August 31, 2012 10-K

0001078782-13-000277.txt : 20130211 0001078782-13-000277.hdr.sgml : 20130211 20130211164330 ACCESSION NUMBER: 0001078782-13-000277 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 13 CONFORMED PERIOD OF REPORT: 20120831 FILED AS OF DATE: 20130211 DATE AS OF CHANGE: 20130211 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Flameret, Inc. CENTRAL INDEX KEY: 0001472147 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS FABRICATED TEXTILE PRODUCTS [2390] IRS NUMBER: 270755877 STATE OF INCORPORATION: NV FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-162022 FILM NUMBER: 13592309 BUSINESS ADDRESS: STREET 1: 1810 E. SAHARA AVE, STE 1429 CITY: LAS VEGAS STATE: NV ZIP: 89104 BUSINESS PHONE: 877-861-0207 MAIL ADDRESS: STREET 1: 1810 E. SAHARA AVE, STE 1429 CITY: LAS VEGAS STATE: NV ZIP: 89104 10-K 1 f10k083112_10k.htm AUGUST 31, 2012 10-K August 31, 2012 10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

X . ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended August 31, 2012

Commission File Number: 333-162022

FLAMERET, INC.

(Exact name of registrant as specified in its charter)


Wyoming	27-0755877
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1810 E. Sahara Ave., Suite 1429, Las Vegas, NV 89104

(Address of principal executive offices) (Zip Code)

(877) 861-0207

(Registrant’s telephone number, including area code)

Securities registered under Section 12(b) of the Exchange Act: None

Securities registered under Section 12(g) of the Exchange Act:

Common Stock, Par Value $.0001

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes . No X .

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes . No X .

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 preceding 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 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 .	Smaller reporting company X .
(Do not check if a smaller reporting company)

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

Yes . No X .

The aggregate market value of the voting and non-voting common stock held by non-affiliates of the registrant, as of February 1, 2013, was approximately $465,486 based on a share value of $0.0023. All executive officers and directors of the registrant have been deemed, solely for the purpose of the foregoing calculation, to be "affiliates" of the registrant.

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date: 222,528,120 shares of $0.0001 par value common stock outstanding as of January 22, 2013.

TABLE OF CONTENTS



		Page
PART I
Special Note Regarding Forward-Looking Statements		3
Item 1. Business		4
Item 1A. Risk Factors		6
Item 2. Properties		11
Item 3. Legal Proceedings		11
Item 4. Submission of Matters to a Vote of Security Holders		11
PART II
Item 5. Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.		12
Item 6. Selected Financial Data		15
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations		15
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.		18
Item 8. Financial Statements and Supplementary Data		18
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		19
Item 9A(T). Controls and Procedures		19
Item 9B. Other Information		19
PART III
Item10. Directors, Executive Officers and Corporate Governance		19
Item 11. Executive Compensation		22
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		23
Item 13. Certain Relationships and Related Transactions, and Director Independence		23
Item 14. Principal Accountant Fees and Services		24
PART IV
Item 15. Exhibits and Financial Statement Schedules		24
SIGNATURES		24

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains “forward-looking statements”. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objections of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements or belief; and any statements of assumptions underlying any of the foregoing.

Forward-looking statements may include the words “may,” “could,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the dates on which they are made. Except for our ongoing securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement. Additionally, the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 most likely do not apply to our forward-looking statements as a result of being a penny stock issuer. You should, however, consult further disclosures we make in future filings of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

Although we believe the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The factors impacting these risks and uncertainties include, but are not limited to:


	·	Our current deficiency in working capital;
	·	Increased competitive pressures from existing competitors and new entrants;


	·	Our ability to market our services to new subscribers;
	·	Inability to locate additional revenue sources and integrate new revenue sources into our organization;


	·	Adverse state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations;
	·	Changes in U.S. GAAP or in the legal, regulatory and legislative environments in the markets in which we operate;


	·	Consumer acceptance of price plans and bundled offering of our services;
	·	Loss of customers or sales weakness;


	·	Technological innovations;
	·	Inability to efficiently manage our operations;


	·	Inability to achieve future sales levels or other operating results;
	·	Inability of management to effectively implement our strategies and business plan


	·	Key management or other unanticipated personnel changes;
	·	The unavailability of funds for capital expenditures; and


	·	The other risks and uncertainties detailed in this report.

For a detailed description of these and other factors that could cause actual results to differ materially from those expressed in any forward-looking statement, please see “Item 1A. Risk Factors” in this document.

EXPLANATORY NOTE

Unless otherwise noted, references in this registration statement to "FLAMERET, INC." the "Company," "we," "our" or "us" means FLAMERET, INC.

AVAILABLE INFORMATION

We file annual, quarterly and special reports and other information with the SEC that can be inspected and copied at the public reference facility maintained by the SEC at 100 F Street, N.E., Room 1580, Washington, D.C. 20549-0405. Information regarding the public reference facilities may be obtained from the SEC by telephoning 1-800-SEC-0330. The Company’s filings are also available through the SEC’s Electronic Data Gathering Analysis and Retrieval System which is publicly available through the SEC’s website (www.sec.gov). Copies of such materials may also be obtained by mail from the public reference section of the SEC at 100 F Street, N.E., Room 1580, Washington, D.C. 20549-0405 at prescribed rates.

PART I

ITEM 1. BUSINESS

OVERVIEW

We were incorporated in the State of Nevada on August 13, 2009 under the name of Flameret, Inc. Flameret; Inc. is a provider of a fire barrier product named Flameret.

FLAMERET, INC. Flameret currently offers three products, Flameret, Ultra Flamex and Impex. Flameret is a flame retardant liquid that is applied to textiles. These treated textiles are used at the production stage of such products as mattresses to resist ignition from smoldering cigarettes and resist ignition from an open-flame heat source. Flameret is a development stage company with a limited history of development stage operations.

MARKET OPPORTUNITY

The fire barrier industry is a multidisciplinary and widely applicable industry. Products enabled by fire barrier technology are applicable to a large number of industries including mattresses, sofas, chairs, carpeting, and workers’ coveralls.

All mattresses made on or after July 1, 2007 for sale in the United States must now meet two separate federal flammability standards administered by the Consumer Product Safety Commission (CPSC) and issued under the Flammable Fabrics Act.

