10-Q
2012-11-30
false
Novation Holdings Inc
0001080602
--08-31
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<!--egx--><p style='text-align:justify;margin:0in 0in 0pt'>Novation Holdings, Inc., formerly Allezoe Medical Holdings, Inc., and formerly Stanford Management, Ltd. (the “Company”), was incorporated under the laws of the State of Delaware on September 24, 2008. Effective October 25, 2012, the Company amended its Articles of Incorporation to change its name to Novation Holdings, Inc., increased its authorized capital to 500 million shares of common stock, par value $0.001, and 10 million shares of preferred stock, par value $0.001, and changed its place of incorporation from Delaware to Florida. The corporate trading symbol also was changed from ALZM to NOHO.</p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>The Company was originally organized for the purpose of acquiring and developing mineral properties. On February 18, 2011, all of the mineral properties and related development and exploration activities were disposed of as part of a series of transactions resulting in the Company moving into the medical technology industry.</p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>On February 18, 2011, the Company acquired all of the outstanding shares of Organ Transport Systems, Inc. (“OTS”), a Nevada corporation, and simultaneously disposed of the assets relating to its former activities in mining exploration, along with all related liabilities. Consequently, OTS was considered to be the surviving entity, with the Company intending to include only the financial results of OTS in its financial statements. Effective March 19, 2012, the Company. agreed to rescind the acquisition of Organ Transport Systems, Inc. The net effect of the rescission transaction has been to remove OTS as a subsidiary of the Company. </p> <p style='text-align:justify;margin:0in 0in 0pt 0.25in'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>As a result of the rescission of the OTS transaction, on July 11, 2012, the Company amended its prior SEC periodic filings to remove the financial results for OTS by filing an amended Form 10-K/A for the year ended August 31, 2011, and amended Forms 10-Q/A for the quarters ended November 30, 2011 and February 29, 2012.</p> <p style='margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>Effective October 25, 2012, the Company completed a 1 for 15 reverse split of its common stock as part of its recapitalization, name change and change of corporate domicile. The reverse stock split has been given retroactive recognition in the Form 10-K for the fiscal year ended August 31, 2012 and in this Form 10-Q. All shares and per share information have been retroactively adjusted to reflect the stock split.</p>
<!--egx--><p style='text-align:justify;margin:0in 0in 0pt'>The Company formed a wholly-owned subsidiary, SureScreen Medical, Inc., a Florida corporation, through which it entered into a licensing agreement with AVM Licensing Corp. for the licensing of proprietary, patent pending technology that would enable healthcare providers to "see and treat" Human Papillomavirus (HPV), the most common sexually transmitted infection and a cause of cervical cancer. In addition to offering easy, affordable, and on-the-spot HPV diagnosis, the technology offers an important alternative to the HPV vaccine. A European patent has been granted for the technology and a patent application to the US Patent and Trademark Office is still pending. If and when all patent applications have been awarded, the Company then will contract for the development of a working prototype for the device and submit the required approval applications to the FDA and similar agencies in Europe so the marketing and sale of the device can be initiated. It is estimated that the FDA review and approval process could commence as early as mid-2014.</p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>In addition, effective December 1, 2012, we acquired the operating assets of an Internet Service Provider (ISP) based in Utah and plan to continue the existing, profitable operations as well as to acquire similar ISPs located across the US. To date, the Company has identified 5 possible acquisition targets. See, Note 9, Subsequent Events.</p>
<!--egx--><p style='text-align:justify;margin:0in 0in 0pt'>The accompanying unaudited consolidated financial statements of the Company at November 30, 2012 and November 30, 2011 have been prepared on the accrual basis of accounting in accordance with generally accepted accounting principles (‘GAAP’) for interim financial statements, instructions to Form 10-Q, and Regulation S-X.</p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>In management’s opinion, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation to make the Company’s financial statements not misleading have been included. The results of operations for the periods ended November 30, 2012 and November 30, 2011 presented are not necessarily indicative of the results to be expected for the full year.</p>
<!--egx--><p style='text-align:justify;margin:0in 0in 0pt'>The Company's financial statements are presented as those of a development stage enterprise through August 31, 2012 and through the date of this interim report. Activities during the development stage include company formation, equity issued for patents and technology, and fixed assets and further implementation of the business plan. The Company has not generated any revenues since inception. We have subsequently acquired or agreed to acquire operating subsidiaries that are producing income and actively engaged in operating activities, and will no longer be required to report as a development stage company for the fiscal quarter beginning December 1, 2012.</p>
<!--egx--><p style='text-align:justify;margin:0in 0in 0pt'>The Company operates in an industry that is subject to rapid technological change. The Company's operations will be subject to significant risk and uncertainties including financial, operational, technological, regulatory and other risks associated with a development stage company, including the potential risk of business failure. </p> <p style='text-align:justify;margin:0in 0in 0pt'> </p>
<!--egx--><p style='text-align:justify;margin:0in 0in 0pt'>The preparation of financial statements in conformity with U.S. 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 revenues and expenses during the reporting period. A significant estimate as of November 30, 2012 and August 31, 2012 included a 100% valuation allowance for deferred tax assets arising from net operating losses incurred since inception.</p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ materially from estimates.</p> <p style='text-align:justify;margin:0in 0in 0pt'> </p>
<!--egx--><p style='text-align:justify;margin:0in 0in 0pt'>The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. The Company had no cash equivalents at November 30, 2012 and August 31, 2012, respectively. The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. There were no balances that exceeded the federally insured limit at November 30, 2012 and August 31, 2012, respectively. </p>
<!--egx--><p style='text-align:justify;margin:0in 0in 0pt'>In accordance with Financial Accounting Standards Board “FASB” Accounting Standards Codification “ASC” Topic 260, <i>“Earnings per Share,” </i>basic earnings (loss) per share (“EPS”) is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to all dilutive potential of shares of common stock outstanding during the period including stock options or warrants, using the treasury stock method (by using the average stock price for the period to determine the number of shares assumed to be purchased from the exercise of stock options or warrants), and convertible debt or convertible preferred stock, using the if-converted method. Diluted EPS excludes all dilutive potential of shares of common stock if their effect is anti-dilutive. The computation of basic and diluted loss per share for the period from September 24, 1998 (inception) to November 30, 2012, is equivalent since the Company has had continuing losses. The Company also has no common stock equivalents. The calculation of earnings per share has been done by applying the 1 for 15 reverse split of common stock, effective November 7, 2012, retroactively to September 24, 1998, the date of inception.</p>
<!--egx--><p style='text-align:justify;margin:0in 0in 8.35pt'>The Company adopted the provisions of FASB ASC 718-20, Stock Compensation – Awards Classified as Equity, which require companies to expense the estimated fair value of employee stock options and similar awards based on the fair value of the award on the date of grant. The cost is recognized over the period during which an employee is required to provide service in exchange for the award, usually the vesting period. At the Annual Meeting of Shareholders held on October 24, 2012, the shareholders approved the adoption of the <font style='background:white'>Novation Holdings, Inc. 2012 Stock Incentive Plan, and the setting aside of 4,500,000 shares of post-reverse split common stock for grants under the Plan. </font>There have been no grants of any stock or other equity under the Plan, or otherwise, as of November 30, 2012. </p> <p style='text-align:justify;margin:0in 0in 0pt'>On July 1, 2011, the Company issued 333,333 post-split shares of common stock valued at $2,100,000 to the Company’s Chairman and CEO, with the shares originally vesting over 5 years on a proportionate basis. As of August 31, 2011, one-fifth or 66,667 shares valued at $420,000 had vested. Mr. Gelmon conveyed two thirds of the original 333,333 post-split shares to two other parties for reasons unrelated to the Company, retaining a total of 111,111 shares. The non-vested balance at August 31, 2011 of 266,667 total shares valued at $1,680,000 had been issued but were being held in escrow for release on an annual basis each July 1. During the year ended August 31, 2012, the Company revised the vesting term to 3 years and released an additional 155,556 shares valued at $980,000. The non-vested balance of 111,111 post-split shares at August 31, 2012 was one-third of the original issuance valued as of the original issue date at $700,000, of which Mr. Gelmon holds 37,037 shares to be received, with a current market value of less than $600. </p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'><b>Non-Employee Stock Based Compensation </b></p> <p style='margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>Share-based payment awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable.</p>
