lyyn10k08312012.htm

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LYYNKS INC. AND SUBSIDIARY

(Formerly En2go International, Inc. and Subsidiary)

(a development stage company)

Consolidated Statements of Cash Flows

							Period from
							inception
							(January 31, 2007)
	For the Year Ended August 31,						through August 31,
	2012			2011			2012
Cash Flows From Operating Activities:
Net loss	$	(1,687,614	)	$	(529,705	)	$	(16,722,843	)

Adjustments to reconcile net loss to net cash used in operating activities:
Debt financing costs		-			5,833			1,906,933
Depreciation expense		20,392			6,124			171,320
Impairment loss		-			-			1,104,917
Options, warrants and common stock issued for services rendered		-			-			5,753,309
Gain on settlement of prior liabilties		-			(508,457	)		(508,457	)
Gain on sale of equipment		-			(9,000	)		(9,000	)

Changes in operating assets and liabilities:
Accounts payable		(55,625	)		(59,955	)		1,109,369
Accrued expense		9,638			14,980			89,618
Net cash used in operating activities		(1,713,209	)		(1,080,180	)		(7,104,834	)

Cash Flows From Investing Activities:
Purchase of property and equipment		(29,274	)		(35,614	)		(247,390	)
Software development		-			-			(1,109,417	)

Net cash used in investing activities		(29,274	)		(35,614	)		(1,356,807	)

Cash Flows From Financing Activities:
Proceeds from related parties		1,026,000			630,500			2,218,510
Proceeds from sale of equipment		-			9,000			46,697
Proceeds from issuance of notes payable		-			-			2,600,000
Repayment of notes payable		-			-			(500,000	)
Proceeds from issuance of common stock and warrants, net of offering costs		920,000			505,000			4,333,599
Net cash provided by financing acitivities		1,946,000			1,144,500			8,698,806

Net increase in cash		203,517			28,706			237,165
Cash beginning of period		33,648			4,942			-
Cash end of period	$	237,165		$	33,648		$	237,165



SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the period for:
Interest	$	-		$	-
Income taxes		-			-

Common stock and warrants issued for payment of accounts payable	$	-		$	70,125		$	166,325

Common stock and warrants issued upon conversion of covertible debt
and related party debt	$	595,000		$	1,212,000		$	3,507,000

See notes to consolidated financial statements.

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Lyynks Inc. and Subsidiary

(formerly En2go International, Inc.)

(a development stage company)

Notes to Consolidated Financial Statements

As of and for the Year Ended August 31, 2012

NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION

The accompanying consolidated financial statements represent the accounts of Lyynks Inc. incorporated in the State of Nevada on August 23, 2002 (formerly En2go International, Inc.) and En2Go, Inc. (“Subsidiary”), incorporated in the State of Nevada on January 31, 2007 (collectively the Parent and the Subsidiary are referred to as the “Company”, “Lyynks” “we” or “our”).

On July 17, 2007, Parent completed an exchange agreement with Subsidiary wherein Parent issued 2,780,000 shares of its common stock in exchange for all the issued and outstanding common stock of Subsidiary. The acquisition was accounted for as a recapitalization of Subsidiary in a manner similar to a reverse purchase as the former shareholders of Subsidiary controlled the combined Company after the acquisition. Following the acquisition and the transfer of an additional 1,075,000 shares from the shareholders of parent to the former shareholders of the subsidiary, the former shareholders of Subsidiary controlled approximately 77% of the total outstanding stock of the combined entity. There was no adjustment to the carrying values of the assets or the liabilities of Parent or Subsidiary as a result of the recapitalization.

The operations of Parent are included only from the date of recapitalization. Accordingly, the previous operations and retained deficits of Parent prior to the date of recapitalization have been eliminated. The financial history prior to the recapitalization is that of the Subsidiary.

On February 22, 2012 the Company filed a Certificate of Dissolution of Subsidiary En2go Inc. with the Nevada Secretary of State.

On March 8, 2012, the Company filed in Nevada Articles of Merger providing for the merger of its wholly-owned subsidiary, Lyynks, Inc., into the Company, as the surviving corporation, and in the merger changing the Company’s name to Lyynks Inc., In the merger, which was for the sole purpose of changing the Company’s name, there were no other changes to the Articles of Incorporation or any changes to the capital stock of the Company, or to its By-Laws or its officers and directors. Pursuant to FINRA approval, the name change was effective for trading purposes on May 14, 2012.

General

The Company is developing software products for the online distribution of audio and video content. The Company plans to provide a service that users can use to deliver their content over the internet with a potential global reach. Additionally end users would be able to use our social network integration to share content links to promote content or content providers.

Basis of Presentation and Going Concern

Our consolidated financial statements have been prepared assuming that we will continue as a going concern. However, we have sustained losses and as of August 31, 2012, we have no revenues and have a net working capital deficiency and a negative cash flow from operations. These conditions, among others, give rise to substantial doubt about our ability to continue as a going concern. Management is continuing to seek additional equity capital. Until such time as we are operating profitably, we anticipate our working capital needs will be funded with proceeds from equity and debt financing. Management believes these steps will provide us with adequate funds to sustain our continued existence. There is, however, no assurance that the steps taken by management will meet all of our needs or that we will continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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Development Stage Activities

Since inception the Company has not yet generated significant revenues and has been defining its business operations and raising capital. All of our operating results and cash flows reported in the accompanying consolidated financial statements from January 31, 2007 through August 31, 2012 are considered to be those related to development stage activities and represent the cumulative from inception amounts from our development stage activities required to be reported pursuant to Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 915, “Development Stage Enterprises”.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates and judgments, including those related to revenue recognition, valuation of long-lived assets, income taxes and litigation. The Company bases its estimates on historical and anticipated results and trends and on various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to future events. The policies discussed below are considered by management to be critical to an understanding of the Company’s financial statements. These estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. By their nature, estimates are subject to an inherent degree of uncertainty. Actual results may differ from those estimates.

Consolidation

The consolidated financial statements include the accounts of Parent and Parent’s wholly-owned Subsidiary. All intercompany balances and transactions have been eliminated in consolidation.

Cash Concentration and Cash Equivalents

We consider all short-term securities purchased with a maturity of three months or less to be cash equivalents. The Company maintains its cash in bank deposit accounts, which, at times, may exceed federally insured limits. Management does not believe the Company is exposed to significant credit risk. Management, as well, does not believe the Company is exposed to significant interest rate and foreign currency fluctuation risks during the period presented in these consolidated financial statements. As of August 31, 2012, there are no amounts that exceed the federally insured limits.

Property and Equipment

Property and equipment are stated as cost less accumulated depreciation. Depreciation is provided on a straight line basis over the estimated useful lives of the assets from one to five years. Maintenance and repairs are charged to expense as incurred and major improvements are capitalized. Gains or losses on sales or retirements are recognized in income.

Revenue Recognition

Through the period from inception through August 31, 2012, the Company had not yet generated any revenues. However, the Company plans to recognize its revenue according to the provisions of ASC 605, “Revenue Recognition”, which takes into account the completion of the transaction, delivery of the product, a final fixed or determinable price, and that collectability is reasonably assured.

Net Earnings (Loss) per common share

Basic earnings (loss) per share excludes dilution and is computed by dividing earnings (loss) available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shares in the earnings (loss) of the Company. Certain unexercised stock options and stock warrants to purchase shares of the Company’s common stock and convertible debt into the shares of the Company as of August 31, 2012 and 2011, were excluded in the computation of diluted earnings (loss) per share because the effect would be antidilutive. For the years ended August 31, 2012 and 2011, there were 54,256,627 and 33,065,627 potential common shares outstanding.

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Evaluation of Long-Lived Assets

The Company reviews long-lived assets for impairment used in operations when events and circumstances indicate that the assets might be impaired and the undiscounted cash flows expected to be generated by those assets are less than the carrying amount of those items. The Company’s cash flow estimates are based on limited operating history and have been adjusted to reflect management’s best estimate of future market and operating conditions. An impairment exists when the carrying amount of the long-lived assets is not recoverable and exceeds the fair value. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If an impairment exists the resulting write-down would be the difference between the fair market value of the long-lived asset and the related book value. The Company’s estimates of fair value represent management’s best estimates based on industry trends.

