of loan		(25,979	)		—
Equity loss from investee		(643,320	)		—
Change in fair value of derivative instruments		4,120,754			—
Change in fair value of derivative instruments – affiliate		(204,444	)		(2,044,298	)
Interest expense		(5,842,057	)		(791,681	)
Total other income (expense), net		18,215,015			(2,854,281	)

Income (loss) before provision for income taxes		16,533,004			(4,041,641	)

Provision for income taxes		(146,477	)		—
Net Income (loss)		16,386,527			(4,041,641	)

Net income (loss) attributable to non-controlling interest		3,132,259			(1,519	)

Net income (loss) attributable to Company	$	13,254,268		$	(4,040,122	)

Preferred Stock dividends		(244,504	)		—

Net income (loss) attributable to common shareholders	$	13,009,764		$	(4,040,122	)

Weighted average common shares outstanding, basic		5,722,789,471			856,939,107
Weighted average common shares outstanding, diluted		229,038,618,381			856,939,107

Earnings (Loss) per Share - Basic:
Income (loss) from continuing operations	$	0.00		$	(0.00	)
Net income (loss) per share – basic	$	0.00		$	(0.00	)

Earnings (Loss) per Share - Diluted:
Income (loss) from continuing operations	$	0.00		$	(0.00	)
Net income (loss) per share – diluted	$	0.00		$	(0.00	)

~~BITZIO,~~The ~~INC~~accompanying notes to the Consolidated Financial Statements are an integral part of these statements.

~~Condensed Consolidated Statements of Stockholders Deficit~~24

	Preferred Series A				Preferred Series B				Common stock				Additional Paid in			Subscription			Stock to be		Accumulated			Total Bitzio, Inc’s Stockholders’			Non controlling			Total Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Capital			Payable			Issued		Deficit			Deficit			Interest			Deficit
Balance as of December 31, 2012		2,043,120	$	2,043		-	$	-		69,923,970	$	69,924	$	18,236,567		$	252,605			-	$	(20,275,632	)	$	(1,714,493	)	$	-		$	(1,714,493	)
Common stock issued for services		-		-		-		-		5,124,498		5,124		441,962			(71,431	)		-		-			375,655						375,655
Preferred stock issued for cash		-		-		500,000		500						249,599			(100	)		-					249,999						249,999
Common stock issued for accounts payable		-		-		-		-		5,164,621		5,165		408,005			-			-		-			413,170						413,170
Common stock issued in conversion of debt		-		-		-		-		95,703,528		95,704		73,583			-			-		-			169,287						169,287
Debt discounts on convertible notes payable		-		-		-		-		-		-		193,500			-			-		-			193,500						193,500
Net loss		-		-		-		-		-		-		-			-			-		(2,710,437	)		(2,710,437	)		-			(2,710,437	)
Balance as of December 31, 2013		2,043,120		2,043		500,000		500		175,916,617		175,917		19,603,216			181,074			-		(22,986,069	)		(3,023,319	)		-			(3,023,319	)
Preferred stock issued for cash		-		-		500,000		500		-		-		249,450			-			-		-			249,450			-			249,950
Common stock issued in conversion of debt		-		-		-		-		1,870,277,969		1,870,279		(958,147	)		-			-		-			912,132			-			912,132
Common stock issued for service		-		-		-		-		50,000,000		50,000		-			-			-		-			50,000			-			50,000
Common stock issued for acquisition		-		-		-		-		850,000,000		850,000		305,000											1,155,000			-			1,155,000
Common stock issued for cash		-		-		-		-		2,500,000		2,500		-			-			-		-			-			-			2,500
Stock to be issued		-		-		-		-		-		-		-			-			120,438		-			120,438			-			120,438
Net loss		-		-		-		-		-		-		-			-			-		(4,040,122	)		(4,040,122	)		(1,519	)		(4,041,641	)
Balance as of December 31, 2014		2,043,120	$	2,043		1,000,000	$	1,000		2,948,694,586	$	2,948,696	$	19,199,481		$	181,074		$	120,438	$	(27,026,191	)	$	(4,573,459	)	$	(1,519	)	$	(4,574,978	)

BITZIO INC. AND SUBSIDIARIES

~~The~~CONSOLIDATED ~~accompanying~~statements ~~notes are an integral part~~ of ~~these~~stockholders’ ~~consolidated financial statements.~~equity

~~F-4~~FOR THE YEARS ENDED DECEMBER 31, 2015 AND December 31, 2014

BITZIO, INC

	Series A Preferred				Series B Preferred						Series D Preferred
	Shares		Amount		Shares			Amount			Shares			Amount
Balance at December 31, 2013		2,043,120	$	2,043		500,000		$	500			—			—

Preferred Stock issued upon cash		—		—		500,000			500			—			—
Common stock issued in conversion of debt		—		—		—			—			—			—
Common stock issued for service		—		—		—			—			—			—
Common stock issued for acquisition		—		—		—			—			—			—
Common stock issued for cash		—		—		—			—			—			—
Stock compensation related to acquisitions		—		—		—			—			—			—
Stock to be issued		—		—		—			—			—			—
Net income (loss)		—		—		—			—			—			—
Balance at December 31, 2014, (Restated)		2,043,120	$	2,043		1,000,000		$	1,000			—			—

Preferred stock issued for common stock		—		—		—			—			15,750			16
Preferred stock issued for acquisition		—		—		—			—			—			—
Common stock issued in conversion of debt		—		—		—			—			—			—
Common stock issued for service		—		—		—			—			(15,750	)		(16	)
Stock compensation		—		—		—			—			—			—
Stock to be issued		—		—		—			—			—			—
Subsidiary stock issued		—		—		—			—			—			—
Debt forgiveness – related parties		—		—		(1,000,000	)		(1,000	)		—			—
Preferred stock dividends		—		—		—			—			—			—
Net income (loss)		—		—		—			—			—			—
Balance at December 31, 2015		2,043,120	$	2,043		—			—			—			—

~~Consolidated~~The accompanying notes to the Consolidated Financial Statements are an integral part of ~~Cash~~these ~~Flows~~statements.

	For the Years Ended December 31,
	2014			2013
Cash Flows from Operating Activities
Net loss	$	(4,040,122	)	$	(2,710,437	)
Adjustments to reconcile net loss to net cash used in operating activities
Net loss attributable to non-controlling interest		(1,519	)		-
Depreciation and amortization		209,085			14,546
Loss on default of convertible note		-			38,667
Loss on extinguishment of debt		42,778			431,379
Loss (Gain) on foreign currency transaction		(24,476	)		7,914
Expenses paid on behalf of the company		-			207,797
Notes payable issued for services		25,332
Stock based compensation		206,776			-
Amortization of debt discounts on convertible notes		227,609			738,428
Origination interest on convertible notes payable		314,150			5,347
Change in derivative liabilities		2,044,298			633,802
Common share issued for services		170,438			375,655
Accounts receivable		(21,510	)		12,572
Prepaid expenses and other current assets		(9,646	)		62,839
Inventory		(53,609	)		-
Accounts payable and accrued expenses		321,903			262,161
Contingent liability		(34,000	)		-
Related party payables		9,993			(148,943	)
Net cash used in continuing operating activities		(612,520	)		(68,273	)
Net cash used in discontinued operating activities		-			(312,658	)
Net cash used in operating activities		(612,520	)		(380,931	)
Cash Flows from Investing Activities
Cash invested in note receivable		(25,979	)		(75,000	)
Net cash used in continuing investing activities		(25,979	)		(75,000	)
Net cash provided by discontinued investing activities		-			129,940
Net cash provided by (used in) investing activities		(25,979	)		54,940
Cash Flows from Financing Activities
Repayments on notes payable		-			(110,000	)
Repayments on convertible debenture		(52,500	)		(133,500	)
Proceeds from notes payable		70,000			110,000
Proceeds from convertible notes payable		463,000			173,500
Proceeds from the sale of common stock		2,500
Proceeds from sale of preferred stock		155,451			250,000
Net cash provided by continuing financing activities		638,451			290,000
Net Cash Provided by Discontinued Financing Activities		-			-
Net cash provided by financing activities		638,451			290,000
Net decrease in cash		(218	)		(35,991	)
Cash acquired in acquisition		170			-
Cash, beginning of period		3,877			39,868
Cash and Cash Equivalents, end of period	$	3,829		$	3,877
Cash Paid For:
Interest	$	-		$	-
Income taxes	$	-		$	-
Non-cash Financing and Investing Activities
Debt discounts on convertible notes payable	$	463,000		$	193,500
Common stock issued for debt	$	1,870,279		$	169,287
Common stock issued for account payable	$	-		$	413,170
Acquisition of Lexi Luu Designs	$	1,061,853		$	-
Acquisition of E-motion	$	699,492		$	-
Notes payable paid by a third party	$	94,500		$	-
Original issue discount	$	90,000		$	-

~~The~~BITZIO ~~accompanying~~INC. ~~notes~~AND ~~are an integral part of these consolidated financial statements.~~SUBSIDIARIES

~~F-5~~CONSOLIDATED statements of stockholders’ equity

~~BITZIO,~~FOR ~~INC.~~THE YEARS ENDED DECEMBER 31, 2015 AND December 31, 2014

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

	Series E Preferred				Series F Preferred				Common Stock
	Shares		Amount		Shares		Amount		Shares			Amount
Balance at December 31, 2013		—	$	—		—	$	—		175,916,617		$	175,917

Preferred Stock issued upon cash		—		—		—		—		—			—
Common stock issued in conversion of debt		—		—		—		—		1,870,277,969			1,870,279
Common stock issued for service		—		—		—		—		50,000,000			50,000
Common stock issued for acquisition		—		—		—		—		850,000,000			850,000
Common stock issued for cash		—		—		—		—		2,500,000			2,500
Stock compensation related to acquisitions		—		—		—		—		—			—
Stock to be issued		—		—		—		—		—			—
Net income (loss)		—		—		—		—		—			—
Balance at December 31, 2014, (Restated)		—	$	—		—	$	—		2,948,694,586		$	2,948,696

Preferred stock issued for common stock		—		—		—		—		(157,500,000	)		(157,500	)
Preferred stock issued for acquisition		200,000		200		800,000		800		—			—
Common stock issued in conversion of debt		—		—		—		—		3,493,226,298			3,493,226
Common stock issued for service		—		—		—		—		1,036,333,333			1,036,333
Stock compensation		—		—		—		—		—			—
Stock to be issued		—		—		—		—		—			—
Subsidiary stock issued		—		—		—		—		—			—
Debt forgiveness – related parties		—		—		—		—		—			—
Preferred stock dividends		—		—		—		—		—			—
Net income (loss)		—		—		—		—		—			—
Balance at December 31, 2015		200,000	$	200		800,000	$	800		7,320,754,217		$	7,320,755

~~DECEMBER~~The ~~31,~~accompanying ~~2014~~notes ~~and~~to ~~2013~~the Consolidated Financial Statements are an integral part of these statements.

~~NOTE 1 – ORGANIZATION~~ 26

~~Bitzio,~~BITZIO ~~Inc~~INC. ~~(“the~~AND 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.SUBSIDIARIES

OnCONSOLIDATED ~~July~~statements ~~27, 2011, Bitzio, Inc. and Bitzio, LLC entered into a share exchange agreement wherein Bitzio, Inc. issued 5,000,000 shares~~ of ~~the Company~~stockholders’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.~~

OnFOR ~~February~~THE 11YEARS ~~2014~~ENDED ~~the~~DECEMBER ~~Company~~31, ~~entered~~2015 ~~into~~AND aDecember ~~Memorandum~~31, ~~of Understanding with Angie Daza d/b/a Cleo VII (the “MOU”). The MOU provides that~~2014

● The Company will organize a subsidiary, which has subsequently been organized in Nevada as Cleo VII, Inc., and which is owned 51% by the Company and 49% by Angie Daza. Angie Daza has contributed the product designs owned by Cleo VII to the subsidiary and agreed to provide production financing for orders up to 2,500 units per month. The Company has committed to deposit $12,000 into the bank account of Cleo VII, Inc. to be used for production and to share equally with Angie Daza the obligation to provide production financing for orders in excess of 2,500 units per month. ● Angie Daza will serve as President of Cleo VII, Inc., and will provide warehousing and fulfillment services at a location in Miami, Florida. The Company will develop marketing campaigns for the Cleo brand and provide administrative services. ● The Company immediately issued to Angie Daza 50,000,000 shares of its common stock, which shall vest quarterly over a two-year period. If Cleo-branded products achieve $1 million in annual gross revenue, the Company will issue to Angie Daza common shares with a market value of $100,000. If Cleo-branded products achieve $2 million in annual gross revenue, the Company will issue to Angie Daza additional common shares with a market value of $100,000.

	Additional Paid In Capital			Subscription Payable		Accumulated Deficit			Non-Controlling Interest			Total Stockholders’ Equity
Balance at December 31, 2013	$	19,603,216		$	181,074	$	(22,986,069	)	$	—		$	(3,023,319	)

Preferred Stock issued upon cash		249,450			—		—			—			249,950
Common stock issued in conversion of debt		(958,185	)		—		—			—			912,094
Common stock issued for service		—			—		—			—			50,000
Common stock issued for acquisition		(430,000	)		—		—			—			420,000
Common stock issued for cash		—			—		—			—			2,500
Stock compensation related to acquisitions		206,776			—		—			—			206,776
Stock to be issued		120,438			—		—			—			120,438
Net income (loss)		—			—		(4,040,122	)		(1,519	)		(4,041,641	)
Balance at December 31, 2014 (Restated)	$	18,791,695		$	181,074	$	(27,026,191	)	$	(1,519	)	$	(5,103,202	)

Preferred stock issued for common stock		157,485			—		—			—			—
Preferred stock issued for acquisition		(18,791,695	)		—		(15,486,510	)		(7,938,597	)		(42,215,802	)
Common stock issued in conversion of debt		(3,164,970	)		—		—			—			328,256
Common stock issued for service		(807,693	)		—		—			—			228,624
Stock compensation		191,896			—		—			—			191,896
Stock to be issued		105,501			—		—			—			105,501
Subsidiary stock issued		15,509,711			—		—			9,719			15,519,430
Debt forgiveness – related parties		480,625			—		—			—			479,625
Preferred stock dividends		—			—		(244,504	)		—			(244,504	)
Net income (loss)		—			—		13,254,268			3,132,259			16,386,527
Balance at December 31, 2015	$	12,472,555		$	181,074	$	(29,502,937	)	$	(4,798,138	)	$	(14,323,648	)

OnThe ~~February~~accompanying ~~18,~~notes ~~2014 the Company executed a non-binding letter of intent~~ to ~~acquire ownership of Sahaja, LLC. Sahaja is currently engaged in~~ the ~~design,~~Consolidated ~~production~~Financial ~~and~~Statements ~~sale~~are ofan ~~apparel.~~integral ~~The~~part ~~Company also agreed to provide loans to Sahaja, LLC totaling up to $100,000 as mutually agreed. As~~ of ~~December~~these ~~31, 2014, $22,979 has been loaned to Sahaja but the acquisition had not yet been completed~~statements.

On March 24, 2014 the Company executed a non-binding letter of intent to acquire ownership of ZMJ Denim, Inc. ZMJ Denim, Inc is currently engaged in the design, production and sale of apparel. The Company also agreed to provide loans to ZMJ Denim, Inc. totaling up to $100,000 as mutually agreed. As of December 31, 2014, the acquisition had not yet been completed. As of December 31, 2014, $3,000 has been loaned to ZMJ Denim Inc., but the acquisition had not yet been completed.27

OnBITZIO ~~July 15, 2014 Gordon McDougall submitted his resignation from his positions as a member of the Company’s Board of Directors and as the Company’s Chief Executive Officer, effective on July 16, 2014~~INC. OnAND ~~July 16, 2014 the Board of Directors appointed Hubert J. Blanchette to serve as the Company’s Chief Executive Officer. Mr. Blanchette is currently a member of the Company’s Board of Directors.~~SUBSIDIARIES

OnCONSOLIDATED ~~July~~STATEMENTS ~~16,~~OF ~~2014~~CASH the Registrant entered into a Share Exchange Agreement with Hubert Blanchette, Paul Koros, Stella Koros, Michael John Koros, Gordon 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.FLOWS

~~The~~FOR ~~transactions~~THE ~~contemplated~~YEARS byENDED ~~the~~DECEMBER ~~Share Exchange Agreement were completed on July 17~~31, 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 -AND ~~$660,000;~~DECEMBER ~~2016 - $780~~31,~~000.~~ The Share Exchange Agreement also provides that additional shares will be issued to all parties if, during the next 24 months, 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.2014

F-6

	Year Ended
	12/31/2015			12/31/2014
CASH FLOW FROM OPERATING ACTIVITIES
Net income (loss)	$	16,386,527		$	(4,041,641	)

Adjustments to reconcile net income(loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		390,025			209,085
(Gain) loss on extinguishment of debt		(21,815,177	)		42,778
Gain on contingent liability		(60,000	)		(34,000	)
Loss on impairment of loan		25,979			—
Loss (gain) on foreign currency transaction		(18,257	)		(24,476	)
Expenses incurred by issuance of debentures		5,244			—
Stock issued for services		681,209			377,214
Recognition of intrinsic value of beneficial conversion feature		1,737,909			—
Notes payable issued for services		—			25,332
Amortization of debt discounts on convertible notes		69,298			227,609
Change in fair value of derivative liabilities		(3,916,310	)		2,044,298
Interest from derivative conversion features		2,887,857			314,150
Bad debt expense		41,000			—
Equity losses from investee		643,320			—
Loss on inventory valuation		236,896			—

Changes in operating assets and liabilities:					—
Accounts receivable		328,500			(21,510	)
Prepaid expenses		79,020			(9,646	)
Deposits		(400,000	)		(53,609	)
Inventory		38,934			—
Other receivables		(160,500	)		—
Costs in excess of earnings		(41,472	)		—
Accrued interest		865,410			—
Accrued interest – related party		111,656			—
Income tax payable		150,000			—
Related party payables		—			9,993
Accounts payable and accrued expenses		3,887,085			321,903
Net cash provided by (used in) operating activities		2,154,152			(612,520	)

CASH FLOWS FROM INVESTING ACTIVITIES
Loans to affiliates		(271,074	)		—
Cash acquired in acquisition		18,029			—
Deferred financing costs		(337,257	)		—
Cash invested in notes receivable		—			(25,979	)
Net cash provided by (used in) investing activities		(590,302	)		(25,979	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable		51,500			70,000
Proceeds from convertible notes payable		3,020,000			463,000
Proceeds from sale of common stock		—			2,500
Proceeds from sale of preferred stock		—			155,451
Repayments on convertible debentures		(3,296,369	)		(52,500	)
Net cash provided by (used in) financing activities		(224,869	)		638,451

Net increase (decrease) in cash		1, 338,982			(218	)
Cash at beginning of period		590,850			3,877
Cash at end of period	$	1,929,831		$	3,829

OnThe ~~July~~accompanying ~~17,~~notes ~~2014, pursuant~~ to the ~~Share~~Consolidated ~~Exchange~~Financial ~~Agreement,~~Statements ~~the~~are ~~Company entered into~~ an ~~Employment~~integral ~~Agreement~~part ~~with Hubert Blanchette. The agreement provides that Mr. Blanchette will serve as Chief Executive Officer~~ of ~~Lexi Luu Design, Inc. for a term of five years. As compensation for~~ these ~~services, the Company agreed to pay Mr~~statements. Blanchette a salary of $150,000 per year, except that for the period through May 31, 2015 sixty percent of the salary will be satisfied by issuance of common stock at a per share value of $.0015. The Registrant agreed to issue 50,000,000 common shares to Mr. Blanchette upon his execution of the agreement, which will vest quarterly over two years. The agreement also provides that Lexi Luu Design, Inc. will pay Mr. Blanchette 5% of the contribution margin realized during the past half year. Lexi Luu is one the leading kids dance and gymnastic wear companies in the United States. Lexi Luu Specializes in unique, custom kids dance and gymnastic wear in playfun patterns, fun colors that can go from dancing to dining out. Their product line includes yoga pants, shorts, tops, sets, ruffle buttoms, tutus amongst its major sellers. Lexi Luu manufactures its products in house at their facility in Arizona and has national and international distribution.

On July 18, 2014 the Registrant entered into a Share Exchange Agreement with Marilu Brassington, Elaine Cunningham and Leticia Brito. Ms. Brassington is the Registrant’s Chief Financial Officer and a member of the Registrant’s board of directors.28

~~The transactions contemplated by the Share Exchange Agreement were completed on July 18~~BITZIO, ~~2014. On that date, the three counterparties~~ ~~transferred to the Registrant all of the capital stock of E-motion Apparel, Inc~~INC. InAND 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 next 24 months, 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.SUBSIDIARIES

OnNOTES ~~July~~TO ~~18,~~CONSOLIDATED ~~2014,~~FINANCIAL pursuant to the Share Exchange Agreement, the Registrant entered into an Employment Agreement with Marilu Brassington. The agreement provides that Ms. Brassington will serve as the Registrant’s Chief Financial Officer and as Chief Executive Officer of E-motion Apparel, Inc. for a term of five years. As compensation for these services, the Registrant agreed to pay Ms. Brassington a salary of $150,000 per year, except that for the period through May 31, 2015 68% of the salary will be satisfied by issuance of common stock at a per share value of $.0015. The Registrant agreed to issue 50,000,000 common shares to Ms. Brassington upon her execution of the agreement, which will vest quarterly over two years. The agreement also provides that the Registrant will pay Ms. Brassington 5% of the contribution margin realized on sales to current customers of E-motion Apparel.STATEMENTS

~~E-motion Apparel,~~NOTE ~~Inc.~~1 ~~E-motion~~BASIS ~~Apparel~~OF isPRESENTATION aAND ~~women’s~~DESCRIPTION ~~contemporary~~OF 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.BUSINESS

~~NOTE~~REFERENCES 2TO –THE ~~GOING CONCERN~~COMPANY

~~The~~References ~~Company’s~~to ~~financial~~“we,” ~~statements~~“our,” ~~are~~“us,” ~~prepared~~“Bitzio” ~~using~~or ~~accounting principles generally accepted in~~ the ~~United States of America~~“Company” ~~applicable~~in ~~to a going concern, which contemplates~~ the ~~realization~~consolidated offinancial ~~assets~~statements and ~~liquidation of liabilities~~ in ~~the~~these ~~normal~~notes ~~course of business. The Company has not yet established an ongoing source of revenues sufficient~~ to ~~cover~~the ~~its~~consolidated ~~operating~~financial ~~costs~~statements ~~and~~refer ~~allow it~~ to ~~continue~~Bitzio, as a ~~going concern~~Nevada corporation, ~~has recurring net loss, an accumulated deficit of $27,026,191~~ and aits ~~net working capital deficit of $5,193,917~~subsidiaries. ~~The~~References ~~ability of the Company~~ to ~~continue~~“GreenShift asCorporation” aor ~~going~~“GreenShift” ~~concern~~in ~~is dependent on~~ the ~~Company obtaining adequate capital~~ toconsolidated ~~fund~~financial ~~operating~~statements ~~losses~~and ~~until~~in itthese ~~becomes~~notes ~~profitable.~~to If the ~~Company~~consolidated isfinancial ~~unable~~statements refer to ~~obtain~~GreenShift ~~adequate capital~~Corporation, a itDelaware ~~could~~corporation, beand ~~forced to~~its ~~cease operations~~subsidiaries.

InSEGMENT order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.DESCRIPTIONS

The ~~ability of the~~ Company’s tooperations ~~continue~~during asthe afiscal ~~going~~year ~~concern~~ended isDecember ~~dependent~~31, ~~upon~~2015, ~~its~~are ~~ability~~classified tointo ~~successfully~~two ~~accomplish~~reportable ~~the~~business ~~plans described~~segments: inagriculture ~~the~~(technology ~~preceding~~licensing) ~~paragraph~~ and ~~eventually~~lifestyle ~~secure~~(apparel ~~other~~sales). ~~sources~~Each of ~~financing~~these ~~and~~segments ~~attain~~is ~~profitable~~organized ~~operations.~~based ~~The~~upon ~~accompanying financial~~the ~~statements~~nature doof product ~~not~~and ~~include~~services ~~any~~offered ~~adjustments~~with ~~that~~each ~~might~~segment behaving ~~necessary~~their ifown ~~the~~corporate ~~Company is unable to continue as a going concern~~operations.

~~NOTE~~CONSOLIDATED 3FINANCIAL ~~– SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES~~STATEMENTS

~~Basis~~For the period ended December 31, 2015, the accompanying consolidated financial statements include all accounts of ~~Presentation~~the Company, including its wholly-owned subsidiaries, its 51% interest in Cleo VII, Inc. and its 80% interest in GreenShift Corporation and its subsidiaries. For the period ended December 31, 2014, the accompanying consolidated financial statements include all accounts of Bitzio, Inc., and its wholly-owned subsidiaries as well as its 51% interest in Cleo VII, Inc. All significant intercompany balances and transactions have been eliminated on a consolidated basis for reporting purposes.

DESCRIPTION OF THE BUSINESS

The Company develops and commercializes clean technologies that facilitate the more efficient use of natural resources. We are focused on doing so primarily in three sectors: agriculture, energy and lifestyle, of which we were only active in our agriculture and lifestyle segments during 2015.

We generate revenue today from our efforts in agriculture, where we license commercially-available technologies to U.S. ethanol producers, and provide our licensees with success-driven, value-added services and other solutions based upon our expertise, know-how, technologies, and patent position. We also generate sales in our lifestyle group by producing and selling activewear and other apparel for women and children, an important early-adopter market for wearable technologies that we are developing. During the year ended December 31, 2015, four customers’ balances each represented over 10% of our accounts receivable, and one customer provided 56% of total revenue in the aggregate; during the year ended December 31, 2014, two customers each provided over 10% of our revenue and 30% of total revenue in the aggregate (See Note 3, Significant Accounting Policies for Revenue Recognition policies, below). In addition, we are evaluating a number of investments and acquisitions in each of our targeted sectors, each with a view toward internalizing additional revenue, management, and infrastructure that we can leverage to bring our technologies to market.

