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<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 2 – Significant Accounting
Policies and Procedures</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Cash and cash equivalents</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company considers all highly liquid
temporary cash investments with an original maturity of three months or less to be cash equivalents. At November 30, 2012 and February
29, 2012, the Company had no cash equivalents.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Concentration of Credit and Business
Risk</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company has no significant off-balance
sheet risk such as foreign exchange contracts, option contracts or other foreign hedging arrangements. The Company’s financial
instruments that are exposed to concentration of credit risks consist primarily of cash. The Company maintains its cash in bank
accounts which may at times, exceed federally-insured limits.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Of the Company’s revenue earned during
the nine-months ended November 30, 2012, approximately 89% was generated through vendor agreements with two customers, Fry’s
Electronics and COSTCO, representing net sales of $718,573.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Accounts receivable</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Accounts receivable is reported at the
customers’ outstanding balances less any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">An allowance for doubtful accounts on accounts
receivable is charged to operations in amounts sufficient to maintain the allowance for uncollectible accounts at a level management
believes is adequate to cover any probable losses. Management determines the adequacy of the allowance based on historical write-off
percentages and information collected from individual customers. Accounts receivable are charged off against the allowance when
collectability is determined to be permanently impaired. As of November 30, 2012, management has deemed all receivables to be collectible,
and has not historically recorded bad debt expenses; therefore no allowance has been recorded.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Inventory</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Inventories are stated at the lower of
cost or market. Cost is determined on a standard cost basis that approximates the first-in, first-out (FIFO) method. Market is
determined based on net realizable value. Appropriate consideration is given to obsolescence, excessive levels, deterioration,
and other factors in evaluating net realizable value. As of November 30, 2012 and February 29, 2012, finished goods inventory was
$0 and $494,076 respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Fixed Assets</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Property and equipment are recorded at
cost. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are charged
to expense as incurred. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation
are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period.
Depreciation is provided over the estimated useful lives of the related assets using the straight-line method for financial statement
purposes. The Company uses other depreciation methods (generally accelerated) for tax purposes where appropriate. The estimated
useful lives for significant property and equipment categories are as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" align="center" style="width: 40%; border-collapse: collapse; font: 10pt Times New Roman, Times, Serif">
<tr style="background-color: rgb(204,238,204); vertical-align: top">
<td style="border: windowtext 1pt solid; text-align: justify; line-height: 200%; padding-left: 5.4pt; width: 50%; padding-right: 5.4pt">Equipment</td>
<td style="border-bottom: windowtext 1pt solid; text-align: justify; line-height: 200%; padding-left: 5.4pt; width: 50%; padding-right: 5.4pt; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid">3-5 years</td></tr>
<tr style="background-color: white; vertical-align: top">
<td style="border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; text-align: justify; line-height: 200%; padding-left: 5.4pt; padding-right: 5.4pt; border-right: windowtext 1pt solid">Furniture</td>
<td style="border-bottom: windowtext 1pt solid; text-align: justify; line-height: 200%; padding-left: 5.4pt; padding-right: 5.4pt; border-right: windowtext 1pt solid">7 years</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company reviews the carrying value
of property, plant, and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset
may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases
where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount
by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment
include current operating results, trends and prospects, the manner in which the property is used, and the effects of obsolescence,
demand, competition, and other economic factors. Based on this assessment there were no impairments needed as of November 30, 2012.
Depreciation expense for the nine-months ended November 30, 2012 and 2011 was $129 and $0, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Revenue recognition</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company recognizes revenue in accordance
with ASC subtopic 605-10 (formerly SEC Staff Accounting Bulletin No. 104 and 13A, “Revenue Recognition”) net of expected
cancellations and allowances. As of November 30, 2012 and February 29, 2012, the Company evaluated evidence of cancellation in
order to make a reliable estimate and determined there were no material cancellations during the years and therefore no allowances
has been made.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company's revenues, which do not require
any significant production, modification or customization for the Company's targeted customers and do not have multiple elements,
are recognized when (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred; (iii) the Company's fee is fixed
and determinable; and (iv) collectability is probable.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Substantially all of the Company's revenues
are derived from the sales of LCD and LED televisions. The Company's customers are charged for these products on a per transaction
basis. Pricing varies depending on the product sold. Revenue is recognized in the period in which the products are sold net of
any discounts or allowances.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Loss per share </u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company reports earnings (loss) per
share in accordance with ASC Topic 260-10, "Earnings per Share." Basic earnings (loss) per share is computed by dividing income
(loss) available to common shareholders by the weighted average number of common shares available. Diluted earnings (loss) per
share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the number of
additional common shares that would have been outstanding if the potential common shares had been issued and if the additional
common shares were dilutive. Diluted earnings (loss) per share has not been presented since the effect of the assumed exercise
or conversion of stock options, warrants, and debt to purchase common shares, would have an anti-dilutive effect. At November 30,
2012 Company had 4,902,418 potential common shares that have been excluded from the computation of diluted net loss per share.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Income taxes </u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company follows ASC subtopic 740-10
for recording the provision for income taxes. ASC 740-10 requires the use of the asset and liability method of accounting for income
taxes. Under the asset and liability method, deferred tax assets and liabilities are computed based upon the difference between
the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the
related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes
in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all
of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount
that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred
income taxes in the period of change. Deferred income taxes may arise from temporary differences resulting from income and expense
items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current,
depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences
that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary
differences are expected to reverse.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Fair Value of Financial Instruments</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company has financial instruments whereby
the fair value of the financial instruments could be different from that recorded on a historical basis in the accompanying balance
sheets. The Company's financial instruments consist of cash, receivables, accounts payable, accrued liabilities, and notes payable.