Advertising Costs

Advertising costs are charged to operations in the period incurred. During the years ended August 31, 2012 and 2011, the Company incurred $-0- and $-0- in advertising costs, respectively.

Income Taxes

The Company accounts for income taxes under the asset and liability method, in accordance with ASC 740, “Income Taxes” (“ASC740”), which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

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

The principal item giving rise to deferred taxes is expenses deductible for tax purposes that are not deductible for book purposes and a net operating loss carryforward

Stock-Based Compensation

The Company records as expense the fair value of equity-based compensation, including stock options and warrants, over the applicable vesting period. The Company also provides more extensive disclosures concerning stock options than required under previous standards.

Software Development Costs

We capitalize software development costs in accordance with generally accepted accounting principles, under which certain software development costs incurred subsequent to the establishment of technological feasibility, may be capitalized before the product is available for general release to customers, in accordance with ASC 350-985, “Software”. We determine technological feasibility to be established upon completion of (1) a detailed program design, (2) Completion of working model. Capitalized software development costs consists of costs for internally developed software to be sold publicly upon completion of development. Capitalized costs consist primarily of direct salaries and the cost of specific external consultants, where such costs qualify for capitalization under generally accepted accounting principles. Amortization shall not start until the product is available for general release to customers. On an annual basis, the Company will determine whether or not there has been impairment in value of the intangible assists and if necessary, records impairment charged to write down the assts to their estimated fair value. At August 31, 2010, new management of the Company evaluated the current software under development and determined the undiscounted cash flows expected to be generated by these assets are substantially less than the carrying amount of these items. Management had determined to develop new software and no longer used the previously developed software. The Company recorded an impairment charge of $1,104,917 for the year ended August 31, 2010, reducing the software costs to $-0-.

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Convertible Debt, Note Discounts and Beneficial Conversion Features

The convertible debentures were issued in accordance with ASC 470-20-25, “Debt with Conversion and Other Options” (“ASC 470-20-25”). We calculated the value of the beneficial conversion feature embedded in the Convertible Notes. The beneficial conversion feature is a discount against the debt and the value to the warrants increases additional paid-in capital.

Recently Issued Accounting Pronouncements

FASB has codified a single source of U.S. Generally Accepted Accounting Principles, the Accounting Standards Codification™. Unless needed to clarify a point to readers, we will refrain from citing specific section references when discussing application of accounting principles or addressing new or pending accounting rule changes. There are no recently issued accounting standards that are expected to have a material effect on our financial condition, results of operations or cash flows..

NOTE 3 – SETTLEMENT OF PRIOR LIABILITIES

We have settled certain payables to reflect the acceptance by these creditors of lesser amounts. Accordingly, amounts accrued with respect to these account holders have been reduced to $-0- from $508,457, and we have recognized other income in that amount in the consolidated statement of operations for the year ended August 31, 2011, and $538,277 for the period from inception (January 31, 2007) through August 31, 2012.

NOTE 4 –FAIR VALUE MEASUREMENTS

The Company utilizes the accounting guidance for fair value measurements and disclosures for all financial assets and liabilities that are recognized or disclosed at fair value in the condensed consolidated financial statements on a recurring basis or on a nonrecurring basis during the reporting period. The fair value is an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants based upon the best use of the asset or liability at the measurement date. The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability. The accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers are defined as follows:

Level 1 – Observable inputs such as quoted market prices in active markets

Level 2 – Inputs other than quoted prices in active markets that are either directly or indirectly observable

Level 3 – Unobservable inputs about which little or no market data exists, therefore requiring an entity to develop its own assumptions

As of August 31, 2012, the Company held certain financial assets that are measured at fair value on a recurring basis. These consisted of cash and cash equivalents. The fair value of the cash and cash equivalents is determined based on quoted market prices in public markets and is categorized as Level 1. The Company does not have any financial assets measured at fair value on a recurring basis as Level 2 or Level 3.

The following table sets forth by level, within the fair value hierarchy, the Company’s financial assets accounted for at fair value on a recurring basis as of August 31, 2012 and August 31, 2011.

	Fair Value Measurements Using

	Quoted Prices		Significant Other		Significant Other
	in Active Market		Observable Inputs		Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)
August 31, 2012
Cash and cash equivalents	$	237,165	$	-	$	-
Total	$	237,165	$	-	$	-

August 31, 2011
Cash and cash equivalents	$	33,648	$	-	$	-
Total	$	33,648	$	-	$	-

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The Company had no financial assets accounted for on a non-recurring basis as of August 31, 2012.

There were no changes to the Company’s valuation techniques used to measure asset fair values on a recurring or nonrecurring basis during the year ended August 31, 2012 and the Company did not have any financial liabilities as of August31, 2012. The Company has other financial instruments, such as advances and other receivables, accounts payable and other liabilities, notes payable and other assets, which have been excluded from the table above. Due to the short-term nature of these instruments, the carrying value of advances and other receivables, accounts payable and other liabilities, notes payable and other assets approximate their fair values.

NOTE 5 - PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

	August 31, 2012		August 31, 2011
Equipment	$	64,888	$	35,614
Accumulated depreciation		26,516		6,124
	$	38,372	$	29,490

Depreciation expense for the year ended August 31, 2012 and 2011 was $20,392 and $6,124, respectively.

NOTE 6 – RELATED PARTY TRANSACTIONS

During the year ended August 31, 2012, Richard Genovese, a Director of the Company ("Genovese" ), converted $595,000 of debt owed to him into 7,933,333 common shares at a conversion price per share of $0.075.

During the year ended August 31, 2012, Genovese made advances of $926,000 to the Company. As of August 31, 2012 and August 31, 2011, the amount due Genovese was $661,510 and $330,510, respectively. The advances are non-interest bearing.

On February 28, 2012, Clayoquot Wilderness Resort Ltd. (“Clayoquot”), a company of which Genovese is a principal, advanced $100,000 to the Company. As of August 31, 2012 and August 31, 2011, the amount due Clayoquot was $100,000 and $-0-, respectively. The advance is non-interest bearing.

NOTE 7 – CONVERTIBLE DEBT

NSC Investments

In August 2008, we issued a promissory note to NSC Investments Ltd. (“NSC”) in the principal amount of $250,000. Under the terms of this promissory note (the “NSC 2008 Note”), interest is to be prepaid at the commencement of each quarter by us issuing 1,600 shares of our common stock. The unpaid principal balance of the promissory note was due and payable in full on the sale of any assets of the Company or November 1, 2008. Further consideration for the loan consisted of 15,000 shares of our common stock at the funding, 5,000 shares of our common stock at the beginning of the next month, and 10,000 shares at the beginning of the next month. This promissory note was extended until February 1, 2009. We agreed to pay 3,900 shares of our common stock as interest and additional issuance of 10,000 shares of our common stock for additional compensation. The promissory note was further extended to May 1, 2009 and we agreed to make payments on the principal of $50,000 by February 15, 2009; repay a further $100,000 by May 1, 2009; issue 3,000 shares of our common stock as interest and additional issuance of 20,040 shares of our common stock for additional compensation. All the terms of the amended agreement were complied with. The remaining $100,000 plus accrued interest was convertible at NSC’s option at $2.00 per share on or before May 1, 2010. Pursuant to ASC 470-25-20, the modification of the Note agreement was not treated as an extinguishment but rather reduced the carrying amount of the debt through an adjustment to the note discounts, with a corresponding increase in additional paid-in capital.

In November 2010, the Company entered into an agreement with NSC Investments Ltd. to issue 585,000 units (“Units”), at a price per Unit of $.20, each Unit consisting of one share of common stock and a common stock purchase warrant to purchase one share of common stock at an exercise price of $.30 per share, to settle the remaining balance of the $100,000 of principal debt and $17,500 of accrued interest. The fair value of the warrants issued was $90,938.

