Edgar Filing: Fresh Traffic Group Inc.

form10k.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

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

	For the fiscal year ended August 31, 2011

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

	For the transition period from __________ to __________

000-53703
Commission File Number

FRESH TRAFFIC GROUP INC.
(Exact name of registrant as specified in its charter)

Nevada	98-0531819
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

201 Portage Avenue Suite 1680, Winnipeg MB, Canada	R3B 3K6
(Address of principal executive offices)	(Zip Code)

(204) 942-4200
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of each class	Name of each exchange on which registered
n/a	n/a

Securities registered pursuant to Section 12(g) of the Exchange Act:

Title of class

Common Stock, $0.001 par value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes

[ ]

[X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.

Yes

[ ] ]

[X]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

[X]

[ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, 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

[ ]

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

[ ]

[X]

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 “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	[ ]	Accelerated filer	[ ]

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

[ ]

[X]

The aggregate market value of common stock held by non-affiliates of the registrant, computed by reference to the price at which the common equity was last sold being $00.13 on February 23, 2011 which is the closest trading day to the last trading day of the second quarter, was approximately $3,640,000 as of February 28, 2011 (the last business day of the registrant’s most recently completed second quarter), assuming solely for the purpose of this calculation that all directors, officers and more than 10% stockholders of the registrant are affiliates. The determination of affiliate status for this purpose is not necessarily conclusive for any other purpose.

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PAST 5 YEARS:

Indicate by check whether the issuer has filed all documents and reports required to be filed by Section 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Yes

[ ]

APPLICABLE ONLY TO CORPORATE REGISTRANTS

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

36,000,000 common shares outstanding as of December 10, 2011

DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g. Part I, Part II, etc.) into which the document is incorporated: (1) Any annual report to security holders; (2) Any proxy or information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or (c) of the Securities Act of 1933. The listed documents should be clearly described for identification purposes.

none

FRESH TRAFFIC GROUP INC.

TABLE OF CONTENTS

		Page
	PART I

Item 1	Business	4
Item 1A	Risk Factors	8
Item 1B	Unresolved Staff Comments	8
Item 2	Properties	8
Item 3	Legal Proceedings	8
Item 4	(Removed and Reserved)

	PART II

Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	9
Item 6	Selected Financial Data	9
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10
Item 7A	Quantitative and Qualitative Disclosures About Market Risk	11
Item 8	Financial Statements and Supplementary Data	11

Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	12
Item 9A	Controls and Procedures	12
Item 9B	Other Information	13

	PART III

Item 10	Directors, Executive Officers and Corporate Governance	14
Item 11	Executive Compensation	16
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	17
Item 13	Certain Relationships and Related Transactions, and Director Independence	19
Item 14	Principal Accounting Fees and Services	20

	PART IV

Item 15	Exhibits, Financial Statement Schedules	21

	SIGNATURES	22

PART I

ITEM 1. BUSINESS

The statements contained in this Annual Report on Form 10-K for the fiscal year ended August 31, 2011, that are not purely historical statements are forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934, including statements regarding the Company's expectations, beliefs, hopes, intentions or strategies regarding the future. These forward-looking statements involve risks and uncertainties. Our actual results may differ from those indicated in the forward-looking statements. Please see "Forward-Looking Statements" under Item 7 of this Annual Report and the factors and risks discussed in other reports filed from time to time with the Securities and Exchange Commission.

General Development of Business

Fresh Traffic Group Inc. (formerly Estate Coffee Holdings Corp. (formerly Slap, Inc.)) (the “Company”, “Fresh”, “we”, “our”, or “us”) was incorporated on March 19, 2007, in the State of Nevada as an oil and gas exploration company. The Company drilled an initial well on its oil and gas leases which was deemed a dry hole. The Company has divested these oil and gas operations as no revenue was expected to be generated from those operations in the immediate future.

On November 2, 2009, the Company filed with the State of Nevada a forward split of its authorized and issued shares of common stock on the basis of nine shares for each one share authorized and issued. The record date for the distribution to stockholders was November 2, 2009 and the effective date for the distribution to stockholders was November 9, 2009. Upon completion of the forward split the authorized shares were increased to 675,000,000 common shares.

On January 10, 2010, the Company entered into a formal agreement (the “Agreement”) with the 100% owners of Estate Coffee Holdings Ltd. (“ECH”), a private company incorporated pursuant to the laws of the State of Maryland whereby the Company agreed to acquire all of the issued and outstanding shares of ECH in exchange for the issuance of 900,000 restricted shares of the Company to Sean Tan, ECH’s primary creditor, in settlement of a promissory note between ECH and Mr. Tan. ECH had previously acquired 20% of the shares of DTS8 Holdings Co. Ltd. (“DTS8”), a Hong Kong company which owns a Wholly Owned Foreign Entity in the Republic of China from which it conducts its operations, from Mr. Tan in exchange for a promissory note in the amount of $60,000 plus interest at the rate of 6% per annum. DTS8 is a coffee roasting operation located in Mainland China. Pursuant to the Agreement ECH became a wholly owned subsidiary of the Company. The shares were issued to Mr. Tan on January 21, 2010, the closing date of the transaction.

On February 8, 2010 the Company changed its name from SLAP, Inc. to Estate Coffee Holdings Corp. to reflect the initiative to operate in the coffee business.

During June, 2010, upon receipt of final documentation with respect to the transaction noted above, the Company discovered that DTS8 had not perfected the transaction with the regulatory authorities in Hong Kong, and further, that the ownership structure of the assets acquired by DTS8 included a second company incorporated in China, the records for which were not able to be obtained by the Company for review. As a result, the Company, ECH, Sean Tan and DTS8 agreed to cancel the transaction effective May 31, 2010 and all shares issued in respect of the transaction were canceled and returned to treasury.

On January 29, 2010, the Company negotiated and entered into a global distribution agreement with Coffee Solutions Ltd. (“CSL”) whereby the Company was granted the rights to market and distribute CSL roasted Jamaica Blue Mountain Coffee. The distribution agreement is temporarily on hold while ECH completes the acquisition of the trademark and license agreement from the Coffee Industry Board. The Company has assigned this agreement to ECH with the divestiture of ECH on July 1, 2011.

On October 20, 2010, the Company, Fresh Traffic Group Corp., a private Manitoba company (“Fresh”), and Jeremy Booth, Kim Lewis and Dmytro Hrytsenko (collectively the “Fresh Shareholders”) entered into a Share Exchange Agreement (the “Agreement”). The Agreement provided for: (a) for the purchase by the Company of all of the issued and outstanding shares of Fresh owned by the Fresh Shareholders in exchange for the issuance of 8,000,000 shares of the common stock of the Company and (b) the settlement of a total of $71,973 of debt on the balance sheet of Fresh by way of the issuance of up to 2,600,000 shares of common stock of the Company. As a result of this agreement, on October 20, 2010, the Company changed its name from Estate Coffee Holdings Corp. to Fresh Traffic Group Inc., as Fresh Traffic Group Corp. has revenues and will be the primary operating subsidiary of the Company until such time as the coffee business is further developed.

On October 26, 2010, the Company completed a closing (the “Closing”) of the Agreement, by the issuance of 8,000,000 shares of the common stock of the Company to the Fresh Shareholders, in exchange for all of the issued and outstanding shares of Fresh, as held by the Fresh Shareholders. Furthermore, as part of a debt settlement arrangement included as part of the Agreement, a total of 2,400,000 shares of common stock of the Company were issued to settle CDN$71,973 (US$ 70,152) of debt on the balance sheet of Fresh.

On July 1, 2011, the Company entered into an agreement with the officer and director of ECH, whereby the Company transferred all of the issued and outstanding shares of ECH as no revenue has been generated and no revenue is expected to be generated from those operations in the immediate future.

The Company’s business consists of the operations as undertaken by Fresh, a wholly-owned subsidiary, those being the provision of internet marketing and search engine optimization (“SEO”) services to a diversified customer base.

Principal Products and Services and their Markets

We provide the following services:

·	Search Engine Optimization (“SEO”)

·	Online Marketing

·	Web Design

·	CRM (Customer Relationship Management) optimization

·	Campaign Management

·	Analytics & Web Hosting

·	iPhone & iPad Apps

·	Video Services

·	Social Media Platforms

·	Software Development; and

·	E-commerce Platform Development

Pricing

Due to the customized nature of our core business and history of experience relative to the industry players in general, our pricing would be considered between medium to high when comparing to competitive SEO offerings. Fresh focuses on delivering results demanded by their clients’ unique needs. Consideration is given to all aspects of the customer’s goals in SEO, Search Engine Marketing (“SEM”), Pay per Click (“PPC”); as well as the online activities of their competitors. We then tailor a comprehensive program suited to the client’s requests. There is no boiler plate approach in our efforts; in fact the opposite is true. Each client has a niche offering and we specialize in generating positive results and ROI by focusing our online marketing efforts to one company per niche market segment and then understanding how to position our clients as leaders within this segment. We are very competitive for our web design and hosting services, again delivering a customized product to our clients based on their needs. Ongoing advisory services are generally included in all contracts.