FUTURE IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers which modifies how all entities recognize revenue and various other revenue accounting standards for specialized transactions and industries. This update is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14, which deferred the effective date of the ASU to fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company is currently evaluating the possible impact of ASU 2014-15, but does not anticipate that it will have a material impact on the Company’s consolidated financial statements.

In June 2014, the FASB issued ASU 2014-12, Compensation – Stock Compensation (Topic 718), Accounting for Share-Based Payments. The amendments in ASU 2014-12 to Topic 718, provides guidance on accounting for a performance target in a share-based payment that affects vesting and that could be achieved after the requisite service period as a performance condition under Accounting Standards Codification (ASC) 718, Compensation - Stock Compensation. The target is not reflected in the estimation of the award’s grant date fair value. Compensation cost would be recognized over the required service period, if it is probable that the performance condition will be achieved. The Company is currently evaluating the possible impact of ASU 2014-12, but does not anticipate that it will have a material impact on the Company’s consolidated financial statements.

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. Under this amendment, management is now required to determine every interim and annual period whether conditions or events exist that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date the financial statements are issued. If management indicates that it is probable the entity will not be able to meet its obligations as they become due within the assessment period, then management must evaluate whether it is probable that plans to mitigate those factors will alleviate that substantial doubt. The Company is currently evaluating the possible impact of ASU 2014-15, but does not anticipate that it will have a material impact on the Company’s consolidated financial statements.

In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis, or ASU No. 2015-02. The amendments of ASU No. 2015-02 were issued in an effort to minimize situations under previously existing guidance in which a reporting entity was required to consolidate another legal entity in which that reporting entity did not have: (1) the ability through contractual rights to act primarily on its own behalf; (2) ownership of the majority of the legal entity’s voting rights; or (3) the exposure to a majority of the legal entity’s economic benefits. ASU No. 2015-02 affects reporting entities that are required to evaluate whether they should consolidate certain legal entities. All legal entities are subject to reevaluation under the revised consolidation model. The guidance in ASU No. 2015-02 is effective for periods beginning after December 15, 2015. Early adoption is permitted. The Company is currently evaluating the possible impact of ASU 2014-15, but does not anticipate that it will have a material impact on the Company’s consolidated financial statements.

ASU 2015-03 and ASU 2015-15 — In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, or ASU No. 2015-03. The amendments of ASU No. 2015-03 were issued to reduce complexity in the balance sheet presentation of debt issuance costs. ASU No. 2015-03 requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of debt liability, consistent with debt discounts or premiums. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this standard. Additionally, in August 2015, the FASB issued ASU No. 2015-15, Interest - Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements, or ASU No. 2015-15, as ASU No. 2015-03 did not specifically address presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. ASU No. 2015-15 allows an entity to continue to defer and present debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The guidance in ASU No. 2015-03 and ASU No. 2015-15 is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted for financial statements that have not been previously issued. The Company is currently evaluating the possible impact of ASU No. 2015-03 for the year ended December 31, 2016, which will result in at $3.2 million reclassification of deferred financing costs out of current assets on the Company’s consolidated financial statements.

In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. The amendments of ASU 2015-11 were issued in an effort to change the measurement principle for inventory from the lower of cost or market to lower of cost and the net realizable value. The guidance in ASU 2015-11 is effective for periods beginning after December 15, 2016. Early adoption is permitted. The Company is currently evaluating the possible impact of ASU 2015-11, but does not anticipate that it will have a material impact on the Company’s consolidated financial statements.

In February 2016, the Financial Accounting Standards Board (“FASB”) issued its new lease accounting guidance in Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842). Under the new guidance, lessees will be required to recognize for all leases (with the exception of short-term leases) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The new standard is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of this ASU to the Company’s consolidated financial statements and related disclosures.

Management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.

NOTE 2

GOING CONCERN

The $2.5 million paid by Bitzio, Inc. (“Bitzio”), to GreenShift Corporation (“GreenShift”) was drawn from a loan of $2.9 million made to Bitzio by TCA Global Credit Master Fund, LP (“TCA”). The loan was made on December 31, 2015, pursuant to a Senior Secured Revolving Credit Facility Agreement (the “Credit Agreement”), under which TCA may lend to Bitzio up to $5.0 million. GreenShift and each of its subsidiaries, as well as each of the other subsidiaries of Bitzio, has executed a Guaranty Agreement dated December 31, 2015, in favor of TCA. In the Guaranty Agreement, GreenShift and each of its subsidiaries as well as each of the other subsidiaries of Bitzio, guaranteed payment of all amounts due to TCA under the Credit Agreement. By separate agreements, GreenShift and each subsidiary pledged all of its assets to secure the guaranty to TCA.

These matters raise substantial doubt about the Company’s ability to continue as a going concern. Our ability to satisfy our obligations will depend on our success in obtaining financing, our success in preserving current revenue sources and developing new revenue sources, and our success in negotiating with the creditors. Management’s plans to resolve the Company’s working capital deficit by increasing revenue, reducing debt and exploring new financing options. There can be no assurances that the Company will be able to eliminate its working capital deficit and that the Company’s historical operating losses will not recur. The accompanying financial statements do not contain any adjustments which may be required as a result of this uncertainty.

NOTE 3

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accompanying 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”).

~~F-7~~PRINCIPLES OF CONSOLIDATION

~~Principles~~All ofsignificant ~~Consolidation~~intercompany balances and transactions were eliminated in consolidation. The financial statements for the period ended December 31, 2015, have been consolidated to include the Company’s wholly-owned subsidiaries, as well as GreenShift Corporation and its subsidiaries. The financial statements for the periods ended December 31, 2014, have been consolidated to include the Company’s wholly-owned subsidiaries.

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and include the Company’s wholly owned subsidiaries Lexi Luu, and E-motion and its 51% owned subsidiary Cleo. All significant intercompany accounts and transactions have been eliminated in consolidation.31

~~Use~~SEGMENT ~~of Estimates~~INFORMATION

~~The~~We ~~preparation~~determined ofour ~~financial~~reporting ~~statements~~units in ~~conformity~~accordance with FASB ASC 280, “Segment Reporting” (“ASC 280”). We evaluate a reporting unit by first identifying its operating segments under ASC 280. We then evaluate each operating segment to determine if it includes one or more components that constitute a business. If there are components within an operating segment that meet the ~~generally~~definition ~~accepted~~of ~~accounting~~a ~~principles~~business, inwe evaluate those components to determine if they must be aggregated into one or more reporting units. If applicable, when determining if it is appropriate to aggregate different operating segments, we determine if the ~~United~~segments ~~States~~are (“economically similar and, if so, the operating segments are aggregated. We currently have two separate operating segments and reporting units. In our agriculture segment, we generate revenue by licensing commercially-available technologies to U.S. ~~GAAP”)~~ ~~requires~~ethanol ~~management~~producers, toand ~~make~~providing ~~estimates~~our licensees with success-driven, value-added services and ~~assumptions~~other insolutions ~~certain~~based ~~circumstances~~upon our ~~that~~expertise, ~~affect~~know-how, ~~the~~technologies, ~~reported~~and ~~amounts~~patent ofposition. We also generate sales in our lifestyle segment by producing and selling ~~assets~~activewear and ~~liabilities~~other apparel for women and ~~disclosures~~children, an important early-adopter market for wearable technologies that we are developing. No sales of ~~contingent~~any ~~assets~~kind occur, and ~~liabilities~~no atcosts ~~the~~of ~~date~~sales of ~~the~~any ~~financial~~kind ~~statements~~are ~~and~~incurred, in the ~~reported amounts~~absence of ~~revenues~~a ~~and~~license ~~expenses~~agreement ~~during~~in our agriculture segment. A single management team that reports to the ~~reporting~~chief ~~period~~operating decision maker comprehensively manages the entire business in each segment. ~~The~~With ~~more~~the ~~significant~~exception ~~estimates~~of ~~include~~the segment classifications noted above, ~~but~~we ~~are~~do not ~~limited~~operate any material separate lines of business or separate business entities with respect to our technologies, products and services; nor do we accumulate discrete ~~valuation~~financial information according to the nature or structure of ~~intangible~~any ~~assets~~specific technology, ~~goodwill~~product and/or ~~long-lived~~service. ~~asset~~Instead, ~~impairment~~management reviews ~~charges,~~the ~~stock~~agriculture ~~based~~and ~~compensation~~lifestyle segments as distinct operating segments, ~~loss~~using ~~contingencies~~ financial and ~~the~~other ~~allowance~~information ~~for~~rendered meaningful ~~doubtful~~only ~~accounts~~by ~~receivable.~~the ~~Actual~~fact ~~results~~that ~~could~~such ~~differ~~information ~~from~~is ~~those~~presented ~~estimates~~and reviewed in the aggregate.

~~Revenue~~REVENUE ~~Recognition~~RECOGNITION

WeIn ~~derive~~our lifestyle segment, we recognize revenue when the following conditions are satisfied: (i) delivery of the product has occurred and (ii) collection is reasonably assured. Under each our ~~revenues~~lifestyle ~~from~~segment, orders are received via national sales representatives, in house wholesale sales departments and various retail platforms. Once the ~~sale~~order is received, they are either automatically or manually inputted into our production system. Our production system generates production orders which our production team takes and produces based on the purchase order terms. Revenue is recognized only when the orders have been shipped. Generally, all orders are paid upon shipment via credit card or wire transfer. For a small percentage, the orders are shipped on terms of ~~products~~less than 30 days. Revenue is recognized at the time of shipment and a related receivable is booked. We ~~recognize~~experience less than 2% of annual sales in returns. For orders where goods are considered damaged, these items are swapped with new merchandise. Under our agriculture segment, GreenShift recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the ~~following~~price ~~conditions~~is fixed or determinable, and collection is reasonably assured. GreenShift recognizes revenue from licensing of GreenShift’s corn oil extraction technologies when corn oil sales occur. Licensing royalties are ~~satisfied~~recognized as earned by calculating the royalty as a percentage of gross corn oil sales by the ethanol plants. For the purposes of assessing royalties, the sale of corn oil is deemed to occur when shipped, which is when four basic criteria have been met: (i) ~~delivery~~persuasive evidence of a customer arrangement; (ii) the price is fixed or determinable; (iii) collectability is reasonably assured, and (iv) product delivery has occurred, which is generally upon shipment to the buyer of the corn oil. To the extent revenues are generated from GreenShift’s licensing support services, GreenShift recognizes such revenues when the services are completed and billed. GreenShift provides process engineering services on fixed price contracts. These services are generally provided over a short period of less than three months. Revenue from fixed price contracts is recognized on a pro rata basis over the life of the contract as they are generally performed evenly over the contract period. GreenShift additionally performs under fixed-price contracts involving design, engineering, procurement, installation, and start-up of oil recovery and other production systems. Revenues and fees on these contracts are recognized using the percentage-of-completion method of accounting. During 2014 and 2015, our percentage-of-completion methods included the efforts-expended percentage-of-completion method and the cost-to-cost method. The efforts-expended method utilizes using measures such as task duration and completion. The efforts-expended approach is used in situations where it is more representative of progress on a contract than the cost-to-cost or the labor-hours method (iisee below). GreenShift ~~collection~~also used the cost-to-cost method which is used to determine the percentage of completion of a project based on the actual costs incurred. Earnings are recognized periodically based upon our estimate of contract revenues and costs in providing the services required under the contract. The percentage of completion method must be used in lieu of the completed contract method when all of the following are present: reasonably ~~assured~~reliable estimates can be made of revenue and costs; the construction contract specifies the parties’ rights as to the goods, consideration to be paid and received, and the resulting terms of payment or settlement; the contract purchaser has the ability and expectation to perform all contractual duties; and the contract contractor has the same ability and expectation to perform. Under the completed contract method income is recognized only when a contract is completed or substantially completed. The asset, “costs and estimated earnings in excess of billings on uncompleted contracts,” represents revenues recognized in excess of amounts billed. The liability, “billings in excess of costs and estimated earnings on uncompleted contracts,” represents billings in excess of revenues recognized.

Prior to November 18, 2013, we derived our revenues from the sale of software and mobile applications through various platforms. We recognized revenue when all of the following conditions were satisfied: (i) there is persuasive evidence of an arrangement; (ii) delivery of the product or provision of the service has occurred; (iii) the fee is fixed or determinable; and (iv) collectability of the fee is reasonably assured.32

~~Cash~~EQUITY ~~and Cash Equivalents~~INVESTMENTS

Equity investments in which the Company exercises significant influence but does not control and is not the primary beneficiary are accounted for using the equity method. The Company’s share of its equity method investee’s earnings or losses is included in other income in the accompanying Consolidated Statements of Operations.

RECEIVABLES AND CREDIT CONCENTRATION

Accounts receivable are uncollateralized, non-interest-bearing customer obligations due under normal trade terms requiring payment within 30 days from the invoice date. Accounts receivable are stated at the amount billed to the customer. Accounts receivable in excess of 90 days old are evaluated for delinquency. In addition, we consider historical bad debts and current economic trends in evaluating the allowance for bad debts. Payments of accounts receivable are allocated to the specific invoices identified on the customer’s remittance advice or, if unspecified, are applied to the oldest unpaid invoices. The carrying amount of accounts receivable has been reduced by a valuation allowance that has been set up in the amount $51,000 and $10,000 as of December 31, 2015 and 2014, respectively. Management will continue to review the valuation allowance on a quarterly basis.

INVENTORIES

Under our agriculture segment, GreenShift maintains an inventory of equipment and components used in systems designed to extract corn oil from licensed ethanol production facilities. The inventory, which consists of equipment and component parts, is held for sale to GreenShift’s licensees on an as needed basis. Inventories are stated at the lower of cost or market, with cost being determined by the specific identification method. Inventories at December 31, 2015 consist of the following:

	2015

Equipment inventory	$	455,000

During the year ended December 31, 2015, GreenShift evaluated the inventory on its books and determined that a write-down to market was necessary. As a result, GreenShift wrote down inventory by $236,896 in 2015, which was expensed under cost of goods sold as a loss on inventory valuation.

Under our lifestyle segment, the 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 December 31, 2015 and 2014, an inventory reserve had not been deemed necessary, and therefore, not recorded. As of December 31, 2015 and 2014, inventory consisted of $154,688 and $121,513 in finished goods, $7,515 and $79,923 in work in process, and $18,279 and $17,980 in raw materials.

CASH AND EQUIVALENTS

We consider all highly liquid investments with remaining maturities 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 three months stated at cost, which approximates market value.

~~Accounts~~PROPERTY ~~Receivable~~AND ~~and Allowance for Doubtful Accounts~~EQUIPMENT

~~Accounts~~Property ~~receivable~~and equipment are ~~presented~~depreciated atusing ~~their~~the ~~face~~straight-line ~~amount,~~method ~~less~~over anthe ~~allowance~~estimated ~~for~~useful ~~doubtful~~lives ~~accounts,~~of onthe assets. Leasehold improvements are amortized over the ~~balance~~lesser ~~sheets~~of the life of the lease or their useful lives. ~~Accounts~~Gains ~~receivable~~and losses on depreciable assets retired or ~~consist~~sold are recognized in the consolidated statement of ~~revenue~~operations ~~earned~~in the year of disposal, and ~~currently~~repair ~~due~~and ~~from~~maintenance ~~customers~~expenditures are expensed as incurred. WeProperty, ~~evaluate~~plant and equipment are stated at cost. Expenditures for major renewals and improvements which extend the ~~collectability~~life or usefulness of ~~accounts~~the ~~receivable~~asset ~~based~~are oncapitalized. aOnce ~~combination~~an asset has been completed and placed in service, it is transferred ofto ~~factors~~the appropriate category and depreciation commences. WeThe ~~recognize~~Company ~~reserves~~uses the straight line method for ~~bad~~depreciation ~~debts~~and ~~based~~depreciates equipment onover ~~estimates~~the ~~developed~~estimated ~~using~~useful ~~standard~~life ~~quantitative~~of ~~measures~~the ~~that~~assets: ~~incorporate historical~~office ~~write~~and computer equipment over 3-~~offs~~5 years and ~~current~~corn ~~economic~~oil ~~conditions~~extraction systems over a 10 year period. AsGains and losses on depreciable assets retired or sold are recognized in the statement of ~~December~~operations 31in the year of disposal, ~~2014~~and repair and ~~2013,~~maintenance ~~the~~expenditures ~~outstanding~~are ~~balance~~expensed ~~allowance~~as ~~for~~incurred. Property and equipment are stated at cost ~~doubtful~~and ~~accounts~~include isamounts ~~zero,~~capitalized ~~respectively~~under capital lease obligations.

~~The~~INTANGIBLE 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.ASSETS

~~Inventory~~The Company accounts for its intangible assets pursuant to ASC 350-20-55-24, “Intangibles – Goodwill and Other”. Under ASC 350, intangibles with definite lives continue to be amortized on a straight-line basis over the lesser of their estimated useful lives or contractual terms. Intangibles with indefinite lives are evaluated at least annually for impairment by comparing the asset’s estimated fair value with its carrying value, based on cash flow methodology. Intangibles with definite lives are subject to impairment testing in the event of certain indicators. Impairment in the carrying value of an asset is recognized whenever anticipated future cash flows (undiscounted) from an asset are estimated to be less than its carrying value. The amount of the impairment recognized is the difference between the carrying value of the asset and its fair value. At December 31, 2015, the Company’s balance sheet included intangible assets with an aggregate carrying value of $224,589 as compared to $589,044 at December 31, 2014.

~~The Company’s inventory is stated at the lower of cost or estimated realizable value, with cost primarily determined on a weighted~~LONG-~~average~~LIVED 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 December 31, 2014, an inventory reserve had not been deemed necessary, and therefore, not recorded. As of December 31, 2014 inventory consisted of $121,513 in finished goods, $79,923 in work in process, and $17,980 in raw materials.ASSETS

~~Long~~Under our agriculture segment, GreenShift assesses the valuation of components of its property and equipment and other long-lived assets ~~Assets~~whenever events or circumstances dictate that the carrying value might not be recoverable. GreenShift bases its evaluation on indicators such as the nature of the assets, the future economic benefit of the assets, any historical or future profitability measurements and other external market conditions or factors that may be present. If such factors indicate that the carrying amount of an asset or asset group may not be recoverable, GreenShift determines whether an impairment has occurred by analyzing an estimate of undiscounted future cash flows at the lowest level for which identifiable cash flows exist. If the estimate of undiscounted cash flows during the estimated useful life of the asset is less than the carrying value of the asset, GreenShift recognizes a loss for the difference between the carrying value of the asset and its estimated fair value, generally measured by the present value of the estimated cash flows.

~~Long~~Under our lifestyle segment, long-lived assets include equipment and intangible assets other than those with indefinite lives. We assess the carrying value of 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. Indicators of impairment 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.

Indicators of impairment 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.34

~~F-8~~PROPERTY AND EQUIPMENT

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 straight-line method. Upon retirement 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. Expenditures for repairs and maintenance are charged to expense as incurred.

~~Property~~BUSINESS 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 straight-line method.ACQUISITIONS

~~Upon~~Business ~~retirement~~acquisitions orare ~~sale~~accounted for under the purchase method of accounting. During 2015, the ~~historical~~Company ~~cost~~accounted for its acquisitions of Skipjack, Punkzgear and GreenShift and its subsidiaries on the basis that they were between entities under common control. During 2014, Bitzio accounted for all of its acquisitions under purchase method accounting. Under that method, assets ~~disposed~~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 ~~related~~fair ~~accumulated~~value ~~depreciation~~of ~~are~~acquired ~~removed~~assets ~~from~~and assumed liabilities, especially with respect to acquired intangibles. Using different assumptions in determining fair value could materially impact the ~~accounts~~purchase price allocation and ~~any~~our ~~resulting~~financial ~~gain~~position orand ~~loss~~results isof ~~recognized~~operations. Results of operations for acquired businesses are included in the financial statements from the date of acquisition.

~~Expenditures~~ACCUMULATED ~~for~~OTHER ~~repairs~~COMPREHENSIVE ~~and maintenance are charged to expense as incurred.~~INCOME

Intangible assets

We evaluate the recoverability of intangible assets periodically and take into account events or circumstances that warrant revised estimates of useful lives or that indicate that impairment exists. All of our intangible assets are subject to amortization. Intangible assets are amortized on a straight-line basis over their useful lives.

Shipping and Handling Costs

For product sales, shipping and handling costs are included as a component of general and administrative expenses. For the years ended December 31, 2014 and 2013, such expenses totaled $9,857 and $0, respectively.

Advertising Expense

The Company expenses marketing, promotions and advertising costs as incurred. For the years ended December 31, 2014 and 2013, such costs totaled $122,390 and $24,137, respectively. Such costs are included in general and administrative expense in the accompanying condensed consolidated statements of operations.

Business Acquisitions

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.

Accumulated Other Comprehensive Income

Comprehensive loss includes net loss as currently reported under U.S. GAAP and other comprehensive loss. Other comprehensive loss considers the effects of additional economic events, such as foreign currency translation adjustments, that are not required to be recorded in determining net loss, but rather are reported as a separate component of stockholders’ equity (deficit). Currently the Company has no other comprehensive income.

~~Stock~~INCOME ~~Based Compensation~~TAXES

WeIncome ~~measure~~taxes ~~and~~are ~~recognize~~accounted ~~stock~~for ~~based~~under ~~compensation~~the ~~expense~~asset ~~using~~and aliability ~~fair~~method, ~~value~~whereby ~~based~~deferred ~~method~~income taxes are recorded for ~~all~~temporary ~~share~~differences between ~~based~~financial ~~awards~~statement ~~made~~carrying toamounts ~~employees~~ and ~~nonemployee~~the ~~directors,~~tax ~~including~~basis ~~grants~~ of ~~stock~~assets ~~options~~ and ~~other~~liabilities. ~~stock~~Deferred ~~based~~tax ~~awards.~~assets ~~The~~and ~~application~~liabilities reflect ofthe ~~this~~tax ~~standard~~rates ~~requires significant~~expected ~~judgment~~to ~~and~~be ~~the~~in ~~use~~effect offor ~~estimates,~~the ~~particularly~~years ~~with~~in ~~regard~~which tothe ~~Black~~differences ~~Scholes~~are ~~assumptions~~expected ~~such~~to asreverse. ~~stock~~A ~~price~~valuation ~~volatility~~allowance ~~and~~is ~~expected~~provided ~~option~~if ~~lives~~it tois ~~value~~more ~~equity~~likely ~~based~~than ~~compensation.~~not Wethat ~~recognize~~some ~~stock~~or ~~compensation~~all ~~expense~~of ~~using~~the adeferred ~~straight-line~~tax ~~method over~~asset ~~the~~will ~~vesting~~not ~~period~~be realized. All of the ~~individual~~subsidiaries are ~~grants~~consolidated for state income tax purposes.

~~Income~~BASIC ~~Taxes~~AND DILUTED INCOME (LOSS) PER SHARE

WeBasic ~~utilize~~and ~~the~~diluted ~~balance~~net ~~sheet~~loss ~~method~~per ofshare ~~accounting~~attributable ~~for~~to ~~income~~common ~~taxes.~~stockholders ~~Accordingly,~~is wecomputed ~~are~~by ~~required~~dividing tonet ~~estimate~~loss ~~our~~attributable ~~income~~to ~~taxes~~common instockholders ~~each~~by the weighted average number of common shares outstanding during the ~~jurisdictions~~period. inOur potentially dilutive shares, which weinclude outstanding ~~operate~~common asstock ~~part~~options, ofcommon ~~the~~stock ~~process~~warrants, ofconvertible ~~preparing~~preferred ~~our~~stock ~~financial~~and ~~statements.~~convertible ~~This~~debentures, ~~process~~have ~~involves~~not been ~~estimating~~included ~~our~~in ~~actual~~the ~~current~~computation ~~tax~~of ~~exposure,~~diluted ~~including~~net ~~assessing~~loss ~~the~~per ~~risks~~share ~~associated~~attributable ~~with~~to ~~tax~~common ~~audits,~~stockholders ~~together~~for ~~with~~all ~~assessing~~periods presented, as the ~~temporary~~results ~~differences~~would ~~resulting~~be ~~from~~anti-dilutive. ~~the~~Such ~~different~~potentially ~~treatment~~dilutive ofshares ~~items~~are ~~for~~excluded ~~tax~~when ~~and~~the ~~accounting~~effect ~~purposes.~~would ~~These~~be ~~differences~~to ~~result~~reduce net loss per inshare. ~~deferred~~There ~~tax~~were ~~assets~~13,844,616 ~~and~~such ~~liabilities~~potentially dilutive shares excluded for the year ended December 31, 2015. Due to the ~~evolving~~net ~~nature~~loss for ~~and~~the ~~complexity~~year ofended ~~tax~~December ~~rules~~31, it2014, isall ~~possible~~such ~~that~~shares ~~our~~were ~~estimates of~~excluded ~~our~~for ~~tax~~that ~~liability~~year ~~could~~as ~~change~~they inwould ~~the~~be ~~future,~~anti-dilutive. ~~which~~The ~~may~~following is ~~result~~a inreconciliation ~~additional~~of ~~tax~~weighted ~~liabilities~~common ~~and~~shares ~~adversely~~outstanding ~~affect~~used ~~our~~in ~~results of~~the ~~operations,~~calculation ~~financial~~of ~~condition~~basic and ~~cash~~diluted ~~flows.~~net income per common share:

Basic and Diluted Net Loss per Common Share

	Year Ended 12/31/2015			Year Ended 12/31/2014

Net income (loss) attributable to common stockholders	$	13,009,764		$	(4,040,122	)
Adjustments for dilutive shares:
Interest savings		510,773			791,681
Preferred Stock dividend		8,767			—
Reversal of derivative (gains) losses		(2,875,835	)		2,044,298
Net income - Adjusted		10,653,469			(1,204,143	)
Weighted average shares used for basic net income per common share		5,722,789,471			856,939,107
Incremental diluted shares		223,315,928,910			—
Weighted average shares used for diluted net income per common share		229,038,618,381			856,939,107
Net income per common share:
Basic	$	0.00		$	(0.00	)
Diluted	$	0.00		$	(0.00	)

Basic and diluted net loss per share attributable to common stockholders is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Our potentially dilutive shares, which include outstanding common stock options, common stock warrants, convertible preferred stock and convertible debentures, have not been included in the computation of diluted net loss per share attributable to common stockholders for all periods presented, as the results would be antidilutive. Such potentially dilutive shares are excluded when the effect would be to reduce net loss per share. There were 11,879,272,169 such potentially dilutive shares excluded for the year ended December 31, 2014.35

~~F-9~~USE OF ESTIMATES

~~Concentration~~The preparation of ~~Credit~~financial ~~Risk~~statements in conformity with GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities at the date of the financial statements, and (iii) the reported amounts of revenues and expenses during the reporting period. We use estimates and assumptions in accounting for the following significant matters, among others:

~~Financial instruments~~- ~~that~~Allowances ~~potentially~~for ~~subject~~doubtful usaccounts; to- ~~concentrations~~Valuation of ~~credit~~acquired ~~risk~~assets; ~~consist~~- ~~primarily~~Inventory valuation and allowances; - Fair value of ~~cash~~derivative instruments and ~~cash~~related ~~equivalents,~~hedged toitems; ~~the extent~~- ~~balances~~Useful ~~exceed~~lives ~~limits~~of ~~that~~property ~~are~~and ~~insured~~equipment byand ~~the~~intangible ~~Federal~~assets; ~~Deposit~~- ~~Insurance~~Asset ~~Corporation~~retirement obligations; - Long lived asset impairments, including goodwill; - Contingencies; - Fair value of options and ~~accounts~~restricted ~~receivable.~~stock granted under our stock-based compensation plans; and, - Tax related items

~~Derivative~~Actual ~~Liabilities:~~results may differ from previously estimated amounts, and such differences may be material to our consolidated financial statements. We periodically review estimates and assumptions, and the effects of revisions are reflected in the period in which the revision is made. The revisions to estimates or assumptions during the periods presented in the accompanying consolidated financial statements were not considered to be significant.

