UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

WASHINGTON,
D.C. 20549



FORM
10-Q



(Mark
One)



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



For
the quarter ended: November 30, 2014



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



For
the transition period from ___________ to ___________



Commission
File Number:001-32658



OSL
HOLDINGS INC.

(Exact
name of registrant as specified in its charter)



|Nevada                                         |  | 98-0441032         
|---------------------------------------------- |  | -------------------
|(State or other jurisdiction of                |  | (I.R.S. Employer   
|incorporation or organization)                 |  | Identification No.)
|                                               |  |                    
|1669 Edgewood Road, Suite 214, Yardley,
    PA |  | 10967              
|(Address of principal executive offices)       |  | (Zip Code)         



(845)
363-6776

(Registrant’s
telephone number, including area code)



N/A

(Former
Name, former address and former fiscal year, if changed since last report)



Indicate
by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the 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. 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 whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company filer. See definition of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2
of the Exchange Act.



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



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



Indicate
the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date. As
of January 9, 2015 there were 394,621,466 shares of common stock, $.001 par value, outstanding.


















TABLE
OF CONTENTS



|                               |                                                                                                                                                                                                                        |  | Page
|------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|PART I - FINANCIAL INFORMATION |                                                                                                                                                                                                                        | 
|                               |                                                                                                                                                                                                                        |  |     
|Item 1.                        | Financial Statements                                                                                                                                                                                                   |  | F-1 
|                               | Condensed Consolidated Balance Sheets as of November 30, 2014 (Unaudited) and August 31, 2014                                                                                                                          |  | F-1 
|                               | Condensed Consolidated Statements of Operations for the Period from September 1, 2014 to October 20, 2014, the Period from October 21, 2014 to November 30, 2014, and three months ended November 30, 2013 (Unaudited) |  | F-2 
|                               | Condensed Consolidated Statements of Cash Flows for the Period from September 1, 2014 to October 20, 2014, the Period from October 21, 2014 to November 30, 2014, and three months ended November 30, 2013 (Unaudited) |  | F-3 
|                               | Notes to Condensed Consolidated Financial Statements (Unaudited)                                                                                                                                                       |  | F-4 
|Item 2.                        | Management’s Discussion and Analysis of Financial Condition and Results of Operations                                                                                                                                  |  | 4   
|Item 3.                        | Quantitative and Qualitative Disclosures About Market Risk                                                                                                                                                             |  | 8   
|Item 4.                        | Controls and Procedures                                                                                                                                                                                                |  | 8   
|                               |                                                                                                                                                                                                                        |  |     
|PART II - OTHER INFORMATION    |                                                                                                                                                                                                                        | 
|                               |                                                                                                                                                                                                                        |  |     
|Item 1.                        | Legal Proceedings                                                                                                                                                                                                      |  | 9   
|Item 1A.                       | Risk Factors                                                                                                                                                                                                           |  | 9   
|Item 2.                        | Unregistered Sales of Equity Securities and Use of Proceeds                                                                                                                                                            |  | 10  
|Item 3.                        | Defaults Upon Senior Securities                                                                                                                                                                                        |  | 10  
|Item 4.                        | Mine Safety Disclosures                                                                                                                                                                                                |  | 10  
|Item 5                         | Other Information                                                                                                                                                                                                      |  | 10  
|Item 6.                        | Exhibits                                                                                                                                                                                                               |  | 11  
|                               | SIGNATURES                                                                                                                                                                                                             |  | 12  



2







USE OF
CERTAIN DEFINED TERMS



Except as
otherwise indicated by the context, references in this report to “we,” “us,” “our,” “our
Company,” or “the Company” are to the combined business of OSL Holdings Inc. and its consolidated subsidiaries.



In addition,
unless the context otherwise requires and for the purposes of this report only:



|● | “Commission” refers to the Securities and Exchange
    Commission;                                              
|- | ----------------------------------------------------------------------------------------------------------------
|  |                                                                                                                 
|● | “Crisnic” refers to Crisnic Fund, S.A., a Costa Rican
    corporation;                                          
|  |                                                                                                                 
|● | “Exchange Act” refers to the Securities Exchange Act
    of 1934, as amended;                                   
|  |                                                                                                                 
|● | “OSL” refers to Office Supply Line, Inc., a Nevada
    corporation and a wholly-owned subsidiary of the Company;
|  |                                                                                                                 
|● | “Red Rock” refers to the Company while named Red Rock
    Pictures Holdings, Inc.; and                          
|  |                                                                                                                 
|● | “Securities Act” refers to the Securities Act of 1933,
    as amended.                                          



CAUTIONARY
STATEMENT RELATED TO FORWARD LOOKING STATEMENTS



This report
contains forward-looking statements. The Securities and Exchange Commission encourages companies to disclose forward-looking information
so that investors can better understand a company’s future prospects and make informed investment decisions. This Quarterly
Report on Form 10-Q and other written and oral statements that we make from time to time contain such forward-looking statements
that set out anticipated results based on management’s plans and assumptions regarding future events or performance. We
have tried, wherever possible, to identify such statements by using words such as anticipate,” “estimate,” “expect,”
“project,” “intend,” “plan,” “believe,” “will” and similar expressions
in connection with any discussion of future operating or financial performance. In particular, these include statements relating
to future actions, future performance or results of current and anticipated sales efforts, expenses, the outcome of contingencies,
such as legal proceedings, and financial results. A list of factors that could cause our actual results of operations and financial
condition to differ materially is set forth below:



|● | Our ability to continue as a going concern.                                                                                                                                                                       
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                   
|● | Our limited operating history, ability to achieve profitability
    and history of losses.                                                                                                                        
|  |                                                                                                                                                                                                                   
|● | Our need for significant additional capital to fund our business
    plan.                                                                                                                                        
|  |                                                                                                                                                                                                                   
|● | Our ability to attract merchants and members to our loyalty program.                                                                                                                                              
|  |                                                                                                                                                                                                                   
|● | Economic conditions that have an adverse effect on consumer spending.                                                                                                                                             
|  |                                                                                                                                                                                                                   
|● | The market price for shares of our common stock has been and may
    continue to be highly volatile and subject to wide fluctuations and the impact of penny stock rules on the liquidity of our
    common stock.



We caution
that the factors described herein and other factors could cause our actual results of operations and financial condition to differ
materially from those expressed in any forward-looking statements we make and that investors should not place undue reliance on
any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which such statement
is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date
on which such statement is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New factors
emerge from time to time, and it is not possible for us to predict all of such factors. Further, we cannot assess the impact of
each such factor on our results of operations or the extent to which any factor, or combination of factors, may cause actual results
to differ materially from those contained in any forward-looking statements.



3







PART
I - FINANCIAL INFORMATION



Item
1. Financial Statements



OSL
Holdings Inc. and Subsidiaries

Condensed
Consolidated Balance Sheets

(Unaudited)



|                                                                                                                                                         |  | Successor         |             |   | Predecessor     |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ----------- | - | --------------- | -
|                                                                                                                                                         |  | November 30, 2014 |             |   | August 31, 2014 |  
|ASSETS                                                                                                                                                   |  |                   |             |   |                 |  
|Current Assets:                                                                                                                                          |  |                   |             |   |                 |  
|Cash                                                                                                                                                     |  | $                 | 36,611      |   |                 | $
|Accounts receivable, net                                                                                                                                 |  |                   | 309,497     |   |                 |  
|Inventory                                                                                                                                                |  |                   | 572,226     |   |                 |  
|Prepaid expenses and other current assets                                                                                                                |  |                   | 28,291      |   |                 |  
|Total current assets                                                                                                                                     |  |                   | 946,625     |   |                 |  
|                                                                                                                                                         |  |                   |             |   |                 |  
|Property and equipment, net                                                                                                                              |  |                   | 18,755      |   |                 |  
|                                                                                                                                                         |  |                   |             |   |                 |  
|Goodwill                                                                                                                                                 |  |                   | 594,322     |   |                 |  
|Indefinite-lived intangible - trademark                                                                                                                  |  |                   | 100,000     |   |                 |  
|Deferred financing fees                                                                                                                                  |  |                   | 70,005      |   |                 |  
|Deposits                                                                                                                                                 |  |                   | 36,075      |   |                 |  
|Total assets                                                                                                                                             |  | $                 | 1,765,782   |   |                 | $
|                                                                                                                                                         |  |                   |             |   |                 |  
|LIABILITIES AND
    STOCKHOLDERS’ DEFICIT                                                                                                                |  |                   |             |   |                 |  
|Current Liabilities:                                                                                                                                     |  |                   |             |   |                 |  
|Accounts payable and accrued expenses                                                                                                                    |  | $                 | 1,267,684   |   |                 | $
|Accrued officers compensation                                                                                                                            |  |                   | 298,542     |   |                 |  
|Advances from related parties                                                                                                                            |  |                   | 10,600      |   |                 |  
|Promissory notes with related parties, net of discounts                                                                                                  |  |                   | 100,000     |   |                 |  
|Convertible notes, net of discounts                                                                                                                      |  |                   | 308,363     |   |                 |  
|Promissory notes, net of discounts                                                                                                                       |  |                   | 1,992,407   |   |                 |  
|Derivative liabilities                                                                                                                                   |  |                   | 1,986,205   |   |                 |  
|Common shares payable                                                                                                                                    |  |                   | 690,250     |   |                 |  
|Total current liabilities                                                                                                                                |  |                   | 6,654,051   |   |                 |  
|Convertible notes, net of discounts                                                                                                                      |  |                   | -           |   |                 |  
|Promissory notes, net of discounts                                                                                                                       |  |                   | 125,000     |   |                 |  
|Total liabilities                                                                                                                                        |  |                   | 6,779,051   |   |                 |  
|                                                                                                                                                         |  |                   |             |   |                 |  
|Commitments and
    contingencies                                                                                                                        |  |                   |             |   |                 |  
|                                                                                                                                                         |  |                   |             |   |                 |  
|Stockholders’
    Equity (Deficit):                                                                                                                      |  |                   |             |   |                 |  
|                                                                                                                                                         |  |                   |             |   |                 |  
|Common stock, $.001 par value, 450,000,000 shares authorized, 355,000,242 and 355,000,242 shares issued and outstanding at November 30, 2014 - Successor |  |                   | 354,474     |   |                 |  
|Common stock - no par, 1,500 shares issued and outstanding - Predecessor                                                                                 |  |                   |             |   |                 |  
|Additional paid-in capital                                                                                                                               |  |                   | 17,961,664  |   |                 |  
|Retained earnings (accumulated deficit)                                                                                                                  |  |                   | (23,329,407 | ) |                 |  
|Total
    stockholders’ equity (deficit)                                                                                                                 |  |                   | (5,013,269  | ) |                 |  
|Total liabilities
    and stockholders’ equity (deficit)                                                                                                 |  | $                 | 1,765,782   |   |                 | $



See
accompanying notes to the condensed consolidated financial statements.



F-1







OSL
Holdings Inc. and Subsidiaries

Condensed
Consolidated Statements of Operations

(Unaudited)



|                                                                     |  | Three-month
    period |            
|-------------------------------------------------------------------- |  | ---------------------- | -----------
|                                                                     |  | Successor              |            
|                                                                     |  | Period
    from        |            
|                                                                     |  | October
    21, to     |            
|                                                                     |  | November
    30, 2014  |            
|                                                                     |  |                        |            
|Merchandise sales                                                    |  | $                      | 474,188    
|Management fee income                                                |  |                        | 77,500     
|Total
    revenues                                                   |  |                        | 551,688    
|Cost of mechandise sold                                              |  |                        | 607,433    
|Gross
    profit (loss)                                              |  |                        | (55,745    
|                                                                     |  |                        |            
|General and administrative expenses                                  |  |                        | 790,078    
|Acquisition costs                                                    |  |                        | 253,495    
|(Gain) loss on disposal of assets                                    |  |                        | (4,718     
|Total
    operating expenses                                         |  |                        | 1,038,855  
|                                                                     |  |                        |            
|Operating income
    (loss)                                          |  |                        | (1,094,600 
|                                                                     |  |                        |            
|Change in value of derivative liability                              |  |                        | (824,123   
|Gain on settlement of derivative liability due to repayment of notes |  |                        | 38,170     
|Gain on discharge of debt                                            |  |                        | -          
|Loss on conversion of debt and accrued interest                      |  |                        | -          
|Other income                                                         |  |                        | 8,333      
|Interest expense                                                     |  |                        | (95,214    
|Interest expense - related party                                     |  |                        | -          
|Interest income                                                      |  |                        | -          
|Other income (expense), net                                          |  |                        | (872,834   
|                                                                     |  |                        |            
|Net income (loss)                                                    |  | $                      | (1,967,434 
|                                                                     |  |                        |            
|Net loss per common share:                                           |  |                        |            
|Net loss per common share - basic and diluted                        |  |                        | (0.01      
|Weighted average common                                              |  |                        |            
|shares outstanding - basic and diluted                               |  |                        | 344,686,235



See
accompanying notes to the condensed consolidated financial statements.



