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HINTO ENERGY, INC
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<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b>NOTE
1 – BUSINESS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES</b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b> </b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b>Business</b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">Hinto
Energy, Inc. (“the Company”) was incorporated in February 13, 1997 in the state of Wyoming. The Company was originally
incorporated for the purpose of general investing. Due to an inability to raise adequate financing the Company was forced to cease
operations in 2001. On October 12, 2004, the Company filed a Form 15-12G, with the Securities and Exchange Commission (“SEC”)
to cease its filing obligations under the Securities Act of 1934. On November 14, 2007, the Company filed a Registration Statement
on Form S-1 in order to register its outstanding shares of common stock and resume its SEC filing status.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
Company’s fiscal year end is December 31<sup>st</sup>. The Company’s financial statements are presented on the accrual
basis of accounting.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><i>Share
Exchange Agreement</i></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">On
July 27, 2011, the Company entered into a Share Exchange and Acquisition Agreement with South Uintah Gas Properties, Inc. (“South
Uintah”) and the South Uintah shareholders. Pursuant to the Share Exchange and Acquisition Agreement (“the Agreement”),
the Company has agreed to issue shares of its restricted common stock for 100% of the issued and outstanding common stock of South
Uintah. The shares are to be exchanged on a one for one basis.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
closing of the transaction is dependent upon the delivery of audited financial statements by South Uintah.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">Prior
to the signing of the Agreement, South Uintah had purchased 3,000,000 shares of the Company’s common stock from its then
majority shareholder Ms. Sharon Fowler. After such purchase, South Uintah holds approximately 70% of the issued and outstanding
common stock of the Company. As part of the Agreement, South Uintah has agreed to return the 3,000,000 shares of common stock
to the Company. On December 22, 2011 the Company and South Uintah modified the purchase agreement and reduced the number of shares
to be returned by South Uintah by 300,000, to 2,700,000. The Company plans to retire such shares to treasury at that time.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">On
January 23, 2012 the Company completed the Share Exchange and Acquisition Agreement (“the Agreement”) and the shareholders
of South Uintah became the majority shareholders of Hinto Energy, Inc. Hinto issued 11,446,931 shares of stock in a one for one
share exchange, assumed $175,000 in notes payable and issued 6,700,000 of warrants in a one for one exchange with South Uintah
warrant holders. South Uintah returned 2,700,000 shares of Hinto stock to the Company, such stock being cancelled. The Company
accounted for the Share Exchange and Acquisition as a reverse capitalization, with South Uintah being the accounting acquirer.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b>Basis
of Presentation</b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><i>Development
Stage Company</i></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
Company has not earned significant revenues from planned operations. Accordingly, the Company’s activities have been accounted
for as those of a “Development Stage Company.” Therefore, the Company’s financial statements of operations,
stockholders’ equity and cash flows disclose activity since the date of the Company’s inception, in this case, South
Uintah Gas Properties, Inc., for the period March 8, 2011 through December 31, 2011 and the combined companies, Hinto and South
Uintah from January 1, 2012 forward.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b>Significant
Accounting Policies</b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><i>Use
of Estimates</i></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
preparation of the 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 periods. Actual results could differ from those estimates.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><i>Cash
and Cash Equivalents</i></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif">The Company
considers all highly liquid investments with an original maturity of three months or less and money market instruments to be cash
equivalents.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif"><i>Oil and
Gas Properties, Full Cost Method</i></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
Company uses the full cost method of accounting for oil and gas producing activities. Costs to acquire mineral interests in oil
and gas properties, to drill and equip exploratory wells used to find proved reserves, and to drill and equip development wells
including directly related overhead costs and related asset retirement costs are capitalized.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">Under
this method, all costs, including internal costs directly related to acquisition, exploration and development activities are capitalized
as oil and gas property costs. Properties not subject to amortization consist of exploration and development costs which are evaluated
on a property-by-property basis. Amortization of these unproved property costs begins when the properties become proved or their
values become impaired. The Company assesses the realization of unproved properties, taken as a whole, if any, on at least an
annual basis or when there has been an indication that impairment in value may have occurred. Impairment of unproved properties
is assessed based on management’s intention with regard to future exploration and development of individually significant
