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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b>NOTE 1. OVERVIEW AND NATURE OF BUSINESS </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Endeavor Power Corporation (the “Company”)
was incorporated in the State of Nevada on July 6, 2005 under the name VB Biotech Laboratories, Inc.  On September 21, 2007,
the Company filed a Certificate of Amendment with the State of Nevada to change its operating name to VB Trade, Inc., with principal
business operations to develop an online website that allowed web designers to sell their website designs in exchange for a commission
on all products that were sold through the website.   On September 21, 2007, the Company entered into a Plan of Merger
(the “Merger”) with Endeavor Uranium, Inc., a mineral exploration company with mineral properties in the northwestern
United States.  Effectively, the Company changed its name to Endeavor Uranium, Inc. as part of the Merger transaction.  On
December 23, 2008, the Company entered into a Joint Venture Agreement (the “Agreement”) with Federated Energy Corporation,
a Tennessee corporation, for working interests in prospective oil and gas wells located in Nowata County, Oklahoma.  Effectively
on December 23, 2008, the Company changed its operating name to Endeavor Power Corporation.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In November, 2010, Management assessed a potential
business opportunity and determined that in an effort to create value for its Shareholders, the Company should change its business
direction. <font style="color: black">On November 8, 2010, the Company discontinued its operations in its working interests in
oil and gas exploration and changed its operating focus to the development of E-Waste processing services aimed at industrial and
government clients.  </font>The Company’s new direction sought to limit the impact of discarded “E-Waste”
on the environment. Discarded computers and electronic equipment pose environmental hazards.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 26, 2011, Mr. Alfonso Knoll resigned
from all positions with the Company, including but not limited to, that of President, Chief Executive Officer, Chief Financial
Officer, Treasurer and Secretary.  The resignation did not involve any disagreement with the Company. On June 8, 2011, the
Company entered into a Settlement Agreement and General Mutual Release (“Settlement Agreement”) to terminate Mr. Knoll’s
Employment Agreement dated November 8, 2010, and to accept his resignation.  Pursuant to the Settlement Agreement, Mr. Knoll
immediately ceased all services to the Company and, on June 11, 2011, returned to the Company any and all shares of its common
stock currently held by him.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 2, 2011, Mr. Matthew Carley was appointed
as the Company’s President, Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary and Director. Mr. Carley
accepted the appointment, but effectively resigned his positions on September 27, 2011. The Company’s Board of Directors
accepted the resignation of Mr. Carley, as well as the resignation of Mr. Keith Kress as a member of the Board of Directors. Simultaneously,
the Board of Directors appointed Tom Mackay as the President/Chief Executive Officer, Secretary, Treasurer/Chief Financial Officer
and the sole member of the Board of Directors.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In accordance with a change in management effective
September 27, 2011, the Company’s business operations changed. The Company intended to provide managerial services, and pursue
potential funding opportunities for the Company. It retained consultants to perform the necessary due diligence on certain mining
properties located in Venezuela, Brazil, Bolivia, Guyana and several other South American countries. Management, however, determined
that the outcome of such due diligence did not provide the Company a viable opportunity, nor did it provide sufficient economic
benefit for the Company. Management has therefore ceased its due diligence and exploration of mining property opportunities, and
is pursuing other viable business opportunities to increase shareholder market value.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><u>Going Concern</u> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">These financial statements have been prepared
on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the
normal course of business. The Company has not generated significant revenues to date and has never paid any dividends and is unlikely
to pay dividends or generate significant earnings in the immediate or foreseeable future.  As at March 31, 2012, the Company
had a working capital deficit of $342,240, and an accumulated deficit of $18,432,957. The continuation of the Company as a going
concern is dependent upon the continued financial support from its shareholders, the ability to raise equity or debt financing,
and the attainment of profitable operations from the Company's future business. These factors raise substantial doubt regarding
the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability
and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable
to continue as a going concern. </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><u>Basis of Presentation </u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">These financial statements and related notes
are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars.