InDEFERRED connection with the Company’s Convertible Notes beginning in November 2013, the Company became contingently obligated to issue shares in excess of the 4.2 billion authorized by shareholders. Consequently, the ability to settle these obligations with shares would be unavailable causing these obligations to potentially be settled in cash. This condition creates a derivative liability.REVENUE

~~The~~Under ~~Company~~our ~~has~~agriculture asegment, ~~sequencing~~deposits ~~policy~~from ~~regarding~~customers ~~share~~are ~~settlement~~not ~~wherein~~recognized ~~instruments~~as ~~with~~revenues, but as liabilities, until the ~~earliest~~following ~~issuance~~conditions are ~~date~~met: ~~would~~revenues beare ~~settled~~realized when cash or claims to cash (receivable) are received in exchange for goods or services or when ~~first.~~assets ~~The~~received ~~sequencing~~in ~~policy~~such ~~also~~exchange ~~considers~~are ~~contingently~~readily ~~issuable~~convertible ~~additional~~to ~~shares,~~cash or claim to cash or when such asgoods/services ~~those~~are ~~issuable~~transferred. When ~~upon~~such aincome ~~stock~~item ~~split~~is earned, to ~~have~~the anrelated ~~issuance~~revenue ~~date~~item tois ~~coincide~~recognized, ~~with~~and the ~~event~~deferred ~~giving~~revenue ~~rise~~is toreduced. To the ~~additional~~extent ~~shares~~revenues are generated from GreenShift’s licensing support services, GreenShift recognizes such revenues when services are completed and billed.

~~Using~~FINANCIAL this sequencing policy, all instruments convertible into common stock, including warrants and the conversion feature of notes payable, issued subsequent to November 18, 2013 are derivative liabilities.INSTRUMENTS

The ~~Company~~carrying ~~also~~values ~~has~~of ~~certain~~accounts ~~notes~~receivable, other receivables, accounts payable ~~with~~and ~~elements~~accrued ~~that~~expenses ~~qualify~~approximate astheir ~~derivatives~~fair values due to their short term maturities. The ~~warrants~~carrying ~~have~~values ~~anti~~of the Company’s long-~~dilution~~term ~~clauses~~debt ~~that~~approximate their fair values based ~~prevent~~upon ~~calculation~~a comparison of the ~~ultimate~~interest ~~number~~rate ofand ~~shares~~terms ~~that~~of ~~may~~such bedebt ~~issued~~to ~~upon~~the ~~exercise,~~rates and ~~two~~terms of ~~the~~debt ~~notes~~currently ~~payable~~available ~~had~~to athe ~~variable~~Company. ~~conversion~~It ~~feature~~was ~~that~~not ~~similarly~~practical ~~prevented~~to estimate the ~~calculation~~fair value of the ~~number~~convertible debt. In order to do so, it would be necessary to obtain an independent valuation of ~~shares~~these ~~into~~unique ~~which~~instruments. ~~they~~The ~~were~~cost ~~convertible~~of that valuation would not be justified in light of the materiality of the instruments to the Company.

The Company values these warrants 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.36

~~Fair~~DERIVATIVE ~~Value~~FINANCIAL ~~Measurements~~ INSTRUMENTS

~~The~~Certain ~~fair value~~ of ~~a financial instrument is~~ the ~~amount~~Company’s ~~that~~debt ~~could~~and beequity ~~received~~instruments ~~upon~~include ~~the~~embedded ~~sale~~derivatives ofthat anrequire ~~asset~~bifurcation orfrom ~~paid~~the tohost ~~transfer a liability~~contract inunder ~~an orderly transaction between market participants at~~ the ~~measurement~~provisions ~~date.~~of ~~Financial~~ASC ~~assets~~815-40, ~~are~~Derivatives ~~marked to bid prices~~ and ~~financial liabilities~~Hedging. ~~are~~Under ~~marked~~the toprovisions ~~offer~~of ~~prices.~~these ~~Fair~~statements, ~~value~~the ~~measurements~~Company dorecords ~~not~~the related ~~include~~derivative ~~transaction~~liabilities ~~costs.~~at A fair value ~~hierarchy is used to prioritize the quality~~ and ~~reliability~~records of the ~~information~~accounting ~~used~~gain toor ~~determine~~loss ~~fair~~resulting ~~values.~~from ~~Categorization~~the ~~within~~change ~~the~~in fair ~~value~~values ~~hierarchy~~at ~~is based on~~ the ~~lowest~~end ~~level~~ of ~~input~~each ~~that~~reporting isperiod. ~~significant~~Change toin the ~~fair~~derivatives ~~value~~instruments ~~measurement.~~resulted ~~The~~in ~~fair~~gain ~~value~~of ~~hierarchy~~$3,916,310 ~~is defined~~for ~~into~~ the ~~following~~year ~~three~~ended ~~categories:~~December 31, 2015.

	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.

In connection with the Company’s Convertible Notes beginning in November 2013, the Company became contingently obligated to issue shares in excess of the 4.2 billion authorized by shareholders. Consequently, the ability to settle these obligations with shares would be unavailable causing these obligations to potentially be settled in cash. This condition creates a derivative liability. Based on ASC 815-10-15-74, Series E shares to EXO and Series F shares, are not considered by the company as a derivative, as the conversion option underlying the Series E shares issued to TCA is not a “tainted” derivative. They are convertible preferred stock for which the conversion option is more akin to equity and as such is being classified in stockholders’ equity as a standalone instrument. In addition, based on ASC 718, Stock-based Compensation and ASC 505-50, Equity-based Payments to Non-Employees, the company excluded the employee options from the derivative liability accounting.

~~Recent~~The ~~Accounting~~Company ~~Pronouncements~~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. Using this sequencing policy, all instruments convertible into common stock, including warrants and the conversion feature of notes payable, issued subsequent to November 18, 2013 are derivative liabilities with the exception of the noted Series E and F preferred shares (that were issued in conjunction with the acquisition of GreenShift) and any employee and director options, for which other accounting guidance is applicable.

~~The~~FAIR ~~Company~~VALUE ~~has evaluated recent pronouncements and does not expect their adoption to have a material impact on the Company’s financial position, or statements.~~INSTRUMENTS

~~NOTE~~Effective 4July –1 ~~PROPERTY~~2009, ~~AND~~the ~~EQUIPMENT~~Company adopted ASC 820, Fair Value Measurements and Disclosures. This topic defines fair value for certain financial and nonfinancial assets and liabilities that are recorded at fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. This guidance supersedes all other accounting pronouncements that require or permit fair value measurements. The Company accounted for the convertible debentures in accordance with ASC 480, Distinguishing Liabilities from Equity, 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 the Company’s common shares.

~~Property~~Effective July 1 2009, the Company adopted ASC 820-10-55-23A, Scope Application to Certain Non-Financial Assets and ~~equipment~~Certain ~~consisted~~Non-Financial Liabilities, ofdelaying ~~the~~application ~~following~~for non-financial assets and non-financial liabilities as permitted. ASC 820 establishes a framework for measuring fair value, and expands disclosures about fair value measurements. In January 2010, the FASB issued an update to ASC 820, which requires additional disclosures about inputs into valuation techniques, disclosures about significant transfers into or out of ~~December~~Levels 311 and 2, ~~2014~~and disaggregation of purchases, sales, issuances, and ~~2013~~settlements in the Level 3 roll forward disclosure. ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows:

		December 31, 2014			December 31, 2013
Level 1	quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date. Financial assets and liabilities utilizing Level 1 inputs include active exchange-traded securities and exchange-based derivatives
Machinery and equipment		$	4,470		$	-
Level 2	inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. Financial assets and liabilities utilizing Level 2 inputs include fixed income securities, non-exchange-based derivatives, mutual funds, and fair-value hedges
Computer and Furniture			1,404			-
Level 3	unobservable inputs for the asset or liability only used when there is little, if any, market activity for the asset or liability at the measurement date. Financial assets and liabilities utilizing Level 3 inputs include infrequently-traded, non-exchange-based derivatives and commingled investment funds, and are measured using present value pricing models
Less: accumulated depreciation		$	(3,150	)		-
Total		$	2,724		$	-

~~Depreciation expense for the year ended December 31, 2014 was $3,150.~~37

~~NOTE~~The 5fair –value ~~INCOME~~of ~~TAXES~~certain of the embedded conversion liabilities was determined using the present value model calculating fair value based on the conversion discount as well as the present value based on term and bond rate. During the year ended December 31, 2014, following assumptions were used: (1) conversion discounts of 10% to 50%; (2) term of less than one year to 8 years and (3) bond rate of 10%. During the year ended December 31, 2015, the following assumptions were used: (1) conversion discounts of 10%; (2) term of less than one year to 7 years and (3) bond rate of 10%. Fluctuations in the conversion discount percentage have the greatest effect on the value of the conversion liabilities valuations during each reporting period. As the conversion discount percentage increases for each of the related conversion liabilities instruments, the change in the value of the conversion liabilities increases, therefore increasing the liabilities on the Company’s balance sheet. The higher the conversion discount percentage, the higher the liability. A 10% change in the conversion discount percentage would result in more than a $2,088,439 change in our Level 3 fair value.

The ~~Company~~fair ~~provides~~value ~~for~~of ~~income~~embedded ~~taxes~~conversion ~~under~~feature ~~ASC~~of ~~740~~320,000 ~~Accounting~~shares ~~for~~of ~~Income~~Series ~~Taxes.~~E ~~ASC~~Preferred ~~740~~Stock ~~requires~~determined ~~the~~using ~~use~~a ofBlack-Scholes anSimulation. This ~~asset~~model ~~and~~requires ~~liability approach~~the ininput ~~accounting~~of ~~for~~highly ~~income~~subjective ~~taxes.~~assumptions, ~~Deferred~~including ~~tax~~the ~~assets~~expected ~~and~~price ~~liabilities~~volatility, ~~are~~which ~~recorded~~is based on the ~~differences between the~~ ~~financial~~historical ~~statement~~volatility ~~and~~of ~~tax~~a ~~bases~~peer group of ~~assets~~publicly ~~and~~traded ~~liabilities~~companies. ~~and~~Changes in the ~~tax~~subjective ~~rates~~input inassumptions ~~effect~~can ~~when~~materially affect ~~these~~the ~~differences~~estimate ~~are~~of ~~expected~~fair ~~to reverse.~~value ~~The~~of ~~Company’s~~the ~~predecessor~~warrants ~~operated~~and asthe ~~entity~~Company’s ~~exempt~~results ~~from~~of ~~Federal~~operations ~~and~~could ~~State~~be ~~income taxes~~impacted.

FThe following assumptions were used in calculations of the Black-10Scholes model for the year ended December 31, 2015 and 2014:

ASC 740 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The provision for income taxes differs from the amounts which would be provided by applying the statutory federal income tax rate of 34% to the net loss before provision for income taxes for the following reasons:

	For the Year Ended December 31, 2015		For the Year Ended December 31, 2014
Annual dividend yield		-%		-%
Expected life (years)		1.00		-
Risk-free interest rate		0.65%		-%
Expected volatility		334%		-%

	December 31, 2014			December 31, 2013
Book income (loss) from operations		(1,373,641	)		(921,549	)
Stock/options issued for services		57,949			125,980
Interest expense on convertible notes		263,279			51,509
Change in derivative liability		695,061			215,493
Change in valuation allowance		357,352			528,567
Income tax expense		-			-

The following table presents the embedded derivatives, the Company’s only financial assets or liabilities measured and recorded at fair value on the Company’s Consolidated Balance Sheets on a recurring basis and their level within the fair value hierarchy during the year ended December 31, 2015:

Net deferred tax assets consist of the following components as of:

Embedded derivative liabilities as of December 31, 2015
Level 1	$	—
Level 2		—
Level 3		11,185,625
Total	$	11,185,625

	2014			2013
Net operating loss carry forwards (expire through 2032)		(9,188,904	)		(7,815,263	)
Stock/options issued for services		3,264,292			3,206,344
Stock/options issued for executive comp.		649,593			649,593
Contributed services		8,194			8,194
Impairment expense		1,805,230			1,805,230
Interest expense on convertible notes		528,107			264,828
Change in derivative liability		802,908			107,847
Loss on sale of assets		82,121			82,121
Total gross deferred tax asset/liabilities		(2,048,459	)		(1,691,107	)
Valuation allowance		2,048,459			1,691,107
Net deferred taxes		-			-

The following table reconciles, for the period ended December 31, 2015, the beginning and ending balances for financial instruments that are recognized at fair value in the consolidated financial statements:

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of $9,188,905 for federal income tax reporting purposes are subject to annual limitations. When a change in ownership occurs, net operating loss carry forwards may be limited as to use in future years. Due to net operating loss carryforwards, income tax returns remain subject to examination by federal and most state tax authorities.

Balance of embedded derivative as of December 31, 2013	$	827,158
Additions related to embedded conversion features of convertible debt issued		777,150
Change in fair value of conversion features		2,044,298
Reductions in fair value due to principal conversions		(436,406	)
Balance of embedded derivatives at December 31, 2014		3,212,200
Additions related to embedded conversion features of convertible debt issued		13,343,898
Change in fair value of conversion features		(2,820,677	)
Reductions in fair value due to repayments/redemptions		(1,669,533	)
Change in fair value of conversion features		(368,674	)
Reductions in fair value due to principal conversions		(511,589	)
Balance at December 31, 2015	$	11,185,625

~~NOTE~~STOCK 6BASED ~~– ACQUISITIONS~~COMPENSATION

OnThe ~~July~~Company ~~16,~~accounts ~~2014~~for stock, westock ~~entered~~options ~~into~~and astock ~~sales~~warrants ~~purchase~~issued ~~agreement~~for toservices ~~acquire~~and ~~100%~~compensation ofby ~~the~~employees ~~outstanding~~under ~~shares~~the ~~of Lexi Luu Designs. Bitzio~~fair ~~paid~~value ~~500,000,000 restricted commons shares for this acquisition~~method. ~~300,000~~For ~~shares valued $0.0014~~non-employees, the fair market ~~price~~value of the Company’s stock is measured on the ~~day~~date of ~~acquisition,~~stock issuance or ~~$420,000, was~~ the ~~consideration~~date ~~given.~~an ~~The~~option/warrant ~~other~~is ~~200,000~~granted ~~shares, or $280,000 were recorded~~ as ~~pre-paid~~appropriate ~~compensation~~under ~~per the guidance at~~ ASC ~~805-10-55-25,~~718 as“Compensation ~~they~~– ~~are~~Stock ~~considered~~Compensation”. ~~compensation~~The Company ~~for~~determined ~~continuing~~the ~~employment~~fair ~~of Mr.~~market ~~Blanchette. The~~ value of the ~~shares~~warrants/options ~~will~~issued beunder ~~amortized over~~ the ~~service~~Black-Scholes ~~period~~Pricing ~~of approximately 20 months~~Model. ~~Lexi~~Effective ~~Luu shareholders~~July ~~are~~1, ~~able~~2006, tothe ~~earn~~Company anadopted ~~additional~~the ~~$300,000~~provisions inof ~~restricted~~ASC ~~common~~718, ~~shares~~which ~~over~~establishes ~~the~~accounting ~~course~~for ofequity ~~three~~instruments ~~years~~exchanged infor anemployee services. ~~earn~~Under ~~out~~the ~~upon~~provisions ~~hitting certain~~ASC ~~revenue~~718, ~~benchmarks.~~share-based ~~The~~compensation ~~Company~~cost ~~recorded~~is anmeasured ~~earnout~~at ~~contingent~~the ~~liability~~grant ~~of $87~~date,~~000~~ asbased ~~part~~on of the ~~acquisition.~~fair Wevalue ~~accounted~~of ~~for~~ the ~~transaction~~award, asand ais ~~business~~recognized ~~combination.~~as Ofan ~~the~~expense ~~purchase~~over ~~price~~the ~~paid~~employee’s asrequisite ofservice ~~July~~period ~~16, 2014~~ (~~$183,629)~~generally ~~was allocated among~~ the ~~assets~~ ~~and~~vesting ~~liabilities~~period ~~and~~ of the ~~difference~~equity ~~was assigned to intangible assets~~grant).

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 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 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 $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.38

~~F-11~~COMMON CONTROL

~~The~~On ~~total~~December ~~purchase~~31, ~~price~~2015, FLUX Carbon Corporation (“FCC”) transferred its ownership interest in Viridis Capital LLC (“Viridis”) to the Company in exchange for an 80% equity interest in Bitzio. Viridis was the ~~Lexi~~owner ~~Luu~~of ~~acquisition~~800,115 shares of GreenShift Corporation (“GreenShift”) Series D Preferred Stock at the time of the transfer. On the same date, the Company acquired the beneficial ownership interest in 187,029 shares of GreenShift Series D Preferred Stock from EXO Opportunity Fund LLC (“EXO”) in exchange for 200,000 shares of the Company’s Series E Preferred Stock. On December 31, 2015, the Company acquired 100,000 shares of GreenShift’s Series G Preferred Stock for $2.5 million in cash, plus an additional 700,000 shares of GreenShift’s Series G Preferred Stock in exchange for the surrender of Bitzio’s beneficial ownership interest in 987,144 shares of GreenShift’s Series D Preferred Stock. At the completion of the foregoing transactions, the Company was ~~allocated~~the beneficial owner of 800,000 shares of GreenShift’s Series G Preferred Stock, and FCC was the beneficial owner of 800,000 shares of the Company’s Series F Preferred Stock. FCC is owned by Kevin Kreisler, our Chairman and Chief Executive Officer, as ~~follows:~~well as the Chairman and Chief Executive Officer of GreenShift prior to and after closing of the above. Mr. Kreisler was additionally the manager of 112359 Factor Fund LLC (“Factor Fund”), the Company’s lender and collateral agent in respect of the Company’s secured loans at the time these transactions were completed. The Company accordingly accounted for these transactions on the basis that they were between entities under common control.

Assets
Cash		170
Accounts receivable		794
Inventories		64,883
Property and equipment		2,724
Other assets		19,503
Intangible assets-Customer relationships		690,629
Liabilities
Accounts payable and accrued liabilities		(256,030	)
Due to shareholder		(15,673	)
Earn-out contingent liability		(87,000	)
Net assets acquired	$	420,000

On February 26, 2015, Lexi –Luu Designs, Inc. entered a Securities Purchase Agreement with Skipjack Dive and Dancewear Inc. where Lexi –Luu Designs, Inc. acquired 100% of the outstanding capital Stock of Skipjack Dive and Dancewear Inc. in exchange for $100,000. This amount was booked as accounts payable to Hubert J.Blanchette.

~~The~~In ~~total~~addition on March 3, 2015, Lexi –Luu Designs, Inc. entered a securities purchase ~~price~~agreement with Punkz Gear, Inc. where Lexi –Luu Designs, Inc. acquired 100% of the outstanding capital Stock of Punkz Gear Inc. in exchange for a $200,000 Subordinated Secured Convertible Debenture (Note) convertible at the ~~E-motion~~rate ~~acquisition~~of $0.10 per share into 2,000,000 million shares of Buyer common stock. This Note was ~~allocated~~payable to Hubert J. Blanchette. Hubert J. Blanchette was and is the CEO of Lexi- Luu Designs, Inc at the time of the above transactions and as ~~follows:~~of December 31, 2015. In both the Skipjack Dive and Dancewear Inc and Punkz Gear acquisitions, the sole selling shareholder of these entities Hubert J. Blanchette was also the CEO of the buying company, Lexi-Luu Designs. Lexi-Luu Designs Inc was the also the issuing entity, and its CEO of Lexi-Luu Designs Inc. and the CEO of Skipjack Dive and Dancewear Inc. and Punkz Gear, Inc. was and is Hubert J. Blanchette, who retained control of the board and management at the time of the acquisition. As a result, both of these acquisitions were deemed between entities under common control.

Assets
Inventories		165,807
Other assets		5,050
Intangible assets-Customer relationships		74,235
Liabilities
Accounts payable and accrued liabilities		(197,092	)
Earn-out contingent liability		(48,000	)
Net assets acquired	$	-

NOTE 4

CONCENTRATIONS

~~The~~During ~~Customer~~the ~~relationships~~year ~~will~~ended beDecember ~~amortized~~31, 2015, for our agriculture segment, four customers’ balances each represented over ~~their~~10% ~~estimated~~of ~~useful~~our accounts ~~lives~~receivable and one customer provided 56% of 2total ~~years~~revenue in the aggregate; during the year ended December 31, 2014, two customers each provided over 10% of our revenue and 30% of total revenue in the aggregate. The Company maintains cash balances with financial institutions that at times may exceed the limits insured by the Federal Deposit Insurance Corporation. Accounts receivable are uncollateralized, non-interest-bearing customer obligations due under normal trade terms requiring payment within 30 days from the invoice date. Accounts receivable are stated at the amount billed to the customer.

NOTE 7 –5 ~~INTANGIBLE~~STOCKHOLDERS’ ~~ASSETS~~EQUITY

~~Intangible~~PREFERRED ~~Assets~~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 Preferred Stock, 1,000,000 shares are designated as Series B Convertible Preferred Stock, 999 shares are designated as Series C Preferred Stock, 520,000 shares of Series E Preferred Stock, and 800,000 shares of Series F Preferred Stock, par value of $0.001.

SERIES B PREFERRED STOCK

As of the years ended December 31, 2015 and 2014, there were 0 and 1,000,000 shares of Series B Preferred Stock issued and outstanding. Each holder of the Series B Shares will participate in any dividend payable to the holders of the common stock on an as-converted basis. The holders of the Series B Shares have voting rights equivalent to the number of shares of common stock into which the Series B Shares are convertible, or 19.8% (in the aggregate) of the Company’s common stock outstanding after the conversion, measured on the date of conversion. In the event of liquidation, following the sale or disposition of all or substantially all of the Company’s assets, holders of Series B Shares shall be entitled to receive $1.50 per preferred share. The Series B Shares are also redeemable at the rate 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. During the year ended December 31, 2014, Factor Fund purchased 500,000 additional shares of Series B Preferred Stock for $250,000. In February 2015, Factor Fund assigned its interest in the Series B Shares to its former members, FLUX Carbon Starter Fund LLC (“FCSF”) and Five Nine Group LLC (“59G”). FCSF and 59G later surrendered their respective interests in the Series B Shares on December 31, 2015 (see Note 9, Debt Obligations, below).

SERIES C PREFERRED STOCK

As of December 31, 2014 there were 999 shares of Series C Preferred Stock issued and outstanding. Holders of the Series C Shares will not participate in any dividend payable to the holders of the common stock, but have voting rights equivalent to the product obtained by dividing (a) the number of votes that the holders of all voting securities other than Series C Shares 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 Shares together will have 50.1% of the voting power of the Company. In the event of liquidation, following the sale or disposition of all or substantially all of the Company’s assets, holders of Series B Shares shall be entitled to receive $0.01 per preferred share. The Series C Shares were deemed to have been automatically redeemed as of November 29, 2015, for no additional consideration.

