10-Q
2012-04-30
false
Alternative Energy Partners, Inc.
0001446896
--07-31
106216194
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<!--egx--><p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. It is management's opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation.</font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">The unaudited interim financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K, which contains the audited financial statements and notes thereto, together with Management’s Discussion and Analysis, for the year ended July 31, 2011. The interim results for the period ended April 30, 2012 are not necessarily indicative of results for the full fiscal year. Notes to the Consolidated Financial Statements, which would substantially duplicate disclosures contained in the audited financials for the fiscal year 2011 as reported in Form 10-K, have been omitted.</font></p>
<!--egx--><p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">Nature of Operations</font></b><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"></font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">Alternative Energy Partners, Inc. (the “Company”) was incorporated in the State of Florida on April 28, 2008.</font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">The Company is involved in the alternative energy sector. The Company has acquired and is seeking to acquire additional emerging growth companies to meet growing demands worldwide in the alternative energy sector. The Company currently has four subsidiaries, Sunarias Corporation (“Sunarias”) acquired during the fiscal year ended July 31, 2010; SkyNet Energy Systems, Inc., and Shovon, LLC, acquired during the fiscal year ended July 31, 2011; and Élan Energy Corp. (“Élan”), incorporated as a wholly-owned subsidiary on September 13, 2010. </font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; COLOR:black; FONT-SIZE:10pt"> </font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><u><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">Sunarias</font></u><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"></font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">Sunarias is a California corporation engaged in thermal and solar energy management. Sunarias marries absorption chilling and solar thermal technologies to provide commercial buildings with energy efficiency at a lower cost. Sunarias intends to assist commercial entities in hedging against extraordinary utility costs, and may be appropriate for use by schools, hospitals, or municipal buildings, among others.</font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><u><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">Shovon, LLC</font></u><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"></font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">On July 7, 2010, the Company acquired Shovon, LLC a California Limited Liability Company, from Healthcare of Today, Inc., the Company’s former majority shareholder (“Healthcare”), in exchange for 1,500,000 (75,000,000 pre-split) shares of Company common stock.</font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><u><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">SkyNet Energy</font></u><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"></font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">On August 19, 2010, the Company acquired SkyNet Energy Systems, Inc (“SkyNet”), a Florida Corporation, from Healthcare of Today, Inc., the Company’s former majority shareholder (“Healthcare”), in exchange for 600,000 (30,000,000 pre-split) shares of Company common stock.</font></p> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center"><font style="FONT-FAMILY:'Times New Roman','serif'; COLOR:black; FONT-SIZE:10pt"> </font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><u><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">Elán</font></u><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"></font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">Elán Energy, Inc. a wholly-owned subsidiary of the Company was formed in September 2010 to manage the Company’s commercial HVAC and related operations. It is actively engaged in the acquisition of commercial mechanical contractors and expects to complete several acquisitions in the next fiscal quarter of the Company.</font></p>
<!--egx--><p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">Development Stage</font></b><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"></font></p> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">The Company's financial statements are presented as those of a development stage enterprise. Activities during the development stage primarily include equity based financing and further implementation of the business plan. The Company has not generated any significant revenues since inception.</font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p>
<!--egx--><p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">Principles of Consolidation</font></b><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"></font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">The accompanying consolidated financial statements include Alternative Energy Partners, Inc. and its wholly-owned subsidiaries described above. All intercompany balances and transactions have been eliminated in consolidation.</font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p>
<!--egx--><p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">Risks and Uncertainties</font></b><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"></font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">The Company intends to operate 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.</font></p>
<!--egx--><p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">Use of Estimates</font></b><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"></font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">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 in 2012 and 2011 included a 100% valuation allowance for deferred tax assets arising from net operating losses incurred since inception.</font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">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.</font></p>
