Bitzio 10Q/A 2011 Q3 Quarterly report (amended)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

(Amendment No. 3)

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the Quarter Ended September 30, 2011

[ ] 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 000-51688

BITZIO, INC.

(Exact name of registrant as specified in its charter)

Nevada 16-1734022

(State or other jurisdiction of (I.R.S. Employer Identification No.)

incorporation or organization)

548 Market Street, Suite 18224, San Francisco, California 94104

(Address of principal executive offices)

(213) 400-0770

(Registrant's telephone number, including area code)

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 past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the 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 whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company

Large accelerated filer [ ] Accelerated filer [ ]

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

(Do not check if a smaller reporting company)

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

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date.

Class Outstanding as of November 18, 2011

Common Stock, $0.001 par value 47,083,625

EXPLANATORY NOTE

Bitzio, Inc. is filing this Amendment No. 3 (the “Form 10-Q/A”) to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2011 (the “Form 10-Q”), originally filed with the Securities and Exchange Commission (“SEC”) on November 18, 2011, and amended on November 21, 2011, and November 22, 2011, for the purpose of including its restated financial statements as of and for the three and nine months ended September 30, 2011.

This Form 10-Q/A continues to speak as of the original filing date of the form 10-Q, does not reflect events that may have occurred subsequent to the original filing date, and does not modify or update any related disclosures made in the form 10-Q.

TABLE OF CONTENTS

Heading

Page

PART I — FINANCIAL INFORMATION

Item 1.

Consolidated Financial Statements

Item 2.

Management's Discussion and Analysis of Financial Condition and Results

of Operations

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Item 4.

Controls and Procedures

PART II — OTHER INFORMATION

Item 1.

Legal Proceedings

Item 1A.

Risk Factors

Item 2

Unregistered Sales of Equity Securities and Use of Proceeds

Item 3.

Defaults Upon Senior Securities

Item 4.

Removed and Reserved

Item 5.

Other Information

Item 6.

Exhibits

PART I — FINANCIAL INFORMATION

Item 1.

Financial Statements

The accompanying unaudited consolidated balance sheets of Bitzio, Inc. (formerly Rocky Mountain Fudge Company, Inc.) at September 30, 2011 and December 31, 2010 and related unaudited consolidated statements of operations and cash flows for the three months and nine months ended September 30, 2011 and 2010, and for the period from January 4, 1990 (date of inception) to September 30, 2011, have been prepared by management in conformity with United States generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. It is suggested that these consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2010 audited financial statements. Operating results for the periods ended September 30, 2011, are not necessarily indicative of the results that can be expected for the fiscal year ending December 31, 2011 or any other subsequent period.


BITZIO, INC.
(Formerly Rocky Mountain Fudge Company, Inc.)
(A Development Stage Company)
Consolidated Balance Sheets

ASSETS

			September 30,		December 31,
			2011		2010
			(Unaudited)
CURRENT ASSETS			(Restated)
	Cash		$	4,562	$	18,068
	Prepaid expenses			341,522		108
		Total Current Assets		346,084		18,176

FIXED ASSETS
	Computer equipment, net			1,196		1,706
		TOTAL ASSETS	$	347,280	$	19,882


LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES

	Accounts payable		$	36,252	$	146
	Accounts payable and accrued expenses - related party			60,889		-
	Notes payable			172,771
	Note payable - related party			25,142		392
		Total Current Liabilities		295,054		538


STOCKHOLDERS' EQUITY (DEFICIT)
	Common stock; 100,000,000 shares authorized,
	at $0.001 par value, 39,312,500 and 33,000,000 shares
	issued and outstanding, respectively			39,313		33,000
	Additional paid-in capital			8,378,933		208,450
	Deficit accumulated during the development stage			(8,366,020)		(222,106)
		Total Stockholders' Equity (Deficit)		52,226		19,344