properties and the ability of the Company to obtain funds to finance such exploration and development. If the results of an assessment
indicate that the properties are impaired, the amount of the impairment is added to the capitalized costs to be amortized.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">Costs
of oil and gas properties will be amortized using the units of production method.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">In
applying the full cost method, the Company will perform an impairment test (ceiling test) at each reporting date, whereby the
carrying value of property and equipment is compared to the “estimated present value,” of its proved reserves discounted
at a 10-percent interest rate of future net revenues, based on current economic and operating conditions, plus the cost of properties
not being amortized, plus the lower of cost or fair market value of unproved properties included in costs being amortized, less
the income tax effects related to book and tax basis differences of the properties. If capitalized costs exceed this limit, the
excess is charged as an impairment expense.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><i>Revenue
Recognition</i></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
Company recognizes revenue when it is earned and expenses are recognized when they occur.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><i> </i></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><i>Net
Loss per Share</i></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">Basic
net loss per common share is calculated by dividing the net loss applicable to common shares by the weighted average number of
common and common equivalent shares outstanding during the period. For the periods ended March 31, 2012 and December 31, 2011,
there were no potential common equivalent shares used in the calculation of weighted average common shares outstanding as the
effect would be anti-dilutive because of the net loss.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><i> </i></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><i>Stock-Based
Compensation</i></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
Company adopted the provisions of and accounts for stock-based compensation using an estimate of value in accordance with the
fair value method. Under the fair value recognition provisions of this statement, stock-based compensation cost is measured at
the grant date based on the fair value of the award and is recognized as expense on a straight-line basis over the requisite service
period, which generally is the vesting period. The Company elected the modified-prospective method, under which prior periods
are not revised for comparative purposes. The valuation method applies to new grants and to grants that were outstanding as of
the effective date and are subsequently modified.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><i>Fair
Value of Financial Instruments</i></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
carrying amount of accounts payable is considered to be representative of respective fair values because of the short-term nature
of these financial instruments.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><i>Other
Comprehensive Income</i></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
Company has no material components of other comprehensive income (loss) and accordingly, net loss is equal to comprehensive loss
in all periods.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif"><i>Income
Taxes</i></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">Provision
for income taxes represents actual or estimated amounts payable on tax return filings each year. Deferred tax assets and liabilities
are recorded for the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and
amounts reported in the accompanying balance sheets, and for operating loss and tax credit carry forwards. The change in deferred
tax assets and liabilities for the period measures the deferred tax provision or benefit for the period. Effects of changes in
enacted tax laws on deferred tax assets and liabilities are reflected as adjustment to the tax provision or benefit in the period
of enactment.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 12.25pt 0 0"><font style="font: 8pt Times New Roman, Times, Serif"><i>Recent
Accounting Pronouncements</i></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">There
were accounting standards and interpretations issued during the period ended March 31, 2012, none of which are expected to have
a material impact on the Company’s financial position, operations or cash flows.</font></p>
<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b>NOTE
1 – BUSINESS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES</b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b> </b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b>Organization</b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">South
Uintah Gas Properties, Inc. (“the Company”) was incorporated on March 8, 2011 in the state of Colorado. The Company
intends to become an independent energy company that intends to acquire and develop oil and gas properties.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
Company’s fiscal year end is December 31<sup>st</sup>. The Company’s financial statements are presented on the accrual
basis of accounting.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b>Principles
of consolidation</b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
accompanying consolidated financial statements include the accounts of the Company and its majority (approximately 57 percent)
owned subsidiary, Hinto Energy, Inc. All intercompany accounts and transactions have been eliminated in consolidation.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b>Basis
of Presentation</b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><i>Development
Stage Company</i></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
Company has not earned significant revenues from planned operations. Accordingly, the Company’s activities have been accounted