We normally enter into one year contracts for online branding and marketing services with our customers. The agreements specify the desired branding and target market the client wants to penetrate. Our customers pay in advance for services rendered on a monthly basis.

Web design, hosting, graphic works, apps and all other services are one of a kind as per the client’s request. These services are all individually quoted on, and once terms have been agreed upon a retainer is paid and progress payments are made based on contract terms.

Distribution Methods of the Products

We provide services through our website and also through our three office locations in Winnipeg, Manitoba, Toronto, Ontario, and Vancouver, British Columbia, Canada.

Status of any Publicly Announced New Product

Through the end of the fiscal year covered by this report, the Company did not announce any new product or service.

Competitive Business Conditions and Our Competitive Position in the Industry and Methods of Competition

We operate in a highly competitive and changing environment. We principally compete with other companies which offer services in the following areas:

·	sales to advertisers of pay-per-click services;

·	aggregation or optimization of online advertising for distribution through search engines, product shopping engines, directories, Web sites or other outlets;

·	provision of local and vertical Web sites containing information and user feedback designed to attract users and help consumers make better, more informed local decisions, while providing targeted advertising inventory for advertisers;

·	local search sales and marketing services;

·	services and outsourcing of technologies that allow customers to manage their campaigns across multiple networks and track the success of these campaigns;

Some of our competitors, as well as potential entrants into our market, may be better positioned to succeed in this market. They may have:

·	longer operating histories;

·	more management experience;

·	an employee base with more extensive experience;

·	better geographic coverage;

·	larger customer bases;

·	greater brand recognition; and

·	significantly greater financial, marketing and other resources

Currently, and in the future, as the use of the Internet and other online services increases, there will likely be larger, more well-established and well-financed entities that acquire companies and/or invest in or form joint ventures in categories or countries of interest to us, all of which could adversely impact our business. Any of these trends could increase competition and reduce the demand for any of our services.

The online local paid-search market is intensely competitive. Our competitors include the major search engines as well as online directories and city guides. Non-paid search engines are beginning to offer paid-search services, and we believe that additional companies will enter into the local search advertising market. We believe that the principal competitive factors in our market are network size, revenue sharing agreements, services, convenience, accessibility, customer service, quality of search tools, quality of editorial review and reliability and speed of fulfillment of search results and ad listings across the Internet infrastructure.

We also compete with other online advertising services as well as traditional offline media such as television, radio and print, for a share of businesses’ total advertising budgets. Nearly all of our competitors have longer operating histories, larger customer bases, greater brand recognition and significantly greater financial, marketing and other resources than we do. Our competitors may secure more favorable revenue sharing agreements with network distributors, devote greater resources to marketing and promotional campaigns, adopt more aggressive growth strategies and devote substantially more resources to website and systems development than we do.

The search industry has experienced consolidation, including the acquisitions of companies offering local paid-search services. Industry consolidation may result in larger, more established and well-financed competitors with a greater focus on local search services. If this trend continues, we may not be able to compete in the local search market and our financial results may suffer.

Sources and Availability of Raw Materials and Names of Principal Suppliers

The only supplier of services to the Company is their internet service provider and the principal provider is MTS Advanced Ltd. However, the Company also uses Shaw Business Services.

Dependence on One or a Few Major Customers

We have a diverse client base, and are not reliant on any one/few major customers.

Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements or Labor Contracts, including Duration

We do not have any royalty agreements or labor contracts.

Need for Any Government Approval of Principal Products or Services

We do not require any specific governmental approval in order to conduct our business.

Effect of Existing or Probably Government Regulations on our Business

We do not anticipate government regulations specific to our business.

Research and Development Activities and Costs

We believe in the importance of continuous research and development, as new product design and development is more often than not a crucial factor in the survival of any company. In an industry that is changing rapidly, we must continually revise the design and range of products. This is necessary due to continuous technology change and development as well as other competitors and the changing preference of customers.

We bear the costs of R&D as part of our overhead.

Costs and Effects of Compliance with Environmental Law

We are not required to comply with any environmental laws that are particular to our business operations. We are subject to typical monitoring and investigation protocols applicable to all businesses.

Employees

Fresh currently has 3 executive personnel and 3 commissioned sales people. An additional 30 individuals are responsible for IT, website design and development, programming and social media. Part time or third party services are engaged as required on a contract basis.

Additional information

You may read and copy any materials that we file with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may also find all of the reports or registration statements that we have previously filed electronically with the SEC at its Internet site at www.sec.gov. Please call the SEC at 1-202-551-8090 for further information on this or other Public Reference Rooms. Our SEC reports and registration statements are also available from commercial document retrieval services, such as CCH Washington Service Bureau, whose telephone number is 1-800-955-0219.

ITEM 1A. RISK FACTORS

The Company is a smaller reporting company and is not required to provide this information.

ITEM 1B. UNRESOLVED STAFF COMMENTS

The Company is a smaller reporting company and is not required to provide this information.

ITEM 2. PROPERTIES

Fresh Traffic Group Inc. has no properties and at this time has no agreements to acquire any properties.

The Company currently operates from executive office space in Winnipeg, Manitoba, Canada for which they pay a rental of $6,454 ($6,423.56CDN) per month. We believe that the foregoing arrangements are sufficient for our current operational needs.

ITEM 3. LEGAL PROCEEDINGS

The Company is not a party to any legal proceedings and is not aware of any pending legal proceedings as of the date of this Form 10-K.

ITEM 4. REMOVED AND RESERVED

PART II

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

Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters

Market Information

The Company's common stock is currently quoted on the Over-the-Counter Bulletin Board (OTC/BB) under the trading symbol “FTGC”.Following is a report of high and low closing bid prices for each quarterly period for the fiscal years ended August 31, 2011 and August 31, 2010.

Quarter	High ($)	Low ($)
4th Quarter ended 8/31/2011	0.145	0.025
3rd Quarter ended 5/31/2011	0.11	0.022
2nd Quarter ended 2/28/2011	0.20	0.08
1st Quarter ended 11/30/2010	0.13	0.04

4th Quarter ended 8/31/2010	0.30	0.09
3rd Quarter ended 5/31/2010	0.80	0.30
2nd Quarter ended 2/28/2010	0.70	0.07
1st Quarter ended 11/30/2009	0.0167	0.0167

The above information was provided by OTC Markets. The quotations provided may reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.

Holders

As of November 29, 2011, there were 28 record holders of the Company’s common stock (which number does not include the number of stockholders whose shares are held by a brokerage house or clearing agency, but does include such brokerage houses or clearing agencies as one record holder).

Dividends

We have never declared or paid dividends on our common stock. We intend to retain earnings, if any, to support the development of our business and therefore do not anticipate paying cash dividends for the foreseeable future. Payment of future dividends, if any, will be at the discretion of our board of directors after taking into account various factors, including current financial condition, operating results and current and anticipated cash needs.

Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities

Recent Sales of Unregistered Securities:

There were no unregistered securities to report which were sold or issued by the Company without the registration of these securities under the Securities Act of 1933 in reliance on exemptions from such registration requirements, within the period covered by this report, which have not been previously included in a Quarterly Report on Form 10-Q or a Current Report on Form 8-K.

ITEM 6. SELECTED FINANCIAL DATA

The Company is a smaller reporting company and is not required to provide this information.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

This current report contains forward-looking statements relating to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "intends", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential", or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors which may cause our or our industry's actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity or performance. You should not place undue reliance on these statements, which speak only as of the date that they were made. These cautionary statements should be considered with any written or oral forward-looking statements that we may issue in the future. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results, later events or circumstances or to reflect the occurrence of unanticipated events.

In this report unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares of our capital stock.

The management’s discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP").

Summary

The Company continues to pursue its primary goals of providing internet marketing and business solutions for a variety of international customers.

