Form 1-A Tao Entertainment, Inc.

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January 28, 2019 11:36 AM EST

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    1-A
    
      LIVE
      
        
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      Tao Entertainment
      CO
      2014
      0001765043
      7812
      45-5432058
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      9061 KEITH AVENUE #206
      WEST HOLLYWOOD
      CA
      90069
      303-503-8631
      Fay Matsukage
      Other
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      Common Stock
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      Weiss Accountancy Corporation & Artesian CPA, LLC
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      Doida Law Group LLC
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      Doida Law Group LLC
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      Tao Entertainment, Inc.
      Shares of common stock
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      equity of Tao Entertainment LLC
    
    
      Section 4(a)(2)

An offering statement pursuant to Regulation A relating to these securities has been filed with the Securities and Exchange Commission. Information contained in this Preliminary Offering Circular is subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted before the offering statement filed with the Commission is qualified. This Preliminary Offering Circular shall not constitute an offer to sell or the solicitation of an offer to buy nor may there be any sales of these securities in any state in which such offer, solicitation or sale would be unlawful before registration or qualification under the laws of any such state. We may elect to satisfy our obligation to deliver a Final Offering circular by sending you a notice within two business days after the completion of our sale to you that contains the URL where the Final Offering Circular or the offering statement in which such Final Offering Circular was filed may be obtained.

27,200,000 Shares of Common Stock

Minimum purchase: 2,000 Shares ($1,000.00)

We are offering a minimum of 3,500,000 shares of common stock and a maximum of 27,200,000 shares of common stock on a “best efforts” basis. The offered shares consist of 20,000,000 newly issued shares (the “Company Offered Shares”) and 7,200,000 of our outstanding shares to be sold by three of our shareholders (the “Selling Securityholder Shares”). We will not receive any of the proceeds from the sale of the Selling Securityholder Shares in the offering. Shares sold in the offering will be allocated pro rata between the Company Offered Shares and Selling Securityholder Shares.

If $1,750,000 in subscriptions for the shares (the “Minimum Offering”) is not deposited in escrow on or before ______________ (the “Minimum Offering Period”), all subscriptions will be refunded to subscribers without deduction or interest. Subscribers have no right to a return of their funds during the Minimum Offering Period. If this minimum offering amount has been deposited by _________________, the offering may continue until the earlier of ____________ (which date may be extended at our option) or the date when all shares have been sold. See “Plan of Distribution” and “Securities Being Offered” for a description of our capital stock.

Generally, no sale may be made to you in this offering if the aggregate purchase price you pay is more than 10% of the greater of your annual income or net worth. Different rules apply to accredited investors and non-natural persons. Before making any representation that your investment does not exceed applicable thresholds, we encourage you to review Rule 251(d)(2)(i)(C) of Regulation A. For general information on investing, we encourage you to refer to www.investor.gov.

There is currently no trading market for our common stock. We intend to apply to have our shares of common stock approved for trading on the OTCQB marketplace and expect to trade under the symbol “_____” upon the completion of this offering.

These are speculative securities. Investing in our shares involves significant risks. You should purchase these securities only if you can afford a complete loss of your investment. See “Risk Factors” beginning on page 4.

	Number of Shares	Price to Public	Underwriting discounts and commissions (1)	Proceeds to issuer (2)
Per share:	1	$0.50	$0.00	$0.37
Total Minimum:	3,500,000	$1,750,000	$0.00	$1,286,765
Total Maximum:	27,200,000	$13,600,000	$0.00	$10,000,000

(1)

We do not intend to use commissioned sales agents or underwriters.

(2)

Does not include expenses of the offering, including costs of blue sky compliance and fees to be paid to [outsourced processing company], estimated to be $______ and $_______ for the minimum and maximum offering amounts, respectively. See “Plan of Distribution.

The United States Securities and Exchange Commission does not pass upon the merits of or give its approval to any securities offered or the terms of the offering, nor does it pass upon the accuracy or completeness of any offering circular or other solicitation materials. These securities are offered pursuant to an exemption from registration with the Commission; however, the Commission has not made an independent determination that the securities offered are exempt from registration.

We are providing the disclosure in the format prescribed by Part II of Form 1-A

Tao Entertainment, Inc., 9061 Keith Avenue, #206, West Hollywood, California 90069

(303) 503-8631; www.tao-entertainment.com

The date of this Preliminary Offering Circular is January 28, 2019

TABLE OF CONTENTS

Page

Number

OFFERING SUMMARY	3

RISK FACTORS	4

DILUTION	12

USE OF PROCEEDS	13

BUSINESS	14

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION	22

DIRECTORS AND EXECUTIVE OFFICERS	24

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS	25

SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITY HOLDERS	26

INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS	27

SECURITIES BEING OFFERED	28

SELLING SECURITYHOLDERS	29

PLAN OF DISTRIBUTION	30

FINANCIAL STATEMENTS	32

OFFERING SUMMARY

The following summary highlights selected information contained in this offering circular. This summary does not contain all the information that may be important to you. You should read the more detailed information contained in this offering circular, including, but not limited to, the risk factors beginning on page 4. References to “we,” “us,” “our,” or the “company” mean Tao Entertainment, Inc.

Our Company

Tao Entertainment, Inc. (“Tao” or the “Company”) develops and produces independent quality motion pictures for wide release, while maintaining strict cost controls. It aims to make projects that possess exceptional quality, starting with the script, and that are commercially exploitable and competitive. Tao plans to produce two to three films over the next five-year period, with budgets ranging from $1 million to $10 million.

This Offering

Securities offered by the Company	Up to 20,000,000 shares of common stock (“Company Offered Shares”)

Securities offered by certain shareholders	Up to 7,200,000 shares of common stock (“Selling Securityholder Shares”)

Minimum-maximum offering	Shares sold in the offering will be allocated pro rata between the Company Offered Shares and Selling Securityholder Shares. If $1,750,000 in subscriptions for the shares (the “Minimum Offering”) is not deposited in escrow on or before ______________ (the “Minimum Offering Period”), all subscriptions will be refunded to subscribers without deduction or interest. Subscribers have no right to a return of their funds during the Minimum Offering Period. If this minimum offering amount has been deposited by _________________, the offering may continue until the earlier of ____________ (which date may be extended at our option) or the date when all shares have been sold.

Common stock outstanding before the offering	251,257,350 shares

Common stock outstanding after the offering	253,830,879 shares (Minimum Offering) 271,257,350 shares (Maximum Offering)

Use of proceeds	The net proceeds of this offering to us, after deducting estimated offering expenses, will range from $1,091,059 (Minimum Offering) to $9,281,500 (Maximum Offering) and will be used primarily to prepare for the next level of fundraising for film projects, general corporate purposes, and to develop one or more motion pictures. We will pay all of the expenses of the offering, but will not receive any of the proceeds from the sale of the Selling Securityholder Shares in this offering.

Risk factors	Investing in our shares involves a high degree of risk. As an investor you should be able to bear a complete loss of your investment. You should carefully consider the information set forth in the “Risk Factors” section of this offering circular.

RISK FACTORS

An investment in our shares involves a high degree of risk and many uncertainties. You should carefully consider the specific factors listed below, together with the cautionary statement that follows this section and the other information included in this offering circular, before purchasing our shares in this offering. If one or more of the possibilities described as risks below actually occur, our operating results and financial condition would likely suffer and the trading price, if any, of our shares could fall, causing you to lose some or all of your investment. The following is a description of what we consider the key challenges and material risks to our business and an investment in our securities.

Risks Related to our Business and Industry

We have a limited operating history and have not yet generated any revenues.

Our limited operating history makes evaluating the business and future prospects difficult, and may increase the risk of your investment. Our operating subsidiary was formed in June 2012 and we have produced only one motion picture. To date, we have no revenues. We intend in the longer term to derive substantial revenues from the distribution of our films. While several films are in the planning and development stage, the revenues generated will come after the completion and marketing of the project. Some projects are completed timely and sold quickly, while others take time to obtain the interest of prospective distributors in market and distribution. It is difficult to predict such uncertainties. We cannot assure you that our motion pictures can be commercially successful.

It is anticipated that we will experience an increase in losses prior to the distribution of our films.

For the fiscal year ended December 31, 2017, we generated a loss of $26,545, and for the six months ended June 30, 2018, we generated a loss of $14,298 (unaudited). We anticipate generating a significant loss for the current fiscal year. The independent auditor’s report on our financial statements includes an explanatory paragraph relating to our ability to continue as a going concern.

We have no revenues, and are currently in debt. Even if we are able to successfully develop and produce our films, there can be no assurance that we will be commercially successful. If we are to ever achieve profitability, we must have a successful distribution of our films, which may not occur.

We have a significant amount of debt.

As of December 31, 2017, our audited balance sheet reflected outstanding loans totaling $342,928, of which $18,145 is classified as short-term.

We have a significant working capital deficiency.

At December 31, 2017, our working capital deficit was $17,835. This deficit increased to $22,490 (unaudited) at June 30, 2018. We have relied upon loans and capital contributions to sustain the operations of the Company.

Our auditor has substantial doubts as to Tao Entertainment’s ability to continue as a going concern.

Our auditor's report on our December 31, 2017 financial statements expresses an opinion that substantial doubt exists as to whether we can continue as an ongoing business. We currently do not have sufficient funds to execute our business plan. Our available funds to date have consisted of contributed capital and loan proceeds. None of our officers or directors have any obligation to continue to make such contributions in the future and may be unable or unwilling to loan or advance any capital to us. As such, there can be no assurances that the Company will have sufficient capital to continue its current operations or implement its business plan which would result in losses to investors.

Terms of subsequent financings may adversely impact your investment.

We may have to engage in common equity, debt, or preferred stock financing in the future. Your rights and the value of your investment in the common stock could be reduced. Interest on debt securities could increase costs and negatively impacts operating results. Preferred stock could be issued in series from time to time with such designation, rights, preferences, and limitations as needed to raise capital. The terms of preferred stock could be more advantageous to those investors than to the holders of common stock. In addition, if we need to raise more equity capital from the sale of common stock, institutional or other investors may negotiate terms at least as, and possibly more, favorable than the terms of your investment. Shares of common stock which we sell could be sold into any market which develops, which could adversely affect the market price.

Early failures would impair our ability to attract additional capital.

Our business model contemplates success from our first productions. That is, we are anticipating revenue from our productions to finance additional productions. In the event that our early productions are not profitable, we will need to raise additional capital from outside investment. There are no guarantees that we will be able to raise such capital, or that if we are able to, that it will be on favorable terms. Early failures are likely to make such additional financing more “expensive” because investors are not likely to be willing to pay for “past mistakes.”

We will not receive revenue from our film production until production is completed and even if completed, there are no assurances that we will receive any revenue.

Upon completion of this Offering, we intend to develop several pre-production packages for feature films that we intend to produce. The production and distribution of a motion picture is a time consuming process. Pre-production on a picture will generally extend for a minimum of two to three months or more. Principal photography may extend for several weeks or more. Post-production may extend from three to four months or more. Distribution and exhibition of motion pictures generally may continue for years before any revenue is realized or generated, if at all.

We will not be able to completely diversify to mitigate the risks associated with the production of each film we intend to produce.

Particularly as produced by independent filmmakers, each motion picture is a separate business venture with its own management, employees and equipment and its own budgetary requirements. Although we are attempting to minimize this by maintaining a slate of projects, there are substantial risks associated with film production, including death or disability of key personnel, other factors causing delays, destruction or malfunction of sets or equipment, the inability of production personnel to comply with budgetary or scheduling requirements and physical destruction or damage to the film itself. Significant difficulties such as these may materially increase the cost of production or may cause the entire project to be abandoned. Because we intend to rely on the same personnel for more than one film project, it will be impossible for us to completely diversify in a manner to mitigate these potential risks.

Our film projects may not be accepted by the market and our business may fail as a direct result of such lack of market acceptance.

The ultimate profitability of any motion picture depends upon its audience appeal in relation to the cost of its production and distribution. The audience appeal of a given motion picture depends, among other things, on unpredictable critical reviews and changing public tastes, and such appeal cannot be anticipated with certainty. If certain segments of the viewing public do not like, are unwilling to pay for or otherwise disprove of our productions, our business may fail.

The premature abandonment of projects may result in losses to investors and impair our overall results of operations.

The production or distribution of our film projects may be abandoned at any stage if further expenditures do not appear commercially feasible, with the resulting loss of some or all of the funds previously expended on the development, production or distribution of our film projects, including funds expended in connection with the development of any screenplays and the pre-production of the projects. In the event that we determine that it is in the best interest of our shareholders to abandon a project, it is unlikely that we will be able to recoup any of our costs.

Cost overruns will affect our results of operations and may cause the failure of our business.

The costs of producing motion pictures are often underestimated and may be increased by factors beyond our control. Such factors may include weather conditions, illness of technical and artistic personnel and requirements, labor disputes, governmental regulations, equipment breakdowns and other production disruptions. While we intend to engage production personnel who have demonstrated abilities to complete films within assigned budgets, the risk of a film running over budget is always significant and may have a substantial adverse impact on our profitability.

We are dependent on our officers, directors and employees for our success.

Failure to retain such personnel could adversely affect the Company. We may initiate a key-person insurance policy for Messrs. Stone and Reina; and may initiate key person life insurance on additional officers and possibly other members of our management team, but as of yet, have not secured such insurance. Our future operations will depend, in part, on our ability to attract, employ and retain additional qualified employees. No assurance can be given that we will be able to attract or retain such personnel.

We rely on consultants and if we are unable to retain these or other similarly qualified individuals, we may not be able to carry out our business operations.

We are dependent upon service providers, particularly actors, editors, writers, and camera crews. Loss of their services could adversely affect our business and our ability to maintain our operations or develop new products. We have not entered into any employment or non-competition agreements with these individuals and do not plan to in the future. Our success will depend on our ability to attract and retain qualified personnel. If we cannot attract and retain the necessary individuals, our operating results will suffer.

Costs associated with our business, including production and input costs are not fixed and might increase, creating uncertainty about our ability to meet our plan of operations.

We have not established long-term contracts with our consultants or other third-party suppliers we intend to rely on. The lack of long-term contracts could result in an increase in what we pay these individuals for their services. An increase in the production costs will reduce our margins and might make our projects uneconomical, leading to the failure of our business.

We do not intend to use unionized labor or seek to have any of our projects backed by completion bonds.

Our business plan is based on our position as a low to mid budget film producer. As part of that plan, we intend to use only non-union talent and service providers. While this may save costs, it may also limit the availability of talent and service providers because many actors and established service providers have significant limitations on their ability to work on non-union film projects. As such, our projects will not have the draw and audience appeal that well-known actors could bring to a project.

Further, we do not intend to use completion bonds to insure that our projects are completed on time or on budget. Thus, if a particular project is not completed on time or on budget, there will be no third-party oversight to “take control” of a project. If we underestimate costs or timing, our projects may not be economically viable and/or we may not be able to complete them which could result in losses to investors.

To the extent that we engage in foreign distribution of our films, we will be subject to all of the additional risks of doing business abroad including, but not limited to, government censorship, currency fluctuations, exchange controls, greater risk of "piracy" copying, and licensing or qualification fees.

If we engage in foreign distribution of our films, a portion of our revenue and expenses are expected to be denominated in currencies other than U.S. dollars. Additionally, international operations are subject to certain risks inherent in doing business abroad, including:

Exposure to local economic and political conditions;

Foreign exchange rate fluctuations and currency controls;

Withholding and other taxes on remittances and other payments by subsidiaries

Investment restrictions or requirements;

Export and import restrictions;

Compliance with local regulations on censuring, licensing and qualification fees; and

Greater potential for our films to be pirated.

Expanding our business in other countries, and developing our business relationships with manufacturers in such jurisdictions are important elements of our strategy. As a result, our exposure to the risks described above may be greater in the future. The likelihood of such risks and their potential effect on us may vary from country to country and are unpredictable. However, any such occurrences could be harmful to our business and our profitability, thereby resulting in a decline in the value of our common stock.

Risks Relating to the Motion Picture Industry

We face intense competition in the market from larger more established companies that offer a wider array of products. These competitors will make it difficult for us to offer competing products and grow our business.

In the production phase, competition will affect our ability to obtain the services of preferred performers and other creative personnel. We will be competing with the producers of other films in arranging for distribution in the domestic theatrical marketplace and in other markets and media. In the distribution phase, competition will limit the availability of theaters required for the successful distribution of our products. These products will be competing directly with other motion pictures and indirectly with other forms of public entertainment. Companies that are larger, better funded, and have longer operating histories dominate our industry. We may not be able to compete successfully against our future competitors and competition could have a material adverse effect on our business, results of operations and financial condition. Our potential competitors may develop superior products and services that achieve greater market acceptance than ours. Accordingly, failure of our marketing campaign to expand our distribution channels will result in the failure of the business.

Industry changes may have a negative impact on our operations.

The entertainment business in general, and the motion picture business in particular, are undergoing significant changes, primarily due to technological developments. These developments have resulted in the availability of alternative forms of leisure time entertainment, including expanded pay and basic cable television, syndicated television, and video games. During the last several years, revenues from licensing of motion pictures to network television have decreased (and fewer films are now being licensed for any price to network television), while revenues from pay television and the Internet have increased relative to network. The level of theatrical success remains a critical factor in generating revenues in these ancillary markets. It is impossible to accurately predict the effect that these and other new technological developments may have on the motion picture industry. These uncertainties, as well as others outlined herein, may have a negative impact on our operations and could result in the complete failure of our business.

Our success depends on our ability to develop, maintain and increase our sales distribution channels. The inability to establish distribution channels may severely limit our growth prospects.

Our business success is completely dependent on our ability to develop, maintain and expand our distribution channels. Revenues derived therefrom represent vital funds for our continued operations. The loss or damage of any of our business relationships and or revenues derived therefore will result in the inability to market and produce our products.

Any disruptions or failures on the distribution of our films may result in the failure of our business.

The profitable distribution of a motion picture depends in large part on the availability of one or more capable and efficient distributors who are able to arrange for appropriate advertising and promotion, proper release dates and bookings in first-run and other theaters. We intend to enlist a public relations firm to create additional publicity for our projects; however, no such arrangement has yet been made. Presently, we have no distribution arrangements and there can be no assurance that profitable distribution arrangements will be obtained for our projects or that our projects can or will be distributed profitably. Any disruptions, delays or failures in this aspect of our business could result in the failure of our business.

Our success may be dependent on foreign markets.

Many films are released each year that are not commercially successful and fail to recoup their production costs from the United States theatrical distribution. Foreign and ancillary markets have, therefore, become increasingly important. As such, we may rely on foreign and ancillary markets for our revenue. Although both foreign and ancillary markets have grown, neither provides a guarantee of revenue. Licensing of a motion picture in the ancillary markets is particularly dependent upon performance in theatrical distribution. Thus, if one of our motion pictures is not an artistic or critical success or if, for any reason, it is not well-received by the public, it may be a financial failure. There are no assurances that all of our films will not be financial failures, resulting in a complete failure of our business.

We operate in a regulated industry and changes in regulations or violations of regulations may result in increased costs or sanctions that could reduce our revenues and profitability.

The motion picture industry is subject to extensive and complex federal and state laws and regulations related to safety, conduct of operations, payment for services and payment for creative talent. If we fail to comply with the laws and regulations that are directly applicable to our business, we could suffer civil and/or criminal penalties or be subject to injunctions and delays in production schedules orders.

Foreign distribution rules and regulations may have an adverse impact on our operations.

Foreign distribution of a motion picture (i.e., outside the United States and Canada) may require the use of various foreign distributors. Some foreign countries may impose government regulations on the distribution of films. Also revenues derived from the distribution of the films in foreign countries, if any, may be subject to currency controls and other restrictions that may temporarily or permanently prevent our ability to receive or account for such revenue. To the extent that we have made the economic decision to pursue a particular film project based upon foreign distribution, our operations may suffer.

Risks Related to the Investment in our Common Stock

The ownership of our common stock is concentrated among existing executive officers and directors.

