UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the fiscal year ended:  August 31, 2015

or

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

For the transition period from

Commission file number 000-55357

THAT MARKETING SOLUTION, INC.

(Exact name of registrant as specified  in its charter)

4535 South 2300 East, Suite B

Salt Lake City, Utah 84117

 (Address of principal executive offices)

(866) 731-8882

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common stock, par value $0.0001 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 [X]

Indicate by check mark if  the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.

Yes [  ]  No [X]

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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.

(1) Yes [X] No [  ]     (2) 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 [X] No [  ]

Indicate by check mark if disclosure of delinquent filers pursuant to item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of 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. [  ]

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Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or 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]

State the aggregate market value of the voting and non-voting common stock held by non-affiliates computed by reference to the price at which the common stock was last sold, or the average bid and asked price of such common stock, as of the last business day of the Registrant's most recently completed second fiscal quarter.

February 27, 2015 - $4,914,000.  There were approximately 27,300,000 shares of common voting stock of the Registrant beneficially owned by non-affiliates on February 27, 2015, which was the last business day of the Registrant’s most recently completed second fiscal quarter.  This computation is based upon the closing sale price of $0.18 per share of the Registrant's common stock on the OTCQB on that date..  

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.  

[  ]  Yes   [  ]  No  Not applicable.

Indicate the number of shares outstanding of each of the registrant’s classes of common equity, as of the latest practicable date:

December 1, 2015:  Common –461,526,102 shares.

Documents incorporated by reference: See Item 15.

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FORWARD-LOOKING STATEMENTS

In this Annual Report on Form 10-K, references to “That Marketing” the “Company,” “we,” “us,” “our” and words of similar import refer to That Marketing Solution, Inc., a Nevada corporation, unless the context requires otherwise.

This Annual Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  In some cases, you can identify forward-looking statements by the following words: “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would,” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Forward-looking statements are not a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time the statements are made and involve known and unknown risks, uncertainties and other factors that may cause our results, levels of activity, performance or achievements to be materially different from the information expressed or implied by the forward-looking statements in this report. These factors include, among others:

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our ability to raise capital;

·

our ability to successfully implement our business plan;

·

declines in general economic conditions in the markets where we may operate; and

·

significant competition in the markets where we may operate.

You should read any other cautionary statements made in this Annual Report as being applicable to all related forward-looking statements wherever they appear in this Annual Report. We cannot assure you that the forward-looking statements in this Annual Report will prove to be accurate, and therefore, prospective investors are encouraged not to place undue reliance on forward-looking statements. You should read this Annual Report completely, and it should be considered in light of all other information contained in the reports or registration statement that we file with the Securities and Exchange Commission (the “Commission” or the “SEC”), including all risk factors outlined therein. Other than as required by law, we undertake no obligation to update or revise these forward-looking statements, even though our situation may change in the future.

JUMPSTART OUR BUSINESS STARTUPS ACT DISCLOSURE

We qualify as an “emerging growth company,” as defined in Section 2(a)(19) of the Securities Act by the Jumpstart Our Business Startups Act (the “JOBS Act”). An issuer qualifies as an “emerging growth company” if it has total annual gross revenues of less than $1.0 billion during its most recently completed fiscal year, and will continue to be deemed an emerging growth company until the earliest of:

As an emerging growth company, we are exempt from various reporting requirements. Specifically, we are exempt from the following provisions:

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Under the JOBS Act, emerging growth companies may delay adopting new or revised accounting standards that have different effective dates for public and private companies until such time as those standards apply to private companies.  

PART I

ITEM 1.  BUSINESS

Business Development

Organization and Other Corporate Developments

The Company was incorporated in the state of Nevada on August 2, 2012, and established a fiscal year end of August 31. We are a development-stage company based in Salt Lake City, Utah and we are engaged in the business of the development, manufacturing, sales, marketing and advertising of nutritional products and products that use our micellization technology through campaigns that involve the use of internet marketing, social media, e-mail databases, customer retention management Micellization is a process by which oil based substances are reformulated to be water soluble, resulting in superior uptake of key nutrients.  As indicated in our Current Report on Form 8-K dated August 18, 2014, and filed with the Commission on the same date, we have already acquired the first product in our planned nutritional supplements portfolio, a blend of nutritional supplements called Low-T (as further described below under the section entitled “Business”) that is targeted at men suffering from low testosterone levels. In the near future, we plan to identify additional product acquisitions, also in the nutritional supplements industry, to expand and diversify our product portfolio. We also plan to develop a portfolio of products in the nutritional supplements industry by applying our in-house competencies in the areas of product development, brand strengthening, marketing, social media and advertising such that the products in our portfolio will gain traction in the United States.

On June 30, 2014, we entered into an Asset Purchase Agreement (the “APA”) with Darren Lopez. Pursuant to the terms of the APA, the Company acquired certain assets owned by Mr. Lopez (the “Assets”) in exchange for the issuance by the Company to Mr. Lopez of 10,000,000 pre-forward split shares of the Company’s $0.001 par value common stock.  The Assets consist primarily of the rights to a proprietary formula for a blend of nutritional supplements called Low-T Vitamin Formula (“Low-T”). Low-T capsules are intended to be a natural, non-FDA regulated, over-the-counter supplement that addresses the primary contributing factors of decreased levels of testosterone in males over the age of 30. Please see the section entitled “Business” below.

Upon closing of the APA on July 31, 2014: (i) Mr. Lopez was appointed as President, Secretary, Treasurer, member of the Company’s Board of Directors (the “Board”), and (ii) Tatiana Mironenko resigned from her positions as President, Secretary, Treasurer and a member of the Board.

The foregoing description of the APA, the Assets and related transactions does not purport to be complete and is qualified in its entirety by reference to the complete text of the APA, which was filed as Exhibit 2.1 to our Current Report on Form 8-K dated August 18, 2014, and which is incorporated herein by reference.

As of July 31, 2014, we discontinued entirely our previous line of business as a provider of 3D virtual tours.  The Assets acquired pursuant to the APA are located at 4535 S. 2300 East, Suite B, Salt Lake City, Utah 84117 and will be principally used to conduct the business of the Company, as described below.