		TOTAL LIABILITIES AND
		STOCKHOLDERS' EQUITY (DEFICIT)	$	347,280	$	19,882

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


BITZIO, INC.
(Formerly Rocky Mountain Fudge Company, Inc.)
(A Development Stage Company)
Consolidated Statements of Operations
(Unaudited)
											From Inception
											on January 4,
			For the Three Months Ended				For the Nine Months Ended				1990 through
			September 30,				September 30,				September 30,
			2011		2010		2011		2010		2011
			(Restated)				(Restated)				(Restated)

REVENUES			$	3,104	$	-	$	3,104	$	-	$	160,806

COST OF SALES				-		-		-		-		58,459
GROSS PROFIT				3,104		-		3,104		-		102,347

OPERATING EXPENSES
	General and administrative			128,365		3,432		151,230		18,581		397,141
	Professional fees			43,294		3,675		62,422		10,205		138,925
	Consulting expense			4,439,733		-		4,439,733		-		4,439,733
	Executive compensation			1,141,576		-		1,141,576		-		1,141,576
	Impairment of goodwill			2,350,800		-		2,350,800		-		2,350,800
	Depreciation			170		171		511		171		852
		Total Operating Expenses		8,103,938		7,278		8,146,272		28,957		8,469,027
		OPERATING LOSS		(8,100,834)		(7,278)		(8,143,168)		(28,957)		(8,366,680)

OTHER INCOME (EXPENSES)
	Interest income			-		-		-		-		4,437
	Interest expense			(500)		-		(746)		(644)		(4,023)
		Total Other Income (Expense)		(500)		-		(746)		(644)		414

LOSS BEFORE INCOME TAXES				(8,101,334)		(7,278)		(8,143,914)		(29,601)		(8,366,266)
PROVISION FOR INCOME TAXES				-		-		-		-		-
		NET LOSS	$	(8,101,334)	$	(7,278)	$	(8,143,914)	$	(29,601)	$	(8,366,266)

BASIC AND DILUTED LOSS
PER SHARE			$	(0.22)	$	(0.00)	$	(0.24)	$	(0.00)

WEIGHTED AVERAGE NUMBER
	OF SHARES OUTSTANDING			37,557,473		33,000,000		34,566,071		16,505,884

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


BITZIO, INC.
(Formerly Rocky Mountain Fudge Company, Inc.)
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)
								From Inception
								on January 4,
				For the Nine Months Ended				1990 through
				September 30,				September 30,
				2011		2010		2011
				(Restated)				(Restated)
CASH FLOWS FROM OPERATING ACTIVITIES
	Net loss			$	(8,143,914)	$	(29,601)	$	(8,366,020)
	Adjustments to reconcile net loss to
	net cash used by operating activities:
		Services contributed by officers
		and shareholders			1,500		1,500		16,700
		Depreciation and amortization			510		171		852
		Common shares issued for services			527,250		-		527,250
		Impairment of goodwill			2,350,800		-		2,350,800
		Stock options issued for services			4,156,470		-		4,156,470
		Stock options issued for executive compensation			1,141,576		-		1,141,576
		Loss on settlement of debt			-		-		936
	Changes in operating assets and liabilities:
		Prepaid expenses			(341,414)		-		(341,522)
		Accounts payable and accrued expenses			35,400		1,384		35,546
		Accounts payable and accrued expenses - related party			60,889		644		111,645
			Net Cash Used in Operating Activities		(210,933)		(25,902)		(365,767)
CASH FLOWS FROM INVESTING ACTIVITIES
		Purchase of computer equipment			-		(2,048)		(2,048)
			Net Cash Used in Investing Activities		-		(2,048)		(2,048)
CASH FLOWS FROM FINANCING ACTIVITIES
		Proceeds from note payable - related party			27,000		-		27,000
		Proceeds from notes payable			172,677		-		172,677
		Repayments of notes payable			(2,250)		-		(2,250)
		Contributed capital			-		-		83,150
		Sale of common stock for cash			-		50,000		91,800
			Net Cash Provided by Financing Activities		197,427		50,000		372,377
		NET INCREASE (DECREASE) IN CASH			(13,506)		22,050		4,562
		CASH AT BEGINNING OF PERIOD			18,068		5,476		-
		CASH AT END OF PERIOD		$	4,562	$	27,526	$	4,562
SUPPLEMENTAL DISCLOSURES OF
	CASH FLOW INFORMATION
	CASH PAID FOR:
		Interest		$	-	$	-	$	79
		Income Taxes		$	-	$	-	$	-
	NON CASH FINANCING ACTIVITIES
		Common stock issued for debt		$	-	$	24,064	$	50,364
The accompanying notes are an integral part of these consolidated financial statements.

