UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K/A

Amendment No. 1Form 10-K

 

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended August 31, 20162018

OR

☐   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to ________

 

Commission File Number:file number: 000-52759

 

DIMI TELEMATICS INTERNATIONAL,BESPOKE EXTRACTS, INC.

(Exact name of registrant as specified in its charter)

 

Nevada 20-4743354

(State or other jurisdiction of


incorporation or organization)

 

(I.R.S. Employer


Identification No.)

323 Sunny Isles Blvd., Suite 700, Sunny Isles, Florida33160
(Address of principal executive offices)(Zip Code)

 

290 Lenox Avenue, New York, NY  10027

(Address of principal executive offices) (Zip Code)

Registrant’s Telephone Number,telephone number, including area code: (855) 633-3738

 

Securities registered pursuant to Section 12(b) of the Exchange Act: NoneNone.

   

Securities registered pursuant to Section 12(g) of the Exchange Act:
Common Stock, par value $0.001 par value
per share

 

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

 

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 ☒

 

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 ☒  No ☐

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒  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 the 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 the definitions of “large accelerated filer,” “accelerated filer”filer,” “smaller reporting company” and “smaller reporting“emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large Accelerated Filer accelerated filerAccelerated Filer filer
Non-Accelerated Filer ☐Non-accelerated filerSmaller Reporting Company reporting company☒ 
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

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

 

The aggregate market value of the voting stockand non-voting common equity held by non-affiliates ofcomputed by reference to the issuer, based upon the last sale price ofat which the common stock of the Companyequity was last sold as of the last business day of itsthe registrant’s most recently completed second fiscal quarter was approximately $391,774 ..$9,757,852.

 

ThereAs of December 14, 2018, there were 2,922,71250,203,907 shares of common stock outstanding as of December 16, 2016.Common Stock, par value $0.001 per share, issued and outstanding.

Documents incorporated by reference:  None

 

 

EXPLANATORY NOTE

This Amendment No. 1 on Form 10-K/A (the “Amended Annual Report”) amends the Annual Report on Form 10-K of DiMi Telematics International, Inc. originally filed with the Securities and Exchange Commission (the “SEC”) on December 16, 2016 (the “Original Filing”). This Amended Annual Report is being filed to correct certain information appearing in Items 10, 12 and 13.

Other than the foregoing, this Amended Annual Report speaks as of the original date of the Original Filing, does not reflect events that may have occurred subsequent to the date of the Original Filing and does not modify or update in any way disclosures made in the Original Filing.

 

 

 

TABLE OF CONTENTSBespoke Extracts, Inc.

Table of Contents

 

PART I1
  
ITEMItem 1. BUSINESSBusiness1
  
ITEMItem 1A. RISK FACTORSRisk Factors.5
Item 1B. Unresolved Staff Comments.9
  
Item 2. Properties.9
Item 3. Legal Proceedings.9
Item 4. Mine Safety Disclosures.9
PART II10
ITEM 1B. UNRESOLVED STAFF COMMENTSItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities10
Item 6. Selected Financial Data10
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.11
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.12
  
ITEM 2. PROPERTIESItem 8. Financial Statements and Supplementary Data12F-1
  

ITEM 3. LEGAL PROCEEDINGSItem 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosures.

12
ITEM 4. MINE SAFETY DISCLOSURES12
PART II

13
  
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESItem 9A. Controls and Procedures13
  
ITEM 6. SELECTED FINANCIAL DATAItem 9B. Other Information.1314
  
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSPART III13
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK15
  
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAItem 10. Directors, Executive Officers and Corporate Governance.F-115
  
ITEM 9A. CONTROLS AND PROCEDURESItem 11. Executive Compensation16
ITEM 9B OTHER INFORMATION17
  
PART IIIItem 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters18
  
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEItem 13. Certain Relationships and Related Transactions, and Director Independence.1819
  
Item 14. Principal Accounting Fees and Services.19
ITEM 11. EXECUTIVE COMPENSATIONPART IV20
  
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSItem 15. Exhibits, Financial Statement Schedules.2120
  
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCESignatures22
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES22
PART IV23
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES23
SIGNATURES2421

  

i

 

 

FORWARD-LOOKING INFORMATIONPART I

 

This Annual Report on Form 10-K containsmay contain forward-looking statements. These statements relate to future events or our future financial performance. We have attempted to identifySuch forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management and involve risks and uncertainties. Forward-looking statements include statements regarding our plans, strategies, objectives, expectations and intentions, which are subject to change at any time at our discretion. Forward-looking statements include our assessment, from time to time of our competitive position, the industry environment, potential growth opportunities and the effects of regulation. Forward-looking statements include all statements that are not historical facts and can be identified by terminology includingterms such as “anticipates,” “believes,” “expects,” “can,” “continue,” “could,” “estimates,” “expects,” “hopes,” “intends,” “may,” “plans,” “potential,” “predict,“predicts,“should”“projects,” “should,” “will,” “would” or “will” or the negative of these terms or other comparable terminology. Thesesimilar expressions.

Forward-looking statements are only predictions;involve known and unknown risks, uncertainties and other factors which may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels or activity, performance or achievements expressed or implied by the forward-looking statements. We discuss many of these risks in greater detail in “Risk Factors.” Given these uncertainties, undue reliance should not be placed on these forward-looking statements. Although we believe that the expectations reflected in theAlso, forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Our expectations arerepresent our management’s beliefs and assumptions only as of the date of this Form 10-K is filed, andreport. Our actual future results may be materially different from what we do not intendexpect. Except as required by law, we assume no obligation to update any of thethese forward-looking statements afterpublicly.

As used in this annual report, the date this Annual Report on Form 10-K is filed to confirm these statements to actual results,terms “we”, “us”, “our”, the “Company”, “Bespoke Extracts, Inc.” and “Bespoke” mean Bespoke Extracts, Inc. unless required by law.otherwise indicated.

Item 1. Business.

 

PART I

ITEM 1.BUSINESS.

BackgroundOur Corporate History

 

We were incorporated in the State of Colorado on July 29, 1988 under the name Cine-Source Entertainment, Inc. On October 28, 2011,April 27, 2004, the Company changed its name to First Quantum Ventures, Inc. On April 13, 2006, the Company changed its name to First Quantum Ventures, Inc., and on May 5, 2006, the Company reincorporated in Nevada. On March 15, 2012, the Company changed its name to DiMi Telematics International, Inc. (“DTII”) entered into a Share Exchange Agreement (the “Share Exchange”) with DiMi Telematics, Inc. (“DTI”)

In early 2017, our management team elected to suspend further investment and working capital on developing its stockholders. Pursuantthen-existing technology and business prospects, turning its attention to the agreement, DTII issued 29,150,000 shares ofhemp-derived cannabidiol, or CBD, market. On March 10, 2017, the Company changed its common stock in exchange for all outstanding shares and warrantsname to purchase common shares of DTI. As a result ofBespoke Extracts, Inc. to align the Share Exchange Agreement, DTI became a subsidiary of DTII.  DTII assumed operation of DTI and entered the Telematics, or Machine to Machine/M2M industry. On November 10, 2011, the closing of the Share Exchange occurred.  In connectionCompany’s corporate identity with the Share Exchange, 5,000,000 of DTII’s issued and outstanding shares of common stock were surrendered for cancellation.

The following discussion includes information about theits new business operations, management and financial condition of DTII and DTI. Unless specifically set forth to the contrary, when used in this report the terms “we,” “us,” “our,” the “Company” and similar terms refer to DTII, a Nevada corporation, and its wholly owned subsidiary DTI, also a Nevada corporation.

Generalplan. 

 

The Company designs, develops and distributes Machine-to-Machine (“M2M”) communications solutions used to remotely track, monitor, manage and protect multiple mobile and fixed assets in real-time from virtually any web-enabled desktop computer or mobile device. Through our proprietary software and hosted service offerings, the Company endeavors to capitalize on the pervasiveness and data transport capabilities of wireless networks in order to facilitate communications and process efficiencies between commercial and industrial business owners/managers and their respective networked control systems, sensors and devices.

Strategically, the Company is now focused on selling its proprietary line of premium quality, all natural cannabidiol (CBD) products in the M2M market segmentsform of tinctures and capsules for the nutraceutical and veterinary markets, which it introduced in whichmid-2018. Produced using pure, all natural, zero-THC phytocannabinoid-rich (“PCR”) hemp-derived CBD, our products are marketed as dietary supplements and distributed through our direct-to-consumers ecommerce store, found at www.BespokeExtracts.com. In the future, we can provide highly differentiatedplan to also sell through select specialty retailers, pharmacies/dispensaries and value-driven solutions capable of unleashing tangible productivity gains, material cost reductions and quantifiable risk mitigation across an enterprise.care providers.

Our mission is to earn global distinction as the leading supplier of world class M2M communications solutions that empower our customers to optimize efficiencies and productivity through remote tracking, monitoring, management and protection of their most valuable assets.

 

 1 

 

 

The DiMi Solution PlatformCannabis Market

 

Our flagship M2M solutionMany states have already legalized medical cannabis, and adult-use cannabis is DiMi,”now legal at the statewide level in several major U.S. markets. According to ArcView Market Research and its research partner BDS Analytics, over the next 10 years, total sales by the legal cannabis industry will reach $57 billion by 2027, and the largest group of cannabis buyers will be in North America, going from $9.2 billion in 2017 to $47.3 billion a proprietary, patent-pending, business intelligencedecade later. For context, in a report released in February 2017, Arcview Market Research stated that the North American black market for cannabis is estimated to have totaled $46.4 billion in sales in 2016.Marijuana Business Factbookreports that 2017 spending on legal recreational and two-way communications platform that capturesmedical cannabis in the U.S. even topped those of Oreos and seamlessly integrates real-time data from networked tracking, monitoring, alarmorganic produce combined – and alert systems, sensorswill likely surpass sales of firearms and devices; and,ammunition in turn, centralizes this data onto an online command and control dashboard that is accessible 24/7the nation by a designated user or communitythe end of designated users through the secure DiMi Internet portal, found at www.dimispeaks.com.2019.

 

To date, we have not yet commenced commercial marketingCBD, one of DiMi and have not yet generated revenues from operations. DiMi over 80 active cannabinoid chemicals found in cannabis, is to begin beta tested in anticipationthe major non-psychoactive component of the initial commercial roll-outplantCannabis sativa L.; and is proving to be an effective treatment for a number of version 4.0, whichhealth conditions affecting adults, children and pets. While U.S. companies cannot legally make medical claims about CBD or its uses, there are countless scientific research studies showing potential therapeutic indications for CBD, demonstrating that it works well with body cells to improve immunity and is anticipated will take placeeven produced naturally in the third quarter of 2017. We have also instructed our outsource software developer to begin work on smartphone apps to work in conjunction with version 4.0. For more information on our agreements with our outsource software developer for the development of version 4.0 and corresponding smartphone apps to work in conjunction with version 4.0, see “MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.”human brain.

 

With adoptionAccording to a 2013 study published in the British Journal of the DiMi Clinical PharmacologyM2M communicationplatform, users can remotely control, monitor, manage, CBD benefits include acting in some experimental models as an anti-inflammatory, anticonvulsant, antioxidant, antiemetic, anxiolytic and acquire data from their operational assets, providing the interfaceantipsychotic agent; and is therefore a potential medicinal treatment for lighting, temperature, humidity, keycard access, fleet managementneuroinflammation, epilepsy, oxidative injury, vomiting and manynausea, anxiety and schizophrenia. Moreover, there have been dozens of other vital systemspeer-reviewed studies suggesting that impact the enterprise. DiMi uses established secure technology standards (i.e. LONet, MODbus, BACnetCBD may have therapeutic value for medical indications including bipolar disorder, cancer, glaucoma, HIV/AIDS, Huntington’s Disease, Crohn’s Disease, Multiple Sclerosis, Parkinson’s Disease, PTSD, rheumatoid arthritis and ELK) combined with a unique, proprietary software interface that keeps users connected to their asset management and control systems through any web-enabled computer or mobile device.Tourette’s Syndrome.

 

By providing dynamic, real-time accessDue to critical information fromthe growing body of published research supporting the promising therapeutic benefits of CBD, the demand for CBDproducts has been increasing rapidly. In fact, cannabis industry analysts at the Brightfield Groupestimate the hemp-CBD market alone could reach $22 billion by 2022. Between 2017 and 2018, the U.S. hemp-derived CBD market has nearly doubled in size, but the five-year growth projections for this market are now dramatically higher than they were a wide arrayyear ago. This is because the full legalization of new or legacy sensors, GPS tracking tools and/or diagnostic devices – irrespectivehemp-derived CBD is now a real and likely prospect following Republican Mitch McConnell’s proposal of their make, model or manufacturer, DiMi alerts or reports backthe Hemp Farm Act of 2018 (the Farm Bill), which is expected to pass before the end of 2018. This legislation would clearly and unambiguously legalize hemp as well as its users via familiar communication tools, like instant messaging, email, HTMLderivatives, extracts and text messaging. Users can even issue global commands to its asset management and control systems through the DiMi software interface.  Moreover, DiMi leverages the collected knowledge of a particular asset or assets and compares it to historical performance metrics and other critical benchmarks through an integrated data management module, giving users insight that allows them to rapidly identify and implement proper preventive maintenance measures, efficiency improvements and other key operational activities.  cannabinoids, including hemp-derived CBD.

 

Our proprietary M2M solutions utilize a cloud-based, two-way communications delivery platform, marketed as “DiMi.”  Leveraging the power, scalability and flexible turnkey advantages of DiMi’s patent-pending software and hosting platform, users are able to remotely track, monitor, manage and protect multiple mobile and fixed assets in real-time from virtually any web-enabled desktop computer or mobile device while located anywhere in the world.  DiMi features a robust, customized interface that gives its users secure command and control functionality of multiple remote, connected sensors, alarms and diagnostic devices. Moreover, the intuitive DiMi framework readily adapts to and integrates both new and legacy monitoring/sensing equipment – irrespective of make, model or manufacturer – providing for simplified, economical M2M deployments.Introductory Product Line

 

Our DiMi solutionGenerally speaking, our management believes most CBD products for oral consumption available on the market have an earthy, bitter taste that some observers suggest is currently being usedreminiscent of chlorophyll. The centerpiece of our introductory retail product line is our great-tasting, flavor-infused tinctures, formulated using only premium, organic ingredients. In addition, we will also market CBD extract in capsule form. As our Company matures, we expect to actively monitor property management systemsexpand our proprietary CBD products to include a much broader range of flavors and form factors.Launched in several high-rise commercial and residential buildings in New York City – all beta sites which have served to demonstratelate summer 2018, our official market debut showcased the efficacy of the DiMi technology and M2M communications platform.  Moving forward, the Company intends to concentrate its DiMicommercialization efforts on marketing the solution to property management companies, commercial property developers, government/military installations, industrial facilities, retail and restaurant chains, colleges and universities, fleet managers, and any business or institutional concern with valuable fixed and mobile assets requiring remote surveillance, regular maintenance or general oversight.following introductory products:

 

We expect to deliver DiMi as a monthly, hosted service that puts critical information into the palm of its user’s hands with no major hardware investments. Our hosting platform can be tailored for each customer to create secure and reliable end-to-end connectivity between their specific remote connected equipment and DiMi’s proprietary web interface. Once a new client’s core M2M business needs have been confirmed, the Company will closely collaborate with the client to design the organizational and process modifications required to ensure a successful DiMi launch, offering full service project definition, management, user interface customization, implementation services and ongoing quality assurance and testing.

● ManukaHoney CBD Tincture: 1000 mg of all-natural, pure hemp-derived CBD extract infused with raw, organic, UMF16+ManukaHoney – available in a 60ml tincture;
Lemon Lime CBD Tincture for Sport: 1500 mg of all-natural, pure hemp-derived CBD extract –available in 60ml tincture;
Bacon CBD Tincture for Pets: 500 mg of all-natural, smoked bacon-flavored, pure hemp-derived CBD extract – available in 2 fluid ounce tincture with convenient spray top for dosing on pet food; and
CBD Gelcaps: 1500 mg of all-natural, pure hemp-derived CBD extract in gelcap form – containing 30 gelcaps with 50 mg each.

 

 2 

 


UsesSupply, Manufacturing and Benefits of the DiMi SolutionLogistics

 

Based uponOur management believes that some companies operating in the knowledgeCBD oil industry tend to emphasize sales and experiencequantity over quality and safety. In late February 2015, the U.S. Federal Drug Administration (“FDA”) issued several warning letters to companies who claimed that their products contained CBD but, following testing of these products by the FDA, were found to have no CBD.

All of our executive management in real estate operationsflavor-infused tinctures and management,capsules are formulated using pure, all natural, zero-THC phytocannabinoid-rich (“PCR”) hemp-derived CBD sourced from one of the largest, fully and vertically integrated producers of PCR hemp oil. All CBD isolates and oils are authenticated by an independent third party via issuance of a Certificate of Analysis (“COA”), which cannabinoid content and profile, microbiological content, heavy metal content, pesticide content, and residual solvent content. We recognize the importance of compliance and is partnered with one of the industry’s leading CGMP certified extraction facilities. This ensures the consistency and quality of our product line and brand.

Through its proprietary engineering process, our American-based supplier isolates and removes any unwanted compounds – while creating the maximum potency level of phytocannabinoids and terpenes – cold, enclosed and continuous manufacturing processes prevents the degradation of natural molecules during extraction and purification. Made and derived from non-GMO, USA-grown hemp, its PCR hemp oil and isolate powder are subjected to a rigorous testing system – both in-house and verified through independent, third party labs – which ensures accurate levels of phytocannabinoids and confirms the absence of THC. Our products contain only the highest level of naturally derived CBD, more than 99.5% pure, and never contain any THC.

We believe that a key differentiator of our finished products is the superb quality of ingredients we source from the industry’s leading suppliers, each of whom we have initially targeted the real estate management industry for initial commercialization of the DiMi Platform solution. Among the usescarefully vetted and benefits of DiMi in the real estate industry are the following:

“Smart” Facility Management

Today’s buildings – whether residential, commercial, medical or otherwise – are sustained through operation of various utility systems. Through these systems, electricity, heat, HVAC, water, lighting, security and other necessities, are provided to the buildings.

Some conventional systems are controlled by human operators and, thus, require maintenance staff on-site or on-call to control, maintain and otherwise operate such systems. Other systems may be controlled electronically or through a combination of electronic and human control. These systems force building owners to extend additional resources and incur burdensome costs in order to maintain proper operation of the systems, as well as account for human errors that may result from improper system operation or management. Moreover, many conventional systems are not capable of remotely controlling multiple buildings having multiple building functionalities using a single monitor and control device nor can they adapt to various control interfaces that are used by the buildings and facility managers.

Our DiMi solution works as a centralizing component of a facility or multiple facilities’ management system, acquiring and interpreting data from thousands of networked devices monitoring systems operating in multiple locations.

Whether a facility manager is looking to save oil and gas, monitor carbon emissions, avert a flood or monitor and control temperatures, lighting or remote keycard access, DiMi provides a fully integrated, affordable solution. Moreover, DiMi allows our clients to evaluate their building management practices for strengths, weaknesses and opportunities to be greener, more productive and more efficient. DiMi’s virtual grid can track and sort building data to enable cost savings, reduce the carbon footprint and set new global standards of performance for the facility management industry.

Energy Savingsqualified.

 

For boilersinstance, raw Mānuka honey used in our products is imported directly from the north island of New Zealand from a supplier which has been supplying quality bee products since 1974. Mānuka honey is believed to run at peak efficiency, operators must attendbe one of the most unique and beneficial forms of honey in the world and may carry the industry’s highest UMF®16+ rating, distinguishing it as superior high-grade Manuka. Produced by bees that pollinate the native Manuka bush, possible Mānuka honey uses range from healing sore throats and digestive illnesses to boiler staging, water chemistry, pumpingcuring Staph infections and boiler controls, boiler fuel-air mixtures, burn-to-load ratios and stack temperatures. DiMi can consolidate all the above efficiency-enhancing metrics and provide monitoring of water chemistry and temperature to improve equipment efficiency and reduce energy expenditures. DiMi provides these features on a cost effective platform which empowers users to realize significant cost savings.gingivitis. All other flavorings infused in our products – including our all-natural, organic lemon lime flavor used in our Bespoke Sport offering -- are also sourced from reputable suppliers.