Upon the sale of all of the shares offered in this offering, our executive officers and directors will continue to own beneficially, in the aggregate, a vast majority of the outstanding shares. As a result, they will be able to exercise a significant level of control over all matters requiring shareholder approval, including the election of directors, amendments to our Articles of Incorporation, and approval of significant corporate transactions. This control could have the effect of delaying or preventing a change of control of Tao Entertainment or changes in management and will make the approval of certain transactions difficult or impossible without the support of these shareholders.

Investors in this offering will experience immediate and substantial dilution.

Due to our significant accumulated deficit, investors in this offering will suffer immediate and substantial dilution of at least $0.47 per share or approximately 93% of the offering price of the shares if the maximum offering is sold or $0.49 per share or approximately 99% of the offering price if only the minimum offering is sold. Further, if all of the shares offered hereby are sold, investors in this offering will own approximately 7% of the then outstanding shares of common stock, but will have paid over 99% of the total consideration for our outstanding shares. See “Dilution.”

There currently is no public trading market for our securities and an active market may not develop or, if developed, be sustained. If a public trading market does not develop, you may not be able to sell any of your securities.

There is currently no public trading market for our common stock, and an active market may not develop or be sustained. If an active public trading market for our securities does not develop or is not sustained, it may be difficult or impossible for you to resell your shares at any price. Even if a public market does develop, the market price could decline below the amount you paid for your shares.

The Company is selling the shares offered in this Offering Circular without an underwriter and may not be able to sell any of the shares offered herein.

The common shares are being offered on our behalf by our officers, on a best-efforts basis. No broker-dealer has been retained as an underwriter and no broker-dealer is under any obligation to purchase any common shares. There are no firm commitments to purchase any of the shares in this Offering. Consequently, there is no guarantee that the Company will be capable of selling all, or any, of the common shares offered hereby.

Investors cannot withdraw funds once invested and will not receive a refund.

Once the minimum 3,500,000 shares are sold, investors will not have the right to withdraw invested funds. Subscription payments will be released from the escrow account to Tao Entertainment if the Subscription Agreements are in good order and the investor is accepted as an investor by the Company. Therefore, once the minimum shares are sold, investors will not have the use or right to return of such funds during the remaining Offering period or thereafter.

Tao Entertainment does not plan to pay dividends in the foreseeable future, and, as a result, stockholders will need to sell shares to realize a return on their investment.

Tao Entertainment has not declared or paid any cash dividends on its capital stock since inception. Tao Entertainment intends to retain any future earnings to finance the operation and expansion of its business and does not anticipate paying any cash dividends in the foreseeable future. As a result, stockholders will need to sell shares of common stock in order to realize a return on their investment, if any. If no market develops for the common shares in the future, investors would lose their entire investment.

You may not be able to sell your shares in our Company because there is no public market for our stock.

There is no public market for our common stock. In the absence of being listed, no market is available for investors in our common stock to sell their shares. We cannot guarantee that a meaningful trading market will develop. If our stock ever becomes tradable, of which we cannot guarantee success, the trading price of our common stock could be subject to wide fluctuations in response to various events or factors, many of which are beyond our control. In addition, the stock market may experience extreme price and volume fluctuations, which, without a direct relationship to the operating performance, may affect the market price of our stock.

There is currently no market for Tao Entertainment’s common stock, but if a market for our common stock does develop, our stock price may be volatile.

There is currently no market for Tao Entertainment’s common stock and there is no assurance that a market will develop. If a market develops, it is anticipated that the market price of Tao Entertainment’s common stock will be subject to wide fluctuations in response to several factors including:

The ability to complete the development of Tao Entertainment’s projects in order to provide them to the public;

The ability to generate revenues from sales;

The ability to generate brand recognition of the Tao Entertainment products and services and acceptance by consumers;

Increased competition from competitors who offer competing services;

The Company’s financial condition and results of operations; and

The ability to continue to find and develop new screenplays and other intellectual property into viable commercial projects.

The trading in our shares will be regulated by the Securities and Exchange Commission Rule 15g-9, which established the definition of a “penny stock.”

The SEC has adopted rules that regulate broker/dealer practices in connection with transactions in penny stocks. The rules, in part, require broker/dealers to provide penny stock investors with increased risk disclosure documents and make a special written determination that a penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These heightened disclosure requirements may have the effect of reducing the number of broker/dealers willing to make a market in our shares, reducing the level of trading activity in any secondary market that may develop for our shares, and accordingly, customers in our securities may find it difficult to sell their securities, if at all.

The shares being offered are defined as a penny stock under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and rules of the Commission. The Exchange Act and such penny stock rules generally impose additional sales practice and disclosure requirements on broker-dealers who sell our securities to persons other than certain accredited investors who are, generally, institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000 ($300,000 jointly with spouse), or in transactions not recommended by the broker-dealer. For transactions covered by the penny stock rules, a broker dealer must make certain mandated disclosures in penny stock transactions, including the actual sale or purchase price and actual bid and offer quotations, the compensation to be received by the broker-dealer and certain associated persons, and deliver certain disclosures required by the Commission. Consequently, the penny stock rules may make it difficult for you to resell any shares you may purchase, if at all.

While Tao Entertainment expects to apply for listing on the OTCQB, we may not be approved, and even if approved, shareholders may not have a market to sell their shares, either in the near term or in the long term.

We can provide no assurance to investors that our common stock will be traded on any exchange or electronic quotation service. While we expect to apply to the OTCQB, we may not be approved to trade on the OTCQB, and we may not meet the requirements for listing on the OTCQB. If we do not meet the requirements of the OTCQB, our stock may then be traded on the OTCPink, and the market for resale of our shares would decrease dramatically, if not eliminated.

Shares eligible for future sale may adversely affect our stock price.

All of the presently outstanding shares of common stock, aggregating 251,257,350 shares of common stock, are “restricted securities” as defined under Rule 144 promulgated under the Securities Act and may only be sold pursuant to an effective registration statement or an exemption from registration, if available. Rule 144, as amended, is an exemption that generally provides that a person who has satisfied a one-year holding period for such restricted securities may sell, within any three-month period (provided Tao is current in its reporting obligations under the Exchange Act), subject to certain manner of resale provisions, an amount of restricted securities which does not exceed the greater of 1% of a company’s outstanding common stock or the average weekly trading volume in such securities during the four calendar weeks prior to such sale. At such time as these shares become unrestricted and available for sale, the sale of these shares by this individual, whether pursuant to Rule 144 or otherwise, may have an immediate negative effect upon the price of Tao’s common stock in any market that might develop.

DILUTION

If you invest in our shares, your interest will be diluted to the extent of the difference between the public offering price per share of our common stock and the as adjusted net tangible book value per share of our common stock after this offering. Our net tangible book value as of June 30, 2018 was $(360,276) (unaudited), or $(0.0014) (unaudited) per share of outstanding common stock. Without giving effect to any changes in the net tangible book value after June 30, 2018 other than the sale of 20,000,000 Company Offered Shares in this offering at the initial public offering price of $0.50 per share, our pro forma net tangible book value as of June 30, 2018 was $8,921,224 (unaudited) or $0.0329 (unaudited) per share of outstanding capital stock. Dilution in net tangible book value per share represents the difference between the amount per share paid by the purchasers of our shares in this offering and the net tangible book value per share of our capital stock immediately afterwards. This represents an immediate increase of $0.0343 per share of common stock to existing shareholders and an immediate dilution of $0.4671 per share of common stock to the new investors, or approximately 93.4% of the assumed initial public offering price of $0.50 per share. The following table illustrates this per share dilution:

	Minimum Offering			Maximum Offering
Initial price to public	$	0.50		$	0.50
Net tangible book value as of June 30, 2018	$	(0.0014	)	$	(0.0014	)
Increase in net tangible book value per share attributable to new investors		0.0043			0.0343
As adjusted net tangible book value per share after this offering		0.0029			0.0329
Dilution in net tangible book value per share to new investors	$	0.4971		$	0.4671

The following table summarizes the differences between the existing shareholders and the new investors with respect to the number of shares of common stock purchased, the total consideration paid, and the average price per share paid, on both a minimum and maximum offering basis:

Minimum Offering:

	Shares Purchased					Total Consideration					Average
	Number		Percent			Amount		Percent			Price Per Share
Existing investors		251,257,350		99.0	%	$	62,798		5.4	%	$	0.0002
New investors		2,573,529		1.0	%		1,091,059		94.6	%	$	0.4240
Total		253,830,879		100.0	%	$	1,153,857		100.0	%

Maximum Offering:

	Shares Purchased					Total Consideration					Average
	Number		Percent			Amount		Percent			Price Per Share
Existing investors		251,257,350		92.6	%	$	62,798		0.7	%	$	0.0002
New investors		20,000,000		7.4	%		9,281,500		99.3	%	$	0.4641
Total		271,257,350		100.0	%	$	9,344,298		100.0	%

Shares sold in the offering will be allocated pro rata between the Company Offered Shares and Selling Securityholder Shares. We will pay all of the expenses of the offering, but will not receive any of the proceeds from the sale of the Selling Securityholder Shares in this offering.

USE OF PROCEEDS

We estimate that, at a per share price of $0.50, the net proceeds to us from the sale of all 27,200,000 shares in the Maximum Offering will be approximately $9,281,500, after deducting the estimated offering expenses of approximately $718,500. If only the minimum number of 3,500,000 shares is sold, the net proceeds to us will be approximately $1,091,059 after deducting estimated offering expenses of $195,706.

The net proceeds of this offering will be used primarily to prepare for the next level of fundraising for film projects, general corporate purposes, and to develop one or more motion pictures.

Accordingly, we expect to use the net proceeds as follows:

	Minimum Offering					Maximum Offering
	Amount		Percentage			Amount		Percentage
Preparation for next level of financing	$	250,000		22.9	%	$	750,000		8.1	%
General corporate purposes (1)		841,059		77.1	%		1,000,000		10.8	%
Film development and production		0		---			7,531,500		81.1	%

TOTAL	$	1,091,059		100.0	%	$	9,281,500		100.0	%

(1)

A portion of working capital will be used for officers’ salaries.

The foregoing information is an estimate based on our current business plan. We may find it necessary or advisable to re-allocate portions of the net proceeds reserved for one category to another, and we will have broad discretion in doing so. Pending these uses, we intend to invest the net proceeds of this offering in short-term, interest-bearing securities.

BUSINESS

Corporate Background

Tao CA was originally formed in California as a limited liability company on June 4, 2012 and later converted into a corporation on February 2, 2018. It conducts its business through a wholly-owned subsidiary, Egg White Productions, LLC, a California limited liability company, which was formed on June 4, 2012 to produce the film, Scrambled.

To date, Tao CA has produced only one film, Scrambled, which is being prepared for distribution. It has options to several projects in development to potentially go into production.

Industry

The motion picture industry is a constantly changing and multi-faceted business that consists of two principal activities: production and distribution. Production can be described as the developing, financing, and making of motion pictures. Distribution is the process of marketing and selling the final product to retailers such as theatrical exhibitors and other ancillary outlets.

According to the Motion Picture Association of America, in 2017, the global box office for all films released in each country around the world reached $40.6 billion, up from $38.6 billion in 2016. The U.S./Canada box office fell 2% to $11.1 billion, down from 2016’s record high of $11.4 billion, while the international box office grew to $29.5 billion from $27.4 billion in 2016. International box office accounted for 73% of total box office in 2017, as compared to 71% in 2016.¹

Independent Film Sector

The major film studios have turned their attention to costly franchise pictures that generate multiple sequels and spinoffs that are high risk, but providing for potential higher upside. For example, Paramount Pictures has done five “Transformer” films, and plans to do more sequels and spinoffs. Coupled with the rapid growth of the internet and other content platforms, there is a growing demand for independent filmmakers to fill an increasing need for original content. This has created an opportunity for independent producers to make non-blockbuster movies and target the lower to middle budgeted films.

The efforts of independent films have been generally well-received, as independent films have received a significant portion of critical acclaim and awards. This type of recognition greatly enhances their value, particularly in ancillary markets.

The filmmaking unions have responded to the increasing number of independent films by instituting low-budget versions of their basic agreements, thereby allowing independent producers to hire the same top-tier talent and technicians used by the major film studios, but at significantly lower rates.

Production Overview

The following general description is a simplified overview of the process of producing and distributing motion pictures and is intended to be an aid to investors in understanding the motion picture business. This overview does not describe what will necessarily occur in the case of any of our particular motion pictures.

¹https://variety.com/2018/digital/news/global-box-office-hits-record-40-6-billion-in-2017-u-s-attendance-lowest-in-23-years-1202742991/#!

Production of Motion Pictures. During the filmmaking process, which may take approximately 12 to 24 months from the start of the development phase to theatrical release, a film progresses through several stages. The four general stages of motion picture production are development, pre-production, principal photography and post-production. A brief summary of each of the four general movie production stages follows:²

Development. In the development stage, underlying literary material for a motion picture project is acquired, either outright, through an option to acquire such rights, or by engaging a writer to create original literary material. If the literary material is not in script form, a writer must be engaged to create a script. The script must be sufficiently detailed to provide the production company and others participating in the financing of a motion picture with enough information to estimate the cost of producing the motion picture. Projects in development do not always become completed motion pictures.

Pre-Production. During the pre-production stage, the production company usually selects a director, actors and actresses, prepares a budget and secures the necessary financing. In cases involving unique or desired talent, commitments must be made to keep performers available for the picture. Some pre-production activities may occur during development.

Principal Photography. Principal photography is the process of filming a motion picture and is the costliest stage of the production of a motion picture. Principal photography may take up to twelve weeks to complete for some projects. Bad weather at locations, the illness of a cast or crew member, disputes with local authorities or labor unions, a director's or producer's decision to re-shoot scenes for artistic reasons and other often unpredictable events can delay the scheduled completion of principal photography and substantially increase its costs.

Post-Production. During the post-production stage, the editing of the raw footage and the scoring and mixing of dialogue, music and sound effects tracks take place, and master printing elements are prepared.

The expenses associated with this four-step process for creating and finishing a film are referred to as its “negative costs.” Duplication of the master and advertising for a film are categorized as “P&A” and are not part of the negative costs of the production.

Distribution Overview

Motion picture revenue is derived from the worldwide licensing of a motion picture: (a) for theatrical exhibition; (b) for non-theatrical exhibition (viewing in airplanes, hotels, military bases and other facilities); (c) to pay television systems for delivery to television receivers by means of cable, over-the-air and satellite delivery systems; (d) to commercial television networks; (e) to local commercial television stations and (f) for reproduction on videos for home video use. Revenue may also be derived from licensing “ancillary rights” to a motion picture for the creation of books, published music, soundtrack albums and merchandise.

Expenses incurred in distributing a motion picture are substantial and vary depending on many factors. These factors include the initial response by the public to the motion picture, the nature of its advertising campaign, and the pattern of its release (e.g., the number of theaters booked and the length of time that a motion picture is in release).

Production

The Company plans to produce its pictures at the lowest possible cost consistent with the quality that it seeks to achieve. The Company will attempt to avoid the substantial overhead associated with major production companies by maintaining a small permanent staff. The Company does not own production facilities or equipment, but will adopt the practice of renting production facilities and equipment and engaging free-lance production staff, only as necessary, on a picture-by-picture basis.

²See “Film Scheduling” 2^nd Ed Ralph S. Singleton and “Hollywood Creative Guide” 5^th Ed, 2007 E. Fleeks.

The Company expects the total production period for a Company-produced motion picture to generally continue for as long as six months and, in some instances, even longer. Multiple projects may run concurrently. The following table represents the estimates of the time periods associated with each phase in the financing, production and distribution of a picture:

Financing period	8 weeks
Pre-Production	8 weeks
Principal Photography	6 weeks
Post-Production	10 weeks
Sneak Previews	35^th week
Premiere	40^th week
Limited opening	41^st week

Distribution Approach

From a business perspective, the primary goal of the Company's film ventures is to maximize the revenues to it and to its investors; however, there can be no assurance that this goal will be achieved or that increased revenues will equate to a higher return on investment. The ultimate commercial success of any motion picture is dependent on its distribution. The Company believes that the most important initial objective in achieving this goal is to maximize proceeds from the United States theatrical release of its pictures, since it considers such theatrical performance to be the single most important determinant of a picture's performance in the subsequent markets of home Video/Podcasts, pay cable and free broadcast television and foreign markets.

The Company plans to approach prospective distributors with a completed or nearly completed film, thus potentially maximizing its bargaining position with respect to negotiating the terms of the distribution arrangements. It is not possible to predict, with certainty, the nature of the distribution arrangements, if any, that the Company may secure for its motion pictures or television series.

To the extent that the Company engages in foreign distribution of its films, it will be subject to all of the additional risks of doing business abroad including, but not limited to, government censorship, currency fluctuations, exchange controls, greater risk of "piracy" copying, and licensing or qualification fees.

Tracking the Independent Dollar

The following breakdown is a simplified illustration meant to aid in a basic understanding of the revenue system for an independent project.

XXX Feature Flm Project

($ Millions)

Domestic Box Office Gross			12.00
Exhibitor Share of Box Office (50%)			6.00
Distributor Share of Box Office (50%)			6.00

REVENUE:
Domestic:
Theatrical Rentals (50% of Box Office)			6.00
Domestic Ancillary (Home entertainment, TV, Cable, Digital)			4.00
Domestic Revenue Total			10.00

Foreign			5.00

TOTAL DISTRIBUTOR GROSS REVENUE			15.00

Less:
Production costs			3.00
Prints and advertising			3.00
TOTAL COSTS			6.00

GROSS INCOME:			9.00

Less Distributor’s Fees (35% of Gross Revenue)			5.25

Net Producer/Investor Income Before Taxes			3.75

In this illustration, proceeds are usually distributed in the following order: cost of prints and advertising, distributor’s fees, deferments and production costs, and then the remainder is the producer’s/investors’ share.

Financing Strategy

The Company proposes to secure equity funding to allow it to maintain consistent control of the filmmaking quality and production costs. This strategy allows for maximum flexibility in a rapidly changing marketplace, in which the availability of film entertainment is in constant change. The Company will not be able to execute on its business plan without at least $1,000,000 from the net proceeds of this Offering. We currently plan to form a single purpose flow-through entity, such as a limited liability company or limited partnership for each film that we produce, where we will be the managing member or the general partner. Each single purpose entity will produce the film, be the union signatory, and raise any needed financing. We believe that this will facilitate our efforts to source financing for the films. The objective is for each film to gain a limited domestic exhibition, with additional revenues and recoupment of investment through ancillary marketplaces/platforms and foreign sales. For the Minimum Offering, approximately $250,000 has been allocated for the formation and marketing of one or more limited partnerships or limited liability company offerings for this effort. The remaining $841,000 will be used for general corporate purposes, including efforts to establish a secondary trading market for the shares sold in this Offering.

To the extent that more than the Minimum Offering is sold, proceeds will be used for an increased allocation for the preparation of flow-through entities and for film production. Investors need to understand that the number and types of film projects available to the Company are directly related to the amount of funding it receives. Primary responsibility for the overall planning, financing and production of each motion picture will rest with our management.

Whenever possible we will attempt to make arrangements with providers of goods and services to defer payment until a later stage in the production and financing cycle. Once a film package has been assembled, there are various methods of obtaining the funds needed to complete the production of a motion picture. Examples of financing alternatives include the assignment of our rights in a film to a joint venture or a co-producer. We may also obtain favorable pre-release sales or pre-licensing commitments from various end-users such as independent domestic distributors, foreign distributors, cable networks, and video distributors. Further we will seek additional revenue from sponsors and product placement in our productions as an additional source of financing and revenue. These various techniques, which are commonly used in the industry, can be combined to finance a project without a major studio financial commitment. We may, at management’s discretion, sell shares of our capital stock or exchange shares for services, to finance the production of films.

We may also take advantage of movie production incentives offered by most of the states in the U.S. Such incentives may consist of any of the following: tax credits based on the amount spent in the particular state, cash rebates, grants, sales tax exemptions, lodging exemptions, and fee-free locations for filming.

We may use any one or a combination of these or other techniques to finance our films. We anticipate that any financing method will permit us to maintain control over the production. There can be no assurance that we will be able to successfully arrange for such additional financing and to the extent we are unsuccessful, our production activities may be adversely affected.

Distribution Arrangements

Effective distribution is critical to the economic success of a feature film, particularly when made by an independent production company. We have not as yet negotiated any distribution agreements.