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2009 Convertible Debentures

On January 15, 2009 we entered into an agreement with Genovese whereby Genovese and/or his affiliates (collectively “Genovese”) advanced to the Company $250,000 for a convertible debenture or debentures (“the 2008 Genovese Convertible Debenture”) for the aggregate principal amount of $250,000. The 2008 Genovese Convertible Debenture was non-interest bearing and matured on December 5, 2010. At the holder’s sole discretion, the holder could elect to convert the 2008 Genovese Convertible Debenture, in whole or in part into common shares of the Company at a conversion price of $0.10 per share. As additional compensation, Genovese was issued a share purchase warrant certificate for 2,500,000 warrants, with each warrant exercisable into one common share at $0.15 per share for a period of three years commencing from the date of the issuance of the warrant certificate. The Company and Genovese further agreed to establish five (5) mutually agreed upon milestones to be attained no later than September 2009 with each milestone generally occurring approximately every forty five (45) days. In conjunction with the attainment of each individual milestone, Genovese agreed to advance to the Company an additional $250,000. In connection with each $250,000 advance, Genovese would be issued an additional $250,000 Debenture. The 2008 Genovese Convertible Debentures were non interest bearing and mature two years from the date of issuance of each subsequent debenture (“2009 Convertible Debentures”). At the holders’ sole discretion, the holder could elect to convert the 2009 Convertible Debentures, in whole or in part, at any time prior to maturity, into common shares of the Company at a conversion price of $0.10 per share.

As additional compensation, Genovese was issued a share purchase warrant certificate for 2,500,000 warrants with each warrant exercisable into one common share at $0.15 per share for a period of three years commencing from the date of the issuance of the warrant certificate for each Convertible Debenture issued. The 2008 Genovese Convertible Debenture was subsequently amended for an aggregate principal amount of $545,000. Additional 2008 Convertible Debentures for $455,000, $250,000, and $50,000 and $195,000 were issued during the year ended August 31, 2009. In April 2009, the amount of 2009 Convertible Debentures available to be issued was increased by $255,000 for an aggregate of $1,750,000.

As of August 31, 2009 a total of $1,750,000 principal amount of 2009 Convertible Debentures had been issued. The amount of the Debentures outstanding at August 31, 2009 was classified as “permanent equity” as capital in excess of par value and a corresponding amount was recorded as a discount against the note payable. This discount was amortized over 24 months on a straight-line basis as interest expense. On September 25, 2009, all issued 2009 Convertible Debentures were converted into 17,500,000 shares of common stock.

Janst Limited

In April 2009, we entered into a loan agreement with Janst Limited for $250,000. The terms of the loan were that the loan bears interest at 15% per annum, matured on May1, 2010, and that the principal and accrued interest is convertible into common stock at the rate of $0.35 per share.

In November 2010, the Company entered into an agreement with Janst Limited to issue 1,515,625 units (“Units”), at a price per Unit of $.20, each Unit consisting of one share of common stock and a common stock purchase warrant to purchase one share of common stock at an exercise price of $.30 per share, to settle the $250,000 of principal debt and $53,125 of accrued interest. The fair value of the warrants issued was $35,250. The fair value of the warrants was estimated using the Black-Scholes pricing method.

Interest expense for the years ended August 31, 2012 and 2011 was $-0- and $6,845, respectively.

NOTE 8 - COMMON STOCK

Effective December 7, 2011 the Company filed an amendment to its Articles of Incorporation (1) to increase our authorized Common Stock from 90,000,000 shares to 1,000,000,000 shares and (2) to authorize a new class of 10,000,000 shares of Preferred Stock with authority for our Board of Directors to issue one or more series of the preferred stock with such designations, rights, preferences, limitations and/or restrictions as it should determine by vote of a majority of such directors. As of August 31, 2012, no shares of preferred stock have been issued.

The Company has authorized 1,000,000,000 shares of common stock with a par value of $.00001. At August 31, 2012 and August 31, 2011, the Company had 54,256,627 and 38,656,627 shares of common stock issued and outstanding, respectively.

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On April 10, 2007, the Company completed a forward stock split by issuing two additional shares of common stock for every one share previously issued.

On July 17, 2007, in connection with its Exchange Agreement with the Subsidiary, Parent issued 2,780,000 shares of its previously authorized but unissued common stock in exchange for all the issued and outstanding common stock of Subsidiary. The 2,780,000 shares have been reflected as though they were issued at the inception of the Subsidiary, with a reverse merger adjustment that represents the shareholders of the public shell at the time of the recapitalization.

During July, 2007, in connection with its Exchange Agreement with Subsidiary, Parent issued 100,000 shares of common stock to private placement subscribers at $10.00 per share.

On October 31, 2007 the Board of Directors approved the issuance of a private placement memorandum for 135,000 shares of common stock at $10.00 per share. On January 22, 2008, we completed a private placement of 135,000 shares of our common stock at a purchase price of $10.00 per share to persons who were not “U.S. Persons” within the meaning of Regulation S (“Regulation S”) promulgated under the Securities Act of 1933, as amended (the “Securities Act”). Also, stock offering costs of $91,401 have been recorded against capital in excess of par value.

During November 2007, the Board of Directors authorized the granting of options to purchase 200,000 shares of common stock at $10.00 per share. The fair value of each option granted is estimated on the date granted using the Black-Scholes option pricing model with the following weighted-average assumptions; risk-free interest rates of 4.4%, expected dividend yields of zero, expected life of 10 years, and expected volatility of 147.95%. The options vested immediately and were valued in total at $2,366,186.

On January 22, 2008, the Company completed a private placement of 135,000 shares of its common stock at a purchase price of $10.00 per share to persons who were not “U.S. Persons” within the meaning of Regulation S (“Regulation S”) promulgated under the Securities Act of 1933, as amended (the “Securities Act”). The Company received gross proceeds from the placement of $1,350,000 and net proceeds of approximately $1,258,600 after deducting $30,000 in placement fees paid to registered investment dealers in Canada and other offering costs.

In August 2008, we issued the NSC 2008 Note in the principal amount of $250,000. In November 2010, the Company entered into an agreement with NSC Investments Ltd. to issue 585,000 units (“Units”), at a conversion price per Unit of $.20, each Unit consisting of one share of common stock and a common stock purchase warrant to purchase one share of common stock at an exercise price of $.30 per share, to settle the remaining balance of the $100,000 of principal debt and $17,500 of accrued interest on the NSC 2008 Note.

During August 2008, the Company issued 45,000 warrants valued at approximately $338,000 to purchase stock for services rendered. The warrants vest over various terms. During the year ended August 31, 2009, the Company recognized compensation expense of $216,479. The fair value of each warrant granted is estimated on the date granted using the Black-Scholes option pricing model with the following weighted average assumptions: risk free interest rates of 3.74% to 3.97%, expected dividend yields of zero, expected life of 10 years and expected volatility of 136.94% to 140.60%.

During the fiscal year ended August 31, 2008, the Company authorized the issuance of 100,000 shares of common stock to Mr. Steve Wozniak. The shares were valued at $1,850,000 based on the fair market value of the stock on the date the shares were issued.

In September 2008, we entered into a subscription agreement with Richard Genovese and/or his affiliates (collectively “Genovese”), pursuant to which Genovese purchased 100,000 shares of our common stock and 100,000 warrants with an exercise price of $1.50 for $150,000.

In October 2008, we entered into an agreement with Euro Trend Trader, Inc. (“ETT”) to provide investor relations and public relations. We agreed to pay ETT $5,000 start up fees and $3,000 per month thereafter. Additionally, we paid ETT 20,000 shares of our common stock for coverage of the Company by a registered market maker and an additional 10,000 shares for investor relations services.

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In November 2008, we borrowed $5,000 from a consultant to the Company which was payable by December 6, 2008. The lender was to receive 200 shares of our common stock per month as interest and an additional consideration of 25,000 warrants with an exercise price of $0.25. In February 2009 we repaid the principal and interest in full and did not issue any shares or warrants.

In November 2008 we issued 5,000 shares of our common stock to Howard Family Trust as a bonus in consideration of the Company’s failure to pay rent on a timely basis. The shares were valued at $14,000 based on the fair market value of the stock on the date the shares were issued.

In May 2009, we entered into a subscription agreement with Robert Kolson, pursuant to which Mr. Kolson purchased 75,000 shares of our common stock and 37,500 warrants with an exercise price of $3.00 for $150,000.