The carrying amounts of the Company's financial instruments approximate their fair values as of November 30, 2012 due to their
short-term nature.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Long-lived assets</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company accounts for its long-lived
assets in accordance with ASC Topic 360-10-05, “Accounting for the Impairment or Disposal of Long-Lived Assets.” ASC
Topic 360-10-05 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate
that the historical cost or carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the
carrying value of an asset by estimating the future net cash flows expected to result from the asset, including eventual disposition.
If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference
between the asset’s carrying value and its fair value or disposable value. For the nine-months ended November 30, 2012, the
Company determined that none of its long-term assets were impaired.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Use of estimates</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">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 affects 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. Actual results
could differ from those estimates.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Advertising </u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company expenses advertising costs
as incurred. Pursuant to its vendor agreement with Fry’s electronics, the Company contributes 5% of each sale to a co-operative
advertising, promotional and marketing campaign. The Company’s advertising and marketing expenses were $119,802 and $28,833
for the nine-months ended November 30, 2012 and 2011, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Research and development</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Research and development costs are expensed
as incurred. During the nine- months ended November 30, 2012 and 2011, the Company did not incur any research and development costs.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Share-Based Compensation </u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company accounts for stock-based payments
to employees in accordance with ASC 718, “Stock Compensation” (“ASC 718”). Stock-based payments to employees
include grants of stock, grants of stock options and issuance of warrants that are recognized in the consolidated statement of
operations based on their fair values at the date of grant.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company accounts for stock-based payments
to non-employees in accordance with ASC 718 and Topic 505-50, “Equity-Based Payments to Non-Employees.” Stock-based
payments to non-employees include grants of stock, grants of stock options and issuances of warrants that are recognized in the
consolidated statement of operations based on the value of the vested portion of the award over the requisite service period as
measured at its then-current fair value as of each financial reporting date. The Company calculates the fair value of option grants
and warrant issuances utilizing the Black-Scholes pricing model. The amount of stock-based compensation recognized during a period
is based on the value of the portion of the awards that are ultimately expected to vest. ASC 718 requires forfeitures to be estimated
at the time stock options are granted and warrants are issued to employees and non-employees, and revised, if necessary, in subsequent
periods if actual forfeitures differ from those estimates. The term “forfeitures” is distinct from “cancellations”
or “expirations” and represents only the unvested portion of the surrendered stock option or warrant. The Company estimates
forfeiture rates for all unvested awards when calculating the expense for the period. In estimating the forfeiture rate, the Company
monitors both stock option and warrant exercises as well as employee termination patterns.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The resulting stock-based compensation
expense for both employee and non-employee awards is generally recognized on a straight-line basis over the requisite service period
of the award.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the nine-months ended November 30,
2012 and 2011, the Company has not issued share-based compensation.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Recent accounting pronouncements</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">No recent accounting pronouncements issued
by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC 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 Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>International Financial Reporting Standards:</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In November 2008, the Securities and Exchange
Commission (“SEC”) issued for comment a proposed roadmap regarding potential use of financial statements prepared in
accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards
Board. Under the proposed roadmap, the Company would be required to prepare financial statements in accordance with IFRS in fiscal
year 2014, including comparative information also prepared under IFRS for fiscal 2013 and 2012. The Company is currently assessing
the potential impact of IFRS on its financial statements and will continue to follow the proposed roadmap for future developments.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Year-end</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company has adopted the last day of
February, as its fiscal year end.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Cash and cash equivalents</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company considers all highly liquid
temporary cash investments with an original maturity of three months or less to be cash equivalents. At November 30, 2012 and February
29, 2012, the Company had no cash equivalents.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Concentration of Credit and Business
Risk</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company has no significant off-balance
sheet risk such as foreign exchange contracts, option contracts or other foreign hedging arrangements. The Company’s financial
instruments that are exposed to concentration of credit risks consist primarily of cash. The Company maintains its cash in bank
accounts which may at times, exceed federally-insured limits.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Of the Company’s revenue earned during
the nine-months ended November 30, 2012, approximately 89% was generated through vendor agreements with two customers, Fry’s
Electronics and COSTCO, representing net sales of $718,573.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Accounts receivable</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Accounts receivable is reported at the
customers’ outstanding balances less any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">An allowance for doubtful accounts on accounts
receivable is charged to operations in amounts sufficient to maintain the allowance for uncollectible accounts at a level management
believes is adequate to cover any probable losses. Management determines the adequacy of the allowance based on historical write-off
percentages and information collected from individual customers. Accounts receivable are charged off against the allowance when
collectability is determined to be permanently impaired. As of November 30, 2012, management has deemed all receivables to be collectible,
and has not historically recorded bad debt expenses; therefore no allowance has been recorded.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Inventory</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Inventories are stated at the lower of
cost or market. Cost is determined on a standard cost basis that approximates the first-in, first-out (FIFO) method. Market is
determined based on net realizable value. Appropriate consideration is given to obsolescence, excessive levels, deterioration,
and other factors in evaluating net realizable value. As of November 30, 2012 and February 29, 2012, finished goods inventory was
$0 and $494,076 respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Fixed Assets</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Property and equipment are recorded at
cost. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are charged
to expense as incurred. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation
are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period.
