UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, ~~D.C.~~DC 20549

FORM 10-K

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

~~For~~FOR ~~the~~THE ~~Fiscal~~YEAR ~~Year~~ENDED ~~Ended:~~DECEMBER ~~December~~ 31, ~~2012~~2014

orOR

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

~~SIMPLEPONS,~~For the ~~INC.~~transition ~~(Exact~~period ~~name~~from of___________ ~~registrant~~to ~~as specified in its charter)~~___________.

Delaware	000-21134	04-2893483
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification Number)

Commission File Number 000-54507

~~1090~~ECO-SHIFT POWER ~~Fountain~~CORP. ~~Street North Cambridge, Ontario N3H 4R7 (Address of principal executive offices, including zip code)~~

(~~519)~~Exact name ~~650-9506~~of ~~(Registrant’s~~registrant ~~telephone~~as ~~number,~~specified ~~including~~in ~~area~~its ~~code~~charter)

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

Delaware	000-21134	04-2893483
(State or other jurisdiction of	(Commission	(I.R.S. Employer
incorporation or organization)	File Number)	Identification Number)

~~Securities~~1090 ~~registered~~Fountain ~~pursuant~~Street ~~to Section 12(g) of the Act: Common Stock, $0.01 par value~~North

~~Indicate by check mark if the registrant is a well-known seasoned issuer~~Cambridge, ~~as defined in Rule 405 the Securities Act. Yes £~~ NoOntario SN3H 4R7

~~Indicate~~(Address byof ~~check~~principal ~~mark~~executive ifoffices, ~~the~~including ~~registrant~~zip ~~is not required to file reports pursuant to Section 13 or Section 15(d~~code) ~~of the Act. Yes £ No S~~

~~Indicate by check mark whether the registrant:~~ (1519) ~~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 last 90 days.650-9506

~~Yes~~(Registrant’s telephone Snumber, Noincluding £area code)

~~Indicate~~Securities byregistered ~~check~~under ~~mark~~Section ~~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~~ 12(~~§232.405~~b) 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 S No £~~Act:

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Yes £ No SNone

~~Indicate~~Securities byregistered ~~check~~under ~~mark~~Section ~~whether~~12(g) ~~the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. 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 S~~Common stock

Indicate by check mark ~~whether~~if the registrant is a ~~shell~~well-known ~~company~~seasoned (issuer, as defined in Rule ~~12b-2~~405 of the ~~Exchange~~Securities Act). Yes £ [ ] No S[X]

~~Issuer’s~~Indicate ~~revenues~~by ~~for~~check ~~its~~mark ~~most~~if ~~recent~~the ~~fiscal~~registrant ~~year~~is ~~were~~not ~~approximately~~required ~~$120,137~~to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]

~~The~~Indicate ~~aggregate~~by ~~market~~check ~~value~~mark ofwhether the ~~voting~~issuer ~~and~~(1) ~~non-voting~~filed ~~common~~all ~~equity~~reports ~~held~~required to be filed by ~~non-affiliates~~Section of13 ~~the~~or ~~registrant~~15(d) onof ~~June~~the ~~29,~~Exchange ~~2012,~~Act ~~based~~during onthe apast ~~closing~~12 ~~price~~months of(or ~~$0.035~~for ~~was~~such ~~approximately~~shorter ~~$3,447,647.~~period Asthat ofthe ~~April~~registrant ~~15,~~was ~~2013,~~required ~~the~~to ~~registrant~~file ~~had~~such 98reports),~~504,204~~ ~~shares~~and of(2) ~~its~~has ~~common~~been subject ~~stock,~~to ~~par~~such ~~value~~filing ~~$0.0001~~requirements ~~per~~for ~~share,~~the ~~outstanding~~last 90 days. YES [X ] NO [ ]

~~Documents~~Indicate ~~Incorporated~~by Bycheck ~~Reference:~~mark ~~None~~whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (1§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]

~~Table~~Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of ~~Contents~~large accelerated filer, accelerated filer, non-accelerated filer, and smaller reporting company in Rule 12b-2 of the Exchange Act.

~~SIMPLEPONS, INC.~~Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [X]

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

~~DECEMBER~~State 31the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, ~~2012~~or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter:

$22,137,212 as of June 30, 2014.

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

As of April 15, 2015, the registrant has 78,052,550 shares of Common Stock issued and outstanding.

TABLE OF CONTENTS

PART I		~~Page #~~
Item 1.	Business.	4
ITEM 1.		BUSINESS	4
Item 1A.	Risk Factors.	5
ITEM 1A.		RISK FACTORS	9
Item 1B.	Unresolved Staff Comments.	6
ITEM 1B.		UNRESOLVED STAFF COMMENTS	12
Item 2.	Properties.	7
ITEM 2.		PROPERTIES	12
Item 3.	Legal Proceedings.	7
ITEM 3.		LEGAL PROCEEDINGS	12
Item 4.	Mine Safety Disclosures.	7
ITEM 4.		MINE SAFETY DISCLOSURES	13
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	8
ITEM 5.		MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES	13
Item 6.	Selected Financial Data.	8
ITEM 6.		SELECTED FINANCIAL DATA	16
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results Of Operations.	8
ITEM 7.		MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	17
Item 7A.	Quantitative And Qualitative Disclosures About Market Risk.	9
ITEM 7A.		QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	20
Item 8.	Financial Statements and Supplementary Data.	9
ITEM 8.		CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	20
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.	9
ITEM 9.		CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	20
Item 9A.	Controls and Procedures.	9
ITEM 9A.		CONTROLS AND PROCEDURES	20
Item 9B.	Other Information.
ITEM 9B.		OTHER INFORMATION	21
PART III
Item 10.	Directors, Executive Officers and Corporate Governance.	10
ITEM 10.		DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	21
Item 11.	Executive Compensation.	11
ITEM 11.		EXECUTIVE COMPENSATION	23
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	12
ITEM 12.		SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	23
Item 13.	Certain Relationships and Related Transactions, and Director Independence.	13
ITEM 13.		CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	24
Item 14.	Principal Accounting Fees and Services.
ITEM 14.		PRINCIPAL ACCOUNTING FEES AND SERVICES	24
PART IV
Item 15.	Exhibits, Financial Statement Schedules.	15
ITEM 15.		EXHIBITS	24
SIGNATURES			25

(2)

~~Table~~CAUTIONARY NOTE ofREGARDING ~~Contents~~FORWARD LOOKING STATEMENTS

~~FORWARD~~This ~~LOOKING~~Annual ~~STATEMENTS~~Report on Form 10-K contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “anticipate,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.

~~Included~~We incannot ~~this~~predict ~~Form~~all ~~10-K~~of ~~are~~the ~~“forward-looking”~~risks ~~statements~~and uncertainties. Accordingly, assuch ~~well~~information asshould ~~historical~~not ~~information.~~be ~~Although~~regarded weas ~~believe~~representations that ~~the~~ ~~expectations~~the ~~reflected~~results inor ~~these~~conditions ~~forward-looking~~described ~~statements~~in ~~are~~such ~~reasonable,~~statements weor ~~cannot assure you~~ that ~~the~~our ~~expectations~~objectives ~~reflected in~~and ~~these~~plans ~~forward-looking statements~~ will ~~prove to~~ be ~~correct.~~achieved ~~Our~~and ~~actual~~we ~~results~~do ~~could~~not ~~differ~~assume any ~~materially~~responsibility ~~from~~for ~~those~~the ~~anticipated in~~accuracy ~~forward-looking~~or ~~statements~~completeness asof aany ~~result~~ of ~~certain~~these ~~factors, including matters described in the section titled “Risk Factors.” Forward~~forward-looking statements. ~~include~~These ~~those that use~~ forward-looking ~~terminology,~~statements are ~~such~~found asat ~~the~~various ~~words~~places ~~“anticipate,”~~throughout ~~“believe,” “estimate,”~~this ~~“expect,”~~Annual ~~“intend,”~~Report ~~“may,”~~on ~~“project,”~~Form ~~“plan,” “will,”~~10-K ~~“shall,” “should,”~~ and ~~similar~~include ~~expressions,~~information ~~including~~concerning ~~when~~possible ~~used~~or ~~in the negative. Although~~assumed wefuture ~~believe~~results ~~that~~of ~~the~~our ~~expectations~~operations, ~~reflected~~including instatements ~~these~~about ~~forward-looking~~potential ~~statements~~acquisition ~~are~~or ~~reasonable~~merger ~~and~~targets; ~~achievable,~~business ~~these~~strategies; ~~statements~~future ~~involve~~cash ~~risks~~flows; ~~and~~financing ~~uncertainties~~plans; plans and weobjectives ~~cannot~~of ~~assure~~management; ~~you~~any ~~that~~other ~~actual results will be consistent with these forward-looking~~ statements~~. We~~ ~~undertake~~regarding nofuture ~~obligation to update or revise these forward-looking statements~~operations, ~~whether~~business ~~to reflect events or circumstances after~~plans ~~the~~and ~~date~~future ~~initially~~financial ~~filed or published~~results, toand ~~reflect~~any ~~the~~other ~~occurrence~~statements ofthat ~~unanticipated~~are ~~events~~not orhistorical ~~otherwise~~facts.

~~(3)~~These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of the Annual Report on Form 10-K. All subsequent written and oral forward-looking statements concerning other matters addressed in this Annual Report on Form 10-K and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Annual Report on Form 10-K.

~~Table~~Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of ~~Contents~~new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise. Our consolidated financial statements are stated in United States dollars and are prepared in accordance with generally accepted accounting principles in the United States of America. In this annual report, unless otherwise specified, all dollar amounts are expressed in United States dollars.

USE OF CERTAIN DEFINED TERMS

Except as otherwise indicated by the context, references in this report to “we,” “us,” “our,” or the “Company,” means the business of Eco-Shift Power Corp.

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

	●	“Exchange Act” refers to the Securities Exchange Act of 1934, as amended;
	●	“SEC” refers to the United States Securities and Exchange Commission;
	●	“Securities Act” refers to the Securities Act of 1933, as amended;

PART I

~~Item~~ITEM 1. ~~Business.~~ BUSINESS

Company History

~~SimplePons,~~Eco-Shift ~~Inc~~Power Corp. (~~“SimplePons”~~formerly Simplepons, ~~“we”~~Inc., “~~our~~Simplepons”, or the “Company”) ~~was~~is ~~incorporated~~a Delaware corporation formed on February 7, 2011. Simplepons was in the ~~State~~ business of ~~Delaware~~the insale ~~1985~~of ~~under~~coupon books and was developing a mobile coupon subscription that solves the ~~name~~problem ~~Procept~~of leaving your coupons at home. On February 5, ~~Inc~~2013, Simplepons completed a reverse merger and subsequently the board of directors (the “Board”) ceased the existing coupon subscription business.

InEco-Shift ~~January~~Power ~~2000,~~Corp. we(“Eco-Shift ~~acquired Heaven’s Door Corporation~~Canada”), a ~~provider~~wholly ofowned ~~goods~~subsidiary ~~and~~of ~~services over~~ the ~~Inrternet~~Company, ~~and~~was ~~changed~~incorporated ~~our name~~on toMay ~~HeavenlyDoor.com~~15, ~~Inc.~~2008 At under the ~~same~~laws ~~time,~~of ~~Procept, Inc. became~~ the ~~new~~Province ~~name~~ of ~~our subsidiary~~Ontario, ~~Pacific Pharmaceuticals, Inc~~Canada., aEco-Shift ~~company~~Canada ~~engaged~~is inprimarily ~~the~~engaged ~~development of cancer therapies, which we acquired~~ in ~~March 1999. During the fourth fiscal quarter of 2000~~developing, weselling ~~entered into an agreement to sell all of our Web-based assets~~ and ~~Internet~~distributing ~~operations and ceased our Internet activities.~~electrical Inlighting ~~connection with this agreement, we changed our name, on December 31, 2000, from HeavenlyDoor~~products.~~com, Inc. to Paligent Inc.~~

~~From~~Sun ~~2001~~& ~~until~~Sun ~~the~~Industries, ~~transaction~~Inc., ~~with~~a ~~IFLC,~~California wecorporation ~~were~~and a ~~shell~~wholly ~~company~~owned assubsidiary of the Company, performs energy optimization lighting projects using a customized approach that ~~term~~includes isdesign ~~defined~~and installation of energy efficient lighting products. The Company’s customers are primarily in the ~~Securities~~United ~~Act~~States of ~~1933~~America and territories.

On ~~November~~February 295, ~~2006~~2013, weSimplepons ~~acquired~~finalized ~~IFLC,~~a ~~then~~share ~~known~~exchange asagreement ~~International~~whereby ~~Fight~~Simplepons ~~League~~issued 34,047,928 ~~Inc.~~(1,702,396,382 apre ~~privately~~split) exchangeable ~~held~~shares ~~Delaware~~for ~~corporation,~~100% ~~pursuant to~~of anthe ~~agreement~~common ~~and~~stock ~~plan~~ of ~~merger,~~Eco-Shift ~~dated~~Canada as(the of“Share ~~August~~Exchange”). ~~25,~~These ~~2006,~~exchangeable byshares are ~~and~~mandatorily ~~among~~convertible ~~us,~~(within ~~our~~five ~~wholly~~years) ~~owned~~into ~~subsidiary,~~Company’s ~~and~~common ~~IFLC~~shares. ~~Immediately following~~Accordingly the ~~merger,~~number weand ~~changed~~the ~~our~~value ~~name~~of tothese shares ~~International~~have ~~Fight~~been ~~League,~~presented ~~Inc.~~as ~~and~~part ~~continued~~of common stock with corresponding credit to ~~operate~~accumulated ~~the~~deficit. ~~business~~The ofexchangeable ~~organizing~~shares are ~~and~~exchangeable ~~promoting~~at athe ~~mixed~~option ~~martial~~of ~~arts~~the ~~sports~~holder, ~~league~~each ~~under~~into ~~the~~one ~~name~~share ~~“International~~of ~~Fight~~common ~~League~~stock of the Company.” WeIn ~~discontinued~~addition, ~~our~~Simplepons issued one ~~operations~~share ~~during~~of Series B Preferred Stock (the ~~quarter~~“Series ~~ended~~B ~~September~~Preferred”). ~~30,~~As ~~2008,~~a ~~and~~result onof ~~September~~the ~~15,~~Share ~~2008~~Exchange, ~~our~~Eco-Shift Canada is now a wholly-owned subsidiary, ~~IFLC,~~of ~~through which~~Simplepons. weThis ~~conducted~~transaction ~~our~~has ~~operations~~been ~~and~~accounted ~~which~~for ~~held~~as ~~substantially~~a ~~all~~reverse ofmerger. ~~our~~Consequently, the assets, ~~voluntarily~~and ~~filed~~liabilities aand ~~petition~~the ~~for~~historical ~~reorganization relief~~operations ~~under~~reflected ~~Chapter~~in 11the ofconsolidated financial statements for the ~~Bankruptcy~~periods ~~Code~~prior to inFebruary ~~the~~5, ~~United~~2013 ~~States~~are ~~Bankruptcy~~those ~~Court~~of ~~for~~Eco-Shift Canada and are recorded at the ~~Southern~~historical ~~District~~cost ofbasis. ~~New~~After ~~York~~February (5, 2013, the ~~“Court”).~~ ~~IFLC~~Company’s consolidated ~~bankruptcy~~financial ~~case~~statements ~~was~~include ~~docketed~~the asassets Inand reliabilities ~~IFL~~of ~~Corp.,~~both ~~Case~~Eco-Shift ~~No.~~Canada ~~08-13589~~and ~~(MG)~~Simplepons and the historical operations of both after that date as one entity.

OnFor ~~November~~accounting 17purposes, ~~2008,~~this ~~IFLC~~transaction ~~sold~~was ~~substantially~~treated ~~all~~as ofan ~~its~~acquisition ~~assets to HD Net for $650,000 in cash plus the assumption~~ of ~~certain~~Simplepons ~~of IFLC’s~~and ~~obligations, pursuant to~~ a ~~sale~~recapitalization ~~under Section 363~~ of ~~the~~Eco-Shift ~~Bankruptcy~~Power ~~Code~~Corp. Eco-Shift ~~which~~Power was ~~approved by~~ the ~~Court~~accounting onacquirer ~~October 28,~~and ~~2008.~~the Inresults ~~connection~~of ~~with~~its ~~the~~operations ~~sale~~carried ofover. ~~substantially~~Accordingly, all ofprior ~~our~~year ~~assets~~financial statements topresented HDfor ~~Net,~~comparative ~~the~~purposes ~~assets~~are ~~sold~~those ~~included~~of ~~the~~Eco-Shift ~~name~~Canada ~~“International Fight~~and ~~League,”~~not ~~our corporate name~~Simplepons. ~~After~~Accordingly, ~~confirmation of~~ the ~~plan~~operations ~~filed~~of Simplepons ~~with~~are ~~the~~not ~~bankruptcy~~carried ~~court~~over and ~~the~~adjusted ~~sale~~ to HD$Nil. ~~Net, we~~Immediately ~~had~~prior noto ~~ongoing~~the ~~business~~Merger, ~~operations.~~Simplepons ~~Upon~~had ~~the~~net ~~closing~~liabilities of ~~this transaction~~$406,496 which wewere ~~became~~acquired aand ~~“shell~~presented ~~company”~~in asthe ~~that~~consolidated ~~term is~~financial ~~defined under federal securities laws~~statements.

On ~~January~~July 1119, ~~2010~~2013, ~~Insurance~~the ~~Marketing~~holder ~~Solutions LLC purchased 730,941 shares~~ of ~~our~~the Series AB ~~Convertible~~ Preferred, ~~Stock~~through ~~(the “Series~~a Aunanimous ~~Preferred~~written ~~Stock”)~~consent ~~pursuant~~in tolieu ~~the terms~~ of ~~that~~a ~~certain~~meeting, ~~Series~~authorized: ~~A Preferred Stock Purchase Agreement. The~~(i) ~~Series~~1-for-50 Areverse ~~Preferred~~stock ~~Stock~~split ~~was~~of ~~convertible~~the ~~into~~Company’s anissued ~~aggregate~~and ofoutstanding ~~1,827,353,~~ shares of ~~our~~ common stock.; ~~This~~(ii) ~~transaction~~the ~~resulted in a~~ change ofin ~~control~~the name of ~~our~~the ~~company.~~Company ~~All~~from ~~shares~~Simplepons, ofInc. ~~our~~to ~~Series~~Eco-Shift APower ~~Preferred~~Corp. ~~Stock~~(the ~~have subsequently been converted into common stock~~“Company”).

InThe ~~November 2011 we acquired SimplePons Operations, Inc., a Delaware corporation (“SimplePons Operations”), in a~~ reverse ~~merger.~~stock Atsplit ~~closing,~~and ~~in exchange for all of~~ the ~~issued~~name ~~and~~change ~~outstanding~~became ~~capital~~effective ~~stock~~on ofthe ~~SimplePons~~date ~~Operations we~~that ~~issued~~ the ~~holders~~Company offiled ~~those~~the ~~shares~~Certificate ~~74,890,000 shares~~ of ~~the~~Amendment ~~our common stock, which, after giving effect~~ to the ~~stock repurchase~~ ~~described~~Articles ~~below,~~of ~~represented~~Incorporation ~~approximately 97.4%~~ of ~~our~~the ~~outstanding~~Company ~~common~~(the ~~stock.~~“Amendment”) Atwith ~~closing, we also issued~~ the ~~SimplePons~~Secretary ~~Operations’ stockholders who were also warrant holders common stock purchase warrants to purchase 20,010,000 shares~~ of ~~our~~State ~~common stock at an exercise price~~ of $0Delaware.25 ~~per~~The ~~share~~Company ~~in exchange for identical three year warrants to purchase SimplePons Operations’ common~~filed ~~stock which were held by~~ the ~~warrant~~Amendment ~~holders~~during ~~immediately prior to closing. Upon~~ the ~~closing~~fourth ofquarter ~~the~~ended ~~reverse~~December ~~merger~~31, ~~our~~2013. ~~sole~~The ~~officer and~~Company ~~director~~has ~~resigned~~also ~~and~~notified ~~simultaneously with~~ the ~~reverse~~Financial ~~merger~~Industry aRegulatory Authority ~~new~~(“FINRA”) ~~board~~ of ~~directors~~the ~~and~~actions ~~new~~by ~~officers~~filing ~~were appointed. In connection with~~ the ~~reverse~~Issuer ~~merger,~~Company weRelated ~~exited~~Action ~~shell~~Notification ~~status~~Form ~~and~~during ~~our business and operations are now those of SimplePons Operations. At closing of~~ the ~~reverse merger, SimplePons Operations entered into a stock repurchase agreement with our then principal stockholder~~fourth ~~and~~quarter anended ~~affiliate~~December ~~of our then sole officer and director~~31, ~~pursuant to which SimplePons Operations purchased 2,024,706 shares of our common stock for $335,000~~2013. ~~Following such purchase, these shares were cancelled and returned to the status of authorized but unissued shares of our common stock.~~

InOn ~~December~~October ~~2011~~20, we2014 ~~changed~~(the ~~our~~“Closing”), ~~name~~the toCompany ~~SimplePons~~entered into a Share Purchase and Exchange Agreement (the “Agreement”) with and among Sun & Sun Industries, Inc. ( the “Sun”), and the common stockholders of Sun, Lynda Sun Frederick and Deborah Sun. Pursuant to the Agreement, the Company acquired 100% of the issued and outstanding shares of common stock of Sun from the two holders thereof, in exchange for the issuance of 9,850,000 shares of the Company’s common stock and the payment of cash in the aggregate amount of $250,000. All preferred stock and shareholder notes of Sun were cancelled at the Closing. As a result of the transactions contemplated by the Agreement, Sun became a wholly owned subsidiary of the Company. The Company also agreed to grant an aggregate of 1,200,000 shares of its common stock to certain key members of Sun promptly following the Closing.

On February 8, 2013, the Company finalized that certain share exchange (the “Share Exchange”) effected by the execution and delivery of: (i) that certain Voting and Exchange Trust Agreement (the “Voting and Exchange Trust Agreement”), by and among the Company, Eco-Shift Call Corp., a wholly-owned subsidiary of the Company and a Canada corporation (“CallCo”), Eco-Shift Acquisition Corp., a wholly-owned subsidiary of the Company and a Canada corporation (“AcqusitionCo”), and Patriquin Law Professional Corporation, a Canada corporation, as trusteee (the “Trustee”); (ii) that certain Support Agreement (the “Support Agreement”), by and among the Company, CallCo and Acquisition Co; and (iii) those certain Rollover Agreements (each a “Rollover Agreement” and, collectively, the “Rollover Agreements”), by and between AcquisitionCo and stakeholders (collectively, the “Stakeholders”) of Eco-Shift Power Corp., a Canada corporation (“Eco-Shift”), including Gilbert Wood (CEO) and James Hughes (CFO). As a result of the Share Exchange, Eco-Shift became a wholly-owned subsidiary of the Company.4

ITEM 1. BUSINESS (continued)

Business Overview

~~The Company focuses on the operations of its wholly-owned subsidiary,~~ Eco-Shift, Power ~~which~~Corp. is an energy management consulting firm that sells and distributes specialty, energy efficient lighting products together with other electrical products to commercial and industrial markets in North America and the Caribbean. Eco-Shift is focused on addressing the need for commercial, industrial, institutional and recreational (CIIR) clients to manage their energy costs during this new era of rising energy costs and beyond. The company’s mission is to help their customers achieve energy and environmental footprint reduction targets through the application of cost effective technologies. Eco-Shift offers a variety of services to identify and quantify energy savings opportunities, including, but not limited to, the following:

● Lighting system audits and retrofit recommendations; ● Lighting design services complete with photometry; ● Local power authority rebate applications and preapprovals; ● HVAC system peak load analysis; ● Power distribution load analysis and retrofit recommendations; ● ISO 50001 program development and implementation; ● Environmental impact analysis of GHG emissions; and ● Underwriting of complete project costs with financing packages.

~~Lighting~~Business ~~design~~And ~~services~~Growth ~~complete with photometry;~~ Strategy

Local power authority rebate applications and preapprovals;

HVAC system peak load analysis;

Power distribution load analysis and retrofit recommendations;

IS050001 program development and implementation;

Environmental impact analysis of GHG emissions; and

Underwriting of complete project costs with financing packages.

(4)

Table of Contents

Business and Growth Strategy

NASDAQ has created the “Clean Edge Smart Grid Infrastructure” index and global technology players such as IBM, Cisco, GE, and Honeywell are developing systems that are changing how we produce, distribute and consume electricity. Power consumed by lighting accounts for a significant portion of the system load and represents a major opportunity for energy savings for businesses across the continent. The large multinationals are focusing on the large, integrated “building management systems” that control all aspects of power consumption for all building systems and in some cases even automatically control window blinds to balance the need for light against air conditioning. These systems are designed primarily for use in high rise office and commercial towers in urban centers and are priced accordingly.

The Company focuses on the significant portion of the market without cost effective solutions for managing energy consumption, especially for lighting. Single story building with high ceilings, known as “hi-bay” typically found in industrial parks, warehouses and big box retail facilities to name a few, which historically have had limited options for conserving power through their lighting systems.

~~The~~From ~~Company~~Eco-Shift’s ~~has~~headquarters ~~access~~in toOntario, ~~high~~Canada ~~quality~~the ~~electronic~~Company ~~ballasts~~has ~~manufacturers~~built ~~around~~a ~~the~~strong ~~world~~competitive ~~whose~~advantage ~~products~~as ~~are~~a ~~reliable~~proven ~~and~~provider ~~highly energy~~of energy efficient lighting solutions and ~~who~~wireless ~~are~~IP ~~developing~~addressable ~~light~~energy management systems. ~~that~~Clients ~~will~~switching ~~add~~to ~~the~~new ~~wireless~~digital ~~control~~electronic ballast ~~system~~driven ~~that~~HID ~~will~~or ~~result~~LED inlighting ~~even~~can ~~greater energy~~generate savings. Inin ~~addition,~~ the ~~Company~~50%-70% ~~has~~range without an ~~agreement~~energy management system. When combined with aEco-Shift’s ~~major~~energy ~~European~~management ~~manufacturer~~system that utilizes state-of-the-art ~~high~~IP ~~efficiency~~addressable ~~electronic~~light ~~ballasts and~~fixtures with wireless ~~lighting~~communication, clients ~~control~~are ~~systems~~seeing ~~that~~rates ~~offer~~of ~~users~~return ~~the~~that ~~opportunity~~often toexceed ~~reduce~~80% ~~energy~~with ~~consumption~~payback ~~associated~~periods ~~with~~ranging ~~lighting~~from ~~by up~~12 to ~~60%~~30 months. ~~These~~Add ~~savings,~~in ~~when~~the ~~combined~~ability to participate in Demand Response programs with aEco-Shift ~~unique~~Power’s ~~value~~Virtual ~~proposition~~Power Point Platform and the ~~Company~~savings ~~has~~are ~~developed~~enhanced by ~~through~~revenues ~~its~~earned ~~business~~from ~~model, provide~~government ~~customers~~programs. ~~with~~While the ~~opportunity~~company continues to ~~upgrade~~grow ~~their~~its ~~lighting~~core ~~system~~business, ~~achieve~~it ais ~~higher~~working ~~quality~~with ~~lighting~~its ~~environment and finance~~roster ~~the~~of ~~project~~over ~~through~~50 ~~the~~clients ~~energy~~as ~~savings~~a ~~generated~~foundation ~~with~~to ~~payback~~introduce ~~periods~~Virtual ~~typically~~Power ~~under~~Plant ~~two~~Platform ~~years.~~(enterprise-wide ~~Further,~~web-enabled ~~unlike~~energy ~~“value~~monitoring and ~~priced”~~control) ~~lighting~~to ~~wholesalers,~~enter ~~the~~and ~~Company~~leverage ~~has~~the ~~integrated~~Demand ~~some~~Response ofmarket. Once the ~~highest~~platform ~~quality~~is ~~components~~in ~~into~~place, ~~its~~Eco-Shift ~~systems~~will ~~with~~be ~~demonstrated extended~~able ~~lifetimes~~to ~~ensuring~~connect, ~~customers~~monitor and ~~will~~control ~~have~~other ~~minimal~~energy ~~maintenance~~using ~~costs~~technologies ~~over~~such ~~the~~as ~~life~~HVAC, ofcompressors, ~~the~~security system, etc. creating a truly “smart building”

Eco-Shift’s ~~has~~growth ~~been~~strategy ~~establishing~~and aexpansion ~~base~~is ofbased ~~operations~~on inbecoming ~~the~~vertically ~~South~~driven and ~~Central~~specialized ~~Ontario,~~in ~~Canada~~favorable ~~region,~~verticals ~~refining~~and ~~its~~their ~~unique sales process~~footprints. ~~which,~~Eco-Shift ~~amongst~~Power ~~other~~has ~~things,~~a ~~targets~~successfully ~~the~~established ~~“C”~~reputation: ~~level~~especially ~~stratum~~in ofSouth ~~medium~~Western toOntario ~~large~~providing ~~industrial~~lighting ~~and~~based ~~commercial enterprises~~energy ~~with~~management ~~its~~solutions ~~unique consultative approach~~ to ~~the~~customer ~~light~~footprints ~~retrofit~~that ~~sales~~include ~~opportunities~~Industrial/Manufacturing, ~~whereby~~Automobile ~~all four lighting technologies (Fluorescent~~Dealerships, Recreational/Sports ~~Induction~~Facilities, ~~LED~~Big ~~and~~Box ~~HID) are presented~~Retail, ~~carefully~~Warehousing ~~avoiding~~& ~~any~~Logistics ~~apparent~~and ~~bias~~Hydroponic/Greenhouse asGrowers. toEco-Shift ~~which~~Power ~~technology~~will webecome ~~favour. Our~~head ~~unique~~office ~~light~~focused ~~assessment~~which ~~process,~~will ~~followed~~require by a ~~thorough~~strategic ~~“Life~~approach ~~Cycle~~to ~~Analysis”~~developing ~~and~~relationships awith ~~very~~corporate ~~detailed~~head ~~presentation~~offices ~~booklet~~in ~~which explains~~order ~~the~~to ~~technology~~claim ~~we’ve~~the ultimate ~~recommended~~goal ~~and~~of ~~incorporates~~becoming the ~~photometry~~vendor ~~and~~of ~~light~~choice ~~design~~for ~~elements~~a ~~that~~corporate ~~support~~roll-out ~~our~~strategy ~~planned light~~for ~~output~~multiple ~~level~~customer ~~predictions. This~~site ~~provides~~projects ~~the~~via ~~recipient with~~ a ~~perfect package to present to their Board of Directors~~replicable ~~who~~process. ~~require~~The ~~such~~geographically ~~input~~focused tostrategy ~~enable~~entails ~~them~~reaching toout ~~make~~farther aninto ~~“informed”~~all ~~decision. Furthermore,~~geographical weregions ~~make~~of itNorth ~~clear~~America ~~that~~via wewhat ~~are~~we acall “~~Full~~Marketing ~~Service~~Brokerage Agencies” ~~provider~~(see insection ~~that~~entitled we“Distribution ~~don’t~~Method ~~just~~of ~~recommend~~Products ~~light retrofit programs, we can~~ and ~~do handle~~Services” ~~the~~as ~~logistics~~well ofas ~~purchasing~~existing ~~and~~subsidiary ~~installing~~(Sun ~~the~~& ~~appropriate~~Sun ~~products~~Industries, ~~for those light retrofit projects~~Inc. We) ~~plan~~and tofuture ~~recruit additional technical sales professionals who will expand that territory to include the balance of the Canadian marketplace~~subsidiaries.

In addition, we will be expanding that territory to include the USA by way of a 2 phase process. The initial research phase will focus on gaining an in-depth understanding of the key political, economic and competitive business drivers for the US market on a state by state basis. The objective of Phase I is to develop a clear understanding of regional markets then generate a list of segmentation variables to be used in the development of a go to market strategy. Phase 2 will consist of a more detailed examination of the options developed in Phase I followed by the development of detailed execution and rollout plans for each of the key regions.5

~~Products~~ITEM ~~and~~1. ~~Services~~BUSINESS (continued)

Products And Services

The following is a representation of some of the products and services the Company currently offers.

Commercial & Industrial High Bay Lighting

~~The~~Formerly, ~~Nedap E~~Eco-~~Series~~Shift (acquired the ~~“E-Series”)~~ electronic ballast isfrom North American and Chinese manufactures, which was a high frequency ballast tuned specifically to drive high intensity discharge (HID) lamps at their optimum efficiency. Four models ~~are~~were available for lamps rated from 250W to 575W and ~~are~~were designed for use in interior high bay applications with ceiling heights of 20ft and above. Typical applications ~~include~~included retail, industrial and warehousing applications where quality of light is important to operations. These ballasts ~~are~~ compatible with industry standard wired control protocols for interfacing with existing building management systems found in high end commercial buildings. ~~Additionally, they~~That ~~are~~technology ~~wirelessly~~has ~~enabled~~been ~~thus~~replaced ~~making~~by ~~lighting~~the ~~control~~new ~~accessible~~LED high bay fixtures which Eco-Shift has now added to aits ~~wider~~product ~~market.~~array ~~Similar~~together ~~products~~with ~~are~~low ~~available~~bay ~~from~~(under ~~North American~~20 ~~and~~ft ~~Chinese~~ceiling ~~manufacturers~~height) LED fixtures.

High Power Outdoor & Recreational Lighting

~~The~~Similarly, ~~Nedap~~Eco-Shift Shas ~~series~~added ~~electronic~~LED ~~ballasts~~outdoor ~~are~~and ~~similar~~recreational tolighting ~~the~~products E-which ~~Series~~are ~~in functionality but~~ designed primarily for outdoor use ~~with higher power lamps from 750W to 2KW~~. ~~Similarly, these types of products are also available from North American and Chinese manufacturers.~~ Typical applications include recreational facilities (both interior and exterior playing surface lighting), parking lots, security lighting and larger industrial facilities. These products are also fully compatible with industry standard control protocols.

Difficult Access Locations

Street lighting, vaulted building atriums and hazardous locations are the target market for QL induction lighting. Consisting of a matched lamp and driver which ESP integrates into various fixture styles, lifetimes of up to 100,000 hours are achieved. Introduced 15 years ago, the QL brand is the “Kleenex” of the induction lighting market. Induction provides superior light levels at lower power and with the renewed emphasis on energy efficiency QL is garnering a lot of attention. The City of San Diego recently began replacing 35,000 street lights with QL systems.