During the year ended August 31, 2009, the Company issued an aggregate of $1,750,000 in 2009 Convertible Debentures. At the holder's sole discretion, the holder was entitled to convert the Debentures, in whole or in part into common shares of the Company at a conversion price of $0.10 per share. As additional compensation, in conjunction with the issuance of the 2009 Convertible Debentures, the Company issued 17,500,000 share purchase warrant certificates with each warrant exercisable into one common share at $0.15 per share for a period of three years commencing from the date of the issuance of the warrant certificate. On September 25, 2009 all of the $1,750,000 of 2009 Convertible Debentures were converted into 17,500,000 common shares and 17,500,000 share purchase warrants exercisable at $0.15 per share remained outstanding.

On September 15 2009, the Company completed a reverse stock split on a one to ten (1:10) basis, such that each shareholder following the reverse split held one new share for every ten shares previously held. The Company’s share transactions disclosed in the financial statements were restated retroactively to reflect the reverse stock split for all periods presented.

On October 30, 2009 we entered into a subscription agreement with Janspec Holdings Limited ("Janspec"), pursuant to which Janspec purchased 428,572 common shares and 428,572 warrants with an exercise price of $0.60 for $150,000.

On November 7, 2009 we entered into a subscription agreement with Peninsula Merchant Syndications Corp. ("Peninsula"), pursuant to which Peninsula purchased 285,715 shares of our common stock and 285,715 warrants with an exercise price of $0.60 for $100,000.

On November 9, 2009, we issued 32,000 common shares to Weintraub Genshlea Chediak in lieu of outstanding legal services provided to the Company. The shares were valued at $11,200 based on the fair market value of the stock on the date that the shares were issued.

On November 13, 2009 we entered into a subscription agreement with Robert Kolson, pursuant to which Mr. Kolson purchased 285,715 shares of our common stock and 285,715 warrants with an exercise price of $0.60 for $100,000.

On January 20, 2010 we issued 170,000 common shares to Howard Family Trust in lieu of outstanding rent, property taxes and insurance. The shares were valued at $85,000 reflective of the fair market value of the stock on the date the shares were issued.

On November 8, 2010, we entered into a subscription agreement with Janst Limited, pursuant to which Janst purchased 1,250,000 shares of our common stock and 1,250,000 warrants with an exercise price of $.30 for $250,000.

On November 8, 2010, we entered into a subscription agreement with NSC Investments Ltd., pursuant to which NSC purchased 250,000 shares of our common stock and 250,000 warrants with an exercise price of $.30 for $50,000.

On November 8, 2010, we entered into a subscription agreement with Richard Genovese., pursuant to which Mr. Genovese purchased 250,000 shares of our common stock and 250,000 warrants with an exercise price of $.30 for $50,000.

On December 13, 2010, we entered into a subscription agreement with Musgrave Investments Ltd., pursuant to which Musgrave purchased 500,000 shares of our common stock and 500,000 warrants with an exercise price of $.30 for $100,000.

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On May 6, 2011, we entered into a subscription agreement with Richard Genovese, pursuant to which Mr. Genovese purchased 600,000 shares of our common stock and 600,000 warrants with an exercise price of $.10 for $30,000.

On July 26, 2011, we entered into a subscription agreement with a private investor. The investor purchased 500,000 shares of our common stock and 500,000 warrants with an exercise price of $.10 for $25,000.

The fair value of the warrants issued in connection with the sale of common stock during the year ended August 31, 2011 was $151,496. The fair value of the warrants was estimated using the Black Scholes pricing method.

On November 22, 2011, we entered into a subscription agreement with a private investor. The investor purchased 2,666,667 shares of our common stock for an aggregate investment in the Company of $200,000.

On December 5, 2011, the Company entered into a subscription agreement with a private investor. The investor purchased 400,000 shares of our common stock and 400,000 warrants with an exercise price of $0.25 per share for an aggregate investment in the Company of $100,000.

On May 1, 2012, we entered into a subscription agreement with a private investor. The investor purchased 100,000 shares of our common stock for an aggregate investment in the Company of $20,000.

On May 2, 2012, we entered into subscription agreements with two private investors. The investors purchased 1,500,000 shares of our common stock for an aggregate investment in the Company of $300,000.

On August 8, 2012, we entered into a subscription agreement with a private investor. The investor purchased 3,000,000 shares of our common stock for an aggregate investment in the Company of $300,000.

The fair value of the warrants issued in connection with the sale of common stock during the year ended August 31, 2012 was $64,200. The fair value of the warrants was estimated using the Black Scholes pricing method.

NOTE 9 – OPTIONS AND WARRANTS

Stock Options

During November, 2007 the Board of Directors of the Company adopted and the stockholders at that time approved the 2007 Stock Plan (“the Plan”). The Plan provides both for the direct award or sale of shares and for the granting of options to purchase shares. Options granted under the plan may include qualified and non-qualified stock options. The aggregate number of shares that may be issued under the plan shall not exceed 750,000 shares of common stock, and are issuable to directors, officers, and employees of the Company. Awards under the plan will be granted as determined by Committees of the Board of Directors or by the Board of Directors. The options will expire after 10 years or 5 years if the option holder owns at least 10% of the common stock of the Company. The exercise price of a non-qualified option must be at least 85% of the market price on the date of issue. The exercise price of a qualified option must be at least equal to the market price or 110% of the market price on the date of issue if the option holder owns at least 10% of the common stock of the Company.

In November 2007, 200,000 stock options were granted with an exercise price equal to fair value at the date of grant. The term of the options granted under the Plan could not exceed 10 years and the stock options granted were vested immediately.

On August 1, 2008, we agreed to issue 30,000 stock options to certain board members for their services to the board.

On September 1, 2008 we granted 15,000 stock options to a certain officer and board member for his services performed as Chair of the Audit Committee and Chair of the Compensation Committee. The estimated value of the compensatory common stock purchase options granted to non-employees in exchange for services and financing expenses was determined using the Black-Scholes pricing model and the following assumptions: expected term of 10 years, a risk free interest rate of 3.97% to 4.40%, a dividend yield of 0% and volatility of 136.94% to 147.95%. On August 31, 2012, we cancelled 25,000 stock options that were issued to a certain board member.

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During the years ended August 31, 2012 and 2011, the amount of the expense charged to operations for compensatory options granted in exchange for services was $-0- and $-0-, respectively.

The following table summarizes the changes in options outstanding and the related prices for the shares of the Company’s common stock issued to employees and non-employees of the Company. These options were granted in lieu of cash compensation for services performed.

	Shares		Weighted Average Exercise Price
Outstanding, September 1, 2008		230,000	$	9.70
Granted		15,000		7.10
Expired/Cancelled		-		-
Exercised		-		-
Outstanding, year ended August 31, 2009		245,000		9.50
Granted		-		-
Expired/Cancelled		(200,000)		-
Exercised		-		-
Outstanding, year ended August 31, 2010		45,000		7.70
Granted		-		-
Expired/Cancelled		(20,000)		-
Exercised		-		-
Outstanding, year ended August 31, 2011		25,000	$	7.86

Granted		-		-

Expired/Cancelled		(25,000)		7.86

Exercised		-		-

Outstanding, period ended August 31, 2012		-0-	$	-0-

Exercisable at August 31, 2012		-0-	$	-0-

Stock Warrants

In September 2008, we entered into a subscription agreement with Richard Genovese and/or his affiliates (collectively “Genovese”) whereby Genovese purchased 100,000 shares of our common stock and 100,000 warrants with an exercise price of $2.00 for $150,000.

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On January 15, 2009 we entered into an agreement with Genovese whereby Genovese and/or his affiliates (collectively “Genovese”) advanced to the Company $250,000 for a convertible debenture (“Debenture”) for the aggregate principal amount of $250,000. The Debenture was be non-interest bearing and matured on December 5, 2010. At the holder’s sole discretion, the holder had the right to elect to convert the Debenture, in whole or in part into common shares of the Company at a conversion price of $0.10 per share. As additional compensation, Genovese was issued a share purchase warrant certificate for 2,500,000 warrants with each warrant exercisable into one common share at $0.15 per share for a period of three years commencing from the date of the issuance of the warrant certificate. The Company and Genovese further agreed to establish five (5) mutually agreed upon milestones to be attained no later than September 2009 with each milestone generally occurring approximately every forty five (45) days. In conjunction with the attainment of each individual milestone, Genovese agreed to advance to the Company an additional $250,000. In connection with each $250,000 advance, Genovese was issued an additional $250,000 Convertible Debenture. The Debentures were non-interest bearing and matured two years from the date of issuance of each subsequent debenture (“Subsequent Debentures”).