 

DiMi can help maintain consistent temperature throughout buildings and provide the ability for managers to monitor and control irregularities. Users benefitFulfillment of orders from being able to: prevent system wear and tear from operating under stress, increase the life of the systems through proper timing of maintenance and determine peak efficiencies and set pre-defined conditions and alerts. DiMi’s service can also measure water consumptionour online customers is managed by unit to ascertain usage by tenant and carbon emissions to track changes.a well-established third-party logistics partner.

 

Enhanced Security

Sales and Marketing

 

DiMi can provide remote monitoring, controlWe currently sell our products through our website.

Management believes that the traditional retail environment is currently experiencing notable economic instability due largely to the global shift in consumer purchasing behaviors – with online shopping/ecommerce sites rapidly overtaking brick-and-mortar stores as consumer preferred shopping venues. In view of this retailing reality, we have adopted a Direct-to-Consumer sales model that is anchored by an ecommerce website whereby we educate, sell, and accessship our CBD products directly to restricted areas. consumers. In addition, we also plan to market our CBD products on a wholesale basis to select specialty retailers, dispensaries and physicians.

Our technology provides an audit trail that enables usersmarketing initiatives include the use of social marketing, social influence marketing, direct response marketing, inbound marketing, email marketing, Search Engine Optimization (“SEO”) and content marketing, among other proven strategies to see who accessed a roomgenerate and when. The abilityconvert sales prospects into loyal, satisfied customers. We will also explore utilizing coupon and deal sites to track entriesdrive traffic to individual rooms via the audit trail eliminates the cost of replacing locksour website and lost keys. DiMi readily interfaces with most alarm panels on the marketretailers, as well as most existing keycard access systems.participate in select industry conferences to promote our brand and build greater awareness of our products among prospective business partners and consumers.

 

 3 

 

 

Disaster ManagementOther brand-building tactics include a sports marketing and sponsorship strategy that has initially focused on Extreme Sports, motor racing and other high action sports athletes, teams and events, with the underpinning goal of generating consumer awareness of our high-performance Lemon-Lime Sport CBD brand by fans and athletes. In March 2018, we were a titled sponsor of sportsbike racer Robertino Pietri who took third place at the 77th annual running of the DAYTONA 200; and in October 2018, we were a title sponsor of motorcycle racer Sean Dylan Kelly who competed in and won first place at the 35th Annual Race of Champions at Daytona International Speedway.

 

Water leaksThe Difference Between Hemp and flooding may be costly for property managers and owners. DiMi can assist with disaster management by providing the ability to monitor strategically placed water sensors in bathrooms, elevator shafts, rooftop drains or any other problematic area. Users will be alerted if there are any irregularities within a defined scope to avert catastrophes. In addition, hurricane shields can be activated from a remote location to avoid disaster and minimize costs in protecting assets.Marijuana

 

Routine MaintenanceBoth marijuana and hemp come from the same species of plant called “Cannabis Sativa L.” However, cultivators of the cannabis plant have manipulated it over the years to encourage specific traits to become dominant. Cannabis plants contain unique compounds called cannabinoids. Current research has revealed over 80 different cannabinoids thus far, but management believes THC is the most well-known and is credited with causing the marijuana high.While marijuana plants contain high levels of THC, hemp contains very little of the psychoactive chemical. The foregoing is one of the differences which distinguishes hemp from marijuana. 

 

All formsHemp was originally cultivated nearly 10,000 years ago in what is modern day Taiwan. Ancient cultivators of routine maintenancethe cannabis plant recognized that canit was dioecious, meaning that it had dual characteristics. Cultivators grew one variety of the cannabis plant to be automated can be controlled directly usingtall and durable. This became what we now call industrial hemp. Upon discovering that the DiMi M2M communications solution. From pre-defined schedules, on a demand basis when equipped withflower buds of the proper sensorscannabis plant had psychoactive effects, cultivators began separating the hemp plants from the flowering plants in order to a user’s instant messaging (“IM”) account anywhereisolate their “medicinal” characteristics.

Scientifically, we now know that industrial hemp plants tend to produce high levels of the Internet is accessible, maintenance can be performed at will. For example, automated service calls can be enabled when a boiler is operating outsidecannabinoid CBD, while producing low amounts of predetermined optimal ranges or, storage tankTHC. Conversely, the marijuana plant produces high THC levels can be preset to enable DiMi to trigger automatic scheduling of oil deliveriesand low CBD levels. This chemical difference dictates the way we use the cannabis plant for medicinal and dietary supplemental purposes.

Federal Legislative Overview

 

Building ValueCannabidiol, or CBD, that is derived from industrial hemp plants — like the CBD used in all products currently being produced or to be produced by Bespoke Extracts — is deemed by the FDA to be a dietary supplement, not a medication. Consequently, in the U.S., no prescription is required to obtain CBD and it can be legally purchased and consumed in all 50 states (and in 40 countries around the world).

 

We believeHowever, in December 2016, the Department of U.S. Drug Enforcement Administration (“DEA”) implemented a new rule that a building that incorporates DiMi will have a documented pedigree of asset performance. Energy management and efficiency gains, along with maintenance and repair history, are mapped through our Master Data Management module. DiMi’s information management capabilities increase property return on investment and overall property value.

The Marketplace

Although widely heraldeddeclared CBD as a “transformative” technology, M2MSchedule I drug, meaning it has “no currently accepted medical use in the United States, a lack of accepted safety for use under medical supervision and a high potential for abuse.” While numerous industry insiders have expressed concerns about the DEA’s new ruling, it is not new. The concept was first used during World War II for identifying “friend” or “foe”widely believed that the agency would struggle to prevent pilots from hittingmake CBD illegal under current laws, thanks to multiple protections put in place by Congress as part of the wrong targets. Satellites use M2M to fire engines based on guidance and navigation sensors. Garage door openers respond2014 Farm Bill. Moreover, subsequent additions to the clicker2015 and 2016 Congressional Appropriations Act prohibit the DEA from going after the products produced under these programs. Moreover, the most recent version of the legislation to legalize growing hemp was introduced in April 2018, with Senate Majority Speaker Mitch McConnell as the primary sponsor, which quickly evolved into the Senate’s Agriculture Improvement Act of 2018 (2018 Farm Bill). On December 3, 2018, House and Senate leaders announced that they had come to an agreement on the reconciled version of the 2018 Farm Bill, which – for the first time ever – includes a car.provision to lift the federal government’s longstanding ban on the commercial production of industrial hemp. It also amends the Federal Controlled Substance Act of 1970 so that industrial hemp containing no more than 0.3% THC is no longer classified as a Schedule I prohibited substance. The difference now is that you can networkvote to approve the sensors in devices and objects, and use the data for extended purposes, such as recognizing that the garage door was left open and notifying the homeowner or security company to close it by way of remote command.

M2M – also commonly called “ubiquitous” or “pervasive” computing – refers to digital microprocessors and sensors embedded in everyday objects and connected to networks. M2M most often refers to “machine-to-machine,” although mobile-to-machine or man-to-machine is also used to describe this fast evolving family of technologies. Because M2M communications can exist in practically any machine, environment and market, it holds the potential to reshuffle entire industry structures, creating an anticipated windfall for technology enablers in the M2M arena and enabling an array of solutions that deliver new levels of “smart services” and commerce.

Secondary Target Markets

Distilling customer needs to discrete services allows us to target and expand high value opportunities and generate critical need niches in vertical market sectors. Combining these niches into a consolidated service, offering a single point customer interface,2018 Farm Bill is expected to giveoccur prior to the Company key competitive differentiation in the marketplace.

Restaurant and Retail Chains – DiMi can provide owners and managersend of restaurants and retail businesses the ability to monitor and control multiple locations remotely from any web-enabled computer or mobile device. We can provide the interface that gives users real-time insight and control of critical systems within their establishments that enable them to reduce costs, manage more efficiently and increase their return on investment. As long as there is Internet access, users can monitor and manage all of their properties – whether at home, walking down the street or traveling out of the country.

With respect to restaurants, DiMi provides the ability to monitor the humidity and temperature of walk-in environments, such as freezers, wine cellars and refrigeration units, helping to ensure that meats age properly, cellaring of wines is maintained and cheese or other perishables are well stored. When a power failure or surge occurs, immediate alerts are sent to a manager or owner’s handheld device, enabling quicker response times and reducing the loss of inventory from food spoilage or wine cellar temperature fluctuation.

Weather extremes may also trigger instability in a restaurant environment. DiMi helps by providing the ability to remotely monitor temperatures in one or more restaurants and signal any deviation from normal.this year.

 

 4 

 

 

Schools, CollegesCompetitive Overview

Given the rapid growth of the U.S. CBD oil industry, hundreds of companies have entered the market. Consequently, the market is becoming highly competitive and Universities – With DiMi, educational facilities can experiencewe believe to compete in the peacemarket requires ensuring the quality and integrity of mind that comes with being able to monitor pointsproduct offerings. Certain of entryour competitors have substantially greater financial, distribution, and marketing resources, as well as restricted areas on-site or remotely from any web-enabled computer or mobile device.greater brand awareness than us, and there can be no assurance we will be able to successfully compete.

Our Headquarters

 

Our solution helpscorporate headquarters is located at 323 Sunny Isles Boulevard, Suite 700, Sunny Isles Beach, Florida 33160. Our Internet website is www.BespokeExracts.com. The contents of the website are not part of this report.

Employees

As of the date of the filing of this report, we have 1 employee, who is full-time.

Item 1A. Risk Factors.

An investment in the Company’s common stock involves a high degree of risk. In determining whether to protect sensitive documents, dormitories and classrooms housing expensive assets, such as computer centers, biotech labs, movie production and digital publishing facilities. Moreover, through usepurchase the Company’s common stock, an investor should carefully consider all of DiMi’s auditing capabilities, school building managersthe material risks described below, together with the other information contained in this report before making a decision to purchase the Company’s securities. An investor should only consider purchasing the Company’s securities if he or she can mitigate losses dueafford to theft and receive immediate, real-time feedback in emergency situations, including security breaches, fire, smoke, gas leaks, and carbon monoxide and carbon dioxide alerts, among other potential crises.suffer the loss of his or her entire investment.

Risk Related to our Business.

 

Healthcare FacilitiesWe have a history of operating losses, and we may not achieve or maintain profitability in the future. – In addition

We incurred a net loss of $7,609,558 for the year ended August 31, 2018. As of August 31, 2018, we have an accumulated deficit of $16,716,644 and a stockholders’ deficit of $427,540. We may never achieve profitability or generate significant revenues.

We will need to benefiting from the same remote monitorraise additional capital, which may not available.

We anticipate that we will need to raise additional capital to execute our business plan and control capabilities afforded all sectors involving the management of building systems, healthcare facilities can leverage DiMi M2M communications solutions in highly innovative waysmaintain and expand our operations. Additional capital may not be available to enhance resident patient care.

For instance, DiMi can provide care facilities with an abilityus on acceptable terms, or at all. If we are unable to prevent scalding due to inconsistencies in tap water temperature. The risk is greater where the resident populationraise additional capital, our business may be elderly, proneharmed and we may need to sensory losscurtail or when nerve reaction times are reduced; thus, the intuitive reaction to pull away from the scalding hot water is not sufficient to avoid potentially severe skin burns.

Another potential application is home monitoring of patients suffering from chronic diseases and conditions, such as congestive heart failure, hypertension, diabetes, asthma and obesity. Hospitals, clinics and physician practices can utilize DiMi to establish an additional communication channel with their patients, removing geographic barriers and enhancing the quality of care.

Connecting with Telehealth devices used in the home and accessed via any web-enabled computer or wireless device, DiMi’s powerful interface can give medical staff the ability to monitor and quickly assess – in real-time – an at-home patient’s oxygen levels, pulse, blood pressure and other vital statistics, potentially reducing hospitalization rates, improving treatment plans and decreasing emergency room visits. Moreover, DiMi’s data management module captures important patient data for medical records, which can help reduce costs related to paperwork and prevent costly mistakes that could lead to malpractice claims.

cease operations.

Industrial Complexes – DiMi’s cloud-based M2M communications platform supports a vast array of possibilities to employ innovative tracking, sensing, monitoring, alerting and reporting equipment to remotely monitor and manipulate industrial control systems. Integrating with existing or new backend systems, DiMi can serve as the command and control interface for a vast number of industrial M2M applications in sectors that range from oil and gas, water treatment and waste management to manufacturing, green power generation and utilities.

One possible DiMi application is managing an industrial complex’s consumption of energy by reducing or shifting electricity use to improve electric grid reliability, manage electricity costs, and encourage load shifting or load shedding during times when the electric grid is near capacity. Another would be real-time remote monitoring and control of automated irrigation systems for a commercial farming enterprise or monitoring and detecting tank leaks at oil refineries.

Because DiMi is hardware-agnostic and readily customized to address the demands of any industrial sector, we believe that the DiMi interface can be leveraged and applied to protect a vast array of fixed and mobile assets deemed valuable and mission-critical.

Logistics/Fleet Management - Powered by DiMi, DiMi Telematics provides the commercial transport industry with a cost effective method of monitoring in real-time all aspects of fleet operations, including driver and vehicle performance, geo-tracking, safety, compliance and efficiency. The resulting benefits range from the successful streamlining of routes and schedules to save money in fuel consumption and personnel costs, to mitigating risk and lowering insurance costs.

Certain U.S. legislation (e.g., Food Safety Act 1990, Quick Frozen Foodstuffs Regs 1995 and the Temperature Control Regs 1995) mandates that mobile transporters of chilled food products closely monitor the temperature of goods in transit to protect them from spoilage. Working in concert with automated, wireless temperature monitoring devices, DiMi is able to transmit alerts directly to fleet managers and/or refrigerated truck drivers when load temperatures approach predefined levels requiring immediate attention.

 5 

 

CompetitionWe have a limited operating history that impedes our ability to evaluate our potential future performance and strategy.

Given the positive outlook for the M2M industry and our targeted market segments, we will sell our solutions in intensely competitive markets. SomeWe began sales of our competitors have significantly greater financial, technical, salesproducts in mid-2018. Our limited operating history makes it difficult for us to evaluate our future business prospects and marketing resources than we do. As the markets for our software products and hosting services continue to develop, additional companies, including those with significant market presence in the wireless industry, could enter the markets in which we compete and further intensify competition. In addition, we believe price competition may become a more significant competitive factor in the future.

Several businesses that share the M2M space can be viewed as competitors, such as M2M application service providers, Mobile Virtual Network Operators, system integrators and wireless operators/carriers that offer a variety of the components and services required for the delivery of complete M2M solutions.

We believe we have a competitive advantage and are uniquely positioned as an M2M solution-centric business because our M2M communications platform is hardware-agnostic, and our hosting environment is in the cloud which gives us the ability to help businesses lower their IT infrastructure costs and management requirements while improving performance, scalability and flexibility.

We have also taken, and will continue to take, the necessary steps to secure the proprietary aspectsmake decisions based on estimates of our applications through patent filings infuture performance. To address these risks and uncertainties, we must do the U.S. and in key international markets. Moreover, we intend to remain focused on proactively developing best-of-breed Internet-enabled M2M solutions that are designed to effectively meet the evolving needs of our primary target market, namely web-based remote asset tracking, management and control with applications in the commercial, industrial, educational, government and military sectors.

The markets for our M2M communications solutions will remain characterized by rapid technological change and evolving industry standards. Nonetheless, the principal competitive factors in these markets will continue to be product performance, ease of use, reliability, price, breadth of solution offerings, sales and distribution capability, technical support and service, customer relations, and general industry and economic conditions.

We believe that our consultative approach to enabling hosted M2M technologies for our clients, as well as the attention we give to their specific needs, requirements and circumstances, are critical competitive differentiators that we are dedicated to preserving and nurturing as we grow. Moreover, prudent and timely integration of new and emerging digital and web technologies into our M2M communications platform will remain an underpinning mission for us if we are to earn and maintain distinction as a recognized industry leader.

Among the public companies with which we may compete are: Digi International, Inc. (Nasdaq: DGII), EnerNOC, Inc. (Nasdaq: ENOC), Evolving Systems, Inc. (Nasdaq: EVOL), Gemalto, NV (OTCQB: GTOFF), Numerex Corp. (Nasdaq: NMRX), RF Monolithics, Inc. (Nasdaq: RFMI), Telular Corporation (Nasdaq: WRLS) and Trimble Navigation Ltd. (Nasdaq: TRMB). Many of these competitors have greater name recognition as well as financial and other resources than we have. We may never become a competitive influence in the marketplace.

Plan of Operations

DiMi Telematics, Inc. is headquartered in New York City and incorporated under the laws of the State of Nevada. Aside from the oversight and administration of our corporate, financial and legal affairs by the executive management team, once commercial roll-out of DiMi takes place, our Company’s operating activities will be centralized in three core areas:following:

 

 SalesSuccessfully execute our business strategy to establish the “Bespoke Extracts” brand and Marketing will employ both directreputation as a well-managed enterprise committed to delivering premium quality and indirect sales models utilizing an in-house businesscost-effective CBD products to the nutraceutical and veterinary markets;
Respond to competitive developments;
Execute value-focused pricing strategies that position our tinctures and gelcaps as premium, great tasting, all-natural CBD products offered at a competitive price;
Effectively and efficiently market and sell our introductory line of CBD products through the development team, partnersof multi-channel distribution strategies focused on direct-to-consumer and resellersdistribution through wholesale venues including specialty retailers, pharmacies, dispensaries and self-service through a service on-demand web interface.physician’s and veterinarian offices;
Attract, integrate, retain and motivate qualified personnel.

Our business strategy may not be successful and we may not successfully address these risks. In the event that we do not successfully address these risks, our business, prospects, financial condition and results of operations may be materially and adversely affected.

Our operating results may fluctuate significantly based on customer acceptance of our products. As a result our period-to-period comparisons of our results of operations are unlikely to provide a good indication of our future performance.

Management expects that we will experience substantial variations in our net sales and operating results from quarter to quarter due to customer acceptance of our products. If customers do not accept our products, our sales and revenue will either fail to materialize or decline, resulting in a reduction in our operating income or possible increase in losses.

If we do not successfully develop additional products and services, or if such products and services are developed but not successfully commercialized, we could lose revenue opportunities.

Our future success will depend, in part, on our ability to expand our product offerings. To that end we have engaged in the process of identifying new product opportunities to provide additional products and related services to our customers. The processes of identifying and commercializing new products is complex and uncertain, and if we fail to accurately predict customers’ changing needs and preferences, our business could be harmed. We have already and may have to continue to commit significant resources to commercializing new products before knowing whether our investments will result in products the market will accept. Furthermore, we may not execute successfully on commercializing those products because of errors in product planning or timing, technical hurdles that we fail to overcome in a timely fashion, or a lack of appropriate resources. This could result in competitors providing those solutions before we do and a reduction in net sales and earnings.  

 

 6 

 

 

The success of new products will depend on several factors, including proper new product definition, timely completion, and introduction of these products, differentiation of new products from those of our competitors, and market acceptance of these products. There can be no assurance that we will successfully identify additional new product opportunities, develop and bring new products to market in a timely manner, or achieve market acceptance of our products or that products and technologies developed by others will not render our products or technologies obsolete or noncompetitive.

We may have difficulties managing our Company’s growth, which could lead to higher operating losses, or we may not grow at all.

If we succeed in growing our business, such growth could strain our human and capital resources, potentially leading to higher operating losses. Our initialability to manage operations and control growth will be dependent upon our ability to raise and spend capital to successfully attract, train, motivate, retain and manage new employees and continue to update and improve our management and operational systems, infrastructure and other resources, financial and management controls, and reporting systems and procedures. Should we be unsuccessful in accomplishing any of these essential aspects of our growth in an efficient and timely manner, then management may receive inadequate information necessary to manage our operations, possibly causing additional expenditures and inefficient use of existing human and capital resources or we otherwise may be forced to grow at a slower pace that could slow or eliminate our ability to achieve and sustain profitability. Such slower than expected growth may require us to restrict or cease our operations and go out of business.