Liquidity & Capital Resources

As of August 31, 2011, our cash balance was $44,538, as compared to $11,785 for the fiscal year ended August 31, 2010. The increase to cash on hand as at August 31, 2011 is substantially due to an increase in sales during the most recently completed fiscal year. Accounts Receivable decreased to $18,204 as at August 31, 2011compared to $25,535 in accounts receivables as at August 31, 2010. The decrease to accounts receivable is directly related to the Company'sincreased success during the most recently completed fiscal year in collecting accounts due immediately upon delivery of invoices to customers to whom we are providing recurring monthly services. We have total current assets of $69,998 as at August 31, 2011 as compared to total current assets of $37,727 at August 31, 2010. This increase is related primarily to an increase in cash for August 31, 2011 over August 31, 2010.

Accounts Payable and accrued payables increased to $131,503 as at August 31, 2011 from $16,358 at August 31, 2010. Loans payable of $68,387 as at August 31, 2010, were settled by the issuance of 2,400,000 shares of common stock concurrent with a Share Exchange Agreement which closed on Otober 26, 2010 with Fresh Traffic Group Corp. and certain other individuals, decreased over the comparative period to$17,199 for the fiscal year ended August 31, 2011(Refer to Note 1 – Nature and Continuance of Operations for further details). The increase to accounts payable and amounts incurred in the current year as loans payable are both due to an increase in liabilities related to our corporate operations to fulfil our public reporting requirements as compared to August 31, 2010 when the Company was a private company and had no reporting obligations. The Company’s liabilities mainly relate to the obligations of the parent corporation and the subsidiary corporation has determined that the funds to pay these obligations cannot currently come from its operations as it would leave insufficient funds for operations of the day to day business. Therefore, the Company will be required to raise funds either by loans or by the sale of equity. To date, the Company has been unable to raise sufficient funds to pay its parent obligations as they become due. Management is reviewing the viability of remaining as a reporting entity and various options for other acquisitions.

Due to the increased operations of our operating subsidiary, Fresh Traffic Group Corp. we have a working capital deficit as at August 31, 2011 of $86,900 as compared to a deficit of $48,424 as at August 31, 2010. Sales have increased and Fresh is continuing to sign new customers in addition to maintaining its existing client business.

The continual costs for maintaining the Company’s public reporting status are eroding the profitability of the Company’s subsidiary, however, the Company has sufficient funds to continue operations without seeking additional capital other than by the way of short term loans to fund expenditures for reporting requirements.

As of the date of the filing of this report on Form 10-K, we believe we have sufficient funds to undertake our current operations. We have sufficient funds to pay our current expenses as they come due, and the Company intends to focus on reducing its accounts payable amount owing. However should we execute growth in our operations, we will be required to raise additional capital in order to ramp up operations. At this time we cannot say how much additional capital may be required.

Should we determine that we need additional capital for expansion, or should there be a significant decrease in our revenues, there can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain additional financing on a timely basis, we may not be able to meet our obligations as they become due and we will be forced to scale down or perhaps even cease operations.

The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

Results of Operations

For the fiscal year ended August 31, 2011, loss from operations totaled ($86,661) on gross sales of $539,884, less costs of goods sold totaling $369,528 resulting in gross profits of $170,356, as compared to a loss from operations of ($43,497) on gross sales of $383,344, less costs of goods sold totaling $287,423, and gross profits of $95,921 for the fiscal year ended August 31, 2010. Sales increased during the periods based on the fact that the Company is becoming further recognized in the industry and the fact that the market for advertising is shifting to a digital format making the Company’s services more desirable and in demand. Profit margins increased due to the Company’s costs related to renegotiating or acquiring new customers as the Company did not have the same promotional and startup costs. While costs of operations increased in the fiscal year ended August 31, 2011 due to an increase in professional fees from $4,262 in 2010 to $42,446 in 2011, and an increase in general and administrative expenses from $110,438 for the fiscal year ended August 31, 2010 to $211,476 for the fiscal year ended August 31, 2011, in the most part due to investor relations costs increasing from $nil in 2010 to $76,000 in 2011, both of these increases to the costs of operations were due to costs at the parent company level in part associated with the acquisition of the Fresh subsidiary and also increased costs of operations for maintaining the Company’s reporting status.

The Company’s gross sales for the fiscal year ending August 31, 2011 increased by 41% over the reported gross sales for August 31, 2010. This increase in sales resulted in gross profits of $170,356 (2011) or an increase of $74,435 over the fiscal year ended August 31, 2010 when the gross profits were $95,921.

Off-balance Sheet Arrangements

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

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is a smaller reporting company and is not required to provide this information.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

All financial information required by this Item is attached hereto below beginning on page F-1.

FRESH TRAFFIC GROUP INC.

(A Development Stage Company)

REPORT AND FINANCIAL STATEMENTS

August 31, 2011

(Stated in US Dollars)

	Page

Audited Financial Statements

Report of Independent Registered Public Accounting Firm	F-2

Consolidated Balance Sheets	F-3

Consolidated Statements of Operations	F-4

Consolidated Statements of Changes in Stockholders’ Equity (Deficit)	F-5

Consolidated Statements of Cash Flows	F-6

Notes to Audited Consolidated Financial Statements	F-7 to F-13

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To The Board of Directors

Fresh Traffic Group Inc.

Winnipeg MB, Canada

We have audited the accompanying consolidated balance sheets of Fresh Traffic Group Inc., (the Company) and subsidiary as of August 31, 2011 and 2010, and the related consolidated statements of operations, changes in stockholders’ equity (deficit), and cash flows for the years then ended. 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 audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audits 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 audits 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 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 Fresh Traffic Group Inc. and subsidiary as of August 31, 2011 and 2010, and the results of its operations and its cash flows for the years then ended, 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 12 to the consolidated financial statements, the Company has suffered losses from operations, and is dependent on its ability to raise capital from stockholders or other sources to sustain operations. These factors, along with other matters as set forth in Note 12, raise substantial doubt that the Company will be able to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Child, Van Wagoner & Bradshaw, PLLC

Child, Van Wagoner & Bradshaw, PLLC

Salt Lake City, Utah

December 14, 2011

F-2

FRESH TRAFFIC GROUP INC.

CONSOLIDATED BALANCE SHEETS

(Stated in US Dollars)

ASSETS	August 31, 2011			August 31, 2010
Current
Cash	$	44,538		$	11,785
Accounts receivable		18,204			25,535
GST receivable		7,256			-
Corporate tax refund		-			407
Total Current Assets		69,998			37,727

Property, plant and equipment, net- Note 2		5,915			8,690
Security deposit - Note 8		19,640			19,032
Total Assets	$	95,553		$	65,449

LIABILITIES
Current
Accounts payable and accrued liabilities	$	131,503		$	16,358
Customer deposits- Note 6		4,622			-
GST payable		3,000			1,406
Loan payable		17,199			68,387
Loan payable – related parties		574			-
Total Current Liabilities		156,898			86,151

STOCKHOLDERS’ EQUITY (DEFICIT)
Capital stock –
Authorized:
$0.001 par value, 675,000,000 common shares authorized;
36,000,000 and 8,000,000 common shares issued and outstanding at August 31, 2011 and August 31, 2010, respectively		36,000			8,000
Additional Paid-in Capital		105,479			(7,900	)
Deficit		(204,301	)		(22,867	)
Accumulated other comprehensive income (loss)		1,477			2,065
Total Stockholders’ Equity (Deficit)		(61,345	)		(20,702	)
Total Liabilities and Stockholders’ Equity (Deficit)	$	95,553		$	65,449

The accompanying notes are an integral part of these consolidated financial statements.

F-3

FRESH TRAFFIC GROUP INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Stated in US Dollars)

	Fiscal Year ended August 31,
	2011			2010
Service based sales	$	539,884		$	383,344
Cost of goods sold		369,528			287,423
Gross profit		170,356			95,921

Operating Expenses
Professional fees		42,446			4,262
Amortization		3,095			6,417
Impairment of assets		-			18,301
Other general and administrative expenses		211,476			110,438
Total operating expenses		257,017			139,418
Income (loss) from operations		(86,661	)		(43,497	)

Other income and expense
Loss on debt settlement		(73,848	)		-
Loss on divestment		(2,000	)		-
Interest expense		(18,925	)		-

Income (loss) before income taxes		(181,434	)		(43,497	)
Income tax benefit (expense)		-			410
Income (loss) from continuing operations		(181,434	)		(43,087	)
Net income (loss)	$	(181,434	)	$	(43,087	)

Net loss per share – basic and diluted
Loss from continuing operations	$	(0.01	)	$	(0.00	)
Net loss per share	$	(0.01	)	$	(0.00	)

Weighted average number of shares outstanding – basic and diluted		31,658,082			8,000,000


Comprehensive income (loss) gain:
Net income (loss)	$	(181,434	)	$	(43,087	)
Foreign currency translation (loss) gain		(588	)		382
Comprehensive income (loss)	$	(182,022	)	$	(42,705	)

The accompanying notes are an integral part of these consolidated financial statements.

