ACQUISITION OF SUBSIDIARIES

12 Months Ended

Dec. 31, 2011

Bitzio, LLC Acquisition

On July 13, 2011 Bitzio, Inc. and Bitzio, LLC., entered into share exchange agreement wherein Bitzio, Inc. issued 5,000,000 shares of the Company's common stock in exchange for 100% of the members' equity of Bitzio, LLC. Through this transaction Bitzio, LLC became a wholly-owned subsidiary of Bitzio, Inc.

The transaction closed on July 27, 2011. Pursuant to the terms of the agreement, the Bitzio, LLC’s members exchanged 100% of their outstanding member’s equity for 5,000,000 shares of the Company’s common stock valued at the market price of the Company’s common stock on the date the agreement was entered into of $0.47 per share or a total of $2,350,000. The 5,000,000 shares represent approximately 13% of the Company’s total outstanding shares immediately following the transaction.

The assets and liabilities of Bitzio, LLC as of the acquisition date will be recorded at their estimated fair value. A preliminary allocation of the purchase price is as follows:

Cash and cash equivalents	$	-
Goodwill		2,350,800
Total assets acquired		2,350,800

Accounts payable		800
Total liabilities acquired		800
Net assets acquired	$	2,350,000

Thinking Drone, Inc. Acquisition

On September 14, 2011 Bitzio, Inc. and Thinking Drone, Inc., entered into a triangular merger wherein Bitzio, Inc. acquired all of the issued and outstanding stock of Thinking Drone, Inc. through its wholly-owned subsidiary Bitzio Holdings, Inc. Bitzio, Inc. received all of the outstanding shares of Thinking Drone in exchange for a $500,000 promissory note and 5,000,000 shares of Bitzio, Inc. common stock. Through this transaction Thinking Drone, Inc. became a wholly-owned subsidiary of Bitzio, Inc.

The transaction closed on November 9, 2011. Pursuant to the terms of the agreement, the Thinking Drone, Inc.’s stockholders exchanged 100% of their outstanding stockholders’ equity for a $500,000 note payable due on October 31, 2012 and 5,000,000 shares of the Company’s common stock valued at the market price of the Company’s common stock on the date the agreement was entered into of $0.15 per share or a total of $1,250,000. The 5,000,000 shares represent approximately 11% of the Company’s total outstanding shares immediately following the transaction.

The assets and liabilities of Thinking Drone, Inc. as of the acquisition date will be recorded at their estimated fair value. A preliminary allocation of the purchase price is as follows:

Cash and cash equivalents	$	1,260
Accounts receivable		9,155
Mobile application portfolio		611,461
Goodwill		638,539
Total assets acquired		1,260,415

Accounts payable		775
Due to related parties		9,640
Total liabilities acquired		10,415
Net assets acquired	$	1,250,000