Loss of our chief executive officer could limit our growth and negatively impact our operations.

We depend upon our president and chief executive officer, Niquana Noel, to a substantial extent. The loss of Ms. Noel could have a material adverse effect on our business, results of operations or financial condition.

We will be required to attract and retain top quality talent to compete in the marketplace.

We believe our future growth and success will depend in part on our ability to attract and retain highly skilled managerial, product development, sales and marketing, team willand finance personnel. We may not succeed in attracting and retaining such personnel. Shortages in qualified personnel could limit our ability to increase sales of existing products and services and launch new product and service offerings.

Our inability to effectively protect our intellectual property would adversely affect our ability to compete effectively, our revenue, our financial condition, and our results of operations.

We may be comprisedunable to obtain intellectual property rights to effectively protect our branding, products, and other intangible assets. Our ability to compete effectively may be affected by the nature and breadth of our current management staff, and supplemented by the hiring of dedicated sales professionals as the Company matures. However,intellectual property rights. While we intend to immediately begin building outdefend against any threats to our global distribution network through resellerintellectual property rights, there can be no assurance that any such actions will adequately protect our interests. If we are unable to secure intellectual property rights to effectively protect our branding, products, and strategic marketing agreements with qualified third party sources. To supportother intangible assets, our revenue and nurture strong relationships withearnings, financial condition, or results of operations could be adversely affected.

Our industry is highly competitive, and we have less capital and resources than many of our future salescompetitors, which may give them an advantage in developing and marketing partners, we expectproducts similar to provide co-marketing, trade show support, product training and DiMi ours or make our products obsolete.demo units, while also actively engaging in industry awareness and leading generation programs.

 

OnceWe are involved in a new client’s core M2M business needshighly competitive industry where we compete with various other nutraceutical companies which offer products similar to the products we sell. These competitors may have been confirmed,far greater resources than we do, giving our solutions team will closely collaborate with the client to design the organizational and process modifications required to ensure a successful DiMi launch, offering full service project definition, management, user interface customization, implementation services and ongoing quality assurance and testing.

In order to achieve accelerated market penetration and sustainable, recurring revenue from a global customer base, the Company expects to ultimately adopt a hybrid salescompetitors an advantage in developing and marketing model involvingproducts similar to ours or products that make our products obsolete. While we believe we are better equipped to customize products for the following: direct sales (solutions team), channel sales (via leading Value-Added Resellers (“VARs”)cannabis market and distributors dedicatedadvise growers on appropriate products to niche market applicationsmaximize crop yield as compared to traditional nutraceuticals, there can be no assurance that DiMiis capable of addressing in target domestic and international markets) and strategic marketing and integration collaborations with industry leading system integrators, Original Equipment Manufacturers (“OEMs”) and large cellular carriers and dealers.

Operations will be responsible for managing daily activities related to monitoring and administering our cloud-based server operations, 24/7 client service/help desk, professional services and installation support and quality assurance and testing of our DiMi software and hosting platform, as well as the implementation and ongoing administration of our hosted clients’ M2M communications platforms.

Our DiMi solution is currently being used to actively monitor property management systems in numerous high-rise commercial and residential buildings in New York City. All beta sites are owned and managed by the FATA Organization. These sites have servedwe will be able to successfully prove the DiMi software technology and hosting platform and will provide the Company’s sales and marketing team with the capability to provide live demonstrations of the DiMi platform.

After our solutions team works in close collaboration with our customers throughout their respective DiMi implementation projects, our account service representatives will assume responsibility for ongoing technical and administrative support following DiMi’s deployment. In addition, our customers will have access to a dedicated team of customer service and technical specialists who can be reached after hours and on weekends through a telephone helpdesk and an online technical support center.

Product Development will be charged with enhancing our existing M2M software applications and services and introducing new and complementary hosted products and applications on a timely basis. We anticipate that the creative formulation of enhancements and new product conceptualization will be performed in-house by our officers and directors. Thereafter, we intend to outsource software enhancement and product development to third parties.

Currently, the Company, in collaboration with its outsource software development team, is engaged in developing the next generation of its M2M communications platform, DiMi 4.0,which is being designed to provide for a number of technological enhancements and new user benefits being built into the system, including Voice Over Internet Protocol. Based on current development timelines, DiMi 4.0 should be finalized and ready for commercial launch on or before the end of the third quarter of 2017.

At that time the Company intends to concentrate its DiMi commercialization efforts on marketing the solution to property management companies, commercial property developers, government/military installations, industrial facilities, retail and restaurant chains, colleges and universities, fleet managers, and any business or institutional concern with valuable fixed and mobile assets requiring remote surveillance, regular maintenance or general oversight.compete against these other manufacturers.

 

 7 

 

 

U.S. federal, state and foreign regulation and enforcement may adversely affect the implementation of marijuana laws and regulations and may negatively impact our revenue and profit or we may be violating the Controlled Substances Act or other U.S. federal, state or foreign laws.

Currently, 32 states and the District of Columbia permit some form of whole-plant cannabis use and cultivation either for medical or recreational use. During the midterm elections in November 2018, two more states voted to legalize medical marijuana use (Missouri and Utah) while one more voted to legalize recreational use (Michigan). Forty-seven states allow or are considering legislation to allow the possession and use of non-psychoactive CBD oil for some medical conditions only. There are efforts in many other states to begin permitting cannabis use and/or cultivation in various contexts, and it has been reported that eleven states are actively considering bills to permit recreational use or to decriminalize the use of marijuana. Nevertheless, the federal government continues to prohibit cannabis in all its forms as well as its derivatives. Under the federal Controlled Substances Act (the “CSA”), the policy and regulations of the federal government and its agencies is that cannabis has no medical benefit, and a range of activities including cultivation and use of cannabis is prohibited. Until Congress amends the CSA or the executive branch deschedules or reschedules cannabis under it, there is a risk that federal authorities may enforce current federal law. Enforcement of the CSA by federal authorities could impair the Company’s business; and could even force the Company to cease operating entirely in the cannabis industry. The risk of strict federal enforcement of the CSA in light of congressional activity, judicial holdings, and stated federal policy, including enforcement priorities, remains uncertain.

Risks Related to our Common Stock

 

Intellectual PropertyThere is a limited trading market for our common stock, and investors may find it difficult to buy and sell our shares.

Our common stock is not listed on any national securities exchange. Accordingly, investors may find it more difficult to buy and sell our shares than if our common stock was traded on an exchange. Although our common stock is quoted on the OTCQB, it is an unorganized, inter-dealer, over-the-counter market which provides significantly less liquidity than the Nasdaq Capital Market or other national securities exchange. Further, prior to July 2018 there was minimal reported trading in our common stock, and any significant trading volume in our common stock may not be sustained. These factors may have an adverse impact on the trading and price of our common stock.

 

Our M2M communications solutions rely onThe market price of our common stock is, and benefit from our portfolio of intellectual property, including pending patents, trademarks, trade secretsis likely to continue to be, highly volatile and domain names.subject to wide fluctuations.

 

Patent Applications:The market price of our common stock is highly volatile and could be subject to wide fluctuations in response to a number of factors that are beyond our control, including:

 

 1.U.S. Patent Application No. 12/798,923
Filed April 13, 2010
Title: Monitoring and Control Systems and Methods
Jurisdiction: U.S. Patent and Trademark Office
2.International Application Serial No. PCT/US2010/030882
Title: Monitoring and Control Systems and Methods
3.Taiwan Patent Application Serial No. 99111633

Title: Monitoring and Control Systems and Methods

Taiwanese Patent No. I503638

Approved October 11, 2015

Expires April 14, 2030

U.S. Trademark Applications

1.Greenfreak Serial No.: 77724645
2.Domain Namesvariations in our quarterly operating results;

 

 

http://www.dimispeaks.com

http://www.greenfreak.com

http://www.controlfreak.org

http://www.theicontrol.us

http://www.icontrol.mobi

http://www.icontrolmultiple.com

http://www.icontrolnow.com

http://www.icontrolonline.com

http://www.greened.biz

http://www.greenfreak.biz

http://www.green-freak.com

http://www.green-freak.info

http://www.green-freak.me

http://www.green-freak.mobi

http://www.green-freak.org

http://www.greened.ws

http://www.greenfreak.info

http://www.greenfreak.me

http://www.greenfreak.mobi

http://www.greenfreak.ws

http://www.greened.net

http://www.askdimi.net

http://www.askdimi.org

http://www.askdimi.info

http://www.askdimi.biz

http://www.askdimi.us

http://www.cntrlfreaks.biz

http://www.cntrlfreaks.us

http://www.cntrlfreaks.com

http://www.cntrlfreaks.info

http://www.cntrlfreaks.net

http://www.cntrlfreaks.org

http://www.greenfreak.us

http://www.greenfreak.com

http://www.Precisionloc8.com

http://www.Precisionloc8.net

http://www.Precisionlok8.com

http://www.Precisionlok8.net

http://www.Precisionlocate.com

http://www.Precisionlocate.net

http://www.DiMiTelematics.com

http://www.DiMiTelematics.net

http://www.DiMiTM.com

http://www.DiMiTM.net

http://www.DiMi-tm.com

http://www.DiMi-tm.net

http://www.DiMi-m2m.com

http://www. DiMi-m2m.net

http://www. DiMim2m.com

http://www. DiMim2m.net

announcements that our revenue or income are below analysts’ expectations;

 

History of DTI

DTI was formed as a Nevada corporation on January 28, 2011 under the name Medepet, Inc. On June 30, 2011, Medepet, Inc. changed its name to Precision Loc8, Inc., on July 28, 2011, Precision Loc8, Inc. changed its name Precision Telematics, Inc. and on August 10, 2011, Precision Telematics changed its name to DiMi Telematics, Inc.

general economic slowdowns;

 

 8 

 

 

sales of large blocks of our common stock; and

announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments. 

OnOur common stock is considered a “penny stock” and is subject to additional sale and trading regulations that may make it more difficult to buy or about July 31, 2011, DTI entered into an Asset Purchase Agreement with Roberto Fata pursuantsell.

Our common stock is considered a “penny stock” and securities broker-dealers participating in sales of our common stock are subject to which Mr. Fata soldthe “penny stock” regulations set forth in Rules 15g-2 through 15g-9 promulgated under the Exchange Act. Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our common stock and DTI purchased the technology encompassing DiMi, including certain specified assets usedcause a decline in the remote monitoring and controlmarket value of building management systems through unique software interface.

History of DTII

DTII was originally formed as Cine-Source Entertainment, Inc. (“Old Corporation”), a Colorado corporation, on July 29, 1988. Pursuant to a Plan of Merger dated February 24, 2004, the Old Corporation filed Articles and Certificate of Merger with the Secretary of State of the State of Colorado merging the Old Corporation into Cine-Source Entertainment, Inc. (the “Surviving Corporation”), a Colorado corporation Thereafter, on April 27, 2004, the name of the Surviving Corporation was changed to First Quantum Ventures, Inc. On April 13, 2006, the Surviving Corporation formed a wholly owned subsidiary, a Nevada corporation, under the name First Quantum Ventures, Inc., and on May 5, 2006 merged the Surviving Corporation into First Quantum Ventures, Inc. On November 10, 2011, DTII acquired DTI in a “reverse merger” as discussed elsewhere in this Annual Report on Form 10-K.our stock.

 

Fiscal Year EndWe do not intend to pay dividends on our common stock for the foreseeable future.

 

Following the closing of the Share Exchange pursuant to which DTII acquired DTI, DTII changed its fiscal year end to August 31, so as to correspond to the fiscal year end of DTI.

Employees

As of November 30, 2016, other than our officers and directors, we hadWe have paid no full time or part time employees other than our Chief Executive Officer.

ITEM 1A.RISK FACTORS.

An investment individends on our common stock involves significant risks. You should carefully consider the following risksto date and all other information set forth in this Annual Report before decidingwe do not anticipate paying any dividends to invest inholders of our common stock. Ourstock in the foreseeable future. While our future dividend policy will be based on the operating results and capital needs of the business, financial conditionwe currently anticipate that we will retain any earnings to finance our future expansion and resultsfor the implementation of operations may suffer asour business plan. A lack of a result of these risks.. In that case,dividend can further affect the market value of our common stock, may decline and you could lose all or partsignificantly affect the value of your investment.any investment in the Company.

   

Risks Associated withAdditional stock offerings in the Company’s Prospective Business and Operationsfuture may dilute then-existing shareholders’ percentage ownership of the Company.

 

Given our plans and expectations that we will need additional capital and personnel, we may need to issue additional shares of common stock or securities convertible or exercisable for shares of common stock, including convertible notes, stock options or warrants. The Company lacks meaningful operating history andissuance of additional securities in the future will require substantial capital if it is to be successful. We will require additional funds for our operations.dilute the percentage ownership of then-current stockholders.

 

At August 31, 2016, we had net negative working capitalFailure to achieve and maintain internal controls in accordance with Sections 302 and 404 of approximately $115,104. We will require significant cash during fiscal 2016-17, in order to grow our business, including implementing any acquisitions. No assurances can be given that the Company will be able to obtain the necessary funding during this time to make any acquisitions or for any other purpose. The inability to raise additional funds willSarbanes-Oxley Act of 2002 could have a material adverse effect on the Company’sour business plan of operation and prospects. Acquisitions may be made with cash or our securities or a combination of cash and securities. To the extentstock price.

Our management has determined that we require cash, we may have to borrow the fundsnot effective disclosure controls and procedures, or sell equity securities. The issuanceinternal control over financial reporting as of equity, if available, would result in dilution to our stockholders. We have no commitments from any financing source and we may not be able to raise any cash necessary to complete an acquisition. If we fail to make any acquisitions, our future growth may be limited. If we make any acquisitions, they may disrupt or have a negative impact on our business.

The terms on which we may raise additional capital may result in significant dilution and may impair our stock price. Because of our cash position, our stock price and our immediate cash requirements, it is difficult for us to raise capital for any acquisition. We cannot assure you that we will be able to get financing on any terms, and, if weAugust 31, 2018. Effective internal controls are able to raise funds, it may be necessary for us to sell our securities at a price that is at a significant discount from the market priceproduce reliable financial reports and on other terms which may be disadvantageous to us. In connection with any such financing, we may be required to provide registration rights to the investors and pay damages to the investorare important in the event that the registration statement is not filedprevention of financial fraud. If we cannot produce reliable financial reports or declared effective by specified dates. The priceprevent fraud, our business and terms of any financing which wouldoperating results could be available to usharmed, investors could resultlose confidence in both the issuance ofour reported financial information, and there could be a significant number of shares and significant downward pressurematerial adverse effect on our stock price.

 

Item 1B. Unresolved Staff Comments.

Not required for a smaller reporting company.

Item 2. Properties.

We maintain our principal office at 323 Sunny Isles Boulevard, Suite 700, Sunny Isles Beach, Florida 33160 square feet of office space. Our monthly rent is $116 under a lease that terminates in June 2019. We believe that our existing facilities are suitable and adequate to meet our current business requirements.

Item 3. Legal Proceedings.

We are not party to, and our property is not the subject of, any material legal proceedings.

Item 4. Mine Safety Disclosures.

Not applicable.

 9 

 

There is substantial doubt about our ability to continue as a going concern.PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. 

 

Our independent public accounting firm in their report dated December 16, 2016 included an explanatory paragraph expressing substantial doubt in our ability to continue as a going concern without additional capital becoming available. Going concern contemplatescommon stock quoted on the realization of assets andOTCQB under the satisfaction of liabilities in the normal course of business over a reasonable length of time. Our ability to continue as a going concern ultimately is dependent on our ability to generate a profit which is dependent upon our ability to obtain additional equity or debt financing, attain further operating efficiencies and, ultimately, to achieve profitable operations. As a result, our financial statements do not reflect any adjustment which would result from our failure to continue to operate as a going concern. Any such adjustment, if necessary, would materially affect the value of our assets.symbol “BSPK.”.

  

The Company’s officers and directors may have conflicts of interest and do not devote their full time to the Company’s operations.

The Company’s officers and directors may have conflicts of interest in that they are and may become affiliated with other companies. In addition, the Company’s officers do not devote their full time to the Company’s operations. Until such time that the Company can afford executive compensation commensurate with that being paid in the marketplace, its officers will not devote their full time and attention to the operations of the Company. No assurances can be given as to when, if ever, the Company will be financially able to engage its officers on a full time basis.

We have not voluntarily implemented various corporate governance measures in the absence of which, stockholders may have more limited protections against interested director transactions, conflicts of interest and similar matters.

Recent federal legislation, including the Sarbanes-Oxley Act of 2002, has resulted in the adoption of various corporate governance measures designed to promote the integrity of the corporate management and the securities markets. Some of these measures have been adopted in response to legal requirements. Others have been adopted by companies in response to the requirements of national securities exchanges, such as the NYSE or The NASDAQ Stock Market, on which their securities are listed. Among the corporate governance measures that are required under the rules of national securities exchanges are those that address board of directors' independence, audit committee oversight, and the adoption of a code of ethics. While our board of directors intends to adopt a Code of Ethics, we have not yet done so nor have we adopted any of these corporate governance measures and, since our securities are not listed on a national securities exchange, we are not required to do so. It is possible that if we were to adopt some or all of these corporate governance measures, stockholders would benefit from somewhat greater assurances that internal corporate decisions were being made by disinterested directors and that policies had been implemented to define responsible conduct. For example, in the absence of audit, nominating and compensation committees comprised of at least a majority of independent directors, decisions concerning matters such as compensation packages to our senior officers and recommendations for director nominees may be made by a majority of directors who have an interest in the outcome of the matters being decided. Prospective investors should bear in mind our current lack of corporate governance measures in formulating their investment decisions.

Provisions of our Articles of Incorporation and Bylaws may delay or prevent take-over which may not be in the best interest of our stockholders.

Provisions of our articles of incorporation and bylaws may be deemed to have anti-takeover effects, which include when and by whom special meetings of our stockholders may be called, and may delay, defer or prevent a takeover attempt. In addition, certain provisions of the Nevada Revised Statutes also may be deemed to have certain anti-takeover effects which include that control of shares acquired in excess of certain specified thresholds will not possess any voting rights unless these voting rights are approved by a majority of a corporation's disinterested stockholders. In addition, our articles of incorporation authorize the issuance of up to 50,000,000 shares of preferred stock with such rights and preferences as may be determined from time to time by our board of directors, of which no shares of preferred stock are issued and outstanding as of August 31, 2016. Our board of directors may, without stockholder approval, issue preferred stock with dividends, liquidation, conversion, voting or other rights that could adversely affect the voting power or other rights of the holders of our common stock. As a result, our board of directors can issue such stock to investors who support our management and give effective control of our business to our management.

10

We may be exposed to potential risks relating to our internal control over financial reporting.Holders

 

As directed by Section 404 of the Sarbanes-Oxley Act of 2002 (“SOX 404”), the SEC has adopted rules requiring public companies to include a report of management in the Company's internal control over financial reporting in its annual reports.

While we expect to expend significant resources in developing the necessary documentation and testing procedures required by SOX 404, there is a risk that we will not comply with all of the requirements imposed thereby. At present, there is no precedent available with which to adequately measure compliance. In the event we identify significant deficiencies or material weaknesses in our internal control over financial reporting that we cannot remediate in a timely manner, investors and others may lose confidence in the reliability of our financial statements and our ability to obtain equity or debt financing could suffer.

Our business relies heavily on outsource software developers, which could harm our business by adversely affecting the availability, delivery, reliability, and development cost of our platform.

We have limited staffing and are relying on our outsource software developer to create our DiMi 4.0 platform. If the outsource software developer delays or curtails progress on our platform, we may not be able to roll out the related platform in desired configurations, or in a timely manner. In addition, we may not be able to replace the functionality provided by the third-party software that we currently offer if that software becomes obsolete, defective, or incompatible with future versions of our software (especially if we use different outsource software developers for different versions of our platform) or if the software is not adequately maintained or updated. Even though other software developers are available, qualification of the alternative developer and establishment of reliable software code could result in delays and a possible loss of sales as well as a significant increase in development costs, which could harm our operating results. In addition, defective or delayed roll out of our platform could harm our reputation and brand recognition.