At the Holders’ sole discretion, the Holder had the right to elect to convert the Subsequent Debentures, in whole or in part, at any time prior to maturity, into common shares of the Company at a conversion price of $0.10 per share. As additional compensation, Genovese was issued a share purchase warrant certificate for 2,500,000 warrants with each warrant exercisable into one common share at $0.15 per share for a period of three years commencing from the date of the issuance of the warrant certificate for each Subsequent Debenture issued. We further agreed that (1) Genovese would be granted the right of first refusal/ right of participation in connection with any additional financing of the Company for two (2) years, (2) Genovese would be entitled to two board seats, (3) we would obtain directors and officers insurance, and (4) the parties would work together commencing December 2008 to address other matters. The Debenture was subsequently amended for an aggregate principal amount of $545,000.

Additional Debentures for $455,000, $250,000, and $50,000 and $195,000 were issued during the year ended August 31, 2009. In April 2009, the amount of convertible debentures available to be issued was increased by $255,000 for an aggregate of $1,750,000. As of August 31, 2009 a total of $1,750,000 had been issued as Debentures. On September 25, 2009 all of the $1,750,000 of debentures were converted into 17,500,000 common shares and 17,500,000 share purchase warrants exercisable at $0.15 per share remain unexercised, respective exercise periods thereof having been extended for an additional year from the original expiration dates.

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During the year ended August 31, 2012, the Company issued 400,000 warrants in connection with the sales of common stock and conversion of debt into common stock. The fair value of the warrants in connection with the allocation of sale and conversion was $64,200.

	Warrants		Weighted Average Exercise Price
Outstanding, September 1, 2008		100,000	$	2.00
Granted		17,500,000		0.15
Expired/Cancelled		-		-
Exercised		-		-
Granted		37,500		3.00
Outstanding, year ended August 31, 2009		17,637,500		0.17
Expired/Cancelled		-		-
Exercised		-		-
Granted		1,000,002		0.60
Outstanding, year ended August 31, 2010		18,637,502		0.19
Granted		14,440,625		0.20
Expired/Cancelled		(37,500)		3.00

Outstanding, September 1, 2011		33,040,627	$	0.19

Granted		400,000	$	0.25

Expired/Cancelled		(1,000,002)	$	0.60

Exercised

Outstanding, period ended August 31, 2012		32,440,625	$	0.18

Exercisable, period ended August 31, 2012		32,440,625	$	0.18

	Warrants Outstanding						Warrants Exercisable
Year	Exercise Price		Number of Warrants Issued		Weighted Average Contractual Life (Years)		Number Exercisable		Weighted Average Exercise Price
2008	$	2.00		100,000		0.65		100,000		2.00
2009		0.15		*10,000,000		0.42		10,000,000		0.15
2009		0.15		*2,500,000		0.48		2,500,000		0.15
2009		0.15		*500,000		0.50		500,000		0.15
2009		0.15		*1,700,000		0.64		1,700,000		0.15
2009		0.15		*150,000		0.66		150,000		0.15
2009		0.15		*50,000		0.68		50,000		0.15
2009		0.15		*50,000		0.70		50,000		0.15
2009		0.15		*500,000		0.97		500,000		0.15
2009		0.15		*2,050,000		0.97		2,050,000		0.15
2011		0.30		6,600,625		3.25		6,600,625		0.30
2011		0.30		500,000		3.35		500,000		0.30
2011		0.10		6,840,000		3.75		6,840,000		0.10
2011		0.10		500,000		3.86		500,000		0.10
2012		0.25		400,000		4.21		400,000		0.25
Total				32,440,625				32,440,625

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As of August 31, 2012, 1,000,002 of the Company's warrants issued and outstanding as of August 31, 2011 have expired.

* The 17,500,000 warrants (“2009 Warrants”) issued in conjunction with the 2009 Convertible Debentures contain an anti-dilution provision that states it is specifically agreed that in the event that the Company shall reduce the number of outstanding shares of Common Stock by combining such shares into a smaller number of shares, then, in such case, the then applicable Exercise Price per Warrant Share purchasable pursuant to the Warrant Certificate in effect at the time of such action will not be changed. On January 30, 2012, the Company extended respective exercise dates of the 2009 Warrants for one additional year from their original expiry dates.

The following table sets forth common stock equivalents (potential common stock) for the years ended August 31, 2012 and 2011 that are not included in the loss per share calculation above because their effect would be anti-dilutive for the periods indicated:

	For the Years Ended August 31,
	2012		2011
Plan Stock Options		-0-		25,000
Warrants		32,440,625		33,040,627
Convertible notes		-		-

NOTE 10 - INCOME TAXES

The Company followed the provisions of ASC 740, “Income Taxes” (“ASC 740”). As a result of the implementation of ASC 740, the Company recognized no adjustment in the net liability for unrecognized income tax benefits. The Company believes there are no potential uncertain tax positions and all tax returns are correct as filed. Should the Company recognize a liability for uncertain tax positions; the Company will separately recognize the liability for uncertain tax positions on its balance sheet. Included in any liability for uncertain tax positions, the Company will also record a liability for interest and penalties. The Company’s policy is to recognize interest and penalties related to uncertain tax positions as a component of the current provision for income taxes.

Substantial changes in the Company’s ownership have occurred, and therefore there is an annual limitation of the amount of Parent’s pre-acquisition net operating loss carryforward which can be utilized. Accordingly, only the post-acquisition net operating loss carryforward has been included for Parent.

The reconciliation of the provision (benefit) for income taxes computed at the U.S. federal statutory rate to the Company’s effective tax rate for the years ended August 31, 2012 and 2011 is as follows:

	2012			2011
Federal benefit at Statutory rate	$	574,000		$	181,000
State income tax, net of federal benefit		34,000			11,000
Unused net operating losses		(608,000	)		(192,000	)

Provision (Benefit) for income taxes	$____-			$	-

The Company has not made provision for income taxes in the year ended August 31, 2012 and 2011, respectively, since the Company has the benefit of net operating losses carried forward in these periods.

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NOTE 11 – COMMITMENTS AND CONTINGENCIES

Consulting Agreement

Effective September 1, 2010, the Company entered into a consulting agreement with, L.A. Dreamline II, LLC, a marketing consultant (a related party), for a monthly consulting fee of $15,000. The consulting agreement is for a term of 25 months. For the year ended August 31, 2012 and 2011, the Company paid the related party $180,000 and $180,000, respectively.

Lease

Effective May 1, 2010 we have entered into a month-to-month lease, providing for a monthly rental of $3,500 for our executive office. Rent expense, including executory costs, for the years ended August 31, 2012 and 2011 was $78,820 and $48,412, respectively.

NOTE 12 – LEGAL PROCEEDINGS

We are party to the following litigation matter.

Stride & Associates. We are a defendant in a suit filed September 2, 2009 by Stride & Associates, Inc. in the Superior Court of California, Los Angeles Superior Court-North Central District, for the amount of $19,500, plus interest, for services allegedly rendered by the plaintiff to the Company in connection with personnel placement. The plaintiff has filed a judgment in the amount of $21,620 against us in this litigation, and the Company has accrued the full amount. We intend to settle this matter.

NOTE 13 – SUBSEQUENT EVENTS

On September 7, 2012 the Company issued 6,610,000 shares to Richard Genovese in conversion of $661,000 principal amount of debt held.

On October 16, 2012 the Company issued 5,714,286 shares to JANST Limited at a share purchase price of $0.07 for an investment of $400,000.

Nevada	98-0389557
(State or other jurisdiction of Incorporation or organization)	(I.R.S. Employer Identification No.)