SERIES E PREFERRED STOCK

On December 31, 2015, the Company filed with the Nevada Secretary of State a Certificate of Designation designating 520,000 shares of preferred stock as Series E Preferred Stock. Each outstanding share of Series E Preferred Stock will have a preference on liquidation of Ten Dollars ($10). The holder of a share of Series E Preferred Stock will have the right to convert the Ten Dollar value of the share into common stock at a conversion price equal to 85% of the average closing bid price for Bitzio common stock during the five trading days preceding conversion, except that no conversion is permitted that will result in the holder becoming the beneficial owner of more than 4.99% of Bitzio’s outstanding common stock. Holders of Series E Preferred Stock have no voting rights by reason of those shares, nor do they have any right to participate in any dividends paid by Bitzio. On December 31, 2015, the Company issued EXO Opportunity Fund LLC (“EXO”) 200,000 shares of Series E Preferred Stock in exchange for beneficial rights to 187,029 shares of GreenShift Series D Preferred Stock as part of the transactions related to the GreenShift merger. On December 31, 2015 the Company issued TCA Global Credit Master Fund, LP, for advisory fees, 320,000 shares of Series E Preferred Stock with a stated value at $3,200,000, for which the underlying conversion feature was valued as a derivative liability at a value greater than this amount of $3,435,737, with the excess treated as preferred dividends. The discount on this redeemable preferred stock of approximately $3.2 million will be amortized through December 31, 2016, the earliest redemption date. In the event that TCA does not realize net proceeds from the sale of these Series E preferred shares or the common shares upon conversion of the preferred shares (the “Advisory Fee shares”) equal to the $3,200,000 fee value by the maturity date of the credit facility, these Advisory fee shares will become subject to mandatory redemption by TCA. TCA may convert portions of principal and interest due under the TCA Note into shares of Bitzio common stock at a conversion price equal to 85% of the lowest daily volume weighted average price of Bitzio common stock during the five trading days preceding conversion provided, however, that no conversion is permitted that will result in the Note-holder becoming the beneficial owner of more than 4.99% of Bitzio’s outstanding common stock.

The $2.9 million loan made on December 31, 2015 is, and any future loan will be, reflected in a Senior Secured Revolving Convertible Promissory Note (the “TCA Note”), which has a maturity date of December 31, 2016. The TCA Note bears interest at 11% per annum. The Credit Agreement required that Bitzio pay an advisory fee to TCA in the amount of $3,200,000. Payment was made on December 31, 2015 by the issuance of 320,000 shares of Series E Preferred Stock to TCA. On December 31, 2015, the Company filed with the Nevada Secretary of State a Certificate of Designation designating 520,000 shares of preferred stock as Series E Preferred Stock. Each outstanding share of Series E Preferred Stock will have a preference on liquidation of Ten Dollars ($10). The holder of a share of Series E Preferred Stock will have the right to convert the Ten Dollar value of the share into common stock at a conversion price equal to 85% of the average closing bid price for Bitzio common stock during the five trading days preceding conversion, except that no conversion is permitted that will result in the holder becoming the beneficial owner of more than 4.99% of Bitzio’s outstanding common stock. Holders of Series E Preferred Stock have no voting rights by reason of those shares, nor do they have any right to participate in any dividends paid by Bitzio. On December 31, 2015, the Company issued EXO Opportunity Fund LLC (“EXO”) 200,000 shares of Series E Preferred Stock in exchange for beneficial rights to 187,029 shares of GreenShift Series D Preferred Stock. On December 31, 2015 the Company issued TCA Global Credit Master Fund, LP, 320,000 shares of Series E Preferred Stock with a stated value at $3,200,000, for which the underlying conversion feature was valued as a derivative liability at a value greater that this amount of $3,435,737 with the excess treated as preferred dividends. The discount on this redeemable preferred stock of approximately $3.2 million will be amortized through December 31, 2016, the earliest redemption date. A Preferred Dividend of $235,737 was immediately recognized at the time of the transaction. To secure its obligations under the Note and Credit Agreement, Bitzio pledged to TCA all of its assets, as did each of Bitzio’s subsidiaries. The agreements with TCA provide TCA with the right to seek redemption of its Series E shares by the Company in the event of default. In the event of a default under the TCA Note or with the consent of Bitzio, TCA may convert portions of principal and interest due under the TCA Note into shares of Bitzio common stock at a conversion price equal to 85% of the lowest daily volume weighted average price of Bitzio common stock during the five trading days preceding conversion; provided, however, that no conversion is permitted that will result in the Note-holder becoming the beneficial owner of more than 4.99% of Bitzio’s outstanding common stock.

The fair value of the embedded conversion features of 320,000 shares of Series E Preferred Stock was determined using a Black-Scholes Simulation. This model requires the input of highly subjective assumptions, including the expected price volatility, which is based on the historical volatility of a peer group of publicly traded companies. Changes in the subjective input assumptions can materially affect the estimate of fair value of the warrants and the Company’s results of operations could be impacted.

The following assumptions were used in calculations of the Black-Scholes model for the year ended December 31, 2015 and 2014:

	For the Year Ended December 31, 2015		For the Year Ended December 31, 2014
Annual dividend yield		-%		-%
Expected life (years)		1.00		-
Risk-free interest rate		0.65%		-%
Expected volatility		334%		-%

SERIES F PREFERRED STOCK

On December 31, 2015, the Company filed with the Nevada Secretary of State a Certificate of Designation designating 800,000 shares of preferred stock as Series F Preferred Stock. Each outstanding share of Series F Preferred Stock may be converted by the holder into shares of Bitzio common stock. The conversion ratio is such that the full 800,000 Series F shares convert into common shares representing 80% of the fully diluted common shares outstanding after the conversion (which includes all common shares outstanding plus all common shares potentially issuable upon the conversion of all derivative securities not held by the holder). The holder of Series F shares may cast the number of votes at a shareholders meeting or by written consent that equals the number of common shares into which the Series F shares are convertible on the record date for the shareholder action. In the event the Board of Directors declares a dividend payable to Bitzio common shareholders, the holders of Series F shares will receive the dividend that would be payable if the Series F shares were converted into Bitzio common shares prior to the dividend. In the event of a liquidation of Bitzio, the holders of 800,000 Series F shares will receive a preferential distribution equal to 80% of the net assets available for distribution to the shareholders.

WARRANTS

The following table summarizes all warrant activity for the year ended December 31, 2015 and 2014:

	Number of Warrants			Weighted Average Exercise Price
Balance outstanding at December 31, 2013		22,561,948		$	0.33
Granted		—			—
Exercised					—
Expired		(7,973,332	)		—
Balance outstanding at December 31, 2014		14,588,616		$	0.35

Exercisable, December 31, 2014		14,588,616		$	0.35

Balance outstanding, December 31, 2014		14,588,616		$	0.35
Granted		—			—
Exercised		—			—
Expired		(744,000	)		0.40
Balance outstanding at December 31, 2015		13,844,616		$	0.35

Exercisable, December 31, 2015		13,844,616		$	0.35

The following table discloses information regarding outstanding and exercisable options and warrants at December 31, 2014:

	Outstanding						Exercisable
					Remaining Weighted
	Number of		Weighted Average		Average Contractual		Number of		Weighted Average
Range of Exercise Prices	Option Shares		Exercise Price		Term (Years)		Option Shares		Exercise Price

$0.20 - $0.29		2,000,000	$	0.20		0.92		2,000,000	$	0.20
$0.30 - $0.39		11,774,616	$	0.37		0.72		11,774,616	$	0.37
$0.40 - $0.49		70,000	$	0.40		1.00		70,000	$	0.40
		13,844,616	$	0.35		0.75		13,844,616	$	0.35

COMMON STOCK

During the year ended December 31, 2015, the Company issued 3,493,226,298 shares upon conversion of $328,256 in debt payable, and 878,833,333 shares for accrued salaries. During the year ended December 31, 2014 the Company issued 1,870,277,969 shares in conversion of notes payable of $912,132, 2,500,000 shares for cash of $2,500, 50,000,000 shares of its common stock to Angie Daza as a result of the acquisition of Cleo VII, Inc., and 850,000,000 shares of its common stock pursuant to the share exchange agreements (see Note 7, Goodwill and Intangible Assets and Note 9, Debt Obligations, below).

During the years ended December 31, 2015 and 2014, the Company agreed to issue a third party 7,200,000 shares (600,000 shares per month for twelve months) and 10,400,000 shares (1,000,000 shares per month from January 2015 to August 2015, then 600,000 shares per month for the remaining four months), respectively, of common stock for service rendered in the amount of $36,000 and $52,000, respectively. The Company also accrued 302,500,000 and 32,500,000 shares, respectively, of common stock based on employment agreements for amounts of $30,250 and $20,938, respectively. As of December 31, 2015 and 2014, the Company recorded common stock to be issued of $204,188 and $120,438, representing 327,795,812 and 49,345,812 shares of common stock issuable for services, which is included in additional paid in capital.

NOTE 6

DEPOSITS

The Company has total deposits in the amount of $469,730 as of the year ending December 31, 2015. For the year ended December 31, 2015, of this amount $400,000 has been classified under current assets.

NOTE 7

GOODWILL AND INTANGIBLE ASSETS

In November 2013, the Company entered into a Distribution Agreement with E-motion Apparel, Inc., which designs women’s apparel and accessories. The agreement grants Bitzio the exclusive worldwide right to distribute E-motion Apparel’s products using the E-motion Apparel trademarks, copyrights and trade dress. The agreement also provides that Bitzio will make a five year non-interest-bearing $75,000 working capital loan to E-motion Apparel, and will pay a license fee of $300,000 to E-motion Apparel. The Distribution Agreement was replaced by the acquisition agreement on July 18, 2014.

On July 16, 2014, wethe ~~entered~~Company ~~into~~acquired ~~a sales purchase agreement in~~ 100% ~~acquisition~~ of ~~all~~the ~~outstanding~~stock ~~shares~~ of Lexi Luu. Designs, Inc. ~~Bitzio~~ ~~paid~~(“LL”), in exchange for 500,000,000 ~~restricted commons~~ shares ~~for~~of ~~this~~Company ~~acquisition.~~common ~~Lexi~~stock, ~~Luu~~plus ~~shareholders~~a ~~are~~subordinate ~~able~~term tonote ~~earn~~in anthe ~~additional~~amount of $300,000 in ~~restricted~~payable ~~common~~from ~~shares~~LL ~~over~~on ~~the~~or ~~course~~before ofDecember ~~years~~31, 2017, insubject anto ~~earn~~compliance ~~out~~with ~~upon~~applicable ~~hitting~~provisions ~~certain~~of ~~revenue~~the ~~benchmarks~~Company’s senior loan agreements. We accounted for the transaction as an equity purchase. Of$183,629 of the purchase price paid ~~as of July 16, 2014 ($183,629)~~ was allocated among the assets and liabilities and the difference was allocated ~~taken~~ to intangible assets in the amount of $690,629. As of December 31, 2015 and 2014, the net carrying amount is $57186,~~354~~376 and $531,690, respectively. ~~This~~The associated intangible ~~assets~~asset ~~will~~is bebeing amortized over a life of 2 years~~, estimated amortization expense for 2015 and 2016 are $37,118 and $20,236 respectively~~.

On July 18, 2014, wethe ~~entered~~Company ~~into~~acquired ~~a sales purchase agreement in~~ 100% ~~acquisition~~ of ~~all~~the ~~outstanding~~stock ~~shares~~ of E-motion Apparel., ~~Designs~~Inc. ~~Bitzio~~ ~~paid~~(“EA”), in exchange for 350,000,000 shares ~~restricted~~of ~~commons~~Company ~~shares~~common ~~for~~stock, ~~this~~plus ~~acquisition.~~a ~~E-motion~~subordinate ~~Apparel~~term ~~shareholders~~note ~~are~~in ~~able~~the toamount ~~earn~~of ~~an additional~~ $300,000 inpayable ~~restricted~~from ~~common~~EA ~~shares~~on ~~over~~or ~~the~~before ~~course~~December of31, 2017, ~~years~~subject into ancompliance ~~earn~~with ~~out~~applicable ~~upon~~provisions ~~hitting~~of ~~certain~~the ~~revenue~~Company’s ~~benchmarks~~senior loan agreements. We accounted for the transaction as an equity purchase. Of$26,235 of the purchase price paid ~~as of July 18, 2014 ($26,235)~~ was allocated among the assets and liabilities and the difference was allocated ~~taken~~ to intangible assets in amount of $74,235. As of December 31, 2015 and 2014, the net carrying amount is $~~531~~20,~~690~~236 and $57,354. ~~This~~The associated intangible ~~assets~~asset ~~will~~is bebeing amortized over a life of 2 years~~, estimated amortization expense for 2015 and 2016 are $354,314 and $186,376 respectively~~.

~~Amortization~~Under ofour agriculture segment, GreenShift accounts for its intangible assets ispursuant ~~computed~~to ~~using~~ASC ~~the straight~~350-~~line~~20-55-24, ~~method~~“Intangibles – Goodwill and isOther”. ~~recognized~~Under ASC 350, intangibles with definite lives continue to be amortized on a straight-line basis over the lesser of their estimated useful lives or contractual terms. Intangibles with indefinite lives are evaluated at least annually for impairment by comparing the asset’s estimated fair value with its carrying value, based on cash flow methodology. Intangibles with definite lives are subject to impairment testing in the event of certain indicators. Impairment in the ~~intangible~~carrying ~~assets~~value of an asset is recognized whenever anticipated future cash flows (undiscounted) from an asset are estimated to be less than its carrying value. ~~Amortization~~The ~~expense~~amount ~~was~~of ~~$209,085~~the ~~and~~impairment ~~$7,069~~recognized ~~for~~is the ~~years~~difference ~~ended~~between ~~December~~the ~~31,~~carrying ~~2014~~value of the asset and ~~2013,~~its fair ~~respectively~~value.

~~Estimated~~The ~~amortization~~Company’s ~~expense for the~~ intangible assets ~~for~~at ~~the~~December ~~next~~31, ~~five~~2015 ~~years~~and ~~consists~~2014, ofrespectively, include the following:

Year ending December 31
	2015			2014
2015		$	382,432
License fees	$	150,000		$	—
2016			206,612
Patent		50,000			—
2017			-
Website		45,076			—
Customer relation		764,864			764,864
Accumulated amortization		(785,351	)		(175,820	)
Intangible assets, net	$	224,589		$	589,044

FAmortization of intangible assets is computed using the straight-12line method and is recognized over the estimated useful lives of the intangible assets. Amortization of intangible assets was $385,634 and $209,085 for the twelve months ended December 31, 2015 and 2014, respectively. Estimated amortization expense for future years is as follows:

NOTE 8 – RELATED PARTY TRANSACTIONS

2016	$	209,814
2017		3,202
2018		3,202
2019		3,202
2020		3,202
Thereafter		1,967
Total	$	224,589

~~Related party payables~~43

~~At December~~NOTE ~~31,~~8 ~~2014~~PROPERTY ~~$10,665~~AND ~~was due to chief financial officer for an advance loan.~~EQUIPMENT

AtDepreciation expense ~~December 31, 2013, $123,000 was due~~ for ~~services~~ ~~rendered~~the byyears aended ~~company~~December ~~owned~~31, by2015 ~~Bitzio’s~~and ~~chief~~2014 ~~executive~~was ~~officer. During 2013~~$4,392 ~~the~~and ~~Company borrowed~~ $3,150,~~000~~ ~~from related~~respectively. ~~party through a convertible promissory note bearing interest at 10% with a maturity date of January 1~~Property, ~~2014.~~plant ~~The~~and ~~note contains~~equipment ~~a conversion feature wherein the note may be converted to shares of the Company’s common stock at the lower of~~consisted ~~$0.05 per common share or 20% discount to market for last 30 trading days prior to the conversion. As~~ of ~~December 31, 2013,~~ the ~~Company~~ ~~had principal outstanding in the note of $150,000, and accrued interest of $15,000.~~following:

NOTE 9 – CONVERTIBLE NOTES PAYABLE

	2015			2014
Furniture and fixtures	$	1,404		$	1,404
Machinery and equipment		27,967			4,470
Computer equipment		1,504			—
Sub-total		30,875			5,874
Less accumulated depreciation		(7,542	)		(3,150	)
Total	$	23,333		$	2,724

~~Exchange of~~NOTE ~~Convertible~~9 ~~Debentures~~DEBT OBLIGATIONS

~~Immediately~~The ~~subsequent~~following tois ~~its~~a ~~purchase~~summary of 500,000 shares of Series B Preferred Stock on November 18, 2013 (see note 9), 112359 Factor Fund, LLC (“Factor Fund”) entered into assignment agreements with seven holders of eight convertible promissory notes issued by the ~~Registrant~~Company’s infinancing ~~2012~~arrangements ~~and~~as ~~2013. The aggregate~~ of ~~the~~December ~~principal balance and accrued interest on the notes was $779~~31,~~591,~~ ~~and all~~2015 ~~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.2014:

Immediately thereafter, Factor Fund entered 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 equalled approximately 128.3% of aggregate principal and accrued interest surrendered in exchange for the A&R Debenture. The primary terms of the A&R Debentures are:

	2015			2014
Current portion of long term debt:
Mortgages and other term notes	$	—		$	—
Current portion of notes payable		402,322			677,572
Current portion of notes payable – related party		310,100			163,666
Note discounts		(47,341	)		(349,891	)
Total current portion of long term debt	$	665,081		$	491,347

Current portion of convertible debentures:
TCA Global Credit Master Fund, L.P., 11% interest, conversion at 85% of market	$	2,900,000			—
Better Half Bloodstock, Inc., 0% interest, conversion at 90% of market		50,000			—
Dakota Capital, 6% interest, conversion at 90% of market		549,723			—
EFG Bank, 6% interest, conversion at 90% of market		117,948			—
Empire Equity, 6% interest, conversion at 90% of market		113,768			—
Epelbaum Revocable Trust, 6% interest, conversion at 90% of market		91,252			—
JMC Holdings, LP, 6% interest, conversion at 90% of market		140,380			—
David Moran & Siobhan Hughes, 6% interest, conversion at 90% of market		2,399			—
Susan Schneider, 6% interest, conversions at 90% of market		10,510			—
Mountainville Ltd., 6% interest, conversions at 90% of market		1,190,446			—
TRK Management LLC, 6% interest, no conversion discount		100,000			—
Cantrell Winsness Technologies, LLC, 2% interest, conversion at 100% of market		75,000			—
Minority Interest Fund (II), LLC, 6% interest, conversion at 90% of market		1,517,830			—
Long Side Ventures, 6% interest, conversion at 90% of market		85,000			—
Related Party Debenture, 6% interest, no conversion discount		59,440			—
112359 Factor Fund LLC, 6% interest, net of discount		—			690,184
FLUX Carbon Starter Fund LLC, 6% interest, no conversion discount		255,000			—
Five Nine Group LLC, 6% interest, no conversion discount		250,000			—
Asher Enterprises, Inc. 8% interest, conversion at 59% of market, net of discount					16,798
Donald Wachelka, 8.5% interest, conversion at $0.10		-			50,000
Convertible note related party, conversion at $0.05		—			150,000
Settlement Contingency Debentures		240,000			101,000
Total current portion of convertible debentures	$	7,748,696		$	1,007,982

Long term convertible debentures:
Gerova Asset Backed Holdings, LP, 2% interest, no conversion discount	$	175,000		$	—
Cantrell Winsness Technologies, LLC, 2% interest, conversion at 100% of market		325,000			—
Long Side Ventures, 6% interest, conversion at 90% of market		225,586			—
EXO Opportunity Fund, LLC, 6% interest, conversion at 90% of market		4,500,000			—
Note discount		(4,500,000	)		—
Total long term convertible debentures	$	725,586		$	—

● 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 prepay the A&R Debentures at any time, but must issue, as a prepayment penalty, common stock with a market value equal to 5% of the principal amount prepaid. ● 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 thirty 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. ● 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.44

~~The~~A ~~Company~~total ~~determined~~of ~~per ASC 470-50-40-10a~~$12,974,282 ~~that~~in ~~the~~principal ~~fair~~from ~~value of~~ the ~~embedded~~convertible ~~conversion~~debt ~~option~~noted inabove ~~the~~is ~~reissued~~ convertible ~~notes as~~into ~~a result of~~ the ~~change~~common instock ~~conversion~~of ~~price and term, increased by more than 10% from~~ the ~~original notes~~Company. ~~Therefore,~~The following ~~debt~~chart ~~extinguishment accounting~~is ~~rules~~presented ~~apply.~~to ~~Accordingly,~~assist the ~~reissued~~reader ~~convertible~~in ~~notes~~analyzing ~~payable~~the ~~were~~Company’s ~~initially~~ability ~~recorded~~to atfulfill ~~fair~~its ~~value,~~fixed ~~with~~debt aservice ~~loss~~requirements onas ~~extinguishment~~ of ~~debt~~December ~~of $220~~31,~~408~~ ~~for~~2015 ~~the~~and ~~difference in~~ the ~~fair~~Company’s ~~value~~ability ~~of the new notes compared~~ to ~~the~~meet ~~carrying~~such ~~value of the old notes.~~obligations:

During the year ended December 31, 2014 $370,296 of principal was converted into 1,055,750,190 shares of the Company’s common stock. The balance of the note as of December 31, 2014 is $617,388 with accrued interest of $57,983.

Year	Amount
2016	$	8,461,118
2017		4,625,000
2018		600,586
2019		—
2020		—
Thereafter		—
Total minimum payments due under current and long term obligations	$	13,686,704

TCA CREDIT LINE

On December 31, 2015, Bitzio and each of its subsidiaries entered into a Senior Secured Revolving Credit Facility Agreement (the “Credit Agreement”) with TCA Global Credit Master Fund, LP (“TCA”). Pursuant to the Credit Agreement, TCA loaned $2,900,000 to Bitzio on December 31, 2015. The Credit Agreement contemplates that the lending limit may be increased to $5,000,000, on Bitzio’s request and at TCA’s discretion, provided that amount of loans outstanding under the Credit Agreement will be capped based upon lending ratios specified in the Credit Agreement. A total of $2,500,000 from the amount loaned on December 31, 2015 was used by Bitzio to purchase the Series G shares from GreenShift, as described above (see Note 5, Shareholder’s Equity, above).

FACTOR FUND DEBENTURE

On August 5, 2014, the Company issued a $650,000 convertible debenture to 112359 Factor Fund LLC (“Factor Fund”) for $325,000 in cash, paid between August 2014 and May 2015. The debenture carried interest at 8% per annum, and converted into Company 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 9.99% of the Company’s outstanding shares. On February 26, 2015, Factor Fund assigned the balance due under the foregoing debenture in two equal $325,000 portions to its members, Five Nine Group LLC (“Five Nine”) and FLUX Carbon Starter Fund LLC (“FCSF”). On the same date, the Company additionally issued convertible debentures with a principal balance of $534,888 to Factor Fund in exchange for debentures issued to Factor Fund in prior periods. The issued amount was then assigned in two equal portions to Factor Fund’s members, Five Nine and FCSF. A total of $592,444 was due as of February 26, 2015, to each Five Nine and FCSF as a result of the foregoing transactions. Of the amount assigned to FCSF, $108,560 of principal plus $16,440 of interest was transferred to Long Side Ventures LLC (“LSV”). The holder of each debenture 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. The Company accounted for the foregoing transfers as an extinguishment of debt and recorded a loss on extinguishment of $938,489.

On December 31, 2015, Five Nine and FCSF agreed to exchange 100% of their respective right, title and interest, in to and under all amounts assigned from Factor Fund and otherwise due to each party in exchange for two $250,000 debentures, one each issued to Five Nine and FCSF. The holder of each debenture 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 9.99% of the Registrant’s outstanding shares. Per ASC 470-50-40-10 the exchange of debt instruments between or a modification of a debt instrument by a debtor and a creditor in a non troubled debt situation is deemed to have been accomplished with debt instruments that are substantially different if the present value of the cash flows under the terms of the new debt instrument is at least 10 percent different from the present value of the remaining cash flows under the terms of the original instrument. The company found that the present value of the cash flows of the new debt instrument was at least 10% different from the present value of the remaining cash flows of the original instrument. Therefore, debt extinguishment accounting rules apply. Accordingly, the reissued convertible notes payable were initially recorded at fair value, with a gain on extinguishment of debt of $639,667 for the difference in the fair value of the new notes compared to the carrying value of the old notes.

YA GLOBAL INVESTMENTS, L.P.

On December 31, 2015, YA Global Investments, LP (“YA Global”) and GreenShift entered into a Settlement Agreement pursuant to which YA Global split its outstanding debt into two debentures, a $14,196,897 debenture and a $5,000,000 debenture; and then accepted, in satisfaction of $14,196,897 of principal and interest accrued on debentures previously issued by GreenShift, a cash payment of $2,000,000, and the execution of a participation agreement by GreenShift and its affiliates. The $5 million debenture was assigned to EXO Opportunity Fund LLC (“EXO”) on the same date. The participation agreement provides that, for an indefinite term, GreenShift and its subsidiaries will pay to YA Global an amount equal to 15% of all payments received by the Company from any new licensees issued in connection with its intellectual properties, including any amounts awarded in the Company’s pending and future infringement matters, net of any legal fees and expenses incurred in obtaining the settlement or award. The balance due to YA Global, including all convertible debt, was paid and satisfied in full as a result of the foregoing transactions.

On the same date, GreenShift deposited $400,000 in cash into escrow in anticipation of settling an additional $2,939,000 in principal and interest due from GreenShift to various assignees of YA Global (“YAGI Assignees”). The relevant agreement provided that the YAGI Assignees had until March 31, 2016, to accept their respective share of the settlement amount. All but three of the assignees, corresponding to about $25,000 in debt, accepted the settlement terms as of such date; in turn corresponding to a total of an additional $2,914,000 in debt elimination during the first quarter 2016 (see Note 22, Subsequent Events, below).

The terms of the $5 million debenture assigned to EXO and the $25,000 balance due to the YA Global assignees noted above are nearly identical. Each debenture bears interest at 6% per annum, and each holder has the right, but not the obligation, to convert any portion of the debenture into GreenShift’s common stock at a rate equal to 90% of the lowest daily volume weighted average price of GreenShift’s common stock during the 20 consecutive trading days immediately preceding the conversion date. The debentures mature on December 31, 2017. The debentures also contain a “buy-in” provision in regards to potential cash-settled portion of any conversion.

GreenShift accounted for the foregoing debentures in accordance with ASC 815, Derivatives and Hedging, as the conversion feature embedded in each debenture could result in the note principal being converted to a variable number of GreenShift’s common shares.