On November 28, 2014, we executed and closed a Sale/Purchase Agreement of AquaV Assets (the “AquaV Agreement”), by which we acquired certain methods for solubilizing, dispersing, flavoring, stabilizing and extending the release of various substances for use in nutritional, cosmetic/skin care, cosmeceutical, pharmaceutical and personal care, together with certain solubilization equipment and other equipment.  The foregoing description of the AquaV Agreement  does not purport to be complete and is qualified in its entirety by reference to the complete text of the AquaV Agreement, which was filed as Exhibit 10 to our Current Report on Form 8-K dated November 28, 2014, and which is incorporated herein by reference.

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Business

Principal products or services and their markets

On July 31, 2014, which was the closing date of the APA, we acquired the rights to a proprietary formula for the Low-T blend of nutritional supplements. Low-T capsules are intended to be a natural, non-FDA regulated, over-the-counter supplement that addresses the primary contributing factors of decreased levels of testosterone in males over the age of 30. The following is a brief description of the ingredients that compose Low-T, and how each of these ingredients helps to supplement the body’s own testosterone production:

Bulbine Natalensis

This South African herb naturally boosts testosterone, while simultaneously lowering estrogen levels in the body. Rodents who were given 25mgs/kg of bodyweight of this ingredient demonstrated an average testosterone level at 260% of the control group (with a concurrent 20% decrease of estrogen) when administered at the lowest tested dosage. Rodents taking 50mgs/kg showed a 347% increase in testosterone levels compared to the control group.

Nettle Root

Nettle Root grows in many parts of the world, but has been naturalized to Brazil. This root contains an aromatase inhibitor. Aromatase is the enzyme present in belly fat that makes testosterone inactive. Additionally, Nettle Root is high in zinc, which offers prostate support, and it also inhibits Sex Hormone-Binding Globulin (SHBG) – which is linked to male infertility, low sex drive and erectile dysfunction. By adding Nettle Root to the Low-T, a natural increase of testosterone and optimum male hormone balance can be achieved.

DHEA

Dehydroepiandrosterone (“ DHEA ”) is a steroid hormone that is produced naturally in the body by the adrenal glands. The body converts DHEA into sex hormones, such as estrogen and testosterone. DHEA levels typically peak for men in the late 20’s, and further decline with age. In a placebo-controlled, randomized, double blind study, researchers from the Washington School of Medicine demonstrated that DHEA supplementation helps to prevent abdominal obesity, and may be a useful treatment in metabolic syndrome, which is a condition where six or more risk factors for heart disease and diabetes are present. Researchers also discovered a significant increase in insulin sensitivity when using DHEA. By offering protection against insulin resistance, and reducing fat levels, DHEA provides a significant overall health benefit including higher levels of energy, and a decreased risk of cardiovascular diseases.

Vitamin B5

There are a number of vitamins and minerals that have been shown to be essential to promote natural, healthy testosterone production in men. One such vitamin is Vitamin B5. Men who suffer from low testosterone often have overworked adrenal glands, and Vitamin B5 has been shown to help support adrenal glands, and increase their natural production of testosterone.

Basella Alba

Basella Alba is an edible perennial vine found in Asia and Africa. It is commonly known as Asian spinach. Research shows Basella Alba can help increase healthy bodyweight, as well as increase seminal weight, due to its ability to significantly increase the body’s natural production of testosterone.

In addition to the product described above, we also acquired the following as part of the Assets:

On July 22, 2015 the Company announced its first international orders for a combination of two products for an Asian Network marketing company.   The Company plans to continue to build this relationship as it allows the Company to grow revenues and cash flow while not being required to expend marketing and advertising dollars.  One of these products uses the Company’s proprietary micellization technology.  To date the Company has received just this initial order but management is working to grow this business.  

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On November 13, 2015, which is subsequent to the end of the period covered by this Report, the Company announced that it has micellized CBD Oil.   Due to its limited finances, management plans to focus on growing and developing this particular business through strategic partnerships and license relationships.  Management plans to focus on developing markets for our micellized CBD oil and continue to grow our Asian clients business and seeks to find additional private label business.  Once revenues or financings make it feasible, management will start pushing its branded products like Low T forward more aggressively.  

Distribution Methods of the Products or Services

Because of limited finances, management has decided to focus on monetizing our micellized CBD oil and other micellized products through private label, licensing, and joint venture relationships.  This is being done to allow the company to grow revenues and strengthen its weakened financial position without having to implement or expend substantial marketing and advertising dollars.  

Status of any Publicly Announced New Product or Service

None; not applicable.

Competitive Business Conditions and Smaller Reporting Company's Competitive Position in the Industry and Methods of Competition

Though our micellization technology is proprietary and unique, it takes time and resources to gain consumer acceptance.  The CBD oil market is very competitive and our potential in making in-roads into this market depends on a lot of factors including customer and end user acceptance (which can not be guaranteed).   We have several additional micellized products that management is looking to monetize but client and consumer acceptance is uncertain.   

Management plans to focus on micellization as a superior option for clients to gain a marketing and differentiation advantage.    

On the negative side, micellization can increase the cost of goods sold of potential products, which may make it tough to gain consumer acceptance.     

Our branded business has been placed on hold until our financial position is strengthened.  That side of our business is very fragmented and competitive.  Potential competition within the Low T marketplace comes from OTC products, as well as prescription offerings.

Low Testosterone Treatment

Based on conclusive research done by some of the nation’s most reputable medical institutions, low testosterone levels in men is a real health risk. However, the treatment of low-t and the accompanying symptoms fall into one of two categories: natural supplements or pharmaceutically based therapies. As is clear by now, the Low-T Vitamin Formula is based on nutrition and natural formulations to achieve healthy, balanced testosterone production and decreased estrogen levels in the body. Here is a brief overview of the pharmaceutical offerings, and how these synthetic therapies differ from our natural Low-T Vitamin Formula.

Prescription Offerings:

Gels and Solutions:

(Example - AndroGel)

Testosterone gels and solutions are applied daily. The testosterone in the gel or solution is absorbed into the body through the skin. Common side effects include nausea, vomiting, headache, dizziness, hair loss, trouble sleeping, change in sexual desire, redness/swelling of the skin, change in skin color, or acne. Typically these gels and solutions are harmful to women, and after application, men should avoid contact with women and children for at least one hour.