~~Luxon~~Distribution ~~Wireless~~Method ~~Controls~~Of Products And Services

The ~~Nedap~~Company ~~Luxon~~formerly ~~wireless~~utilized ~~control~~a ~~system~~direct issales ~~designed~~force ~~for~~to ~~use~~sell ~~with~~its ~~the~~products Eand ~~Series~~services by utilizing a combination of our network of personal contacts and Sleads ~~Series~~generated ~~e-HID~~through ~~ballasts~~referrals and isthe ~~offered~~Company’s website. Management recognized that in ~~two~~order ~~configurations;~~to put the Company on a ~~low~~more ~~cost~~sustainable ~~wall~~growth ~~mount~~path, ~~control~~more ~~panel~~structure and afocus ~~Windows~~is ~~based~~required ~~software~~to ~~platform~~meet ~~complete~~the ~~with~~Company’s ~~scheduling~~desired ~~tools~~projections. To ~~and~~that end, the ~~ability~~Company tois ~~communicate~~currently developing a more detailed sales and marketing plan based on a program that will focus on ~~with~~the ~~automated~~acquisition ~~demand~~of ~~response~~already ~~programs.~~established ~~Both~~lighting ~~configurations~~specialty ~~are~~operations ~~compatible~~as ~~with~~subsidiaries ~~zone~~(such ~~occupancy~~as ~~sensors~~Sun ~~and~~& ~~daylight~~Sun ~~harvesting~~Industries, Inc.,) ~~sensors~~in ~~enabling~~certain ~~energy~~key ~~savings~~geographical areas of North America and/or by adding what we call Marketing Brokerage Agencies in ~~excess~~certain of ~~60%~~those areas to extend Eco-Shift’s reach and saturate the growing market for the new LED high and low bay fixtures.

~~Distribution~~These ~~Method~~initiatives account for a significant portion of ~~Products~~the ~~and~~2015 ~~Services~~operating budget. Management believes this is a critical tool for extracting maximum value to put the Company on a sustainable growth path.

The Company currently utilizes a direct sales force to sell its products and services by utilizing a combination of our network of personal contacts and leads generated through referrals and the Company’s website. Management recognizes that in order to put the Company on a more sustainable growth path, more structure and focus is required to meet the Company’s desired projections. To that end, the Company is currently developing a more detailed sales and marketing plan based on the following key strategy elements:6

~~Educate & Inform: A~~ITEM ~~key initiative under development is to educate and inform the market regarding the opportunities inherent in high efficiency lighting and control systems~~1. ~~The~~BUSINESS ~~Company is currently developing a messaging program to be delivered in various forms such as lunch & learns, presentations at industry tradeshows and various industry association gatherings.~~(continued)

InStatus ~~addition,~~Of ~~the~~Planned ~~Company~~Products isAnd also targeting various industry associations in the electrical contracting and construction industry as well as property management and retail segments. The objective is to leverage the network effect utilizing the “pitch once, sell many” concept to generate leads for the individual sales consultants through these forums.Services

~~Targeting~~The Company ~~Sales:~~has ~~Beginning as~~introduced ofits ~~the~~NetZero ~~fiscal~~Certification ~~year~~as ~~ended~~Eco-Shift ~~2013,~~Power’s ~~each~~means ~~sales~~of ~~consultant~~qualifying ~~will~~lighting ~~sharpen~~products ~~their~~that ~~focus~~meet exacting criteria and ~~concentrate~~is on a ~~specific~~new ~~segment. The~~tool ~~objective~~for isindustry to ~~develop~~make ~~expertise~~better inenergy ~~areas~~and ~~such~~cost assaving ~~big~~decisions. ~~box~~ECOP ~~retail,~~has ~~general~~developed ~~warehousing,~~rigorous ~~recreational~~protocols including ~~facilities,~~over ~~industrial/light assembly,~~22 ~~greenhouse~~necessary ~~agriculture,~~tests ~~automotive~~that ~~component~~all ~~manufacturers~~products ~~etc.~~must ~~Management~~go ~~believes~~through ~~this~~to ~~will~~attain ~~further~~NetZero ~~enhance~~Certification. ~~the~~With ~~image~~a foundation in new-era ofLED ~~the~~lighting ~~Company~~and aswireless aand ~~trusted~~web-enabled ~~advisor~~technologies, inEco-Shift ~~the~~Power ~~minds~~is oftransitioning ~~customers~~clients’ asdecision amaking ~~result~~from ofold, fixed ~~each~~technology ~~consultant~~to ~~gaining~~the ~~specialized~~new ~~knowledge~~information ~~in order~~age. toThe ~~address~~premise is that the ~~challenges~~NetZero ~~unique~~certification toprovides ~~each~~certainty, ~~application.~~avoids Aconfusion and ~~significant~~means ~~recruitment~~industrial ~~effort~~and iscommercial ~~required~~clients tocan ~~attract~~improve ~~and~~the ~~retain professionals~~quality ~~for~~of ~~each~~their ~~segment~~decision making when seeking cost savings from energy efficient lighting.

~~New Construction & Major~~Competitive ~~Renovation~~Business ~~Market: Similar to the marketing programs being developed under the Educate & Inform banner~~Conditions, ~~this~~Competitive ~~market~~Position ~~is viewed~~And asMethods anOf opportunity to leverage sales efforts. By targeting Design/Build Contractors and Engineering Firms with a sales team experienced at selling to technical audiences and large project teams consisting of multiple stakeholders, the intent is to get the Company’s products designed into the specification documents that get used on multiple projects. A market data service is being utilized to identify specific contractors and projects, particularly those designing for Leadership in Energy and Environmental Design (“LEED”) certification. LEED consists of a suite of rating systems for the design, construction and operation of high performance green buildings, homes and neighborhoods and has gained significant momentum over the past five years. Property owners can charge higher rents in LEED certified buildings and in 2012 72% of the Top 100 infrastructure projects in Canada are designing for LEED certification.Competition

Management also views this as a strategic opportunity to add to the product portfolio over time through pilot projects before rolling out to the general sales force.

These initiatives account for a significant portion of the 2013 operating budget. Management believes this is a critical tool for extracting maximum value to put the Company on a sustainable growth path.

Status of Planned Products

The Company plans to launch a number of private labeled products in 2013. The premier product will be our own “white labelled” Electronic HID ballast with the trade name “NETZERO”. Management believes that by private labeling and the building of our own brand, market awareness will significantly increase. Furthermore, management believes that the Company will be differentiated from other solution providers due the following: (i) the “NETZERO” product will cover the full range of high wattages from 250 to 575; (ii) the product will incorporate motion sensors and daylight harvesting features; (iii) the product will carry a full three year warranty; (iv) the product will have a very low failure rate which will be published on our web site; and (v) it will incorporate one of the most comprehensive and user-friendly light management systems in the industry.

Competitive Business Conditions, Competitive Position and Methods of Competition

We currently face competition from both traditional lighting companies that provide general lighting products, such as incandescent, fluorescent and neon lighting, and from specialized lighting companies that are engaged in providing LED products. In general, we compete with both groups on the basis of design, innovation, quality of light, maintenance costs, safety issues, energy consumption, price, product quality and brightness.

We compete with traditional lighting companies, including Acuity Brands Lighting, Inc., Cooper Lighting (a division of Cooper Industries, Inc.), Hubbell Lighting, Inc. (a division of Hubbell Incorporated), Juno Lighting Group (a division of Schneider Electric SA), Osram Sylvania and Royal Philips Lighting (a division of Koninklijke Philips Electronics N.V.) in the general illumination market. Our LED products tend to be alternatives to traditional lighting sources for applications within the commercial market. In these markets, we compete on the basis of energy savings, lamp life and durability.

We also compete with providers of LED replacement lamps and other energy efficient lighting products and fixtures. These companies include traditional lighting companies such as Sylvania and Philips; specialized lighting companies such as Lighting Science Group Corporation; certain packaged LED suppliers such as Cree, which is primarily a manufacturer of LEDs; as well as multiple low cost offshore providers. In the market for LED lighting products, we compete on the basis of design, innovation, light quality, maintenance costs, safety issues, energy consumption, price, product quality, and energy savings resulting from the use of the latest lighting technology, energy Star and UL certifications and brightness.

Eco-Shift has a unique sales process which, amongst other things, targets the “C” level stratum of medium to large industrial and commercial enterprises with its unique consultative approach to the light retrofit sales opportunities whereby all four lighting technologies (Fluorescent, Induction, LED and HID) are presented, carefully avoiding any apparent bias as to which technology we favour. Our unique light assessment process followed by a thorough “Life Cycle Analysis” and a very detailed presentation booklet which explains the technology we’ve recommended and incorporates the photometry and light design elements that support our planned light output level predictions. This provides the recipient with a perfect package to present to their board of directors who require such input to enable them to make an informed decision. Furthermore, we make it clear that we are a “Full Service” provider in that we don’t just recommend light retrofit programs; we can and do handle the logistics of purchasing and installing the appropriate products for those light retrofit projects.

ITEM 1. BUSINESS (continued)

We believe that we can compete favorably in our markets, based on the following factors:

·● unique consultative sales process that does not favour one technology over another; ● the latest in finished product technology that has been thoroughly analyzed and tested; ● breadth and diversity of high-quality product offerings that include lighting audits plus a Life cycle analysis that calculates key economic indicators such as “Pay Back Period” and “ROI”; ● offer asset backed financing packages that pay for themselves by way of energy savings; ● ability to offer custom light retrofit solutions that meet customers’ needs at a competitive price; ● excellence in customer service and support; and ● recruitment and retention of qualified personnel, particularly engineers.

· the latest in finished product technology that has been thoroughly analyzed and tested;

· breadth and diversity of high-quality product offerings that include lighting audits plus a Life cycle analysis that calculates key economic indicators such as “Pay Back Period” and “ROI”;

· offer asset backed financing packages that pay for themselves by way of energy savings;

· ability to offer custom light retrofit solutions that meet customers’ needs at a competitive price;

· excellence in customer service and support; and

· recruitment and retention of qualified personnel, particularly engineers.

We expect our markets to remain competitive and to reflect rapid technological evolution and continuously evolving customer and regulatory requirements. Our ability to remain competitive depends in part upon our success in developing new and enhanced advanced lighting solutions and introducing these products at competitive prices on a timely basis.

Sources of Of Raw Materials

The Company does not use raw materials; rather the Company purchases finished products and components from a variety of third party manufacturers which we then ~~combine to make our “luminaire packages” in order to~~ replace out dated and inefficient fixtures.

Dependence on On One orOr Few Major Customers

The Company does not currently depend on one or a few major customers, rather the Company’s client and prospect base is extremely large in the industrial, institutional, recreational and commercial/retail markets.

~~Patents,~~Need ~~Trademarks,~~For ~~Licenses,~~Governmental ~~Royalty~~Approval ~~Agreements~~And ~~or Labor Contracts~~Certification

The Company currently has a patent pending design on the “Down Light” collar portion of the HID Luminaire package. The basis of the patent rests in optimized contours of the reflector which results in higher lumens per watt output from the Luminaire Assembly. Simply put, for a given light level at the work surface, dimmed or lower power lamps can be used.

Need for Governmental Approval and Certification

As an aggregated solutions provider, all products and components purchased the Company must be pre-certified by all governmental regulatory bodies located in the jurisdictions where the Company conducts business. In some, but not all cases, the aggregated solution provided by the Company must be resubmitted as a standalone product and recertified at the expense of the Company. These approved solutions/certifications, become the intellectual property of the Company. Such certifications include, but are not limited to, the Canadian Standards Association, Electrical Safety Authority and Underwriters Laboratories.

Estimate ofOf ~~the~~The Amount Spent on Research ~~and~~And Development

~~Research~~The ~~and~~Company ~~development~~is ~~expenses~~a ~~were~~solutions $0provider and ~~$23~~as such,~~902~~ aggregates the technology of manufacturers of electronic products in ~~2012~~order to provide our clients with some of the world’s best selection of products that maximize light output and ~~2011~~minimize energy consumption. As such, ~~respectively~~our research and development expenses are kept to a minimum since such costs are dedicated to evaluating the legitimacy and accuracy of high-tech manufacturers’ claims concerning their products.

~~The~~Research ~~Company~~and isdevelopment aexpenses ~~solutions~~were ~~provider~~confined ~~and~~to asa ~~such,~~commitment ~~aggregates~~to ~~the~~a ~~technology~~research ofand ~~manufacturers~~development ofcompany ~~electronic~~in ~~products~~the inyear ~~order~~2014 to provide exclusive ~~our~~rights ~~clients~~to ~~with~~ the ~~some~~new ofLED ~~the~~low ~~world’s~~and ~~best~~high ~~selection~~bay oftechnology ~~products~~in ~~that~~exchange ~~maximize~~for ~~light output and minimize energy consumption. As such~~5,000,000 ~~our~~ECOP ~~research~~common shares and ~~development expenses are kept to~~ a ~~minimum~~commitment ~~since such costs are dedicated~~ to ~~evaluating~~pay ~~the legitimacy~~$100,000 ~~and~~cash ~~accuracy~~in of2015 ~~high-tech~~and ~~manufacturers’~~$Nil ~~claims~~in ~~concerning their products~~2014.

Costs ~~and~~And ~~effects~~Effects ofOf ~~environmental~~Environmental ~~compliance~~Compliance

We are not aware of any material effects that compliance with federal, state, local or foreign environmental protection laws or regulations will have on our business. We have not expended material amounts to comply with any environmental protection laws or regulations and do not anticipate having to do so in the foreseeable future.

Employees

The Company currently employs 15under 25 full-time employees. ~~The~~Rather, ~~Company~~the ~~also~~company ~~utilizes~~chooses ~~the~~to ~~services~~engage ofspecialized ~~three~~consultants ~~electrical~~(as ~~engineering university~~individuals ~~students~~or as companies) who are ~~recruited~~put ~~from~~under ~~local~~contract ~~universities~~only ~~under~~on ~~their~~a ~~co-op~~“if, ~~placement~~as ~~programs~~and ~~for~~when ~~four~~needed” ~~month~~basis ~~periods~~to avoid high fixed overhead expenses. In addition, the Company engages independent electrical contractors for the installation aspect of its sales process on a job-by-job basis and these contractors are coordinated by the Company’s full-time project manager employees to guarantee that quality service standards are met for all of the Company’s installations.

Available ~~information~~Information

Our website address is www.eco-shiftpower.com. We do not intend our website address to be an active link or to otherwise incorporate by reference the contents of the website into this Report. The public may read and copy any materials the Company files with the U.S. Securities and Exchange Commission (the “SEC”) at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0030. The SEC maintains an Internet website (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.

~~(5)~~ITEM 1A. RISK FACTORS

Table of Contents

Item 1A. Risk Factors.

You should carefully consider the risks described below, together with all of the other information included in this report, in considering our business and prospects. The risks and uncertainties described below are not the only ones facing the Company. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations. The occurrence of any of the following risks could harm our business, financial condition or results of operations.

Risks Related toTo ~~the~~ Our Business and Industry

We ~~have~~Have aA ~~limited~~Limited ~~operating~~Operating ~~history~~History ~~from~~From ~~which~~Which ~~you~~You ~~can~~Can ~~evaluate~~Evaluate ~~our~~Our ~~performance~~Performance.

Since we have a limited operating history, it will be difficult for investors and securities analysts to evaluate our business and prospects and predict future revenue. Because we have a limited operating history, we will encounter risks, expenses and difficulties of which we are unaware, and may be challenging to overcome. There can be no assurance that our efforts will be successful or that we will reach profitability.

~~Our~~There ~~auditors~~is ~~have raised~~ substantial ~~doubts~~Doubts asAs toTo ~~our~~Our ~~ability~~Ability toTo ~~continue~~Continue asAs aA ~~going~~Going ~~concern~~Concern.

Our financial statements have been prepared assuming we will continue as a going concern. Since the inception of ~~SimplePons~~the ~~Operations in February 2011~~Company, we have experienced substantial and recurring losses from operations, which losses have caused an accumulated deficit of $37,~~352~~255,~~164~~484 at December 31, ~~2012~~2014. ~~SimplePons~~The Company has not generated sufficient cash flow to internally fund its business and has historically funded its operating through sales of our securities, including to insiders and our affiliates. These factors, among others, raise substantial doubt about ~~SimplePons~~the Company’s ability to continue as a going concern. The financial statements of ~~SimplePons~~the Company do not include any adjustments that might result from the outcome of this uncertainty. We anticipate that our operating expenses will continue to increase and we will continue to incur substantial losses in future periods until we are successful in significantly increasing our revenues and cash flow. ~~There~~An effort has been mounted to raise a significant amount of funding from an investment banker, which amount will enable ECOP to complete current product development and fulfill already established orders worldwide and expand retrofit markets through an aggressive acquisition program and the Marketing Brokerage Agency program. However, there are no assurances that we will be able to increase our revenues and cash flow to a level which supports profitable operations and provides sufficient funds to pay our obligations. If we are unable to meet those obligations, we could be forced to cease operations in which event investors would lose their entire investment in our ~~company~~Company.

If weWe ~~need~~Need ~~additional~~Additional ~~capital~~Capital to ~~fund~~Fund ~~our~~Our ~~growing~~Growing ~~operations~~Operations, weWe ~~may~~May ~~not~~Not beBe ~~able~~Able toTo ~~obtain~~Obtain ~~sufficient~~Sufficient ~~capital~~Capital ~~and~~And ~~may~~May beBe ~~forced~~Forced toTo ~~limit~~Limit ~~the~~The ~~scope~~Scope ofOf ~~our~~Our ~~operations~~Operations.

As we implement our growth strategies, we may experience increased capital needs. We may not, however, have sufficient capital to fund our future operations without additional capital investments. If adequate additional financing is not available on reasonable terms or at all, we may not be able to carry out our corporate strategy and we would be forced to modify our business plans (e.g., limit our expansion, limit our marketing efforts and/or decrease or eliminate capital expenditures), any of which may adversely affect our financial condition, results of operations and cash flow. Such reduction could materially adversely affect our business and our ability to compete.

ITEM 1A. RISK FACTORS (continued)

Our capital needs will depend on numerous factors, including, without limitation, (i) our profitability, (ii) our ability to respond to a release of competitive products by our competitors, and (iii) the amount of our capital expenditures, including acquisitions. Moreover, the costs involved may exceed those originally contemplated. Cost savings and other economic benefits expected may not materialize as a result of any cost overruns or changes in market circumstances. Failure to obtain intended economic benefits could adversely affect our business, financial condition and operating performances.

Insiders ~~have~~Have ~~substantial~~Substantial ~~control~~Control over usUS, ~~and~~And they ~~could~~Could ~~delay~~Delay orOr ~~prevent~~Prevent aA ~~change~~Change inIn ~~our~~Our ~~corporate~~Corporate ~~control~~Control ~~even~~Even ifIf ~~our~~Our ~~other~~Other ~~stockholders~~Stockholders ~~want~~Want itIt toTo ~~occur~~Occur.

As of the date of this filing, our executive officers, directors and principal stockholders who beneficially own 5% or more of our outstanding common stock, own in the aggregate, more than a majority of our voting equity. These stockholders are able to exercise significant control over all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. This could delay or prevent an outside party from acquiring or merging with our Company even if our other stockholders want it to occur.

Our ~~future~~Future ~~success~~Success ~~depends~~Depends ~~upon~~Upon, inIn ~~large~~Large ~~part~~Part, ~~our~~Our ~~continuing~~Continuing ~~ability~~Ability toTo ~~attract~~Attract and ~~retain~~Retain ~~qualified~~Qualified ~~personnel~~Consultants and/or Qualified Personnel.

Expansion of our business and operation may require additional consultants, managers and employees with industry experience, in which case our success will be dependent on our ability to attract and retain experienced management personnel and other employees. There can be no assurance that we will be able to attract or retain qualified personnel. Competition may also make it more difficult and expensive to attract, hire and retain qualified managers and employees. If we fail to attract, train and retain sufficient numbers of the qualified personnel, our prospects, business, financial condition and results of operations will be materially and adversely affected.

We ~~may~~May ~~not~~Not beBe ~~able~~Able toTo ~~prevent~~Prevent ~~others~~Others ~~from~~From ~~using~~Using ~~our~~Our ~~intellectual~~Intellectual ~~property~~Property, ~~and~~And ~~may~~May beBe ~~subject~~Subject toTo ~~claims~~Claims byBy ~~third~~Third ~~parties~~Parties that weWe ~~infringe~~Infringe onOn ~~their~~Their ~~intellectual~~Intellectual ~~property~~Property.

We regard the content that we plan to distribute via digital media to be important to our success. We plan to rely on non-disclosure and other contractual provisions to protect our proprietary rights. We may also try to protect our intellectual property rights by, among other things, searching the Internet to detect unauthorized use of our intellectual property.

However, policing the unauthorized use of our intellectual property is often difficult and any steps we take may not, in every case, prevent the infringement by unauthorized third parties. Further, there can be no assurance that our efforts to enforce our rights and protect our intellectual property will be successful. We may need to resort to litigation to enforce our intellectual property rights, which may result in substantial costs and diversion of resources and management attention.

Further, although management does not believe that our products and services infringe on the intellectual rights of others, there is no assurance that we will not be the target of infringement or other claims. Such claims, even if not true, could result in significant legal and other costs and may be a distraction to our management or interrupt our business.

We ~~encounter~~Encounter ~~competition~~Competition in ~~our~~Our ~~business~~Business, ~~and~~And ~~any~~Any ~~failure~~Failure toTo ~~compete~~Compete ~~effectively~~Effectively ~~could~~Could ~~adversely~~Adversely ~~affect~~Affect ~~our~~Our ~~results~~Results ofOf ~~operations~~Operations.

We anticipate that our competitors will continue to expand and seek to obtain additional market share with competitive price and performance characteristics. Aggressive expansion of our competitors or the entrance of new competitors into our markets could have a material adverse effect on our business, results of operations and financial condition.

Risks Relating to Being a Public Company

We ~~will~~Will ~~incur~~Incur ~~significant~~Significant ~~costs~~Costs toTo ~~ensure~~Ensure ~~compliance~~Compliance ~~with~~With United States ~~corporate~~Corporate ~~governance~~Governance ~~and~~And ~~accounting~~Accounting ~~requirements~~Requirements.

We will incur significant costs associated with our public company reporting requirements and costs associated with corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002 and other rules implemented by the SEC. We expect all of these applicable rules and regulations to significantly increase our legal and financial compliance costs and to make some activities more time consuming and costly. We also expect that these applicable rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on the Company’s board of directors (the “Board”) or as executive officers. We may be wrong in our prediction or estimate of the amount of additional costs we may incur or the timing of such costs.

If we fail to maintain an effective system of internal control over financial reporting, our ability to accurately and timely report our financial results or prevent fraud may be adversely affected and investor confidence may be adversely impacted.10

ITEM 1A. RISK FACTORS (continued)

If We Fail to Maintain an Effective System Of Internal Control Over Financial Reporting, Our Ability To Accurately And Timely Report Our Financial Results Or Prevent Fraud may Be Adversely Affected and Investor Confidence may Be Adversely Impacted.

As directed by Section 404 of the Sarbanes-Oxley Act of 2002, or SOX 404, the SEC adopted rules requiring public companies to include a report of management on the Company’s internal controls over financial reporting in their annual reports. Under current SEC rules, our management may conclude that our internal controls over our financial reporting are not effective. Even if our management concludes that our internal controls over financial reporting are effective, our independent registered public accounting firm may issue a report that is qualified if it is not satisfied with our controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us. In the event that we are unable to have effective internal controls, investors and others may lose confidence in the reliability of our financial statements and our ability to obtain equity or debt financing as needed could suffer.

Risks Related toTo Our Common Stock

Our ~~common~~Common ~~stock~~Stock isIs ~~quoted~~Quoted onOn ~~the~~The OTCBB ~~which~~Which ~~may~~May ~~have~~Have anAn ~~unfavorable~~Unfavorable ~~impact~~Impact onOn ~~our~~Our ~~stock~~Stock ~~price~~Price ~~and~~And ~~liquidity~~Liquidity.

Our common stock is quoted on the OTCBB. The OTCBB is a significantly more limited market than the New York Stock Exchange or the NASDAQ Stock Market. The quotation of our shares on the OTCBB may result in a less liquid market available for existing and potential stockholders to trade shares of our common stock, could depress the trading price of our common stock and could have a long-term adverse impact on our ability to raise capital in the future.

~~(6)~~Provisions Of Our Certificate Of Incorporation And Bylaws may Delay or Prevent a Take-Over Which May Not Be In The Best Interests Of Our Stockholders.

~~Table~~Provisions of our certificate of ~~Contents~~incorporation and bylaws may be deemed to have anti-takeover effects, which include when and by whom special meetings of our stockholders may be called, and may delay, defer or prevent a takeover attempt. In addition, certain provisions of the Delaware General Corporation Law also may be deemed to have certain anti-takeover effects which include that control of shares acquired in excess of certain specified thresholds will not possess any voting rights unless these voting rights are approved by a majority of a corporation’s disinterested stockholders.

Provisions of our certificate of incorporation and bylaws may delay or prevent a take-over which may not be in the best interests of our stockholders.

Provisions of our certificate of incorporation and bylaws may be deemed to have anti-takeover effects, which include when and by whom special meetings of our stockholders may be called, and may delay, defer or prevent a takeover attempt. In addition, certain provisions of the Delaware General Corporation Law also may be deemed to have certain anti-takeover effects which include that control of shares acquired in excess of certain specified thresholds will not possess any voting rights unless these voting rights are approved by a majority of a corporation's disinterested stockholders.

Further, our certificate of incorporation authorizes the issuance of up to 5,000,000 shares of preferred stock with such rights and preferences as may be determined from time to time by our board of directors in their sole discretion. Our board of directors may, without stockholder approval, issue series of preferred stock with dividends, liquidation, conversion, voting or other rights that could adversely affect the voting power or other rights of the holders of our common stock.

In ~~order~~Order toTo ~~raise~~Raise ~~sufficient~~Sufficient ~~funds~~Funds toTo ~~expand~~Expand ~~our~~Our ~~operations~~Operations, weWe ~~may~~May ~~have~~Have toTo ~~issue~~Issue ~~additional~~Additional ~~securities~~Securities atAt ~~prices~~Prices ~~which~~Which ~~may~~May ~~result~~Result inIn ~~substantial~~Substantial ~~dilution~~Dilution toTo ~~our~~Our ~~shareholders~~Shareholders.

If we raise additional funds through the sale of equity or convertible debt, our current stockholders’ percentage ownership will be reduced. In addition, these transactions may dilute the value of our common shares outstanding. We may also have to issue securities that may have rights, preferences and privileges senior to our common stock.

We ~~are~~Are ~~subject~~Subject toTo ~~the~~The ~~penny~~Penny ~~stock~~Stock ~~rules~~Rules ~~which~~Which ~~will~~Will ~~make~~Make ~~our~~Our ~~securities~~Securities ~~more~~More ~~difficult~~Difficult toTo ~~sell~~Sell.

We are subject to the SEC’s “penny stock” rules because our securities sell below $5.00 per share. The penny stock rules require broker-dealers to deliver a standardized risk disclosure document prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson, and monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, the bid and offer quotations, and the broker-dealer and salesperson compensation information must be given to the customer orally or in writing prior to completing the transaction and must be given to the customer in writing before or with the customer’s confirmation.

ITEM 1A. RISK FACTORS (continued)

Furthermore, the penny stock rules require that prior to a transaction, the broker dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. The penny stock rules are burdensome and may reduce purchases of any offerings and reduce the trading activity for our securities. As long as our securities are subject to the penny stock rules, the holders of such securities will find it more difficult to sell their securities.

We ~~are~~Are ~~not~~Not ~~likely~~Likely toTo ~~pay~~Pay ~~cash~~Cash ~~dividends~~Dividends inIn ~~the~~The ~~foreseeable~~Foreseeable ~~future~~Future.

We currently intend to retain any future earnings for use in the operation and expansion of our business. Accordingly, we do not expect to pay any cash dividends in the foreseeable future, but will review this policy as circumstances dictate.

~~Item~~ITEM 1B. ~~Unresolved~~UNRESOLVED ~~Staff~~STAFF ~~Comments.~~COMMENTS

Not applicable.

~~Item~~ITEM 2. ~~Property.~~PROPERTIES

The Company’s principal operations ~~center is~~ comprised of an executive office space of approximately 3,100 square feet and 9,100 square feet of warehouse space which we lease from an unaffiliated third party pursuant to a five year lease agreement expiring in June 2017. Under the terms of the lease, the annual base rent and our share of the operating expenses will range from approximately $124,800 in year one to approximately $135,800 in year five.:

Item 3. Legal Proceedings.

	●	An executive office space located at 2101 S. Yale St. Santa Ana, California, USA under an operating lease on an year to year basis for approximately lease rent of $65,000 per annum.

	●	An executive office space located at 1090 Fountain Street North, Cambridge, Ontario, Canada – comprising of approximately 3,100 square feet and 9,100 square feet of warehouse space which we lease from an unaffiliated third party pursuant to a five year lease agreement expiring in June 2017. Under the terms of the lease, the annual base rent and our share of the operating expenses will range from approximately $124,800 in year one to approximately $135,800 in year five.

~~The~~ITEM ~~Company is a defendant in an action styled Wei Ken Seto v SimplePons, Inc~~3., ~~Case~~LEGAL ~~No.~~PROCEEDINGS 112CV234202, in the Superior Court of the State of California in and for the County of Santa Clara. Mr. Seto, the Company’s former Chief Operating Officer, filed the complaint against us in October 2012 for non-payment of wages, vacation time and waiting time penalties under the California Labor Code Section 203. He is seeking $71,918 in base salary, $5,308 in wages for accrued vacation time and $17,309 in waiting time penalties, for an aggregate of $94,535, together with reasonable attorney’s fees. In response to this complaint, we have filed a Notice of Motion and Motion to Stay or Dismiss Action for Being File in Improper Forum, together with a supporting Memorandum of Points and Authorities and the Declaration of Richard A. Miller, a former executive officer and director of the Company. In these pleadings, we are seeking a dismissal of the lawsuit citing that Mr. Seto’s employment agreement with us, which is the basis of his claims, provides that the 15th Judicial Circuit of Florida is the venue and exclusive forum in which to adjudicate any case or controversy that arises in connection with the employment agreement. We intend to vigorously defend this action.

~~Other~~The ~~than~~Company ~~the~~is ~~matter~~involved ~~disclosed~~in ~~above,~~the wefollowing ~~are~~significant ~~not~~claims ~~currently~~and ~~involved~~litigation, inasserted ~~any~~by ~~litigation~~and ~~that~~against wethe ~~believe~~Company, ~~could~~which have aarisen in ~~materially~~the ~~adverse effect~~ordinary oncourse ~~our~~of ~~financial~~business. ~~condition~~Claims orare ~~results~~recorded ofat ~~operations.~~their ~~There~~estimated isnet norealizable ~~action,~~value ~~suit,~~or ~~proceeding,~~expected ~~inquiry~~cost orwhen ~~investigation~~such ~~before~~amounts orare byprobable ~~any~~and ~~court,~~can ~~public~~be ~~board,~~reasonably ~~government~~estimated. ~~agency,~~The ~~self-regulatory~~Company ~~organization~~believes orthat ~~body~~it ~~pending~~has ~~or,~~a tonumber ~~the~~of ~~knowledge~~valid ofdefences to the ~~executive~~actions against ~~officers~~it ofand ~~our~~the Company orintends ~~any~~to ofvigorously ~~our~~defend ~~subsidiaries,~~or ~~threatened~~assert ~~against~~these orclaims ~~affecting~~and ~~our~~does ~~Company,~~not ~~our~~believe ~~common~~that ~~stock,~~a ~~any~~significant ofliability ~~our~~will ~~subsidiaries~~result, orother ofthan ~~our~~the ~~Company’s~~amounts orrecorded. ~~our~~However, the Company’s ~~subsidiaries’~~cannot ~~officers~~predict the outcome thereof or ~~directors~~the inimpact ~~their~~that ~~capacities~~an asadverse ~~such,~~result inwill ~~which~~have anupon ~~adverse~~its ~~decision~~consolidated ~~could~~financial ~~have~~position, aresults ~~material~~of ~~adverse~~operations ~~effect~~or liquidity.

~~Item~~ a) The Company has been named as a co-defendant in a claim by a customer, who is seeking damages of $10,000,000 CAD ($8,647,000 USD) and return of a deposit of CAD 150,000 (USD 129,705) which was received by the company under a Value-Added Reseller arrangement. The company has filed a counterclaim against the customer for damages of CAD 9,548,560 (USD 8,256,640) resulting from the plaintiff’s breach of contract plus punitive damages of CAD 1,000,000 (USD 864,700) for negligence and loss of business reputation. Management of the company believes these claims are without merit and has accrued CAD 150,000 (USD 129,705) in the financial statements in regards to this claim, as management believes this represents the maximum amount the company may ultimately be required to pay. b) On June 12, 2013, the Company has been named defendant in a claim by 954793 Ontario Inc. for CAD1,000,000 (USD 864,700) in damages under section 3 (2) of the Wishart Act. The Company filed a statement of Defence on September 18, 2014. c) On August 12, 2013, the Company was named co-defendant in a claim by Boehmer Box LP, a customer, who is seeking damages of C$500,000 (USD 432,350) associated with breach of contract and warranty. On March 31, 2014, Venture Lighting International Inc., one of the co-defendants in Boehmer Box LP claim, filed a statement of Defence and Crossclaim against all co-defendants, including the Company. d) On January 7, 2014, the Company commenced an action in the Superior Court of Justice for Ontario against N.V. Nederlandsche Apparatenfabriek “Nedap”, Niek Nijenhuis, Thomas Lang, Jeroen Somsen (together, the Nedap Defendants), Venture Lighting International Inc., Andrew Tyrrell, NRG Metalworks Inc., Craig Chornaby, Full Energy Solutions Distribution and Jan Christopher Vargas (together, the Defendants). Eco-Shift claims for C$25,000,000 (USD 21,617,500) in compensatory and punitive damages for breach of contract, breach of confidence, conspiracy, breach of fiduciary duty, intentional interference with economic relations and inducing breach of contract. On April 9, 2014, the Nedap Defendants filed a statement of Defence and Counterclaim for the amount of Euro 3,321,000 (USD 4,037,200) in damages associated with unrecovered costs, lost profits and lost revenues due to reputational damage. ~~Mine~~On ~~Safety~~April ~~Disclosures~~10, 2014, Venture Lighting International Inc. filed a statement of Defence and Crossclaim. e) In December 2014, the Company was served with a complaint by the ex-employee of Simplepons claiming that the Company failed to pay him approximately $101,000 for his salary and severance payment under the terms of his employment agreement. The Company intend to seek an amicable resolution of the dispute but will defend itself if such a resolution is not possible.

