0001538495
2012-04-01
2012-12-31
0001538495
2013-01-09
0001538495
2012-12-31
0001538495
2012-03-31
0001538495
2012-10-01
2012-12-31
0001538495
2011-10-01
2011-12-31
0001538495
2011-04-01
2011-12-31
0001538495
2010-04-23
2012-12-31
0001538495
2011-03-31
0001538495
2011-12-31
0001538495
2010-04-22
0001538495
us-gaap:CommonStockMember
2010-04-23
2011-03-31
0001538495
us-gaap:CommonStockMember
2012-04-01
2012-12-31
0001538495
us-gaap:CommonStockMember
2010-04-22
0001538495
us-gaap:CommonStockMember
2011-03-31
0001538495
us-gaap:CommonStockMember
2012-03-31
0001538495
us-gaap:CommonStockMember
2012-12-31
0001538495
us-gaap:AdditionalPaidInCapitalMember
2012-04-01
2012-12-31
0001538495
us-gaap:AdditionalPaidInCapitalMember
2010-04-22
0001538495
us-gaap:AdditionalPaidInCapitalMember
2011-03-31
0001538495
us-gaap:AdditionalPaidInCapitalMember
2012-03-31
0001538495
us-gaap:AdditionalPaidInCapitalMember
2012-12-31
0001538495
us-gaap:RetainedEarningsMember
2010-04-23
2011-03-31
0001538495
us-gaap:RetainedEarningsMember
2011-04-01
2012-03-31
0001538495
us-gaap:RetainedEarningsMember
2012-04-01
2012-12-31
0001538495
us-gaap:RetainedEarningsMember
2010-04-22
0001538495
us-gaap:RetainedEarningsMember
2011-03-31
0001538495
us-gaap:RetainedEarningsMember
2012-03-31
0001538495
us-gaap:RetainedEarningsMember
2012-12-31
0001538495
2010-04-23
2011-03-31
0001538495
2011-04-01
2012-03-31
iso4217:USD
xbrli:shares
iso4217:USD
xbrli:shares
Ultimate Novelty Sports Inc.
0001538495
10-Q
2012-12-31
false
--03-31
No
No
Yes
Smaller Reporting Company
Q3
2013
35800
10280000
37250
14452
4953
14009
60681
5862
4062
2700
2700
10140
31388
10390
2253
11309
50541
5200
5200
2700
900
-900
2700
8100
12500
2500
14500
995
9023
2774
1182
4421
17199
22783
12198
2500
4000
31083
36758
15826
36758
2168
537
3612
3612
20715
19197
19197
91132
34735
6394
33930
153747
-59744
-24345
-4141
-22621
-103206
497
304
-14
63
574
-60241
-24649
-4127
-22684
-103780
-20687
-22852
-60241
-20687
-22852
0
0
0
0
9235018
10280000
6700000
6700000
2415
11654
4409
1432
1500
2415
13154
2415
13154
21020
15037
14400
9000
26803
25956
1472
63695
49993
63695
49993
10280
6700
32220
-103780
-43539
-61280
-36839
-13987
0
6700
6700
10280
0
0
0
32220
0
-20687
-43539
-103780
2415
13154
0.001
0.001
75000000
75000000
10280000
6700000
10280000
6700000
-3943
1500
5983
-7425
21020
1472
1472
-51286
-34052
-81288
35800
42500
5400
5400
14400
847
25675
26803
42047
31075
83703
0
0
0
0
0
0
-9239
-2977
2415
0
6700000
6700000
10280000
0
0
0
0
0
0
6700000
3580000
35800
6700
3580
32220
6700
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 1 – organization and operations</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.75in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.75in"><i><u>Ultimate
Novelty Sports Inc.</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.75in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Ultimate Novelty Sports
Inc. (the “Company”) was incorporated under the laws of the State of Nevada on April 23, 2010. The Company provides
consulting services to the athletic facilities industry. The Company offers a full range of consulting services, including start-up
strategy development, membership pricing and management, operational analysis, marketing and public relations and staff training.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.75in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.75in"><i><u>Formation
of Ultimate Novelty Sports (Canada) Inc.</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On May 6, 2010, the Company
formed a wholly owned subsidiary, Ultimate Novelty Sports Inc., an Ontario, Canada Corporation (“UNSI Canada”). UNSI
Canada uses the U.S. Dollar as its reporting currency as well as its functional currency, however from time to time, UNSI Canada,
incurs certain expenses in Canadian Dollars.</p>
<p style="margin: 0pt"></p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 2 – summary of significant accounting
policies</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><i><u>Basis of presentation – unaudited interim financial
information</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The accompanying unaudited
interim consolidated financial statements and related notes have been prepared in accordance with accounting principles generally
accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations
of the United States Securities and Exchange Commission (“SEC”) to Form 10-Q and Article 8 of Regulation S-X. Accordingly,
they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited
interim consolidated financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are,
in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Unaudited interim
results are not necessarily indicative of the results for the full fiscal year. These unaudited interim consolidated financial
statements should be read in conjunction with the financial statements of the Company for the fiscal year ended March 31, 2012
and notes thereto contained in the information as part of the Company’s Registration Statement on Form S-1, which was filed
with the Securities and Exchange Commission on June 4, 2012.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Principles of consolidation</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The accompanying consolidated
financial statements include all of the accounts of the Company as of December 31, 2012 and 2011, for the three and nine months
ended December 31, 2012 and 2011 and cumulative from inception. UNSI Canada is included as of December 31, 2012 and 2011 and for
the period from May 6, 2010 (date of formation) through December 31, 2012.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">All intercompany balances
and transactions have been eliminated.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Development stage company</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="color: black">The
Company is a development stage company as defined by </font>section 915-10-20 of the FASB Accounting Standards Codification<font style="color: black">.
Although, the Company has generated revenues it has incurred operating expenses and expenses associated with implementation of
its business plan resulting in net operating losses for the reported periods and accumulated deficit since inception. The Company
is devoting substantially all of its efforts on generating revenues from consulting services and implementation of its business
plan. All losses accumulated since inception have been considered as part of the Company’s development stage activities.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i> </i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Use of estimates and assumptions</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">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
at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company’s significant
estimates and assumptions include the fair value of financial instruments; the carrying value<font style="color: black">, recoverability