Patches:

(Example – Androderm)

Patches allow testosterone to be gradually absorbed by the skin. Patches are applied daily. Common side effects include redness, itching, burning, or hardened skin where the skin patch is worn, breast swelling or tenderness, increased acne or hair growth, headache, depressed mood, or changes in sex drive. Many of the prescription patches on the market have known drug interactions with commonly prescribed drugs, and just like the gels/solutions, exposure to the active ingredients on the patch is harmful to women and children. Testosterone

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can cause birth defects in a fetus, so pregnant women should avoid coming into contact with testosterone topical gels, or with a man's skin where a testosterone topical patch has been worn or the gel has been applied.

Injections:

(Example – Depo)

Testosterone injections, usually administered in the upper buttock, are typically given every 1-2 weeks by a doctor. Common side effects include nausea, vomiting, headache, skin color changes, increased/decreased sexual interest, oily skin, hair loss, and acne. Pain and redness at the injection site may also occur. The active ingredient in a synthetic testosterone injection like Depo is called testosterone cypionate.

Pellets:

(Example – TESTOPEL)

A doctor places pellets under the skin near the hip during a surgical procedure to gradually introduce synthetic testosterone into the body. Common side effects include nausea, jaundice, alterations in liver function tests, (in rare cases) hepatitis; retention of sodium, chloride, water, potassium, calcium and inorganic phosphates; increased or decreased libido, headache, anxiety, depression, and inflammation and pain at the site of subcutaneous implantation of testosterone containing pellets.

As more  FDA-approved products hit the market, the baby boomer generation is taking note. In 2011, consumers spent approximately $1.6 billion on prescription testosterone therapies, almost triple the amount spent in 2006, according to market research company IMS Health.

Sources and Availability of Raw Materials and Names of Principal Suppliers

At the current time, the Company is outsourcing this function to UST Corp., including all raw material procurement and production. UST Corp. is an FDA approved lab.

Dependence on One or a Few Major Customers

The market for our products is diffuse.  In launching the Low-T Formula, the Company is relying on direct sales mechanisms, including online advertising campaigns, Facebook, SEO and keyword strategies and email campaigns.

Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements or Labor Contracts, including Duration

None; not applicable.

Need for any Governmental Approval of Principal Products or Services

There is no need for governmental approval as the FDA regulates both finished dietary supplement products and dietary ingredients. FDA regulates dietary supplements under a different set of regulations than those covering "conventional" foods and drug products. Under the Dietary Supplement Health and Education Act of 1994 (DSHEA):

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Manufacturers and distributors of dietary supplements and dietary ingredients are prohibited from marketing products that are adulterated or misbranded.  That means that these firms are responsible for evaluating the safety and labeling of their products before marketing to ensure that they meet all the requirements of DSHEA and FDA regulations.

FDA is responsible for taking action against any adulterated or misbranded dietary supplement product after it reaches the market.

Effect of Existing or Probable Governmental Regulations on the Business

Smaller Reporting Company

We are subject to the disclosure requirements of Regulation S-K of the Commission, as a “smaller reporting company.”  That designation relieves us of some of the informational requirements of Regulation S-K.

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Sarbanes/Oxley Act

We are also subject to the Sarbanes-Oxley Act of 2002.  The Sarbanes/Oxley Act created a strong and independent accounting oversight board to oversee the conduct of auditors of public companies and strengthens auditor independence.  It also requires steps to enhance the direct responsibility of senior members of management for financial reporting and for the quality of financial disclosures made by public companies; establishes clear statutory rules to limit, and to expose to public view, possible conflicts of interest affecting securities analysts; creates guidelines for audit committee members’ appointment, compensation and oversight of the work of public companies’ auditors; management assessment of our internal controls; prohibits certain insider trading during pension fund blackout periods; requires companies to evaluate internal controls and procedures; and establishes a federal crime of securities fraud, among other provisions. Compliance with the requirements of the Sarbanes/Oxley Act has substantially increased our legal and accounting costs.

Exchange Act Reporting Requirements

On January 29, 2015, we registered our $0.0001 par value common stock under Section 12(g) of the Exchange Act.  Section 14(a) of the Exchange Act requires all companies with securities registered pursuant to Section 12(g) to comply with the rules and regulations of the SEC regarding proxy solicitations, as outlined in Regulation 14A. Matters submitted to shareholders of the Company at a special or annual meeting thereof or pursuant to a written consent will require the Company to provide the Company’s shareholders with the information outlined in Schedules 14A or 14C of Regulation 14; preliminary copies of this information must be submitted to the Commission at least 10 days prior to the date that definitive copies of this information are forwarded to the Company’s shareholders.

We are required to file annual reports on Form 10-K and quarterly reports on Form 10-Q with the Commission on a regular basis, and are required to timely disclose certain material events (e.g., changes in corporate control; acquisitions or dispositions of a significant amount of assets other than in the ordinary course of business; and bankruptcy) in a Current Report on Form 8-K.

Emerging Growth Company

The Company is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or JOBS Act. As long as we remain an emerging growth company, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports, and exemptions from the requirements of holding an annual nonbinding advisory vote on executive compensation and seeking nonbinding stockholder approval of any golden parachute payments not previously approved. We may take advantage of these reporting exemptions until we are no longer an “emerging growth company.”

Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

We will remain an “emerging growth company” for up to five years, although we would cease to be an “emerging growth company” prior to such time if we have more than $1 billion in annual revenue, more than $700 million in market value of our common stock is held by non-affiliates or we issue more than $1 billion of non-convertible debt over a three-year period.

Research and Development Costs During the Last Two Fiscal Years

During the fiscal years ended August 31, 2015, and 2014, we incurred no product research and development costs.  

Cost and Effects of Compliance with Environmental Laws

None; not applicable.

Number of Total Employees and Number of Full Time Employees

As of the date of this Annual Report on Form 10-K, we have no employees besides Darren J. Lopez, the Company’s CEO and Matthew R. Smith, the President.  Under the terms of the AquaV Agreement, we agreed to enter into employment

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agreements with Matthew Smith and Clint Sorensen, but we have not yet entered into any such agreements.  See our Current Report on Form 8-K dated November 28, 2014, which is incorporated herein by reference.

Additional Information

You may read and copy any materials that we file with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549.  You may also find this Annual Report and all reports that we file electronically with the SEC at their Internet site www.sec.gov.  Please call the SEC at 1-202-551-8090 for further information on this or other Public Reference Rooms.  This Annual Report, and our SEC reports or other registration statements, once filed, will also be available from commercial document retrieval services, such as Corporation Service Company, whose telephone number is 1-800-222-2122.