for as those of a “Development Stage Company.” Therefore, the Company’s financial statements of operations,
stockholders’ equity and cash flows disclose activity since the date of the Company’s inception.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><i>Going
Concern</i></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
Company’s financial statements for the period of March 8, 2011 (Inception) through December 31, 2011 have been prepared
on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the
normal course of business. The Company reported an accumulated total shareholders’ deficit of $602,384 as of December 31,
2011. The Company has not recognized any revenues from its activities since inception. These factors raise substantial doubt about
the Company’s ability to continue as a going concern.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b> </b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b>Significant
Accounting Policies</b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><i>Use
of Estimates</i></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
preparation of the 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 periods. Actual results could differ from those estimates.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><i>Cash
and Cash Equivalents</i></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif">The Company
considers all highly liquid investments with an original maturity of three months or less and money market instruments to be cash
equivalents.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif"><i>Oil and
Gas Properties, Full Cost Method</i></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
Company uses the full cost method of accounting for oil and gas producing activities. Costs to acquire mineral interests in oil
and gas properties, to drill and equip exploratory wells used to find proved reserves, and to drill and equip development wells
including directly related overhead costs and related asset retirement costs are capitalized.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">Under
this method, all costs, including internal costs directly related to acquisition, exploration and development activities are capitalized
as oil and gas property costs. Properties not subject to amortization consist of exploration and development costs which are evaluated
on a property-by-property basis. Amortization of these unproved property costs begins when the properties become proved or their
values become impaired. The Company assesses the realization of unproved properties, taken as a whole, if any, on at least an
annual basis or when there has been an indication that impairment in value may have occurred. Impairment of unproved properties
is assessed based on management’s intention with regard to future exploration and development of individually significant
properties and the ability of the Company to obtain funds to finance such exploration and development. If the results of an assessment
indicate that the properties are impaired, the amount of the impairment is added to the capitalized costs to be amortized.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">Costs
of oil and gas properties will be amortized using the units of production method.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">In
applying the full cost method, the Company will perform an impairment test (ceiling test) at each reporting date, whereby the
carrying value of property and equipment is compared to the “estimated present value,” of its proved reserves discounted
at a 10-percent interest rate of future net revenues, based on current economic and operating conditions, plus the cost of properties
not being amortized, plus the lower of cost or fair market value of unproved properties included in costs being amortized, less
the income tax effects related to book and tax basis differences of the properties. If capitalized costs exceed this limit, the
excess is charged as an impairment expense.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><i>Revenue
Recognition</i></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
Company recognizes revenue when it is earned and expenses are recognized when they occur.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><i> </i></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><i>Net
Loss per Share</i></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">Basic
net loss per common share is calculated by dividing the net loss applicable to common shares by the weighted average number of
common and common equivalent shares outstanding during the period. For the period from March 8, 2011 ended December 31, 2011,
there were no potential common equivalent shares used in the calculation of weighted average common shares outstanding as the
effect would be anti-dilutive because of the net loss.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><i> </i></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><i>Stock-Based
Compensation</i></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
Company adopted the provisions of and accounts for stock-based compensation using an estimate of value in accordance with the
fair value method. Under the fair value recognition provisions of this statement, stock-based compensation cost is measured at
the grant date based on the fair value of the award and is recognized as expense on a straight-line basis over the requisite service
period, which generally is the vesting period. The Company elected the modified-prospective method, under which prior periods
are not revised for comparative purposes. The valuation method applies to new grants and to grants that were outstanding as of
the effective date and are subsequently modified.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><i>Fair
Value of Financial Instruments</i></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
carrying amount of accounts payable is considered to be representative of respective fair values because of the short-term nature
of these financial instruments.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><i>Other