and impairment, if any, of long-lived assets, including the values assigned to and the estimated useful lives of computer equipment;
income tax rate, income tax provision and valuation allowance of deferred tax assets; its wholly-owned subsidiary’s functional
currency and foreign currency exchange rate; and</font> the assumption that the Company will continue as a going concern. <font style="color: black">Those
significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to
those estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Management bases its estimates
on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of
which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from
other sources.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Management regularly reviews
its estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable
assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ
from those estimates.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Fair value of financial instruments</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company follows paragraph
825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph
820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of
its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally
accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency
and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy
which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy
gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority
to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:</p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-left: 36.5pt; border-collapse: collapse">
<tr>
<td style="width: 6%; vertical-align: top; text-autospace: none"> </td>
<td style="width: 1%; text-autospace: none; font-weight: bold"> </td>
<td style="width: 93%; vertical-align: top; text-autospace: none; font-weight: bold; text-align: center"> </td></tr>
<tr>
<td style="vertical-align: top; text-autospace: none">Level 1</td>
<td style="text-autospace: none"> </td>
<td style="vertical-align: top; text-autospace: none">Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.</td></tr>
<tr>
<td style="vertical-align: top; text-autospace: none"> </td>
<td style="text-autospace: none"> </td>
<td style="vertical-align: top; text-autospace: none"> </td></tr>
<tr>
<td style="vertical-align: top; text-autospace: none">Level 2</td>
<td style="text-autospace: none"> </td>
<td style="vertical-align: top; text-autospace: none">Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.</td></tr>
<tr>
<td style="vertical-align: top; text-autospace: none"> </td>
<td style="text-autospace: none"> </td>
<td style="vertical-align: top; text-autospace: none"> </td></tr>
<tr>
<td style="vertical-align: top; text-autospace: none">Level 3</td>
<td style="text-autospace: none"> </td>
<td style="vertical-align: top; text-autospace: none">Pricing inputs that are generally observable inputs and not corroborated by market data.</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Financial assets are considered
Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and
at least one significant model assumption or input is unobservable.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The fair value hierarchy
gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority
to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described
above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The carrying amount of
the Company’s financial assets and liabilities, such as cash, accounts receivable, prepaid expenses, accounts payable, accrued
expenses, and payroll taxes payable approximate their fair value because of the short maturity of those instruments.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Transactions involving
related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market
dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party
transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations
can be substantiated.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">It is not however practical
to determine the fair value of advances from stockholders due to their related party nature.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Carrying value, recoverability and impairment
of long-lived assets </u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company has adopted
paragraph 360-10-35-17 of the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived
assets, which include office equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company assesses the
recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived
asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment,
if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using
the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined
to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book
values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company considers the
following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance
or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the
manner or use of assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or
changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased
competitive pressures; (v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory
changes. The Company evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the
occurrence of such events.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The impairment charges,
if any, is included in operating expenses in the accompanying consolidated statements of income and comprehensive income (loss).</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Fiscal year end</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company elected March
31 as its fiscal year end date.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><i><u>Cash and cash equivalents </u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The Company considers all highly liquid investments
with a maturity of three months or less to be cash and cash equivalents.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Accounts receivable and allowance for
doubtful accounts</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="color: black">Accounts
receivable are recorded at the invoiced amount, net of an allowance for doubtful accounts. The Company follows paragraph 310-10-50-9
</font>of the FASB Accounting Standards Codification to estimate the allowance for doubtful accounts.<font style="color: black">
The Company performs on-going credit evaluations of its customers and adjusts credit limits based upon payment history and the
customer’s current credit worthiness, as determined by the review of their current credit information; and determines the
allowance for doubtful accounts based on historical write-off experience, customer specific facts and economic conditions.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="color: black">Outstanding