ITEM 1A.  RISK FACTORS

Risk Factors

An investment in our common stock involves a high degree of risk. Before deciding whether to invest in our common stock, you should consider carefully the risks discussed below. There are numerous and varied risks, known and unknown, that may prevent us from achieving our goals. If any of these risks actually occurs, our business, financial condition or results of operation may be materially adversely affected. In such case, the trading price of our common stock could decline and investors could lose all or part of their investment.

Risks Related to Our Company

We are a development stage company; we have a history of losses; there are doubts about our ability to continue as a going concern.

We have not achieved our planned principal operations and we are in the development stage of operations. We have incurred net losses since inception, and at this time as well as for the foreseeable future, we expect to finance our activities and overhead expenses through the issuance and sale of our debt or equity securities. The recoverability of the costs incurred by the Company to date is highly uncertain and is dependent upon achieving commercial production and sales of its products, of which no assurances can be given. The Company’s prospects must be considered in light of the risks, expenses and difficulties which are frequently encountered by companies in the development stage in the emerging industry in which we hope to commence material operations.

We expect to incur increased operating expenses during the fiscal year ending August 31, 2016, and for the foreseeable future. The amount of net losses and the time required for the Company to reach and sustain profitability are uncertain. The likelihood of the Company’s success must be considered in light of the problems, expenses, difficulties, and delays frequently encountered in connection with a development stage business, including, but not limited to, uncertainty as to development and the time required for the Company’s planned products to become available in the marketplace. There can be no assurance that the Company will ever generate material revenues or achieve profitability at all or on any substantial basis. These matters raise substantial doubt about the Company’s ability to continue as a going concern, and as such, we expect our independent auditor will express substantial doubt about our ability to continue as a going concern. A result of such a doubt regarding our ability to continue as a going concern may be that the Company will find it difficult to raise capital. If the Company ceases or curtails its development activities due to such difficulties, it is highly likely that you would lose your entire investment.

We will require substantial additional capital to pursue our business plan.

Since its inception, the Company has received minimal revenue. The Company’s capital requirements will depend on many factors, including, among other things, the cost of developing its business and marketing activities, the efficacy and effectiveness of its proposed products, costs (whether or not foreseen), the length of time required to collect accounts receivable it may in the future generate, competing technological and market developments and acceptance. Changes in the Company’s proposed business or business plan could materially increase the Company’s capital requirements. The Company cannot assure you that its proposed plans will not change or that changed circumstances will not result in the depletion of its capital resources more rapidly than currently anticipated.

The Company will need to obtain substantial additional financing to, among other things, fund the future development of any services, products or product lines it attempts to undertake and for general working capital purposes. Any additional equity financing, if available, may be dilutive to stockholders and any such additional equity securities may have rights, preferences

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or privileges that are senior to those of the holders of its shares of common stock. Debt financing, if available, will require payment of interest and may involve security interests on the Company’s assets and restrictive covenants that could impose limitations on the Company’s operating flexibility.  Any debt securities that we issue in the future may also be convertible into shares of our common stock at below-market conversion prices, which may have an adverse effect on the market price of our common stock.

The Company’s ability to obtain needed financing may be impaired by such factors as the capital markets, the capital structure of the Company, the development stage of the Company, the lack of an active market for the shares of common stock, and the Company’s lack of profitability, all of which would impact the availability or cost of future financings. The Company cannot assure prospective investors that it will be able to obtain requisite financing in a timely fashion or at all or, if obtained, that such financing will be on acceptable terms. The Company’s inability to obtain needed financing on acceptable terms would have a material, adverse effect on the implementation of its proposed business plan and could result in a total loss of your investment.

On October 20, 2015, as noted in our Current Report on Form 8-K filed with the SEC on November 5, 2015, the maturity dates of two of our outstanding Senior Convertible Promissory Notes passed without payment of any of the Piad In Cash Full Purchase Price Amount as defined in the Notes.  Accordingly, each of the Note holders obtained the right to payment in form form of conversion of their respective Notes into shares of our common stock.  This has made obtaining additional financing even more difficult.  

We must effectively manage the growth of our operations, or our company will suffer.

Our ability to successfully implement our business plan requires an effective planning and management process. If funding is available, we may elect to increase the scope of our operations and acquire complementary businesses. Implementing our business plan will require significant additional funding and resources. If we grow our operations, we will need to hire additional employees and make significant capital investments. If we grow our operations, it will place a significant strain on our existing management and resources. If we grow, we will need to improve our financial and managerial controls and reporting systems and procedures, and we will need to expand, train and manage our workforce. Any failure to manage any of the foregoing areas efficiently and effectively would cause our business to suffer.

The Company is wholly dependent on  Darren Lopez and Matt Smith

The Company is wholly dependent on Messrs. Lopez and Smith, who are its sole executive officers and directors. The future performance of the Company will depend on the continued service of Messrs. Lopez and Smith and/or our ability to hire additional qualified persons. The Company has not yet entered into an employment agreement with either Mr.. Lopez or Mr. Smith, but may do so in the future. It is expected that any such employment agreements will, among other terms, permit Messrs. Lopez and Smith to conduct other business activities outside of their employment with the Company. The Company has not obtained any “key-man” life insurance policies nor does it presently plan to obtain or maintain any such policies on Mr.  Lopez or Mr. Smith or any other of its possible future employees. The loss of either Mr. Lopez or Mr. Smith would materially and adversely affect the Company’s proposed business.

Our results of operations may fluctuate from quarter to quarter, which could affect our business, financial condition and results of operations.

Our results of operations may fluctuate from quarter to quarter depending upon several factors, some of which are beyond our control. These factors include, but are not limited to:

These and other factors could affect our business, financial condition and results of operations, and this makes the prediction of our financial results on a quarterly basis difficult. Also, it is possible that our quarterly financial results may be below the expectations of public market analysts.

We may be unable to maintain an effective system of internal control over financial reporting, and as a result we may be unable to accurately report our financial results.