Depreciation is provided over the estimated useful lives of the related assets using the straight-line method for financial statement
purposes. The Company uses other depreciation methods (generally accelerated) for tax purposes where appropriate. The estimated
useful lives for significant property and equipment categories are as follows:</p>
<table cellspacing="0" cellpadding="0" align="center" style="width: 40%; border-collapse: collapse; font: 10pt Times New Roman, Times, Serif">
<tr style="background-color: rgb(204,238,204); vertical-align: top">
<td style="border: windowtext 1pt solid; text-align: justify; line-height: 200%; padding-left: 5.4pt; width: 50%; padding-right: 5.4pt">Equipment</td>
<td style="border-bottom: windowtext 1pt solid; text-align: justify; line-height: 200%; padding-left: 5.4pt; width: 50%; padding-right: 5.4pt; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid">3-5 years</td></tr>
<tr style="background-color: white; vertical-align: top">
<td style="border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; text-align: justify; line-height: 200%; padding-left: 5.4pt; padding-right: 5.4pt; border-right: windowtext 1pt solid">Furniture</td>
<td style="border-bottom: windowtext 1pt solid; text-align: justify; line-height: 200%; padding-left: 5.4pt; padding-right: 5.4pt; border-right: windowtext 1pt solid">7 years</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company reviews the carrying value
of property, plant, and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset
may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases
where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount
by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment
include current operating results, trends and prospects, the manner in which the property is used, and the effects of obsolescence,
demand, competition, and other economic factors. Based on this assessment there were no impairments needed as of November 30, 2012.
Depreciation expense for the nine-months ended November 30, 2012 and 2011 was $129 and $0, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Revenue recognition</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company recognizes revenue in accordance
with ASC subtopic 605-10 (formerly SEC Staff Accounting Bulletin No. 104 and 13A, “Revenue Recognition”) net of expected
cancellations and allowances. As of November 30, 2012 and February 29, 2012, the Company evaluated evidence of cancellation in
order to make a reliable estimate and determined there were no material cancellations during the years and therefore no allowances
has been made.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company's revenues, which do not require
any significant production, modification or customization for the Company's targeted customers and do not have multiple elements,
are recognized when (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred; (iii) the Company's fee is fixed
and determinable; and (iv) collectability is probable.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Substantially all of the Company's revenues
are derived from the sales of LCD and LED televisions. The Company's customers are charged for these products on a per transaction
basis. Pricing varies depending on the product sold. Revenue is recognized in the period in which the products are sold net of
any discounts or allowances.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Loss per share </u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company reports earnings (loss) per
share in accordance with ASC Topic 260-10, "Earnings per Share." Basic earnings (loss) per share is computed by dividing income
(loss) available to common shareholders by the weighted average number of common shares available. Diluted earnings (loss) per
share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the number of
additional common shares that would have been outstanding if the potential common shares had been issued and if the additional
common shares were dilutive. Diluted earnings (loss) per share has not been presented since the effect of the assumed exercise
or conversion of stock options, warrants, and debt to purchase common shares, would have an anti-dilutive effect. At November 30,
2012 Company had 4,902,418 potential common shares that have been excluded from the computation of diluted net loss per share.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Income taxes </u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company follows ASC subtopic 740-10
for recording the provision for income taxes. ASC 740-10 requires the use of the asset and liability method of accounting for income
taxes. Under the asset and liability method, deferred tax assets and liabilities are computed based upon the difference between
the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the
related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes
in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all
of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount
that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred
income taxes in the period of change. Deferred income taxes may arise from temporary differences resulting from income and expense
items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current,
depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences
that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary
differences are expected to reverse.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Fair Value of Financial Instruments</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company has financial instruments whereby
the fair value of the financial instruments could be different from that recorded on a historical basis in the accompanying balance
sheets. The Company's financial instruments consist of cash, receivables, accounts payable, accrued liabilities, and notes payable.
The carrying amounts of the Company's financial instruments approximate their fair values as of November 30, 2012 due to their
short-term nature.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Long-lived assets</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company accounts for its long-lived
assets in accordance with ASC Topic 360-10-05, “Accounting for the Impairment or Disposal of Long-Lived Assets.” ASC
Topic 360-10-05 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate
that the historical cost or carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the
carrying value of an asset by estimating the future net cash flows expected to result from the asset, including eventual disposition.