account balances are reviewed individually for collectability. The allowance for doubtful accounts is the Company’s best
estimate of the amount of probable credit losses in the Company’s existing accounts receivable. Bad debt expense is included
in general and administrative expenses, if any. Pursuant to paragraph 310-10-50-2 </font>of the FASB Accounting Standards Codification
<font style="color: black">account balances are charged off against the allowance after all means of collection have been exhausted
and the potential for recovery is considered remote. The Company has adopted paragraph 310-10-50-6 </font>of the FASB Accounting
Standards Codification and determine when receivables are past due or delinquent based on how recently payments have been received.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">At December 31, 2012 and
2011, there was no allowance for doubtful accounts.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company does not have
any off-balance-sheet credit exposure to its customers.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><i> </i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><i><u>Office equipment</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Office equipment is recorded
at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as
incurred. Depreciation of office equipment is computed by the straight-line method <font style="color: black">(after taking into
account their respective estimated residual values) </font>over the assets estimated useful life of five (5) years. Upon sale or
retirement of office equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss
is reflected in statements of operations.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Related parties</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company follows subtopic
850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party
transactions.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Pursuant to Section 850-10-20
<font style="color: black">the Related parties include a. affiliates of the Company; b.  Entities for which investments
in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection
of Section 825–10–15, to be accounted for by the equity method by the investing entity; c.  trusts for the benefit
of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d. principal
owners of the Company; e. management of the Company; f.  other parties with which the Company may deal if one party controls
or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties
might be prevented from fully pursuing its own separate interests; and g.  Other parties that can significantly influence
the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties
and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully
pursuing its own separate interests.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="color: black">The
financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense
allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated
in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall
include: a. the nature of the relationship(s) involved; b. a description of the transactions, including transactions
to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such
other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c. the
dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change
in the method of establishing the terms from that used in the preceding period; and d. amounts due from or to </font>related
parties <font style="color: black">as of the date of each balance sheet presented and, if not otherwise apparent, the terms and
manner of settlement.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Commitments and contingencies</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="color: black">The
Company follows subtopic 450-20 of </font>the FASB Accounting Standards Codification to report accounting for contingencies.<font style="color: black">
Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the
Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent
liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal
proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates
the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought
or expected to be sought therein.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">If the assessment of a
contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated,
then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates
that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated,
then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would
be disclosed.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Loss contingencies considered
remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management
does not believe, based upon information available at this time, that these matters will have a material adverse effect on the
Company’s consolidated financial position, results of operations or cash flows. However, there is no assurance that such
matters will not materially and adversely affect the Company’s business, financial position, and results of operations or
cash flows.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i> </i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Revenue recognition</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company applies paragraph
605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized
or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are
met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to
the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company derives its
revenues from sales contracts with its customer with revenues being generated upon rendering of services. Persuasive evidence of
an arrangement is demonstrated via invoice; service is considered provided when the service is delivered to the customers; and
the sales price to the customer is fixed upon acceptance of the purchase order and there is no separate sales rebate, discount,
or volume incentive.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Foreign currency transactions</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company applies the
guidelines as set out in Section 830-20-35 of the FASB Accounting Standards Codification (“Section 830-20-35”) for
foreign currency transactions. Pursuant to Section 830-20-35 of the FASB Accounting Standards Codification, foreign currency transactions
are transactions denominated in currencies other than the U.S. Dollar, which is the Company’s reporting currency and functional
currency. Foreign currency transactions may produce receivables or payables that are fixed in terms of the amount of foreign currency
that will be received or paid. A change in exchange rates between the reporting currency and the currency in which a transaction
is denominated increases or decreases the expected amount of reporting currency cash flows upon settlement of the transaction.