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Our reporting obligations as a public company place a significant strain on our management, operational and financial resources and systems. We do not at the moment have a chief financial officer, a chief accounting officer, or any employee with a financial or accounting background, though we are conducting a search for such an individual. At present, we would be unable to conclude that we maintain an effective system of internal control over financial reporting. If we fail to maintain an effective system of internal control over financial reporting, we could experience delays or inaccuracies in our reporting of financial information, or non-compliance with the SEC, reporting and other regulatory requirements. This could subject us to regulatory scrutiny and result in a loss of public confidence in our management, which could, among other things, cause our stock price to drop.

Risks Related to Our Business and Industry

Unfavorable publicity or consumer perception of our products and any similar products distributed by other companies could have a material adverse effect on our business.

We will be highly dependent on finding the right licensing relationships or joint venture partnerships for our proprietary micellized CBD oil as well and securing private label relationships for micellized products which the Company has developed and has within its pipeline.   

In addition, we will be highly dependent upon consumer acceptance of the safety, efficacy and quality of our products, as well as similar products distributed by other companies. Consumer acceptance of products can be significantly influenced by scientific research or findings, national media attention and other publicity about product use. A product may be received favorably, resulting in high sales associated with that product that may not be sustainable as consumer preferences change. In addition, recent studies have challenged the safety or benefit of certain nutritional supplements and dietary ingredients. Future scientific research or publicity could be unfavorable to our industry or any of our particular products and may not be consistent with earlier favorable research or publicity. A future research report or publicity that is perceived by our consumers as less than favorable or that questions earlier favorable research or publicity could have a material adverse effect on our ability to generate revenue. Adverse publicity in the form of published scientific research, statements by regulatory authorities or otherwise, whether or not accurate, that associates consumption of our products or any other similar products with illness or other adverse effects, or that questions the benefits of our or similar products, or that claims that such products are ineffective could have a material adverse effect on our business, reputation, financial condition or results of operations.

We may incur material product liability claims, which could increase our costs and adversely affect our reputation, revenues and operating income.

Currently we are a development stage company and we believe we have no products requiring liability insurance. However, in the future we intend to obtain insurance coverage because if we become a retailer, formulator and/or manufacturer of products designed for human consumption, we will be subject to product liability claims if the use of our products, whether manufactured by us or by our third-party manufacturer, were to be alleged to have resulted in illness or injury or if our products were to include inadequate instructions or warnings. Our products will consist of vitamins, minerals, herbs and other ingredients that are classified as foods or dietary supplements, and are not necessarily subject to pre-market regulatory approval or clearance by the U.S. Food and Drug Administration (the “FDA ”) or other governmental authorities. Our products could contain spoiled or contaminated substances, and some of our products contain ingredients that do not have long histories of human consumption. Previously unknown adverse reactions resulting from human consumption of these ingredients could occur. A product liability claim against us could result in increased costs and could adversely affect our reputation with our customers, which, in turn, could have a materially adverse effect on our business, results of operations, financial condition and cash flows.

If we experience product recalls, we may incur significant and unexpected costs and damage to our reputation and, therefore, could have a material adverse effect on our business, financial condition or results of operations.

To the extent we engage in product sales in the future, we may be subject to product recalls, withdrawals or seizures if any of the products we formulate, manufacture or sell are believed to cause injury or illness or if we are alleged to have violated governmental regulations in the manufacture, labeling, promotion, sale or distribution of our products. A recall, withdrawal or seizure of any of our products could materially and adversely affect consumer confidence in our brands and lead to decreased demand for our products. In addition, a recall, withdrawal or seizure of any of our products would require significant management attention, would likely result in substantial and unexpected expenditures and could materially and adversely affect our business, financial condition or results of operations.

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We acquire a significant amount of key ingredients for our products from foreign suppliers, and may be negatively affected by the risks associated with international trade and importation issues .

We acquire a significant amount of key ingredients for a number of our products from suppliers outside of the United States.  Accordingly, the acquisition of these ingredients is subject to the risks generally associated with importing raw materials, including, among other factors, delays in shipments, changes in economic and political conditions, quality assurance, nonconformity to specifications or laws and regulations, tariffs, trade disputes and foreign currency  fluctuations.  We cannot assure you that raw materials received from suppliers outside of the United States will conform to all specifications, laws and regulations.  There have in the past been quality and safety issues in our industry with certain items imported from overseas.  We may incur additional expenses and experience shipment delays due to preventative measures adopted by the U.S. government, our suppliers and our Company.

We operate in a highly competitive industry and compete against many large companies that could harm our business.

Many companies worldwide are dedicated to our business of developing, selling, marketing and advertising products in the nutritional supplement industry and the CBD oil marketplace. We expect more companies to enter this industry. Our competitors vary in size from small companies to very large companies with dominant market shares and substantial financial resources. Most of our competitors have significantly greater financial, marketing and development resources than we have. As a result, we may not be able to devote adequate resources to develop, acquire or license new supplements, undertake extensive marketing campaigns, adopt aggressive pricing policies or adequately compensate our suppliers to the same degree as certain of our competitors. In particular, any of our competitors may offer products and services that have significant performance, price, creativity and/or other advantages over our supplements. These competing products and services may significantly affect the demand for our services. In addition, any of our current or future competitors may be acquired by, receive investments from or enter into other strategic relationships with larger, longer-established and better-financed companies and therefore obtain significantly greater financial, marketing and product development resources than we have. If we are unable to compete effectively in our principal markets, our business, financial condition and results of operations could be materially and adversely affected.

We may be unable to protect our intellectual property from infringement by third parties, and third parties may claim that the Company infringes on their intellectual property, either of which could materially and adversely affect the Company.

We do not have any patents to protect our intellectual property.  Despite our efforts to protect the Company’s intellectual property (especially our proprietary micellized products), third parties may infringe or misappropriate the Company’s intellectual property or may develop intellectual property competitive with that of the Company. The Company’s competitors may independently develop similar technology or otherwise duplicate the Company’s proposed processes or services. As a result, the Company may have to litigate to enforce and protect its intellectual property rights to determine their scope, validity or enforceability. Intellectual property litigation is particularly expensive, time-consuming, diverts the attention of management and technical personnel and could result in substantial cost and uncertainty regarding the Company’s future viability. The loss of intellectual property protection or the inability to secure or enforce intellectual property protection would limit the Company’s ability to produce and/or market its products in the future and would likely have a material, adverse effect on any revenues the Company may in the future be able to generate by the sale or license of such intellectual property.