<!--egx--><p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">Cash and Cash Equivalents</font></b><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"></font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. At April 30, 2012 and July 31, 2011, respectively, the Company had no cash equivalents.</font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">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. At April 30, 2012 and July 31, 2011, respectively, there were no balances that exceeded the federally insured limit.</font></p>
<!--egx--><p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">Earnings per Share</font></b><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"></font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (‘ASC”) Topic 260, <i>“Earnings per Share,” </i>Basic earnings per share (“EPS”) is computed by dividing net 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 April 28, 2008 (inception) to April 30, 2012, is equivalent since the Company has had continuing losses. </font></p>
<!--egx--><p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">Share Based Payments</font></b><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"></font></p> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">Generally, all forms of share-based payments, including stock option grants, restricted stock grants and stock appreciation rights, are measured at their fair value on the awards’ grant date, and based on the estimated number of awards that are ultimately expected to vest. 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. The expense resulting from share-based payments are recorded as a component of general and administrative expense.</font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p>
<!--egx--><p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">Intangible Assets</font></b><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"></font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">Intangible assets are stated at cost less accumulated amortization and, if impaired, at fair value. They are amortized in accordance with the relevant income stream or by using the straight line method over their useful lives from the time they are first available for use. The estimated useful lives vary according to the specific asset but are typically: 1 to 12 years for customer contracts and relationships; 3 to 8 years for capitalized software; 3 to 10 years for patents, trademarks and licenses; and 3 to 8 years for capitalized development currently being amortized.</font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">Intangible assets which are not yet being amortized are subject to annual impairment reviews.</font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">Goodwill</font></b><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"></font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">Goodwill arises on the acquisition of a business when the fair value of the consideration given exceeds the fair value attributed to the net assets acquired (including contingent liabilities). It is subject to annual impairment reviews.</font></p>
<!--egx--><p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">Segment Information</font></b><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"></font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">During the three and nine months ended April 30, 2012 and 2011, the Company only operated in one segment; therefore, segment information has not been presented.</font></p>
<!--egx--><p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">Fair Value of Financial Instruments</font></b><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"></font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">The carrying amounts of the Company’s short-term financial instruments, including accounts payable and accrued liabilities, approximate fair value due to the relatively short period to maturity for these instruments.</font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">Fair Value Measurement</font></b><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"></font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">The fair value of the Company's financial assets and liabilities reflects the Company's estimate of amounts that it would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from sources independent from the Company) and to minimize the use of unobservable inputs (the Company's assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:</font></p> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <table width="100%" style="WIDTH:100%" cellpadding="0" cellspacing="0"> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:36.9pt"> <td width="7%" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; WIDTH:7%; PADDING-RIGHT:0in; HEIGHT:36.9pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">Level 1:</font></p></td> <td width="2%" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; WIDTH:2%; PADDING-RIGHT:0in; HEIGHT:36.9pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p></td> <td width="69%" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; WIDTH:69%; PADDING-RIGHT:0in; HEIGHT:36.9pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.</font></p> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid"> <td width="7%" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; WIDTH:7%; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">Level 2:</font></p></td> <td width="2%" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; WIDTH:2%; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p></td> <td width="69%" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; WIDTH:69%; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.</font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid"> <td width="7%" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; WIDTH:7%; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">Level 3:</font></p></td> <td width="2%" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; WIDTH:2%; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p></td> <td width="69%" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; WIDTH:69%; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">Unobservable inputs based on the Company's assessment of the assumptions that market participants would use in pricing the asset or liability.</font></p></td></tr></table> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">At April 30, 2012, and July 31, 2011, respectively the Company has no instruments that require additional disclosure.</font></p>