We intend to release our films in the United States through existing distribution companies, primarily independent distributors. We will retain the right for ourselves to market the films on a jurisdiction-by-jurisdiction basis throughout the rest of the world, and to market television and other uses separately. In many instances, depending upon the nature of distribution terms available, it may be advantageous or necessary for us to license all, or substantially all, distribution rights through one major distributor.

To the extent that we may engage in foreign distribution of our films, we will be subject to all of the additional risks of doing business abroad including, but not limited to, government censorship, currency fluctuations, exchange controls, greater risk of "piracy" copying, and licensing or qualification fees.

It is not possible to predict, with certainty, the nature of the distribution arrangements, if any, that we may secure for our motion pictures.

Competition

The motion picture industry is intensely competitive. Competition comes from companies within the same business and companies in other entertainment media that create alternative forms of entertainment. The industry is currently evolving in such a way that certain multinational multimedia firms will be able to dominate this space because of their control over key film, magazine, and television content, as well as key network and cable outlets. These organizations have numerous competitive advantages, such as the ability to acquire financing for their projects and to make favorable arrangements for the distribution of completed films. All of our competitors will likely be organizations of substantially larger size and capacity, with far greater financial and personnel resources and longer operating histories, and may be better able to acquire properties, personnel and financing, and enter into more favorable distribution agreements. Our success will depend on public taste, which is both unpredictable and susceptible to rapid change.

As an independent film production company, we most likely will not have the backing of a major studio for production and distribution support. Consequently, we may not be able to complete a motion picture.

In order to be competitive, we intend to create independent motion pictures that may appeal to a wide range of public taste both in the United States and abroad. Investors must be aware that at this time we have produced one film, but have not yet distributed it. We may not be successful in doing so.

Intellectual Property Rights

Rights to motion pictures are granted legal protection under the copyright laws of the United States. These laws provide substantial civil and criminal penalties for unauthorized duplication and exhibition of motion pictures. Motion pictures, musical works, sound recordings, artwork, and still photography are separately subject to copyright under most copyright laws. We plan to take appropriate and reasonable measures to secure, protect, and maintain copyright protection for all of our pictures under the laws of the applicable jurisdictions. Motion picture piracy is an industry-wide problem. The motion picture industry trade association provides a piracy hotline and investigates all piracy reports. The results of such investigations may warrant legal action, by the owner of the rights, and, depending on the scope of the piracy, investigation by the Federal Bureau of Investigation with the possibility of criminal prosecution.

Under the copyright laws of the United States, copyright in a motion picture is automatically secured when the work is created and "fixed" in a copy. We intend to register our films for copyright with the United States Copyright Office. This office will register claims to copyright and issue certificates of registration but neither will "grant" or "issue" copyrights. Only the expression (camera work, dialogue, sounds, etc.) fixed in a motion picture can be protected under copyright. Copyright in the United States does not cover the idea or concept behind the work or any characters portrayed in the work. Registration with the appropriate office establishes a public record of the copyright claim.

Ordinarily, a number of individuals contribute authorship to a motion picture, including the writer, director, producer, camera operator, editor, and others. Under the laws of the United States, these individuals are not always considered the "authors;" however, because a motion picture is frequently a "work made for hire." In the case of a work made for hire, the employer, not the individuals who actually created the work, is considered the author for copyright purposes. We intend all of our films to be works made for hire in which we will be the authors and thereby own the copyright to our films.

For copyright purposes, publication of a motion picture takes place when one or more copies are distributed to the public by sale, rental, lease or lending, or when an offering is made to distribute copies to a group of persons (wholesalers, retailers, broadcasters, motion picture distributors, and the like) for purposes of further distribution or public performance. A work that is created (fixed in tangible form for the first time) on or after January 1, 1978, is automatically protected from the moment of its creation and is ordinarily given a term enduring for the author's life plus an additional 70 years after the author's death. For works made for hire, the duration of copyright will be 95 years from publication or 120 years from creation, whichever is shorter.

Although we plan to copyright all of our film properties and projects, there is no practical protection from films being copied by others without payment to us, especially overseas. We may lose an indeterminate amount of revenue as a result of motion picture piracy. Being a small company, with limited resources, it will be difficult, if not impossible, to pursue our various remedies.

Motion picture piracy is an international, as well as a domestic problem. It is extensive in many parts of the world. In addition to the Motion Picture Association of America, the Motion Picture Export Association, the American Film Marketing Association, and the American Film Export Association monitor the progress and efforts made by various countries to limit or prevent piracy. In the past, these various trade associations have enacted voluntary embargoes of motion picture exports to certain countries in order to pressure the governments of those countries to become more aggressive in preventing motion picture piracy. The United States government has publicly considered trade sanctions against specific countries that do not prevent copyright infringement of American motion pictures. There can be no assurance that voluntary industry embargoes or United States government trade sanctions will be enacted. If enacted, such actions may impact the revenue that we realize from the international exploitation of our motion pictures. If not enacted or if other measures are not taken, the motion picture industry, including us, may lose an indeterminate amount of revenue as a result of motion picture piracy.³

Censorship

An industry trade association, the Motion Picture Association of America assigns ratings for age group suitability for domestic theatrical distribution of motion pictures under the auspices of its Code and Rating Administration. The film distributor generally submits its film to the Code and Rating Administration for a rating. We plan to follow the practice of submitting our motion pictures for ratings.

Television networks and stations in the United States as well as some foreign governments may impose additional restrictions on the content of a motion picture that may wholly or partially restrict exhibition on television or in a particular territory.

Theatrical distribution of motion pictures, in a number of states and certain jurisdictions, is subject to provisions of trade practice laws passed in those jurisdictions. These laws generally seek to eliminate the practice known as "blind bidding" and prohibit the licensing of films unless theater owners are invited to attend screenings of the film first. In certain instances, these laws also prohibit payment of advances and guarantees to film distributors by exhibitors.

There can be no assurance that current and future restrictions on the content of our films may not limit or affect our ability to exhibit our pictures in certain jurisdictions and media.

Labor Laws

We are aware that the cost of producing and distributing filmed entertainment has increased substantially in recent years. This is due, among other things, to the increasing demands of creative talent as well as industry-wide collective bargaining agreements. Many of the screenplay writers, performers, directors and technical personnel in the entertainment industry who will be involved in our productions are members of guilds or unions that bargain collectively on an industry-wide basis. We have found that actions by these guilds or unions can result in increased costs of production and can occasionally disrupt production operations. If such actions impede our ability to operate or produce a motion picture, it may substantially harm our ability to earn revenue and result in our business to fail.

We will use non-unionized talent whenever possible to reduce our costs of production. Notwithstanding, many individuals associated with our productions, including actors, writers and directors, will be members of guilds or unions, that bargain collectively with producers on an industry-wide basis from time to time. Our operations will be dependent upon our compliance with the provisions of collective bargaining agreements governing relationships with these guilds and unions. Strikes or other work stoppages by members of these unions could delay or disrupt our activities. The extent to which the existence of collective bargaining agreements may affect us in the future is not currently known.

Employees

As of November 30, 2018, we employed 2 full-time and no part-time people.

³Motion Picture Academy of America, United Drive-In Theater Owners Association and National Association of Theater Owners annual reports 2007, 2008.

Facilities

The Company uses the residence of Frank Reina for its offices, which space is currently being provided free of charge. Currently, there are no proposed programs for the renovation, improvement or development of the facilities currently used.

Legal Proceedings

There are no legal proceedings material to our business or financial condition pending and, to the best of our knowledge, there are no such legal proceedings contemplated or threatened.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

The Company was originally incorporated in Colorado on December 4, 2014 as Colorado Green Ventures, Inc. On February 9, 2018, it entered into a share exchange transaction with Tao Entertainment, Inc., a California corporation (“Tao CA”), and issued 151,000,000 shares of its common stock to acquire all of the issued and outstanding shares of Tao CA. Tao CA was originally formed in California as a limited liability company on June 4, 2012 and later converted into a corporation on February 2, 2018. It conducts its business through a wholly-owned subsidiary, Egg White Productions, LLC, a California limited liability company, which was formed on June 4, 2012 to produce the film, Scrambled. As a result of the share exchange transaction, the historical financial statements are those of Tao CA.

Since our incorporation in June 2012, we have been engaged primarily in the production of a film, Scrambled, through a majority-owned subsidiary, Egg White Productions, LLC. Funds to pay for the costs of production were provided by a third party and are to be repaid based on a defined disbursement agreement upon realization of revenue from the exploitation of the film. Based on a memorandum of understanding with the third party, no interest accrues on the outstanding principal amount of the loan ($324,783 as of June 30, 2018 (unaudited) and December 31, 2017) and a contingent profit payment may be made at the sole discretion of the Company.

Operating Results

We have not yet generated any revenues and do not anticipate doing so until 2019 at the earliest.

Year Ended December 31, 2017 Compared to Year Ended December 31, 2016. Operating expenses for the fiscal year ended December 31, 2017 were approximately 29% less than those of the preceding fiscal year because there were less expenses due to a more limited working schedule for film promotion and development.

Six Months Ended June 30, 2018 Compared to Six Month Ended June 30, 2017 (unaudited). Operating expenses for the six months ended June 30, 2018 were approximately 46% less than those of the comparable 2017 period due to a more limited working schedule for film promotion and development.

Liquidity and Capital Resources

December 31, 2017. As of December 31, 2017, our working capital deficit was $(17,835), as compared to $(13,211) at December 31, 2016. The increase is due to the increased amount of loans from a member of Tao CA (now a shareholder of the Company), which is unsecured, payable on demand, and non-interest bearing, and represents distributions payable to that individual.

Cash used in operating activities, which totaled $26,307 in 2017, was offset by loans and cash contributions from members of Tao CA, totaling $29,240. Similarly in 2016, cash used in operating activities of $43,283 was offset by loans and cash contributions from members totaling $42,203.

June 30, 2018 (unaudited). At June 30, 2018, our working capital deficit increased to $(22,490) from $(17,835) at December 31, 2017.

Going Concern. Our financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has not generated operating revenues since inception and has never paid any dividends. The continuation of the Company as a going concern is dependent upon its successful exploitation of its film asset, or the continued financial support from its shareholders, or the ability of the Company to obtain necessary equity and debt financing to continue. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. See Note 5 – Going Concern in the Notes to the Financial Statements in this Offering Circular.

Plan of Operations

For the next 12 months, the Company will continue to rely on its principal shareholders to loan funds to the Company as needed if it is unable to market Scrambled for distribution and derive revenues from such distribution.

Proceeds from this offering will allow the Company to form and market master limited partnerships or other similar types of entities to provide the funding necessary for its films and the films of others. In the next three to five years, the Company plans to develop and produce no less than three feature films of various audience-friendly genres in the $1 to $10 million dollar budget range and possibly television projects. The Company proposes to form a single purpose entity to produce each film, become union signatory and raise additional financing if needed. The objective is for each film to gain a limited domestic run, with additional revenues and recoup of investment through ancillary marketplaces/platforms and foreign sales. Successful completion of only the Minimum Offering will enable the Company to form and market at least one flow-through entity to produce a feature film. Accordingly, management believes that proceeds from the Minimum Offering will satisfy its cash requirements for at least six months.

DIRECTORS AND EXECUTIVE OFFICERS

Our directors and executive officers, and their ages as of October 31, 2018, are as follows:

Name	Position	Age	Term of Office

Robert Stone	President and Director	37	February 2018
George Cole	Chief Operating Officer and Director	71	February 2018
Frank Reina	Secretary and Director	37	February 2018

All of our executive officers work on a part-time basis for us. There are no family relationships between any director or executive officer. During the past five years, none of the persons identified above has been involved in any bankruptcy or insolvency proceeding or convicted in a criminal proceeding, excluding traffic violations and other minor offenses.

Robert Stone founded Tao CA with Frank Reina in June 2012. He began his involvement in the film industry in 2003 when he worked at the Robert Evans Company as an assistant to the producer. He has experience in talent management (Essential Talent Management, December 2004 to January 2006; and McKeon/Myones Entertainment, January 2006 to January 2008), as well as production, working as a freelance production management/coordinator on various television and film projects from January 2008 to December 2010. Since February 2012, he has been a finance, strategy and business development consultant with Paradigm Talent Agency. In addition, for the past five years, he has worked with Tao CA. Mr. Stone graduated from the University of Colorado at Boulder in 2003 and received an MBA degree in finance and international business from Loyola Marymount University in 2011.

George Cole began a business consulting firm in the late 1970’s in connection with his family’s real estate investment business. He has been the president of Jayhawker Investment Holdings, Inc. since July 1971, a Denver-based holding company that assists its portfolio companies with financing, business consulting and marketing services. Jayhawker focuses on the natural resources, media and entertainment, and real estate sectors.

Frank Reina founded Tao CA with Robbie Stone in June 2012. He studied film at Hofstra University in New York from 1999 to 2002, and earned his Bachelor of Arts degree from Columbia College in 2005. He worked for at Paramount Studios for the Robert Evans Company from October 2003 to March 2005 as an executive assistant to the principals of the company. He also worked as a motion picture talent agent at Paradigm Talent Agency from March 2005 to January 2009. Scrambled is Frank Reina's feature film directorial debut. He is also the writer, director, producer, and editor of the highly entertaining short films Shit!, Straw Berries!, White Shark, and Star Tails. He has also served as the chief of staff to Spiro Razatos, a stunt coordinator known for his work in action movies such as the Fast and Furious films, Captain America: Civil War, and Venom.

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

None of our executive officers or directors received any compensation from the Company during the fiscal year ended December 31, 2017. No compensation is anticipated to be paid for the fiscal year ending December 31, 2018.

To the extent the Company has funds available to do so, it proposes to pay each of Messrs. Stone and Reina an annual salary of $125,000. In addition, it proposes to pay a $75,000 bonus to each of them upon the successful completion of two motion pictures or the formation and funding of a master limited partnership.

Compensation of Directors

We do not compensate our directors for attendance at meetings. We reimburse our officers and directors for reasonable expenses incurred during the course of their performance. We have no long-term incentive plans.

Future Compensation

The Board of Directors intends to create a bonus compensation plan and stock option plan for the benefit of the Company’s executives. To the extent that a bonus compensation plan and/or a stock option plan is finalized, such plans will be overseen at the direction of the Company’s board of directors. Any bonus compensation and any award of stock options is not guaranteed; rather they will be awarded at the discretion of the Board and will be based on the achievement of operational milestones and the executive’s performance, jointly.

SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITY HOLDERS

Set forth below is information regarding the beneficial ownership of our common stock, our only outstanding class of capital stock, as of November 30, 2018 by (i) each person whom we know owned, beneficially, more than 10% of the outstanding shares of our common stock, and (ii) all of the current directors and executive officers as a group. We believe that, except as otherwise noted below, each named beneficial owner has sole voting and investment power with respect to the shares listed. Unless otherwise indicated herein, beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission, and includes voting or investment power with respect to shares beneficially owned.

Name and address of beneficial owner (1)	Amount of nature of beneficial ownership (2)	Amount and nature of beneficial ownership acquirable	Percent of class (3)
George Cole (4)	82,757,350	-0-	32.9%
Frank Reina	74,500,000	-0-	29.7%
Robert Stone	73,000,000	-0-	29.1%
Jayhawker Investment Holdings, Inc.	67,757,350	-0-	27.0%
All directors and officers as a group (3 persons) (4)	230,257,350	-0-	91.6%

*less than 1%

(1)

The address of those listed is c/o Tao Entertainment, Inc., 9061 Keith Avenue, #206, West Hollywood, CA 90069.

(2)

Unless otherwise indicated, all shares are owned directly by the beneficial owner.

(3)

Based on 251,257,350 shares outstanding prior to this offering.

(4)

Includes 67,757,350 shares owned of record by Jayhawker Investment Holdings, Inc. of which Mr. Cole is the President, a director and 35.6% shareholder.

INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS

Robert Stone did not take his share of distributions from Tao CA when it was a limited liability company and was owed $18,145 and $13,521 as of December 31, 2017 and 2016, respectively. The debt is unsecured, payable on demand, and non-interest bearing.

Future Transactions

All future affiliated transactions will be made or entered into on terms that are no less favorable to us than those that can be obtained from any unaffiliated third party. A majority of the independent, disinterested members of our board of directors will approve future affiliated transactions, and we will maintain at least two independent directors on our board of directors to review all material transactions with affiliates.

SECURITIES BEING OFFERED

Our authorized capital stock consists of 500,000,000 shares of common stock. As of November 30, 2018, we had 251,257,350 shares of common stock outstanding.

The following is a summary of the rights of our capital stock as provided in our articles of incorporation and bylaws. For more detailed information, please see our articles of incorporation and bylaws, which have been filed as exhibits to the offering statement of which this offering circular is a part.

Common Stock

Voting Rights. The holders of the common stock are entitled to one vote for each share held of record on all matters submitted to a vote of the shareholders. Colorado law provides for cumulative voting for the election of directors. As a result, any shareholder may cumulate his or her votes by casting them all for any one director nominee or by distributing them among two or more nominees. This may make it easier for minority shareholders to elect a director.

Dividends. Subject to preferences that may be granted to any then outstanding preferred stock, holders of common stock are entitled to receive ratably such dividends as may be declared by the board of directors out of funds legally available therefor as well as any distributions to the shareholders. The payment of dividends on the common stock will be a business decision to be made by our board of directors from time to time based upon results of our operations and our financial condition and any other factors that our board of directors considers relevant. Payment of dividends on the common stock may be restricted by loan agreements, indentures and other transactions entered into by us from time to time.

Liquidation Rights. In the event of our liquidation, dissolution or winding up, holders of common stock are entitled to share ratably in all of our assets remaining after payment of liabilities and the liquidation preference of any then outstanding preferred stock.

Absence of Other Rights or Assessments. Holders of common stock have no preferential, preemptive, conversion or exchange rights. There are no redemption or sinking fund provisions applicable to the common stock. When issued in accordance with our articles of incorporation and law, shares of our common stock are fully paid and not liable to further calls or assessment by us.

Transfer Agent and Registrar

The Company is in the process of selecting a transfer agent and registrant for its common stock.

SELLING SECURITYHOLDERS

The following table sets forth the name of the selling securityholders, the number of shares of common stock beneficially owned by them prior to this offering, the number of Selling Securityholder Shares being offered pursuant to this Offering Circular, and the number of shares and percentage of outstanding shares of common stock to be beneficially owned by them after this offering, assuming that all of the Selling Securityholder Shares are sold in the offering.

The Selling Securityholder Shares sold in the offering shall be allocated pro rata among the selling securityholders. Mr. George Cole is an officer and director of the Company.

We will pay all of the expenses of the offering, but will not receive any of the proceeds from the sale of the Selling Securityholder Shares in the offering.

Name	Number of Shares Owned		% of Common Stock Prior to Offering	Number of Shares to be Sold in Offering		Number of Shares Owned After Offering		% of Common Stock After the Offering
Sandra Azcarate		15,000,000	6.0%		3,700,000		11,300,000	4.2%
George Cole (1)		15,000,000	6.0%		3,000,000		12,000,000	4.4%
Jeffrey Esses		1,000,000	0.4%		500,000		500,000	0.2%
					7,200,000

(1)

Does not include 67,757,350 shares owned of record by Jayhawker Investment Holdings, Inc. of which Mr. Cole is the President, a director and 35.6% shareholder.

PLAN OF DISTRIBUTION

We are not selling the shares through commissioned sales agents or underwriters. We will use our existing website, www.tao-entertainment.com, to provide notification of the offering. Persons who desire information will be directed to _________________________, a website owned and operated by an unaffiliated third party that provides technology support to issuers engaging in equity crowdfunding efforts. We will pay _______________ $__ per investor.

This Offering Circular will be furnished to prospective investors via download 24 hours per day, 7 days per week on the ____________ website.

In order to subscribe to purchase the shares, a prospective investor must complete a subscription agreement and send payment by wire transfer or ACH. Investors must answer certain questions to determine compliance with the investment limitation set forth in Regulation A Rule 251(d)(2)(i)(C) under the Securities Act of 1933, which states that in offerings such as this one, where the securities will not be listed on a registered national securities exchange upon qualification, the aggregate purchase price to be paid by the investor for the securities cannot exceed 10% of the greater of the investor’s annual income or net worth. In the case of an investor who is not a natural person, revenues or net assets for the investor’s most recently completed fiscal year are used instead.