Our sales and profitability may be affected by changes in economic, business and industry conditions.

If the economic climate in the United States or abroad deteriorates, customers or potential customers could reduce or delay their nutritional supplement purchases or investments. Reduced or delayed nutritional supplement purchases or investments could decrease our sales and profitability. In this environment, our customers may experience financial difficulty and fail to budget or reduce budgets for the purchase of our products. This may lead to longer sales cycles, delays in purchase decisions, payment and collection, and can also result in downward price pressures, causing our sales and profitability to decline. In addition, general economic uncertainty and general declines in capital spending in the supplement sector make it difficult to predict changes in the purchasing requirements of our customers and the markets we serve. There are many other factors which could affect our business, including:

These trends and factors could adversely affect our business, profitability and financial condition and diminish our ability to achieve our strategic objectives.

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Risks Related to Our Common Stock

Our common stock currently does not meet OTCQB eligibility standards.

Our common stock is currently quoted on the OTCQB under the symbol “TSTS.” On November 27, 2015, which is subsequent to the end of the period covered by this Annual Report, the Company received at notice from OTC Markets stating that, because our common stock’s  bid price has closed below $0.01 for more than 30 consecutive calendar days, it and no longer meets the Standards for Continued Eligibility for OTCQB as per the OTCQB Standards, section 2.3(2):  To remain eligible for trading on the OTCQB marketplace, the Company must: 2) Have proprietary priced quotations published by a Market Maker in OTC Link with a minimum closing bid price of $0.01 per share on at least one of the prior thirty consecutive calendar days. In the event that the minimum closing bid price for the Company’s common stock falls below $0.01 per share, a grace period of 180 calendar days to regain compliance shall begin, during which the minimum closing bid price for the Company’s common stock must be $0.01 or greater for ten consecutive trading days;

Pursuant to these OTCQB Standards, the company has been granted a period of 180 calendar days in which to regain compliance with Section 2.3.(2). Our grace period expires May 25, 2016, and at that time if the Company’s bid price has not closed at or above $0.01 per share for any 10 consecutive trading days, then our common stock will be removed from the OTCQB marketplace.  In such an event, we would attempt to obtain quotations for our common stock on the OTCPink market. However, there can be no assurance that our common stock will meet the OTCQB Standards such that we will be able to maintain quotations on the OTCQB or, that, if it does not, that we will be able to obtain quotations on the OTCPink market. Accordingly, there can be no assurance as to the continued liquidity of any markets for our common stock, the ability of holders of our common stock to sell their shares, or the prices at which holders may be able to sell their shares.

The conversion of our outstanding convertible notes into shares of our common stock may have a significant adverse effect on our common stock price. 

During the 2015 calendar year, we have issued four promissory notes that are convertible into shares of our common stock at discounts to our common stock market price ranging from 40% to 60%.  The conversion of these notes may result in a substantial increase in the number of our outstanding shares, and the note holders’ sales of such shares may have a significant negative effect on our common stock price.  In addition, the issuance of such conversion shares may dilute both the equity interests and the earnings per share of our existing common stockholders.  Such dilution may be substantial, depending on the number of shares issued.   

A sale of a substantial number of shares of our common stock may cause the price of the common stock to decline.

If our current stockholders, including members of management, sell substantial amounts of our common stock in the public market, the market price of our common stock could fall. These sales also may make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate.

Our common stock is subject to the “penny stock” rules of the SEC, and the trading market in our securities is limited, which makes transactions in our stock cumbersome and may reduce the value of an investment in our stock.

The SEC has adopted Rule 3a51-1, which establishes the definition of a “penny stock” for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, Rule 15g-9 requires:

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In order to approve a person's account for transactions in penny stocks, the broker or dealer must:

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form:

Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

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 cause a decline in the market value of our stock.

Because our principal stockholder controls a significant number of shares of our common stock, he has effective control over actions requiring stockholder approval.

As of December 1, 2015, Mr. Lopez beneficially owns more than 60% of our outstanding shares of common stock. Accordingly, he has the ability to control the Company and the outcome of issues submitted to our stockholders.

We have not paid dividends in the past and do not expect to pay dividends in the future. Any return on investment may be limited to the value of our common stock.

We have never paid cash dividends on our common stock and do not anticipate paying cash dividends in the foreseeable future. The payment of dividends on our common stock would depend on earnings, financial condition and other business and economic factors affecting us at such time as our board of directors may consider relevant. If we do not pay dividends, our common stock may be less valuable because a return on your investment will only occur if its stock price appreciates.

The increase in our authorized number of shares of common stock may have anti-takeover effects.

On November 5, 2015, which is subsequent to the end of the period covered by this Report, Mr. Lopez (acting in his capacity as our majority stockholder) and our Board of Directors unanimously resolved to increase our authorized number of shares of common stock from 500 million (500,000,000) to one-and-one-half billion (1,500,000,000).  Our ability to issue the increased number of voting securities may lead to an increase in the number of votes required in order to approve a future change in control  and may make it substantially more difficult for third parties to gain control of the Company through a tender offer, proxy contest, merger or other transaction.  The ability to prevent a change in control may deprive our stockholders of any benefits that may result from such a change in control, including the potential realization of a premium over the market price for our common stock that could result from a transaction of this type.  Furthermore, the issuance of a large block of additional shares to parties who may be deemed “friendly” to our Board of Directors may make it more difficult to remove incumbent directors from office, even if such removal would benefit our common stockholders.  In addition, our issuance of any additional shares of our common stock may dilute both the equity interests and the earnings per share of our existing common stockholders.  Such dilution may be substantial, depending on the number of shares issued.   

ITEM 1B.  UNRESOLVED STAFF COMMENTS

Not required for smaller reporting companies.

ITEM 2:  PROPERTIES

We do not own any real estate or other properties.

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ITEM 3:  LEGAL PROCEEDINGS

In the ordinary course of business, we may be involved in legal proceedings from time to time. As of the date hereof, except as set forth herein, there are no known legal proceedings against the Company. No governmental agency has instituted proceedings, served, or threatened the Company with any complaints.

ITEM 4:  MINE SAFETY DISCLOSURES

None; not applicable.