The use of fire barriers in the mattresses and mattresses bedding for children in particular is an area of increasing interest, and these types of materials are the cornerstones of new generations of mattresses and mattresses beddings. Flameret, Inc. aims to establish its Flameret product to the mattresses industry. The Company believes that the combination of their Flameret product, aimed in an industry that has widespread applicability and furthermore is creating interest on a global scale, is one of its unique features.

DESCRIPTION OF PRODUCTS

Product Development:

In July 2009, Mr. Glover began working with Seatex LTD www.seatexcom, located at 445 TX-36 Rosenberg, Texas 77471, to blend, manufacture and package the Flameret product for Flameret, Inc. Mr. Glover provided Seatex with the United American, Inc. formula for Flameret.

Since 1968 Seatex has been providing turnkey chemical compounding, contract manufacturing and private label packaging services. Areas of expertise include food service, food processing, automotive, institutional and industrial laundry, janitorial, industrial and oilfield service markets. Seatex can manufacture and package to strict specifications, duplicate formulas, or make available our own 400 plus finished formulations. Seatex is employee owned. Seatex is a full service contract manufacturer dedicated to the production and marketing of branded products and turnkey custom formulations.

Private Label:

Seatex offers a turn-key program for private labelers. They maintain a very large library of formulations compiled from 40 years of chemical blending experiences. Seatex can assist in label design, maintain MSDS and all regulatory issues. Seatex also carries full product liability insurance.

Seatex currently sits on approximately 20 acres occupying over 210,000 square feet of a modern manufacturing and warehousing facilities. Rail service is available.

Flameret, Inc. will provide Seatex with its formula for Flameret. The formula is based on two patents #4,961,865 and #4,950,410 which the company received from United American, Inc. These two patents contain all required information to produce Flameret.

Flameret, Inc. intends to contract with Seatex to batch, mix, fill, package, label, palletize and ship a proprietary flame retardant compound product (Flameret) subject to strict requirements for quality control, cost control, timeliness and confidentiality, once it has sold Flameret to a customer.

Manufacturing:

Flameret, Inc. intends to have Seatex manufacture Flameret for the company. All key ingredients included in our product are readily available from Seatex. The following ingredients are contained in Flameret (Sodium Chloride, Magnesium Chloride, Sodium Sulfate Decahydrate, Calcium Chloride, Magnesium Sulfate, Calcium Sulfate, Potassium Sulfate, Magnesium Bromide, Potassium Chloride and Water). Seatex has not produced any Flameret for Flameret, Inc. Flameret, Inc. does not have any formal agreements with Seatex to batch, mix, fill, package, label, palletize and ship a proprietary flame retardant compound product (Flameret).

Flameret, Inc. Technology

UNITED AMERICAN AND FLAMERET

On May 18, 1989 United American Inc. (UAI) acquired patent #4,961,865 (fire extinguishing solutions for extinguishing phosphorus and metal fire) and patent #4,950,410 from the inventor Edmund Pennartz. After acquiring the patents and the technology from Mr. Pennartz, UAI developed three fire retardant products, 1. Flameret, a textile FR treatment. 2. Ultra Flamex, a fire extinguishing product and, 3. Impex.

Flameret is applied as a liquid compound to textiles, this produces a carbon membrane which is activated when heat is applied to produce the fire retardant properties, and this protection is called a carbon barrier shield. [Fire barrier].

United American, Inc. has never sold their products to any manufacturers; the company’s sole business is the development of fire barrier products. On August 14, 2009 Flameret, Inc. acquired the rights to market and sell United American, Inc.’s three products 1. Flameret, a textile FR treatment. 2. Flamex , a fire extinguishing product and 3. Impex. for 15 years worldwide. Flameret has the rights to use all studies, reports and research conducted by UAI in regard to these three products. Flameret, Inc. will compensate United American, Inc. by paying a 1.5% gross royalty to UAI on all products sold.

FLAMERET, INC. is presently attempting to market for sale one product named (Flameret), a textile FR treatment. Flameret is a liquid that is applied to textiles, these treated textiles are used at the production stage of such products as mattresses to resist ignition from smoldering cigarettes and resist ignition from an open-flame heat source. The company aims to focus on long-term client retention within the U.S. and Canadian mattress industries.

Flameret, Inc. is a development stage company. Flameret, Inc. has a limited history of development stage operations. We presently do not have the funding to execute our business plan.

We expect to provide one product named (Flameret), a textile FR treatment to mattress manufacturers. As such, we may not always be successful in achieving a long-term contract or be immediately compensated for services rendered. Although we currently restrict our fire retardant products to mattress manufacturers our products are applicable to a wide range of fields and businesses, and therefore are not restricted to a particular industry.

Achievement of our business objective is basically dependent upon the judgment, skill and knowledge of our management. Mr. Glover, currently our sole executive officer and director. There can be no assurance that a suitable replacement could be found for any of our officers upon their retirement, resignation, inability to act on our behalf, or death.

DISTRIBUTION

Flameret Fire Retardant

In July 2009, Mr. Glover provided Seatex with the United American, Inc. formula for Flameret to determine if Seatex was able to blend, manufacture and package the Flameret product for Flameret, Inc. Seatex LTD www.seatexcom, is located at 445 TX-36 Rosenberg, Texas, 77471.

After reviewing the formula Seatex advised Flameret, Inc. that they could batch, mix, fill, package, label, palletize and ship a proprietary flame retardant compound product (Flameret) subject to strict requirements for quality control, cost control, timeliness and confidentiality.

Seatex has not produced any Flameret for Flameret, Inc. Flameret, Inc. does not have any formal agreements with Seatex to batch, mix, fill, package, label, palletize and ship a proprietary flame retardant compound product (Flameret). Flameret, Inc. intends to enter into a formal contract with Seatex once it has sold Flameret to a customer.

It is a light weight transparent liquid and does not leave white flaky residues and will not change the hand [feel] or scent of the fabric. It will not discolor or shrink the fabric and is odorless. It needs less than 24 hours for curing time depending upon the process and textile application to allow for complete fiber penetration and compound set up.

Flameret FR is a water based solution applied to the fresh milled textiles. The liquid solution first penetrates into the molecular structure. The treated textile is then dried through ovens that evaporate the water leaving a fire retardant compound thoroughly bound and bonded throughout the molecular structure of the fabric. It is this bound compound that creates fire resistance when an external heat source is applied - thus creating a carbon barrier shield. When external heat is applied to the treated surface by heat sources such as candles, matches, molten metal or any direct flame, this bound compound is changed into a carbon barrier shield. This carbon barrier shield triggers an interlocking effect of one fiber to another and produces a surface that deflects heat and will not allow fire to penetrate the surface. This carbon barrier shield will cause the fire to die out as the carbon barrier shield suffocates the fire by not allowing oxygen to the fire on the fibers. FLAMERET’s FR will be used on textiles that are natural as well as synthetic fibers.