Comprehensive Income</i></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
Company has no material components of other comprehensive income (loss) and accordingly, net loss is equal to comprehensive loss
in all periods.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif"><i>Income
Taxes</i></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">Provision
for income taxes represents actual or estimated amounts payable on tax return filings each year. Deferred tax assets and liabilities
are recorded for the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and
amounts reported in the accompanying balance sheets, and for operating loss and tax credit carry forwards. The change in deferred
tax assets and liabilities for the period measures the deferred tax provision or benefit for the period. Effects of changes in
enacted tax laws on deferred tax assets and liabilities are reflected as adjustment to the tax provision or benefit in the period
of enactment.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><i>Noncontrolling
interest</i></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">A
subsidiary of the Company has minority members, representing ownership interests of 43% at December 31, 2011. The Company accounts
for these minority, or noncontolling interests pursuant to ASC 810-10-65 whereby gains or losses in a subsidiary with a noncontrolling
interest are allocated to the noncontrolling interest based on the ownership percentage of the noncontrolling interest, even if
that allocation results in a deficit noncontrolling interest balance.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 12.25pt 0 0"><font style="font: 8pt Times New Roman, Times, Serif"><i>Recent
Accounting Pronouncements</i></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">There
were accounting standards and interpretations issued during the period of March 8, 2011 (Inception) through December 31, 2011,
none of which are expected to have a material impact on the Company’s financial position, operations or cash flows.</font></p>
<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b>NOTE
2 – GOING CONCERN AND MANAGEMENTS’ PLAN</b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
Company’s financial statements for the three months ended March 31, 2012 and the period of March 3, 2011 through December
31, 2011 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities
and commitments in the normal course of business. The Company reported a net loss of $237,659 for the three months ended March
31, 2012, and an accumulated deficit of $1,064,954 as of March 31, 2012. At March 31, 2012, the Company had a working capital
deficit of $131,001.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
future success of the Company is likely dependent on its ability to attain additional capital, or to find an acquisition to add
value to its present shareholders and ultimately, upon its ability to attain future profitable operations. There can be no assurance
that the Company will be successful in obtaining such financing, or that it will attain positive cash flow from operations. Management
believes that actions presently being taken to revise the Company’s operating and financial requirements provide the opportunity
for the Company to continue as a going concern.</font></p>
<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"></p>
<p style="margin: 0pt"> </p>
<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b>NOTE
3 – OIL AND GAS LEASES</b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b> </b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
Company purchased a farmout of deep right interests in approximately 5,000 net acres in the Uintah Basin in Utah in July 2011,
amended in December 2011. The purchase price of the farmout interest was $478,200, made up of $303,000 in cash, $175,000 in notes
payable and $200 in common stock (2,000,000 shares.) The Company has subsequently expended an additional $198,500 in cash for
the completion of a gas pipeline connection, surface equipment and initial well rework.</font></p>
<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b> </b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b>NOTE
2 – OIL AND GAS LEASES</b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b> </b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
Company purchased a farmout of deep right interests in approximately 5,355 gross acres and 4,887 net acres in the Uintah Basin
in Utah in July 2011, amended in December 2011, with conveyance of approximately 4,100 acres made in 2011, and the remainder in
February 2012. The purchase price of the farmout interest was $478,200, made up of $303,000 in cash, $175,000 in notes payable
and $200 in common stock.</font></p>
<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b>NOTE
4 – CURRENT LIABILITIES</b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b> </b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
Company has $375,000 in other notes payable that it expects to be paid in the next twelve months. Of this amount, $200,000 is
to be returned to a former investor. Further information regarding the $200,000 amount payable is found in Note 7.</font></p>
<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"></p>
<p style="margin: 0pt"> </p>
<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b>NOTE
5– LONG TERM NOTE PAYABLE</b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b> </b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
Company placed a $500,000 secured convertible note payable with a single investor. The note has a term of 3 years, an interest
rate of 10%, is convertible into the Company’s common stock at $1 per share and is secured by oil and gas leases held by
South Uintah Gas Properties, Inc.</font></p>
<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b> </b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b>NOTE
4 – CONVERTIBLE PROMISSORY NOTES</b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b> </b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