Other than the matters described above we are not currently involved in any litigation that we believe could have a materially adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our Company or any of our subsidiaries, threatened against or affecting our Company, our common stock, any of our subsidiaries or of our Company’s or our Company’s subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

(7)

Table of Contents

PART II

~~Item~~ITEM 5. ~~Market~~MARKET ~~for~~FOR ~~Registrant~~REGISTRANT’sS ~~Common~~COMMON ~~Equity~~EQUITY, ~~Related~~RELATED ~~Stockholder~~STOCKHOLDER ~~Matters~~MATTERS ~~and~~AND ~~Issuer~~ISSUER ~~Purchases~~PURCHASES ofOF ~~Equity~~EQUITY ~~Securities~~SECURITIES.

(a) Market Information

~~The~~On ~~Company’s~~February ~~Common~~5, ~~Stock~~2013, isSimplepons ~~quoted~~finalized a share exchange agreement whereby Simplepons issued 34,047,928 exchangeable shares (1,702,396,382 shares on ~~the~~pre-stock ~~OTCBB~~split ~~under~~basis) ~~the~~for ~~under~~100% of the ~~symbol~~common stock of Eco-Shift (the “~~QPON.~~Share Exchange”). ~~The~~As ~~following~~a ~~table~~result ~~sets forth~~of the ~~quarterly~~Share ~~high~~Exchange, ~~and~~Eco-Shift ~~low~~is ~~sale~~now ~~prices~~a ~~for~~wholly-owned ~~our~~subsidiary ~~common~~of ~~shares~~Simplepons. This transaction has been accounted for ~~the~~as ~~last~~a ~~two~~reverse merger. ~~completed~~Consequently, ~~fiscal~~the ~~years~~assets and liabilities and the ~~subsequent~~historical ~~interim periods.~~operations ~~Quotations~~reflected onin the ~~OTCBB~~consolidated ~~reflect~~financial ~~bid~~statements for ~~and~~the ~~ask~~periods ~~quotations,~~prior ~~may~~to ~~reflect~~February ~~inter-dealer prices~~5, ~~without~~2013 ~~retail~~are ~~markup,~~those ~~markdown or~~of ~~commission,~~Eco-Shift and ~~may~~are ~~not~~recorded ~~represent~~at ~~actual~~the ~~transactions~~historical cost basis. ~~The~~After ~~historical~~February 5, ~~share~~2013, ~~prices~~the inCompany’s ~~this~~consolidated ~~table~~financial ~~have~~statements ~~been~~include ~~adjusted~~the toassets ~~give effect~~and toliabilities ~~the~~of ~~forward~~both ~~stock~~Eco-Shift ~~split~~and Simplepons and the historical operations of ~~our~~both ~~common~~after ~~stock~~that indate ~~December~~as ~~2011~~one entity.

Quarter ended	High		Low
March 31, 2013	$	0.0995		0.025
December 31, 2012	$	0.28	$	0.022
September 30, 2012	$	0.65	$	0.22
June 30, 2012	$	1.00	$	0.22
March 31, 2012	$	3.50	$	0.55
December 31, 2011	$	4.00	$	0.20
September 30, 2011	$	0.275	$	0.275
June 30, 2011	$	0.275	$	0.275
March 31, 2011	$	1.20	$	1.00

On October 20, 2014 (the “Closing”), Eco-Shift Power Corp. (“Eco-Shift USA”) entered into a Share Purchase and Exchange Agreement with and among Sun & Sun Industries, Inc. (“Sun Industries”), and the common stockholders of Sun Industries, Lynda Sun Frederick and Deborah Sun (the “Agreement”). Pursuant to the Agreement, the Eco-Shift USA acquired 100% of the issued and outstanding shares of common stock of Sun from the two holders thereof, in exchange for the issuance of 9,850,000 shares of Eco-Shift USA common stock and the payment of cash in the aggregate amount of $250,000. All preferred stock and shareholder notes of Sun were cancelled at the Closing. As a result of the transactions contemplated by the Agreement, Sun became a wholly owned subsidiary of Eco-Shift USA. Eco-Shift USA also agreed to grant an aggregate of 1,200,000 shares of its common stock to certain key members of management of Sun promptly following the Closing.

The Company’s Common Stock is quoted on the OTCBB under the under the symbol “ECOP.” The following table sets forth the quarterly high and low sale prices for our common shares since the date of reverse merger after taking into account the stock split of 1:50.

Quarter ended	High		Low

December 31, 2014	$	0.367	$	0.10

September 30, 2014	$	0.40	$	0.25

June 30, 2014	$	0.85	$	0.39

March 31, 2014	$	0.55	$	0.31

December 31, 2013	$	0.90	$	0.35

(b) Holders

As of April 15, ~~2013~~2015, there were approximately ~~182~~174 holders of record of our common stock. This figure does not take into account those shareholders whose certificates are held in the name of broker-dealers or other nominees.

(c) Dividends

We have never paid any cash dividends on our common shares, and we do not anticipate that we will pay any dividends with respect to those securities in the foreseeable future. Our current business plan is to retain any future earnings to finance the expansion development of our business.

(d) Securities Authorized for Issuance under Equity Compensation Plan

The following table shows information with respect this plan as of the fiscal year ended December 31, 2012.

Equity Compensation Plan Information
Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)		Weighted-average Exercise price of outstanding options, warrants and rights (b)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders		2,750,000		0.275		2,250,000
Equity compensation plans not approved by security holders				—		—
Total		2,750,000		0.275		2,250,000

Transfer Agent

Our transfer agent is American Stock Transfer & Trust Company, LLC, 6201 15th Avenue, Brooklyn, NY 11219.

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES (continued)

Recent Sales of Unregistered Securities

~~During~~In ~~the~~January ~~fiscal~~and ~~year~~February ~~ended December 31~~2013, ~~2012,~~the weCompany ~~have~~ issued ~~the~~124,000 ~~following~~shares ~~securities~~of ~~which~~common ~~were~~stock ~~not~~(6,200,000 ~~registered~~shares ~~under~~on ~~the~~pre-stock ~~Securities Act~~split ~~and~~basis) ~~not previously disclosed~~ in ~~the~~a private ~~Company’s~~placement ~~Quarterly~~to ~~Reports~~seven onaccredited ~~From 10-Q or Current Reports on Form 8-K~~investors. ~~Unless otherwise~~The ~~indicated,~~price ~~all~~ of the ~~share~~common ~~issuances~~stock ~~described~~was ~~below~~$0.05 ~~were~~per ~~made~~share, inand ~~reliance on~~ the ~~exemption~~Company ~~from~~received ~~registration provided~~proceeds ~~by Section 4(2)~~ of ~~the~~$310,000 ~~Securities~~which ~~Act~~will ~~for~~be ~~transactions~~used ~~not~~to ~~involving~~meet aworking ~~public~~capital ~~offering:~~requirement.

OnThrough ~~October~~an ~~31,~~assignment ~~2012~~agreement dated March 8, 2013 between the Company, ~~issued~~a ~~1,000,000~~lender ~~shares~~and holders of ~~common~~three ~~stock~~newly ~~with~~issued apromissory ~~fair~~notes ~~value~~ of $~~100~~16,~~000 to~~667 aeach, ~~consultant~~the ~~for~~lender aassigned ~~variety~~the oforiginal ~~services~~note todated ~~the~~May ~~Company~~5, ~~including~~2012 ~~accounting~~to ~~services~~the ~~related~~holders toof ~~the~~new ~~preparation~~promissory ~~and~~notes ~~filing~~with certain amendments. ofDuring the ~~Company’s~~quarter ~~quarterly~~ended ~~and~~June ~~annual reports~~30, ~~EDGAR services~~2013, ~~and~~ the ~~preparation~~holders of ~~corporate~~these ~~tax~~promissory ~~returns.~~notes ~~All~~converted ~~shared were~~all ~~considered~~the ~~earned~~debts ~~upon~~outstanding ~~receipt.~~into ~~Expense~~220,000 shares ~~for~~of the ~~year~~Company’s ~~ended~~common ~~December~~stock 31(11,000,000 ~~2012~~shares ~~amounted~~on topre-stock ~~$100,000~~split basis).

On August 31, 2013, the Company in consideration of $50,000 entered into a common stock purchase warrant arrangement with an individual, entitling the warrant holder to purchase from the Company 200,000 of its shares at an exercise price of $0.25 per share, at any time on or before August 31, 2016. The Company has credited additional paid in capital as the Company believes that the instrument require substantial initial investment and does not meet the definition of derivative liability.

On September 10, 2013, the Company issued 60,000 shares (3,000,000 shares on pre-stock split basis) in accordance with the terms of stipulation for entry of judgment in connection with a lawsuit filed by the Company’s former Chief Operating Officer. These shares were valued at the prevailing market price at the time of issuance and adjusted against his total liability of $134,535.

During October 2013, the Company issued 12,645,213 shares (632,260,655 shares on pre-stock split basis) in connection with Linear note conversion as explained in note 13 to the financial statements;

On October 14, 2013, the Board of Directors of the Company through a special resolution approved:

	●	the issuance of 2,000,000 shares of the Company (100,000,000 shares on pre-stock split basis) pursuant to Confidential Term Sheet Investment Agreement dated September 12, 2013 between the Company, Eco-Shift Power Corp. and GreenSync Solutions. These shares were valued at $0.5 per common stock and accordingly $1,000,000 was recorded under legal and professional fees in the statement of operations during the fourth quarter ended December 31, 2013.; and

	●	the issuance of 50,000 (2,500,000 shares on pre-stock split basis) pursuant to Confidential Settlement Agreement and Mutual Release dated October 8, 2013 between a Claimant, Company, Consultant and Attorney. The Claimant had made certain allegations involving disclosures made by officers, directors and agents of the Company, Attorney and Consultant. 25,000 shares were issued during fourth quarter ended December 31, 2013 and remaining 25,000 shares were issued during first quarter ended March 31, 2014. These shares were valued at $37,500 based on market price and were recorded as expense in the statement of operations during the fourth quarter year ended December 31, 2013.

Pursuant to Term Sheet Agreement dated November 21, 2013, the Company entered into various Subscription Agreements during the months of October, November and December 2013 and issued 3,981,652 shares of common stock at an exercise price of $0.25 per share of common stock along with the issuance of same number of warrants. The Company received $896,371 net of issuance costs of $99,042.

In January 2014, the Company issued 400,000 shares of common stock pursuant to a consulting agreement. These shares were valued at $0.35 per common share representing the market price at the time of issuance. Accordingly $140,000 has been recorded as legal and professional charges in the statement of operations with corresponding credits to common stock and additional paid-in capital.

In January 2014, the Company issued remaining 25,000 shares of common stock out of the total shares of 50,000 common stock pursuant to a Confidential Settlement Agreement and Mutual General Release with a claimant as explained explained in the preceding paragraphs.

In January 2014, the Company issued 1,650,000 shares of common stock in connection with stock based compensation recorded during the fourth quarter ended December 31, 2013.

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES (continued)

On February 8, 2014, the “Company”, finalized that certain Share Exchange effected by the execution and delivery of that certain Voting and Exchange Trust Agreement, Support Agreement, and Rollover Agreements, each as defined in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on February 14, 2013, and as amended on Form 8-K/A filed with the SEC on June 4, 2013 The “Closing 8-K”). Pursuant to the Rollover Agreement certain Stakeholders (as defined in the Rollover Agreement) were issued Exchangeable Shares that are exchangeable for shares of common stock in the Company. Pursuant to the Voting and Exchange Trust Agreement, the holders of Exchangeable Shares effectively voted such securities as common stock of the Company through a Series B Preferred Stock held by a trustee, as more fully described in the Closing 8-K.

On February 25, 2014, Gilbert Wood, the then Company’s Chief Executive Officer and director, James Hughes, the Company’s Chief Financial Officer and director, and Patty Bates-Woods elected to exchange their Exchangeable Shares pursuant to the terms of the Voting and Exchange Trust Agreement, Rollover Agreement and Support Agreement for 19,984,584, 4,962,315 and 4,962,635 shares of common stock of the Company, respectively. The Company was required to give effect to such election and issue such shares not less than five (5) or more than ten (10) days following such election. Accordingly, 29,911,799 shares were issued in March 2014.

The above description of the Voting and Exchange Trust Agreement, Rollover Agreement and Support Agreements do not purport to be complete and is qualified in its entirety by reference to the Support Agreement, which is attached as Exhibits 2.1, 2.2 and 2.3 to the Company’s Report on Form 8-K filed with the SEC on February 14, 2013.

On February 25, 2014, the Company filed an Amended and Restated Certificate of Designation of Series B Preferred Stock (the “Certificate of Amendment”), which clarifies certain voting rights after giving effect to the November 2013 reverse stock split of the Company. The Certificate of Amendment was approved by the unanimous consent of the Board of Directors of the Company and the sole holder of Series B Preferred Stock as of February 25, 2014. The Certificate of Amendment was filed with the Secretary of State of the State of Nevada.

In February 2014, the Company entered into various subscription and warrant agreements for the issuance of 160,000 shares of common stock at a price of $0.25 per common share.

In April 2014, the Company engaged a third party consultant to provide certain business consulting services for a term of one year and issued 1,300,000 shares of common stock as compensation for such services. These shares were valued at $0.45 per common stock and $585,000 was recorded as prepaid expenses to be amortized over a term of one year. Accordingly, the Company recorded $438,750 as professional charges in the statement of operations for the year ended December 31, 2014.

In April 2014, the Company agreed to settle certain claims for consulting services provided by a third party through issuance of 2,500,000 shares of common stock. These shares were valued at $0.45 per common stock and $1,125,000 was recorded as professional charges in the statement of operations for the year ended December 31, 2014.

In July 2014, the Company issued 127,536 shares of common stock pursuant to a common stock purchase warrant agreement issued in August 2013. The holder elected to exercise the warrant on a cashless exercise basis. The Company has debited the additional paid-in-capital with corresponding credit to common stock.

In September 2014, the Company issued 275,000 shares of common stock to certain employees of the Company. These shares have been valued at the market rate on the date of issuance and resultantly $76,973 was recorded as stock compensation expense in the consolidated statements of operations with corresponding credit to common stock and additional paid-in-capital.

In October 2014, the Company issued 96,000 (4.8 million pre-split) shares of common stock to certain employees of the Company in connection with the reverse merger which allowed for a “President’s list” these shares were set aside for the President who may issue these shares at his discretion.

In October 2014, the Company issued additional 29,000 shares of common stock to certain employees of the Company. These shares have been valued at the market rate on the date of issuance and resultantly $22,620 was recorded as stock compensation expense in the consolidated statements of operations with corresponding credit to common stock and additional paid-in-capital.

In October 2014, the Company issued 166,667 shares of common stock against legal services in connection with the acquisition of Sun Industries, which was completed on October 20, 2014. These shares were valued at $0.15 per common stock, being the market value of the date of issuance, and $25,000 was recorded as professional charges in the statement of operations with corresponding credit to common stock and additional paid-in-capital.

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES (continued)

In October 2014, the Company issued 200,000 of common stock in connection with management consulting, business advisory, shareholder information and public relations services pursuant to a consulting agreement with a third party. These shares were valued at $0.31 per common stock, being the market value of the date of issuance, and $62,000 was recorded as professional charges in the statement of operations with corresponding credit to common stock and additional paid-in-capital.

In October 2014, the Company issued 387,500 shares of common stock pursuant to a Restricted Stock Agreement, Loan Agreement and Consulting Agreement with two third parties. These shares were valued at $0.30 per common stock, being the market value of the date of issuance, and $116,250 was recorded as professional charges in the statement of operations with corresponding credit to common stock and additional paid-in-capital.

During November and December 2014, the Company issued 1,228,674 shares of restricted common stock on partial conversion of $90,000 out of $100,000 (face value) convertible note held by JSJ Investments as explained in note 13 to the financial statements.

Pursuant to Share Purchase and Exchange Agreement in connection with the acquisition of Sun, which was completed on October 20, 2014 as explained in note 7 to the financial statements, the Company has committed to issue 11,050,000 shares of common stock. These shares are presented as shares to be issued in the statement changes in shareholder’s deficiency as at December 31, 2014.

Rule 10B-18 Transactions

During the year ended December 31, ~~2012~~2014, there were no repurchases of the Company’s common stock by the Company.

~~Item~~ITEM 6. ~~Selected~~SELECTED ~~Financial~~FINANCIAL ~~Data.~~DATA

~~Not~~As a ~~applicable~~smaller reporting company, as defined in Rule 12b-2 of the Exchange Act, we are not required to provide the information required by this item.

~~Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.~~16

~~THE~~ITEM ~~FOLLOWING~~7. MANAGEMENT’S DISCUSSION ~~OF OUR PLAN OF OPERATION~~ AND ~~RESULTS~~ANALYSIS OF ~~OPERATIONS SHOULD BE READ IN CONJUNCTION WITH THE~~ FINANCIAL ~~STATEMENTS AND~~CONDITION RELATED NOTES TO THE FINANCIAL STATEMENTS INCLUDED ELSEWHERE IN THIS REPORT. THIS DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS THAT RELATE TO FUTURE EVENTS OR OUR FUTURE FINANCIAL PERFORMANCE. THESE STATEMENTS INVOLVE KNOWN AND ~~UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE OUR ACTUAL~~ RESULTS, ~~LEVELS~~ OF ACTIVITY, PERFORMANCE OR ACHIEVEMENTS TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, LEVELS OF ACTIVITY, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY THESE FORWARD-LOOKING STATEMENTS. THESE RISKS AND OTHER FACTORS INCLUDE, AMONG OTHERS, THOSE LISTED UNDER “FORWARD-LOOKING STATEMENTS” AND “RISK FACTORS” AND THOSE INCLUDED ELSEWHERE IN THIS REPORT.OPERATIONS

~~Results~~The following discussion of ~~Operations~~our financial condition and results of operations should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this report. Some of the statements in this discussion and elsewhere in this report constitute forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934. See “Cautionary Statement Regarding Forward-Looking Information” following the Table of Contents of this report. Because this discussion involves risk and uncertainties, our actual results may differ materially from those anticipated in these forward-looking statements.

	For the Year Ended December 31,
	2012		2011
Net sales	$	120,137		6,641
Gross profit	$	51,351		5,707
General and administrative expenses	$	608,708		121,459
Loss from operations	$	(2,319,197)		(832,104)
Other income (expenses)	$	(201,377)		514
Net loss	$	(2,520,574)		(831,590)

Plan of Operation

~~Revenues~~The Company is focused on the continued execution of a strategic plan aimed at increasing shareholder value. Operations will continue to be focused on three complimentary business segments:

~~For the year ended December 31, 2012, revenue was $120,137, as compared to $6,641 for the period ended December 31, 2011~~1. ~~The increase~~ inLighting ~~revenues~~Retrofits invia ~~2012~~subsidiary ~~was~~Sun ~~attributable to the increase in sales of coupon books.~~Industries

~~Operating~~The ~~Expenses~~Company will continue to grow its lighting retrofit business via subsidiary Sun Industries, which has 23 years of industry experience and a competitive advantage in the public sector with over 700 projects completed in 30 states. Sun Industries will continue to specialize in the EPCM (engineering/design, procurement, construction and maintenance) of diversified, large-scale lighting retrofit projects. Sun Industries will continue to target projects North America wide ranging anywhere from $100,000-$10 million. The Company will allocate resources towards removing barrier to revenue growth, which include increased bonding capacity and additional staff (sales and project development).

~~For the year ended December 31, 2012, operating expenses were $~~2~~,370,548 as compared to $837,811 for the period ended December 31, 2011~~. OEM/Distribution ~~Our~~– ~~total~~LED ~~operating~~Lighting ~~expenses in 2012 increased substantially from 2011. The following factors were primarily attributable to this increase:~~ Fixtures

~~Salary~~The ~~expense~~Company ~~increased~~will tofocus ~~$843,194~~a insignificant ~~2012~~amount ~~from~~of ~~$340,405~~new resources towards the ongoing push into the market as an Original Equipment Manufacturer (OEM) of LED products that are competitive on specifications (ie lumen per watt) and lowest cost in ~~2011~~the market. ~~The~~Investments ~~increase~~will be ~~was~~made ~~$502~~in product development and sales staff. For 2015-2016,~~789~~ orthe ~~147%~~company aswill ~~compared~~focus toon the ~~same~~manufacturing ~~periods~~and distribution of inthe ~~2011~~ECOP LED Flat Panel series and ECOP LED High bay fixtures. ECOP will also take advantage of distribution networks and industry relationships to distribute OEM products from other manufacturers under licensing agreement.

~~Consulting expense increased to $764,544 in 2012 from $288,206 in 2011~~3. ~~Consulting expense is primarily attributable to non-cash expenses~~ ~~from~~Wireless ~~the~~Light ~~issuances~~Management ofSystems ~~our common stock to various consultants for SEC compliance, investor relations~~ and ~~business~~Energy ~~development services. These costs were typically recognized at grant dates since most shared were considered earned upon receipt.~~Management

~~Selling,~~The ~~general~~Company ~~and~~will ~~administrative~~continue ~~expense~~with ~~principally~~the ~~includes~~final ~~rent,~~development ~~travel,~~stages ~~commissions,~~of ~~professional~~its ~~fees,~~wireless ~~promotional,~~light ~~entertainment and~~management ~~advertising~~system ~~expenses,~~(Radium) ~~market~~that ~~research,~~allows ~~fundraising~~for ~~expenses~~full automation and programming of facility lighting and other ~~overhead~~energy ~~expenses~~using ~~excluding~~technologies ~~salary~~(HVAC, ~~expense~~plug load). ~~The~~Once ~~principal increases~~a infacility ~~SG&A~~has ~~expenses~~the Radium insystem ~~2012~~installed, ~~from~~clients ~~the~~can ~~comparable~~earn ~~periods~~additional inrevenue ~~2011~~via ~~included~~utility ~~increases~~funded inDemand ~~option~~Response ~~expense,~~programs. ~~travel~~The ~~and~~Company ~~entertainment~~will provide ~~expenses,~~back-office ~~rent~~support for Energy Management, ~~and~~including ~~costs~~the ~~associated~~participation ~~with~~in ~~books~~Demand ~~distributed~~Response asprograms, ~~promotional~~via ~~materials~~ongoing Software-as-a-Service contracts.

WeOperations ~~expect~~in ~~that~~2014 ~~our~~remained ~~SG&A~~focused ~~will~~on ~~continue~~the final phases of product and software commercialization. Company resources have been directed to product ~~increase~~development in ~~future~~order ~~periods~~to asexpedite ~~our~~the ~~business~~timelines ~~expands~~for ~~although~~commercial atlaunch ~~this~~of ~~time~~new weproducts which are ~~not~~anticipated to gain significant ~~able~~market share. Beginning in Q3 2014, changes to ~~quantify~~operations occurred as the ~~expected~~company ~~increase~~started to market products as an Original Equipment Manufacturer (OEM). The Company forecasts significant sales growth in Q3 2015 based on expectations for the new low-cost high bay LED products, the Wireless Light Management System, and a focus on revenue growth via strategic acquisitions. In Q2 2015, the Company plans to hire additional staff in step with revenue increases including OEM sales staff that will be focused on national electrical supply companies and national electrical contractors in both the US and Canada. The Company will continue to focus on the lighting retrofit market with existing sales staff.

~~Other~~Operations ~~Expenses~~to Focus on Three High-Growth Revenue Streams:

WeA ~~accrued~~key ~~$25,900~~focus inof ~~liquidated~~operations ~~damages~~for inQ2 ~~2012~~2015 ~~which~~is ~~was~~the ascommercial alaunch ~~result~~ of ~~our~~the ~~failure~~Company’s toLED ~~timely~~high ~~file~~bay athat ~~registration~~is ~~statement~~expected ~~related~~ to ahave ~~private~~one of ~~placement~~the oflowest ~~our~~MSRP’s ~~securities~~available ~~which~~on ~~closed~~the ~~during~~North American market. The Company is preparing operations for significant sales given that the ~~second~~LED ~~quarter~~high ofbay ~~2012~~will be competitively priced with legacy technologies, oroffering ~~the~~significant ~~registration~~energy ~~statement~~savings ~~failed~~for clients at tocomparable capital cost. Operations will be ~~effective~~refocused ~~within~~to ~~150~~ensure ~~days~~that ~~after~~the ~~closing~~Company can manage high volume sales as an OEM.

WeIn ~~also~~addition ~~had~~to ~~loss~~the commercial launch of ~~$28~~the Company’s LED,~~011~~ ~~due~~the company had been focusing on integrating the newly acquired company, Sun & Sun Industries to ~~change~~offer inthe ~~fair~~added value ofproposition ~~derivative~~to ~~liabilities~~the ~~related~~long established client base in USA. By vertically integrating the company, Eco- Shift continues to replicate and refine its unique sales process which: a) targets the ~~convertible~~“C” level ~~note~~stratum ~~payable~~of medium to ~~Asher~~large industrial and commercial enterprises; b) develops a high yield of opportunities via the internet ~~Enterprises~~based ~~Inc.~~Lead ~~The~~Generation ~~interest~~software; ~~expense~~c) ~~related~~offers an objective and consultative approach to ~~this~~the ~~note~~lighting ~~was~~retrofits $1for clients; d) provides expertise in and access to all four lighting technologies (Fluorescent,~~227~~ Induction, LED and ~~amortization~~HID); e) provides total disclosure with a thorough “Life Cycle Analysis” of ~~the~~each ~~debt~~client ~~discount~~project. ~~was~~Furthermore, $8Eco-Shift is rapidly becoming a “Full Service” energy solution provider soon to offer wireless energy management technologies for individual lighting fixture control,~~548~~ demand response revenue programs & administration, peak demand management, fault detection & diagnostics (of all energy systems) and direct load control across large corporate enterprise energy assets.

~~Net~~We ~~Loss~~plan to recruit 4-6 additional highly experienced technical sales professionals who will expand our territory of the Canadian marketplace and the United States.

~~Net loss for year ended December 31, 2012, was $2,520,574 or loss per share of $0.03, as compared to $831,590 or loss per share of $0.01, for the comparable period ended December 31, 2011.~~17

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

In addition to integrating the operations with Sun & Sun Industries, we plan on leveraging the existing customer base to expand further into the U.S. by way of a 2 phase process. The initial research phase will focus on gaining an in-depth understanding of the most costly areas to utilize electricity as well as other economic and competitive business drivers on a state by state basis. The objective of Phase I is to develop a clear understanding of regional markets then generate a list of segmentation variables that allow us to prioritize and focus on the most fertile grounds to do our hunting in. Phase 2 will consist of a more detailed examination of the options developed in Phase I followed by the development of detailed execution and rollout plans for each of the key regions. In addition to increasing company’s footprint in the US and improved economies of scale, the integration also helps in training the staff of that business and assisting in the recruiting of additional sales staff. In terms of direct sales activity, Eco-Shift will utilize its local sales team to continually expand the territory (targeting US based businesses) within an 8 hour drive from Eco-Shift’s headquarters located in Cambridge, Ontario Canada such as Chicago, Detroit, Pittsburgh, Cleveland and Buffalo. The next step would be to recruit and train additional highly experienced technical sales professionals in those areas. Those states include Michigan, Illinois, New York, Ohio, Pennsylvania, Connecticut, Massachusetts, New Jersey and Wisconsin.

The Company has introduced its NetZero Certification as Eco-Shift Power’s means of qualifying lighting products that meet exacting criteria and is a new tool for industry to make better energy and cost saving decisions. ECOP has developed rigorous protocols including over 22 necessary tests that all products must go through to attain NetZero Certification. With a foundation in new-era LED lighting and wireless and web-enabled technologies, Eco-Shift Power is transitioning clients’ decision making from old, fixed technology to the new information age. The premise is that the NetZero certification provides certainty, avoids confusion and means industrial and commercial clients can improve the quality of their decision making when seeking cost savings from energy efficient lighting.

COMPARISON OF OPERATING RESULTS

Comparison of operating results for the year ended December 31, 2014 to 2013

Revenue

Revenue decreased by $99,291 to $1,270,970 for the year ended December 31, 2014 from $1,370,261 for the year ended December 31, 2013.

Decrease in revenue for the year ended December 31, 2014 as compared to the year ended December 31, 2013 was due to increased focus on development of new product which is expected to result in higher revenues going forward.

The Company was able to maintain a level of sales to cover the direct overheads and part of indirect costs.

The acquisition of Sun is expected to provide a healthy contribution to revenue in 2015 and onwards since 2014 covered only post October 20, 2014 results of Sun.

Cost of Goods Sold

Cost of goods sold was $1,007,076 for the year ended December 31, 2014, compared to $803,909 for the year ended December 31, 2013, an increase of $203,167 from the previous year. The increase is due to a relatively lower gross margin due to increased market competition.

Net Expenses

Net expenses for the year ended December 31, 2014 decreased to $2,802,811 from $3,559,356 for the year ended December 31, 2013.

Decrease in net expenses for the year ended December 31, 2014 was mainly due to gain resulting from change in fair value of derivative liabilities of $2,483,495 mainly resulting from a decline in the market price of the Company’s stock. In 2013, the expenses were higher on account of a non-recurring expense relating to extinguishment loss on modification of Linear note amounting to $539,505. This decrease is offset by an increase in professional fees by $1,313,564, mainly due to acquisition and other legal transactions, and an increase in interest and bank charges by $400,351, mainly on account of additional borrowings in the year 2014.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Net loss.

During the year ended December 31, 2014, we incurred a net loss of $2,538,917 as compared to a net loss of $2,993,004 during the year ended December 31, 2013 for the reasons noted above.

Liquidity and Capital Resources

~~The~~As ~~following~~of ~~table~~December ~~summarizes~~31, 2014, the Company had total assets of $6,738,303 (2013:$710,354), which included total current assets of $2,064,238 (2013:$ ~~liabilities~~698,256), comprising of cash of $205,635 (2013:$107,770), accounts receivable of $957,076(2013:$24,442), work-in-process and ~~working~~inventory ~~capital~~of at$Nil ~~December~~(2013:$142,891), 31advances and deposits of $111,413 ~~2012~~(2013:$150,756), ~~compared~~prepayments toand ~~December~~other 31receivables of $204,406 (2013:$55,020). Non-current asset consisted of intangible assets and goodwill arising on acquisition of Sun Industries ~~2011~~of $2,225,410 and $2,380,987, respectively and property and equipment of $67,668 (2013:$12,098). The intangible assets include customer base acquired at a fair value of $1,948,000 and trademarks of $444,900.

	December 31, 2012		December 31, 2011		Increase/Decrease
Current Assets	$	13,593	$	521,973	$	(508,380)
Current Liabilities	$	591,495	$	157,930	$	433,565
Working Capital (Deficit)	$	(577,902)	$	364,043	$	(941,945)

The Company had total current liabilities of $7,370,807 (2013:$1,900,182) as of December 31, 2014 and derivative liabilities of $151,689 (2013:Nil). The current liabilities consisted of accounts payable and accrued liabilities of $2,351,753 (2013: $418,415), customer deposits of $215,807 (2013:$357,976), liquidated damages payable of $70,300 (both in 2014 and 2013), provision for contingent liability of $129,705 (2013:$141,030), advances from shareholders of $308,943 (2013:$118,696), convertible notes payable of $1,560,968 (2013:$189,685) and promissory notes payable of $736,098 (2013:$604,080).

AtThe ~~December~~Company ~~31, 2012, we~~ had a working capital deficit of $~~577~~5,~~902~~306,569 ~~as compared to a working capital of 364~~(2013:$1,~~043~~201,926) atand ~~December 31, 2011,~~ an ~~increase~~accumulated in deficit of $~~941~~7,~~945.~~255,484 ~~The increase is primarily attributable to the decrease in current assets and increase~~(2013:$4,716,567) inas ~~current~~of ~~liabilities~~December as31, ~~follows:~~2014.

~~Accrued~~Net cash ~~liabilities~~used ~~increased~~in operating activities. During the year ended December 31, 2014, the Company used $2,051,813 of net cash in operating activities compared to $~~121~~978,~~749~~854 as of net cash in operating activities for the year ended December 31, ~~2012~~2013. ~~from~~The increase in net cash used in operating activities by $61,~~546~~072,959 was mainly attributable to the increase in loss for the year ended December 31, 2014 as ofcompared to the previous year ended December 31, ~~2011~~2013 offset by change in working capital balances.

~~Accrued~~Net cash ~~salary~~used ~~increased~~in ~~to $208,077~~investing asactivities. ofDuring the year ended December 31, ~~2012~~2014, ~~from~~the Company generated $9231,~~339~~569 asof net cash in investing activities compared to $222,042 of net cash used in investing activities for the year ended December 31, ~~2011~~2013. The increase in cash generated was mainly due to receipt of restricted cash of $127,219 offset by cash paid in connection with Sun acquisition of $100,000.

~~Convertible~~Net cash ~~note~~provided ~~payable~~by financing activities. During the year ended December 31, 2014, net of ~~discount,~~cash provided by financing activities was $761,~~449~~963,991 as compared to $1,412,262 for the year ended December 31, 2013. The increase of $551,729 is mainly because of proceeds from the issuance of shares/warrants and notes during the year ended December 31, ~~2012~~2014.

~~Net~~Need ~~cash~~For ~~used~~Additional in operating activities for the years ended December 31, 2012 and 2011 was $1,067,996 and $489,045, respectively. The net loss for the years ended December 31, 2012 and 2011 was $2,520,574 and $831,590, respectively. The Company’s cash used in operations increase in 2012 was due primarily to the net loss of $2,520,574.Capital

~~Net~~The ~~cash~~Company ~~obtained~~has ~~through~~incurred ~~all~~recurring ~~financing~~losses ~~activities~~from ~~for~~operations ~~the~~and ~~years~~as ~~ended~~at December 31, ~~2012~~2014, ~~was~~the ~~$996,874,~~Company ashas ~~compared~~a toworking ~~$713,718~~capital ~~for~~deficiency ~~the~~of ~~year ended December 31~~$5,306,569 ~~2011.~~and ~~The~~has ~~company~~accumulated ~~raised~~deficit of $~~893~~7,~~874~~255,484. ~~through~~These ~~the~~factors ~~sale~~raise ofsubstantial ~~common~~doubt ~~stock~~as atto ~~the~~its ~~price~~ability ~~range~~to ~~from~~continue ~~$.10 through~~as ~~$0.25~~a ingoing ~~2012~~concern.