If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference
between the asset’s carrying value and its fair value or disposable value. For the nine-months ended November 30, 2012, the
Company determined that none of its long-term assets were impaired.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Use of estimates</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">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 affects 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. Actual results
could differ from those estimates.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Advertising </u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company expenses advertising costs
as incurred. Pursuant to its vendor agreement with Fry’s electronics, the Company contributes 5% of each sale to a co-operative
advertising, promotional and marketing campaign. The Company’s advertising and marketing expenses were $119,802 and $28,833
for the nine-months ended November 30, 2012 and 2011, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Research and development</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Research and development costs are expensed
as incurred. During the nine- months ended November 30, 2012 and 2011, the Company did not incur any research and development costs.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Share-Based Compensation </u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company accounts for stock-based payments
to employees in accordance with ASC 718, “Stock Compensation” (“ASC 718”). Stock-based payments to employees
include grants of stock, grants of stock options and issuance of warrants that are recognized in the consolidated statement of
operations based on their fair values at the date of grant.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company accounts for stock-based payments
to non-employees in accordance with ASC 718 and Topic 505-50, “Equity-Based Payments to Non-Employees.” Stock-based
payments to non-employees include grants of stock, grants of stock options and issuances of warrants that are recognized in the
consolidated statement of operations based on the value of the vested portion of the award over the requisite service period as
measured at its then-current fair value as of each financial reporting date. The Company calculates the fair value of option grants
and warrant issuances utilizing the Black-Scholes pricing model. The amount of stock-based compensation recognized during a period
is based on the value of the portion of the awards that are ultimately expected to vest. ASC 718 requires forfeitures to be estimated
at the time stock options are granted and warrants are issued to employees and non-employees, and revised, if necessary, in subsequent
periods if actual forfeitures differ from those estimates. The term “forfeitures” is distinct from “cancellations”
or “expirations” and represents only the unvested portion of the surrendered stock option or warrant. The Company estimates
forfeiture rates for all unvested awards when calculating the expense for the period. In estimating the forfeiture rate, the Company
monitors both stock option and warrant exercises as well as employee termination patterns.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The resulting stock-based compensation
expense for both employee and non-employee awards is generally recognized on a straight-line basis over the requisite service period
of the award.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the nine-months ended November 30,
2012 and 2011, the Company has not issued share-based compensation.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Recent accounting pronouncements</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">No recent accounting pronouncements issued
by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC 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 Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>International Financial Reporting Standards:</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In November 2008, the Securities and Exchange
Commission (“SEC”) issued for comment a proposed roadmap regarding potential use of financial statements prepared in
accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards
Board. Under the proposed roadmap, the Company would be required to prepare financial statements in accordance with IFRS in fiscal
year 2014, including comparative information also prepared under IFRS for fiscal 2013 and 2012. The Company is currently assessing
the potential impact of IFRS on its financial statements and will continue to follow the proposed roadmap for future developments.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Year-end</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company has adopted the last day of
February, as its fiscal year end.</p>
0
0
0.89
718573
P3Y
P7Y
129
0
4902418
0.05
P5Y
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">These financial statements have been prepared
in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will
be able to meet its obligations and continue its operations for its next fiscal year. Realization values may be substantially different
from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying
values and classification of assets and liabilities should the Company be unable to continue as a going concern. The Company has
not yet achieved profitable operations and since its inception (February 23, 2010) through November 30, 2012 the Company had accumulated
losses of $3,118,755 and a working capital deficit of $2,416,785. Management expects to incur further losses in the development
of its business, all of which raises substantial doubt about the Company’s ability to continue as a going concern. The Company’s
ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain
the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come
due.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company expects to continue to incur
substantial losses as it executes its business plan and does not expect to attain profitability in the near future. Since its inception,
the Company has funded operations through short-term borrowings and equity investments in order to meet its strategic objectives.
The Company's future operations are dependent upon external funding and its ability to execute its business plan, realize sales
and control expenses. Management believes that sufficient funding will be available from additional borrowings and private placements
to meet its business objectives, including anticipated cash needs for working capital, for a reasonable period of time. However,
there can be no assurance that the Company will be able to obtain sufficient funds to continue the development of its business
operation, or if obtained, upon terms favorable to the Company.</p>
<p style="margin: 0pt"></p>
2416785
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On January 11, 2012, the Company entered
into an Accounts Receivable Purchase & Security Agreement with Pacific Business Capital Corporation (“PBCC”), subsequently
approved by the board of directors on February 27, 2012. Pursuant to the agreement, PBCC has the option to purchase various trade
receivables presented by the Company at a minimum discount of 0.813% of the face value of each account purchased. PBCC has the
option to reserve and withhold a minimum of 20% of the gross face amount of all accounts purchased. The reserve account may be
held by PBCC and applied against charge-backs or any obligations of the Company to PBCC. In addition, in the event a purchased
account remains unpaid more than 15 days from the date of purchase, an additional service discount of 0.54 % per day will be charged
to the Company until paid-in full. The agreement with PBCC is secured by all of the Company’s assets, and has been personally
guaranteed by the Company’s executive officers. During the nine-months ended November 30, 2012, the Company has sold trade
receivables with a face value of $929,303 at a discount of $7,555 to PBCC for proceeds of $767,398, net of reserves. On August
24, 2012, PBCC assigned 100% of their interest in the January 11, 2012 agreement with the Company to a third party, CC Fund, LLC.
During the three and nine months ended November 30, 2012, the Company had recorded financing costs of $0 and $96,295, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On November 18, 2011, the Company agreed
to a payment holdback in the amount of $10,000 as a provision to its agreement with Costco. The holdback is to be utilized to cover
any future costs attributable to potential returns and or allowances. Per the verbal agreement, Costco calculates the retained
amount at their discretion at a rate equal to approximately 5% of each total order and can be held for a period up to nine-months.
