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<p style="margin: 0pt"> </p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 10pt Times New Roman, Times, Serif"><b><i>Nature
of Organization</i></b></p>
<p style="text-indent: 0pt"><br />
</p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 10pt Times New Roman, Times, Serif"><font style="font-weight: normal">Creative
Learning Corporation (“CLC”), formerly B2 Health, Inc., was incorporated March 8, 2006 in the State of Delaware. BFK
Franchise Company LLC (“BFKF”) was formed in the State of Nevada on May 19, 2009. Effective July 2, 2010, CLC was acquired
by BFKF in a transaction classified as a reverse acquisition.<font style="color: #ff0000"> </font>CLC concurrently changed
its name from B2 Health, Inc. to Creative Learning Corporation. The financial statements represent the activity of BFKF from May
19, 2009 forward, and the consolidated activity of BFKF and CLC from July 2, 2010 forward. BFKF and CLC are hereinafter referred
to collectively as the "Company". The Company, primarily through franchises, offers educational programs designed to teach principles
of engineering, architecture and physics to children using Lego ® bricks. The Company may also engage in any other business
that is permitted by law, as designated by the Board of Directors of the Company.</font></p>
<p style="text-indent: 0pt"><br />
</p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 10pt Times New Roman, Times, Serif"><font style="font-weight: normal">In
addition to the accounts of CLC and BFKF, the accompanying consolidated financial statements include the accounts of CLC’s
subsidiaries, BFK Development Company LLC (“BFKD”) from November 25, 2009 (BFKD’s inception) forward, and CI
Franchise Company LLC (“CI”), formed on September 14, 2012.</font></p>
<p style="text-indent: 0pt"><br />
</p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 10pt Times New Roman, Times, Serif"><font style="font-weight: normal">BFKF
held a 50% ownership interest in BFKD from November 25, 2009 through October 2, 2010. On October 3, 2010, the BFKF acquired the
50% noncontrolling interest in BFKD. Immediately following the acquisition of the noncontrolling interest, BFKF transferred its
100% interest in BFKD to CLC.</font></p>
<p style="text-indent: 0pt"><br />
</p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font-family: Times New Roman, Times, Serif"><font style="font-size: 10pt; font-weight: normal">CI
Franchise Company LLC (“CI”) was formed to purchase and operate another franchise concept known as Challenge Island</font><font style="font-size: 70%; vertical-align: text-top">®,
</font><font style="font-size: 10pt">a service business within a defined exclusive territory, providing unique challenge-based
programs designed to foster critical and creative thinking skills, problem solving methodology, and core STEM (Science, Technology,
Engineering, Mathematics) principles in children ages 3-13+.</font></p>
<p style="text-indent: 0pt"><br />
</p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 10pt Times New Roman, Times, Serif"><font style="font-weight: normal">Because
all of the entities (BFKF, BFKD, CI and CLC) are related parties under common ownership, all transactions among these entities
have been recorded within members’ equity.</font></p>
<p style="text-indent: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 10pt Times New Roman, Times, Serif"><font style="font-weight: normal"><i><u>Principles
of Consolidation</u></i></font></p>
<p style="text-indent: 0pt"><br />
</p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 10pt Times New Roman, Times, Serif"><font style="font-weight: normal">The
accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All intercompany
accounts and transactions have been eliminated in consolidation.</font></p>
<p style="text-indent: 0pt"><br />
</p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 10pt Times New Roman, Times, Serif"><b><i>Fiscal
year</i></b></p>
<p style="text-indent: 0pt"><br />
</p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 10pt Times New Roman, Times, Serif"><font style="font-weight: normal">The
Company operates on a September 30 fiscal year-end.</font></p>
<p style="text-indent: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 10pt Times New Roman, Times, Serif"><b><i>Use
of Estimates</i></b></p>
<p style="text-indent: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 10pt Times New Roman, Times, Serif"><font style="font-weight: normal">The
preparation of financial statements in accordance with generally accepted accounting principles permits management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities
at the date of financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual
results could differ from those estimates.</font></p>
<p style="text-indent: 0pt"><br /> </p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 10pt Times New Roman, Times, Serif"><b><i>Reclassifications</i></b></p>
<p style="text-indent: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 10pt Times New Roman, Times, Serif"><font style="font-weight: normal">Certain
amounts in the prior year’s consolidated financial statements have been reclassified to conform to the current year presentation
and to correct prior year errors. The reclassifications did not have any effect on the prior year net loss.</font></p>
<p style="text-indent: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 10pt Times New Roman, Times, Serif"><b><i>Cash
and Cash Equivalents</i></b></p>
<p style="text-indent: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 10pt Times New Roman, Times, Serif"><font style="font-weight: normal">The
Company considers all highly liquid securities with original maturities of three months or less when acquired, to be cash equivalents.  We
had no cash equivalents at September 30, 2012 and 2011.</font></p>
<p style="text-indent: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 10pt Times New Roman, Times, Serif"><b><i>Accounts
Receivable</i></b></p>
<p style="text-indent: 0pt"><br />
</p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 10pt Times New Roman, Times, Serif"><font style="font-weight: normal">The
Company reviews accounts receivable periodically for collectability and establishes an allowance for doubtful accounts and records
bad debt expense when deemed necessary. At September 30, 2012 and 2011, the Company’s allowance for doubtful accounts totaled
$12,000, and $28,660, respectively.</font></p>
<p style="text-indent: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 10pt Times New Roman, Times, Serif"><b><i>Property,
Equipment and Depreciation</i></b></p>
<p style="text-indent: 0pt"><br />
</p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 10pt Times New Roman, Times, Serif"><font style="font-weight: normal">Property
and equipment are stated at cost.  Depreciation is calculated using the straight-line method over the estimated useful
lives of the related assets, currently set at five years.  Expenditures for additions and improvements are capitalized,
while repairs and maintenance costs are expensed as incurred.  The cost and related accumulated depreciation of property
and equipment sold or otherwise disposed of are removed from the accounts and any gain or loss is recorded in the year of disposal.</font></p>
<p style="text-indent: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 10pt Times New Roman, Times, Serif"><b><i>Fair
Value of Financial Instruments</i></b></p>
<p style="text-indent: 0pt"><br />
</p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 10pt Times New Roman, Times, Serif"><font style="font-weight: normal">The
carrying amounts of cash, accounts receivable and current liabilities approximate fair value because of the short-term maturity
of these items. These fair value estimates are subjective in nature and involve uncertainties and matters of significant judgment,
and, therefore, cannot be determined with precision.  Changes in assumptions could significantly affect these estimates.  The
Company does not hold or issue financial instruments for trading purposes, nor does it utilize derivative instruments.</font></p>
<p style="text-indent: 0pt"><br />
</p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 10pt Times New Roman, Times, Serif"><font style="font-weight: normal">The
FASB Accounting Standards Codification (“ASC”) clarifies that fair value is an exit price, representing the amount
that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.
