TABLETABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

These unaudited condensed consolidated financial statements have been prepared by the registrant,DiMi Telematics International, Inc. (the “Company”), pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”).Commission. These condensedunaudited consolidated financial statements and the notes attached hereto should be read in conjunction with the financial statements and notes included in the registrant’sCompany���s annual report on Form 10-K for itsthe fiscal year ended August 31, 20152016 as filed with the SECSecurities and Exchange Commission (the “SEC”) on December 30, 2015.16, 2016. In the opinion of the registrant,the Company, all adjustments, including normal recurring adjustments necessary to present fairly the financial position of the Company, as of November 30, 20152016 and August 31, 20152016 and the results of its operations and cash flows for the periods ended November 30, 20152016 and 20142015 have been included in the financial statements.included. The results of operations for the interim period are not necessarily indicative of the results for the full year.

ITEM 1. FINANCIAL STATEMENTS

Dimi Telematics International, Inc.

 Condensed Consolidated Balance Sheets

(Unaudited)

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

Dimi Telematics International, Inc.

 Condensed Consolidated Statements of Operations

(unaudited)(Unaudited)

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

Dimi Telematics International, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)(Unaudited)

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

DiMi Telematics International, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. BASIS OF PRESENTATION AND NATURE OF BUSINESS OPERATIONS

Basis of Presentation

The accompanying unaudited consolidated financial statements of DiMi Telematics International, Inc. (formerly known as First Quantum Ventures, Inc.), a Nevada corporation (the “Company”), have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete consolidated financial statements. These unaudited consolidated financial statements and related notes should be read in conjunction with the Company's annual report on Form 10-K for the fiscal year ended August 31, 2015.2016. In the opinion of management, these unaudited consolidated financial statements reflect all adjustments that are of a normal recurring nature and which are necessary to present fairly the financial position of the Company as of November 30, 2015,2016, and the results of operations and cash flows for the three months ended November 30, 20152016 and 2014.2015. The results of operations for the three months ended November 30, 20152016 are not necessarily indicative of the results that may be expected for the entire fiscal year.

The Company 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 referredCertain prior period amounts have been reclassified 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 subsequentconform to the acquisition. Based on a review of these factors, the acquisition was accounted for as a reverse acquisition, i.e., the Company was considered the acquired company and DTI was considered the acquiring company for accounting purposes. 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 do not include the Company’s results prior to the date of closing. Accordingly the accompanying financial statements are the financial statements of the DTI. In addition, the Company’s fiscal year end changed to DTI’s fiscal year end of August 31 following the closing.current period presentation.

The Company has retroactively reflected the acquisition in DTI’s common stock in a ratio consistent with the Share Exchange.

On March 15, 2012, First Quantum changed its name to DiMi Telematics International, Inc.

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.

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:  

Going Concern

The accompanying financial statements have been prepared contemplatingassuming a continuation of the Company as a going concern. However, the Company has reported a net loss of $81,092$42,501 for the three months ended November, 30, 20152016 and had an accumulateda working capital deficit of $2,143,716$157,572 as of November 30, 2015.  The Company has net working capital of $94,2962016.  These conditions raise substantial doubt about our ability to continue as of November 30, 2015.

DTI’s flagship M2M solution is “DiMi,” a proprietary, patent-pending, business intelligence and two-way communications platform that captures and seamlessly integrates real-time data from networked tracking, monitoring, alarm and alert systems, sensors and devices; and, in turn, centralizes this data onto an online command and control dashboard that is accessible 24/7 by a designated user or community of designated users through the secureDiMiInternet portal, found atwww.dimispeaks.com.

With adoption of theDiMiM2M communicationsplatform, users can remotely control, monitor, manage and acquire data from their operational assets, providing the interface for lighting, temperature, humidity, keycard access, fleet management and many other vital systems that impact the enterprise.  DiMiuses established secure technology standards (i.e. LONet, MODbus, BACnet 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.

By providing dynamic, real-time access to critical information from a wide array of new or legacy sensors, GPS tracking tools and/or diagnostic devices – irrespective of their make, model or manufacturer,DiMialerts or reports back to its users via familiar communication tools, like IM, email, HTML and text messaging.  Users can even issue global commands to its asset management and control systems through theDiMisoftware interface.  Moreover,DiMileverages 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.    

DTI’sDiMi solution is currently being used to actively monitor property management systems in several high-rise commercial and residential buildings in New York City;all beta sites which have served to successfully prove theDiMi technology and M2M communications platform.  Moving forward, DTI intends to concentrate itsDiMicommercialization 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.  

Once a new client’s core M2M business needs have been confirmed, DTI will closely collaborate with the client to design the organizational and process modifications required to ensure a successfulDiMi launch, offering full service project definition, management, user interface customization, implementation services and ongoing quality assurance and testing.