GreenShift determined the aggregate value of the YAGI Assignee debentures at December 31, 2014, to be $1,605,782 which represented the aggregate face value of the debentures of $1,445,266 plus the present value of the conversion feature. During the year ended December 31, 2015, GreenShift made payments against the YAGI Assignee debentures which resulted in a $25,227 reduction of the fair value of the conversion liability for the period. In addition, the value was reduced by $400,804 for conversion features eliminated upon retirement of the related debentures (see below) as well as a reduction of $16,655 due to conversions during the period. During the year ended December 31, 2015, a value of $16,655 was recognized for conversion features and accretion to fair value for new debentures assigned during the period. The carrying value of the YAGI Assignee debentures was $2,518,167 as of December 31, 2015, including principal of $2,266,426 and the value of the conversion liability. The present value of the liability for the conversion feature has reached its estimated settlement value of $251,760 as of December 31, 2015. Interest expense of $122,156 for these obligations was accrued for the year ended December 31, 2015.

GreenShift is prohibited under its loan agreements from issuing common shares at prices lower than those afforded to EXO in the absence of EXO’s prior consent. The EXO Debenture provides for adjustments to the conversion price to the extent that GreenShift issues equity at a lower price in the future. As a result, in any such event, EXO would have the right to receive common shares upon conversion of the EXO Debenture at rates equal to the relevant lower rates. A note discount of $5,000,000 and a derivative liability of $7,484,632 were recorded at the time of the assignment. GreenShift accounted for the EXO Debenture in accordance with 815-40, Derivatives and Hedging, as the conversion feature embedded in the EXO Debenture could result in the note principal being converted to a variable number of GreenShift’s common shares. The balance of the EXO Debenture (including the related note discount) was $4,500,000 at December 31, 2015. At December 31, 2015, GreenShift valued the conversion features using a Black-Scholes model with a weighted probability calculation of the conversion price reset feature and the following assumptions: dividend yield of zero, years to maturity of 2.0 years, Discount rate of 0.14 percent, and annualized volatility of 296%. During the year ended December 31, 2015, the change in the fair value of the derivative resulted in an accounting gain of $248,463. As of December 31, 2015, the fair value of the derivative liability was $6,736,169.

As of December 31, 2010, GreenShift had convertible debentures payable to Minority Interest Fund (II), LLC (“MIF”) in an aggregate principal amount of $3,988,326 (the “MIF Debenture”) and convertible debentures payable to Viridis Capital LLC in an aggregate principal amount of $518,308 (the “Viridis 2010 Debenture”). Effective October 1, 2015, MIF assigned $557,500 of its convertible debt to EXO (the “EXO Debenture”). As of December 31, 2015, MIF assigned $100,000 of its balance to TKR Management LLC. During the year ended December 31, 2014, $95,390 and $70,812 in principal was converted into common stock as of December 31, 2015 and 2014, respectively. As of December 31, 2015, the balances of the EXO, TKR, MIF and Viridis Debentures were $0, $100,000, $1,517,830, and $0, respectively.

During the year ended December 31, 2015, GreenShift issued a $400,000 convertible debt to Cantrell Winsness Technologies, LLC (“CWT” and the “CWT Debenture”) in exchange for all amounts accrued under the technology agreement and CWT’s interest in the Series F Preferred Stock. CWT shall have the right, but not the obligation, to convert any portion of the convertible debenture into GreenShift’s common stock at $0.001 per share. The CWT Debenture matures December 31, 2018. The balance of the CWT Debenture was $400,000 at December 31, 2015.

During the year ended December 31, 2012, GreenShift incurred $175,000 in convertible debt to Gerova Asset Back Holdings, LP (“Gerova” and the “Gerova Debenture”). Gerova shall have the right, but not the obligation, to convert any portion of the convertible debenture into GreenShift’s common stock at a rate equal to 100% of the closing market price for GreenShift’s common stock for the day preceding the conversion date. The Gerova Debenture matures December 31, 2018. Gerova delivered a release in favor of GreenShift in respect of any and all amounts that may have been due under GreenShift’s former guaranty agreement with Gerova. The balance of the Gerova Debenture was $175,000 at December 31, 2015. Interest expense of $3,500 for these obligations was accrued for the year ended December 31, 2015.

During the year ended December 31, 2013, Minority Interest Fund (II), LLC assigned $200,000 of its convertible debt to Nicholas J. Morano, LLC (“Morano” and the “Morano Debenture”). Morano shall have the right, but not the obligation, to convert any portion of the accrued interest into GreenShift’s common stock at 100% of the market price for GreenShift’s common stock at the time of conversion. During the year ended December 31, 2014, $75,746 in principal was converted into common stock. Morano released GreenShift from its obligation to pay off the remaining balance on the debenture. The balance of principal and interest due under the Morano Debenture was $0 at December 31, 2015.

Effective December 31, 2015, Minority Interest Fund (II), LLC assigned $100,000 of its convertible debt to TRK Management, LLC (“TRK” and the “TRK Debenture”). TRK shall have the right, but not the obligation, to convert any portion of the accrued interest into GreenShift’s common stock at 100% of the market price for GreenShift’s common stock at the time of conversion. The balance of the TRK Debenture was $100,000 at December 31, 2015.

ASHER ENTERPRISE INC.

On March 4, 2014, the Company issued an 8% convertible promissory note in the aggregate principal amount of $37,500 to an accredited investor. The note has a maturity date of December 10, 2014. 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. The Company accounted for the conversion feature as a derivative valued at $253,302, of which $37,500 was recorded as a debt discount to be amortized over the life of the note. The remaining $215,802 was expensed immediately to interest expense. As of December 31, 2014, the note and accrued interest was fully repaid.

On April 14, 2014, the Company issued an 8% convertible promissory note in the aggregate principal amount of $37,500 to an accredited investor. The note has a maturity date of January 18, 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 year ended December 31, 2014, the Company recorded an interest expense of $1,500. The Company accounted for the conversion feature as a derivative valued at $48,244, of which $37,500 was recorded as a debt discount to be amortized over the life of the note. The remaining $10,744 was expensed immediately to interest expense. During the year ended December 31, 2014, the Company recorded an interest expense of $1,500. During the year ended December 31, 2014 $37,500 of principal was converted into 494,361,111 shares of the Company’s common stock.

~~F-13~~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 nine months ended September 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 September 30, 2015, the note and accrued interest was fully repaid.

On ~~May~~August 520, 2014, the Company issued an 8% convertible promissory note in the aggregate principal amount of $3220,500 to an accredited investor. The note has a maturity date of ~~February~~May 915, 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 ~~year~~nine months ended ~~December~~September 3130, ~~2014~~2015, the Company recorded an interest expense of $~~1,635~~606. The Company ~~accounted~~ accounted for the conversion feature as a derivative valued at $3631,~~411~~689, of which $3220,500 was recorded as a debt discount to be ~~amortized~~ amortized over the life of the note. The remaining $311,~~911~~189 was expensed immediately to interest expense. ~~During~~As ~~the~~of ~~year ended~~ December 31, ~~2014~~ ~~$23~~2015,~~515 of principal was converted into 391,916,688 shares of~~ the ~~Company’s common stock The balance of the~~ note ~~as of~~and ~~December 31, 2014 is $8,985 with~~ accrued interest ofwas ~~$1,635~~fully repaid.

~~On August~~NOTE 5,10 ~~2014~~COMMITMENTS ~~the~~AND Registrant entered into a Securities Purchase Agreement with 112359 Factor Fund, LLC (“Factor Fund”), pursuant to which the Registrant sold to Factor Fund a Secured Convertible Debenture. The Securities Purchase Agreement provides that Factor Fund will make ten payments, commencing with a payment of $80,000 on August 5, 2014, followed monthly by eight payments of $25,000 each and one $20,000 payment (i.e. total payments of $300,000). 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:CONTINGENCIES

● 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 Debenture 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 9.99% of the Registrant’s outstanding shares.FACILITIES

~~The~~Our ~~Registrant’s~~agriculture ~~obligations~~group ~~under~~headquarters ~~the Debenture~~ are ~~secured~~located byin aAlpharetta, ~~pledge~~Georgia. ofThe ~~all~~Alpharetta oflease ~~the~~had ~~Registrant’s~~a ~~assets.~~one Inyear ~~addition, Hubert~~term ~~Blanchette~~that ~~and~~terminated ~~Marilu~~on January ~~Brassington~~2016, ~~who~~at ~~are~~which ~~officers~~time ~~and directors of~~ the ~~Registrant,~~lease ~~have~~was ~~pledged~~extended aby ~~total~~another ofyear. ~~666~~The ~~shares of~~monthly ~~Series~~lease Cpayment ~~Preferred~~is ~~Stock and 362~~$1,~~500,000~~664. ~~shares~~For ofthe ~~common~~agriculture ~~stock to secure~~ group, the ~~Registrant’s~~total ~~obligations~~rent ~~under~~for the ~~Debenture. The~~years ~~Company~~ended ~~accounted~~December ~~for~~31, ~~the~~2015 ~~conversion~~and ~~features~~2014 aswas a$21,257 ~~derivative~~and ~~valued at~~ $~~407~~22,~~504~~500, ofrespectively. ~~which~~Our ~~$396~~apparel operations are based in Chatsworth,~~370~~ ~~was~~California. ~~recorded~~The asChatsworth lease has a ~~debt discount~~three toyear beterm ~~amortized~~that ~~over~~terminates ~~the~~in ~~life~~January of2019. ~~the~~The ~~note,~~monthly ~~the~~lease payment ~~remaining~~is $114,~~134~~300. ~~was~~For ~~expensed~~the ~~immediately~~apparel togroup, ~~interest~~the ~~expense.~~total ~~The~~rent ~~balance of~~for the ~~note~~years asended of December 31, 2015 and 2014 iswas $~~410~~38,~~000~~674 ~~with~~and ~~accrued interest of~~ $944,021, respectively.~~980.~~

On August 5, 2014 the Registrant entered into a letter agreement with Factor Fund that modified the terms of the Secured Amended & Restated Convertible Debentures issued by the Registrant to Factor Fund on November 18, 2013 (the “A&R Debentures”). The modifications:INFRINGEMENT

●On October ~~increased~~13, 2009, the ~~maximum~~U.S. ~~number~~Patent and Trademark Office (“PTO”) issued U.S. Patent No. 7,601,858, titled “Method of ~~shares~~Processing ~~that~~Ethanol ~~Factor~~Byproducts ~~Fund~~and ~~can~~Related ~~hold~~Subsystems” ~~upon~~(the ~~conversion~~‘858 Patent) to GS CleanTech Corporation, a wholly-owned subsidiary of GreenShift Corporation. On October 27, 2009, the ~~A&R~~PTO ~~Debentures~~issued ~~from~~U.S. 4Patent No.~~99%~~ 7,608,729, titled “Method of Freeing the ~~outstanding~~Bound Oil Present in Whole Stillage and Thin Stillage” (the ‘729 Patent) to 9GS CleanTech.~~99%~~ Both the ‘858 Patent and the ‘729 Patent relate to GreenShift’s corn oil extraction technologies. ●GS ~~changed~~CleanTech Corporation, our wholly-owned subsidiary, subsequently filed legal actions in multiple jurisdictions alleging infringement by various persons and entities. Multiple additional related suits and countersuits were filed. On May 6, 2010, we submitted a “Motion to Transfer Pursuant to 28 U.S.C. § 1407 for Consolidated Pretrial Proceedings” to the ~~period~~United ~~over~~States ~~which~~Judicial Panel on Multidistrict Litigation (the ~~conversion~~“Panel”) ~~price~~located ~~will~~in beWashington, ~~measured~~D.C. ~~from~~In this motion, we moved the 30Panel ~~trading~~to ~~days~~transfer ~~preceding~~and ~~conversion~~consolidate all pending suits involving infringement of our patents to ~~the~~one 60federal ~~trading~~court ~~days~~for ~~preceding~~orderly ~~conversion~~and efficient review of all pre-trial matters. ●On ~~eliminated~~August 6, 2010, the ~~restriction~~Panel onordered the ~~number~~consolidation and transfer of ~~shares~~all pending suits in the U.S. District Court, Southern District of ~~common~~Indiana ~~stock~~for pretrial proceedings (the “MDL Case”). In October 2014, the District Court in Indiana ruled in favor of the defendants in our pending patent infringement matter on their motions for summary judgment alleging that our ~~Factor~~corn ~~Fund~~oil ~~can~~extraction ~~sell~~patents were invalid, including US Pat. Nos. 7,601,858 and 8,168,037. The summary judgment ruling was not final and there are additional issues in the MDL Case that can be expected to be resolved this year. We disagree with the court’s ruling and intend to mount a ~~month~~vigorous appeal at the appropriate time.

On August 20, 2014, the Company issued an 8% convertible promissory note in the aggregate principal amount of $20,500 to an accredited investor. The note has a maturity date of May 15, 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 year ended December 31, 2014, the Company recorded an interest expense of $606. The Company accounted for the conversion feature as a derivative valued at $31,689, of which $20,500 was recorded as a debt discount to be amortized over the life of the note. The remaining $11,189 was expensed immediately to interest expense. The balance of the note as of December 31, 2014 is $20,500 with accrued interest of $606.48

~~NOTE~~OTHER ~~10 – DERIVATIVE LIABILITY~~MATTERS

~~Effective~~GreenShift ~~July~~is ~~31,~~party ~~2009,~~to ~~the~~an ~~Company~~action ~~adopted~~entitled ~~ASC~~Max ~~815~~v. ~~which~~GS ~~defines~~AgriFuels ~~determining~~Corp., ~~whether~~et anal. ~~instrument~~in ~~(or~~the ~~embedded~~Supreme ~~feature)~~Court, isNew ~~solely~~York ~~indexed~~County, in which the plaintiffs toare anasserting ~~entity’s~~claims ~~own~~to ~~stock.~~money ~~The~~damages ~~conversion~~against ~~price~~GreenShift ofand ~~our~~other ~~outstanding~~defendants, ~~convertible~~arising ~~notes~~from ~~are~~a ~~subject~~series toof ~~“reset”~~Share ~~provisions~~Purchase Agreements indated ~~the~~March ~~event~~6, ~~the~~2007, ~~Company~~under ~~subsequently~~which ~~issues~~the ~~common~~individual ~~stock,~~plaintiffs ~~stock~~sold ~~warrants,~~their ~~stock~~shares ~~options~~in orSustainable ~~convertible~~Systems, ~~debt~~Inc., ~~with~~to aGS ~~stock~~AgriFuels ~~price~~Corporation, ~~exercise~~a ~~price~~former orsubsidiary ~~conversion~~of ~~price~~GreenShift. ~~lower~~In ~~than~~their ~~conversion~~Amended ~~price~~Complaint, ofplaintiffs ~~these~~asserted ~~notes.~~claims Iffor ~~these~~breach ~~provisions~~of ~~are triggered~~contract, ~~the~~fraud ~~conversion~~and negligent ~~price~~misrepresentation, ofand sought money damages in the ~~note~~amount ~~will~~of be$6 ~~reduced~~million. AsOn aMarch ~~result~~19, 2013, the ~~Company~~Court ~~has~~granted ~~determined~~in ~~that~~part the ~~conversion~~defendants’ motion ~~feature~~to isdismiss ~~not~~the ~~considered~~Amended toComplaint, beand dismissed all but the breach of contract claims asserted against GreenShift and certain ~~solely~~other ~~indexed~~corporate defendants. On April 1, 2015, GreenShift entered into a settlement agreement pursuant to which the ~~Company’~~plaintiff s are ~~own~~to ~~stock~~receive $25,000 in cash and isa ~~therefore~~convertible ~~not~~debenture ~~afforded~~in ~~equity~~the ~~treatment~~amount of $300,000. In ~~accordance~~the ~~with~~event ~~ASC~~that ~~815~~the plaintiffs have not converted the debenture in full at the expiration of three years, the plaintiffs may request the remaining amount be paid in full ~~Company~~at ~~has~~that ~~bifurcated~~time. While the ~~conversion~~settlement ~~feature~~agreement has not yet been implemented by the payment of the ~~note~~specified cash and ~~recorded~~the aissuance of ~~derivative~~the ~~liability~~specified debenture, the action has been marked “disposed” by the court.

~~F-14~~On September 10, 2012, Long Side Ventures commenced an action entitled Long Side Ventures and Sunny Isles Ventures, LLC, LLC v. GreenShift et. al., in the United States District Court for the Southern District of New York, alleging breach of contract and other causes of action for which the plaintiff seeks damages of about $250,000 plus costs. On February 24, 2015, GreenShift entered into a settlement agreement pursuant to which the plaintiff is to receive $150,000 in cash and securities in the amount of $250,000. GreenShift accrued the entire $400,000 judgment on its books as of the year ended December 31, 2014. During the six months ended June 30, 2014, GreenShift issued a debenture to Long Side Ventures in the amount of $250,000 (see Note 9, Debt Obligations, above). GreenShift has already paid the $150,000 due in cash under the settlement agreement. Nevertheless, there is a current dispute with the plaintiffs as to whether GreenShift and the other defendants have performed their obligations under the settlement agreement, and whether the plaintiffs have the right to declare a default under the settlement agreement. GreenShift has taken the position that it has fully performed and intends to vigorously contest any alleged default. Upon the performance of the terms of the Settlement Agreement, the Action will be dismissed against GreenShift and the other defendants.

~~ASC~~On ~~815~~October ~~requires~~10, ~~Company~~2013, ~~management~~Golden toTechnology ~~assess~~Management, LLC, and other plaintiffs commenced an action entitled Golden Technology Management, LLC, et al. v. NextGen Acquisition, Inc. et al. in the ~~fair~~Supreme ~~market~~Court ~~value~~of the State of ~~certain~~New ~~derivatives~~York, atCounty ~~each~~of ~~reporting~~New ~~period~~York, alleging breach of contract and ~~recognize~~other causes of action against GreenShift in connection with the acquisition of NextGen Fuel, Inc. by a former ~~any~~subsidiary. ~~change~~Plaintiffs seek damages in excess of $5,200,000 plus prejudgment interest and costs. On December 22, 2014, the ~~fair~~court granted ~~market~~summary ~~value~~judgment as ~~another~~to ~~income~~the orformer ~~expense~~subsidiary’s ~~item~~liability for payment of the sum of $3.2 million, plus prejudgment interest and costs. The ~~Company~~plaintiffs’s ~~only~~have ~~asset~~asserted ora claim for alter ego liability ~~measured~~for ~~at fair~~that ~~value~~amount onagainst aGreenShift ~~recurring~~and the ~~basis~~other defendants. The litigation is ~~its~~proceeding ~~derivative~~and ~~liability~~GreenShift ~~associated~~intends ~~with~~to ~~convertible~~vigorously ~~notes~~defend ~~payable~~this action. At this stage of the proceedings, we cannot evaluate the likelihood of an unfavorable outcome in excess of the amounts previously accrued.

AtGreenShift ~~origination,~~is ~~the~~also ~~Company~~involved ~~valued~~in ~~the~~various ~~conversion~~collection ~~features~~matters ~~using~~for ~~the~~which ~~following~~vendors ~~assumptions:~~are ~~dividend~~seeking ~~yield~~payment offor ~~zero,~~services ~~years~~rendered ~~to maturity of between 1.00~~ and ~~2.02~~goods ~~years, risk free rates of between 0~~provided.18 GreenShift and ~~0.27~~its ~~percent,~~subsidiaries ~~and~~are ~~annualized~~party ~~volatility~~to ofnumerous ~~between~~matters ~~149%~~pertaining ~~and 172%.~~to Atoutstanding ~~December~~amounts ~~31,~~alleged ~~2014, the Company revalued the conversion features using the following assumptions: dividend yield of zero, years~~ to ~~maturity~~be ~~of between 0~~due.11 ~~and 1.93 years, risk free rates of 0.25 percent, and annualized volatility of between 256 and~~Management ~~368~~is ~~percent~~unable ~~and~~to ~~determined~~characterize ~~that,~~or ~~during~~evaluate the ~~year~~probability ~~ended~~of ~~December~~any ~~31,~~outcome ~~2014,~~at ~~the Company’s derivative liability increased by $2,044,298 to $3,212,200. The Company recognized a corresponding loss on derivative liability in conjunction with~~ this ~~revaluation~~time.

~~NOTE 11 – COMMITMENTS AND CONTINGENCIES~~49

~~Since~~Under ~~May~~GreenShift’s ~~15,~~insurance ~~2014~~programs, ~~E-motion~~coverage ~~leases~~is ~~its~~obtained ~~office~~for ~~space~~catastrophic onexposures, aas ~~month-to-month~~well ~~basis~~as atthose arisks ~~fixed~~required ~~rate~~to ~~of $1,750 per month. Lexi Luu leases~~be ~~its~~insured ~~office~~by ~~space~~law ~~since~~or ~~June~~contract. ~~15,~~There ~~2014,~~is at a ~~rate of~~ $2,~~099~~500 deductible per ~~month,~~occurrence ~~with~~for anenvironmental ~~increase~~impairments. toEnvironmental ~~$2,162~~liability insurance ~~per~~is ~~month~~carried ~~starting~~with ~~September~~policy ~~1, 2015,~~limits ~~and~~of to $~~2,227 starting September~~ 1,000,000 ~~2016.~~per ~~The~~occurrence ~~agreement~~and ~~provides for~~ $~~0 rent payment for the months of June 2014~~2, ~~and July and August 2015. Expiration date of the lease agreement is September 14~~000,000 ~~2017~~aggregate.

~~NOTE~~GreenShift 12is –party ~~NOTES~~to ~~PAYABLE~~an employment agreement with Kevin Kreisler, GreenShift’s Chairman and Chief Executive Officer, which agreement includes terms for reimbursement of expenses, periodic bonuses, four weeks’ vacation and participation in any employee benefits provided to all employees of GreenShift Corporation.

OnGreenShift’s ~~November~~Articles 18of Incorporation provide that GreenShift shall indemnify its officers, ~~2013~~directors, employees and agents to the ~~Company~~full ~~entered~~extent permitted ~~into~~by aDelaware ~~Distribution~~law. ~~Agreement~~GreenShift’s ~~with~~Bylaws ~~E-motion~~include ~~Apparel,~~provisions ~~Inc.~~to ~~The~~indemnify ~~agreement~~its ~~provides~~officers ~~that~~and ~~the~~directors and other persons ~~Company~~against ~~will~~expenses ~~issue~~(including aattorney’s ~~promissory~~fees, ~~note~~judgments, tofines ~~E-motion~~and amounts paid for settlement) incurred in anconnection ~~amount~~with actions ~~equal~~or toproceedings ~~100%~~brought ofagainst ~~the~~them ~~License~~by ~~Fee~~reason of ~~$300~~their serving or having served as officers,~~000.~~ ~~The~~directors ~~Promissory~~or ~~Note~~in other capacities. ~~shall~~GreenShift does not, however, indemnify them in actions in which it is determined that they have anot ~~maturity~~acted ~~date~~in ofgood ~~December~~faith ~~31,~~or ~~2016~~have acted unlawfully. GreenShift is further subject to various indemnification agreements with various parties pursuant to which GreenShift has agreed to indemnify and behold ~~payable~~such inparties 4harmless ~~installments~~from ofand ~~$75,000~~against onexpenses ~~December~~and ~~31,~~costs ~~2014,~~incurred ~~December~~(including ~~31,~~attorney’s ~~2015~~fees, ~~December 31~~judgments, ~~2105~~fines and ~~December~~amounts ~~31,~~paid ~~2016.~~for ~~The~~settlement) ~~Promissory~~in ~~Note~~connection ~~shall~~with ~~bear~~the noprovision ~~interest~~by ~~and~~such beparties ~~unsecured~~of certain financial accommodations to GreenShift. AsSuch ofparties ~~July~~indemnified 18by GreenShift include FLUX Carbon Corporation, ~~2014~~EXO Opportunity Fund LLC, ~~the~~Minority ~~note~~Interest ~~was~~Fund ~~cancelled~~(II) LLC, Acutus Capital LLC, and ~~replaced~~various ~~with~~family ~~the~~members ~~merger~~of ~~agreement~~GreenShift’s chairman that have provided GreenShift with cash investments.

~~From~~Prior ~~February~~to December 31, 2015, Viridis was subject to ~~April~~guaranty ~~2014~~and pledge agreements in favor of YA Global, ~~the~~pursuant ~~Company~~to ~~entered~~which ~~into~~Viridis apledged its ~~marketing~~equity ~~agreement~~in GreenShift and other assets to secure GreenShift ‘s payment obligations under its prior agreements with ~~Echo~~YA Global. ~~Factory~~To cure various defaults of GreenShift’s debt to YA Global in 2007, ~~Inc~~2009 and 2010, YA Global liquidated about $1.8 million ~~The~~of ~~agreement~~stock ~~provides~~owned ~~that~~by Viridis, the proceeds of which were applied by YA Global to the reduction of amounts due from GreenShift. ~~Company~~In ~~will~~addition, ~~issue~~as ~~three~~a ~~promissory~~further ~~notes~~requirement of YA Global to ~~Echo~~cure ~~Factory~~debt defaults in 2007 and 2008, an ~~amount~~affiliate ~~equal~~of Viridis agreed to eliminate about $72.2 million in debt and exchange another $800,~~500~~000 in debt for ~~service~~restricted ~~provided~~common onshares; ~~February~~which ~~14,~~shares ~~March~~were subject to restrictions 14on ~~and~~transfer ~~April~~required ~~14,~~by ~~2014~~YA Global. ~~The~~Each ~~Promissory~~of ~~Note~~the ~~shall~~foregoing ~~have~~transactions 12triggered ~~month~~tax ~~term~~consequences and ~~bear~~GreenShift’s 8%associated agreements ~~interest~~to ~~and~~indemnify. beDuring ~~unsecured.~~the Asyear ofended December 31, ~~2014~~ 2015, ~~the~~GreenShift ~~Company~~incurred ~~had~~a ~~principal~~total ~~outstanding~~of about $1 million in ~~the~~other ~~promissory~~expenses related ~~note~~to indemnification expenses in satisfaction of ~~$22~~its obligations under relevant agreements,~~500,~~ ~~and~~which ~~accrued~~is ~~interest~~disclosed in Other Expenses within the accompanying Statement of ~~$1,405~~Operations.