Risks Related to the Company’s Common Stock

The Company does not expect to pay dividends in the foreseeable future.

The Company has never paid cash dividends on its common stock and has no plans to do so in the foreseeable future. The Company intends to retain earnings, if any, to develop and expand its business.

“Penny stock” rules may make buying or selling the common stock difficult and severely limit their market and liquidity.

Trading in the Company’s common stock is subject to certain regulations adopted by the SEC commonly known as the “Penny Stock” rules. The Company’s common stock qualifies as penny stock and is covered by Section 15(g) of the Securities and Exchange Act of 1934, as amended (the “1934 Act”), which imposes additional sales practice requirements on broker/dealers who trade in the Company’s common stock in the market. The “Penny Stock” rules govern how broker/dealers can deal with their clients and “penny stock.” For sales of the Company’s common stock, the broker/dealer must make a special suitability determination and receive from clients a written agreement prior to making a trade. The additional burdens imposed upon broker/dealers by the “penny stock” rules may discourage broker/dealers from effecting transactions in the Company’s common stock, which could severely limit our stock’s market price and liquidity. This could prevent investors from reselling the Company’s common stock and may cause the price of our common stock to decline.

11

Although publicly traded, the Company’s common stock has substantially less liquidity than the average trading market for a stock listed on a national securities exchange, and its market price may fluctuate dramatically in the future.

Although the Company’s common stock is eligible for quotation on the OTC Pink, the trading market in the common stock has substantially less liquidity than shares of companies listed on national securities exchanges. A public trading market having the desired characteristics of depth, liquidity and orderliness depends on the presence in the marketplace of willing buyers and sellers of our common stock at any given time. This presence depends on the individual decisions of investors and general economic and market conditions over which we have no control. Due to, among other reasons, limited trading volume, the market price of the Company’s common stock may fluctuate significantly in the future, and these fluctuations may be unrelated to the Company’s performance. General market price declines or overall market volatility in the future could adversely affect the price of the Company’s common stock, and the current market price may not be indicative of future market prices.

ITEM 1B.UNRESOLVED STAFF COMMENTS.

Not applicable.

ITEM 2.PROPERTIES.

The Company’s current executive offices are located at 290 Lenox Avenue, New York City, New York, 10027. The property consists of 500 square feet of finished office space. We currently have a five year lease through August 31, 2019. We believe that the current office space is adequate to meet our current needs.

ITEM 3.LEGAL PROCEEDINGS.

None.

ITEM 4.MINE SAFETY DISCLOSURES.

Not applicable.

12

PART II

ITEM 5.MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASERS OF EQUITY SECURITIES.

Market Information

Our shares of common stock are quoted on the OTC Pink under the symbol “DIMI”. However, our shares do not trade other than on an extremely limited and sporadic basis. The following table sets forth for the periods indicated the range of high and low bid quotations per share as reported on the OTC Pink since the first period for which figures are available. These quotations represent inter-dealer prices, without retail markups, markdowns or commissions and may not necessarily represent actual transactions

Fiscal Year 2016 High  Low 
First Quarter $1.20  $.90 
Second Quarter $.90  $.30 
Third Quarter $.35  $.30 
Fourth Quarter $.30  $.30 

Fiscal Year 2015 High  Low 
First Quarter $1.53  $0.60 
Second Quarter $0.93  $0.30 
Third Quarter $0.66  $0.42 
Fourth Quarter $1.59  $0.42 

Holders. As of December 14, 2016,12, 2018, there were approximately 339353 holders of record of our common stock, which excludes those stockholders holding stock in street name.

Dividend Policy

 

Dividend Policy. We have not declared or paid cash dividends or made distributionson our common stock in the past, and we do not anticipate that we will pay cash dividends or make distributionsour common stock in the foreseeable future. We currently intend to retain and reinvest future earnings, if any, to finance our operations.

 

Repurchases of Equity Compensation Plans. We have not authorized any compensation plans (including individual compensation arrangements) under which our equity securities have been authorized for issuance as of the end of the most recently completed fiscal year ended August 31, 2016. We have not authorized any such plan for the fiscal year ended August 31, 2016.

Recent Sales of Unregistered SecuritiesSecurities.

 

None.

 

ITEM 6.SELECTED FINANCIAL DATA.

Item 6. Selected Financial Data.

 

Not required for smaller reporting companies.

 

ITEM 7.10 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion ofhighlights the principal factors that have affected our financial condition and results of operations should be read in conjunction with the audited financial statementsas well as our liquidity and notes theretocapital resources for the fiscal year ended August 31, 2016, found in this Annual Report. In addition to historical information, the following discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Where possible, we have tried to identify these forward looking statements by using words such as “anticipate,” “believe,” “intends,” or similar expressions. Our actual results could differ materially from those anticipated by the forward-looking statements due to important factors and risks including, but not limited to, those set forth under “Risk Factors” in Part I, Item 1A of this Annual Report.

Forward-looking Statements

We and our representatives may from time to time make written or oral statements that are “forward-looking,” including statements contained in this annual report and other filings with the SEC, reports to our stockholders and news releases. All statements that express expectations, estimates, forecasts or projections are forward-looking statements. In addition, other written or oral statements which constitute forward-looking statements may be made by us or on our behalf. Words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,” “project,” “forecast,” “may,” “should,” variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in or suggested by such forward-looking statements. We undertake no obligation to update or revise any of the forward-looking statements after the date of this Annual Report to conform forward-looking statements to actual results, except as may be required under applicable law. Important factors on which such statements are based are assumptions concerning uncertainties, including but not limited to, uncertainties associated with the following:

Inadequate capital and barriers to raising the additional capital or to obtaining the financing needed to implement our business plans;

13

Our failure to earn revenues or profits;
Inadequate capital to continue business;
Volatility or decline of our stock price;
Potential fluctuation in quarterly results;
Rapid and significant changes in markets;
Litigation with or legal claims and allegations by outside parties; and
Insufficient revenues to cover operating costs.

The followingperiods described. This discussion should be read in conjunction with the financial statementsour Consolidated Financial Statements and the related notes thereto which are included in Item 8 of this annual report.Form 10-K. This discussion contains forward-looking statements that involvestatements. Please see the explanatory note concerning “Forward-Looking Statements” in Part I of this Annual Report on Form 10-K and Item 1A. Risk Factors for a discussion of the uncertainties, risks uncertainties and assumptions.  Our actualassumptions associated with these forward-looking statements. The operating results may differ substantially from those anticipatedfor the periods presented were not significantly affected by inflation.

Overview

We were incorporated in any forward-looking statements includedthe State of Colorado on July 29, 1988 under the name Cine-Source Entertainment, Inc. On April 27, 2004, the Company changed its name to First Quantum Ventures, Inc. On April 13, 2006, the Company changed its name to First Quantum Ventures, Inc., and on May 5, 2006, the Company reincorporated in this discussionNevada. On March 15, 2012, the Company changed its name to DiMi Telematics International, Inc.

In early 2017, our management team elected to suspend further investment and working capital on developing its then-existing technology and business prospects, turning its attention to the hemp-derived cannabidiol, or CBD, market. On March 10, 2017, the Company changed its name to Bespoke Extracts, Inc. to align the Company’s corporate identity with its new business plan.

The Company is now focused on introducing a proprietary line of premium quality, all natural cannabidiol (CBD) products in the form of tinctures and capsules for the nutraceutical and veterinary markets, which it introduced in mid-2018. Produced using pure, all natural, zero-THC phytocannabinoid-rich (“PCR”) hemp-derived CBD, our products are marketed as a result of various factors.dietary supplements and distributed through our direct-to-consumers ecommerce store, found at www.BespokeExtracts.com. In the future, we also plan to our products through select specialty retailers, pharmacies/dispensaries and care providers.

 

RESULTS OF OPERATIONS FOR THE FISCAL YEARSYEAR ENDED AUGUST 31, 20162018 AND 2015AUGUST 31, 2017.

 

Sales

Sales during the year ended August 31, 2018 were $15,919 compared to $0 for the year ended August 31, 2017. During the year ended August 31, 2018 the Company began selling and shipping its CBD products.

Selling, General and Administrative Expenses

 

Selling, general and administrative expenses for the yearyears ended August 31, 20162018 and August 31, 2017 totaled $34,520 an increase$6,769,723 and $6,332,332, respectively. Stock based compensation which is primarily comprised of $3,899 comparedthe expense for warrants issued to our former Presidents and Chief Executive Officers, was included in selling, general and administrative, expenses of $30,621and totaled $6,508,991 and $6,285,695, respectively for the yearyears ended August 31, 2015. Stock based compensation208 and 2017. Payroll expense amounted to $24,389 and $91,986 respectively for the years ended August 31, 208 and 2017. The reduction in expense was due to a reduction in full time employees. Consulting amounted to $185,523 and $105,750 respectively for the amount of $0years ended August 31, 208 and $105,0002017. The increase was primarily due to branding and marketing performed by consultants hired during the year ended August 31, 2016 and 2015, respectively. Payroll expense amounted to $101,173 and $93,645 for the year ended August 31, 2016 and 2015, respectively. Consulting expense amounted to $124,584 and $47,280 for the year ended August 31, 2016 and 2015, respectively. Professional fees amount to $104,192 and $116,138 for the year ended August 31, 2016 and 2015 respectively.

Amortization Expense

2018. Amortization expense for the years ended August 31, 20162018 and 2015 totaled $1312017 was $3,346 and $3,798,$1,739 respectively. Amortization expense is in relation to a URL purchase and the prior year’s amortization is the expensing of intellectual property and the iPhone application.property.

 

Interest Expense

 

Interest expense on promissory notes for the years ended August 31, 2016208 and 2015, totaled $3652017, was $419,000 and $0$63,311, respectively. The Company had noincrease of interest expense was due to the issuance of additional notes during 2015.

Impairment of Asset

Impairment of asset for the year ended August 31, 2016 and 2015, totaled $0 and $334,685, respectively. The impairment was due to the Dimi platform2018 and the complicationsamortization expense for the warrants and beneficial conversion associated with finding suitable properties for beta testing.those notes.

 

14

Net Loss

 

For the reasons stated above, our net loss for the year ended August 31, 20162018 totaled $364,965$7,609,558 or $0.13$(0.21) per share, a decreasean increase of $366,202 or approximately 50.1%$930,061 compared to a net loss for the year ended August 31, 2015 that was $731,167. The majority2017 of the additional loss is due to the recognition of impairment on the Dimi platform.$6,679,497 or ($0.48) per share.

 

11

LIQUIDITY AND CAPITAL RESOURCES

 

As of August 31, 2016,2018, we had cash and cash equivalents of $431.$79,784. Net cash used in operating activities for the year ended August 31, 20162018 was approximately $216,938.$747,688. Our current liabilities as of August 31, 20162018 totaled $115,535 consisted of:$566,174 consisting of accounts payable and accrued liabilities of $84,035$105,424, and convertible note payable –related partypayables-net, unamortized discounts of $31,500. We have net negative working capital of $115,104 as of August 31, 2016.$460,700.

 

The accompanying financial statements have been prepared contemplatingassuming a continuation of the Company as a going concern. The Company has reported a net loss of $364,965$7,609,558 for the year ended August 31, 20162018 and had an accumulated deficit of $2,427,589$16,716,644 as of August 31, 2016.2018. These conditions raise significant doubt about our ability to continue as a going concern.

 

We have not generated positive cash flows from operating activities. The primary source of capital has been from the sale of equity securities. Our primary use of capital has been for professional fees and general and administrative costs. Our workingWe have no committed sources of capital requirements are expectedand will need to increase in line with the growth ofraise additional capital to continue and expand our business.operations. Additional capital may not be available on terms acceptable to us, or at all.

 

OFF-BALANCE SHEET ARRANGEMENTS

 

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

 

ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Item 7A. Quantitative and Qualitative Disclosure About Market Risk.

 

Not required for a smaller reporting companies.company.

 

 1512 

 

 

Item 8. Financial Statements and Supplementary Data.

ITEM 8.CONTENTSPAGE NO.
 
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.Report of Independent Registered Public Accounting FirmF-2
Consolidated Balance SheetsF-3
Consolidated Statements of OperationsF-4
Consolidated Statement of Owners EquityF-5
Consolidated Statements of Cash FlowsF-6
Notes to Consolidated Financial StatementsF-7 - F-19

 


Report of Independent Registered Public Accounting Firm

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Shareholders and Board of Directors and Stockholdersof

Dimi Telematics International,Bespoke Extracts, Inc.

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheetsheets of Dimi Telematics International,Bespoke Extracts, Inc. and its subsidiary (collectively, the “Company”) as of August 31, 2016,2018 and 2017, and the related consolidated statements of operations, stockholders’ equity (deficit)deficit, and cash flows for the yearyears then ended. These consolidated financial statements areended, and the responsibility ofrelated notes (collectively referred to as the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States)“financial statements”). Those standards require that we plan and perform an 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 audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Dimi Telematics International, Inc. and its subsidiarythe Company as of August 31, 20162018 and 2017, and the consolidated results of their operations and their cash flows for the yearyears then ended, in conformity with accounting principles generally accepted in the United States of America.

Going Concern Matter

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As describeddiscussed in Note 1 to the financial statements, the Company has incurredsuffered recurring losses from operations and has a workingnet capital deficit. These factors raisedeficiency that raises substantial doubt about the Company’sits ability to continue as a going concern. Management’sManagement's plans in regard to this materthese matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

/s/ MaloneBailey, LLPBasis for Opinion

www.malonebailey.com

Houston, Texas

December 16, 2016

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

ToThese financial statements are the Board of Directors and Stockholders of
Dimi Telematics International, Inc.

We have audited the accompanying consolidated balance sheets of Dimi Telematics International, Inc. (the Company) as of August 31, 2015 and 2014, and the related statements of operations, stockholders’ equity, and cash flows for eachresponsibility of the years in the two year period ended August 31, 2015 and 2014. Dimi Telematics International, Inc’s management is responsible for these financial statements.Company’s management. Our responsibility is to express an opinion on these consolidatedthe Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.misstatement, whether due to error or fraud. The companyCompany is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included considerationAs part of our audits we are required to obtain an understanding 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’sCompany's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supportingregarding the amounts and disclosures in the financial statements, assessingstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement presentation.statements. We believe that our audits provide a reasonable basis for our opinion.

In our opinion,

/s/ MaloneBailey, LLP

www.malonebailey.com

We have served as the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Dimi Telematics International, Inc. as of August 31, 2015 and 2014, and the results of its operations and its cash flows for each of the years in the two year period ended August 31, 2015 and 2014, in conformity with accounting principles generally accepted in the United States of America.Company's auditor since 2016.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has suffered losses from operations, which 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 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Houston, Texas

 

RBSM, LLP

December 23, 2015.
Henderson, Nevada

14, 2018

 

F-2

F-2

Dimi Telematics International,Bespoke Extracts, Inc.

Consolidated Balance Sheets

 

  August 31  August 31, 
Assets 2016  2015 
Current assets      
Cash $431  $185,869 
Prepaid expenses-stock based  -   21,000 
Total current assets  431   206,869 
         
Prepaid expense-stock based  -   74,375 
Intellectual property, net of amortization of $876 and $745, respectively  1,314   1,445 
Total assets $1,745  $282,689 
         
Liabilities and Stockholders' Equity (Deficit)        
Current liabilities        
Accounts payable and accrued liabilities $69,426  $31,514 
Accounts payable - related party  14,609   - 
Note payable - related party  31,500   - 
Total current liabilities  115,535   31,514 
         
Stockholders' Equity (Deficit)        
Series A Convertible Prefered Stock, $0.001 par value, 50,000,000 authorized shares; no shares issued and outstanding as of August 31, 2016 and August 31, 2015, respectively  -   - 
Common stock, $0.001 par value: 800,000,000 authorized; 2,922,712 and 2,422,712 shares issued and outstanding as of  August 31, 2016 and August 31, 2015, respectively  2,923   2,423 
Common stock payable - 500,000 shares  -   210,000 
Additional paid in capital  2,310,876   2,101,376 
Accumulated deficit  (2,427,589)  (2,062,624)
Total stockholders' equity (deficit)  (113,790)  251,175 
Total liabilities and stockholders' equity (deficit) $1,745  $282,689 
  August 31,  August 31, 
  2018  2017 
Assets      
Current assets      
Cash $79,784  $87,172 
Accounts receivable  2,004   - 
Prepaid expense  30,976   19,952 
Inventory  61,857   - 
Total current assets  174,621   107,124 
         
Domain names, net of amortization of $5,019 and $1,673  45,166   48,512 
Total assets $219,787  $155,636 
         
Liabilities and Stockholders’ Deficit        
Current liabilities        
Accounts payable and accrued liabilities $105,424  $36,525 
Deposit for future assets sales from related party  -   45,000 
Convertible notes - related parties, net unamortized discounts $199,300 and $5,019, respectively  460,700   123,000 
Note payable - related party  50   30,050 
Total current liabilities  566,174   234,575 
         
Non-current liabilities        
Related party convertible note payable, net of unamortized discounts $98,847 and $346,837  81,153   193,163 
Total non-current liabilities  81,153   193,163 
Total liabilities  647,327   427,738 
         
Stockholders’ Deficit        
Series A Convertible Preferred Stock, $0.001 par value, 50,000,000 authorized shares; no shares issued and outstanding as of August 31, 2018 and August 31, 2017, respectively  -   - 
Common stock, $0.001 par value: 800,000,000 authorized;42,902,712 and 26,822,712 shares issued and outstanding as of August 31, 2018 and August 31, 2017, respectively  42,903   26,823 
Additional paid-in capital  16,246,201   8,808,161 
Accumulated deficit  (16,716,644)  (9,107,086)
Total stockholders’ deficit  (427,540)  (272,102)
Total liabilities and stockholders’ deficit $219,787  $155,636 

 

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

F-3


Dimi Telematics International,Bespoke Extracts, Inc.

Consolidated Statements of Operations

 

 For the year ended  For the year ended 
 August 31, August 31,  August 31, August 31, 
 2016  2015  2018  2017 
     
Sales $11,944  $- 
Sales - related party  3,975   - 
Total Sales  15,919   - 
        
Cost of products sold  (22,925)  - 
Gross Profit  (7,006)  - 
             
Operating expenses:             
Selling, general and administrative expenses $34,520  $30,621   6,769,723   6,332,332 
Payroll expense  101,173   93,645   24,389   91,986 
Professional fees  104,192   116,138   132,342   65,631 
Consulting  124,584   47,280   185,523   105,750 
Stock based compensation  -   105,000 
Promotion  68,229   - 
Brand development  -   10,000 
Formula development  -   7,500 
Impairment of intellectual property  -   1,248 
Amortization expense  131   3,798   3,346   1,739 
Loss on impairment of asset  -   334,685 
Total operating expenses  364,600   731,167   7,183,552   6,616,186 
                
Loss from operations  (364,600)  (731,167)  (7,190,558)  (6,616,186)
                
Other expense                
Interest expense  (365)  -   (419,000)  (63,311)
Total other expense  (365)  -   (419,000)  (63,311)
                
Loss before income tax  (364,965)  (731,167)  (7,609,558)  (6,679,497)
Provision for income tax  -   -   -   - 
Net Loss $(364,965) $(731,167) $(7,609,558) $(6,679,497)
                
Net loss per share: basic and diluted $(0.13) $(0.30)
Net loss per common share: basic and diluted $(0.21) $(0.48)
                
Weighted average shares outstanding basic and diluted  2,843,085   2,422,712 
Weighted average common shares outstanding basic and diluted  35,408,438   13,814,767 

 

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

 

 F-4 

 

 

Dimi Telematics International,Bespoke Extracts, Inc.

