10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2012

[   ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from __________ to __________

Commission File Number 000-52790

PMI Construction Group

(Exact name of registrant as specified in its charter)

Nevada	95-4465933
(State or other jurisdiction of	(IRS Employer Identification No.)
incorporation or organization)
539 East Blackhawk Lane, Alpine, UT	84004
(Address of principal executive offices)	(Zip Code)

801-796-2595

 (Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.Yes [X]   No [   ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes [X]  No  [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated filer ¨                                                                                                Accelerated filer ¨

Non-accelerated filer  ¨ (Do not check if a smaller reporting company)                 Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [X]   No [  ]

Indicate the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date.

17,300,709 shares of $0.001 par value common stock on August 6, 2012

Part I - FINANCIAL INFORMATION

Item 1. Financial Statements

PMI Construction Group

FINANCIAL STATEMENTS

(UNAUDITED)

June 30, 2012

The financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted.  However, in the opinion of management, all adjustments (which include only normal recurring accruals) necessary to present fairly the financial position and results of operations for the periods presented have been made.  These financial statements should be read in conjunction with the accompanying notes, and with the historical financial information of the Company.

PMI Construction Group
(A Development Stage Enterprise)
Balance Sheets
	June 30,			December 31,
	2012			2011
	(Unaudited)
Assets
Current Assets:
Cash	$	4,898		$	15,384
Prepaid expenses		--			1,625
Total Assets	$	4,898		$	17,009
Liabilities and Stockholders’ Equity (Deficit)
Current Liabilities:
Accounts payable	$	2,200		$	1,500
Notes and accrued interest payable to related parties		148,881			142,735
Total Current Liabilities	$	151,081		$	144,235
Stockholders’ Equity (Deficit)
Convertible preferred stock, $0.001 par value,
5,000,000 shares authorized, 634 shares issued and outstanding		1			1
Common stock, $0.001 par value, 95,000,000 shares
authorized, 17,300,709 shares issued and outstanding		17,301			17,301
Retained deficit		(5,064	)		(5,064	)
Deficit accumulated during the development stage		(158,421	)		(139,464	)
Total Stockholders’ Equity (Deficit)		(146,183	)		(127,226	)
Total Liabilities and Stockholders’ Equity (Deficit)	$	4,898		$	17,009
See accompanying notes to financial statements

PMI Construction Group

(A Development Stage Company)

Statements of Operations

(Unaudited)

	For the three months ended June 30,						For the six months ended June 30,						From the date of commencing development stage activities (February 17, 2004) Through June 30,
	2012			2011			2012			2011			2012
Revenue	$	—		$	—		$	—		$	—		$	—
Operating expenses:
General and  administrative		5,536			2,679			12,811			14,074			124,857
Total operating      expenses		5,536			2,679			12,811			14,074			124,857
Loss from operations		(5,536	)		(2,679	)		(12,811	)		(14,074	)		(124,857	)
Other Income (Expense)
Interest expense		(3,073	)		(2,130	)		(6,146	)		(4,151	)		(33,564	)
Total other expenses		(3,073	)		(2,130	)		(6,146	)		(4,151	)		(33,564	)
Net Loss	$	(8,609	)		(4,809	)		(18,957	)		(18,225	)		(158,421	)
Net loss per share of common stock	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Net Loss fully diluted share of common stock	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Weighted average number of common shares		17,300,709			17,300,709			17,300,709			17,300,709
Weighted average number of fully diluted common shares		17,300,709			17,301,709			17,300,709			17,300,709

See accompanying notes to financial statements

PMI Construction Group

(A Development Stage Company)

Statements of Cash Flows

(Unaudited)

	For The Six Months Ended						From the date of commencing development stage activities (February 17, 2004) Through
	June 30,						June 30,
	2012			2011			2012
Cash flows from operating activities:
Net Loss	$	(18,957	)	$	(18,225	)	$	(158,421	)
Adjustments to reconcile net loss to net cash used by      operating activities:
Conversion of interest payable to common stock		—			—			312
Changes in operating assets and liabilities:
(Increase) decrease in prepaid expense		1,625			(3,250	)		—
Increase (decrease) in accounts payable		700			385			1,317
Increase (decrease) in interest payable to related parties		6,146			4,151			34,873
Net cash used in operating activities		(10,486	)		(16,939	)		(121,919	)
Cash flows from financing activities:
Notes payable to related parties		—			25,000			126,817
Net cash provided by financing activities		—			25,000			126,817
Net change in cash		(10,486	)		8,061			4,898
Cash, beginning of period		15,384			11,100			—
Cash, end of period	$	4,898		$	19,161		$	4,898
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Income taxes	$	—		$	—		$	—
Interest	$	—		$	—		$	—
Non-cash financing activity:     Conversion of interest payable to notes payable	$	—		$	—		$	1,200

See accompanying notes to financial statements

PMI Construction Group

(A Development Stage Enterprise)

Notes to Unaudited Financial Statements

June 30, 2012

Note 1: Basis of Presentation

The accompanying unaudited financial statements of PMI Construction Group (the “Company”) were prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. Management of the Company (“Management”) believes that the following disclosures are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the audited financial statements and the notes thereto for the year ended December 31, 2011 included in the Company’s Form 10-K report.