~~Off-Balance~~The ~~Sheet~~Company’s ~~Arrangements~~continued existence is dependent upon management’s ability to develop profitable operations and resolve its liquidity problems. Management anticipates the Company will attain profitable status and improve its liquidity through continued business development and additional equity investment in the Company. Management is pursuing various sources of financing including a debt financing of $4 million as the first tranche for a $10 million debt financing, which is currently in the advance stage of negotiation. In the event the Company is not able to raise the necessary equity financing, the Company intends to seek stockholder loans or debt financing to meet its working capital and growth requirements. This will enable Company’s operations to advance and grow in order to produce sufficient operating cash to repay its current loans. There can be no assurance that the necessary debt or equity financing will be available, or will be available on terms acceptable to the Company, in which case the Company may be unable to meet its obligations.

~~We have no significant known off balance sheet arrangements.~~19

~~Critical~~ITEM ~~Accounting~~7. ~~Policies~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

WeThe ~~believe~~Company’s ~~that~~consolidated ~~the~~financial ~~following~~statements ~~accounting~~have ~~policies~~been ~~are~~prepared on a going concern basis, which implies the ~~most~~Company ~~critical~~will continue to ~~aid~~realize ~~you~~its assets and discharge its liabilities in ~~fully~~the ~~understanding~~normal course of business. As shown in the accompanying consolidated financial statements, the Company has experienced losses from operations and ~~evaluating~~has ~~this~~negative ~~“Management~~working capital as of December 31, 2014. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The continuation of ~~Discussion~~the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and ~~Analysis~~the attainment of ~~Financial~~profitable ~~Condition~~operations. The consolidated financial statements do not include any adjustments related to the recoverability and ~~Results~~classification of ~~Operations~~recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue as a going concern.”

~~Website~~There ~~Development~~can be no assurance that the Company will be able to continue to raise funds, in which case we may be unable to meet our obligations and we may cease operations.

~~The~~ITEM ~~Company has adopted the provisions of FASB Accounting Standards Codification No~~7A. ~~350~~QUANTITATIVE ~~Intangible-Goodwill~~AND ~~and~~QUALITATIVE ~~Other.~~DISCLOSURES ~~Costs incurred~~ABOUT inMARKET ~~the planning stage of a website are expensed, while costs incurred in the development stage are capitalized and amortized over the estimated three year life of the asset~~RISK. On September 30, 2012, the Company evaluated the impairment by estimating future undiscounted cash flows expected to result from the use of the website and its eventual disposition. Since the sum of the expected undiscounted future cash flow is significantly less than the carrying amount of the website, the carrying amount of the website in amount of $113,068 was recognized as impairment loss during the year ended December 31, 2012.

~~Stock~~As a smaller reporting company, as defined in Rule 12b-~~Based~~2 of the Exchange Act, we are not required to provide the information required ~~Compensation~~by this item.

~~The~~ITEM ~~Company recognizes compensation costs to employees under FASB Accounting Standards Codification No~~8. ~~718,~~CONSOLIDATED ~~Compensation~~FINANCIAL -STATEMENTS ~~Stock Compensation.~~AND ~~Under~~SUPPLEMENTARY FASB Accounting Standards Codification No. 718, companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share based compensation arrangements include stock options, restricted share plans, performance based awards, share appreciation rights and employee share purchase plans. As such, compensation cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant.DATA

~~Equity instruments~~The ~~issued~~information toin ~~other~~response ~~than employees are recorded on the basis of the fair value of the instruments, as required by FASB Accounting Standards Codification No. 505, Equity Based Payments~~ to ~~Non-Employees.~~this Initem ~~general, the measurement date~~ is ~~when~~contained ~~either~~elsewhere ain ~~(a)~~this ~~performance~~Report ~~commitment,~~beginning asfrom ~~defined,~~Pages ~~is reached or (b) the earlier of (i) the non~~F-~~employee~~1 ~~performance is complete or (ii) the instruments are vested. The measured value related~~ to ~~the instruments is recognized over a period based on the facts and circumstances of each particular grant as defined in the FASB Accounting Standards Codification~~F-29.

~~Going~~ITEM ~~Concern~~9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

We have limited working capital and limited revenues from sales of products and services. During the fiscal year ended December 31, 2012, our operating expenses continued to be greater than our revenues. These factors have caused our accountants to express substantial doubt about our ability to continue as a going concern. The accompanying financial statements do not include any adjustment that might be necessary if we are unable to continue as a going concern.

Our ability to continue as a going concern has caused the Board of Directors to continue to look for sources of investment capital, and investigate merger and acquisition opportunities. We will look to further diversify our holdings and sources of cash flow.

(8)

Table of Contents

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

We do not hold any derivative instruments and do not engage in any hedging activities.

Item 8. Financial Statements and Supplementary Data.

Our financial statements are contained in pages F-1 through F-14 which appear at the end of this Annual Report.

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

On March 8, 2013, the Board dismissed Liggett Vogt & Webb P.A. (“Webb”), as the Company’s independent registered public accounting firm.

Webb’s report on the financial statements for the fiscal year ended December 31, 2011, contained no adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principle, other than for a going concern. The Company engaged Webb on November 1, 2011. The report on the financial statements for the fiscal year ended December 30, 2010, was provided by Rothstein, Kass & Company, P.C., the Company’s independent registered public accounting firm prior to Webb, on March 28, 2011.

During the fiscal year ended December 31, 2011, and in the subsequent interim period through March 8, 2013, the date of dismissal of Webb, there were no disagreements with Webb on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Webb, would have caused them to make reference to the subject matter of the disagreements in its reports on the financial statements for such year. During the fiscal year ended December 31, 2011, and in the subsequent interim period through March 8, 2013, the date of dismissal of Webb, there were no reportable events as defined in Item 304(a)(1)(v) of Regulation S-K.

On March 8, 2013, the Board approved the engagement of DNTW Chartered Accountants, LLP (“DNTW”), as the Company’s new independent registered public accounting firm.

During the fiscal year ended December 31, 2011, and the subsequent interim period prior to the engagement of DNTW, the Company has not consulted DNTW regarding (i) the application of accounting principles to any specified transaction, either completed or proposed; (ii) the type of audit opinion that might be rendered on the Company’s financial statements, and either a written report was provided to the registrant or oral advice was provided that the new accountant concluded was an important factor considered by the registrant in reaching a decision as to the accounting, auditing or financial reporting issue; or (iii) any matter that was either the subject of a disagreement (as defined in Item 304(a)(1)(v)) or a reportable event (as defined in Item 304(a)(1)(v)).

Item 9A. Controls and Procedures.

(a) Evaluation of Disclosure and Control Procedures

Based on their evaluation as of the end of the period covered by this Annual Report on Form 10-K, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(c) and 15d-15(e) under the Exchange Act) are not effective to ensure that information required to be disclosed by us in report that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms and to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

(b) Management’s Assessment of Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in the Exchange Act Rules 13a-15(f). A system of internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Under the supervision and with the participation of management, including the principal executive officer and the principal financial officer, the Company’s management has evaluated the effectiveness of its internal control over financial reporting as of December 31, 2012, based on the criteria established in a report entitled “Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission” and the interpretive guidance issued by the Commission in Release No. 34-55929. Based on this evaluation, the Company’s management has evaluated and concluded that as of December 31, 2012, the Company’s internal control over financial reporting was ineffective due to the existence of material weakness as described below.

A material weakness is a control deficiency, or combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements would not be prevented or detected on a timely basis. The Company’s assessment identified certain material weaknesses which are set forth below:

Functional Controls and Segregation of Duties

Because of the company’s limited resources, there are limited controls over information processing, and no internal controls over the accuracy, completeness and authorization of transactions.

There is an inadequate segregation of duties consistent with control objectives. Our Company’s management is composed of a small number of individuals resulting in a situation where limitations on segregation of duties exist. In order to remedy this situation we would need to hire additional staff to provide greater segregation of duties. Currently, it is not feasible to hire additional staff to obtain optimal segregation of duties. Management will reassess this matter in the following year to determine whether improvement in segregation of duty is feasible.

There is a lack of top level reviews in place to review targets, product development, joint ventures or financing. All major business decisions are carried out by the officers with board of director approval when needed.

Accordingly, as the result of identifying the above material weaknesses we have concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the Company’s internal controls.

Management believes that the material weaknesses set forth above were the result of the scale of our operations and are intrinsic to our small size. Management believes these weaknesses did not have a material effect on our financial results and intends to take remedial actions upon receiving funding for the Company’s business operations.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management’s report herein.

There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information.

None.

~~(9)~~ITEM 9A. CONTROLS AND PROCEDURES

~~Table~~ Evaluation of ~~Contents~~Disclosure Controls and Procedures

Our Principal Executive Officer and Principal Financial Officer, after evaluating the effectiveness of our “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Annual Report on Form 10-K (the “Evaluation Date”), have concluded that as of the Evaluation Date, our disclosure controls and procedures were not effective to provide reasonable assurance that information we are required to disclose in reports that 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 rules and forms, and that such information is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. This conclusion was based on the existence of the material weaknesses in our internal control over financial reporting previously disclosed and discussed below.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. We identified and continue to have the following material weaknesses in our internal controls over financial reporting: we currently do not have an internal audit group, and we will need to train accounting and financial staff with appropriate public company reporting and compliance requirements. Additionally, due to the fact that we have only few officers and directors who have some experience as officers or directors of a reporting company, such level of experience may impair our ability to maintain effective internal controls over financial reporting and disclosure controls and procedures, which may result in material misstatements to our consolidated financial statements and an inability to provide accurate and timely financial information to our stockholders.

ITEM 9A. CONTROLS AND PROCEDURES (continued)

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over our financial reporting as defined in Rule 13a-15(f) under the Exchange Act. Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting for external purposes in accordance with accounting principles generally accepted in the United States. Internal control over financial reporting includes maintaining records that in reasonable detail accurately and fairly reflect our transactions; providing reasonable assurance that transactions are recorded as necessary for preparation of our consolidated financial statements; providing reasonable assurance that receipts and expenditures of our assets are made in accordance with management authorization; and providing reasonable assurance that unauthorized acquisition, use or disposition of our assets that could have a material effect on our consolidated financial statements would be prevented or detected on a timely basis. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our consolidated financial statements would be prevented or detected.

Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this valuation, segregation of duties & maintenance of current accounting records have been identified as material weaknesses in internal control over financial reporting.

To address the need for more effective internal controls, management has plans to improve the existing controls and implement new controls as our financial position and capital availability improves.

Changes in Internal Control over Financial Reporting

There have been no changes during the year ended December 31, 2014 in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

PART III

~~Item~~ITEM 10. ~~Directors~~DIRECTORS, ~~Executive~~EXECUTIVE ~~Officers,~~OFFICERS ~~and~~AND ~~Corporate~~CORPORATE ~~Governance.~~GOVERNANCE

~~The~~Our executive ~~following~~officers ~~table~~ and ~~biographical summaries set forth information, including principal occupation and business experience, about our~~ directors ~~and~~are ~~executive~~as ~~officers at April 15, 2013~~follows:

Name	Age	~~Age~~	Positions and Offices Held	~~Position~~
Brian S. John (1)		44		President and Chief Executive Officer and Director
Alistair Haughton /Gilbert Wood*	53		President & Chief Executive Officer (CEO)
Richard A. Miller (2)		45		Chief Operating Officer, Vice President, Secretary and Director
James Hughes	71		Chief Financial Officer (CFO)
Wei-Ken Seto (3)		39		Chief Operating Officer
Martin Scott (4)		31		Chief Financial Officer
Gilbert Wood (5)		50		Chief Executive Officer, President, Director
James Hughes (6)		68		Chief Financial Officer and Director

* Alistair Haughton was appointed as President & Chief Executive Officer (1CEO) ~~Effective~~of onthe ~~February~~Company 8,and ~~2013~~has replaced James Hughes who was acting as interim CEO after four month sabbatical leave from Gilbert Wood, which began in September 2014. Mr. ~~John~~Woods ~~resigned~~will not asbe ~~Chief~~returning ~~Executive~~to ~~Officer~~his ~~and~~prior ~~President.~~roles ~~Effective~~as onan ~~March~~officer ~~21,~~of ~~2013~~the Company, although he remains a Director of the Company. Mr. ~~John~~Hughes ~~resigned~~remains a asDirector ~~director~~and the CFO of the Company.

~~(2) Effective on February 8, 2013, Mr. Miller resigned as Chief Operating Officer, Vice President and Secretary. Effective on March 21, 2013, Mr. Miller resigned as Director.~~Alistair Haughton

~~(3)~~Alistair Haughton’s ~~Effective~~appointment ~~August~~brings 31more than 30 years of management and executive level experience. Alistair’s experience includes successful postings as Strategic Business Manager, ~~2012~~COO, MrCEO and Managing Director of multiple public and private companies. This ~~Seto~~includes ~~resigned~~the asNorwegian ~~Chief~~multi-national ~~Operating~~Cermaq ~~Officer~~Group, Canadian operations, where he managed the successful and profitable restructuring of operations with annual sales in excess of $400 M, over 400 employees, and numerous contractual outsourced entities.

~~(4) On October 22, 2012, Mr. Scott resigned as Chief Financial Officer.~~21

~~(5)~~ITEM 10. ~~Effective on February 8~~DIRECTORS, ~~2013,~~EXECUTIVE ~~Mr.~~OFFICERS ~~Wood~~AND ~~was~~CORPORATE ~~appointed~~GOVERNANCE ~~Chief Executive Officer, President and Director.~~(continued)

~~(6) Effective on February 8, 2013, Mr. Hughes was appointed as Chief Financial Officer and Director.~~Gilbert Wood

Gilbert Wood has more than 20 years of experience in a variety of industries, ~~age~~serving 50in senior management roles in both private and publicly held companies. He has been CEO and President of the Company since May 2008 and he continues to grow the Company through international markets for Eco-Shift Power for suite of products.

~~Gilbert Wood, age 50, combines over 10 years of experience in lighting senior management. Since 2007,~~ Mr. Wood ~~served~~has asimplemented ~~Chief~~a ~~Executive Officer,~~channel ~~President~~Strategy ~~and~~for ~~Chairman~~distribution of ~~Eco-Shift~~the ~~Power~~smart ~~Corp.~~for ~~Prior~~distribution ~~to that, Mr. Wood served as Vice-President~~ of ~~Business~~the ~~Development of~~SMART ~~Illumination~~product ~~IQ,~~line aacross ~~manufacturer and distributor of lighting fixtures, from 2003 through 2008. From 1990 through 2003, Mr. Wood~~Canada ~~served as Chief Executive Officer~~ and ~~President~~developed ~~of Valet Vending Inc.,~~ a ~~company~~territorial ~~that~~structure ~~manufactured and distributed vending machines~~ for the ~~hotel~~United ~~and~~States ~~restaurant~~as ~~industry~~well ~~across~~as ~~Canada~~USA OEM partner.

~~The~~Prior ~~Board~~to ~~believes~~working ~~that~~for Eco-Shift, Mr. Wood‘s ~~extensive~~operated ~~senior~~his ~~management~~own ~~experience~~consulting incompany ~~the~~for ~~lighting~~five ~~industry~~years ~~will~~where behe anprovided ~~important~~management ~~factor~~and business indevelopment ~~the~~training ~~Company’s~~ensuring their growth in to acompanies ~~leader~~ in the ~~sustainability~~IT, ~~movement~~manufacturing, distribution, retail, and utility commodity sectors.

~~James~~Mr. ~~Hughes,~~Wood ~~age~~has 68also served as the President of Valet Vending Inc. for 12 years.

James Hughes, age 68, was a principal owner of Eco-Shift Power Corp. and has served as the Chief Financial Officer, Secretary-Treasurer and a Director of the company since 2007. From 1992 through 2007, Mr. Hughes owned and served as Chief Executive Officer and a Director of TAI Communications Inc., a provider of information products and services to professionals in Canada.

~~Mr.~~James Hughes ~~received~~has amore ~~Bachelor~~than of30 ~~Arts~~years ~~degree~~of experience in ~~Economics~~a ~~from~~variety ~~the~~of ~~University~~industries. ofHe ~~Western~~is ~~Ontario~~with inthe ~~1968~~Company ~~and~~since a2007. ~~Chartered~~Currently ~~Accountant designation~~he ~~from~~is the CFO ~~Institute~~and ofa ~~Chartered~~principal ~~Accountants~~owner of ~~Ontario~~the ~~in 1973~~Company.

~~The~~Prior ~~Board~~to ~~believes~~joining ~~that~~Eco-Shift ~~Mr.~~he ~~Hughes’~~was ~~vast~~a ~~experience in accounting and auditing,~~ management ~~consulting,~~consultant ~~developing~~to ~~computer~~develop ~~based management~~entrepreneurial ~~information~~business ~~systems~~concepts and ~~being~~working anunder ~~entrepreneur~~contract ~~will~~with entrepreneurs bewhose abusiness ~~significant~~require ~~asset to help~~ the ~~Company~~establishment ~~grow~~and inmaintenance toof aMIS ~~recognized leader~~based inon ~~the~~sound ~~sustainability~~internal ~~movement~~control principles.

~~Family~~Term ~~Relationships~~of Office

~~There~~Our directors are noappointed ~~family~~for ~~relationships~~one ~~among~~year term to hold office until the next annual general meeting of our ~~directors,~~stockholders ~~executive~~or until removed from office in accordance with our bylaws. Our officers, orif ~~persons~~any, ~~nominated~~are orappointed ~~chosen~~by our board of directors and hold office until removed by the ~~Company~~board. toAll ~~become~~officers and directors listed above will remain in office until the next annual meeting of our stockholders, orand ~~executive~~until ~~officers~~their successors have been duly elected and qualified. There are no agreements with respect to the election of Directors. We do not have any standing committees. None of our ~~directors~~Officers and/or ~~executive~~Directors ~~officers~~have filed any bankruptcy petition, been convicted of or ~~their~~been ~~respective~~the ~~immediate~~subject ~~family~~of ~~members~~any criminal proceedings or ~~affiliates~~the subject of any order, judgment or decree involving the violation of ~~are~~any ~~indebted~~state toor usfederal securities laws within the past five (5) years.

~~Committees~~Audit ~~of the Board of Directors~~Committee

We ~~have~~do not ~~established~~have ~~any~~a ~~committees,~~standing ~~including~~audit committee of the Board of Directors. Management has determined not to establish an audit committee, at apresent ~~compensation~~because ~~committee~~of orour alimited ~~nominating~~resources ~~committee. The~~and ~~Board~~limited ~~currently~~operating ~~acts~~activities asdo ~~our~~not warrant the formation of an audit committee or the expense of doing so. AtWe do not have a financial expert serving on the ~~present~~Board ~~time,~~of weDirectors ~~believe~~or employed as an officer based on management’s belief that ~~our~~the ~~Board~~cost isof ~~capable~~obtaining the services of ~~analyzing~~a person who meets the criteria for a financial expert ~~and~~under ~~evaluating~~Item ~~our~~401(e) of Regulation S-B is beyond its limited financial ~~statements~~resources and ~~understanding~~the financial skills of such an expert are simply not required or necessary for us to maintain effective internal controls and procedures for financial reporting in light of the limited scope and simplicity of accounting issues raised in its consolidated financial statements at this stage. We have not formed a Compensation Committee, Nominating and Corporate Governance Committee or any other Board Committee as of the filing of this Annual Report.

~~Legal~~Certain Legal Proceedings

ToNo ~~the best of our knowledge~~director, ~~during~~nominee ~~the~~for ~~past ten years, none of the following occurred with respect to our present or former~~ director, ~~executive~~ ~~officer,~~ or ~~employee: (1) any bankruptcy petition filed by or against any business of which such person was a general partner or~~ executive officer ~~either at the time~~ of the ~~bankruptcy~~Company orhas ~~within~~appeared ~~two~~as ~~years~~a ~~prior~~party toin ~~that time; (2)~~ any ~~conviction~~legal ~~in a criminal~~ proceeding ormaterial ~~being subject~~ to ~~a pending criminal proceeding (excluding traffic violations and other minor offenses);~~ ~~(3)~~an ~~being~~evaluation ~~subject to any order, judgment or decree, not subsequently reversed, suspended or vacated,~~ of ~~any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting~~ his orability ~~her involvement in any type of business, securities~~ or ~~banking~~integrity ~~activities;~~during ~~and (4) being found by a court of competent jurisdiction (in a civil action),~~ the ~~SEC~~ orpast ~~the~~five ~~Commodities Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated~~years.

~~Compliance with Section 16(A) of the Exchange Act~~22

~~Section~~ITEM ~~16(a) of the Exchange Act requires the Company’s directors, executive officers and persons who beneficially own~~ 10~~% or more of a class of securities registered under Section 12 of the Exchange Act to file reports of beneficial ownership and changes in beneficial ownership with the SEC~~. ~~Directors~~DIRECTORS, ~~executive~~EXECUTIVE ~~officers~~OFFICERS ~~and~~AND ~~greater~~CORPORATE ~~than~~GOVERNANCE ~~10% stockholders are required by the rules and regulations of the SEC to furnish the Company with copies of all reports filed by them in compliance with Section 16~~(acontinued).

~~Based~~Compliance ~~solely~~With ~~on our review of certain reports filed with the Securities and Exchange Commission pursuant to~~ Section 16(aA) ofOf ~~the~~The ~~Securities~~ Exchange Act ~~of 1934, as amended, the reports required to be filed with respect to transactions in our common stock during the fiscal year ended December 31, 2012, were timely~~.

~~Code~~We do not have a class of ~~Ethics~~equity securities registered pursuant to section 12 of the Securities Exchange Act and ~~Business~~therefore our directors, officers and persons who beneficially own more than 10% of ~~Conduct~~a registered class of our equity securities are not required to file reports of ownership and changes in ownership with the SEC or furnish us with copies of these reports.

~~We have adopted a~~ Code ~~of Business Conduct and Ethics, which applies to our board of directors, our executive officers and our employees,~~ ~~outlines the broad principles~~ of ~~ethical business conduct we adopted, covering subject areas such as:~~Ethics

•We currently ~~compliance~~do ~~with~~not ~~applicable~~have ~~laws~~a ~~and~~code ~~regulations, • handling~~ of ~~books~~ethics ~~and~~that ~~records,~~applies •to ~~public~~our ~~disclosure reporting~~officers, •employees ~~insider trading, • discrimination~~ and ~~harassment~~director, •including ~~health~~our ~~and~~Chief ~~safety,~~Executive ~~• conflicts of interest, • competition and fair dealing, and • protection of company assets~~Officer.

AITEM ~~copy~~11. ofEXECUTIVE our Code of Business Conduct and Ethics is available without charge, to any person desiring a copy of the Code of Business Conduct and Ethics, by written request to us at our principal offices at 1090 Fountain Street North, Cambridge, Ontario, N3H 4R7.COMPENSATION

~~(10)~~Compensation of Executive Officers

~~Table~~The following summary compensation table sets forth all compensation awarded to, earned by, or paid to the named executive officer paid by us during the fiscal years ended December 31, 2014 and 2013 in all capacities for the accounts of ~~Contents~~our executive officer:

~~Item~~SUMMARY ~~11.~~COMPENSATION ~~Executive Compensation.~~TABLE

The following summary compensation table sets forth all compensation awarded to, earned by, or paid to the named executive officers paid by us during the periods ended December 31, 2012, 2011 and 2010.

Name	Position		Salary		Consulting		Bonus		Others		Total
			$		$		$		$		$
*2014*

Gilbert Wood		CEO		124,615		-		-		-		124,615

James Hughes		CFO/CEO		94,615		-		-		-		94,615

*2013*

Gilbert Wood		CEO		150,000		-		-		-		150,000

James Hughes		CFO		120,000		-		-		-		120,000

~~2012~~ITEM ~~SUMMARY~~12. ~~COMPENSATION~~SECURITY ~~TABLE~~OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Name and Principal Position	Year	Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		Non-Equity Incentive Plan Compensation (S)			Nonqualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Total ($)
Brian S. John (1)	2012	$	100,000	$	0	$	0	$	0	$		0	$	0	$	0	$	100,000
Former Chief Executive	2011	$	50,000	$	0	$	0	$	3,092	$		0	$	0	$	0	$	53,092
Officer and President	2010	$	0	$	0	$	0	$	0	$		0	$	0	$	0	$	0
Richard A. Miller (2)	2012	$	100,000	$	0	$	0	$	0	$	0		$	0	$	0	$	100,000
Former Chief Operating Officer	2011	$	50,000	$	0	$	0	$	3,092	$		0	$	0	$	0	$	53,092
Vice President, Secretary	2010	$	0	$	0	$	0	$	0	$		0	$	0	$	0	$	0
Wei-Ken Seto (3)	2012	$	91,935	$	0	$	0	$	0	$		0	$	0	$	0	$	91,935
Former Operating Officer	2011	$	0	$	0	$	0	$	0	$		0	$	0	$	0	$	0
	2010	$	0	$	0	$	0	$	0	$		0	$	0	$	0	$	0
Martin Scott (4)	2012	$	58,333	$	0	$	0	$	0	$		0	$	0	$	0	$	58,333
Chief Financial Officer	2011	$	0	$	0	$	0	$	0	$		0	$	0	$	0	$	0
Chairman	2010	$	0	$	0	$	0	$	0	$		0	$	0	$	0	$	0
Gilbert Wood (5)	2012	$	0	$	0	$	0	$	0	$		0	$	0	$	0	$	0
Chief Executive Officer	2011	$	0	$	0	$	0	$	0	$		0	$	0	$	0	$	0
President	2010	$	0	$	0	$	0	$	0	$		0	$	0	$	0	$	0
James Hughes (6)	2012	$	0	$	0	$	0	$	0	$		0	$	0	$	0	$	0
Chief Financial Officer	2011	$	0	$	0	$	0	$	0	$		0	$	0	$	0	$	0
	2010	$	0	$	0	$	0	$	0	$		0	$	0	$	0	$	0

The following table sets forth certain information as of the date hereof with respect to the beneficial ownership of our ordinary shares, the sole outstanding class of our voting securities, by (i) each stockholder known to be the beneficial owner of 5% or more of the outstanding common stock of the Company, (ii) each executive officer and director, and (iii) all executive officers and directors as a group.

~~(1)~~Beneficial ~~Mr.~~ownership ~~John~~is ~~was~~determined ~~appointed~~in ~~Chief~~accordance with ~~Executive~~the ~~Officer~~rules of the Securities and ~~President~~Exchange inCommission ~~November~~and ~~2011~~generally includes voting or investment power with respect to securities. ordinary ~~Effective~~shares onsubject ~~February~~to 8options, ~~2013,~~warrants ~~Mr.~~or ~~John~~convertible ~~resigned~~securities exercisable or convertible within 60 days as ~~Chief~~of ~~Executive~~the ~~Officer~~date hereof are deemed outstanding for computing the percentage of the person or entity holding such options, warrants or convertible securities but are not deemed outstanding for computing the percentage of any other person and ~~President~~is based on 78,052,550 shares of common stock issued and outstanding as of April 15, 2015.

(2) In November 2011, Mr. Miller was appointed as Vice President-Chief Operating Officer. Effective on February 8, 2013, Mr. Miller resigned as Chief Operating Officer, Vice President and Secretary.

	Beneficial
Name and address	Ownership		Percentage

Director and CEO and CFO
Gilbert Wood – CEO (103 Mannheim Crescent, Petersburg, ON, N0B 2H0)		19,984,584		25.60	%
James Hughes – CFO (806-53 Speedvale Ave W, Guelph, ON, N1H 1J6)		4,962,315		6.36	%

5% Security Holder
Patty Bates Wood (103 Mannheim Crescent, Petersburg, ON, N0B 2H0)		4,962,635		6.36	%

~~(3) Mr. Seto was appointed Chief Operating Officer on January 20, 2011. Effective August 31, 2012, Mr. Seto resigned as Chief Operating Officer and Mr. Miller was appointed as Chief Operating Officer.~~23

~~(4) In November 2011, Mr~~ITEM 13. ~~Scott~~CERTAIN ~~was~~RELATIONSHIPS ~~appointed~~AND asRELATED ~~Chief Financial Officer. On October 22~~TRANSACTIONS, ~~2012,~~AND ~~Mr.~~DIRECTOR ~~Scott resigned as Chief Financial Officer.~~INDEPENDENCE

Convertible notes of $174,353 (52013 - $189,685) ~~Effective~~and onpromissory ~~February~~notes 8of $172,940 (2013 - $164,535) ~~Mr.~~have ~~Wood~~been ~~was~~issued ~~appointed~~to ~~Chief~~close ~~Executive~~family ~~Officer~~members of ~~and~~the ~~President~~shareholders which are outstanding at year end.

~~(6) Effective on February 8, 2013, Mr~~ITEM 14. ~~Hughes~~PRINCIPAL asACCOUNTING ~~appointed~~FEES ~~Chief~~AND ~~Financial Officer.~~SERVICES

~~Employment~~AUDIT ~~Agreements~~FEES

OnThe ~~November~~aggregate ~~16,~~fees ~~2011,~~billed ~~the~~for ~~Company~~each ~~entered into new three-year employment agreements with its President and Vice President which superseded their prior agreements with our subsidiary, SimplePons Operations, Inc. Under the terms~~ of ~~these agreements,~~ the ~~Company~~last ~~agreed to~~two ~~pay~~fiscal ~~each~~years ~~of them an annual salary of $100,000~~ for ~~the~~professional ~~period~~services ~~commencing~~rendered onby the ~~effective~~principal ~~date~~account ~~and ending on December 31, 2012, and thereafter~~ for the audit ~~period~~of ~~commencing~~our onconsolidated ~~January~~financial 1,statements ~~2013 and ending~~ on ~~December~~Form ~~31,~~10K ~~2013, a base salary at an annual rate $125,000,~~ and ~~thereafter~~review ~~for the period commencing January 1, 2014 until the end~~ of ~~the~~consolidated ~~term~~financial ofstatements ~~this~~included agreement, a base salary at an annual rate of $150,000. Each executive is also entitled to an annual bonus of at the discretion of our board of directors. Each of these executive officers is also entitled to participate in ~~all benefit programs we offer~~ our ~~employees. The agreements, which contain~~Annual anReports ~~automatic~~on ~~yearly~~Form ~~renewal provision, contain customary confidentially and non~~10-~~compete~~K ~~provisions. Each employee’s employment may be terminated upon his death or disability~~ and ~~with~~services orthat without cause. In the event we should terminate his employment upon his death or disability, he is entitled to his then current base salary for a period of three months from the date of termination and all granted but unvested options are ~~immediately~~normally ~~vested.~~provided Inby the ~~event~~accountant we should terminate the agreement for cause or if he should resign, he is entitled to payment of his base salary through the date of termination. At our option we may terminate his employment without cause, in ~~which~~connection ~~event he is entitled to payment of his then base salary and bonus through the date of termination together~~ with ~~one~~statutory ~~years’ salary payable in a lump sum at the date of termination~~ and ~~all~~regulatory ~~granted but unvested options are~~filings ~~immediately~~or ~~vested.~~engagements Asfor ofthese ~~December~~fiscal ~~31,~~years ~~2012~~were ~~accrued~~as ~~salaries including payroll taxes are $102,870.~~follows:

On November 16, 2011, the Company entered into a new three-year employment agreement with its Chief Financial Officer, which is effective November 16, 2011. Under the terms of this agreement, we agreed to pay our Chief Financial Officer an annual salary of $70,000 for the period commencing on the effective date and ending on December 31, 2012, and thereafter for the period commencing on January 1, 2013 and ending on December 31, 2013, a base salary at an annual rate $87,500, and thereafter for the period commencing January 1, 2014 until the end of the term of this agreement, a base salary at an annual rate of $109,375. He is also entitled to an annual bonus of at the discretion of our board of directors. The agreements, which contain an automatic yearly renewal provision, contain customary confidentially and non-compete provisions. Each employee’s employment may be terminated upon his death or disability and with or without cause. In the event we should terminate his employment upon his death or disability, he is entitled to his then current base salary for a period of three months from the date of termination and all granted but unvested options are immediately vested. In the event we should terminate the agreement for cause or if he should resign, he is entitled to payment of his base salary through the date of termination. At our option we may terminate his employment without cause, in which event he is entitled to payment of his then base salary and bonus through the date of termination together with one years’ salary payable in a lump sum at the date of termination and all granted but unvested options are immediately vested. As of December 31, 2012, accrued salary including payroll taxes was $44,370. On February 8, 2012, the Company issued its Chief Financial Officer an additional grant of options to purchase an aggregate of 1,000,000 shares of our common stock at an exercise price of $0.75 per share, which vest quarterly over three-years beginning on February 8, 2012. The 1,000,000 warrants were forfeited at the end of 2012 due to the resignation of its Chief Financial Officer.

	Year Ended
	2014		2013

Audit and review fees	$	67,200	$	75,000

Tax Fees		-		-

All Other Fees		32,000		-

Total	$	99,200	$	75,000

On January 20, 2012, the Company entered into a three-year employment with our new Chief Operating Officer. Under the terms of this agreement, the Company agreed to pay our Chief Operating Officer an annual salary of $150,000. As additional compensation, the Company granted options to purchase an aggregate of 3,000,000 shares of our common stock at an exercise price of $0.75 per share, which vest quarterly over three-year beginning on August 1, 2012. Our Chief Operating Officer may be terminated upon his death or disability and with or without cause. In the event we should terminate his employment upon his death or disability, he is entitled to his then current base salary for a period of three months from the date of termination and all vested options remain exercisable through the original terms of the options. In the event we should terminate the agreement for cause or if he should resign, he is entitled to payment of his base salary through the date of termination. At our option we may terminate his employment without cause. If we terminate him without cause within six months from the date of the agreement, he is not entitled to any compensation and all granted but unvested options immediately terminate. In the event we should terminate him without cause after the six-month anniversary of the employment agreement, he is entitled to payment of his then base salary and bonus through the date of termination together with three months’ salary payable in a lump sum on the date of termination and all vested options remain exercisable through the original option term. The Chief Operating Officer resigned on August 31, 2012. Accordingly, the Company accrued salaries including payroll taxes in amount of $77,483 as of December 31, 2012. On October 17, 2012, the Chief Operating Officer filed the complaint against the Company for non-payment of wages, vacation time and waiting time penalties under the California Labor Code Section 203. He is seeking $71,918 in base salary, $5,308 in wages for accrued vacation time and $17,309 in waiting time penalties, for an aggregate of $94,535, together with reasonable attorney’s fees.