BITZIO, INC.

(Formerly Rocky Mountain Fudge Company, Inc.)

(A Development Stage Company)

Notes to the Condensed Consolidated Financial Statements

September 30, 2011 (Unaudited)

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 September 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 September 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 - 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.

BITZIO, INC.

(Formerly Rocky Mountain Fudge Company, Inc.)

(A Development Stage Company)

Notes to the Condensed Consolidated Financial Statements

September 30, 2011 (Unaudited)

NOTE 3 - GOING CONCERN (CONTINUED)

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management plans to seek capital from the sale of common stock and debt securities 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 4 - RELATED PARTY TRANSACTIONS

During the period ended September 30, 2011, a shareholder of the Company loaned the Company $25,142. Previously, a Company director 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 eight percent per annum, and is due on demand. As of September 30, 2011, accrued interest payable pursuant to the note totaled $754.

During the nine months ended September 30, 2011, a Company director performed services valued at $1,500 which have been recorded as a contribution to capital.

NOTE 5 – STOCKHOLDERS’ EQUITY

Stock-Split

Effective June 14, 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.

Common Stock

On June 23, 2011, the Company issued 750,000 shares of common stock 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.

On July 27, 2011 the Company issued 5,000,000 shares of common stock in order to acquire Bitzio, Corp. These shares were valued at the market rate on the date of issuance, or $0.47, resulting in a total share amount of $2,350,000.

On August 19, 2011 the Company issued 262,500 shares of common stock to an unrelated third party as payment toward prepaid consulting services. These shares were valued at the market value on the date of issuance, or $0.38 per share, resulting in a total contract amount of $99,750. This amount is being amortized over the 12-month term of the consulting contract.

On September 1, 2011 the Company issued 300,000 shares of common stock as payment for consulting services rendered. The shares were valued at the market rate on the date of issuance, or $0.45 per share, resulting in an aggregate expense of $135,000.

BITZIO, INC.

(Formerly Rocky Mountain Fudge Company, Inc.)

(A Development Stage Company)

Notes to the Condensed Consolidated Financial Statements

September 30, 2011 (Unaudited)

NOTE 5 – STOCKHOLDERS’ EQUITY (CONTINUED)

Stock Options

During the nine-month period ended September 30, 2011 the Company granted options to purchase 14,400,000 shares of the Company’s common stock at strike prices ranging from $0.25 to $0.45. Each of the options is valid for a period of five years from the grant date. The Company used the Black-Scholes Options Pricing Model to value these options. As of September 30, 2011 none of the options have been exercised.

NOTE 6 – SIGNIFICANT EVENTS

Corporate Name Change

Effective June 10, 2011, the Company changed its name from Rocky Mountain Fudge Company, Inc. to Bitzio, Inc. Pursuant to this transaction, shares of the Company’s common stock are now trading under the Company’s new trading symbol, BTZO.

Acquisition of Bitzio, LLC

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. The Agreement was completed on July 27, 2011.

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., issued to the Seller 5,000,000 shares of the Company’s common stock. These shares were issued on August 9, 2011.

NOTE 7 – RESTATED FINANCIAL STATEMENTS

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 September 30, 2011 closing date and assumed approximately $575,000 of liabilities of Digispace Solutions, LLC.

There is no material relationship between the Company and the Sellers, other than the Digispace Agreement and the Bitzio Corp. Agreement described below.