Flameret will be used on the components of mattresses prior to their final assembly.

Mattress manufacturing use the following components in their mattresses, ticking, high loft non-woven and needle pointed fibers, filler cloths, universal borders and mattress socks. Flameret can be applied to all of these materials to impart a carbon barrier shield.

These textiles include almost every fabric that is used to make a mattress


1.	Ticking – A material used on the top and bottom sides of the top mattress and foundations.
2.	Universal Borders – The material that is used on the sides of the top mattress and foundation


3.	Non Woven Loft and Side Panels – In some applications a fire barrier inserted under the ticking is necessary as in the case of pillow top with heavy fuel load and some institutional beds
4.	Mattress Sock – Like the word implies in some applications such as with memory foam a stretchy material is needed to shape with the memory foam when it is slept on.


5.	Filler Cloth - is an inexpensive cotton cloth material that goes on the top of the foundation.

To utilize our second prong of sales approach conducted by Mr. John Glover the company will need to seek additional capital to fund this model. Presently the Company does not have the additional capital needed to utilize the second prong of sales, setting up distributors of the Flameret product.

In 2013 Flameret, Inc. intends to market through mattress distributors its Flameret product. In order for the Company to begin the distributor model it will require the Company to seek additional capital in excess of $5M in order to develop the distributor network. The Company believes it will not have the additional capital until the second quarter of 2013.

COMPETITION

The fire retardant industry is highly competitive and is characterized by a large number of competitors ranging from small to large companies with substantial resources. The company’s main competition is 3M and DuPont, who provide oil based toxic retardants. Many of our potential competitors have substantially larger customer bases, greater name recognition, greater reputation, and significantly greater financial and marketing resources than we do. In the future, aggressive marketing tactics implemented by our competitors could impact our limited financial resources and adversely affect our ability to compete in these markets. There are some other small operators who claim that their products are non toxic but do not have the testing to support their claims.

Price competition exists in fire retardant products. Costs of raw materials decreases within the industry could adversely affect our operations and profitability. There are many fire retardant companies that could discount their products which could result in lower revenues for the entire industry. A shortfall from expected revenue levels would have a significant impact on our potential to generate revenue and possibly cause our business to fail.

EMPLOYEES

Christopher Glover is Director, Chief Executive Officer, and President, of Flameret, Inc. Presently, there are three additional employees of the Company, John Meredith, CFO, John Glover, Vice President of Marketing and Susan Allwork, Secretary and Director.

The Company plans to employ individuals on an as needed basis. The company anticipates that it will need to hire additional employees as the business grows. In addition, the Company may expand the size of our Board of Directors in the future. Presently Christopher Glover, John Meredith and John Glover will devote 40 hours a week to the affairs of the Company. Christopher Glover, John Meredith, and John Glover do not receive a salary or benefits in any form. Presently the Company does not have any plans to begin paying salaries, cash or otherwise, or offering any form of benefits to our Board of Directors, Officer and employees.

ITEM 1A. RISK FACTORS

In addition to the other information in this Annual Report, the following risk factors, among others, should be considered carefully in evaluating the Company and its business.

A) RISKS RELATED TO OUR BUSINESS

THE COMPANY HAS A LIMITED DEVELOPMENT STAGE OPERATING HISTORY UPON WHICH TO BASE AN EVALUATION OF ITS BUSINESS AND PROSPECTS. WE MAY NOT BE SUCCESSFUL IN OUR EFFORTS TO GROW OUR BUSINESS AND TO EARN INCREASED REVENUES. AN INVESTMENT IN OUR SECURITIES REPRESENTS SIGNIFICANT RISK AND YOU MAY LOSE ALL OR PART OF YOUR ENTIRE INVESTMENT.

We have a limited history of development stage operations and we may not be successful in our efforts to grow our business and to earn revenues. Our business and prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of development, particularly companies providing services to a rapidly evolving market such as fire retardants. As a result, management may be unable to adjust its spending in a timely manner to compensate for any unexpected revenue shortfall. This inability could cause net losses in a given period to be greater than expected. An investment in our securities represents significant risk and you may lose all or part of your entire investment.

WE HAVE A HISTORY OF LOSSES. FUTURE LOSSES AND NEGATIVE CASH FLOW MAY LIMIT OR DELAY OUR ABILITY TO BECOME PROFITABLE. IT IS POSSIBLE THAT WE MAY NEVER ACHIEVE PROFITABILITY. AN INVESTMENT IN OUR SECURITIES REPRESENTS SIGNIFICANT RISK AND YOU MAY LOSE ALL OR PART OF YOUR ENTIRE INVESTMENT.

We have yet to establish profitable development stage operations or a history of profitable development stage operations. We anticipate that we will continue to incur substantial development stage operating losses for an indefinite period of time due to the significant costs associated with the development of our business.

Since incorporation, we have expended financial resources on the development of our business. As a result, losses have been incurred since incorporation. Management expects to experience development stage operating losses and negative cash flow for the foreseeable future. Management anticipates that losses will continue to increase from current levels because the Company expects to incur additional costs and expenses related to: marketing and promotional activities; the possible addition of new personnel; and the development of relationships with strategic business partners.

The Company’s ability to become profitable depends on its ability to generate and sustain sales while maintaining reasonable expense levels. If the Company does achieve profitability, it cannot be certain that it would be able to sustain or increase profitability on a quarterly or annual basis in the future. An investment in our securities represents significant risk and you may lose all or part of your entire investment.

IF WE DO NOT OBTAIN ADDITIONAL FINANCING, OUR BUSINESS WILL FAIL.

We will need to obtain additional financing in order to complete our business plan because we currently do not have any income. We do not have any arrangements for financing and we may not be able to find such financing if required. Obtaining additional financing would be subject to a number of factors, including investor acceptance. These factors may adversely affect the timing, amount, terms, or conditions of any financing that we may obtain or make any additional financing unavailable to us. If we do not obtain additional financing our business will fail.

