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Green Star Alternative Energy Inc.
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<p style="margin: 0"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 1.  ORGANIZATION AND
DESCRIPTION OF BUSINESS</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Green Star Alternative Energy, Inc.
(the “Company”) was incorporated under the laws of the State of Nevada on March 2, 2001 and originally in the travel
business, where the Company provided travel packages to financial services professionals in connection with seminars and other
professional education events.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 6, 2008, the Company, by amendment
to its articles of incorporation, changed its name to Green Star Alternative Energy, Inc. and changed its business operations to
become a provider of energy from wind, water and sunlight. The Company ceased this business as of June 30, 2010.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has minimal operations at
this time and is considered a development stage company.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Currently, the Company seeks suitable
candidates for a business combination with a private company.  The Company has made no efforts to identify a possible
business combination. As a result, the Company has not conducted negotiations or entered into a letter of intent concerning any
target business. The business purpose of the Company is to seek the acquisition of or merger with, an existing company. The Company
selected December 31 as its fiscal year end.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company is currently considered
to be a "blank check" company. The U.S. Securities and Exchange Commission (the “SEC”) defines those companies
as "any development stage company that is issuing a penny stock, within the meaning of Section 3 (a)(51) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), and that has no specific business plan or purpose, or has indicated
that its business plan is to merge with an unidentified company or companies." Under SEC Rule 12b-2 under the Exchange Act,
the Company also qualifies as a “shell company,” because it has no or nominal assets (other than cash) and no or nominal
operations.  Many states have enacted statutes, rules and regulations limiting the sale of securities of "blank
check" companies in their respective jurisdictions. Management does not intend to undertake any efforts to cause a market
to develop in our securities, either debt or equity, until we have successfully concluded a business combination. The Company intends
to comply with the periodic reporting requirements of the Exchange Act for so long as it is subject to those requirements.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company’s principal business
objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with
a business rather than immediate, short-term earnings. The Company will not restrict its potential candidate target companies to
any specific business, industry or geographical location and, thus, may acquire any type of business.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Form of Acquisition</i></b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The manner in which the Company participates
in an opportunity will depend upon the nature of the opportunity, the respective needs and desires of the Company and the promoters
of the opportunity, and the relative negotiating strength of the Company and such promoters.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">In the case of an acquisition, the transaction
may be accomplished upon the sole determination of management without any vote or approval by stockholders. In the case of a statutory
merger or consolidation directly involving the Company, it will likely be necessary to call a stockholders' meeting and obtain
the approval of the holders of a majority of the outstanding securities. The necessity to obtain such stockholder approval may
result in delay and additional expense in the consummation of any proposed transaction and will also give rise to certain appraisal
rights to dissenting stockholders. Most likely, management will seek to structure any such transaction so as not to require stockholder
approval.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">It is anticipated that the investigation
of specific business opportunities and the negotiation, drafting and execution of relevant agreements, disclosure documents and
other instruments will require substantial management time and attention and substantial cost for accountants, attorneys and others.
If a decision is made not to participate in a specific business opportunity, the costs theretofore incurred in the related investigation
might not be recoverable. Furthermore, even if an agreement is reached for the participation in a specific business opportunity,
the failure to consummate that transaction may result in the loss to the Company of the related costs incurred. </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">We presently have no employees apart
from our management. Our officers and directors are engaged in outside business activities and anticipate that they will devote
to our business very limited time until the acquisition of a successful business opportunity has been identified. We expect no
significant changes in the number of our employees other than such changes, if any, incident to a business combination.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="margin: 0"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 2.  SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Basis of Presentation </i></b>—
The accompanying unaudited financial statements are presented in accordance with the requirements for Form 10-Q and Regulation
S-X. In the opinion of management, all adjustments (all of which were of a normal recurring nature) considered necessary to fairly
present the financial position, results of operations, and cash flows of the Company on a consistent basis, have been made.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">These results have been determined
on the basis of generally accepted accounting principles and practices applied consistently with those used in the
preparation of the Company's financial statements. Operating results for the nine months ended September 30, 2012 are not
necessarily indicative of the results that may be expected for the year ending December 31, 2012.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company recommends that the accompanying
unaudited financial statements for the interim period be read in conjunction with the Company's financial statements for the year
ended December 31, 2011 included in the Company's Annual Report on Form 10-K.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying unaudited financial
statements have been prepared in conformity with accounting principles generally accepted in the United States of America.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Going Concern</i></b>
— Since inception through September 30, 2012, the Company has a cumulative net loss of $466,118. Since inception, the
Company has also been dependent upon the receipt of capital investment or other financing to fund its operations. The Company
currently has no source of operating revenue, and has only limited working capital with which to pursue its business plan,
which contemplates the completion of a business combination with an operating company. The amount of capital required to
sustain operations until the successful completion of a business combination is subject to future events and uncertainties.