PART II

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

Market Information

Commencing on or about September 30, 2013, our shares of common stock were quoted on the OTCQB market.   Our common stock is currently quoted on the OTCQB under the symbol “TSTS”.  No assurance can be given that any established market for our common stock will develop or be maintained.  Furthermore, the sale of our common stock by members of management, directors, convertible note holders or others may have a substantial adverse impact on any such market.  With the exception of the shares outlined below under the heading “Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities,” all current holders of shares of our common stock have satisfied the six-month holding period requirement of Rule 144; these listed persons’ shares are subject to the resale limitations outlined below under the heading “Rule 144.”  

Set forth below are the high and low closing bid prices for our common stock for each quarter of our 2014 and 2015 fiscal years.  These bid prices were obtained from OTC Markets Group, Inc. formerly known as the “Pink Sheets, LLC”, formerly known as the “National Quotation Bureau, LLC.”  All prices listed herein reflect inter-dealer prices, without retail mark-up, markdown or commissions and may not represent actual transactions. Quotations for our common stock commenced on September 30, 2013.

*These figures reflect the 20 for 1 forward split of our common stock that took effect on September 17, 2014.

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Rule 144

The following is a summary of the current requirements of Rule 144:

Holders

The number of record holders of our common stock as of the date of this Annual Report is approximately 11.  This figure does not include an indeterminate number of beneficial owners who may hold their shares in “street name.”

Dividends

We have not declared any cash dividends with respect to our common stock, and do not intend to declare dividends in the foreseeable future.  There are no material restrictions limiting, or that are likely to limit, our ability to pay dividends on our securities.

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Securities Authorized for Issuance under Equity Compensation Plans

Equity Compensation Plan Information.

Recent Sales of Unregistered Securities

Except as indicated below, the Company has not sold any equity securities during the period covered by this Report that were not registered under the Securities Act and that have not already been disclosed in a Quarterly Report on Form 10-Q or a Current Report on Form 8-K.

During the fiscal year ended August 31, 2015, and through December 1, 2015, the Company has issued the following securities upon partial conversion of its outstanding convertible notes:

Senior Convertible Promissory Note issued to FirstFire Global Opportunities Fund, LLC on March 20, 2015: 72,780,754 shares of common stock.

Senior Convertible Promissory Note issued to R-Squared Partners, LLC on March 20, 2015:  60,345,174 shares of common stock.  

These shares were issued in reliance on the exemption from registration provided by Section 4(a)(1) of the Securities Act of 1933, as amended, and Rule 144 of the Securities and Exchange Commission.

Purchases of Equity Securities by Us and Affiliated Purchasers

ISSUER PURCHASES OF EQUITY SECURITIES

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ITEM 6:  SELECTED FINANCIAL DATA

Not required for smaller reporting companies.

ITEM 7:  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-looking Statements

Statements made in this Annual Report which are not purely historical are forward-looking statements with respect to the goals, plan objectives, intentions, expectations, financial condition, results of operations, future performance and business of our Company, including, without limitation, (i) our ability to raise capital, and (ii) statements preceded by, followed by or that include the words “may,” “would,” “could,” “should,” “expects,” “projects,” “anticipates,” “believes,” “estimates,” “plans,” “intends,” “targets” or similar expressions.

Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond our control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following, general economic or industry conditions, nationally and/or in the communities in which we may conduct business, changes in the interest rate environment, legislation or regulatory requirements, conditions of the securities markets, our ability to raise capital, changes in accounting principles, policies or guidelines, financial or political instability, acts of war or terrorism, other economic, competitive, governmental, regulatory and technical factors affecting our current or potential business and related matters.  Accordingly, results actually achieved may differ materially from expected results in these statements.  Forward-looking statements speak only as of the date they are made.  We do not undertake, and specifically disclaim, any obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of such statements.  We have no obligation to update any of our forward-looking statements other than as required by law.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Plan of Operation.

We operate with virtually no capital. We are presently attempting to raise sufficient funds to enter into production of Low-T. We estimate that we will require an additional $20,000 to continue to our present development of Low-T and approximately an additional $180,000 to begin actual production of Low-T as well as for working capital. We anticipate that the receipt of such funds would enable us to satisfy our cash requirements for a period of 12 months.

Until sufficient capital is raised to launch our branded products the Company will focus on monetizing its micellized CBD oil and other micellized private label products and continue to grow our Asian clients business.  

We have no long-term debt, and have been able to meet our past financial obligations, including operational expenses and acquisition costs, on a current basis.

We cannot assure you that we be able to monetize our micellized CBD oil, attract private label clients for our micellized products or secure enough capital to be able to put Low-T into production or to further develop other products or product portfolios and we cannot assure you that $200,000 would be sufficient to enable us to fully fund our anticipated cash requirements.  In addition, we cannot assure you that the requisite financing, whether over the short or long term, will be raised within the necessary time frame or on terms acceptable to us, if at all.  Should we be unable to raise sufficient funds we may be required to curtail our operating plans if not cease them entirely.  As a result, we cannot assure you that we will be able to operate profitably on a consistent basis, or at all, in the future.

Liquidity

As of August 31, 2015, our cash balance was $894.  As outlined above under the subheading “Plan of Operation,” because we will require debt or equity funding of approximately $200,000 to begin production of our Low-T product management plans on focusing on monetizing the company’s micellized CBD oil, as well as other micellized products as private label opportunities. This is being done to manage costs and increase revenues and improve our ability to attract additional working capital.  Our working capital requirements are expected to increase in line with the growth of our business and acquisitions.

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In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) acquisition of inventory of Low-T; (ii) developmental expenses associated with a start-up business; and (iii) sales, marketing and advertising expenses. We intend to finance these expenses with further issuances of securities, and debt issuances. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations.

Going Concern

The independent auditors' report accompanying our August 31, 2015 financial statements contains an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared "assuming that we will continue as a going concern," which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business, as to which there can be no assurance.

Results of Operations

Fiscal Year Ended August 31, 2015, Compared to Fiscal Year Ended August 31, 2014.

We had $495 and $0 in revenues and $20,916 and $0 in cost of goods sold for the years ended August 31, 2015 and 2014, respectively.  The increase in revenues and cost of goods sold was due to the commencement of operations in the nutritional supplement business during the year ending August 31, 2015.