Any amount remaining after the nine-month period has expired is fully payable to the Company. As of November 30, 2012, the amounts
held in reserve were $0.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On November 19, 2012, the Company entered
into a Waiver and Release Agreement with Fry’s Electronics (“Fry’s”) whereby, the Company agreed to settle
approximately $255,486 in accounts receivable owed by Fry’s for a total of $75,000 comprised of cash in the amount of $60,000
and the return of $15,000 of inventory held by Fry’s at the time of agreement. As of November 30, 2012, Fry’s had paid
the $60,000 directly to CC Fund, LLC, the Company’s secured creditor, on behalf of the Company and subsequently, returned
$15,000 in inventory to the Company. As of November 30, 2012, the Company had recorded a settlement expense in the amount of $180,486
in connection with the agreement.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Accounts receivable consist of the following:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" align="center" style="width: 60%; border-collapse: collapse; font-size: 10pt">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td>
<td> </td>
<td colspan="3" style="text-align: center">November 30,</td>
<td> </td>
<td colspan="3" style="text-align: center">February 29,</td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td>
<td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="border-bottom: black 1pt solid; text-align: center">2012</td>
<td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="border-bottom: black 1pt solid; text-align: center">2012</td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify; padding-left: 5.4pt; width: 54%">Trade accounts receivable</td>
<td style="width: 1%"> </td>
<td style="text-align: left; width: 1%">$</td>
<td style="text-align: right; width: 20%">11,013</td>
<td style="text-align: left; width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="text-align: left; width: 1%">$</td>
<td style="text-align: right; width: 20%">789,188</td>
<td style="text-align: left; width: 1%"> </td></tr>
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: justify; padding-left: 5.4pt">Due to/from factoring</td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">—</td>
<td style="text-align: left"> </td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">247,835</td>
<td style="text-align: left"> </td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify; padding-left: 5.4pt">Customer hold-back</td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">—</td>
<td style="text-align: left"> </td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">10,000</td>
<td style="text-align: left"> </td></tr>
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">Less: Allowance for doubtful accounts</td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">—</td>
<td style="text-align: left; padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">—</td>
<td style="text-align: left; padding-bottom: 1pt"> </td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 2.5pt; padding-left: 5.4pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.5pt double; text-align: left">$</td>
<td style="border-bottom: black 2.5pt double; text-align: right">11,013</td>
<td style="text-align: left; padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.5pt double; text-align: left">$</td>
<td style="border-bottom: black 2.5pt double; text-align: right">1,047,023</td>
<td style="text-align: left; padding-bottom: 2.5pt"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of November 30, 2012 and February 29,
2012, respectively, the Company had not established an allowance for doubtful accounts.</p>
<p style="margin: 0pt"></p>
<table cellspacing="0" cellpadding="0" align="center" style="width: 60%; border-collapse: collapse; font-size: 10pt">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td>
<td> </td>
<td colspan="3" style="text-align: center">November 30,</td>
<td> </td>
<td colspan="3" style="text-align: center">February 29,</td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td>
<td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="border-bottom: black 1pt solid; text-align: center">2012</td>
<td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="border-bottom: black 1pt solid; text-align: center">2012</td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify; padding-left: 5.4pt; width: 54%">Trade accounts receivable</td>
<td style="width: 1%"> </td>
<td style="text-align: left; width: 1%">$</td>
<td style="text-align: right; width: 20%">11,013</td>
<td style="text-align: left; width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="text-align: left; width: 1%">$</td>
<td style="text-align: right; width: 20%">789,188</td>
<td style="text-align: left; width: 1%"> </td></tr>
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: justify; padding-left: 5.4pt">Due to/from factoring</td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">—</td>
<td style="text-align: left"> </td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">247,835</td>
<td style="text-align: left"> </td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify; padding-left: 5.4pt">Customer hold-back</td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">—</td>
<td style="text-align: left"> </td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">10,000</td>
<td style="text-align: left"> </td></tr>
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">Less: Allowance for doubtful accounts</td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">—</td>
<td style="text-align: left; padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">—</td>
<td style="text-align: left; padding-bottom: 1pt"> </td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 2.5pt; padding-left: 5.4pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.5pt double; text-align: left">$</td>
<td style="border-bottom: black 2.5pt double; text-align: right">11,013</td>
<td style="text-align: left; padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.5pt double; text-align: left">$</td>
<td style="border-bottom: black 2.5pt double; text-align: right">1,047,023</td>
<td style="text-align: left; padding-bottom: 2.5pt"> </td></tr>
</table>
2012-01-11
2012-02-27
0.00813
0.20
P15D
0.0054
929303
7555
767398
96295
0
10000
0.05
0
255486
75000
60000
60000
15000
15000
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Organization</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Southern Products, Inc. (the “Company”)
was incorporated in Nevada on February 23, 2010 and is doing business as SIGMAC USA. The Company is a consumer electronics company
utilizing its d.b.a., SIGMAC USA to develop and brand its products. The Company began its plan of operations by entering into agreements
for the sale of branded, low-priced televisions in the United States. The business consists of the design, assembly, import, marketing
and sale of our models of Sigmac branded flat panel televisions into the US market. Upon establishment of the SIGMAC brand, management
intends to expand its market to international consumers.</p>
<p style="margin: 0pt"></p>
11013
789188
247835
10000
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following is a summary of property
and equipment:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" align="center" style="width: 60%; border-collapse: collapse; font-size: 10pt">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td>