During December 2011, it was determined that the acquisition of Digispace could not be completed as contemplated in the Digispace Agreement. Accordingly, the Company has restated its financial statements to remove the assets, liabilities and operations of Digispace. The restatement reduced the Company’s debt by $892,049 and goodwill impairment expense by the same amount.

BITZIO, INC.

(Formerly Rocky Mountain Fudge Company, Inc.)

(A Development Stage Company)

Notes to the Condensed Consolidated Financial Statements

September 30, 2011 (Unaudited)

NOTE 7 – RESTATED FINANCIAL STATEMENTS (CONTINUED)

The following financial statements compared the original financial statements to those as restated.


ASSETS
			September 30,		September 30,
			2011		2011
			(Restated)		(Original)
CURRENT ASSETS
	Cash		$	4,562	$	11,661
	Prepaid expenses			341,522		342,369
		Total Current Assets		346,084		354,030
FIXED ASSETS
	Computer equipment, net			1,196		1,196
		TOTAL ASSETS	$	347,280	$	355,226

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
	Accounts payable		$	36,252	$	651,247
	Accounts payable and accrued expenses - related party			60,889		60,889
	Notes payable			172,771		267,771
	Note payable - related party			25,142		215,142
		Total Current Liabilities		295,054		1,195,049

STOCKHOLDERS' EQUITY (DEFICIT)
	Common stock; 100,000,000 shares authorized,
	at $0.001 par value, 39,312,500 and 33,000,000 shares
	issued and outstanding, respectively			39,313		39,313
	Additional paid-in capital			8,378,933		8,378,933
	Deficit accumulated during the development stage			(8,366,020)		(9,258,069)
		Total Stockholders' Equity (Deficit)		52,226		(839,823)
		TOTAL LIABILITIES AND
		STOCKHOLDERS' EQUITY (DEFICIT)	$	347,280	$	355,226

BITZIO, INC.

(Formerly Rocky Mountain Fudge Company, Inc.)

(A Development Stage Company)

Notes to the Condensed Consolidated Financial Statements

September 30, 2011 (Unaudited)

NOTE 7 – RESTATED FINANCIAL STATEMENTS (CONTINUED)



			For the Three Months Ended				For the Nine Months Ended
			September 30,				September 30,
			2011		2011		2011		2011
			(Restated)				(Restated)

REVENUES			$	3,104	$	3,104	$	3,104	$	3,104
COST OF SALES				-		-		-		-
GROSS PROFIT				3,104		3,104		3,104		3,104
OPERATING EXPENSES
	General and administrative			128,365		128,365		151,230		151,230
	Professional fees			43,294		43,294		62,422		62,422
	Consulting expense			4,439,733		4,439,733		4,439,733		4,439,733
	Executive compensation			1,141,576		1,141,576		1,141,576		1,141,576
	Impairment of goodwill			2,350,800		3,242,849		2,350,800		3,242,849
	Depreciation			170		170		511		511
		Total Operating Expenses		8,103,938		8,995,987		8,146,272		9,038,321

		OPERATING LOSS		(8,100,834)		(8,992,883)		(8,143,168)		(9,035,217)
OTHER INCOME (EXPENSES)
	Interest income			-		-		-		-
	Interest expense			(500)		(500)		(746)		(746)
		Total Other Income (Expense)		(500)		(500)		(746)		(746)

LOSS BEFORE INCOME TAXES				(8,101,334)		(8,993,383)		(8,143,914)		(9,035,963)
PROVISION FOR INCOME TAXES				-		-		-		-

		NET LOSS	$	(8,101,334)	$	(8,993.383)	$	(8,143,914)	$	(9,035,963)

BASIC AND DILUTED LOSS
PER SHARE			$	(0.22)	$	(0.24)	$	(0.24)	$	(0.00)

WEIGHTED AVERAGE NUMBER
	OF SHARES OUTSTANDING			37,557,473		37,557,473		34,566,071		16,505,884

BITZIO, INC.