Consulting Agreements

On October 22, 2012, the Company engaged Greentree Financial Group, Inc., a consulting firm (“Greentree”), to provide certain services to including accounting services related to the preparation and filing of our quarterly and annual reports, EDGAR services, and the preparation of our corporate tax returns. Under the terms of this agreement, we agreed to pay the consultant 1,000,000 shares of our common stock, which was earned on the date of the agreement, together with certain additional fees and reimbursement for out-of-pocket expenses, including reasonable fees of its counsel. The term of this agreement ends on the date of submission of our quarterly report for the second quarter of 2013 and may be renewed upon mutual written agreement of the parties. Under the terms of the agreement we also agreed to indemnify Greentree.

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Table of Contents

Outstanding Equity Awards

2012 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
OPTION AWARDS													STOCK AWARDS
Name (a)	Number of Securities Underlying Unexercised Options (#) Exercisable (b)		Number of Securities Underlying Unexercised Options (#) Unexercisable (c)			Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) (d)		Option Exercise Price ($) (e)				Option Expiration Date (f)	Number of Shares or Units of Stock That Have Not Vested (#) (g)		Market Value of Shares or Units of Stock That Have Not Vested ($) (h)	Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (i)		Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (#) (j)
Brian S. John (1) Former Chief Executive Officer, President		712,965-			287,035		—			0.275		10/31/2015		287,035	17.222	—	-
Richard A. Miller (2) Former Vice President, Chief Operating Officer, Secretary		712,965		287,035			0.275		10/31/2015		287,035			17,222	—	-
Wei-Ken Soto (3) Former Chief Operating Officer
Martin Scott (4) Former Chief Financial Officer

(1) Effective February 8, 2013, Mr. John resigned as Chief Executive Officer and President.

(2) Effective February 8, 2013, Mr. Miller resigned as Vice President, Chief Operating Officer and Secretary.

(3) Effective August 31, 2012, Mr. Soto resigned as Chief Operating Officer.

(4) Effective October 22, 2012, Mr. Scott resigned as Chief Financial Officer.

DIRECTOR COMPENSATION

During the year, ended December 31, 2012, the Company did not pay any cash fees or expenses to our directors for serving on the Board.

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

The following tables set forth certain information regarding the beneficial ownership of our Common Stock as of April 15, 2013 of (i) each person known to us to beneficially own more than 10% of Common Stock, (ii) our directors, (iii) each named executive officer and (iv) all directors and named executive officers as a group. As of April 15, 2013, there were a total of 98,504,204 shares of Common Stock and 1,702,235,971 Exchangeable Shares issued and outstanding. Each share of Common Stock is entitled to one vote on matters on which holders of voting stock of the Company are eligible to vote. Each Exchangeable Share is convertible into one share of Common Stock at the holder’s option. The column entitled “Percentage of Outstanding Common Stock” shows the percentage of voting common stock beneficially owned by each listed party.

The number of shares beneficially owned is determined under the rules promulgated by the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under those rules, beneficial ownership includes any shares as to which a person or entity has sole or shared voting power or investment power plus any shares which such person or entity has the right to acquire within sixty (60) days April 15, 2013 through the exercise or conversion of any stock option, convertible security, warrant or other right. Unless otherwise indicated, each person or entity named in the table has sole voting power and investment power (or shares such power with that person’s spouse) with respect to all shares of capital stock listed as owned by that person or entity.

Name and address of Beneficial Owner	Number of Shares of Common Stock	Percent of Class (1)
Directors and Named Executive Officers:
Gilbert Wood (3)	992,229,218	40.78	%
James Hughes (4)	248,131,729	10.20	%
All officers and directors as a group:	1,240,360,947	50.98	%
5% or Greater Beneficial Owners
Pat Bates Wood (5)	248,131,729	10.20	%
Linear Group Holdings, Inc. (6)	632,260,655	25.99	%

	(1)	Unless otherwise indicated, the address of each beneficial owner listed above is c/o SimplePons, Inc., 1090 Fountain Street North, Cambridge, Ontario, Canada N3H 4R7.
	(2)	Beneficial ownership is calculated based on the 98,504,204 shares of Common Stock issued and outstanding as of April 15, 2013, together with securities exercisable or convertible into shares of Common Stock within sixty (60) days of the Record Date hereof for each stockholder, including the Exchangeable Shares which are convertible into shares of Common Stock as well as shares issuable upon the conversion of a convertible promissory note.

	(3)	Mr. Wood is the Chief Executive Officer, President and Chairman of the Company. Mr. Wood owns 992,229,218 Exchangeable Shares, which are convertible at Mr. Wood’s option into shares of Common Stock on a one to one basis. .
	(4)	Mr. Hughes is the Chief Financial Officer and a member of the Board. Mr. Hughes owns 248,131,729 Exchangeable Shares, which are convertible at Mr. Hughes’ option into shares of Common Stock on a one to one basis.
	(5)	Ms. Wood owns 248,131,729 Exchangeable Shares, which are convertible at Ms. Wood’s option into shares of Common Stock on a one to one basis.
	(6)	Linear Group Holdings, Inc. (“Linear Group”) beneficially owns 632,260,655 pursuant to a convertible promissory note which is convertible upon Linear Group’s option. Linear Group’s address is 11693 San Vincente Blvd., Suite 824, Los Angeles, CA 90049.

Changes in Control

We are not aware of any arrangements that may result in “changes in control” as that term is defined by the provisions of Item 403(c) of Regulation S-K.

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

Related Transactions

In January 2012, the Company borrowed $40,000 from Mr. Wei-Ken Seto, a former executive officer, under the terms of a convertible promissory note due in January 2013. The note, which bears interest at 4% per annum, is convertible at our option into shares of our common stock at a conversion price of $0.10 per share. The balance of the note remained unchanged as of December 31, 2012. Interest expense for the year ended December 31, 2012 amounted to $1,499.

Director Independence

On an annual basis, each director and executive officer will be obligated to disclose any transactions with the Company in which a director or executive officer, or any member of his or her immediate family, have a direct or indirect material interest in accordance with Item 407(a) of Regulation S-K. Following completion of these disclosures, the Board will make an annual determination as to the independence of each director using the current standards for “independence” that satisfy both the criteria for the Nasdaq and the American Stock Exchange.

As of December 31, 2012, the Board determined that there are no independent directors under these standards.

(12)

Table of Contents

Item 14. Principal Accounting Fees and Services.

The following table sets forth the aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the Company's annual financial statements and review of financial statements included in the Company's Form 10-Q quarterly reports or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years.

	2012		2011
Audit Fees	$	45,768	$	36,231
Audit-Related Fees	$	-	$	-
Tax Fees	$	-	$	-
All Other Fees	$	-	$	-
TOTAL	$	45,678	$	36,231

Audit Fees — This category includes the audit of our annual financial statements, review of financial statements included in our Quarterly Reports on Form 10-Q and services that are normally provided by the independent registered public accounting firm in connection with engagements for those fiscal years. This category also includes advice on audit and accounting matters that arose during, or as a result of, the audit or the review of interim financial statements.

Audit-Related Fees — This category consists of assurance and related services by the independent registered public accounting firm that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under “Audit Fees.” The services for the fees disclosed under this category include consultation regarding our correspondence with the Securities and Exchange Commission and other accounting consulting.

Tax Fees — This category consists of professional services rendered by our independent registered public accounting firm for tax compliance and tax advice. The services for the fees disclosed under this category include tax return preparation and technical tax advice.

All Other Fees — This category consists of fees for other miscellaneous items.

We do not have an audit committee. Our entire board of directors pre-approves all services provided by our independent auditors.

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Table of Contents

PART IV

~~Item~~ITEM 15. ~~Exhibits, Financial Statement Schedules.~~EXHIBITS

Exhibit No.		Description
2.1		Agreement and Plan of Merger by and among Paligent Inc., IFL Corp., and International Fight League, Inc., dated as of August 25, 2006 (Incorporated by reference to the Company’s amended Schedule 14A, filed with the SEC on October 31, 2006).
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*
2.2		Agreement and Plan of Reorganization dated October 20, 2011 by and between IFLI Acquisition Corp., IFLI Acquisition Subsidiary Corp. and SimplePons, Inc. (Incorporated by reference to the Current Report on Form 8-K, filed with the SEC on October 20, 2011).
31.2		Certification Of Principal Financial Officer Pursuant To 18 U.S.C. Section 1350, as adopted pursuant to Section 302 Of The Sarbanes-Oxley Act Of 2002*
2.3		Form of Voting and Exchange Trust Agreement, dated February 8, 2013, by and among SimplePons, Inc., Eco-Shift Call Corp., Eco-Shift Acquisition Corp. and Patriquin Law Professional Corporation (Incorporated by reference to the registrant’s Current Report on Form 8-K filed February 14, 2013).
32.1		Certification Of Principal Executive Officer Pursuant To 18 U.S.C. Section 1350, as adopted pursuant to Section 906 Of The Sarbanes-Oxley Act Of 2002*
2.4		Form of Rollover Agreement, dated February 8, 2013, by and between SimplePons, Inc. and each of Frank Yapuncic, Gilbert Wood, James Hughes, Jeff Preitauer, Patty Bates-Wood and certain other individuals, respectively (Incorporated by reference to the registrant’s Current Report on Form 8-K filed February 14, 2013).
32.2		Certification Of Principal Financial Officer Pursuant To 18 U.S.C. Section 1350, as adopted pursuant to Section 906 Of The Sarbanes-Oxley Act Of 2002*
2.5		Form of Support Agreement, dated February 8, 2013, by and among SimplePons, Inc., Eco-Shift Call Corp. and Eco-Shift Acquisition Corp. (Incorporated by reference to the registrant’s Current Report on Form 8-K filed February 14, 2013).
101.INS		XBRL Instance Document**
3.1		Amended and Restated Certificate of Incorporation of Paligent Inc. (f/k/a HeavenlyDoor.com, Inc.), filed with the Secretary of State of Delaware on June 26, 2000 (Incorporated by reference to the registrant’s registration statement on Form S-8 (Commission File No. 333-45168) filed on September 5, 2000).
101.SCH		XBRL Taxonomy Extension Schema Document**
3.2		Certificate of Ownership and Merger of Paligent Inc. into HeavenlyDoor.com, Inc., filed with the Secretary of State of Delaware on December 28, 2000, to be effective as of December 31, 2000. (Incorporated by reference to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2000, filed on April 2, 2001).
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document**
3.3		Certificate of Amendment to Certificate of Incorporation of Paligent Inc. filed with the Secretary of State of the State of Delaware on November 28, 2006, to be effective as of November 29, 2006 to give effect to the reverse stock split (Incorporated by reference to the registrant’s Current Report on Form 8-K filed on December 5, 2006).
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document**
3.4		Certificate of Amendment to Certificate of Incorporation of Paligent Inc. filed with the Secretary of State of the State of Delaware on November 28, 2006, to be effective as of November 29, 2006 to change the Registrant’s name to International Fight League, Inc. (Incorporated by reference to the registrant’s Current Report on Form 8-K filed on December 5, 2006).
101.LAB		XBRL Taxonomy Extension Label Linkbase Document**
3.5		Certificate of Amendment to the registrant’s Amended and Restated Certificate of Incorporation, filed with the Secretary of State of Delaware on June 28, 2007 (Incorporated by reference to the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007 filed on August 14, 2007).
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document**
3.6		Amended and Restated By-laws of the Company (Incorporated by reference to the registrant’s Current Report on Form 8-K filed on May 22, 2007).
3.7		Certificate of Amendment to the registrant’s Amended and Restated Certificate of Incorporation, filed with the Secretary of State of Delaware and effective on July 8, 2010 (Incorporated by reference to the registrant’s Current Report on Form 8-K filed July 12, 2010).
3.8		Certificate of Merger (Incorporated by reference to the registrant’s Current Report on Form 8-K filed November 7, 2011).
3.9		Amendment No. 1 dated November 1, 2011 to the Amended and Restated Bylaws (Incorporated by reference to the registrant’s Current Report on Form 8-K filed November 7, 2011).
3.10		Certificate of Amendment to the Amended and Restated Certificate of Incorporation (Incorporated by reference to the registrant’s Current Report on Form 8-K filed on December 15, 2011).
3.11		Certificate of Incorporation of Eco-Shift Call Corp. (Incorporated by reference to the registrant’s Current Report on Form 8-K filed February 14, 2013).
3.12		Certificate of Incorporation of Eco-Shift Acquisition Corp. (Incorporated by reference to the registrant’s Current Report on Form 8-K filed February 14, 2013).
3.13		Certificate of Incorporation of Eco-Shift Power Corp. (Incorporated by reference to the registrant’s Current Report on Form 8-K filed February 14, 2013).
3.14		Bylaws of Eco-Shift Call Corp. (Incorporated by reference to the registrant’s Current Report on Form 8-K filed February 14, 2013).
3.15		Bylaws of Eco-Shift Acquisition Corp. (Incorporated by reference to the registrant’s Current Report on Form 8-K filed February 14, 2013).
3.16		Bylaws of Eco-Shift Power Corp. (Incorporated by reference to the registrant’s Current Report on Form 8-K filed February 14, 2013).
3.17		Certificate of Designation for Series B Preferred Stock (Incorporated by reference to the registrant’s Current Report on Form 8-K filed February 14, 2013).
4.1		Form of Warrant dated August 6, 2007 (Incorporated by reference to the registrant’s Current Report on Form 8-K filed on August 9, 2007).
4.2		Warrant dated March 1, 2007 issued to placement agent (Incorporated by reference to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007, filed on May 15, 2007).
4.3		Warrant dated August 6, 2007 issued to placement agent (Incorporated by reference to the registrant’s registration statement on Form S-1 (Commission File No. 333-146629) filed October 11, 2007).
4.4		Warrant dated June 1, 2007 issued to consultant (Incorporated by reference to the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007, filed on August 14, 2007).
4.5		Form of Coach’s Warrant (Incorporated by reference to the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007, filed on August 14, 2007).
4.6		Form of Exchange Warrant (Incorporated by reference to the registrant’s Current Report on Form 8-K filed November 7, 2011).
4.7		Form of Series B common stock purchase warrant (Incorporated by reference to the Company’s Annual Report on Form 10-K filed March 28, 2012).
4.8		Form of Series C common stock purchase warrant (Incorporated by reference to the Company’s Annual Report on Form 10-K filed March 28, 2012).
4.9		Form of Placement Agent Warrant (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed May 14, 2012).
4.10		Form of Series D common stock purchase warrant (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed August 17, 2012).
4.11		Convertible Promissory Note dated October 26, 2012 in the principal amount of $63,000 due to Asher Enterprises, Inc. (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed November 27, 2012).
4.12		Convertible Promissory Note, dated October 26, 2012, issued by SimplePons, Inc. in favor of Asher Enterprises, Inc. (Incorporated by reference to the registrant’s Current Report on Form 8-K filed February 14, 2013).
10.1		Asset Purchase Agreement, dated September 19, 2008, between IFL Corp. and HD Net LLC (Incorporated by reference to the Current Report on Form 8-K filed by the registrant on September 24, 2008).
10.2		Registration Rights Agreement, dated December 22, 2006 between International Fight League, Inc. and the stockholders party thereto (Incorporated by reference to the registrant’s registration statement on Form S-1 (Commission File No. 333-140636) filed on February 12, 2007).
10.3		Stock Repurchase Agreement dated November 1, 2011 by and between IFLI Acquisition Corp., Insurance Marketing Solutions, LLC and SimplePons, Inc.(Incorporated by reference to the registrant’s Current Report on Form 8-K filed November 7, 2011).
10.4		Employment Agreement dated February 15, 2011 by and among SimplePons, Inc. and Brian S. John (Incorporated by reference to the registrant’s Current Report on Form 8-K filed November 17, 2011).
10.5		Employment Agreement dated February 15, 2011 by and among SimplePons, Inc. and Richard A. Miller (Incorporated by reference to the registrant’s Current Report on Form 8-K filed November 17, 2011).
10.6		Employment Agreement dated February 15, 2011 by and among SimplePons, Inc. and Martin Scott (Incorporated by reference to the registrant’s Current Report on Form 8-K filed November 17, 2011).
10.7		Employment Agreement dated February 15, 2011 by and among SimplePons, Inc. and Wei-Ken Seto (Incorporated by reference to the registrant’s Current Report on Form 8-K filed January 26, 2012).
10.8		Office Lease Agreement dated November 11, 2011 by and among ATC Realty One, LLC and SimplePons, Inc.(Incorporated by reference to the registrant’s Current Report on Form 8-K filed November 17, 2011).
10.9		2011 Equity Compensation Plan (Incorporated by reference to the registrant’s Current Report on Form 8-K filed November 7, 2011).
10.10		Form of Registration Rights Agreement (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed May 14, 2012).
10.11		Advisory Agreement dated July 23, 2012 by and between SimplePons, Inc. and Adolfo Carmona (Incorporated by reference to the registrant’s Current Report on Form 8-K filed August 3, 2012).
10.12		Investor Relations Agreement dated June 26, 2012 by and between SimplePons, Inc. and American Capital Ventures, Inc. (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed August 17, 2012).
10.13		Investor Relations and Consulting Agreement dated August 6, 2012 by and between SimplePons, Inc. and Acorn Management Partners, L.L.C. (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed August 17, 2012).
10.14		Advisory Agreement dated August 1, 2012 by and between SimplePons, Inc. and Dr. David Greenfield (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed August 17, 2012).
10.15		Securities Purchase Agreement dated October 26, 2012 by and between SimplePons, Inc. and Asher Enterprises, Inc. (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed November 27, 2012).
10.16		Agreement dated October 26, 2012 by and between Greentree Financial Group, Inc. and SimplePons, Inc. (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed November 27, 2012).
10.17		Assignment Agreement, dated February 8, 2013, by and among Asher Enterprises, Inc., Linear Capital LLC and SimplePons, Inc. (Incorporated by reference to the registrant’s Current Report on Form 8-K filed February 14, 2013).
10.18		Modification of Convertible Promissory Note, dated February 8, 2013, executed by SimplePons, Inc. and Linear Group Holdings, Inc. (Incorporated by reference to the registrant’s Current Report on Form 8-K filed February 14, 2013).
14.1		Code Business Conduct and Ethics adopted November 1, 2011 (Incorporated by reference to the registrant’s Current Report on Form 8-K filed November 7, 2011).
16.1		Letter dated November 4, 2011 from Rothstein, Kass & Company, P.C. (Incorporated by reference to the registrant’s Current Report on Form 8-K filed November 7, 2011).
16.2		Letter of Liggett, Vogt & Webb, P.A., dated March 11, 2013 (Incorporated by reference to the registrant’s Current Report on Form 8-K filed March 12, 2013).
17.1		Resignation Letter of Brian S. John (Incorporated by reference to the registrant’s Current Report on Form 8-K filed February 14, 2013).
17.2		Resignation Letter of Richard A. Miller (Incorporated by reference to the registrant’s Current Report on Form 8-K filed February 14, 2013).
31.1		Certification by the Principal Executive Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)) *
31.2		Certification by the Principal Financial Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a))*
32.1		Certification by the Principal Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
32.2		Certification by the Principal Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 *
101.INS		XBRL Instance Document **
101.SCH		XBRL Taxonomy Extension Schema **
101.CAL		XBRL Taxonomy Extension Calculation Linkbase **
101.DEF		XBRL Taxonomy Extension Definition Linkbase **
101.LAB		XBRL Taxonomy Extension Label Linkbase **
101.PRE		XBRL Taxonomy Extension Presentation Linkbase **

* ~~filed~~ Filed herewith

** In accordance with Regulation S-T, the XBRL-~~related~~formatted ~~information~~interactive ondata ~~Exhibit~~files ~~No.~~that comprise Exhibit 101 toin this ~~Annual~~annual ~~Report~~report on Form 10-K shall be deemed “furnished” ~~herewith~~ and not “filed.”.

~~(14)~~24

Table of Contents

SIGNATURES

~~Pursuant~~In toaccordance with the requirements of ~~Section 13 or 15(d) of~~ the Exchange Act ~~of 1934~~, the registrant ~~has duly~~ caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

			SIMPLEPONS, INC.
	ECO-SHIFT POWER CORP.
Date: April 16, 2013			By:	/s/ Gilbert Wood
DATED: April 15, 2015	By:	/s/ Alistair Haughton
				Name: Gilbert Wood
		Alistair Haughton
				Title: Chief Executive Officer(Principal Executive Officer)
		President & Chief Executive Officer
DATED: April 15, 2015	By:	/s/ James Hughes
		James Hughes
		Chief Financial Officer

Date: April 16, 2013	By:	/s/ James Hughes
		Name: James Hughes
		Title: Chief Financial Officer(Principal Financial Officer)

~~Pursuant~~INDEX toTO ~~the~~CONSOLIDATED ~~requirements~~FINANCIAL ~~of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.~~STATEMENTS

Name	Position	Date
/s/ Gilbert Wood	Chief Executive Officer, President and Director	April 16, 2013
Gilbert Wood
/s/ James Hughes	Chief Financial Officer and Director	April 16, 2013
James Hughes

ECO-SHIFT POWER CORP.

~~(15)~~AUDITED CONSOLIDATED FINANCIAL STATEMENTS

~~Table~~FOR THE ofFISCAL ~~Contents~~YEARS ENDED DECEMBER 31, 2014 AND 2013

CONTENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM		F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	F-2 - F-3
CONSOLIDATED BALANCE SHEETS		F-3
BALANCE SHEETS	F-4
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS		F-4
STATEMENTS OF OPERATIONS	F-5
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIENCY		F-5
STATEMENT OF STOCKHOLDERS’ DEFICIT	F-6
CONSOLIDATED STATEMENTS OF CASH FLOWS		F-6
STATEMENTS OF CASH FLOWS	F-7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS		F-7 - F-9
NOTES TO FINANCIAL STATEMENTS	F-8-F14

~~(F-1)~~26

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of:

SimplePons, Inc.

We have audited the accompanying consolidated balance sheet of SimplePons, Inc. and Subsidiary (the “Company”) as of December 31, 2012 and the related consolidated statement of operations, changes in stockholders’ deficit and cash flows for the year ended December 31, 2012 and for the period from February 7, 2011 (Inception) to December 31, 2012. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. The financial statements of the Company as of December 31, 2011, and for the period from February 7, 2011 (Inception) to December 31, 2011, were audited by another auditor; whose report dated March 26, 2012; express an unqualified opinion on the financial statements.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly in all material respects, the financial position of SimplePons, Inc. as of December 31, 2012 and the results of its operations and its cash flows for the year ended December 31, 2012 and for the period from February 7, 2011 (Inception) to December 31, 2012 in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements the Company has continuing losses and negative cash flows from operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans concerning these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ DNTW Toronto LLP

Licensed Public Accountants

Markham, Ontario, Canada

April 15, 2013

(F-2)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of: Eco-Shift Power Corp.

~~SimplePons~~We have audited the accompanying consolidated balance sheet of Eco-Shift Power Corp. as of December 31, 2014, and the related consolidated ~~Inc~~statements of operations, comprehensive loss, stockholders’ deficiency, and cash flows for the year then ended. Eco-Shift Power Corp.’s management is responsible for these consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. The consolidated financial statements of the Company for the year ended December 31, 2013 were audited by other auditors, whose report, dated April 7, 2014, expressed an unqualified opinion on those consolidated financial statements and also included an explanatory paragraph that raised substantial doubt about the Eco-Shift Power Corp.’s ability to continue as a going concern.

We ~~have~~conducted ~~audited~~our ~~the~~audit ~~accompanying~~in ~~consolidated~~accordance ~~balance~~with ~~sheet~~the standards of ~~SimplePons,~~the ~~Inc~~Public Company Accounting Oversight Board (United States). Those standards require that we plan and ~~Subsidiary~~perform (the audit to obtain reasonable assurance about whether the financial statements are free of material “misstatement. The Company”) asis ofnot ~~December~~required 31to have, ~~2011~~nor ~~and~~were ~~the~~we ~~related~~engaged ~~consolidated~~to ~~statement~~perform, an audit of ~~operations,~~its ~~changes~~internal incontrol ~~stockholders’~~over financial ~~equity~~reporting. ~~and~~Our ~~cash~~audit ~~flows~~included consideration of internal control over financial reporting as a basis for ~~the~~designing ~~period~~audit ~~from~~procedures that ~~February~~are 7appropriate in the circumstances, ~~2011~~but ~~(Inception)~~not tofor ~~December~~the ~~31,~~purpose ~~2011.~~of ~~These~~expressing ~~financial~~an ~~statements~~opinion ~~are~~on the ~~responsibility~~ effectiveness of the Company’s internal ~~management.~~control ~~Our~~over ~~responsibility~~financial isreporting. toAccordingly, we express anno such opinion. An audit also includes examining, on ~~these~~a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, ~~based~~assessing the accounting principles onused and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

WeIn ~~conducted~~ our ~~audit~~opinion, ~~in accordance with~~ the ~~standards~~consolidated offinancial ~~the~~statements ~~Public~~referred ~~Company~~to ~~Accounting~~above ~~Oversight~~present ~~Board~~fairly, ~~(United~~in ~~States).~~all ~~Those~~material ~~standards require~~respects, ~~that we plan and perform~~ the ~~audit~~financial toposition of ~~obtain reasonable assurance about whether~~ the ~~financial~~Eco-Shift ~~statements~~Power ~~are~~Corp. ~~free~~as of ~~material misstatement.~~December ~~An audit includes examining~~31, ~~on a test basis~~2014, ~~evidence supporting the amounts~~ and ~~disclosures in~~ the ~~financial~~results ~~statements. An~~of ~~audit~~its ~~also~~operations ~~includes assessing the accounting principles used~~ and ~~significant~~its ~~estimates~~cash ~~made~~flows byfor ~~management,~~the asyear ~~well~~then ~~as evaluating~~ended ~~the~~in ~~overall~~conformity ~~financial~~with ~~statement~~accounting ~~presentation.~~principles Wegenerally ~~believe~~accepted ~~that~~in ~~our~~the ~~audit~~United ~~provides~~States aof ~~reasonable basis for our opinion~~America.

InThe ~~our~~accompanying ~~opinion, the~~ consolidated financial statements ~~referred~~have tobeen ~~above~~prepared ~~present~~assuming ~~fairly~~that Eco-Shift Power Corp. will continue as a going concern. As discussed in ~~all~~Note ~~material~~3 ~~respects,~~to the consolidated financial ~~position of SimplePons~~statements, ~~Inc~~Eco-Shift Power Corp. ashas ofincurred ~~December~~recurring 31losses from operations, ~~2011~~has a working capital deficiency and ~~the~~an ~~results~~accumulated ofdeficit ~~its~~that ~~operations~~raise ~~and~~substantial doubt about its ~~cash~~ability ~~flows~~to continue ~~for~~as ~~the~~a ~~period~~going ~~from~~concern. ~~February 7,~~Management’s ~~2011~~plans ~~(Inception)~~in regard to ~~December~~these ~~31,~~matters ~~2011~~are also described in ~~conformity~~Note ~~with~~3. ~~accounting~~The ~~principles~~consolidated financial ~~generally~~statements ~~accepted~~do innot ~~the~~include ~~United~~any ~~States~~adjustments that might result from the outcome of ~~America~~this uncertainty.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, for the period from February 7, 2011 (Inception) to December 31, 2011, the Company has a net loss of $831,590 and a negative cash flow from operations of $489,045. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans concerning these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

	/s/ SRCO Professional Corporation
	CHARTERED ACCOUNTANT
Richmond Hill, Ontario, Canada	Authorized to practise public accounting by the
April 15, 2015	Chartered Professional Accountants of Ontario

~~WEBB & COMPANY, P.A.~~F-1

~~Certified~~Schwartz Levitsky ~~Public~~Feldman ~~Accountants~~llp

~~Boynton Beach, Florida~~CHARTERED ACCOUNTANTS

~~March~~LICENSED PUBLIC ~~26, 2012~~ACCOUNTANTS

~~1500 Gateway Boulevard, Suite 202 i~~TORONTO ~~Boynton~~● ~~Beach, FL 33426~~MONTREAL

~~Telephone:~~Report of ~~(561)~~Independent ~~752-1721~~Registered ~~i Fax:~~Public ~~(561)~~Accounting ~~734-8562~~Firm

~~www~~To the Board of Directors and Stockholders of Eco-Shift Power Corp.~~cpawebb~~ (formerly Simplepons, Inc.~~com~~)

(FWe have audited the accompanying consolidated balance sheet of Eco-3Shift Power Corp. (“the Company”) as of December 31, 2013, and the related consolidated statements of operations, comprehensive loss, stockholders’ deficiency, and cash flows for the year ended December 31, 2013. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. The consolidated financial statements of the Company for the year ended December 31, 2012 were audited by other auditors, whose report, dated April 15, 2013, expressed an unqualified opinion on those consolidated financial statements and also included an explanatory paragraph that raised substantial doubt about the Company’s ability to continue as a going concern.

SIMPLEPONS, INC AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2012 AND 2011
ASSETS
		December 31, 2012			December 31, 2011
CURRENT ASSETS
Cash	$	1,558		$	120,768
Accounts receivable, net		1,300			820
Inventory, net		—			28,753
Prepaid expenses and other current assets		1,452			362,138
Deposit		9,283			9,494
TOTAL CURRENTS ASSETS		13,593			521,973
TOTAL PROPERTY AND EQUIPMENT, NET		15,120			12,690
OTHER ASSETS
Website, net		—			106,311
Prepaid expenses		—			93,750
Trademarks		—			825
TOTAL OTHER ASSETS		—			200,886
TOTAL ASSETS	$	28,713		$	735,549
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
CURRENT LIABILITIES
Accounts payable	$	73,148		$	65,591
Accrued liabilities		121,749
Accrued salaries payable		208,077			92,339
Liquidated damages payable		25,900			—
Contingent liabilities		23,062			—
Convertible note payable		36,449			—
Convertible note payable - related party		40,000			—
Derivative liabilities		63,110			—
TOTAL LIABILITIES		591,495			157,930
COMMITMENTS AND CONTINGENCIES (Note 14)
STOCKHOLDERS’ (DEFICIT) EQUITY
Preferred stock, $0.0001 par value, 1,000,000 shares authorized, 0 shares issued and outstanding		—			—
Common stock, $0.01 par value, 400,000,000 shares authorized, 87,970,870 and 77,140,870 shares issued and outstanding, respectively		879,709			771,409
Additional paid in capital		1,909,673			637,800
Accumulated deficit		(3,352,164	)		(831,590	)
TOTAL STOCKHOLDERS' (DEFICIT) EQUITY		(562,782	)		577,619
TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY	$	28,713		$	735,549

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

~~The~~In our ~~accompanying~~opinion, ~~notes~~the ~~are~~consolidated anfinancial ~~integral~~statements ~~part~~referred ofto ~~these~~above ~~consolidated~~present fairly, in all material respects, the financial ~~statements~~position of the Company as of December 31, 2013, and the results of its operations and its cash flows for the year ended December 31, 2013, in conformity with accounting principles generally accepted in the United States of America.

~~(F-4)~~The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company has suffered recurring losses, has a working capital deficiency and an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

SIMPLEPONS, INC. AND SUBSIDIARY
	“SCHWARTZ LEVITSKY FELDMAN LLP”
CONSOLIDATED STATEMENT OF OPERATIONS
Toronto, Ontario, Canada	Chartered Accountants
FOR THE YEAR ENDED DECEMBER 31, 2012 AND
April 7, 2014	Licensed Public Accountants
FOR THE PERIOD FROM FEBRUARY 7, 2011 (INCEPTION) TO DECEMBER 31, 2011
					For the Period Ended
		For the year ended			February 7, 2011 (Inception)
		December 31, 2012			to December 31, 2011
Revenue		$	120,137		$	6,641
Cost of goods sold			68,786			934
Gross Profit			51,351			5,707
OPERATING EXPENSES
Salaries			843,194			340,405
Consulting			764,544			288,206
Selling, general and administrative			608,708			121,459
Legal and professional			114,376			78,663
Depreciation			39,726			9,078
Total Operating Expenses			2,370,548			837,811
Net loss from operations			(2,319,197	)		(832,104	)
Other income / (expenses)
Interest expense			(11,350	)		—
Interest income			14			514
Change in fair value of derivative liabilities			(28,011	)		—
Liquidated damages			(25,900	)		—
Contingent losses			(23,062	)		—
Impairment loss from website development			(113,068	)		—
Total other expeneses			(201,377	)		514
NET LOSS BEFORE PROVISION FOR INCOME TAXES		$	(2,520,574	)	$	(831,590	)
PROVISION FOR INCOME TAXES			—			—
NET LOSS		$	(2,520,574	)	$	(831,590	)
Net loss per share - basic and diluted		$	(0.03	)	$	(0.01	)
Weighted average number of shares outstanding during the period - basic and diluted			81,853,356			59,340,343

~~The~~2300 ~~accompanying~~Yonge ~~notes~~Street, ~~are~~Suite an1500, ~~integral~~Box ~~part~~2434 ofToronto, ~~these~~Ontario ~~consolidated~~M4P ~~financial~~1E4 ~~statements~~Tel: 416 785 5353 Fax: 416 785 5663

(F-6)2

SIMPLEPONS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDER'S DEFICIT
FOR THE YEAR ENDED DECEMBER 31, 2012 AND THE PERIOD FROM FEBRUARY 7, 2011 (INCEPTION) TO DECEBMBER 31, 2011
	Preferred stock				Common stock				Additional
	Shares		Amount		Shares		Amount		paid in capital			Accumulated deficit			Total
February 7 , 2011 (Inception)	-		$-		-		$-		$-			$-			$-
Common stock sold to founders ($.000125)		—		—		40,000,000		400,000		(395,000	)		—			5,000
Sale of common stock ($.0025)		—		—		1,000,000		10,000		(7,500	)		—			2,500
								—
Sale of common stock ($.00125)		—		—		2,000,000		20,000		(17,500	)		—			2,500
								—
Common stock issued for professional fees ($.05 per share)		—		—		1,400,000		14,000		56,000			—			70,000
								—
Private placement of common stock ($.05 per share), net of fees of $11,783		—		—		20,010,000		200,100		788,617			—			988,717
								—
Private placement of common stock ($.25 per share)		—		—		200,000		2,000		48,000			—			50,000
Common stock issued for consulting services ($.05 per share)		—		—		10,000,000		100,000		400,000			—			500,000
								—
Common stock to be issued for Website development ($.05 per share)		—		—		500,000		5,000		20,000			—			25,000
Stock option expense		—		—		—		—		17,183			—			17,183
Reverse Merger		—		—		2,030,870		20,309		(272,000	)		—			(251,691	)
Net loss for the period February 7, 2011 (Inception) to December 31, 2011		—		—		—		—		—			(831,590	)		(831,590	)
Balance December 31, 2011		—		—		77,140,870		771,409		637,800			(831,590	)		577,619
Common stock issued for cash, net of share issuance costs		—		—		7,580,000		75,800		765,574			—			841,374
Common stock issued for services						3,250,000		32,500		337,500			—			370,000
Stock option expense		—		—		—		—		168,799			—			168,799
Net loss for the year		—		—		—		—		—			(2,520,574	)		(2,520,574	)
Balance December 31, 2012		—	$	—		87,970,870	$	879,709	$	1,909,673		$	(3,352,164	)	$	(562,782	)

ECO-SHIFT POWER CORP.