<!--egx--><p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">Recent Accounting Pronouncements</font></b><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"></font></p> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">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. </font></p>
<!--egx--><p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">As reflected in the accompanying financial statements, the Company has a net loss of $386,034 net cash used in operations of $77,837 for the nine months ended April 30, 2012; and deficit accumulated during the development stage of $6,717,052 at April 30, 2012. </font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">These factors, among others, raise doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments related to recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.</font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">In response to these problems, management has taken the following actions:</font></p> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <table width="100%" style="WIDTH:100%" cellpadding="0" cellspacing="0"> <tr style="PAGE-BREAK-INSIDE:avoid"> <td width="48" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; WIDTH:0.5in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><font style="FONT-FAMILY:Symbol; FONT-SIZE:10pt">·</font><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"></font></p></td> <td 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" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> The Company is seeking third party debt and/or equity financing;</font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid"> <td width="48" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; WIDTH:0.5in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><font style="FONT-FAMILY:Symbol; FONT-SIZE:10pt">·</font><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"></font></p></td> <td 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" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> The Company is cutting operating costs, and</font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:9pt"> <td width="48" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; WIDTH:0.5in; PADDING-RIGHT:0in; HEIGHT:9pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><font style="FONT-FAMILY:Symbol; FONT-SIZE:10pt">·</font><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"></font></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; HEIGHT:9pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt 4.5pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> As described in Note 8, the Company has been involved in numerous acquisitions with the intent of achieving a level of profitability</font></p></td></tr></table>
<!--egx--><p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">The Company currently occupies office space in Merritt Island, Florida sub-leased from a consultant which also provides financial, accounting, compliance and other support services to the Company on a three year consulting agreement. The rent payable under the consulting agreement is not separately stated and is included in the monthly consulting fee payable for the services agreed. The services include use of office equipment, software, servers, and office personnel of the consultant, as well as use of the consultant’s offices as the mailing address for the Company.</font></p> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p>
<!--egx--><p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">On January 15, 2012, the Company amended its articles of incorporation to increase authorized common stock to 250,000,000 shares and authorize 5,000,000 in preferred shares.</font><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"></font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">During the nine months ended April 30, 2012, the Company converted $194,878 in notes into 93,190,993 shares of common stock.</font></p> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 10pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 10pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">As a result of these transactions, there were 106,216,193 common shares issued and outstanding and no preferred shares authorized at April 30, 2012.</font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">At April 30, 2012, the Company’s former majority shareholder held 462,167 common shares.</font></p>
<!--egx--><p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">The following details the significant terms and balances of convertible notes payable, net of debt discounts:</font></p> <div align="center"> <table width="623" style="MARGIN:auto auto auto 4.65pt; WIDTH:467.05pt; BORDER-COLLAPSE:collapse" cellpadding="0" cellspacing="0"> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:53.1pt"> <td width="352" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:263.65pt; PADDING-RIGHT:5.4pt; HEIGHT:53.1pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td width="120" 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:53.1pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center"><font style="FONT-FAMILY:'Times New Roman','serif'; COLOR:black; FONT-SIZE:10pt">April 30, 2012 (unaudited)</font></p></td> <td width="17" colspan="2" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:12.75pt; PADDING-RIGHT:5.4pt; HEIGHT:53.1pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td width="134" colspan="2" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:100.65pt; PADDING-RIGHT:5.4pt; HEIGHT:53.1pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center"><font style="FONT-FAMILY:'Times New Roman','serif'; COLOR:black; FONT-SIZE:10pt">July 31, 2011 (unaudited)</font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:126.4pt"> <td width="352" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:263.65pt; PADDING-RIGHT:5.4pt; HEIGHT:126.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; COLOR:black; FONT-SIZE:10pt">On December 23, 2010, the Company issued its promissory note in the amount of $53,000 to an unrelated third party for additional working capital. The note was due September 24, 2011 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 58 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 $6,646, respectively. The note was fully converted at April 30, 2012.</font></p></td> <td 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:126.