<td> </td>
<td colspan="3" style="text-align: center">November 30,</td>
<td> </td>
<td colspan="3" style="text-align: center">February 29,</td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td>
<td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="border-bottom: black 1pt solid; text-align: center">2012</td>
<td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="border-bottom: black 1pt solid; text-align: center">2012</td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify; padding-left: 5.4pt; width: 54%">Furniture and fixtures</td>
<td style="width: 1%"> </td>
<td style="text-align: left; width: 1%">$</td>
<td style="text-align: right; width: 20%">1,200</td>
<td style="text-align: left; width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="text-align: left; width: 1%">$</td>
<td style="text-align: right; width: 20%">1,200</td>
<td style="text-align: left; width: 1%"> </td></tr>
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">Less: accumulated depreciation</td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">200</td>
<td style="text-align: left; padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">71</td>
<td style="text-align: left; padding-bottom: 1pt"> </td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 2.5pt; padding-left: 5.4pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.5pt double; text-align: left">$</td>
<td style="border-bottom: black 2.5pt double; text-align: right">1,000</td>
<td style="text-align: left; padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.5pt double; text-align: left">$</td>
<td style="border-bottom: black 2.5pt double; text-align: right">1,129</td>
<td style="text-align: left; padding-bottom: 2.5pt"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Depreciation for the nine-months ended
November 30, 2012 and 2011 was $129 and $0, respectively.</p>
<p style="margin: 0pt"></p>
<table cellspacing="0" cellpadding="0" align="center" style="width: 60%; border-collapse: collapse; font-size: 10pt">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td>
<td> </td>
<td colspan="3" style="text-align: center">November 30,</td>
<td> </td>
<td colspan="3" style="text-align: center">February 29,</td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td>
<td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="border-bottom: black 1pt solid; text-align: center">2012</td>
<td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="border-bottom: black 1pt solid; text-align: center">2012</td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify; padding-left: 5.4pt; width: 54%">Furniture and fixtures</td>
<td style="width: 1%"> </td>
<td style="text-align: left; width: 1%">$</td>
<td style="text-align: right; width: 20%">1,200</td>
<td style="text-align: left; width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="text-align: left; width: 1%">$</td>
<td style="text-align: right; width: 20%">1,200</td>
<td style="text-align: left; width: 1%"> </td></tr>
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">Less: accumulated depreciation</td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">200</td>
<td style="text-align: left; padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">71</td>
<td style="text-align: left; padding-bottom: 1pt"> </td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 2.5pt; padding-left: 5.4pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.5pt double; text-align: left">$</td>
<td style="border-bottom: black 2.5pt double; text-align: right">1,000</td>
<td style="text-align: left; padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.5pt double; text-align: left">$</td>
<td style="border-bottom: black 2.5pt double; text-align: right">1,129</td>
<td style="text-align: left; padding-bottom: 2.5pt"> </td></tr>
</table>
200
71
1200
1200
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Employment/Consulting commitments</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On June 1, 2011, the Company agreed to
pay its two executive officers annual salaries of $240,000 each with 50% to be paid in cash and the remaining $120,000 to accrue
until such time the Company has sufficient operating capital to pay the accrued compensation. On June 11, 2012, subsequent to the
quarter end, we terminated our chief operating officer. As of November 30, 2012, the Company settled all amounts owing to its former
executive in the amount of $212,101 which includes previously accrued compensation.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of November 30, 2012, the Company has
paid executive compensation of $79,700 and accrued $300,000. The balance owed at November 30, 2012 and February 29, 2012 totaled
$257,362 and $246,500, respectively.</p>
<p style="margin: 0pt"></p>
2011-06-01
240000
0.50
120000
212101
79700
300000
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Line of credit</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 15, 2012, the Company signed an
addendum to their factoring agreement dated January 11, 2012 with Pacific Business Capital Corporation (“PBCC”). The
addendum provides for a short-term line of credit with a limit of $1,000,000 to be advanced based on specific purchase orders presented
by the Company. Pursuant to the terms of the agreement, interest will be charged at a rate of 1.5% per month on the unpaid balance.
Additionally, any amounts outstanding in excess of thirty-days will have an additional interest charge of 0.05% per day until paid
in full. All advances are collateralized with the inventory of the Company. During the nine-months ended November 30, 2012, the
Company was advanced and repaid a total of $400,000. As of the balance sheet date the Company has recorded interest expense of
$3,200 in connection with the advance.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Note payable</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the nine-months ended November 30,
2012, the Company severed its relationship with a certain supplier in connection with the termination of their chief operating
officer. As a result, the then outstanding accounts payable balance was converted to a short-term note. The note is non-interest
bearing, unsecured and due on demand. As of November 30, 2012, the Company settled the entire balance and record additional paid-in
capital of $174,271 (see related party disclosure above).</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Convertible note payable</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On June 29, 2012, the Company issued a
$488,489 Convertible Promissory Note and Security Interest in favor of a creditor representing the past due invoices of the creditor
for professional fees. On August 24, 2012, the Company agreed to amend the note to include an additional $15,000 in the principal
balance, which represents an expense paid on behalf of the Company by the holder. On November 30, 2012, the Company together with
the holder further amended the note to include additional advances of $8,000, a payment of $60,000 and change to the conversion
terms. The amended principal balance of the note is $451,489.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The note is collateralized through the
granting of a Security Interest in all the current and future assets of the Company until such time the note is fully satisfied.