Consolidated Statement of Stockholders'Owners Equity (Deficit)

 

                       Total 
  Preferred Stock  Common Stock  Additional  Common     Stockholders' 
  Shares  Par  Shares  Par  Paid-in  Stock  Accumulated  Equity 
  Outstanding  Amount  Outstanding  Amount  Capital  Payable  Deficit  (Deficit) 
August 31, 2014  -  $-   2,423,907  $2,423  $2,101,376  $-  $(1,331,457) $772,342 
                                 
Common stock payable for consulting services  -   -   -   -   -   105,000   -   105,000 
                                 
Common stock payable for stock based compensation  -   -   -   -   -   105,000   -   105,000 
                                 
Net loss  -   -   -   -   -   -   (731,167)  (731,167)
                                 
August 31, 2015  -  $-   2,422,712  $2,423  $2,101,376  $210,000  $(2,062,624) $251,175 
                                 
Shares issued for stock payable  -   -   500,000   500   209,500   (210,000)  -   - 
                                 
Net loss  -   -   -   -   -   -   (364,965)  (364,965)
                                 
August 31, 2016  -  $-   2,922,712  $2,923  $2,310,876  $-  $(2,427,589) $(113,790)
  Preferred  Preferred  Common  Common     Common       
  Shares  Par  Shares  Par     Stock  Accumulated    
  Outstanding  Amount  Outstanding  Amount  APIC  Payable  Deficit  Total 
August 31, 2016  -  $-   2,922,712  $2,923  $2,310,876  $-  $(2,427,589) $(113,790)
   -   -                         
Stock issued with related party debt      -   2,700,000   2,700   154,809   -   -   157,509 
   -                             
Stock issued for asset purchase      -   200,000   200   29,800   -   -   30,000 
   -                             
Issuance of warrants and options for compensation  -   -   -   -   6,285,695   -   -   6,285,695 
                                 
Exercise of options and warrants      -   41,000,000   41,000   (36,000)  -   -   5,000 
   -                             
Warrants issued with related party debt      -   -   -   44,981   -   -   44,981 
   -                             
Forfeiture of stock issued through warrant exercise      -   (20,000,000)  (20,000)  18,000   -   -   (2,000)
   -                             
Net loss  -   -   -   -   -   -   (6,679,497)  (6,679,497)
August 31, 2017  -   -   26,822,712   26,823   8,808,161   -   (9,107,086)  (272,102)
                                 
Sale of common stock  -   -   4,900,000   4,900   455,400   -   -   460,300 
                                 
Conversion of debt to common stock  -   -   10,050,000   10,050   70,350   -   -   80,400 
                                 
Common stock issued with debt  -   -   1,100,000   1,100   78,349   -   -   79,449 
                                 
Warrants issued with related party debt  -   -   -       21,980   -   -   21,980 
                                 
Beneficial conversion feature on convertible debt  -   -   -   -   123,000   -   -   123,000 
                                 
Stock based compensation  -   -   30,000   30   6,508,961   -   -   6,508,991 
                                 
Sale of assets to related parties  -   -   -   -   180,000   -   -   180,000 
                                 
Net loss  -   -   -   -   -   -   (7,609,558)  (7,609,558)
August 31, 2018  -  ��-   42,902,712   42,903   16,246,201   -   (16,716,644)  (427,540)

 

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

 

 F-5 

 

Dimi Telematics International,Bespoke Extracts, Inc.

Consolidated Statements of Cash Flows

 

 For the year ended  For the year ended 
 August 31, August 31,  August 31, August 31, 
 2016  2015  2018  2017 
Cash flows from operating activities          
Net loss $(364,965) $(731,167) $(7,609,558) $(6,679,497)
Adjustments to reconcile net loss to net cash used in operating activities                
Amortization expense  131   3,798   3,346   1,739 
Loss on impairment  -   334,685 
Amortization of debt discounts  353,119   35,653 
Option expense amortized  -   - 
Stock based compensation  -   114,625   6,508,991   6,285,695 
Impairment of intellectual property  -   1,248 
Changes in operating assets and liabilities                
Accounts payable  37,547   26,156 
Accounts receivable  (2,004)  - 
Inventory  (61,857)  - 
Prepaid expense  (11,024)  (19,952)
Accounts payable and accrued liabilities  71,299   (32,901)
Accounts payable - related party  14,609   -   -   (14,069)
Accrued interest expense  365   - 
Prepaid expense  95,375   - 
Net Cash used in operating activities  (216,938)  (251,903)  (747,688)  (422,084)
                
Cash flows from investing        
Proceeds from sale of assets to related parties  90,000   45,000 
Cash paid for domain names  -   (20,185)
Net cash provided by investing activities  90,000.00   24,815 
        
Cash flow from financing activities                
Payment of note payable - related party  (30,000)  (5,500)
Proceeds from exercise of warrants  -   3,000 
Borrowings on related party convertible debt  220,000   360,000 
Proceeds from note payable - related party  31,500   -   -   127,050 
Sale of common stock and warrants  460,300   - 
Net cash provided by financing activities  31,500   -   650,300   484,550 
                
Net increase in cash and cash equivalents  (185,438)  (251,903)
Net increase / (decrease) in cash and cash equivalents  (7,388)  87,281 
Cash and cash equivalents at beginning of period  185,869   437,772   87,172   431 
Cash and cash equivalents at end of period $431  $185,869  $79,784  $87,712 
                
Supplemental disclosure of cash flow information                
Cash paid during period for                
Interest $-  $- 
Income taxes $-  $- 
Cash paid for interest $11,626  $- 
Cash paid for income taxes  -   - 
                
Noncash investing and financing activities:                
Shares issued for stock payable $210,000  $- 
Shares issued for prepaid expense $-  $105,000 
Shares issued for stock based compensation $-  $105,000 
Common stock payable issued for acquisition of domain names $-  $30,000 
Discount due beneficial conversion feature $123,000  $- 
Stock issued for conversion of debt - related party $80,000  $157,509 
Stock issued with related party debt $79,449   - 
Warrants issued with related party debt $21,980   44,981 
Related party note and accrued interest exchanged for purchase of assets $45,000   - 

 

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

 F-6 

 

 

DiMi Telematics International,Bespoke Extracts, Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in USD)

1.NOTE 1 — NATURE OF OPERATIONS, SIGNIFICANT ACCOUNTING POLICIES AND NATURE OF BUSINESS OPERATIONSGOING CONCERN

 

BasisNature of PresentationBusiness Operations

Cine-Source Entertainment, Inc. (the “Old Corporation”) a Colorado corporation, was formed on July 29, 1988. Pursuant to a Plan of Merger dated February 24, 2004, the Old Corporation filed Articles and Certificate of Merger with the Secretary of State of the State of Colorado merging the Old Corporation into Cine-Source Entertainment, Inc. (the “Surviving Corporation”), a Colorado corporation. A previous controlling stockholder group of the Old Corporation arranged the merger for business reasons that did not materialize. On April 26, 2004, the Surviving Corporation effectuated a 1 for 200 reverse stock split. The name of the Surviving Corporation was changed to First Quantum Ventures, Inc., on April 27, 2004. On April 13, 2006, the Surviving Corporation formed a wholly owned subsidiary, a Nevada corporation named First Quantum Ventures, Inc., and on May 5, 2006 merged the Surviving Corporation with and into this subsidiary.

On March 15, 2012, the Company changed its name to DiMi Telematics International, Inc.

On April 16, 2012, the Company issued a 1 for 1 stock dividend to current stockholders whereby the Company issued an additional 33,959,744 shares of common stock.  On May 16, 2012, the Company issued an additional 1 for 1 stock dividend to current stockholders whereby an additional 71,286,155 shares were issued. The dividends were also applied to outstanding warrants.  The Company has reflected the dividends as splits, which have been retroactively reflected in the financial statements.

In early 2017, our management team elected to suspend further investment and working capital on developing the Company’s technology and business prospects, turning its attention to prevailing new business opportunities in other high growth industries; namely the hemp-derived cannabidiol (“CBD”) market. On March 10, 2017, the Company changed its name to Bespoke Extracts, Inc. to align the Company’s corporate identity with its new business plan.

The Company is now focused on marketing and selling a proprietary line of premium, quality, all natural CBD products in the forms of tinctures, capsules, drops and edibles for the nutraceutical and veterinary markets, which it introduced in mid-2018. Produced using pure, all natural, zero-THC phytocannabinoid-rich (“PCR”) hemp-derived isolate, the Company markets its products as dietary supplements through its retail ecommerce store found at www.bespokeextracts.com. In the future, the Company also intends to sell its products through wholesale channels.

Principles of Consolidation

 

The accompanying financial statements present on a consolidated basis the accounts of Bespoke Extracts, Inc. (formerly DiMi Telematics International, Inc. (formerly First Quantum Ventures, Inc.), a Nevada corporation (the “Company”), and its wholly owned subsidiary, DiMi Telematics, Inc. (“DTI”). All significant intercompany accounts and transactions have been eliminated in consolidation.

 

On October 28, 2011,Certain prior period amounts have been reclassified to conform to current period presentation.

Major Customers

Sales to one customer, who is the Company entered into a Share Exchange Agreement (the “Share Exchange”) with DTI and its stockholders. Pursuant to the agreement, the Company issued 291,500 sharesspouse of its common stock in exchange for all outstanding shares and warrants to purchase common shares of DTI.  As a result of the Share Exchange Agreement, DTI became a subsidiary of the Company. The Company assumed operation of DTI and entered the Telematics/M2M industry. On November 10, 2011, the closing of the Share Exchange occurred.  In connection with the Share Exchange, (a) 50,000one of the Company’s issued and outstanding sharessignificant shareholders, amounted to 24% of common stock were surrenderedsales for cancellation and (b)the year ended August 31, 2018. The loss of business from one or a combination of the Company’s officers and directors resigned andsignificant customers, or an unexpected deterioration in their financial condition, could adversely affect the following individuals assumed their duties as officers and directors:Company’s operations.

 

NameTitle(s)
Barry TenzerPresident, Chief Executive Officer, Chief Financial Officer, Secretary and Director
Roberto FataExecutive Vice President – Business Development and Director

The Company has accounted for the acquisition under the purchase method of accounting for business combinations. Under the purchase method of accounting in a business combination effected through an exchange of equity interest, the entity that issues the equity interest is generally the acquiring entity. In some business combinations (commonly referred to as reverse acquisitions), however, the acquired entity issues the equity interest. Accounting for business combinations requires consideration of the facts and circumstances surrounding a business combination that generally involves the relative ownership and control of the entity by each of the parties subsequent to the acquisition. Based on a review of these factors, the Share Exchange was accounted for as a reverse acquisition, i.e., the Company was considered the acquired company and DTI was considered the acquiring company. As a result, the Company’s assets and liabilities were incorporated into DTI’s balance sheet based on the fair value of the net assets acquired. Further, the Company’s operating results will not include the Company’s results prior to the date of closing. Accordingly the accompanying financial statements are the financial statements of DTI. In addition, the Company’s fiscal year end changed to DTI’s fiscal year end of August 31 following the closing.Going Concern

 

The accompanying financial statements have been prepared assuming a continuation of the Company as a going concern. The Company has retroactively reflectedreported a net loss of $7,609,558 for the acquisitionyear ended August 31, 2018 and had a working capital deficit of DTI’s common stock in$391,553 as of August 31, 2018. These conditions raise substantial doubt about our ability to continue as a ratio consistent with the Share Exchange.going concern.

 

On March 15, 2012, First Quantum Ventures, Inc., changedThe Company’s ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining the necessary financing to meet its name to DiMi Telematics International, Inc.obligations and repay its liabilities arising from normal business operations when they come due. There is no assurance that this series of events will be satisfactorily completed. The accompanying financial statements do not contain any adjustments that may result from the outcome of this uncertainty.

 

Nature of Business Operations

DTI is a development stage company formed on January 28, 2011 as Medepet Inc., a Nevada corporation.  During the first year of operations DTI redefined its business purpose and operation.  On June 20, 2011, DTI changed its name from Medepet Inc. to Precision Loc8.  On July 28, 2011, DTI changed its name from Precision Loc8 to Precision Telematics Inc. On August 9, 2011, DTI changed its name to DiMi Telematics Inc.

 F-7 

 

 

On July 28, 2011, DTI entered into an asset purchase agreement for the purchase of intellectual property.

DTI designs, develops and distributes Machine-to-Machine (M2M) communications solutions used to remotely track, monitor, manage and protect multiple mobile and fixed assets in real-time from virtually any web-enabled desktop computer or mobile device. Through our proprietary software and hosted service offerings, DTI is endeavoring to capitalize on the pervasiveness and data transport capabilities of wireless networks in order to facilitate communications and process efficiencies between commercial and industrial business owners/managers and their respective networked control systems, sensors and devices.  

DTI is focused on the M2M market segments in which we can provide highly differentiated and value-driven solutions capable of unleashing tangible productivity gains, material cost reductions and quantifiable risk mitigation across an enterprise.  Aside from the oversight and administration of our corporate, financial and legal affairs by the executive management team, our operating activities are centralized in three core areas:  

Sales and Marketing, which will employ both direct and indirect sales models utilizing an in-house business development team, partners and resellers and self-service through a service on-demand web interface.  
Operations, which will be responsible for managing daily activities related to monitoring and administering our cloud-based server operations; 24/7 client service/help desk; professional services and installation support; and quality assurance and testing of ourDiMisoftware and hosting platform, as well as the implementation and ongoing administration of our hosted clients’ M2M communications platforms.  
Product Development, which will be charged with enhancing our existing M2M software applications and services and introducing new and complementary hosted products and applications on a timely basis.  

Going Concern

The accompanying financial statements have been prepared contemplating the realization of assets and the satisfaction of liabilities in the normal course of business. However, the Company has reported a net loss of $364,965 for the year ended August 31, 2016 and had an accumulated deficit of $2,427,589 as of August 31, 2016.  The Company had net negative working capital of $115,104 as of August 31, 2016.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The conditions described above raise substantial doubt about the Company's ability to continue as a going concern. The Company's ability to obtain additional financing depends on the success of its growth strategy and its future performance, each of which is subject to general economic, financial, competitive, legislative, regulatory, and other factors beyond the Company's control.

We will need additional investments in order to continue operations. Additional investments are being sought, but we cannot guarantee that we will be able to obtain such investments. Financing transactions may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms.

F-8

However, the trading price of our common stock could make it more difficult to obtain financing through the issuance of equity or debt securities. Even if we are able to raise the funds required, we may incur unexpected costs and expenses, or experience unexpected cash requirements that would force us to seek alternative financing. Further, if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common stock. If additional financing is not available or is not available on acceptable terms, we will have to curtail our operations.

The ability to successfully resolve these factors raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements of the Company do not include any adjustments that may result from the outcome of the aforementioned uncertainties.

Cash and Cash Equivalents

 

For purposes of these financial statements, cash and cash equivalents includes highly liquid debt instruments with maturity of less than three months.

 

Concentrations of Credit Risk

 

Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents. The Company places its cash and temporary cash investments with high credit quality institutions. At times, such investments may be in excess of the FDIC insurance limit

 

Intellectual Property

Intellectual property is stated at cost. When retired or otherwise disposed, the related carrying value and accumulated amortization are removed from the respective accounts and the net difference less any amount realized from disposition, is reflected in earnings. Minor additions and renewals are expensed in the year incurred. Major additions and renewals are capitalized and depreciated over their estimated useful lives being 3 years up to 15 years.

Inventory

Inventories are stated at the lower of cost or net realizable value.  Cost is determined by the first-in, first-out basis and market being determined as the lower of replacement cost or net realizable value. The Company records inventory write-downs for estimated obsolescence of unmarketable inventory based upon assumptions about future demand and market conditions. As of August 31, 2018, inventory amounted to $61,857 which consisted of finished goods.

Income Taxes

 

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

 

The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. A valuation allowance is established against deferred tax assets that do not meet the criteria for recognition. In the event the Company were to determine that it would be able to realize deferred income tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the valuation allowance which would reduce the provision for income taxes.

 

The Company follows the accounting guidance which provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized initially and in subsequent periods. Also included is guidance on measurement, recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

 

iPhone ApplicationRevenue Recognition

 

The iPhone applicationCompany recognizes revenue from product sales to customers, distributors and resellers when products that do not require further services or installation by the Company are shipped, when there are no uncertainties surrounding customer acceptance and when collectability is stated at cost. When retired or otherwise disposed,reasonably assured. Cash received by the related carrying valueCompany prior to shipment is recorded as deferred revenue. Sales are made to customers under terms allowing certain limited rights of return and accumulated amortization are removed from the respective accountsother limited product and the net difference less any amount realized from disposition, is reflected in earnings. Minor additions and renewals are expensedperformance warranties for which provision has been made in the year incurred. Major additions and renewals are capitalized and depreciated over their estimated useful lives being 3 years. As of August 31 2015, the iPhone application has been fully amortized.accompanying unaudited condensed financial statements.

 

 F-9F-8 

 

 

DiMi Platform

When retired or otherwise disposed,Amounts billed to customers in sales transactions related to shipping and handling, represent revenues earned for the related carrying valuegoods provided and accumulated amortization are removed from the respective accountsincluded in net sales. Costs of shipping and the net difference less any amount realized from disposition, is reflectedhandling are included in earnings. Minor additions and renewals are expensed in the year incurred. Major additions and renewals are capitalized and depreciated over their estimated useful lives being 5 years. The impairment was due to the Dimi platform and the complications with finding suitable properties for beta testing. Ascost of August 31, 2015, the company recognized full impairment of the Dimi Platform and expensed $334,685 as a loss from impairment.

Intellectual Property

Our M2M communications solutions rely on and benefit from our portfolio of intellectual property, including pending patents, trademarks, trade secrets and domain names.

Intellectual property is stated at cost. When retired or otherwise disposed, the related carrying value and accumulated amortization are removed from the respective accounts and the net difference less any amount realized from disposition, is reflected in earnings. Minor additions and renewals are expensed in the year incurred. Major additions and renewals are capitalized and depreciated over their estimated useful lives being 3 years up to 15 years.

Revenue Recognitionproducts sold.

 

The Company willaccounts for revenue in accordance with Topic 606 which was adopted at the beginning of fiscal year 2018 using the modified retrospective method. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The Company did not recognize revenueany cumulative-effect adjustment to retained earnings upon adoption as the effect was immaterial. The adoption of these standards did not have a material impact on four basic criteria which must be met before revenue can be recognized: (1) persuasive evidencethe Company’s consolidated statements of an arrangement exists; (2) delivery has occurred; (3)operations during the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded.year ended August 31, 2018.

 

Stock Based Compensation

 

The Company accounts for all compensation related to stock, options or warrants using a fair value based method whereby compensation cost is measured at the grant date for employee awards and upon a commitment date or completion of services for nonemployee awards based on the value of the award and is recognized over the service period, which is usually the vesting period. The Company uses the Black-Scholes pricing model to calculate the fair value of options and warrants issued to both employees and non-employees. Stock issued for compensation is valued using the market price of the stock on the date of the related agreement.

 

Recent Accounting Pronouncements

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern. The provisions of ASU No. 2014-15 require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in this ASU are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. The Company is currently assessing the impact of this ASU on the Company’s financial statements.

F-10

On June 10, 2014, the Financial Accounting Standards Board (FASB) issued a new accounting statement that reduces some of disclosures and reporting requirements for development stage companies. The change will be in effect for the interim and annual reporting periods beginning after December 15, 2014. As of such date, among other things development stage entities will no longer be required to report inception-to-date information. The Company has elected early adoption of this pronouncement and will no longer being reporting inception-to-date information.

Net Loss per Share

 

Basic loss per share amounts are computed based on net loss divided by the weighted average number of common shares outstanding. There were no outstanding common stock equivalents as of August 31, 2016 or 2015. Diluted earnings per share reflect the potential dilution that could occur if potentially dilutive securities were exercised or converted to common stock. The dilutive effect of options and warrants and their equivalent is computed by application of the treasury stock method and the effect of convertible securities by the “if converted” method.  Outstanding options, warrants and convertible debt were excluded from the calculation of diluted loss per share during 2018 and 2017 because their inclusion would have been anti-dilutive.

 

Management Estimates

 

The presentation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates.