Company has issued $500,000 of convertible promissory notes. The notes earn interest at 6% per annum, are unsecured, with principal
and interest convertible in whole or in part by the holder into common shares of the Company at $.25 per share any time prior
to repayment. Conversion of the entire principal amount of $500,000 would result in an additional 2,000,000 outstanding common
shares. The notes are due at various dates from April through July 2012. 2,000,000 common stock purchase warrants exercisable
at $.50 were issued in connection with these notes. The Company has recognized no beneficial conversion expense on the convertible
notes as the Company’s common stock currently has no trading market or established cash market price.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">In
December 2011, the Company’s majority owned subsidiary, Hinto Energy, Inc., issued a $500,000 secured three year note payable,
with principal and interest convertible in whole or in part by the holder into common shares of Hinto Energy, Inc. at $1.00 per
share any time prior to repayment, and bearing interest at 10% per annum, with interest payable quarterly. The Company has recognized
no beneficial conversion expense on the convertible note as the conversion feature was not in the money.</font></p>
<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b>NOTE
6 – STOCKHOLDERS’ EQUITY</b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><i>Common
Stock</i></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
authorized common stock of the Company is 50,000,000 shares of common stock with a $0.001 par value. At March 31, 2012, the Company
had 13,925,931 shares of its common stock issued and outstanding.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">During
the three months ended March 31, 2012, the Company issued 410,000 shares of its common stock to investors that purchased $205,000
of the securities at a price of $.50 per common share and 69,000 shares for services to be provided over a six month period beginning
in February 2012, valued at $1.50 per share.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
Company also issued 11,375,000 of its restricted common shares to acquire South Uintah Gas Properties, Inc.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><i>Preferred
Stock</i></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><i> </i></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">On
August 18, 2011, the Company filed an amendment to the Articles of Incorporation with the Secretary of State of Wyoming to authorize
25,000,000 shares of Preferred Shares to be designated in any series or classes and with those rights, privileges and preferences
to be determined at the discretion of the Company’s Board of Directors. At this time, the Company has not designated any
series of preferred stock or issued any shares of preferred stock.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><i>Stock
Option Plan</i></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><i> </i></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif; color: black">On
August 17, 2011, the Company’s shareholders approved the </font>2011 Hinto Energy, Inc. Stock Option and Award Incentive
Plan (“Plan”). The Plan provides for the grant of stock options to directors, officers, employees, consultants, and
advisors of the Company. The Plan is administered by a committee consisting of members of the Board of Directors (the "Stock
Option Committee"), or in its absence, the Board of Directors.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
Plan provides for a total of 2,000,000 shares of common stock to be reserved for issuance subject to options. As of the date of
this Proxy Statement, the Board has not approved the grant of any options to purchase shares of common stock, nor the conditions,
performance or vesting requirements.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b><i>Warrants</i></b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
Company had the following warrants outstanding at March 31, 2012:</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td nowrap="nowrap" style="width: 26%; border: windowtext 1pt solid; font: bold 8pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">Warrants</font></td>
<td style="width: 22%; border: windowtext 1pt solid; font: bold 8pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Term
in years</font></td>
<td style="width: 29%; border: windowtext 1pt solid; font: bold 8pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Vesting
in years</font></td>
<td style="width: 23%; border: windowtext 1pt solid; font: bold 8pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Exercise
Price</font></td></tr>
<tr style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td nowrap="nowrap" style="border: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">3,000,000</font></td>
<td nowrap="nowrap" style="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">3
to 5</font></td>
<td nowrap="nowrap" style="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">Variable</font></td>
<td nowrap="nowrap" style="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">$2.00</font></td></tr>
<tr style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td nowrap="nowrap" style="border: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">1,700,000</font></td>
<td nowrap="nowrap" style="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">3</font></td>
<td nowrap="nowrap" style="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">1</font></td>
<td nowrap="nowrap" style="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">$1
and $3</font></td></tr>
<tr style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td nowrap="nowrap" style="border: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">2,000,000</font></td>
<td nowrap="nowrap" style="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">2</font></td>
<td nowrap="nowrap" style="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">Vested</font></td>
<td nowrap="nowrap" style="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">$0.50</font></td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">Each