The Company’s fiscal year-end is December 31.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><u>Cash and Cash Equivalents</u> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company considers all highly liquid instruments
with maturity of three months or less at the time of issuance to be cash equivalents. As at March 31, 2012, the Company had no
cash equivalents.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><u>Use of Estimates</u> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The preparation of financial statements in
conformity with generally accepted accounting principles in the United States and 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. The Company regularly evaluates
estimates and assumptions related to the valuation of its mineral properties, and deferred income tax asset valuation allowances.
The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes
to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of
assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results
experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material
differences between the estimates and the actual results, future results of operations will be affected.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><u>Basic and Diluted Net Income (Loss) Per Share </u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company computes net income (loss) per
share in accordance with ASC 260, <i>Earning per Share</i>.  ASC 260 requires presentation of both basic and diluted
earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to
common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS
gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible
preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining
the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive
potential shares if their effect is anti dilutive.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><u>Comprehensive Loss</u> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">ASC 220,<i> Comprehensive Income,</i> establishes
standards for the reporting and display of comprehensive loss and its components in the financial statements. As at March 31, 2012,
the Company has no items that represent comprehensive loss and, therefore, has not included a schedule of comprehensive loss in
the financial statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><u>Foreign Currency Translation</u> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company’s functional and reporting
currency is the United States dollar. Monetary assets and liabilities denominated in foreign currencies are translated in accordance
with ASC 830 <i>Foreign Currency Translation Matters,</i> using the exchange rate prevailing at the balance sheet date.
Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in
the determination of income. Foreign currency transactions are primarily undertaken in Canadian dollars. The Company has not, to
the date of these financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><u>Revenue Recognition</u> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company recognizes revenue in accordance
with ASC 605, <i>Revenue Recognition</i>. Revenue is recognized only when the price is fixed or determinable, persuasive evidence
of an arrangement exists, the service has been provided, and collectability is reasonably assured.  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><u>Property and Equipment </u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Property and equipment is comprised of vehicles
and general equipment and are recorded at cost and is depreciated using the straight-line method over the estimated useful lives
of three years. Maintenance and repairs are charged to expense as incurred. Significant renewals and betterments are capitalized.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><u>Financial Instruments</u> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Pursuant to ASC 820, <i>Fair Value Measurements
and Disclosures </i>and ASC 825, <i>Financial Instruments</i>, an entity is required to maximize the use of observable
inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 and 825 establishes a fair value hierarchy
based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s
categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
ASC 820 and 825 prioritizes the inputs into three levels that may be used to measure fair value:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table align="center" cellspacing="0" cellpadding="0" style="width: 90%; border-collapse: collapse; font-size: 10pt">
<tr style="vertical-align: top">
<td style="width: 11%; font-size: 10pt; text-decoration: underline; text-align: justify">Level 1</td>
<td style="width: 89%; font-size: 10pt; text-align: justify">Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.</td></tr>
<tr style="vertical-align: top">
<td style="font-size: 10pt; text-align: justify"> </td>
<td style="font-size: 10pt; text-align: justify"> </td></tr>
<tr style="vertical-align: top">
<td style="font-size: 10pt; text-decoration: underline; text-align: justify">Level 2</td>
<td style="font-size: 10pt; text-align: justify">Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.</td></tr>
<tr style="vertical-align: top">
<td style="font-size: 10pt; text-align: justify"> </td>
<td style="font-size: 10pt; text-align: justify"> </td></tr>
<tr style="vertical-align: top">
<td style="font-size: 10pt; text-decoration: underline; text-align: justify">Level 3</td>
<td style="font-size: 10pt; text-align: justify">Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 27pt 0 1in; text-align: justify; text-indent: -1in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company’s financial instruments consist
principally of cash, accounts payable, and accrued liabilities. Pursuant to ASC 820 and 825, the fair value of cash is determined
based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The recorded values
of all other financial instruments approximate their current fair values because of their nature and respective maturity dates
or durations.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Stock-Based Compensation</u> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company records stock-based compensation
in accordance with ASC 718, <i>Share-Based Payments</i>, using the fair value method. All transactions in which goods or services
are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration
received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to
employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity
instruments issued.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><u>Recently Adopted
Accounting Standards</u>:  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company evaluates
the pronouncements of various authoritative accounting organizations, primarily the Financial Accounting Standards Board (“FASB”),
the US Securities and Exchange Commission (“SEC”), and the Emerging Issues Task Force (“EITF”), to determine
the impact of new pronouncements on US GAAP and the impact on the Company. The Company has adopted the following new accounting
standards during 2012:<i> </i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i> </i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 22.1pt 0 22.5pt; text-align: justify; background-color: white"><i>Trouble
Debt Restructuring:</i> Issued in April, 2011, ASU 2011-02 clarifies which loan modifications constitute troubled debt restructurings.