These unaudited financial statements reflect all adjustments, consisting only of normal recurring adjustments that, in the opinion of Management, are necessary to present fairly the financial position and results of operations of the Company for the periods presented. Operating results for the six months ended June 30, 2012, are not necessarily indicative of the results that may be expected for the year ending December 31, 2012.

Note 2: Summary of Significant Accounting Policies

Organization – The Company was incorporated under the laws of the State of Utah on November 11, 1980 as Bullhead Exploration, Inc. On February 19, 1997 the Company changed its name and its corporate domicile was changed to the state of Nevada. The Company was a party to a Settlement and Release Agreement filed in the United States District Court for the District of Utah, Central Division, having an agreed effective date of February 17, 2004, which resulted in a change of control of the Company in August 2004. Since that time the Company has obtained loans and issued its common stock for cash, to finance its endeavors in seeking a new business venture. The Company has not generated any revenue since 2004 and is considered a development stage enterprise as defined in ASC Topic 815.

Quasi Reorganization – The Company sold substantially all of its assets during 2000 and remained dormant until 2004 when it commenced to seek a new business venture. In accordance with ASC Topic 815, the Company became a development stage enterprise at that time and the stockholders of the Company approved a quasi reorganization effective as of January 1, 2004. The quasi reorganization provided for a readjustment of the Company’s capital accounts and resulted in its retained deficit from prior operations being offset against its paid-in capital account in the amount of $1,928,775 and the remaining deficit of $5,064 continues to be reflected as a retained deficit. The Company also created a new equity account entitled “Deficit Accumulated During the Development Stage” and the results of operations have since been recorded in that account. No other accounts were affected by this readjustment and the Company’s accounting is substantially similar to that of a new enterprise.

Use of Estimates – The accompanying unaudited financial statements are prepared in conformity with accounting principles generally accepted in the United States of America and require that Management make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. The use of estimates and assumptions may also affect the reported amounts of expenses. Actual results could differ from those estimates or assumptions.

PMI Construction Group

(A Development Stage Enterprise)

Notes to Unaudited Financial Statements (continued)

June 30, 2012

Net Loss and Fully Diluted Loss per Share of Common Stock – The loss per share of common stock is computed by dividing the net loss during the periods presented by the weighted average number of shares outstanding during those same periods. The diluted loss per share of common stock is computed by dividing the net loss during the periods presented by the weighted average number of shares outstanding and the potential number of shares that could be outstanding during the entire period presented as a result of the conversion of preferred stock into common. At June 30, 2012, 634 shares of preferred stock are outstanding that may be converted into 634 shares of common stock. None of the present notes payable to related parties contain a conversion feature.

Income Taxes – The Company has no deferred taxes arising from temporary differences between income for financial reporting and for income tax purposes. At June 30, 2012, the Company has a net operating loss carry forward of approximately $158,000 that expires if unused through 2032. The Company’s utilization of any net operating loss carry forward may be unlikely as a result of its intended development stage activities.  A deferred tax asset in the amount of $35,193 is fully offset by a valuation allowance in the same amount.  The change in the valuation allowance was $7,393 and $6,160 for the six months ended June 30, 2012 and 2011, respectively.

The Company adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, on January 1, 2007.  As a result of the implementation of Interpretation 48, the Company recognized approximately no increase in the liability for unrecognized tax benefits. Income tax periods 2009, 2010, and 2011 are open for examination by taxing authorities.

Note 3: Going Concern

The Company’s financial statements have been prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not generated any revenue since entering the development stage and is currently dependent on its sole officer/director (“Executive”) to provide a source of future operating capital. The Company is also dependent on the Executive serving in his capacities without compensation.  The Company assumes that the Executive will continue to provide operating capital to the Company or find other individuals or entities to provide such capital. No assurance can be given that future sources of the capital will be available. A change in these circumstances would have a material adverse effect on the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Note 4: Capital Stock

Convertible Preferred Stock – The Company has 634 shares of convertible preferred stock issued and outstanding with the following preferences: a) these shares are convertible into 634 shares of common stock at any time and shall be converted into common stock upon the death of the registered owner; and, b) each preferred share is entitled to twenty votes on any matter voted upon by the common stockholders.

Preferred Stock and Common Stock – The Company’s Board of Directors is expressly granted the authority to issue without stockholder action, the authorized shares of the Company’s preferred and common stock. The Board of Directors may determine the powers, preferences, limitations, and relative rights of any class of common or preferred stock before the issuance thereof.

PMI Construction Group

(A Development Stage Enterprise)

Notes to Unaudited Financial Statements (continued)

June 30, 2012

Note 5: Related Party Transactions

Effective September 1, 2006, a stockholder of the Company paid the Company’s accounts payable in the amount of $10,317 and entered into an unsecured note payable with the Company. The terms of the note require repayment on January 31, 2008, bearing interest at 8% per annum. The stockholder has verbally agreed not to pursue the collection of the note and accrued interest in the amount of $4,817, until such time as the Company has sufficient capital to repay this amount. Total due is $15,133 at June 30, 2012.

On April 20, 2007, the Company entered into an unsecured convertible note for $1,500 bearing interest at 8% per annum with a stockholder of the Company who exercised the conversion provision in March 2008. The conversion provision provided that the principal amount and all accrued interest may be converted into shares of the Company’s common stock at the rate of one share for each $0.001. As a result, 1,608,160 shares of common stock were issued in March 2008.