~~The~~CONSOLIDATED BALANCE ~~accompanying notes are an integral part of these consolidated financial statements~~SHEETS

~~(F-7)~~AS OF DECEMBER 31, 2014 AND 2013

SIMPLEPONS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2012 AND
FOR THE PERIOD FROM FEBRUARY 7, 2011 (INCEPTION) TO DECEMBER 31, 2011
				For the Period Ended
	For the year ended			February 7, 2011 (Inception)
	December 31, 2012			to December 31, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(2,520,574	)	$	(831,590	)
Adjustments to reconcile net loss to net cash provided by / (used in) operating activities:
Depreciation and amortization expense		39,726			9,079
Impairment of inventory		36,569			—
Impairment of website development		113,068			—
Contingent loss		23,062			—
Amortization of discount on note payable		8,548
Change in fair value of derivative liabilities		28,011
Issuance of common stock and warrants for services		688,750			251,250
Issuance of stock options for services		168,799			17,183
Changes in operating assets and liabilities:
Increase in accounts receivable		(480	)		(820	)
Increase in inventory		(7,816	)		(28,753	)
Increase in prepaid expenses and other assets		135,686			(53,830	)
Increase in deposits		211			(9,494	)
Increase in liquidated damages		25,900			—
Increase in accounts payable and accrued expenses		76,806			72,136
Increase in accrued salaries		115,738			85,794
Net Cash Provided by / (Used In) Operating Activities		(1,067,996	)		(489,045	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of trademarks		(650	)		(825	)
Development of website		(40,820	)		(89,612	)
Purchase of property and equipment		(6,618	)		(13,468	)
Net Cash Used In Investing Activities		(48,088	)		(103,905	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Note payable - related party		40,000			—
Proceeds from note payable		63,000			—
Payment pursuant to recapitalization		—			(335,000	)
Sale of common stock, net of offering costs		893,874			1,048,718
Net Cash Provided by Investing Activities		996,874			713,718
NET INCREASE / (DECREASE) IN CASH		(119,210	)		120,768
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		120,768			—
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	1,558		$	120,768
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest	$	—		$	—
Cash paid for taxes	$	—		$	—
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Common stock issued for consulting fees	$	370,000		$	500,000
Common stock issued for website development	$	—		$	25,000
Common stock issued for prepaid insurance	$	—		$	83,308
The accompanying notes are an integral part of these consolidated financial statements

(Expressed in United States Dollars)

(F-8)

	December 31, 2014			December 31, 2013
	$			$
ASSETS
Cash		205,635			107,770
Restricted cash [note 5]		55,023			217,377
Accounts receivable		957,076			24,442
Costs and estimated earnings in excess of billings [note 6]		530,685			—
Inventory		—			142,891
Advances and deposits		111,413			150,756
Prepayments and other receivables		204,406			55,020
Total current assets		2,064,238			698,256
Goodwill [note 7]		2,225,410			—
Intangible assets, net [note 7]		2,380,987			—
Property and equipment [note 8]		67,668			12,098
Total assets		6,738,303			710,354

LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
Current liabilities
Accounts payable and accrued liabilities		2,351,753			418,415
Note payable to bank [note 9]		697,705			—
Customer deposits		215,807			357,976
Liquidated damages payable [note 10]		70,300			70,300
Provision for a contingent liability [note 11]		129,705			141,030
Advances from shareholders [note 12]		308,943			118,696
Convertible notes payable [note 13]		1,560,968			189,685
Billings in excess of costs and estimated earnings [note 6]		448,291			—
Derivative liabilities [note 14]		851,237			—
Promissory notes payable [note 15]		736,098			604,080
Total current liabilities		7,370,807			1,900,182
Derivative liabilities [note 14]		151,689			—
Total liabilities		7,522,496			1,900,182

Stockholders’ deficiency
Preferred stock, $0.0001 par value, 5,000,000 shares authorized, 1 share outstanding as of December 31, 2014 and 2013.		1			1
Common stock, $0.01 par value, 400,000,000 shares authorized, 63,410,853 and 54,863,211 common shares outstanding as at December 31, 2014 and 2013, respectively, which includes 4,138,394 and 34,047,928 exchangeable common shares, respectively [note 16]		634,108			548,631
Shares to be issued [note 16]		110,500			—
Additional paid-in-capital		5,499,984			2,895,815
Accumulated other comprehensive gain		226,698			82,292
Accumulated deficit		(7,255,484	)		(4,716,567	)
Total stockholders’ deficiency		(784,193	)		(1,189,828	)
Total liabilities and stockholders’ deficiency		6,738,303			710,354

Going concern [note 3]
Commitments and contingencies [note 17]
Related party transactions [note 18]
Subsequent events [note 21]

~~SIMPLEPONS,~~See ~~INC. AND SUBSIDIARY~~accompanying notes

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~F-3

~~FOR~~ECO-SHIFT POWER ~~THE~~CORP. ~~YEAR ENDED DECEMBER 31, 2012 AND~~

~~THE~~CONSOLIDATED STATEMENTS ~~PERIOD~~OF ~~FROM~~OPERATIONS ~~FEBRUARY~~AND 7,COMPREHENSIVE ~~2011 (INCEPTION)~~LOSS TOFOR THE YEARS ENDED DECEMBER 31, ~~2011~~2014 AND 2013

~~1. Organization, Basis of Presentation~~(Expressed ~~and~~in ~~Nature~~United ofStates ~~Operations~~Dollars)

Simplepons, Inc. is a Delaware Corporation formed on February 7, 2011. IFLI Acquisition Corp., formerly International Fight League, Inc. (“IFLI”) was incorporated in the State of Delaware on May 8, 1992. On November 1, 2011 we closed on a share exchange agreement with IFLI Acquisition Corp. and exchanged all of our outstanding shares for 37,455,000 shares of IFLI Acquisition Corp, Inc. and warrants equal to and on the same terms as those outstanding at the date of the merger. Simplepons, Inc. was the accounting acquirer and IFLI Acquisition Corp. was the accounting acquiree in the transaction that was treated as a reverse merger and recapitalization. As part of the exchange agreement, IFLI Acquisition Corp. purchased 1,012,353 shares of common stock from the principal stockholder for $335,000 and assumed net assets of $83,309 resulting in a charge to equity upon recapitalization of $251,691. The Company is deemed to have issued 2,030,870 common shares to the original shareholders of IFLI. Following the purchase, the shares were cancelled. Upon closing of the reverse merger, IFLI Acquisition Corp. was renamed Simplepons, Inc. and Simplepons, Inc. was renamed Simplepons Operations, Inc. Simplepons, Inc. and Simplepons Operations, Inc. are hereafter referred to as the “Company”. At closing, Company’s stockholders owned approximately 97% of IFLI outstanding common stock, giving effect to the stock repurchase.

	Year ended			Year ended
	December 31, 2014			December 31, 2013
	$			$
REVENUE		1,270,970			1,370,261

COSTS OF SALES		1,007,076			803,909

GROSS PROFIT		263,894			566,352

EXPENSES
Legal and professional fees [note 16]		2,748,984			1,435,420
Salaries and benefits		846,868			790,219
Interest and bank charges		559,607			159,256
Write down of inventory		207,743			—
Stock compensation expense [note 16]		99,593			120,000
Rent and occupancy		165,560			129,891
Marketing and advertising		81,847			77,458
Travel		65,122			55,255
Bad debts		144,273			—
Telecommunications		33,581			32,100
Repair and maintenance		60,507			39,056
Commission		—			43,475
Depreciation		20,822			5,818
Amortization of intangible assets		47,913			—
Change in fair value of derivative liabilities [note 14]		(2,483,495	)		—
Extinguishment loss on modification [note 13]		—			539,505
Other operating expenses		203,886			131,903
		2,802,811			3,559,356
Net loss for the year before income taxes		(2,538,917	)		(2,993,004	)
Income taxes [note 20]		—			—
Net loss for the year		(2,538,917	)		(2,993,004	)
Foreign currency translation adjustment		144,406			109,036
Comprehensive loss		(2,394,511	)		(2,883,968	)

Loss per share, basic and diluted		(0.044	)		(0.076	)

Weighted average number of common shares outstanding		54,536,711			37,859,442

~~The~~See accompanying ~~consolidated financial~~ statements include the accounts of Simplepons, Inc. and its wholly owned subsidiary Simplepons Operations, Inc. for the year ended December 31, 2012 and the period from February 7, 2011 (inception) to December 31, 2011. All intercompany accounts have been eliminated in the consolidation.notes

During the year, the Company was is in the business of the sale of coupon books and was developing a mobile coupon subscription that solves the problem of leaving your coupons at home. On February 5, 2013 the Company completed a business combination and subsequently the Board of Directors discontinued the existing coupon subscription business, see Note 15.F-4

2.ECO-SHIFT POWER ~~Summary of Significant Accounting Principles~~CORP.

~~(A)~~CONSOLIDATED STATEMENTS ~~Going~~OF ~~Concern~~STOCKHOLDERS’ DEFICIENCY

AsFOR ~~reflected in the accompanying consolidated~~THE ~~financial~~YEARS ~~statement~~ENDED ~~for~~DECEMBER ~~the year ended December~~ 31, ~~2012,~~2014 ~~the~~AND Company has a net loss of $2,520,574 and used cash in operations of $1,067,996. These factors raise substantial doubt about the Company’s ability to continue as a going concern. In addition there is a working capital deficiency of $577,902 and a stockholders’ deficit of $562,782 as of December 31, 2012.2013

~~The Company’s continued existence~~(Expressed isin ~~dependent~~United ~~upon~~States its ability to raise capital and to successfully market and sell its products. The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.Dollars)

As of December 31, 2012, the Company had proceeds of 893,874, net of offering cost, from sales of common stock, and raised $103,000 in gross proceeds for working capital through the sale of convertible promissory notes to an accredited investor and an officer. Subsequent to year end the Company completed a merger and raised additional financing. The Company is in discussions with additional prospective investors and, while it has no firm commitments for additional capital, it reasonably expects to conclude additional capital rounds in 2013 which provide additional working capital to it. Management believes that actions presently being taken to obtain additional funding and implement its new strategic business plan, provide for the opportunity for the Company to continue as a going concern.

														Accumulated
									Shares		Additional			other
	Preferred stock				Common stock				to be		paid-in			comprehensive			Accumulated
	Shares		Amount		Shares (a)		Amount		issued		capital			gain (loss)			deficit			Total
			$				$		$		$			$			$			$
Recapitalization of capital retroactively adjusting the accounting acquirer's legal capital to reflect the legal capital of the accounting acquiree as at December 31, 2012 (b)		1		1		35,807,346		358,073		—		—			(26,744	)		(1,317,068	)		(985,738	)
Acquisition of net liabilities of - Simplepons reverse merger [note 16]		—		—		—		—		—		—			—			(406,495	)		(406,495	)
Issuance of shares against convertible notes [note 16]		—		—		12,865,213		128,652		—		510,185			—			—			638,837
Issuance of shares against term sheet agreement [note 16]		—		—		2,000,000		20,000		—		980,000			—			—			1,000,000
Issuance of shares against settlement agreements [note 16]		—		—		85,000		850		—		146,785			—			—			147,635
Stock based compensation [note 16]		—		—		—		—		—		120,000			—			—			120,000
Issuance of warrants for cash [note 16]		—		—		—		—		—		50,000			—			—			50,000
Issuance of shares for cash [note 16]		—		—		4,105,652		41,056		—		1,088,845			—			—			1,129,901
Translation adjustment		—		—		—		—		—		—			109,036			—			109,036
Loss for the year		—		—		—		—		—		—			—			(2,993,004	)		(2,993,004	)
As at December 31, 2013		1		1		54,863,211		548,631		—		2,895,815			82,292			(4,716,567	)		(1,189,828	)
Issuance of shares against consulting and legal services [note 16]		—		—		4,956,432		49,565		—		2,003,708			—			—			2,053,273
Issuance of shares against Confidential Settlement Agreement [note 16]		—		—		25,000		250		—		(250	)		—			—			—
Stock based compensation [note 16]		—		—		2,050,000		20,500		—		79,093			—			—			99,593
Issuance of shares and warrants for cash [note 16]		—		—		160,000		1,600		—		38,400			—			—			40,000
Issuance of shares against exercise of warrants [note 16]		—		—		127,536		1,275		—		(1,275	)		—			—			—
Issuance of shares against convertible notes [note 16]		—		—		1,228,674		12,287		—		182,275			—			—			194,562
Shares to be issued against acquisition of Sun Industries [note 16]		—		—		—		—		110,500		3,468,595			—			—			3,579,095
Fair value of warrants at issuances [note 14]		—		—		—		—		—		(1,462,717	)		—			—			(1,462,717	)
Fair value of embedded conversion feature of notes at issuances [note 14]		—		—		—		—		—		(1,703,660	)		—			—			(1,703,660	)
Translation adjustment		—		—		—		—		—		—			144,406			—			144,406
Loss for the year		—		—		—		—		—		—			—			(2,538,917	)		(2,538,917	)
As at December 31, 2014		1		1		63,410,853		634,108		110,500		5,499,984			226,698			(7,255,484	)		(784,193	)

(Ba) ~~Use~~Common stock is after stock split of ~~Estimates~~50:1 as explained in Note 1.

~~In preparing financial statements in~~(b) ~~conformity~~Retroactively ~~with~~restated ~~generally accepted accounting principles, management is required~~ to ~~make~~reflect ~~estimates and assumptions that affect~~ the ~~reported~~effect ~~amounts~~ of ~~assets and liabilities and~~ the ~~disclosure~~recapitalization oftransaction ~~contingent~~on ~~assets~~February ~~and~~5, ~~liabilities~~2013, atas ~~the~~explained ~~date~~in ofNote ~~the financial statements and revenues and expenses during the reported period~~1. ~~Actual results could differ from those estimates.~~

~~The Company’s significant estimates~~See ~~and~~accompanying assumptions include the fair value of financial instruments; allowance for doubtful accounts; the carrying value, recoverability and impairment, if any, of long-lived assets, including the values assigned to and the estimated useful lives of property and equipment and website; interest rate; underlying assumptions to estimate the fair value of beneficial conversion features, warrants and options; revenue recognized or recognizable; sales returns and allowances; income tax rate, income tax provision, deferred tax assets and valuation allowance of deferred tax assets; and the assumption that the Company will continue as a going concern. Those significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.notes

Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.F-5

~~Management regularly evaluates the key~~ECO-SHIFT ~~factors~~POWER ~~and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions~~CORP. ~~After such evaluations, those estimates are adjusted accordingly, if deemed appropriate.~~

~~(C)~~CONSOLIDATED STATEMENTS ~~Cash~~OF ~~and~~CASH ~~Cash Equivalents~~ FLOWS

~~The~~FOR ~~Company’s~~THE YEARS ~~cash~~ENDED ~~equivalents are~~DECEMBER ~~short-term~~31, ~~highly~~2014 ~~liquid~~AND ~~investments that are both readily convertible to known amounts of cash and that have insignificant risk of change in value because of changes in interest rates.~~2013

(D)Expressed in ~~Inventories~~United States Dollars)

The Company’s inventories consist entirely of purchased finished goods. Inventories are stated at lower of cost or market. Cost is determined on the first-in, first-out basis. During the year ended December 31, 2012, the Company recorded an impairment of inventory in the amount of $36,569 which is also included in the cost of goods sold. Subsequent to year end no further sales of the coupon books were made and accordingly the impairment represent the unsalable goods of the discontinued operations.

	Year ended			Year ended
	December 31, 2014			December 31, 2013
	$			$
OPERATING ACTIVITIES
Net loss for the year		(2,538,917	)		(2,993,004	)
Items not affecting cash
Issuance of shares for services		2,053,273			—
Change in fair value of derivative liabilities		(2,483,495	)		—
Extinguishment loss on modification		—			539,505
Accretion/amortization of debt discount		59,255			40,000
Stock compensation expense		99,593			1,120,000
Depreciation		20,822			5,818
Amortization of intangible assets		47,913			—
Write-down of inventory		207,743			—
Bad debts		144,273			—
Gain on disposal of property and equipment		(2,311	)		—
Liquidated damages charges		—			44,400

Change in working capital balances
Accounts receivable		(324,410	)		76,243
Costs and estimated earnings, net		(82,394	)		—
Inventory		—			13,061
Advances and deposits		111,478			(80,158	)
Income taxes recoverable		—			24,303
Prepayments and other receivables		(140,412	)		(53,875	)
Accounts payable and accrued liabilities		894,873			34,024
Customer deposits		(119,097	)		250,829
Cash used in operating activities		(2,051,813	)		(978,854	)
INVESTING ACTIVITIES
Restricted cash		127,219			(217,377	)
Cash paid for acquisition [note 7]		(100,000	)		—
Proceeds from disposal of property and equipment		11,525			—
Purchase of property and equipment		(7,175	)		(4,665	)
Cash used in investing activities		31,569			(222,042	)
FINANCING ACTIVITIES
Note payable to bank/bank indebtedness		(54,223	)		(57,841	)
Proceeds from issuance of shares/warrants		40,000			1,256,371
Proceeds from issuance of convertible notes		1,580,000			195,899
Proceeds from issuance of promissory notes		189,029			703,473
Repayment of promissory and convertible notes		—			(503,118	)
Net proceeds from shareholders		209,185			(182,522	)
Cash provided by financing activities		1,963,991			1,412,262

Net (decrease) increase in cash during the year		(56,253	)		211,366

Effect of foreign currency translation adjustment		154,118			(105,357	)

Cash, beginning of year		107,770			1,761
Cash, end of year		205,635			107,770

~~(E)~~On ~~Property~~February 5, ~~and~~2013, ~~Equipment~~the Company assumed net liabilities of $406,496 by shares exchange [note 1]

~~The Company values property and equipment~~Supplementary atcash ~~cost~~flow ~~and~~information ~~depreciates~~[note ~~these assets using the straight-line method over their expected useful life. The Company uses a five year life for computer equipment and a three year life for software.~~19]

~~(F)~~See ~~Impairment~~accompanying notes

~~In accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification No. 360, Property, Plant and Equipment, the Company carries long~~F-lived assets at the lower of the carrying amount or fair value. Impairment is evaluated by estimating future undiscounted cash flows expected to result from the use of the asset and its eventual disposition. If the sum of the expected undiscounted future cash flow is less than the carrying amount of the assets, an impairment loss is recognized. Fair value, for purposes of calculating impairment, is measured based on estimated future cash flows, discounted at a market rate of interest.6

~~(G)~~ECO-SHIFT POWER ~~Website~~CORP. ~~Development~~

~~The Company has adopted the provisions~~NOTES ofTO ~~FASB~~THE ~~Accounting~~CONSOLIDATED ~~Standards~~FINANCIAL Codification No. 350 Intangible-Goodwill and Other. Costs incurred in the planning stage of a website are expensed, while costs incurred in the development stage are capitalized and amortized over the estimated three year life of the asset. Subsequent to year end, the Company decided to discontinue the coupon subscriptions business, and determined that the website developed for coupon subscriptions operation would not have any future economic benefit. The carrying amount of the website in amount of $113,068 was recognized as impairment loss during the year ended December 31, 2012.STATEMENTS

~~(H)~~AS ~~Stock-Based~~OF DECEMBER ~~Compensation~~31, 2014 and 2013

~~The Company recognizes compensation~~(Expressed costs to employees under FASB Accounting Standards Codification No. 718, Compensation - Stock Compensation. Under FASB No. 718, companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in ~~the~~United ~~financial~~States statements over the period during which employees are required to provide services. Share based compensation arrangements include stock options and warrants. As such, compensation cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant.Dollars)

~~Equity instruments issued to other than employees are recorded on the basis of the fair value of the instruments, as required by FASB Accounting Standards Codification No~~1. ~~505, Equity Based Payments to Non-Employees. In general, the measurement date is when either a (a) performance commitment,~~NATURE asOF defined, is reached or (b) the earlier of (i) the non-employee performance is complete or (ii) the instruments are vested. The measured value related to the instruments is recognized over a period based on the facts and circumstances of each particular grant as defined in the FASB Accounting Standards Codification.OPERATIONS

(FEco-9Shift Power Corp. (formerly Simplepons, Inc., “Simplepons”, the “Company”) is a Delaware corporation formed on February 7, 2011. Simplepons was in the business of the sale of coupon books and was developing a mobile coupon subscription that solves the problem of leaving your coupons at home. On February 5, 2013, Simplepons completed a reverse merger and subsequently the board of directors (the “Board”) ceased the existing coupon subscription business.

Eco-Shift Power Corp. (I“Eco-Shift Canada”), ~~Loss~~a ~~Per~~wholly ~~Share~~owned subsidiary of the Company, was incorporated on May 15, 2008 under the laws of the Province of Ontario, Canada. Eco-Shift Canada is primarily engaged in developing, selling and distributing electrical lighting products.

~~Basic and diluted net loss per common~~Sun ~~share~~& isSun ~~computed~~Industries, ~~based upon the weighted average common shares outstanding as defined by FASB Accounting Standards Codification No~~Inc. ~~260~~, ~~Earnings~~a ~~Per~~California ~~Share.~~corporation Asand ofa ~~December~~wholly ~~31,~~owned ~~2012~~subsidiary ~~there~~of ~~were~~the 2Company,~~750,000~~ ~~options,~~performs ~~24,658,790~~energy ~~warrants and 400,000 common~~optimization ~~shares~~lighting ~~issuable~~projects ~~upon~~using ~~conversion~~a ofcustomized ~~convertible~~approach ~~notes~~that ~~payable~~includes ~~outstanding~~design ~~whose~~and ~~effect~~installation ~~was~~of ~~anti-dilutive~~energy ~~and~~efficient ~~not~~lighting ~~included~~products. ~~in diluted~~The ~~net~~Company’s ~~loss~~customers ~~per~~are ~~share~~primarily ~~for~~in the ~~year~~United ~~ended~~States ~~December~~of ~~31,~~America ~~2012. The options~~ and ~~warrants may dilute future earnings per share~~territories.

On February 5, 2013, Simplepons finalized a share exchange agreement whereby Simplepons issued 34,047,928 (J1,702,396,382 pre-split) exchangeable ~~Fair~~shares ~~Value~~for 100% of ~~Financial~~the ~~Instruments~~common stock of Eco-Shift Canada (the “Share Exchange”). These exchangeable shares are mandatorily convertible (within five years) into Company’s common shares. Accordingly the number and the value of these shares have been presented as part of common stock with corresponding credit to accumulated deficit. The exchangeable shares are exchangeable at the option of the holder, each into one share of common stock of the Company. In addition, Simplepons issued one share of Series B Preferred Stock (the “Series B Preferred”). As a result of the Share Exchange, Eco-Shift Canada is now a wholly-owned subsidiary of Simplepons. This transaction has been accounted for as a reverse merger. Consequently, the assets and liabilities and the historical operations reflected in the consolidated financial statements for the periods prior to February 5, 2013 are those of Eco-Shift Canada and are recorded at the historical cost basis. After February 5, 2013, the Company’s consolidated financial statements include the assets and liabilities of both Eco-Shift Canada and Simplepons and the historical operations of both after that date as one entity.

For accounting purposes, this transaction was treated as an acquisition of Simplepons and a recapitalization of Eco-Shift Power Corp. Eco-Shift Power was the accounting acquirer and the results of its operations carried over. Accordingly, all prior year financial statements presented for comparative purposes are those of Eco-Shift Canada and not Simplepons. Accordingly, the operations of Simplepons are not carried over and adjusted to $0. Immediately prior to the Merger, Simplepons had net liabilities of $406,496 which were acquired and presented in the consolidated financial statements.

On July 19, 2013, the holder of the Series B Preferred, through a unanimous written consent in lieu of a meeting, authorized: (i) 1-for-50 reverse stock split of the Company’s issued and outstanding shares of common stock; (ii) the change in the name of the Company from Simplepons, Inc. to Eco-Shift Power Corp. (the “Company”).

The reverse stock split and the name change became effective on the date that the Company filed the Certificate of Amendment to the Articles of Incorporation of the Company (the “Amendment”) with the Secretary of State of Delaware. The Company filed the Amendment during the fourth quarter ended December 31, 2013. The Company has also notified the Financial Industry Regulatory Authority (“FINRA”) of the actions by filing the Issuer Company Related Action Notification Form during the fourth quarter ended December 31, 2013.

As explained in note 7 to the consolidated financial statements, on October 20, 2014 (the “Closing”), the Company entered into a Share Purchase and Exchange Agreement (the “Agreement”) with and among Sun & Sun Industries, Inc. ( the “Sun”), and the common stockholders of Sun, Lynda Sun Frederick and Deborah Sun. Pursuant to the Agreement, the Company acquired 100% of the issued and outstanding shares of common stock of Sun from the two holders thereof, in exchange for the issuance of 9,850,000 shares of the Company’s common stock and the payment of cash in the aggregate amount of $250,000. All preferred stock and shareholder notes of Sun were cancelled at the Closing. As a result of the transactions contemplated by the Agreement, Sun became a wholly owned subsidiary of the Company. The Company also agreed to grant an aggregate of 1,200,000 shares of its common stock to certain key members of Sun promptly following the Closing.

F-7

ECO-SHIFT POWER CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 and 2013

(Expressed in United States Dollars)

2. BASIS OF PRESENTATION AND CONSOLIDATION

The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and are expressed in United States dollars (“USD”).

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries – Eco-Shift Power Corp. Canada and Sun & Sun Industries, Inc. All inter-company transactions and balances have been eliminated in preparing the consolidated financial statements.

3. GOING CONCERN

The Company’s 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 incurred recurring losses from operations and as at December 31, 2014, the Company has a working capital deficiency of $5,306,569 and has accumulated deficit of $7,255,484. These factors raise substantial doubt as to its ability to continue as a going concern.

The Company’s continued existence is dependent upon management’s ability to develop profitable operations and resolve its liquidity problems. Management anticipates the Company will attain profitable status and improve its liquidity through continued business development and additional equity investment in the Company. Management is pursuing various sources of financing. In the event the Company is not able to raise the necessary equity financing, the Company intends to seek stockholder loans or debt financing, as needed, until profitable operations are attained. There can be no assurance that the necessary debt or equity financing will be available, or will be available on terms acceptable to the Company, in which case the Company may be unable to meet its obligations. Should the Company be unable to realize its assets and discharge its liabilities in the normal course of business, the net realizable value of its assets may be materially less than the amounts recorded in the financial statements. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash

Cash includes cash on hand and balances with banks.

Restricted Cash

Restricted cash represents cash which is available for use subject to approval from certain investors.

Earnings (Loss) Per Share

The Company has adopted the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 260-10 which provides for calculation of “basic” and “diluted” earnings per share. Basic earnings per share includes no dilution and is computed by dividing net income or loss available to common stockholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity. Basic and diluted losses per share were the same at the reporting dates as there were no common stock equivalents outstanding at December 31, 2014 and 2013. The weighted average number of shares of common stock outstanding includes 4,138,394 (2013: 34,047,928) exchangeable shares (2013: 34,047,928) as described in note 1. All outstanding warrants and options have an anti-dilutive effect on the loss per share and are therefore excluded from the determination of the diluted loss per share calculation for the years ended December 31, 2014 and 2013.

F-8

ECO-SHIFT POWER CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 and 2013

(Expressed in United States Dollars)

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Revenue Recognition

The Company recognizes revenue on arrangements in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements” and No. 104, “Revenue Recognition”. In all cases, revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed and collectability is reasonably assured. These conditions are generally met upon completion of delivery and installation for the Company.

The Company has mainly three streams of revenue - (a) sales and installation; (b) training; and (c) lighting projects.

(a)		Sales are recognized upon passage of title to the customer. This occurs when products are delivered and installed at the customers’ locations in accordance with the terms of the contract with customers.

(b)		Training income is recognized when training services are provided.

(C)		Revenues from lighting projects are recognized on the percentage-of-completion method in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 605-35, “Revenue Recognition-Construction-Type and Production-Type Contracts”. Percentage-of-completion is measured principally by the percentage of costs incurred to date for each contract to the estimated total costs for such contract at completion.

		Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. In forecasting ultimate profitability on certain contracts, estimated recoveries are included for work performed under customer change orders to contracts, for which firm prices have not yet been negotiated but authorization to proceed with extra work is received from the customer. Due to uncertainties inherent in the estimation process, it is reasonably possible that completion costs, including those arising from contract penalty provisions and final contract settlements, will be revised in the near-term. Such revisions to costs and income are recognized in the period in which the revisions are determined.

		Costs and estimated earnings in excess of billings arise in the balance sheets when revenues have been recognized but the amounts cannot be billed under the terms of the contracts. Such amounts are recoverable from customers upon various measures of performance, including achievement of certain milestones, completion of specified units, or completion of a contract.

Goodwill and Identifiable Intangible Assets

Goodwill and other identifiable intangible assets with indefinite lives that are not being amortized, such as trade names, are tested at least annually for impairment and are written down if impaired. Identifiable intangible assets with finite lives are amortized over their estimated useful lives and are reviewed for impairment whenever facts and circumstances indicate that their carrying values may not be fully recoverable. The intangible assets are being amortized over their estimated useful lives of ten years using the straight-line method.

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Areas involving significant estimates and assumptions include: work in progress estimation, inventory valuation reserves; allowance for doubtful accounts; deferred income tax assets and liabilities, and related valuation allowances; expected future cash flows used in evaluating intangible assets and property and equipment for impairment, estimated useful lives of property and equipment and intangible assets, accruals and valuation of derivative instruments. Actual results could differ from those estimates. These estimates are reviewed periodically, and, as adjustments become necessary, they are reported in earnings in the period in which they become known.

F-9

ECO-SHIFT POWER CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 and 2013

(Expressed in United States Dollars)

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Inventory

Inventory, which comprises of electrical lighting materials and supplies, is valued at the lower of cost and market value, with cost being determined on a weighted average basis. The cost of inventory includes purchase price, freight, custom duties and other delivery expenses. Market for materials and supplies is net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less any applicable variable selling costs.

The Company evaluates the carrying value of inventory on a regular basis, taking into account such factors as historical and anticipated future sales compared with quantities on hand and the price the Company expects to obtain for products in the market compared with historical cost.

Comprehensive Income (Loss)

The Company follows ASC 220, Comprehensive Income which establishes standards for reporting and presentation of comprehensive income (loss) and its components in a full set of financial statements. Comprehensive income is presented in the statements of changes in stockholders’ equity (deficit), and consists of foreign currency translation adjustments. ASC 220 requires only additional disclosures in the consolidated financial statements and does not affect the Company’s financial position or results of operations.

Leases

The Company leases property and equipment in the ordinary course of business. Significant lease obligations relate to the Company’s premises. These leases have varying terms and may or may not include purchase or buyout options and guaranteed residuals. The terms of these leases are considered when determining whether a lease is classified as operating or capital. The expense associated with leases that have escalating payment terms is recognized on a straight-line basis over the life of the lease.

Accounts Receivable

Accounts receivable are stated at outstanding balances, net of an allowance for doubtful accounts. The allowance for doubtful accounts is established through provisions charged against income. Accounts deemed to be uncollectible are charged against the allowance and subsequent recoveries, if any, are credited to the allowance. Management’s periodic evaluation of the adequacy of the allowance is based on past experience, aging of the receivables, adverse situations that may affect a customer’s ability to pay, current economic conditions and other relevant factors. This evaluation is inherently subjective as it requires estimates that may be susceptible to significant change. Unpaid balances remaining after the stated payment terms are considered past due.

Foreign Currency Translation

The functional currency of the Canadian based company is the Canadian dollar and US based company is US Dollar. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities are translated using the historical rate on the date of the transaction. All exchange gains or losses arising from translation of these foreign currency transactions are included in net income (loss) for the year. In translating the financial statements of the Company’s Canadian subsidiary from their functional currency into the Company’s reporting currency of United States dollars, balance sheet accounts are translated using the closing exchange rate in effect at the balance sheet date for monetary items and using the historical rate on the date of the transaction for non-monetary items, and income and expense accounts are translated using an average exchange rate prevailing during the reporting period. Adjustments resulting from the translation, if any, are included in cumulative other comprehensive income (loss) in the statement of stockholders’ equity. The Company has not, to the date of these consolidated financial statements, entered into derivative instruments to hedge the impact of foreign currency fluctuations.

