iTalk Inc. (fka TALK)

[21ZNA9]

7 LAWSUITS against SCAM TALK and UMS:

On June 10, 2016, following discussions on June 9, 2016 between David Levy, the Company’s Chief Executive Officer, and the Company’s independent registered public accounting firm, the Board of Directors of the Company concluded that the UMS Financial Statements should no longer be relied upon. Management determined that there were four legal actions commenced against the Company in November 2015 and December 2015, which were required to be disclosed in the notes to the UMS Financial Statements. Management believes that the principal amounts owing to vendors of approximately $1.1 million, which are the basis for the legal actions, have been properly reflected in the UMS Financial Statements, but is in the process of determining whether any additional loss contingencies need to be recorded.



In identifying the omitted disclosures for UMS, the Company also identified a legal action commenced against UMS and the Company in March 2016 which was not disclosed in the Company’s quarterly report on Form 10-Q for the quarter ended November 30, 2015, filed with the SEC on May 16, 2016. Management believes that the principal amount owing to the vendor of approximately $0.07 million, which is the basis for the legal action, has been properly reflected in the Company’s financial statements, but is in the process of determining whether any additional loss contingencies need to be recorded. The Company is working to amend its quarterly report on Form 10-Q for the quarter ended November 30, 2015 to provide the required disclosures.

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