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 of $250,000.  

Income Taxesgoing concern.

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 Application

The iPhone application is stated at cost. When retired or otherwise disposed of, 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 life, or three (3) years.

DiMi Platform

When retired or otherwise disposed of, 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 life, or five (5) years. The impairment was due to the DiMi platform and the complications with finding suitable properties for beta testing. As 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 of, 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 life, or three (3) to fifteen (15) years.

Revenue Recognition

The Company recognizes revenue on four basic criteria which must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) 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.

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 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.

Fair Value Measurements

The Company measures and discloses the fair value of assets and liabilities required to be carried at fair value in accordance with ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”). ASC 820 defines fair value, establishes a framework for measuring fair value, and enhances fair value measurement disclosure.

The Company believes the carrying amounts of cash and cash equivalents, prepaid expenses, accounts payable and accrued liabilities are a reasonable approximation of the fair value of those financial instruments because of the nature of the underlying transactions and the short-term maturities involved.

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’sCompany’s ability to continue as a going concern by incorporatingis dependent upon the Company generating profitable operations in the future and/or obtaining the necessary financing to meet its obligations and expanding upon certain principlesrepay its liabilities arising from normal business operations when they come due. There is no assurance that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definitionthis series 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 toevents will 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.satisfactorily completed.

2. EQUITY

Net Loss per Share

Basic loss per share amounts is computed based on net loss divided by the weighted average number of common shares outstanding. There were no outstanding warrants as of November 30, 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.  

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 PROPERTY

Intellectual property of the following:

DTI executed an Asset Purchase Agreement on August 28, 2011 which included various types of intellectual property.  Amortization expense for the three months ended November 30, 2015 and 2014 amounted to $33 and $950, respectively.

3. IPHONE APPLICATION

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

Amortization expense for the iPhone application for the three months ended November 30, 2015 and 2014 amounted to $0 and $917, respectively. As of August 31, 2015, the iPhone application is fully amortized.

4. DiMi PLATFORM

The Company has contracted for the development of software to develop and distribute 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. Completion of the software is anticipated to be implemented by the second quarter 2016.  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. EQUITY

Common Stock

The Company was formed in the state of Nevada on April 13, 2006.  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 October 1, 2015, the Board of Directors and a majority of the Company’s shareholders approved an amendment of the Company’s Articles of Incorporation to effect a 1one (1) for 3three (3) reverse stock split of the Company’s outstanding common stock.stock (the “Reverse Split”). The Reverse Split became effective on December 1, 2015. As a result of the Reverse Split, each three (3) shares of common stock issued and outstanding prior to the reverse splitReverse Split have been converted into one (1) share of common stock. The effect of the reverse stock splitReverse Split has been applied retroactively throughout this document.quarterly report.

On, July 8, 2015, the Company authorized the issuance of 250,000 shares of common stock for consulting fees in the aggregate amount of $105,000. The shares were issued on October 30, 2015.

On, July 8, 2015, the Company authorized the issuance of 250,000 shares of common stock for stock based compensation in the aggregate amount of $105,000. The shares were issued on October 30, 2015.

6.On October 30, 2015, the Company issued the 500,000 shares of common stock granted on July 8, 2015 to settle the common stock payable of $210,000.

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

The changes in notes payable to related party consisted of the following during the year ending November 30, 2016:

On May 17, 2016, the Company issued to Lyle Hauser, 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. 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. On October 27, 2016, the Company issued a significant shareholder a 7% unsecured promissory note in the amount of $10,000 which matures six months from the date of issuance. On November 14, 2016, the Company issued a significant shareholder 7% unsecured promissory note in the amount of $80,000 which matures six months from the date of issuance

The changes in notes payable to related party consisted of the following during the year ended November 30, 2016:

3. 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 of– Operations.

7. COMMITMENTS AND CONTINGENCIESOn April 27, 2016, the Company issued our CEO two 7% unsecured promissory note in the aggregate amount of $5,500 which matured six months from the date of issuance Both notes have been paid off and the remaining principal amount is $0.

On May 17, 2016, the Company issued to Lyle Hauser, 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.

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. 

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 November 30, 2015 there are no continuing commitments2016 the accounts payable – related party has been paid and contingencies.

8. SUBSEQUENT EVENTScurrently has a balance of $0.

On October 1, 2015,27, 2016 the BoardCompany issued a significant shareholder a 7% unsecured promissory notes totaling $10,000 which matures six months from the date of Directors andissuance.