<!--egx--><p style='text-align:justify;margin:0in 0in 0pt'>The Company accounts for income taxes in accordance with FASB ASC 740, Income Taxes. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is recorded and deducted from deferred tax assets when the deferred tax assets are not expected to be realized based on currently available evidence. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.</p> <p style='margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>Management has analyzed its various federal and state filing positions and believes that its income tax filing positions and deductions are well documented and supported. Additionally, management believes that no accruals for tax liabilities are necessary. Therefore, no reserves for uncertain income tax positions have been recorded.</p>
<!--egx--><p style='text-align:justify;margin:0in 0in 0pt'>The Company maintains its cash in a bank deposit account in a bank which participates in the Federal Deposit Insurance Corporation (FDIC) Program. As of November 30, 2012 and August 31, 2012, the Company had no balances in excess of federally insured limits.</p>
<!--egx--><p style='text-align:justify;margin:0in 0in 0pt'>In accordance with accounting principles generally accepted in the United States of America, certain assets and liabilities are required to be recorded at fair value on a recurring basis. </p>
<!--egx--><p style='text-align:justify;margin:0in 0in 0pt'>The Company evaluates embedded conversion features within convertible debt under ASC 815 “<i>Derivatives and Hedging</i>” to determine whether the embedded conversion feature should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. The Company uses a Binomial pricing model to estimate the fair value of convertible debt conversion features at the end of each applicable reporting period. Changes in the fair value of these derivatives during each reporting period are included in the consolidated statement of operation. Inputs into the Binomial pricing model require estimates, including such items as estimated volatility of the Company’s stock, risk-free interest rate and the estimated life of the financial instruments being fair valued.</p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 <i>“Debt with Conversion and Other Options”</i> for consideration of any beneficial conversion feature.</p> <p style='margin:0in 0in 0pt'> </p>
<!--egx--><p style='text-align:justify;margin:0in 0in 0pt'>As reflected in the accompanying consolidated financial statements, the Company has not yet emerged from the development stage, has a net loss of $273,874 and net cash used in operations of $112,888 for the three months ended November 30, 2012; and negative working capital of $404,764 and an accumulated deficit of $9,540,317 at November 30, 2012.</p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>The accompanying consolidated financial statements of the Company have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company is a development stage company and has suffered recurring losses and has no established source of revenue. Its ability to continue as a going concern is dependent upon achieving profitable operations and generating positive cash flows.</p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>There can be no assurances that the Company will be able to achieve profitable operations or obtain additional funding. These factors create substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of the uncertainty.</p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>Management intends to raise financing through private or public equity financing or other means and interests that it deems necessary to provide the Company with the ability to continue in existence. </p> <p style='margin:0in 0in 0pt'> </p>
<!--egx--><p style='text-align:justify;margin:0in 0in 0pt'>In September 2011, the FASB issued an amendment to Topic 350, Intangibles—Goodwill and Other, which simplifies how entities test goodwill for impairment. Previous guidance under Topic 350 required an entity to test goodwill for impairment using a two-step process on at least an annual basis. First, the fair value of a reporting unit was calculated and compared to its carrying amount, including goodwill. Second, if the fair value of a reporting unit was less than its carrying amount, the amount of impairment loss, if any, was required to be measured. Under the amendments in this update, an entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads the entity to determine that it is more likely than not that its fair value is less than its carrying amount. If after assessing the totality of events or circumstances, an entity determines that it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, then the two-step impairment test is unnecessary. If the entity concludes otherwise, then it is required to test goodwill for impairment under the two-step process as described under paragraphs 350-20-35-4 and 350-20-35-9 under Topic 350. The amendments are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011 and early adoption is permitted. The Company is currently evaluating whether early adoption is necessary.</p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>The Company continually assesses any new accounting pronouncements to determine their applicability to the Company. Where it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequence of the change to its financial statements and assures that there are proper controls in place to ascertain that the Company’s financials properly reflect the change. </p>
<!--egx--><p style='text-align:justify;margin:0in 0in 0pt'>The Company restated its previously issued financial statements for the three months ended November 30, 2011 to reflect the rescission of the previous acquisition of Organ Transport Systems, Inc. (“OTS”) in March 2012. The rescission of OTS resulted in the removal of all OTS transactions from the Company’s previously reported financial statements as of and for the three months ended November 30, 2011. This restatement was reflected in an amended Form 10-Q/A filed with the SEC in July 2012 for the three months ended November 30, 2011.</p> <p style='margin:0in 0in 0pt'> </p>
<!--egx--><p style='text-align:justify;margin:0in 0in 0pt'>The Company accounts for income taxes in accordance with accounting standards for Accounting for Income Taxes which require the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statements and tax basis of assets and liabilities, and for the expected future tax benefit to be derived from tax loss and tax credit carry-forwards. Additionally, the standards require the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets.</p> <p style='margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>The following is a schedule of deferred tax assets as of November 30, 2012, and August 31, 2012:</p> <p style='margin:0in 0in 0pt'> </p> <table border="0" cellspacing="0" cellpadding="0" style='margin:auto auto auto 41.4pt;border-collapse:collapse'> <tr> <td valign="top" width="204" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:153pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="top" width="60" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:45pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="top" width="132" style='border-bottom:windowtext 1pt solid;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:99pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>November 30, 2012</p></td> <td valign="top" width="36" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:27pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'> </p></td> <td valign="top" width="138" style='border-bottom:black 1pt solid;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:103.5pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>August 31, 2012</p></td></tr> <tr> <td valign="top" width="204" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:153pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'>Net operating loss </p></td> <td valign="top" width="60" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:45pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="top" width="132" style='border-bottom:windowtext 1pt solid;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:99pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'> $ 9,540,317</p></td> <td valign="top" width="36" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:27pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'> </p></td> <td valign="top" width="138" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:103.5pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <div style='border-bottom:windowtext 1pt solid;border-left:medium none;padding-bottom:1pt;padding-left:0in;padding-right:0in;border-top:windowtext 1pt solid;border-right:medium none;padding-top:1pt'> <p align="right" style='border-bottom:medium none;text-align:right;border-left:medium none;padding-bottom:0in;margin:0in 0in 0pt;padding-left:0in;padding-right:0in;border-top:medium none;border-right:medium none;padding-top:0in'> $ 9,266,443</p></div></td></tr> <tr> <td valign="top" width="204" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:153pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'>Future tax benefit at 34% </p></td> <td valign="top" width="60" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:45pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="top" width="132" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:99pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>3,243,708</p></td> <td valign="top" width="36" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:27pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'> </p></td> <td valign="top" width="138" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:103.5pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>3,150,591</p></td></tr> <tr> <td valign="top" width="204" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:153pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'>Less: Valuation allowance</p></td> <td valign="top" width="60" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:45pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="top" width="132" style='border-bottom:windowtext 1pt solid;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:99pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'> (3,243,708)</p></td> <td valign="top" width="36" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:27pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'> </p></td> <td valign="top" width="138" style='border-bottom:black 1pt solid;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:103.5pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>(3,150,591)</p></td></tr> <tr> <td valign="top" width="204" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:153pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'>Net deferred tax asset</p></td> <td valign="top" width="60" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:45pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="top" width="132" style='border-bottom:windowtext 1.5pt double;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:99pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'> $ --</p></td> <td valign="top" width="36" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:27pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'> </p></td> <td valign="top" width="138" style='border-bottom:windowtext 1.5pt double;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:103.5pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'> $ --</p></td></tr></table> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>The valuation allowance changed by approximately $93,117 during the three months ended November 30, 2012.