It also requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which
these assets and liabilities must be grouped, based on significant levels of inputs as follows:</font></p>
<p style="text-indent: 0pt"><b> </b></p>
<p> </p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="text-align: left; width: 1%"> </td>
<td style="text-align: left; width: 10%">Level 1:</td>
<td style="text-align: left; width: 89%">Quoted prices in active markets for identical assets or liabilities.</td></tr>
<tr style="vertical-align: top">
<td style="text-align: left"> </td>
<td style="text-align: left; text-indent: 0pt">Level 2:</td>
<td style="text-align: left; text-indent: 0pt">Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability.</td></tr>
<tr style="vertical-align: top">
<td style="text-align: left"> </td>
<td style="text-align: left; text-indent: 0pt">Level 3:</td>
<td style="text-align: left; text-indent: 0pt">Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.</td></tr>
</table>
<p style="text-indent: 0pt"><br />
</p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 10pt Times New Roman, Times, Serif"><font style="font-weight: normal">The
determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant
to the fair value measurement.</font></p>
<p style="text-indent: 0pt"><br /></p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 10pt Times New Roman, Times, Serif"><font style="font-weight: normal"><i><u>Long-Lived
Assets</u></i></font></p>
<p style="text-indent: 0pt"><br />
</p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 10pt Times New Roman, Times, Serif"><font style="font-weight: normal">In
accordance with ASC 350, the Company regularly reviews the carrying value of intangible and other long-lived assets for the existence
of facts or circumstances, both internally and externally, that may suggest impairment. If impairment testing indicates a lack
of recoverability, an impairment loss is recognized by the Company if the carrying amount of a long-lived asset exceeds its fair
value.</font></p>
<p style="text-indent: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 10pt Times New Roman, Times, Serif"><font style="font-weight: normal"><i><u>Revenue
recognition</u></i></font></p>
<p style="text-indent: 0pt"><br />
</p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 10pt Times New Roman, Times, Serif"><font style="font-weight: normal">Revenue
is recognized on an accrual basis after services have been performed under contract terms, the service price to the client is fixed
or determinable, and collectibility is reasonably assured.</font></p>
<p style="text-indent: 0pt"><br />
</p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 10pt Times New Roman, Times, Serif"><font style="font-weight: normal">Initial
franchise fees are recognized upon the commencement of operations by the franchisee, which is when the Company has performed substantially
all initial services required by the franchise agreement. Any unearned income<font style="color: #ff0000"> </font>represents
franchise fees received for which the Company has not completed its initial obligations under the franchise agreement. Such obligations
generally consist of site location assistance and training. Royalties and marketing fees are recognized as earned.</font></p>
<p style="text-indent: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 10pt Times New Roman, Times, Serif"><font style="font-weight: normal"><i><u>Advertising
costs</u></i></font></p>
<p style="text-indent: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 10pt Times New Roman, Times, Serif"><font style="font-weight: normal">Advertising
costs are expensed as incurred. The Company incurred advertising costs for the years ended September 30, 2012 and 2011 of $324,229
and $180,774, respectively.</font></p>
<p style="text-indent: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 10pt Times New Roman, Times, Serif"><b><i>Income
Taxes</i></b></p>
<p style="text-indent: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 10pt Times New Roman, Times, Serif"><font style="font-weight: normal">The
Company accounts for income taxes pursuant to ASC 740. Under ASC 740 deferred taxes are provided on a liability method whereby
deferred tax assets are recognized for deductible temporary differences and operating loss carryforwards and deferred tax liabilities
are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets
and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management,
it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities
are adjusted for the effects of changes in tax laws and rates on the date of enactment.</font></p>
<p style="text-indent: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 10pt Times New Roman, Times, Serif"><b><i>Net
earnings (loss) per share</i></b></p>
<p style="text-indent: 0pt"><br />
</p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 10pt Times New Roman, Times, Serif"><font style="font-weight: normal">ASC
260-10-45, “Earnings Per Share”, requires presentation of "basic" and "diluted" earnings per share on the face of the
statements of operations for all entities with complex capital structures. Basic earnings per share are computed by dividing net
income by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential
dilution that could occur if securities or other contracts to issue common stock were exercised or converted during the period.