F-2







OSL
Holdings Inc. and Subsidiaries

Condensed
Consolidated Statements of Cash Flows

(Unaudited)



|                                                                                                       |  | Three-month period |           
|------------------------------------------------------------------------------------------------------ |  | ------------------ | ----------
|                                                                                                       |  | Successor          |           
|                                                                                                       |  | Period from        |           
|                                                                                                       |  | October 21, to     |           
|                                                                                                       |  | November 30, 2014  |           
|                                                                                                       |  |                    |           
|Cash flows from operating activities:                                                                  |  |                    |           
|Net income (loss)                                                                                      |  | $                  | (1,967,434
|Adjustments to reconcile net income (loss) to net cash provided by (used in) operating
    activities: |  |                    |           
|Stock issued to officers for compensation and services                                                 |  |                    | 271,350   
|Stock issued for acquisition expenses                                                                  |  |                    | 223,500   
|Stock issued for services                                                                              |  |                    | 3,750     
|Gain on settlement of derivative liability due to repayment of notes                                   |  |                    | (38,170   
|Change in fair value of derivative liabilities                                                         |  |                    | 824,123   
|Depreciation                                                                                           |  |                    | 445       
|Amortization of note discounts                                                                         |  |                    | 68,418    
|Gain on disposal of assets                                                                             |  |                    | (4,718    
|Changes in operating assets and liabilities:                                                           |  |                    |           
|Accounts receivable                                                                                    |  |                    | (122,496  
|Inventory                                                                                              |  |                    | 299,213   
|Prepaid expenses and other current assets                                                              |  |                    | (49,119   
|Accounts payable and accrued expenses                                                                  |  |                    | (133,331  
|Accrued compensation - officers                                                                        |  |                    | 68,785    
|Net cash provided by (used in) operating activities                                                    |  |                    | (555,684  
|                                                                                                       |  |                    |           
|Cash flows from investing activities:                                                                  |  |                    |           
|Acquisitions, net of cash acquired                                                                     |  |                    | (1,408,033
|Proceeds from disposal of equipment                                                                    |  |                    | 45,000    
|Net cash used in investing activities                                                                  |  |                    | (1,363,033
|                                                                                                       |  |                    |           
|Cash flows from financing activities:                                                                  |  |                    |           
|Repayment of promissory note                                                                           |  |                    | (10,000   
|Repayment of convertible notes                                                                         |  |                    | (16,667   
|Cash received on issuances of promissory notes                                                         |  |                    | 1,900,000 
|Advances from (to) related parties                                                                     |  |                    | (2,500    
|Repayments of promissory notes - related parties                                                       |  |                    | (7,500    
|Cash received on issuances of common stock                                                             |  |                    | 162,000   
|Distributions to shareholders                                                                          |  |                    | -         
|Cash paid to obtain financing                                                                          |  |                    | (70,005   
|Net cash provided by financing activities                                                              |  |                    | 1,955,328 
|Net increase (decrease) in cash and cash equivalents                                                   |  |                    | 36,611    
|Cash and cash equivalents at beginning of period                                                       |  |                    | -         
|Cash and cash equivalents at end of period                                                             |  | $                  | 36,611    
|Supplemental disclosures of cash flow information:                                                     |  |                    |           
|                                                                                                       |  |                    |           
|Cash paid for:                                                                                         |  |                    |           
|Interest                                                                                               |  |                    | 3,333     
|Income taxes                                                                                           |  |                    | 3,950     
|                                                                                                       |  |                    |           
|Non-cash financing activities:                                                                         |  |                    |           
|Debt discounts originated from derivative liabilities                                                  |  |                    | 110,250   
|Common shares issued upon conversion of convertible debt and accrued interest                          |  |                    | 90,882    
|Reclassification of derivative liabilites to additional paid-in capital                                |  |                    | 259,992   



See
accompanying notes to the condensed consolidated financial statements.



F-3







OSL
Holdings Inc. and Subsidiaries

Notes
to Condensed Consolidated Financial Statements

(Unaudited)



Note
1- Organization, Nature of Business and Basis of Presentation



Organization
and Nature of Business



OSL
Holdings Inc. (the “Company”) was incorporated under the name Red Rock Pictures, Inc. on August 18, 2006 under the
laws of the State of Nevada and was engaged in the business of developing, financing, producing and licensing feature-length motion
pictures and direct response infomercials. On June 6, 2008, the Company entered into a stock for stock exchange agreement with
Studio Store Direct, Inc. (“SSD”). Pursuant to the stock for stock exchange agreement the Company acquired 100% of
the assets of SSD by issuing 11,000 restricted common shares in exchange for all the issued and outstanding shares of SSD. With
the addition of SSD, the Company also operated as a traditional infomercial production and distribution company.



On
October 10, 2011, the Company completed a share exchange (the “Share Exchange”) with Office Supply Line, Inc. (“OSL”),
a company incorporated in the State of Nevada on September 16, 2010, whereby OSL exchanged all of the issued and outstanding shares
of OSL in exchange for 50,000 shares of the Company’s common stock. As part of the Share Exchange, the Company entered into
a Share Cancellation Agreement and Release (the “Share Cancellation Agreement”) with Crisnic Fund S.A., a Costa Rican
corporation (“Crisnic”), and OSL, pursuant to which Crisnic cancelled 14,130 shares of the Company in exchange for
$10,000 cash and a Secured Promissory Note of OSL in the principal amount of $240,000 (the “Crisnic Note”). See Note
8.



Immediately
prior to the Share Exchange, the Company entered into an Asset Assignment Agreement (the “Asset Assignment Agreement”)
by and among Reno Rolle (“Rolle”), Todd Wiseman (“Wiseman”), former principals of the Company, and Red
Rock Direct (an entity managed by Rolle and Wiseman), pursuant to which the Company assigned certain of its assets to Red Rock
Direct in consideration of the cancelation of shares of the Company of Rolle (144 shares that had not yet been issued) and Wiseman
(5,000 shares due under an employment agreement), pursuant to Share Cancellation Agreements and Releases entered into among each
of Rolle (and Lynn Rolle, the wife of Rolle) and Wiseman, the Company and OSL; and the assumption of certain indebtedness of the
Company by Red Rock Direct.



For
financial statement reporting purposes, the Share Exchange was treated as a reverse acquisition, with OSL deemed the accounting
acquirer and the Company deemed the legal acquirer. These financial statements reflect the historical activity of OSL, and the
historical stockholders’ equity of OSL has been retroactively restated for the equivalent number of shares received in the
Share Exchange after giving effect to the differences in par value offset to additional paid-in capital. In connection with the
Share Exchange, OSL was deemed to have issued an additional 1,068 shares of common stock to its stockholders existing prior to
the Share Exchange. Reverse merger costs of approximately $649,000 include net liabilities of $408,000 assumed upon the reverse
merger and the $250,000 cost of the Share Cancellation Agreement.



On
October 17, 2011, the Company changed its name to OSL Holdings Inc. and became a holding company for its operating subsidiaries.



On
October 20, 2014, the Company acquired Go Green Hydroponics Inc. (“GGH”) for $1.8 million subject to certain post-closing
adjustments based on a target working capital amount. Also on that date the Company closed on a debt financing transaction in
the amount of $1.9 million, the proceeds of which were used to fund the GGH acquisition and for the Company’s working capital
purposes. See Note 2 and Note 9.



F-4







Basis
of Presentation



The unaudited
interim financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange
Commission (“SEC”). The financial statements and notes are presented as permitted on Form 10-Q and do not contain
information included in the Company’s annual statements and notes. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with accounting principles generally accepted in the United States of
America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures
are adequate to make the information presented not misleading. It is suggested that these condensed consolidated financial statements
be read in conjunction with the August 31, 2014 audited financial statements and the accompanying notes thereto included in our
Form 10-K. While management believes the procedures followed in preparing these unaudited condensed consolidated financial statements
are reasonable, the accuracy of the amounts are in some respects dependent upon the facts that will exist, and procedures that
will be accomplished by the Company later in the year.



These condensed
consolidated financial statements reflect all adjustments, including normal recurring adjustments which, in the opinion of management,
are necessary to present fairly the operations and cash flows for the periods presented.



Note
2 – GG/OSL Transaction



On October
20, 2014, the Company purchased all of the outstanding common stock of Go Green Hydroponics, Inc. (“GGH” or “Predecessor”)
for a gross amount of $1,800,000 (see Note 9), before a working capital adjustment, pursuant to which GGH became the predecessor
to the Company. As a result of the Company’s push-down of its investment basis in GGH arising from the transaction, a new
basis of accounting was created on October 20, 2014. In these condensed consolidated financial statements, the results of operations
and cash flows of GGH for the periods ended on or prior to October 20, 2014 and the financial position of GGH as of balance sheet
dates prior to October 20, 2014 are referred to herein as “Predecessor” consolidated financial information, and the
results of operations and cash flows of GGH for periods beginning on October 21, 2014 and the financial position of GGH as of
October 21, 2014 and subsequent balance sheet dates are referred to herein as “Successor” consolidated financial information.



In conjunction
with the execution of the GGH acquisition, the Company entered into a debt financing arrangement for $1.9 million. For additional
information, see Note 9.



Direct transaction
costs associated with the GGH acquisition of $253,495, including professional fees and other related costs, have been expensed
as incurred and classified within operating expenses in accordance with the accounting guidance. These transaction costs were
substantially all incurred at the time of the acquisition.



The GGH
transaction has been accounted for using the acquisition method of accounting, whereby the total purchase price was allocated
to the acquired identifiable net assets based on assessments of their respective fair values, and the excess of the purchase price
over the fair values of these identifiable net assets was allocated to goodwill. This allocation is preliminary and subject to
adjustment based on final assessment of the fair values of the acquired identifiable assets and liabilities. The preliminary fair
value of assets and liabilities that were pushed down to GGH was determined by management. Although most of the items in the valuation
process remain open, the items with the highest likelihood of changing upon finalization of the valuation process include intangible
assets, specifically one trademark, and goodwill. The adjustments, if any, arising out of the completion of the purchase price
allocation will not impact cash flows.



A summary
of the preliminary purchase price and opening balance sheet pushed down to GGH as of the October 20, 2014 acquisition date is
presented in the table below:



|Gross purchase price                  |  | $ | 1,800,000 |  
|------------------------------------- |  | - | --------- | -
|Net liquid working capital adjustment |  |   | (173,889  | )
|Net purchase price                    |  | $ | 1,626,111 |  



F-5







Assets acquired
and liabilities assumed:



|Cash and cash equivalents                            |  | $ | 218,078   |  
|---------------------------------------------------- |  | - | --------- | -
|                                                     |  |   |           |  
|Inventories                                          |  |   | 871,439   |  
|                                                     |  |   |           |  
|Other current assets                                 |  |   | 2,624     |  
|                                                     |  |   |           |  
|Fixed assets, net                                    |  |   | 16,201    |  
|                                                     |  |   |           |  
|Intangible assets – trademark (indefinite lived) (a) |  |   | 100,000   |  
|                                                     |  |   |           |  
|Goodwill (b)                                         |  |   | 594,037   |  
|                                                     |  |   |           |  
|Accounts payable                                     |  |   | (52,494   | )
|                                                     |  |   |           |  
|Credit cards                                         |  |   | (72,520   | )
|                                                     |  |   |           |  
|Other current liabilities                            |  |   | (51,254   | )
|                                                     |  |   |           |  
|Net assets acquired                                  |  | $ | 1,626,111 |  



|(a) | This
                                         reflects the Go Green trademark that the Company has fair valued utilizing the relief-from-royalty
                                         method on the basis that a trademark has a fair value equal to the present value of the
                                         royalty income attributable to it. Under this method a benchmark royalty rate is multiplied
                                         by the net revenue anticipated from the trademark over the course of the estimated life
                                         of the trademark to derive an estimate of the royalty income that could be generated
                                         hypothetically by licensing the subject trademark, in an arm’s-length transaction,
                                         to a third party. Net revenue used for the valuation of the Go Green trademark is based
                                         on management’s forecasts. The Company has determined that the trademark has an
                                         indefinite useful life because Go Green is one of the most highly regarded brands in
                                         the hydroponics industry and continues to be a profitable business experiencing significant
                                         sales growth. The Company plans to continue to make investments to enhance the value
                                         of the Go Green trademark into the future. There are no legal, regulatory, contractual,
                                         competitive, economic or other factors that the Company is aware of or that it believes
                                         would limit the useful life of the trademark.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|(b) | The
                                         goodwill recognized in conjunction with the GGH transaction is primarily attributable
                                         to strategic benefits, including enhanced financial and operational scale, market diversification,
                                         customer service and customer satisfaction, and substantial synergies that are expected
                                         to be achieved through implementation of GGH’s new technologies in the hydroponics
                                         industry.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       



The Company
will review its goodwill and indefinite-lived intangible assets annually for impairment, or sooner, if events or circumstances
indicate that the carrying amount of an asset may not be recoverable. If the carrying amounts of goodwill and the Go Green trademark
exceed their fair value, an impairment charge would be recognized in an amount equal to that excess.