~~During 2012,~~NOTE ~~the~~11 ~~Company~~GUARANTY borrowed $55,000 through an unsecured promissory note bearing interest at 10% with a maturity 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 December 31, 2014, the Company had principal outstanding in the promissory note of $90,152, and accrued interest of $20,794.AGREEMENT

On ~~June~~December 431, ~~2012~~2015, Bitzio, ~~Inc. and ACT~~ entered into a ~~share~~$2.9 ~~purchase~~million ~~agreement~~loan ~~wherein~~transaction ~~Bitzio~~with ~~acquired~~TCA ~~all~~Global ofCredit ~~the~~Master ~~issued~~Fund, ~~and~~LP ~~outstanding~~(“TCA”), ~~member’s~~pursuant ~~equity~~to inwhich ~~exchange~~Bitzio drew $2.5 million for ~~3,300,000~~use ~~Series~~in Aits ~~Convertible~~acquisition ~~Redeemable~~of ~~Preferred~~100,000 shares of ~~the~~GreenShift’s ~~Company.~~Series OnG ~~February~~Preferred Stock 22(see Note 5, ~~2013~~ Shareholders’ Equity, ~~the~~above). ~~two~~The ~~parties~~TCA ~~agreed~~loan was made pursuant to ~~unwind~~a ~~the~~Senior ~~transaction~~Secured byRevolving ~~Bitzio~~Credit Facility ~~returning~~Agreement (the ~~ACT~~“Credit ~~shares~~Agreement”), ~~acquired~~under ~~and~~which ~~ACT~~TCA ~~returning~~may ~~the~~lend to Bitzio ~~preferred~~ ~~share~~up ~~consideration~~to ~~for~~$5.0 ~~cancellation~~million. InGreenShift ~~addition~~and each of its subsidiaries, ~~Bitzio~~as ~~agreed~~well toas ~~pay~~each anof ~~aggregate~~the other subsidiaries of ~~147~~Bitzio,~~000~~ ~~Euros~~has ~~($194,447~~executed ~~USD)~~a Guaranty Agreement in favor of TCA toon ~~ACT~~December 31, 2015. ~~The~~FCC, ~~Company~~GreenShift, ~~re-measured~~and ~~the~~each ~~amount~~of ~~due~~its insubsidiaries, ~~U.S.~~as ~~dollars~~well as each of the other subsidiaries of Bitzio, has executed a Guaranty Agreement dated December 31, ~~2014~~2015, ~~and~~in ~~recorded~~favor aof ~~gain~~TCA, onpursuant ~~foreign~~to ~~currency~~which GreenShift and its subsidiaries guaranteed ~~transaction~~payment of ~~$24,476~~all amounts due to TCA under the Credit Agreement. ~~The~~By ~~amount~~separate ~~due~~agreements, asGreenShift and each subsidiary pledged all of ~~December~~its ~~31,~~assets ~~2014~~to issecure ~~$177,885~~the guaranty to TCA.

~~On January~~NOTE ~~29,~~12 ~~2014~~SEGMENT the Company sold a Promissory Note to The Victor Vinco Family Trust (the “Trust”). The purchase price was $70,000. The principal amount of the Note is $94,500, which is payable in installments of $18,900 on the 15th day of each month during the term of the Note. The Note does not bear interest, except in the event of a default, at which time interest shall accrue at 18% per annum. As of December 31, 2014, the note and accrued interest was fully repaid.INFORMATION

OnWe ~~July~~determined 1,our ~~2013,~~reporting ~~Lexi-Luu~~units ~~borrowed~~in ~~$10~~accordance with ASC 280,~~000~~ ~~through~~“Segment anReporting” ~~unsecured~~(“ASC ~~promissory~~280”). ~~note~~We evaluate ~~bearing~~a ~~interest~~reporting ~~$1,076~~unit ~~maturity~~by ~~date~~first ofidentifying ~~January 1,~~its ~~2014~~operating segments under ASC 280. ~~This~~We ~~note~~then isevaluate ~~currently~~each atoperating ~~default,~~segment ~~and~~to determine ~~bearing~~if ~~45%~~it ~~interest~~includes one or more components that constitute a business. AsIf there are components within an operating segment that meet the definition of ~~December~~a 31business, ~~2014~~we evaluate those components to determine if they must be aggregated into one or more reporting units. If applicable, ~~the~~when ~~Company~~determining ~~had~~if ~~principal~~it ~~outstanding~~is appropriate to aggregate different operating segments, we determine inif the ~~promissory~~segments ~~note~~are ofeconomically ~~$5222,~~similar and, ~~accrued~~if ~~interest~~so, ofthe ~~$1822~~operating segments are aggregated.

~~NOTE 13 – PREFERRED STOCK~~50

The Company’s isoperations ~~authorized~~during tothe ~~issue~~fiscal ~~25,000,000~~year ~~shares~~ended ofDecember ~~preferred stock~~31, of2015 ~~which~~are ~~2,500,000~~classified ~~shares~~into ~~are~~two ~~designated~~reportable asbusiness ~~Series~~segments: Lifestyle Aand ~~Convertible Redeemable~~Agriculture. ~~Preferred~~Each ~~Stock,~~of ~~1,000,000~~these ~~shares~~segments ~~are~~is ~~designated~~organized asbased ~~Series~~upon Bthe ~~Convertible~~nature ~~Preferred~~of ~~Stock,~~products and ~~999~~services ~~shares~~offered. ~~are~~The ~~designated~~Company’s asoperations ~~Series~~during Cthe ~~Preferred~~fiscal ~~Stock~~year ended December 31, ~~par~~2014 ~~value~~are comprised solely of $0Lifestyle.~~001.~~ Summarized financial information about each segment is provided below:

F-15

	Corporate			Lifestyle			Agriculture			Total
Year Ended December 31, 2015

Total Assets	$	5,025,157		$	210,841		$	5,635,372		$	10,871,370

Revenue	$	—		$	402,818		$	9,466,988		$	9,869,806
Costs of sales		—			325,191			3,177,314			3,502,505
Depreciation/amortization expense		386,823			—			3,202			390,025
Operating expenses - other		2,488,255			310,458			4,860,574			7,659,287

Gain on extinguishment of debt		13,309,542			—			8,505,635			21,815,177
Interest expense		(5,831,899	)		(10,158	)		—			(5,842,057	)
Change in fair value of derivatives		3,916,310			—			—			3,916,310
Equity loss from investee		—			—			(643,320	)		(643,320	)
Other expense		(1,031,095	)		—			—			(1,031,095	)
Income (loss) before taxes		7,487,780			(242,989	)		9,288,213			16,533,004
Taxes		(146,477	)		—			—			(146,477	)
Net income (loss)	$	7,341,303		$	(242,989	)	$	9,288,213		$	16,386,527

Preferred stock dividends		(244,504	)		—			—			(244,504	)

Year Ended December 31, 2014

Total Assets	$	660,681		$	238,448		$	—		$	899,129

Revenue	$	79,754		$	314,757		$	—		$	394,511
Costs of sales		31,375			177,954			—			209,329
Depreciation/amortization expense		209,085			—			—			209,085
Operating expenses - other		980,420			183,037			—			1,163,457

Change in fair value of derivatives		(2,044,298	)		—			—			(2,044,298	)
Interest expense		(791,681	)		—			—			(791,681	)
Gain (loss) on extinguishment of debt		(42,778	)		—			—			(42,778	)
Other income (expense)		24,476			—			—			24,476
Income (loss) before taxes		(3,995,407	)		(46,234	)		—			(4,041,641	)
Taxes		—			—			—			—
Net loss	$	(3,995,407	)	$	(46,234	)	$	—		$	(4,041,641	)

~~Series~~During Athe ~~Preferred~~year ~~Stock~~ended December 31, 2015, for our agriculture segment, one customer provided 56% of total revenue in the aggregate, totaling $5,528,739; during the year ended December 31, 2014, two customers each provided over 10% of our revenue and 30% of total revenue in the aggregate.

~~As of~~NOTE ~~December~~13 ~~31,~~MINORITY ~~2013~~SHAREHOLDER ~~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:~~OBLIGATION

●Under our ~~Series~~agriculture Asegment, ~~Convertible~~GreenShift ~~Redeemable~~accrued ~~Shares have no dividend rights. ● In the event of liquidation~~$158,284 ~~following~~as ~~the sale or disposition~~ of ~~all~~December ~~or substantially all of the Company’s assets~~31, 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 convertible2015, atin ~~the~~connection ~~option~~with ofamounts ~~the~~incurred ~~holder, at any time~~ prior to ~~January~~2005 by 2,an ~~2017,~~inactive ~~and upon payment of $0~~subsidiary.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~~51

~~On November~~NOTE ~~18,~~14 ~~2013~~SUPPLEMENTAL ~~the~~DISCLOSURE ~~Company~~OF ~~filed~~CASH ~~with~~FLOW 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:INFORMATION

● The following 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~~summary of ~~the~~supplemental ~~Registrant,~~disclosures ~~the holder~~ of ~~each~~cash ~~share~~flow ~~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.~~information:

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

	2015			2014
Cash paid during the year for the following:
Interest	$	—		$	—
Income taxes		—			—

Supplemental schedule of non-cash investing and financing activities:
Debentures converted into common stock		986,601			1,870,279
Debt discounts on convertible notes payable		4,620,000			463,000
Reduction in value of conversion features of convertible debt from conversions		30,963			—
Investment in joint venture via contribution of intellectual property		4,000,000			—
Forgiveness of affiliate receivable charged against paid-in capital		480,625			—
Acquisition of subsidiaries		—			1,761,345
Note payable paid by a third party		—			94,500
Other issue discount		—			90,000

Acquisition of Lexi Luu:
Cash acquired		—			170
Other assets acquired		—			778,533
Liabilities assumed		—			(358,703	)
Earn-out contingent liability		—			(120,000	)
3,000,000 common shares issued		—			(300,000	)

Acquisition of E-motion Apparel
Cash acquired		—			(497	)
Other assets acquired		—			245,092
Liabilities assumed		—			(196,595	)
Earn-out contingent liability		—			(48,000	)
		—			-

Acquisition of GreenShift and its subsidiaries:
Cash acquired		587,021			—
Other assets acquired		1,494,740			—
Liabilities assumed		(41,797,563	)		—
Excess of carrying value of consideration given, recorded against non-controlling interest, additional paid in capital and accumulated deficit		42,216,802			—
Total non-cash consideration (below)		(2,501,000	)

Note payable issued		2,500,000
Issuance of Series E Preferred Stock		200			—
Issuance of Series F Preferred Stock		800			—

Acquisition of Punkz Gear:
Cash acquired		16,526			—
Other assets acquired		8,276			—
Liabilities assumed		(740	)		—
Excess of carrying value of note payable issued over net assets received and recorded as additional paid in capital		(175,938	)		—
Note payable issued		(200,000	)		—

Acquisition of Skipjack:
Cash acquired		1,502			—
Other assets acquired		35,494			—
Liabilities assumed		(21,747	)		—
Excess of carrying value of note payable issued over net assets received and recorded as additional paid in capital		(84,751	)		—
Note payable issued		(100,000	)		—

~~On November~~NOTE ~~18,~~15 ~~2013~~RELATED ~~the~~PARTY 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.TRANSACTIONS

~~Designation~~On February 26, 2015, the Company entered into and ~~Sale~~closed under a securities purchase agreement to acquire 100% of ~~Series~~the Coutstanding shares ~~Preferred~~of ~~Stock~~Skipjack Dive and Dancewear, Inc., in exchange for a 2% subordinate secured term note in the aggregate principal amount of $100,000 owed to the individual who was the Company’s chief executive officer at that time. The note has a maturity date of December 31, 2015, and is convertible at the rate of $0.10 per share into 1,000,000 shares of common stock of the Company. As of December 31, 2015, the Company had principal outstanding in the note of $100,000. 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 the individual who was the Company’s chief executive officer at that time. The note has a maturity date of December 31, 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 December 31, 2015, the Company had principal outstanding in the note of $200,000.

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:52

●Minority Interest Fund (II), LLC (“MIF”) is party to certain convertible debentures issued by GreenShift (see Note 9, Debt Obligations, above). The ~~holder~~managing member of ~~each~~MIF ~~share~~is ~~will~~a ~~have~~relative of GreenShift’s chairman. On December 31, 2015, MIF and Acutus Capital LLC (“AC”) assigned their respective beneficial ownership interests in the ~~right~~Series D Shares to ~~cast~~EXO Opportunity Fund LLC (“EXO”) (see Note 5, Shareholders’ Equity, above). EXO, in turn, assigned the ~~number~~corresponding beneficial interests to Bitzio in exchange for 200,000 shares of ~~votes~~Bitzio ~~that~~Series ~~equals~~E Preferred Stock. On the ~~product~~same ~~obtained~~date, FLUX Carbon Corporation (“FCC”), an entity owned by ~~dividing~~Kevin Kreisler, GreenShift’s chairman, transferred its ownership interest in Viridis Capital LLC (a“Viridis”) ~~the~~to ~~number~~Bitzio. As a result of ~~votes~~the ~~that~~foregoing transactions, on December 31, 2015, Bitzio was the ~~holders~~beneficial owner of 862,500 Series D Shares, as well as AC’s 2011 contractual right to receive an additional 124,875 Series D Shares, all ~~voting~~of ~~securities~~which ~~other~~was ~~than~~exchanged for 700,000 shares of GreenShift’s Series CG Preferred Stock. ~~outstanding~~GreenShift onfiled a ~~the~~Certificate ~~record~~of ~~date~~Elimination for ~~the~~its ~~stockholder~~Series ~~action~~D ~~are~~Preferred ~~entitled~~Stock toafter ~~cast~~completing bythat ~~(b)~~transfer. ~~nine~~On ~~hundred~~December ~~ninety-eight~~31, 2015, Bitzio entered into a $2.9 million loan transaction with TCA Global Credit Master Fund, LP (~~998~~“TCA”), ~~with~~pursuant ~~the~~to ~~result~~which ~~that~~Bitzio ~~all~~drew $2.5 ~~999~~million for use in its acquisition of 100,000 shares of GreenShift’s Series CG Preferred Stock ~~together~~(see ~~will~~Note ~~have~~5, 50Shareholders’ Equity, above).1% ofFCC, ~~the~~GreenShift, ~~voting~~and ~~power~~each of ~~the~~its ~~Registrant.~~subsidiaries, ●as Inwell as each of the ~~event~~other subsidiaries of Bitzio, executed a ~~liquidation~~Guaranty Agreement in favor of ~~the~~TCA ~~Registrant~~on December 31, ~~the~~2015, ~~holder~~pursuant ofto ~~each~~which ~~share~~GreenShift ofand ~~Series~~its Bsubsidiaries ~~Preferred~~guaranteed ~~Stock~~payment of ~~will~~all beamounts ~~entitled~~due to aTCA ~~liquidation~~under ~~preference~~the ofCredit $Agreement (see Note 11, Guaranty Agreement, above).~~01.~~ ●As ~~The~~a ~~holder~~result ~~will~~of ~~not~~all ~~participate~~of inthe foregoing ~~any~~transactions, ~~dividend~~as ~~payable~~of toDecember 31, 2015, FCC was the ~~holders~~beneficial owner of 80% of Bitzio’s equity, and Bitzio was the ~~common~~beneficial ~~stock~~owner onof an80% ~~as-converted~~of ~~basis~~GreenShift’s equity. ●Bitzio Ondevelops ~~November~~and 29commercializes clean technologies that facilitate the more efficient use of natural resources, ~~2015~~and is focused on doing so primarily in three sectors: agriculture, ~~each~~energy ~~outstanding~~and ~~share~~lifestyle. Kevin ofKreisler, ~~Series~~GreenShift’s Cchairman ~~Preferred~~and ~~Stock~~chief ~~shall~~executive beofficer, ~~deemed~~was appointed to ~~have~~the ~~been~~posts ~~automatically~~of ~~redeemed~~chairman byand ~~the~~chief ~~Corporation.~~executive officer Noupon ~~redemption~~completion ~~price~~of ~~shall~~the beforegoing ~~payable~~transactions.

OnDuring the year ended December 331, ~~2013~~2015, GreenShift issued a $400,000 convertible debt to Cantrell Winsness Technologies, LLC (“CWT” and the ~~Board~~“CWT ofDebenture”) ~~Directors~~in ~~sold~~exchange ~~333~~for ~~shares~~all ofamounts ~~Series~~accrued Cunder the TAA and CWT’s interest in the Series F Preferred Stock. toCWT ~~each~~shall ofhave ~~Gordon~~the ~~McDougall~~right, ~~Marilu~~but ~~Brassington and~~not ~~Hubert~~the ~~Blanchette~~obligation, ~~for~~to aconvert ~~price~~any portion of the convertible debenture into GreenShift’s common stock at $0.01001 per share. The ~~three~~CWT ~~shareholders~~Debenture ~~were~~matures ~~the~~December ~~members~~31, 2018. CWT delivered a release in favor of ~~the~~GreenShift ~~Registrant’s~~in ~~Board~~respect of ~~Directors~~ atany and all amounts that ~~time.~~may ~~The~~have ~~Company~~been ~~valued~~due ~~the~~under ~~shares~~GreenShift’s atAmended ~~$99,~~and ~~but~~Restated ~~immediately~~Technology Acquisition ~~revalued~~Agreement ~~the~~with ~~shares~~CWT. toThe balance of the ~~amount~~CWT toDebenture bewas ~~paid~~$400,000 at ~~settlement~~ orDecember $031, 2015.

FDuring the year ended December 31, 2015, and further to GreenShift’s stated diversification plans, GreenShift invested in the development of technologies and businesses that are strategically-16relevant to GreenShift’s existing operations. GreenShift’s wholly-owned subsidiary, GS CleanTech Corporation, is the owner of 100% of the issued and outstanding membership units of Genarex LLC (“GX”), an entity that in turn holds 36.75% of the issued and outstanding membership units of Genarex FD LLC (“LLC”). LLC was formed in 2015 for the purpose of continuing the development and commercialization of an intellectual property portfolio involving production of carbon-neutral alternatives for fossil fuel derived products (“Bioproducts Portfolio”), which had previously been developed by GX in concert with various third parties. Under the associated agreements, an unaffiliated member of LLC has agreed to provide LLC up to $3 million to fund the continuing development of the Bioproducts Portfolio. As of December 31, 2015, GreenShift extended and had about $72,000 in receivables due from GFD, which amount has since been paid.

~~Designation~~During 2015, GreenShift loaned about $30,000 to Plaid Canary Corporation (“PCC”), for use in the development of agricultural technology; about $90,000 to FLUX Carbon Mitigation Fund LLC (“FCMF”), for use in the development of energy technology and ~~Sale~~businesses; and about $92,000 to Bitzio, Inc. (“Bitzio”), for use in the development of ~~Series~~lifestyle Dtechnology ~~Preferred~~and businesses. ~~Stock~~GreenShift additionally incurred about $684,000 in research and development costs involving its efforts with PCC and agricultural technology. FLUX Carbon Corporation (“FCC”) is the beneficial owner of an 80% equity interest in Bitzio, and of the majority of the stock of the companies which own PCC and FCMF. FCC is owned by Kevin Kreisler, our chairman and chief executive officer.

OnAt ~~August~~December 531, 2014, ~~the~~$10,665 ~~Registrant~~was ~~filed~~due ~~with~~and ~~the~~payable ~~Nevada~~to ~~Secretary~~our ofthen ~~State~~current Chief Financial Officer as a ~~Certificate~~result of ~~Designation~~a ofshort-term 35demand loan he made to the Company. As well,~~750~~ ~~shares~~a total of ~~Series~~$123,000 was due to our former Chief Executive Officer related to earned fees Dduring ~~Preferred~~his ~~Stock~~tenure. During 2013, ~~which~~the ~~had~~Company ~~been~~borrowed ~~designated~~$150,000 byfrom ~~the~~related ~~Registrant’s~~party ~~Board~~through a convertible promissory note bearing interest at 10% with a maturity date of ~~Directors~~January as1, ~~authorized~~2014. byThe note contains a conversion feature wherein the ~~Registrant~~note may be converted to shares of the Company’s ~~Articles~~ common stock at the lower of ~~Incorporation~~$0.05 ~~The~~per ~~holders~~common share of ~~shares~~December of31, ~~Series~~2014, Dthe ~~Preferred~~Company ~~Stock~~had ~~will~~principal outstanding ~~have~~in the ~~following~~note ~~rights:~~of $150,000, and accrued interest of $15,001.

● 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 stock53

~~As of~~NOTE ~~December~~16 ~~31,~~INCOME ~~2014 no shares of Series D preferred stock have been issued.~~TAXES

~~NOTE~~Under 14the –lifestyle ~~COMMON~~segment, ~~STOCK~~the Company provides for income taxes under ASC 740, Accounting for Income Taxes. ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. The Company’s predecessor operated as entity exempt from Federal and State income taxes.

OnASC ~~January~~740 ~~13,~~requires ~~2014~~ the ~~Company~~reduction ~~filed~~of ~~with~~deferred ~~the~~tax ~~Nevada~~assets ~~Secretary~~by ~~of State~~ a ~~Certificate~~valuation ofallowance ~~Amendment~~if, tobased ~~Articles~~on ~~of Incorporation. The Certificate of Amendment increased~~ the ~~number~~weight of ~~authorized~~available ~~shares of common stock from 250 million to 2 billion. On September 12~~evidence, ~~2014~~it ~~the Company filed with the Nevada Secretary of State a Certificate of Amendment to Articles of Incorporation. The Certificate~~is ofmore ~~Amendment~~likely ~~increased~~than ~~the~~not ~~number~~that ofsome ~~authorized~~or ~~shares~~all of ~~common stock from 2 billion to 4.2 billion. There were 2,948,694,586 shares issued and outstanding as of December 31, 2014. The activity surrounding~~ the ~~issuances~~deferred oftax ~~the~~assets ~~Common~~will ~~Stock~~not isbe ~~as follows:~~realized.

~~During~~Due to the ~~year~~change ~~ended~~in ~~December~~ownership ~~31,~~provisions ~~2014~~of the ~~Company~~ ~~issued~~Tax ~~1,870,277,969~~Reform ~~shares~~Act inof ~~conversion~~1986, ofnet ~~notes~~operating ~~payable~~loss carry forwards of approximately $~~912,132,~~51.5 million ~~2,500,000~~for ~~shares~~federal ~~for~~income ~~cash~~tax ofreporting ~~$2,500,~~purposes 50are subject to annual limitations. When a change in ownership occurs,~~000,000~~ net operating ~~shares~~loss ofcarry ~~its~~forwards ~~common~~may ~~stock~~be limited as to ~~Angie~~use ~~Daza~~in ~~under~~future ~~the~~years. ~~MOU~~Due ~~(see~~to ~~Note~~net ~~1),~~operating ~~and~~loss ~~850~~carryforwards,~~000,000~~ ~~shares~~income oftax ~~its~~returns ~~common~~remain subject ~~stock~~to ~~pursuant~~examination toby ~~the Share~~federal ~~Exchange~~and ~~Agreements~~most ~~(see~~state ~~Note~~tax 6)authorities.

~~During~~The ~~the~~tax ~~year~~loss ~~ended~~carry-forwards ~~December~~are ~~31,~~available ~~2013~~to offset future taxable income with the ~~Company~~federal ~~issued~~and ~~105,992,647~~state ~~shares~~carry-forwards ofbeginning ~~common~~to ~~stock~~expire in of2023. ~~that~~The ~~5,164,621~~Company ~~shares~~has ~~were~~evaluated ~~issued~~its ~~as payment~~tax positions for ~~accounts~~years ~~payables~~which atremain ansubject ~~average~~to ~~price~~examination ofby ~~$0.08~~major ~~per~~tax ~~share~~jurisdictions, in ~~5,124,498~~accordance ~~shares~~with ~~were~~the ~~issued~~requirements atof anASC ~~average~~740 ~~price~~and ofas $0a result concluded no adjustment was necessary.~~07 per~~ ~~share~~The asCompany ~~payment~~files ~~for~~income tax ~~services~~returns ~~valued~~in atthe ~~$370~~U.~~531~~S. federal jurisdiction, and ~~subscriptions~~various ~~payable~~state ofjurisdictions. ~~$71~~For 2015,~~431,~~ ~~and~~the 95Company’s subsidiary,~~703,528~~ ~~shares~~GreenShift does ~~were~~not ~~issued~~plan ~~in conversion~~on ofmaking ~~notes~~the ~~payable~~election ofto ~~$138~~be included in Bitzio’s consolidated tax returns,~~270~~ thus it is presented below as a separate taxpaying component. AsThe Company’s evaluation of uncertain tax positions was performed for the tax years ended December 31, ~~2014~~2011 and forward, wethe ~~had~~tax ~~$120,438~~years ofwhich ~~common~~remain ~~stock~~subject to beexamination ~~issued~~by major tax jurisdictions as of December 31, 2015. There were no unrecognized tax benefits. Interest and ~~subscription~~penalties related to uncertain tax positions will be recognized in ~~payable~~income tax expense. As of ~~$181~~December 31,~~074~~ 2015, no interest related to uncertain tax positions had been accrued.