Commencing in August 2007, the Company’s former sole officer and director has from time to time entered into unsecured demand notes bearing interest at 10% per annum which, at June 30, 2012 totaled $55,000 in principal and $21,059 in interest.  Effective July 1, 2011, the former sole officer assigned 100% of the right, title and interest of this unsecured demand note to Banyan Investment Company.

During 2011, the Company entered into an unsecured convertible note for $25,000 bearing interest at 7.5% with the Company’s CFO.  The note shall be repaid in full at the earlier of five years from the date hereof, or the merger, reorganization or acquisition between the Company and another corporation or entity that has operations, through a lump sum payment of interest and principal.

 On June 27, 2011, the Company entered into an additional unsecured convertible note for $25,000 with the Company’s CFO.  The note bears interest at 12% and shall be repaid in full at the earlier of five years from the date hereof, or the merger, reorganization or acquisition between the Company and another corporation or entity that has operations, through a lump sum payment of interest and principal.  Accrued interest for both notes at June 30, 2012 and December 31, 2011 was $7,688 and $4,696, respectively.

Note 6: Subsequent Events

The Company has evaluated subsequent events from the balance sheet date through the date the financials were issued, and has determined there are no events that would require disclosure herein.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Special Note Regarding Forward-Looking Statements

This periodic report contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the Plan of Operations provided below, including information regarding the Company’s financial condition, results of operations, business strategies, operating efficiencies or synergies, competitive positions, growth opportunities, and the plans and objectives of management. The statements made as part of the Plan of Operations that are not historical facts are hereby identified as "forward-looking statements."

Critical Accounting Policies and Estimates

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the unaudited Financial Statements and accompanying notes.  Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from these estimates under different assumptions or conditions.  The Company believes there have been no significant changes during the three and six month periods ended June 30, 2012, to the items disclosed as significant accounting policies in management’s Notes to the Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

Corporate History

PMI Construction Group, a Nevada corporation, (the “Company”) terminated its subsidiary operations and has engaged in no business since the termination of such operations. During February 2004, a change of control of the Company occurred and since that time the Company has been looking for a business opportunity.  The Company was originally incorporated on November 11, 1980 in the State of Utah under the name Bullhead Exploration, Inc.  On January 31, 1994, Bullhead Exploration, Inc. changed its domicile to Delaware and its name to Intrazone, Inc.  In February 1997, the Company changed its state of domicile to Nevada through the merger of the Company with a wholly-owned subsidiary created for the purpose of effectuating a change of domicile and subsequently changed its name to PMI Construction Group.  The Company was originally incorporated to seek investment opportunities in the oil and gas industries.

Plan of Operations

Overview:

The Company has not received any revenue from operations in each of the last two fiscal years and is considered a development stage enterprise. The Company’s current operations have consisted of taking such action as management believes necessary to prepare to seek an acquisition or merger with an operating entity. The Company’s former officer and director, who is a stockholder of the Company, has financed the Company's current operations, which have consisted primarily of maintaining in good standing the Company's corporate status, in fulfilling its filing requirements with the Securities and Exchange Commission, including the audit of its financial statements, and in changing the marketplace of its securities.

The financial statements contained in this interim report have been prepared assuming that the Company will continue as a going concern. The Company is not engaged in any revenue producing activities and has not established any source of revenue other than described herein. These factors raise substantial doubt that the Company will be able to continue as a going concern even though management believes that sufficient funding is available to meet its operating needs during the next twelve months. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Risks associated with the plan of operations:

In its search for a business opportunity, management anticipates that the Company will incur additional costs for legal and accounting fees to locate and complete a merger or acquisition.  As previously discussed, the Company does not have any revenue producing activities whereby it can meet the financial requirements of seeking a business opportunity. There can be no assurance that the Company will receive any benefits from the efforts of management to locate a business opportunity.

The Company does not propose to restrict its search for a business opportunity to any particular industry or geographical area and may, therefore, attempt to acquire any business in any industry. The Company has unrestricted discretion in seeking and participating in a business opportunity, subject to the availability of such opportunities, economic conditions, and other factors. Consequently, if and when a business opportunity is selected, such business opportunity may not be in an industry that is following general business trends.

The selection of a business opportunity in which to participate is complex and risky. Additionally, the Company has only limited resources and this fact may make it more difficult to find any such opportunities. There can be no assurance that the Company will be able to identify and acquire any business opportunity which will ultimately prove to be beneficial to the Company and its stockholders. The Company will select any potential business opportunity based on management's business judgment. The Company may acquire or participate in a business opportunity based on the decision of management that potentially could act without the consent, vote, or approval of the Company's stockholders.

Since its inception, the Company has not generated any revenue and it is unlikely that any revenue will be generated until such time as the Company locates a business opportunity to acquire or with which it can merge. However, the Company is not restricting its search to those business opportunities that have profitable operations. Even though a business opportunity may be acquired that has revenues or gross income, there is no assurance that profitable operations or net income will result therefrom. Consequently, even though the Company may be successful in acquiring a business opportunity, such acquisition does not assume that a profitable business opportunity is being acquired or that stockholders will benefit through an increase in the market price of the Company's Common Stock.