Since the
Company did not make the Internal Revenue Code Section 338(g) election in connection with the taxable stock acquisition of GGH
as the tax cost to the Company exceeded the present value of tax savings from such an election, the Company does not receive a
stepped-up tax basis in either the acquired net assets to fair value or GGH’s common stock but, rather, a carryover basis.
Accordingly, none of the goodwill, intangible assets or other items in the valuation process that were stepped-up for accounting
purposes arising from the acquisition is deductible for income tax purposes.



F-6







Note
3 – Going Concern



The
Company’s condensed consolidated financial statements are presented on a going concern basis, which contemplates the realization
of assets and satisfaction of liabilities in the normal course of business. The Company has experienced losses from operations
since inception, and has working capital and stockholders’ deficiencies. These
circumstances raise substantial doubt as to its ability to continue as a going concern. The Company has $36,611 on hand and therefore
must rely on additional financing to fund ongoing operations. Over the next twelve months, the Company expects a burn rate of
at least $50,000 per month and will need to raise at least $600,000 by the end of the year of 2015 to remain in business. We can
give no assurance that our efforts to raise additional capital in the future will be successful. The Company’s existence
is dependent upon management’s ability to develop profitable operations and resolve its liquidity problems. The consolidated
financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification
of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue
as a going concern.



The
Company will require additional capital, either through debt or private placements, in order to execute its business plan. Such
additional financing may not become available on acceptable terms, or at all. We can give no assurance that any additional financing
that the Company does obtain will be sufficient to meet our needs in the long term. Even if the Company is able to obtain additional
financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for
our stockholders, in the case of equity financing.



Note
4 – Summary of Significant Accounting Policies



Principles
of Consolidation



The
accompanying consolidated financial statements of the Company include the accounts of OSL Holdings Inc. and its wholly owned subsidiaries,
Go Green, OSL, OSL Diversity Marketplace, Inc., OSL Rewards Corporation, Red Rock Pictures Inc. and Studio Store Direct Inc. Inter-company
balances and transactions have been eliminated in consolidation.



Use
of Estimates



The
preparation of financial statements in conformity with accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates. Examples include estimates and assumptions used in valuing
derivative liabilities and the value of stock compensation. These estimates are reviewed periodically, and, as adjustments become
necessary, they are reported in earnings in the period in which they become known.



F-7







Cash
and Cash Equivalents



For
purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of
90 days or less to be cash equivalents to the extent the funds are not being held for investment purposes.



Where
right of offset does not exist, book overdrafts representing outstanding checks are included in accounts payable in the accompanying
consolidated balance sheets since the Company is not relieved of its obligations to vendors until the outstanding checks have
cleared the bank. The change in outstanding book overdrafts is considered an operating activity and is presented as such in the
consolidated statement of cash flows. The balance of book overdrafts included in accounts payable was $5,053 and $0 at November
30, 2014 and August 31, 2014, respectively.



Accounts
Receivable and Allowance for Doubtful Accounts



Accounts
receivable are recorded at the invoiced amount and do not bear interest. The Company maintains allowances for doubtful accounts
for estimated losses resulting from the inability of its customers to make required payments. Account balances are charged off
against the allowance when it is probable the receivable will not be recovered. Bad debt expense was $0 the period from October
21, 2014 to November 30, 2014, the period from September 1, 2014 to October 20, 2014, and three months ended November 30, 2013,
respectively.



Inventory



Inventories
are stated at the lower of cost or market with the cost principally determined using an average cost method. Provisions for potentially
obsolete or slow-moving inventory are made based on management’s analysis of inventory levels, historical usage, and market
conditions. Inventories consist primarily of finished goods.



Property
and Equipment



Property
and equipment are stated at cost less accumulated depreciation and amortization. When property and equipment is retired or otherwise
disposed of, the net carrying amount is eliminated with any gain or loss on disposition recognized in earnings at that time. Maintenance
and repairs are expensed as incurred.



Depreciation
is calculated on a straight-line basis using an estimated useful life of the assets of 3 to 5 years.



Impairment
of Long-Lived Assets



The Company
evaluates the carrying value of long-lived assets to be held and used when events or changes in circumstances indicate the carrying
value may not be recoverable. The carrying amount of an asset or asset group is not recoverable if it exceeds the sum of the undiscounted
cash flows expected to result from the use of the asset and its eventual disposition. In that event, an impairment loss is recognized
based on the amount by which the carrying value exceeds the fair market value of the long-lived asset or asset group.



Goodwill
and Intangible Assets



Goodwill
reflects the excess of the acquisition value of GGH over the fair value of tangible and identifiable intangible assets as determined
upon the acquisition date. The Company recorded $594,322 of goodwill as a result of the acquisition. The goodwill is non-deductible
for tax purposes.



Identifiable
intangible assets consist of GGH’s trade name. The trade name is an indefinite-lived asset and consequently is not amortized.



The Company’s
annual impairment reviews for goodwill and indefinite-lived intangible assets are performed as of the first day of its fourth
quarter. The Company also performs interim reviews when the Company determines that a triggering event has occurred that would
more likely than not reduce the fair value of the reporting unit below its carrying value.



The Company
uses a two-step impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment loss to
be recognized (if any). The Step 1 calculation used to identify potential impairment compares the calculated fair value for the
Company’s single reporting unit to its book value, including goodwill, on the measurement date. If the fair value of the
reporting unit is less than its book value, then a Step 2 calculation is performed to measure the amount of the impairment loss
(if any) for the reporting unit.



The Step
2 calculation compares the implied fair value of the goodwill to the book value of goodwill. The implied fair value of goodwill
is equal to the excess of the fair value of the reporting unit above the fair value of identified assets and liabilities. If the
book value of goodwill exceeds the implied fair value of goodwill, an impairment loss is recognized in an amount equal to the
excess (not to exceed the book value of goodwill).



Deferred
Financing Costs



Costs related
to the issuance of debt are capitalized and amortized to interest expense on a straight-line basis over the contractual life of
the related debt.



Revenue
Recognition



Revenue
is recognized from merchandise sales at the time the customer takes possession of the merchandise. Provisions for discounts and
rebates to customers, and returns and other adjustments, are provided in the same period that the related sales are recorded.



Management
fees are recognized when earned based upon the contractual terms of the management agreements.



Other
Income



Other income
consists of rental revenue from the leasing of property and equipment.



F-8







Fair
Value of Financial Instruments



The
Company measures its financial assets and liabilities in accordance with the requirements of ASC 820 - Fair Value Measurements
and Disclosures. ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes
a fair value hierarchy to classify the inputs used in measuring fair value as follows:



Level
1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.



Level
2 - Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar
assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived
from or corroborated by observable market data.



Level
3 - Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants
would use in pricing the asset or liability based on the best available information.



The
carrying value of the Company’s cash, accounts payable and accrued liabilities, advances from stockholder, senior secured
convertible debt, secured note payable and advances from related parties approximates fair value because of the short-term maturity
of these instruments.



The
following table presents financial liabilities of the Company measured and recorded at fair value on the Company’s balance
sheets on a recurring basis and their level within the fair value hierarchy as of November 30, 2014 and August 31, 2014, respectively.



|                                                                     |  |   | Level 1 |  |  |   | Level 2 |  |  |   | Level 3     | 
|-------------------------------------------------------------------- |  | - | ------- |  |  | - | ------- |  |  | - | ----------- | 
|                                                                     |  |   |         |  |  |   |         |  |  |   |             | 
|Fair value of derivative liabilities - November 30, 2014 - Successor |  | $ | -       |  |  | $ | -       |  |  |   | $ 1,986,205 | 
|                                                                     |  |   |         |  |  |   |         |  |  |   |             | 
|Fair value of derivatives - August 31, 2014 - Predecessor            |  | $ | -       |  |  | $ | -       |  |  | $ | -           | 



Earnings
or Loss per Share



The
Company accounts for earnings per share pursuant to ASC 260 - Earnings per Share, which requires disclosure in the financial
statements of “basic” and “diluted” earnings (loss) per share. Basic earnings (loss) per share are computed
by dividing net income (loss) by the weighted average number of common shares outstanding for the year. Diluted earnings (loss)
per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding plus common stock
equivalents (if dilutive) related to stock options and warrants for each year. As there was a net loss of the Successor Company
for the period, basic and diluted loss per share is the same for the period from October 21, 2014 to November 30, 2014. For the
period September 1, 2014 to October 20, 2014, and the three months ended November 30, 2013 (Predecessor Company) there were no
dilutive securities issued or outstanding.



F-9







Stock-Based
Compensation



The
Company periodically issues stock grants, stock options and warrants to officers, directors and consultants for services rendered.
Options vest and expire according to terms established at the grant date. The Company accounts for share-based payments to officers
and directors by measuring the cost of services received in exchange for equity awards based on the grant date fair value of the
awards, with the cost recognized as compensation expense in the Company’s financial statements over the vesting period of
the awards. The Company accounts for share-based payments to consultants by determining the value of the stock compensation based
upon the measurement date at either (a) the date at which a performance commitment is reached or (b) at the date at which the
necessary performance to earn the equity instruments is complete.



Derivative
Financial Instruments



The
Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify
as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument
is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported
in the statements of operations. For stock-based derivative financial instruments, the Company uses a weighted average Black Scholes
Merton option pricing model, assuming maximum value, to value the derivative instruments at inception and on subsequent valuation
dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as
equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet
as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12
months of the balance sheet date.



Recent
Accounting Standards



The
Company does not expect the adoption of any recently issued accounting pronouncements to have a significant impact on its financial
position, results of operations or cash flows.



Note
5 - Property and Equipment



The table
below displays our property and equipment balances as of November 30, 2014 and August 31, 2014.



|                                                |  | Successor             |         |   | Predecessor         |  
|----------------------------------------------- |  | --------------------- | ------- | - | ------------------- | -
|                                                |  | November
    30, 2014 |         |   | August
    31, 2014 |  
|                                                |  |                       |         |   |                     |  
|Furniture and fixtures                          |  | $                     | 4,300   |   |                     | $
|Machinery and equipment                         |  |                       | 19,043  |   |                     |  
|Transportation equipment                        |  |                       | 21,950  |   |                     |  
|Leasehold improvements                          |  |                       | 13,700  |   |                     |  
|                                                |  |                       | 58,993  |   |                     |  
|Less: accumulated depreciation and amortization |  |                       | (40,238 | ) |                     |  
|Property, plant and equipment, net              |  |                       | 18,755  |   |                     |  



Depreciation
expense was $445, $77, and $88 for the period from October 21, 2014 to November 30, 2014, the period from September 1, 2014 to
October 20, 2014, and three months ended November 30, 2013, respectively.



Note
6 – Accrued Officers Compensation



As of November
30, 2014 and August 31, 2014, the Company had accrued compensation for its officers in amount of $298,542 and $0, respectively.
Under the terms of their employment agreements that were executed during the year ended August 31, 2014, the balance is convertible
at a 70% discount of the average trading price 5 days prior to conversion.



Under ASC
815-15 - “Derivatives and Hedging”, the Company determined that the convertible feature of the liabilities
should be classified as derivative liabilities. The derivative liabilities are subsequently measured at fair value at the end
of each reporting period with the change in fair value recorded in earnings. The Company determined the fair value of the embedded
conversion feature as of November 30, 2014 and August 31, 2014 to be $804,262 and $0. For the period from October 21, 2014 to
November 30, 2014, the period from September 1, 2014 to October 20, 2014, and three months ended November 30, 2013, $207,801,
$0, and $0, respectively, was recorded as a loss on derivatives that resulted from the change in fair value of the conversion
features.



As
of November 30, 2014 and August 31, 2014, the Company’s officers were due $54,789 and $0, respectively, for expenses incurred
by them on behalf of the Company in the normal course of business. These liabilities are included in accounts payable and accrued
expenses on the accompanying balance sheets.



Note
7 – Advances from Related Parties



The Company
periodically receives funding from certain related parties to help fund its cash operating needs. The balance outstanding as of
November 30, 2014 and August 31, 2014 was $10,600 and $0, respectively. The loans are not convertible, non-interest bearing, unsecured
and due on demand.



For
the period from October 21, 2014 to November 30, 2014, the period from September 1, 2014 to October 20, 2014, and three months
ended November 30, 2013, the Company paid net advances to related parties of $2,500, $7,400, and $0, respectively.