F-4

FRESH TRAFFIC GROUP INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

(Stated in US Dollars)

					Additional						Accumulated
	Common Stock				Paid-in			Accumulated			Other
	Shares		Amount		Capital			Deficit			Comprehensive			Total

Balance, August 31, 2009		8,000,000	$	8,000	$	(7,900	)	$	20,220		$	,1683		$	22,003
Foreign currency transaction adjustment												382			3822
Net loss for the period									(43,087	)					(43,087	)
Balance, August 31, 2010		8,000,000		8,000		(7,900	)		(22,867	)		2,065			(20,702	)
Shares issued for debt		2,400,000		2,400		141,600									144,000
Recapitalization		25,200,000		25,200		(80,199	)								(54,999	)
Shares issued for investor relationship		400,000		400		47,600									48,000
Disposal of subsidiary						4,378									4,378
Foreign currency transaction adjustment												(588	)		(588	)
Net loss for the period									(181,434	)					(181,434	)
Balance, August 31, 2011		36,000,000	$	36,000	$	105,479		$	(204,301	)	$	1,477		$	(61,345	)

The accompanying notes are an integral part of these consolidated financial statements.

F-5

FRESH TRAFFIC GROUP INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Stated in US Dollars)

	Fiscal Year ended August 31,
	2011			2010
Cash flows from operating activities
Net loss	$	(181,434	)	$	(43,087	)
Adjustment to reconcile net loss to cash provided by (used in) operations:
Amortization		3,095			6,417
Impairment on fixed assets		-			18,301
Loss on debt settlement		73,848			-
Investor relations paid by common stock		48,000			-
Accrued interest		1,167			-
Changes in assets and liabilities:
Accounts receivable		8,191			(24,855	)
GST receivable		(1,752	)		-
GST payable		258			(177	)
Corporate tax refund		-			(410	)
Corporate tax payable		431			(847	)
Customer deposits		4,622			-
Accounts payable and accrued liabilities		71,401			20,199
Net cash provided by (used in) operating activities		27,827			(24,459	)

Cash flows from Investing Activities
Domain name acquired		-			(18,932	)
Furniture and equipment purchase		(320	)		-
Net cash provided by (used in) investing activities		(320	)		(18,932	)

Cash flows from Financing Activities
Proceeds from loan payable		4,374			-
Proceeds from loan – related parties		582			38,092
Repayment of loan – related parties		(46	)		-
Net cash provided by financing activities		4,910			38,092

Effect of currency rate change on cash		336			1,255

Increase (decrease) in cash during the period		32,753			(4,044	)
Cash, beginning of period		11,785			15,829
Cash, end of period	$	44,538		$	11,785

Supplemental disclosure of cash flow information:
Cash paid for:
Interest	$	-		$	-
Income taxes	$	-		$	-

Non-cash transactions:
Common stock issued in settlement of debt	$	70,152		$	-

The accompanying notes are an integral part of these consolidated financial statements.

F-6

FRESH TRAFFIC GROUP INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

August 31, 2011

(Stated in US Dollars)

NOTE 1 - NATURE AND CONTINUANCE OF OPERATIONS

Organization:

Fresh Traffic Group Inc. (the “Company”) was incorporated in the State of Nevada, United States of America on March 19, 2007.

The business of the Company is undertaken by its one wholly-owned subsidiary, Fresh Traffic Group Corp. The Company’s year-end is August 31.

The Company is no longer in the development stage, as a result of the October 26, 2010 acquisition of Fresh Traffic Group Corp., resulting in significant consolidated revenues from planned operations.

On November 2, 2009, the Company filed with the State of Nevada a forward split of its authorized and issued shares of common stock on the basis of nine-for-one in the form of a special stock distribution to stockholders of record as of November 2, 2009. The effective date for the distribution to stockholders was November 9, 2009, subject to approval from FINRA to the transfer agent to complete the distribution. The effect of the stock split has been recognized retroactively in the stockholders’ deficit accounts for all periods presented, and in all shares and per share data in the financial statements.

On January 10, 2010, the Company entered into a formal agreement (the “Agreement”) with the 100% owners of Estate Coffee Holdings Ltd. (formerly Sumbody Coffee Company) (“ECH”), a private company incorporated pursuant to the laws of the State of Maryland whereby the Company agreed to acquire all of the issued and outstanding shares of ECH in exchange for the issuance of 900,000 restricted shares of the Company to Sean Tan, ECH’s primary creditor, in settlement of a promissory note between ECH and Mr. Tan. ECH had previously acquired 20% of the shares of DTS8 Holdings Co. Ltd. (“DTS8”), a Hong Kong company which operates as a Wholly Owned Foreign Entity in the Republic of China, from Mr. Tan in exchange for a promissory note in the amount of $60,000 plus interest at the rate of 6% per annum. DTS8 is a coffee roasting operation located in Mainland China. Pursuant to the Agreement, ECH became a wholly-owned subsidiary of the Company. The shares were issued to Mr. Tan on January 21, 2010, which is the closing date of the transaction. Subsequently, upon receipt of final documentation with respect to the transaction noted above, the Company discovered that DTS8 had not perfected the transaction with the regulatory authorities in Hong Kong, and further, that the ownership structure of the assets acquired by DTS8 included a second Hong Kong based entity, the records for which were not able to be obtained by the Company for review. As a result, the acquisition of DTS8 Holdings Co. Ltd. by the Company’s wholly-owned subsidiary ECH was cancelled with return of the 900,000 shares held by Mr. Tan to treasury. The Company and the shareholders of ECH did not cancel the transaction whereby the Company acquired ECH, and ECH remains a wholly-owned subsidiary of the Company. On February 8, 2010, the Company changed its name from SLAP, Inc. to Estate Coffee Holdings Corp. to reflect the initiative to operate in the coffee business. Currently there is no activity being undertaken by ECH as the Company does not have sufficient funding at this time to fund operations.

On October 20, 2010, the Company changed its name from Estate Coffee Holdings Corp. to Fresh Traffic Group Inc. due to the acquisition of Fresh Traffic Group Corp., which was acquired as an operating subsidiary as detailed below. Fresh Traffic Group Corp. has revenues and will be the primary operating subsidiary of the Company until the coffee business is further developed.

F-7

FRESH TRAFFIC GROUP INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

August 31, 2011

(Stated in US Dollars)

NOTE 1 - NATURE AND CONTINUANCE OF OPERATIONS (continued)

On October 26, 2010, the Company completed a closing (the “Closing”) of a Share Exchange Agreement (the “Agreement”) which was entered into between the Company, Fresh Traffic Group Corp. (“Fresh Corp”) and Jeremy Booth, Kim Lewis and Dmytro Hrytsenko (collectively the “Fresh Shareholders”) on October 20, 2010. The Agreement provided: (a) for the purchase by the Company of all of the issued and outstanding shares of Fresh Corp owned by the Fresh Shareholders in exchange for the issuance of 8,000,000 shares of the common stock of the Company; (b) the settlement of a total of CDN$71,973 of debt on the balance sheet of Fresh Corp by way of the issuance of up to 2,400,000 shares of common stock of the Company to a creditor of Fresh Corp who was an unrelated third party creditor. (Ref Note – 3)

On November 12, 2010, the Company received the resignation of Mr. Errol Gillespie as a Director and Officer (President, Chief Financial Officer, Secretary-Treasurer / Principal Executive Officer, Principal Financial Officer) of the Company and appointed Mr. Jeremy Booth as the President of the Company, following a change in control of the Company.

On February 24, 2011, Mr. Jeremy Booth was appointed Treasurer of the Company and Ms. Kimberly Lewis was appointed as Secretary.

On July 1, 2011, the Company determined to divest its ownership of ECH to its sole officer and director as no revenue has been generated and no revenue is expected to be generated from those operations in the immediate future.

NOTE 2 - SUMMARIES OF SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements present the Company and its wholly-owned subsidiary, Fresh Corp. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates, which have been made using careful judgment. Actual results may vary from these estimates.

The financial statements have, in management’s opinion, been properly prepared within reasonable limits of materiality and within the framework of the significant accounting policies summarized below:

Revenue Recognition Revenue is recognized on the products and services when the following criteria are satisfied: persuasive evidence of an arrangement exists, product delivery and title transfer has occurred or the services have been rendered, the price is fixed and determinable, and collectability is reasonably assured. The Company’s revenue is primarily generated through term-based contracts with clients that require a flat monthly fee for services rendered on a monthly basis, depending on the service level provided under the contract. We record the service revenue on a straight line basis over the contract period.