The acquisition of a business opportunity, no matter what form it may take, will almost assuredly result in substantial dilution for the Company's current stockholders. Inasmuch as the Company only has its equity securities (its Common Stock and Preferred Stock) as a source to provide consideration for the acquisition of a business opportunity, the Company's issuance of a substantial portion of its authorized Common Stock is the most likely method for the Company to consummate an acquisition. The issuance of any shares of the Company's Common Stock will dilute the ownership percentage that current stockholders have in the Company.

The Company does not intend to employ anyone in the future, unless its present business operations were to change. At the present time, management does not believe it is necessary for the Company to have an administrative office and utilizes the mailing address of the Company's president for business correspondence. The Company intends to reimburse management for any out of pocket costs other than those associated with maintaining the Company’s business address.

Liquidity and Capital Resources

As of June 30, 2012, the Company had negative $146,183 in working capital with $4,898 in assets and liabilities of $151,081.  If the Company cannot find a new business, it will have to seek additional capital either through the sale of its shares of Common Stock or through a loan from its officer, stockholders or others. The Company has only incidental ongoing expenses primarily associated with maintaining its corporate status and professional fees associated with accounting and legal costs.

Management anticipates that the Company will incur more costs including legal and accounting fees to locate and complete a merger or acquisition.  At the present time the Company does not have the assets to meet these financial requirements. Additionally, the Company does not have substantial assets to entice potential business opportunities to enter into transactions with the Company.

It is unlikely that any revenue will be generated until the Company locates a business opportunity that it may acquire or with which it may merge.  Management of the Company will be investigating various business opportunities.  These efforts may result in the Company incurring out of pocket expenses for its management and expenses associated with legal and accounting costs.  There can be no guarantee that the Company will receive any benefits from the efforts of management to locate business opportunities.

 If and when the Company locates a business opportunity, management of the Company will give consideration to the dollar amount of that entity's profitable operations and the adequacy of its working capital in determining the terms and conditions under which the Company would consummate such an acquisition.  Potential business opportunities, no matter which form they may take, will most likely result in substantial dilution for the Company's stockholders as it has only limited capital and no operations.

Results of Operations

For the three and six months ended June 30, 2012, the Company had a net loss of $8,609 and $18,957, respectively, compared to a loss for the three and six months ended June 30, 2011, of $4,809 and $18,225. The Company had no revenue during the three and six months ended June 30, 2012. The Company does not anticipate any revenue until it locates a new business opportunity.

Off-balance sheet arrangements

The Company does not have any off-balance sheet arrangements and it is not anticipated that the Company will enter into any off-balance sheet arrangements.

Forward-looking Statements

The Private Securities Litigation Reform Act of 1995 (the “Act”) provides a safe harbor for forward-looking statements made by or on behalf of our Company. Our Company and our representatives may from time to time make written or oral statements that are “forward-looking,” including statements contained in this quarterly Report and other filings with the Securities and Exchange Commission and in reports to our Company’s stockholders. Management believes that all statements that express expectations and projections with respect to future matters, as well as from developments beyond our Company’s control including changes in global economic conditions are forward-looking statements within the meaning of the Act. These statements are made on the basis of management’s views and assumptions, as of the time the statements are made, regarding future events and business performance. There can be no assurance, however, that management’s expectations will necessarily come to pass. Factors that may affect forward- looking statements include a wide range of factors that could materially affect future developments and performance, including the following:

Changes in Company-wide strategies, which may result in changes in the types or mix of businesses in which our Company is involved or chooses to invest; changes in U.S., global or regional economic conditions, changes in U.S. and global financial and equity markets, including significant interest rate fluctuations, which may impede our Company’s access to, or increase the cost of, external financing for our operations and investments; increased competitive pressures, both domestically and internationally, legal and regulatory developments, such as regulatory actions affecting environmental activities, the imposition by foreign countries of trade restrictions and changes in international tax laws or currency controls; adverse weather conditions or natural disasters, such as hurricanes and earthquakes, labor disputes, which may lead to increased costs or disruption of operations.

This list of factors that may affect future performance and the accuracy of forward-looking statements is illustrative, but by no means exhaustive. Accordingly, all forward-looking statements should be evaluated with the understanding of their inherent uncertainty.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

NA-Smaller Reporting Company

Item 4.  Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our president and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our president and principal financial officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective such that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our president and principal financial officer, as appropriate to allow timely decisions regarding disclosure.

Changes in internal control over financial reporting

The Company does not have any off-balance sheet arrangements and it is not anticipated that the Company will enter into any off-balance sheet arrangements.

PART II - OTHER INFORMATION

ITEM 1.  Legal Proceedings

           None

ITEM 2.  Unregistered Sales of Equity Securities and Use of Proceeds

Recent Sales of Unregistered Securities

We have not sold for cash any restricted securities during the three months ended June 30, 2012.

Use of Proceeds of Registered Securities

None; not applicable.

Purchases of Equity Securities by Us and Affiliated Purchasers

During the three months ended June 30, 2012, we have not purchased any equity securities nor have any officers or directors of the Company.

ITEM 3.  Defaults Upon Senior Securities

We are not aware of any defaults upon senior securities. We have several notes payable to entities controlled by our current CEO. Demand for payment of these notes have not been made and we have received a verbal assurance from our officer and director that such demand will not be forthcoming in the near future.  All parties, as of June 30, 2012, have verbally agreed not to pursue collection of the notes and accrued interest.