The investment limitation does not apply to accredited investors, as that term is defined in Regulation D Rule 501 under the Securities Act of 1933. An individual is an accredited investor if he/she meets one of the following criteria:

a natural person whose individual net worth, or joint net worth with the undersigned’s spouse, excluding the “net value” of his or her primary residence, at the time of this purchase exceeds $1,000,000 and having no reason to believe that net worth will not remain in excess of $1,000,000 for the foreseeable future, with “net value” for such purposes being the fair value of the residence less any mortgage indebtedness or other obligation secured by the residence, but subtracting such indebtedness or obligation only if it is a liability already considered in calculating net worth; or

a natural person who has individual annual income in excess of $200,000 in each of the two most recent years or joint annual income with that person’s spouse in excess of $300,000 in each of those years and who reasonably expects an income in excess of those levels in the current year.

An entity other than a natural person is an accredited investor if it falls within any one of the following categories:

an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974, as amended, (i) if the decision to invest is made by a plan fiduciary which is either a bank, savings and loan association, insurance company, or registered investment adviser; (ii) if such employee benefit plan has total assets in excess of $5,000,000; or (iii) if it is a self-directed plan whose investment decisions are made solely by accredited investors;

a tax-exempt organization described in Section 501(c)(3) of the Internal Revenue Code, a corporation, a Massachusetts or similar business trust or a partnership, which was not formed for the specific purpose of acquiring the securities offered and which has total assets in excess of $5,000,000;

a trust, with total assets in excess of $5,000,000, which was not formed for the specific purpose of acquiring the securities offered, whose decision to purchase such securities is directed by a “sophisticated person” as described in Rule 506(b)(2)(ii) under Regulation D; or

certain financial institutions such as banks and savings and loan associations, registered broker-dealers, insurance companies, and registered investment companies.

FINANCIAL STATEMENTS

Independent Auditors’ Report	F-1

Consolidated Balance Sheets at December 31, 2017 and 2016	F-3

Consolidated Statements of Net Loss for the years ended December 31, 2017 and 2016	F-4

Consolidated Statement of Changes in Members’ Deficit for the two years ended December 31, 2017	F-5


Consolidated Statements of Cash Flows for the years ended December 31, 2017 and 2016	F-6

Notes to Consolidated Financial Statements December 31, 2017 and 2016	F-7

Consolidated Balance Sheets at June 30, 2018 (unaudited) and December 31, 2017	F-13

Consolidated Statements of Net Loss for the six months ended June 30, 2018 (unaudited)	F-14


Consolidated Statement of changes in Members’/Shareholders’ Deficit for the Six Months Ended June 30, 2018	F-15

Consolidated Statements of Cash Flows for the six months ended June 30, 2018 (unaudited)	F-16

Notes to Consolidated Financial Statements June 30, 2018 (unaudited)	F-17

INDEPENDENT AUDITORS’ REPORT

July 5, 2018

To the Members

TAO Entertainment, LLC

West Hollywood, CA

Report on the Consolidated Financial Statements

We have audited the accompanying consolidated financial statements of TAO Entertainment, LLC which comprise the consolidated balance sheets as of December 31, 2017 and 2016, and the related consolidated statements of net loss, changes in members’ deficit, and cash flows for the years then ended, and the related notes to the consolidated financial statements.

Management's Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of TAO Entertainment, LLC as of December 31, 2017 and 2016, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

F-1

TAO Entertainment, LLC

July 5, 2018

Page 2

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 5 to the consolidated financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 5. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

WEISS ACCOUNTANCY CORPORATION

F-2

TAO ENTERTAINMENT, LLC

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2017 AND 2016

	2017			2016

ASSETS

Current Assets
Cash	$	310		$	310

Non-Current Assets
Capitalized film production costs		334,232			334,177
Property and equipment, net		2,640			-

		336,872			334,177

	$	337,182		$	334,487


LIABILITIES AND MEMBERS' DEFICIT

Current Liabilities
Loans from member	$	18,145		$	13,521

Long-Term Liabilities
Deferred payments		6,000			6,000
Production loan		324,783			324,783

		330,783			330,783

		348,928			344,304

Members' Deficit		(11,746	)		(9,817	)

	$	337,182		$	334,487

See accompanying notes to consolidated financial statements.

F-3

TAO ENTERTAINMENT, LLC

CONSOLIDATED STATEMENTS OF NET LOSS

FOR THE YEARS ENDED DECMEBER 31, 2017 AND 2016

	2017			2016

Revenues	$	-		$	-

Operating Expenses
Distribution and marketing		15,824			29,912
General and administrative		10,721			7,270

		26,545			37,182

Net Loss	$	(26,545	)	$	(37,182	)

See accompanying notes to consolidated financial statements.

F-4

TAO ENTERTAINMENT, LLC

CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS' DEFICIT

FOR THE YEARS ENDED DECMEBER 31, 2017 AND 2016

	2017			2016

Members' Deficit, beginning	$	(9,817	)	$	(10,817	)

Net Loss		(26,545	)		(37,182	)

Members Contributions		24,616			38,182

Members' Deficit, ending	$	(11,746	)	$	(9,817	)

See accompanying notes to consolidated financial statements.

F-5

TAO ENTERTAINMENT, LLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECMEBER 31, 2017 AND 2016

	2017			2016

Cash Flows from Operating Activities
Net loss	$	(26,545	)	$	(37,182	)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation expense		293			-
Increase in capitalized film production costs		(55	)		(6,101	)

Net cash used in operating activities		(26,307	)		(43,283	)

Cash Flows from Investing Activities
Acquisitions of property and equipment		(2,933	)		-

Cash Flows from Financing Activities:
Net increase in loans from member		4,624			4,021
Cash contributions by members		24,616			38,182

Net cash provided by financing activities		29,240			42,203

Net Decrease in Cash		-			(1,080	)

Cash, Beginning		310			1,390

Cash, Ending	$	310		$	310

See accompanying notes to consolidated financial statements.

F-6

TAO ENTERTAINMENT, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2017 AND 2016

Note 1 - Accounting Policies

Organization and Nature of Operations

The Company is organized as a California limited liability company. The members of a limited liability company are not personally liable for any debt, obligation or liability of the company. Through its wholly owned subsidiary, Egg White Productions, LLC, the Company produces low-budget motion pictures for distribution.

Generally Accepted Accounting Principles

These consolidated financial statements have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”).

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of TAO Entertainment, LLC (the “Parent Company”), and its wholly-owned subsidiary, Egg White Productions, LLC (collectively, the “Company”). All significant intercompany balances and transactions have been eliminated in consolidation.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all short-term debt securities purchased with a maturity of three months or less to be cash equivalents.

Capitalized Film Production Costs

The Company capitalizes costs of production and acquisition, including financing costs and production overhead, to capitalized film production costs. These costs for an individual film are amortized and participation and residual costs are accrued to direct operating expenses in the proportion that current year’s revenues bear to management’s estimates of the ultimate revenue at the beginning of the current year expected to be recognized from the exploitation, exhibition or sale of such film. Capitalized film production costs is stated at the lower of amortized cost or estimated fair value. The valuation of investment in capitalized film production costs is reviewed on a title-by-title basis, when an event or change in circumstances indicates that the fair value of a film or television program is less than its unamortized cost. In determining the fair value of the films, the Company employs a discounted cash flows ("DCF") methodology with assumptions for cash flows. Key inputs employed in the DCF methodology include estimates of a film's ultimate revenue and costs as well as a discount rate. The discount rate utilized in the DCF analysis is based on the Company’s weighted average cost of capital plus a risk premium representing the risk associated with producing a particular film. The fair value of any film costs associated with a film that the Company plans to abandon is zero. As the primary determination of fair value is determined using a DCF model, the resulting fair value is considered a Level 3 measurement (as defined below). Additional amortization is recorded in the amount by which the unamortized costs exceed the estimated fair value of the film or television program. Estimates of future revenue involve measurement uncertainty and it is therefore possible that reductions in the carrying value of investment in films and television programs may be required as a consequence of changes in our future revenue estimates.

F-7

TAO ENTERTAINMENT, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2017 AND 2016

Note 1 - Accounting Policies (continued)

Capitalized Film Production Costs (continued)

As of December 31, 2017 and 2016, capitalized film production costs are carried at cost at a balance of $334,232 and $334,177, respectively. The costs are associated with the one film, Scrambled, that the Company has produced to date. No amortization or impairment has been recorded as the Company continues to seek exploitation opportunities for the film and believes these costs to be realizable.

Property and Equipment

Property and equipment consists of office and production equipment and is stated at cost. Depreciation is provided using the straight-line method over 5 years.

Deferred Payments

The Company has entered into certain agreements with service providers during the production of the Company’s film, Scrambled. These agreements call for deferred payments that are earned upon completion of the services provided, and are due and payable upon ultimate exploitation of the film pursuant to the defined disbursement agreement discussed in Note 4 below.

Income Taxes

The Parent Company is treated as a domestic limited liability company for federal income tax purposes. As a result, the Parent Company does not incur a federal income tax liability, and the members are individually responsible for taxes on items of partnership income, gain, loss and deduction. The State of California imposes a limited liability company tax of $800. In addition the Parent Company is subject to a limited liability company fee based on gross income.

The Subsidiary Company is a single member LLC that is disregarded for federal income tax purposes and does not incur federal income taxes. All of the Subsidiary Company activity is reported on the federal and state income tax returns of the Parent Company and are subject to taxation as described in the preceding paragraph. The State of California imposes a limited liablity company tax of $800. In addition, the Subsidiary Company is subject to a limited liability company fee based on gross income.

The Company does not record a provision for US federal, state, or local income taxes, because the members report their share of the Company’s income or loss on their income tax returns. The Company files an income tax return in the US federal jurisdiction and may file income tax returns in various US states. The Company is generally subject to examination by U.S. federal (or state and local) income tax authorities for three or four years from the filing of a tax return.

Advertising

The Company expenses advertising costs as they are incurred.

F-8

TAO ENTERTAINMENT, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2017 AND 2016

Note 1 - Accounting Policies (continued)

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Fair Value

The fair value of the Company’s financial instruments reflects the amounts that the Company estimates it will receive in connection with the sale of an asset or paid in connection with the transfer of a liability in an orderly transaction between market participants at the measurement date (exit price). The fair value hierarchy that prioritizes the use of inputs used in valuation techniques is as follows:

Level 1 – quoted prices in active markets for identical assets and liabilities;

Level 2 – observable inputs other than quoted prices in active markets, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data;

Level 3 – unobservable inputs reflecting management’s assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

The carrying amounts of financial instruments, which include cash and cash equivalents, accounts payable, accrued expenses and amounts due to third parties, approximate their fair values due to their short maturities.

The Company’s management believes capitalized film production costs would be categorized under Level 3, as defined above, and their cost approximates their fair value. The Company does not currently have a revenue stream from which to estimate discounted cash flows. Furthermore, the Company has not identified any factors that could indicate there is impairment of the capitalized film production cost asset.

Recently Issued Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). The objective of ASU 2014-09 is to establish a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most of the existing revenue recognition guidance, including industry-specific guidance. The core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

F-9

TAO ENTERTAINMENT, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2017 AND 2016

Note 1 - Accounting Policies (continued)

Recently Issued Accounting Pronouncements (continued)

In applying ASU 2014-09, companies will perform a five-step analysis of transactions to determine when and how revenue is recognized. ASU 2014-09 applies to all contracts with customers except those that are within the scope of other topics in the FASB’s ASC. ASU 2014-09 is effective for annual reporting periods (including interim periods within that reporting period) beginning after December 15, 2017 and shall be applied using either a full retrospective or modified retrospective approach. Early application is not permitted. In August 2015, FASB issued ASU 2015-14, which defers the effective date of ASU 2014-09 for all companies for all annual periods beginning after December 15, 2018 with early adoption permitted only as of annual reporting periods beginning after December 31, 2017, including interim periods within the reporting period. In March 2016, the FASB issued ASU 2016-08 as an amendment to ASU 2014-09, which clarifies how to identify the unit of accounting for the principal versus agent evaluation, how to apply the control principle to certain types of arrangements, such as service transactions, and reframed the indicators in the guidance to focus on evidence that an entity is acting as a principal rather than as an agent. The Company will adopt the new standard effective January 1, 2019, using the modified retrospective approach. The Company has not determined if this guidance will have a material impact on our consolidated financial statements.

In April 2015, the FASB issued an accounting standards update relating to the presentation of debt issuance costs. The accounting update requires companies to present debt issuance costs related to a recognized debt liability presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts, rather than as an asset. The guidance is effective for our fiscal year beginning January 1, 2016, with early adoption permitted. We have adopted this guidance and accordingly, the production loan in our consolidated balance sheets is recorded net of debt issuance costs (see Note 4).

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 changes accounting for leases and requires lessees to recognize the assets and liabilities arising from all leases, including those classified as operating leases under previous accounting guidance, on the balance sheet and requires disclosure of key information about leasing arrangements to increase transparency and comparability among organizations. The new guidance is effective for annual periods beginning after December 15, 2019. Early adoption is permitted. The Company is in the process of determining the effects the adoption will have on its financial.

With the exception of the updated standards discussed above, there have been no new accounting pronouncements not yet effective that have significance, or potential significance, to the Company’s financial statements.

Note 2 - Property and Equipment

During the year ended December 31, 2017, the Company acquired office and production equipment with a cost totaling $2,933. Accumulated depreciation as of December 31, 2017 was $293.

Depreciation expense was $293 for the year ended December 31, 2017.

F-10

TAO ENTERTAINMENT, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2017 AND 2016

Note 3 – Related Party Transactions

Loans from Member

As of December 31, 2017 and 2016 the Company was indebted to one of its members in the amount of $18,145 and $13,521, respectively. The debt is unsecured, payable on demand, is non-interest bearing, and represents distributions payable to the member.

Note 4 – Production Loan

Shortly after formation of the Company, it entered into an arrangement whereby a third party would provide funding for the production of the Company’s first film. The arrangement called for $350,000 in funding, less any transaction costs and bank fees. Pursuant to a Memorandum of Understanding (MOU) between the parties, the principal amount is to be used to pay for the costs associated with the production and shall be due and payable based on a defined disbursement agreement upon realization of revenue from the exploitation of the film. The MOU further states that no interest shall accrue on the principal and a contingent profit payment may be made at the sole discretion of the Company.

As of December 31, 2017 and 2016, the balance outstanding on this loan, net of debt issuance costs of $25,217, was $324,783.

Note 5 – Going Concern

As shown in the accompanying consolidated financial statements, the Company incurred a net loss of $26,545 during the year ended December 31, 2017, and as of that date, the Company's total liabilities exceeded its total assets by $11,746. Those factors, as well as the uncertain conditions that the Company faces regarding the realization of its capitalized film production costs (see Note 1), create a substantial doubt about the Company's ability to continue as a going concern for the year following the date the financial statements are available to be issued. Management of the Company has evaluated these conditions and has proposed a plan to market and promote its film asset and is pursuing alternate financing sources. The ability of the Company to continue as a going concern and meet its obligations as they become due is dependent on successful exploitation of its film asset or its ability to complete alternate financing arrangements. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Note 6 – Subsequent Events

In preparing these consolidated financial statements, the Company has evaluated subsequent events and transactions for potential recognition or disclosure through July 5, 2018, the date the financial statements were available to be issued and has identified the following items warranting disclosure in the consolidated financial statements.

On June 19, 2018, the members of the Company executed a Memorandum of Understanding that incorporated by reference the production loan that was received in June 2012. See Note 4 for further discussion.

F-11

TAO ENTERTAINMENT, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2017 AND 2016

Note 6 – Subsequent Events (continued)

As of the date of issuance of the consolidated financial statements, the Company was anticipating filing a stock offering pursuant to Securities and Exchange Commission Regulation A on the OTC Market. The intended purpose of the anticipated financing transaction is to raise capital for operating expenditures as well as creating a fund for future investment in film production projects.

F-12

TAO ENTERTAINMENT, INC.

CONSOLIDATED BALANCE SHEET

JUNE 30, 2018 (UNAUDITED)

	June 30, 2018

Current Assets:
Cash	$	155
Total current assets		155
Non-Current Assets:
Capitalized film production costs		334,232
Property and equipment, net		2,347
Total non-current assets		336,579
Total Assets	$	336,734


LIABILITIES AND SHAREHOLDERS' OR MEMBERS' DEFICIT

Current Liabilities:
Loans from member	$	18,145
Loans from other		4,500
Total current liabilities		22,645
Long-Term Liabilities:
Accounts payable		9,350
Deferred payments		6,000
Production loan		324,783
Total long-term liabilities		340,133
Total Liabilities		362,778

Shareholders' or Members' Deficit		(26,044	)
Total Liabilities and Shareholders' or Members' Deficit	$	336,734

See accompanying notes to consolidated financial statements.

F-13

TAO ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF NET LOSS

FOR THE SIX MONTHS ENDED JUNE 30, 2018

(UNAUDITED)

	2018

Revenues	$	-
Operating Expenses
General and administrative		14,298
Net Loss	$	(14,298	)

See accompanying notes to consolidated financial statements.

F-14

TAO ENTERTAINMENT, INC.

STATEMENTS OF CHANGES IN SHAREHOLDERS’ OR MEMBERS’ DEFICIT

FOR THE SIX MONTHS ENDED JUNE 30, 2018

(UNAUDITED)

	For the six-month period ended June 30, 2018

Members' Deficit, beginning (January 1, 2018)	$	(11,746	)

Net Loss (January 1, 2018 to February 2, 2018)		(48	)

Members' Deficit at February 2, 2018		(11,794	)

Net Loss (February 3, 2018 to June 30, 2018)		(14,250	)

Shareholders' Deficit June 30, 2018	$	(26,044	)

See accompanying notes to consolidated financial statements.

F-15

TAO ENTERTAINMENT, INC.

STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2018

(UNAUDITED)

	2018
Cash Flows from Operating Activities
Net Loss	$	(14,298	)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation expense		293
Increase in accounts payable		9,350
Net cash used in operating activities		(4,655	)

Cash Flows from Financing Activities:
Increase in loans from other		4,500
Net cash provided by financing activities		4,500
Net Decrease in Cash		(155	)
Cash, Beginning		310
Cash, Ending	$	155

See accompanying notes to consolidated financial statements.

F-16

TAO ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2018

(UNAUDITED)

Note 1 - Accounting Policies

Organization and Nature of Operations

The Company was organized as a Colorado corporation on December 4, 2014 under the name Colorado Green Ventures, Inc. (“CGV”). The shareholders of a corporation are not personally liable for any debt, obligation or liability of the company.

Tao Entertainment, LLC (California limited liability corporation) was formed on June 4, 2012. On February 2, 2018, Tao Entertainment, LLC converted from an LLC to Tao Entertainment Inc., (a California corporation, referred to hereinafter as “TE California”). Through its wholly owned subsidiary, Egg White Productions, LLC, TE California produces low-budget motion pictures for distribution.

On February 2, 2018, the shareholders of TE California exchanged their shares to CGV in exchange for shares of capital stock of CGV, and the shareholders of TE California were provided 60.1% of the outstanding stock of CGV in this transaction, and CGV acquired 100% of the TE California’s stock. Therefore, TE California became a wholly owned subsidiary of CGV. No change in financial condition occurred during this transition and all business remain constant with that noted in the audited financial statements as of December 31, 2017.

On February 12, 2018, CGV, changed its name to Tao Entertainment, Inc., and is the parent company to TE California and its subsidiary Egg White Productions, LLC.

Generally Accepted Accounting Principles

These financial statements have been prepared in accordance with United States ("U.S.") generally accepted accounting principles ("GAAP").

Principles of Consolidation

The accompanying financial statements include the accounts of TAO Entertainment, Inc. (the "Parent Company"), and its wholly-owned subsidiary, TE California, together with its wholly-owned subsidiary, Egg White Productions, LLC (collectively, the "Company"). All significant intercompany balances and transactions have been eliminated in consolidation.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all short-term debt securities purchased with a maturity of three months or less to be cash equivalents.

