iTalk Inc. (fka TALK)

[integral]

On September 18, 2013, the Company entered into a twenty four-month inventory financing agreement with Curve Commercial Services, LLC with a total credit line available of $500,000. Purchases made by the Company through the financing agreement bear interest at 18% per annum plus an admin fee of 1% of the gross face amount of each supplier’s invoice. The Company is required to purchase a minimum of $500,000 through the agreement on a quarterly basis or will be charged the greater of (i) one percent of the difference between the amounts of goods purchased by the Company based upon accepted purchase orders during that quarterly period and the minimum purchase amount or (ii) an amount equal to what would have been charged had the Company achieved the minimum purchase amount. Purchases through the financing agreement were $5,493,391and $4,440,670 for the six months ended June 30, 2015 and 2014, respectively. Amounts due under both the September 18, 2013 and January 9, 2015 arrangements totaled $934,454 as of June 30, 2015and is recorded in Accounts Payable on the combined balance sheet.

On January 9, 2015 the Company entered into a twenty four-month term loan totaling $250,000 with Curve Commercial Services, LLC. The term loan bears interest at 18.00% per annum. The Company will pay monthly principal and interest payments commencing on January 12, 2015 and on the first day of each consecutive month. The remaining principal balance, plus all accrued but unpaid interest, is due and payable on the maturity date of January 9, 2017. The purchases through this financing agreement and outstanding balances as of June 30, 2015 are included in the amounts above for Curve Commercial Services agreement dated September 18, 2013.

On January 5, 2014, the Company entered into a separate twenty four-month inventory financing agreement with ProcurePal, LLC with a total credit line available of $500,000. Purchases made by the Company through the financing agreement bear interest at 10% plus an admin fee of 1% of the gross face amount of each supplier’s invoice. The Company will receive an 8% interest rebate if the invoice is paid within 30 days and a 6% rebate if the invoice is paid within 60 days. The Company is required to purchase a minimum of $500,000 through the agreement on a semi-annual basis or will be charged a fee equal to two percent of the difference between the invoiced amount of goods purchased by the Company during the semi-annual period and the minimum purchase amount with a minimum charge of $2,500. Purchases through the financing agreement were $2,391,483 and 1,956,391for the six months period ended June 30, 2015 and 2014. Amounts due under the arrangement totaled $435,091 as of June 30, 2015 and is recorded in Accounts Payable on the combined balance sheet.

F-9


On January 5, 2015, the Company amended its inventory financing agreement with Curve Commercial Services, LLC. The agreement is twenty-four months and the terms of the financing agreement are the same terms as the Procure Pal, LLC agreement discussed in Note 5.

The total interest expense related to the inventory financing agreements was $198,349 and $16,065 for the six months ended June 30, 2015 and 2014, respectively.