That increase or decrease in expected reporting currency cash flows is a foreign currency transaction gain or loss<b> </b>that
generally shall be included in determining net income for the period in which the exchange rate changes. Likewise, a transaction
gain or loss (measured from the transaction date<b> </b>or the most recent intervening balance sheet date, whichever is later)
realized upon settlement of a foreign currency transaction generally shall be included in determining net income for the period
in which the transaction is settled. The exceptions to this requirement for inclusion in net income of transaction gains and losses
pertain to certain intercompany transactions and to transactions that are designated as, and effective as, economic hedges of net
investments and foreign currency commitments. Pursuant to Section 830-20-25 of the FASB Accounting Standards Codification, the
following shall apply to all foreign currency transactions of an enterprise and its investees: (a) at the date the transaction
is recognized, each asset, liability, revenue, expense, gain, or loss arising from the transaction shall be measured and recorded
in the functional currency of the recording entity by use of the exchange rate in effect at that date as defined in section 830-10-20
of the FASB Accounting Standards Codification; and (b) at each balance sheet date, recorded balances that are denominated in currencies
other than the functional currency or reporting currency of the recording entity shall be adjusted to reflect the current exchange
rate.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">UNSI Canada uses the U.S.
Dollar as its reporting currency as well as its functional currency, however from time to time, UNSI Canada, incurs certain expenses
in Canadian Dollars. The change in exchange rates between the U.S. Dollar and the Canadian Dollar, the currency in which a transaction
is denominated increases or decreases the expected amount of reporting currency cash flows upon settlement of the transaction.
That increase or decrease in expected reporting currency cash flows is a foreign currency transaction gain or loss<b> </b>that
generally is included in determining net income (loss) for the period in which the exchange rate changes.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.5in"><i><u>Income
taxes</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company accounts for
income taxes under Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax
assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or
tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement
and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to
reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not
that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply
to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred
tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the
enactment date.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="color: black">The
Company adopted the provisions of </font>paragraph 740-10-25-13 of the FASB Accounting Standards Codification<font style="color: black">.
</font>Paragraph 740-10-25-13<font style="color: black"> addresses the determination of whether tax benefits claimed or expected
to be claimed on a tax return should be recorded in the financial statements. Under </font>paragraph 740-10-25-13<font style="color: black">,
the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position
will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized
in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty
percent (50%) likelihood of being realized upon ultimate settlement. </font>Paragraph 740-10-25-13<font style="color: black"> also
provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and
requires increased disclosures.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The estimated future tax
effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying consolidated
balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred
tax assets recorded on its consolidated balance sheets and provides valuation allowances as management deems necessary.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 36.3pt">Management makes judgments
as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax
liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions.