We had $239,695 in general and administrative expenses for the year ended August 31, 2015, compared to $54,683 in general and administrative expenses for the year ended August 31, 2014.   The increase in general and administrative expenses was mainly due to the commencement of operations in the nutritional supplement business.

We had $29,909 in amortization and depreciation expenses, $140,624 in impairment expense from the write-off of intangible assets and $30,327 in impairment expense from the write-off of equipment for the year ended August 31, 2015.  There were no such expenses in the year ended August 31, 2014.  The increases in these categories are due to the acquisition of the Aqua V assets, which were initially capitalized and amortized and depreciated, then written off after management deemed that due to the lack of use and generation of sufficient revenue, the carrying amount may not be fully recoverable.

We had 263,277 in interest expense and $62,893 in loss derivatives for the year ended August 31, 2015, compared to $92 in interest expense in the year ended August 31, 2014.  The increase in interest and loss on derivatives are due to the issuance of convertible debt instruments during the year ended August 31, 2015 which resulted in the recognition of $249,967 in debt issuance and discount costs.

We had a net loss of $787,146 for the year ended August 31, 2015 compared to a net loss of $54,775 for the year ended August 31, 2014.  The increase in net loss was due to the commencement of operations in the nutritional supplement business during the year ending August 31, 2015 and the expenses related to financing the initial purchase of inventory, equipment and intangible assets.

Off-Balance Sheet Arrangements

We do not have any off balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, results of operations, liquidity or capital expenditures.

ITEM 7A:  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required for smaller reporting companies.

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ITEM 8:  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

C O N T E N T S

NOTE 7 - COMMON STOCK

Common Stock

During the year ended August 31, 2014, the Company issued 200,000,000 shares of its common stock at $0.0001 per share for research and development work valued at $10,000.

During September 2014, the Company increased its authorized shares to 550,000,000, divided into two classes: 500,000,000 shares of common stock, $0.001 par value; and, 50,000,000 shares of preferred stock, $0.001 par value.  Additionally, the Company effected a 20-for-1 forward split of its outstanding common stock.  All references to common stock shares and prices per share have been retroactively adjusted to account for the forward split.

During November 2014, as part of the Asset Purchase Agreement (see Note 3) the Company agreed to issue 1,000,000 shares of the Company’s common stock valued at the market price on the date of issue of $118,000, or $0.118 per share.

During March 2015, as part of the Securities Purchase Agreements (see Note 4), the Company agreed to issue a total of 150,000 unregistered and restricted shares of the Company’s common stock valued at $34,500, or $0.23 per share, which was the market price of the Company’s common stock on the date of the transaction.

NOTE 8 – COMMON STOCK WARRANTS

As part of the Securities Purchase Agreements, the Company agreed to issue Common Stock Purchase Warrants to purchase a total of two million (2,000,000) shares of the Company’s common stock at any time from the date of issuance for a period of five years at an exercise price of $0.50 per share, subject to adjustment in the event of stock dividends, stock splits and the like.

The warrants were valued at $395,238 using the Black-Scholes option fair value pricing model using the following assumptions:

The following table summarizes the outstanding warrants and associated activity for the year ended August 31, 2015:

NOTE 9 - GOING CONCERN

The Company's financial statements are prepared using Generally Accepted Accounting Principles applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has recently accumulated losses of $857,388 as of August 31, 2015 and has negative working capital. All of these items raise substantial doubt about its ability to continue as a going concern. Management's plans with respect to alleviating the adverse financial conditions that caused management to express substantial doubt about the Company's ability to continue as a going concern are as follows:

The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due.  Management intends to finance operating costs over the next twelve months with existing cash on hand and loans from directors and/or private placement of common stock.

There can be no assurance that the Company will be able to achieve its business plans, raise any more required capital or secure the financing necessary to achieve its current operating plan. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plan described in the preceding paragraph and eventually 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 10 - SUBSEQUENT EVENTS

During September 2015, holders of two Senior Convertible Promissory Notes agreed to extend the maturity dates in exchange for extension fees.  One Senior Convertible Promissory Note was extended one month, to October 20, 2015 in exchange for a 15%, or $25,753, extension fee due and payable on October 20, 2015. The other Senior Convertible Promissory Note was extended to September 28, 2015 in exchange for $6,000 extension fee due and payable on September 20, 2015.

Effective as of September 18, 2015, the Company entered into an Amendment Agreement by which the holder of the Company’s outstanding Senior Convertible Promissory Note dated March 20, 2015 in the principal amount of $137,500 agreed to extend the Senior Convertible Promissory Note’s maturity date from September 20, 2015, to October 20, 2015.  

In consideration of such extension, the Company agreed to pay the holder an extension fee of $25,753, representing 15 percent of the amount due under the Senior Convertible Promissory Note. With the exception of these matters, all other terms of the Senior Convertible Promissory Note and related loan documents remain in full force and effect.

Effective as of September 28, 2015, the Company entered into an Amendment Agreement by which the Company and the holder of the Company’s Senior Convertible Promissory Note dated March 20, 2015, in the principal amount of $137,500 agreed to amend the conversion terms of the Senior Convertible Promissory Note as follows:

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services that are normally provided by our principal accountants in connection with statutory and regulatory filings or engagements.

Audit-related Fees - Consists of fees for assurance and related services by our principal accountants that are reasonably related to the performance of the audit or review of the Company’s financial statements and are not reported under “Audit fees.”

Tax Fees - Consists of fees for professional services rendered by our principal accountants for tax compliance, tax advice and tax planning.

All Other Fees - Consists of fees for products and services provided by our principal accountants, other than the services reported under “Audit fees,” “Audit-related fees,” and “Tax fees” above.

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors

The Company has not established an Audit Committee; therefore, there is no Audit Committee policy in this regard. However, the Company does not require approval in advance of the performance of professional services to be provided to the Company by its principal accountant. Additionally, all services rendered by our principal accountant are performed pursuant to a written engagement letter between us and the principal accountant.

PART IV

ITEM 15:  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)(1)(2)    Financial Statements.  See the audited financial statements and financial statement schedules for the year ended August 31, 2015, contained in Item 8 above which are incorporated herein by this reference.

(a)(3)         Exhibits.  The following exhibits are filed as part of this Annual Report:

No.            Description

Exhibit 31.1 Certification of Darren Lopez, the Company’s CEO and acting CFO, pursuant to section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 32 Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002

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