Dilutive securities having an anti-dilutive effect on diluted earnings per share are excluded from the calculation. When the company
is in loss position, no dilutive effect is considered.</font></p>
<p style="text-indent: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 10pt Times New Roman, Times, Serif"><b><i>Stock-based
compensation</i></b></p>
<p style="text-indent: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 10pt Times New Roman, Times, Serif"><font style="font-weight: normal">The
Company accounts for employee and non-employee stock awards under ASC 718, whereby equity instruments issued to employees for services
are recorded based on the fair value of the instrument issued and those issued to non-employees are recorded based on the fair
value of the consideration received or the fair value of the equity instrument, whichever is more reliably measurable.</font></p>
<p style="text-indent: 0pt"><br /></p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 10pt Times New Roman, Times, Serif"><b><i>Non-controlling
interest</i></b></p>
<p style="text-indent: 0pt"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 10pt Times New Roman, Times, Serif"><font style="font-weight: normal">A
subsidiary of the Company had minority members, representing ownership interests of 50% at September 30, 2010.  The Company
accounted for this non-controlling interest pursuant to ASC 810-10-65 whereby gains or losses in a subsidiary with a non-controlling
interest are allocated to the non-controlling interest based on the ownership percentage of the non-controlling interest, even
if that allocation results in a deficit non-controlling interest balance. As discussed above, the minority interest was reduced
to 0% on October 3, 2010.</font></p>
<p style="margin: 0pt"></p>
<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><b><i>Fiscal
year</i></b></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">The
Company operates on a September 30 fiscal year-end.</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"> <br /></p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><b><i>Cash
and Cash Equivalents</i></b></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">The
Company considers all highly liquid securities with original maturities of three months or less when acquired, to be cash equivalents.  We
had no cash equivalents at September 30, 2012 and 2011.</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"> </p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><b><i>Accounts
Receivable</i></b></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">The
Company reviews accounts receivable periodically for collectability and establishes an allowance for doubtful accounts and records
bad debt expense when deemed necessary. At September 30, 2012 and 2011, the Company’s allowance for doubtful accounts totaled
$12,000, and $28,660, respectively.</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"> </p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal"><i><u>Revenue
recognition</u></i></font></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">Revenue
is recognized on an accrual basis after services have been performed under contract terms, the service price to the client is fixed
or determinable, and collectibility is reasonably assured.</font></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">Initial
franchise fees are recognized upon the commencement of operations by the franchisee, which is when the Company has performed substantially
all initial services required by the franchise agreement. Any unearned income<font style="color: #ff0000"> </font>represents
franchise fees received for which the Company has not completed its initial obligations under the franchise agreement. Such obligations
generally consist of site location assistance and training. Royalties and marketing fees are recognized as earned.</font></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"></p>
<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"> </p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><b><i>Property,
Equipment and Depreciation</i></b></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br /></p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">Property
and equipment are stated at cost.  Depreciation is calculated using the straight-line method over the estimated useful
lives of the related assets, currently set at five years.  Expenditures for additions and improvements are capitalized,
while repairs and maintenance costs are expensed as incurred.  The cost and related accumulated depreciation of property
and equipment sold or otherwise disposed of are removed from the accounts and any gain or loss is recorded in the year of disposal.</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"></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><b><i>Income
Taxes</i></b></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">The
Company accounts for income taxes pursuant to ASC 740. Under ASC 740 deferred taxes are provided on a liability method whereby
deferred tax assets are recognized for deductible temporary differences and operating loss carryforwards and deferred tax liabilities
are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets
and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management,
it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities
are adjusted for the effects of changes in tax laws and rates on the date of enactment.</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"> <br /></p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><b><i>Net
earnings (loss) per share</i></b></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">ASC
260-10-45, “Earnings Per Share”, requires presentation of "basic" and "diluted" earnings per share on the face of the
statements of operations for all entities with complex capital structures. Basic earnings per share are computed by dividing net
income by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential
dilution that could occur if securities or other contracts to issue common stock were exercised or converted during the period.
Dilutive securities having an anti-dilutive effect on diluted earnings per share are excluded from the calculation. When the company
is in loss position, no dilutive effect is considered.</font></p>
<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"></p>
1041786
517830
27271
25250
0
3500
0
3417267
1577752
47960
109822
2937407
1467930
905031
603533
393948
303801
2834771
2078670
351126
269261
8800
0
0
0
353814
18525
10691
137480
141363
161429
182823
324229
180774
397250
287427
124552
22251
12400
76746
582496
-500918
22314
-5096
22314
30557
0
35653
604810
-506014
0
0
0
0
604810
-506014
0
0
0
0
0.05
-0.1
604810
-506014
11445492
5003405
683635
-122812
145409
4123
43500
99308
38335
-26334
-125895
-9918
106488
89005
19630
30800
409346
18525
10691
-159679
-137156
-10000
10000
25250
144429
127156
523956
490559
750527
951177
200650
40000
0
11630242
6978000
10288575
11556075
2581268
1335044
699434
-155075
1029
1155
258
1975445
2006118
670427
-1277040
-672230
-771026
0
0
-54734
0
0
-54734
0
54734
1156734
951177
116
951061
0
0
11000
1310573
8800
409346
1
131
8799
9215
0
0
0
0
1260000
5240000
0
0
126
524
-126
-524
0
0
0
0
-33500
0
-3
3
5000
3750
0
3750
25000
18250
2
18248
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><b><i>Use
of Estimates</i></b></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">The
preparation of financial statements in accordance with generally accepted accounting principles permits management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities
at the date of financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual
results could differ from those estimates.</font></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"></p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><b><i>Reclassifications</i></b></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">Certain
amounts in the prior year’s consolidated financial statements have been reclassified to conform to the current year presentation
and to correct prior year errors. The reclassifications did not have any effect on the prior year net loss.</font></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><b><i>Fair
Value of Financial Instruments</i></b></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">The
carrying amounts of cash, accounts receivable and current liabilities approximate fair value because of the short-term maturity
of these items. These fair value estimates are subjective in nature and involve uncertainties and matters of significant judgment,
and, therefore, cannot be determined with precision.  Changes in assumptions could significantly affect these estimates.  The
Company does not hold or issue financial instruments for trading purposes, nor does it utilize derivative instruments.</font></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">The
FASB Accounting Standards Codification (“ASC”) clarifies that fair value is an exit price, representing the amount
that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.