F-10







Note
8 – Convertible Notes



Convertible
notes consisted of the following as of November 30, 2014 and August 31, 2014:



|                                                  |  |  |     |  | Successor         |   |          | Predecessor     | 
|------------------------------------------------- |  |  | --- |  | ----------------- | - | -------- | --------------- | 
|                                                  |  |  |     |  | November 30, 2014 |   |          | August 31, 2014 | 
|Convertible notes - Panache                       |  |  | (A) |  |                   | $ | 45,806   |                 | 
|Convertible notes - Adar Bays                     |  |  | (B) |  |                   |   | 100,125  |                 | 
|Convertible notes - LG Capital Fund               |  |  | (C) |  |                   |   | 45,000   |                 | 
|Convertible notes - Union Capital                 |  |  | (D) |  |                   |   | 104,219  |                 | 
|Convertible notes - Typenex Co.                   |  |  | (E) |  |                   |   | 203,750  |                 | 
|Convertible notes - JSJ Investments               |  |  | (F) |  |                   |   | 100,000  |                 | 
|Less: note discounts                              |  |  |     |  |                   |   | (290,537 | )               | 
|Convertible notes, net of discounts               |  |  |     |  |                   |   | 308,363  |                 | 
|Less: current portion                             |  |  |     |  |                   |   | -        |                 | 
|Convertible notes, net of discounts - non-current |  |  |     |  |                   | $ | 308,363  |                 | 



F-11







(A)
Panache Capital, LLC



The
Panache Notes were issued during the period from March 5, 2012 to April 26, 2012. The Panache Notes bear interest at 15%. The
Panache Notes are convertible at the option of the holder, in their entirety or in part, into common stock of the Company. The
conversion price is based on a 49% discount to the average of the three lowest closing bid prices for the Company’s common
stock during the ten trading days immediately preceding a conversion date.



The
Panache Notes include an anti-dilution provision that allows for the automatic reset of the conversion or exercise price upon
any future sale of common stock instruments at or below the current exercise price. The Company considered the current FASB guidance
of “Determining Whether an Instrument Indexed to an Entity’s Own Stock” which indicates that any adjustment
to the fixed amount (either conversion price or number of shares) of the instrument regardless of the probability or whether or
not within the issuers’ control, means the instrument is not indexed to the issuers own stock. Accordingly, the Company
determined that the conversion price of the Panache Notes is not a fixed amount because it is subject to fluctuation based on
the occurrence of future offerings or events. As a result, the Company determined that the conversion features are not considered
indexed to the Company’s own stock and characterized the fair value of the conversion features as derivative liabilities
upon issuance and at the end of each reporting period or termination of the instrument with the change in fair value recorded
to earnings.



For
the period from October 21, 2014 to November 30, 2014, the Company paid $16,667 and issued a total of 9,004,119 shares of Common
Stock at an average conversion price of $0.006 or $57,745 in partial settlement of the Panache Notes. As of November 30, 2014,
the total remaining balance outstanding to Panache under the Panache Notes was $45,806, net of a discount of zero.



The
Company determined the fair value of the embedded conversion feature for the Panache Notes as of November 30, 2014 to be $100,139.
The Company recorded a loss on derivatives of $191,530 for the period from October 21, 2014 to November 30, 2014 as a result of
the change in fair value of the derivative liability. As a result of the repayment of a portion of the Panache Notes, a corresponding
portion of the derivative liability of $38,170 was written off to gain on settlement of debt. Upon conversion of the note, under
ASC 815-15 - “Derivatives and Hedging”, the fair value of the conversion feature on the conversion date of
$259,992 was reclassified from liabilities to equity.



F-12







(B)
- Adar Bays, LLC



On
May 12, 2014, the Company issued an unsecured convertible promissory note to Adar Bays, LLC (an accredited investor) in the principal
amount of $55,125. The note was issued at a discount of 5%, in exchange for $52,500 cash consideration and bears interest at 8%
per annum. The note matures on May 13, 2015.



At
any time or times after 180 days from the date of the note and until the maturity dates, the note holder is entitled to convert
any portion of the outstanding and unpaid amount into fully paid and non-assessable shares of common stock. The conversion price
will be based on a 35% discount to the lowest closing bid price for the ten prior trading days including the day upon which the
notice of conversion is received by the Company.



Under
ASC 815-15 - “Derivatives and Hedging”, the Company determined that the convertible feature of the note should
be classified as a derivative liability with a corresponding amount recorded as a debt discount. The Company determined the initial
fair value of the embedded conversion feature for the Adar Bays Note to be $113, 077. The Company recorded a corresponding debt
discount of $55,125 and loss on derivatives of $57,952. The Company recorded a gain on derivatives of $21,563 for the period from
October 21, 2014 to November 30, 2014 as a result of the change in fair value of the derivative liability.



For
the period from October 21, 2014 to November 30, 2014, the Company issued a total of 284,900 shares of common stock at an average
conversion price of $0.0175 or $5,000 in partial settlement of the note. During the period from October 21, 2014 to November 30,
2014 the Company amortized $5,391 of debt discount to interest expense. As of November 30, 2014, the total remaining balance outstanding
was $0, net of discount of $50,125.



On
June 16, 2014, the Company issued an unsecured convertible promissory note to Adar Bays, LLC in the principal amount of $50,000.
The note bears interest at 8% per annum. The note matures on June 15, 2015. At any time or times after 180 days from the date
of the note and until the maturity dates, the note holder is entitled to convert any portion of the outstanding and unpaid amount
into fully paid and non-assessable shares of common stock. The conversion price will be based on a 35% discount to the lowest
closing bid price for the ten prior trading days including the day upon which the notice of conversion is received by the Company.
As of November 30, 2014, the total remaining balance outstanding was $50,000.



(C)
– LG Capital Fund



On May 12,
2014, the Company issued an unsecured convertible promissory note to LG Capital Fund (an accredited investor) in the principal
amount of $55,125. The note was issued at a discount of 5%, in exchange for $52,500 cash consideration and bears interest at 8%
per annum. The note matures on May 13, 2015. At any time or times after 180 days from the date of the note and until the maturity
dates, the note holder is entitled to convert any portion of the outstanding and unpaid amount into fully paid and non-assessable
shares of common stock. The conversion price will be based on a 35% discount to the lowest closing bid price for the ten prior
trading days including the day upon which the notice of conversion is received by the Company.



Under
ASC 815-15 - “Derivatives and Hedging”, the Company determined that the convertible feature of the note should
be classified as a derivative liability with a corresponding amount recorded as a debt discount. The Company determined the initial
fair value of the embedded conversion feature for the LG Note to be $113, 077. The Company recorded a corresponding debt discount
of $55,125 and loss on derivatives of $57,952. The Company recorded a gain on derivatives of $40,049 for the period from October
21, 2014 to November 30, 2014 as a result of the change in fair value of the derivative liability.



For the
period from October 21, 2014 to November 30, 2014, the Company issued a total of 601,074 shares of common stock at an average
conversion price of $0.0176 or $10,125 in partial settlement of the note.



During the
period from October 21, 2014 to November 30, 2014 the Company amortized $10,619 of debt discount to interest expense. As of November
30, 2014, the total remaining balance outstanding was $0, net of discount of $45,000.



(D)
– Union Capital



On
June 16, 2014 the Company issued an unsecured convertible promissory note to Union Capital (an accredited investor) in the principal
amount of $55,219. The note bears interest at 8% per annum. The note matures on June 16, 2015.



F-13







At any time
or times after 180 days from the date of the note and until the maturity dates, the note holder is entitled to convert any portion
of the outstanding and unpaid amount into fully paid and non-assessable shares of common stock. The conversion price will be based
on a 35% discount to the lowest closing bid price for the ten prior trading days including the day upon which the notice of conversion
is received by the Company. As of November 30, 2014, the total remaining balance outstanding was $54,219.



On June
16, 2014, the Company issued a second unsecured convertible promissory note to Union Capital in the principal amount of $50,000.
The note bears interest at 8% per annum. The note matures on June 16, 2015. At any time or times after 180 days from the date
of the note and until the maturity dates, the note holder is entitled to convert any portion of the outstanding and unpaid amount
into fully paid and non-assessable shares of common stock. The conversion price will be based on a 35% discount to the lowest
closing bid price for the ten prior trading days including the day upon which the notice of conversion is received by the Company.
As of November 30, 2014, the total remaining balance outstanding was $50,000.



(E)
– Typenex Co.



On
July 1, 2014, the Company entered into a securities purchase agreement with Typenex Co-Investment, LLC, (“Typenex”)
for the sale and issuance of a secured convertible promissory note in the principal amount of $535,000 (the “Typenex Note”)
and warrants to purchase shares of the Company’s common stock for an aggregate of $267,503 (the “Typenex Warrants”).
The Typenex Note matures on September 30, 2015 and carried an Original Issue Discount (“OID”) of $30,000. In addition,
the Company agreed to pay $5,000 to Typenex to cover Typenex’s legal fees, accounting costs, due diligence, monitoring and
other transaction costs incurred in connection with the Typenex Note. Interest is payable on the Typenex Note at 10% per annum.
The Typenex Note is exercisable in seven (7) tranches (each, a “Tranche”), consisting of (i) an initial Tranche in
an amount equal to $137,500 and any interest, costs, fees or charges accrued thereon or added thereto under the terms of the Typenex
Note and the other transaction documents (“Tranche #1”), which was funded by way of a $125,000 initial cash payment
to the Company on July 1, 2014, $7,500 of OID and $5,000 in transaction costs, and (ii) six (6) additional Tranches by way of
a promissory note issued by Typenex in favor of the Company (each, an “Investor Note”) in the amount of $66,250, plus
any interest, costs, fees or charges accrued thereon or added thereto under the terms of the Typenex Note. The conversion price
for each Tranche conversion into shares of the Company’s common stock shall be the lesser of (i) the Lender Conversion Price
of $.07, and (ii) 70% of the average of the three (3) lowest VWAPs (volume weighed average price) in the twenty (20) trading days
immediately preceding the applicable conversion (the “Market Price”), provided that if at any time the average of
the three (3) lowest VWAPs in the twenty (20) trading days immediately preceding any date of measurement is below $0.01, then
in such event the then-current conversion factor shall be reduced by 5% for all future conversions (e.g., 70% to 65%).



The
Company granted Typenex a security interest in those certain Tranches or “Investor Notes” issued by Typenex in favor
of the Company on July 1, 2014, in the initial principal amounts of $62,500 each, and any and all claims, rights and interests
in any of the above and all substitutions for, additions and accessions to and proceeds thereof. The Investor Notes bear interest
at the rate of 8% per annum and mature on September 30, 2015 (15 months after the date they are issued). The Company granted a
security interest in the general assets of the Company to Typenex.



In connection
with the Typenex Note, the Company entered into a membership interest pledge agreement with Typenex (“Typenex Membership
Interest Pledge Agreement”) whereby Typenex pledged its 40% membership interest in Typenex Medical, LLC to the Company to
secure Typenex’s performance of its obligations under two promissory notes, issued to the Company by Typenex, each in the
principal amount of $62,500.



F-14







Under
and concurrently with the securities purchase agreement with Typenex, the Company also issued to Typenex warrants to purchase,
in the aggregate, a number of shares equal to $267,503 divided by the by the Market Price as defined in the Typenex Note. The
Typenex Warrants may also be exercised by cashless exercise.



Neither
the Typenex Note nor warrants are exercisable, however, if the number of shares to be issued to the holder upon such exercise,
together with all other shares then owned by the holder and its affiliates, would result in the holder beneficially owning more
than 4.99% of our outstanding common stock. This ownership limitation can be increased or decreased to any percentage not exceeding
9.99% by the holder upon 61 days’ notice to us.



The
conversion price under the Typenex Note and the exercise price of the Typenex Warrants is subject to proportional adjustment in
the event of stock splits, stock dividends and similar corporate events. In addition, the conversion price and exercise price
is subject to adjustment if we issue or sell shares of our common stock for a consideration per share less than the conversion
or exercise price then in effect, or issue options, warrants or other securities convertible or exchange for shares of our common
stock at a conversion or exercise price less than the conversion price under the Typenex Notes or exercise price of the Typenex
Warrants then in effect. If any of these events should occur, the conversion or exercise price is reduced to the lowest price
at which the Company’s common stock was issued or is exercisable.



In
conjunction with the funding of Tranche #1 and #2 of the Typenex Note, the Company issued warrants to Typenex and recorded an
initial discount on the note in the same amount. During the period from October 21, 2014 to November 30, 2014 the Company amortized
$9,555 of this debt discount to interest expense.



Under
ASC 815-15 - “Derivatives and Hedging”, the Company determined that the warrants and convertible feature of
the note should be classified as derivative liabilities with a corresponding amount recorded as a debt discount. The Company determined
the fair value of the warrants and embedded conversion feature for the Typenex Note as of November 30, 2014 to be $100,313 and
$389,364, respectively. The Company recorded a loss on derivatives of $134,038 for the period from October 21, 2014 to November
30, 2014 as a result of the change in fair value of the derivative liabilities.



During
the period from October 21, 2014 to November 30, 2014 the Company amortized $8,298 of this debt discount to interest expense.
In addition, $674 and $450 of the OID discount and closing costs discount, respectively has been amortized to interest expense
for the year ended August 31, 2014.



As of November
30, 2014, the total remaining Typenex Note balance outstanding was $60,207net of debt discounts of $143,543.



(F)
– JSJ Investments



On September
3, 2014, the Company issued an unsecured convertible promissory note to an accredited investor in the principal amount of $100,000.
The note bears interest at 12% per annum. The note matures on March 1, 2015. At any time or times from the issuance date of the
note and until the maturity dates, the note holder is entitled to convert any portion of the outstanding and unpaid amount into
fully paid and non-assessable shares of common stock. The conversion price will be based on a 45% discount to the lowest daily
trading prices for the ten previous trading days to the date of conversion.