Cash and Cash Equivalents- For purposes of the statement of cash flow, we consider all cash in banks, money market funds, and certificates of deposit with an original maturity date of less than three months to be cash equivalents.

Accounts Receivable and accounting for bad debt and allowance- Accounts receivable are stated at the amount that management expects to collect from outstanding balances. Bad debts and allowances are provided based on historical experience and management’s evaluation of outstanding accounts receivable. Management evaluates past due or delinquency of accounts receivable based on the open invoices aged on due date basis. The allowance for doubtful accounts at August 31, 2011 and August 31, 2010 is Nil.

F-8

FRESH TRAFFIC GROUP INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

August 31, 2011

(Stated in US Dollars)

NOTE 2 - SUMMARIES OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Property, Plant, and Equipment - Property, plant and equipment are stated at historical cost. Amortization is provided annually at rates calculated to write-off the cost of the assets over their estimated useful lives at the following rates:

·	Furnishings – 20% declining balance method
·	Computer equipment – 55% declining balance method

The following is a summary of property, plant, and equipment and accumulated depreciation:

	August 31, 2011			August 31, 2010
Furniture	$	9,853		$	9,533
Computer equipment		8,120			8,120
Less: accumulated depreciation	(12,058		)		(8,963	)
	$	5,915		$	8,690

Depreciation expense was $3,095 and $6,417 in each year ended August 31, 2011 and August 31, 2010, respectively.

Foreign Currency Translation – The functional currency of Fresh Corp, one of the Company’s subsidiaries, is the Canadian Dollar. The Company uses the United States dollar as its reporting currency. All transactions initiated in Canadian Dollars are translated to U.S. Dollar in accordance with ASC 830-10-20 “Foreign Currency Translation” as follows:

·	Revenue and expense items at the average rate of exchange in effect on the transaction date;
·	Non-monetary assets and liabilities at historical exchange rates, unless such items are carried at market, in which case they are translated at the exchange rate in effect on the balance sheet date; and
·	Monetary assets and liabilities at the exchange rate at the balance sheet date.

Adjustments arising from such translations are deferred until realization and are included as a separate component of stockholders’ equity (deficit) as a component of comprehensive income (loss). Therefore, translation adjustments are not included in determining net income but reported as other comprehensive income.

For foreign currency transactions, the Company translates these amounts to the Company’s functional currency at the exchange rate effective on the invoice date. If the exchange rate changes between the time of purchase and the time actual payment is made, a foreign exchange transaction gain or loss results which is included in determining net income for the period.

No significant realized exchange gains or losses were recorded to August 31, 2011.

Financial Instruments - The carrying value of the Company’s financial instruments, consisting of cash and accounts payable and accrued liabilities approximate their fair value due to the short-term maturity of such instruments. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial statements.

Comprehensive Income (Loss) - ASC Topic No. 220, “Comprehensive Income,” establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. Comprehensive income or loss is comprised of net earnings or loss and other comprehensive income or loss, which includes certain changes in equity, excluded from net earnings, primarily foreign currency translation adjustments.

F-9

FRESH TRAFFIC GROUP INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

August 31, 2011

(Stated in US Dollars)

NOTE 2 - SUMMARIES OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Income Taxes - The Company has adopted SFAS No. 109 – “Accounting for Income Taxes”. ASC Topic 740 requires the use of the asset and liability method of accounting for income taxes. Under the asset and liability method of ASC Topic 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying 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 years in which those temporary differences are expected to be recovered or settled.

Basic and Diluted Loss Per Share - In accordance with ASC Topic 280 – “Earnings Per Share”, the basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. At August 31, 2011, the Company had no stock equivalents that were anti-dilutive and excluded in the loss per share computation.

Note 3 – BUSINESS COMBINATION

On October 26, 2010, Fresh Traffic Group Inc. (formerly: Estate Coffee Holdings Corp.) completed a closing (the “Closing”) of a share exchange agreement (the "Agreement"), by the issuance of 8,000,000 shares of the common stock of Fresh Traffic Group Inc. to the Shareholders of Fresh Traffic Group Corp. (the "Fresh Shareholders"), in exchange for all of the issued and outstanding shares of Fresh Traffic Group Corp, as held by the Fresh Shareholders. Furthermore, as part of a debt settlement arrangement included as part of the Agreement, a total of 2,400,000 shares of common stock of the Company were issued to an unrelated creditor to settle CDN$71,973 (US$ 70,152) of debt on the balance sheet of Fresh Traffic Group Corp.

Following completion of all of the above conditions on the closing date: (i) Fresh Traffic Group Corp. was acquired by Fresh Traffic Group Inc. being the sole shareholder of Fresh Traffic Group Corp; and (ii) the Fresh shareholders received an aggregate of 8,000,000 shares of Fresh Traffic Group Inc.’s common stock representing 22.47% of the issued and outstanding shares.

The business combination was accounted for as a reverse acquisition pursuant to the guidance in Appendix B of SEC Accounting Disclosure Rules and Practices Official Text, which provides that the “acquisition of a private operating company by a non-operating public shell corporation typically results in the owners and management of the private company having actual or effective voting and operating control of the combined company. These transactions are considered by the Securities and Exchange Commission to be capital transactions in substance, rather than business combinations. That is, the transaction is equivalent to the issuance of stock by the private company for the net monetary assets of the shell corporation, accompanied by a recapitalization.” Accordingly, the acquisition has been accounted for as a recapitalization, and, for accounting purposes, Fresh Traffic Group Corp. is considered the acquirer in a reverse acquisition. The historical financial statements for the fiscal year ended August 31, 2010 and prior to October 26, 2010 in this annual report are those of Fresh Corp.

Fresh Traffic Group Inc.'s historical accumulated deficit for the periods prior to October 26, 2010, in the amount of $231,800, was eliminated against additional paid in capital, and the accompanying financial statements present the previously issued shares of the Fresh Traffic Group Inc.’s common stock as having been issued pursuant to the acquisition on October 26, 2010.

Note 4 – DISCONTINUED OPERATIONS

On July 1, 2011, the Company determined to divest its ownership of ECH to its sole officer and director as no revenue is expected to be generated from those operations in the immediate future.

Revenue and income (loss) from the business were Nil from the period October 27, 2010 to July 1, 2011.

At August 31, 2011 and 2010, there were no amounts included in assets and liabilities and in discontinued operations.

F-10

FRESH TRAFFIC GROUP INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

August 31, 2011

(Stated in US Dollars)

Note 5 – ACCOUNTS RECEIVABLE

The Company’s accounts receivable consists solely of trade receivables totaling $18,204 as of August 31, 2011 and $25,535 at August 31, 2010.

Note 6 – CUSTOMER DEPOSITS

The Company records payments received from customers before services are provided as customer deposits in the consolidated balance sheets.

Note 7– LOAN PAYABLE

During the fiscal year ended August 31, 2011, the Company obtained unsecured demand loans for $4,374 at an annual interest rate of 8%. Interest expense incurred and associated with the demand loans amounted to $1,167 during the fiscal year ended August 31, 2011.

Note 8 – LEASE AGREEMENT

On November 1, 2008, the Company’s subsidiary, Fresh Corp. leased office space in Winnipeg, Manitoba, Canada for five years for monthly rental payments of USD$6,454 (CAD$6,380) per month including estimated operating costs and applicable taxes. Lease Commitments – following five years:

2012	$	77,448
2013		77,448
2014		12,908
	$	167,804

Under the terms of the above noted lease, Fresh Corp. was required to provide a security deposit totaling $19,640 (CAD$21,031) equivalent to 6 months of rent and operating costs. The security deposit is held by the Landlord without interest and shall be returned to Fresh Corp. without interest within sixty (60) days after the expiry of the lease or earlier termination of the term; or, at the Landlord’s option, shall be applied by the Landlord on account of the last month’s rent. The amount is included on the consolidated balance sheets of the Company as "Security Deposit."

Note 9 – DEFERRED TAX ASSETS

The following table summarizes the significant components of the Company’s deferred tax assets:

	August 31, 2011			August 31, 2010
Deferred tax assets	$	61,300		$	6,860
Non-capital loss carry forward		-			-
Valuation allowance for deferred tax asset		(61,300	)		(6,860	)
	$	-		$	-

The amount taken into income as deferred tax assets must reflect that portion of the income tax loss carry-forwards that is likely to be realized from future operations. The Company has chosen to provide an allowance of one hundred percent (100%) against all available income tax loss carry-forwards, regardless of their time of expiry.