</p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>Under Sections 382 and 269 (the ‘shell corporation’ rule) of the Internal Revenue Code, following an “ownership change,” special limitations (“Section 382 Limitations”) apply to the use by a corporation of its net operating loss, or NOL, carry-forwards arising before the ownership change and various other carry-forwards of tax attributes (referred to collectively as the ‘Applicable Tax Attributes’). The Company had NOL carry-forwards due to historical losses of Stanford of approximately $368,374 at November 30, 2012.</p> <p style='margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>The Company has adopted the provisions of FASB ASC 740-10-25. As a result of its implementation, the Company performed a comprehensive review of its uncertain tax positions in accordance with recognition and measurement standards established by FASB ASC 740-10-25. In this regard, an uncertain tax position represents the Company’s expected treatment of a tax position taken in a prepared and filed tax return, or expected to be taken in a tax return, that has not been reflected in measuring income tax expense for financial reporting purposes. The Company does not expect any reasonably possible material changes to the estimated amount of liability associated with uncertain tax positions through November 30, 2012. The Company’s continuing policy is to recognize accrued interest and penalties related to income tax matters in income tax expense.</p>
<!--egx--><p style='text-align:justify;margin:0in 0in 0pt;background:white'>Matriarch Management Inc. provides financial, accounting, and similar services to the Company at a monthly fixed fee of $10,000, commencing March 1, 2012. Michael Gelmon, who serves the Company as CEO, is paid as a consultant to the Company at the rate of $10,000 per month, commencing July 1, 2012. Mr. Gelmon is a Canadian citizen and resident. Ezequiel Rodriguez, who serves as Corporate Secretary and Assistant Corporate Counsel, and John Burke, who serves as the Company’s principal accounting officer, are both employed by Matriarch Management, Inc.</p>
<!--egx--><p style='text-align:justify;margin:0in 0in 0pt'>The Company is authorized to issue 500,000,000 shares of common stock, par value $0.001 per share and 10 million shares of preferred stock, par value $0.001. </p> <p style='text-align:justify;margin:0in 0in 0pt'>. </p> <p style='text-align:justify;margin:0in 0in 0pt'>During the quarter ended November 30, 2012, the Company issued Company stock as follows:</p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>In September, 2012 we issued a total of 737,780 common shares to Asher Enterprises, Inc. on a conversion totaling $16,670 in principal amounts of loans and accrued interest, at a price of $0.0225 per share, representing 50 percent of the low price for the shares during a three day trading period.</p> <p style='margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>In October, 2012 we issued a total of 2,284,848 common shares to Asher Enterprises, Inc. on three conversions totaling $36,400 in principal amounts of loans and accrued interest, at prices of $0.0165, $0.015, and $0.0135 per share respectively, representing 50 percent of the low price for the shares during a three day trading period.</p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>As a result of these transactions, there were 33,117,128 common shares outstanding at November 30, 2012.</p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>In December, 2012 we issued a total of 636,364 common shares to Common Stock, LLC. on a conversion totaling $7,000 in principal amounts of loans, at a price of $0.011, per share, representing 60 percent of the low price for the shares during a three day trading period.</p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>In December, 2012, we issued 1,000,000 shares of Series A Convertible Preferred Stock in connection with the acquisition of Immersion House.</p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>As a result of the issue of these shares, we now have a total of 33,753,492 common shares and 1,000,000 preferred shares issued and outstanding as of January 18, 2013.</p>
<!--egx--><p style='text-align:justify;margin:0in 0in 0pt'>*The Company analyzed the conversion option for derivative accounting consideration under ASC 815-15 "Derivatives and Hedging" and determined that certain outstanding instruments should be classified as liabilities once the conversion option became effective (typically after three or six months) due to there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options.</p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>The following is a summary of notes payable at November 30, 2012 and August 31, 2012:</p> <p style='margin:0in 0in 0pt'> </p> <table border="0" cellspacing="0" cellpadding="0" width="664" style='margin:auto auto auto 4.65pt;width:498.35pt;border-collapse:collapse'> <tr style='height:3.85pt'> <td valign="bottom" width="409" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:306.75pt;padding-right:5.4pt;height:3.85pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'>Description</p></td> <td valign="bottom" width="126" style='border-bottom:windowtext 1pt solid;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:94.5pt;padding-right:5.4pt;height:3.85pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>November 30, 2012</p> <p align="center" style='text-align:center;margin:0in 0in 0pt'>(Unaudited)</p></td> <td valign="bottom" width="15" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:11.1pt;padding-right:5.4pt;height:3.85pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td> <td valign="bottom" width="115" colspan="2" style='border-bottom:windowtext 1pt solid;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:86pt;padding-right:5.4pt;height:3.85pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>August 31, 2012</p> <p align="center" style='text-align:center;margin:0in 0in 0pt'>(Audited)</p></td></tr> <tr style='height:13.9pt'> <td valign="bottom" width="409" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:306.75pt;padding-right:5.4pt;height:13.9pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>Asher Enterprises, Inc.* </p></td> <td valign="bottom" width="126" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:94.5pt;padding-right:5.4pt;height:13.9pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td> <td valign="bottom" width="16" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:11.8pt;padding-right:5.4pt;height:13.9pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td> <td valign="bottom" width="114" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:85.3pt;padding-right:5.4pt;height:13.9pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td></tr> <tr style='height:1.4in'> <td valign="bottom" width="409" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:306.75pt;padding-right:5.4pt;height:1.4in;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='text-align:justify;margin:0in 0in 0pt'>On April 25, 2012, the Company issued its promissory note in the amount of $37,500 to an unrelated third party for additional working capital. The note is due on January 30, 2013 and carries interest at 8 percent per annum, payable at maturity. The note is convertible into common stock of the Company after six months, at the election of the Holder, at 51 percent of the average of the three lowest closing bid prices of the common stock for the ten trading days prior to the date of the election to convert. The carrying amount of the debt discount was $22,875 and $0, respectively. </p></td> <td valign="bottom" width="126" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:94.5pt;padding-right:5.4pt;height:1.4in;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>14,625</p></td> <td valign="bottom" width="16" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:11.8pt;padding-right:5.4pt;height:1.4in;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td> <td valign="bottom" width="114" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:85.3pt;padding-right:5.4pt;height:1.4in;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>37,500</p></td></tr> <tr style='height:19.35pt'> <td valign="bottom" width="409" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:306.75pt;padding-right:5.4pt;height:19.35pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'>Asher Enterprises, Inc.*</p></td> <td valign="bottom" width="126" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:94.5pt;padding-right:5.4pt;height:19.35pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td> <td valign="bottom" width="16" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:11.8pt;padding-right:5.4pt;height:19.35pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td> <td valign="bottom" width="114" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:85.3pt;padding-right:5.4pt;height:19.35pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td></tr> <tr style='height:112.05pt'> <td valign="bottom" width="409" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:306.75pt;padding-right:5.4pt;height:112.05pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='text-align:justify;margin:0in 35.4pt 0pt 0in'>On March 12, 2012, the Company issued its promissory note in the amount of $35,000 to an unrelated third party for additional working capital. The note is due on December 14, 2012 and carries interest at 8 percent per annum, payable at maturity. The note is convertible into common stock of the Company after six months, at the election of the Holder, at 50 percent of the average of the three lowest closing bid prices of the common stock for the ten trading days prior to the date of the election to convert. The note was fully converted as of November 30, 2012.</p></td> <td valign="bottom" width="126" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:94.5pt;padding-right:5.4pt;height:112.05pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>-</p></td> <td valign="bottom" width="16" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:11.8pt;padding-right:5.4pt;height:112.05pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td> <td valign="bottom" width="114" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:85.3pt;padding-right:5.4pt;height:112.05pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>35,000 </p></td></tr> <tr style='height:0.25in'> <td valign="bottom" width="409" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:306.75pt;padding-right:5.4pt;height:0.25in;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'>Asher Enterprises, Inc.