Under
ASC 815-15 - “Derivatives and Hedging”, the Company determined that the convertible feature of the note should
be classified as a derivative liability with a corresponding amount recorded as a debt discount. The Company determined the fair
value of the embedded conversion feature for the Note as of November 30, 2014 to be $172,436. The Company recorded a loss on derivatives
of $37,247 for the period from October 21, 2014 to November 30, 2014 as a result of the change in fair value of the derivative
liability.



During
the period from October 21, 2014 to November 30, 2014 the Company amortized $22,447 of this debt discount to interest expense.



As of November
30, 2014, the total remaining Note balance outstanding was $50,179 net of debt discount of $49,821.



Note
9 – Promissory Notes



May
1, 2013 Note



On May 1,
2013, the Company issued an unsecured promissory note in the principal amount of $10,000 to a private investor. The note was due
on demand, bore interest at 12% per annum where interest accrued and was payable in cash upon demand. During the period from October
21, 2014 to November 30, 2014 the Company repaid the outstanding balance in full. As of November 30, 2014 and 2013, the total
remaining balance outstanding under the note was $0.



F-15







December
12, 2013 Note



On
December 12, 2013, the Company issued an unsecured promissory to a private investor. The note was due and payable on January 12,
2014. All past due principal of this note shall bears interest until paid at the rate of 15% per annum. As of November 30, 2014, the total remaining balance outstanding under the promissory note was $5,000.



March
13, 2014 Note



On
March 13, 2014, the Company issued an unsecured promissory note in the principal amount of $100,000 with an interest rate of 3%
per annum to a private investor in exchange for $50,000 cash. The promissory note matures on March 12, 2015 and may be prepaid
in whole or in part, at any time. The difference between the note amount of $100,000 and the $50,000 cash received, or $50,000,
was recorded as a debt discount that is amortized to interest expense over the term of the note. As additional consideration,
the Company issued warrants to purchase of 200,000 shares of common stock without any additional consideration. The warrants are
exercisable when the Company share price reaches $0.50. Under ASC 815-15 “Derivatives and Hedging”, the warrants
initial relative fair value was recorded as a derivative liability with a corresponding debt discount.



During
the period from October 21, 2014 to November 30, 2014, the Company amortized $10,984 of the debt discounts to interest expense.
As of November 30, 2014, the total remaining note balance outstanding was $72,407, net of discount of $27,593. In addition $6,200
was record as loss on derivative liability resulting from the change in fair value of the warrants for the period from October
21, 2014 to November 30, 2014. The value of derivative liability as of November 30, 2014, was determined to be $8,200. See Note
13.



May
1, 2014 Note



On
May 1, 2014, the Company issued an unsecured promissory note in the principal amount of $15,000 in exchange for $10,000 in cash
consideration. The promissory note bears no interest and was due on August 1, 2014. All past due principal on this note bears
interest at 12% per annum. The difference between the cash received and note amount, or $5,000, was recorded as a debt discount
and was amortized to interest expense over the term of the note.



As
additional consideration, the Company issued warrants to purchase 160,000 shares of common stock without any additional consideration.
Under ASC 815-15 - “Derivatives and Hedging”, the warrants were tainted by the convertible notes. The Company
recorded the initial relative fair value of the warrants as a debt discount and a derivative liability.



As
of November 30, 2014, the total remaining note balance outstanding was $15,000, net of discounts of $0. In addition $4,960 was
record as loss on derivative liability resulting from the change in fair value of the warrants for the period from October 21,
2014 to November 30, 2014. The value of derivative liability as of November 30, 2014, was determined to be $6,560. See Note 13.



F-16







Kevin
Mulhearn Note



On July
10, 2014, the Company issued an unsecured promissory note to Kevin Mulhean (the “Mulhearn Note) in the principal amount
of $339,612. The note accrued no interest per annum and was due and payable on January 31, 2019. Payments made prior to November
30, 2014 were to be applied to the outstanding balance by the payment amount multiplied by 2. Any payments made between September
1, 2014 and December 31, 2014 would be applied to the outstanding balance by the payment amount multiplied by 1.75. Any payments
made between January 1, 2015 and March 31, 2015, were to be applied to the outstanding balance by the payment amount multiplied
by 1.5. Any payments made between April 1, 2015 and June 30, 2015 were to be applied to the outstanding balance by the payment
amount multiplied by 1.25; and any payments made after June 30, 2015 were to be applied to the outstanding balance without a multiplier.
In the event of default, which would occur if the Company failed to pay when due any principal of the Mulhearn Note.



As consideration
for the Mulhearn Note, the Company issued warrants for the purchase of 9,333,333 shares of common stock exercisable without any
additional consideration. As of November 30, 2014 4,333,333 of those warrants remain outstanding. Under ASC 815-15 - “Derivatives
and Hedging”, the warrants were tainted by the convertible notes. The Company recorded the initial relative fair value
of the warrants as a debt discount and a derivative liability.



For the
period from October 21, 2014 to November 30, 2014, $134,333 was recorded as a loss on derivative resulting from the change in
fair value of the warrants. The derivative liability as of November 30, 2014 was determined to be $177,666.



On September15,
2014, the Company entered into an agreement with Kevin Mulhearn, under which Mr. Mulhearn agreed to reduce the amount then due
under the Mulhearn Note to $125,000.



As of November
30, 2014, the total remaining balance outstanding of the Mulhearn Note was $125,000, net of discount of $0, and was classified
as a long term liability in the consolidated balance sheet.



TCA
Debenture



On October
20, 2014 (the “TCA Effective Date”), we borrowed an initial $1,900,000 from TCA Global Credit Master Fund, LP (“TCA”)
and issued a senior secured convertible redeemable debenture to TCA in the original principal amount of $1,900,000 (the “TCA
Debenture”) pursuant to the terms of a securities purchase agreement we entered into with TCA (the “TCA SPA”).
We agreed to borrow up to maximum of $5,000,000 in one or more closings in TCA’s sole discretion (each a “Funding”)
under the TCA SPA. Our subsidiaries, Office Supply Line, Inc., OSL Diversity Marketplace, Inc., OSL Rewards Corporation, and Go
Green Hydroponics Inc. (“GGH”) (collectively the “Subsidiary Guarantors”) signed the TCA SPA as joint
and several guarantors. We issued $223,500 worth of our unregistered shares of common stock to TCA upon the TCA Effective Date,
in exchange for advisory services previously provided to us, with the price per share valued at the lowest volume weighted average
price for our common stock for the 5 business days immediately prior to the TCA Effective Date (the “TCA Initial Shares”).
We agreed to issue additional shares of our unregistered common stock to TCA in the event that TCA does not realize $223,500 of
net proceeds from the sale of the TCA Initial Shares. The amount of additional shares issued would only be the amount required
for TCA to meet the $223,500 threshold upon their sale. If after twelve months, TCA has not realized net proceeds totaling $223,500
from the sale of the TCA Initial Shares, and the additional shares if applicable, then we agreed to redeem TCA’s remaining
shares upon written notice for an amount sufficient for TCA to reach the $223,500 threshold. Further, we agreed to pay a 2% transaction
fee to TCA for each Funding, which will be subtracted from the principal amount of each respective Funding, as well as a one-time
due diligence fee of $8,000 and legal fees of $15,000 to TCA. These fees were record as deferred financing fees in the amount
of $70,005. The TCA SPA also contains additional covenants, representations, conditions precedent, and other provisions that are
customary of securities purchase agreements.



F-17







We
used $1,800,000 from the proceeds of the TCA Debenture to finance our purchase of GGH.



The
TCA Debenture bears interest at the rate of 11% per annum, has a maturity date of October 20, 2015 (“TCA Maturity Date”),
and was funded by TCA in cash on October 20, 2014. We may redeem the TCA Debenture at any time prior to the TCA Maturity Date,
by giving written notice to TCA three business days beforehand, and by paying the entire outstanding amount plus related fees
on the third business day. We agreed to make monthly payments of principal, interest, and a redemption premium in the amount of
$11,400, subject to a 5% late charge if we do not pay within the 5 day grace period of each monthly payment.



The
interest rate under the TCA Debenture will increase to 18% per annum, and TCA may accelerate full repayment of the TCA Debenture
upon the occurrence of an event of default. An event of default includes, but is not limited to: (i) our failure to pay any amount
due under the TCA Debenture, (ii) an assignment by us for the benefit of our creditors, (iii) any court order appointing a receiver,
liquidator, or trustee for us (subject to a 30 day cure period), (iv) any court order adjudicating us insolvent (subject to a
30 day cure period), (v) our filing of a bankruptcy petition, (vi) the filing of a bankruptcy petition against us (subject to
a 30 day cure period), (vii) we admit we cannot pay our debts, or (vii) we breach the TCA Debenture or TCA SPA (each a “TCA
Event of Default”).



The
TCA Debenture is convertible by TCA into shares of our common stock at any time while the TCA Debenture is outstanding, if agreed
upon by us and TCA, or in TCA’s sole discretion upon a TCA Event of Default. If a TCA Event of Default occurs, TCA may convert
the TCA Debenture at the conversion price for each share of 85% multiplied by the lowest volume weighted average price for our
common stock during the 5 trading days prior to the relevant notice of conversion (“TCA Conversion Price”). The TCA
Conversion Price is subject to adjustment upon certain events, including but not limited to stock splits, dividends, the sale
of all or substantially all of our assets, reclassification of our common stock, and our effectuation of a merger or consolidation.
TCA does not have the right to convert the TCA Debenture into our common stock if such conversion would result in TCA’s
beneficial ownership exceeding 4.99% of our outstanding common stock at that time. During the time that the TCA Debenture is outstanding,
we have agreed to reserve the total number of our common stock that would be issuable if the entire TCA Debenture was converted
at that time. The TCA Debenture also contains waiver, notice, and assignment provisions that are customary of convertible debentures.



The
TCA SPA, TCA Debenture, and all future debentures issued pursuant to the TCA SPA are guaranteed by the Subsidiary Guarantors pursuant
to separately signed guaranty agreements (the “TCA Guaranty Agreements”). The TCA Guaranty Agreements contain representations,
warranties, covenants, and other provisions that are customary of guaranty agreements. The TCA SPA, TCA Debenture, and all future
debentures issued pursuant to the TCA SPA are secured by a security interest in all of the Subsidiary Guarantors’ assets,
whether now existing or hereafter acquired, pursuant to separately signed security agreements (the “TCA Security Agreements”).
The TCA Guaranty Agreements contain representations, warranties, covenants, and other provisions that are customary of security
agreements.



We,
as well as Robert Rothenberg (“Rothenberg”), our Chief Executive Officer, and Eli Feder (“Feder”), our
Chief Corporate Development Officer and Director, and Steve Gormley (“Gormley”), our Chief Business Development Officer
and Director (collectively, the “Pledging Parties”), have signed pledge agreements (the “TCA Pledge Agreements”),
whereby the Pledging Parties pledged to TCA as additional security for the TCA Debenture all of their right, title and interest
in, and provided a first priority lien and security interest on (i) all outstanding shares of common stock of the Subsidiary Guarantors
owned by us and (ii) a total of 60,000,000 shares of our common stock owned by the Pledging Parties.



Note
10 – Promissory Notes with Related Parties



On
August 8, 2011, the Company issued an unsecured promissory note in the principal amount of $24,000 to a related party. The promissory
note is due on demand, bears interest at 8% per annum where interest accrues and is payable in cash upon demand. As of November
30, 2014, the total remaining balance outstanding was $24,000.



On
April 15, 2013, the Company issued an unsecured promissory note in the principal amount of $6,000 to a related party. The promissory
note is due on demand, bears interest at 12% per annum where interest accrues and is payable in cash upon demand. As of November
30, 2014, the total remaining balance outstanding was $6,000.



On
May 13, 2013, the Company issued a promissory note in an aggregate principal amount equal to $20,000 to a related party. The promissory
note accrues simple interest at a rate of 12% per annum and is due on demand. All past-due principal shall bear interest until
paid at the maximum non-usurious interest rate that at any time may be contracted for, taken, reserved, charged, or received on
the indebtedness evidenced by the promissory note (the Maximum Rate) or, if no Maximum Rate is established by applicable law,
at the rate of 15% per annum.



F-18







The
occurrence of any one of the following events will be deemed an event of default: (a) the Company shall fail to pay when due any
principal of the promissory note; or (b) the Company shall: (i) apply for or consent to the appointment of a receiver, trustee,
or intervenor, custodian or liquidator of all or a substantial part of its assets, (ii) be adjudicated as bankrupt or insolvent
or file a voluntary petition for bankruptcy or admit in writing that it is unable to pay its debts as they become due, (iii) make
a general assignment for the benefit of creditors, (iv) file a petition or answer seeking reorganization or an arrangement with
creditors or to take advantage of any bankruptcy or insolvency laws, (v) file an answer admitting the material allegations of,
or consent to, or default in answering, a petition filed against it in any bankruptcy, reorganization, or insolvency proceeding,
or any action for the purpose of effecting any of the foregoing; or (vi) an order, judgment or decree shall be entered by any
court of competent jurisdiction or other competent authority approving a petition appointing a receiver, trustee, intervenor or
liquidator of all of its assets, and such order, judgment or decree shall continue unstayed and in effect for a period of sixty
(60) days.