It also requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which
these assets and liabilities must be grouped, based on significant levels of inputs as follows:</font></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><b> </b></p>
<p style="font: 8pt Times New Roman, Times, Serif"> </p>
<table cellpadding="0" cellspacing="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; width: 10%; font: 8pt Times New Roman, Times, Serif">Level 1:</td>
<td style="text-align: left; width: 89%; font: 8pt Times New Roman, Times, Serif">Quoted prices in active markets for identical assets or liabilities.</td></tr>
<tr style="vertical-align: top; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">Level 2:</td>
<td style="text-align: left; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability.</td></tr>
<tr style="vertical-align: top; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">Level 3:</td>
<td style="text-align: left; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.</td></tr>
</table>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">The
determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant
to the fair value measurement.</font></p>
<p style="text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"> </p>
<p style="font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal"><i><u>Long-Lived Assets</u></i></font></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">In
accordance with ASC 350, the Company regularly reviews the carrying value of intangible and other long-lived assets for the existence
of facts or circumstances, both internally and externally, that may suggest impairment. If impairment testing indicates a lack
of recoverability, an impairment loss is recognized by the Company if the carrying amount of a long-lived asset exceeds its fair
value.</font></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal"><i><u>Advertising
costs</u></i></font></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">Advertising
costs are expensed as incurred. The Company incurred advertising costs for the years ended September 30, 2012 and 2011 of $324,229
and $180,774, respectively.</font></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><b><i>Stock-based
compensation</i></b></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">The
Company accounts for employee and non-employee stock awards under ASC 718, whereby equity instruments issued to employees for services
are recorded based on the fair value of the instrument issued and those issued to non-employees are recorded based on the fair
value of the consideration received or the fair value of the equity instrument, whichever is more reliably measurable.</font></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"></p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><b><i>Non-controlling
interest</i></b></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">A
subsidiary of the Company had minority members, representing ownership interests of 50% at September 30, 2010.  The Company
accounted for this non-controlling interest pursuant to ASC 810-10-65 whereby gains or losses in a subsidiary with a non-controlling
interest are allocated to the non-controlling interest based on the ownership percentage of the non-controlling interest, even
if that allocation results in a deficit non-controlling interest balance. As discussed above, the minority interest was reduced
to 0% on October 3, 2010.</font></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">On July 2, 2010 Creative Learning Corporation
entered into an agreement to exchange securities (the "Agreement") with BFK Franchise Company LLC, acquiring 100% of the outstanding
membership interests of BFK Franchise Company LLC through the Agreement calling for the issuance of 9,000,000 shares of its common
stock. During the years ended September 30, 2011 and 2010, 5,240,000 and 1,557,000 shares were issued under the Agreement, with
2,203,000 shares remaining to be issued as of September 30, 2011 and -0- shares remaining at September 30, 2012.<font style="color: #ff0000"> </font>The
transaction was accounted for as a reverse acquisition as the members of BFK Franchise Company LLC retained the majority of the
outstanding common stock of Creative Learning Corporation after the share exchange. Effective with the Agreement, the Company's
stockholders' equity was retroactively recapitalized as that of BFK Franchise Company LLC, while 100% of the net liabilities of
Creative Learning Corporation valued at $200,330 consisting of accounts payable of $26,330 and stock subscriptions payable $174,000,
were recorded as being acquired in the reverse acquisition for its 713,000 outstanding common shares. The net liabilities acquired
of $200,330 combined with the stock value of $962,500 based on market price on the acquisition date led to the Company recognizing
goodwill on the transaction of $1,162,880, which was immediately written off. Subsequent to the July 2, 2010 recapitalization,
Creative Learning Corporation and BFK Franchise Company LLC remain separate legal entities (with Creative Learning Corporation
as the parent of BFK Franchise Company LLC). The accompanying consolidated financial statements exclude the financial position,
results of operations and cash flows of Creative Learning Corporation prior to the July 2, 2010. Creative Learning Corporation
concurrent with the transaction changed its name from B2 Health, Inc. to Creative Learning Corporation. Effective with the July
2, 2010 Agreement the Company sold its 100% owned subsidiary Back 2 Health, Ltd. to a company related by common control for a nominal
fee. </font></p>
<p style="font: 8pt Times New Roman, Times, Serif"></p>
<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"></p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">During
the years ended September 30, 2012 and 2011, the Company paid related parties (companies related by common control) for the following
expenses:</font></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="font: 8pt Times New Roman, Times, Serif"> </p>
<table cellpadding="0" cellspacing="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top; font: 8pt Times New Roman, Times, Serif">
<td style="width: 36pt; text-align: right; font: 8pt Times New Roman, Times, Serif">·  </td>
<td style="font: 8pt Times New Roman, Times, Serif; text-align: justify; text-indent: 0pt">$393,948 and $303,801, respectively, for franchise consulting and commissions;</td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif"> </p>
<table cellpadding="0" cellspacing="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top; font: 8pt Times New Roman, Times, Serif">
<td style="width: 36pt; text-align: right; font: 8pt Times New Roman, Times, Serif">·  </td>
<td style="font: 8pt Times New Roman, Times, Serif; text-align: justify; text-indent: 0pt">$12,400 and $76,746, respectively, for franchise training and expenses;</td></tr>
</table>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">As
of September 30, 2012, the Company owed related parties $16,771 for franchise commissions.  This liability is reported
in the accompanying consolidated financial statements as Accounts payable, related party.</font></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">As
of September 30, 2011, the Company owed related parties $11,100 for franchise commissions and other charges. This liability is
reported in the accompanying consolidated financial statements as Accounts payable, related party.</font></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">As
of September 30, 2012, the Company owed a $40,000, non-interest bearing promissory note to a related party for Consulting Services
payable in 2013 by issuance of 40,000 shares of the Company’s Common Stock.  This liability is reported in the
accompanying financial statements as Notes Payable, related party.</font></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"></p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><b> </b></p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">As
of September 30, 2010 and 2009, the Company owed a $650 unsecured note payable to a related party that matured in December 2010.