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><font style="FONT-FAMILY:'Times New Roman','serif'; COLOR:black; FONT-SIZE:10pt"> $ - </font></p></td> <td width="17" colspan="2" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:12.75pt; PADDING-RIGHT:5.4pt; HEIGHT:126.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td width="122" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:91.65pt; PADDING-RIGHT:5.4pt; HEIGHT:126.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><font style="FONT-FAMILY:'Times New Roman','serif'; COLOR:black; FONT-SIZE:10pt"> $ 26,354 </font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:135.9pt"> <td width="352" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:263.65pt; PADDING-RIGHT:5.4pt; HEIGHT:135.9pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; COLOR:black; FONT-SIZE:10pt">On March 9, 2011, the Company issued its promissory note in the amount of $35,000 to an unrelated third party for additional working capital. The note was due December 7, 2011 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 58 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 $25,345, respectively. The note was fully converted at April 30, 2012.</font></p></td> <td 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:135.9pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><font style="FONT-FAMILY:'Times New Roman','serif'; COLOR:black; FONT-SIZE:10pt"> - </font></p></td> <td width="17" colspan="2" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:12.75pt; PADDING-RIGHT:5.4pt; HEIGHT:135.9pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td width="122" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:91.65pt; PADDING-RIGHT:5.4pt; HEIGHT:135.9pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><font style="FONT-FAMILY:'Times New Roman','serif'; COLOR:black; FONT-SIZE:10pt"> 9,655 </font></p></td></tr> <tr> <td width="352" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; BACKGROUND-COLOR:transparent; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0"></td> <td width="120" 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="5" 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="122" 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"><font style="COLOR:black; FONT-SIZE:10pt"> </font></p> <div align="center"> <table width="624" style="MARGIN:auto auto auto 57pt; WIDTH:468.15pt; BORDER-COLLAPSE:collapse" cellpadding="0" cellspacing="0"> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:134.1pt"> <td width="348" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:260.9pt; PADDING-RIGHT:5.4pt; HEIGHT:134.1pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; COLOR:black; FONT-SIZE:10pt">On March 15, 2011, 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 March 14, 2012 and carries interest at 10 percent per annum, payable at maturity. The note is convertible into common stock of the Company at any time before the due date, 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 $0 and $22,492, respectively.</font></p></td> <td width="134" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:100.4pt; PADDING-RIGHT:5.4pt; HEIGHT:134.1pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><font style="FONT-FAMILY:'Times New Roman','serif'; COLOR:black; FONT-SIZE:10pt"> 10,678 </font></p></td> <td width="17" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13pt; PADDING-RIGHT:5.4pt; HEIGHT:134.1pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td width="125" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.85pt; PADDING-RIGHT:5.4pt; HEIGHT:134.1pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><font style="FONT-FAMILY:'Times New Roman','serif'; COLOR:black; FONT-SIZE:10pt"> 27,508 </font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:135pt"> <td width="348" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:260.9pt; PADDING-RIGHT:5.4pt; HEIGHT:135pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; COLOR:black; FONT-SIZE:10pt">On June 13, 2011, the Company issued a promissory note in the amount of $32,500 to an unrelated third party for additional working capital. The note was due March 15, 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 58 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 $23,534, respectively. This note was fully converted at April 30, 2012.</font></p></td> <td width="134" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:100.4pt; PADDING-RIGHT:5.4pt; HEIGHT:135pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><font style="FONT-FAMILY:'Times New Roman','serif'; COLOR:black; FONT-SIZE:10pt"> - </font></p></td> <td width="17" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13pt; PADDING-RIGHT:5.4pt; HEIGHT:135pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td width="125" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.85pt; PADDING-RIGHT:5.4pt; HEIGHT:135pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><font style="FONT-FAMILY:'Times New Roman','serif'; COLOR:black; FONT-SIZE:10pt"> 8,966 </font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:112.5pt"> <td width="348" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:260.9pt; PADDING-RIGHT:5.4pt; HEIGHT:112.5pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; COLOR:black; FONT-SIZE:10pt">On June 30, 2011, the Company issued a promissory note in the amount of $50,000 to an unrelated third party for additional working capital. The note is due December 31, 2012 and carries interest at 2 percent per annum, payable at maturity. The note is convertible into common stock of the Company at any time after issuance of the note, at the election of the Holder, at $0.013 per share. The carrying amount of the debt discount was $7,361 and $45,695, respectively.