OUR DEVELOPMENT STAGE OPERATING RESULTS WILL BE VOLATILE AND DIFFICULT TO PREDICT. IF THE COMPANY FAILS TO MEET THE EXPECTATIONS OF PUBLIC MARKET ANALYSTS AND INVESTORS, THE MARKET PRICE OF OUR COMMON STOCK MAY DECLINE SIGNIFICANTLY.

Management expects both quarterly and annual development stage operating results to fluctuate significantly in the future. Because our development stage operating results will be volatile and difficult to predict, in some future quarter our development stage operating results may fall below the expectations of securities analysts and investors. If this occurs, the trading price of our common stock may decline significantly.

A number of factors will cause gross margins to fluctuate in future periods. Factors that may harm our business or cause our development stage operating results to fluctuate include the following: the inability to obtain new customers at reasonable cost; the ability of competitors to offer new or enhanced services or products; price competition; the failure to develop marketing relationships with key business partners; increases in our marketing and advertising costs; increased labor costs that can affect demand for fire retardant products; the amount and timing of development stage operating costs and capital expenditures relating to expansion of operations; a change to or changes to government regulations; a general economic slowdown. Any change in one or more of these factors could reduce our ability to earn and grow revenue in future periods.

WE HAVE INCURRED LOSSES SINCE INCEPTION AND EXPECT TO INCUR LOSSES FOR THE FORSEEABLE FUTURE. IF WE DO NOT RECEIVE ADDITIONAL FUNDING, WE WOULD HAVE TO CURTAIL OR CEASE DEVELOPEMNT STAGE OPERATIONS. AN INVESTMENT IN OUR SECURITIES REPRESENTS SIGNIFICANT RISK AND YOU MAY LOSE ALL OR PART OF YOUR ENTIRE INVESTMENT.

We have incurred recurring net losses from operations resulting in an accumulated deficit of $7,261,505 and a working capital deficit of $858,234 as of August 31, 2012. These factors raise substantial doubt about the Company’s ability to continue as a going concern. At August 31, 2012, our cash on hand was $183. We do not currently have sufficient capital resources to fund operations. To stay in business, we will need to raise additional capital through public or private sales of our securities, debt financing or short-term bank loans, or a combination of the foregoing.

We will need additional capital to fully implement our business, operating and development plans. However, additional funding from an alternate source or sources may not be available to us on favorable terms, if at all. To the extent that money is raised through the sale of our securities, the issuance of those securities could result in dilution to our existing security holder. If we raise money through debt financing or bank loans, we may be required to secure the financing with some or all of our business assets, which could be sold or retained by the creditor should we default in our payment obligations. If we fail to raise sufficient funds, we would have to curtail or cease operations.

OUR CURRENT BUSINESS DEVELOPMENT STAGE OPERATIONS RELY HEAVILY UPON OUR KEY EMPLOYEE AND FOUNDER, MR. CHRISTOPHER GLOVER.

We have been heavily dependent upon the expertise and management of Mr. Christopher Glover, our Chief Executive Officer and President, and our future performance will depend upon his continued services. The loss of the services of Mr. Glover’s services could seriously interrupt our business operations, and could have a very negative impact on our ability to fulfill our business plan and to carry out our existing development stage operations. The Company currently does not maintain key man life insurance on this individual. There can be no assurance that a suitable replacement could be found for him upon retirement, resignation, inability to act on our behalf, or death.

OUR FUTURE GROWTH MAY REQUIRE RECRUITMENT OF QUALIFIED EMPLOYEES.

In the event of our future growth in administration, marketing, and customer support functions, we may have to increase the depth and experience of our management team by adding new members. Our future success will depend to a large degree upon the active participation of our key officers and employees. There is no assurance that we will be able to employ qualified persons on acceptable terms. Lack of qualified employees may adversely affect our business development.

(B) RISKS RELATED TO THE INDUSTRY

THE FIRE RETARDANT INDUSTRY IS COST COMPETITIVE AND IS CHARACTERIZED BY LOW FIXED COSTS. A REDUCTION IN COST FOR THE INDUSTRY COULD AFFECT THE DEMAND FOR OUR FIRE RETARDANT PRODUCTS.

The fire retardant industry is highly competitive and is characterized by a large number of competitors ranging from small to large companies with substantial resources. Many of our potential competitors have substantially larger customer bases, greater name recognition, greater reputation, and significantly greater financial and marketing resources than we do. In the future, aggressive marketing tactics implemented by our competitors could impact our limited financial resources and adversely affect our ability to compete in these markets.

Price competition exists in fire retardant products. Costs of raw material decreases within the industry could adversely affect our operations and profitability. There are many fire retardant companies that could discount their products which could result in lower revenues for the entire industry. A shortfall from expected revenue levels would have a significant impact on our potential to generate revenue and possibly cause our business to fail.

THE COMPANY’S RELIANCE ON MATTRESS MANUFACTURERS MAY HAVE A SIGNIFICANT IMPACT ON THE COMPANY’S ABILITY TO GENERATE REVENUE AND POSSIBLY CAUSE OUR BUSINESS TO FAIL.

The Company intends to provide a fire retardant product to mattress manufactures. As such, the Company may not always be successful in achieving a long-term contract or be immediately compensated for products and services rendered. Since we expect our fire retardant product to be sold to mattress manufactures any slowdown in that industries would greatly affect the company.

The company’s success is dependent on its ability to obtain and maintain clients. No assurances can be given that the Company will be able to create a client or maintain a client base or that it will be able to attract new clients. The loss of one or more new clients of the Company or a significant reduction in business from such new clients could have a material adverse effect on the Company. The Company does not have contracts with any clients at this time.

OUR DEVELOPMENT STAGE OPERATING RESULTS MAY FLUCTUATE DUE TO FACTORS WHICH ARE NOT WITHIN OUR CONTROL.

Our development stage operating results are expected to fluctuate in the future based on a number of factors, many of which are not in our control. Our development stage operating expenses primarily include general administrative expenses that are relatively fixed in the short-term. If our revenues are lower than we expect because demand for our product and service diminishes, or if we experience an increase in defaults among approved applicants or for any other reasons we may not be able to quickly return to acceptable revenue levels.

Because of the unique nature of our business and the fact that there are no comparable past business models to rely on, future factors that may adversely affect our business are difficult to forecast. Any shortfall in our revenues would have a direct impact on our business. In addition, fluctuations in our quarterly results could adversely affect the market price of our common stock in a manner unrelated to our long-term operating performance.

WE HAVE A SHORT DEVELOPMENT STAGE OPERATING HISTORY AND FACE MANY OF THE RISKS AND DIFFICULTIES FREQUENTLY ENCOUNTERED BY A YOUNG COMPANY.