The related party forgave the note during the year ended September 30, 2011.</font></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">During
the year ended September 30, 2011, certain debt holders converted their promissory notes and related accrued interest into shares
of CLC common stock (see Note 6).</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"></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">Property
and equipment consist of the following:</font></p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><b>  </b></p>
<table cellpadding="0" cellspacing="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 2px; text-align: left; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td colspan="6" style="border-bottom: black 2px solid; font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">September 30,</td>
<td nowrap="nowrap" style="text-align: center; padding-bottom: 2px; text-indent: 0pt; font: bold 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: center; padding-bottom: 2px; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: center; padding-bottom: 2px; text-indent: 0pt; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="border-bottom: black 2px solid; font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">2012</td>
<td nowrap="nowrap" style="text-align: center; padding-bottom: 2px; text-indent: 0pt; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: center; padding-bottom: 2px; text-indent: 0pt; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="border-bottom: black 2px solid; font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">2011</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: bold 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #cceeff; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; width: 76%; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">Furniture and Fixures</td>
<td style="text-align: right; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif">$</td>
<td style="text-align: right; width: 9%; font: 8pt Times New Roman, Times, Serif">54,435</td>
<td nowrap="nowrap" style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif">$</td>
<td style="text-align: right; width: 9%; font: 8pt Times New Roman, Times, Serif">42,334</td>
<td nowrap="nowrap" style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">Equipment</td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">29,857</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">21,200</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #cceeff; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="padding-bottom: 2px; text-align: left; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">Real Property</td>
<td style="padding-bottom: 2px; text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: right">229,035</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 2px; text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: right">105365</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">313,327</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">168,899</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #cceeff; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="padding-bottom: 2px; text-align: left; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">Less accumulated depreciation</td>
<td style="padding-bottom: 2px; text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: right">(29,805</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif">)</td>
<td style="padding-bottom: 2px; text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: right">(11,280</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif">)</td></tr>
<tr style="background-color: white; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="padding-bottom: 4px; text-align: left; padding-left: 189pt; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 4px; text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: left">$</td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: right">283,522</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 4px; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 4px; text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: left">$</td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: right">157,619</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 4px; font: 8pt Times New Roman, Times, Serif"> </td></tr>
</table>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">Depreciation
expense totaled $18,525 and $10,691, respectively, for the years ended September 30, 2012 and 2011.</font></p>
<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"></p>
<table cellpadding="0" cellspacing="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 2px; text-align: left; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td colspan="6" style="border-bottom: black 2px solid; font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">September 30,</td>
<td nowrap="nowrap" style="text-align: center; padding-bottom: 2px; text-indent: 0pt; font: bold 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: center; padding-bottom: 2px; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: center; padding-bottom: 2px; text-indent: 0pt; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="border-bottom: black 2px solid; font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">2012</td>
<td nowrap="nowrap" style="text-align: center; padding-bottom: 2px; text-indent: 0pt; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: center; padding-bottom: 2px; text-indent: 0pt; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="border-bottom: black 2px solid; font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">2011</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: bold 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #cceeff; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; width: 76%; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">Furniture and Fixures</td>
<td style="text-align: right; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif">$</td>
<td style="text-align: right; width: 9%; font: 8pt Times New Roman, Times, Serif">54,435</td>
<td nowrap="nowrap" style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif">$</td>
<td style="text-align: right; width: 9%; font: 8pt Times New Roman, Times, Serif">42,334</td>
<td nowrap="nowrap" style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">Equipment</td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">29,857</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">21,200</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #cceeff; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="padding-bottom: 2px; text-align: left; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">Real Property</td>
<td style="padding-bottom: 2px; text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: right">229,035</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 2px; text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: right">105365</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">313,327</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">168,899</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #cceeff; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="padding-bottom: 2px; text-align: left; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">Less accumulated depreciation</td>
<td style="padding-bottom: 2px; text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: right">(29,805</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif">)</td>
<td style="padding-bottom: 2px; text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: right">(11,280</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif">)</td></tr>
<tr style="background-color: white; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="padding-bottom: 4px; text-align: left; padding-left: 189pt; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 4px; text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: left">$</td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: right">283,522</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 4px; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 4px; text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: left">$</td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: right">157,619</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 4px; font: 8pt Times New Roman, Times, Serif"> </td></tr>
</table>
<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"></p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">In
September of 2012, the Company purchased a second franchise concept and trademarks, and is carrying an Intangible Asset for this
purchase of $$25,250 under a newly created Subsidiary called CI Franchise Company LLC, where CI stands for Challenge Island.</font></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"></p>
<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"></p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">At
September 30, 2010, the Company owed $100,000 in unsecured promissory notes outstanding to individuals, to be repaid from proceeds
of a private placement offering of the Company’s common stock which was commenced in July 2010, with 1% interest compounded
monthly on the outstanding balance. If one of the notes, for $50,000, was not repaid by July 1, 2010, the Company was required
to pay $5,000 per month from mid-July 2010 forward, until the note was retired. Pursuant to note terms, the lenders were to also
receive 50,000 common shares by June 2010 (which remained due at September 30, 2010); and upon repayment of the note, have the
right to purchase 200,000 shares of the Company at $.50 per share.  In June 2011, the Company exchanged 125,000 shares
of common stock for the $50,000 note and $6,341 in accrued interest (a value of $.45 per share).</font></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">At