One November 14, 2016 the Company issued a majoritysignificant shareholder a 7% unsecured promissory note totaling $80,000 which matures six months from the date of the shareholders of DiMi Telematics International, Inc. (the “Company”) approved an amendment of the Company’s Articles of Incorporation to effect a 1 for 3 reverse stock split of the Company’s outstanding common stock (the “Reverse Split”). The Reverse Split became effective on the OTC Pink tier (the “OTC Pink”) operated by the OTC Markets Group, Inc. on December 1, 2015, having been approved by the Financial Industry Regulatory Authority, Inc. (“FINRA”) on November 30, 2015. As a result of the Reverse Split, each three (3) shares of common stock issued and outstanding prior to the Reverse Split have been converted into one (1) share of common stock, with all fractional shares rounded up to the nearest whole number thereof and all options, warrants, and any other similar instruments convertible into, or exchangeable or exercisable for, shares of common stock have been adjusted accordingly. The effect of the reverse stock split has been applied retroactively throughout this document.issuance.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF OPERATIONS.

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 quarterly reportQuarterly 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,” and 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 quarterly reportQuarterly Report to conform forward-looking statements to actual results. Important factors on which such statements are based are assumptions concerning uncertainties, including but not limited to, uncertainties associated with the following:

The following discussion should be read in conjunction with the financial statements and the notes thereto which are included in this quarterly report.Quarterly Report. This discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ substantially from those anticipated in any forward-looking statements included in this discussion as a result of various factors.

Overview

Cine-Source Entertainment, Inc. (the “Old Corporation”“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”“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 effectedeffectuated a 1-for-2001 for 200 reverse stock split. On April 27, 2004 theThe 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 suchthis subsidiary, referred to herein as DTII.

As disclosed on a Current Report on Form 8-K filed with the SEC on November 16, 2011, on October 28, 2011, we entered into a Share Exchange Agreement (the “Exchange Agreement”) with Andrew Godfrey, our then Chief Executive Officer, DTI and the holders of all of the issued and outstanding capital stock of DTI (the “DiMi Stockholders”). Pursuant to the Exchange Agreement, we exchanged 9,716,667 shares of our common stock (the “First Quantum Shares”) for 100% of the issued and outstanding shares of DTI (the “DiMi Shares”). The exchange of the DiMi Shares for the First Quantum Shares is hereinafter referred to as the “Share Exchange.” The First Quantum Shares issued in the Share Exchange represented 85.8% of our issued and outstanding common stock immediately following the Share Exchange. As a result of the Share Exchange, DTI became a wholly-owned subsidiary of DTII. In connection with the Share Exchange, (a) 1,666,667 shares of our issued and outstanding common stock owned by Kesgood Company, Inc. were surrendered for cancellation and (b) our officers and directors resigned and the following individuals assumed their duties as officers and directors:

The Share Exchange qualified as a transaction exempt from registration or qualification under the Securities Act of 1933, as amended (the “Securities Act”“Securities Act”), and under the applicable securities laws of each jurisdiction where any of the stockholders reside.

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 includewere also applied to outstanding warrants.  The Company has reflected the dividends as splits, which have been retroactively reflected in the financial statements.

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 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.

The Company 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 fromOther than the oversight and administration of our corporate, financial and legal affairs by the executive management team, our Company’s operating activities are centralized in the following three core areas:

Sales and Marketing 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.interface;

Operationswill 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.platform; and

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 outside third parties.

Plan of Operations

Product Development Plan

Product development will be chargedtasked with enhancing our existing M2M software applications and services and introducing new and complementary hosted products and applications on a timely basis.

The primary building blocks of M2M technology on which the Company has focused its development activities have been and will remain:

The Company’s proprietary M2M solutions utilize a cloud-based, two-way communications delivery platform, marketed as “DiMi.” Leveraging the power, scalability and flexible turnkey advantages ofDiMi’spatent-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.

DiMifeatures a robust, customized interface that gives its users secure command and control functionality of multiple remote, connected sensors, alarms and diagnostic devices. Moreover, the intuitiveDiMiframework readily adapts to and integrates both new and legacy monitoring/sensing equipment – irrespective of make, model or manufacturer – providing for simplified, economical M2M deployments.

DiMiis delivered 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 andDiMi’s proprietary web interface.

The Company will commence beta testing of the newest version ofDiMi in anticipation of the initial commercial roll-out of version 4.0, which the Company anticipates will occur in the second quarter of fiscal year 2016. Pursuant to an agreement dated September 18, 2014, we agreed to pay our outsource software developer, Creative Media Farm SL, an aggregate sum of $250,000 for the development ofDiMi4.0. On August 5, 2013, we agreed to extend and amend our agreement with our outsource software developer to: (i) continue to develop drivers and improvements to theDiMiversion 4.0 platform, the work for which was initially anticipated to be complete by January, 2014 but is now anticipated to be complete by March, 2016 and (ii) begin work on smartphone apps to allow version 4.0 to be fully accessible from smartphones, the work for which was completed and delivered to us on February 10, 2014. The extended agreement requires us to pay our outsource software developer: (i) $14,400 per month for a total of six months in order to complete the development of the drivers and improvements to theDiMiversion 4.0 platform and (ii) a total of $13,800 for the development of smartphone apps to work in conjunction withDiMiversion 4.0. The services were complete and payments for the extensions were paid between August 2013 and April 2014.