It may be necessary for the Company to secure additional working capital through loans or sales of common stock, and there
can be no assurance that such funding will be available in the future. The immediate future success of the Company is
dependent on its ability to find and successfully merge with a target business and on obtaining additional financing to
financially support the Company until that time. These conditions raise substantial doubt about the Company's ability to
continue as a going concern.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying unaudited financial
statements have been presented on the basis of the continuation of the Company as a going concern and do not include any adjustments
relating to the recoverability and classification of recorded asset amounts or the amounts and classifications of liabilities that
might be necessary should the Company be unable to continue as a going concern.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i> </i></b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Use of Estimates — </i></b>The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities as well as the reported amounts of revenues and expenses. Actual results could differ from
these estimates.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Cash and Cash Equivalents —
</i></b>Cash and cash equivalents, if any, include all highly liquid instruments with an original maturity of three months or less
at the date of purchase. As of September 30, 2012, the Company had no cash and cash equivalents.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> <b><i>Concentration
of Credit Risk</i></b> — Financial instruments that potentially subject the Company to a concentration of credit risk consist
of cash.  The Company maintains its cash with high credit quality financial institutions; at times, such balances with
any one financial institution may exceed Federal Deposit Insurance Corporation insured limits.</font> <font style="font: 10pt Times New Roman, Times, Serif">The
Company has not incurred any loss from this risk.</font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Fair Value of Financial Instruments
— </i></b>The Company follows guidance for accounting for fair value measurements of financial assets and financial liabilities
and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the financial statements
on a recurring basis. Additionally, the Company adopted guidance for fair value measurement related to nonfinancial items that
are recognized and disclosed at fair value in the financial statements on a nonrecurring basis. The guidance establishes a fair
value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest
priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest
priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy
are as follows:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">• Level 1 inputs are quoted prices
(unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement
date.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">• Level 2 inputs are inputs other
than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">• Level 3 inputs are unobservable
inputs for the asset or liability.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The level in the fair value hierarchy
within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair value
measurement in its entirety.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company’s financial instruments
include accrued liabilities. The estimated fair value of these instruments approximates its carrying amount due to the short maturity
of these instruments.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Management believes it is not practical
to estimate the fair value of loan from related party because the transactions cannot be assumed to have been consummated at arm’s
length, the terms are not deemed to be market terms, there are no quoted values available for these instruments, and an independent
valuation would not be practical due to the lack of data regarding similar instruments, if any, and the associated potential costs.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i> </i></b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Loss Per Share</i></b> —
The Company computes net loss per share in accordance with FASB ASC Topic 260, “Earnings per Share,” Under the provisions
of the standard, basic and diluted net loss per share is computed by dividing the net loss available to common stockholders for
the period by the weighted average number of shares of common stock outstanding during the period.  Common equivalent shares
related to stock options and warrants have been excluded from the computation of basic and diluted earnings per share for the nine
months ended September 30, 2012 and 2011 because their effect is anti-dilutive.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>Revenue
Recognition </i></b>— The Company is in the development stage and has yet to realize revenues from planned operations. The
Company will recognize revenue on arrangements in accordance with Financial</font> <font style="font: 10pt Times New Roman, Times, Serif">Accounting
Standards Board Accounting Standards Codification (“ASC”) No. 605, “Revenue Recognition”. In all cases,
revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service
is performed and collectability of the resulting receivable is reasonably assured. The Company has not recorded any sales transactions