September 30, 2010, the Company also had $100,000 in unsecured convertible notes outstanding to individuals, due in November 2010,
with 1% interest compounded monthly on the outstanding balance, convertible at the lender’s election at $.50 per share into
200,000 common shares. Pursuant to note terms, the lenders were to also receive 25,000 common shares by June 2010 and 25,000 shares
by August 31, 2010, which remained due at September 30, 2010. The Company recognized a beneficial conversion feature debt discount
on the convertible notes of $100,000 (limited to the face amount of the notes), which was allocated $58,753 to paid in capital
and $41,247 to stock subscriptions payable. The debt discount is amortized over the lives of the loans. Interest expense from debt
amortization in fiscal year 2010 was $80,370, with a remaining debt discount of $19,630 amortized during the year ended September
30, 2011.</font></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><b> </b></p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">During
the year ended September 30, 2011, the remaining $150,000 in promissory notes and $13,956 in related accrued interest were converted
into 372,902 shares of the Company’s common stock (a value of $0.44 per share). As of September 30, 2011, the Company had
no promissory notes, accrued interest liabilities or related stock options outstanding in relation to these promissory notes.</font></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">As
of September 30, 2012, the Company owed a $40,000, non-interest bearing promissory note to a related party for Consulting Services
payable in 2013 by issuance of 40,000 shares of the Company’s Common Stock.  This liability is reported in the
accompanying financial statements as Notes Payable, related party.</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"></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"></p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">During
the year ended September 30, 2011, the Company sold 1,156,734 shares of its common stock to investors for proceeds totaling $951,177,
or $0.82 per share.</font></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">During
the year ended September 30, 2011, the Company issued 1,310,573 shares of its common stock to vendors in exchange for consulting
services valued at $409,346 or $0.31 per share.</font></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">During
the year ended September 30, 2012, the Company issued 1,260,000 shares of its common stock as the final fulfillment of all commitments
pursuant to the July 2, 2010 Securities Exchange Agreement (see Note 2).</font></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">During
the year ended September 30, 2012, the Company issued 11,000 shares of its common stock in exchange for consulting services valued
at $8,800 or $0.80 per share.</font></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">During
the year ended September 30, 2012, the Company issued 5,000 shares of its common stock to fulfill a prior commitment related to
a late, loan interest payment valued at $3,750 or $0.75 per share.</font></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">During
the year ended September 30, 2012, the Company issued 25,000 shares of its common stock related to the acquisition of a second
Franchise concept valued at $18,250 or $0.73 per share.</font></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">During
the year ended September 30, 2012, the Company canceled 33,500 of prior shares of its common stock previously issued in error.</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"></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">At
September 30, 2012, the Company owed a $40,000, non-interest bearing promissory note to a related party for Consulting Services
payable in 2013 by issuance of 40,000 shares of the Company’s Common Stock.</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"></p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal"><u>Non-employee
stock options</u></font></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">The
Company accounts for non-employee stock options under ASC 718, whereby option costs are recorded based on the fair value of the
consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. Unless otherwise
provided for, the Company covers option exercises by issuing new shares.</font></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"></p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><b> </b></p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">During
the year ended September 30, 2010 the Company issued 200,000 common stock purchase options in conjunction with notes payable, allowing
the holder to purchase one share of common stock per option, exercisable upon repayment of the notes payable at $0.50 per share
with an open term. At September 30, 2011,  no remaining options related to these notes payables were still outstanding.
The fair value of the option grants were estimated on the date of grant using the Black-Scholes option pricing model with the following
assumptions: risk free interest rate of 2.1 – 2.57%, dividend yield of 0%, expected lives estimated at five years, volatility
from 81 - 115%. The Company incurred and recorded compensation expense under the stock options of $-0-, $-0-, and $353,814, respectively,
for the years ended September 30, 2012, 2011 and 2010.</font></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">Also
in fiscal year 2010 the Company issued 31,067 common stock purchase warrants as part of $3.00 units sold in an ongoing private
placement offering that commenced in July 2010. Each unit contains four shares of common stock and one common stock purchase warrant,
with each warrant allowing the holder to purchase one share of common stock, exercisable anytime at the holder’s election
at $3.00 per share, through a term expiring July 31, 2013. The value of the sold units has been allocated to the common shares
as the warrants were not in the money on the date of sale.</font></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal"><u>Employee
stock options</u></font></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">The
Company accounts for employee stock options under ASC 718. Unless otherwise provided for, the Company covers option exercises by
issuing new shares. There were no employee stock options issued or outstanding in 2012 and 2011.</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"></p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">The
Company currently supports independently owned franchises located in 32 states, 4 Canadian provinces and 6 other countries. Following
is a summary of the annual franchise activity:</font></p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><b>  </b></p>
<table cellpadding="0" cellspacing="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: center; padding-bottom: 2px; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: center; padding-bottom: 2px; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"> </td>
<td colspan="10" style="border-bottom: black 2px solid; font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">September 30,</td>
<td nowrap="nowrap" style="text-align: center; padding-bottom: 2px; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: center; padding-bottom: 2px; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: center; padding-bottom: 2px; text-indent: 0pt; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="border-bottom: black 2px solid; font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">2012</td>
<td nowrap="nowrap" style="text-align: center; padding-bottom: 2px; text-indent: 0pt; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: center; padding-bottom: 2px; text-indent: 0pt; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="border-bottom: black 2px solid; font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">2011</td>
<td nowrap="nowrap" style="text-align: center; padding-bottom: 2px; text-indent: 0pt; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: center; padding-bottom: 2px; text-indent: 0pt; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="border-bottom: black 2px solid; font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">2010</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: bold 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #cceeff; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; text-indent: 0pt; width: 64%; font: 8pt Times New Roman, Times, Serif">Franchises in operation - beginning of year</td>
<td style="text-align: right; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; width: 9%; font: 8pt Times New Roman, Times, Serif">75</td>
<td nowrap="nowrap" style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; width: 9%; font: 8pt Times New Roman, Times, Serif">36</td>
<td nowrap="nowrap" style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; width: 9%; font: 8pt Times New Roman, Times, Serif">6</td>
<td nowrap="nowrap" style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">Franchises sold during the year</td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">137</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">42</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">30</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #cceeff; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">Franchises cancelled, terminated or</td>
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="padding-bottom: 2px; text-align: left; padding-left: 9pt; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">repurchased during the year</td>
<td style="padding-bottom: 2px; text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: right">(2</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif">)</td>
<td style="padding-bottom: 2px; text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: right">(3</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif">)</td>