F-10

ECO-SHIFT POWER CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 and 2013

(Expressed in United States Dollars)

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Fair Value of Financial Instruments

The Company ~~measures~~follows ~~its~~ASC ~~financial and non~~820-~~financial~~10 ~~assets~~Fair ~~and~~Value ~~liabilities,~~Measurements asand ~~well~~Disclosures asdefines ~~makes~~fair ~~related disclosures~~value, inestablishes ~~accordance~~a ~~with~~framework ~~FASB~~for ~~Accounting Standards Codification~~measuring ~~No.~~fair ~~820,~~value ~~Fair~~and ~~Value~~requires ~~Measurement,~~disclosure ~~which~~about ~~provides~~fair ~~guidance~~value ~~with~~measurements ~~respect~~of toassets ~~valuation~~and ~~techniques~~liabilities. toASC be820-10 ~~utilized~~defines ~~in the determination of~~ fair value ofas ~~assets~~the exchange ~~and~~price ~~liabilities.~~that ~~Approaches~~would ~~include,~~be ~~(i)~~received ~~the~~for ~~market~~an ~~approach~~asset ~~(comparable~~or ~~market~~paid ~~prices),~~to ~~(ii)~~transfer ~~the~~a ~~income approach~~liability (~~present~~an ~~value~~exit ofprice) ~~future~~in ~~income~~the principal or ~~cash~~most ~~flow),~~advantageous market ~~and~~for ~~(iii)~~ the ~~cost~~asset ~~approach~~or ~~(cost~~liability toin ~~replace~~an ~~the~~orderly ~~service~~transaction ~~capacity~~between ofmarket ~~an asset~~participants oron ~~replacement~~the ~~cost)~~measurement date. ASC ~~Topic~~ 820-10 ~~utilizes~~also establishes a fair value hierarchy, ~~that~~which ~~prioritizes~~requires an entity to maximize the use of observable inputs toand ~~valuation~~minimize ~~techniques~~the ~~used~~use of tounobservable ~~measure~~inputs when measuring fair value. ~~into~~The ~~three~~standard ~~broad~~describes three levels. ~~The~~of ~~following~~inputs isthat amay ~~brief~~be ~~description~~used ofto ~~those~~measure ~~three levels~~fair value:

● Level 1: ~~Observable~~– ~~inputs~~Valuation ~~such~~based ason quoted market prices (unadjusted) for identical assets or liabilities in active markets that are observable. ● Level 2 – Valuation based on quoted market prices for ~~identical~~similar assets orand liabilities in active markets. ● Level 3 – Valuation based on unobservable inputs that are supported by little or no market activity, therefore requiring management’s best estimate of what market participants would use as fair value.

~~Level~~In instances 2:where ~~Inputs~~the ~~other~~determination ~~than~~of ~~quoted~~the ~~prices~~fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that ~~are~~is ~~observable,~~significant ~~either~~to ~~directly~~the orfair ~~indirectly~~value measurement in its entirety. ~~These~~Our ~~include~~assessment ~~quoted~~of ~~prices~~the ~~for~~significance ~~similar~~of ~~assets~~a orparticular ~~liabilities~~input to the fair value measurement in ~~active~~its ~~markets~~ entirety requires judgment, and ~~quoted~~considers ~~prices~~factors ~~for~~specific ~~identical~~to the asset or ~~similar~~liability. ~~assets~~The orvaluation of ~~liabilities~~our inderivative ~~markets~~liability ~~that~~is ~~are~~determined ~~not~~using ~~active~~Level 1 inputs, which consider (i) time value, (ii) current market and (iii) contractual prices.

~~Level~~Fair value 3:estimates ~~Unobservable~~discussed ~~inputs~~herein inare ~~which little~~based orupon nocertain market ~~data~~assumptions ~~exists~~and pertinent information available to management as of December 31, ~~therefore~~2014 ~~requiring~~and an2013. ~~entity~~The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to ~~develop~~the ~~its~~short-term ~~own~~nature ~~assumptions~~of these instruments. These financial instruments include cash, ~~such~~restricted ascash, ~~valuations~~accounts receivable, ~~derived~~accounts payable and accrued liabilities, liquidated damages payable, advances from shareholders and promissory notes. ~~valuation~~The ~~techniques~~fair invalue of the Company’s debt instruments is estimated based on current rates that would be available for debt of similar terms, which ~~one~~is ~~more~~not ~~significant~~significantly ~~inputs~~different orfrom ~~significant~~its stated value, ~~drivers~~except ~~are~~for ~~unobservable~~the convertible notes payable, at fair value, which has been revalued based on current market rates using Level 1 inputs.

~~Our financial instruments include cash,~~Income ~~accounts~~Taxes ~~receivable, accounts payable, accrued liabilities, accrued salaries payable, liquidated damages payable, contingent liabilities, convertible note payable, convertible note payable – related party,~~ and ~~derivative~~Uncertain ~~liabilities.~~Tax Positions

The Company accounts for income taxes under ASC 740, Accounting for Income Taxes. Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying ~~values~~amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the ~~Company’s~~periods in which those temporary differences are expected to be recovered ~~cash,~~or ~~accounts~~settled. ~~receivable,~~Under ~~accounts~~ASC ~~payable~~740, ~~accrued~~the effect on deferred tax assets and liabilities, ~~accrued~~of ~~salaries~~a ~~payable~~change in tax rates is recognized in income in the period that includes the enactment date. ASC 740-10-05, ~~liquidated~~Accounting ~~damages~~for ~~payable~~Uncertainty in Income Taxes, ~~contingent~~prescribes a recognition ~~liabilities~~threshold ~~approximate~~and ~~their~~a ~~fair~~measurement ~~value~~attribute ~~due~~for the financial statement recognition and measurement of tax positions taken or expected to ~~their~~be ~~short-term~~taken ~~nature~~in a tax return.

~~The~~For ~~Company’s~~those ~~convertible~~benefits ~~note payable~~to ~~and~~be ~~convertible~~recognized, ~~note~~a ~~payable – related party are measured at amortized cost based upon management’s best estimate~~tax ofposition ~~interest~~must ~~rates~~be ~~that~~more-likely-than-not ~~would~~to be ~~available~~sustained toupon ~~the~~examination ~~company~~by ~~for~~taxation ~~similar financial~~authorities.

The ~~derivative~~amount ~~liabilities~~recognized ~~are~~is ~~stated~~measured as the largest atamount ~~their~~of ~~fair~~benefit ~~value~~that asis agreater ~~level~~than 350 ~~measurement~~percent likely of being realized upon ultimate settlement. Potential tax benefits from net operating losses and foreign tax credit carry forwards are not recognized by the Company until their realization is more likely than not. The Company ~~used~~assesses the validity of our conclusions regarding uncertain tax positions on a ~~Black-Scholes~~quarterly ~~model~~basis to determine if ~~the~~facts ~~fair~~or ~~values~~circumstances ofhave ~~these~~arisen ~~derivative liabilities.~~that ~~See~~might ~~Note~~cause 6us ~~for~~to change our judgment regarding the ~~Company~~likelihood of a tax position’s sustainability ~~assumptions~~under ~~used~~audit. inThe ~~determining~~Company ~~the~~has ~~fair~~determined ~~value~~that ofthere ~~these~~were ~~financial~~no ~~instruments~~material uncertain tax positions as at December 31, 2014 and 2013.

~~(K) Business Segments~~F-11

~~The Company operates in one segment~~ECO-SHIFT ~~and~~POWER ~~therefore segment information is not presented~~CORP.

~~(L)~~NOTES TO ~~Revenue~~THE ~~Recognition~~CONSOLIDATED FINANCIAL STATEMENTS

~~The~~AS ~~Company recognizes revenue in accordance~~OF ~~with~~DECEMBER ~~FASB Accounting Standards Codification No. 605~~31, ~~Revenue~~2014 ~~Recognition. In all cases, revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, delivery has occurred~~ and collectability is reasonably assured. The criteria are met when the deal books are delivered to our customers and collectability is reasonably assured. The Company records these sales net of any discounts provided to the customer.2013

(M)Expressed in ~~Concentrations~~United States Dollars)

~~During the year ended December 31, 2012~~4. ~~the~~SUMMARY ~~Company~~OF ~~had~~SIGNIFICANT ~~one~~ACCOUNTING ~~customer~~POLICIES ~~who represented 15% of sales. The sales during year of 2011 were nominal.~~(continued)

~~(N)~~Property and ~~Income~~equipment ~~Taxes~~

~~The~~Property and ~~Company~~equipment ~~uses~~is ~~the~~stated ~~asset~~at ~~and~~historical ~~liability method~~cost inless ~~accounting~~accumulated ~~for income taxes~~depreciation. ~~Under this method~~Depreciation, ~~deferred income tax assets and liabilities are determined~~ based on ~~difference between financial reporting and tax bases of assets and liabilities and are measured using~~ the ~~enacted~~estimated ~~tax~~useful ~~rates~~lives ~~that will be in~~of ~~effect when~~ the ~~differences~~assets, ~~are expected to reverse. A valuation allowance~~ is provided tousing ~~offset any net deferred tax assets for which management believes it is more likely than not that~~ the ~~net~~below ~~deferred~~noted ~~asset~~life ~~will~~and ~~not be realized.~~methods:

(O) Convertible note payable

Trucks and trucks		5 years Straight line-method
Computer and equipment		3 - 7 years Straight line-method
Furniture and fixtures		5 - 7 years Straight line-method
Leasehold improvements		39 years Straight line-method

~~The Company accounts for convertible~~Impairment note payable in accordance with the FASB Accounting Standards Codification No. 815, Derivatives and Hedging, since the conversion feature is not indexed to the Company’s stock and can’t be classified in equity. The Company allocates the proceeds received from convertible note payable between the liability component and conversion feature component. The conversion feature that is considered embedded derivative liabilities has been recorded at their fair value as its fair value can be separated from the convertible note and its conversion is independent of ~~the~~Long-Lived underlying note value. The Company has also recorded the resulting discount on debt related to the conversion feature and is amortizing the discount using the effective interest rate method over the life of the debt instruments.Assets

~~(P)~~The Company ~~Derivative~~reviews ~~liabilities~~its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be recoverable through undiscounted future cash flows. If impairment exists based on expected future undiscounted cash flows, a loss is recognized in income. The amount of the impairment loss is the excess of the carrying amount of the impaired asset over the fair value of the asset, typically based on discounted future cash flows. The Company has assessed its long-lived assets and has determined that there was no impairment in their carrying amounts at December 31, 2014 and 2013.

~~The Company accounts for derivative~~Employee ~~liabilities~~Stock inBased accordance with the FASB Accounting Standards Codification No. 815, Derivatives and Hedging. FASB Accounting Standards Codification 815 requires companies to recognize all derivative liabilities in the balance sheet at fair value, and marks it to market at each reporting date with the resulting gains or losses shown in the Consolidated Statement of Operations.Compensation

~~(Q)~~Pursuant to ~~Recent~~ASC ~~Accounting~~718, ~~Pronouncements~~the Company recognizes expense for its stock-based compensation based on the fair value of the equity or liability instruments issued. The Company has not adopted a formal employee stock based compensation plan.

~~The Company has reviewed all recently issued, but not yet effective, accounting pronouncements up to ASU 2012~~Non-~~07, and does not believe the future adoption of any such~~Employee ~~pronouncements~~Stock ~~may~~Based ~~be expected to cause a material impact on its consolidated financial condition or the consolidated results of its operations.~~Compensation

(FThe Company accounts for stock based compensation awards issued to non-employees for services, as prescribed by ASC 718-10), at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the guidelines in ASC 505-50. The Company issues compensatory shares for services including, but not limited to, executive, management, accounting, archeological, operations, corporate communication, financial and administrative consulting services.

3.Investment Tax ~~Property~~Credits ~~and Equipment~~Recoverable

AtGovernment assistance ~~December~~and 31tax credits relating to qualifying expenditures, ~~2012~~to ~~and~~the ~~2011~~extent ~~property~~that there is reasonable assurance of realization, are accounted for using the cost reduction method, whereby the government assistance and ~~equipment~~tax ~~consisted~~credits are recorded as reductions against the related expenses or the carrying value of the ~~following~~related assets. Tax credits are subject to review by the Canada Revenue Agency (“CRA”) and any adjustments that may reduce the tax credit recorded.

	2012			2011
Computers and equipment	$	20,086		$	13,468
Accumulated depreciation		(4,966	)		(778	)
Balance	$	15,120		$	12,690

Subsequent Events

~~Depreciation~~In accordance ~~expenses~~with ~~for~~FASB ~~the~~ASC ~~year~~855, ~~ended December~~Subsequent 31Events, ~~2012~~the ~~and~~Company ~~for~~evaluates ~~the~~subsequent ~~period~~events ~~from~~through ~~February~~the 7,date ~~2011~~the toCompany’s annual ~~December~~report ~~31,~~on ~~2011~~Form ~~were~~10-K ~~$4,188~~is ~~and~~ready ~~$778,~~to ~~respectively~~issue.

~~4. Website Development~~F-12

~~The website states at cost less accumulated~~ECO-SHIFT ~~amortization,~~POWER ~~consists~~CORP. ~~of the following:~~

	2012		2011
Website	$	156,907	$	114,612
Accumulated depreciation		(43,839)		(8,301)
Impairment		(113,068)
Balance	$	-	$	106,311

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

~~Depreciation~~AS ~~expenses for the year ended~~OF ~~December~~DECEMBER 31, ~~2012~~2014 and ~~for the period from February 7, 2011 to December 31, 2011 were $35,538 and $8,301, respectively.~~2013

~~Subsequent to year end, the Company~~(Expressed decided to discontinue the coupon subscriptions business, and determined that the website developed for coupon subscriptions operation would not have any future economic benefit. The carrying amount of the website in ~~amount~~United ofStates ~~$113,068 was recognized as impairment loss during the year ended December 31, 2012.~~ Dollars)

54. SUMMARY ~~Convertible~~OF ~~Note~~SIGNIFICANT ~~Payable~~ACCOUNTING POLICIES (continued)

~~On October 26, 2012, the Company entered~~Derivative into a Securities Purchase Agreement with Asher Enterprises, Inc. (“Asher”) pursuant to which we sold Asher a $63,000 principal amount convertible promissory note (“Asher Note”) in a private transaction. The Company received gross proceeds of $63,000. The Company did not pay any commissions or finder’s fees in this transaction, but paid legal fees of Asher’s counsel in the amount of $3,000. The Note bears an interest rate of 8% per annum and is due on July 24, 2013, pursuant to which Asher has an option to convert all or any portion of the accrued interest and unpaid principal balance of the Asher Note into the Common Stock of the Company or its successors, at 58% of the market price, no sooner than April 24, 2013.Instruments

The Company ~~has~~accounts ~~determined~~for ~~that the~~ conversion ~~feature~~options ~~of Asher Note represents an~~ embedded ~~derivative~~in ~~since Asher Note is~~ convertible ~~into~~notes ain ~~variable~~accordance ~~number~~with ofASC ~~shares upon conversion~~815. ~~Accordingly,~~ASC ~~Asher~~815 ~~Note~~generally isrequires ~~not considered~~ companies to bebifurcate ~~conventional~~conversion ~~debt~~options ~~and the~~ embedded ~~conversion~~in ~~feature~~convertible ~~must~~notes ~~be bifurcated~~ from ~~the~~their ~~debt~~ host instruments and ~~accounted~~to account for them as afree standing derivative ~~liability.~~financial ~~Accordingly, the fair value of this derivative instrument has been recorded as a liability on the balance sheet with the corresponding amount recorded as a discount to Asher Note~~instruments. ~~Such discount~~ASC ~~will~~815 beprovides ~~accreted~~for ~~from~~an ~~the~~exception ~~issuance date~~ to ~~the~~this ~~maturity~~rule ~~date~~when ofconvertible ~~Asher~~notes, ~~Note.~~as ~~The~~host ~~change in the fair value of the derivative liability will be recorded in other income or expenses in the consolidated statement of operations at the end of each period~~instruments, ~~with~~ ~~the~~are ~~offset~~deemed to ~~the~~be ~~derivative liability on the balance sheet. The beneficial conversion feature included in Asher Note resulted in an initial debt discount of $35~~conventional,~~099.~~ ~~The~~as ~~fair~~defined ~~value~~by ofASC ~~the embedded derivative liability was determined using the Black~~815-~~Scholes valuation model on the issuance date with the assumptions in the table below~~40.

AtThe Company ~~December~~accounts 31for convertible notes deemed conventional and conversion options embedded in non-conventional convertible notes which qualify as equity under ASC 815, ~~2012~~in accordance with the provisions of ASC 470-20, which provides guidance on accounting for convertible securities with beneficial conversion features. Accordingly, the Company ~~revalued~~records, as a discount to convertible notes, the ~~embedded~~intrinsic ~~derivative~~value ~~liability~~of ~~with~~such conversion options based upon the ~~assumptions~~differences inbetween the ~~table~~fair ~~below.~~value ~~For~~of the ~~period~~underlying ~~from~~common stock at the ~~issuance~~commitment date toof ~~December~~the ~~31, 2012,~~note transaction and the ~~Company~~effective ~~increased~~conversion ~~the~~price ~~derivative~~embedded ~~liability~~in ofthe ~~$35,099~~note. byDebt ~~$28,011~~discounts ~~resulting~~under these inarrangements aare ~~derivative~~amortized ~~liability~~over ofthe ~~$63,110~~term atof ~~December 31,~~the ~~2012~~related debt.

Reporting Date	Fair Value	Term (Years)	Assumed Conversion Price	Market Price on Issuance Date	Volatility Percentage	Risk-free Rate
10/26/12	$35,099	0.74	$0.234	$0.28	155%	0.018
12/31/12	$63,110	0.56	$0.019	$0.03	402%	0.018

Recently issued accounting pronouncements

~~The~~From time ~~carrying~~to ~~value~~time, ofnew ~~Asher~~accounting ~~Note~~pronouncements ~~was $36,449,~~are ~~net~~issued ofby the ~~remaining~~Financial ~~debt~~Accounting ~~discount,~~Standards asBoard of(FASB) ~~December~~or ~~31,~~other ~~2012.~~standard ~~The~~setting bodies ~~Company~~that ~~recorded~~are ~~interest~~adopted ~~expense~~by ~~related~~the toCompany ~~this~~as ~~note~~ of ~~$1,227~~the ~~and~~specified ~~amortization~~effective ofdate. ~~the~~Unless ~~debt~~otherwise ~~discount~~discussed inhere, the ~~amount~~Company ofbelieves that ~~$8,548~~recently ~~during~~issued ~~the~~accounting ~~year~~pronouncements ~~ended~~adopted ~~December~~do ~~31,~~not ~~2012.~~have ~~The~~a ~~interest~~material ~~expense of~~impact ~~$1,227~~on ~~has~~its ~~been~~financial ~~included~~position inor ~~accrued~~results ~~liabilities~~of operations.

Asher Note	2012		2011
Proceeds	$	63,000	-
Less derivative liabilities on initial recognition		(35,099)	-
Value of Asher Note on initial recognition		27,901	-
Add accumulated accretion expense		8,549	-
Balance as at December 31	$	36,449	-

In April 2014, an accounting pronouncement was issued by the FASB to update existing guidance on discontinued operations. This guidance raises the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. This pronouncement is aimed at reducing the frequency of disposals reported as discontinued operations by focusing on strategic shifts. This pronouncement is effective for fiscal years beginning on or after December 15, 2014 and interim periods thereafter. Early adoption is permitted. The Company has not yet adopted this guidance.

6On May 28, 2014, the FASB issued a new financial accounting standard on revenue from contracts with customers, Update No. ~~Derivative~~2014-09, Revenue ~~Liabilities~~from Contracts with Customers (Topic 606). The standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance. The accounting standard is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016. Early adoption is not permitted. The Company is currently evaluating the impact of this accounting standard.

AsOn August ~~of December 31~~27, ~~2012~~2014, the ~~Company’s derivative~~FASB ~~liabilities~~issued ~~are~~a ~~embedded~~new ~~derivatives~~financial ~~associated~~accounting ~~with~~standard ~~the~~on ~~Company’s~~going ~~convertible~~concern, ~~note~~Update ~~payable~~2014-15, ~~(Note~~Presentation ~~5).~~of ~~Due to the~~Financial ~~Asher~~Statements ~~Note’s~~- ~~conversion~~Going ~~feature,~~Concern ~~the~~(Subtopic ~~actual~~205-40): ~~number~~Disclosure of ~~shares~~Uncertainties ofabout ~~common~~an ~~stock~~Entity’s ~~that~~Ability ~~would~~to beContinue ~~required~~as if a ~~conversion~~Going Concern. ofThe ~~the note~~standard asprovides ~~described~~guidance inabout ~~Note~~management’s 4responsibility ~~was~~to ~~made~~evaluate ~~through~~whether ~~the~~there ~~issuance~~is ofsubstantial doubt about the ~~Company~~organization’s ~~common~~ability ~~stock~~to ~~cannot~~continue beas ~~predicted.~~a Asgoing aconcern. ~~result, the~~The ~~conversion~~amendments ~~feature~~in ~~requires~~this ~~derivative~~Update ~~accounting~~apply ~~treatment~~to ~~and~~all ~~will~~companies. beThey become ~~bifurcated~~effective ~~from~~in the ~~note~~annual ~~and~~period ~~“marked~~ending toafter ~~market” each~~December ~~reporting~~15, ~~period~~2016, ~~through~~with ~~the~~early ~~consolidated~~application ~~statement~~permitted. The Company is currently evaluating the impact of ~~operations~~this accounting standard.

~~The~~On April ~~Company~~7, ~~measured~~2015, the ~~fair~~FASB ~~value~~ issued Accounting Standards Update (ASU) No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the ~~derivative~~Presentation ~~liabilities~~of asDebt ~~$35,099~~Issuance onCosts. The amendments in this ASU require that debt issuance ~~date~~costs ~~(October~~related ~~26,~~to ~~2012),~~a recognized ~~and~~debt ~~remeasured~~liability be presented in the ~~fair~~balance ~~value~~sheet as ~~$63,110~~a ondirect ~~December 31,~~deduction ~~2012~~from the carrying amount of that debt liability, consistent with debt discounts and ~~recorded~~the accounting for debt issue costs under IFRS. The recognition and measurement guidance for debt issuance costs are not affected by the ~~change~~amendments ofin ~~fair~~this ~~value~~ASU. ofThe ~~$28,011~~amendments in ~~the~~this ~~consolidated~~Update ~~statement~~apply ofto ~~operations~~all companies. They become effective for public business entities in the ~~year~~annual ~~ended~~period ending after December 15, 2015, and interim periods within 31those fiscal years, ~~2012~~with early application permitted. The Company is currently evaluating the impact of this accounting standard.

7.All other ~~Convertible~~recent ~~Note~~pronouncements ~~Payable~~issued -by ~~Related~~the ~~Party~~FASB or other authoritative standards groups with future effective dates are either not applicable or are not expected to be significant to the consolidated financial statements of the Company.

~~On January 24, 2012, the Company entered into a 4% convertible promissory note with its former Chief Operating Officer in the amount of $40,000~~5. ~~The note is due on January~~RESTRICTED ~~24,~~CASH 2013. Prior to the maturity date, the Company has the option to convert the principle and accrued interest into shares of the Company’s common stock at $0.10 per share. The fair value of the conversion was equal to the Company’s stock price on the date of issuance and no beneficial conversion was recorded. Interest expense for the year ended December 31, 2012 amount to $1,499.

~~The Company is in default of the~~Restricted ~~repayment~~cash ofas ~~the~~at ~~promissory~~December ~~note~~31, ~~with~~2014 ~~its~~and ~~former~~2013 ~~Chief~~represented ~~Operating~~balance ~~Office~~held ~~who~~in ~~has~~an ~~also~~escrow ~~filed~~account aand ~~claim~~is ~~against~~available ~~the~~subject ~~Company,~~to ~~see~~certain ~~Note~~investors’ 10approval.

86. COSTS ~~Liquidated~~AND ~~Damages~~ESTIMATED ~~Payable~~EARNINGS

~~Pursuant to the Company’s private~~Costs placement completed in 2012 in the gross amount of $370,000, as of December 31, 2012 purchasers under the private placement (the “Holders”) are entitled to liquidated damages if a registration statement covering the resale of the 1,480,000 shares of common stock sold under the private placement (the “Registrable Securities”) is not filed within 60 days of the termination date of the private placement on May 15, 2012 and ~~declared~~estimated ~~effective~~earnings within 150 days of the termination date. The Company shall make pro rata payments to each Holder, in an amount equal to 1.0% of the aggregate amount invested by such Holder (based upon the number of Registrable Securities then owned by such Holder) for each 30-day period or pro rata for any portion thereof following the date by which such Registration Statement should have been filed or effective (the “Blackout Period”). Such payments can be made in cash or shares of common stock with the fair market value on the date of issuance and ~~shall~~related ~~constitute the Holder’s exclusive monetary remedy for such events, but shall not affect the right of the Holder to seek injunctive relief. The~~ amounts ~~payable~~billed as liquidated damages shall be paid monthly within ten (10) business days of the last day of each month following the commencement of the Blackout Period until the termination of the Blackout Period. Such payments shall be made to each holder at ~~the sole option of the Company in either cash or shares of Common Stock. As of~~ December 31, ~~2012,~~2014 ~~the~~are ~~Company~~as ~~has accrued seven months of liquidated damages payable in the amount of $25,900.~~ follows:

(F-11)

	$
Cost incurred		3,849,742
Estimated earnings, thereon		658,547
		4,508,289
Less: Billings to date		(4,425,895	)
		82,394

~~9. Related Party Transactions~~F-13

~~On January 24, 2012, the Company entered~~ECO-SHIFT ~~into~~POWER ~~a 4% convertible promissory note with its former Chief Operating Officer in the amount of $40,000 (Note 6)~~CORP.

~~10.~~NOTES TO ~~Contingent~~THE ~~Liabilities~~CONSOLIDATED FINANCIAL STATEMENTS

AsAS ofOF DECEMBER ~~December~~ 31, ~~2012,~~2014 the Company had contingent liabilities in amount of $23,062 in connection with the lawsuit filed by the Company’s former Chief Operating Officer. On October 17, 2012, the former Chief Operating Officer filed the complaint against the Company for non-payment of wages, vacation time and waiting time penalties under the California Labor Code Section 203. He is seeking $71,918 in base salary, $5,308 in wages for accrued vacation time and $17,309 in waiting time penalties, for an aggregate of $94,535, together with reasonable attorney’s fees. The balance of contingent liabilities recorded in the accompanying consolidated balance sheet represented the difference between aggregate amount in the lawsuit and accrued salaries to the former Chief Operating Officer.2013

~~11.~~(Expressed in ~~Stockholders’~~United ~~Equity~~States Dollars)

~~(A)~~6. COSTS ~~Authorized~~AND ~~Shares~~ESTIMATED EARNINGS (continued)

~~The Company is authorized to issue 400,000,000~~Such ~~shares~~amounts ofare ~~common~~included ~~stock,~~in ~~par~~the ~~value~~accompanying ~~$0.01~~balance ~~per~~sheet ~~shares~~as ~~and~~at ~~1,000,000~~December ~~shares of preferred stock~~31, ~~par~~2014 ~~value~~under ~~$0.0001 per share with rights and preferences to be determined by~~ the ~~Board~~following ~~of Directors.~~captions:

(B) Sales of Common Stock

	$
Cost and estimated earnings in excess of billings		530,685
Billings in excess of costs and estimated earnings		(448,291	)
		82,394

~~On January 20, 2012, the Company issued 450,000 Units of its securities in a private placement to two accredited investors~~7. ~~The price of these Units was $0.50 per unit.~~GOODWILL ~~Each~~AND ~~Unit~~INTANGIBLE consists of one share of common stock and one three year Series C Warrant. Each Series C Warrant entitles the holder to purchase one share of common stock at an exercise price of $0.50 per share. Upon 30 days’ notice, the Company has the right to call the warrants at $0.0001 per warrant if the Company’s stock is quoted for trading in the over the counter market, the closing price of our common stock is $.50 or more for five consecutive trading days and there is an effective registration statement covering the resale of the shares of common stock underlying the Series C Warrants. The Company received proceeds of $225,000. On September 20, 2012, the Company issued additional 1,800,000 shares to these two investors as adjustment to their purchase price to $0.1 per share, resolving price issues raised by the investors.ASSETS

~~During the six months ended June 30,~~Business 2012 the Company issued 1,480,000 shares of common stock in a private placement to six accredited investors. The price of the common stock was $0.25 per share. Pursuant to the placement agent agreement the Company issued warrants to purchase 148,000 shares of common stock at a price of $.25 to the placement agent and paid a 10% commission and a 2% expense allowance and legal and professional fees of $138,626. The Company received net proceeds of $231,374.acquisition

~~During~~On October 20, 2014 (the ~~three~~“Closing”), ~~months~~the ~~ended~~Company ~~September~~entered into a Share Purchase and Exchange Agreement (the “Agreement”) ~~30,~~with ~~2012~~and among Sun & Sun Industries, ~~the~~Inc. ~~Company~~( ~~issued~~the 2“Sun”),~~550,000~~ ~~Units~~and the common stockholders of ~~its~~Sun, ~~securities~~Lynda inSun aFrederick and ~~private~~Deborah ~~placement~~Sun. Pursuant to ~~accredited~~the ~~investors.~~Agreement, ~~The~~the ~~price~~Company acquired 100% of ~~these~~the issued and outstanding shares of common stock of ~~Units~~Sun ~~was~~from ~~$0.10~~the ~~per~~two ~~unit.~~holders ~~Each~~thereof, ~~Unit~~in ~~consists~~exchange for the issuance of ~~one~~9,850,000 ~~share~~shares of the Company’s common stock and ~~one~~the payment ~~three~~of ~~year~~cash ~~Series~~in Dthe ~~Warrant.~~aggregate ~~Each~~amount ~~Series~~of D$250,000. ~~Warrant entitles~~All ~~the~~preferred ~~holder~~stock toand ~~purchase~~shareholder ~~one~~notes ~~share~~ of ~~common~~Sun ~~stock~~were cancelled at anthe ~~exercise~~Closing. As ~~price~~a result of ~~$0.25~~the ~~per~~transactions ~~share~~contemplated ~~and~~by the Agreement, Sun became a wholly owned subsidiary of the Company. ~~received~~The ~~proceeds~~Company also agreed to grant an aggregate of ~~$255~~1,200,000 shares of its common stock to certain key members of Sun promptly following the Closing.

~~During~~This acquisition ~~the~~was ~~three~~accounted ~~months~~for ~~ended~~using ~~September 30, 2012,~~ the ~~Company~~acquisition ~~issued~~method ~~1,300,000 Units~~ of ~~its securities in a private placement to the accredited investors~~accounting. The ~~price~~fair ~~of these~~value ~~Units was $0.10 per unit. Each Unit consists~~ of ~~one~~assets, ~~share~~liabilities ~~of common stock~~ and ~~one three year Series E Warrant. Each Series~~intangible Eassets ~~Warrant~~and ~~entitles~~ the ~~holder to~~ purchase ~~one~~price ~~share~~allocation ofas ~~common stock at an exercise price~~ of ~~$0.25~~the ~~per~~valuation ~~share~~date, ~~and~~which ~~subject~~is toOctober ~~adjustments due~~20, to2014 ~~recapitalization~~is oras ~~reclassification of common stock. The Company received proceeds of $130,000.~~follows:

	Allocation of Purchase Price
	$			$
Cash		26,867
Accounts receivable		795,601
Other current assets and prepaid expenses		21,547
Costs and estimated earnings in excess of billings		510,419
Property and equipment, net		79,672
Total tangible assets		1,434,106
Assumed liabilities
Accounts payable and accrued liabilities					1,026,699
Billings in excess of costs and estimated earnings					475,782
Note payable					4,912
Long term loan					751,928
Total liabilities					2,259,321
Net liabilities		(825,215	)
Intangible assets acquired
Customer base		1,984,000
Trade-name		444,900
Total intangible assets acquired		2,428,900
Goodwill		2,225,410
Total net assets acquired		3,829,095

~~In May 2011, the Company issued 4,000,000~~Key ~~shares~~factors ofthat ~~common~~make ~~stock~~up ~~valued~~the atgoodwill ~~$200,000~~created ~~($0.05~~by ~~per~~the ~~share)~~transaction ~~based~~include onknowledge ~~contemporaneous stock sales~~ and ~~$50,000~~experience ~~cash~~of tothe aacquired ~~consultant for~~workforce ~~management consulting, business advisory, strategic planning~~ and ~~public relations. On August 26, 2011 the Company amended to~~infrastructure ~~agreement~~ and ~~agreed~~expected tosynergies ~~pay~~from the ~~consultant~~combination anof ~~additional~~operations ~~$50,000~~as ~~for~~it ~~services~~pertains ~~under this agreement. On February 3, 2012, the Company agreed~~ to ~~amend a May 18, 2011 consulting agreement to pay~~ the ~~consultant~~energy anefficient ~~additional~~lighting ~~$30,000~~business ~~upon receipt~~ of ~~additional funding~~Sun. The term of the agreement is for one year and expires on May 17, 2012. Accordingly, expenses for the year ended December 31, 2012 and for the period from February 7, 2011 (Inception) to December 31, 2011 were $150,794 and $179,206, respectively.

In August 2011, the Company issued 4,000,000 shares of common stock valued at $200,000 ($0.05 per share) based on contemporaneous stock sales to a consultant for a variety of services to the Company, including industry analysis, identifying and introducing potential strategic partners to the Company, evaluations of competitors and development of strategies to increase the Company’s competitiveness and advice on effective management of relationships with investment banking firms. The original term of the agreement is for two years and expires on August 15, 2013. Since there are no services to be rendered in 2013 as a result of the change in operations of the Company in February 2013 (see Note 15), the balance of unrecognized expenses was expended in 2012. Accordingly, expenses for the year ended December 31, 2012 and for the period from February 7, 2011 (Inception) to December 31, 2011 were $162,500 and $37,500, respectively.F-14

~~In August 2011, the Company issued 2,000,000~~ECO-SHIFT ~~shares~~POWER ~~of common stock valued at $100,000 ($0~~CORP.05 per share) based on contemporaneous stock sales to a consultant for a variety of services to the Company, including industry analysis, identifying and introducing potential strategic partners to the Company, evaluations of competitors and development of strategies to increase the Company’s competitiveness and advice on effective management of relationships with investment banking firms. The original term of the agreement is for two years and expires on August 15, 2013. Since there are no services to be rendered in 2013 as a result of the change in operations of the Company in February 2013 (see Note 15), the balance of unrecognized expenses was expended in 2012. Accordingly, expenses for the year ended December 31, 2012 and for the period from February 7, 2011 (Inception) to December 31, 2011 were $81,250 and $18,750, respectively.