for the nine months ended September 30, 2012 and 2011.</font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Income Taxes</i></b> — The
Company records income taxes in accordance with the provisions of the Financial Accounting Standards Board (“FASB”)
Accounting Standards Codification (“ASC”) Topic 740, “Income Taxes.”  The standard requires,
among other provisions, an asset and liability approach to recognize deferred tax liabilities and assets for the expected future
tax consequences of temporary differences between the financial statement carrying amounts and tax basis of assets and liabilities.  Valuation
allowances are provided if based upon the weight of available evidence, it is more likely than not that some or all of the deferred
tax assets will not be realized.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Reclassifications </i></b>—
Certain Prior period amounts have been reclassified to conform to current period presentations.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i> </i></b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Recently Issued Accounting Pronouncements
- Adopted</i></b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">In May 2011, the FASB issued Accounting
Standards Update No. 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement
and Disclosure Requirements in U.S. GAAP and IFRSs”. The amendments result in common fair value measurement and disclosure
requirements in U.S. generally accepted accounting principles (GAAP) and International Financial Reporting Standards (IFRSs), and
do not require additional fair value measurements and are not intended to establish valuation standards or affect valuation practices.
The amendments in this update are effective during interim and annual periods beginning after December 15, 2011. Adoption
of the new amendment did not have an effect on the Company’s financial position, results of operations or cash flow.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Recently Issued Accounting Pronouncements
– Not Adopted</i></b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">In
December 2011, the FASB issued ASU 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities. The
amendments in this update require an entity to</font> <font style="font: 10pt Times New Roman, Times, Serif">disclose information
about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements
on its financial position. This update will enhance disclosures required by U.S. GAAP by requiring improved information about financial
instruments and derivative instruments. The requirements of this update are effective</font> <font style="font: 10pt Times New Roman, Times, Serif">for
annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. Entities should
provide the disclosures required retrospectively for all comparative periods presented. We are currently evaluating the impact
of adopting ASU 2011-11 on the consolidated financial statements.</font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The FASB issued Accounting Standards
Update (ASU) No. 2012-02 Intangibles Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment,
on July 27, 2012, to simplify the testing for a drop in value of intangible assets such as trademarks, patents, and distribution
rights. The amended standard reduces the cost of accounting for indefinite-lived intangible assets, especially in cases where the
likelihood of impairment is low. The changes permit businesses and other organizations to first use subjective criteria to determine
if an intangible asset has lost value. The amendments to U.S. GAAP will be effective for fiscal years starting after September
15, 2012. Early adoption is permitted. The adoption of this accounting guidance will not have a material impact on our financial
statements and related disclosures.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Other recent accounting pronouncements
issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the
United States Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s
present or future financial statements.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Basis of Presentation </i></b>—
The accompanying unaudited financial statements are presented in accordance with the requirements for Form 10-Q and Regulation
S-X. In the opinion of management, all adjustments (all of which were of a normal recurring nature) considered necessary to fairly
present the financial position, results of operations, and cash flows of the Company on a consistent basis, have been made.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">These results have been determined on
the basis of generally accepted accounting principles and practices applied consistently with those used in the preparation of
the Company's financial statements. Operating results for the nine months ended September 30, 2012 are not necessarily indicative of
the results that may be expected for the year ending December 31, 2012.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company recommends that the accompanying
unaudited financial statements for the interim period be read in conjunction with the Company's financial statements for the year
ended December 31, 2011 included in the Company's Annual Report on Form 10-K.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying unaudited financial
statements have been prepared in conformity with accounting principles generally accepted in the United States of America.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Going Concern</i></b> —