(Formerly Rocky Mountain Fudge Company, Inc.)

(A Development Stage Company)

Notes to the Condensed Consolidated Financial Statements

September 30, 2011 (Unaudited)

NOTE 8 – SUBSEQUENT EVENTS

Common stock issuances

Subsequent to September 30, 2011 the Company issued 2,771,125 shares of common stock to various consulting and investor relations entities as consideration for services to be rendered.

Acquisition of Thinking Drone, Inc.

On November 9, 2011 the Company executed an Agreement whereby the Company, through its wholly-owned subsidiary, Bitzio Holdings, Inc., acquired Thinking Drone Inc. This acquisition was executed upon the Company’s issuance of 5,000,000 shares of common stock to the former owners of Thinking Drone, Inc. The Company has a continuing obligation pursuant to the acquisition agreement to pay an additional $500,000 in cash by means of: a) $50,000 on or before November 30, 2011, b) not less than $25,000 on or before the last day of each month, beginning with December 31, 2011, and c) the unpaid balance plus unpaid interest on or before October 31, 2012.

Convertible Debentures

Subsequent to September 30, 2011 the Company received $240,000 pursuant to the issuance of convertible debentures. For each debenture, the lender purchases a certain number of units, with one unit being equal to an 8.5 percent convertible note and 2,000 shares of the Company’s common stock. The units were sold by the Company at $1,000 per unit. The convertible notes are convertible into the Company’s common stock at $0.10 per share, convertible after the one-year note term expires.

In accordance with ASC 855, Company management reviewed all material events through the date of this report and there are no other material subsequent events to report.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking and Cautionary Statements

This report contains forward-looking statements relating to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “will” “should," “expect," "intend," "plan," anticipate," "believe," "estimate," "predict," "potential," "continue," or similar terms, variations of such terms or the negative of such terms. These statements are only predictions and involve known and unknown risks, uncertainties and other factors. Although forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment, actual results could differ materially from those anticipated in such statements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

The following information should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this Form 10-Q.

Going Concern

Our independent auditors have indicated in a footnote to our financial statements that we have not yet established an ongoing source of revenues sufficient to cover operating costs and to allow us to continue as a going concern. Our ability to continue as a going concern is dependent on us securing and maintaining adequate capital to fund operating losses until we become profitable. If we are unable to increase revenues or secure adequate financing in the near future, allowing us to fully implement our business plan, our ability to continue as a going concern may be compromised, and we could be forced to cease operations.

During 2010, we began to explore potential merger candidates – existing operating entities or start-ups, likely in the technology industry. Any such mergers would be facilitated with the issuance of common stock, and would play a key role in diversifying our business interests.

On May 21, 2010 we formed Eveps International, Inc., a Nevada company, as a wholly-owned subsidiary. On September 24, 2010, we changed the name of the subsidiary to Wireless Power Controls, Inc. (“Wireless”). As of September 30, 2011 Wireless had no assets or liabilities, and had not earned any revenues.

During the third quarter of 2011 the Company began implementing its business plan of consummating strategic business acquisitions. Below is a brief discussion on the three acquisitions consummated to date:

Acquisition of Bitzio, Corp.

Bitzio Corp. is a company that focuses on developing niche mobile applications for consumers and organizations.

Acquisition of Digispace Solutions, LLC

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.

On December 19, 2011, the Company entered into a Third Amendment to the agreement for the acquisition of DigiSpace Solutions, LLC that, among other things, moved the closing date to January 10, 2012. As a result, the financial statements of DigiSpace Solutions, Inc. have not been consolidated herein as they were originally contemplated in the Form 10-Q.

Cash on Hand

As of September 30, 2011, we had cash of $4,562, which we believe to be inadequate for our current cash demands. If our ongoing business continues to provide insufficient revenues to maintain our business operations, we may need to seek additional financing. There is no assurance that additional funding will be available on terms acceptable to us, or at all.