644-1812 West Burbank Blvd., Burbank, CA	91506
(Address of principal executive offices)	(Zip Code)

Large accelerated filer	[ ]	Accelerated filer	[ ]

Non-accelerated filer	[ ] (Do not check if a smaller reporting company)	Smaller reporting company	[X]

PART I	1

Item 1. Business	1

Item 1A. Risk Factors	3

Item 1B. Unresolved Staff Comments	8

Item 2. Properties	8

Item 3. Legal Proceedings	8

Item 4. Mine Safety Disclosures	8

PART II	9

Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities	9

Item 6. Selected Financial Data	9

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations	10

Item 7A. Quantitative and Qualitative Disclosures About Market Risk	12

Item 8. Financial Statements and Supplementary Data	12

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	13

Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure	33

Item 9A. Controls and Procedures	33

Item 9B. Other Information	33

PART III	34

Item 10. Directors, Executive Officers, and Corporate Governance	34

Item 11. Executive Compensation	36

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	38

Item 13. Certain Relationships and Related Transactions, and Director Independence	39

PART IV	39

Item 14. Principal Accountant Fees and Services	39

Item 15. Exhibits and Financial Statement Schedules	41

	High		Low
Fiscal Year ended August 31, 2010
Fourth Quarter	$	.38	$	.06
Third Quarter	$	.40	$	.20
Second Quarter	$	.90	$	.40
First Quarter(1)	$	.96	$	.40

Fiscal Year ended August 31, 2011
Fourth Quarter	$	.10	$	.07
Third Quarter	$	.11	$	.04
Second Quarter	$	.11	$	.02
First Quarter	$	.38	$	.05

Fiscal Year ended August 31, 2012
Fourth Quarter	$	.30	$	.11
Third Quarter	$	.11	$	.11
Second Quarter	$	.11	$	.11
First Quarter	$	.11	$	.02

Fiscal Year ended August 31, 2013
First Quarter	$	.35	$	.16

	Page

Report of Independent Registered Public Accounting Firms	13

Consolidated Balance Sheets as of August 31, 2012 and 2011	14

Consolidated Statements of Operations for the years ended August 31, 2012 and 2011	15

Consolidated Statements of Stockholders’ Equity (Deficiency) as of August 31, 2012	16

Consolidated Statements of Cash Flows for the years ended August 31, 2012 and 2011	18

Notes to Consolidated Financial Statements	19

	August 31,
	2012			2011

ASSETS
Current Assets:
Cash	$	237,165		$	33,648

Property and equipment - net		38,372			29,490
Total Assets	$	275,537		$	63,138


LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current Liabilities:
Accounts payable	$	500,211		$	555,836
Accrued expenses		19,493			9,855
Due to related parties		761,510			330,510
Total Current Liabilities		1,281,214			896,201


Commitments and Contingencies

Stockholders' Deficiency:
Common stock, $.00001 par value, 1,000,000,000 shares authorized, 54,256,626 and 38,656,627 shares issued and outstanding atAugust 31, 2012 and 2011, respectively		544			387
Capital in excess of par value		15,716,622			14,201,779
Deficit accumulated during the development stage		(16,722,843	)		(15,035,229	)
Total Stockholders' Deficiency		(1,005,677	)		(833,063	)

Total Liabilities and Stockholders' Deficiency	$	275,537		$	63,138

							Period from
							inception
	For the Year Ended						(January 31, 2007) through
	August 31,						August 31,
	2012			2011			2012
Revenues	$	-		$	-		$	-
Costs and Expenses:
General and administrative expenses		1,687,614			1,034,484			8,594,450
Stock issued for services		-			-			1,762,617
Non-cash compensation		-			-			3,990,692
Impairment loss		-			-			1,104,914
Total operating expenses		1,687,614			1,034,484			15,452,673

Loss from operations		(1,687,614	)		(1,034,484	)		(15,452,673	)


Other Income (Expense):
Other income (primarily from the settlement of prior liabiltities)		-			508,457			538,277
Interest expense		-			(6,845	)		(212,314	)
Interest expense on amortization of note discount		-			(5,833	)		(1,605,133	)
Gain on sale of equipment		-			9,000			9,000
Total other income (expense)		-			504,779			(1,270,170	)

Loss before provision for income taxes		(1,687,614	)		(529,705	)		(16,722,843	)

Provision for income taxes		-			-			-

Net loss	$	(1,687,614	)	$	(529,705	)	$	(16,722,843	)

Net loss per share of common stock -
Basic and diluted	$	(0.03	)	$	(0.02	)

Weighted Average Shares Outstanding -
Basic and diluted		48,288,048			32,080,545

											Deficit
											Accumulated			Total
					Capital in						During			Stockholders'
	Common		Stock		Excess of			Subscription			Development			Equity
	Shares		Amount		Par Value			Receivable			Stage			(Deficiency)
Balance - August 31, 2007		4,980,460		50	$	999,950		$	-		$	(602,659	)	$	397,341

Issuance of options and warrants
issued for services rendered		-		-		3,686,768			-			-			3,686,768

Common stock issued for $10.00
per share in January 2008		135,000		1		1,349,999			-			-			1,350,000

Offering costs on issuance of
common stock		-		-		(91,401	)		-			-			(91,401	)

Issuance of common stock
for services rendered		100,000		1		1,849,999			-			-			1,850,000

Issuance of common stock as
consideration for debt financing		16,600		-		144,600			(6,400	)		-			138,200

Net loss for the year ended
August 31, 2008		-		-		-			-			(7,830,062	)		(7,830,062	)

Balance - August 31, 2008		5,232,060		52		7,939,915			(6,400	)		(8,432,721	)		(499,154	)

Common stock and warrants
issued for $1.50 per unit in
October 2008		100,000		1		149,999			-			-			150,000

Common stock issued for services
rendered in October 2008		30,000		-		63,000			-			-			63,000

Common stock issued for services
in November 2008		5,000		-		14,000			-			-			14,000

Common stock issued in
consideration of debt financing -
Sept - April 2009		71,940		1		174,999			-			-			175,000

Common stock issued for $2.00
per share in May 2009		75,000		1		149,999			-			-			150,000

Discount on notes payable net of
amortization		-		-		1,593,729			-			-			1,593,729

Interest and stock based
compensation		-		-		133,141			6,400			-			139,541

Net loss for the year ended
August 31, 2009		-		-		-			-			(2,983,660	)		(2,983,660	)

Balance - August 31, 2009		5,514,000		55		10,218,782			-			(11,416,381	)		(1,197,544	)

Name	Age	Title	Held Position Since
Robert Rosner	48	President and Chief Executive Officer, Chief Financial Officer and Director	President and Chief Executive Officer – March 2010 Director – May 2010
Bruce Schmidt	58	Secretary, Treasurer, Director	Director - September 2006 Secretary & Treasurer-April 2009
Richard Genovese	59	Director	June 2009
Frank Anderson	54	Director	June 2009

Name and Principal Position	Fiscal Year	Salary			Bonus	Stock Awards	Option Awards	Non-Equity Incentive Plan Compensation	Non- Qualified Deferred Compensation Earnings	All Other Compensation	Total
Robert Rosner (2)	2012	$	14,600								$	14,600
	2011
	2010

Paul E. Fishkin, President CFO and Director (1)	2010	$	8,000								$	8,000

Tolga F. Katas, Chief Technology Officer	2010	$	191,000	$	50,000						$	241,000

Name and Address of Beneficial Owner (1)	Number of Shares Owned Beneficially		Percentage*

Abeille Limited (2) Le Montaigne 7 Ave. de Grande Bretagne, MC 98900 Monte Carlo		9,500,000		13.84	%

511919 NB Limited (3)		5,000,000		7.24	%
PO Box 49139
Vancouver, BC V7T 1A7

Richard Genovese (4)		47,672,205		57.49	%

JANST Limited (5) 87 Mary Street Georgetown, Grand Cayman Cayman Islands		13,245,536		18.83	%

Janspec Holdings Limited		6,715,239		10.09	%
14185 Rio Place
Surrey, BC V3S 0L2

Bruce Schmidt (6)		30,000		**

All Officers and Directors as a Group		47,702,205		57.54	%

	Fiscal Year Ended August 31, 2011		Fiscal Year Ended August 31, 2012
Audit Fees	$	36,000	$	37,000
Audit-Related Fees
Tax Fees
All Other Fees

Total	$	36,000	$	37,000

Number	Description

3.1*	Restated Certificate of Incorporation of En2Go International, Inc. Dated August 15, 2007 (incorporated by reference to the Company’s Form 10-K for the year ended August 31, 2007 filed on December 14, 2007).