Since inception through September 30, 2012, the Company has a cumulative net loss of $466,118. Since inception, the Company has also
been dependent upon the receipt of capital investment or other financing to fund its operations. The Company currently has no source
of operating revenue, and has only limited working capital with which to pursue its business plan, which contemplates the completion
of a business combination with an operating company. The amount of capital required to sustain operations until the successful
completion of a business combination is subject to future events and uncertainties. It may be necessary for the Company to secure
additional working capital through loans or sales of common stock, and there can be no assurance that such funding will be available
in the future. The immediate future success of the Company is dependent on its ability to find and successfully merge with a target
business and on obtaining additional financing to financially support the Company until that time. These conditions raise substantial
doubt about the Company's ability to continue as a going concern.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying unaudited financial
statements have been presented on the basis of the continuation of the Company as a going concern and do not include any adjustments
relating to the recoverability and classification of recorded asset amounts or the amounts and classifications of liabilities that
might be necessary should the Company be unable to continue as a going concern.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Use of Estimates — </i></b>The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities as well as the reported amounts of revenues and expenses. Actual results could differ from
these estimates.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Cash and Cash Equivalents —
</i></b>Cash and cash equivalents, if any, include all highly liquid instruments with an original maturity of three months or less
at the date of purchase. As of September 30, 2012, the Company had no cash and cash equivalents.</p>
<p style="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> <b><i>Concentration
of Credit Risk</i></b> — Financial instruments that potentially subject the Company to a concentration of credit risk consist
of cash.  The Company maintains its cash with high credit quality financial institutions; at times, such balances with
any one financial institution may exceed Federal Deposit Insurance Corporation insured limits.</font> <font style="font: 10pt Times New Roman, Times, Serif">The
Company has not incurred any loss from this risk.</font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Fair Value of Financial Instruments
— </i></b>The Company follows guidance for accounting for fair value measurements of financial assets and financial liabilities
and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the financial statements
on a recurring basis. Additionally, the Company adopted guidance for fair value measurement related to nonfinancial items that
are recognized and disclosed at fair value in the financial statements on a nonrecurring basis. The guidance establishes a fair
value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest
priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest
priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy
are as follows:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">• Level 1 inputs are quoted prices
(unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement
date.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">• Level 2 inputs are inputs other
than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">• Level 3 inputs are unobservable
inputs for the asset or liability.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The level in the fair value hierarchy
within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair value
measurement in its entirety.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company’s financial instruments
include accrued liabilities. The estimated fair value of these instruments approximates its carrying amount due to the short maturity
of these instruments.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Management believes it is not practical
to estimate the fair value of loan from related party because the transactions cannot be assumed to have been consummated at arm’s
length, the terms are not deemed to be market terms, there are no quoted values available for these instruments, and an independent
valuation would not be practical due to the lack of data regarding similar instruments, if any, and the associated potential costs.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Loss Per Share</i></b> —
The Company computes net loss per share in accordance with FASB ASC Topic 260, “Earnings per Share,” Under the provisions
of the standard, basic and diluted net loss per share is computed by dividing the net loss available to common stockholders for
the period by the weighted average number of shares of common stock outstanding during the period.  Common equivalent shares
related to stock options and warrants have been excluded from the computation of basic and diluted earnings per share for the nine
months ended September 30, 2012 and 2011 because their effect is anti-dilutive.</p>
<p style="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>Revenue
Recognition </i></b>— The Company is in the development stage and has yet to realize revenues from planned operations. The