Capitalized Film Production Costs

F-17

TAO ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2018

(UNAUDITED)

Note 1 - Accounting Policies (continued)

Capitalized Film Production Costs (continued)

investment in capitalized film production costs is reviewed on a title-by-title basis, when an event or change in circumstances indicates that the fair value of a film or television program is less than its unamortized cost. In determining the fair value of the films, the Company employs a discounted cash flows ("DCF") methodology with assumptions for cash flows. Key inputs employed in the DCF methodology include estimates of a film's ultimate revenue and costs as well as a discount rate. The discount rate utilized in the DCF analysis is based on the Company's weighted average cost of capital plus a risk premium representing the risk associated with producing a particular film. The fair value of any film costs associated with a film that the Company plans to abandon is zero. As the primary determination of fair value is determined using a DCF model, the resulting fair value is considered a Level 3 measurement (as defined below). Additional amortization is recorded in the amount by which the unamortized costs exceed the estimated fair value of the film or television program. Estimates of future revenue involve measurement uncertainty and it is therefore possible that reductions in the carrying value of investment in films and television programs may be required as a consequence of changes in our future revenue estimates.

As of June 30, 2018, capitalized film production costs are carried at cost at a balance of $334,232. The costs are associated with the one film, Scrambled, that the Company has produced to date. No amortization or impairment has been recorded as the Company continues to seek exploitation opportunities for the film and believes these costs to be realizable.

Property and Equipment

Property and equipment consists of office and production equipment and is stated at cost. Depreciation is provided using the straight-line method over 5 years.

Deferred Payments

The Company has entered into certain agreements with service providers during the production of the Company's film, Scrambled. These agreements call for deferred payments that are earned upon completion of the services provided and are due and payable upon ultimate exploitation of the film pursuant to the defined disbursement agreement discussed in Note 4 below.

Income Taxes

The Company uses the liability method of accounting for income taxes as set forth in ASC 740, Income Taxes. Under the liability method, deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect during the years in which the basis differences reverse. A valuation allowance is recorded when it is unlikely that the deferred tax assets will be realized. The Company assesses its income tax positions and records tax benefits for all years subject to examination based upon its evaluation of the facts, circumstances and information available at the reporting date. In accordance with ASC 740-10, for those tax positions where there is a greater than 50% likelihood that a tax benefit will be sustained, our policy is to record the largest amount of tax benefit that is more likely than not to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where there is less than 50% likelihood that a tax benefit will be sustained, no tax benefit will be recognized in the financial statements. The Company has determined that there are no material uncertain tax positions.

F-18

TAO ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2018

(UNAUDITED)

Note 1 - Accounting Policies (continued)

The Company accounts for income taxes with the recognition of estimated income taxes payable or refundable on income tax returns for the current period and for the estimated future tax effect attributable to temporary differences and carryforwards. Measurement of deferred income items is based on enacted tax laws including tax rates, with the measurement of deferred income tax assets being reduced by available tax benefits not expected to be realized in the immediate future. The Company had net operating loss carryforwards of $14,250 as of June 30, 2018. The Company pays Federal and Colorado income taxes at rates of approximately 21% and 4.6%, respectively, and has used an effective blended rate of 25.4% to derive net tax assets of $3,620 as of June 30, 2018, resulting from its net operating loss carryforwards and other temporary book to tax differences. Due to uncertainty as to the Company’s ability to generate sufficient taxable income in the future to utilize the net operating loss carryforwards before they begin to expire in 2038, the Company has recorded a full valuation allowance to reduce the net deferred tax asset to zero.

The State of California imposes a corporation tax of $800 annually on the subsidiary. The Company is generally subject to examination by U.S. federal (or state and local) income tax authorities for three or four years from the filing of a tax return.

Advertising

The Company expenses advertising costs as they are incurred.

Use of Estimates

Fair Value

The fair value of the Company's financial instruments reflects the amounts that the Company estimates it will receive in connection with the sale of an asset or paid in connection with the transfer of a liability in an orderly transaction between market participants at the measurement date (exit price). The fair value hierarchy that prioritizes the use of inputs used in valuation techniques is as follows:

Level 1-quoted prices inactive markets for identical assets and liabilities;

Level 2 - observable inputs other than quoted prices in active markets, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data;

Level 3 - unobservable inputs reflecting management's assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

F-19

TAO ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2018

(UNAUDITED)

Note 1-Accounting Policies (continued)

Fair Value (continued)

The Company's management believes capitalized film production costs would be categorized under Level 3, as defined above, and their cost approximates their fair value. The Company does not currently have a revenue stream from which to estimate discounted cash flows. Furthermore, the Company has not identified any factors that could indicate there is impairment of the capitalized film production cost asset.

Recently Issued Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"). The objective of ASU 2014-09 is to establish a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most of the existing revenue recognition guidance, including industry-specific guidance. The core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

In applying ASU 2014-09, companies will perform a five-step analysis of transactions to determine when and how revenue is recognized. ASU 2014-09 applies to all contracts with customers except those that are within the scope of other topics in the FASB's ASC. ASU 2014-09 is effective for annual reporting periods (including interim periods within that reporting period) beginning after December 15, 2017 and shall be applied using either a full retrospective or modified retrospective approach. Early application is not permitted. In August 2015, FASB issued ASU 2015-14, which defers the effective date of ASU 2014-09 for all companies for all annual periods beginning after December 15, 2018 with early adoption permitted only as of annual reporting periods beginning after December 31, 2017, including interim periods within the reporting period. In March 2016, the FASB issued ASU 2016-08 as an amendment to ASU 2014-09, which clarifies how to identify the unit of accounting for the principal versus agent evaluation, how to apply the control principle to certain types of arrangements, such as service transactions, and reframed the indicators in the guidance to focus on evidence that an entity is acting as a principal rather than as an agent. The Company will adopt the new standard effective January 1, 2019, using the modified retrospective approach. The Company has not determined if this guidance will have a material impact on our consolidated financial statements.

F-20

TAO ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2018

(UNAUDITED)

Note 1-Accounting Policies (continued)

Recently Issued Accounting Pronouncements (continued)

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) ("ASU 2016-02"). ASU 2016- 02 changes accounting for leases and requires lessees to recognize the assets and liabilities arising from all leases, including those classified as operating leases under previous accounting guidance, on the balance sheet and requires disclosure of key information about leasing arrangements to increase transparency and comparability among organizations. The new guidance is effective for annual periods beginning after December 15, 2019. Early adoption is permitted. The Company is in the process of determining the effects the adoption will have on its financial.

Note 2 - Property and Equipment

During the six months ended June 30,2018, the Company did not acquire office and production equipment. Accumulated depreciation as of June 30, 2018 was $586.

Depreciation expense was $293 for the six months ended June 30, 2018.

Note 3-Related Party Transactions

Loans from Member

As of June 30, 2018, the Company was indebted to one of its members in the amount of $18,145. The debt is unsecured, payable on demand, is non-interest bearing, and represents distributions payable to the member.

Note 4 -Production Loan

Shortly after formation of the Company, it entered into an arrangement whereby a third party would provide funding for the production of the Company's first film. The arrangement called for $350,000 in funding, less any transaction costs and bank fees. Pursuant to a Memorandum of Understanding (MOU) between the parties, the principal amount is to be used to pay for the costs associated with the production and shall be due and payable based on a defined disbursement agreement upon realization of revenue from the exploitation of the film. The MOU further states that no interest shall accrue on the principal and a contingent profit payment may be made at the sole discretion of the Company.

F-21

TAO ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2018

(UNAUDITED)

Note 4 -Production Loan (continued)

As of June 30, 2018, the balance outstanding on this loan, net of debt issuance costs of $25,217, was $324,783.

Note 5- Shareholders’ Equity

The Company has authorized 500,000,000 shares of no par value common stock.

Prior to the merger transaction described in Note 1, the Company had 100,257,350 shares of common stock outstanding. As part of the merger agreement, the Company issued to the shareholders of TE California 151,000,000 shares of its common stock for the acquisition of 100% of TE California. As of June 30, 2018, the Company has 251,257,350 shares of common stock issued and outstanding.

Note 6-Going Concern

As shown in the accompanying financial statements, the Company incurred a net loss of $14,298 during the six months ended June 30, 2018, and as of that date, the Company's total liabilities exceeded its total assets by $26,044. Those factors, as well as the uncertain conditions that the Company faces regarding the realization of its capitalized film production costs (see Note 1), create a substantial doubt about the Company's ability to continue as a going concern for the year following the date the financial statements are available to be issued. Management of the Company has evaluated these conditions and has proposed a plan to market and promote its film asset and is pursuing alternate financing sources. The ability of the Company to continue as a going concern and meet its obligations as they become due is dependent on successful exploitation of its film asset or its ability to complete alternate financing arrangements. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Note 7-Subsequent Events

In preparing these financial statements, the Company has evaluated subsequent events and transactions for potential recognition or disclosure through December 6, 2018, the date the financial statements were available to be issued. No items were identified which warranted disclosure in the consolidated financial statements.

As of the date of issuance of the financial statements, the Company was anticipating filing a stock offering with the Securities and Exchange Commission in reliance on Regulation A. The intended purpose of the anticipated financing transaction is to raise capital for operating expenditures as well as creating a fund for future investment in film production projects.

F-22

PART III

Item 16.

Index to Exhibits

Item 17 Number	Exhibit
2.1	Articles of Incorporation, as amended
2.2	Bylaws
4.1	Form of Subscription Agreement*
6.1	Memorandum of Understanding regarding Production Loan
7.1	Agreement and Plan of Share Exchange
8.1	Form of Escrow Agreement*
11.1	Consent of Weiss Accountancy Corporation
12.1	Opinion of Doida Law Group LLC*

* To be filed by amendment

SIGNATURES

Pursuant to the requirements of Regulation A, the issuer certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form 1-A and has duly caused this offering statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of West Hollywood, State of California, on January 28, 2019.

	TAO ENTERTAINMENT, INC.



	By:	/s/ Robert Stone
		Robert Stone, President

This offering statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date

/s/ Robert Stone	President and Director (Principal Executive, Financial and Accounting Officer)	January 28, 2019
Robert Stone


/s/ George Cole	Chief Operating Officer and Director	January 28, 2019
George Cole


/s/ Frank Reina	Secretary and Director	January 28, 2019
Frank Reina

Exhibit 1A-2.1

AMDRST_PC Page 1 of 2 Rev. 12/16/2016 Document must be filed electronically. Paper documents are not accepted. Fees & forms are subject to change. For more information or to print copies of filed documents, visit www.sos.state.co.us. ABOVE SPACE FOR OFFICE USE ONLY Amended and Restated Articles of Incorporation filed pursuant to §7-90-301, et seq. and §7-110-107 and §7-90-304.5 of the Colorado Revised Statutes (C.R.S.) 1. For the entity, its ID number and entity name are ID number _________________________ (Colorado Secretary of State ID number) Entity name ______________________________________________________. 2. The new entity name (if applicable) is ______________________________________________________. 3. The amended and restated constituent filed document is attached. 4. If the amendment provides for an exchange, reclassification or cancellation of issued shares, the attachment states the provisions for implementing the amendment. 5. (Caution: Leave blank if the document does not have a delayed effective date. Stating a delayed effective date has significant legal consequences. Read instructions before entering a date.) (If the following statement applies, adopt the statement by entering a date and, if applicable, time using the required format.) The delayed effective date and, if applicable, time of this document is/are ________________________. (mm/dd/yyyy hour:minute am/pm) Notice: Causing this document to be delivered to the Secretary of State for filing shall constitute the affirmation or acknowledgment of each individual causing such delivery, under penalties of perjury, that such document is such individual's act and deed, or that such individual in good faith believes such document is the act and deed of the person on whose behalf such individual is causing such document to be delivered for filing, taken in conformity with the requirements of part 3 of article 90 of title 7, C.R.S. and, if applicable, the constituent documents and the organic statutes, and that such individual in good faith believes the facts stated in such document are true and such document complies with the requirements of that Part, the constituent documents, and the organic statutes. This perjury notice applies to each individual who causes this document to be delivered to the Secretary of State, whether or not such individual is identified in this document as one who has caused it to be delivered. 6. The true name and mailing address of the individual causing the document to be delivered for filing are ____________________ ______________ ______________ _____ (Last) (First) (Middle) (Suffix) ______________________________________________________ (Street name and number or Post Office Box information) ______________________________________________________ __________________________ ____ ____________________ (City) (State) (Postal/Zip Code) _______________________ ______________ (Province – if applicable) (Country – if not US) United States Denver Jeffrey 20141741901 Colorado Green Ventures,Inc. 80202 475 17th St., Ste. 960 Esses A. CO Colorado Secretary of State Date and Time: 10/31/2017 11:31 AM ID Number: 20141741901 Document number: 20171821486 Amount Paid: $25.00 AMDRST_PC Page 2 of 2 Rev. 12/16/2016 (If the following statement applies, adopt the statement by marking the box and include an attachment.)  This document contains the true name and mailing address of one or more additional individuals causing the document to be delivered for filing. Disclaimer: This form/cover sheet, and any related instructions, are not intended to provide legal, business or tax advice, and are furnished without representation or warranty. While this form/cover sheet is believed to satisfy minimum legal requirements as of its revision date, compliance with applicable law, as the same may be amended from time to time, remains the responsibility of the user of this form/cover sheet. Questions should be addressed to the user’s legal, business or tax advisor(s). AMD_PC Page 1 of 2 Rev. 12/20/2016 Document must be filed electronically. Paper documents are not accepted. Fees & forms are subject to change. For more information or to print copies of filed documents, visit www.sos.state.co.us. ABOVE SPACE FOR OFFICE USE ONLY Articles of Amendment filed pursuant to §7-90-301, et seq. and §7-110-106 of the Colorado Revised Statutes (C.R.S.) 1. For the entity, its ID number and entity name are ID number _________________________ (Colorado Secretary of State ID number) Entity name ______________________________________________________. 2. The new entity name (if applicable) is ______________________________________________________. 3. (If the following statement applies, adopt the statement by marking the box and include an attachment.)  This document contains additional amendments or other information. 4. If the amendment provides for an exchange, reclassification or cancellation of issued shares, the attachment states the provisions for implementing the amendment. 5. (Caution: Leave blank if the document does not have a delayed effective date. Stating a delayed effective date has significant legal consequences. Read instructions before entering a date.) (If the following statement applies, adopt the statement by entering a date and, if applicable, time using the required format.) The delayed effective date and, if applicable, time of this document is/are _______________________. (mm/dd/yyyy hour:minute am/pm) Notice: Causing this document to be delivered to the Secretary of State for filing shall constitute the affirmation or acknowledgment of each individual causing such delivery, under penalties of perjury, that such document is such individual's act and deed, or that such individual in good faith believes such document is the act and deed of the person on whose behalf such individual is causing such document to be delivered for filing, taken in conformity with the requirements of part 3 of article 90 of title 7, C.R.S. and, if applicable, the constituent documents and the organic statutes, and that such individual in good faith believes the facts stated in such document are true and such document complies with the requirements of that Part, the constituent documents, and the organic statutes. This perjury notice applies to each individual who causes this document to be delivered to the Secretary of State, whether or not such individual is identified in this document as one who has caused it to be delivered. 6. The true name and mailing address of the individual causing the document to be delivered for filing are ____________________ ______________ ______________ _____ (Last) (First) (Middle) (Suffix) ______________________________________________________ (Street name and number or Post Office Box information) ______________________________________________________ __________________________ ____ ____________________ (City) (State) (Postal/Zip Code) _______________________ ______________ (Province – if applicable) (Country – if not US) 20141741901 Colorado Green Ventures,Inc. Tao Entertainment, Inc cole George 475 17th Suite 960 Denver CO 80202 United States Colorado Secretary of State Date and Time: 02/12/2018 04:55 PM ID Number: 20141741901 Document number: 20181125289 Amount Paid: $25.00 AMD_PC Page 2 of 2 Rev. 12/20/2016 (If the following statement applies, adopt the statement by marking the box and include an attachment.)  This document contains the true name and mailing address of one or more additional individuals causing the document to be delivered for filing. Disclaimer: This form/cover sheet, and any related instructions, are not intended to provide legal, business or tax advice, and are furnished without representation or warranty. While this form/cover sheet is believed to satisfy minimum legal requirements as of its revision date, compliance with applicable law, as the same may be amended from time to time, remains the responsibility of the user of this form/cover sheet. Questions should be addressed to the user’s legal, business or tax advisor(s).

Exhibit 1A-2.2

BYLAWS

COLORADO GREEN VENTURES, INC.

ARTICLE I

Offices

The principal office of the corporation shall be designated from time to time by the corporation and may be within or outside of Colorado.

The corporation may have such other offices, either within or outside Colorado, as the board of directors may designate or as the business of the corporation may require from time to time.

The registered office of the corporation required by the Colorado Business Corporation Act to be maintained in Colorado may be, but not need be, identical with the principal office, and the address of the registered office may be changed from time to time by the board of directors.

ARTICLE II

Shareholders

Section 1. Annual Meeting. The annual meeting of the shareholders shall be held during the month of January of each year on a date and time fixed by the board of directors of the corporation (or by the president in the absence of action by the board of directors), beginning with the year 2013, for the purpose of electing directors and for the transaction of such other business as may come before the meeting. If the election of directors is not held on the day fixed as provided herein for any annual meeting of the shareholders, or any adjournment thereof, the board of directors shall cause the election to be held at a special meeting of the shareholders as soon thereafter as it may conveniently be held.

A shareholder may apply to the district court in the county in Colorado where the corporation’s principal office is located or, if the corporation has no principal office in Colorado, to the district court of the county in which the corporation’s registered office is located to seek an order that a shareholders’ meeting be held: (i) if an annual meeting was not held within six (6) months after the close of the corporation’s most recently ended fiscal year or fifteen (15) months after its last annual meeting, whichever is earlier; or (ii) if the shareholder participated in a proper call of, or proper demand for, a special meeting and notice of the special meeting was not given within thirty (30) days after the date of the call or the date the last of the demands necessary to require calling of the meeting was received by the corporation pursuant to section 7-107-102(1)(b), C.R.S., as amended, or the special meeting was not held in accordance with the notice.

Section 2. Special Meeting. Unless otherwise prescribed by statute, special meetings of the shareholders may be called for any purpose by the president or by the board of directors. The president shall call a special meeting of the shareholders if the corporation receives one or more written demands for the meeting, stating the purpose or purposes for which it is to be held, signed and dated by holders of shares representing at least 10% of all the votes entitled to be cast on any issue proposed to be considered at the meeting.

Section 3. Place of Meeting. The board of directors may designate any place, either within or outside Colorado, as the place for the annual meeting or any special meeting called by the board of directors. A waiver of notice signed by all shareholders entitled to vote at a meeting may designate any place, either within or outside Colorado, as the place for such meeting. If no designation is made, or if a special meeting is called other than by the board, the place of meeting shall be the principal office of the corporation.

Section 4. Notice of Meeting. Written notice stating the place, date, and hour of the meeting shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting except: (i) if the number of authorized shares is to be increased, at least thirty (30) days notice shall be given; or (ii) if any other longer notice period is required by the Colorado Business Corporation Act. The secretary shall be required to give such notice only to shareholders entitled to vote at the meeting except as otherwise required by the Colorado Business Corporation Act.

Notice of a special meeting shall include a description of the purpose or purposes of the meeting. Notice of an annual meeting need not include a description of the purpose or purposes of the meeting except the purpose or purposes shall be stated with respect to: (i) an amendment to the Articles of Incorporation of the corporation; (ii) a merger or share exchange in which the corporation is a party and, with respect to a share exchange, in which the corporation’s shares will be acquired; (iii) a sale, lease, exchange, or other disposition, other than in the usual and regular course of business, of all or substantially all of the property of the corporation or of another entity that this corporation controls, in each case with or without the goodwill; (iv) a dissolution of the corporation; (v) restatement of the Articles of Incorporation; or (vi) any other purpose for which a statement of purpose is required by the Colorado Business Corporation Act. Notice shall be given personally or by mail, private carrier, telegraph, teletype, electronically transmitted facsimile, or other form of wire or wireless communication by or at the direction of the president, the secretary, or the officer or persons calling the meeting to each shareholder of record entitled to vote at such meeting. If mailed and if in a comprehensible form, such notice shall be deemed to be given and effective when deposited in the United States mail, properly addressed to the shareholder at the shareholder’s address as it appears in the corporation’s current record of shareholders, with first-class postage prepaid. If notice is given other than by mail, and provided that such notice is in a comprehensible form, the notice is given and effective on the date actually received by the shareholder.