In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax
jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="color: black">The
Company did not take any uncertain tax positions and had no unrecognized tax liabilities or benefits in accordance with the provisions
of </font>Section 740-10-25 <font style="color: black">at December 31, 2012 and 2011.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Net income (loss) per common share</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Net income (loss) per common
share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. <font style="color: black">Basic
net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common
stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the
weighted average number of shares of common stock and potentially outstanding shares of common stock during the period </font>to
reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock
options or warrants<font style="color: black">.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="color: black">There
were no potentially dilutive shares outstanding</font> as of December 31, 2012 and 2011.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Cash flows reporting</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company adopted paragraph
230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according
to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the
<font style="color: black">indirect or reconciliation method (“Indirect method”) as defined by </font>paragraph 230-10-45-25
of the FASB Accounting Standards Codification<font style="color: black"> to report net cash flow from operating activities by adjusting
net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating
cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are
included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent
of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes
on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash
and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts
or payments in the period pursuant to </font>paragraph 830-230-45-1 of the FASB Accounting Standards Codification<font style="color: black">.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Subsequent events</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company follows the
guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company
will evaluate subsequent events through<font style="color: black"> the date when the financial statements were issued</font>.
Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements
issued when they are widely distributed to users, such as through filing them on EDGAR.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.5in"><i><u>Recently
issued accounting pronouncements</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>FASB Accounting Standards Update No.
2011-05</u></i></p>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In June 2011, the FASB
issued the FASB Accounting Standards Update No. 2011-05 “Comprehensive Income” (“ASU 2011-05”), which was
the result of a joint project with the IASB and amends the guidance in ASC 220, Comprehensive Income, by eliminating
the option to present components of other comprehensive income (OCI) in the statement of stockholders’ equity. Instead, the
new guidance now gives entities the option to present all non-owner changes in stockholders’ equity either as a single continuous
statement of comprehensive income or as two separate but consecutive statements. Regardless of whether an entity chooses to present
comprehensive income in a single continuous statement or in two separate but consecutive statements, the amendments require entities
to present all reclassification adjustments from OCI to net income on the face of the statement of comprehensive income.</p>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 35.45pt"><font style="font-size: 8pt"> 
</font>The amendments in this Update should be applied retrospectively and are effective for public entity for fiscal years, and
interim periods within those years, beginning after December 15, 2011.</p>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>FASB Accounting Standards Update No.
2011-08</u></i></p>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In September 2011, the
FASB issued the FASB Accounting Standards Update No. 2011-08 “<i>Intangibles—Goodwill and Other: Testing Goodwill
for Impairment” (“ASU 2011-08”).</i> This Update is to simplify how public and non-public entities test
goodwill for impairment. The amendments permit an entity to first assess qualitative factors to determine whether it is more likely
than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary
to perform the two-step goodwill impairment test described in Topic 350. Under the amendments in this Update, an entity is not
required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its
fair value is less than its carrying amount.</p>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The guidance is effective
for interim and annual periods beginning on or after December 15, 2011. Early adoption is permitted.</p>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>FASB Accounting Standards Update No.
2011-10</u></i></p>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In December 2011, the FASB
issued the FASB Accounting Standards Update No. 2011-10<i>“Property, Plant and Equipment: Derecognition of in Substance Real
Estate-a Scope Clarification” (“ASU 2011-09”).</i> This Update is to resolve the diversity in practice as
to how financial statements have been reflecting circumstances when parent company reporting entities cease to have controlling
financial interests in subsidiaries that are in substance real estate, where the situation arises as a result of default on nonrecourse
debt of the subsidiaries.</p>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The amended guidance is
effective for annual reporting periods ending after June 15, 2012 for public entities. Early adoption is permitted.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>FASB Accounting Standards Update No.
2011-11</u></i></p>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In December 2011, the FASB
issued the FASB Accounting Standards Update No. 2011-11<i>“Balance Sheet: Disclosures about Offsetting Assets and Liabilities”
(“ASU 2011-11”).</i> This Update requires an entity to 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. The
objective of this disclosure is to facilitate comparison between those entities that prepare their financial statements on the
basis of U.S. GAAP and those entities that prepare their financial statements on the basis of IFRS.</p>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The amended guidance is
effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>FASB Accounting Standards Update No.