It is intended to assist creditors in determining whether a modification of the terms of a receivable meets the criteria to be
considered a troubled debt restructuring, both for purposes of recording an impairment loss and for disclosure of troubled debt
restructurings. The new guidance is effective for interim and annual periods beginning on or after June 15, 2011, and applies retrospectively
to restructurings occurring on or after the beginning of the fiscal year of adoption. Early adoption is permitted.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 22.1pt 0 22.5pt; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 22.1pt 0 22.5pt; text-align: justify; background-color: white"><i>Comprehensive
Income</i>: Issued in June, 2011, ASU 2011-05 eliminates the current option to present other comprehensive income and its components
in the statement of changes in equity. It will require companies to report the total of comprehensive income including the components
of net income and the components of other comprehensive income in either a single continuous statement of comprehensive income
or in two separate but consecutive statements. The amendments in the ASU are effective for interim and annual periods beginning
on or after December 15, 2011, and should be applied retrospectively. Early adoption is permitted.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 22.1pt 0 22.5pt; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 22.1pt 0 22.5pt; text-align: justify; background-color: white"><i>Intangibles:</i> Issued
in September, 2011, ASU 2011-08<i> </i>permits entities to first perform a qualitative assessment to determine whether it
is more likely than not (a likelihood of more than 50 percent) that the fair value of a reporting unit is less than its carrying
amount. If the entity determines that it is more likely than not that the fair value of a reporting unit is less than its carrying
amount, it would then perform the first step of the goodwill impairment test; otherwise, no further impairment test would be required.
The amendments will be effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December
15, 2011. Early adoption is permitted.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 22.1pt 0 22.5pt; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 22.1pt 0 22.5pt; text-align: justify; background-color: white"><i>Disclosures
about Offsetting Assets and Liabilities</i>: Issued in December, 2011, ASU 2011-11 requires disclosures to provide information
to help reconcile differences in the offsetting requirements under U.S. GAAP and IFRS. The differences in the offsetting requirements
account for a significant difference in the amounts presented in statements of financial position prepared in accordance with U.S.
GAAP and IFRS for certain entities. An entity is required to apply the amendments for annual reporting periods beginning on or
after January 1, 2013, and interim periods within those annual periods.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 22.1pt 0 22.5pt; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><u>Recently Issued
Accounting Standards Updates:</u> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">There were various
updates recently issued, most of which represented technical corrections to the accounting literature or application to specific
industries. None of the updates are expected to a have a material impact on the Company's consolidated financial position, results
of operations or cash flows.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b>NOTE 3. PROPERTY AND EQUIPMENT</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0">Property and Equipment consists of the following:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: center; padding-left: 10pt; text-indent: -10pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" nowrap="nowrap" style="text-align: center; border-bottom: Black 1pt solid">March 31, 2012</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" nowrap="nowrap" style="text-align: center; border-bottom: Black 1pt solid">December 31, 2011</td><td style="padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 54%; text-align: left; padding-left: 10pt; text-indent: -10pt">General  Equipment</td><td style="width: 3%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">2,500</td><td style="width: 1%; text-align: left"> </td><td style="width: 3%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">2,500</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-indent: -10pt; padding-left: 10pt">Automobiles</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">11,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">11,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-left: 10pt; text-indent: -10pt">Sub-Total</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">13,500</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">13,500</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-left: 10pt; text-indent: -10pt"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; text-indent: -10pt; padding-left: 10pt">Accumulated Deprecation</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(6,278</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(5,153</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-left: 10pt; text-indent: -10pt"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; text-indent: -10pt; padding-left: 10pt">Property and Equipment, Net</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">7,222</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">8,347</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Depreciation expense totaled $1,125 and $4,500