If requested by the person or person lawfully calling such meeting, the secretary shall give notice thereof at corporate expense. No notice need to be sent to any shareholder if three successive notices mailed to the last known address of such shareholder have been returned as undeliverable until such time as another address for such shareholder is made known to the corporation by such shareholder. In order to be entitled to receive notice of any meeting, a shareholder shall advise the corporation in writing of any change in such shareholder’s mailing address as shown on the corporation’s books and records.

When a meeting is adjourned to another date, time, or place, notice need not be given of the new date, time, or place if the new date, time, or place of such meeting is announced before adjournment of the meeting at which the adjournment is taken. At the adjourned meeting, the corporation may transact any business that may have been transacted at the original meeting. If the adjournment is for more than 120 days, or if a new record date is fixed for the adjourned meeting, a new notice of the adjourned meeting shall be given to each shareholder of record entitled to vote at the meeting as of the new record date.

A shareholder may waive notice of a meeting before or after the time and date of the meeting signed by such shareholder. Such waiver shall be delivered to the corporation for filing with the corporate records, but this delivery and filing shall not be conditions to the effectiveness of the waiver. Further, by attending a meeting, either in person or by proxy, a shareholder waives objection to lack of notice or defective notice of the meeting unless the shareholder objects at the beginning of the meeting to the holding of the meeting or the transaction of business at the meeting because of lack of notice or defective notice. By attending the meeting, the shareholder also waives any objection to consideration at the meeting of a particular matter not within the purpose or purposes described in the meeting notice unless the shareholder objects to considering the matter when it is presented.

Section 5. Fixing of Record Date. For the purpose of determining shareholders entitled to: (i) notice of or vote at any meeting of shareholders or any adjournment thereof; (ii) receive distributions or share dividends; (iii) demand a special meeting; or (iv) make a determination of shareholders for any other proper purpose, the board of directors may fix a future date as the record date for any such determination of shareholders, such date in any case to be not more than seventy (70) days, and, in case of a meeting of shareholders, not less than ten (10) days, prior to the date on which the particular action requiring such determination of shareholders is to be taken. If no record date is fixed by the directors, the record date shall be the day before the notice of the meeting is given to shareholders or the date on which the resolution of the board of directors providing for a distribution is adopted, as the case may be. When a determination of shareholders entitled to vote at any meeting of shareholders is made as provided in this section, such determination shall apply to any adjournment thereof unless the board of directors fixes a new record date, which it must do if the meeting is adjourned to a date more than 120 days after the date fixed for the original meeting. Unless otherwise specified when the record date is fixed, the time of day for such determination shall be as of the corporation’s close of business on the record date.

Notwithstanding the above, the record date for determining the shareholders entitled to take action without a meeting or entitled to be given notice of action so taken shall be the date a writing upon which the action is taken is first received by the corporation. The record date for determining shareholders entitled to demand a special meeting shall be the date of the earliest of any demands pursuant to which the meeting is called.

Section 6. Voting Lists. After a record date is fixed for a shareholders’ meeting, the secretary shall make, at the earlier of ten (10) days before such meeting or two business days after notice of the meeting has been given , a complete list of the shareholders entitled to be given notice of such meeting or any adjournment thereof. The list shall be arranged by voting groups and, within each voting group, by class or series of shares, shall be in alphabetical order within each class or series, and shall show the address and the number of shares of each class or series held by each shareholder. For the period beginning the earlier of ten (10) days prior to the meeting or two business days after notice of the meeting is given and continuing through the meeting and any adjournment thereof, this list shall be kept on file at the principal office of the corporation, or at a place (which shall be identified in the notice) in the city where the meeting will be held. Such list shall be available for inspection on written demand by any shareholder (including, for the purpose of this Section 6, any holder of voting trust certificates) or the shareholder’s agent or attorney during regular business hours and during the period available for inspection. The original stock transfer books shall be prima facie evidence as to who are the shareholders entitled to examine such list or transfer books or to vote at any meeting of shareholders.

Any shareholder, the shareholder’s agent, or attorney may copy the list during regular business hours and during the period it is available for inspection, provided: (i) the shareholder has been a shareholder for at least three (3) months immediately preceding the demand or holds at least 5% of all outstanding shares of any class of shares as of the date of the demand; (ii) the demand is made in good faith and for a purpose reasonably related to the demanding shareholder’s interest as a shareholder; (iii) the shareholder describes with reasonable particularity the purpose and the records the shareholder desires to inspect; (iv) the records are directly connected with the described purpose; (v) the shareholder pays a reasonable charge covering the costs of labor and material for such copies, not to exceed the estimated cost of production and reproduction.

Section 7. Recognition Procedure for Beneficial Owners. The board of directors may adopt by resolution a procedure whereby a shareholder of the corporation may certify in writing to the corporation that all or a portion of the shares registered in the name of such shareholder are held for the account of a specified person or persons. The resolution may set forth: (i) the types of nominees to which it applies; (ii) the rights or privileges that the corporation will recognize in a beneficial owner, which may include rights and privileges other than voting; (iii) the form of certification and the information to be contained therein; (iv) if the certification is with respect to a record date, the time within which the certification must be received by the corporation; (v) the period for which the nominee’s use of the procedure is effective; and (vi) such other provisions with respect to the procedure as the board deems necessary or desirable. Upon receipt by the corporation of a certificate complying with the procedure established by the board of directors, the persons specified in the certification shall be deemed, for the purpose or purposes set forth in the certification, to be the registered holders of the number of shares specified in place of the shareholder making the certification.

Section 8. Quorum and Manner of Acting. One-third of the votes entitled to be cast on a matter by a voting group, represented in person or by proxy, shall constitute a quorum of that voting group for action on the matter. If less than one-third of such votes are represented at a meeting, a majority of the votes so represented may adjourn the meeting from time to time without notice for a period not to exceed 120 days for any one adjournment. If a quorum is present at such adjourned meeting, any business may be transacted that might have been transacted at the meeting as originally noticed. The shareholders present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum, unless the meeting is adjourned and a new record date is set for the adjourned meeting.

If a quorum exists, action on a matter other than the election of directors by a voting group is approved if the votes cast within the voting group favoring the action exceed the votes cast within the voting group opposing the action unless the vote of a greater number or voting by classes is required by law or the Articles of Incorporation.

Section 9. Proxies. At all meetings of shareholders, a shareholder may vote by proxy by signing an appointment form or similar writing, either personally or by the shareholder’s duly authorized attorney-in-fact. A shareholder may also appoint a proxy by transmitting or authorizing the transmission of a telegram, teletype, or other electronic transmission providing a written statement of the appointment to the proxy, a proxy solicitor, proxy support service organization, any other person duly authorized by the proxy to receive appointments as agent for the proxy, or to the corporation. The transmitted appointment shall set forth or be transmitted with written evidence from which it can be determined that the shareholder transmitted or authorized the transmission of the appointment. The proxy appointment form or similar writing shall be filed with the secretary of the corporation before or at the time of the meeting. The appointment of a proxy is effective when received by the corporation and is valid for eleven (11) months unless a different period is expressly provided in the appointment form or similar writing.

Any complete copy, including an electronically transmitted facsimile, of an appointment of a proxy may be substituted for or used in lieu of the original appointment for any purpose for which the original appointment could be used.

Revocation of a proxy does not affect the right of the corporation to accept the proxy’s authority unless: (i) the corporation had notice that the appointment was coupled with an interest and notice that such interest is extinguished is received by the secretary or other officer or agent authorized to tabulate votes before the proxy exercises the proxy’s authority under the appointment; or (ii) other notice of the revocation of the appointment is received by the secretary or other officer or agent authorized to tabulate votes before the proxy exercises the proxy’s authority under the appointment. Other notice of revocation may, in the discretion of the corporation, be deemed to include the appearance at a shareholders’ meeting of the shareholder who granted the proxy and the shareholder’s voting in person on any matter subject to a vote at such meeting.

The death or incapacity of the shareholder appointing a proxy does not affect the right of the corporation to accept the proxy’s authority unless notice of the death or incapacity is received by the secretary or other officer or agent authorized to tabulate votes before the proxy exercises the proxy’s authority under the appointment.

The corporation shall not be required to recognize an appointment made irrevocable if it has received a writing revoking the appointment signed by the shareholder (including a shareholder who is a successor to the shareholder who granted the proxy), either personally or by the shareholder’s attorney-in-fact, notwithstanding that the revocation may be a breach of an obligation of the shareholder to another person not to revoke the appointment.

Subject to Section 11 and any express limitation on the proxy’s authority appearing on the appointment form, the corporation is entitled to accept the proxy’s vote or other action asthat of the shareholder making the appointment.

Section 10. Voting of Shares. Each outstanding share, regardless of class, shall be entitled to one (1) vote, except in the election of directors, and each fractional share shall be entitled to a corresponding fractional vote on each matter submitted to a vote at a meeting of shareholders except to the extent that the voting rights of the shares of any class or classes are limited or denied by the Articles of Incorporation as permitted by the Colorado Business Corporation Act. Cumulative voting shall not be permitted in the election of directors or for any other purpose. Each record holder of stock shall be entitled to vote in the election of directors and shall have as many votes for each of the shares owned by the record holder as there are directors to be elected and for whose election the record holder has the right to vote.

At each election of directors, that number of candidates equaling the number of directors to be elected having the highest number of votes cast in favor of their election shall be elected to the board of directors.

Except as otherwise ordered by a court of competent jurisdiction, upon a finding that the purpose of this Section would not be violated in the circumstances presented to the court, the shares of the corporation are not entitled to be voted if they are owned, directly or indirectly, by a second corporation, domestic or foreign, and the first corporation owns, directly or indirectly, a majority of the shares entitled to vote for directors of the second corporation except to the extent that the second corporation holds the shares in a fiduciary capacity.

Redeemable shares are not entitled to be voted after notice of redemption is mailed to the holders and a sum sufficient to redeem the shares has been deposited with a bank, trust company, or other financial institution under an irrevocable obligation to pay the holders the redemption price on surrender of the shares.

Section 11. Corporation’s Acceptance of Votes. If the name signed on a vote, consent, waiver, proxy appointment, or proxy appointment revocation corresponds to the name of a shareholder, the corporation, if acting in good faith, is entitled to accept the vote, consent, waiver, proxy appointment, or proxy appointment revocation and give it effect as the act of the shareholder. If the name signed on a vote, consent, waiver, proxy appointment, or proxy appointment revocation does not correspond to the name of a shareholder, the corporation, if acting in good faith, is nevertheless entitled to accept the vote, consent, waiver, proxy appointment, or proxy appointment revocation and to give it effect as the act of the shareholder if:

(i) The shareholder is an entity, and the name signed purports to be that of an officer or agent of the entity;

(ii) The name signed purports to be that of an administrator, executor, guardian, or conservator representing the shareholder, and, if the corporation requests, evidence of fiduciary status acceptable to the corporation has been presented with respect to the vote, consent, waiver, proxy appointment, or proxy appointment revocation;

(iii) The name signed purports to that of a receiver or trustee in bankruptcy of the shareholder, and, if the corporation requests, evidence of this status acceptable to the corporation has been presented with respect to the vote, consent, waiver, proxy appointment, or proxy appointment revocation;

(iv) The name signed purports to be that of a pledgee, beneficial owner, or attorney-in-fact of the shareholder, and, if the corporation requests, evidence acceptable to the corporation of the signatory’s authority to sign for the shareholder has been presented with respect to the vote, consent, waiver, proxy appointment, or proxy appointment revocation;

(v) Two or more persons are the shareholders as cotenants or fiduciaries, and the name signed purports to be the name of at least one (1) of the cotenants or fiduciaries, and the person signing appears to be acting on behalf of all the cotenants or fiduciaries; or

(vi) The acceptance of the vote, consent, waiver, proxy appointment, or proxy appointment revocation is otherwise proper under the rules established by the corporation that are not inconsistent with this Section 11.

The corporation is entitled to reject a vote, consent, waiver, proxy appointment, or proxy appointment revocation if the secretary or other officer or agent authorized to tabulate votes, acting in good faith, has reasonable basis for doubt about the validity of the signature on it or about the signatory’s authority to sign for the shareholder.

Neither the corporation nor its officers nor any agent who accepts or rejects a vote, consent, waiver, proxy appointment, or proxy appointment revocation in good faith and in accordance with the standards of this Section is liable in damages for the consequences of the acceptance or rejection.

Section 12. Informal Action by Shareholders. Any action required or permitted to be taken at a meeting of the shareholders may be taken without a meeting if the corporation receives a written consent (or counterparts thereof) that sets forth the action so taken signed by shareholders holding shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all of the shares entitled to vote thereon were present and voted. Such consent shall have the same force and effect as would the vote of the consenting shareholders cast at a meeting and may be stated as such in any document. The corporation may receive such writing by electronically transmitted facsimile or other form of wire or wireless communication providing the corporation with a complete copy thereof, including a copy of the signature thereto.

No action taken pursuant to this Section 12 shall be effective unless, within sixty (60) days after the date the corporation first receives a writing describing and consenting to the action and signed by a shareholder, the corporation has received writings that describe and consent to the action, signed by shareholders holding at least the number of shares necessary to authorize or take the action (disregarding any consent that has been revoked as provided below). Any action taken under this Section 12 shall be effective as of the date the last writing necessary to effect the action is received by the corporation unless all of the writings necessary to effect the action specify a different effective date, in which case such specified date shall be the effective date for such action. If any shareholder revokes the shareholder’s consent as provided for herein prior to what would otherwise be the effective date, the action proposed in the consent shall be invalid unless the number of shares for which valid consents have been received are sufficient to authorize or take the action. Any shareholder that has signed a writing describing and consenting to action taken pursuant to this Section 12 may revoke such consent by a writing signed and dated by the shareholder describing the action and stating that the shareholder’s prior consent thereto is revoked if such writing is received by the corporation before the effectiveness of the action. Unless otherwise fixed by statute or a court, the record date for determining shareholders entitled to take action pursuant to this Section 12 or entitled to be given notice of the taking of such an action as provided in the following paragraph is the date the corporation first receives a writing upon which the action is taken.

If action is taken under this Section 12 with less than unanimous consent of all shareholders entitled to vote upon the action, the corporation or shareholders taking the action shall, upon receipt by the corporation of all writings necessary to effect the action, give notice of the action to all shareholders who were entitled to vote upon the action but who have not consented to the action as provided in this Section 12. The notice shall contain or be accompanied by the same material, if any, that would have been required under title 7 of the Colorado Revised Statutes to be given to shareholders in or with notice of the meeting at whcih the action would have been submitted to the shareholders.

Section 13. Meetings by Telecommunication. Any or all of the shareholders may participate in an annual or special shareholders’ meeting by, or the meeting may be conducted through the use of, any means of communication by which all persons participating in the meeting may hear each other during the meeting. A shareholder participating in a meeting by this means is deemed to present in person at the meeting.

ARTICLE III

Board of Directors

Section 1. General Powers. All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation shall be managed under the direction of, its board of directors except as otherwise provided in the Colorado Business Corporation Act or the Articles of Incorporation.

Section 2. Number, Qualifications, and Tenure. The number of directors of the corporation shall be fixed from time to time by the board of directors, but no decrease in the number of directors shall have the effect of shortening the term of any incumbent director. A director shall be a natural person who is eighteen (18) years of age or older. A director need not be a resident of Colorado or a shareholder of the corporation.

Directors shall be elected at each annual meeting of shareholders. Each director shall hold office until the next annual meeting of shareholders following the director’s election and removed in the manner provided by the Colorado Business Corporation Act. Any director may be removed by the shareholders of the voting group that elected the director with or without cause, at a meeting called for that purpose. The notice of the meeting shall state that the purpose or one of the purposes of the meeting is the removal of the director. A director may be removed only if the number of votes cast in favor of removal exceeds the number of votes cast against the removal.

Section 3. Vacancies. Any director may resign at any time by giving written notice to the secretary. Such resignation shall take effect at the time the notice is received by the secretary unless the notice specifies a later effective date. Unless otherwise specified in the notice of resignation, the corporation’s acceptance of such resignation shall not be necessary to make it effective. Any vacancy on the board of directors may be filled by the affirmative vote of a majority of the shareholders at a special meeting called for that purpose or by the board of directors. If the directors remaining in office constitute less than a quorum of the board, the directors may fill the vacancy by the affirmative vote of a majority of all the directors remaining in office. If elected by the directors, the director shall hold office until the next annual shareholders’ meeting at which directors are elected. If elected by the shareholders, the director shall hold office for the unexpired term of the director’s predecessor in office; except that if the director’s predecessor was elected by the directors to fill a vacancy, the director elected by the shareholders shall hold office for the unexpired term of the last predecessor elected by the shareholders.

Section 4. Regular Meetings. A regular meeting of the board of directors shall be held without notice immediately after and at the same place as the annual meeting of the shareholders. The board of directors may provide by resolution the time and place, either within or outside Colorado, for the holding of additional regular meetings without other notice.

Section 5. Special Meetings. Special meetings of the board of directors may be called by or at the request of the president or any director. The person or persons authorized to call special meetings of the board of directors may fix any place, either within or outside Colorado, as the place for holding any special meeting of the board of directors called by them, provided that no meeting shall be called outside the State of Colorado unless a majority of the board of directors has so authorized.

Section 6. Notice. Notice of the date, time, and place of any special meeting shall be given to each director at least two (2) days prior to the meeting by written notice either personally delivered or mailed to each director at the director’s business address , or by notice transmitted by private courier, telegraph, telex, electronically transmitted facsimile, or other form of wire or wireless communication. If mailed, such notice shall be deemed to be given and to be effective on the earlier of: (i) five (5) days after such notice is deposited in the United States mail, properly addressed, with first-class postage prepaid; or (ii) the date shown on the return receipt if mailed by registered or certified mail, return receipt requested, provided that the return receipt is signed by the director to whom the notice is addressed. If notice is given by telex, electronically transmitted facsimile, or other similar form of wire or wireless communication, such notice shall be deemed to be given and to be effective when sent, and with respect to a telegram, such notice shall be deemed to be given and to be effective when the telegram is delivered to the telegraph company. If a director has designated in writing one or more reasonable addresses or facsimile numbers for delivery of notice to the director, notice sent by mail, telegraph, telex, electronically transmitted facsimile, or other form of wire or wireless communication shall not be deemed to have been given or to be effective unless sent to such addresses or facsimile numbers, as the case may be.

A director may waive notice of a meeting before or after the time and date of the meeting by a writing signed by such director. Such waiver shall be delivered to the secretary for filing with the corporate records, but such delivery and filing shall not be conditions to the effectiveness of the waiver. Further, a director’s attendance at or participation in a meeting waives any required notice to the director of the meeting unless, at the beginning of the meeting or promptly upon the director’s later arrival, the director objects to holding the meeting or transacting business at the meeting because of lack of notice or defective notice and does not thereafter vote for or assent to action taken at the meeting. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the board of directors need be specified in the notice or waiver of notice of such meeting.

Section 7. Quorum. A majority of the number of directors fixed by the board of directors pursuant to Article III, Section 2 or, if no number is fixed, a majority of the number in office immediately before the meeting begins shall constitute a quorum for the transaction of business at any meeting of the board of directors.

Section 8. Manner of Acting. The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the board of directors.

Section 9. Compensation. By resolution of the board of directors, any director may be paid any one or more of the following: the director’s expenses, if any, of attendance at meeting, a fixed sum for attendance at each meeting, a stated salary as director, or such other compensation as the corporation and the director may reasonably agree upon. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor.