warrant gives the holder the right to purchase one share of the Company’s common stock at the exercise price. The 3,000,000
unvested warrants, issued in connection with consulting services, vest at various dates from May 2012 through June 2014 and expire
at various dates from May 2014 through June 2016. The 1,700,000 unvested warrants, issued in connection with consulting services,
vest at various dates from June 2012 through November 2012, with 1,100,000 warrants being exercisable at $1 and 600,000 being
exercisable at $3. The 2,000,000 warrants currently exercisable were issued in connection with notes payable and expire at dates
from May 2013 through July 2013. These 2,000,000 warrants are callable at the option of the Company in the first year from the
grant dates of May through July 2011 at the exercise price under various conditions, generally if the Company completes a $4,500,000
private placement of common stock. No expense was recorded by the Company on the issuance of any of the 6,700,000 warrants, as
the Company’s common stock has no trading market and no material common stock cash sales have been made, and thus none of
the warrants were in the money.</font></p>
<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b>NOTE
6- STOCKHOLDERS’ EQUITY (DEFICIT)</b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
authorized capital stock of the Company is 100,000,000 shares of common stock and 25,000,000 or preferred stock, both with a $0.0001
par value. At December 31, 2011, Company had 9,375,000 shares of its common stock issued and outstanding.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
Company’s subsidiary Hinto Energy, Inc., at December 31, 2011 had a stock subscription payable of $40,000 to an individual
calling for the issuance for 80,000 Hinto Energy, Inc. common shares.</font></p>
<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b>NOTE
7 – LEGAL MATTERS</b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b> </b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">In
March 2012 a note holder of South Uintah Gas Properties, Inc., Bridge Industries, LLC filed a complaint against the Company in
the Circuit Court of the Eighteenth Judicial Circuit, Seminole County, Florida, alleging in general breach of contract and seeking
return of all monies lent to South Uintah Gas Properties, Inc. of $400,000, the value of 1,000,000 shares of the Company’s
common stock and other equity appreciation, and compensation for services and costs. The Company is evaluating the action and
its response, and the outcome of the case is currently unknown.</font></p>
<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"></p>
<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b>NOTE
8 - SUBSEQUENT EVENTS</b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif">The Company
has evaluated it activities subsequent to the period ended March 31, 2012, through May 8, 2012 and found no reportable subsequent
events.</font></p>
<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b>NOTE
11 – SUBSEQUENT EVENTS</b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b> </b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif">The Company
has evaluated it activities subsequent to the year ended December 31, 2011 through May 17, 2012 and found the following reportable
subsequent events.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b> </b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif">The Company
has converted $500,000 in convertible notes payable and accrued interest into 2,071,931 common shares.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif">The acquisition
of the Company by Hinto Energy, Inc. occurred on January 23, 2012, with the Company becoming a wholly owned subsidiary of Hinto
Energy, Inc. The acquisition resulted in the Company’s’ shareholders exchanging 11,446,931 common shares, which included
the 2,071,031 common shares resulting from note conversion mentioned in the previous paragraph of this Note 10, for shares of
Hinto Energy common stock, exchanging 6,700,000, 2 to 5 year warrants, with exercise prices ranging from $1 to $3 dollars per
share for warrants to purchase Hinto Energy stock, exchanging $175,000 of the Company’s promissory notes payable for notes
payable by Hinto Energy<font style="color: red">,</font> and the return of 2,700,000 shares of the Hinto Energy’s common
stock currently held by South Uintah to Hinto Energy, Inc.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif">In March 2012
a note holder of South Uintah Gas Properties, Inc., Bridge Industries, LLC filed a complaint against the Company and Hinto Energy,
Inc. in the Circuit Court of the Eighteenth Judicial Circuit, Seminole County, Florida, alleging in general breach of contract
and seeking return of all monies lent to South Uintah Gas Properties, Inc. of $400,000, $200,000 which remains outstanding, the
value of 1,000,000 shares of the Company’s common stock and other equity appreciation, and compensation for services and
costs. The Company is evaluating the action and its response, and the outcome of the case is currently unknown.</font></p>
991988
194284
960215
797606
1074595
990701
0
59259
156570
0
401892
245322
45699
-602384
0
0
90000
0
0
90000
63000
63000
0
27000
0
0
40000
40000
0
0
200000
200000
-17859
0
-51434
-33575
0
0
0
-31422
-237659
0
-1064954
-237659
-829028
-797606
-797606
-237659
-31422
0
0
200
200
0
0
-55992
-55992
0
0
175000
175000
17250
0
100
100
<p style="margin: 0pt"> </p>
<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b>NOTE
3 – INVESTMENT IN HINTO ENERGY, INC.</b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b> </b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">On
July 12, 2011, the Company purchased 3,000,000 shares of the common stock of Hinto Energy, Inc. (Hinto), formerly Garner Investments,
Inc., for cash of $300,000. The Company entered into a Share Purchase and Exchange Agreement with Hinto, on July 27, 2011 as discussed
in Note 9. Upon the completion a proposed merger with Hinto, the Company has agreed to return the 2,700,000 shares to Hinto. The