At August 31, 2011, the Company has accumulated non-capital losses totaling $204,301,, which are available to reduce taxable income in future taxation years. These losses expire beginning in 2027.

F-11

FRESH TRAFFIC GROUP INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

August 31, 2011

(Stated in US Dollars)

Note 9 – DEFERRED TAX ASSETS (continued)

The Company adopted the provisions of ASC Topic 740, Accounting for Uncertainty in Income Taxes, on September 1, 2007. As a result of the implementation of ASC Topic 740, the Company recognized approximately no increase in the liability for unrecognized tax benefits.

The Company has no tax position at August 31, 2011 and August 31, 2010 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. No such interest or penalties were recognized during the periods presented. The Company had no accruals for interest and penalties at August 31, 2011 or August 31, 2010. The Company’s utilization of any net operating loss carry forward may be unlikely as a result of its current unprofitable activities.

Note 10 – COMMON STOCK

On October 26, 2010, the Company issued 8,000,000 shares of the common stock of the Company to the Fresh Shareholders pursuant to the share exchange agreement. (Ref Note 3)

Furthermore, as part of a debt settlement arrangement included as part of the exchange agreement, a total of 2,400,000 shares of common stock of the Company were issued to an unrelated third party creditor of Fresh Corp to settle CDN$71,973 (US$ 70,152) of debt on the balance sheet of Fresh Corp. The issuance of 2,400,000 shares of common stock was valued at the market value of the stock on the date of issue which was $0.06 per share. As a result, the Company recorded a loss on settlement of debt of $73,848 which amount reflects the difference between the book value of the loan payable and the market value of the 2,400,000 shares issued on the date of settlement.

On December 7, 2010, the Company entered into a one-year agreement with a marketing company. Under the agreement, the marketing company is engaged to assist in the development and dissemination of the corporate information to various parties to further our business and opportunities. The Company agrees to make a twelve month commitment to pay the following non-refundable fees: (i) the sum of 800,000 restricted shares of common stock of the Company (the “Shares”) with 400,000 restricted shares payable upon the execution date of the agreement and 400,000 restricted shares payable six months from the execution date of this agreement. 400,000 restricted shares were issued on Dec 8, 2010. The issuance of 400,000 shares of common stock was valued at the market value of the stock on the issuance date. As a result, the Company recorded an investor relations expense of $48,000 during the fiscal year ended August 31, 2011. The 400,000 shares due on June 8, 2011 were not issued by the Company as the Company is disputing the services provided by the marketing company. No demand for payment of the shares has been made by the marketing company and the Company does not expect any demand to be made, however, the Company has recorded the amount of $28,000 as a contingent liability, included in accounts payable and accrued liabilities on the balance sheets of the Company, based on the closing price of the shares of common stock of the Company on June 7, 2011 at $0.07 per share. Should any demand for payment be made the Company intends to take legal action in regard to the non-performance of the marketing company.

Note 11 – RELATED PARTY TRANSACTIONS

During the fiscal year ended August 31, 2011, the Company paid to Mr. Jeremy Booth, the President of the Company, USD$44,271 (CAD$44,754) (2010-NIL) for the provision of contract services including search engine optimization and internet marketing services. These fees were recorded as cost of goods sold and were paid in cash.

F-12

FRESH TRAFFIC GROUP INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

August 31, 2011

(Stated in US Dollars)

Note 12 – GOING CONCERN

The Company has experienced net losses to date, and though it has generated revenue from operations, we will need additional working capital to service debt and for ongoing operations, which raises substantial doubt about its ability to continue as a going concern. Management of the Company has developed a strategy to meet operational shortfalls which may include equity funding, short-term or long-term financing or debt financing, to enable the Company to reach profitable operations.

Note 13– SUBSEQUENT EVENTS

In November, 2011, the Company received a loan from an unrelated third party in the amount of $21,000 to pay prior year fees payable to the Company’s auditor. The loan is for a one year term and bears interest at 8% per annum.

The Company has evaluated subsequent events from the date of the balance sheet to the date of this filing and determined there are no other events to be disclosed.

F-13

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

In the fiscal years ended August 31, 2011 and 2010, there have been no changes in the Company’s accounting policies, nor have there been any disagreements with our accountants.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, under supervision and with the participation of the Company’s Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures, as defined under Exchange Act Rules 13a-15(e) and 15d-15(e). Based upon this evaluation, the Principal Executive Officer and Principal Financial Officer concluded that, as of August 31, 2011, because of the material weakness in our internal control over financial reporting (“ICFR”) described below, our disclosure controls and procedures were not effective.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that required information to be disclosed in our reports filed or submitted under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that required information to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined under Exchange Act Rules 13a-15(f) and 15d-15(f). Our internal control over financial reporting is 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.

Management assessed the effectiveness of our internal control over financial reporting as of August 31, 2011. In making the assessment, management used the criteria issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Based on its assessment, management concluded that, as of August 31, 2011, our internal control over financial reporting was not effective and that material weaknesses in ICFR existed as more fully described below.

As defined by Auditing Standard No. 5, “An Audit of Internal Control Over Financial Reporting that is Integrated with an Audit of Financial Statements” established by the Public Company Accounting Oversight Board (“PCAOB”), a material weakness is a deficiency or combination of deficiencies that results in more than a remote likelihood that a material misstatement of annual or interim financial statements will not be prevented or detected. In connection with the assessment described above, management identified the following control deficiencies that represent material weaknesses as of August 31, 2011:

Lack of an independent audit committee or audit committee financial expert, and no independent directors. We do not have any members of the Board who are independent directors and we do not have an audit committee. These factors may be counter to corporate governance practices as defined by the various stock exchanges and may lead to less supervision over management;

Inadequate staffing and supervision within our bookkeeping operations. We have one consultant involved in bookkeeping functions, who provides two staff members. The relatively small number of people who are responsible for bookkeeping functions and the fact that they are from the same firm of consultants prevents us from segregating duties within our internal control system. The inadequate segregation of duties is a weakness because it could lead to the untimely identification and resolution of accounting and disclosure matters or could lead to a failure to perform timely and effective reviews. This may result in a failure to detect errors in spreadsheets, calculations or assumptions used to compile the financial statements and related disclosures as filed with the SEC;


3)	Outsourcing of our accounting operations. Because there are no employees in our administration, we have outsourced all of our accounting functions to an independent firm. The employees of this firm are managed by supervisors within the firm and are not answerable to our management. This is a material weakness because it could result in a disjunction between the accounting policies adopted by our Board of Directors and the accounting practices applied by the independent firm;
4)	Insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements;

5)	Ineffective controls over period end financial disclosure and reporting processes.

Management's Remediation Initiatives

As of August 31, 2011, management assessed the effectiveness of our internal control over financial reporting. Based on that evaluation, it was concluded that during the period covered by this report, the internal controls and procedures were not effective due to deficiencies that existed in the design or operation of our internal controls over financial reporting. However, management believes these weaknesses did not have an effect on our financial results. During the course of their evaluation, we did not discover any fraud involving management or any other personnel who play a significant role in our disclosure controls and procedures or internal controls over financial reporting.

Due to a lack of financial and personnel resources, we are not able to, and do not intend to, immediately take any action to remediate these material weaknesses. We will not be able to do so until, if ever, we acquire sufficient financing and staff. We will implement further controls as circumstances, cash flow, and working capital permits. Notwithstanding the assessment that our ICFR was not effective and that there were material weaknesses as identified in this report, we believe that our financial statements contained in our Annual Report on Form 10-K for the period ended August 31, 2011, fairly presents our financial position, results of operations, and cash flows for the periods covered, as identified, in all material respects.

Management believes that the material weaknesses set forth above were the result of the scale of our operations and intrinsic to our small size. Management also believes that these weaknesses did not have an effect on our financial results.

We are committed to improving our financial organization. As part of this commitment, we will, as soon as funds are available to the Company (1) appoint outside directors to our board of directors sufficient to form an audit committee and who will undertake the oversight in the establishment and monitoring of required internal controls and procedures; (2) create a position to segregate duties consistent with control objectives and to increase our personnel resources. We will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary, and as funds allow.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s annual report was not subject to attestation by the Company’s registered public accounting firm pursuant to the rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.