3.1a*	Certificate of Change Pursuant to NRS 78.209 For Nevada Profit Corporations (incorporated by reference to Exhibit 99.1 to the Company’s Annual Report on Form 10-K filed on December 15, 2009).

3.1b	Certificate of Amendment to Articles of Incorporation, filed December 7, 201 (incorporated by reference to Exhibit 3.1b to the Company’s Annual Report on Form 10-K, filed December 13, 2011)

3.1c	Articles of Merger between the Company and its wholly-owned subsidiary Lyynks Inc. (incorporated by reference to Exhibit 3.1c to the Company’s Quarterly Report on Form 10-Q, filed July 16, 2012).

3.2*	Bylaws of Lyynks Inc. (incorporated by reference to the Company’s Registration Statement on Form SB2 filed October 25, 2002).

10.1*	Employment Agreement, dated as of July 16, 2007, by and between EN2GO International Inc. and Paul E. Fishkin (incorporated by reference to the Company’s Form 8-K filed on July 18, 2007).

10.2*	Employment Agreement, dated as of July 16, 2007, by and between EN2GO International Inc. and Tolga Katas (incorporated by reference to the Company’s Form 8-K filed on July 18, 2007).

10.3*	En2Go International, Inc. Stock Option Plan (incorporated by reference to the Company’s Form 8-K, filed on November 16, 2007).

10.4*	License Agreement with Christine Marie dated as of June 4, 2007 (incorporated by reference to the Company’s Form 10-K for the year ended August 31, 2007 filed on December 14, 2007).

10.5*	Share Exchange Agreement with En2Go, Inc. and its Stockholders dated as of June 8, 2007 (incorporated by reference to the Company’s Form 10-K for the year ended August 31, 2008 filed on December 14, 2007).

10.6*	Investor Relations and Corporate Communications Agreement, dated as of January 23, 2008, by and between EN2GO International Inc. and Connect Capital Ltd. (incorporated by reference to the Company’s Form 8-K filed on January 28, 2008).

10.7*	Investor Relations and Corporate Communications Agreement, dated as of January 23, 2008, by and between EN2GO International Inc. and Connect Corporate Communications, Inc. (incorporated by reference to the Company’s Form 8-K filed on January 28, 2008).

10.8*	Agreement for Settlement and Forgiveness of Debt, dated as of February 5, 2008 (incorporated by reference to the Company’s Form 10-QSB for the period ended February 29, 2008 filed on April 18, 2008).

10.9*	Amended and Restated En2go International, Inc. 2007 Stock Option plan, Dated July 1, 2008 (incorporated by reference to “Exhibit A” in the Company’s Definitive Proxy Statement filed on July 16, 2008).

10.10*	Convertible Promissory Note as Amended, dated August 1, 2008 by and between En2go International, Inc. and NSC Investments Ltd. (incorporated by reference to the Company’s Form 10-K for the year ended August 31, 2008 filed on December 15, 2008).

10.11*	Share Purchase Agreement, dated September 11, 2008, by and between En2go International, Inc. and Richard Genovese (incorporated by reference to the Company’s Form 10-K for the year ended August 31, 2008 filed on December 15, 2008).

10.12*	Convertible Debenture Agreement between Richard Genovese and the Company dated January 15, 2009 (incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the period ended November 30, 2008 filed on January 20, 2009).

10.13*	Form Convertible Debenture (incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the period ended November 30, 2008 filed on January 20, 2009).

10.14*	Form Common Stock Warrant (incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the period ended November 30, 2008 filed on January 20, 2009).

10.15*	Amended Convertible Debenture Agreement between Richard Genovese and the Company Dated January 15, 2009 (incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the period ended February 28, 2009 filed on April 20, 2009).

10.16*	Premium Network License and Reseller Agreement between Digital Stream, Inc. and the Company dated June 10, 2009 (incorporated by reference to the Company’s Report on Form 8-K filed on June 17, 2009).

14.1*	Code of Ethics and Business Conduct (incorporated by reference to the Company’s Form 10-KSB filed on November 19, 2003).

14.2*	Amended and Restated Code Of Ethics (incorporated by reference to the Company’s Form 8-K filed on March 4, 2009).

31.1	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SEC Ref. No.	Title of Document
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Label Linkbase Document
101.PRE	XBRL Taxonomy Presentation Linkbase Document

	LYYNKS INC.
Dated: December 11, 2012

	By:	/s/ ROBERT ROSNER
		Robert Rosner
		President, Chief Executive Officer,
		Principal Financial and Accounting Officer

	/s/ ROBERT ROSNER
	Robert Rosner, President, Chief Executive Officer and Director

	/s/ BRUCE SCHMIDT
	Bruce Schmidt
	Director

	/s/ RICHARD GENOVESE
	Richard Genovese
	Director

	/s/ FRANK ANDERSON
	Frank Anderson
	Director

/s/ Robert Rosner
Robert Rosner, Chief Executive Officer and
Chief Financial Officer

/s/ Robert Rosner
Robert Rosner
Chief Executive Officer and
Chief Financial Officer

COMMITMENTS AND CONTINGENCIES (Details Narrative) (USD $)	12 Months Ended
	Aug. 31, 2012	Aug. 31, 2011
Notes to Financial Statements
Paid to the related party for consulting fees	$ 180,000	$ 180,000
Rent expense	$ 78,820	$ 48,412

OPTIONS AND WARRANTS (Details) (USD $)	12 Months Ended
OPTIONS AND WARRANTS (Details) (USD $)	Aug. 31, 2012	Aug. 31, 2011	Aug. 31, 2010	Aug. 31, 2009	Aug. 31, 2008
Shares granted	0	0
Stock Options [Member]
Shares outstanding	0	45,000	45,000	245,000	230,000
Shares granted				15,000
Shares expired/cancelled	(25,000)	(20,000)	(200,000)
Shares exercised
Shares exercisable	0
Shares outstanding, weighted average exercise price	$ 0	$ 7.70	$ 7.70	$ 9.50	$ 9.70
Shares granted, weighted average exercise price				$ 7.10
Shares expired/cancelled, weighted average exercise price	$ 7.86
Shares exercised, weighted average exercise price
Shares exercisable, weighted average exercise price	$ 0

OPTIONS AND WARRANTS (Details Narrative) (USD $)	12 Months Ended
OPTIONS AND WARRANTS (Details Narrative) (USD $)	Aug. 31, 2012	Aug. 31, 2011
Notes to Financial Statements
Compensatory options granted in exchange for services	0	0
Warrants issued in connection with the sales of common stock and conversion of debt into common stock	400,000
Fair value of the warrants in connection with the allocation of sale and conversion	$ 64,200

SETTLEMENT OF PRIOR LIABILITIES	12 Months Ended
SETTLEMENT OF PRIOR LIABILITIES	Aug. 31, 2012
Notes to Financial Statements
NOTE 3 - SETTLEMENT OF PRIOR LIABILITIES	We have settled certain payables to reflect the acceptance by these creditors of lesser amounts. Accordingly, amounts accrued with respect to these account holders have been reduced to $-0- from $508,457, and we have recognized other income in that amount in the consolidated statement of operations for the year ended August 31, 2011, and $538,277 for the period from inception (January 31, 2007) through August 31, 2012.