 

2. INTELLECTUAL PROPERTYASSET PURCHASE AGREEMENT

 

Intellectual propertyOn February 21, 2017, the Company, purchased all right, title, interest and goodwill in or associated with certain the domain names set forth in an asset purchase agreement for a total of $20,185 in cash and 200,000 shares of the following:

  August 31,
2016
  August 31,
2015
 
Intellectual property $2,190  $2,190 
Less: amortization  876   745 
Net intellectual property $1,314  $1,445 

DTI executed an Asset Purchase Agreement on August 28, 2011 which included various types of intellectual property.  Amortization expense forCompany’s common stock valued at $30,000. For the years ended August 31, 20162018 and 20152017 amortization expense amounted to $131$3,346 and $131,$1,739, respectively.

3. I PHONE APPLICATION

The Company’s purchase of an iPhone application was completed in September 2012. The total cost of the application is $11,000 and will bedomain names are being amortized over a three15 year period.

 

  August 31,
2016
  August 31,
2015
 
Intellectual property $11,000  $11,000 
Less: amortization  11,000   11,000 
Net intellectual property $-  $- 

F-11

Amortization expense for the iPhone application for the year ended August 31, 2016 and 2015 amounted to $0 and $3,667, respectively.

4. DiMi PLATFORM

The company has contracted for the development of software to develop and distributes Machine-to-Machine (M2M) communications solutions used to remotely track, monitor, manage and protect multiple mobile and fixed assets in real-time from virtually any web-enabled desktop computer or mobile device.  The Company has recognized a loss on impairment in the amount of $334,685 as of August 31, 2015. The impairment was due to the Dimi platform and the complications with finding suitable properties for beta testing.

5.3. NOTE PAYABLE – RELATED PARTY

 

On April 27, 2016, the Company issued our CEO a 7% unsecured promissory note in the amount of $2,500 which maturesmatured six months from the date of issuance. On July 5, 2016, the companyCompany issued our CEO a second 7% unsecured note in the amount of $3,000 which maturesmatured six months from date of issuance. On November 17, 2016, the Company repaid the principal amount of the notes, or $5,500.

F-9

 

The changes in these notes payable to this related party consisted of the following during the year endingended August 31, 2016:2018 and the year ended August 31, 2017:

 

August 31,
2016
Notes payable – related party$-
Borrowings on notes payable – related party5,500
Notes payable – related party at August 31, 20165,500
  August 31,
2018
  August 31,
2017
 
Notes payable – related party at beginning of period $      50  $5,500 
Payments on notes payable – related party  -   (5,550)
Borrowings on notes payable – related party  -   50 
Note payable – related party at end of period $50  $50 

On May 17, 2016,February 14, 2017, the Company issued to Lyle Hauser, the Company’s largest shareholder at the time, a 7% unsecured promissory note in the amount of $30,000 which matured six months from the date of issuance. On May 31, 2018 the Company repaid the promissory note in the amount of $30,000 and accrued interest of $2,811.

On May 17, 2016, the Company issued to The Vantage Group Ltd. (“Vantage”), a significant shareholder at that time, a 7% unsecured promissory note in the amount of $10,000 which matureshad an original maturity of six months from the date of issuance. On August 15, 2016, the Company issued to Vantage a significant shareholder a second 7% unsecured promissory note in the amount of $26,000$16,000 which matureshad an original maturity of six months from the date of issuanceissuance. On October 27, 2016, the Company issued the same shareholder a 7% unsecured promissory note in the amount of $10,000 which had an original maturity date of six months from the date of issuance. On November 14, 2016, the Company issued the same shareholder a 7% unsecured promissory note in the amount of $80,000 which had an original maturity date of six months from the date of issuance. On March 31, 2017, the Company issued the same shareholder a 7% unsecured promissory note in the amount of $7,000 which had an original maturity date of six months from the date of issuance.

On April 17, 2017 the preceding notes issued to Vantage were amended to be convertible into common stock and to mature on April 18, 2018. The convertible notes had a fixed conversion price of $0.008. The amendments to the notes created a beneficial conversion feature of $123,000 and amortization of the discount of $123,000 during the year ended August 31, 2018. The Company issued a total of 10,050,000 shares of common stock to convert $80,000 principal and$400 of accrued interest into common stock and the remaining $43,000 was exchanged with an additional $2,000 of accrued interest to purchase assets of the Company.

 

The changes in notes payable to these related partyparties consisted of the following during the year ended August 31, 2016:2018 and 2017.

 

  August 31,
2018
  August 31, 2017 
Notes payable – related party at beginning of period $153,000  $26,000 
Payments on notes payable – related party  (30,000)  - 
Conversion  (80,000)  - 
Exchange for purchase of Company assets  (43,000)  - 
Borrowings on notes payable – related party  -   127,000 
Note payables – related party at end of period $-  $153,000 

 August 31,
2016
Notes payable – related party$-
Borrowings on notes payable – related party26,000
Notes payable – related party at August 31, 201626,000F-10 

 

6. EQUITY4. CONVERTIBLE DEBENTURE – RELATED PARTY

 

Common StockOn April 11, 2017, the Company executed a $540,000 related party convertible debenture with an original issue discount of $180,000. The note has a 0% interest rate and a term of two years. If the note is not paid in full on the due date, the note will have a 0% interest rate until paid in full. In connection with the note, the Company issued the lender an aggregate of 2,700,000 shares of common stock and 900,000 warrants. The relative fair value of the stock ($157,509) and warrants ($44,981) aggregating $202,490 was recognized as a discount to the note. Amortization of $162,473 was recognized during the year ended August 31, 2018. The conversion price of the outstanding balance is the lesser of $3.00 or 40% of the volume weighted average price of the 30 days at date of conversion; not to be less than $1.00. In connection with the note the lender is entitled to receive greater of 5% every dollar raised through financing or every dollar of revenue generated through the earlier of maturity date and repayment of the principal. As of August 31, 2018 the Company has accrued $34,015.

  August 31,
2018
  August 31,
2017
 
Related Party Convertible debenture $540,000  $540,000 
Unamortized discount  (184,364)  (346,837)
Related Party Convertible debenture, net of unamortized discount $355,636  $193,163 

On September 18, 2017, the Company executed, with a related party, an $180,000 convertible debenture with an original issue discount of $60,000. The note has a 0% interest rate and a term of two years. In connection with the note, the Company issued the lender an aggregate of 900,000 shares of common stock and 300,000 warrants to purchase common stock. The relative fair value of the stock and warrants aggregating $68,499 was recognized as a discount to the note. Amortization of $29,652 was recognized during the year ended August 31, 2018. The conversion price of the outstanding balance is the lesser of $3.00 or 40% of the volume weighted average price of the 30 days at date of conversion; not to be less than $1.00. In connection with the debenture the lender is entitled to receive the greater of 5% of every dollar raised through financing or every dollar of revenue generated through the earlier of the maturity date or repayment of the principal. As of August 31, 2018 the Company has accrued $25,000.

  August 31,
2018
 
Convertible debenture $180,000 
Unamortized discount  (98,847)
Convertible debenture, net of unamortized discount $81,153 

On December 13, 2017, the Company executed a $120,000 convertible debenture with an original issue discount of $20,000. The debenture has a 0% interest rate and a term of one year. In connection with the note, the Company issued the lender an aggregate of 200,000 shares of common stock and 100,000 warrants to purchase common stock. The relative fair value of the stock and warrants aggregating $32,930 was recognized as a discount to the note. Amortization of $37,994 was recognized during the year ended August 31, 2018. The conversion price of the outstanding balance is the lesser of $3.00 or 40% of the volume weighted average price of the 30 days at date of conversion; not to be less than $1.00. In connection with the debenture the lender is entitled to receive the greatest of 5% every dollar raised through financing or every dollar of revenue generated through the earlier of maturity date and repayment of the principal, as of August 31, 2018 the Company has accrued $20,000.

  August 31,
2018
 
Convertible debenture $120,000 
Unamortized discount  (14,936)
Convertible debenture, net of unamortized discount $105,064 

F-11

5. EQUITY

 

The Company was formed in the state of Nevada on April 13, 2006. Common Stock

The Company has authorized capital of 800,000,000 shares of common stock with a par value of $0.001, and 50,000,000 shares of preferred stock with a par value of $0.001.

 

On December 1, 2015April 11, 2017, the Company effectedissued 2,700,000 shares of common stock in connection with the issuance of a 1 for 3 reverse stock splitconvertible note with a principal amount of $540,000 (see Note 4). The relative fair value of the stock of $157,509 was recognized as a discount to the note that is being amortized to interest expense over the life of the note.

During the year ended August 31, 2017, the Company issued an aggregate of 40,000,000 common shares pursuant to exercise of options and warrants for proceeds of $5,000. During the year ended August 31, 2017 20,000,000 shares were cancelled and returned to the Company along with the return of the $2,000 exercise price.

On September 18, 2017, the Company issued 900,000 shares of common stock in connection with the issuance of a convertible note with a principal amount of $180,000. The relative fair value of the stock of $51,503 was recognized as a discount to the note that is being amortized to interest expense over the life of the note.

On September 22, 2017, the company issued 900,000 shares of common stock and 300,000 warrants pursuant to a stock purchase agreement for cash of $60,300.

On November 10, 2017, the Company issued an aggregate of 1,400,000 shares of common stock to the holder of a related party 7% convertible promissory note, to convert principal amount of $11,200.

On November 27, 2017, the Company issued an aggregate of 1,450,000 shares of common stock to the holder of a related party 7% convertible promissory note, to convert principal amount of $11,600.

On December 28, 2017, the Company issued an aggregate of 1,550,000 shares of common stock to the holder of a 7% convertible promissory note, dated November 14, 2016 to convert principal amount of $12,400.

On December 13, 2017, the Company issued an aggregate of 200,000 shares of common stock with a relative fair value of $27,946 to the holder of a $120,000 convertible debenture with an original issue discount of $20,000. The debenture has a 0% interest rate and a term of one year.

On March 5, 2018, the Company entered into a securities purchase agreement with an investor which following such investment was a related party. Pursuant to the purchase agreement, upon closing on March 7, 2018, the Company issued and sold to the investor, 3,000,000 shares of common stock for an aggregate purchase price of $300,000. The Company agreed to issue additional shares of common stock (the “Make-Good Shares”) to the investor for no additional consideration, in the event that, during the six month period commencing on the closing date, the Company sells common stock at a purchase price lower than $0.10 (the “Subsequent Financing Price”), such that the total number of shares of common stock received by the investor under the purchase agreement (including the Make-Good Shares and the initial shares) will be equal to the total purchase price of $300,000 divided by such lower Subsequent Financing Price. In addition the Company agreed not to pay cash compensation over $100,000 to any Officer of Director.

On March 9, 2018, the Company issued an aggregate of 1,780,000 shares of common stock to the holder of a 7% convertible promissory note, dated November 14, 2016 to convert principal amount of $14,240.

On March 9, 2018, he Company entered into and closed an asset purchase agreement with VMI Acquisitions, LLC (“VMI”), pursuant to which the Company sold to VMI the Company’s proprietary Machine-to-Machine communications solution and certain other intellectual property for a purchase price of $180,000. $135,000 of the purchase price was paid by members of VMI in cash and had previously been deposited with the Company. The remaining $45,000 of the purchase price was paid in the form of a reduction in outstanding stock. All sharedebt and per share amounts herein have been retroactively restatedreimbursements of expenses owed to reflecta member of VMI. Certain members of VMI are noteholders and/or shareholders of the split.Company. At the time of the sale the intellectual property had a book value of $0. As the parties were considered significant shareholders and related parties, the consideration of $180,000 was recorded as a capital contribution.

 

 F-12 

 

 

On May 15, 2018 the Company issued 500,000 shares of common stock to an investor for a purchase price of $50,000, and on May 29, 2018, the Company issued 1,870,000 shares of common stock upon conversion of a convertible note in the amount of $14,960. The Company agreed to issue additional shares of common stock (the “Make-Good Shares”) to the investor for no additional consideration, in the event that, during the six month period commencing on the closing date, the Company sells common stock at a purchase price lower than $0.10 (the “Subsequent Financing Price”), such that the total number of shares of common stock received by the investor under the purchase agreement (including the Make-Good Shares and the initial shares) will be equal to the total purchase price of $50,000 divided by such lower Subsequent Financing Price. In addition the Company agreed not to pay cash compensation over $100,000 to any Officer of Director.

 

On July 8, 2015,June 11, 2018, the Company authorizedissued an aggregate of 2,000,000 shares of common stock to issue 250,000the holder of a 7% Convertible Promissory Note, dated November 14, 2016 to convert principal amount and accrued interest of $16,000.

On June 15, 2018, the Company issued 500,000 shares of common stock pursuant to a stock purchase agreement for cash of $50,000.

On August 29, 2018 the Company issued 30,000 shares of common stock for services valued at $44,400.

Warrants

During the year ended August 31, 2017, warrant activity includes the following:

On March 14, 2017, the Company entered into an employment agreement with Barry Tenzer to continue as CEO of the Company. In connection with the employment agreement the Company issued Mr. Tenzer a warrant to purchase up to 20,000,000 share of common stock at a per share price of $0.0001. The warrant was exercised in full on March 28, 2017. On May 22, 2017, Barry Tenzer resigned as President and Chief Executive Officer. In connection with the resignation of Mr. Tenzer, the 20,000,000 shares of stock issued upon the exercise of the warrants was returned to the company and cancelled and the exercise proceeds of $2,000 were returned to Mr. Tenzer. The fair value of the warrants was determined to be $4,998,021 which was recognized as compensation expense during the year ended August 31, 2017.

During the year ended August 31, 2018, warrant activity included the following:

On September 18, 2017, the Company executed an $180,000 convertible debenture with an original issue discount of $60,000. In connection with the debenture, the Company issued the lender 300,000 common stock purchase warrants with a term of 3 years and an exercise price of $1.00. The relative fair value of the warrants of $16,996 was recognized as a discount to the debenture.

On December 13, 2017, the Company issued 100,000 warrants to McGlothin Holdings Ltd. The relative fair value of the warrants of $4,984 was recognized as a discount to the debenture.

On May 22, 2017, the Company entered into an employment agreement with Marc Yahr to serve as President and Chief Executive Officer of the Company for a term of three years, unless earlier terminated pursuant to the terms of the employment agreement. Pursuant to the terms of the employment agreement, Mr. Yahr received a warrant to purchase up to 20,000,000 shares of the Company’s common stock at an exercise price of $0.0001 per share. The warrants were exercised in full on May 31, 2017; however, the 20,000,000 shares of the Company’s common stock were not issued to Mr. Yahr until June 10, 2017. The shares received upon the exercise of the warrants were subject to forfeiture over a service period of three years. The fair value of the award was determined to be $10,998,105 which will be recognized as compensation expense over the three year service period.  Warrant expense under this award for the year ended August 31, 2018 totaled $3,633,532; the warrant expense under this award for the year ended August 31, 2017 totaled $1,014,489. As of August 31, 2018, $6,359,316 remains to be expensed over the remaining vesting period. Effective October 30, 2018, Marc Yahr resigned from all positions with the Company including as President and Chief Executive Officer of the Company (except as director, which he resigned as on November 25, 2018).

F-13

On January 22, 2018, the Company entered into a sales representation agreement for a term of six months. Pursuant to the agreement the Company agreed to issue the nonemployee sales representative warrants to purchase 10,000 shares of common stock per month (an aggregate of 60,000 warrants) with an exercise price of $0.50, with a term of three years. The warrants shall be exercisable at any time on or after the six (6) month anniversary of each issuance date, at his election, in whole or in part, by means of a “cashless exercise”. The fair value of this award was determined to be $58,816 of which $51,635 was recognized during the year ended August 31, 2018.

On February 22, 2018, the Company entered into a consulting feesagreement for a term of one year. Pursuant to the agreement the Company agreed to issue the nonemployee consultant warrants to purchase 10,000 shares of common stock per month (an aggregate of 120,000 warrants) with an exercise price of $0.40, exercisable for cash only for a period of three years commencing six months form the issuance date. The fair value of this award was determined to be $106,663 of which $65,005 was recognized during the year ended August 31, 2018.

On March 2, 2018 the Company entered into a management agreement with Global Corporate Management, LLC. Pursuant to this agreement, the Company agreed to pay $4,000 and to issue 150,000 common stock purchase warrants with an exercise price of $0.50, exercisable commencing six months after issuance for a period of 5 years. The fair value of this award was determined to be $3,419,925 of which $1,457,561 was recognized during the year ended August 31, 2018.

On March 20, 2018 the Company entered into a 12 month consulting agreement with Patagonia Global Trading, LLC. Upon execution of this agreement and upon the consultant signing their first customer, acceptable by the Company, and for services rendered, the Company will immediately issue 50,000 common stock purchase warrants to purchase common stock at an exercise price of $.30 per share. As of August 31, 2018, Patagonia Global Trading, LLC, had not signed any customers and had not earned any warrants. The Company agreed to pay a total commission rate of 10% of the gross sale amount to be paid in the amountform of $105,000. Thesecash and or warrants to purchase shares of common stock of the Company.

On April 16, 2018 The Company entered into a consulting agreement with Dr. David Hellman for marketing and promotion services. The term is 1 year with payment of 50,000 warrants each month to purchase common stock with an exercise price of $0.60. However, if the Consultant generates more than $10,000 in monthly sales, the Warrants will have an exercise price of $.30, and if the Consultant generates more than $20,000 in monthly sales, the Warrants may be exchanged in “cashless exercise”. Additionally, the Company shall pay 10% of retail sales and 5% of wholesale sales. On July 11, 2018 the Company terminated the agreement. On August 1, 2018 the Company entered into a new consulting agreement with Dr. Hellman. The term is 1 year with payment of 60,000 warrants each month to purchase common stock with an exercise price of $0.60. The warrants may be exercised on a cashless basis. A total of $256,038 warrant expense in relation to this award was recognized during the year ended August 31, 2018.

On April 11, 2017, the Company executed a $540,000 convertible debenture with an original issue discount of $180,000. In connection with the note, the Company issued the lender 900,000 warrants with a term of 3 years and an exercise price of $1.00. The relative fair value of the warrants $44,981 was recognized as a discount to the note.

F-14

The following table summarizes the warrant activities during the year ended August 31, 2018, and 2017, respectively:

  Number of
Warrants
  Weighted-
Average
Price
Per Share
 
Outstanding at August 31, 2016  -  $- 
Granted  40,900,000   0.02 
Canceled or expired  (40,000,000)  - 
Exercised  -   - 
Outstanding at August 31, 2017  900,000  $1.00 
Granted  1,930,000   0.69 
Canceled or expired  -   - 
Exercised  -   - 
Outstanding at August 31, 2018  2,830,000  $0.79 
Exercisable at August 31, 2018  1,610,000  $1.00 
         
Intrinsic value at August 31, 2018 $538,500     

The fair value of the warrants was estimated using the Black-Scholes option pricing model and the following range of assumptions:

Grant Date
For the year ended August 31, 2018
Risk-free interest rate at grant date1.52% -2.70%
Expected stock price volatility183% - 362%
Expected dividend payout-
Expected option in life-years2.5 - 6.5 years

Grant Date
For the year ended August 31, 2017
Risk-free interest rate at grant date1.06% - 1.44%
Expected stock price volatility117% - 362%
Expected dividend payout-
Expected option in life-years1 - 3 years

OPTIONS

On July 26, 2017 the Company granted a nonemployee options to purchase 2,200,000 shares of common stock. The options have a three year term. 1,000,000 options are immediately exercisable on the date of issuance with an exercise price of $0.001 and the remaining 1,200,000 options vest over a period of three years at an exercise price of $1.00. On July 26, 2017, 1,000,000 shares were not issuedexercised. The aggregate fair value of the award as of August 31, 20152018 was determined to be $1,112,547 and for the balance is reflectedyear ended August 31, 2018 option expense recognized totaled $1,000,820. The aggregate fair value of the award as common stock payable inof August 31, 2017 was determined to be $485,248 and for the consolidated balance sheet.year ended August 31, 2017 option expense recognized totaled $273,185.