The Security Interest was subsequently perfected by the holder through filing. The note bears interest at a rate of 12% per annum
and requires monthly installments of $15,000 per month until paid in full commencing on July 10, 2012. Further, at the sole option
of the holder, demand for payment can be made with a thirty-day written notice of such demand. In the event of default, the unpaid
balance will accrue interest at a default rate of 18% per annum. The Company has not paid in accordance with the terms of the note,
and is currently in default and accruing interest at the default rate of 18%. Interest charged to operations relating to this note
amounted to $38,753 for the period ended November 30, 2012.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the amended terms of the note,
it is convertible into shares of the Company’s common stock at the option of the holder at any time in whole or in part at
a fixed conversion rate of $0.10. On the commitment date, management evaluated the conversion feature with respect to the benefit
of the holder and determined the value of the conversion feature to be equal to the face value of the amended note, $451,489. This
amount has been recorded as a discount against the outstanding balance of the note. The discount is amortized to interest expense
over the estimated life of the debt using the effective interest method. Interest charged to operations relating to the amortization
of the debt discount as of November 30, 2012 amounted to $27,157.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In addition, as a result of the November
30, 2012 amendment, the debt instrument no longer contains an embedded derivative which had previously resulted from the variable
conversion rate indexed to the market price of the Company’s own common stock. As of November 30, 2012, the Company’s
derivative liability was $0.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="margin: 0pt"></p>
2012-01-11
2012-03-15
1000000
0.015
0.0005
400000
174271
488489
451489
400000
2012-06-29
0.12
15000
0.18
451489
27157
0
0.10
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Lease agreements</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In April 2011, the Company entered into
a month to month sub-lease agreement for office and warehouse space commencing April 1, 2011. Pursuant to the terms of the agreement,
the monthly lease amount is $7,000. In August 2011, the Company amended their agreement to acquire additional square footage for
conference and office space for an additional $1,000 per month. In addition, from time to time the Company utilizes various storage
facilities as needed.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the nine-months ended November 30,
2012, the Company re-negotiated the amount of square footage necessary for its current operations resulting in and elimination
of its warehouse and a significant portion of office space whereby reducing its monthly expense from $8,000 to $1,500. As of November
30, 2012, the Company has recorded rent expense of $29,216.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Proposed Settlement of accounts payable</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Subsequent to the period ended November
30, 2012, the Company has been negotiating a settlement in re-payment terms with two of its vendors. Pursuant to the proposed settlement
agreements, the vendor will agree to forgive some of the outstanding balance in exchange for re-payment terms involving periodic
payments based on a percentage of money received during equity raises and generated from sales revenues.</p>
<p style="margin: 0pt"></p>
1500
7000
8000
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company’s financial instruments
consist principally of notes payable, convertible debentures and a derivative liability. Notes payable and convertible debentures
are financial liabilities with carrying values that approximate fair value. The Company determines the fair value of notes payable
and convertible debentures based on the effective yields of similar obligations. The Company determines the fair value of its derivative
liability based upon the trading prices of its common stock on the date of commitment and when applicable, on the last day of each
reporting period. The Company uses the Black-Scholes Option Model in valuing the fair value of its derivative liability.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company adopted ASC Topic 820-10 at
the beginning of 2010 to measure the fair value of certain of its financial assets required to be measured on a recurring basis.
The adoption of ASC Topic 820-10 did not impact the Company’s financial condition or results of operations. ASC Topic 820-10
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 unobservable inputs (Level 3 measurements). ASC Topic 820-10 defines fair value as the price that would
be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement
date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal
market for the asset or liability. The three levels of the fair value hierarchy under ASC Topic 820-10 are described below:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Level I</u> – Valuations based
on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Level II</u> – Valuations based
on quoted prices for similar assets and liabilities in active markets, quoted prices for identical assets and liabilities in markets
that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term
of the assets or liabilities.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company’s Level 2 liabilities
consist of notes payable, convertible debentures and a derivative liability. The Company determines the fair value of notes payable
and convertible debentures based on the effective yields of similar obligations. The Company determines the fair value of its derivative
liability based upon the trading prices of its common stock on the date of commitment and when applicable, at each reporting period
balance sheet date. The Company uses the Black-Scholes Option Model in valuing the fair value of its derivative liability.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Level III</u> – Valuations based
on inputs that are supportable by little or no market activity and that are significant to the fair value of the asset or liability.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table presents a reconciliation
of all assets and liabilities measured at fair value on a recurring basis as of November 30, 2012:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" align="center" style="width: 85%; border-collapse: collapse; font-size: 10pt">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td>
<td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="border-bottom: black 1pt solid; text-align: center">Level I</td>
<td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="border-bottom: black 1pt solid; text-align: center">Level II</td>
<td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="border-bottom: black 1pt solid; text-align: center">Level III</td>
<td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="border-bottom: black 1pt solid; text-align: center">Fair Value</td></tr>
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: justify; padding-left: 5.4pt">November 30, 2012</td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"> </td>
<td style="text-align: left"> </td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"> </td>