ITEM 4.  Mine Safety Disclosure

NA – The Company is not engaged in mining activities.

ITEM 5.  Other Information.

None

ITEM 6.  Exhibits

a) Index of Exhibits:

Exhibit Table #	Title of Document	Location
3 (i)	Articles of Incorporation	Incorporated by reference*
3 (i)	Amended Articles of Incorporation	Incorporated by reference*
3 (i)	Amended Articles of Incorporation	Incorporated by reference*
3 (ii)	Bylaws	Incorporated by reference*
4	Specimen Stock Certificate	Incorporated by reference*
11	Computation of loss per share	Notes to financial statements
31	Rule 13a-14(a)/15d-14a(a) Certification – CEO & CFO	This filing
32	Section 1350 Certification – CEO & CFO	This filing
101.INS	XBRL Instance**
101.XSD	XBRL Schema**
101.CAL	XBRL Calculation**
101.DEF	XBRL Definition**
101.LAB	XBRL Label**
101.PRE	XBRL Presentation**

* Incorporated by reference from the Company's registration statement on Form 10-SB filed with the Commission, SEC File No. 000-52790.

**XBRL information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934, and is not subject to liability under those sections, is not part of any registration statement or prospectus to which it relates and is not incorporated or deemed to be incorporated by reference into any registration statement, prospectus or other document.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	PMI Construction Group
	(Registrant)
Dated: August 10, 2012	By:	/s/ Jeffrey Peterson
		Jeffrey Peterson
		Chief Executive Officer
		Principal Financial Officer
		Director

EX-31.1

Exhibit 31.1

Certification of Principal Executive Officer

Pursuant to 18 U.S.C. 1350

 (Section 302 of the Sarbanes-Oxley Act of 2002)

I, Jeffrey Peterson, certify that:

1. I have reviewed this report on Form 10-Q of PMI CONSTRUCTION GROUP;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 10, 2012                                                                

/s/ Jeffrey Peterson                                                      

Jeffrey Peterson, Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of Principal Financial Officer

Pursuant to 18 U.S.C. 1350

(Section 302 of the Sarbanes-Oxley Act of 2002)

I, Jeffrey Peterson certify that:

1. I have reviewed this report on Form 10-Q of PMI CONSTRUCTION GROUP;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 10, 2012                                                                           

/s/ Jeffrey Peterson                                                      

Jeffrey Peterson, Principal Financial Officer

EX-32

                                                                    Exhibit 32.1. and

       Exhibit 32.2

Certification of Principal Executive Officer

Pursuant to 18 U.S.C. 1350

(Section 906 of the Sarbanes-Oxley Act of 2002)

The undersigned, Jeffrey Peterson, Chief Executive Officer, and Jeffrey Peterson, Principal Financial Officer, of PMI Construction Group (the "Registrant") do hereby certify, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of our knowledge, based upon a review of the Quarterly Report on Form 10-Q for the period June 30, 2012 of the Registrant, as filed with the Securities and Exchange Commission on the date hereof (the "Report"):

 (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

 (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Dated:  August 10, 2012                                                                

By:  /s/ Jeffrey Peterson

Jeffrey Peterson

Chief Executive Officer/Principal Financial Officer

 * A signed original of this written statement required by Section 906 has been provided to PMI Construction Group and will be retained by PMI Construction Group and furnished to the Securities Exchange Commission or its staff upon request.

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Capital Stock

3 Months Ended

Jun. 30, 2012

Capital Stock:

Capital Stock

Note 4: Capital Stock

Convertible Preferred Stock – The Company has 634 shares of convertible preferred stock issued and outstanding with the following preferences: a) these shares are convertible into 634 shares of common stock at any time and shall be converted into common stock upon the death of the registered owner; and, b) each preferred share is entitled to twenty votes on any matter voted upon by the common stockholders.

Preferred Stock and Common Stock – The Company’s Board of Directors is expressly granted the authority to issue without stockholder action, the authorized shares of the Company’s preferred and common stock. The Board of Directors may determine the powers, preferences, limitations, and relative rights of any class of common or preferred stock before the issuance thereof.

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Going Concern

3 Months Ended

Jun. 30, 2012

Going Concern:

Going Concern

Note 3: Going Concern

The Company’s financial statements have been prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not generated any revenue since entering the development stage and is currently dependent on its sole officer/director (“Executive”) to provide a source of future operating capital. The Company is also dependent on the Executive serving in his capacities without compensation.  The Company assumes that the Executive will continue to provide operating capital to the Company or find other individuals or entities to provide such capital. No assurance can be given that future sources of the capital will be available. A change in these circumstances would have a material adverse effect on the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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Balance Sheets (USD $)	Jun. 30, 2012	Dec. 31, 2011
Current Assets:
Cash	$ 4,898	$ 15,384
Prepaid expenses		1,625
Total Assets	4,898	17,009
Current Liabilities:
Accounts payable	2,200	1,500
Notes and accrued interest payable to related parties	148,881	142,735
Total Current Liabilities	151,081	144,235
Stockholders' Equity (Deficit)
Convertible preferred stock, $0.001 par value, 5,000,000 shares authorized, 634 shares issued and outstanding	1	1
Common stock, $0.001 par value, 95,000,000 shares authorized, 17,300,709 shares issued and outstanding	17,301	17,301
Retained deficit	(5,064)	(5,064)
Deficit accumulated during the development stage	(158,421)	(139,464)
Total Stockholders' Equity (Deficit)	(146,183)	(127,226)
Total Liabilities and Stockholders' Equity (Deficit)	$ 4,898	$ 17,009