As
of November 30, 2014, the total remaining balance outstanding under the promissory note was $20,000 net of discount of $0.



On
May 28, 2013, the Company issued a demand promissory note (the “Demand Note”) in an aggregate principal amount equal
to $50,000 (the Demand Note Principal Amount) to an accredited investor and related party, which is secured by all intellectual
and personal property of the Company. The Demand Note accrues simple interest at a rate of 12% per annum, is due and payable on
any future date on which the holder of the Demand Note (the “Demand Noteholder”) demands repayment (the “Due
Date”). Unpaid principal after the Due Date shall accrue interest at a rate of 16% annually until paid. The occurrence of
any one of the following events will be deemed an event of default: (a) the failure of the Company to pay the Demand Note Principal
Amount and any accrued interest in full on or before the Due Date; (b) the death of the Demand Noteholder; (c) the filing of bankruptcy
proceedings involving the Company as a debtor; (d) the application for the appointment of a receiver for the Company; (e) the
making of a general assignment for the benefit of the Company’s creditors; (f) the insolvency of the Company; or (g) a misrepresentation
by the Company to the Demand Noteholder for the purpose of obtaining or extending credit.



As
of November 30, 2014, the total remaining balance outstanding under the Demand Note was $50,000.



Note
11 – Derivative Liabilities



In
June 2008, the FASB issued authoritative guidance on determining whether an instrument (or embedded feature) is indexed to an
entity’s own stock. Under the authoritative guidance, effective January 1, 2009, instruments which do not have fixed settlement
provisions are deemed to be derivative instruments. The conversion features of certain of the Company’s convertible notes
do not have a fixed settlement provision because conversion of the notes will be adjusted if the Company issues securities at
lower prices in the future.



F-19







The
Company was included the reset provisions in order to protect the holders of the notes from the potential dilution associated
with future financings. In accordance with the FASB authoritative guidance, the conversion feature of notes were separated from
the host contract and recognized as a derivative instrument. The conversion feature of the notes have been characterized as a
derivative liability to be re-measured at the end of every reporting period with the change in value reported in the statement
of operations.



At
the date of issuance and as of November 30, 2014, the derivative liabilities were valued using a probability weighted average
Black-Scholes pricing model, assuming maximum value. Maximum value was computed using the stock price on the date of the transaction
and at each balance sheet date.



The
following table summarizes the derivative liabilities included in the consolidated balance sheet:



|Derivative liabilities as of October 21, 2014 - Successor             |  | $ | 1,349,994 |  
|--------------------------------------------------------------------- |  | - | --------- | -
|Change in the fair value of derivative liabilities                    |  |   | 824,123   |  
|Settlement of derivative liability due to conversion of related notes |  |   | (259,992  | )
|Settlement of derivative liability due to repayment of related notes  |  |   | (38,170   | )
|Debt discounts originated during the period                           |  |   | 110,250   |  
|Derivative liabilities as of November 30, 2014 - Successor            |  | $ | 1,986,205 |  



Note
12 – Capital Stock



There were
no equity transactions related to the Predecessor Company.



Common
Stock - Successor



Common
Shares Issued for Employee Compensation



On November
11, 2014, the Company issued to current officers of the Company, pursuant to their employment agreements, a total of 10,050,000
shares of its restricted common stock valued at $271,350.



Common
Shares Issued for Services from Outside Parties



On November
15, 2014, per terms of a consulting agreement the Company issued to a certain unaffiliated party a total of 107,143 shares of
its restricted common stock valued at $3,750.



On October
22, 2014, the Company issued to TCA Global Credit Master Fund LP a total of 15,284,916 shares of its restricted common stock valued
at $223,500 in exchange for advisory services.



Common
Shares Issued for Cash



On October
21, 2014, the Company issued to a certain unaffiliated party a total of 3,571,428 shares of its restricted common stock valued
at $0.0084 per share as a direct investment per a Securities Purchase Agreement. In addition, 1,000,000 common stock warrants
were issued pursuant to the Securities Purchase Agreement. The warrants have a four year life and have an exercise price of $0.02.



On October
24, 2014, the Company issued to a certain unaffiliated party a total of 421,407 shares of its restricted common stock valued at
$0.0237 per share as a direct investment per a Securities Purchase Agreement. In addition, 100,000 common stock warrants were
issued pursuant to the Securities Purchase Agreement. The warrants have a one year life and have an exercise price of $0.05.



On October
24, 2014, the Company issued to a certain unaffiliated party a total of 421,407 shares of its restricted common stock valued at
$0.0237 per share as a direct investment per a Securities Purchase Agreement. In addition, 100,000 common stock warrants were
issued pursuant to the Securities Purchase Agreement. The warrants have a one year life and have an exercise price of $0.05.



On October
24, 2014, the Company issued to a certain unaffiliated party a total of 421,407 shares of its restricted common stock valued at
$0.0237 per share as a direct investment per a Securities Purchase Agreement. In addition, 100,000 common stock warrants were
issued pursuant to the Securities Purchase Agreement. The warrants have a one year life and have an exercise price of $0.05.



F-20







On October
24, 2014, the Company issued to a certain unaffiliated party a total of 421,407 shares of its restricted common stock valued at
$0.0237 per share as a direct investment per a Securities Purchase Agreement. In addition, 100,000 common stock warrants were
issued pursuant to the Securities Purchase Agreement. The warrants have a one year life and have an exercise price of $0.05.



On October
27, 2014, the Company issued to a certain unaffiliated party a total of 1,322,751 shares of its restricted common stock valued
at $0.0189 per share as a direct investment per a Securities Purchase Agreement. In addition, 300,000 common stock warrants were
issued pursuant to the Securities Purchase Agreement. The warrants have a one year life and have an exercise price of $0.04.



On October
27, 2014, the Company issued to a certain unaffiliated party a total of 105,820 shares of its restricted common stock valued at
$0.0189 per share as a direct investment per a Securities Purchase Agreement. In addition, 25,000 common stock warrants were issued
pursuant to the Securities Purchase Agreement. The warrants have a one year life and have an exercise price of $0.04.



On October
31, 2014, the Company issued to a certain unaffiliated party a total of 1,322751 shares of its restricted common stock valued
at $0.0189 per share as a direct investment per a Securities Purchase Agreement. In addition, 300,000 common stock warrants were
issued pursuant to the Securities Purchase Agreement. The warrants have a one year life and have an exercise price of $0.05.



On November
4, 2014, the Company issued to a certain unaffiliated party a total of 357,143 shares of its restricted common stock valued at
$0.028 per share as a direct investment per a Securities Purchase Agreement. In addition, 100,000 common stock warrants were issued
pursuant to the Securities Purchase Agreement. The warrants have a one year life and have an exercise price of $0.04.



On November
26, 2014, the Company issued to a certain unaffiliated party a total of 840,336 shares of its restricted common stock valued at
$0.0357 per share as a direct investment per a Securities Purchase Agreement. In addition, 300,000 common stock warrants were
issued pursuant to the Securities Purchase Agreement. The warrants have a one year life and have an exercise price of $0.07.



Common
Shares Issued upon Conversion of Convertible Notes and Accrued Interest



On October
27, 2014, the Company issued a total of 6,287,370 shares of its restricted common stock upon conversion of $28,577 of principal
and $5,732 of accrued interest held by certain assignees of the Panache debt.



On November
17, 2014, the Company issued a total of 284,900 shares of its common stock upon conversion of $5,000 principal amount of the Company’s
debt.



On November
21, 2014, the Company issued a total of 601,074 shares of its common stock upon conversion of $10,125 of principal and $424 of
accrued interest of the Company’s liabilities.



On November
21, 2014, the Company issued a total of 2,716,749 shares of its restricted common stock upon conversion of $29,167 of principal
and $11,856 of accrued interest held by an assignee of the Panache debt.



F-21







Common
Shares Payable



Common shares
payable represents contractual obligations incurred by the Company to issue common shares. The liability represents shares that
have been earned but not yet issued either in certificate, electronic or book entry form.



|                           |  | Successor         |            |  | Predecessor     |  
|-------------------------- |  | ----------------- | ---------- |  | --------------- | -
|                           |  | November 30, 2014 |            |  | August 31, 2014 |  
|                           |  | Shares            |            |  | Amount          |  
|                           |  |                   |            |  |                 |  
|Shares due to employees    |  |                   | 20,800,000 |  |                 | $
|Shares due to debt holders |  |                   | 2,500,000  |  |                 |  
|Shares due to consultants  |  |                   | 150.000    |  |                 |  
|                           |  |                   | 23,450,000 |  |                 | $



Note
13 – Stock Options and Warrants



There were
no warrants or options issued or outstanding related to the Predecessor Company.



A summary
of stock option activity for the three months ended November 30, 2014 is as follows:



|                                                   |  |            |   |  | Weighted |  
|-------------------------------------------------- |  | ---------- | - |  | -------- | -
|                                                   |  |            |   |  | Average  |  
|                                                   |  | Number     |   |  | Exercise |  
|                                                   |  | of Options |   |  | Price    |  
|Balance outstanding, October 21, 2014 - Successor  |  |            | - |  |          | $
|Options granted                                    |  |            | - |  |          |  
|Options exercised                                  |  |            | - |  |          |  
|Options expired or forfeited                       |  |            | - |  |          |  
|Balance outstanding, November 30, 2014 - Successor |  |            | - |  |          | $
|Balance exercisable, November 30, 2014 - Successor |  |            | - |  |          | $



There were
no options related to the Predecessor Company outstanding at August 31, 2014. Information relating to outstanding stock options
of the Successor Company at November 30, 2014, summarized by exercise price is as follows:



|               |   |  | Outstanding |  |   | Exercisable | 
|-------------- | - |  | ----------- |  | - | ----------- | 
|Exercise Price |   |  |             |  |   | Life        | 
|Per Share      |   |  | Shares      |  |   | (Years)     | 
|$              | - |  |             |  | - |             | 



F-22







Stock
Options Issued to Executives



Stock Option were granted to certain executives of the Successor Company on March 5, 2014 in conjunction with an Executive
Agreement, under which Eric Kotch (former CFO), Eli Feder, Bob Rothenberg and Steven Gormley (Executives) exchanged all
rights to past due employment compensation, equity, debt, and conversion rights, totaling in aggregate $1,357,300 for
35,000,000 stock options to purchase common stock, full indemnification protection from the Company, and release of any
claims or liabilities through the date of the Executive Agreement. The Executives also agreed:



a) to forgive
the full balance currently owed as set forth above;



b) to terminate
all employment agreements and rights thereunder effective on the date of the Executive Agreement;



c) that
any employment or compensation agreements with any of the Executives entered into within a date 18 months from the Executive Agreement,
will require an approval by 75% of the board of directors;



d) the Executives
will enter into leakout agreements on a pro rata basis and to be determined terms;



e) the Executives
will be subject to a one year non-competition agreement beginning the later of the termination of such directors employment with
the Company or resignation or removal from the board of directors.



The 35,000,000
stock options, which vested immediately, had a two year life and were exercisable with no further consideration. The options were exercised on September 15, 2014 for a total of 35,000,000 of the Company’s restricted common stock.



Warrants



Summary
of Warrants



A summary
of warrant activity for the period from October 21, 2014 to November 30, 2014 is presented below:



|                                                   |  |             |            |  | Average  |  
|-------------------------------------------------- |  | ----------- | ---------- |  | -------- | -
|                                                   |  | Number      |            |  | Exercise |  
|                                                   |  | of Warrants |            |  | Price    |  
|Balance outstanding, October 21, 2014 - Successor  |  |             | 10,357,333 |  |          | $
|Warrants granted                                   |  |             | 1,439,347  |  |          |  
|Warrants exercised                                 |  |             | -          |  |          |  
|Warrants expired or forfeited                      |  |             | -          |  |          |  
|Balance outstanding, November 30, 2014 - Successor |  |             | 11,796,680 |  |          | $
|Balance exercisable, November 30, 2014 - Successor |  |             | 5,093,333  |  |          | $



F-23







Information
relating to outstanding warrants of the Successor Company at November 30, 2014, summarized by exercise price is as follows:



|               |   |  | Outstandting |  |            | Exercisable | 
|-------------- | - |  | ------------ |  | ---------- | ----------- | 
|Exercise Price |   |  |              |  |            | Life        | 
|Per Share      |   |  | Shares       |  |            | (Years)     | 
|$              | - |  |              |  | 11,796,680 |             | 



The aggregate
intrinsic value of outstanding warrants as of November 30, 2014 was $461,801.