Company will recognize revenue on arrangements in accordance with Financial</font> <font style="font: 10pt Times New Roman, Times, Serif">Accounting
Standards Board Accounting Standards Codification (“ASC”) No. 605, “Revenue Recognition”. In all cases,
revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service
is performed and collectability of the resulting receivable is reasonably assured. The Company has not recorded any sales transactions
for the nine months ended September 30, 2012 and 2011.</font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Income Taxes</i></b> — The
Company records income taxes in accordance with the provisions of the Financial Accounting Standards Board (“FASB”)
Accounting Standards Codification (“ASC”) Topic 740, “Income Taxes.”  The standard requires,
among other provisions, an asset and liability approach to recognize deferred tax liabilities and assets for the expected future
tax consequences of temporary differences between the financial statement carrying amounts and tax basis of assets and liabilities.  Valuation
allowances are provided if based upon the weight of available evidence, it is more likely than not that some or all of the deferred
tax assets will not be realized.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Reclassifications </i></b>—
Certain Prior period amounts have been reclassified to conform to current period presentations.</p>
<p style="margin: 0"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b>NOTE 3.   RELATED PARTY TRANSACTIONS –
NOTE PAYABLE </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company issued an unsecured Promissory
Note dated November 10, 2008 (the "Note") to Jesse de Castro, a director of the Company, in connection with a $15,000
working capital loan to the Company. The terms and conditions of such note allow for the prepayment of principle and accrued interest
at anytime without penalty. The interest rate is 7% per annum and the maturity date is December 31, 2012. The total accrued interest
as of June 30, 2012 is $3,820. On January 30, 2011, Jesse de Castro granted all his rights, privilege, benefit and remedies under
this Note to Verdad Telecom, which is owned by its president Eric Stoppenhagen.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company issued an unsecured Promissory
Note dated November 25, 2008 (the "Note") to Jesse de Castro, a director of the Company, in connection with a $30,000
working capital loan to the Company. The terms and conditions of such Note allow for the prepayment of principle and accrued interest
at anytime without penalty. The interest rate is 7% per annum and the maturity date is December 31, 2012. The total accrued interest
as of June 30, 2012 is $7,554. On January 30, 2011, Jesse de Castro granted all his rights, privilege, benefit and remedies under
this Note to Verdad Telecom, which is owned by its president Eric Stoppenhagen.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company issued an unsecured Promissory
Note dated February 12, 2009 (the "Note") to Jesse de Castro, a director of the Company, in connection with an $8,000
working capital loan to the Company. The terms and conditions of such Note allow for the prepayment of principle and accrued interest
at anytime without penalty. The interest rate is 7% per annum and the maturity date is December 31, 2012. The total accrued interest
as of June 30, 2012 is $1,893. On January 30, 2011, Jesse de Castro granted all his rights, privilege, benefit and remedies under
this Note to Verdad Telecom, which is owned by its president Eric Stoppenhagen.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company issued an unsecured Promissory
note dated February 17, 2009 (the "Note") to Jesse de Castro, a director of the Company, in connection with a $5,000
working capital loan to the Company. The terms and conditions of such Note allow for the prepayment of principle and accrued interest
at anytime without penalty. The interest rate is 7% per annum and the maturity date is December 31, 2012. The total accrued interest
as of June 30, 2012 is $1,178. On January 30, 2011, Jesse de Castro granted all his rights, privilege, benefit and remedies under
this Note to Verdad Telecom, which is owned by its president Eric Stoppenhagen.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company issued an unsecured Promissory
Note dated March 6, 2009 (the "Note") to Jesse de Castro, a director of the Company, in connection with a $25,000 working
capital loan to the Company. The terms and conditions of such Note allow for the prepayment of principle and accrued interest at
anytime without penalty. The interest rate is 7% per annum and the maturity date is December 31, 2012. The total accrued interest
as of June 30, 2012 is $5,811. On January 30, 2011, Jesse de Castro granted all his rights, privilege, benefit and remedies under
this Note to Verdad Telecom, which is owned by its president Eric Stoppenhagen.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company issued an unsecured Promissory
Note dated May 15, 2009 (the "Note") to Jesse de Castro, a director of the Company, in connection with a $20,000 working
capital loan to the Company. The terms and conditions of such Note allow for the prepayment of principle and accrued interest
at anytime without penalty. The interest rate is 7% per annum and the maturity date is December 31, 2012. The total accrued interest
as of June 30, 2012 is $4,380. On January 30, 2011, Jesse de Castro granted all his rights, privilege, benefit and remedies under