Changes in Internal Control over Financial Reporting

During the period covered by this report, there were no changes (including corrective actions with regard to significant deficiencies or material weaknesses) in our internal controls over financial reporting that occurred that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

There is no further information required to be disclosed in a report on Form 8-K during the fourth quarter of the year covered by the Form 10-K, but that was not reported, whether or not otherwise required by this Form 10-K.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Identification of Directors, Executive Officers and Certain Significant Employees

The following table sets forth the names and ages of all directors, executive officers and certain significant employees of the Company as of the filing date of this report, further indicating all positions and offices with the Company held by each such person, their term of office, and any arrangement or understanding between themselves and any other person(s) pursuant to which they were or are to be selected as a director or officer:

Name	Age	Position	Term of Office
Jeremy Booth	50	President, CEO, Director Treasurer	From December 11, 2010 to present From February 24, 2011 to present
Kimberly Lewis	27	Secretary	From February 24, 2011 to present

Except as otherwise indicated below, no organization by which any officer or director previously has been employed is an affiliate, parent, or subsidiary of the Company. Furthermore, except as otherwise indicated below, no director or person nominated or chosen to become a director holds any other directorships in any company with a class of securities registered pursuant to section 12 of the Exchange Act or subject to the requirements of section 15(d) of such Act or any company registered as an investment company under the Investment Company Act of 1940, 15 U.S.C. 80a–1, et seq., as amended.

Jeremy Booth – President and Chief Executive Officer, Treasurer and Member of the Board of Directors

Mr. Booth was appointed, President and to the Board of Directors on December 11, 2010 and Treasurer on February 24, 2011.

From July 2008 to present Mr. Booth has served as the President of Fresh Traffic Group Corp., a Manitoba corporation, which was acquired by the Company in October 2010, and is presently a wholly-owned subsidiary. Mr. Booth founded Fresh Traffic Group Corp. to provide Search Engine Optimization (SEO) and internet marketing services. From March 2005 to July 2008, Mr. Booth was providing comparable SEO and internet marketing services on a sole proprietorship basis.

Mr. Booth is not an officer or director of any other reporting company that files annual, quarterly or periodic reports.

Ms. Kimberly Lewis - Secretary

Ms. Lewis was appointed Secretary of the Company on February 24, 2011.

Ms. Lewis is the Secretary of the Company’s wholly-owned subsidiary Fresh Traffic Group Corp. having been appointed on formation of the Company in July, 2008.

From July 2008 to present, Ms. Lewis, as well as serving in her position as Secretary, has been an independent consultant to Fresh Traffic Group Corp. From 2003 until 2007, Ms. Lewis was a director of Bayleaf Media Productions, a private Florida corporation where she assisted in customer service, sales administration, general office duties and advertising.

Ms. Lewis is not an officer or director of any other reporting company that files annual, quarterly or periodic reports.

Ms. Lewis is also self-employed as a photographic model.

Involvement in Certain Legal Proceedings, Family Relationships

None of our executive officers, directors, significant employees, promoters or control persons have been involved in any bankruptcy proceedings within the last five years, been convicted in or has pending any criminal proceeding, been subject to

any order, judgment or decree enjoining, barring, suspending or otherwise limiting involvement in any type of business, securities or banking activity or been found to have violated any federal, state or provincial securities or commodities laws.

Ms. Lewis, an officer of the Company and Mr. Booth, an officer and director of the Company have a common-law relationship.

Section 16(a) Beneficial Ownership Reporting Compliance

Based on a review of Forms 3, 4, and 5 and amendments thereto furnished to the registrant during its most recent fiscal year, the following represents each officer, director and beneficial owner of more than 10% of our securities who did not file on a timely basis reports required by Section 16(a) of the Exchange Act during the most recent fiscal year:

Name	Position Held	Form 3/# of transactions	Form 4/# of transactions	Form 5/# of transactions
Dmytro Hrytsenko	10% beneficial owner	Late/1	n/a	n/a
Jeremy Booth	President, Treasurer and director	Late/1	n/a	n/a
Kimberly Lewis	Secretary	Late/1	n/a	n/a

Code of Ethics

As of the date of this report, the Company has not adopted a code of ethics that applies to its principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. When and if the Company adopts a code of ethics it will file a copy of its code of ethics with the Securities and Exchange Commission as an exhibit to its annual report for the period during which the code of ethics is adopted.

Corporate Governance

Nominating Committee

There have been no material changes to the procedures by which security holders may recommend nominees to the Company's board of directors.

Audit Committee

The Board of Directors presently does not have an audit committee; therefore the Board of Directors performs the same functions as an audit committee.

ITEM 11. EXECUTIVE COMPENSATION

The Company does not currently have a compensation committee. Compensation is determined by our sole director. Compensation as paid to our officers and directors for the fiscal years ended August 31, 2011 and August 31, 2010 is detailed below.

Summary Compensation Table

Name and Principal Position	Fiscal year ended August 31,	Salary ($)	Bonus ($)	Stock Awards ($)	Option Awards ($)	Non-Equity Incentive Plan Compensation ($)	Nonqualified Deferred Compensation ($)	All Other Compensation ($)	Total ($)
Jeremy Booth President & CEO, Treasurer (1)	2011	44,271	-0-	-0-	-0-	-0-	-0-	-0-	44,271
Errol Gillespie President & CEO, Secretary-Treasurer (2)	2011	-0-	-0-	-0-	-0-	-0-	-0-	-0-	-0-
Errol Gillespie President & CEO, Secretary-Treasurer (2)	2010	-0-	-0-	-0-	-0-	-0-	-0-	-0-	-0-
David Wehrhahn President & CEO (3)	2010	-0-	-0-	-0-	-0-	-0-	-0-	-0-	-0-

(1)	Mr. Booth held this office for fiscal 2011 from December 11, 2010.

(2)	Mr. Gillespie held this office for fiscal 2011 until December 11, 2010 and for fiscal 2010 from April 28, 2010.

(3)	Mr. Wehrhahn held this office for fiscal 2010 until April 28, 2010.

Outstanding Equity Awards at Fiscal Year End

The Company has no outstanding stock option or any other form of equity plan.

Compensation of Directors

The Company did not have any compensation plans for its directors during fiscal 2011 and did not pay any compensation to its directors or officers for their positions as directors or officers during fiscal 2011.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Securities Authorized for Issuance under Equity Compensation Plans

The following table provides information as of the end of the Company’s most recently completed fiscal year with respect to compensation plans (including individual compensation arrangements) under which equity securities of the registrant are authorized for issuance, aggregated as follows:

Plan category	Number of shares of common stock 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	-0-	-0-	-0-
Equity compensation plans not approved by security holders	-0-	-0-	-0-
Total	-0-	-0-	-0-

The Company does not currently have any equity compensation plans.

Security Ownership of Certain Beneficial Owners

The following table sets forth information, as of November 28, 2011, with respect to the beneficial ownership of the Company’s common stock by each person known by the Company to be the beneficial owner of more than 5% of the outstanding common stock. Information is also provided regarding beneficial ownership of common stock if all outstanding options, warrants, rights and conversion privileges (to which the applicable 5% stockholders have the right to exercise in the next 60 days) are exercised and additional shares of common stock are issued.

Title of Class	Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership	Percent of Class (%) (1)
Common	Dmytro Hrytsenko PR Malrosova 14, Cherkassy, Ukraine 18005	4,000,000 common shares held directly	11.11%
Common	Ocean Exploration Ltd. Cor 12 Bayman Ave & Calle al Mar Belize City, Belize	2,400,000 common shares held directly	6.67%
Common	Jeremy Booth 5566 Henderson Highway St. Clements MB R3C 2E7	2,000,000 common shares held directly	5.56%
Common	Kim Lewis 5566 Henderson Highway St. Clements MB R3C 2E7	2,000,000 common shares held directly	5.56%
Common	Vicky Barlow #403, 3412 Parkdale Blvd NW Calgary AB T2N 3T4	1,800,000 common shares held directly	5.00%

(1)

Beneficial ownership is determined in accordance with SEC rules and includes voting or investment power with respect to securities. All shares of common stock subject to options or warrants exercisable within 60 days of November 28, 2011 are deemed to be outstanding and beneficially owned by the persons holding those options or warrants for the purpose of computing the number of shares beneficially owned and the percentage ownership of that person. They are not, however, deemed to be outstanding and beneficially owned for the purpose of computing the percentage ownership of any other person. Subject to the paragraph above, the percentage ownership of outstanding shares is based on 36,000,000 shares of common stock outstanding as of November 28, 2011.

Security Ownership of Management

The following table sets forth information, as of November 28, 2011, with respect to the beneficial ownership of the Company’s common stock by each of the Company's officers and directors, and by the officers and directors of the Company as a group. Information is also provided regarding beneficial ownership of common stock if all outstanding options, warrants, rights and conversion privileges (to which the applicable officers and directors have the right to exercise in the next 60 days) are exercised and additional shares of common stock are issued.