Note
14 – Management Services and Business Furniture and Equipment Lease Agreements



In
connection with the operations of a dispensary in California, we entered into the following agreements with Sean Ridgley (“DRIP”),
subsequently assigned to Drip in the Bucket Consulting, LLC on September 30, 2014.



Management
Services Agreement.



The
Company’s management services agreement with Drip in the Bucket Consulting (the “Drip Management Agreement”)
whereby Drip in the Bucket Consulting appointed the Company as its sole and exclusive agent for the management of the business
affairs of Ridgley’s business (the “Business”). Drip in the Bucket Consulting is future planning for operating
a dispensary in California. Drip in the Bucket Consulting agreed to pay the Company $75,000 per month. The term of the agreement
is for an initial term of five years and will be automatically renewed for three successive five year periods. The Company will
provide all equipment, fixtures, office supplies, furniture, and furnishings deemed reasonably necessary by the Company for the
operation of the Business. The Company will provide or arrange for all marketing plans, creation of logos & trademarks, all
process and future planning documents, all printing, stationery, forms, postage, duplication or photocopying services, payroll,
and other support services as are reasonably necessary and appropriate for the operation of the business, including billing and
collection.



F-24







In addition,
the Company entered into an a consulting agreement with Sean Ridgley (“Ridgley”) whereby Ridgley agreed to provide
us with contract and business development services for a period of thirty-six (36) months. As compensation for his services, we
agreed to issue Mr. Ridgley 250,000 shares of our unregistered common stock (which shares were issued on May 15, 2014), a cash
payment of $15,000 net of all applicable taxes, state, federal, or otherwise for hours expended each month, 50,000 shares of our
unregistered common stock which shall be issued to Ridgley within ten (10) business days of his request for each month of service,
and reimbursement for previously approved expenses incurred by Ridgley in connection with providing the services to us under the
Consulting Agreement.



Note
15 – Commitments and Contingencies



Litigation



Moscowitz/Lou
Ross Holdings, LLC - On June 20, 2014, Marc Moscowitz filed a Complaint in the Supreme Court of the State of New York
for Rockland County (Index No. 032738/14) against the Company seeking judgment in favor of Mr. Moscowitz in the amount of $30,000
with interest from August 7, 2011 as to $24,000 and interest from April 13, 2013 as to $6,000 and attorney’s fees and expenses
as a result of the Company’s alleged failure to pay such amounts to the plaintiff due under two promissory notes issued
by the Company in favor of Mr. Moscowitz. On June 25, 2014, Mr. Moscowitz and Lou Ross Holdings, LLC filed a Notice of Motion
for Summary Judgment in Lieu of Complaint in the Supreme Court of the State of New York for Rockland County (Index No. 032742/2014)
against the Company seeking judgment in favor of Mr. Moscowitz in the amount of $50,000 with interest from May 24, 2013 at the
rate of 12% per annum and a judgment in favor of Lou Ross Holdings, LLC in the amount of $10,000 with interest from May 15, 2013
at the rate of 12% per annum and attorney’s fees and expenses as a result of the Company’s alleged failure to pay
such amounts to the plaintiffs due under a promissory note issued by the Company in favor of the respective plaintiffs. On September
15, 2014 the parties signed a Stipulation of Settlement whereby the Company agreed to pay Moscowitz the sum of $62,000 and Lou
Ross the sum of $10,000. Although the Company paid Mr. Moscowitz and Lou Ross Holdings, LLC $10,000, it did not pay the full $72,000
and on December 11, 2014 the Court entered a judgment in the sum of $77,000 together
with interest from September 15, 2014 together with the costs and disbursements of
this action. The Company is seeking to have the ordered amended to reflect the balance due based on the $10,000 payment made.



From
time to time, we may become involved in various lawsuits and legal proceedings that arise in the ordinary course of business.
However, litigation is subject to inherent uncertainties and an adverse result in these or other matters may arise from time to
time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have
a material adverse effect on our business, financial condition or operating results.



Note
16 – Income Taxes



As
of November 30, 2014 and August 31, 2014, as a result of the acquisition of GGH, the Company recorded non-deductible goodwill
in the amount of $594,322.There were no other differences between financial reporting and tax bases of assets and liabilities.
The Company will have tax losses available to be applied against future years’ income as result of the losses incurred.
However, due to the losses incurred in the period and expected future operating results, management determined that it is more
likely than not that the deferred tax asset resulting from the tax losses available for carry forward will not be realized through
the reduction of future income tax payments. Accordingly a 100% valuation allowance has been recorded for deferred tax assets.
Net operating loss carry forwards were $9,986,584 and $0 as of November 30, 2014 (Successor) and August 31, 2014 (Pedecessor),
respectively, and will begin expiring in 2030.



F-25







Deferred
tax assets consisted of the following as of November 31, 2014 and August 31, 2014:



|                        |  | Successor |            |   | Predecessor |  
|----------------------- |  | --------- | ---------- | - | ----------- | -
|                        |  | 2014      |            |   | 2014        |  
|Net operating losses    |  | $         | 3,495,304  |   |             | $
|Valuation allowance     |  |           | (3,495,304 | ) |             |  
|Net deferred tax assets |  | $         | -          |   |             | $



Note
17 – Subsequent Events



Issuance
of Unregistered Shares of Common Stock



On
December 5, 2014, we issued to a certain unaffiliated party a total of 892,858 shares of our restricted common stock valued at
$0.0280 per share, in exchange for an investment of $25,000.



On
December 15, 2014, we made three separate issuances to certain affiliated parties for a total of 10,050,000 shares of our restricted
common stock valued at $0.0050 per share. Each of the three issuances was for 3,350,000 shares for payment of a bonus pursuant
to the terms of their respective employment agreements with us.



On
December 17, 2014, we issued to a certain unaffiliated party a total of 461,538 shares of our common stock valued at $0.0163 per
share upon conversion of $7,500 principal of our debt.



On
December 19, 2014, we issued to a certain unaffiliated party a total of 1,000,000 shares of our common stock valued at $0.0083
per share upon conversion of $8,333 principal of our debt .



On
December 23, 2014, we issued to a certain unaffiliated party a total of 1,674,275 shares of our common stock valued at $0.0226
per share upon conversion of $16,666.67 principal of our debt .



On
December 24, 2014, we issued to a certain unaffiliated party a total of 1,111,111 shares of our common stock valued at $0.0117
per share upon conversion of $13,000 principal of our debt .



On
December 30, 2014, we issued to a certain unaffiliated party a total of 3,000,000 shares of our common stock valued at $0.0071
per share upon conversion of $20,374.59 principal and $935.52 accrued interest of our debt .



On
December 31, 2014, we issued to a certain unaffiliated party a total of 7,600,000 shares of our restricted common stock valued
at $0.0132 per share, in exchange for an investment of $100,000.



On
January 5, 2015, we issued to two unaffiliated parties a total of 2,397,569 shares of our common stock valued at $0.0117 per share
upon conversion of $24,625 principal and $775.89 accrued interest of our debt.





F-26









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



Overview



Our
business is predicated on a socially conscious business model dedicated to consumer advocacy, social activism and the advancement
of civil liberties through the power of commerce. We specialize in serving affluent, liberal and libertarian consumer groups,
a constituency that we believe responds to cause marketing and activism. The Company has developed and launched two distinct business
units to effectuate its mission: Equality Rewards, a technology platform delivering consumer rewards programs; and, OSL Medical
Services, a management, future planning and services platform centered on the development and financing of indoor gardens and
cultivation facilities, production technologies, merchandise and operational services for businesses in the herbal and natural
medicine industry. OSL Medical Services is designed to support its clients with branding, technology, marketing, logistics,
and future planning services on a state-by-state basis throughout the United States.



EQUALITY
REWARDS DIVISION



Equality
Rewards is a platform agnostic consumer rewards program designed to advance minority civil rights through the power of commerce.
The technology behind Equality Rewards constitutes a commerce driven, interactive social network powered by consumer transactions.
The Equality Rewards’ social network attracts, aggregates and optimizes a community of consumers, corporations, merchants
and suppliers. The platform is designed to bring minority and minority allied consumer groups together with businesses that support
minority causes or are minority owned and operated. The minority groups supported by Equality Rewards include, but are not limited
to, women, African-Americans, Hispanics, Asian Americans, Veterans, lesbian, gay, bisexual and transgender (LGBT) Americans and
Americans with disabilities.



OSL
HOLDINGS MEDICAL SERVICES DIVISION



OSL
Medical Services, a division of our company, is dedicated to advancing the rights of patients in need of legal access to medically
recommended, cannabis-based medicines. We support the decriminalization of medical marijuana while remaining compliant with local
and federal laws governing the use, sale and distribution of medically recommended, legal medical marijuana. We are committed
to supporting consumers who suffer from illnesses best managed and treated by the use of medically recommended, legally obtained
medical marijuana. OSL Medical Services is designed to provide future planning services that optimize, support and provide business
services to legal, fully compliant medical marijuana dispensaries, legal medical marijuana-related technology providers and legal
medical marijuana-related business service providers that intend to enter the market once medical marijuana is federally legal.



Recent
Developments



On May 26, 2014 we entered into
a Management Services Agreement which was assigned to Drip in the Bucket Consulting, LLC on September 30, 2014 (“DRIP”),
who agreed to pay us $75,000 per month to act as his sole and exclusive agent for the management of the business affairs of their
business. Under the terms of this agreement, we will arrange for the business to lease, acquire, or otherwise procure a location
reasonably acceptable to the business. We will provide all equipment, fixtures, office supplies, furniture, and furnishings deemed
reasonably necessary by us for the operation of the business. We will provide or arrange for marketing plans, creation of logos
& trademarks, all process and future planning documents, all printing, stationery, forms, postage, duplication or photocopying
services, payroll, other support services as are reasonably necessary and appropriate for the operation of the business, including
billing and collection and certain advertising and promotion services.







4









On
October 20, 2014 we acquired Go Green Hydroponics Inc. (“Go Green”) for $1,800,000 paid in cash at closing and entered
into employment agreements with its principals. Go Green is a hydroponics, indoor gardening and cultivation supply retail operation,
located in Los Angeles, California, specializing in the sale of hydroponic cultivation equipment, mineral nutrient solutions and
gardening resources and equipment. Simultaneously, we entered into and completed the sale of an initial $1,900,000 of our senior
secured convertible redeemable debenture to TCA Global Credit Master Fund, LP maturing on October 20, 2015.



As
we continue to grow, we are in the development of a multi-tier, on-line cross platform social network and information repository
solution that will enable legal marijuana dispensaries and hydroponic gardening supply retailers to manage marketing, lead generation,
and retail discovery.  The platform is expected to become an ad supported online extension of our recently acquired Go Green
Hydroponics retail operations and other vertical venders and will enable local and hyper local search with advanced querying capabilities
when it is expected to launch after the second quarter of fiscal 2015.  Designs for the platform include a comprehensive
B2B and B2C portal and a social network with planned user generated content features. We plan to launch both a web based and mobile
platform that will enable dispensaries and patrons to manage and search while on the go.  Planned community and social features
will allow patrons to share experiences and provide feedback to the dispensaries and community.



We
believe that these initiatives will enable us to achieve growth in our partner and customer base leading to increasing revenues
in fiscal 2015.



Combined
Results Regarding Go Green Acquisition



On
October 20, 2014 we acquired Go Green for $1.8 million subject to certain post-closing adjustments based on a target working capital
amount and closed on a debt financing transaction in the amount of $1.9 million, the proceeds of which were used to fund the Go
Green acquisition and for the Company’s working capital purposes. See Note 2 and Note 9 of the Company’s financial
statements appearing elsewhere in this report. To provide a more meaningful basis for comparing the results of operations for
the three months ended November 30, 2014 to the corresponding prior year period, we have presented financial information for the
three months ended November 30, 2014 that reflects the combination of the results for the 2014 Predecessor and Successor Periods.
The combination of Predecessor and Successor Periods is not permitted by U.S. GAAP and has not been prepared with a view towards
complying with Article 11 of SEC Regulation S-X.



Results
of Operations



Comparison
of the Three Months Ended November 30, 2014 and 2013



Total
Revenues





Total
revenues were $1,058,356 and $488,109 for the three months ended November 30, 2014 and 2013, respectively. The revenues were primarily
a result of the Go Green acquisition, with the increase due to strong sales growth. In addition, revenue of $77,500 was derived
from DRIP (see Recent Developments above in this Item 2).



Cost
of Merchandise Sold and Gross Profit (Loss)



Cost
of merchandise sold arising from the Go Green acquisition was $981,918 and $384,082 for the three months ended November 30, 2014
and 2013, respectively. The gross profit percentage on cost of merchandise sold, excluding the effect of purchase accounting noncash
adjustments, was 22 percent for the three months ended November 30, 2014 compared to 21 percent for the corresponding prior year
period.









5









General and Administrative



General
and administrative expenses increased $777,127 to $846,273 for the three months ended November 30, 2014 from $69,146 for the corresponding
prior year period. The increase related to noncash stock-based compensation expense related to common shares issued to Company
executives as bonuses or as part of their employment agreements for $271,350, as well as increases in salaries expense of $265,166
and professional fees of $227,822.