Results of Operations

For the Three Months Ended September 30, 2011 and 2010

We had revenues of $3,104 for the three-month period (“third quarter”) ended September 30, 2011 and no revenues for the period ended September 30, 2010. During the quarter ended September 30, 2011, we incurred a net loss of $8,101,334 compared to a $7,278 loss during the third quarter of 2010. The increased loss for the current quarter of 2011 is attributed primarily to significant increases in consulting and professional fees, executive compensation, and impairment of goodwill. All of these expenses relate to the Company’s concerted effort to move forward with its business plan and acquisition strategies.

For the Nine Months Ended September 30, 2011 and 2010

We realized $3,104 of revenue during the nine-month period (“first three quarters”) ended September 30, 2011 and 2010. During the first three quarters of 2011, we incurred a net loss of $8,143,914 compared to a $29,601 loss during the corresponding period of 2010. The increased loss for the 2011 period is attributed primarily to significant increases in consulting and professional fees, executive compensation, and impairment of goodwill. All of these expenses relate to the Company’s concerted effort to move forward with its business plan and acquisition strategies.

In the opinion of management, inflation has not and will not have a material effect on our operations in the immediate future.

Liquidity and Capital Resources

At September 30, 2011, we had cash on hand of $4,562 compared to $18,068 at December 31, 2010. The decrease in cash is attributed primarily to cash used in operations for the nine months ended September 30, 2011 of $210,933, partially offset by net cash proceeds of $24,750 from related-party notes payable and net cash proceeds from notes payable from non-related parties of $172,677.

We estimate cash requirements for the next twelve months to be approximately $150,000. Current cash on hand will not be sufficient and if we do not realize adequate revenues, we will need to seek additional funding. We have no agreements or arrangements for future capital. If management or stockholders are unable to provide additional future funding, if the need arises, we may have to look at alternative sources of funding. We do not have any firm plans as to the source of this alternative funding and there is no assurance that such funds will be available or, that even if they are available, that they will be available on terms that will be acceptable to us. In the event we are unable to secure necessary future funding, we may have to curtail our business or cease operations completely.

At September 30, 2011, we had total assets of $347,280 and stockholders' equity of $52,226 compared to total assets of $19,882 stockholders' equity of $19,344 at December 31, 2010.

Net Operating Loss

We have accumulated approximately $222,106 of net operating loss carryforwards through December 31, 2010, which may be offset against taxable income and income taxes in future years. The use of these losses to reduce future income taxes will depend on the generation of sufficient taxable income prior to the expiration of the net operating loss carryforwards. The carry-forwards expire in the year 2031. In the event of certain changes in control, there will be an annual limitation on the amount of net operating loss carryforwards that can be used. No tax benefit has been reported in the financial statements for the year ended December 31, 2010 or the nine months ended September 30, 2011 because there is a 50 percent or greater chance that the carryforward will not be used. Accordingly, the potential tax benefit of the loss carryforward is offset by a valuation allowance of the same amount.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

This item is not required for a smaller reporting company.

Item 4.

Controls and Procedures.

Evaluation of Disclosure Controls and Procedures. Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Disclosure and control procedures are also designed to ensure that such information is accumulated and communicated to management, including the chief executive officer and chief financial officer, to allow timely decisions regarding required disclosures.

As of the end of the period covered by this quarterly report, we carried out an evaluation, under the supervision and with the participation of management, including our chief executive officer and

principal accounting officer, of the effectiveness of the design and operation of our disclosure controls and procedures. In designing and evaluating the disclosure controls and procedures, management recognizes that there are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their desired control objectives. Additionally, in evaluating and implementing possible controls and procedures, management is required to apply its reasonable judgment. Based on the evaluation described above, our management, including our principal executive officer and principal accounting officer, have concluded that, as of September 30, 2011, our disclosure controls and procedures were not effective due to a lack of adequate segregation of duties and the absence of an audit committee.