We have a short development stage operating history from August 13, 2009 to present for investors to evaluate the potential of our business development. We are continuing to build our customer base and our brand name. We do not have any customers at this time. In addition, we also face many of the risks and difficulties inherent in introducing new products and services. These risks include the ability to:


●	Increase awareness of our brand name;
●	Develop an effective business plan;
●	Meet customer standards;
●	Implement advertising and marketing plan;
●	Attain customer loyalty;
●	Maintain current strategic relationships and develop new strategic relationships;
●	Respond effectively to competitive pressures;
●	Continue to develop and upgrade our service; and
●	Attract, retain and motivate qualified personnel.

Our future will depend on our ability to raise additional capital and bring our product and service to the marketplace, which requires careful planning to provide a product and service that meets customer standards without incurring unnecessary cost and expense.

WE MAY NEED ADDITIONAL CAPITAL TO DEVELOP OUR BUSINESS.

The development of our services will require the commitment of resources to increase the advertising, marketing and future expansion of our business. In addition, expenditures will be required to enable us in 2011 to conduct planned business research, development of new affiliate and associate offices, and marketing of our existing and future products and services. Currently, we have no established bank-financing arrangements. Therefore, it is possible that we would need to seek additional financing through subsequent future private offering of our equity securities, or through strategic partnerships and other arrangements with corporate partners.

We cannot give you any assurance that any additional financing will be available to us, or if available, will be on terms favorable to us. The sale of additional equity securities could result in dilution to our stockholders. The occurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financing covenants that would restrict our operations. If adequate additional financing is not available on acceptable terms, we may not be able to implement our business development plan or continue our business operations.

WE MAY NOT BE ABLE TO BUILD OUR BRAND AWARENESS.

Development and awareness of our brand Flameret will depend largely upon our success in creating a customer base and potential referral sources. In order to attract and retain customers and to promote and maintain our brand in response to competitive pressures, management plans to gradually increase our marketing and advertising budgets. If we are unable to economically promote or maintain our brand, then our business, results of operations and financial condition could be severely harmed. The company presently has a deficit of $858,234 in working capital.

OUR FUTURE SUCCESS RELIES UPON A COMBINATION OF PATENTS AND PATENTS PENDING, PROPRIETARY TECHNOLOGY AND KNOW-HOW, TRADEMARKS, CONFIDENTIALITY AGREEMENTS AND OTHER CONTRACTUAL COVENANTS TO ESTABLISH AND PROTECT OUR INTELLECTUAL PROPERTY RIGHTS. IF OUR PRODUCTS ARE DUPLICATED OUR RESULTS OF OPERATIONS WOULD BE NEGATIVELY IMPACTED.

Our application for trademark protection has been approved for "Flameret.” Because intellectual property protection is critical to our future success, we intend to rely heavily on trademark, trade secret protection and confidentiality or license agreements with our employees, customers, partners and others to protect proprietary rights. However, effective trademark, service mark and trade secret protection may not be available in every country in which we intend to sell our products and services. Unauthorized parties may attempt to copy aspects of our products or to obtain and use our proprietary information. As a result, litigation may be necessary to enforce our intellectual property rights to protect our trade secrets and to determine the validity and scope of the proprietary rights of others. Such litigation could result in substantial costs and diversion of recourses and could significantly harm our business and operating results.

Furthermore, the relationship between regulations governing domain names and laws protecting trademarks and similar proprietary rights is unclear. Therefore, we may be unable to prevent third parties from acquiring domain names that are similar to, infringe upon or otherwise decrease the value of intended trademarks and other proprietary rights.

There can be no assurance that third parties will not assert infringement claims against us. If infringement claims are brought against us, there can be no assurance that we will have the financial resources to defend against such claims or prevent an adverse judgment against us. In the event of an unfavorable ruling on any such claim, there can be no assurance that a license or similar agreement to utilize the intellectual property rights in question relied upon by us in the conduct of our business will be available to us on reasonable terms, if at all. The loss of such rights (or the failure by us to obtain similar licenses or agreements) could have a material adverse effect on our business, financial condition and results of operations.

OUR BUSINESS EMPLOYS LICENSED UNITED AMERICAN, INC. TECHNOLOGY WHICH MAY BE DIFFICULT TO PROTECT AND MAY INFRINGE ON THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.

We currently license our technology from United American, Inc. United American, Inc. owns two U.S. patents, (patent #4,961,865 and patent#4,950,410) and may file more patent applications in the future. Patent #4,961,865 expired on 10-09-2010 and Patent #4,950,410 expired on 8-21-2010. Both Patent renewals are pending . Our success depends, on these patents and on our ability to use the United American, Inc. Technology, and for United American, Inc. to obtain patents, maintain trade secrecy and not infringe the proprietary rights of third parties. We cannot assure you that the patents of others will not have an adverse effect on our ability to conduct our business, that we will develop additional proprietary technology that is patentable or that any patents issued to us or United American, Inc. will provide us with competitive advantages or will not be challenged by third parties. Further, we cannot assure you that others will not independently develop similar or superior technologies, duplicate elements of the United American, Inc. Technology or design around it. It is possible that we may need to acquire other licenses to, or to contest the validity of, issued patents or claims of third parties. We cannot assure you that any license would be made available to us on acceptable terms, if at all, or that we would prevail in any such contest. In addition, we could incur substantial costs in defending ourselves in suits brought against us for alleged infringement of another party’s patents in bringing patent infringement suits against other parties based on our licensed patents.

In addition to licensed patent protection, we also rely on United American Inc. trade secrets, proprietary know-how and technology that we seek to protect, in part, by confidentiality agreements with our prospective blenders, manufactures employees and consultants. We cannot assure you that these agreements will not be breached, that we will have adequate remedies for any breach, or that our trade secrets and proprietary know-how will not otherwise become known or be independently discovered by others.

WE MAY INCUR SUBSTANTIAL COSTS OR LOSE IMPORTANT RIGHTS AS A RESULT OF LITIGATION OR OTHER PROCEEDINGS RELATING TO OUR PRODUCTS, PATENTS AND OTHER INTELLECTUAL PROPERTY RIGHTS.