TITLE OF CLASS	NAME AND ADDRESS OF BENEFICIAL OWNER	AMOUNT AND NATURE OF BENEFICIAL OWNER	PERCENT OF CLASS (1)
Common	Jeremy Booth Director, CEO, President & Treasurer 5566 Henderson Highway St. Clements MB R3C 2E7	2,000,000 common shares held directly	5.56%
Common	Kimberly Lewis Secretary 5566 Henderson Highway St. Clements MB R3C 2E7	2,000,000 common shares held directly	5.56%
Common	All Officers and Directors as a group		11.12%

(1)

Changes in Control

During the fiscal year ended August 31, 2011, the Company acquired all of the issued and outstanding shares of Fresh Traffic Group Corp. in exchange for the issuance of 8,000,000 shares of common stock of the Company. Subsequent to the issuance, Mr. Jeremy Booth, the President of Fresh Traffic Group Corp. was appointed an officer and director of the Company and Mr. Errol Gillespie resigned, thus effecting a change in control of the Company.

There are no additional present arrangements or pledges of our securities which may result in a change in control of the Company. However, there are no provisions in our Articles of Incorporation or Bylaws that would delay, defer or prevent a change in control.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Transactions with Related Persons, Promoters and Certain Control Persons

Transactions with Related Persons

During the fiscal year ended August 31, 2011, the Company entered into an agreement to acquire all of the issued and outstanding shares of Fresh Traffic Group Corp. in exchange for a total 8,000,000 shares of common stock of the Company. A total of 4,000,000 common shares were issued to Jeremy Booth, the current officer and director of the Company and Kim Lewis (his spouse) in exchange for 50% of the shares of Fresh Traffic Group Corp.

The Company issued a further 4,000,000 common shares to Dmytro Hrytsenko in exchange for the remaining 50% of the shares of Fresh Traffic Group Corp.

During the fiscal year ended August 31, 2011, the Company paid to Mr. Jeremy Booth, the President of the Company, USD$44,271 (CAD$44,754) for the provision of comparable search engine optimization and internet marketing services

Promoters and Certain Control Persons

None.

Parents

There are no parents of our Company.

Director Independence

As of the date of this Annual Report, we have no independent directors.

The Company has developed the following categorical standards for determining the materiality of relationships that the Directors may have with the Company. A Director shall not be deemed to have a material relationship with the Company that impairs the Director's independence as a result of any of the following relationships:

the Director is an officer or other person holding a salaried position of an entity (other than a principal, equity partner or member of such entity) that provides professional services to the Company and the amount of all payments from the Company to such entity during the most recently completed fiscal year was less than two percent of such entity’s consolidated gross revenues;

2.	the Director is the beneficial owner of less than five (5%) per cent of the outstanding equity interests of an entity that does business with the Company;

the Director is an executive officer of a civic, charitable or cultural institution that received less than the greater of one million ($1,000,000) dollars or two (2%) per cent of its consolidated gross revenues, as such term is construed by the New York Stock Exchange for purposes of Section 303A.02(b)(v) of the Corporate Governance Standards, from the Company or any of its subsidiaries for each of the last three (3) fiscal years;

the Director is an officer of an entity that is indebted to the Company, or to which the Company is indebted, and the total amount of either the Company's or the business entity's indebtedness is less than three (3%) per cent of the total consolidated assets of such entity as of the end of the previous fiscal year; and

5.	the Director obtained products or services from the Company on terms generally available to customers of the Company for such products or services. The Board retains the sole right to interpret and apply the foregoing standards in determining the materiality of any relationship.

The Board shall undertake an annual review of the independence of all non-management Directors. To enable the Board to evaluate each non-management Director, in advance of the meeting at which the review occurs, each non-management Director shall provide the Board with full information regarding the Director’s business and other relationships with the Company, its affiliates and senior management.

Directors must inform the Board whenever there are any material changes in their circumstances or relationships that could affect their independence, including all business relationships between a Director and the Company, its affiliates, or members of senior management, whether or not such business relationships would be deemed not to be material under any of the categorical standards set forth above. Following the receipt of such information, the Board shall re-evaluate the Director's independence.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The following table sets forth the fees billed to the Company for professional services rendered by the Company's independent registered public accounting firm, for the years ended August 31, 2011 and August 31, 2010:

Services	$	2011	$	2010
Audit fees		32,050		12,000
Audit related fees				6,000
Tax fees		800		500
All other fees				-0-
Total fees		32,850		18,500

Audit fees consist of fees for the audit of the Company's annual financial statements or the financial statements of the Company’s subsidiaries or services that are normally provided in connection with the statutory and regulatory filings of the annual financial statements.

Audit-related services include the review of the Company's financial statements and quarterly reports that are not reported as Audit fees.

Tax fees shown for 2011 are estimated only for the purposes of this disclosure based on advice from the principal auditor for preparation of our U.S. tax return and are expected to be $800. We expect the Canadian tax returns will be prepared by Canadian accountants qualified to undertake the tax returns and that those fees will be $1,500 as well, bringing total fees for 2011tax returns to $2,300.

All other fees consist of fees for products and services provided by our principal accountants, other than the services reported under “Audit fees,” “Audit-related fees,” and “Tax fees” above.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

Financial Statements & Schedules

The information required by this item is incorporated herein by reference to the financial statements and notes thereto listed in Item 8 of Part II and included in this Annual Report.

All financial statement schedules are omitted because the required information is included in the financial statements and notes thereto listed in Item 8 of Part II and included in this Annual Report.

Exhibits

Number	Description
2.1	Share Exchange Agreement by and among the Company, Errol Gillespie, Garey Reynolds and Estate Coffee Holdings Ltd., a Maryland corporation dated January 10, 2009.	Incorporated by reference to the Exhibits attached to the Corporation’s Form 10-Q filed with the SEC on April 19, 2010
3(i)	Articles of Incorporation.	Incorporated by reference to the Exhibits attached to the Corporation’s Form S-1 filed with the SEC on May 29, 2008
3(i) (ii)	Certificate of Change dated November 2, 2009 in regard to a forward split of the issued and authorized capital of the Company	Incorporated by reference to the Exhibits attached to the Corporation’s Form 10-Q filed with the SEC on April 19, 2010
3(i) (iii)	Certificate of Amendment to the Articles of the Corporation effective February 8, 2010 amending the name of the corporation to Estate Coffee Holdings Corp.	Incorporated by reference to the Exhibits attached to the Corporation’s Form 10-Q filed with the SEC on April 19, 2010
3(i) (iv)	Amended Articles of Incorporation dated October 20, 2010 reflecting name change to Fresh Traffic Group Inc.	Filed herewith.
3(ii)	Bylaws.	Incorporated by reference to the Exhibits attached to the Corporation’s Form S-1 filed with the SEC on May 29, 2008
10.1	Farm-Out Agreement dated July 9, 2007 between Dar Energy Inc. and SLAP, Inc.	Incorporated by reference to the Exhibits attached to the Corporation’s Form S-1 filed with the SEC on May 29, 2008
10.2	Global Distribution Agreement dated January 29, 2010 between Coffee Solutions Ltd and Estate Coffee Holdings Corp.	Incorporated by reference to the Exhibits attached to the Corporation’s Form 10-Q filed with the SEC on April 19, 2010
10.3	Letter of Intent between the Company, Fresh Traffic Group and the shareholders of Fresh Traffic Group executed August 14, 2010.	Incorporated by reference to the Exhibits filed with the Company’s Form 8-K filed with the SEC on August 20, 2010.
10.4	Share Exchange Agreement dated October 20, 2010 between the Company, Fresh Traffic Group Corp., and the shareholders of Fresh Traffic Group Corp.	Incorporated by reference to the Exhibits filed with the Company’s Form 8-K filed with SEC on November 5, 2010.
31.1	Section 302 Certification - Principal Executive Officer	Filed herewith
31.2	Section 302 Certification - Principal Financial Officer	Filed herewith
32.1	Certification Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith

SIGNATURES

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

		FRESH TRAFFIC GROUP INC.

Date:	December 14, 2011	By:	/s/ Jeremy Booth
		Name:	Jeremy Booth
		Title:	President, Chief Executive Officer, Principal Executive Officer, Principal Financial Officer

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated, who constitute the entire board of directors:

Date:	December 14, 2011	By:	/s/ Jeremy Booth
		Name:	Jeremy Booth
		Title:	President, Chief Executive Officer, Principal Executive Officer, Principal Financial Officer and Director