</font></p></td> <td width="134" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:100.4pt; PADDING-RIGHT:5.4pt; HEIGHT:112.5pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><font style="FONT-FAMILY:'Times New Roman','serif'; COLOR:black; FONT-SIZE:10pt"> 42,639 </font></p></td> <td width="17" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13pt; PADDING-RIGHT:5.4pt; HEIGHT:112.5pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td width="125" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.85pt; PADDING-RIGHT:5.4pt; HEIGHT:112.5pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><font style="FONT-FAMILY:'Times New Roman','serif'; COLOR:black; FONT-SIZE:10pt"> 4,305 </font></p></td></tr></table></div> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><font style="COLOR:black; FONT-SIZE:10pt"> </font></p> <div align="center"> <table width="634" style="WIDTH:475.65pt; BORDER-COLLAPSE:collapse" cellpadding="0" cellspacing="0"> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:102pt"> <td width="363" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:272.05pt; PADDING-RIGHT:5.4pt; HEIGHT:102pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; COLOR:black; FONT-SIZE:10pt">On July 31, 2011, the Company issued six (6) promissory notes totaling $60,000 to an unrelated third party for additional working capital. The notes are due December 31, 2012 and carries interest at 2 percent per annum, payable at maturity. The note is convertible into common stock of the Company at any time after issuance of the note, at the election of the Holder, at $0.013 per share. The carrying amount of the debt discount was $3,280 and $59,784, respectively.</font></p></td> <td width="106" 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:102pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><font style="FONT-FAMILY:'Times New Roman','serif'; COLOR:black; FONT-SIZE:10pt"> - </font></p></td> <td width="34" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:25.7pt; PADDING-RIGHT:5.4pt; HEIGHT:102pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td width="131" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:98.45pt; PADDING-RIGHT:5.4pt; HEIGHT:102pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><font style="FONT-FAMILY:'Times New Roman','serif'; COLOR:black; FONT-SIZE:10pt"> 218 </font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:120.6pt"> <td width="363" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:272.05pt; PADDING-RIGHT:5.4pt; HEIGHT:120.6pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; COLOR:black; FONT-SIZE:10pt">On February 7, 2012, the Company issued a promissory note in the amount of $32,500 to an unrelated third party for additional working capital. The note is due November 9, 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 55 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 $32,500 and $0, respectively.</font></p></td> <td width="106" 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:120.6pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><font style="FONT-FAMILY:'Times New Roman','serif'; COLOR:black; FONT-SIZE:10pt"> - </font></p></td> <td width="34" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:25.7pt; PADDING-RIGHT:5.4pt; HEIGHT:120.6pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td width="131" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:98.45pt; PADDING-RIGHT:5.4pt; HEIGHT:120.6pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><font style="FONT-FAMILY:'Times New Roman','serif'; COLOR:black; FONT-SIZE:10pt"> - </font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:120.6pt"> <td width="363" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:272.05pt; PADDING-RIGHT:5.4pt; HEIGHT:120.6pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; COLOR:black; FONT-SIZE:10pt">On March 8, 2012, the Company issued a promissory note in the amount of $32,500 to an unrelated third party for additional working capital. The note is due December 12, 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 55 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 $32,500 and $0, respectively.</font></p></td> <td width="106" 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:120.6pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><font style="FONT-FAMILY:'Times New Roman','serif'; COLOR:black; FONT-SIZE:10pt"> - </font></p></td> <td width="34" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:25.7pt; PADDING-RIGHT:5.4pt; HEIGHT:120.6pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td width="131" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:98.45pt; PADDING-RIGHT:5.4pt; HEIGHT:120.6pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><font style="FONT-FAMILY:'Times New Roman','serif'; COLOR:black; FONT-SIZE:10pt"> - </font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:114.75pt"> <td width="363" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:272.05pt; PADDING-RIGHT:5.4pt; HEIGHT:114.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; COLOR:black; FONT-SIZE:10pt">On February 21, 2012, , the Company issued a promissory note in the amount of $27,500. The note is due February 21, 2015 and carries interest at 9 percent per annum, payable at maturity. The note is convertible into common stock of the Company 180 days after issuance of the note, at the election of the Holder, at 80% of the closing price on the date of the debenture ($0.0019). The carrying amount of the debt discount was $10,450 and $0, respectively.</font></p></td> <td width="106" 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:114.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><font style="FONT-FAMILY:'Times New Roman','serif'; COLOR:black; FONT-SIZE:10pt"> 17,050 </font></p></td> <td width="34" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:25.7pt; PADDING-RIGHT:5.4pt; HEIGHT:114.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td width="131" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:98.45pt; PADDING-RIGHT:5.4pt; HEIGHT:114.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><font style="FONT-FAMILY:'Times New Roman','serif'; COLOR:black; FONT-SIZE:10pt"> - </font></p></td></tr></table></div> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><font style="COLOR:black; FONT-SIZE:10pt"> </font></p> <div align="center"> <table width="634" style="WIDTH:475.65pt; BORDER-COLLAPSE:collapse" cellpadding="0" cellspacing="0"> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:114.75pt"> <td width="363" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:272.05pt; PADDING-RIGHT:5.4pt; HEIGHT:114.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; COLOR:black; FONT-SIZE:10pt">On December 1, 2011, the converted accounts payable into a promissory note totaling $30,000. The note is due November 9, 2012 and carries interest at 8 percent per annum, payable at maturity. The note is convertible into common stock of the Company 180 days after issuance of the note, at the election of the Holder, at 45% of the average lowest three (3) trading prices for the common stock during the ten (10) day trading period prior to the conversion date. The carrying amount of the debt discount was $3,491 and $0, respectively.