for the three months ended March 31, 2012 and the year ended December 31, 2011, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b>NOTE 4. NOTES AND LOANS PAYABLE</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: -1.15pt">In June, 2010, the Company
issued a note payable in the principal amount of $9,075 to a non-related party.  Under the terms of the note, the amount is
unsecured, non-interest bearing, and due upon demand.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: -1.15pt"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: -1.15pt">In June, 2010, the Company
issued a note payable in the principal amount of $10,000 to a non-related party. Under the terms of the note, the amount is
unsecured, accrues interest at a rate of 8% per annum, and is due upon demand.  As of March 31, 2012, the Company has recorded
$1,610 in interest as an accrued expense.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: -1.15pt"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: -1.15pt">On April 21, 2011, the
Company issued a note payable in the principal amount of $65,000 to a non-related party. The note is unsecured, bears interest
at a rate of 10% per annum, and is due upon demand. As of March 31, 2012, the Company has recorded $7,462 in interest as an accrued
expense.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 5. RELATED PARTY PAYABLE</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As at March 31, 2012, related party payable
consists of $126,599 representing miscellaneous operating expenses accrued and/or paid on behalf of the Company by certain related
parties.  The amounts owing are unsecured, non-interest bearing, and due upon demand.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 6. NOTES PAYABLE – RELATED PARTY</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On August 25, 2009, the Company issued a convertible
promissory note (the “Note”) of $826,541 to a related party to settle outstanding debt obligations owing as of the
issuance date.  Under the terms of the Note, the amount owing accrued interest at a rate of 10% per annum, was due August
25, 2011, and contained certain provisions to convert the debt into common shares of the Company.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 17, 2010, the Company issued the related
party 375,000 common shares to settle $75,000 of the outstanding Note, reducing the principal balance to $751,541.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In September, 2010, the Company issued the
related party 140,000,000 common shares to settle $500,000 of the Note, reducing the principal balance to $251,541.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On September 17, 2010, the Company amended
the Note with the related party to combine the remaining principal of $251,541 with the accrued interest to date of $65,897, for
a revised principal balance of $317,438. The new principal balance continues to accrue interest at a rate of 10% per annum, but
no longer contains a provision for conversion.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In November, 2010, the Company received an
additional $100,000 from the related party, increasing the principal balance to $417,438.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As at March 31, 2012, the principal balance
of the Note is $417,438. The Company has recorded $84,568 in interest as an accrued expense.  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b>NOTE 8. WARRANTS</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0">During the year ended March 31, 2012, the Company had the following
share purchase warrants outstanding:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table align="center" cellspacing="0" cellpadding="0" style="width: 90%; border-collapse: collapse">
<tr style="vertical-align: top">
<td colspan="7" style="border: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Outstanding and Exercisable Warrants</td></tr>
<tr style="vertical-align: bottom">
<td style="border-right: windowtext 1pt solid; border-left: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="border-right: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Number of</td>
<td nowrap="nowrap" style="border-right: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Remaining Contractual Life</td>
<td colspan="2" style="border-right: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Exercise Price times Number</td>
<td colspan="2" style="border-right: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Weighted
Average</td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Exercise Price</td>
<td style="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Shares</td>
<td style="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">(in years)</td>
<td colspan="2" style="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">of Shares</td>
<td colspan="2" style="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Exercise Price</td></tr>
<tr style="background-color: rgb(204,238,255)">
<td style="width: 25%; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">$0.900</td>
<td style="width: 17%; border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">500,000</td>
<td style="width: 18%; border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">0.41</td>
<td style="width: 3%; border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">$</td>
<td style="width: 17%; border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">450,000</td>
<td style="width: 3%; border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">$</td>
<td style="width: 17%; border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">0.900</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table align="center" cellspacing="0" cellpadding="0" style="width: 90%; border-collapse: collapse">