2011-12</u></i></p>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In December 2011, the FASB
issued the FASB Accounting Standards Update No. 2011-12<i>“Comprehensive Income:  Deferral of the Effective Date
for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards
Update No. 2011-05” (“ASU 2011-12”).</i> This Update is a deferral of the effective date pertaining to reclassification
adjustments out of accumulated other comprehensive income in ASU 2011-05. FASB is to going to reassess the costs and benefits of
those provisions in ASU 2011-05 related to reclassifications out of accumulated other comprehensive income. Due to the time required
to properly make such a reassessment and to evaluate alternative presentation formats, the FASB decided that it is necessary to
reinstate the requirements for the presentation of reclassifications out of accumulated other comprehensive income that were in
place before the issuance of Update 2011-05.</p>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">All other requirements
in Update 2011-05 are not affected by this Update, including the requirement to report comprehensive income either in a single
continuous financial statement or in two separate but consecutive financial statements. Public entities should apply these requirements
for fiscal years, and interim periods within those years, beginning after December 15, 2011.</p>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Other Recently Issued, but Not Yet Effective
Accounting Pronouncements</u></i></p>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Management does not believe
that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the
accompanying consolidated financial statements.</p>
<p style="margin: 0pt"></p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 3 – going concern</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="color: black">The
accompanying consolidated financial statements have been prepared </font>assuming that the Company will continue as a going concern<font style="color: black">.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">As reflected in the accompanying
consolidated financial statements, the Company had a deficit accumulated during the development stage at December 31, 2012 and
2011, a net loss and net cash used in operating activities for the fiscal period then ended.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">While the Company is attempting
to generate sufficient revenues, the Company’s cash position may not be sufficient enough to support the Company’s
daily operations. Management intends to raise additional funds by way of a public or private offering. Management believes that
the actions presently being taken to further implement its business plan and generate sufficient revenues provide the opportunity
for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate sufficient
revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to
continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient
revenues.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The consolidated financial
statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.</p>
<p style="margin: 0pt"></p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 4 – related party transactions</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Consulting services from President and
Chief Financial Officer</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Consulting services provided
by the President and Chief Financial Officer for the nine months ended December 31, 2012 and 2011 were as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table align="center" cellspacing="0" cellpadding="0" style="font: 9pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: #EEECE1">
<td style="text-autospace: none; text-align: center"> </td>
<td style="text-autospace: none; text-align: center"> </td>
<td colspan="2" style="border-bottom: windowtext 1pt solid">
<p style="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center">Nine Months</p>
<p style="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center">Ended</p>
<p style="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center">December 31,</p>
<p style="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center">2012</p></td>
<td style="text-autospace: none; text-align: center"> </td>
<td style="text-autospace: none; text-align: center"> </td>
<td colspan="2" style="border-bottom: windowtext 1pt solid">
<p style="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center">Nine Months</p>
<p style="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center">Ended</p>
<p style="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center">December 31,</p>
<p style="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center">2011</p></td>
<td style="text-autospace: none; text-align: center"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 54%; text-autospace: none"> </td>
<td style="width: 2%; text-autospace: none"> </td>
<td style="width: 4%; text-autospace: none"> </td>
<td style="width: 14%; border-top: windowtext 1pt solid; text-autospace: none"> </td>
<td style="width: 1%; text-autospace: none"> </td>
<td style="width: 2%; text-autospace: none"> </td>
<td style="width: 4%; text-autospace: none"> </td>
<td style="width: 18%; border-top: windowtext 1pt solid; text-autospace: none"> </td>
<td style="width: 1%; text-autospace: none"> </td></tr>
<tr style="background-color: #EEECE1">
<td style="vertical-align: bottom; text-autospace: none">President</td>
<td style="vertical-align: bottom; text-autospace: none"> </td>
<td style="vertical-align: bottom; text-autospace: none">$</td>
<td style="vertical-align: bottom">