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Basis of Presentation

3 Months Ended

Jun. 30, 2012

Basis of Presentation:

Basis of Presentation

Note 1: Basis of Presentation

The accompanying unaudited financial statements of PMI Construction Group (the “Company”) were prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. Management of the Company (“Management”) believes that the following disclosures are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the audited financial statements and the notes thereto for the year ended December 31, 2011 included in the Company’s Form 10-K report.

These unaudited financial statements reflect all adjustments, consisting only of normal recurring adjustments that, in the opinion of Management, are necessary to present fairly the financial position and results of operations of the Company for the periods presented. Operating results for the six months ended June 30, 2012, are not necessarily indicative of the results that may be expected for the year ending December 31, 2012.

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Summary of Significant Accounting Policies

3 Months Ended

Jun. 30, 2012

Summary of Significant Accounting Policies:

Summary of Significant Accounting Policies

Note 2: Summary of Significant Accounting Policies

Organization – The Company was incorporated under the laws of the State of Utah on November 11, 1980 as Bullhead Exploration, Inc. On February 19, 1997 the Company changed its name and its corporate domicile was changed to the state of Nevada. The Company was a party to a Settlement and Release Agreement filed in the United States District Court for the District of Utah, Central Division, having an agreed effective date of February 17, 2004, which resulted in a change of control of the Company in August 2004. Since that time the Company has obtained loans and issued its common stock for cash, to finance its endeavors in seeking a new business venture. The Company has not generated any revenue since 2004 and is considered a development stage enterprise as defined in ASC Topic 815.

Quasi Reorganization – The Company sold substantially all of its assets during 2000 and remained dormant until 2004 when it commenced to seek a new business venture. In accordance with ASC Topic 815, the Company became a development stage enterprise at that time and the stockholders of the Company approved a quasi reorganization effective as of January 1, 2004. The quasi reorganization provided for a readjustment of the Company’s capital accounts and resulted in its retained deficit from prior operations being offset against its paid-in capital account in the amount of $1,928,775 and the remaining deficit of $5,064 continues to be reflected as a retained deficit. The Company also created a new equity account entitled “Deficit Accumulated During the Development Stage” and the results of operations have since been recorded in that account. No other accounts were affected by this readjustment and the Company’s accounting is substantially similar to that of a new enterprise.

Use of Estimates – The accompanying unaudited financial statements are prepared in conformity with accounting principles generally accepted in the United States of America and require that Management make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. The use of estimates and assumptions may also affect the reported amounts of expenses. Actual results could differ from those estimates or assumptions.

Net Loss and Fully Diluted Loss per Share of Common Stock – The loss per share of common stock is computed by dividing the net loss during the periods presented by the weighted average number of shares outstanding during those same periods. The diluted loss per share of common stock is computed by dividing the net loss during the periods presented by the weighted average number of shares outstanding and the potential number of shares that could be outstanding during the entire period presented as a result of the conversion of preferred stock into common. At June 30, 2012, 634shares of preferred stock are outstanding that may be converted into 634 shares of common stock. None of the present notes payable to related parties contain a conversion feature.

Income Taxes – The Company has no deferred taxes arising from temporary differences between income for financial reporting and for income tax purposes. At June 30, 2012, the Company has a net operating loss carry forward of approximately $158,000 that expires if unused through 2032. The Company’s utilization of any net operating loss carry forward may be unlikely as a result of its intended development stage activities.  A deferred tax asset in the amount of $35,193 is fully offset by a valuation allowance in the same amount.  The change in the valuation allowance was $7,393 and $6,160 for the six months ended June 30, 2012 and 2011, respectively.

The Company adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, on January 1, 2007.  As a result of the implementation of Interpretation 48, the Company recognized approximately no increase in the liability for unrecognized tax benefits. Income tax periods 2009, 2010, and 2011 are open for examination by taxing authorities.

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Balance Sheets (Parenthetical) (USD $)	Jun. 30, 2012	Dec. 31, 2011
Common Stock, par or stated value	$ 0.001	$ 0.001
Common Stock, shares authorized	95,000,000	95,000,000
Common Stock, shares issued	17,300,709	17,300,709
Common Stock, shares outstanding	17,300,709	17,300,709
Preferred Stock, par or stated value	$ 0.001	$ 0.001
Preferred Stock, shares authorized	5,000,000	5,000,000
Preferred Stock, shares issued	634	634
Preferred Stock, shares outstanding	634	634