In recent years, there has been significant litigation involving patents and other intellectual property rights in many technology-related industries. Until recently, patent applications were retained in secrecy by the US Patent and Trademark Office until and unless a patent was issued. As a result, there may be US patent applications pending of which we are unaware that may be infringed by the use of our technology or a part thereof, thus substantially interfering with the future conduct of our business. In addition, there may be issued patents in the United States or other countries that are pertinent to our business of which we are not aware. We and future customers could be sued by other parties for patent infringement in the future. Such lawsuits could subject us and them to liability for damages or require us to obtain additional licenses that could increase the cost of our products, which might have an adverse effect on our sales.

In addition, in the future we may assert our intellectual property rights by instituting legal proceedings against others. We may not be able to successfully enforce United American, Inc. patents in any lawsuits we may commence. Defendants in any litigation we may commence to enforce United American, Inc. patents may attempt to establish that United American, Inc. patents are invalid or are unenforceable. Any patent litigation could lead to a determination that one or more of our patents are invalid or unenforceable. If a third party succeeds in invalidating one or more of our patents that party and others could compete more effectively against us. Our ability to derive sales from products or technologies covered by these patents could be adversely affected.

Whether we are defending the assertion of third party intellectual property rights against our business as a result of the use of United American, Inc. technology, or we are asserting our own intellectual property rights against others, such litigation can be complex, costly, protracted and highly disruptive to our business operations by diverting the attention and energies of management and key technical personnel. As a result, the pendency or adverse outcome of any intellectual property litigation to which we are subject could disrupt business operations, require the incurrence of substantial costs and subject us to significant liabilities, each of which could severely harm our business.

Plaintiffs in intellectual property cases often seek injunctive relief. Any intellectual property litigation commenced against us could force us to take actions that could be harmful to our business and thus to our future sales.

WE MAY INCUR SIGNIFICANT COSTS TO BE A PUBLIC COMPANY TO ENSURE COMPLIANCE WITH U.S. CORPORATE GOVERNANCE AND ACCOUNTING REQUIREMENTS AND WE MAY NOT BE ABLE TO ABSORB SUCH COSTS.

We may incur significant costs associated with our public company reporting requirements, costs associated with newly applicable corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002 and other rules implemented by the SEC. We expect all of these applicable rules and regulations to significantly increase our legal and financial compliance costs and to make some activities more time consuming and costly. We also expect that these applicable rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or as executive officers. We are currently evaluating and monitoring developments with respect to these newly applicable rules, and we cannot predict or estimate the amount of additional costs we may incur or the timing of such costs. In addition, we may not be able to absorb these costs of being a public company, which will negatively affect our business operations.

THE LIMITED PUBLIC COMPANY EXPERIENCE OF OUR MANAGEMENT TEAM COULD ADVERSELY IMPACT OUR ABILITY TO COMPLY WITH THE REPORTING REQUIREMENTS OF U.S. SECURITIES LAWS.

Our management team has limited public company experience, which could impair our ability to comply with legal and regulatory requirements such as those imposed by Sarbanes-Oxley Act of 2002. Our senior management has never had sole responsibility for managing a publicly traded company. Such responsibilities include complying with federal securities laws and making required disclosures on a timely basis. Our senior management may not be able to implement programs and policies in an effective and timely manner that adequately respond to such increased legal, regulatory compliance and reporting requirements, including the establishing and maintaining internal controls over financial reporting. Any such deficiencies, weaknesses or lack of compliance could have a materially adverse effect on our ability to comply with the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which is necessary to maintain our public company status. If we were to fail to fulfill those obligations, our ability to continue as a U.S. public company would be in jeopardy in which event you could lose your entire investment in our company.

C) RISKS RELATED TO THE OWNERSHIP OF OUR SECURITIES

WE MAY NEVER PAY ANY DIVIDENDS TO SHAREHOLDERS.

We have never declared or paid any cash dividends or distributions on our capital stock. We currently intend to retain our future earnings, if any, to support operations and to finance expansion and therefore we do not anticipate paying any cash dividends on our common stock in the foreseeable future.

The declaration, payment and amount of any future dividends will be made at the discretion of the board of directors, and will depend upon, among other things, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors as the board of directors considers relevant. There is no assurance that future dividends will be paid, and, if dividends are paid, there is no assurance with respect to the amount of any such dividend.

OUR CONTROLLING SECURITY HOLDER MAY TAKE ACTIONS THAT CONFLICT WITH YOUR INTERESTS.

Mr. Christopher Glover beneficially owns approximately 9% of our capital stock with voting rights. The directors elected by our controlling security holder will be able to significantly influence decisions affecting our capital structure. This control may have the effect of delaying or preventing changes in control or changes in management, or limiting the ability of our other security holders to approve transactions that they may deem to be in their best interest.

AS OUR SOLE DIRECTOR AND OFFICER AND OUR ASSETS ARE LOCATED IN ENGLAND, INVESTORS MAY BE LIMITED IN THEIR ABILITY TO ENFORCE CIVIL ACTIONS IN THE UNITED STATES AGAINST OUR DIRECTOR OR OUR ASSETS. YOU MAY NOT BE ABLE TO RECEIVE COMPENSATION FOR DAMAGES TO THE VALUE OF YOUR INVESTMENT CAUSED BY WRONGFUL ACTIONS BY OUR DIRECTOR OR OFFICERS.

Our assets are located in England and our director is a resident of England. Consequently, it may be difficult for United States investors to affect service of process within the United States on our director. A judgment of a US court predicated solely upon such civil liabilities may not be enforceable in England by a English court if the US court in which the judgment was obtained did not have jurisdiction, as determined by the English court, in the matter. There is substantial doubt whether an original action could be brought successfully in England against any of our future assets or our director predicated solely upon such civil liabilities. You may not be able to recover damages as compensation for a decline in your investment.

YOU MAY EXPERIENCE DILUTION OF YOUR OWNERSHIP INTEREST BECAUSE OF THE FUTURE ISSUANCE OF ADDITIONAL SHARES OF OUR COMMON STOCK AND OUR PREFERRED STOCK.

In the future, we may issue our authorized but previously unissued equity securities, resulting in the dilution of the ownership interests of our present stockholders. We are currently authorized to issue an aggregate of 600,000,000 shares of capital stock consisting of 500,000,000 shares of common stock, par value $0.0001 per share, and 100,000,000 shares of preferred stock, par value $0.0001 per share.