purchase resulted in the Company recording goodwill of approximately $339,000, negative net worth in the subsidiary of approximately
$56,000 and noncontrolling interest of approximately negative $17,000.</font></p>
<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"></p>
<p style="margin: 0pt"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b> </b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b>NOTE
5 – NOTES PAYABLE, OTHER</b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b> </b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
Company issued two non-interest bearing notes payable for a total of $175,000 as part of the purchase price of the lease interest
described in Note 2. One note for $75,000 is due in one year, and the second note for $100,000 is due in two years.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">In
May 2011 the Company accepted a Subscription Agreement for $500,000 in exchange for a $500,000 Secured Convertible Promissory
Note in the amount of $500,000, 1,000,000 shares of Company’s common stock and warrants exercisable for a total of 2,000,000
shares of the Company’s common stock with prices ranging from $0.25 per share to $1.50 per share. At the time of the closing,
the Company received $400,000 of the $500,000. On September 6, 2011, after a failure to receive the remaining $100,000 from the
subscriber, South Uintah Gas gave notice to the subscriber of its termination of the Subscription Agreement and associated agreements
due to a failure of the subscriber to perform its obligations. As a result, South Uintah Gas has cancelled the shares and the
warrants issued to the subscriber, repaid $200,000 and is making arrangements to repay the remaining $200,000 in full to the former
subscriber.</font></p>
<p style="margin: 0pt"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b>NOTE
7 - WARRANTS</b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
Company had the following warrants outstanding at December 31, 2011:</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">  </font></p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td nowrap="nowrap" style="width: 26%; border: windowtext 1pt solid; font: bold 8pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">Warrants</font></td>
<td style="width: 22%; border: windowtext 1pt solid; font: bold 8pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Term
in years</font></td>
<td style="width: 29%; border: windowtext 1pt solid; font: bold 8pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Vesting
in years</font></td>
<td style="width: 23%; border: windowtext 1pt solid; font: bold 8pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Exercise
Price</font></td></tr>
<tr style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td nowrap="nowrap" style="border: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">3,000,000</font></td>
<td nowrap="nowrap" style="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">3
to 5</font></td>
<td nowrap="nowrap" style="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">Variable</font></td>
<td nowrap="nowrap" style="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">$2.00</font></td></tr>
<tr style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td nowrap="nowrap" style="border: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">1,700,000</font></td>
<td nowrap="nowrap" style="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">3</font></td>
<td nowrap="nowrap" style="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">1</font></td>
<td nowrap="nowrap" style="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">$1
and $3</font></td></tr>
<tr style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td nowrap="nowrap" style="border: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">2,000,000</font></td>
<td nowrap="nowrap" style="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">2</font></td>
<td nowrap="nowrap" style="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">Vested</font></td>
<td nowrap="nowrap" style="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">$0.50</font></td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">  </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">Each
warrant gives the holder the right to purchase one share of the Company’s common stock at the exercise price. The 3,000,000
vested warrants, issued in connection with consulting services, vest at various dates from May 2012 through June 2014 and expire
at various dates from May 2014 through June 2016. The 1,700,000 vested warrants, issued in connection with consulting services,
vest at various dates from June 2012 through November 2012, with 1,100,000 warrants being exercisable at $1 and 600,000 being
exercisable at $3. The 2,000,000 warrants currently exercisable were issued in connection with notes payable and expire at dates
from May 2013 through July 2013. These 2,000,000 warrants are callable at the option of the Company in the first year from the
grant dates of May through July 2011 at the exercise price under various conditions, generally if the Company completes a $4,500,000
private placement of common stock. No expense was recorded by the Company on the issuance of any of the 6,700,000 warrants, as
the Company’s common stock has no trading market and no material common stock cash sales have been made, and thus none of
the warrants were in the money.</font></p>
<p style="margin: 0pt"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b> </b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b>NOTE
8 – INCOME TAXES</b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
Company is subject to federal and domestic income taxes. The Company has had no income, and therefore has paid no income tax.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">Deferred
income taxes arise from temporary timing differences in the recognition of income and expenses for financial reporting and tax
purposes. The Company’s deferred tax assets consist entirely of the benefit from net operating loss (NOL) carry-forwards.