*</p></td> <td valign="bottom" width="126" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:94.5pt;padding-right:5.4pt;height:0.25in;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td> <td valign="bottom" width="16" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:11.8pt;padding-right:5.4pt;height:0.25in;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td> <td valign="bottom" width="114" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:85.3pt;padding-right:5.4pt;height:0.25in;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td></tr> <tr style='height:121.5pt'> <td valign="bottom" width="409" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:306.75pt;padding-right:5.4pt;height:121.5pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='text-align:justify;margin:0in 0in 0pt'>On January 20, 2012, the Company issued its promissory note in the amount of $40,000 to an unrelated third party for additional working capital. The note was due on October 23, 2012 and carried interest at 8 percent per annum, payable at maturity. The note was convertible into common stock of the Company after six months, at the election of the Holder, at 50 percent of the average of the three lowest closing bid prices of the common stock for the ten trading days prior to the date of the election to convert. The carrying amount of the debt discount was $0 and $8,288, respectively. The note was fully converted as of November 30, 2012. </p></td> <td valign="bottom" width="126" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:94.5pt;padding-right:5.4pt;height:121.5pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>-</p></td> <td valign="bottom" width="16" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:11.8pt;padding-right:5.4pt;height:121.5pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td> <td valign="bottom" width="114" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:85.3pt;padding-right:5.4pt;height:121.5pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>6,712 </p></td></tr> <tr style='height:18.45pt'> <td valign="bottom" width="409" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:306.75pt;padding-right:5.4pt;height:18.45pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'>Asher Enterprises, Inc.*</p></td> <td valign="bottom" width="126" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:94.5pt;padding-right:5.4pt;height:18.45pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td> <td valign="bottom" width="16" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:11.8pt;padding-right:5.4pt;height:18.45pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td> <td valign="bottom" width="114" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:85.3pt;padding-right:5.4pt;height:18.45pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td></tr> <tr style='height:96.3pt'> <td valign="bottom" width="409" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:306.75pt;padding-right:5.4pt;height:96.3pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='text-align:justify;margin:0in 0in 0pt'>On September 1, 2012, the Company issued its promissory note in the amount of $42,500 to an unrelated third party for additional working capital. The note is due on June 7, 2013 and carries interest at 8 percent per annum, payable at maturity. The note is convertible into common stock of the Company after six months, at the election of the Holder, at 51 percent of the average of the three lowest closing bid prices of the common stock for the ten trading days prior to the date of the election to convert. The note was fully outstanding as of November 30, 2012. </p></td> <td valign="bottom" width="126" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:94.5pt;padding-right:5.4pt;height:96.3pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>42,500 </p></td> <td valign="bottom" width="16" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:11.8pt;padding-right:5.4pt;height:96.3pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td> <td valign="bottom" width="114" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:85.3pt;padding-right:5.4pt;height:96.3pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>-</p></td></tr> <tr> <td width="409" style='border-bottom:#f0f0f0;border-left:#f0f0f0;background-color:transparent;border-top:#f0f0f0;border-right:#f0f0f0'></td> <td width="126" style='border-bottom:#f0f0f0;border-left:#f0f0f0;background-color:transparent;border-top:#f0f0f0;border-right:#f0f0f0'></td> <td width="15" style='border-bottom:#f0f0f0;border-left:#f0f0f0;background-color:transparent;border-top:#f0f0f0;border-right:#f0f0f0'></td> <td width="1" style='border-bottom:#f0f0f0;border-left:#f0f0f0;background-color:transparent;border-top:#f0f0f0;border-right:#f0f0f0'></td> <td width="114" style='border-bottom:#f0f0f0;border-left:#f0f0f0;background-color:transparent;border-top:#f0f0f0;border-right:#f0f0f0'></td></tr></table> <p style='margin:0in 0in 0pt'> </p> <div align="center"> <table border="0" cellspacing="0" cellpadding="0" width="660" style='margin:auto auto auto 4.65pt;width:495pt;border-collapse:collapse'> <tr style='height:21.15pt'> <td valign="bottom" width="397" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:297.75pt;padding-right:5.4pt;height:21.15pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'>Asher Enterprises, Inc.*</p></td> <td valign="bottom" width="134" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:100.85pt;padding-right:5.4pt;height:21.15pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td> <td valign="bottom" width="16" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:11.8pt;padding-right:5.4pt;height:21.15pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td> <td valign="bottom" width="105" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:78.5pt;padding-right:5.4pt;height:21.15pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td> <td width="8" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:0in;padding-right:0in;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td></tr> <tr style='height:107.1pt'> <td valign="bottom" width="397" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:297.75pt;padding-right:5.4pt;height:107.1pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='text-align:justify;margin:0in 0in 0pt'>On October 3, 2012, the Company issued its promissory note in the amount of $32,500 to an unrelated third party for additional working capital. The note is due on July 5, 2013 and carries interest at 8 percent per annum, payable at maturity. The note is convertible into common stock of the Company after six months, at the election of the Holder, at 51 percent of the average of the three lowest closing bid prices of the common stock for the ten trading days prior to the date of the election to convert. The note was fully outstanding as of November 30, 2012. </p></td> <td valign="bottom" width="134" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:100.85pt;padding-right:5.4pt;height:107.1pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>32,500</p></td> <td valign="bottom" width="16" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:11.8pt;padding-right:5.4pt;height:107.1pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td> <td valign="bottom" width="105" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:78.5pt;padding-right:5.4pt;height:107.1pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>-</p></td> <td width="8" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:0in;padding-right:0in;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td></tr> <tr style='height:14.85pt'> <td valign="bottom" width="399" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:299.1pt;padding-right:5.4pt;height:14.85pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'>Common Stock LLC *</p></td> <td valign="bottom" width="139" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:104.5pt;padding-right:5.4pt;height:14.85pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td> <td valign="bottom" width="16" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:11.95pt;padding-right:5.4pt;height:14.85pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td> <td valign="bottom" width="106" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:79.45pt;padding-right:5.4pt;height:14.85pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td></tr> <tr style='height:120.15pt'> <td valign="bottom" width="399" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:299.1pt;padding-right:5.4pt;height:120.15pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='text-align:justify;margin:0in 0in 0pt'>On January 20, 2012, the Company issued its promissory note in the amount of $20,000 to an unrelated third party for additional working capital. The note was due on October 31, 2012 and carried interest at 6 percent per annum, payable at maturity. The note is convertible into common stock of the Company after six months, at the election of the Holder, at 60 percent of the average of the three lowest closing bid prices of the common stock for the ten trading days prior to the date of the election to convert. $6,000 has been converted to common stock as of November 30, 2012. </p></td> <td valign="bottom" width="139" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:104.5pt;padding-right:5.4pt;height:120.15pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>14,000 </p></td> <td valign="bottom" width="16" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:11.95pt;padding-right:5.4pt;height:120.15pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td> <td valign="bottom" width="106" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:79.45pt;padding-right:5.4pt;height:120.15pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>5,507</p></td></tr> <tr style='height:0.3in'> <td valign="bottom" width="399" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:299.1pt;padding-right:5.4pt;height:0.3in;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='text-align:justify;margin:0in 0in 0pt'>Common Stock LLC *</p></td> <td valign="bottom" width="139" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:104.5pt;padding-right:5.4pt;height:0.3in;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td> <td valign="bottom" width="16" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:11.95pt;padding-right:5.4pt;height:0.3in;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td> <td valign="bottom" width="106" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:79.45pt;padding-right:5.4pt;height:0.3in;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td></tr> <tr style='height:102.6pt'> <td valign="bottom" width="399" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:299.1pt;padding-right:5.4pt;height:102.6pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='text-align:justify;margin:0in 0in 