We may also issue additional shares of our common stock or other securities that are convertible into or exercisable for common stock in connection with hiring or retaining employees or consultants, future acquisitions, future sales of our securities for capital raising purposes, or for other business purposes. The future issuance of any such additional shares of our common stock or other securities may create downward pressure on the trading price of our common stock. There can be no assurance that we will not be required to issue additional shares, warrants or other convertible securities in the future in conjunction with hiring or retaining employees or consultants, future acquisitions, future sales of our securities for capital raising purposes or for other business purposes.

OUR COMMON STOCK IS CONSIDERED PENNY STOCKS, WHICH MAY BE SUBJECT TO RESTRICTIONS ON MARKETABILITY, SO YOU MAY NOT BE ABLE TO SELL YOUR SHARES.

If our common stock becomes tradable in the secondary market, we will be subject to the penny stock rules adopted by the SEC that require brokers to provide extensive disclosure to their customers prior to executing trades in penny stocks. These disclosure requirements may cause a reduction in the trading activity of our common stock, which in all likelihood would make it difficult for our shareholders to sell their securities.

Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system). Penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. The broker-dealer must also make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security that becomes subject to the penny stock rules. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in our securities, which could severely limit the market price and liquidity of our securities. These requirements may restrict the ability of broker-dealers to sell our common stock and may affect your ability to resell our common stock.

THERE IS NO ASSURANCE OF A PUBLIC MARKET OR THAT OUR COMMON STOCK WILL EVER TRADE ON A RECOGNIZED EXCHANGE. THEREFORE, YOU MAY BE UNABLE TO LIQUIDATE YOUR INVESTMENT IN OUR STOCK.

There is no established public trading market for our common stock. Our shares have not been listed or quoted on any exchange or quotation system. There can be no assurance that a market maker will agree to file the necessary documents with FINRA, which operates the OTCBB, nor can there be any assurance that such an application for quotation will be approved or that a regular trading market will develop or that if developed, will be sustained. In the absence of a trading market, an investor may be unable to liquidate their investment.

ITEM 2. PROPERTIES

The principal executive office of Flameret, Inc. is located at 1810 E. Sahara Ave, Suite 1429, Las Vegas, NV 89104. Our telephone number is: 877-861-0207.

ITEM 3. LEGAL PROCEEDINGS

From time to time, we may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

We did not submit any matters to a vote of our security holders during the fourth quarter of the fiscal year 2012.

PART II

ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

(a) Market Information

The Company's Common Stock is currently traded on the National Association of Security Dealers' over-the-counter bulletin board market (OTCBB) under the symbol FLRE.OB. The following table sets forth the high and low bid prices for each quarter within the last fiscal year, beginning with the commencement of our trading in June of 2010. The source of these quotations is the OTCBB Trade Activity Report. The quotations reflect inter-dealer prices, without retail mark-up, markdown or commission, and may not necessarily represent actual transactions.


	COMMON STOCK MARKET PRICE
	HIGH		LOW
FISCAL YEAR ENDED AUGUST 31, 2012:
Fourth Quarter	$	0.0029	$	0.0049
Third Quarter	$	0.0060	$	0.0035
Second Quarter	$	0.0090	$	0.0040
First Quarter	$	0.06	$	0.0074
FISCAL YEAR ENDED AUGUST 31, 2011:
Fourth Quarter	$	2.00	$	0.28
Third Quarter	$	10.00	$	1.00
Second Quarter	$	74.00	$	9.50
First Quarter	$	450.00	$	15.00

(b) Holders of Common Stock

We are authorized to issue 500,000,000 shares of common stock, $0.0001 par value per share. Currently we have 222,528,012 shares of common stock issued and outstanding. As of August 31, 2012, there were approximately Fifty eight (58) shareholders of the Company’s common stock. As of August 31, 2012, the closing price of the Company’s shares of common stock was $0.0025 per share. Island Stock Transfer (telephone: (727) 289-0010; facsimile: (727) 289-0069) is the registrar and transfer agent for our common stock.

Each share of common stock shall have one (1) vote per share for all purposes. The holders of a majority of the shares entitled to vote, present in person or represented by proxy, shall constitute a quorum at all meetings of our shareholders. Our common stock does not provide a preemptive, subscription or conversion rights and there are no redemption or sinking fund provisions or rights. Our common stock holders are not entitled to cumulative voting for election of the board of directors.

Holders of common stock are entitled to receive ratably such dividends as may be declared by the board of directors out of funds legally available therefore as well as any distributions to the security holder. We have never paid cash dividends on our common stock, and do not expect to pay such dividends in the foreseeable future.

In the event of a liquidation, dissolution or winding up of our company, holders of common stock are entitled to share ratably in all of our assets remaining after payment of liabilities. Holders of common stock have no preemptive or other subscription or conversion rights. There are no redemption or sinking fund provisions applicable to the common stock.

Flameret has never declared or paid dividends on its Common Stock. Flameret intends to follow a policy of retaining earnings, if any, to finance the growth of the business and does not anticipate paying any cash dividends in the foreseeable future. The declaration and payment of future dividends on the Common Stock will be at sole discretion of the Board of Directors and will depend on Flameret's profitability and financial condition, capital requirements, statutory and contractual restrictions, future prospects and other factors deemed relevant.

(d) Securities Authorized for Issuance under Equity Compensation Plans

The Company has not established any compensation plans to which our securities are authorized for issuance to employees or non-employees (such as directors, consultants and advisors) in exchange for consideration in the form of services.

(e) Recent Sales of Unregistered Securities

Preferred Shares Issued

On November 10, 2010, the Company issued 10 shares of series A preferred stock for services at $1,000 per share, for an aggregate value of $10,000.

On December 23, 2010, the Company issued 100,000 shares of series D preferred stock for services at $2.50 per share, for an aggregate value of $250,000.

On January 25, 2011, the Company issued 400,000 shares of series B preferred stock for services at $0.01 per share, for an aggregate value of $5,739. Additionally, the Company issued 1,775,000 shares of series B preferred stock upon conversion of debts at $0.01 per share, for an aggregate value of $20,675.

On April 6, 2011, the Company issued 100,000 shares of series B preferred stock for services at $3.75 per share, for an aggregate value of $375,000.

On May 15, 2011 the Company issued 500,000 shares of series F preferred stock for cash at $0.009 per share, for an aggregate value of $4,286. Additionally, the Company issued 500 shares of common stock for cash at $1.42 per share, for an aggregate total of $717.

On July 19, 2011 the Company converted 276,585 shares of common stock, along with certain debts and series B and D preferred shares, into 1,803,032 shares of the Company’s series E preferred stock. The Company recognized a gain on conversion of $430,289 pursuant to this transaction.