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Related Party Transactions (Details) (USD $)			3 Months Ended		3 Months Ended		3 Months Ended		12 Months Ended
	Jun. 30, 2012	Dec. 31, 2011	Jun. 30, 2012 UnsecuredNotePayableMember	Sep. 01, 2006 UnsecuredNotePayableMember	Mar. 31, 2008 UnsecuredConvertibleNotePayableMember	Apr. 20, 2007 UnsecuredConvertibleNotePayableMember	Jun. 30, 2012 UnsecuredDemandNotePayableMember	Aug. 01, 2007 UnsecuredDemandNotePayableMember	Dec. 31, 2011 UnsecuredConvertibleNotePayable2Member	Jun. 27, 2011 UnsecuredConvertibleNotePayable3Member
Debt instrument, face amount				$ 10,317		$ 1,500		$ 55,000	$ 25,000	$ 25,000
Debt instrument, description			The terms of the note require repayment on January 31, 2008, bearing interest at 8% per annum. The stockholder has verbally agreed not to pursue the collection of the note and accrued interest in the amount of $4,817, until such time as the Company has sufficient capital to repay this amount.						The note shall be repaid in full at the earlier of five years from the date hereof, or the merger, reorganization or acquisition between the Company and another corporation or entity that has operations, through a lump sum payment of interest and principal.
Debt Instrument, fair value			15,133
Interest rate						8.00%		10.00%	7.50%	12.00%
Unsecured convertible note, conversion price						$ 0.001
Unsecured convertible note, shares issued					1,608,160
Accrued interest to date							21,059
Assignment of demand note payable rights							Effective July 1, 2011, the former sole officer assigned 100% of the right, title and interest of this unsecured demand note to Banyan Investment Company.
Accrued interest on unsecured convertible note payables	$ 7,688	$ 4,696

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Document and Entity Information	3 Months Ended
	Jun. 30, 2012	Aug. 06, 2012
Document and Entity Information:
Entity Registrant Name	PMI Construction Group
Document Type	10-Q
Document Period End Date	Jun. 30, 2012
Amendment Flag	false
Entity Central Index Key	0001408300
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		17,300,709
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2

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Statements of Operations (Unaudited) (USD $)	3 Months Ended		6 Months Ended		100 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012
Revenue
Operating expenses:
General and administrative	5,536	2,679	12,811	14,074	124,857
Total operating expenses	5,536	2,679	12,811	14,074	124,857
Loss from operations	(5,536)	(2,679)	(12,811)	(14,074)	(124,857)
Other Income (Expense)
Interest expense	(3,073)	(2,130)	(6,146)	(4,151)	(33,564)
Total other expenses	(3,073)	(2,130)	(6,146)	(4,151)	(33,564)
Net Loss	$ (8,609)	$ (4,809)	$ (18,957)	$ (18,225)	$ (158,421)
Net loss per share of common stock	$ 0.00	$ 0.00	$ 0.00	$ 0.00
Net Loss fully diluted share of common stock	$ 0.00	$ 0.00	$ 0.00	$ 0.00
Weighted average number of common shares	17,300,709	17,300,709	17,300,709	17,300,709
Weighted average number of fully diluted common shares	17,300,709	17,301,709	17,300,709	17,300,709

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Jun. 30, 2012

Policies (Detail level 2):

Organization

Organization – The Company was incorporated under the laws of the State of Utah on November 11, 1980 as Bullhead Exploration, Inc. On February 19, 1997 the Company changed its name and its corporate domicile was changed to the state of Nevada. The Company was a party to a Settlement and Release Agreement filed in the United States District Court for the District of Utah, Central Division, having an agreed effective date of February 17, 2004, which resulted in a change of control of the Company in August 2004. Since that time the Company has obtained loans and issued its common stock for cash, to finance its endeavors in seeking a new business venture. The Company has not generated any revenue since 2004 and is considered a development stage enterprise as defined in ASC Topic 815.

Quasi Reorganization

Quasi Reorganization – The Company sold substantially all of its assets during 2000 and remained dormant until 2004 when it commenced to seek a new business venture. In accordance with ASC Topic 815, the Company became a development stage enterprise at that time and the stockholders of the Company approved a quasi reorganization effective as of January 1, 2004. The quasi reorganization provided for a readjustment of the Company’s capital accounts and resulted in its retained deficit from prior operations being offset against its paid-in capital account in the amount of $1,928,775 and the remaining deficit of $5,064 continues to be reflected as a retained deficit. The Company also created a new equity account entitled “Deficit Accumulated During the Development Stage” and the results of operations have since been recorded in that account. No other accounts were affected by this readjustment and the Company’s accounting is substantially similar to that of a new enterprise.

Use of Estimates

Use of Estimates – The accompanying unaudited financial statements are prepared in conformity with accounting principles generally accepted in the United States of America and require that Management make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. The use of estimates and assumptions may also affect the reported amounts of expenses. Actual results could differ from those estimates or assumptions.

Net Loss and Fully Diluted Loss per Share of Common Stock

Net Loss and Fully Diluted Loss per Share of Common Stock – The loss per share of common stock is computed by dividing the net loss during the periods presented by the weighted average number of shares outstanding during those same periods. The diluted loss per share of common stock is computed by dividing the net loss during the periods presented by the weighted average number of shares outstanding and the potential number of shares that could be outstanding during the entire period presented as a result of the conversion of preferred stock into common. At June 30, 2012, 634shares of preferred stock are outstanding that may be converted into 634 shares of common stock. None of the present notes payable to related parties contain a conversion feature.