Changes in Internal Control Over Financial Reporting. Management has evaluated whether any change in our internal control over financial reporting occurred during the third quarter of fiscal 2011. Based on its evaluation, management, including the chief executive officer and principal accounting officer, concludes that there has been no change in our internal control over financial reporting during the third quarter of fiscal 2011 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1.

Legal Proceedings

There are no material pending legal proceedings to which we are a party or to which any of our property is subject and, to the best of our knowledge, no such actions against us are contemplated or threatened.

Item 1A.

Risk Factors

This item is not required for a smaller reporting company.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

On August 8, 2011 the Company issued 5,000,000 shares of common stock in order to acquire Bitzio, Corp. These shares were valued at the market rate on the date of issuance, or $0.47, resulting in a total share amount of $2,350,000.

On August 22, 2011 the Company issued 262,500 shares of common stock to an unrelated third party as payment toward prepaid consulting services. These shares were valued at the market value on the date of issuance, or $0.38 per share, resulting in a total contract amount of $99,750. This amount is being amortized over the 12-month term of the consulting contract.

On September 14, 2011 the Company issued 300,000 shares of common stock as payment for consulting services rendered. The shares were valued at the market rate on the date of issuance, or $0.45 per share, resulting in an aggregate expense of $135,000.

Item 3.

Defaults Upon Senior Securities

This Item is not applicable.

Item 4.

Removed and Reserved

Item 5.

Other Information

On April 29, 2011, pursuant to action taken by our sole remaining director, Steven D. Moulton, the Board of Directors appointed Gordon McDougall to become and serve as a director of the Company. Mr. McDougall fills a vacancy on the Board created by the resignation of Jacob Colby as a director on April 25, 2011. Mr. Colby resigned for personal reasons.

The Board of Directors also appointed Mr. McDougall as our President and Chief Executive Officer, replacing Mr. Moulton in those positions. Mr. Moulton remains as our Secretary. There were no understandings or arrangements with any person regarding Mr. McDougall’s appointment as a director, President and Chief Executive Officer.

SUBSEQUENT EVENTS

Common stock issuances

Subsequent to September 30, 2011 the Company issued 2,771,125 shares of common stock to various consulting and investor relations entities as consideration for services to be rendered and 5,000,000 shares of common stock in respect of the purchase of Thinking Drone, Inc.

Convertible Notes

Subsequent to September 30, 2011 the Company received $240,000 pursuant to the issuance of convertible notes. For each note, the lender purchases a certain number of units, with one unit being equal to an 8.5 percent convertible note and 2,000 shares of the Company’s common stock. The units were sold by the Company at $1,000 per unit. The convertible notes are convertible into the Company’s common stock at $0.10 per share, convertible at any time until the notes have been repaid in full.

Acquisition of Thinking Drone, Inc.

Bitzio completed the acquisition of Thinking Drone, Inc., which does business as Free The Apps on November 10, 2011. Thinking Drone, Inc is an independent application developer for the iPhone and Android platforms. The acquisition extends Bitzio's footprint into social media and smartphone markets.

Founded in 2009, Free The Apps has created numerous free apps, including "Top 10" overall apps featured in iTunes App Store. With over 34 million downloads, some of Free The Apps' successful free apps include Convert Units for Free and Crop for Free.

Item 6.

Exhibits

Exhibit 31.1

Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes Oxley Act of 2002.

Exhibit 31.2

Certification of Principal Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.1

Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.2

Certification of Principal Accounting Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 101.INS

XBRL Instance Document

Exhibit 101.SCH

XBRL Taxonomy Extension Schema Document

Exhibit 101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

Exhibit 101.LAB

XBRL Extension Labels Linkbase Document

Exhibit 101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

Exhibit 101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

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.

BITZIO, INC.

Date: December 22, 2011

By: /S/ GORDON MCDOUGALL

Gordon McDougall

President and C.E.O.

By: /S/ BOB GARNETT

Bob Garnett

Chief Financial Officer

Bitzio (BTZO) Inactive 10-Q/A2011 Q3 Quarterly report (amended)