<tr>
<td rowspan="4" style="border: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 0.7pt; padding-left: 0.7pt; text-align: center">Warrants</td>
<td nowrap="nowrap" style="vertical-align: bottom; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 0.7pt; padding-left: 0.7pt; text-align: center"> </td>
<td colspan="3" style="vertical-align: bottom; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 0.7pt; padding-left: 0.7pt; text-align: center">Weighted</td>
</tr>
<tr>
<td style="vertical-align: bottom; border-right: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 0.7pt; padding-left: 0.7pt; text-align: center">Number</td>
<td colspan="3" style="vertical-align: bottom; border-right: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 0.7pt; padding-left: 0.7pt; text-align: center">Average</td>
</tr>
<tr>
<td nowrap="nowrap" style="vertical-align: bottom; border-right: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 0.7pt; padding-left: 0.7pt; text-align: center">of Shares</td>
<td colspan="3" style="vertical-align: bottom; border-right: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 0.7pt; padding-left: 0.7pt; text-align: center">Exercise</td>
</tr>
<tr>
<td style="vertical-align: bottom; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 0.7pt; padding-left: 0.7pt; text-align: center"> </td>
<td colspan="3" style="vertical-align: bottom; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 0.7pt; padding-left: 0.7pt; text-align: center">Price</td>
</tr>
<tr style="background-color: rgb(204,238,255)">
<td style="vertical-align: bottom; width: 59%; border-left: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; border-right: windowtext 1pt solid; padding-right: 0.7pt; padding-left: 11.9pt">Outstanding at December 31, 2011</td>
<td style="vertical-align: bottom; width: 21%; border-right: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 6.5pt; padding-left: 0.7pt; text-align: right">500,000</td>
<td style="vertical-align: top; width: 2%; padding-right: 0.7pt; padding-left: 0.7pt; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; padding-right: 0.7pt; padding-left: 0.7pt; font: 10pt Times New Roman, Times, Serif">$</td>
<td style="vertical-align: bottom; width: 17%; border-right: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 7.75pt; padding-left: 0.7pt; text-align: right">0.900</td>
</tr>
<tr style="background-color: White">
<td style="vertical-align: bottom; border-right: windowtext 1pt solid; border-left: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 0.7pt; padding-left: 20.9pt">Issued</td>
<td style="vertical-align: bottom; border-right: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 6.5pt; padding-left: 0.7pt; text-align: right">—</td>
<td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; padding-right: 0.7pt; padding-left: 0.7pt; text-align: right"> </td>
<td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; padding-right: 0.7pt; padding-left: 0.7pt; text-align: right"> </td>
<td style="vertical-align: bottom; border-right: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 7.75pt; padding-left: 0.7pt; text-align: right">—</td>
</tr>
<tr style="background-color: rgb(204,238,255)">
<td style="vertical-align: bottom; border-right: windowtext 1pt solid; border-left: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 0.7pt; padding-left: 20.9pt">Exercised</td>
<td style="vertical-align: bottom; border-right: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 6.5pt; padding-left: 0.7pt; text-align: right">—</td>
<td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; padding-right: 0.7pt; padding-left: 0.7pt; text-align: right"> </td>
<td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; padding-right: 0.7pt; padding-left: 0.7pt; text-align: right"> </td>
<td style="vertical-align: bottom; border-right: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 7.75pt; padding-left: 0.7pt; text-align: right">—</td>
</tr>
<tr style="background-color: White">
<td style="vertical-align: bottom; border-right: windowtext 1pt solid; border-left: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 0.7pt; padding-left: 20.9pt">Expired / Cancelled</td>
<td style="vertical-align: bottom; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 6.5pt; padding-left: 0.7pt; text-align: right">—</td>
<td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; padding-right: 0.7pt; padding-left: 0.7pt; text-align: right"> </td>
<td style="vertical-align: bottom; border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 0.7pt; padding-left: 0.7pt; text-align: right"> </td>
<td style="vertical-align: bottom; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 7.75pt; padding-left: 0.7pt; text-align: right">—</td>
</tr>
<tr style="background-color: rgb(204,238,255)">
<td style="vertical-align: bottom; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 0.7pt; padding-left: 11.9pt">Outstanding at March 31, 2012</td>
<td style="vertical-align: bottom; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 6.5pt; padding-left: 0.7pt; text-align: right">500,000</td>
<td style="vertical-align: top; border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 0.7pt; padding-left: 0.7pt"> </td>
<td style="vertical-align: bottom; border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 0.7pt; padding-left: 0.7pt">$</td>
<td style="vertical-align: bottom; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 7.75pt; padding-left: 0.7pt; text-align: right">0.900</td>
</tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0">The outstanding share purchase warrants expire on August 25, 2012.