Income Taxes

Income Taxes – The Company has no deferred taxes arising from temporary differences between income for financial reporting and for income tax purposes. At June 30, 2012, the Company has a net operating loss carry forward of approximately $158,000 that expires if unused through 2032. The Company’s utilization of any net operating loss carry forward may be unlikely as a result of its intended development stage activities.  A deferred tax asset in the amount of $35,193 is fully offset by a valuation allowance in the same amount.  The change in the valuation allowance was $7,393 and $6,160 for the six months ended June 30, 2012 and 2011, respectively.

The Company adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, on January 1, 2007.  As a result of the implementation of Interpretation 48, the Company recognized approximately no increase in the liability for unrecognized tax benefits. Income tax periods 2009, 2010, and 2011 are open for examination by taxing authorities.

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Subsequent Events

3 Months Ended

Jun. 30, 2012

Subsequent Events:

Subsequent Events

Note 6: Subsequent Events

The Company has evaluated subsequent events from the balance sheet date through the date the financials were issued, and has determined there are no events that would require disclosure herein.

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Summary of Significant Accounting Policies: Income Taxes (Details) (USD $)	3 Months Ended	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2012	Jun. 30, 2011
Net operating loss carry forward	$ 158,000	$ 158,000
Deferred tax asset	35,193	35,193
Change in valuation allowance		7,393	6,160
Unrecognized tax benefits, period increase	$ 0

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Summary of Significant Accounting Policies: Quasi Reorganization (Details) (USD $)	Jun. 30, 2012	Dec. 31, 2011	Jan. 01, 2004
Adjustement against paid-in capital account			$ 1,928,775
Retained deficit	$ 5,064	$ 5,064	$ 5,064

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Summary of Significant Accounting Policies: Net Loss and Fully Diluted Loss per Share of Common Stock (Details)	Jun. 30, 2012
Preferred stock available for conversion	634
Common stock convertible from preferred	634

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Capital Stock (Details)	3 Months Ended
	Jun. 30, 2012	Dec. 31, 2011
Preferred Stock, shares outstanding	634	634
Convertible Preferred Stock, preferences	a) these shares are convertible into 634 shares of common stock at any time and shall be converted into common stock upon the death of the registered owner; and, b) each preferred share is entitled to twenty votes on any matter voted upon by the common stockholders.

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Statements of Cash Flows (Unaudited) (USD $)	6 Months Ended		100 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012
Cash flows from operating activities:
Net Loss	$ (18,957)	$ (18,225)	$ (158,421)
Adjustments to reconcile net loss to net cash used by operating activities:
Conversion of interest payable to common stock			312
Changes in operating assets and liabilities:
(Increase) decrease in prepaid expense	1,625	(3,250)
Increase (decrease) in accounts payable	700	385	1,317
Increase (decrease) in interest payable to related parties	6,146	4,151	34,873
Net cash used in operating activities	(10,486)	(16,939)	(121,919)
Cash flows from financing activities:
Notes payable to related parties		25,000	126,817
Net cash provided by financing activities		25,000	126,817
Net change in cash	(10,486)	8,061	4,898
Cash, beginning of period	15,384	11,100
Cash, end of period	4,898	19,161	4,898
Supplemental disclosure of cash flow information:
Cash paid during the period for: Income taxes
Cash paid during the period for: Interest
Conversion of interest payable to notes payable			$ 1,200

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Related Party Transactions

3 Months Ended

Jun. 30, 2012

Related Party Transactions:

Related Party Transactions

Note 5: Related Party Transactions

Effective September 1, 2006, a stockholder of the Company paid the Company’s accounts payable in the amount of $10,317 and entered into an unsecured note payable with the Company. The terms of the note require repayment on January 31, 2008, bearing interest at 8% per annum. The stockholder has verbally agreed not to pursue the collection of the note and accrued interest in the amount of $4,817, until such time as the Company has sufficient capital to repay this amount. Total due is $15,133 at June 30, 2012.

On April 20, 2007, the Company entered into an unsecured convertible note for $1,500 bearing interest at 8% per annum with a stockholder of the Company who exercised the conversion provision in March 2008. The conversion provision provided that the principal amount and all accrued interest may be converted into shares of the Company’s common stock at the rate of one share for each $0.001. As a result, 1,608,160 shares of common stock were issued in March 2008.

Commencing in August 2007, the Company’s former sole officer and director has from time to time entered into unsecured demand notes bearing interest at 10% per annum which, at June 30, 2012 totaled $55,000 in principal and $21,059in interest.  Effective July 1, 2011, the former sole officer assigned 100% of the right, title and interest of this unsecured demand note to Banyan Investment Company.

During 2011, the Company entered into an unsecured convertible note for $25,000 bearing interest at 7.5% with the Company’s CFO.  The note shall be repaid in full at the earlier of five years from the date hereof, or the merger, reorganization or acquisition between the Company and another corporation or entity that has operations, through a lump sum payment of interest and principal.

 On June 27, 2011, the Company entered into an additional unsecured convertible note for $25,000 with the Company’s CFO.  The note bears interest at 12% and shall be repaid in full at the earlier of five years from the date hereof, or the merger, reorganization or acquisition between the Company and another corporation or entity that has operations, through a lump sum payment of interest and principal.  Accrued interest for both notes at June 30, 2012 and December 31, 2011 was $7,688 and $4,696, respectively.