0pt'>On March 19, 2012, the Company issued its promissory note in the amount of $20,000 to an unrelated third party for additional working capital. The note is due on December 19, 2012 and carries interest at 6 percent per annum, payable at maturity. The note was convertible into common stock of the Company after six months, at the election of the Holder, at 60 percent of the average of the three lowest closing bid prices of the common stock for the ten trading days prior to the date of the election to convert. The carrying amount of the debt discount was $3,789 and $0, respectively. </p></td> <td valign="bottom" width="139" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:104.5pt;padding-right:5.4pt;height:102.6pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>16,211</p></td> <td valign="bottom" width="16" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:11.95pt;padding-right:5.4pt;height:102.6pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td> <td valign="bottom" width="106" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:79.45pt;padding-right:5.4pt;height:102.6pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>20,000</p></td></tr> <tr style='height:102.6pt'> <td valign="bottom" width="399" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:299.1pt;padding-right:5.4pt;height:102.6pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='text-align:justify;margin:0in 0in 0pt'>Common Stock LLC *</p></td> <td valign="bottom" width="139" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:104.5pt;padding-right:5.4pt;height:102.6pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td> <td valign="bottom" width="16" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:11.95pt;padding-right:5.4pt;height:102.6pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td> <td valign="bottom" width="106" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:79.45pt;padding-right:5.4pt;height:102.6pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td></tr> <tr style='height:102.6pt'> <td valign="bottom" width="399" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:299.1pt;padding-right:5.4pt;height:102.6pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='text-align:justify;margin:0in 0in 0pt'>On May 2, 2012, the Company issued its promissory note in the amount of $20,000 to an unrelated third party for additional working capital. The note is due on February 8, 2013 and carries interest at 6 percent per annum, payable at maturity. The note was convertible into common stock of the Company after six months, at the election of the Holder, at 60 percent of the average of the three lowest closing bid prices of the common stock for the ten trading days prior to the date of the election to convert. The carrying amount of the debt discount was $13,263 and $0, respectively.</p></td> <td valign="bottom" width="139" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:104.5pt;padding-right:5.4pt;height:102.6pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>6,737</p></td> <td valign="bottom" width="16" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:11.95pt;padding-right:5.4pt;height:102.6pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td> <td valign="bottom" width="106" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:79.45pt;padding-right:5.4pt;height:102.6pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>20,000</p></td></tr> <tr> <td width="397" style='border-bottom:#f0f0f0;border-left:#f0f0f0;background-color:transparent;border-top:#f0f0f0;border-right:#f0f0f0'></td> <td width="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;background-color:transparent;border-top:#f0f0f0;border-right:#f0f0f0'></td> <td width="133" style='border-bottom:#f0f0f0;border-left:#f0f0f0;background-color:transparent;border-top:#f0f0f0;border-right:#f0f0f0'></td> <td width="7" style='border-bottom:#f0f0f0;border-left:#f0f0f0;background-color:transparent;border-top:#f0f0f0;border-right:#f0f0f0'></td> <td width="9" style='border-bottom:#f0f0f0;border-left:#f0f0f0;background-color:transparent;border-top:#f0f0f0;border-right:#f0f0f0'></td> <td width="7" style='border-bottom:#f0f0f0;border-left:#f0f0f0;background-color:transparent;border-top:#f0f0f0;border-right:#f0f0f0'></td> <td width="98" style='border-bottom:#f0f0f0;border-left:#f0f0f0;background-color:transparent;border-top:#f0f0f0;border-right:#f0f0f0'></td> <td width="8" style='border-bottom:#f0f0f0;border-left:#f0f0f0;background-color:transparent;border-top:#f0f0f0;border-right:#f0f0f0'></td></tr></table></div> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <table border="0" cellspacing="0" cellpadding="0" width="673" style='margin:auto auto auto 4.65pt;width:504.75pt;border-collapse:collapse'> <tr style='height:17.95pt'> <td valign="bottom" width="379" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:284.25pt;padding-right:5.4pt;height:17.95pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'>Panache Group *</p></td> <td valign="bottom" width="132" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:99pt;padding-right:5.4pt;height:17.95pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td> <td valign="bottom" width="30" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:22.5pt;padding-right:5.4pt;height:17.95pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td> <td valign="bottom" width="120" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:1.25in;padding-right:5.4pt;height:17.95pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td> <td width="12" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:0in;padding-right:0in;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td></tr> <tr style='height:99pt'> <td valign="bottom" width="379" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:284.25pt;padding-right:5.4pt;height:99pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='text-align:justify;margin:0in 0in 0pt'>On January 10, 2012, the Company issued its promissory note in the amount of $50,000 to an unrelated third party for additional working capital. The note is due on January 10, 2013 and carries interest at 10 percent per annum, payable at maturity. The note was immediately convertible into common stock of the Company, at the election of the Holder, at 75 percent of the average of the three lowest closing bid prices of the common stock for the ten trading days prior to the date of the election to convert. The carrying amount of the debt discount was $1,112 and $0, respectively. $40,320 had been converted to common stock as of November 30, 2012. </p></td> <td valign="bottom" width="132" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:99pt;padding-right:5.4pt;height:99pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>8,568 </p></td> <td valign="bottom" width="30" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:22.5pt;padding-right:5.4pt;height:99pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td> <td valign="bottom" width="120" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:1.25in;padding-right:5.4pt;height:99pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>6,100</p></td> <td width="12" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:0in;padding-right:0in;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td></tr> <tr style='height:17.95pt'> <td valign="bottom" width="379" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:284.25pt;padding-right:5.4pt;height:17.95pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>JMJ Financial *</p></td> <td valign="bottom" width="132" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:99pt;padding-right:5.4pt;height:17.95pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td> <td valign="bottom" width="30" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:22.5pt;padding-right:5.4pt;height:17.95pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td> <td valign="bottom" width="120" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:1.25in;padding-right:5.4pt;height:17.95pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td> <td width="12" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:0in;padding-right:0in;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td></tr> <tr style='height:110.25pt'> <td valign="bottom" width="379" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:284.25pt;padding-right:5.4pt;height:110.25pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='text-align:justify;margin:0in 0in 0pt'>On July 30, 2012, the Company issued its promissory note in the amount of $56,000 to an unrelated third party for additional working capital. The note is due on July 30, 2013. The note is convertible into common stock of the Company after three months, at the election of the Holder, at $0.006 or 70 percent of the lowest closing trading price of the common stock for the twenty-five trading days prior to the date of the election to convert. The Note was issued at a discount of $6,000, of which $4,004 unamortized portion remains at November 30, 2012. The carrying amount of the debt discount was $43,818 and $0, respectively. There were no conversions as of November 30, 2012. </p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p align="right" style='text-align:right;margin:0in 0in 0pt'> </p></td> <td valign="bottom" width="132" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:99pt;padding-right:5.4pt;height:110.25pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'> 8,178</p></td> <td valign="bottom" width="30" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:22.5pt;padding-right:5.4pt;height:110.25pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="bottom" width="120" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:1.25in;padding-right:5.4pt;height:110.25pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>50,500 </p></td> <td width="12" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:0in;padding-right:0in;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td></tr> <tr style='height:16.65pt'> <td valign="bottom" width="397" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:297.75pt;padding-right:5.4pt;height:16.65pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='text-align:justify;margin:0in 0in 0pt'>JMJ Financial *</p></td> <td valign="bottom" width="126" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:94.5pt;padding-right:5.4pt;height:16.65pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td> <td valign="bottom" width="30" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:22.5pt;padding-right:5.4pt;height:16.65pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td> <td valign="bottom" width="120" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:1.25in;padding-right:5.4pt;height:16.65pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'></td></tr> <tr style='height:107.1pt'> <td valign="bottom" width="397" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:297.75pt;padding-right:5.4pt;height:107.1pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>On