Marketing Plan

Strategically, the Company 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.

We have also taken, and will continue to take, the necessary steps to secure the proprietary aspects of our applications through patent filings in 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 will 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.

As soon as practicable, the Company intends to concentrate itsDiMi 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.

In order to achieve accelerated market penetration and sustainable, recurring revenue from a global customer base, the Company expects to ultimately adopt a hybrid sales and marketing model involving direct sales (solutions team), channel sales (via leading Value-Added Resellers (VARs)(“VARs”) and distributors dedicated to niche market applications thatDiMi is capable of addressing in target domestic and international markets) and strategic marketing and integration collaborations with industry leading system integrators, original equipment manufacturersOriginal Equipment Manufacturers (“OEMs”) and large cellular carriers and dealers.

Employees

As of November 30, 2015,2016 the Company employed no full ortime and no part time employees other than its Chief Executive Officer.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED NOVEMBER 30, 20152016 AND 2014.2015.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended November 30, 2016 and 2015 totaled $8,452 and 2014 totaled $6,866, and $1,491, respectively. Payroll expense amounted to $22,717$24,563 and $13,168$22,717 for the three months ended November 30, 2016 and 2015, and 2014, respectively. Consulting expense amounted to $11,784 and $13,355 for the three months ended November 30, 2015 and 2014, respectively. Professional fees amount to $39,692 and $23,738 for the three months ended November 30, 2015 and 2014, respectively. 

Amortization Expense

Amortization expense for the three months ended November 30, 20152016 and 20142015 totaled $33 and $950,$33, respectively. Amortization expense consistsis the expensing of expensing intellectual property and the iPhone application.

Interest Expense

Interest expense on promissory notes for the three months ended November 30, 2016 and 2015, was $840 and $0, respectively.  The Company entered into two unsecured promissory notes with related parties during the three months ended November 30, 2016.  The notes have a 7% interest rate and mature 6 months from the date of issuance. See Note 2.

Net Loss

For the reasons stated above, our net loss for the three months ended November 30, 20152016 totaled $81,092$42,501 or $0.03($0.01) per share, an increasea decrease of $28,390 or approximately 54%$38,591 compared to oura net loss of $52,702 for the three months ended November 30, 2014.2015 of $81,092, or ($0.03) per share. The majority of the additional loss is due to increasea decrease in payroll expenseconsulting and professional fees.

LIQUIDITY AND CAPITAL RESOURCES

As of November 30, 2015,2016, we had cash and cash equivalents of $124,762.$14,488. Net cash used in operating activities for the three months ended November 30, 20152016 was approximately $61,107.$70,443. Our current liabilities as of November 30, 20152016 totaled $48,216$172,060 consisting of accounts payable and accrued liabilities.liabilities of $56,060 and note payables of $116,000. We have net negative working capital of $94,296$157,572 as of November 30, 2015.2016.

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 $81,092$42,501 for the three months ended November 30, 20152016 and had an accumulated deficit of $2,143,716$2,470,090 as of November 30, 2015.2016. 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 working capital requirements are expected to increase in line with the growth of our business.

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 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not required forapplicable to smaller reporting companies.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, managementManagement 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 the 1934 Act (“Exchange Act)Act”)).  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 Exchange Act is (i) recorded, processed, summarized and reported within, within the time periods specified in the Commission's rules and forms,and (ii) accumulated and communicated to our management, including our chief executive officer and chief financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Based on this evaluation, it has been concluded that the design and operation of our disclosure controls and procedures are not effective due tosince the following material weaknesses:weaknesses exist:

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.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act)that occurred during the last fiscal quarter ended November 30, 2015 that hashave materially affected, or isare reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company knows of no legal proceedings to which it isWe are not currently a party or to, whichnor is any of itsour property iscurrently the subject which areof, any pending threatened or contemplated or any unsatisfied judgments against the Company.legal proceeding that will have a material adverse effect on our business.

ITEM 1A. RISK FACTORSNot applicable to smaller reporting companies.

There are no material changes from the risk factors previously disclosed in our annual report on Form 10-K filed with the SEC on December 30, 2015. 

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

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

No disclosure required.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

* Filed herewithherewith.

** Furnished herewithherewith.

SIGNATURES

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

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