<td style="padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: right"> </td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #cceeff; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; padding-bottom: 4px; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">Franchises in operation - end of year</td>
<td style="padding-bottom: 4px; text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: right">210</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 4px; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 4px; text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: right">75</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 4px; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 4px; text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: right">36</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 4px; font: 8pt Times New Roman, Times, Serif"> </td></tr>
</table>
<p style="text-align: center; font: 8pt Times New Roman, Times, Serif"><b> </b></p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">Franchises
are required to pay the Company an initial franchise fee, royalty fees totaling 7% of gross sales, and marketing fees totaling
2% of gross sales.</font></p>
<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"></p>
<table cellpadding="0" cellspacing="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: center; padding-bottom: 2px; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: center; padding-bottom: 2px; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"> </td>
<td colspan="10" style="border-bottom: black 2px solid; font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">September 30,</td>
<td nowrap="nowrap" style="text-align: center; padding-bottom: 2px; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: center; padding-bottom: 2px; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: center; padding-bottom: 2px; text-indent: 0pt; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="border-bottom: black 2px solid; font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">2012</td>
<td nowrap="nowrap" style="text-align: center; padding-bottom: 2px; text-indent: 0pt; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: center; padding-bottom: 2px; text-indent: 0pt; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="border-bottom: black 2px solid; font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">2011</td>
<td nowrap="nowrap" style="text-align: center; padding-bottom: 2px; text-indent: 0pt; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: center; padding-bottom: 2px; text-indent: 0pt; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="border-bottom: black 2px solid; font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">2010</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: bold 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #cceeff; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; text-indent: 0pt; width: 64%; font: 8pt Times New Roman, Times, Serif">Franchises in operation - beginning of year</td>
<td style="text-align: right; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; width: 9%; font: 8pt Times New Roman, Times, Serif">75</td>
<td nowrap="nowrap" style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; width: 9%; font: 8pt Times New Roman, Times, Serif">36</td>
<td nowrap="nowrap" style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; width: 9%; font: 8pt Times New Roman, Times, Serif">6</td>
<td nowrap="nowrap" style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">Franchises sold during the year</td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">137</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">42</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">30</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #cceeff; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">Franchises cancelled, terminated or</td>
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="padding-bottom: 2px; text-align: left; padding-left: 9pt; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">repurchased during the year</td>
<td style="padding-bottom: 2px; text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: right">(2</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif">)</td>
<td style="padding-bottom: 2px; text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: right">(3</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif">)</td>
<td style="padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: right"> </td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #cceeff; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; padding-bottom: 4px; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">Franchises in operation - end of year</td>
<td style="padding-bottom: 4px; text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: right">210</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 4px; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 4px; text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: right">75</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 4px; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 4px; text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: right">36</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 4px; font: 8pt Times New Roman, Times, Serif"> </td></tr>
</table>
<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"></p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><b><i>Lease
Commitments</i></b></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><br />
</p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><font style="font-weight: normal">The
Company entered into an office lease agreement commencing May 1, 2010 and ending April 30, 2015. The office lease calls for monthly
rent and operating payments that escalate over the term of the lease. Future minimum rental payments are estimated as follows:</font></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><br />
</p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"> </p>
<p style="text-align: center; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"> </p>
<table cellpadding="0" cellspacing="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; text-indent: 0pt; font: bold 8pt Times New Roman, Times, Serif">September 30,</td>
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="font: 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #cceeff; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; text-indent: 0pt; width: 88%; font: 8pt Times New Roman, Times, Serif">2013</td>
<td style="text-align: right; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif">$</td>
<td style="text-align: right; width: 9%; font: 8pt Times New Roman, Times, Serif">51,500</td>
<td nowrap="nowrap" style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">2014</td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">53,500</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #cceeff; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; padding-bottom: 2px; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">2015</td>
<td style="padding-bottom: 2px; text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: right">23,000</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="padding-bottom: 4px; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 4px; text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: left">$</td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: right">128,000</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 4px; font: 8pt Times New Roman, Times, Serif"> </td></tr>
</table>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><b> </b></p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><font style="font-weight: normal">Rent
expense was $64,296 and $80,122, respectively, for the years ended September 30, 2012 and 2011.</font></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><br />  </p>
<p style="text-align: right; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><font style="font-weight: normal">  </font></p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><b> </b></p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif; margin-bottom: 0pt"><b><i>Contingencies</i></b><font style="font-weight: normal">There
are no contigencies as of September 30, 2012.</font></p>
<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"></p>
<table cellpadding="0" cellspacing="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; text-indent: 0pt; font: bold 8pt Times New Roman, Times, Serif">September 30,</td>
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="font: 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #cceeff; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; text-indent: 0pt; width: 88%; font: 8pt Times New Roman, Times, Serif">2013</td>
<td style="text-align: right; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif">$</td>
<td style="text-align: right; width: 9%; font: 8pt Times New Roman, Times, Serif">51,500</td>
<td nowrap="nowrap" style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">2014</td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">53,500</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #cceeff; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; padding-bottom: 2px; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">2015</td>
<td style="padding-bottom: 2px; text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: right">23,000</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="padding-bottom: 4px; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 4px; text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: left">$</td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: right">128,000</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 4px; font: 8pt Times New Roman, Times, Serif"> </td></tr>