this Note to Verdad Telecom, which is owned by its president Eric Stoppenhagen.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company issued an unsecured Promissory
Note dated September 25, 2009 (the "Note") to Jesse de Castro, a director of the Company in connection with a $43,000
working capital loan to the Company. The terms and conditions of such Note allow for the prepayment of principle and accrued interest
at anytime without penalty. The interest rate is 7% per annum and the maturity date is December 31, 2012. The total accrued interest
as of June 30, 2012 is $8,321. On January 30, 2011, Jesse de Castro granted all his rights, privilege, benefit and remedies under
this Note to Verdad Telecom, which is owned by its president Eric Stoppenhagen.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company issued an unsecured Promissory
Note dated September 30, 2009 (the "Note") to Jesse de Castro, a director of the Company in connection with a $75,000
working capital loan to the Company. The terms and conditions of such Note allow for the prepayment of principle and accrued interest
at anytime without penalty. On September 17, 2010, we issued 11,000,000 shares of common stock, in partial settlement of US$55,000
of the Note dated September 30, 2009.The interest rate is 7% per annum and the maturity date is December 31, 2012. The total accrued
interest as of June 30, 2012 is $7,564. On January 30, 2011, Jesse de Castro granted all his rights, privilege, benefit and remedies
under this Note to Verdad Telecom, which is owned by its president Eric Stoppenhagen.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The total Notes outstanding as of June 30, 2012 is $166,000. The total amount of unpaid interest relating
to these Notes is $41,381 as of June 30, 2012.</p>
11000000
483
<p style="margin: 0"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b>NOTE 4.  STOCKHOLDERS' DEFICIT</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 6, 2008, the Company voted,
to amend its Articles of Incorporation to increase the total number of authorized shares of common stock at par value of $0.001
to 200,000,000 (two hundred million). Holders of shares of common stock are entitled to one vote for each share on all matters
to be voted on by the stockholders. Holders of common stock do not have cumulative voting rights and are entitled to share ratably
in dividends, if any. In the event of a liquidation, dissolution or winding up the Company, the holders of common stock are entitled
to share pro rata all assets remaining after payment in full of all liabilities.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">All outstanding shares of common stock
are fully paid and non-assessable. Holders of common stock have no pre emptive rights to purchase our common stock. There are no
conversion or redemption rights or sinking fund provisions with respect to the common stock.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">In March, 2001, the Company issued 10,937,500
shares of its common stock to various officers and consultants for services ($1,250) rendered to the Company.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">In April, 2001, the Company issued 10,937,500
shares of its common stock to various officers and consultants for services ($1,250) rendered to the Company.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">In the fourth quarter of 2001, the Company
issued an offering of 6,562,500 shares of its common stock to various shareholders in exchange for cash proceeds realized in the
amount of $7,500.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 9, 2008, the Company issued 17,500,043
shares of common stock at a price of $0.002857 per share to its new CFO/Director for a total cash consideration of $50,000.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 6, 2008, the Company voted,
via amendment to their Articles of Incorporation, to approve a forward share split of the Corporation's outstanding and issued
shares of common stock of five (5) shares for each one (1) issued by the Corporation.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 28, 2010, the Company's Board
of Directors approved the Record Date of January 29, 2010 for the dividend of three additional shares of the Company's Common Stock
for every four shares of the Company's Common Stock outstanding. All fractional shares will be rounded up to the next whole share.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">On September 17, 2010, we issued 17,400,000
to a company controlled by our sole director and officer, Jesse De Castro. We have been indebted to Mr. De Castro in the amount
of US$221,000 as a result of shareholder loans, and US$32,000 as a result of accrued and unpaid compensation. Mr. De Castro agreed
to accept 11,000,000 shares of common stock, in partial settlement of US$55,000 of the outstanding shareholder loans, and 6,400,000
shares of common stock in settlement of the accrued and unpaid compensation.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The stockholders' equity section of
the Company contains the following class of capital stock as of June 30, 2012:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Common stock, $ 0.001 par value: 200,000,000
authorized 63,337,543 shares issued and outstanding.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">All share amounts have been retroactively
adjusted for all periods presented.</p>
0.001
0.001
-1250
-1250
32000
63337543
209800
0
0
94063