PROPERTY AND EQUIPMENT (Details Narrative) (USD $)	12 Months Ended		67 Months Ended
PROPERTY AND EQUIPMENT (Details Narrative) (USD $)	Aug. 31, 2012	Aug. 31, 2011	Aug. 31, 2012
Notes to Financial Statements
Depreciation expense	$ 20,392	$ 6,124	$ 171,320

PROPERTY AND EQUIPMENT (Details) (USD $)	Aug. 31, 2012	Aug. 31, 2011
Notes to Financial Statements
Equipment	$ 64,888	$ 35,614
Accumulated depreciation	26,516	6,124
Property and equipment, net	$ 38,372	$ 29,490

RELATED PARTY TRANSACTIONS (Details Narrative) (USD $)	12 Months Ended			12 Months Ended
RELATED PARTY TRANSACTIONS (Details Narrative) (USD $)	Aug. 31, 2009	Aug. 31, 2012 Clayoquot Wilderness Resort Ltd. [Member]	Aug. 31, 2011 Clayoquot Wilderness Resort Ltd. [Member]	Aug. 30, 2012 Director [Member]	Aug. 31, 2012 Director [Member]	Aug. 31, 2011 Director [Member]
Debt amount converted to common stock	$ 1,750,000			$ 595,000
Common shares issued on conversion				7,933,333
Conversion price per share	$ 0.10			$ 0.075
Advance from related party				926,000
Due to related party		$ 100,000	$ 0		$ 661,510	$ 330,510

CONVERTIBLE DEBT (Details Narrative) (USD $)	12 Months Ended
CONVERTIBLE DEBT (Details Narrative) (USD $)	Aug. 31, 2012	Aug. 31, 2011	Aug. 31, 2009
Notes to Financial Statements
Convertible debenture principal amount			$ 1,750,000
Interest expense	$ 0	$ 6,845

COMMON STOCK (Details Narrative) (USD $)	12 Months Ended				67 Months Ended
COMMON STOCK (Details Narrative) (USD $)	Aug. 31, 2012	Aug. 31, 2011	Aug. 31, 2009	Aug. 31, 2008	Aug. 31, 2012
Notes to Financial Statements
Preferred stock issued	0				0
Common stock, authorized	1,000,000,000	1,000,000,000			1,000,000,000
Common stock, par value	$ 0.00001	$ 0.00001			$ 0.00001
Common stock, issued	54,256,626	38,656,627			54,256,626
Common stock, outstanding	54,256,626	38,656,627			54,256,626
Compensation expense			$ 216,479		$ 3,990,692
Shares authorized to issue				100,000
Value of shares authorized to issue				1,850,000
Debt amount converted to common stock			1,750,000
Conversion price per share			$ 0.10
Fair value of the warrants issued in connection with the sale of common stock	$ 64,200

Consolidated Balance Sheets (USD $)	Aug. 31, 2012	Aug. 31, 2011
Current Assets:
Cash	$ 237,165	$ 33,648
Property and equipment - net	38,372	29,490
Total Assets	275,537	63,138
Current Liabilities:
Accounts payable	500,211	555,836
Accrued expenses	19,493	9,855
Due to related party	761,510	330,510
Total Current Liabilities	1,281,214	896,201
Stockholders' Deficiency:
Common stock, $.00001 par value, 1,000,000,000 shares authorized, 54,256,626 and 38,656,627 shares issued and outstanding at August 31, 2012 and 2011, respectively	544	387
Capital in excess of par value	15,716,622	14,201,779
Deficit accumulated during the development stage	(16,722,843)	(15,035,229)
Total Stockholders' Deficiency	(1,005,677)	(833,063)
Total Liabilities and Stockholders' Deficiency	$ 275,537	$ 63,138

Consolidated Statements of Cash Flows (USD $)	12 Months Ended		67 Months Ended
Consolidated Statements of Cash Flows (USD $)	Aug. 31, 2012	Aug. 31, 2011	Aug. 31, 2012
Cash Flows From Operating Activities:
Net loss	$ (1,687,614)	$ (529,705)	$ (16,722,843)
Adjustments to reconcile net loss to net cash used in operating activities:
Debt financing costs		5,833	1,906,933
Depreciation expense	20,392	6,124	171,320
Impairment loss			1,104,917
Options, warrants and common stock issued for services rendered			5,753,309
Gain on settlement of prior liabilties		(508,457)	(508,457)
Gain on sale of equipment		(9,000)	(9,000)
Changes in operating assets and liabilities:
Accounts payable	(55,625)	(59,955)	1,109,369
Accrued expense	9,638	14,980	89,618
Net cash used in operating activities	(1,713,209)	(1,080,180)	(7,104,834)
Cash Flows From Investing Activities:
Purchase of property and equipment	(29,274)	(35,614)	(247,390)
Software development			(1,109,417)
Net cash used in investing activities	(29,274)	(35,614)	(1,356,807)
Cash Flows From Financing Activities:
Proceeds from related party	1,026,000	630,500	2,218,510
Proceeds from sale of equipment		9,000	46,697
Proceeds from issuance of notes payable			2,600,000
Repayment of notes payable			(500,000)
Proceeds from issuance of common stock and warrants, net of offering costs	920,000	505,000	4,333,599
Net cash provided by financing acitivities	1,946,000	1,144,500	8,698,806
Net increase in cash	203,517	28,706	237,165
Cash beginning of period	33,648	4,942
Cash end of period	237,165	33,648	237,165
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:Interest
Cash paid during the period for:Income taxes
Common stock and warrants issued for payment of accounts payable		70,125	166,325
Common stock and warrants issued upon conversion of covertible debt and related party debt	$ 595,000	$ 1,212,000	$ 3,507,000

OPTIONS AND WARRANTS (Details 3)	12 Months Ended
OPTIONS AND WARRANTS (Details 3)	Aug. 31, 2012	Aug. 31, 2011
Stock Options [Member]
Shares excluded from computation due t o anti-dilutive effect	0	25,000
Warrant [Member]
Shares excluded from computation due t o anti-dilutive effect	32,440,625	33,040,627
Convertible Note [Member]
Shares excluded from computation due t o anti-dilutive effect

Document and Entity Information (USD $)	12 Months Ended
Document and Entity Information (USD $)	Aug. 31, 2012	Dec. 07, 2012
Document And Entity Information
Entity Registrant Name	LYYNKS INC.
Entity Central Index Key	0001200528
Document Type	10-K
Document Period End Date	Aug. 31, 2012
Amendment Flag	false
Current Fiscal Year End Date	--08-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Public Float		$ 542
Entity Common Stock, Shares Outstanding		54,256,626
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2012

Consolidated Statements of Operations (USD $)	12 Months Ended		67 Months Ended
Consolidated Statements of Operations (USD $)	Aug. 31, 2012	Aug. 31, 2011	Aug. 31, 2012
Income Statement [Abstract]
Revenues
Costs and Expenses:
General and administrative expenses	1,687,614	1,034,484	8,594,450
Stock issued for services			1,762,617
Non-cash compensation			3,990,692
Impairment loss			1,104,914
Total operating expenses	1,687,614	1,034,484	15,452,673
Loss from operations	(1,687,614)	(1,034,484)	(15,452,673)
Other Income (Expense):
Other income (primarily from the settlement of prior liabiltities)		508,457	538,277
Interest expense		(6,845)	(212,314)
Interest expense on amortization of note discount		(5,833)	(1,605,133)
Gain on sale of equipment		9,000	9,000
Total other income (expense)		504,779	(1,270,170)
Loss before provision for income taxes	(1,687,614)	(529,705)	(16,722,843)
Provision for income taxes
Net loss	$ (1,687,614)	$ (529,705)	$ (16,722,843)
Net loss per share of common stock - Basic and diluted	$ (0.03)	$ (0.02)
Weighted Average Shares Outstanding - Basic and diluted	48,288,048	32,080,545

OPTIONS AND WARRANTS (Details 1) (USD $)	12 Months Ended
OPTIONS AND WARRANTS (Details 1) (USD $)	Aug. 31, 2012	Aug. 31, 2011	Aug. 31, 2010	Aug. 31, 2009	Aug. 31, 2008
Shares granted	0	0
Warrant [Member]
Shares outstanding	32,440,625	33,040,627	18,637,502	17,637,500	100,000
Shares granted				17,500,000
Shares expired/cancelled	(1,000,002)	(37,500)
Shares exercised
Shares granted	400,000	14,440,625	1,000,002	37,500
Shares exercisable	32,440,625
Shares outstanding, weighted average exercise price		$ 0.19	$ 0.19	$ 0.17	$ 2.00
Shares granted, weighted average exercise price				$ 0.15
Shares expired/cancelled, weighted average exercise price	$ 0.60	$ 3.00
Shares exercised, weighted average exercise price
Shares granted, weighted average exercise price	$ 0.25	$ 0.20	$ 0.60	$ 3.00
Shares exercisable, weighted average exercise price	$ 0.18