 </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 9. INCOME TAXES</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The components of the net deferred tax asset
at March 31, 2012 and December 31, 2011, the statutory tax rate, the effective tax rate and the amount of the valuation allowance
are indicated below:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 80%">
<tr style="vertical-align: bottom">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-left: 10pt; text-indent: -10pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td colspan="2" nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif; text-align: center; border: Black 1pt solid">March 31, 2012</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td colspan="2" nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif; text-align: center; border: Black 1pt solid">December 31, 2011</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 10pt Times New Roman, Times, Serif; padding-left: 10pt; text-indent: -10pt"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 52%; font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 10pt; text-indent: -10pt">Income (Loss) Before Taxes</td><td style="width: 3%; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="width: 18%; font: 10pt Times New Roman, Times, Serif; text-align: right">(35,787</td><td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="width: 5%; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="width: 18%; font: 10pt Times New Roman, Times, Serif; text-align: right">(1,967,287</td><td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 10pt; text-indent: -10pt">Statutory rate</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">34</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">%</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">34</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font: 10pt Times New Roman, Times, Serif; padding-left: 10pt; text-indent: -10pt"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 10pt; text-indent: -10pt">Computed expected tax payable (recovery)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">12,168</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">668,878</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font: 10pt Times New Roman, Times, Serif; padding-left: 10pt; text-indent: -10pt">Non-deductible expenses</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">—</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">(1,530</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 10pt; text-indent: -10pt">Change in valuation allowance</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(12,168</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(667,348</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font: 10pt Times New Roman, Times, Serif; padding-left: 10pt; text-indent: -10pt"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 10pt; text-indent: -10pt">Reported income taxes</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">—</td><td style="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">—</td><td style="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The significant components of deferred income
tax assets and liabilities at March 31, 2012 and December 31, 2011 are as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 80%">
<tr style="vertical-align: bottom">
<td style="text-align: center; padding-left: 10pt; text-indent: -10pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td colspan="2" nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif; text-align: center; border: Black 1pt solid">March 31, 2012</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td colspan="2" nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif; text-align: center; border: Black 1pt solid">December 31, 2011</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 10pt Times New Roman, Times, Serif; padding-left: 10pt; text-indent: -10pt"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 52%; font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 10pt; text-indent: -10pt">Net operating loss carried forward</td><td style="width: 3%; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="width: 18%; font: 10pt Times New Roman, Times, Serif; text-align: right">5,926,079</td><td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="width: 5%; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="width: 18%; font: 10pt Times New Roman, Times, Serif; text-align: right">5,890,292</td><td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font: 10pt Times New Roman, Times, Serif; padding-left: 10pt; text-indent: -10pt"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 10pt; text-indent: -10pt">Valuation allowance</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(5,926,079</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(5,890,292</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font: 10pt Times New Roman, Times, Serif; padding-left: 10pt; text-indent: -10pt"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 10pt; text-indent: -10pt">Net deferred income tax asset</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">—</td><td style="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">—</td><td style="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="color: black">As at March 31,
2012, the Company had $</font>5,926,079 <font style="color: black">of net operating losses which expire commencing in the year
2026.  </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 10. SUBSEQUENT EVENTS</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company has evaluated
events and transactions that occurred between March 31, 2012 and the date the consolidated financial statements were available
for issue, for possible disclosure or recognition in the consolidated financial statements. The Company has determined that there