  Number of Options  Weighted-
Average
Price Per Share
 
Outstanding at August 31, 2016      - 
Granted  2,200,000   .55 
Exercised  1,000,000   .001 
Canceled or expired  -   - 
Addition due to ratchet trigger  -   - 
Outstanding at August 31, 2017  1,200,000  $1.00 
Granted  -   - 
Canceled or expired  -   - 
Exercised  -   - 
Outstanding at August 31, 2018  1,200,000  $1.00 
Exercisable at August 31, 2018  600,000   1.00 
Intrinsic value at August 31, 2018 $-     

F-15

6. RELATED PARTY ASSET PURCHASE AGREEMENT

 

On July 8, 2015,August 29, 2017, the Company authorizedreceived $82,750 as a deposit from a significant shareholder toward the purchase price on an agreement that was being negotiated with VMI Acquisitions, LLC for purchase of certain of the Company’s assets as well as the payment of $7,500 of expenses on behalf of the Company. The remaining $45,000 of the purchase price was paid in the form of a reduction in outstanding debt and reimbursements of expenses owed to issue 250,000a member of VMI. Certain members of VMI are noteholders and/or shareholders of the Company and related parties. The agreement was completed and closed on March 9, 2018.  As the parties were considered significant shareholder the consideration of $180,000 was recorded as a capital contribution. At the time of the sale the intellectual property had a book value of $0.

7. EMPLOYMENT AGREEMENT

On March 14, 2017, the Company entered into a two year employment agreement with Barry Tenzer to continue as CEO of the Company. In connection with the employment agreement the Company issued Mr. Tenzer a warrant to purchase up to 20,000,000 share of common stock at a per share price of $0.0001. The warrant was exercised in full on March 28, 2017. The shares of common stock for stock based compensation inunderlying the amount of $105,000. These shareswarrant were not issued as of August 31, 2015 and the balance is reflected as common stock payable in the consolidated balance sheet.on April 6, 2017.

 

On October 30, 2015,September 6, 2017, Barry Tenzer resigned as President and Chief Executive Officer of the CompanyCompany. In connection with the resignation of Mr. Tenzer his stock issued pursuant to his employment agreement was returned to the 500,000 common shares granted on July 8, 2015 to settle the common stock payable of $210,000.

7. RELATED PARTY TRANSACTIONS

We currently lease approximately 500 square feet of general office space at 290 Lenox Avenue, New York, NY 10027 from our Vice President – Operations.Company.

 

On April 27, 2016,May 22, 2017, the Board of Directors of the Company issued our CEO two 7% unsecured promissory note totaling $5,500appointed Marc Yahr as President and Chief Executive Officer of the Company and as a member of the Company’s Board.

On May 22, 2017, the Company entered into an employment agreement with Mr. Yahr pursuant to which mature six monthsMr. Yahr would serve as President and Chief Executive Officer of the Company for a term of three years, unless earlier terminated pursuant to the terms of the employment agreement. Pursuant to the terms of the employment agreement, Mr. Yahr received a warrant to purchase up to 20,000,000 shares of the Company’s common stock at an exercise price of $0.0001 per share. The warrants were exercised in full on August 31, 2017.

8. INCOME TAXES

On December 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act (the “TCJA”) that significantly reforms the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). The TCJA, among other things, contains significant changes to corporate taxation, including reduction of the corporate tax rate from a top marginal rate of 35% to a flat rate of 21%, effective as of January 1, 2018; limitation of the datetax deduction for interest expense; limitation of issuance.the deduction for net operating losses to 80% of current year taxable income and elimination of net operating loss carrybacks, in each case, for losses arising in taxable years beginning after December 31, 2017 (though any such tax losses may be carried forward indefinitely); modifying or repealing many business deductions and credits, including reducing the business tax credit for certain clinical testing expenses incurred in the testing of certain drugs for rare diseases or conditions generally referred to as “orphan drugs”; and repeal of the federal Alternative Minimum Tax (“AMT”).

F-16

 

The Companystaff of the Securities and Exchange Commission issued Staff Accounting Bulletin No. 118 to address the application of GAAP in situations when a significant shareholder two 7% unsecured promissory notes totaling $26,000 which mature six months fromregistrant does not have the datenecessary information available, prepared or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of issuance.

Asthe TCJA. In connection with the initial analysis of August 31, 2016,the impact of the TCJA, the Company had an outstanding payable of $14,609 to the CEO. The payable is unsecured, due on demand and bears no interest.

8. INCOME TAXES

Deferred income taxes are determined using the liability method for the temporary differences between the financial reporting basis and income tax basis of the Company's assets and liabilities. Deferred income taxes are measured based on the tax rates expected to be in effect when the temporary differences are included in the Company's tax return. Deferredremeasured its deferred tax assets and liabilities are recognized based on anticipatedthe rates at which they are expected to reverse in the future, which is generally 21%. The remeasurement of the Company’s deferred tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases.was offset by a change in the valuation allowance.

 

The Company is subjectFASB ASC 740,Income Taxes,requires a valuation allowance to US taxes. Historically,reduce the Company has had no net taxable income, and therefore has paid no income tax.

Asdeferred tax assets reported if, based on the weight of August 31, 2016 and 2015, the Company had a net operating loss (NOL) carryforward of approximately $1,738,968, and $1,374,003. The NOL carryforward begins to expire in various years through 2030. Because management is unable to determine thatevidence, it is more likely than not that some portion or all of the Companydeferred tax assets will realizenot be realized. After consideration of all the tax benefit related to the NOL carryforward, by having future taxable income,evidence, both positive and negative, management has determined that a full valuation allowance has been established atof $601,979 and $733,911 against its net deferred taxes is necessary as of August 31, 2016  to reduce the tax benefit asset value to zero.2018 and 2017, respectively.

 

ComponentsAt August 31, 2018 and August 31, 2017, respectively, the Company had $2,844,565 and $2,097,117, respectively, of U.S. net deferred tax assets, includingoperating loss carryforwards remaining, which expire beginning in 2017.

As a valuation allowance,result of certain ownership changes, the Company may be subject to an annual limitation on the utilization of its U.S. net operating loss carryforwards pursuant to Section 382 of the Internal Revenue Code. A study to determine the effect, if any, of this change, has not been undertaken.

Tax returns for the years ended August 31, 2018, 2017, 2016, 2015, and 2014 are subject to examination by the Internal Revenue Service.

A reconciliation of the Company’s income taxes to amounts calculated at the federal statutory rate is as follows atfor the years ended August 31st:31:

 

  2016  2015 
Deferred tax assets:      
Net operating loss  608,989   480,901 
Valuation allowance  (608,989)   (480,901)
Total deferred tax assets $-  $- 
  2018  2017 
       
Federal statutory taxes  (35.00)%  (35.00)%
Change in tax rate estimate  14.00%  - 
Change in valuation allowance  21.00%  35.00%
   -%  -%

 

The valuation allowance for deferred tax assets as of August 31, 20162018 and 20152017 was $608,989$601,978 and 480,901,$733,991 respectively.  In assessing the recovery of the deferred tax assets, 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 in the periods in which those temporary differences become deductible.  Management considers the scheduled reversals of future deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment.  As a result, management determined it was more likely than not the deferred tax assets would not be realized as of August 31, 20152018 and 2014,2017 and recorded a full valuation allowance.

 

Reconciliation between the statutory rate and the effective tax rate is as follows at August 31:

  2018  2017 
Federal statutory tax Reconciliation rate  (21.0)%  (35.0)%
Permanent difference and other  -   - 

F-17

Components of net deferred tax assets, including a valuation allowance, are as follows at August 31st:

  2018  2017 
Deferred tax assets:      
Net operating loss  597,359   734,291 
Valuation allowance  (597,359)  (734,291)
Total deferred tax assets $-  $- 

A reconciliation of the expected income tax benefit at the U.S. Federal income tax rate to the income tax benefit actually recognized for the years ended August 31, 2018 and 2017 is set forth below:

  2018  2017 
       
Net loss  (2,663,345)  (2,337,824)
Non-deductible expenses and other  1,441,043   2,212,472 
Effect due to decrease in tax rates  1,359,234   - 
Change in valuation allowance  (136,932)  (125,352)
Benefit from income taxes $-  $- 

9. SUBSEQUENT EVENTS.RELATED PARTY TRANSACTIONS

On May 17, 2016, the Company issued to Lyle Hauser, who was then the Company’s largest shareholder, a 7% unsecured promissory note in the amount of $10,000 which matured six months from the date of issuance. The note has matured and remains unpaid at August 31, 2017.

On August 15, 2016, the Company issued a significant shareholder a 7% unsecured promissory note in the amount of $16,000 which matures six months from the date of issuance. The notes has matured and remains unpaid at the quarter ended August 31, 2017.

As of August 31, 2016, the Company had an outstanding payable of $14,609 to the CEO. The payable is unsecured, due on demand and bears no interest. As of August 31, 2017 the accounts payable – related party has been paid and currently has a balance of $0.

 

On October 27, 2016 the Company issued a significant shareholder a 7% unsecured promissory notes totaling $10,000 which matures six months from the date of issuance. The notes has matured and remains unpaid at August 31, 2017.

 

OnOne November 14, 2016 the Company issued a significant shareholder a 7% unsecured promissory note totaling $80,000 which matures six months from the date of issuance.

 

On February 17, 2017, the Company issued a significant shareholder a 7% unsecured promissory note in the amount of $30,000 which matures six months from the date of issuance.

On March 31, 2017, the Company issued a significant shareholder 7% unsecured promissory note in the amount of $7,000 which matures six months from the date of issuance.

On April 11, 2017, the Company executed a $540,000 convertible debenture with an original issue discount of $180,000. The note has a 0% interest rate and a term of two years. If the note is not paid in full on the due date, the note will have a 0% interest rated until paid in full. In connection with the note, the Company issued the lender an aggregate of 2,700,000 shares and 900,000 warrants.

On August 29, 2017, the Company received $45,000 as a deposit from a significant shareholder toward the purchase price on an agreement that was being negotiated with VMI Acquisitions, LLC for purchase of certain of our Company’s assets.

During the year ended August 31, 2018 sales to a customer, who is the spouse of one of the Company’s significant shareholders, amounted to $3,975.

 F-13F-18 

 

 

10. COMMITMENTS AND CONTINGENCIES

On January 22, 2018, the Company entered into a sales representation agreement to manage and solicit orders in a set territory, the United States, with an initial term of six months. The sales representative shall be compensated 6% of the net sales and three year warrants monthly to purchase 10,000 shares of common stock at an exercise price of $0.50. Warrants may be exercised after six month anniversary of issuance date.

On February 1, 2018 the Company entered into a consulting agreement with Optimal Setup LLC for a term of one year to advise the Company on search engine optimization and digital marketing. Optimal Setup LLC shall receive monthly for services performed $2,500 and 10,000 warrants for common stock exercisable for cash price of $0.40. Warrants may be exercised after six month anniversary date.

On February 22, 2018, the Company entered into a consulting agreement for a term of one year. Pursuant to the agreement the Company agreed to issue the nonemployee consultant warrants to purchase 10,000 shares of common stock per month (an aggregate of 120,000 warrants) with an exercise price of $0.40, exercisable for cash only for a period of three years commencing six months form the issuance date.

On March 2, 2018 the Company entered into a two year management agreement with Global Corporate Management, LLC. Pursuant to this agreement, the Company to pay $4,000 and to issue 150,000 common stock purchase warrants (exercise price of $0.50, 5 year term, exercisable 6 months after issuance).

On March 20, 2018 the Company entered into a consulting agreement with Patagonia Global Trading, LLC. Upon execution of this agreement and upon the consultant signing their first customer, acceptable by the Company, and for services rendered, the Company will immediately issue 50,000 common stock purchase warrants to purchase common stock at an exercise price of $.30 per share.   As of May 31, 2018 Patagonia Global Trading, LLC, had not signed any customers and had not earned any warrants. The Company agreed to pay a total commission rate of 10% of the gross sale amount to be paid in the form of cash and or warrants to purchase shares of common stock of the Company

On April 16, 2108 The Company entered into a consulting agreement with Dr. David Hellman for marketing and promotion services. The term is 1 year with payment of 50,000 warrants to purchase common stock with an exercise price of $0.60. However, if the consultant generates more than $10,000 in monthly sales, the warrants will have an exercise price of $.30, and if the Consultant generates more than $20,000 in monthly sales, the warrants may be exchanged in “cashless exercise”. Additionally, the Company shall pay 10% of retail sales and 5% of wholesale sales. On July 11, 2018 the Company terminated the agreement. On August 1, 2018 the Company entered into a new consulting agreement with Dr. Hellman. The term is 1 year with payment of 60,000 warrants to purchase common stock with an exercise price of $0.60. The warrants may be exercised on a cashless basis.

11. SUBSEQUENT EVENTS

Between September 1, 2018 and December 14, 2018 the Company sold a total of 2,300,000 shares of common stock for proceeds of $135,000.

On October 13, 2018 the Company issued 1,000,000 shares of common stock for a sponsorship.

Effective October 30, 2018, Marc Yahr resigned from all positions with the Company including as President and Chief Executive Officer of the Company, except as a member of the board of directors. On November 25, 2018 Mr. Yahr resigned as his position as a member board of directors. On November 6, 2018 Mr. Yahr returned 16,000,000 shares of common stock to the treasury.

Effective October 30, 2018, the Board of Directors of the Company appointed Niquana Noel as President and Chief Executive Officer of the Company.

Effective October 30, 2018, the Company entered into an employment agreement with Ms. Noel pursuant to which Ms. Noel will serve as the Company’s Chief Executive Officer and president for a term of four years, unless earlier terminated pursuant to the terms of the employment agreement. Pursuant to the terms of the employment agreement, Ms. Noel’s annual salary is $96,000 and she received a warrant to purchase up to 20,000,000 shares of the Company’s common stock at an exercise price of $0.0001 per share. Ms. Noel exercised the warrant and was issued the 20,000,000 shares on October 31, 2018.

ITEM 9.F-19 

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

 

None.

 

ITEM 9A.CONTROLS AND PROCEDURES.

Item9A. Controls and Procedures.

 

(a)          Evaluation of Disclosure Controls and Control Procedures

 

Management of the Company conducted an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, Act)as amended (the “Exchange Act”) pursuant to Rule 13a-15 under the 1934 Act as of the end of the period covered by this report. The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the 1934Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s (the “SEC”) rules and forms and that such information is accumulated and communicated to management, including our principal executive and principal financial officers,officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

Based on this evaluation, management concluded that the design and operation of our disclosure controls and procedures are not effective due to the following material weaknesses:

 

 ● Since inception ourOur chief executive officer also functions as our chief financial officer.  As a result, our officers may not be able to identify errors and irregularities in the financial statements and reports.
   
 We were unable to maintain full segregation of duties within our financial operations due to our reliance on limited personnel in the finance function.  While this control deficiency did not result in any audit adjustments to our financial statements, it could have resulted in a material misstatement that might have been prevented or detected by a segregation of duties.
   
 Documentation of all proper accounting procedures is not yet complete.

 

16

To the extent reasonably possible given our limited resources, we intend to take measures to cure the aforementioned weaknesses, including, but not limited to, increasing the following:capacity of our qualified financial personnel to ensure that accounting policies and procedures are consistent across the organization and that we have adequate control over financial statement disclosures.

  

Increasing the capacity of our qualified financial personnel to ensure that accounting policies and procedures are consistent across the organization and that we have adequate control over financial statement disclosures.


(b)         Management’s Report on Internal Control over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). 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 for external purposes of accounting principles generally accepted in the United States.

 

Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statementsstatements.

13

 

Our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of August 31, 20162018 based on the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013).

 

A material weakness is defined within the Public Company Accounting Oversight Board’s Auditing Standard No. 5 as 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 the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

 

In conducting his evaluation, our officer noted the following material weaknesses in our internal controls over financial reporting:

 

 ● While certain accounting procedures have been adopted, compliance with such procedures has been inconsistent.
   
 ● The Boardboard of Directorsdirectors has not established an Audit Committee.  Accordingly, the entire Board,board, rather than an independent body, has reviewed our financial statements.
   
 ● Segregation procedures could be improved by strengthening cross approval of various functions, including cash disbursements and internal audit procedures where appropriate.

 

As a result of these deficiencies in our internal controls, our officer concluded that our internal control over financial reporting was not effective. 

 

This Annual Reportannual report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. The Company’s internal control over financial reporting was not subject to attestation by the Company’s independent registered public accounting firm pursuant to rules of the SEC that permit the Company to provide only management’s report in this annual report.

 

(c)          Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting, that occurredas defined in Rules 13a-15(t) and 15d-15(f) under the Exchange Act, during the last fiscalfourth quarter of the fiscal year ended August 31, 20162018 that hashave materially affected, or isare reasonably likely to materially affect, our internal control over financial reporting.

 

ITEM 9B.OTHER INFORMATION.

Item 9B. Other Information.

 

None.

 

 1714 

 

 

PART III

  

ITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

Item 10. Directors, Executive Officers, and Corporate Governance.

 

We have appointed the following individuals to serveNiquana Noel serves as our chief executive officersofficer, president, chief financial officer, and directors:sole director.

 

NameAgeTitle(s)
Barry Tenzer83President, Chief Executive Officer, Chief Financial Officer, Secretary and Director
Roberto Fata47Executive Vice President – Business Development and Director

Barry Tenzer,Ms. Noel, 37, has served as President, Chief Executive Officer, Chief Financial Officer, Secretarythe Company’s president, chief executive officer and Director of DiMi Telematics prior to the Share Exchange,chief financial officer since October 30, 2018, and assumed those duties with the Company following the Share Exchange. Mr. Tenzer founded, managed andas our director since November 25, 2018. Ms. Noel also previously served as operations manager at the Company. Ms. Noel is a boardproven entrepreneurial executive with expertise in operations, finance and accounting, SEC reporting and compliance, staffing, marketing and corporate governance. Ms. Noel has spent nearly two decades working with privately-held and publicly-traded micro and small cap companies. Since 2008, Ms. Noel has been a key member of numerous private and public companies operating in a broad range of industries, including real estate, property management, construction, legal services, commercial packaging, cemetery, auto sales and chartered aviation services. From 1968 to 1981, he was General Partner of 527 Madison Avenue Company NY, LP, and No. 34th St. Company, L.P.the leadership team at Hash Labs Inc. (formerly MedeFile International, Inc.), and Limited Partnerhas served as its chief operating officer since May 2018 and as a director of Hash Labs Inc. since August 2013. Ms. Noel served as chief executive officer and president of Hash Labs Inc. from January 2014 to May 2018. Prior to serving in approximately 20 real estate investments. From 1976 to 2003, Mr. Tenzerthat capacity, Ms. Noel served as operations manager of Hash Labs Inc. from 2008. Early in Ms. Noel’s career while working for a serial entrepreneur, she was charged with overseeing daily business operations for interests ranging from the CEOownership and operation of HIG Corporation, which owned and operated six cemeteries in Maryland, Virginia and Florida. From 1997Florida; to 2003, Mr. Tenzer also founded and served as President and CEO of Motorcars Auto Group, Inc., a company engaged in the ownership and operation of exotic, high performance carauto dealerships and auto accessory businesses. Mr. Tenzer currently serves as General Partner of Northerly Company, a real estate partnership. Mr. Tenzer graduated from Cornell University, where he was awarded his BA degree,businesses in 1953, and from NYU Law School, where he earned his LLB, in 1956. Mr. Tenzer was admitted to the New York Bar in 1957 and practiced law in private practice until 1961.

The Board of Directors has concluded that Mr. Tenzer is qualified to serve as a director of the Company because of his extensive involvement in real estate ventures and managerial experience in operating and advising a wide range of public and private companies.south Florida.

 

Roberto Fata served as Executive Vice President – Business Development and Director of DiMi Telematics prior to the Share Exchange, and assumed those duties with the Company following the Share Exchange. Since 1991, Mr. Fata has been employed by the FATA Organization (“FATA”), a New York City-based real estate company that has owned and managed commercial and residential properties in Manhattan, New York for over 70 years. As FATA’s President and Managing Director, he has played a leadership role in the revitalization of Harlem, one of Manhattan’s most famous neighborhoods. He currently serves on the Board of Directors for both the Greater Harlem Board of Realtors and the 125th Street Business Improvement District. In 2006, Mr. Fata founded DiMi PA, Inc. to commercialize DiMiSpeaks, a facility management software and hosting solution that he developed to better manage the many building operating systems that support all of FATA’s real estate properties. In 2010, Mr. Fata sold the assets of DiMi PA to DiMi Telematics, and he now serves as Executive Vice President of Business Development and a Director of the Company.