Section 10. Presumption of Assent. A director of the corporation who is present at a meeting of the board of directors or committee of the board at which action on any corporate matter is taken shall be presumed to have assented to all action taken at a meeting unless: (i) the director objects at the beginning of the meeting, or promptly upon the director’s arrival, to the holding of the meeting or the transaction of business at the meeting and does not thereafter vote for or assent to any action taken at the meeting; (ii) the director contemporaneously requests that the director’s dissent or abstention as to any specific action taken be entered in the minutes of the meeting; or (iii) the director causes written notice of the director’s dissent or abstention as to any specific action to be received by the presiding officer of the meeting before its adjournment or by the secretary promptly after the adjournment of the meeting. A director may dissent to a specific action at a meeting while assenting to others. The right to dissent to a specific action taken at a meeting of the board of directors or a committee of the board shall not be available to a director who voted in favor of such action.

Section 11. Committees. By resolution adopted by a majority of all the directors in office when the action is taken, the board of directors may designate from among its members an executive committee and one or more other committees and appoint one or more members of the board of directors to serve on them. To the extent provided in the resolution, each committee shall have all the authority of the board of directors; except that no such committee shall have the authority to: (i) authorize distributions; (ii) approve or propose to shareholders actions or proposals required by the Colorado Business Corporation Act to be approved by shareholders; (iii) fill vacancies on the board of directors or any committee thereof; (iv) amend the Articles of Incorporation; (v) adopt, amend, or repeal the bylaws; (vi) approve a Plan of Merger not requiring shareholder approval; (vii) authorize or approve the reacquisition of shares unless pursuant to a formula or method prescribed by the board of directors; or (viii) authorize of approve the issuance or sale of shares, or contract for the sale of shares, or determine the designations and relative rights, preferences, and limitations of a class or series of shares; except that the board of directors may authorize a committee or officer to do so within the limits set by the board of directors to adopt any final resolution setting forth all preferences, limitations, and relative rights of such class or series and to authorize an amendment to the Articles of Incorporation stating the preferences, limitations, and relative rights of a class or series for filing with the Secretary of State under the Colorado Business Corporation Act.

Sections 4,5, 6, 7, 8, and 12 of Article III, which govern meetings, notice, waiver of notice, quorums, voting requirements, and action without a meeting of the board of directors, shall apply to committees and their members appointed under this Section 11.

Neither the designation of any such committee, the delegation of authority to such committee, nor any action by such committee pursuant to its authority shall alone constitute compliance by any member of the board of directors or a member of the committee in question with the member’s responsibility to conform to the standard of care set forth in Article III, Section 14 of these bylaws.

Section 12. Informal Action by Directors. Any action required or permitted to be taken at a meeting of the directors or any committee designated by the board of directors may be taken without a meeting if a written consent (or counterpart thereof) that sets forth the action so taken is signed by all of the directors entitled to vote with respect to the action taken. Such consent shall have the same force and effect as a unanimous vote of the directors or committee members and may be stated as such in any document. Unless the consent specifies a different effective time or date, action taken under this Section 12 is effective at the time or date the last director signs a writing describing the action taken unless, before such time, any director has revoked the director’s consent by a writing signed by the director and received by the president or the secretary of the corporation.

Section 13. Telephonic Meetings. The board of directors may permit any director (or any member of a committee designated by the board) to participate in a regular or special meeting of the board of directors or a committee thereof through the use of any means of communication by which all directors participating in the meeting can hear each other during the meeting. A director participating in a meeting in this manner is deemed to be present in person at the meeting.

Section 14. Standard of Care. A director shall perform the director’s duties as a director, including, without limitation, the director’s duties as a member of any committee of the board, in good faith, in a manner the director reasonably believes to be in the best interests of the corporation, and with the care an ordinarily prudent person in a like position would exercise under similar circumstances. In performing the director’s durties, a director shall be entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, in each case prepared or presented by the persons herein designated. However, the director shall not be considered to be acting in good faith if the director has knowledge concerning the matter in question that would cause such reliance to be unwarranted. A director shall not be liable to the corporation or its shareholders for any action the director takes or omits to take as a director if, in connection with such action or omission, the director performs the director’s duties in compliance with this Section 14.

The designated persons on whom a director is entitled to rely are (i) one or more officers or employees of the corporation whom the director reasonably believes to be reliable and competent in the matters presented, (ii) legal counsel, public accountant, or other person as to matters that the director reasonably believes to be within such person’s professional or expert competence, or (iii) a committee of the board of directors on which the director does not serve if the director reasonably believes the committee merits confidence.

ARTICLE IV

Officers and Agents

Section 1. General. The officers of the corporation shall be a president, a secretary, and a treasurer, each of whom shall be appointed by the board of directors and shall be a natural person eighteen (18) years of age or older. One person may hold more than one office. The board of directors or an officer or officers so authorized by the board may appoint one or more vice presidents or such other officers, assistant officers, committees, and agents, including a chairman of board, assistant secretaries, and assistant treasurers, as they may consider necessary. Except as expressly prescribed by these bylaws the board of directors or the officer or officers authorized by the board shall from time to time determine the procedure for the appointment of officers, their authority and duties, and their compensation, provided that the board of directors may change the authority, duties, and compensation of any officer who is not appointed by the board.

Section 2. Appointment and Term of Office. The officers of the corporation to be appointed by the board of directors shall be appointed at each annual meeting of the board held after the annual meeting of the shareholders. If the appointment of officers is not made at such meeting, or if an officer or officers are to be appointed by another officer of officers of the corporation, such appointments shall be made as determined by the board of directors or the appointing person or persons. Each officer shall hold office until the first of the following occurs: the officer’s successor shall have been duly appointed and qualified, the officer’s death, the officer’s resignation, or the officer’s removal in the manner provided in Section 3.

Section 3. Resignation and Removal. An officer may resign at any time by giving written notice of resignation to the president, secretary, or other person who appoints such officer. The resignation is effective when the notice is received by the corporation unless the notice specifies a later effective date.

Any officer or agent may be removed at any time, with or without cause, by the board of directors or an officer of officers authorized by the board. Such removal does not affect the contract rights, if any, of the corporation or of the person so removed. The appointment of an officer or agent shall not in itself create contract rights.

Section 4. Vacancies. A vacancy in any office, however occurring, may be filled by the board of directors, or by the officer or officers authorized by the board, for the unexpired portion of the officer’s term. If an officer resigns and the officer’s resignation is made effective at a later date, the board of directors, or officer or officers authorized by the board, may permit the officer to remain in office until the effective date and may fill the pending vacancy before the effective date if the board of directors, or officer or officers authorized by the board, provide that the successor shall not take office until the effective date. In the alternative, the board of directors, or officer or officers authorized by the board of directors, may remove the officer at any time before the effective date and may fill the resulting vacancy.

Section 5. President. The president shall preside at all meetings of shareholders and all meetings of the board of directors unless the board of directors has appointed a chairman, vice chairman, or other officer of the board and has authorized such person to preside at meetings of the board of directors. Subject to the direction and supervision of the board of directors, the president shall be the chief executive officer of the corporation and shall have general and active control of its affairs and business and general supervision of its officers, agents, and employees. Unless otherwise directed by the board of directors, the president shall attend, in person or by substitute appointed by the president, or shall execute on behalf of the corporation written instruments appointing a proxy or proxies to represent the corporation at, all meetings of the stockholders of any other corporation in which the corporation holds any stock. On behalf of the corporation, the president may, in person, by substitute, or by proxy, execute written waivers of notice and consents with respect to any such meetings. At all such meetings and otherwise, the president, in person, by substitute, or by proxy, may vote the stock held by the corporation, execute written consents and other instruments with respect to such stock, and exercise any and all rights and powers incident to the ownership of said stock, subject to the instructions, if any, of the board of directors. The president shall have custody of the treasurer’s bond, if any. The president shall have such additional authority and duties as are appropriate and customary for the office of president and chief executive officer except as the same may be expanded or limited by the board of directors from time to time.

Section 6. Vice Presidents. The vice presidents shall assist the president and shall perform such duties as may be assigned to them by the president or by the board of directors. In the absence of the president, the vice president, if any, (or, if more than one, the vice presidents in the order designated by the board of directors, or if the board makes no such designation, the senior vice president as determined by first election to that office), shall have the powers and perform the duties of president.

Section 7. Secretary. The secretary shall: (i) prepare and maintain as permanent records the minutes of the proceedings of the shareholders and the board of directors, a record of all actions taken by the shareholders or board of directors without a meeting, a record of all actions taken by a committee of the board of directors in place of the board of directors on behalf of the corporation, and a record of all waivers of notice of meetings of shareholders and of the board of directors or any committee thereof; (ii) see that all notices are duly given in accordance with the provisions of these bylaws and as required by law; (iii) serve as custodian of the corporate records and of the seal of the corporation and affix the seal to all documents when authorized by the board of directors; (iv) keep at the corporation’s registered office or principal place of business a record containing the names and addresses of all shareholders in a form that permits preparation of a list of shareholders arranged by voting group and by class or series of shares within each voting group, that is alphabetical within each class or series and that shows the address of, and the number of shares of each class or series held by, each shareholder unless such a record shall be kept at the office of the corporation’s transfer agent or registrar; (v) maintain at the corporation’s principal office the originals or copies of the corporation’s Articles of Incorporation, bylaws, minutes of all shareholders’ meetings, and records of all actions taken by shareholders without a meeting for the past three (3) years, all written communications within the past three (3) years to shareholders as a group or to the holders of any class or series of shares as a group, a list of the names and business addresses of the current directors and officers, a copy of the corporation’s most recent corporate report filed with the Secretary of State, and financial statements showing in reasonable detail the corporation’s assets and liabilities and results of operations for the last three (3) years; (vi) have general charge of the stock transfer books of the corporation unless the corporation has a transfer agent; (vii) authenticate records of the corporation; and (viii) in general, perform all duties incident to the office of secretary and such other duties as from time to time may be assigned to the secretary by the president or by the board of directors. Assistant secretaries, if any, shall have the same duties and powers, subject to supervision by the secretary. The directors and/or shareholders may, however, respectively designate a person other than the secretary or assistant secretary to keep minutes of their respective meetings.

Any books, records, or minutes of the corporation may be in written form or in any form capable of being converted into written form within a reasonable time.

Section 8. Treasurer. The treasurer shall be the principal financial officer of the corporation, shall have the care and custody of all funds, securities, evidences of indebtedness, and other personal property of the corporation, and shall deposit the same in accordance with the instructions of the board of directors. Subject to the limits imposed by the board of directors, the treasurer shall receive and give receipts and acquittances for money paid in on account of the corporation and shall pay out of the corporation’s funds on hand all bills, payrolls, and other just debts of the corporation of whatever nature upon maturity. The treasurer shall perform all other duties incident to the office of the treasurer and, upon request of the board, shall make such reports to it as may be required at any time. The treasurer shall, if required by the board, give the corporation a bond in such sums and with such sureties as shall be satisfactory to the board, conditioned upon the faithful performance of the treasurer’s duties and for the restoration to the corporation of all books, papers, vouchers, money, and other property of whatever kind in the treasurer’s possession or under the treasurer’s control belonging to the corporation. The treasurer shall have such other powers and perform such other duties as may from time to time be prescribed by the board of directors or the president. The assistant treasurers, if any, shall have the same powers and duties, subject to the supervision of the treasurer.

The treasurer shall also be the principal accounting officer of the corporation. The treasurer shall prescribe and maintain the methods and systems of accounting to be followed, keep complete books and records of account as required by the Colorado Business Corporation Act, prepare and file all local, state, and federal tax returns, prescribe and maintain an adequate system of internal audit, and prepare and furnish to the president and the board of directors statements of account showing the financial position of the corporation and the results of its operations.

ARTICLE V

Stock

Section 1. Certificates. The board of directors shall be authorized to issue any of its classes of shares with or without certificates. The fact that the shares are not represented by certificates shall have no effect on the rights and obligations of shareholders. If the shares are represented by certificates, such shares shall be represented by consecutively numbered certificates signed, either manually or by facsimile, in the name of the corporation by the president or any other officer authorized by the board of directors. In case any officer who has signed or whose facsimile signature has been placed upon such certificate shall have ceased to be such officer before such certificate is issued, such certificate may nonetheless be issued by the corporation with the same effect as if the officer were such officer at the date of its issue. All certificates shall be consecutively numbered, and the names of the owners, the number of shares, and the date of issue shall be entered on the books of the corporation. Each certificate representing shares shall state upon its face:

(i) That the corporation is organized under the laws of Colorado;

(ii) The name of the person to whom issued;

(iii) The number and class of the shares and the designation of the series, if any, that the certificate represents;

(iv) The par value, if any, of each share represented by the certificate; and

(v) Any restrictions imposed by the corporation upon the transfer of the shares represented by the certificate.

If shares are not represented by certificates within a reasonable time following the issue or transfer of such shares, the corporation shall send the shareholder a complete written statement of all of the information required o be provided to holders of uncertified shares by the Colorado Business Corporation Act.

Section 2. Consideration for Shares. Certificated or uncertificated shares shall not be issued until the shares represented thereby are fully paid. The board of directors may authorize the issuance of shares for consideration consisting of any tangible or intangible property or benefit to the corporation, including cash, promissory notes, services performed, or other securities of the corporation. The promissory note of a subscriber or an affiliate of a subscriber shall not constitute payment or partial payment for shares of the corporation unless the note is negotiable and is secured by collateral, other than the shares being purchased, having a fair market value at least equal to the principal amount of the note. For purposes of this Section 2, “promissory note” means a negotiable instrument on which there is an obligation to pay independent of collateral and does not include a nonrecourse note.

Section 3. Lost Certificate. In case of the alleged loss, destruction, or mutilation of a certificate of stock, the board of directors may direct the issuance of a new certificate in lieu thereof upon such terms and conditions in conformity with law as the board may prescribe. The board of directors may, in its discretion, require an affidavit of lost certificate and/or bond in such form and amount and with such surety as it may determine before issuing a new certificate.

Section 4. Transfer of Shares. Upon surrender to the corporation, or to a transfer agent of the corporation, of a certificate of stock duly endorsed or accompanied by proper evidence of succession, assignment, or authority to transfer, receipt of such documentary stamps as may be required by law, and evidence of compliance with all applicable securities laws and other restrictions, the corporation shall issue a new certificate to the person entitled thereto and cancel the old certificate. Every such transfer of stock shall be entered on the stock books of the corporation that shall be kept at its principal office or by the person and at the place designated by the board of directors.

Except as otherwise expressly provided in Article II, Sections 7, and 11, and except for the assertion of dissenters’ rights to the extent provided in Article 113 of the Colorado Business Corporation Act, the corporation shall be entitled to treat the registered holder of any shares of the corporation as the owner thereof for all purposes, and the corporation shall not be bound to recognize any equitable or other claim to, or interest in, such shares or rights deriving from such shares on the part of any person other than the registered holder, including, without limitation, any purchaser, assignee, or transferee of such shares or rights deriving from such shares, unless and until such other person becomes the registered holder of such shares whether or not the corporation shall have either actual or constructive notice of the claimed interest of such other person.

Section 5. Transfer Agents, Registrars, and Paying Agents. The board of directors may at its discretion appoint one or more transfer agents, registrars, and agents for making payment upon any class of stock, bond, debenture, or other security of the corporation. Such agents and registrars may be located either within or outside Colorado. They shall have such rights and duties and shall be entitled to such compensation as may be agreed.

ARTICLE VI

Indemnification of Certain Persons

Section 1. Indemnification. For purposes of this Article VI, a “Proper Person” means any person (including the estate or personal representative of a director) who was or is a party or is threatened to be made a party, to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative, and whether formal or informal, by reason of the fact that the Proper Person is or was a director, officer, employee, fiduciary, or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, partner, trustee, employee, fiduciary, or agent of any foreign or domestic profit or nonprofit corporation or of any partnership, joint venture, trust, profit or nonprofit unincorporated association, limited liability company, or other enterprise or employee benefit plan. The corporation shall indemnify any Proper Person against reasonably incurred expenses (including attorney’s fees), judgments, penalties, fines (including any excise tax assessed with respect to an empployee benefit plan), and amounts paid in settlement reasonably incurred by the Proper Person in connection with such action, suit, or proceeding if it is determined by the groups set forth in Section 4 of this article that the Proper Person conducted herself or himself in good faith and that the Proper Person reasonably believed: (i) in the case of conduct in the Proper Person’s official capacity with the corporation, that the Proper Person’s conduct was in the corporation’s best interests; (ii) in all other cases (except criminal cases), that the Proper Person’s conduct was at least not opposed to the corporation’s best interests; or (iii) in the case of any criminal proceeding, that the Proper Person had no reasonable cause to believe the Proper Person’s conduct was unlawful. Official capacity means, when used with respect to a director, the office of director and, when used with respect to any other Proper Person, the office in a corporation held by the officer or the employment, fiduciary, or agency relationship undertaken by the employee, fiduciary, or agent on behalf of the corporation. Official capacity does not include service for any other domestic or foreign corporation or other person or employee benefit plan.

A director’s conduct with respect to an employee benefit plan for a purpose the director reasonably believed to be in the interests of the participants in or beneficiaries of the plan is conduct that satisfies the requirement in (ii) of this Section 1. A director’s conduct with respect to an employee benefit plan for a purpose that the director did not reasonably believe to be in the interests of the participants in or beneficiaries of the plan shall be deemed not to satisfy the requirement of this section that the director conduct herself or himself in good faith.

No indemnification shall be made under this Article VI to a Proper Person with respect to any claim, issue, or matter in connection with a proceeding by or in the right of a corporation in which the Proper Person was adjudged liable to the corporation or in connection with any proceeding charging that the Proper Person derived an improper personal benefit, whether or not involving action in an official capacity, in which the Proper Person was adjudged liable on the basis that the Proper Person derived an improper personal benefit. Further, indemnification under this section in connection with a proceeding brought by or in the right of the corporation shall be limited to reasonable expenses, including attorney’s fees, incurred in connection with the proceeding.

Section 2. Right to Indemnification. The corporation shall indemnify any Proper Person who was wholly successful, on the merits or otherwise, in defense of any action, suit, or proceeding as to which the Proper Person was entitled to indemnification under Section 1 of this Article VI against expenses (including attorney’s fees) reasonably incurred by the Proper Person in connection with the proceeding without the necessity of any action by the corporation other than the determination in good faith that the defense has been wholly successful.

Section 3. Effect of Termination of Action. The termination of any action, suit, or proceeding by judgment, order, settlement, or conviction, or upon a plea of nolo contendere or its equivalent shall not of itself create a presumption that the person seeking indemnification did not meet the standards of conduct described in Section 1 of this Article VI. Entry of judgment by consent as part of a settlement shall not be deemed an adjudication of liability as described in Section 2 of this Article VI.

Section 4. Groups Authorized to Make Indemnification Determination. Except where there is a right to indemnification as set forth in Section 1 or 2 of this article or where indemnification is ordered by a court in Section 5, any indemnification shall be made by the corporation only as determined in the specific case by a proper group that indemnification of the Proper Person is permissible under the circumstances because the Proper Person has met the applicable standards of conduct set forth in Section 1 of this article. This determination shall be made by the board of directors by a majority vote of those present at a meeting at which a quorum is present, which quorum shall consist of directors not parties to the proceeding (“Quorum”). If a Quorum cannot be obtained, the determination shall be made by a majority vote of a committee of the board of directors designated by the board, which committee shall consist of two (2) or more directors not parties to the proceeding except directors who are parties to the proceeding may participate in the designation of directors for the committee. If a Quorum of the board of directors cannot be obtained and the committee cannot be established, or even if a Quorum is obtained or the committee is designated and a majority of the directors constituting such Quorum or committee so directs, the determination shall be made by: (i) independent legal counsel selected by a vote of the board of directors or the committee in the manner specified in this Section 4 or, if a Quorum of the full board of directors cannot be obtained and a committee cannot be established, by independent legal counsel selected by a majority vote of the full board (including directors who are parties to the action); or (ii) a vote of the shareholders.

Authorization of indemnification and advance of expenses shall be made in the same manner as the determination that indemnification or advance of expenses is permissible except, if the determination that indemnification or advance of expenses is permissible is made by independent legal counsel, authorization of indemnification and advance of expenses shall be made by the body that selected such counsel.