~~NOTE~~The 15provision –for ~~STOCK~~income ~~OPTIONS~~taxes ~~AND~~for ~~WARRANTS~~the years ended December 31, 2015 and December 31, 2014 consisted of the following:

The following table summarizes all stock option and warrant activity for the year ended December 31, 2014 and 2013:

	2015		2014
Current provision:
Federal	$	143,957	$	—
State		2,520		—
Total current provision		146,477		—

Deferred provision (benefit) for tax:
Federal		—		—
State		—		—
Total deferred provision (benefit) for tax		—		—

Total provision for tax	$	146,477	$	—

	Number of Warrants			Weighted Average Exercise Price
Balance outstanding, December 31, 2012		24,361,948		$	0.34
Granted		-			-
Exercised		-			-
Expired		(1,800,000	)		0.50
Balance outstanding, December 31, 2013		22,561,948		$	0.33
Exercisable, December 31, 2013		22,561,948		$	0.33
Balance outstanding, December 31, 2013		22,561,948		$	0.33
Granted		-			-
Exercised		-			-
Expired		(7,973,332	)		-
Balance outstanding, December 31, 2014		14,588,616		$	0.35
Exercisable, December 31, 2014		14,588,616		$	0.35

The Company has more than one taxpaying component which is composed of GreenShift and all the other consolidated entities (“Bitzio”) that reflect the tax provision on a separate return basis. The provision for income taxes differs from the amounts which would be provided by applying the statutory federal income tax rate of 34% to the net loss before provision for income taxes for the following reasons:

The following table discloses information regarding outstanding and exercisable options and warrants at December 31, 2014:

	Bitzio 12/31/15			GreenShift 12/31/15			Total 12/31/15

Book income (loss) before income taxes	$	206,636		$	5,424,623		$	5,631,259
Stock options issued for services		113,560			—			113,560
Interest expense on convertible notes		205,090			345,545			550,635
Interest related to conversion features		—			1,435,664			1,435,664
Amortization of Goodwill		(125,274	)		—			(125,274	)
Change in derivative liability		(977,784	)		(353,762	)		(1,331,546	)
Investee loss		—			218,729			218,729
Utilization of net operating loss carryforwards		—			(2,626,962	)		(2,626,962	)
Gain on extinguishment of debt		—			(4,146,945	)		(4,146,945	)
Other		—			(150,415	)		(150,415	)
Change in valuation allowance		577,772			—			577,772
Income tax expense		—			146,477			146,477

	Outstanding						Exercisable
Range of Exercise Prices	Number of Option Shares		Weighted Average Exercise Price		Remaining Weighted Average Contractual Term (Years)		Number of Option Shares		Weighted Average Exercise Price
$0.20 - $0.29		2,000,000		0.20		1.92		2,000,000		0.20
$0.30 - $0.39		11,774,616		0.37		1.72		11,774,616		0.37
$0.40 - $0.49		814,000		0.40		0.25		814,000		0.40
		14,588,616		0.51		1.66		14,588,616		0.51

F-17

	Bitzio 12/31/14
Book income (loss) from operations		(1,373,641	)
Interest expense on convertible notes		184,198
Amortization of Goodwill		(125,274	)
Change in derivative liability		695,061
Change in valuation allowance		619,656
Income tax expense		—

~~NOTE~~In 16assessing –whether ~~FAIR~~the ~~VALUE~~deferred ~~MEASUREMENTS~~tax assets are realizable, Management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible. Management believes it is more likely than not that the Company will not realize the benefits of these deductible differences. The amount of the deferred tax asset considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carry forward period are reduced.

~~Our~~Net ~~financial~~deferred tax assets ~~and~~consist ~~(liabilities)~~of ~~carried~~the atfollowing ~~fair~~components ~~value measured on a recurring basis~~ as of ~~December 31, 2014 and December 31, 2013, consisted of the following~~:

				Fair Value Measurements Using
	Bitzio 12/31/15			GreenShift 12/31/15				Total 12/31/15
	Total Fair			Quoted prices in			Significant other			Significant
Net operating loss carry forwards (expire through 2035)	$	6,413,913		$	11,088,465			$	17,502,378
	Value at			active markets			observable inputs			Unobservable inputs
Stock/options issued for services		534,877			—				534,877
Description	December 31, 2014			(Level 1)			(Level 2)			(Level 3)
Allowance for doubtful accounts		—			41,000				(41,000	)
Derivative liability (1)	$	(3,212,200	)	$	—		$	(3,212,200)		$	—
Total gross deferred tax asset/liabilities		6,948,790			11,047,465				17,996,255
Valuation allowance		(6,948,790	)		(11,047,465	)			(17,996,255	)
Net deferred taxes		—			—				—

				Fair Value Measurements Using
	Bitzio 12/31/14
	Total Fair			Quoted prices in		Significant other		Significant
Net operating loss carry forwards (expire through 2034)		5,836,142
	Value at			active markets		observable inputs		Unobservable inputs
Stock/options issued for services		421,317
Description	December 31, 2013			(Level 1)		(Level 2)		(Level 3)
Total gross deferred tax asset/liabilities		6,257,459
Derivative liability (1)	$	(827,158	)	$	—	$	(827,158)	$	—
Valuation allowance		(6,257,459	)
Net deferred taxes		—

~~(1) The~~NOTE ~~derivative~~17 ~~is calculated using the Black Scholes Pricing Model~~ACQUISITIONS

~~NOTE~~On 17July –16, ~~CONCENTRATION~~2014, OFwe ~~RISK~~entered into a sales purchase agreement to acquire 100% of the outstanding shares of Lexi Luu Designs, Inc. (“LL”). Bitzio paid 500,000,000 restricted common shares for this acquisition. 300,000,000 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 200,000,000 shares were recorded as compensation for the continuing employment for Mr. Blanchette and will be expensed over the service period of 20 months. The value of the shares will be amortized over the service period of approximately 20 months. LL shareholders are able to earn an additional $300,000 in restricted common shares over the course of three years in an earn-out upon hitting certain revenue benchmarks. The Company recorded an earn-out 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. As of December 31, 2015 and 2014, the revenue of LL was below the earn-out revenue benchmark, we wrote off $27,000 and $28,000 in contingent liability, respectively. Per ASC 805-10-050-4, if the acquirer is a public entity, if comparative financial statements are presented, the revenues and earnings of the combined entity for the current reporting period as though the acquisition date as of the beginning the annual reporting period.

We derived approximately 99% of our revenues from one customer in 2013. For the year ended December 31, 2014, we derived approximately 30% of our sales from contracts with two 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.55

~~NOTE~~The 18following –table ~~SUBSEQUENT~~summarizes ~~EVENTS~~our consolidated results of operations for the year ended December 31, 2014, as well as unaudited pro forma consolidated results of operations as though the Lexi Luu Designs and E-motion Apparel acquisitions had occurred on January 1, 2014:

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.

	As Reported 12/31/14			Pro Forma 12/31/14

Net sales	$	394,511		$	767,310
Net income (loss)		(1,187,360	)		(1,174,919	)
Earnings per common share:
Basic	$	(0.00	)	$	(0.00	)
Diluted	$	(0.00	)	$	(0.00	)

OnThe ~~March~~unaudited 3,pro ~~2015,~~forma ~~the~~information ~~Company~~set ~~entered~~forth ~~into~~above ~~and~~is ~~closed~~for ~~under~~informational apurposes ~~securities~~only. ~~purchase~~The ~~agreement~~pro toforma ~~acquire~~information ~~100%~~should ofnot ~~all~~be ~~outstanding shares~~considered indicative of ~~Punkz~~actual ~~Gear,~~results ~~Inc.,~~that inwould ~~exchange~~have ~~for~~been aachieved 2%if ~~subordinate secured term note in~~ the ~~aggregate~~Lexi ~~principal~~Luu ~~amount~~Designs ~~of $200,000. The note has a maturity date of September 30, 2015,~~ and isE-motion ~~convertible~~Apparel athad ~~the~~occurred ~~rate~~on ~~of $0.10 per share into 2~~January 1,~~000,000~~ ~~shares of common stock of the Company~~2014.

On ~~March~~July 518, ~~2015~~2014, ~~the~~we ~~Company~~ entered into a ~~securities~~sales purchase agreement to acquire 100% of ~~all~~the outstanding shares of ~~Koka~~E-motion ~~Creative~~Apparel, Inc. ~~Corporation~~(“EA”). ~~The~~Bitzio ~~Company~~paid ~~agreed~~350,000,000 torestricted ~~pay~~commons ~~800~~shares for this acquisition. All 350,000,000 shares ofwere ~~Series~~recorded as Fcompensation ~~preferred~~for ~~stock~~the ~~for~~continuing ~~this~~employment ~~acquisition~~for Ms. ~~The~~Brassington ~~terms~~and ofMs. ~~the~~Cunningham ~~agreement with~~and ~~Koka~~will ~~provide~~be ~~for~~expensed ~~(a)~~over the ~~completion~~service period of ~~two~~20 ~~equity~~months. ~~financings~~E-motion byApparel ~~the~~shareholders ~~Company,~~are able to earn an ~~initial~~additional $3300,000~~,000~~ ~~financing~~in ~~and~~restricted acommon ~~subsequent~~shares over the course ~~$6,000,000~~of ~~financing;~~years ~~(b)~~in ~~the~~an ~~spin~~earn-out ofupon ~~the~~hitting ~~Company’s~~certain ~~existing~~revenue ~~operations~~benchmarks. toThe ~~the~~ Company’s ~~shareholders;~~recorded ~~(c)~~an ~~the~~earn-out contingent liability of $48,000 ~~restructuring~~as part of the ~~Company’s~~acquisition. ~~outstanding~~We ~~debt~~accounted ~~and~~for ~~equity~~the totransaction ~~eliminate~~as a business combination. Of the ~~substantial~~purchase ~~majority~~price paid as of July 18, 2014 ($26,235) was allocated among the ~~Company’s debt~~assets and toliabilities ~~prepare~~and the ~~Company~~difference was assigned to ~~petition~~intangible ~~for~~assets. ~~up-listing;~~This License Agreement between Bitzio and ~~(d)~~E-motion ~~the~~Apparel ~~appointment~~was ofcancelled ~~Koka’s~~on ~~designees~~July to18, 2014 and was replaced with the ~~Company’s management~~sales ~~and~~purchase ~~board~~agreement. As of ~~directors.~~December ~~The~~31, ~~agreement~~2015 ~~provides~~and ~~for~~2014, as the ~~closing~~revenue of EA was below the ~~Koka~~earn-out ~~acquisition~~revenue ~~simultaneously~~benchmark, ~~with~~we ~~the~~wrote ~~completion~~off $33,000 and $6,000 ofin ~~the~~contingent ~~first~~liability, ~~financing~~respectively.

~~On April 9, 2015 the Company filed with the Nevada Secretary of State a Certificate of Amendment to Articles of Incorporation.~~ The ~~Certificate~~total ofpurchase ~~Amendment~~price ~~increased~~for the ~~number~~LL ofacquisition ~~authorized~~was ~~shares~~allocated ofas ~~common stock from 4.2 billion to 10 billion.~~follows:

F-18

Assets
Cash	$	170
Accounts receivable		794
Inventories		64,883
Property and equipment		2,724
Other assets		19,503
Intangible assets-Customer relationships		690,629

Liabilities
Accounts payable and accrued liabilities		(256,030	)
Due to shareholder		(15,673	)
Earn-out contingent liability		(87,000	)
Net assets acquired	$	420,000

~~ITEM~~The 9total –purchase ~~CHANGES~~price INfor ~~AND~~the ~~DISAGREEMENTS~~EA ~~WITH~~acquisition ~~ACCOUNTANTS~~was ONallocated ~~ACCOUNTING~~as ~~AND FINANCIAL DISCLOSURE~~follows:

Assets
Inventories	$	165,807
Other assets		5,050
Intangible assets-Customer relationships		74,235

Liabilities
Accounts payable and accrued liabilities		(197,092	)
Earn-out contingent liability		(48,000	)
Net assets acquired	$	-

The customer relationships are being amortized over their estimated useful lives of 2 years.

NOTE 18

RESTATEMENT

The Company has restated its results for the year ended December 31, 2014, and three months ended March 31, 2015, six months ended June 30, 2015 and nine months ended September 30, 2015 to correct erroneously capitalized share-based payments to our former CFO and CEO related to the business combination between Bitzio Inc., Lexi Luu Designs and E-motion Apparel (see Note 17, Acquisitions), and combine common stock to be issued in the amount of $120,438 into additional paid in capital. The table below summarizes the impact of the restatement described above on financial information previously reported on the Company’s Form 10-K for the period ended December 31, 2014:

	Original			Adjustments			As Restated

Balance Sheet for Year Ended 12/31/14:

Prepaid expense	$	560,631		$	(528,224	)	$	32,407
Total current assets		808,414			(528,224	)		280,190
Total assets		1,427,353			(528,224	)		899,129
Additional paid in capital		19,199,481			(407,786	)		18,791,695
Stock to be issued		120,438			(120,438	)		—
Total stockholders’ deficit, Bitzio		(4,573,479	)		(528,224	)		(5,101,683	)
Total stockholders’ deficit		(4,574,978	)		(528,224	)		(5,103,202	)
Total liabilities and stockholders’ deficit		1,427,353			(528,224	)		899,129

Statement of Stockholders’ Equity for Year Ended 12/31/14:

Additional Paid in Capital	$	19,199,481		$	(407,786	)	$	18,791,695
Stock to be issued		120,438			(120,438	)		—
Total stockholders’ equity		(4,574,978	)		(528,224	)		(5,103,202	)

NOTE 19

INVESTMENT IN JOINT VENTURE UNDER THE EQUITY METHOD

GreenShift’s wholly-owned subsidiary, GS CleanTech Corporation, is the owner of 100% of the issued and outstanding membership units of Genarex LLC (“GX”), an entity that in turn holds 36.75% of the issued and outstanding membership units of Genarex FD LLC (“LLC”). LLC was formed in 2015 for the purpose of continuing the development and commercialization of an intellectual property portfolio involving production of carbon-neutral alternatives for fossil fuel derived products (“Bioproducts Portfolio”), which had previously been developed by GX in concert with various third parties. ASC 810 requires GreenShift to evaluate non-consolidated entities periodically and as circumstances change to determine if an implied controlling interest exists. GreenShift has evaluated this equity investment and concluded that LLC is a variable interest entity and GreenShift is not the primary beneficiary. LLC’s fiscal year end is December 31. Under the associated agreements, an unaffiliated member of LLC has agreed to provide LLC up to $3 million to fund the continuing development of the Bioproducts Portfolio. As of December 31, 2015, $1,247,536 of that amount had been received. The members also assigned their respective interests in the Bioproducts Portfolio to LLC. GX’s contribution was valued at $4 million, however, the relevant agreements provide for GX to receive a preferential distribution until it receives approximately $3 million, at which point GX’s interest will decrease from 36.75% to 24.50%. GreenShift engaged two separate third party valuation firms, the first to complete a fairness opinion in respect of the foregoing, and the second to perform a valuation of GX’s interest in LLC using the fair value method as defined by FASB ASC 805-10-20. Under this method, fair value is defined as “the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date.” Using the income approach, the valuation company used the discounted cash flow method to develop low, mid and high cash projections for LLC’s potential business model by estimating the expected cash flows derived from production of LLC’s products on a commercial scale. As of December 31 2015, GreenShift had funded $971,175 towards operations and research and development of LLC, of which $898,817 has been reimbursed under the relevant joint venture agreements. The following presents unaudited summary financial information for LLC. Such summary financial information has been provided herein based upon the individual significance of this unconsolidated equity investment to the consolidated financial information of GreenShift. The investment balance carried on GreenShift’s balance sheet amounts to $3,360,355 as of December 31, 2015. GreenShift’s share of the net loss from LLC for the nine months ended December 31, 2015 was $643,320. The following table contains summarized financial data for LLC (unaudited):

	12/31/2015
Current assets	$	2,238
Intangible assets, net		3,619,048
Current liabilities		123,281
Members’ equity		3,009,900

	Year ended 12/31/2015
Net sales	$	—

Operating expenses		1,369,580
Amortization expense		380,952
Net (loss)		(1,750,532	)

NOTE 20

DEBT EXTINGUISHMENT

In February 2015, Factor Fund’s holdings in the Company were split between its two members, FLUX Carbon Starter Fund LLC (“FCSF”) and Five Nine Group LLC (“59G”). On February 26, 2015, Factor Fund assigned the balance due under the foregoing debenture in two equal $325,000 portions to its members, Five Nine Group LLC (“Five Nine”) and FLUX Carbon Starter Fund LLC (“FCSF”). On the same date, the Company additionally issued convertible debentures with a principal balance of $534,888 to Factor Fund in exchange for debentures issued to Factor Fund in prior periods. The issued amount was then assigned in two equal portions to Factor Fund’s members, Five Nine and FCSF. A total of $592,444 was due as of February 26, 2015, to each Five Nine and FCSF as a result of the foregoing transactions. Of the amount assigned to FCSF, $108,560 of principal plus $16,440 of interest was transferred to Long Side Ventures LLC (“LSV”). The Company accounted for the foregoing transfers as an extinguishment of debt and recorded a loss on extinguishment of $938,489. On December 31, 2015, 59G and FCSF entered into an agreement with the Company pursuant to which the Company securities held by 59G and FCSF were to be exchanged for two debentures in the amount of $250,000 and $255,000, respectively. Each debenture has a maturity date of December 31, 2018, and bears a 2% interest rate. Per ASC 470-50-40-10 the exchange of debt instruments between or a modification of a debt instrument by a debtor and a creditor in a non troubled debt situation is deemed to have been accomplished with debt instruments that are substantially different if the present value of the cash flows under the terms of the new debt instrument is at least 10 percent different from the present value of the remaining cash flows under the terms of the original instrument. The company found that the present value of the cash flows of the new debt instrument was at least 10% different from the present value of the remaining cash flows of the original instrument. Therefore, debt extinguishment accounting rules apply. Accordingly, the reissued convertible notes payable were initially recorded at fair value, with a gain on extinguishment of debt of $639,667 for the difference in the fair value of the new notes compared to the carrying value of the old notes.

Effective as of December 31, 2015, GreenShift entered into a series of agreements providing for contingent participation payments involving use of the Company’s extraction technologies. Collectively, these agreements resulted in an aggregate of $26,720,059 in debt extinguishment for amounts that had been due, payable and accrued as of December 31, 2015, as well as a reduction in the Company’s continuing costs of sales, legal expenses and interest expense moving forward. First, GreenShift and YA Global Investments, L.P. (“YA Global”) entered into an agreement pursuant to which GreenShift agreed to pay 15% of all payments received by GreenShift from any new licensees issued in connection with its intellectual properties, including any amounts awarded in the Company’s pending and future infringement matters, net of any legal fees and expenses incurred in obtaining the settlement or award (see Note 9, Debt Obligations, above). Next, Cantor Colburn LLP (“Cantor”) and GreenShift entered into an amended agreement pursuant to which Cantor agreed to accept 15% of any recoveries from GreenShift’s pending patent litigation in excess of $3.6 million per year in exchange for all services rendered to date and moving forward. GreenShift recognized an $8,433,388 gain on extinguishment of debt upon the write-off of all accrued legal fees. The terms of the original and amended agreements include a beneficial conversion feature due to the variable nature of the number of shares that could be issued in settlement of fees under the agreement. As a result, GreenShift recognized and expense of $1,737,909 and $1,035,780 for the intrinsic value of the beneficial conversion feature for the years ended December 31, 2015 and 2014, respectively. Finally, CWT and GreenShift entered into an amended agreement pursuant to which CWT agreed to accept 20% of GreenShift’s net cash receipts deriving from use of the Company’s extraction technologies, after payment in full of all litigation costs and expenses (including attorneys’ fees and expenses). Under the amended CWT agreement, no amount shall accrue or be due and payable to CWT until the earlier to occur of the date on which all such litigation costs and expenses have been paid on a current basis, the date on which GreenShift has successfully appealed the October 2014 summary judgment ruling in GreenShift’s pending infringement litigation, and all applicable appeal periods in connection therewith have expired, or the date on which GreenShift has entered into new license agreements corresponding to an additional $1,000,000 in annualized revenue.

We accordingly consider these transactions to be an extinguishment of debt. The appropriate accounting treatment is therefore to recognize the difference between the net carrying amount of the extinguished debt and the reacquisition price of the debt as income in the current period.

NOTE 21

NOTES RECEIVABLE

In 2014, the Company advanced aggregate amount of $25,979 to two unrelated third parties, these notes are non-interest bearing and due to demand. The Company determined that the amount was uncollectable as of December 31, 2015.

NOTE 22

SUBSEQUENT EVENTS

Between January 1, 2016 and the date of this filing, GreenShift paid a total of $379,574 to all but three of the YAGI Assignees (see Note 9, Debt Obligations, above), in settlement of about $2,914,000 in debt elimination, and a gain on extinguishment of debt of $2,551,613.

On April 23, 2016, the Company entered in to two release agreements pursuant to which the Company and the associated creditors agreed to fully satisfy $413,252 in obligations plus related accrued interest in exchange for $15,000 in cash and 200,000,000 shares of the Company’s common stock.

ITEM 9

CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A – CONTROLS AND PROCEDURES

~~(a)~~EVALUATION ~~Disclosure~~OF ~~Controls~~DISCLOSURE ~~and~~CONTROLS ~~Procedures~~AND PROCEDURES

WeOur ~~conducted~~principal anexecutive ~~evaluation,~~officer ~~with~~and ~~the~~principal ~~participation~~financial ofofficer ~~our~~participated ~~Chief~~in ~~Executive Officer~~ and ~~Chief~~supervised ~~Financial~~the ~~Officer,~~evaluation of ~~the effectiveness of~~ our disclosure controls and procedures, (as defined in Rules ~~13a~~13(a)-15(e) and 15(d)-15(e) under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”)). The Company’s chief executive officer and chief financial officer determined that, as of ~~December~~the ~~31,~~end ~~2014.~~of ~~Based~~the onperiod covered ~~that~~by ~~evaluation~~this report, ~~our~~the ~~Chief~~Company ~~Executive~~had ~~Officer~~a ~~and~~material ~~Chief~~weakness ~~Financial~~because ~~Officer~~it did not have ~~concluded~~a ~~that as~~sufficient number of ~~December~~personnel ~~31,~~with ~~2014,~~an ~~our~~appropriate level ~~disclosure~~of ~~controls~~knowledge and ~~procedures~~experience ~~were~~of ~~not~~generally ~~effective~~accepted ~~due~~accounting toprinciples in the ~~material~~United ~~weaknesses~~States ~~identified~~of ~~and~~America (U.S. GAAP) that ~~described~~are incommensurate ~~Item~~with ~~9A(b)~~the Company’s financial reporting requirements. As a result, Management concluded that the Company’s disclosure controls and procedures were not effective at December 31, 2015.

~~(b)~~There ~~Management~~have ~~Report~~been onno ~~Internal~~changes ~~Control~~in ~~Over~~the ~~Financial~~company’s ~~Reporting~~internal control over financial reporting during the most recently completed fiscal quarter that have materially affected or are reasonably likely to materially affect, the company’s internal control over financial reporting.

~~Our~~Management’s ~~management~~Report ison ~~responsible for establishing and maintaining adequate internal control over financial reporting.~~ Internal ~~control over~~Control ~~financial~~Over ~~reporting~~Financial is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act, as amended, as a process designed by, or under the supervision of, our principal executive and principal financial officer and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States and includes those policies and procedures that:Reporting

●Management has ~~Pertain~~conducted, towith the ~~maintenance~~participation of ~~records~~the ~~that~~Chief inExecutive ~~reasonable~~Officer ~~detail accurately~~ and ~~fairly~~the ~~reflect~~Chief ~~our~~Financial ~~transactions~~Officer, ~~and~~an ~~any~~assessment, ~~disposition~~including testing of ~~our~~the ~~assets;~~effectiveness ●of ~~Provide~~our ~~reasonable~~internal ~~assurance~~control ~~that~~over ~~transactions are recorded as necessary to permit preparation of~~ financial ~~statements~~reporting. inThe ~~accordance~~assessment ~~with~~was ~~generally~~conducted ~~accepted~~using ~~accounting~~the ~~principles, and that our receipts and expenditures are being made only~~ criteria in ~~accordance~~Internal ~~with~~Control—Integrated ~~authorizations~~Framework of(1992) ~~our~~issued ~~management~~by ~~and~~the ~~directors;~~committee ~~and ● Provide reasonable assurance regarding prevention or timely detection~~ of ~~unauthorized~~Sponsoring ~~acquisition,~~Organizations ~~use or disposition~~ of ~~our assets that could have a material effect on~~ the ~~financial~~Treadway ~~statements~~Commission (“COSO”).

~~Because~~A ofmaterial ~~its~~weakness ~~inherent~~is ~~limitations~~a deficiency, or combination of deficiencies, in internal control over financial reporting, ~~may~~such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be ~~prevent~~prevented or ~~detect~~detected ~~all~~on ~~misstatements~~a timely basis. ~~Projections of~~In ~~any~~connection ~~evaluation~~with management’s assessment of ~~effectiveness~~the tocompany’s ~~future~~internal ~~periods~~control over ~~are~~financial ~~subject~~reporting, tomanagement identified the ~~risk~~following ~~that~~material ~~controls~~weakness ~~may~~in ~~become~~the ~~inadequate~~company’s ~~because~~internal ofcontrol ~~changes~~over financial inreporting ~~conditions~~as of December 31, or2015. Management determined that at December 31, 2015, the ~~degree~~company had a material weakness related to its control environment because it did not have a sufficient number of ~~compliance~~personnel with an appropriate level of U.S. GAAP knowledge and experience commensurate with its financial reporting requirements. This material weakness resulted in the ~~policies~~identification orof adjustments ~~procedures~~during ~~may~~the ~~deteriorate~~financial statement close process that have been recorded in the financial statements.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2014. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (1992). Based on this assessment, Management identified the following three material weaknesses that have caused management to conclude that, as of December 31, 2014, our disclosure controls and procedures, and our internal control over financial reporting, were not effective at the reasonable assurance level:60

1.Because Weof dothe ~~not~~material ~~have~~weakness ~~written~~described ~~documentation~~above, ofmanagement ~~our~~has ~~internal~~concluded ~~control~~that ~~policies~~the ~~and~~company ~~procedures.~~did ~~Written~~not ~~documentation~~maintain ofeffective ~~key~~ internal ~~controls~~control over financial reporting ~~is a requirement of Section 404 of the Sarbanes-Oxley Act~~ as of ~~the year ending~~ December 31, ~~2014.~~2015, ~~Management evaluated~~based ~~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~~Internal ~~deficiency~~Control—Integrated ~~that~~Framework ~~resulted~~issued ~~represented~~by ~~a material weakness~~COSO.