</font></p></td> <td width="106" 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:114.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><font style="FONT-FAMILY:'Times New Roman','serif'; COLOR:black; FONT-SIZE:10pt"> 26,509 </font></p></td> <td width="34" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:25.7pt; PADDING-RIGHT:5.4pt; HEIGHT:114.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td width="131" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:98.45pt; PADDING-RIGHT:5.4pt; HEIGHT:114.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><font style="FONT-FAMILY:'Times New Roman','serif'; COLOR:black; FONT-SIZE:10pt"> - </font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:22pt"> <td width="363" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:272.05pt; PADDING-RIGHT:5.4pt; HEIGHT:22pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td width="106" style="BORDER-BOTTOM:windowtext 2.25pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:79.45pt; PADDING-RIGHT:5.4pt; HEIGHT:22pt; BORDER-TOP:windowtext 1pt solid; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><font style="FONT-FAMILY:'Times New Roman','serif'; COLOR:black; FONT-SIZE:10pt"> $ 96,876 </font></p></td> <td width="34" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:25.7pt; PADDING-RIGHT:5.4pt; HEIGHT:22pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td width="131" style="BORDER-BOTTOM:windowtext 2.25pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:98.45pt; PADDING-RIGHT:5.4pt; HEIGHT:22pt; BORDER-TOP:windowtext 1pt solid; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><font style="FONT-FAMILY:'Times New Roman','serif'; COLOR:black; FONT-SIZE:10pt"> $ 77,006 </font></p></td></tr></table></div>
<!--egx--><p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">Acquisition</font></b><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">:</font></p> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <p style="MARGIN:0in 0in 10pt"><font style="LINE-HEIGHT:115%; FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">Clarrix Energy, LLC</font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 10pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">The Company has entered into an acquisition agreement dated March 12, 2012 to acquire Clarrix Energy, LLC from its sole member, Élan Energy & Water, Inc., a related party, for a total of forty million (40,000,000) common shares and 5,000,000 Series A Convertible Preferred Shares of the Company. The acquisition closed on May 30, 2012. When issued, the Series A Convertible Preferred Stock will be a voting stock which votes on a par with the common shares except that the Series A Preferred always has a vote equal to 51 percent of the total votes eligible to vote on any matter, and is convertible at the election of the holder into 51 percent of the resulting common shares outstanding at the time of the election to convert.</font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 10pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">Clarrix Energy, LLC provides energy consultative and brokerage services to business of all sizes. The objective of these services is to decrease utility costs in as many ways as possible for every client. The company currently has agreements with energy suppliers in 10 states, and is in pursuit of<font style="COLOR:#1f497d"> </font>additional supply partners.</font></p> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt"> </font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 10pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">Clarrix Energy was founded in 2011 by a management team composed of a diverse group of highly skilled executives with broad base of skills medicine, finance, web development, and retail. The company’s initial source of revenue is from commissions generated by saving businesses from 1 to 25% on their utility bills. Management will be diligently searching for products and services for clients, including solar, surge protection, lighting and more.</font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 10pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">The deregulation of energy by the federal government has created multiple opportunities in the energy sector. Multiple states allow businesses and consumers to select the supplier of their commodity (gas or electricity). This, of course, is intended to give business the opportunity to save on their utility costs. </font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 10pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">The company will be focusing on a creative online strategy to attract and manage clients. Management is developing a sales force in all areas their supply agreements allow. Management plans to technology and state-of-the-art web and social networking strategies to maximize lead generation and minimize advertising costs.</font></p> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 10pt"><b><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">Share issues</font></b><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">:</font></p> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 10pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">During May of 2012, the Company converted $10,678 of notes payable into 22,135,354 common shares.</font></p> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 10pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">During May of 2012, the Company issued 40,000,000 common shares to acquire Clarrix Energy as referenced in Note 8 above.</font></p> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 10pt"><font style="FONT-FAMILY:'Times New Roman','serif'; FONT-SIZE:10pt">As a result of these transactions, there were 168,351,547 common shares outstanding at June 14, 2012.</font></p>
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shares
iso4217:USD
iso4217:USD
shares
Net of accumulated amortization of $18,550 and $10,925
Solar generation technology (net)
Net of debt discount of $89,582 and $183,494
$0.001 par value, 250,000,000 shares authorized, 106,216,193 and 12,835,864 shares issued and outstanding
$0.001 par value, 5,000,000 shares authorized
Expenses paid by shareholder
Beneficial conversion feature-notes payable