On July 19, 2011 the Company issued 1,803,032 shares of series E preferred stock pursuant to the conversion of 276,585 shares of common stock, 100,000 shares of series B preferred stock, 100,000 shares of series D preferred stock, and certain debts to related parties totaling $1,026,447. The Company recorded a gain on conversion of debts in the amount of 430,239 pursuant to this transaction.

On August 2, 2011, the Company issued 45,000 shares of series E preferred stock for cash at $1.00 per share, yielding total cash proceeds of $45,000.

On August 3, 2011 the Company converted 788 shares of series E preferred stock into 788,000 shares of the Company’s common stock pursuant to the conversion terms of the preferred stock. Additionally, the Company issued 150,000 shares of series E preferred stock for services rendered. These shares were valued at $1.00 per share, for total compensation expense of $150,000.

On August 10, 2011 the Company issued 88,900 shares of series E preferred stock upon the conversion of debts payable to an unrelated entity. The fair value of the shares issued was $88,900, or $1.00 per share.

On August 30, 2011 the Company issued 20,000,000 shares of common stock upon conversion of 20,000 shares of series E preferred stock.

On September 6, 2011, the Company issued 2,000 shares of series B preferred stock for cash at $1.25 per share, for an aggregate value of $2,500.

On September 10, 2011 the Company converted 52,880 shares of series E preferred stock into 52,880,000 shares of common stock pursuant to the conversion terms of the preferred stock.

On September 14, 2011, the Company issued 4,000 shares of series B preferred stock for cash at $2.50 per share, for an aggregate value of $10,000.

On September 15, 2011 the Company converted 8,330 shares of series E preferred stock into 8,330,000 shares of common stock pursuant to the conversion terms of the preferred stock.

On September 27, 2011, the Company issued 4,000 shares of series B preferred stock for cash at $2.50 per share, for an aggregate value of $10,000.

On October 6, 2011 the Company converted 8,500 shares of series E preferred stock into 8,500,000 shares of common stock pursuant to the conversion terms of the preferred stock.

On October 13, 2011 the Company issued a net total of 36,000 shares of series E preferred stock for services at $1.00 per share, resulting in an aggregate value of $36,000. Also on October 13, 2011 the Company issued 1,500,000 shares of common stock for services at $0.025 per share, resulting an aggregate value of $37,500.

On October 24, 2011 the Company converted 7,800 shares of series E preferred stock into 7,800,000 shares of common stock pursuant to the conversion terms of the preferred stock.

On October 27, 2011 the Company converted 50,000 shares of series B preferred stock into 75,000 shares of common stock.

On October 31, 2011, the Company issued 29,000 shares of series E preferred stock for cash at $1.00 per share, for an aggregate value of $29,000.

On November 3, 2011 the Company converted 15,000 shares of series E preferred stock into 15,000,000 shares of common stock pursuant to the conversion terms of the preferred stock.

On November 4, 2011 the Company converted 63,000 shares of series E preferred stock into 63,000,000 shares of common stock pursuant to the conversion terms of the preferred stock.

On March 15, 2012 the Company converted 25,000 shares of series E preferred stock into 25,000,000 shares of common stock pursuant to the conversion terms of the preferred stock.

On April 15, 2012 the Company issued 5,000 shares of series E preferred stock for cash at $1.00 per share, resulting in total cash proceeds of $5,000.

On April 20, 2012 the Company converted 10,000 shares of series E preferred stock into 10,000,000 shares of series E preferred stock pursuant to the conversion terms of the preferred stock.

Common Shares Issued

On August 13, 2009, the Company issued 18,000 founder’s shares at a value of $-0-. Also on August 13, 2009, the Company received $2,500 in capital contributed from the Company’s founder and CEO.

On November 9, 2010, the Company issued 36,000 shares of common stock in partial settlement of debt on previously executed convertible notes payable. The shares of stock issued were recorded at $540,000, or $15 per share based on the quoted market price of the shares on the date of issuance, and the amount of debt that was forgiven was equal to $3,600. As such, the Company recorded a loss on settlement of debt in connection with the transaction of $536,400.

On November 30, 2010, the Company cancelled 405 shares of common stock erroneously issued as founders’ shares.

On December 23, 2010, the Company issued 100 shares of common stock for services at $40 per share, for total proceeds of $4,000.

On January 20, 2011, the Company issued 250,000 shares of common stock for services at $10 per share, for an aggregate total of $2,500,000.

On January 20, 2011, the Company issued 9,000 shares of common stock in partial settlement of debt on previously executed convertible notes payable. The shares of stock issued were recorded at $90,000, or $10 per share based on the quoted market price of the shares on the date of issuance, and the amount of debt that was forgiven was equal to $900. As such, the Company recorded a loss on settlement of debt in connection with the transaction of $89,100.

On January 25, 2011 the Company issued 1,595 shares of common stock for the conversion of $15,950 in debts. These shares were valued at approximately $10 per share, for an aggregate value of $15,153, resulting in a gain on settlement of debt in the amount of $797.

On January 27, 2011, the Company issued 35,500 shares of common for services at $25 per share, for an aggregate total of $887,500.

On January 28, 2011 the Company issued 3,000 shares of common stock in settlement of debt. The shares were valued at $25 per share, based on the quoted market price of the shares on the date of issuance, resulting in a total amount of $75,000.

On March 14, 2011 the Company issued 2,000 shares of common stock for services at $10 per share, for an aggregate total of $20,000.

On April 15, 2011, the Company issued 8,000 shares of common stock for services at $2.00 per share, for an aggregate total of $16,000.

On May 15, 2011, the Company issued 500 shares of common stock for cash at $1.42 per share, for an aggregate total of $714.

On June 6, 2011 the Company issued 46,905 shares of common stock for services at $2.00 per share, for an aggregate total of $93,810. The Company also issued 15,000 shares of common stock in settlement of debts. These shares were valued at $30,000, or $2.00 per share based on the quoted market price of the shares on the date of issuance.

On June 30, 2011 the Company issued 1,500 shares of common stock for services at $1.20 per share, for an aggregate total of $1,800.

On July 29, 2011 the Company elected to enact a 1:1,000 share reverse-split of its common stock. All references to common stock in these financial statements have been retroactively restated so as to assume the effect of this reverse stock-split.

On August 3, 2011 the Company issued 5,000 shares of common stock for services at $0.50 per share, for an aggregate value of $2,500.