The Board of Directors has concluded that Mr. Fata is qualified to serve as a director of the Company because his employment of approximately 20 years with the FATA Organization. Mr. Fata’s experience in the real estate business and his role in the development of the Company’s proprietary software makes him a critical resource in our quest to commercialize ourDiMi Solution.

Terms of Office

 

Our directors are appointed for one year terms in accordance with our charter documents and hold office until the earlier of (i) the next annual meeting of our stockholders,shareholders, (ii) until they are removed from the board or (iii) until they resign.

 

18

Committees of our Board of Directors

We have not established any committees, including an Audit Committee, a Compensation Committee or a Nominating Committee, or any committees performing similar functions. The functions of those committees are currently undertaken by Board of Directors as a whole. Because we have only two directors, neither of which is independent, we believe that the creation of these committees, at this time, would be cumbersome and constitute more form over substance, particularly under circumstances where a substantial majority of our outstanding shares are controlled by one individual (who has approved the appointment of our directors) and at a time when our resources do not permit us to obtain officers’ and directors’ liability insurance.

Stockholder Nominees for Directors

We do not have a policy regarding the consideration of any director candidates which may be recommended by our stockholders, including the minimum qualifications for director candidates, nor has our Board of Directors established a process for identifying and evaluating director nominees. We have not adopted a policy regarding the handling of any potential recommendation of director candidates by our stockholders, including the procedures to be followed. Our Board has not considered nor has it adopted any of these policies as we have never received a recommendation from any stockholder for any candidate to serve on our Board of Directors. Given our relative size, early stage of development and lack of officers’ and directors’ insurance coverage, we do not anticipate that any of our stockholders will make such a recommendation in the near future. While there have been no nominations of additional directors proposed, in the event such a proposal is made, all members of our Board will participate in the consideration of director nominees. In considering a director nominee, it is likely that our Board will consider the professional and/or educational background of any nominee with a view towards how such candidate might bring a different viewpoint or experience to our Board.

Audit Committee Financial Expert

Barry Tenzer, our President, Chief Executive Officer, Chief Operating Officer and a Director, is an “audit committee financial expert” within the meaning of Item 407(d)(5) of Regulation S-K.

Code of Ethics

We have not yet adopted a Code of Ethics but expect to consider and approve a Code of Ethics in the near term.

Family Relationships

 

There are no family relationships among our executive officers and directors.None.

 

Involvement in Certain Legal Proceedings

During the past ten years, none of our current directors or executive officers promoters, control persons, or nominees has been:

 

 the subject of any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
   
 convicted in a criminal proceeding or is subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
   
 subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or any Federal or State authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities;
   
 found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law;law.

 15 

 the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of (a) any Federal or State securities or commodities law or regulation; (b) any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or (c) any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

 19 

 the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

 

Compliance with Section 16(a) of the Exchange ActBeneficial Ownership Reporting Compliance

 

Section 16(a) of the Exchange Act requires the Company'sCompany’s officers and directors, and certain persons who own more than 10% of a registered class of the Company'sCompany’s equity securities (collectively, "Reporting Persons"“Reporting Persons”), to file reports of ownership and changes in ownership ("(“Section 16 Reports"Reports”) with the Securities and Exchange Commission (the "SEC"“SEC”).  Reporting Persons are required by the SEC to furnish the Company with copies of all Section 16 Reports they file. Based solely on its review of the copies of such Section 16 Reports received by the Company, or written representations received from certain Reporting Persons, all Section 16(a) filing requirements applicable to the Company'sCompany’s Reporting Persons during and with respect to the fiscal year ended August 31, 20162018 have been complied with on a timely basis, except that the Forms 4 filed by Messrs. Tenzer and Fata and the Forms 3 filed by the Company’s two 10% shareholders who appear under Item 11 were not filed on a timely basis.

  

Changes in Nominating ProceduresBoard Committees

 

None.We have not established any committees of the board of directors due to the small size of the Company and the board. We do not have an audit committee financial expert because we do not have the resources to retain one.

 

Board Leadership Structure and Role inon Risk Oversight

Mr. Tenzer serves as Chairman and Chief Executive Officer. Due toNiquana Noel is presently the small size and early stage of the Company, we believe it is currently most effective to have the Chairman and Chief Executive Officer positions combined.only board member.

 

Our Board of Directorsboard is primarily responsible for overseeing our risk management processes. The Board of Directorsboard receives and reviews periodic reports from management, auditors, legal counsel, and others, as considered appropriate regarding the Company’s assessment of risks. The Board of Directorsboard focuses on the most significant risks facing the Company and the Company’s general risk management strategy, and also ensures that risks undertaken by the Company are consistent with the board’s appetite for risk. While the Board of Directorsboard oversees the Company’s risk management, management is responsible for day-to-day risk management processes. We believe this division of responsibilities is the most effective approach for addressing the risks facing the Company and that our board leadership structure supports this approach. Ms. Noel’s operational experience qualifies her to serve on our board of directors. 

 

Stockholder Communication with the Board of Directors

Stockholders may send communications to our board of directors by writing to Bespoke Extracts, Inc., 323 Sunny Isles Blvd., Suite 700, Sunny Isles, Florida, 33160, Attention: Corporate Secretary.

Code of Ethics

The Company has adopted a Code of Ethics that applies to the Company’s chief executive officer. Any person may obtain a copy of our Code of Ethics, without charge, by mailing a request to the Company at the address appearing on the front page of this Annual Report on Form 10-K or by viewing it on our website found at www.BespokeExtracts.com.

ITEM 11.16 EXECUTIVE COMPENSATION.

Item 11. Executive Compensation.

 

Summary Compensation Table

 

The following table summarizes all compensation recorded by using 2016 and 2015 forto our then principalchief executive officer eachduring the years ended August 31, 2018 and August 31, 2017. No other executive officer servingreceived compensation of more than $100,000 during such periods.

Name and Principal Position Year  Salary  Bonus  Stock
Awards
  Option
Awards
  Non-Equity
Incentive
Plan
Compensation
  Nonqualified
Deferred
Compensation
Earnings
  All Other
Compensation
  Total 
(a) (b)  (c)  (d)  (e)  (f)  (g)  (h)  (i)  (j) 
Marc Yahr  2018   0   --   --   --   --   --   --   0 
Former CEO, President (1)  2017   21,000   --   --   --   --   --   --   21,000 
                                     
Barry Tenzer
Former CEO and
  2018   --   --   --   --   --   --   --   -- 
President (2)  2017   63,000   --   --   --   --   --   --   63,000 

(1) Mr. Yahr resigned as such whose annual compensation exceeded $100,000,president and up to two additional individuals for whom disclosure would have been made in this table but for the fact that the individual was not serving as anchief executive officer of our company at August 31, 2016. The value attributable to any option awards is computed in accordance with FASB ASC Topic 718.the Company on October 30, 2018.

(2) Mr. Tenzer resigned as president and chief executive officer of the Company on May 22, 2017.

 

Name and Principal Position Year  Salary  Bonus  Stock
Awards
  Option
Awards
  Non-Equity
Incentive
Plan
Compensation
  Nonqualified
Deferred
Compensation
Earnings
  All Other
Compensation
  Total 
(a) (b)  (c)  (d)  (e)  (f)  (g)  (h)  (i)  (j) 
Barry Tenzer CEO  2016   84,000   10,000   94,000   --   --   --   --   -- 
President Secretary  2015   74,342   8,000   105,000   --   --   --   --   -- 
                                     
Roberto Fata  2016   --   --   --   --   --   --   --   -- 
Exec VP  2015   --   --   105,000   --   --   --   --   -- 

Employment Agreements

Effective October 30, 2018, the Company entered into an employment agreement with Ms. Noel pursuant to which Ms. Noel will serve as the Company’s chief executive officer and president. Ms. Noel will serve as president and chief executive officer of the Company for a term of four years, unless earlier terminated pursuant to the terms of the employment agreement. Pursuant to the terms of the employment agreement, Ms. Noel’s salary is $96,000 per year and she received warrants to purchase up to 20,000,000 shares of the Company’s common stock at an exercise price of $0.0001 per share. Ms. Noel has exercised the warrants and has been issued the shares. The shares will be required to be returned to the Issuer as follows:

Ms. Noel will return 80% of the shares to the Issuer if she is not serving as chief executive officer of the Issuer pursuant to her employment agreement as of October 30, 2019 (the first anniversary of the employment agreement);

Ms. Noel will return 60% of the shares to the Issuer if she is not serving as chief executive officer of the Issuer pursuant to her employment agreement as of October 30, 2020 (the second anniversary of the employment agreement);

 

 2017 

 

Ms. Noel will return 40% of the shares to the Issuer if she is not serving as chief executive officer of the Issuer pursuant to her employment agreement as of October 30, 2021 (the third anniversary of the employment agreement); and

Ms. Noel will return 20% of the shares to the Issuer if she is not serving as chief executive officer of the Issuer pursuant to her employment agreement as of October 30, 2022 (the fourth anniversary of the employment agreement).

 

Outstanding Equity Awards at Fiscal Year-End

 

None.

NoneCompensation of Directors

 

CompensationNo director of Directorsthe Company received any compensation for serving as director of the Company during the year ended August 31, 2018.

 

We have not established standard compensation arrangements for our directorsItem 12. Security Ownership of Certain Beneficial Owners and do not have any agreements or understandings to compensate directors for their services as such.Management and Related Stockholder Matters.

ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

 

As of December 16, 2016,14, 2018 we had 2,922,71250,203,907 shares of common stock issued and outstanding. The following table sets forth information known to us relating to the beneficial ownership of such shares as of such date by:

 

 each person who is known by us to be the beneficial owner of more than 5% of our outstanding voting stock;

 each director;

 each named executive officer; and

 all named officers and directors as a group.

 

Unless otherwise indicated, the business address of each person listed is care of DTIIBespoke Extracts, Inc., at 290 Lenox Avenue, New York, NY 10027.323 Sunny Isles Blvd., Suite 700, Sunny Isles, Florida 33160. The percentages in the table have been calculated on the basis of treating as outstanding for a particular person, all shares of our common stock outstanding on that date and all shares of our common stock issuable to that holder in the event of exercise of outstanding options, warrants, rights or conversion privileges owned by that person at that date which are exercisable within 60 days of December 16, 2016.12, 2018. Except as otherwise indicated, the persons listed below have sole voting and investment power with respect to all shares of our common stock owned by them, except to the extent that power may be shared with a spouse.them.

Name of Beneficial Owner Amount of Beneficial Ownership  Percent of Class 
Executive Officers and Directors:      
Niquana Noel  20,000,000   39.8%
Officers and Directors as a group (1 person):  20,000,000   39.8%
5% Holders:        
McGlothlin Holdings, Ltd. (1)  5,222,667   10.1%
Marc Yahr (2)  4,000,000   8.0%

(1)Includes 660,000 shares issuable upon conversion of a debenture and 1,000,000 shares issuable upon exercise of warrants. McGlothlin Holdings, Ltd.’s address is PO Box 590, Luling, Texas, 78649, and its control person is Stan McGlothlin.
(2)The address of Marc Yahr is 1005 Kane Concourse Ste 207-1, Bay Harbour Islands FL 33154-2117.

Equity Compensation Plan Information.

 

Name of Beneficial Owner Amount  of Beneficial Ownership  Percent of Class 
Executive Officers and Directors:        
Roberto Fata  410,000   14.0%
Barry Tenzer  394,000   13.5%
Officers and Directors as a group (2 persons):  804,000   27.5%
5% Holders:        
Lyle Hauser (1)  812,800   27.8%
McGlothlin Holdings, Ltd. (2)  662,667   22.7%
Anthony Ivankovich (3)  435,003   14.9%

(1)   Mr. Hauser’s address is 1000 Quayside Terrace, Suite 1810, Miami, FL 33138.

(2)   McGlothlin Holdings, Ltd.’s address is Po BOX 590, Luling, Texas 78649 and its control person is Stan McGlothlin.

(3)   Mr. Ivankovich’s address is 791 Crandon Blvd., Apt. PH-6, Key Biscayne, FL 33149.None. 

 

 2118 

 

 

ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

We do not have any independent directors.

ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICES.

  Audit Fees  Audit-
Related Fees
  Tax Fees  All Other Fees 
             
2016 $15,000  $-  $-  $- 
2015 $21,500  $-  $-  $- 

We have no formal audit committee. However, our entire Board of Directors is our de facto audit committee. In discharging its oversight responsibility as to the audit process, the Board obtained from the independent auditors a formal written statement describing all relationships between the auditorsItem 13. Certain Relationships and us that might bear on the auditors' independence as required by Independence Standards Board Standard No. 1, “Independence Discussions with Audit Committees.” The Board discussed with the auditors any relationships that may impact their objectivityRelated Transactions, and independence, including fees for non-audit services, and satisfied itself as to the auditors' independence. The Board also discussed with management, the internal auditors and the independent auditors the quality and adequacy of its internal controls. The Board reviewed with the independent auditors their management letter on internal controls.Director Independence.

 

Certain Relationships and Related Transactions.

On May 17, 2016, the Company issued to The Vantage Group Ltd. (“Vantage”), an entity owned by Lyle Hauser, who was then a greater than 5% stockholder, a 7% promissory note in the amount of $10,000 which had an original maturity of six months from the date of issuance. On August 15, 2016, the Company issued to Vantage a 7% promissory note in the amount of $16,000 which had an original maturity of six months from the date of issuance. On October 27, 2016, the Company issued to Vantage a 7% promissory note in the amount of $10,000 which had an original maturity date of six months from the date of issuance. On November 14, 2016, the Company issued to Vantage a 7% promissory note in the amount of $80,000 which had an original maturity date of six months from the date of issuance. On March 31, 2017, the Company issued to Vantage a 7% promissory note in the amount of $7,000 which had an original maturity date of six months from the date of issuance. On April 17, 2017 the notes were amended to be convertible into common stock and to mature on April 18, 2018, with a conversion price of $0.008.  

On February 17, 2017, the Company issued to Vantage, a 7% promissory note in the amount of $30,000 which matured six months from the date of issuance. This note has been repaid.

On April 11, 2017, the Company executed a $540,000 convertible debenture with an original issue discount of $180,000 issued to McGlothlin Holdings, Ltd. (“McGlothlin”), a greater than 5% stockholder of the Company. The note has a 0% interest rate and a term of two years. In connection with the note, the Company issued the lender an aggregate of 2,700,000 shares and 900,000 warrants. The conversion price of the outstanding balance is the lesser of $3.00 or 40% of the volume weighted average price of the 30 days at date of conversion; not to be less than $1.00. This debenture remains outstanding.

On September 18, 2017, the Company issued a $180,000 convertible debenture with an original issue discount of $60,000 to Alneil Associates, which was then a greater than 5% stockholder. The note has a 0% interest rate and a term of two years. In connection with the note, the Company issued the lender an aggregate of 900,000 shares of common stock and 300,000 warrants to purchase common stock.

On December 13, 2017, the Company executed a $120,000 convertible debenture issued to McGlothlin with an original issue discount of $20,000. The debenture has a 0% interest rate and a term of one year. The conversion price of the outstanding balance is the lesser of $3.00 or 40% of the volume weighted average price of the 30 days at date of conversion; not to be less than $1.00. In connection with the debenture, the Company issued to McGlothinlin an aggregate of 200,000 shares of common stock and 100,000 warrants to purchase common stock. This debenture is outstanding.

During the year ended August 31, 2018, the Company had sales of $3,975 to the spouse of Stan McGlothin, who is the owner of McGlothlin, a greater than 5% stockholder of the Company

Director Independence.

Niquana Noel is our sole director and does not qualify as an independent director under the Nasdaq listing standards.

Item 14. Principal Accounting Fees and Services.

The following table shows the fees that were billed to the Company by its independent auditor for professional services rendered in the fiscal years ended August 31, 2018 and 2017.

Fiscal Year Audit Fees Audit-Related
Fees
 Tax Fees All Other Fees 
2018  23,500 $   -    -   
2017 $16,000 $- $- $     - 

The board of directors serves as the audit committee of the Company. The board of directors on an annual basis reviews audit and non-audit services performed by the independent registered public accounting firm. All audit and non-audit services are pre-approved by the board of directors, which considers, among other things, the possible effect of the performance of such services on the auditors’ independence. The board of directors has considered the role of MaloneBailey LLP in providing services to us for the fiscal year ended August 31, 2018 and has concluded that such services are compatible with MaloneBailey LLP’s independence as the Company’s  independent registered public accounting firm.

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PART IV

 

ITEM 15.EXHIBITS, FINANCIAL STATEMENT SCHEDULES

Item 15. Exhibits, Financial Statement Schedules.

 

(B)(a)

(1) Our financial statements are listed on page F-1 of this annual report.

(2) Financial statement schedules: None.

(b)  Exhibits.

 

Exhibit No. Description
   
3.1 Articles of Incorporation (1)
(incorporated by reference to Form 10-SB filed August 10, 2007)
3.2 Articles and CertificateCertificates of Merger (1)(incorporated by reference to Form 10-SB filed August 10, 2007)
3.3 
3.3 Certificate of Amendment (2)
to Articles of Incorporation (incorporated by reference to 8-K filed March 19, 2012)
3.4 Certificate of Amendment (3)
to Articles of Incorporation (incorporated by reference to 8-K filed March 5, 2014)
3.5 Certificate of Amendment (4)
to Articles of Incorporation (incorporated by reference to 8-K filed December 3, 2015)
3.6 Bylaws (1)Articles of Merger (incorporated by reference to 8-K filed March 10, 2017)
3.7 Bylaws (incorporated by reference to Form 10-SB filed August 10, 2007)
31.110.1 Asset Purchase Agreement, dated March 9, 2018, between the Company and VMI Acquisitions, LLC (incorporated by reference to 8-K filed March 14, 2018)
10.2Securities Purchase Agreement, dated March 5, 2018 between the Company and Purchaser named therein (incorporated by reference to 8-K filed March 8, 2018)
14.1Code of Ethics*

31.1

Certification pursuant to Section 302 of the Sarbanes-Oxley Act*

32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
   
101.INS XBRL Instance Document*
   
101.SCH XBRL Taxonomy Extension Schema Document*
   
101.CAL XBRL Taxonomy Calculation Linkbase Document*
   
101.DEF XBRL Taxonomy Extension Definition Linkbase Document*
   
101.LAB XBRL Taxonomy Label Linkbase Document*
   
101.PRE XBRL Taxonomy Presentation Linkbase Document*

  

* Filed herewith

 

(1) Incorporated by reference to Form 10-SB12B filed August 10, 2007.

(2) Incorporated by reference to Form 8-K filed March 15, 2012.

(3) Incorporated by reference to Form 8-K filed March 5, 2014.

(4) Incorporated by reference to Form 8-K filed December 3, 2015.

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SIGNATURES

 

Pursuant to 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.

  

 DIMI TELEMATICS INTERNATIONAL,BESPOKE EXTRACTS, INC.
  

February 8, 2017

Dated:  December 14, 2018
By:/s/ Barry TenzerNiquana Noel
 Name:Barry TenzerNiquana Noel
 Title:

Chief Executive Officer (Principal Executive Officer), and

Chief Financial Officer

(principal executive officer,

principal financial officer and
(Principal Accounting and Financial Officer)principal accounting officer)

  

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:SIGNATURE/s/ Barry Tenzer

February 8, 2017

 Name: Barry TenzerTITLE 
Title: Chief Executive Officer
(Principal Executive Officer), Chief Financial Officer (Principal Accounting and Financial Officer) and Director
DATE
   
By:/s/ Roberto FataFebruary 8, 2017
 Name: Roberto Fata 
/s/ Niquana NoelTitle:Chief Executive Vice President – Business DevelopmentOfficer,
Chief Financial Officer and Director
December 14, 2018
Niquana Noel(principal executive, financial and accounting officer) 

 

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