Section 5. Court-Ordered Indemnification. Any Proper Person may apply for indemnification to the court considering the proceeding or to another court of competent jurisdiction for mandatory indemnification under Section 2 of this article, including indemnification for reasonable expenses incurred to obtain court-ordered indemnification. If a court determines that the Proper Person is entitled to indemnification under Section 2 of this article, the court shall order indemnification, including the Proper Person’s reasonable expenses incurred to obtain court-ordered indemnification. If the court determines that such Proper Person is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not the Proper Person met the standards of conduct set forth in Section 1 of this article or was adjudged liable in the proceeding, the court may order such indemnification as the court deems proper except that, if the Proper Person has been adjudged liable, indemnification shall be limited to reasonable expenses incurred in connection with the proceeding and reasonable expenses incurred to obtain court-ordered indemnification.

Section 6. Advance of Expenses. Reasonable expenses (including attorney’s fees) incurred in defending an action, suit, or proceeding as described in Section 1 may be paid by the corporation to any Proper Person in advance of the final disposition of such action, suit, or proceeding upon receipt of: (i) a written affirmation of such Proper Person’s good-faith belief that the proper Person has met the standards of conduct prescribed by Section 1 of this Article VI; (ii) a written undertaking, executed personally or on the proper Person’s behalf, to repay such advances if it is ultimately determined that the Proper Person did not meet the prescribed standards of conduct (the undertaking shall be an unlimited general obligation of the Proper Person but need not be secured and may be accepted without reference to financial ability to make repayment); and (iii) a determination made by the proper group (as described in Section 4 of this Article VI) that the facts as then known to the group would not preclude indemnification. Determination and authorization of payments shall be made in the same manner as specified in Section 4 of this Article VI.

Section 7. Additional Indemnification to Certain Persons Other Than Directors. In addition to the indemnification provided to officers, employees, fiduciaries, or agents because of their status as Proper Persons under this article, the corporation may also indemnify and advance expenses to them if they are not directors of the corporation to a greater extent than is provided in these bylaws if not inconsistent with public policy and if provided for by general or specific action of its board of directors or shareholders or by contract.

Section 8. Witness Expenses. The sections of this Article VI do not limit the corporation’s authority to pay or reimburse expenses incurred by a director in connection with an appearance as a witness in a proceeding at a time when the director has not been named as a defendant or a respondent in the proceeding.

Section 9. Report to Shareholders. Any indemnification of, or advance of expenses to, a director in accordance with this Article VI, if arising out of a proceeding by or on behalf of the corporation, shall be reported in writing to the shareholders with or before the notice of the next shareholders’ meeting. If the next shareholder action is taken without a meeting at the instigation of the board of directors, such notice shall be given to the shareholders at or before the time the first shareholder signs a writing consenting to such action.

ARTICLE VII

Provision of Insurance

Section 1. Provision of Insurance. By action of the board of directors, notwithstanding any interest of the directors in the action, the corporation may purchase and maintain insurance, in such scope and amounts as the board of directors deems appropriate, on behalf of any person who is or was a director, officer, employee, fiduciary, or agent of the corporation, or who, while a director, officer, employee, fiduciary, or agent of the corporation, is or was serving at the request of the corporation as a director, officer, partner, trustee, employee, fiduciary, or agent of any other foreign or domestic profit or nonprofit corporation or of any partnership, joint venture, trust, profit or nonprofit unincorporated association, limited liability company, other enterprise, or employee benefit plan, against any liability asserted against, or incurred by, such person in that capacity or arising out of such person’s status as such whether or not the corporation would have the power to indemnify such person against such liability under the provisions of Article VI or applicable law. Any such insurance may be procured from any insurance company designated by the board of directors of the corporation, whether such insurance company is formed under the laws of Colorado or any other jurisdiction of the United States or elsewhere, including any insurance company in which the corporation has an equity interest or any other interest, through stock ownership or otherwise.

ARTICLE VIII

Miscellaneous

Section 1. Corporate Seal. The board of directors may adopt a corporate seal, which shall be circular in form and shall contain the name of the corporation and the words, “Seal, Colorado.”

Section 2. Fiscal Year. The fiscal year of the corporation shall be as established by the board of directors.

Section 3. Amendments. The board of directors shall have power, to the maximum extent permitted by the Colorado Business Corporation Act, to make, amend, and repeal the bylaws of the corporation at any regular or special meeting of the board, unless the shareholders, in making, amending, or repealing a particular bylaw, expressly provide that the directors may not amend or repeal such bylaw. The shareholders also shall have the power to make, amend, or repeal the bylaws of the corporation at any annual meeting or at any special meeting called for that purpose.

Section 4. Receipt of Notices by Corporation. Notices, shareholder writings consenting to action, and other documents or writings shall be deemed to have been received by the corporation when they are actually received: (i) at the registered office of the corporation in Colorado; (ii) at the principal office of the corporation (as that office is designated in the most recent document filed by the corporation with the Secretary of State for Colorado designating a principal office) addressed to the attention of the secretary of the corporation; (iii) by the secretary of the corporation wherever the secretary may be found; or (iv) by any other person authorized from time to time by the board of directors or the president to receive such writings, wherever such person is found.

Section 5. Gender. Unless the context requires otherwise, words of the masculine gender shall be construed to include correlative words of the feminine and vice versa.

Section 6. Conflicts. In the event of any irreconcilable conflict between these bylaws and either the corporation’s Articles of Incorporation or applicable law, the latter shall control.

Section 7. Definitions. Governing Law. Except as otherwise specifically provided in these bylaws, all terms used in these bylaws shall have the same definition as in the Colorado Business Corporation Act, and these bylaws shall be construed and governed by the laws of the State of Colorado.

CERTIFICATE

I hereby certify that the foregoing bylaws, constituting twenty-two (22) pages, including this page, constitute the Bylaws of Jayhawker Investmant Holdings, Inc. adopted by the Board of Directors of the Corporation on March 25, 2011.


	Secretary

Exhibit 1A-6.1

MEMORANDUM OF UNDERSTANDING

This Memorandum of Understanding (“MOU”) is entered into as of June 19, 2018, by and among:

Frank Reina and Robert Stone (are referred to herein individually and collectively as “Producers”); and

II.

Gu, Yao Wen (referred to herein individually and collectively as “Payee”).

Background:

June 2012, Producers and Payee entered into an arrangement that Payee would help fund the production of the feature film “Scrambled” (formally known as “First Love”) in the production amount of $350,000 (Three Hundred and Fifty Thousand Dollars and No Cents) less any transaction costs and bank fees.

Understanding and Arrangement:

The MOU is that the principal amount used for the production shall be repayable based on the revenue waterfall in Exhibit A Definition of Defined Proceeds. No interest shall accrue on the production amount used in the production with a possible goodwill interest at the Producers discretion. The Producers will grant title/billing credit of Executive Producer credit and order at Producers discretion.

The parties have executed this MOU as of the date first above written.

By:	By:


/s/ Robert Stone	/s/ Frank Reina

Robert Stone	Frank Reina
9061 Keith Ave # 206	9061 Keith Ave # 206
West Hollywood, CA 90069	West Hollywood, CA 90069

By:

/s/ Gu, Yao Wen

Gu, Wao Wen

Exhibit A

Definition of Defined Proceeds

In determining “Defined Proceeds” the Gross Revenue received by the Company from all sources paid to or received by Company (e.g., money paid by domestic distributors and foreign sales agents) derived from the worldwide exploitation of the Motion Picture in perpetuity throughout the universe will be applied and paid in accordance with the following Revenue Waterfall:

-First: All amounts owed to lien holders, (e.g. lending institutions (if any); and mandatory union payments such as residual pay-outs and priority guild deferments) (if any);

Second: Repayment of any loans (and associated interest and transactional fees) made by any financial institution, completion guarantor, or other non-Member financing source (if any);

-Third: Any remaining outstanding debt (other than third-party deferments), (e.g. unpaid cost overruns associated with delivering the Picture (if any), self-marketing or self-distribution costs, (if any), not otherwise covered by a third party distributor), and a reasonable, prudent and customary ordinary business reserve for on-going accountancy fees, legal fees, taxes and government filing fees related to the maintenance of the Company and distribution of future proceeds;

-Fourth: After payment of such mandatory priority deductible expenses, Investor shall recoup one hundred percent (100%) of Investor’s investment plus an additional premium (“Recoupment”).

-Fifth: Any possible talent, crew, or other individual or entity authorized deferred payments (i.e. any contractually fixed costs or fixed compensation payments).

After Recoupment (and any subsequent deferred payment), the remainder is “Defined Proceeds” which may also be called “Actual Profits.” The Defined Proceeds/Actual Profits are then divided evenly between the Producer’s Share and the Investors’ Share. All amounts of subsequent contingent compensation owed to third parties such as talent, crew, and service providers shall be paid solely from Producer’s Share without adversely affecting Investors’ Share.

Exhibit 1A-7.1

AGREEMENT AND PLAN OF SHARE EXCHANGE This Agreement and Plan of Share Exchange (this "Agreement and Plan") is entered into by and among Tao Entertainment, Inc., a California corporation (formerly known as Tao Entertainment, LLC, a California limited liability company, "TE"), Colorado Green Ventures, Inc., a Colorado corporation ("CGV"), Robert Stone ("Stone"), and Frank Reina ("Reina", and together with Stone, the "Shareholders" and each a "Shareholder", and the Shareholders together with TE and CGV, the "Parties" and each a "Party") as of the ad.A day of , 2018 (the "Effective Date"). WHEREAS, each Shareholder currently owns all of the issued and outstanding shares of TE (the "TE Shares"); WHEREAS, CGV desires to acquire all of the TE Shares; WHEREAS, the Shareholders desire to exchange their TE Shares to CGV in exchange for 151,000,000 shares of capital stock of CGV, which shall equal 60.1% of the total issued shares of capital stock of CGV (such total issued shares of capital stock of CGV, the "CGV Shares") on a fully diluted basis; WHEREAS, the Parties desire for, upon the Closing (as defined below), the Shareholders will own 60.1% of the CGV Shares, and CGV will own 100% of the TE Shares; WHEREAS, all of the Board of Directors of CGV and TE, a majority of the shareholders of CGV, and the Shareholders (who are all of the shareholders of TE) have approved and adopted this Agreement prior to the Effective Date. 1. Agreement of Share Exchange TE shall be acquired by CGV, and the Shareholders shall own 60.1% of the capital stock of CGV on a fully diluted basis. This shall be a statutory exchange pursuant to Section 368(a)(l)(B) of the Internal Revenue Code, as amended. 2. Effect of Share Exchange. On the effective date of the exchange, the common stock of TE shall be exchanged as provided in this Agreement and Plan, and the former holders of the shares are entitled to the exchange rights provided in this Agreement and Plan, the articles of share exchange and their rights under the Colorado Business Corporation Act and the California Corporations Code. 3. Conversion of Shares. The manner and basis of exchanging the shares of TE into shares of CGV and issuing of CGV Shares to the Shareholders is as follows: A. At the Closing (the following is collectively the "Exchange"): (i) the Shareholders shall sell, convey, transfer and assign to CGV, and CGV shall purchase and accept from the Shareholders, all of the issued and outstanding TE Shares held by such Shareholders, and (ii) in exchange for the sale, conveyance, transfer and assignment of TE Shares pursuant to 3(A)(i), CGV shall sell, convey, transfer and assign to each Shareholder, and each Shareholder shall purchase and accept from CGV, 75,500,000 (for a combined total of 151,000,000) newly-issued CGV Shares . At the Closing and as a result of the Exchange, Shareholders shall own 60.1% of the total issued and outstanding shares of CGV on a fully diluted basis, and CGV shall own 100% of the total issued and outstanding shares of the total TE Shares on a fully diluted basis. B. No fractional shares in CGV shall be issued by reason of the Exchange. 4. Resignation of Current CGV Board of Directors and Officers. Contemporaneously with the Closing, all of the current members of the CGV board of directors and current officers of CGV shall resign, and shall be replaced through special meetings of the shareholders and board of directors respectively to be held following the Closing. 5. Approval by Directors and Shareholders. This Agreement and Plan has been approved prior to the Effective Date by the board of directors of both TE and CGV, all of the shareholders of TE (who are the Shareholders), and a majority of the shareholders of CGV. 6. Statement of Share Exchange. At the Closing, appropriate officers of each of TE and CGV shall execute the Statement of Share Exchange as required under Colorado Revised Statute 7-11-105 and file that Statement with the Secretary of State of Colorado. 7. Closing. A. The Closing. The closing of the Exchange shall occur on the Effective Date (the "Closing"). The Closing will take place at such date, time and place or manner as may be agreed upon by the Parties. B. Conditions to Shareholders' and TE's Obligations. The obligations of the Shareholders and TE under this Agreement and Plan, (including, without limitation, the obligation to transfer the TE Shares in exchange for the CGV Shares pursuant to Section 3) shall be subject to satisfaction of the following conditions, unless waived in writing by Shareholders and TE: (i) CGV shall have performed in all material respects all agreements, and satisfied in all material respects all conditions on its part to be performed 2 or satisfied hereunder, at or prior to the Closing; (ii) all of the representations and warranties of CGV herein shall have been true and correct in all respects when made, shall have continued to have been true and correct in all respects at all times subsequent thereto, and shall be true and correct in all material respects on and as of the Closing as though made on, as of, and with reference to such Closing; (iii) CGV shall have executed and delivered to Shareholders all documents necessary to issue the CGV Shares to Shareholders as contemplated by this Agreement and Plan (including Section 3); and (iv) CGV shall have obtained or made, as applicable, all consents, authorizations and approvals from, and all declarations, filings and registrations required to consummate the transactions contemplated by this Agreement and Plan. C. Conditions to CGV Obligations. The obligations of CGV under this Plan and Agreement, (including, without limitation, the obligation to issue the CGV Shares in exchange for the transfer by Shareholders of the TE Shares pursuant to Section 3) shall be subject to satisfaction of the following conditions, unless waived by CGV: (i) Shareholders and TE shall have performed in all respects all agreements, and satisfied in all respects all conditions on their part to be performed or satisfied hereunder, at or prior to the Closing; (ii) all of the representations and warranties of Shareholders and TE herein shall have been true and correct in all material respects when made, shall have continued to have been true and correct in all material respects at all times subsequent thereto, and shall be true and correct in all material respects on and as of the Closing as though made on, as of, and with reference to such Closing; (iii) Shareholders and TE shall have executed and delivered to CGV all documents necessary to transfer the TV Shares to CGV, as contemplated by this Agreement and Plan (including Section 3), and (iv) Shareholders and TE shall have obtained or made, as applicable, all consents, authorizations and approvals from, and all declarations, filings and registrations required to consummate the transactions contemplated by this Agreement. D. Closing Documents. At the Closing: (i) Shareholders shall deliver to CGV, in form and substance reasonably satisfactory to CGV, evidence of the transfer of TE Shares to CVG pursuant to Section 3; (ii) CGV shall deliver to Shareholders, in form and substance reasonably satisfactory to Shareholders, (i) evidence of the issuance of CGV Shares to the Shareholders pursuant to Section 3, and (ii) copies of resolutions adopted by the board of directors and Shareholders of CGV authorizing the execution and delivery of, and performance of CGV's obligations under this Agreement and Plan. 9. Representations and Warranties. CGV hereby represents and warrants, on behalf of itself and each of its equity holders immediately prior to Closing, to each of the Shareholders and TE the following: 3 A. Due Organization. CGV is a corporation duly organized, validly existing and in good standing under the laws of the State of Colorado, with all requisite power and authority, and is not currently, and has never conducted, any business. B. Capitalization. The authorized capital stock of CGV consists of 500,000,000 shares of common stock, of which 100,267,350 shares are issued and outstanding prior to Closing and held in the following amounts by the following shareholders of CGV: 67,750,350 shares by Jayhawker Investment Holdings, Inc.,15,000,000 shares by George W. Cole, 15,000,000 shares by Sandra Azcazate, 1,000,000 shares by Angela Foxhawk, 1,000,000 shares by Jeffrey Esses, and 500,000 shares by Nikki Mahoney. C. Due Authority. CGV has full corporate power and authority to enter into and perform its obligations under this Agreement and Plan and has obtained the affirmative vote or consent of a majority of its equity holders to consummate the transactions contemplated by this Agreement and Plan, all of which are in effect prior to and as of the Closing. D. No Liabilities; No Liens; No Contracts. CGV has no liabilities, obligations or commitments of any nature whatsoever, asserted or unasserted, known or unknown, absolute or contingent, accrued or unaccrued, matured or unmatured or otherwise. CGV has no indebtedness whatsoever. There are no liens or other encumbrances of any kind or nature on any of the assets or equity securities of CGV. CGV has not entered into any contracts, written or oral. E. Property. CGV does not own, lease, license or otherwise have any interest in any real or personal property, whether tangible or intangible. F. Litigation and Governmental Orders. There are no Actions pending or, to CGV's Knowledge, threatened, against or by CGV, and no event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such Action. The term "Action" means any claim, action, cause of action, demand, lawsuit, arbitration, inquiry, audit, notice of violation, proceeding, litigation, citation, summons, subpoena or investigation of any nature, civil, criminal, administrative, regulatory or otherwise, whether at law or in equity. The term "CGV's Knowledge" means the actual or constructive knowledge of any director or officer of the Company, after due inquiry. G. No Employees. CGV does not currently have, and has never had, any employees or independent contractors, or any employment benefit plans. H. Taxes. All tax returns required to be filed on or before the Closing by CGV have been, or will be, timely filed, and are true, complete and correct in all respects or will be true, complete and correct in all respects. All taxes due and owing by CGV have been, or will be, timely paid in full. 4 I. No Brokers. No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement and Plan or any other agreement in connection herewith based upon any arrangement made by or on behalf of CGV. 10. Indemnification. The representations and warranties set forth in Section 9 shall survive indefinitely. CGVagrees that CGV shall defend, indemnify and hold harmless Shareholders and TE, and any of TE's directors, officers or equity holders, against any and all losses, damages, liabilities, deficiencies, claims, actions, judgments, settlements, interest, awards, penalties, fines, costs or expenses of whatever kind, including, without limitation, attorney's fees and the costs of enforcing any right of indemnification under this Agreement and Plan, arising out of or resulting from any claim of a third party related to any breach of any representation or warranty under this Agreement and Plan. 11. Abandonment of Exchange. Notwithstanding anything to the contrary or implied in this Agreement and Plan, this Agreement and Plan may be abandoned without further liability and obligation prior to the Closing by the board of directors of either corporation adopting a resolution and giving notice to the other corporation and filing a statement of change with the secretary of state. The Agreement and Plan may be abandoned in the event or on the contingency that: A. A material adverse change occurs in the business, properties, operations, or financial condition of the other corporation; B. Any drastic of substantial change occurs in the economic or political condition generally of Colorado or the United States of America which would affect the advisability of completing the contemplated Exchange. C. On the discovery that any financial statements, or other information furnished by the other corporation is highly inaccurate, misleading in material respect, or omits important relevant data or information; D. Either of the corporations becomes involved in any litigation not previously disclosed to the other, either pending or threatened, which would materially affect the fmancial condition or reputation of the other corporation; or E. Any action of suit to enjoin or restrain or restrict the contemplated Exchange has been filed in any court or agency having jurisdiction in the matter. 5 12. Miscellaneous. A. This Agreement and Plan may be executed in any number of counterparts, each of which is deemed an original, and all of which together constitutes one and the same agreement. Delivery of an executed counterpart of this Agreement and Plan electronically or by facsimile shall be effective as delivery of an original executed counterpart of this Agreement and Plan. B. This Agreement constitutes the sole and entire agreement of the Parties with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter. C. This Agreement and Plan, and each of the terms and provisions hereof, may only be amended, modified, waived or supplemented by an agreement in writing signed by each Party. [Execution Page Follows] 6 IN WITNESS WHEREOF, the Parties have executed this Agreement and Plan as of the Effective Date. By: p4e,4- SQL .e (Print name) Its: Pfe By: Its: COLORADO S, INC. L-c) (Print name) ,Laa„,_6acsai A SHAREHO HERS Robe Frank 7

Exhibit 1A-11.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation in this Offering Statement on Form 1-A of our report dated July 5, 2018, relating to the consolidated financial statements of TAO Entertainment, LLC , as of December 31, 2017 and 2016 and to all references to our firm included in this Offering Statement.

/S/ Weiss Accountancy Corporation

Van Nuys, California

January 24, 2018

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