The NOL carry forwards expire in various years through 2030. The Company’s deferred tax assets are offset by a valuation
allowance due to the uncertainty of the realization of the NOL carry-forwards. NOL carry-forwards may be further limited by a
change in company ownership and other provisions of the tax laws.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
Company’s deferred tax assets, valuation allowance, and change in valuation allowance are as follows:</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="width: 31%; vertical-align: bottom; border: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; padding-top: 0.75pt; padding-right: 0.75pt; padding-left: 0.75pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">Period
Ending</font></td>
<td style="width: 26%; vertical-align: bottom; border: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; padding-top: 0.75pt; padding-right: 0.75pt; padding-left: 0.75pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">Estimated
NOL Carry-forward benefit</font></td>
<td style="width: 23%; vertical-align: top; border: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; padding-top: 0.75pt; padding-right: 0.75pt; padding-left: 0.75pt"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">Valuation
Allowance</font></p></td>
<td style="width: 20%; vertical-align: bottom; border: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; padding-top: 0.75pt; padding-right: 0.75pt; padding-left: 0.75pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">Net
Tax Benefit</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td nowrap="nowrap" style="border: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; vertical-align: bottom; padding-top: 0.75pt; padding-right: 0.75pt; padding-left: 0.75pt; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td nowrap="nowrap" style="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; vertical-align: bottom; padding-top: 0.75pt; padding-right: 0.75pt; padding-left: 0.75pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; vertical-align: top; padding-top: 0.75pt; padding-right: 0.75pt; padding-left: 0.75pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td nowrap="nowrap" style="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; vertical-align: bottom; padding-top: 0.75pt; padding-right: 0.75pt; padding-left: 0.75pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td nowrap="nowrap" style="border: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; padding-top: 0.75pt; padding-right: 0.75pt; padding-left: 0.75pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">December
31, 2011</font></td>
<td nowrap="nowrap" style="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; padding-top: 0.75pt; padding-right: 0.75pt; padding-left: 0.75pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">$307,038</font></td>
<td style="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; padding-top: 0.75pt; padding-right: 0.75pt; padding-left: 0.75pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">$(307,038)</font></td>
<td nowrap="nowrap" style="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; padding-top: 0.75pt; padding-right: 0.75pt; padding-left: 0.75pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">-</font></td></tr>
<tr style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td nowrap="nowrap" style="border: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; padding-top: 0.75pt; padding-right: 0.75pt; padding-left: 0.75pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td nowrap="nowrap" style="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; padding-top: 0.75pt; padding-right: 0.75pt; padding-left: 0.75pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; padding-top: 0.75pt; padding-right: 0.75pt; padding-left: 0.75pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td nowrap="nowrap" style="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font: 8pt Times New Roman, Times, Serif; padding-top: 0.75pt; padding-right: 0.75pt; padding-left: 0.75pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
</table>
<p style="margin: 0pt"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b>NOTE
9 – SHARE PURCHASE AND EXCHANGE AGREEMENT</b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b> </b></font></p>
<p style="margin: 0; font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif">The Company
has entered into a Share Exchange and Acquisition Agreement (Agreement) with Hinto Energy, Inc., formerly Garner Investments,
Inc., and its Shareholders whereby Hinto will acquire the Company for 9,375,000 common shares, up to $675,000 in convertible and
non-convertible promissory notes, plus accrued interest and 6,700,000 warrants in varying increments and exercise prices, subject
to receipt of audited financial statements in accordance with SEC Rules and Regulations. The Company will return 2,700,000 shares
of Hinto stock currently held by the Company.</font></p>
<p style="margin: 0pt"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b>NOTE
10 – RELATED PARTY TRANSACTIONS</b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; color: red"><font style="font: 8pt Times New Roman, Times, Serif"><b> </b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">Of
the $71,316 in outstanding Company accounts payable at December 31, 2011, $66,361 is to a related party shareholder for legal
services. A related party shareholder donated $90,000 in legal fee payments to the capital of the Company in 2011.</font></p>
11375000
13925931
0
45699
-543125
11375
13926
272796
1096727
-827295
-1064954
0
0
0
0
0
0
0
-543124
45699
0
2000000
410000
205000
2000
410
204590
200
-1800
200
205000
5500000
5500
550
-4950
550
2000000
2000
200
-1800
200
-300000
-300
0
300
0
175000
175
18
-157
18
-16797
-16797
2000000
2000
0
71203
-31422
41781
-41781
0
0
0
210000
147000
147000
0
63000
69000
103500
69
103431
103500
2071931
517982
2072
515910
517982