2.This Weannual doreport does not ~~have~~include ~~sufficient~~an ~~segregation~~attestation report of ~~duties~~the ~~within~~Company’s ~~accounting~~registered ~~functions,~~public ~~which~~accounting isfirm aregarding ~~basic~~ internal control. ~~Due~~over tofinancial ~~our~~reporting. ~~size, segregation~~Management’s ofreport ~~all~~was ~~conflicting duties may~~ not ~~always~~subject beto ~~possible~~attestation ~~and~~by ~~may~~the ~~not~~Company’s beregistered ~~economically~~public accounting ~~feasible.~~firm ~~However,~~pursuant to ~~the~~rules ~~extent possible, the initiation~~ of ~~transactions,~~ the ~~custody~~Securities ~~of assets~~ and ~~the~~Exchange ~~recording~~Commission ofthat ~~transactions~~permit ~~should~~a besmaller ~~performed~~reporting bycompany ~~separate individuals. Management evaluated the impact of our failure~~ to ~~have segregation of duties on our assessment of our disclosure~~provide ~~controls~~only ~~and~~management’s ~~procedures~~report ~~and~~in ~~has~~its ~~concluded~~annual ~~that the control deficiency that resulted represented a material weakness~~report.

~~3. We~~ITEM ~~outsource~~9B ~~the~~OTHER bookkeeping 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.INFORMATION

To address these material weaknesses, management performed additional analyses and other procedures to ensure that the financial statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented. Accordingly, we believe that the financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented.

This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to the rules of the Securities and Exchange Commission that permit us to provide only our management’s report in this Annual Report.

To remediate the material weakness in our documentation, evaluation and testing of internal controls we plan to engage a third-party firm to assist us in remedying this material weakness once resources become available.

We intend to remedy our material weakness with regard to insufficient segregation of duties by hiring additional employees in order to segregate duties in a manner that establishes effective internal controls once resources become available.

(d) Changes in Internal Control over Financial Reporting

No change in our system of internal control over financial reporting occurred during the period covered by this report, the fourth quarter of the fiscal year ended December 31, 2014, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B – OTHER INFORMATION

None.

PART III

ITEM 10 – DIRECTORS, AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Directors and Executive Officers

The following table sets forth the names and ages of each of our current directors and executive officers, the positions with the Company held by each person, and the date such person became a director of the Company. Our executive officers are elected annually by the Board of Directors. The directors serve one-year terms until their successors are elected. The executive officers serve terms of one year or until their death, resignation or removal by the Board of Directors. Family relationships among any of the directors and officers are described below.

Name	Age	~~Title~~Position
Hubert Blanchette	58	Chief Executive Officer, Director
Kevin Kreisler	43	Chairman, Chief Executive Officer, Chief Financial Officer
Marilu Brassington	37	Chief Financial Officer, Director

~~Hubert~~Kevin J.Kreisler ~~Blanchette~~is the founder and chairman of GreenShift Corporation. Mr. ~~Blanchette~~Kreisler ~~joined~~has ~~the~~been ~~Company~~responsible asfor ~~Chief~~devising ~~Executive~~the ~~Officer~~Company’s strategic indirection ~~July~~and ~~2014.~~the ~~From~~development ~~2006~~and tocommercialization ~~present,~~of its technologies. Mr. ~~Blanchette has~~Kreisler ~~held~~served as the ~~position~~Company’s vice ofpresident ~~Director~~from of1998 ~~Skipjack~~to ~~Dive~~2000, &president ~~Dancewear~~from ~~Inc.~~2000 to 2002, chief executive officer from 2002 to 2013 and from ~~2003~~2014 to the present. Mr. Kreisler has ~~held~~also served as the ~~position~~Company’s chairman from 2005 to the present. Mr. Kreisler is a graduate of Rutgers ~~Director~~University College of Engineering (B.S., Civil and Environmental Engineering, 1994), Rutgers University Graduate School of ~~Chronic~~Management ~~Car~~(M.B.A., ~~Audio~~1995), ~~Inc~~and Rutgers University School of Law (J.D., 1997). Mr. ~~Blanchette~~Kreisler ~~was~~is ~~appointed~~admitted to ~~the~~practice ~~Board~~law ofin ~~Directors~~New Jersey ~~because~~and ofthe ~~his~~United ~~experience~~States ~~with~~District ~~turn~~Court ~~around~~for ~~management~~the District of New Jersey.

~~Marilu Brassington.~~ Since 2010, Ms. Brassington has been employed as co-chief executive and financial officer of E-motion Apparel, Inc., which launched a new clothing label during that period. On November 18, 2013 the Company became the exclusive worldwide distributor for the E-motion Apparel label, and at that time Ms. Brassington joined the Company as CFO and a member of the Board of Directors. From 2005 to 2007 Ms. Brassington was employed as chief financial officer of Givefun.com, then from 2007 to 2008 was engaged by Gifts.com/IAC as a consultant to assist in the post-acquisition integration of Givefun.com into the Gifts.com product line. While with Givefun.com, Ms. Brassington was responsible for financial management and business partners relations. From 2002 to 2005 Ms. Brassington was employed as a Controller by Societe Generale, Investment Banking Division. From 1998 to 2001 Ms. Brassington was employed as an auditor by Deloitte & Touche. In 1994 Ms. Brassington passed the London A Levels. In 1998 the University of Miami awarded her a B.B.A. degree with concentrations in Accounting, Finance and Math, after which she was certified as a public ~~accountant~~ accountant in the State of Illinois. In 2001 and 2002 Ms. Brassington earned Degrees I and II at the Alliance Francaise.

~~Family Relationships~~61

~~There~~OTHER ~~are no family relationships between any of our officers or directors.~~DIRECTORSHIPS

Other Directorships

Other than as set forth above, none of our officers and directors is a director of any company with a class of securities registered pursuant to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of such Act or any company registered as an investment company under the Investment Company Act of 1940.

~~Audit~~AUDIT ~~Committee~~COMMITTEE

Our board does not have an Audit Committee or other committees, due to the small number of members of the Board.

~~Compliance~~COMPLIANCE ~~with~~WITH ~~Section~~SECTION 16(aA) ofOF ~~the~~THE ~~Securities~~SECURITIES ~~Exchange~~EXCHANGE ~~Act~~ACT ofOF 1934

Section 16(a) of the Securities Exchange Act of 1934 requires the Company’s directors and executive officers and persons who own more than ten percent of a registered class of the Company’s equity securities to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Officers, directors and greater than ten percent shareholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file. To ~~the~~our ~~Company’s~~ knowledge, none of the current required parties are delinquent in their 16(a) filings, except that neither of the officers and directors has filed a Form 3.

~~Code~~CODE ofOF ~~Ethics~~ETHICS

We have not adopted a written code of ethics, primarily due to the small number of members of our management.

17ITEM 11 EXECUTIVE COMPENSATION

~~ITEM~~The ~~11–~~following ~~EXECUTIVE~~table ~~COMPENSATION~~sets forth all compensation awarded to, earned by, or paid by Bitzio, Inc., and its subsidiaries to the individuals who served as the Company’s Chief Executive Officer during the years ended December 31, 2015 and 2014. There were no executive officers whose total salary and bonus for the fiscal year ended December 31, 2014 exceeded $100,000.

Summary Compensation Table

Name	Year		Salary		Bonus		Stock Awards		Option Awards		Other Compensation

Kevin Kreisler⁽¹⁾		2015	$	—		—		—		—		—
		2014		—		—		—		—		—

Marilu Brassington⁽²⁾		2015		21,657		—		89,750		—		—
		2014		—		—		—		—		—

Hubert Blanchette⁽³⁾		2015		—		—		83,250		—		—
		2014		1,500		—		—		—		—

The following table sets forth information with respect to compensation earned by our Chief Executive Officer for the years ended December 31, 2014, 2013 and 2012.

⁽¹⁾	Mr. Kreisler was appointed to the post of chief executive officer on December 31, 2015.

⁽²⁾	Ms. Brassington served as chief financial officer between July 2014 and December 2015.

⁽³⁾	Mr. Blanchette served as chief executive officer between July 2014 and December 2015.

Name & Position	Fiscal Year		Salary ($)		Bonus ($)		Stock Awards($)			Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Nonqualified Deferred Compensation ($)		All Other Compensation ($)		Total ($)
Hubert Blanchette		2014		1,500		-		-			-		-		-		-		1,500
Chief Executive Officer(2)		2013		-		-		-			-		-		-		-		-
Marilu Brassington		2014		-		-		-			-		-		-		-		-
Chief Financial Officer		2013		-		-		-			-		-		-		-		-
Gordon McDougall		2014		-		-		-			-		-		-		-		-
Former Chief Executive Officer(1)		2013		57,000		-		-			-		-		-		-		57,000
		2012		-		-		240,000	(3)

COMPENSATION OF DIRECTORS

(1)	Mr. McDougall was President and Chief Executive Officer from April 29, 2011 to February 2, 2012. Mr. McDougall again became our Chief Executive Officer from November 19, 2013 to July 16, 2014. Salary during 2013 consists of fees paid to Tezi Advisory in compensation for Mr. McDougall’s services as CEO.
(2)	Mr. Blanchette was President and Chief Executive Officer from July 25, 2013 to November 19, 2013 and again after July 16, 2014.
(3)	Mr. McDougall received his 2012 salary in the form of 4,800,000 shares of common stock of the Company, valued at $0.05 per share.

None.

~~Director~~OUTSTANDING ~~Compensation~~EQUITY AWARDS AT FISCAL YEAR-END

For the years ended December 31, 2014 and 2013, none of the members of our Board of Directors received compensation for his or her service as a director. We do not currently have an established policy to provide compensation to members of our Board of Directors for their services in that capacity.

Outstanding Equity Awards at Fiscal Year-End

We do not currently have a stock option or grant plan.

ITEM 12 – SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT ~~AND RELATED STOCKHOLDER MATTERS~~

As of the date of this report, the outstanding equity securities of the Company consist of 47,~~142~~320,~~894~~704,~~587~~217 shares of common stock, 2,043,120 shares of Series A Preferred Stock, 1,000,000 shares of Series B Preferred Stock, 520,000 shares of Series E Preferred Stock, and ~~999~~800,000 shares of Series CF Preferred Stock. The following table sets forth certain information with respect to the Company’s ~~equity~~voting securities owned of record or beneficially by (i) each Director of the Company; (ii) all Directors and Executive Officers as a group; and (iii) each person who owns beneficially more than 5% of each class of the Company’s outstanding equity securities.

	Common Stock					Series A Preferred(1)				Series B Preferred(2)					Series C Preferred(3)
	Shares		% of Class			Shares		% of Class		Shares		% of Class			Shares		% of Class			Voting Power
Marilu Brassington		157,500,000		3.8	%		-		-		-		-			333		33.3	%		17.9	%
Hubert Blanchette		200,000,000		4.8	%		-		-		-		-			333		33.3	%		18.3	%
All directors and named executive officers as a group (3 individuals)		357,500,000		8.6	%		-		-		-		-			666		66.7	%		36.2	%
5% or More Shareholders
Gordon McDougall		-		-			-		-		-		-			333		33.3	%		16.7	%
Flux Carbon Startter Fund, LLC (4)		-		-			-		-		250,000		25.0	%		-		-			2.4	%
Five Nine Group LLC (5)		-		-			-		-		250,000		25.0	%		-		-			2.4	%
Technor Services, Ltd.		-		-			-		-		283,692		28.4	%		-		-			2.8	%
Scott Stern		-		-			-		-		107,749		10.8	%		-		-			1.0	%
RP Capital, LLC		-		-			-		-		80,833		8.1	%		-		-			0.8	%

(1) Each share of Series A Convertible Redeemable Preferred Stock gives the holder the right, but not the obligation, prior to January 2, 2017, to purchase two (2) shares of our common stock at a purchase price of $0.40 per share. Further, we can redeem the Series A Preferred Stock at $0.0025 per share after January 2, 2017. The holder of Series A shares has no voting rights.

Name and Address Of Beneficial Owner⁽¹⁾	Common		% of Class			Series G Preferred		% of Class			Percentage of Voting Power

Kevin Kreisler⁽²⁾		—		0	%		800,000		100	%		80	%

Marilu Brassington⁽²⁾		157,500,000		2.2	%		—		—			1.7	%

Officers and Directors as a group (1 person)		157,500,000		2.2	%		800,000		100	%		81.7	%

⁽¹⁾	The address of each shareholder is c/o GreenShift Corporation, 5950 Shiloh Road East, Suite N, Alpharetta, Georgia, 30005.

⁽²⁾	All shares listed for Mr. Kreisler are owned of record by FLUX Carbon Corporation, an entity owned by Mr. Kreisler.

	(2)	Each share of Series B Preferred Stock is convertible into 0.0000198% 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 Company, 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.
	(3)	Shares of Series C Preferred Stock give the holder 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 Company. In the event of a liquidation of the Company, 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.
	(4)	Mary Carroll has voting and dispositional control of the shares owned by Flux Carbon Starter Fund, LLC.
	(5)	Ryan Reese and Alan Thomas have voting and dispositional control of the shares owned by Five Nine Group LLC.

ITEM 13

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

~~ITEM~~There 13have –been ~~CERTAIN~~no ~~RELATIONSHIPS~~transactions ~~AND~~since ~~RELATED~~the ~~TRANSACTIONS~~beginning of the 2015 fiscal year, ~~AND~~in ~~DIRECTOR~~which ~~INDEPENDENCE~~we were or are to be a participant and the amount involved exceeded or exceeds the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years, and in which any related person had or will have a direct or indirect material interest (other than compensation described under “Executive Compensation”).

~~There have been no transactions since the beginning of the 2014 fiscal year~~REVIEW, ~~in which we were or are to be a participant and the amount~~ ~~involved~~APPROVAL ~~exceeded~~OR orRATIFICATION ~~exceeds~~OF ~~the~~TRANSACTIONS ~~lesser~~WITH ofRELATED $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years, and in which any related person had or will have a direct or indirect material interest (other than compensation described under “Executive Compensation”).PERSONS

Review, Approval or Ratification of Transactions with Related Persons

As we have not adopted a Code of Ethics, we rely on our board to review related party transactions on an ongoing basis to prevent conflicts of interest. Our board reviews a transaction in light of the affiliations of the director, officer or employee and the affiliations of such person’s immediate family. Transactions are presented to our board for approval before they are entered into or, if this is not possible, for ratification after the transaction has occurred. If our board finds that a conflict of interest exists, then it will determine the appropriate remedial action, if any. Our board approves or ratifies a transaction if it determines that the transaction is consistent with the best interests of the Company.

~~Director~~DIRECTOR ~~Independence~~INDEPENDENCE

During the year ended December 31, ~~2014~~2015, we had no independent directors. We evaluate independence by the standards for director independence established by applicable laws, rules, and listing standards including, without limitation, the standards for independent directors established by The ~~Nasdaq~~NYSE ~~Stock Market~~MKT, and the Securities and Exchange Commission.

~~ITEM~~RELATED 14PARTY ~~– PRINCIPAL ACCOUNTING FEES AND SERVICES~~TRANSACTIONS

~~Audit~~Minority ~~fees~~Interest Fund (II), LLC (“MIF”) is party to certain convertible debentures issued by the Company (see Note 9, Debt Obligations, above). The managing member of MIF is a relative of the Company’s chairman. On December 31, 2015, MIF and Acutus Capital LLC (“AC”) assigned their respective beneficial ownership interests in the Series D Shares to EXO Opportunity Fund LLC (“EXO”) (see Note 5, Shareholders’ Equity, above). EXO, in turn, assigned the corresponding beneficial interests to Bitzio in exchange for 200,000 shares of Bitzio Series E Preferred Stock. On the same date, FLUX Carbon Corporation (“FCC”), an entity owned by Kevin Kreisler, the Company’s chairman, transferred its ownership interest in Viridis Capital LLC (“Viridis”) to Bitzio. As a result of the foregoing transactions, on December 31, 2015, Bitzio was the beneficial owner of 862,500 Series D Shares, as well as AC’s 2011 contractual right to receive an additional 124,875 Series D Shares, all of which was exchanged for 700,000 shares of the Company’s Series G Preferred Stock. The Company filed a Certificate of Elimination for its Series D Preferred Stock after completing that transfer. On December 31, 2015, Bitzio entered into a $2.9 million loan transaction with TCA Global Credit Master Fund, LP (“TCA”), pursuant to which Bitzio drew $2.5 million for use in its acquisition of 100,000 shares of the Company’s Series G Preferred Stock (see Note 5, Shareholders’ Equity, above). FCC, the Company, and each of its subsidiaries, as well as each of the other subsidiaries of Bitzio, executed a Guaranty Agreement in favor of TCA on December 31, 2015, pursuant to which the Company and its subsidiaries guaranteed payment of all amounts due to TCA under the Credit Agreement (see Note 11, Guaranty Agreement, above). As a result of all of the foregoing transactions, as of December 31, 2015, FCC was the beneficial owner of 80% of Bitzio’s equity, and Bitzio was the beneficial owner of 80% of the Company’s equity. Bitzio develops and commercializes clean technologies that facilitate the more efficient use of natural resources, and is focused on doing so primarily in three sectors: agriculture, energy and lifestyle. Kevin Kreisler, the Company’s chairman and chief executive officer, was appointed to the posts of chairman and chief executive officer upon completion of the foregoing transactions.

~~During the years ended December 31, 2014 and 2013, Sadler, Gibb & Associates, LLC served as our independent registered accounting firm.~~63

~~The aggregate~~ITEM ~~fees~~14 ~~billed~~PRINCIPAL ~~for~~ACCOUNTANT ~~the~~FEES ~~two~~AND most recently completed fiscal periods ended December 31, 2014 and December 31, 2013 for professional services rendered by Sadler, Gibb & Associates, LLC for the audit of our annual financial statements, quarterly reviews of our interim financial statements and services normally provided by the independent accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows:SERVICES

	Year Ended December 31, 2014		Year Ended December 31, 2013
Audit Fees and Audit Related Fees	$	29,000	$	28,060
Tax Fees		-		-
All Other Fees		-		-
Total	$	29,000	$	28,060

INDEPENDENT AUDITOR FEES

InThe ~~the~~Company ~~above~~engaged ~~table~~Rosenberg, ~~“audit~~Rich, ~~fees”~~Baker ~~are~~Berman ~~fees~~and ~~billed~~Company byto ~~our~~serve ~~company’s~~as ~~external~~its independent auditor ~~for~~on ~~services~~February ~~provided~~12, ~~in auditing our company’s annual financial statements for the subject year~~2016. ~~“Audit-related fees” are fees not included in~~Previously, ~~audit~~Sadler, ~~fees~~Gibb ~~that~~& ~~are~~Associates, ~~billed~~LLC byserved ~~the~~as ~~auditor for assurance and related services that are reasonably related to~~ the ~~performance of the audit review of our company~~Company’s ~~financial~~independent ~~statements. “Tax fees” are fees billed by the~~ auditor ~~for professional services rendered for tax compliance, tax advice and tax planning~~. ~~“All other fees” are fees billed by the auditor for products and services not included in the foregoing categories.~~

19Audit Fees

Rosenberg Rich Baker Berman & Co. billed $0 to the Company for professional services rendered for the audit of fiscal 2015 financial statements. Sadler, Gibb & Associates, LLC billed $29,000 to the Company for professional services rendered for the audit of fiscal 2014 financial statements and review of the financial statements included in fiscal 2014 10-Q filings.

Audit-Related Fees

Rosenberg Rich Baker Berman & Co. billed $0 to the Company during fiscal 2015 for assurance and related services. Sadler, Gibb & Associates, LLC billed $29,000 to the Company during fiscal 2014 for assurance and related services that are reasonably related to the performance of the 2013 audit or review of the quarterly financial statements.

Tax Fees

Rosenberg Rich Baker Berman & Co. billed $10,000 to the Company during fiscal 2015 for professional services rendered for tax compliance, tax advice and tax planning. Sadler, Gibb & Associates, LLC billed $0 to the Company during fiscal 2014 for professional services rendered for tax compliance, tax advice and tax planning.

All Other Fees.

Rosenberg Rich Baker Berman & Co. billed $0 to the Company in fiscal 2015 for services not described above. Sadler, Gibb & Associates, LLC billed $0 to the Company in fiscal 2014 for services not described above

It is the policy of the Company’s Board of Directors that all services, other than audit, review or attest services must be pre-approved by the Board of Directors, acting in lieu of an audit committee. All of the services described above were approved by the Board of Directors.

PART IV

ITEM 15 – EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a)		Exhibit List
Exhibit Number		Description
3.1		Certificate of Incorporation - incorporated by reference to the Registration Statement on Form 10-SB filed on December 19, 2005.
3.1(a)		Certificate of Amendment of Certificate of Incorporation - incorporated by reference to Current Report on Form 8-K filed on June 14, 2011.
3.1(b)		Certificate of Amendment of Certificate of Incorporation - incorporated by reference to Current Report on Form 8-K filed on May 31, 2012.
3.1(c)		Certificate of Amendment of Certificate of Incorporation - incorporated by reference to Current Report on Form 8-K filed on January 14, 2014.
3.1(d)		Certificate of Amendment of Certificate of Incorporation - incorporated by reference to Current Report on Form 8-K filed on September 16, 2014.
3.1(e)		Certificate of Designation of Series A Convertible Redeemable Preferred Stock - incorporated by reference to Current Report on Form 8-K filed on January 12, 2012.
3.1(f)		Amendment to Certificate of Designation of Series A Convertible Redeemable Preferred Stock - incorporated by reference to Quarterly Report on Form 10-Q filed on May 15, 2012.
3.1(g)		Certificate of Designation of Series B Convertible Preferred Stock - incorporated by reference to Current Report on Form 8-K filed on November 22, 2013.
3.1(h)		Certificate of Designation of Series CE ~~Convertible Redeemable~~ Preferred Stock of Bitzio, Inc. - incorporated by reference to Current Report on Form 8-K filed on ~~December~~January 926, ~~2013.~~2016
3.1(i)		Certificate of Designation of Series DF ~~Convertible Redeemable~~ Preferred Stock of Bitzio, Inc. - incorporated by reference to Current Report on Form 8-K filed on ~~August~~January 726, ~~2014.~~2016
3.2		Amended and Restated Bylaws - incorporated by reference to Current Report on Form 8-K filed on February 13, 2014.
10-a		~~Memorandum~~Senior ofSecured ~~Understanding~~Revolving ~~dated~~Credit ~~February~~Facility 11Agreement effective as of December 31, ~~2014~~2015 among Bitzio, Inc., ~~d/b/a~~its ~~Democratique~~subsidiaries, ~~Cleo~~and ~~vii~~TCA ~~and~~Global ~~Angie~~Credit ~~Daza~~Master Fund, LP. - incorporated by reference to Current Report on Form 8-K filed on ~~March~~November 3122, ~~2014~~2013.
10-b		~~Promissory~~Form ~~Note~~of ~~dated~~Senior ~~January~~Secured ~~29,~~Revolving ~~2014~~Convertible ~~issued~~Promissory Note issuable to ~~The~~TCA ~~Victor~~Global ~~Vinco~~Credit ~~Family~~Master ~~Trust~~Fund, ~~dated~~LP ~~September~~pursuant 6,to ~~2002~~the Credit Agreement - incorporated by reference to Current Report on Form 8-K filed on ~~February~~November 1822, ~~2014~~2013.
10-c		~~Securities~~Form ~~Purchase~~of Security Agreement ~~dated~~executed ~~November~~by 18Bitzio, ~~2013~~Inc. ~~between~~and each subsidiary of Bitzio, Inc. ~~and~~with ~~112359~~TCA ~~Factor~~Global Credit Master Fund, ~~LLC~~LP dated December 31, 2015 - incorporated by reference to Current Report on Form 8-K filed on November 22, 2013.
10-d		Form of Exchange Agreement dated November 18, 2013 between Bitzio, Inc. and 112359 Factor Fund, LLC - incorporated by reference to Current Report on Form 8-K filed on November 22, 2013.
31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 as incorporated herein by reference.
10-e		Form of Secured Amended & Restated Convertible Debenture issued on November 18, 2013 - incorporated by reference to Current Report on Form 8-K filed on November 22, 2013.
31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 as incorporated herein by reference.
10-f		Security Agreement dated November 18, 2013 between Bitzio, Inc. and 112359 Factor Fund, LLC - incorporated by reference to Current Report on Form 8-K filed on November 22, 2013.
32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to the Sarbanes-Oxley Act of 2002 as incorporated herein by reference.
31.1		Rule 13a-14(a) Certification – CEO*
32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to the Sarbanes-Oxley Act of 2002 as incorporated herein by reference.
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**
101.SCH		XBRL Schema**
101.CAL		XBRL Calculation**
101.DEF		XBRL Definition**
101.LAB		XBRL Label**
101.PRE		XBRL Presentation**

* Filed herewith65

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

SIGNATURES

InPursuant ~~accordance~~to ~~with~~the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on the date indicated.

	Bitzio, Inc.
Dated: April 15, 2015	By:	/s/ Hubert Blanchette
	Name:	Hubert Blanchette
	Its:	Chief Executive Officer

BITZIO INC.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:	/s/ KEVIN KREISLER
	KEVIN KREISLER
	Chief Executive Officer
Date:	May 27, 2016

Dated: April 15, 2015	By:	/s/ Hubert Blanchette
	Name:	Hubert Blanchette
	Its:	Chief Executive Officer, Director

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

Dated: April 15, 2015	By:	/s/ Marilu Brassington
	/s/ KEVIN KREISLER
	Name:	Marilu Brassington
	KEVIN KREISLER
	Its:	Chief Financial Officer, Chief Accounting Officer, Director
	Chairman, Chief Executive Officer
Date:	May 27, 2016
	/s/ MARILU BRASSINGTON
	MARILU BRASSINGTON
	Chief Financial Officer, Chief Accounting Officer, Director
Date:	May 27, 2016

2166

Filing Compare · Bitzio, Inc.