The discussion below is based upon the Company's legacy business which is not currently generating revenue.





Forward Looking Statements

This analysis of our results of operations should be read in conjunction with the accompanying financial statements.





Revenues and Gross Profit



                     Year ended
                    September 30,            $           %
                2015         2015         Change      Change
Sales, net      $   -     $   448,627     $     -           -
Cost of Sales       -       1,424,573           -           -
Gross Martin    $   -     $  (975,946 )         -           -




Sales



Not applicable



Gross Profit



Not applicable



Operating Costs and Expenses



                                  Year ended
                                 September 30,            $
                             2015         2015         Change

General and administrative       -     $ 3,065,428     $     -
Sales and Marketing              -       1,179,836           -
Research and development         -         177,653
                                 -     $ 4,422,917           -








  11

General and Administrative Expenses





Not applicable



                                              Year ended September 30,
                                           2015               2014
Professional fees                          $   -       $           615,767
Salaries and benefits                          -                   665,983
Other general and administrative expense       -                 1,783,678
                                           $   -       $         3,065,428




Professional Fees Expense

Not applicable

Salary and Benefits

Not applicable.



Sales and Marketing



Not Applicable



Research and Development



Not applicable



Other Income (Expense)



Not applicable



Going Concern

The financial statements are prepared using the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America and have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. However, the Company has incurred significant losses and experienced negative cash flow since its inception.

A successful transition to attaining profitable operations is dependent upon obtaining sufficient financing to fund the Company's planned expenses and achieving a level of revenues adequate to support the Company's cost structure. Management plans to finance future operations through the use of cash on hand, increased revenues and capital raised through equity or debt financing. We also expect to receive proceeds from stock warrant exercises from existing shareholders.

There can be no assurances that the Company will be able to achieve positive cash flow from operations in 2015 and beyond. If the Company is unable to achieve positive cash flows from operations and is not able to obtain alternate additional financing of equity or debt, the Company may need to file for bankruptcy or cease operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts classified as liabilities that might be necessary should the Company be forced to take any such actions.









  12

Our future expenditures will depend on numerous factors, including: the rate at which we can introduce and sell products; the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights; and market acceptance of our products and competing technological developments. We expect that we will incur approximately $1,500,000 in cash expenditures for our operating expenses during fiscal year 2015. As we expand our activities and operations, our cash requirements are expected to increase at a rate consistent with revenue growth after we have achieved sustained revenue generation.

RECENT ACCOUNTING PRONOUNCEMENTS





New Accounting Standards

There are several new accounting pronouncements issued by the Financial Accounting Standards Board ("FASB") which are not yet effective. Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe any of these accounting pronouncements has had or will have a material impact on the Company's financial position or operating results.





Critical Accounting Policies

In December 2001, the SEC issued its Financial Reporting Release, "Cautionary Advice Regarding Disclosure about Critical Accounting Policies," suggesting companies provide additional disclosure and commentary on their most critical accounting policies. The SEC defined the most critical accounting policies as the ones that are most important to the portrayal of a company's financial condition and operating results, and require management to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based on this definition our most critical accounting policies are in the process of evolving while we move from the development stage to the operational stage of our business cycle.

Off-Balance Sheet Arrangements

None.

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