~~On February 15, 2012, the Company engaged~~NOTES anTO ~~investment~~THE ~~banking~~CONSOLIDATED ~~firm~~FINANCIAL to serve as our exclusive financial advisor. Under the terms of the one year agreement, the investment banker will provide the Company with financial advisory and investment banking services for an annual fee of $60,000. The Company has agreed to reimburse the investment banking firm for its expenses incurred in connection with the engagement and to pay it certain additional transactional fees. The Company has also granted the investment bank firm the right to serve as our investment banker for any private or public offering of our securities and in certain other transactions, upon such terms as the parties may mutually agree. As of December 31, 2012 accrued investment banking fees amounted to $52,500.STATEMENTS

InAS ~~June 2012, the Company issued 300,000~~OF ~~shares~~DECEMBER of common stock valued at $75,000 ($0.25 per share) based on contemporaneous stock sales to a consultant for investor relations. All shares were considered earned upon receipt. Expense for the year ended December 31, ~~2012~~2014 ~~amounted~~and ~~to $75,000.~~2013

~~On July 23, 2012, the Company issued 900,000 shares of common stock valued at $90,000~~ (~~$0.10 per share) based on contemporaneous stock sales to a consultant for a variety~~Expressed ~~of services to the Company, including existing practices evaluation, strategies development~~ in ~~connection~~United ~~with~~States ~~corporate and brand identity, advertising and new business support. All shares were considered earned upon receipt. Expense for the year ended December 31, 2012 amounted to $90,000.~~Dollars)

On7. ~~August 1, 2012, the Company issued~~GOODWILL ~~450,000~~AND ~~shares~~INTANGIBLE ofASSETS ~~common stock valued at $45,000~~ (~~$0.10 per share~~continued) based on contemporaneous stock sales to a consultant for a variety of services to the Company, including existing practices evaluation, strategies development in connection with corporate and brand identity, advertising and new business support. All shares were considered earned upon receipt. Expense for the year ended December 31, 2012 amounted to $45,000.

~~On August 6, 2012, the Company issued~~Business ~~600,000~~acquisition ~~shares of common stock valued at $60,000~~ (~~$0.10 per share~~continued) based on contemporaneous stock sales to a consultant for a variety of services to the Company, including investor and public relations assessment, marketing surveys, investor support, and strategic business planning. All shares were considered earned upon receipt. Expense for the year ended December 31, 2012 amounted to $60,000.

~~On October~~The ~~31,~~details ~~2012, the Company issued 1,000,000 shares~~ of ~~common stock with a fair value of $100,000 to a consultant for a variety of services to~~ the ~~Company,~~purchase ~~including~~consideration ~~accounting~~are ~~services~~as related to the preparation and filing of the Company’s quarterly and annual reports, EDGAR services, and the preparation of corporate tax returns. All shares were considered earned upon receipt. Expense for the year ended December 31, 2012 amounted to $100,000.follows:

(D) Stock Options

	$
Cash paid at Closing		250,000
Common stock at fair value		3,579,095
Consideration paid		3,829,095

~~On November 1, 2011, the Company granted a total of 4,100,000 stock options to employees and officers including 2,500,000 options to Officers.~~ The ~~option vest quarterly~~ ~~over~~fair avalue ~~period~~ of ~~three years and have an exercise price of $0.275 per share. The Options were valued using~~ the ~~Black-Scholes~~common ~~Option Pricing~~stock ~~Model~~to ~~with~~be ~~the~~issued ~~following~~is ~~assumptions: dividend yield of 0%, annual volatility of 87%, risk free interest rate of .87%, and expected life of 4 years. For the year ended December 31, 2012 the Company expensed $72,184~~ as ~~the fair value.~~follows:

During the first quarter of 2012, the Company granted a total of 4,300,000 stock options to employees and officers including 4,000,000 options to officers. The option vest quarterly over a period of three years and have an exercise price of $0.75 per share. The options were valued at $539,177 using the Black-Scholes Option Pricing Model with the following assumptions: dividend yield of 0%, annual comparative companies volatility due to the stock being thinly traded of 101%, risk free interest rate of .87%, and expected life of 4 years using the simplified method. For the year ended December 31, 2012 the Company expensed $86,728.

	$
Number of common stock (note 16)		11,050,000
Market price		0.3239
Fair value of common stock		3,579,095

~~On April 30, 2012, the Company hired~~Goodwill ~~a Director of Engineering. Under the terms of the employment offer letter agreement, the Director of Engineering receives an annual salary of $115,000~~ and ~~will~~intangible be eligible to participate in our existing benefit programs. As additional compensation, the Company granted options to purchase 800,000 shares of common stock with an exercise price of $0.45 per share that vest quarterly in arrears over three years. Employment is terminable by either party at any time, with or without cause. The options were valued at $118,640 using the Black-Scholes Option Pricing Model with the following assumptions: dividend yield of 0%, annual comparative companies volatility due to the stock being thinly traded of 101%, risk free interest rate of .39%, and expected life of four years using the simplified method. For the year ended December 31, 2012 the Company expensed $9,887.assets

		Weighted Avg. Exercise
Options:	Shares		Price
Balance, December 31, 2011	4,100,000	$	0.275
Granted	5,700,000		0.71
Exercised	—		—
Forfeited	(7,050,000)		0.63
Balance at December 31, 2012	2,750,000	$	0.275
Options exercisable at December 31, 2012	1,960,656	$	0.275

Goodwill of $2,225,410 represents the excess of cost over fair value of net assets of Sun acquired.

~~The~~Intangible assets ~~following~~of ~~table~~$2,380,987 ~~summarizes~~(net ~~information~~of ~~about~~amortization ~~options~~charge of $47,913) comprise of $1,944,864 (net of amortization charge of $39,136) representing ~~for~~fair ~~the~~value ~~Company~~of ascustomer base and $436,123 (net of ~~December~~amortization 31charge of $8,777) ~~2012:~~representing fair value of trade-name/marks.

		2012 Options Outstanding							Options Exercisable
Range of Exercise Price		Number Outstanding at December 31, 2012		Weighted Average Remaining Contractual		Weighted Average Exercise Price			Number Exercisable at December 31, 2012		Weighted Average Exercise Price
$	0.275		2,750,000		3.838		$	0.275		1,960,656		$	0.275

ASC Topic 805, “Business Combinations” (“ASC 805”) requires that all business combinations be accounted for using the acquisition method and that certain identifiable intangible assets acquired in a business combination be recognized as assets apart from goodwill. ASC Topic 350, “Intangibles-Goodwill and Other” (“ASC 350”) requires goodwill and other identifiable intangible assets with indefinite useful lives not be amortized, such as trade names, but instead tested at least annually for impairment (which the Company test each October 1, absent any impairment indicators) and be written down if impaired. ASC 350 requires that goodwill be allocated to its respective reporting unit and that identifiable intangible assets with finite lives be amortized over their useful lives.

~~(F-12)~~8. PROPERTY AND EQUIPMENT

12. Warrants

	2014			2013
	$			$
Automobiles and trucks		225,870			4,937
Computer and equipment		172,004			14,287
Furniture and fixtures		150,576			11,334
Lease improvement		25,434			-
Total costs		573,884			30,558
Less: Accumulated depreciation		(506,216	)		(18,460	)
		67,668			12,098

~~The following tables summarize all warrant grants for the year ended December 31, 2012, and the related changes during this period.~~F-15

	Number of Warrants			Weighted Average Exercise Price
Stock Warrants
Balance at December 31, 2011		20,879,412		$	0.92
Granted		4,448,000			0.28
Exercised		—			—
Expired		(668,622	)		0.38
Balance at December 31, 2012		24,658,790			0.26
Warrants Exercisable at December 31, 2012		24,658,790		$	0.26

ECO-SHIFT POWER CORP.

~~In connection with a private placement~~NOTES inTO ~~2007,~~THE ~~the~~CONSOLIDATED ~~Company~~FINANCIAL issued 13,976,180 warrants with an exercise price of $1.05 that expires between March 1, 2012 to March 15, 2017. The exercise price and number of warrant shares issuable upon exercise of the warrants are subject to adjustment from time to time for stock dividends and splits and fundamental transactions, which include a merger or consolidation or any sale of all or substantially all of the Company’s assets, any tender offer or exchange offer is completed pursuant to which holders of the Company’s common stock are permitted to tender or exchange their shares for other securities, cash or property, or any reclassification of the Company’s common stock or any compulsory share exchange pursuant to which the Company’s common stock is effectively converted into or exchanged for other securities, cash or property. The warrants also contain a cashless exercise provision. In the case of a fundamental transaction, the warrant holders will be entitled to rights equivalent to the common shareholders as if the warrant shares were issued immediately prior to the fundamental transaction. The investor warrants also provide that if the Company offers or sells stock in a subsequent equity sale at a price below the warrant exercise price then in effect, then the number of warrant shares issuable will be increased such that the aggregate exercise price of the warrants, after taking into account an equivalent price decrease, shall be equal to the aggregate exercise price prior to such adjustment (“reset provision”). Under ASC 815-40-15, the Company is required to account for warrants with reset provisions when the following three items are present (1) one or more underlying amounts or payments are required (2) no initial net investment or an initial net investment that is smaller than would be required for other types of contracts (3) its terms require or permit net settlement, it can be readily settled net by means outside the contract or it provides for delivery of an asset that puts the recipient in a position not substantially different from the net settlement. ASC 815-40-15 further defines the requirement that the assets are readily convertible to cash. Due to the lack of a public market for the Company’s securities, the Company determined that the warrants were not readily convertible to cash and therefore no derivative liability has been recorded. As of December 31, 2012, the total warrants outstanding in connection with this 2007 private placement are 790 warrants with a weighted average exercise price of $0.39 per share.STATEMENTS

~~13.~~AS ~~Income~~OF DECEMBER ~~tax~~31, 2014 and 2013

~~The Company’s income tax expense~~(Expressed ~~differs~~in ~~from~~United ~~the~~States ~~“expected” tax expense for federal income tax purpose by applying the Federal & State blended rate of 37.63% as follows:~~Dollars)

	For the year ended			For the period ended
	December 31, 2012			December 31, 2011
Expected income tax benefit (expense) at the statutory rate of 37.63%	$	(948,492	)		(313,003	)
Tax effect of expenses that are not deductible for income tax purposes		333,237			102,906
Change in valuation allowance		615,255			210,097
Provision for income taxes	$	—			—
The components of deferred taxes assets are as follows:
		2012			2011
Deferred tax asset:
Net operating loss carryforwards	$	2,193,334			558,321
Effective tax rate		37.63	%		37.63	%
Deferred taxes assets		825,352			210,097
Valuation allowance		(825,352	)		(210,097	)
Deferred taxes assets, net	$	—			—

9. NOTE PAYABLE TO BANK

AsThis represents ofthe ~~December~~amount ~~31,~~payable ~~2012,~~to ~~the Company has~~ a ~~net~~bank ~~operating~~under ~~loss~~the ~~carry~~Restated ~~forward~~and ofFinal ~~approximately~~Forbearance ~~$2,193,334~~Agreement (~~2011~~the ~~– 558,321~~“Agreement”) ~~available~~dated September to30, ~~offset~~2014. ~~future~~The ~~taxable~~note ~~income through~~is ~~2032. This~~secured ~~results~~by insubstantially ~~deferred~~all ~~tax~~ assets of ~~approximately~~the ~~$825,352~~Company ~~(2011~~and –personal ~~210,097)~~guarantees asfrom ofthe ~~December 31,~~stockholders ~~2012~~and a related party. The ~~valuation~~note ~~allowance~~bears interest at ~~December~~the ~~31,~~rate ~~2012~~of ~~was~~10% ~~approximately~~per ~~$825~~annum,~~352~~ ~~(2011~~payable ~~– 210,097)~~monthly. ~~The~~It ~~change~~is indue ~~the~~for ~~valuation allowance~~repayment ~~for~~on the ~~year~~forbearance termination ~~ended~~date ~~December~~of May 31, ~~2012~~2015. ~~was~~The anAgreement ~~increase~~includes ofcertain ~~$615,255~~financial and other covenants which will primarily be tested on a calendar year basis.

~~The~~10. ~~Company’s federal income tax~~LIQUIDATED ~~return~~DAMAGES ~~for the year ended December 31, 2012 is subject to examination by the Internal Revenue Service.~~PAYABLE

~~14.~~Pursuant to ~~Commitments~~the Simplepons’s private placement completed during the year ended December 31, 2012 in the gross amount of $370,000, as of December 31, 2012 purchasers under the private placement (the “Holders”) are entitled to liquidated damages if a registration statement covering the resale of the 1,480,000 shares of common stock sold under the private placement (the “Registrable Securities”) is not filed within 60 days of the termination date of the private placement on May 15, 2012 and ~~contingencies~~declared effective within 150 days of the termination date. The Company shall make pro rata payments to each Holder, in an amount equal to 1% of the aggregate amount invested by such Holder (based upon the number of Registrable Securities then owned by such Holder) for each 30-day period or pro rata for any portion thereof following the date by which such Registration Statement should have been filed or effective (the “Blackout Period”).

Such payments can be made in cash or shares of common stock with the fair market value on the date of issuance and shall constitute the Holder’s exclusive monetary remedy for such events, but shall not affect the right of the Holder to seek injunctive relief. The amounts payable as liquidated damages shall be paid monthly within ten (A10) ~~Lease~~business ~~agreement~~days of the last day of each month following the commencement of the Blackout Period until the termination of the Blackout Period. Such payments shall be made to each holder at the sole option of the Company in either cash or shares of common stock. As of December 31, 2014 and December 31, 2013, the Company has accrued liquidated damages payable in the amount of $70,300.

~~The Company is committed under operating lease agreement for the rental of its premises~~11. ~~The minimum annual future lease payment is from approximately~~PROVISION ~~$124,800~~FOR inA ~~year~~CONTINGENT ~~one to approximately $135,800 in year five. The lease will be terminated on December 31, 2016.~~LIABILITY

Eco-Shift has been named as a co-defendant in a claim by a customer, who is seeking damages of $10,000,000 CAD (B$8,647,000 USD) ~~Contingencies~~and return of a deposit of $150,000 CAD ($129,705 USD) which was received by the Company under a Value-Added Reseller arrangement. The Company has filed a counterclaim against the customer for damages of $9,548,560 CAD ($8,256,640 USD) resulting from the plaintiff’s breach of contract plus punitive damages of $1,000,000 CAD ($864,700 USD) for negligence and loss of business reputation. Management of the company believes these claims are without merit and has accrued $150,000 CAD ($129,705 USD) in the consolidated financial statements in regards to this claim, as management believes this represents the maximum amount the Company may ultimately be required to pay based on the legal opinion.

The Company is a defendant in an action commenced by the Company’s former Chief Operating Officer, who filed a complaint against the Company in October 2012 for non-payment of wages, vacation time and waiting time penalties under the California Labor Code Section 20312. ~~The plaintiff is seeking~~ ~~$71,918~~ADVANCES inFROM base salary, $5,308 in wages for accrued vacation time and $17,309 in waiting time penalties, for an aggregate of $94,535, together with reasonable attorney’s fees. The Company is seeking a dismissal of the lawsuit citing that the former COO’s employment agreement, which is the basis of the claims, provides that it the 15th Judicial Circuit of Florida is the venue and exclusive forum in which to adjudicate any case or controversy that arises in connection with the employment agreement. The Company intends to vigorously defend this action.SHAREHOLDERS

~~15.~~The advances ~~Financial~~from ~~Instruments~~shareholders are unsecured, non-interest bearing and due on demand.

~~(A) Fair Values~~F-16

~~The~~ECO-SHIFT ~~Company’s~~POWER financial instruments consist of cash, accounts receivable, accounts payable, accrued liabilities, accrued salaries payable, liquidated damages payable, contingent liabilities, convertible note payable, convertible note payable – related party, and derivative liabilitiesCORP. ~~The fair values of these financial instruments approximate their carrying values due to the short-term maturity of these instruments.~~

~~The carrying values of the Company’s~~NOTES ~~cash,~~TO ~~accounts~~THE ~~receivable,~~CONSOLIDATED ~~accounts~~FINANCIAL ~~payable, accrued liabilities, accrued salaries payable, liquidated damages payable, contingent liabilities approximate their fair value due to their short-term nature.~~STATEMENTS

~~The~~AS ~~Company’s~~OF DECEMBER ~~convertible~~31, ~~note payable~~2014 and ~~convertible note payable – related party are measured at amortized cost based upon management’s best estimate of interest rates that would be available to the company for similar financial~~2013

~~The derivative liabilities are stated~~(Expressed ~~at their fair value as a level 3 measurement. The Company used a Black-Scholes model to determine the fair values of these derivative liabilities. See Note 5 for the Company’s assumptions used~~ in ~~determining~~United ~~the~~States ~~fair value of these financial instruments.~~Dollars)

~~(B)~~13. CONVERTIBLE ~~Liquidity~~NOTES ~~Risk~~PAYABLE

~~Liquidity risk is the risk that the Company’s cash flows from~~The ~~operations~~details ~~will~~of ~~not~~convertibles benotes ~~sufficient~~outstanding ~~for the Company to continue operating and discharge is liabilities. The Company is exposed to liquidity risk~~ as ~~its~~at ~~continued~~December ~~operation is dependent upon its ability to obtain financing~~31, ~~either~~2014 inare ~~the form of debt or equity, or achieving profitable operations in order to satisfy its liabilities~~ as ~~they come due.~~follows:

(F-13)

	$
ESS convertible notes [note a]		173,846
JSJ convertible notes [note b]		7,122
Other convertible notes [note c]		1,380,000
Convertible notes as at December 31, 2014		1,560,968

~~16.~~(a) ~~Subsequent~~Eco-Shift Scientific ~~Events~~convertible notes

On June 17 and July 3, 2013, the Company entered into two 10% convertible promissory notes with Eco-Shift Scientific Inc. amounting to $182,503 (A$211,059 CAD). ~~Share~~These ~~Exchange~~two ~~Transaction~~notes were due on June 17, 2014 and July 3, 2014, respectively. Prior to the maturity date, the holder has the option to convert the principle and accrued interest into shares of the Company’s common stock at $0.25 per share. The Company is in the process of formalizing arrangements with these note holders to extend the term by one more year. These notes were tainted due to issuance of other notes and the embedded conversion feature in these notes have been accounted for as a derivative liability due to the variable conversion provision and full reset conversion price feature based on guidance in ASC 820 and EITF 07-05 (See note 14).

OnThe Company ~~February~~evaluated 5,the ~~2013~~terms ~~the~~and ~~Company~~conditions ~~finalized~~of ~~a share~~the ~~exchange~~convertible ~~agreement~~debentures ~~whereby~~under the ~~Company~~guidance ~~issued~~of 1ASC 815,~~702,235,971~~ ~~exchangeable~~Derivatives ~~shares~~and Hedging. The conversion feature met the definition of conventional convertible for ~~100%~~purposes of applying the ~~common~~conventional ~~stock~~convertible exemption. The definition of ~~Eco-Shift Power~~conventional ~~Corp.,~~contemplates a ~~Canadian~~limitation ~~corporation~~on the number of shares issuable under the arrangement. The ~~exchangeable~~instrument was convertible into a fixed number of shares ~~are~~and ~~exchangeable~~there atwere no down round protection features contained in the ~~option~~contracts. ofSince the convertible promissory note achieved the ~~holder~~conventional convertible exemption, ~~each~~the ~~into~~Company ~~one~~was ~~share~~required to consider whether ofthe ~~common~~hybrid ~~stock~~contract embodied a beneficial conversion feature. The calculation of the ~~Company.~~effective Inconversion ~~addition~~amount did not result in a beneficial conversion feature because the ~~Company~~fair ~~issued~~value ~~one~~of ~~Series~~the Bconversion ~~Preferred~~was ~~share,~~equal to the ~~terms~~Company’s stock price on the date of ~~which~~issuance ~~are~~and ~~detailed~~no ~~below~~beneficial conversion was recorded.

AsThese notes have been issued to an associated company (a ~~result~~related party as one of the ~~Share~~shareholder ~~Exchange,~~of ~~Eco~~“E”-Shift ~~Power~~ ~~Corp~~Scientific Inc. is ~~now~~ a ~~wholly-owned~~close ~~subsidiary~~family member of the ~~Company.~~shareholder ~~This~~of ~~transaction~~the ~~will be accounted for as reverse merger~~Company).

(Bb) ~~Note~~JSJ Investments ~~Modification~~convertible notes

~~Concurrently~~On April ~~with~~7, ~~the~~2014 ~~closing~~and ofJune ~~the~~10, ~~Share Exchange~~2014, the Company ~~entered~~issued ~~into~~convertible apromissory ~~modification~~notes ~~agreement~~in (the ~~“Amendment”)~~principal toamounts ~~that~~of ~~Certain~~$100,000 ~~Convertible~~each ~~Promissory~~to ~~Note~~JSJ ~~(the~~Investments (“~~Note~~Holder”). ~~originally~~These ~~issued~~notes onbear ~~October~~interest ~~26,~~at ~~2012,~~12% byper ~~the~~annum ~~Company~~and inhave ~~favor~~a ofsix-month ~~Asher~~term. ~~Enterprises,~~The ~~Inc.~~note ~~(“Asher”)~~is pre-payable inat ~~the~~any ~~principal~~time ~~amount~~by ofthe ~~$63~~Company,~~000.~~ ~~The~~subject ~~Note~~to ~~was~~payment ~~subsequently~~of ~~assigned~~a toredemption ~~Linear~~premium ~~Group~~of ~~Holdings,~~125% ~~Inc.~~in ~~(“Linear”)~~lieu ~~pursuant to~~of ~~that~~principal ~~certain~~and ~~Assignment~~interest ~~Agreement~~otherwise ~~dated~~payable. The ~~February~~note 8,is ~~2013~~also (convertible by the ~~“Assignment~~holder ~~Agreement”),~~into byshares ~~and~~of ~~among~~common ~~Asher,~~stock ~~Linear and~~of the Company. ~~Pursuant~~at a 50% discount to the ~~Amendment,~~average of the three ~~Note~~lowest ~~shall~~trades beon ~~convertible~~the atprevious ~~the~~ten ~~option~~trading ofdays ~~Linear~~before ~~into~~conversion. anThe ~~aggregate~~note ~~amount~~may be converted in two tranches of ~~632~~$50,~~260,655~~000 plus ~~shares~~interest, or 4.99% of the ~~Company’s~~then current issued and outstanding number of shares of common stock of the Company, whichever is lower.

~~(C)~~The details ~~Increase~~of inthese ~~Authorized~~convertible ~~Capital~~notes are as follows:

The Certificate of Incorporation of the Company authorizes the issuance of up to 5,000,000 shares of preferred stock and further authorizes the Board of Directors to fix and determine the designation, preferences, conversion rights, or other rights, including voting rights, qualifications, limitations, or restrictions of the preferred stock. On January 31, 2013, the Board approved by unanimous written consent an amendment to the Company’s Certificate of Incorporation to designate the rights and preferences of the Series B Preferred.

	$
Gross amount received - Principal balance		200,000
Less: Principal balance converted during Q4 2014		(90,000	)
Remaining principal balance		110,000
Less: Unamortized discount		(102,878	)
Convertible notes as at December 31, 2014		7,122

~~(D) Certificate of Designation~~F-17

~~On February 1, 2013, the Company filed the~~ECO-SHIFT ~~Certificate~~POWER ~~of Designation with the State of Delaware Secretary of State pursuant to which the Company set forth the designation, powers, rights, privileges, preferences and restrictions of the Series B Preferred~~CORP.

~~Among other things, the share of the Series~~NOTES BTO ~~Preferred~~THE ~~has~~CONSOLIDATED ~~voting~~FINANCIAL rights equal to the number of Exchangeable Shares that are issued and outstanding as of the record date, except for any Exchangeable Shares owned by any subsidiary of the Company. The Company has authorized one (1) share of Series B Preferred.STATEMENTS

~~(E)~~AS ~~Discontinued~~OF DECEMBER ~~Operations~~31, 2014 and 2013

~~Subsequent to the Share Exchange and~~(Expressed ~~the~~in ~~commencement~~United ofStates ~~the Eco-Shift Power Corp. business operations, the Company decided to discontinue the mobile coupon subscription operations.~~Dollars)

~~(F)~~13. CONVERTIBLE ~~Sales~~NOTES ofPAYABLE ~~Common Stock~~(Continued)

InThe embedded ~~March~~conversion ~~2013,~~feature in the ~~Company~~notes ~~issued~~have ~~6,200,000 shares~~been ofaccounted ~~common~~for ~~stock~~as in a ~~private~~derivative ~~placement~~liability due to ~~seven~~the ~~accredited~~variable ~~investors.~~conversion ~~The~~provision and full reset conversion price offeature ~~the~~based ~~common~~on ~~stock~~guidance ~~was~~in ~~$0.05~~ASC ~~per~~820 ~~share,~~ and ~~the~~EITF ~~Company~~07-05 ~~received~~(See ~~proceeds~~note ~~of $310,000~~14).

The Company converted $90,000 of the JSJ notes eliminating $150,878 of the derivative liability. The unamortized discount as at December 31, 2014 amounting to $102,389.

(c) Other convertible notes (tainted and issued during Q3-Q4 2014)

From July 1, 2014 to December 31, 2014, pursuant to various subscription agreements the Company issued Promissory Notes (“Tainted Promissory Notes”) to investors and issued warrants to acquire additional shares of Common Stock at an exercise price of $0.20-$0.25 per share (the “Q3 and Q4 2014 Tainted Warrant”). These convertible notes bear interest at 8% per annum, subject to a default rate at 12% per annum, and mature on the one-year anniversary of the date of issuance. The notes may be pre-paid at any time at the option of the Company. The unpaid principal and accrued and unpaid interest are convertible at any time before prepayment in full or the maturity date, at the option of the note holder, into shares of common stock of the Company at a conversion price of $0.15 per share. The Warrants have three-year terms and provide for standard adjustment of the exercise price and shares. The Warrant may be exercised in whole or in part, on any day after the issuance of the Warrant. If at the time of exercise of the Warrant, a registration statement for the resale of the Warrant Shares is not effective, then the Investor has a cashless exercise right. These Warrants are tainted derivative liabilities as a result of the JSJ note issued on April 7, 2014.

Extinguishment loss on modification of Asher note during the year ended December 31, 2013

On October 26, 2012, the Company issued a $63,000 8% convertible note with a term to July 24, 2013 (the “Maturity Date”) to Asher Enterprises, Inc. (“Asher”). The principal amount of the note and interest was payable on the maturity date. The note was convertible into common stock beginning six months after the issuance date, at the holder’s option, at a 58% discount to the average of the three lowest closing bid prices of the common stock during the 10 trading day period prior to conversion. In the event the Company prepays the note in full, the Company was required to pay off all principal, interest and any other amounts owing multiplied by (i) 120% if prepaid during the period commencing on the closing date through 60 days thereafter, (ii) 130% if prepaid 61 days following the closing through 90 days following the closing, (iii) 140% if prepaid 91 days following the closing through 120 days following the closing, and (iv) 150% if prepaid 121 days following the closing through 180 days following the closing. The agreement provided the holder with full down-round protection in the event of any equity sales sold below the applicable conversion price. The terms of the convertible note provide for certain redemption features which include features indexed to equity risks. In the event of default, the amount of principal and interest not paid when due bear interest at the rate of 22% per annum and the note becomes immediately due and payable. Should that occur the Company is liable to pay the holder 150% of the then outstanding principal and interest (the “default put”).

The Company evaluated the terms and conditions of the convertible note under the guidance of ASC 815, Derivatives and Hedging. The conversion feature did not meet the definition of “indexed to a company’s own stock” provided for in ASC 815 due to the down round protection feature. Therefore, the conversion feature requires bifurcation and liability classification. Additionally, the default put requires bifurcation because it is indexed to risks that are not associated with credit or interest risk. As a result, the compound embedded derivative comprises of (i) the embedded conversion feature and (ii) the default put. Rather than bifurcating and recording the compound embedded derivative as a derivative liability, the Company elected to initially and subsequently measure the convertible note in its entirety at fair value, with changes in fair value recognized in earnings in accordance with ASC 815-15-25-4.

F-18

ECO-SHIFT POWER CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 and 2013

(Expressed in United States Dollars)

13. CONVERTIBLE NOTES PAYABLE (Continued)

The following table reflects the allocation of the purchase on the financing date:

Convertible Notes at Fair Value	$63,000 Face Value
Proceeds	$	(60,000	)
Convertible promissory notes		66,507
Financing costs expense		(3,000	)
Day-one derivative loss		(3,507	)

Before conversion of the note during the further quarter ended December 31, 2013, the estimated fair value of the $63,000 convertible promissory notes was as follows which was recognized during the third quarter ended September 30, 2013:

Convertible Notes
$63,000 face value convertible note due July 24, 2013		$	(632,261	)

Concurrently with the closing of the Share Exchange, the Company entered into a modification agreement (the “Amendment”) to the Asher Note. The Asher Note was subsequently assigned to Linear Group Holdings, Inc. (“Linear”) pursuant to that certain Assignment Agreement dated February 8, 2013 (the “Assignment Agreement”), by and among Asher, Linear and the Company. Pursuant to the Amendment, the Asher Note shall be convertible at the option of Linear into an aggregate 12,645,213 shares of the Company’s common stock. The note was fully converted into the Company’s common stock during the fourth quarter ended December 31, 2013.

Although the actual number of shares convertible into common stock was fixed due to the Amendment, the embedded conversion feature still required liability classification due to the down-round protection features present in the contracts. The amendment resulted in a modification with substantially different terms, which required the convertible note payable to be accounted for as a debt extinguishment in accordance with FASB ASC Topic No. 470, Debt, Debt with conversions and other options. As a result of the modification, the Company recorded an extinguishment loss in the amount of $539,505 during the year ended December 31, 2013.

Interest expense recognized on all the convertible notes for the year ended December 31, 2014 amounted to $24,850 (2013: $8,988).

14. DERIVATIVE LIABILITIES

Pursuant to various purchase agreements entered during the year ended December 31, 2014, the Company sold to investors and issued warrants to acquire up to 13,299,276 additional shares of Common Stock (the “Warrant Shares”) at an exercise prices of $1.00; $0.50; and $0.25 per share (the “Tainted Warrant”) as detailed below:

	Warrants (tainted)
Warrants	Issue Date	Amount		Derivative Value at 9/30/14		Issuances - Derivative		Exercise - Derivative		Derivative Value at 12/31/14		Mark to Market
Warrants (issued Q2-Q3 2014)	4/7/14 -9/5/14		7,432,742	$	576,503		-		-	$	117,646	($	458,857	)
Warrants (issued Q4 2014)	10/1/14 -12/30/14		5,866,534		-	$	416,087	$	-	$	104,179	($	311,908	)
			13,299,276	$	576,503	$	416,087	$	0	$	221,825	($	770,765	)

These warrants have three-year terms and provide for standard adjustment of the exercise price and shares. The warrant may be exercised in whole or in part, on any day after the issuance of the warrant. If at the time of exercise of the warrant, a registration statement for the resale of the warrant shares is not effective, then the Investor has a cashless exercise right. These Warrants are tainted derivative liabilities as a result of the JSJ note issued on April 7, 2014.

F-19

ECO-SHIFT POWER CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 and 2013

(Expressed in United States Dollars)

14. DERIVATIVE LIABILITIES (continued)

The embedded conversion feature in the Notes and Warrants should be accounted for as a derivative liability due to the variable conversion provision and full reset conversion price feature in the JSJ Notes based on guidance in ASC 820 and EITF 07-05.

In summary, quarter wise derivative valuations for the year ended December 31, 2014 are as follows:

	Embedded feature of convertible notes			Warrant liabilities			Total
	$			$			$
Fair value at issuance during Q2 2014		588,120			638,069			1,226,189
Change in fair value		(122,679	)		(205,941	)		(328,620	)
Fair value as at June 30, 2014		465,441			432,128			897,569
Fair value at issuance during Q3 2014		404,072			408,561			812,633
Change in fair value		(136,334	)		(264,186	)		(400,520	)
Fair value as at September 30, 2014		733,179			576,503			1,309,682
Fair value at issuance during Q4 2014		1,181,901			416,087			1,597,988
Fair value at conversion		(150,389	)		-			(150,389	)
Change in fair value		(983,589	)		(770,766	)		(1,754,355	)
Fair value of derivatives as at December 31, 2014		781,102			221,824			1,002,926

The derivative liabilities as at December 31, 2014 have been classified based on maturity date as detailed below:

	$
Current		851,237
Non-current		151,689
Fair value of derivatives as at December 31, 2014		1,002,926

The derivative liabilities were valued using a multi-nomial model. The following assumptions were utilized; risk-free rates based on remaining term of instrument, volatility based on the company’s historical volatility (ranging from 173% on 9/30/14 to 158% on 12/31/14), dividend yield of 0%, maturity dates based on the instrument terms, and underlying stock price as quoted on NASDAQ ($0.315 on September 30, 2014 and $0.1299 on December 31, 2014).

F-20

ECO-SHIFT POWER CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 and 2013

(Expressed in United States Dollars)

14. DERIVATIVE LIABILITIES (continued)

The details of the outstanding derivative warrants as at December 31, 2014 issued during Q2 and Q3 of 2014 are as follows:

Holder	Issue Date	Maturity Date	Issuance - Warrants		Exercise Price		DV at Issuance or 6.30.14		Derivative Value at 9/30/14		Derivative Value at 12/31/14		Mark to Market
10/04/12 - Golden Explorations - 2000000	2014-04-07	2015-10-31		2,000,000		0.5000		199,535		101,152		27,431		(73,721	)
11/19/12 - Erwin Speckert - 800000	2014-04-07	2015-11-30		800,000		0.5000		79,411		40,252		11,474		(28,778	)
11/21/12 - Golden Explorations - 600000	2014-04-07	2015-11-30		600,000		0.5000		59,558		30,189		8,605		(21,584	)
05/13/13 - F. Boulos - 6000	2014-04-07	2016-05-31		6,000		1.0000		276		219		62		(157	)
05/13/13 - P. Bowman IRA LLC - 6000	2014-04-07	2016-05-31		6,000		1.0000		276		219		62		(157	)
09/11/13 - F. Boulos - 100000	2014-04-07	2016-09-30		100,000		0.2500		16,819		10,283		1,707		(8,576	)
09/11/13 - P. Bowman IRA LLC - 100000	2014-04-07	2016-09-30		100,000		0.2500		16,819		10,283		1,707		(8,576	)
12/17/13 - BHKT - 120000	2014-04-07	2016-12-31		120,000		0.5000		11,483		5,462		1,782		(3,680	)
12/17/13 - Fundacion R.P.D. - 20000	2014-04-07	2016-12-31		20,000		0.5000		1,914		910		297		(613	)
12/17/13 - A.I.R. - 43560	2014-04-07	2016-12-31		43,560		0.5000		4,168		1,983		647		(1,336	)
12/17/13 - Arango M. Fernando - 15720	2014-04-07	2016-12-31		15,720		0.5000

Filing Compare · Eco-Shift Power Corp.