<p style="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: right">2,700</p>
<p style="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: right"> </p></td>
<td style="vertical-align: top; text-autospace: none; text-align: center"> </td>
<td style="vertical-align: bottom; text-autospace: none"> </td>
<td style="vertical-align: bottom; text-autospace: none">$</td>
<td style="vertical-align: bottom; text-autospace: none; text-align: right">2,700</td>
<td style="vertical-align: bottom; text-autospace: none"> </td></tr>
<tr>
<td style="vertical-align: bottom; text-autospace: none">Chief Financial Officer</td>
<td style="vertical-align: bottom; text-autospace: none"> </td>
<td style="border-bottom: windowtext 1pt solid; vertical-align: bottom; text-autospace: none"> </td>
<td style="border-bottom: windowtext 1pt solid; vertical-align: bottom">
<p style="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: right">2,700</p>
<p style="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: right"> </p></td>
<td style="vertical-align: top; text-autospace: none; text-align: center"> </td>
<td style="vertical-align: bottom; text-autospace: none"> </td>
<td style="vertical-align: bottom; text-autospace: none"> </td>
<td style="vertical-align: bottom; text-autospace: none; text-align: right">2,700</td>
<td style="vertical-align: bottom; text-autospace: none"> </td></tr>
<tr>
<td style="text-autospace: none"> </td>
<td style="text-autospace: none"> </td>
<td colspan="2" style="text-autospace: none; text-align: right"> </td>
<td style="vertical-align: top; text-autospace: none"> </td>
<td style="text-autospace: none"> </td>
<td colspan="2" style="border-top: black 1pt solid; text-autospace: none; text-align: right"> </td>
<td style="text-autospace: none"></td></tr>
<tr style="vertical-align: bottom; background-color: #EEECE1">
<td style="text-autospace: none"> </td>
<td style="text-autospace: none"> </td>
<td style="border-bottom: windowtext 1.5pt double; text-autospace: none">$</td>
<td style="border-bottom: windowtext 1.5pt double; text-autospace: none; text-align: right">5,400</td>
<td style="text-autospace: none">*</td>
<td style="text-autospace: none"> </td>
<td style="text-autospace: none">$</td>
<td style="text-autospace: none; text-align: right">5,400</td>
<td style="text-autospace: none"> </td></tr>
<tr>
<td style="text-autospace: none"> </td>
<td style="text-autospace: none"> </td>
<td colspan="2" style="text-autospace: none"> </td>
<td style="text-autospace: none"> </td>
<td style="text-autospace: none"> </td>
<td colspan="2" style="border-top: black 2.25pt double; text-autospace: none"> </td>
<td style="text-autospace: none"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 9pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify">* - A portion of consulting services
directly related to sales provided by the President and Chief Financial Officer totaling $2,700 was reported as cost of sales as
of December 31, 2012 and 2011.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the year ended March 31, 2012, the President
of the Company provided a $25,000 loan to the Company. The loan payable is payable on demand, unsecured, bears interest at 4.5%
per annum (compounded yearly) and consists of $25,000 of principal, and $1,803 of accrued interest payable as of December 31, 2012.</p>
<p style="margin: 0pt"></p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 5 – stockholders’ equity
(deficit)</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Shares authorized</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Upon formation the total
number of shares of all classes of stock which the Company is authorized to issue is seventy-five million (75,000,000) shares of
common stock, par value $.001 per share.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i> </i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Common stock</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On September 20, 2010,
the Company sold 6,700,000 shares of its common stock at par to its directors for $6,700 in cash.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">During the nine months
ended December 31, 2012, the Company’s Registration Statement on the Form S-1/A filed with the Securities and Exchange Commission
was declared effective. The Company has sold 3,580,000 common shares at $0.01 per share for total proceeds of $35,800 pursuant
to this Registration Statement.</p>
<p style="margin: 0pt"></p>
<p style="margin: 0pt"></p>
<p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.8in; text-align: justify; text-indent: -0.8in">Note 6
- foreign operations</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="letter-spacing: -0.15pt"><i><u>Operations</u></i></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Substantially all of the
Company’s operations are carried out in the Russia. Accordingly, the Company’s business, financial condition and results
of operations may be influenced by the political, economic and legal environments in Russia. The Company’s business may be
influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency fluctuation
and remittances and methods of taxation, among other things.</p>
<p style="margin: 0pt"></p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 7 – subsequent events</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company has evaluated
all events that occurred after the balance sheet date through the date when the financial statements were issued to determine if
they must be reported. The Management of the Company determined that there were no reportable subsequent events to be disclosed<font style="color: black">.</font></p>
<p style="margin: 0pt"></p>