</table>
<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: left; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">A
reconciliation of the U.S. statutory federal income tax rate to the effective tax rate is as follows:</font></p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><b> </b> </p>
<table cellpadding="0" cellspacing="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 2px; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td colspan="6" style="border-bottom: black 2px solid; font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">September 30,</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 2px; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="border-bottom: black 2px solid; font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">2012</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 2px; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="border-bottom: black 2px solid; font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">2011</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: bold 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #cceeff; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; width: 76%; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">U.S. Federal statutory graduated rate</td>
<td style="text-align: right; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; width: 9%; font: 8pt Times New Roman, Times, Serif">34.00</td>
<td nowrap="nowrap" style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif">%</td>
<td style="text-align: right; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; width: 9%; font: 8pt Times New Roman, Times, Serif">34.00</td>
<td nowrap="nowrap" style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif">%</td></tr>
<tr style="background-color: white; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">State income tax rate,</td>
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #cceeff; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">    net of federal benefit</td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">3.63</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif">%</td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">3.63</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif">%</td></tr>
<tr style="background-color: white; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">Net operating loss for which no tax</td>
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #cceeff; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="padding-bottom: 2px; text-align: left; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">  benefit is currently available</td>
<td style="padding-bottom: 2px; text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: right">-37.63</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif">%</td>
<td style="padding-bottom: 2px; text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: right">-37.63</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif">%</td></tr>
<tr style="background-color: white; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="padding-bottom: 4px; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 4px; text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: right">0.00</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 4px; font: 8pt Times New Roman, Times, Serif">%</td>
<td style="padding-bottom: 4px; text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: right">0.00</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 4px; font: 8pt Times New Roman, Times, Serif">%</td></tr>
</table>
<p style="text-align: left; font: 8pt Times New Roman, Times, Serif"><b> </b></p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">At
September 30, 2012, deferred tax assets consisted of a net tax asset of $251,549, due to remaining net operating loss carryforwards
of $668,481 which was fully allowed for in the valuation allowance of $251,549.  The valuation allowance offsets the
net deferred tax asset for which there is no assurance of recovery.  The change in the valuation allowance for the years
ended September 30, 2012 and 2011 totaled $(231,636) and $190,413, respectively.  The net operating loss carryforwards
begin to expire in the year 2030.</font></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">The
valuation allowance will be evaluated at the end of each year, considering positive and negative evidence about whether the deferred
tax asset will be realized.  At that time, the allowance will either be increased or reduced; reduction could result
in the complete elimination of the allowance if positive evidence indicates that the value of the deferred tax assets is no longer
impaired and the allowance is no longer required.</font></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">Should
we undergo an ownership change as defined in the Internal Revenue Code, our net tax operating loss carryforwards generated prior
to the ownership change may be subject to an annual limitation, which could reduce or defer the utilization of these losses.</font></p>
<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"></p>
<table cellpadding="0" cellspacing="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 2px; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td colspan="6" style="border-bottom: black 2px solid; font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">September 30,</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 2px; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="border-bottom: black 2px solid; font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">2012</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 2px; font: bold 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="border-bottom: black 2px solid; font: bold 8pt Times New Roman, Times, Serif; text-align: center; text-indent: 0pt">2011</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: bold 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #cceeff; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; width: 76%; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">U.S. Federal statutory graduated rate</td>
<td style="text-align: right; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; width: 9%; font: 8pt Times New Roman, Times, Serif">34.00</td>
<td nowrap="nowrap" style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif">%</td>
<td style="text-align: right; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; width: 9%; font: 8pt Times New Roman, Times, Serif">34.00</td>
<td nowrap="nowrap" style="text-align: left; width: 1%; font: 8pt Times New Roman, Times, Serif">%</td></tr>
<tr style="background-color: white; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">State income tax rate,</td>
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #cceeff; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">    net of federal benefit</td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">3.63</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif">%</td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif">3.63</td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif">%</td></tr>
<tr style="background-color: white; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: left; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">Net operating loss for which no tax</td>
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="text-align: left; font: 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #cceeff; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="padding-bottom: 2px; text-align: left; text-indent: 0pt; font: 8pt Times New Roman, Times, Serif">  benefit is currently available</td>
<td style="padding-bottom: 2px; text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: right">-37.63</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif">%</td>
<td style="padding-bottom: 2px; text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 2px solid; font: 8pt Times New Roman, Times, Serif; text-align: right">-37.63</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px; font: 8pt Times New Roman, Times, Serif">%</td></tr>
<tr style="background-color: white; vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="padding-bottom: 4px; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="padding-bottom: 4px; text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: right">0.00</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 4px; font: 8pt Times New Roman, Times, Serif">%</td>
<td style="padding-bottom: 4px; text-align: right; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: left"> </td>
<td style="border-bottom: black 4px double; font: 8pt Times New Roman, Times, Serif; text-align: right">0.00</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 4px; font: 8pt Times New Roman, Times, Serif">%</td></tr>
</table>
<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"></p>
<p style="text-indent: 0pt; font: 8pt Times New Roman, Times, Serif"><br />
</p>
<p style="text-align: justify; text-indent: 0pt; margin-right: 0; margin-left: 0; font: 8pt Times New Roman, Times, Serif"><font style="font-weight: normal">We
have evaluated the effects of all subsequent events from October 1, 2012 through December 10, 2012, the date the accompanying financial
statements were available to be issued. Other than those set out above, there have been no subsequent events after September 30,
2012 for which disclosure is required.</font></p>
<p style="margin: 0pt; font: 8pt Times New Roman, Times, Serif"></p>
54435
42334
29857
21200
229035
105365
313327
168899
75
36
6
137
42
30
(2)
(3)
210
75
36
53500
23000
128000
51500
.3400
.3400
.3763
0.3763
0
0
0
0
0
2203000
0.04
0.0363
At September 30, 2012, the Company owed a $40,000, non-interest bearing promissory note to a related party for Consulting Services payable in 2013 by issuance of 40,000 shares of the Company’s Common Stock.
64296
80122
251549
668481
251549
-231636
190413
2030