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BITZIO, INC.
(Formerly Rocky Mountain Fudge Company, Inc.)
(A Development Stage Company)
Notes to the Unaudited Condensed Consolidated Financial Statements
June 30, 2011 and December 31, 2010
NOTE 1 - CONDENSED FINANCIAL STATEMENTS
The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at June 30, 2011 and 2010 and for all periods presented have been made.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 2010 audited financial statements. The results of operations for the periods ended June 30, 2011 and 2010 are not necessarily indicative of the operating results for the full years.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reclassification
Certain balances in previously issued financial statements have been reclassified to be consistent with the current period presentation.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 reporting period. Actual results could differ from those estimates
Recent Accounting Pronouncements
The Company has evaluated recent accounting pronouncements and their adoption has not had or is not expected to have a material impact on the Company’s financial position or statements.
NOTE 3 - RELATED PARTY TRANSACTIONS
During the period ended June 30, 2011, a shareholder of the Company loaned the Company $25,000. Previously, the Company’s president paid $392 of expenses on behalf of the Company, which was added to the terms of the note. The note accrues interest at a rate of 8.0% per annum, and is due on demand. As of June 30, 2011, accrued interest payable pursuant to the note totaled $247.
During the six months ended June 30, 2011, the Company’s president performed services valued at $1,500 which have been recorded as a contribution to capital.
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BITZIO, INC.
(Formerly Rocky Mountain Fudge Company, Inc.)
(A Development Stage Company)
Notes to the Unaudited Condensed Consolidated Financial Statements
June 30, 2011 and December 31, 2010
NOTE 4 - GOING CONCERN
The Company's financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.
In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plans to obtain such resources for the Company include (1) obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses, and (2) seeking out and completing mergers with existing operating companies. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE 5 – SIGNIFICANT EVENTS
Formation of Subsidiary
On May 28, 2010 the Company formed Eveps International, Inc. (“Eveps”), a Nevada company, as a wholly-owned subsidiary. Eveps was formed with the intent to be utilized as a vehicle to facilitate any potential future merger transactions with existing operating entities. On September 24, 2010 the Company changed the corporate name of this entity from Eveps International, Inc. to Wireless Power Controls, Inc. (“Wireless”), which is a wholly-owned subsidiary of the Company. All intercompany transactions between the Company and Wireless have been eliminated in the preparation of these consolidated financial statements.
Corporate Name Change
Effective May 31, 2011, a Certificate of Amendment to Articles of Incorporation was filed with the Nevada Secretary of State changing the name of the Registrant from Rocky Mountain Fudge Company, Inc. to Bitzio, Inc. Pursuant to this transaction, shares of the Company’s common stock are now trading under the Company’s new trading symbol, BTZOD.
Stock-Split
Effective May 19, 2011, the Registrant effected a four-for-one forward-split of the shares of its common stock. All references to common stock activity in these financial statements have been retroactively restated so as to incorporate the effects of this stock-split.
Equity Transactions
On June 23, 2011, the Company issued 750,000 shares to various consultants for services to be performed over the succeeding 12 months. The shares were valued at the trading price on the issuance date of $0.39 per share, for a total value of $292,500, and are being amortized over the 12-month service period.
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BITZIO, INC.
(Formerly Rocky Mountain Fudge Company, Inc.)
(A Development Stage Company)
Notes to the Unaudited Condensed Consolidated Financial Statements
June 30, 2011 and December 31, 2010
NOTE 6 – SUBSEQUENT EVENTS
Acquisition of Empire Group, LLC
On July 11, 2011, the Company’s wholly-owned subsidiary, Empire Holding, Inc., entered into an agreement (the “Agreement”) with two individuals (collectively, the “Sellers”) to acquire all of their interests in The Empire Group LLC. There is no material relationship between the Company and the Sellers, other than the Agreement.
The Company, through its subsidiary Empire Holding, Inc. will pay the Sellers a total of $600,000 in three monthly installments of $200,000 each, commencing on the July 31, 2011 closing date of the Agreement.
The Empire Group LLC is an established developer of entertainment-based mobile applications for smartphones.
Acquisition of Bitzio Corp.
On July 13, 2011, the Company’s wholly owned subsidiary, Bitzio Holdings, Inc., entered into an agreement (the “Agreement”) with an individual (the “Seller”) to acquire all of the shares of Bitzio Corp. There is no material relationship between the Company and the Seller, other than the Agreement.
Bitzio Corp. is a company that focuses on developing niche mobile applications for consumers and organizations.
As consideration for the acquisition, the Company, through its subsidiary Bitzio Holdings, Inc., will grant to the Seller 5,000,000 shares of the Company’s common stock. These shares were issued on August 9, 2011.
Acquisition of Digispace Solutions, LLC
On August 3, 2011, the Company’s wholly-owned subsidiary, Digispace Holdings, Inc., entered into an agreement (the “Digispace Agreement”) with two individuals (collectively, the “Sellers”) to acquire all of their interests in Digispace Solutions, LLC. As consideration for the acquisition, Digispace Holdings, Inc. will pay to the Sellers $200,000 cash in 12 monthly installments commencing on the closing date and will assume approximately $575,000 of Digispace Solutions, LLC debt. The Company will grant options to the Sellers to purchase up to 1,000,000 shares of the Company’s common stock at a price of $0.45 per share for five years following theclosing date. The closing date for the acquisition is contracted to be or before August 22, 2011.
There is no material relationship between the Company and the Sellers, other than the Digispace Agreement and the Bitzio Corp. Agreement described below.
Digispace Solutions, LLC is an online performance-based advertising company offering a variety of services to assist in the development of a company’s online presence, marketing, tracking and customer management. It provides proprietary web technologies to power online strategies and solutions.
Stock Option Grants
On July 1, 2011, the Company granted options to purchase 5,000,000 shares of common stock to an officer of the Company. These options have a strike price of $0.25 per share, and expire after a period of five years.
Other Events
In accordance with ASC 855-10, Company management reviewed all material events through the date of this report and there are no material subsequent events to report.
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