<td style="text-align: left"> </td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"> </td>
<td style="text-align: left"> </td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"> </td>
<td style="text-align: left"> </td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify; padding-left: 5.4pt; width: 36%">Intellectual property</td>
<td style="width: 1%"> </td>
<td style="text-align: left; width: 1%">$</td>
<td style="text-align: right; width: 13%">—</td>
<td style="text-align: left; width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="text-align: left; width: 1%">$</td>
<td style="text-align: right; width: 13%">—</td>
<td style="text-align: left; width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="text-align: left; width: 1%">$</td>
<td style="text-align: right; width: 13%">10,000</td>
<td style="text-align: left; width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="text-align: left; width: 1%">$</td>
<td style="text-align: right; width: 13%">10,000</td>
<td style="text-align: left; width: 1%"> </td></tr>
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">Convertible note</td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">—</td>
<td style="text-align: left; padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">—</td>
<td style="text-align: left; padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">—</td>
<td style="text-align: left; padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">—</td>
<td style="text-align: left; padding-bottom: 1pt"> </td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left">$</td>
<td style="border-bottom: black 1pt solid; text-align: right">—</td>
<td style="text-align: left; padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left">$</td>
<td style="border-bottom: black 1pt solid; text-align: right">—</td>
<td style="text-align: left; padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left">$</td>
<td style="border-bottom: black 1pt solid; text-align: right">10,000</td>
<td style="text-align: left; padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left">$</td>
<td style="border-bottom: black 1pt solid; text-align: right">10,000</td>
<td style="text-align: left; padding-bottom: 1pt"> </td></tr>
</table>
<p style="margin: 0pt"></p>
<table cellspacing="0" cellpadding="0" align="center" style="width: 85%; border-collapse: collapse; font-size: 10pt">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td>
<td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="border-bottom: black 1pt solid; text-align: center">Level I</td>
<td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="border-bottom: black 1pt solid; text-align: center">Level II</td>
<td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="border-bottom: black 1pt solid; text-align: center">Level III</td>
<td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="border-bottom: black 1pt solid; text-align: center">Fair Value</td></tr>
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: justify; padding-left: 5.4pt">November 30, 2012</td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"> </td>
<td style="text-align: left"> </td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"> </td>
<td style="text-align: left"> </td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"> </td>
<td style="text-align: left"> </td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"> </td>
<td style="text-align: left"> </td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify; padding-left: 5.4pt; width: 36%">Intellectual property</td>
<td style="width: 1%"> </td>
<td style="text-align: left; width: 1%">$</td>
<td style="text-align: right; width: 13%">—</td>
<td style="text-align: left; width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="text-align: left; width: 1%">$</td>
<td style="text-align: right; width: 13%">—</td>
<td style="text-align: left; width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="text-align: left; width: 1%">$</td>
<td style="text-align: right; width: 13%">10,000</td>
<td style="text-align: left; width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="text-align: left; width: 1%">$</td>
<td style="text-align: right; width: 13%">10,000</td>
<td style="text-align: left; width: 1%"> </td></tr>
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">Convertible note</td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">—</td>
<td style="text-align: left; padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">—</td>
<td style="text-align: left; padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">—</td>
<td style="text-align: left; padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">—</td>
<td style="text-align: left; padding-bottom: 1pt"> </td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left">$</td>
<td style="border-bottom: black 1pt solid; text-align: right">—</td>
<td style="text-align: left; padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left">$</td>
<td style="border-bottom: black 1pt solid; text-align: right">—</td>
<td style="text-align: left; padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left">$</td>
<td style="border-bottom: black 1pt solid; text-align: right">10,000</td>
<td style="text-align: left; padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left">$</td>
<td style="border-bottom: black 1pt solid; text-align: right">10,000</td>
<td style="text-align: left; padding-bottom: 1pt"> </td></tr>
</table>
10000
10000
10000
10000
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company is authorized to issue up to
440,000,000 shares of $0.001 par value common stock and 10,000,000 shares of $0.001 par value preferred stock. The Preferred Stock
may be issued in one or more series, with all rights and preferences being determined by the board of directors.</p>
<p style="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Preferred Stock</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The voting rights, rate of dividends preference
in relation to other classes or series, and rights in the event of liquidation related to shares of Preferred Stock of any series
are determined by the board of directors and may vary from time to time.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Common Stock</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Holders of common stock have voting rights
equal to one vote for each share of Common Stock held and are entitled to receive dividends when, and if declared by the board
of directors subject to the rights of any Preferred Stock having preference as to dividends. In the event of liquidation or dissolution,
subject to the rights of Preferred Stock Holders’ are entitled to share ratably in the Corporations assets. Holders of Common
Stock do not have conversion, redemption or preemptive rights.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Recapitalization</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Effective December 14, 2012, the Company
issued a stock dividend equal to a 5-for-1 forward stock split. All share issuances have been retroactively restated.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of November 30, 2012 and 2011, there
were no warrants or options granted or outstanding.</p>
<p style="margin: 0pt"></p>
0
0
5:1
0
0
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Subsequent to the period ended November
30, 2012, the Company received advances from CC Fund totalling approximately $25,000.</p>
<p style="margin: 0pt"></p>
25000