October 3, 2012, the Company issued its promissory note in the amount of $56,000 to an unrelated third party for additional working capital. The note is due on October 3, 2013. The note is convertible into common stock of the Company after three months, at the election of the Holder, at $0.006 or 70 percent of the lowest closing trading price of the common stock for the twenty-five trading days prior to the date of the election to convert. The Note was issued at a discount of $6,000, of which $5,047 unamortized portion remains at November 30, 2012. </p></td> <td valign="bottom" width="126" colspan="2" style='border-bottom:windowtext 1pt solid;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:94.5pt;padding-right:5.4pt;height:107.1pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>50,953</p></td> <td valign="bottom" width="30" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:22.5pt;padding-right:5.4pt;height:107.1pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="bottom" width="120" colspan="2" style='border-bottom:windowtext 1pt solid;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:1.25in;padding-right:5.4pt;height:107.1pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>- </p></td></tr> <tr style='height:10.3pt'> <td valign="bottom" width="397" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:297.75pt;padding-right:5.4pt;height:10.3pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'>Total notes payable – current</p></td> <td valign="bottom" width="126" colspan="2" style='border-bottom:windowtext 1.5pt double;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:94.5pt;padding-right:5.4pt;height:10.3pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$ 194,272</p></td> <td valign="bottom" width="30" colspan="2" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:22.5pt;padding-right:5.4pt;height:10.3pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="bottom" width="120" colspan="2" style='border-bottom:windowtext 1.5pt double;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:1.25in;padding-right:5.4pt;height:10.3pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$ 181,319</p></td></tr> <tr> <td width="379" style='border-bottom:#f0f0f0;border-left:#f0f0f0;background-color:transparent;border-top:#f0f0f0;border-right:#f0f0f0'></td> <td width="18" style='border-bottom:#f0f0f0;border-left:#f0f0f0;background-color:transparent;border-top:#f0f0f0;border-right:#f0f0f0'></td> <td width="114" style='border-bottom:#f0f0f0;border-left:#f0f0f0;background-color:transparent;border-top:#f0f0f0;border-right:#f0f0f0'></td> <td width="12" style='border-bottom:#f0f0f0;border-left:#f0f0f0;background-color:transparent;border-top:#f0f0f0;border-right:#f0f0f0'></td> <td width="18" style='border-bottom:#f0f0f0;border-left:#f0f0f0;background-color:transparent;border-top:#f0f0f0;border-right:#f0f0f0'></td> <td width="12" style='border-bottom:#f0f0f0;border-left:#f0f0f0;background-color:transparent;border-top:#f0f0f0;border-right:#f0f0f0'></td> <td width="108" style='border-bottom:#f0f0f0;border-left:#f0f0f0;background-color:transparent;border-top:#f0f0f0;border-right:#f0f0f0'></td> <td width="12" style='border-bottom:#f0f0f0;border-left:#f0f0f0;background-color:transparent;border-top:#f0f0f0;border-right:#f0f0f0'></td></tr></table> <p style='margin:0in 0in 0pt'> </p>
<!--egx--><p style='text-align:justify;margin:0in 0in 0pt'>During the three months ended November 30, 2012, the Company recognized new derivative liabilities of $220,344 as a result of convertible debt issuances having embedded conversion options. The fair value of these derivative liabilities exceeded the principal balance of the related notes payable by $57,844, and was recorded as a loss on derivatives for the three months ended November 30, 2012. </p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>As a result of conversion of notes payable described in Note 7, the Company reclassified $68,530 of derivative liabilities to equity and the change in fair value of derivatives was $9,432. </p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>As of November 30, 2012, the fair value of the Company’s derivative liabilities was $173,197 and $9,432 was recognized as a gain on derivatives due to change in fair value of the liabilities during the three months ended November 30, 2012.</p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>The following table summarizes the derivative liabilities included in the consolidated balance sheet: </p> <p style='margin:0in 0in 0pt'> </p> <div align="center"> <table border="0" cellspacing="0" cellpadding="0" width="606" style='border-collapse:collapse'> <tr style='height:53.55pt'> <td valign="bottom" width="283" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:0in;width:212.1pt;padding-right:0in;height:53.55pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="bottom" width="119" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:0in;width:89.4pt;padding-right:0in;height:53.55pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="bottom" width="204" colspan="2" style='border-bottom:black 1.5pt solid;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:0in;width:153pt;padding-right:0in;height:53.55pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'><b>Fair Value</b></p> <p align="center" style='text-align:center;margin:0in 0in 0pt'><b>Measurements Using Significant</b></p> <p align="center" style='text-align:center;margin:0in 0in 0pt'><b>Unobservable</b></p> <p align="center" style='text-align:center;margin:0in 0in 0pt'><b>Inputs (Level 3)</b></p></td></tr> <tr> <td valign="bottom" width="283" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:212.1pt;padding-right:0in;background:#cceeff;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'><b>Derivative Liabilities:</b></p></td> <td valign="bottom" width="119" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:89.4pt;padding-right:0in;background:#cceeff;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="bottom" width="24" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:0.25in;padding-right:0in;background:#cceeff;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="bottom" width="180" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:135pt;padding-right:0in;background:#cceeff;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td></tr> <tr> <td valign="bottom" width="283" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:212.1pt;padding-right:0in;background:white;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'>Balance at August 31, 2012</p></td> <td valign="bottom" width="119" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:89.4pt;padding-right:0in;background:white;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="bottom" width="24" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:0.25in;padding-right:0in;background:white;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="180" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:135pt;padding-right:0in;background:white;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>30,815</p></td></tr> <tr> <td valign="bottom" width="283" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:212.1pt;padding-right:0in;background:#cceeff;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'>ASC 815-15 additions</p></td> <td valign="bottom" width="119" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:89.4pt;padding-right:0in;background:#cceeff;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="bottom" width="24" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:0.25in;padding-right:0in;background:#cceeff;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="bottom" width="180" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:135pt;padding-right:0in;background:#cceeff;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>220,344</p></td></tr> <tr> <td valign="bottom" width="283" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:212.1pt;padding-right:0in;background:white;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'>Change in fair value</p></td> <td valign="bottom" width="119" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:89.4pt;padding-right:0in;background:white;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="bottom" width="24" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:0.25in;padding-right:0in;background:white;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="bottom" width="180" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:135pt;padding-right:0in;background:white;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>(9,432)</p></td></tr> <tr> <td valign="bottom" width="283" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:212.1pt;padding-right:0in;background:#cceeff;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'>ASC 815-15 deletions </p></td> <td valign="bottom" width="119" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:89.4pt;padding-right:0in;background:#cceeff;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="bottom" width="24" style='border-bottom:windowtext 1pt solid;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:0.25in;padding-right:0in;background:#cceeff;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="bottom" width="180" style='border-bottom:windowtext 1pt solid;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:135pt;padding-right:0in;background:#cceeff;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>(68,530)</p></td></tr> <tr> <td valign="bottom" width="283" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:212.1pt;padding-right:0in;background:white;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'>Balance at November 30, 2012</p></td> <td valign="bottom" width="119" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:89.4pt;padding-right:0in;background:white;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="bottom" width="24" style='border-bottom:windowtext 1.5pt double;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:0.25in;padding-right:0in;background:white;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'>$ </p></td> <td valign="bottom" width="180" style='border-bottom:windowtext 1.5pt double;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:135pt;padding-right:0in;background:white;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>173,197</p></td></tr></table></div> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>The following table summarizes the derivative gain or loss recorded as a result of the derivative liabilities above:</p> <p style='margin:0in 0in 0pt'> </p> <div align="center"> <table border="0" cellspacing="0" cellpadding="0" width="564" style='border-collapse:collapse'> <tr> <td valign="bottom" width="283" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:0in;width:212.1pt;padding-right:0in;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="bottom" width="119" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:0in;width:89.4pt;padding-right:0in;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="bottom" width="162" colspan="2" style='border-bottom:black 