were no such events or transactions that warrant disclosure or recognition in the consolidated financial statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"></p>
-483981
-91005
50005
15850
3000
191206
18812
13957
110250
6880452
1800000
6278
1125
1125
826541
-13500
13500
1489576
65000
83991
264949
84075
65000
1061561
5000
-992095
-609718
-382377
-26055
27802
1747
500000
5600000
151063898
9063834
-4277892
-11772
-12183
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b>NOTE 7. COMMON STOCK</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>All common shares issued for services or
settlements of debt are valued based on the end-of-day market prices on the date of issuance, unless otherwise specified.  </i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i> </i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>The Company and its Board of Directors authorized
a 1:100 reverse common stock split on August 16, 2010, The effects of the reverse stock split resulted in the number of issued
and outstanding common stock to decrease from 106,388,200 common shares to 1,063,898 common shares, have been applied on a retroactive
basis, and are reflected below where applicable.</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i> </i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The total number of authorized shares of common
stock that may be issued by the Company is 250,000,000 with a par value of $0.001 per share.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: -0.5pt">During the year ended
December 31, 2006, the Company issued 325,000,000 founder shares for cash proceeds of $5,000.  These shares were cancelled
during the year ended December 31, 2007.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: -0.5pt"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: -0.5pt">During the year ended
December 31, 2006, the Company issued 513,448 (post-split adjusted) common shares for cash proceeds of $78,991.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: -0.5pt"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: -0.5pt">In October 2007, the Company
issued 140,000 (post-split adjusted) common shares at $0.40 per common share, with a fair value of $5,600,000, to acquire mineral
properties.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: -0.5pt"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 22, 2009, the Company issued 460 (post-split
adjusted) common shares of the Company with a fair value of $67,376 to settle debt obligations of $27,500, resulting in a loss
on settlement of debt of $39,876.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 22, 2009, the Company issued 460 (post-split
adjusted) common shares of the Company with a fair value of $67,376 to settle debt obligations of $27,500, resulting in a loss
on settlement of debt of $39,876.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 22, 2009, the Company issued 1,667
(post-split adjusted) common shares of the Company with a fair value of $245,000 to settle debt obligations of $100,000, resulting
in a loss on settlement of debt of $145,000.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 22, 2009, the Company issued 100 (post-split
adjusted) common shares of the Company with a fair value of $14,700 to settle debt obligations of $12,000, resulting in a loss
on settlement of debt of $2,700.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 22, 2009, the Company issued 750 (post-split
adjusted) common shares of the Company with a fair value of $110,250 to a related party as incentive bonus shares for the conversion
of amounts owing into a long-term convertible note payable.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On August 25, 2009, the Company issued 32,000
(post-split adjusted) common shares of the Company for consulting services with a fair value of $3,776,000.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 17, 2010, the Company issued 375,000
(post-split adjusted) common shares to a related party for the repayment of payable note payable of $75,000, resulting in a loss
on settlement of debt of $180,000.  Per the convertible note agreement the Company was to convert the debt at $0.006 per share
(post split) for a total issuance of 12,500,000 shares. The additional 25,000,000 shares were issued at the closing price of the
stock on the day of issuance resulting in the $180,000 loss.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On September 20, 2010, the Company issued 140,000,000
common shares to settle outstanding notes payable of $500,000 resulting in a loss on settlement of debt of $3,116,667.  Per
the convertible note agreement the Company was to convert the debt at $0.006 per share (post split) for a total issuance of 83,333,333
shares. The additional 56,666,667 shares were issued at the closing price of the stock on the day of issuance resulting in the
$3,166,667 loss.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On November 8, 2010, the Company issued 3,500,000
common shares to the CEO of the Company for management services with a fair value of $910,000. As a result, $906,500 was recorded
as paid in capital.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On February 23, 2011, the Company issued 10,000,000
shares of its common stock in exchange for services rendered to the Company, valued at $1,800,000. As a result, $1,790,000 was
recorded as paid in capital.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 14, 2011, pursuant to the Settlement
Agreement related to the resignation of the Company’s former CEO/President, the 3,500,000 shares of common stock previously
issued on November 8, 2010, were returned to treasury. As a result, paid in capital was reduced by $3,500.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of March 31, 2012, the Company had 151,063,898
common shares issued and outstanding.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>