Acquisition
Costs



Acquisition
costs in connection with the Go Green transaction of $253,495 consisted of professional fees and other related costs for the current
three-month period.



Interest
Expense



Interest
expense was $95,214 and $0 for the three months ended November 30, 2014 and 2013, respectively, as no interest is reflected for
OSL for the prior year period under Predecessor accounting rules.



Gain
on Settlement of Debt



Gain
on settlement of debt was $38,170 and $0 for the three months ended November 30, 2014 and 2013, respectively. The change is reported
in the statements of operations.



Change
in Value of Derivative Liability



Loss
on derivative liabilities was $824,123 and $0 for the three months ended November 30, 2014 and 2013, respectively. This change
in derivative liability is a noncash expense reported in the statements of operations.



Net
Income (Loss)



Our
net income (loss) for the three months ended November 30, 2014 and 2013 was ($1,891,446) and $34,881, respectively. Our net loss
for the current three-month period was attributable to our limited revenue to date that was more than offset by general and administrative
expenses, acquisition costs and the change in value of our derivative liabilities, as discussed above.



Liquidity
and Capital Resources



Liquidity is the ability of an
enterprise to generate adequate amounts of cash to meet its needs for cash requirements. The Company remains in the start-up stage
and has not generated significant revenues since inception. It has experienced recurring operating losses and negative cash flows
from operations since its inception. It also has a working capital and stockholders’ deficit of $619,601 and $5,013,269,
respectively, at November 30, 2014. We have $36,611 cash on hand. We expect a burn rate of at least $50,000 per month and will
need to raise at least $600,000 in 2015 to remain in business, for which we can give no assurance of success. Due to the "start-up"
nature of our business, we expect to incur losses as and if we expand. To date, our cash flow requirements have been met by equity
and debt financings. If we are unable to successfully sell additional securities in one or more offerings, generate sufficient
profits or otherwise obtain additional funds for our working capital needs, we may need to cease or curtail operations. Furthermore,
there is no assurance the net proceeds from any successful financing arrangement will be sufficient to cover cash requirements
during the initial stages of our operations. For these reasons, our auditors believe that there is substantial doubt that we will
be able to continue as a going concern.





6













The
Company has incurred and continues to incur substantial indebtedness to finance its operations. As of November 30, 2014 the Company’s
total current liabilities were $6,654,051, with a working capital deficit of $619,601. See Note 7 – Advances from Related
Parties, Note 8 – Convertible Notes, Note 9 – Promissory Notes, Note 10 – Promissory Notes with Related Parties,
and Note 11 – Derivative Liabilities of the Company’s financial statements appearing elsewhere in this report.



Net
cash provided by (used in) operating activities was ($378,666) and $38,358 for the three months ended November 30, 2014 and 2013,
respectively. Cash was primarily used to fund our current period net loss from operations.



Net
cash used in investing activities was $1,363,033 and $0 for the three months ended November 30, 2014 and 2013, respectively. Cash
of $1,408,033 was used for the Go Green acquisition, net of cash acquired.



Net
cash provided by financing activities was $1,875,328 and $0 for the three months ended November 30, 2014 and 2013, respectively.
During the three months ended November 30, 2014, we received $1,900,000 from our senior secured convertible redeemable debenture
to TCA Global Credit Master Fund, LP to fund the Go Green transaction, which was partially offset by $70,005 paid to obtain the
financing. We also received $162,000 from issuances of common stock that was partially offset by repayments of promissory notes
(including related parties) and convertible notes totaling $26,667. Further, we had distributions to shareholders of $80,000.



We
believe our current working capital position together with our expected future cash flows from operations will be insufficient
to fund our operations in the ordinary course of business, anticipated capital expenditures, debt payment requirements and other
contractual obligations for at least the next twelve months. We have been and expect to continue to fund these activities with
debt and equity financing.



The
Company will require additional capital, either through debt or private placements, to meet its substantial debt obligations and
execute its business plan. Such additional financing may not become available on acceptable terms and there can be no assurance
that any additional financing that the Company does obtain will be sufficient to meet its needs in the long term. Even if we are
able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause
substantial dilution for our stockholders, in the case of equity financing.



Off
Balance Sheet Arrangements



There
are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources
that is material to investors.



Going
Concern



The Company’s independent
certified public accountants have stated in their audit report for the year ended August 31, 2014, that the Company has no current
source of revenue and, without realization of additional capital it would be unlikely for the Company to continue as a going concern.
If the Company is not successful in raising the necessary capital, then the Company believes that its independent certified public
accountants would issue an opinion with a similar going concern modification regarding the Company’s financial condition.





7









Critical
Accounting Policies



The
Company’s consolidated financial statements and related public financial information are based on the application of accounting
principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments
and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenues and expense amounts
reported. These estimates can also affect supplemental information contained in our external disclosures including information
regarding contingencies, risk and financial condition. We believe our use if estimates and underlying accounting assumptions adhere
to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions
that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different
assumptions or conditions. We continue to monitor significant estimates made during the preparation of our consolidated financial
statements.



Our
significant accounting policies are summarized in Note 4 of our condensed consolidated financial statements included in this report.
While all these significant accounting policies impact our financial condition and results of operations, the Company views certain
of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on
the Company’s consolidated financial statements and require management to use a greater degree of judgment and estimates.
Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely
that applying any other reasonable judgments or estimate methodologies would cause effect on our consolidated results of operations,
financial position or liquidity for the periods presented in this report.







Item
3. Quantitative and Qualitative Disclosures About Market Risk



We
are a Smaller Reporting Company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide
the information under this item.



Item
4. Controls and Procedures



Disclosure
Controls and Procedures



Under
the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial
Officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures, (as defined under Rule 13a-15(e)
and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act)) as of the period ended November
30, 2014. Based on this evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure
controls and procedures are ineffective to ensure that information required to be disclosed by us in the reports we file or submit
under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and
Exchange Commission’s rules and forms, and that such information is accumulated and communicated to the Company’s
management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.



8







We
are in the continuous process of improving our internal control over financial reporting in an effort to eliminate these material
weaknesses through improved supervision and training of our staff, but additional effort is needed to fully remedy these deficiencies.
Management has engaged a Certified Public Accountant as a consultant to assist with the financial reporting process in an effort
to mitigate some of the identified weaknesses. The Company intends on hiring the necessary staff to address the weaknesses once
additional capital is obtained which will allow full operations to commence.



Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even
those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation
and presentation.



We
have taken numerous steps to address the underlying causes of the internal control deficiencies, primarily through the development
and implementation of policies, improved processes and documented procedures, the retention of third-party experts and contractors,
and the hiring of additional accounting personnel with technical accounting and inventory accounting experience.



Changes
in internal control over financial reporting



There
were no changes in the Company’s internal control over financial reporting that occurred during the last fiscal quarter
covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, the
Company’s internal control over financial reporting.



PART
II - OTHER INFORMATION



Item
1. Legal Proceedings



Moscowitz/Lou
Ross Holdings, LLC - On June 20, 2014, Marc Moscowitz filed a Complaint in the Supreme Court of the State of New York
for Rockland County (Index No. 032738/14) against the Company seeking judgment in favor of Mr. Moscowitz in the amount of $30,000
with interest from August 7, 2011 as to $24,000 and interest from April 13, 2013 as to $6,000 and attorney’s fees and expenses
as a result of the Company’s alleged failure to pay such amounts to the plaintiff due under two promissory notes issued
by the Company in favor of Mr. Moscowitz. On June 25, 2014, Mr. Moscowitz and Lou Ross Holdings, LLC filed a Notice of Motion
for Summary Judgment in Lieu of Complaint in the Supreme Court of the State of New York for Rockland County (Index No. 032742/2014)
against the Company seeking judgment in favor of Mr. Moscowitz in the amount of $50,000 with interest from May 24, 2013 at the
rate of 12% per annum and a judgment in favor of Lou Ross Holdings, LLC in the amount of $10,000 with interest from May 15, 2013
at the rate of 12% per annum and attorney’s fees and expenses as a result of the Company’s alleged failure to pay
such amounts to the plaintiffs due under a promissory note issued by the Company in favor of the respective plaintiffs. On September
15, 2014 the parties signed a Stipulation of Settlement whereby the Company agreed to pay Moscowitz the sum of $62,000 and Lou
Ross the sum of $10,000. Although the Company paid Mr. Moscowitz and Lou Ross Holdings, LLC $10,000, it did not pay the full $72,000
and on December 11, 2014 the Court entered a judgment in the sum of $77,000 together
with interest from September 15, 2014 together with the costs and disbursements of
this action. The Company is seeking to have the ordered amended to reflect the balance due based on the $10,000 payment made.



From
time to time, we may become involved in various lawsuits and legal proceedings that arise in the ordinary course of business.
However, litigation is subject to inherent uncertainties and an adverse result in these or other matters may arise from time to
time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have
a material adverse effect on our business, financial condition or operating results.



Item
1A. Risk Factors



We
are a Smaller Reporting Company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide
the information under this item.



9







Item
2. Unregistered Sales of Equity Securities and Use of Proceeds



On
October 27, 2014, OSL Holdings, Inc. (“we,” “us,” “our,” or “Company”) made two
separate issuances to certain unaffiliated parties for a total of 1,428,571 shares of our restricted common stock valued at $0.0189
per share. The first issuance was for 1,322.751 shares, and the second issuance was for 105,820 shares, in exchange for a direct
investment of $25,000 and $2,000 respectively.



On
October 31, 2014, we issued to a certain unaffiliated party a total of 1,322,751 shares of our restricted common stock valued
at $0.0189 per share, in exchange for an investment of $25,000.



On
November 4, 2014, we issued to a certain unaffiliated party a total of 357,143 shares of our restricted common stock valued at
$0.0280 per share, in exchange for an investment of $10,000.



On
December 5, 2014, we issued to a certain unaffiliated party a total of 892,858 shares of our restricted common stock valued at
$0.0280 per share, in exchange for an investment of $25,000.



On
December 15, 2014, we made three separate issuances to certain affiliated parties for a total of 10,050,000 shares of our restricted
common stock valued at $0.0050 per share. Each of the three issuances was for 3,350,000 shares for payment of a bonus pursuant
to the terms of their respective employment agreements with us.



On
December 17, 2014, we issued to a certain unaffiliated party a total of 461,538 shares of our common stock valued at $0.0163 per
share upon conversion of $7,500 principal of our debt.



On
December 19, 2014, we issued to a certain unaffiliated party a total of 1,000,000 shares of our common stock valued at $0.0083
per share upon conversion of $8,333 principal of our debt .



On
December 23, 2014, we issued to a certain unaffiliated party a total of 1,674,275 shares of our common stock valued at $0.0226
per share upon conversion of $16,666.67 principal of our debt .



On
December 24, 2014, we issued to a certain unaffiliated party a total of 1,111,111 shares of our common stock valued at $0.0117
per share upon conversion of $13,000 principal of our debt .



On
December 30, 2014, we issued to a certain unaffiliated party a total of 3,000,000 shares of our common stock valued at $0.0071
per share upon conversion of $20,374.59 principal and $935.52 accrued interest of our debt .



On
December 31, 2014, we issued to a certain unaffiliated party a total of 7,600,000 shares of our restricted common stock valued
at $0.0132 per share, in exchange for an investment of $100,000.



On
January 5, 2015, we issued to two unaffiliated parties a total of 2,397,569 shares of our common stock valued at $0.0117 per share
upon conversion of $24,625 principal and $775.89 accrued interest of our debt .



The
shares of common stock referenced herein were issued in reliance upon the exemption from securities registration afforded by the
provisions of Section 4(a)(2) of the Securities Act of 1933, as amended, (“Securities Act”), and/or Regulation D,
as promulgated by the U.S. Securities and Exchange Commission under the Securities Act, and/or Section 3(a)(9) of the Securities
Act.



Item
3. Defaults Upon Senior Securities



None



Item
4. Mine Safety Disclosures



None



Item
5. Other Information



10







Item
6. Exhibits



|Exhibit
    Number |  | Description
    of Exhibit                                                                                                                                                                           
|------------------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                   |  |                                                                                                                                                                                                      
|31.1*              |  | Certification
    of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2002.                                       
|                   |  |                                                                                                                                                                                                      
|31.2*              |  | Certification
    of Principal Financial and Accounting Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002.                        
|                   |  |                                                                                                                                                                                                      
|32.1*              |  | Certification
    of Principal Executive Officer and Principal Financial and Accounting, pursuant to 18 U.S.C. Section 1350 as adopted pursuant
    to Section 906 of the Sarbanes-Oxley Act of 2002.



*
Filed herewith.



11







SIGNATURES



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



|                           | OSL
    Holdings, Inc.
|-------------------------- | ----------------------
|                           |                       
|Date: January
    20, 2015 | By:                   
|                           |                       
|                           |                       
|                           |                       
|Date: January
    20, 2015 | By:                   
|                           |                       
|                           |                       



12