1.5pt solid;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:0in;width:121.5pt;padding-right:0in;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'><b>Included in Other Income (Expense) on Consolidated Statement of Operations</b></p></td></tr> <tr> <td valign="bottom" width="283" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:212.1pt;padding-right:0in;background:#cceeff;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'><b>Gain/(Loss) on Derivative Liability:</b></p></td> <td valign="bottom" width="119" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:89.4pt;padding-right:0in;background:#cceeff;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="bottom" width="24" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:0.25in;padding-right:0in;background:#cceeff;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="bottom" width="138" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:103.5pt;padding-right:0in;background:#cceeff;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td></tr> <tr> <td valign="bottom" width="283" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:212.1pt;padding-right:0in;background:white;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'>Change in fair value of derivatives</p></td> <td valign="bottom" width="119" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:89.4pt;padding-right:0in;background:white;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="bottom" width="24" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:0.25in;padding-right:0in;background:white;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="138" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:103.5pt;padding-right:0in;background:white;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'> 9,432</p></td></tr> <tr> <td valign="bottom" width="283" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:212.1pt;padding-right:0in;background:#cceeff;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'>Derivative expense</p></td> <td valign="bottom" width="119" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:89.4pt;padding-right:0in;background:#cceeff;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="bottom" width="24" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:0.25in;padding-right:0in;background:#cceeff;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="bottom" width="138" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:103.5pt;padding-right:0in;background:#cceeff;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'> (57,844)</p></td></tr> <tr style='height:3.5pt'> <td valign="bottom" width="283" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:212.1pt;padding-right:0in;background:white;height:3.5pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'>Balance for the three months ended November 30, 2012</p></td> <td valign="bottom" width="119" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:89.4pt;padding-right:0in;background:white;height:3.5pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="bottom" width="24" style='border-bottom:windowtext 1.5pt double;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:0.25in;padding-right:0in;background:white;height:3.5pt;border-top:windowtext 1pt solid;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'>$ </p></td> <td valign="bottom" width="138" style='border-bottom:windowtext 1.5pt double;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:103.5pt;padding-right:0in;background:white;height:3.5pt;border-top:windowtext 1pt solid;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'> (48,412)</p></td></tr></table></div> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>The fair values of derivative instruments were estimated using the Binomial pricing model based on the following weighted-average assumptions:</p> <div align="center"> <table border="0" cellspacing="0" cellpadding="0" width="564" style='border-collapse:collapse'> <tr> <td valign="bottom" width="283" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:0in;width:212.1pt;padding-right:0in;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="bottom" width="119" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:0in;width:89.4pt;padding-right:0in;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="bottom" width="162" colspan="2" style='border-bottom:black 1.5pt solid;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:0in;width:121.5pt;padding-right:0in;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'><b>Convertible Debt Instruments</b></p></td></tr> <tr> <td valign="bottom" width="283" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:212.1pt;padding-right:0in;background:#cceeff;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'>Risk-free rate</p></td> <td valign="bottom" width="119" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:89.4pt;padding-right:0in;background:#cceeff;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="bottom" width="24" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:0.25in;padding-right:0in;background:#cceeff;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="bottom" width="138" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:103.5pt;padding-right:0in;background:#cceeff;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>0.21% - 0.30% </p></td></tr> <tr> <td valign="bottom" width="283" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:212.1pt;padding-right:0in;background:white;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'>Expected volatility</p></td> <td valign="bottom" width="119" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:89.4pt;padding-right:0in;background:white;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="bottom" width="24" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:0.25in;padding-right:0in;background:white;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="bottom" width="138" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:103.5pt;padding-right:0in;background:white;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>100% - 300%</p></td></tr> <tr> <td valign="bottom" width="283" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:212.1pt;padding-right:0in;background:#cceeff;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'>Expected life</p></td> <td valign="bottom" width="119" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:89.4pt;padding-right:0in;background:#cceeff;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="bottom" width="24" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:0.25in;padding-right:0in;background:#cceeff;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="bottom" width="138" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;padding-left:0in;width:103.5pt;padding-right:0in;background:#cceeff;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'> 9 months – 12 months</p></td></tr></table></div> <p style='margin:0in 0in 0pt'> </p>
<!--egx--><p style='text-align:justify'>On December 6, 2012, we completed the acquisition of contract assets of Burgoyne Internet Services, LLC (“Burgoyne”), a Utah limited liability company, with an effective closing date of December 1, 2012. Since the effect of the change of control of the limited liability company under Utah law was a legal dissolution of the company, the acquisition has been treated as an acquisition of contract rights by Burgoyne Internet Services, Inc., a newly formed Florida corporation and a wholly-owned subsidiary of the Company. The owners of the old Burgoyne continue to hold the accounts receivable, cash, checking accounts and merchant account of the company and will file tax returns for the old Burgoyne reflecting the transaction. In addition to the acquisition consideration of $200,000, the seller, ISP Holdings, LLC, a Utah limited liability company, also agreed to provide $50,000 in working capital at closing and an additional $50,000 in working capital if the median dollar value of Novation’s trading volume for its common stock for any consecutive 30 day period equals or exceeds $50,000 during the one year period after closing. The closing was completed on December 6, 2012 upon the transfer of the initial $50,000 in working capital funds, although the acquisition transaction has been treated as closing effective on December 1, 2012 for accounting purposes.</p> <p style='text-align:justify'>Novation has issued its convertible promissory note to ISP Holdings, Inc. in the principal amount of $280,000, representing the $200,000 purchase price for Burgoyne, the initial $50,000 working capital advance, a $15,000 original issue discount, and a $15,000 expense allowance to cover ISP Holding’s expenses related to the transaction. The promissory note has a term of 14 months, bears interest at 8 percent, and is convertible into common stock (subject to a maximum holding of 9.9 percent of the total common shares outstanding at any time) at $0.03 per share. The second working capital loan of $50,000, if made, will bear similar terms, except that there will be no original issue discount or expense allowance.</p> <p style='text-align:justify;margin:0in 0in 0pt'>Burgoyne provides Internet access, emails, and related services to customers throughout the United States, primarily in areas where high speed cable and other high speed Internet access services are not readily available. Its web site is at www.burgoyne.com. As a result of this initial ISP acquisition, Novation plans to undertake acquisitions of other regional ISP companies in a national roll-up strategy. We have already identified 5 other regional ISP companies for sale and believe that, with the added infrastructure provided by Novation, the existing operating success can grow and add to the bottom line for Novation. During the two prior calendar years, ending December 31, 2011 and 2010, Burgoyne Internet Services, LLC reported the following revenues and expenses:</p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <table border="0" cellspacing="0" cellpadding="0" style='border-bottom:medium none;border-left:medium none;border-collapse:collapse;border-top:medium none;border-right:medium none'> <tr> <td valign="top" width="326" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:244.35pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='text-align:justify;margin:0in 0in 0pt'> </p></td> <td valign="top" width="21" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:15.8pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'> </p></td> <td valign="top" width="128" style='border-bottom:windowtext 1pt solid;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:96.25pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>December 31, 2011</p></td> <td valign="top" width="21" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:15.8pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'> </p></td> <td valign="top" width="123" style='border-bottom:windowtext 1pt solid;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:92.2pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>December 31, 2010</p></td></tr> <tr style='height:8.5pt'> <td valign="top" width="326" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:244.35pt;padding-right:5.4pt;height:8.5pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='text-align:justify;margin:0in 0in 0pt'>Gross sales income</p></td> <td valign="top" width="21" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:15.8pt;padding-right:5.4pt;height:8.5pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='text-align:justify;margin:0in 0in 0pt'>$</p></td> <td valign="top" width="128" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:96.25pt;padding-right:5.4pt;height:8.5pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>179,983</p></td> <td valign="top" width="21" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:15.8pt;padding-right:5.4pt;height:8.5pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="top" width="123" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:92.2pt;padding-right:5.4pt;height:8.5pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>315,142</p></td></tr> <tr style='height:5.85pt'> <td valign="top" width="326" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:244.35pt;padding-right:5.4pt;height:5.85pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='text-align:justify;margin:0in 0in 0pt'>Less:</p></td> <td valign="top" width="21" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:15.8pt;padding-right:5.4pt;height:5.85pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='text-align:justify;margin:0in 0in 0pt'> </p></td> <td valign="top" width="128" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:96.25pt;padding-right:5.4pt;height:5.85pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'> </p></td> <td valign="top" width="21" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:15.8pt;padding-right:5.4pt;height:5.85pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'> </p></td> <td valign="top" width="123" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:92.2pt;padding-right:5.4pt;height:5.85pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'> </p></td></tr> <tr> <td valign="top" width="326" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:244.35pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='text-align:justify;margin:0in 0in 0pt'>General and administrative expenses</p></td> <td valign="top" width="21" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:15.8pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='text-align:justify;margin:0in 0in 0pt'> </p></td> <td valign="top" width="128" style='border-bottom:windowtext 1pt solid;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:96.25pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>130,549</p></td> <td valign="top" width="21" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:15.8pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'> </p></td> <td valign="top" width="123" style='border-bottom:windowtext 1pt solid;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:92.2pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>198,684</p></td></tr> <tr> <td valign="top" width="326" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:244.35pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='text-align:justify;margin:0in 0in 0pt'> </p></td> <td valign="top" width="21" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:15.8pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='text-align:justify;margin:0in 0in 0pt'> </p></td> <td valign="top" width="128" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:96.25pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'> </p></td> <td valign="top" width="21" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:15.8pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'> </p></td> <td valign="top" width="123" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:92.2pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'> </p></td></tr> <tr> <td valign="top" width="326" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:244.35pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='text-align:justify;margin:0in 0in 0pt'>Net income</p></td> <td valign="top" width="21" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:15.8pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='text-align:justify;margin:0in 0in 0pt'>$</p></td> <td valign="top" width="128" style='border-bottom:windowtext 1.5pt double;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:96.25pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>49,434</p></td> <td valign="top" width="21" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:15.8pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="top" width="123" style='border-bottom:windowtext 1.5pt double;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:92.2pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>116,458</p></td></tr> <tr> <td valign="top" width="326" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:244.35pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='text-align:justify;margin:0in 0in 0pt'> </p></td> <td valign="top" width="21" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:15.8pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p style='text-align:justify;margin:0in 0in 0pt'> </p></td> <td valign="top" width="128" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:96.25pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'> </p></td> <td valign="top" width="21" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:15.8pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'> </p></td> <td valign="top" width="123" style='border-bottom:#f0f0f0;border-left:#f0f0f0;padding-bottom:0in;background-color:transparent;padding-left:5.4pt;width:92.2pt;padding-right:5.4pt;border-top:#f0f0f0;border-right:#f0f0f0;padding-top:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'> </p></td></tr></table> <p style='text-align:justify;margin:0in 0in 0pt'>For its current year through October 31, 2012 (10 months), old Burgoyne reported revenues of $125,690, expenses of $76,847 and net income of $48,843. Novation will include revenues and expenses related to new Burgoyne in its consolidated financial statements commencing December 1, 2012, in its current fiscal year ending August 31, 2013.</p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>As part of the transaction, the Company also executed a Transition Services Agreement with ISP Holdings, LLC. under which ISP Holdings will continue to provide administrative services in managing the ISP business of Burgoyne for a period of 9 months from closing, for a nominal fee of the greater of 2 percent of revenues or $200 per month.</p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>The acquisition agreement also provided that the parties would undertake a reconciliation of income and expenses as of December 31, 2012 and that ISP Holdings would then transfer the net funds due for the operations of Burgoyne through December 31, 2012 to Burgoyne Internet Services, Inc. Thereafter, all income and expenses related to the operations of the ISP business will be recorded directly by Burgoyne Internet Services, Inc. and included in the consolidated results of operations with the Company.</p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>The Company does not consider the transaction as resulting in the acquisition of the business of old Burgoyne, as the old Burgoyne business is continuing under ISP Holdings, LLC, which will collect all outstanding accounts receivable, file tax returns for old Burgoyne under its federal and state tax ID numbers on the cash basis of accounting, and will manage the business as it existed at closing. Burgoyne Internet Services, Inc. will commence operations as of December 1, 2012 as a separate entity from old Burgoyne, has its own separate federal and state tax ID numbers, different staff, reports on the accrual basis and will consolidated with the Company for all financial and tax reporting matters.</p> <p style='margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>On December 6, 2012, the Company also completed the acquisition of Casita de los Ninos, LLC, <font style='background:white'>a California limited liability company doing business as Immersion House<sup>™</sup> </font>(www.immersionhouse.com) which is devoted to helping children learn new languages and gain cultural experiences in those targeted languages. Casita de los Niños, the flagship company for Immersion House, was launched in 2009 in Northern California (Bay Area) and focuses on teaching children Spanish through learning centers and various after school enrichment programs. Immersion House learning centers, products, publications, media, partnerships, resources, and instructors are all committed to one goal: to provide the best “immersive” experience so that students and their families can learn to: Think Global, Act Global, and Be Global. Immersion House differs from other learning language programs in the way that it “immerses” students in the target language they are learning. When students enter its learning centers they are transported into the “world” of that language. They experience the sights, sounds, and tastes of the target language they are learning. When students eat, bake, converse, play, and interact with native speakers, they not only learn the language, they experience its people, culture, and traditions. Paul Bliss, President, and Christy Bliss, the founders of Immersion House<sup>™</sup>, remain as management. The plan is to expand both the language experiences offered and the geographic locations of Immersion House<sup>™ </sup>learning.</p> <p style='text-align:justify;margin:0in 0in 0pt'> </p> <p style='text-align:justify;margin:0in 0in 0pt'>The consideration for the acquisition was the issuance of one million shares of convertible preferred stock having a stated value of $100,000, carrying voting power equal to 51 percent of the total voting power of all classes of stock, a dividend preference equal to $0.01 per share, and a conversion option into shares of common stock valued at the time of conversion at 1 million dollars, based on the 5 day trailing average closing price of the stock. If not already converted, the preferred stock converts automatically five years after issue into shares of common stock valued at the time of conversion at 2 million dollars, based on the 5 day trailing average closing price of the stock<b>.</b></p>
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shares
iso4217:USD
iso4217:USD
shares
Net of accumulated amortization of $20,615 and $15,689
Net of accumulated depreciation of $327 and $221
Net of debt discount of $93,908 and $25,861
$0.001 par value, 500,000,000 shares authorized, 33,117,128 and 30,094,500 shares issued and outstanding
Expenses paid by shareholder
Derivative settlement