0001554757-12-000318.txt : 20121114
0001554757-12-000318.hdr.sgml : 20121114
20121114074210
ACCESSION NUMBER: 0001554757-12-000318
CONFORMED SUBMISSION TYPE: 10-Q
PUBLIC DOCUMENT COUNT: 12
CONFORMED PERIOD OF REPORT: 20120930
FILED AS OF DATE: 20121114
DATE AS OF CHANGE: 20121114
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: TREE TOP INDUSTRIES, INC.
CENTRAL INDEX KEY: 0000356590
STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING, DATA PROCESSING, ETC. [7370]
IRS NUMBER: 830250943
STATE OF INCORPORATION: NV
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 10-Q
SEC ACT: 1934 Act
SEC FILE NUMBER: 000-10210
FILM NUMBER: 121201005
BUSINESS ADDRESS:
STREET 1: 511 SIXTH AVENUE, SUITE 800
CITY: NEW YORK
STATE: NY
ZIP: 10011
BUSINESS PHONE: 7752613728
MAIL ADDRESS:
STREET 1: 511 SIXTH AVENUE, SUITE 800
CITY: NEW YORK
STATE: NY
ZIP: 10011
FORMER COMPANY:
FORMER CONFORMED NAME: GOHEALTH MD INC
DATE OF NAME CHANGE: 20000201
FORMER COMPANY:
FORMER CONFORMED NAME: NUGGET EXPLORATION INC
DATE OF NAME CHANGE: 19920703
10-Q
1
tree_top-10q.htm
Unassociated Document
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
x QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period Ended September 30, 2012
or
¨ TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition period from _______________ to ______________
Commission File Number:
000-10210
TREE TOP INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
NEVADA
83-0250943
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
511 Sixth Avenue, Suite 800,
New York, NY 10011
(Address of principal executive offices) (Zip Code)
(775) 261-3728
Registrant's telephone number, including area code
(Former name, former address and former fiscal year, if changed since last report)
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 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. (Check One).
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
¨
No
x
Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date.
As of November 5, 2012, the number of shares outstanding of the registrant’s class of common stock was 525,070,455.
TABLE OF CONTENTS
Pages
PART I. FINANCIAL INFORMATION
3
Item 1.
Financial Statements
3
Unaudited Condensed Consolidated Balance Sheets at September 30, 2012 and December 31, 2011
3
Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months ended September 30, 2012 and 2011, and From Inception of the Development Stage on August 1, 2007 through September 30, 2012
4
Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2012 and 2011, and From Inception of the Development Stage on August 1, 2007 through September 30, 2012
5
Notes to Unaudited Condensed Consolidated Financial Statements
6
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
12
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
16
Item 4.
Controls and Procedures
16
PART II OTHER INFORMATION
17
Item 1.
Legal Proceedings
17
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
18
Item 3.
Defaults Upon Senior Securities
18
Item 5.
Other Information
18
Item 6.
Exhibits
19
SIGNATURES
20
- 2 -
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
TREE TOP INDUSTRIES, INC.
(A Development Stage Company)
Consolidated Balance Sheets
ASSETS
September 30,
December 31,
2012
2011
(Unaudited)
CURRENT ASSETS
Cash and cash equivalents
-
$
517
Total Current Assets
-
517
PROPERTY AND EQUIPMENT (NET)
14,946
39,518
INVESTMENTS AT COST
95,256
-
TOTAL ASSETS
$
110,202
$
40,035
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued expenses
706,789
676,853
Accrued interest
157,831
134,179
Due to officers and directors
3,737,774
3,186,130
Convertible Notes (Net of discount)
70,834
50,000
Notes Payable
32,000
Notes payable- in default
597,860
597,860
Total Current Liabilities
5,303,088
4,645,022
Total Liabilities
5,303,088
4,645,022
STOCKHOLDERS' DEFICIT
Common stock, par value $0.001 per share, 1,000,000,000 shares authorized; 565,070,455 and 379,380,276 issued, 525,070,455 and 339,380,276 outstanding, respectively
565,070
379,380
Additional paid-in-capital
144,082,093
140,263,974
Unearned ESOP shares
(1,700,000
)
(1,700,000
)
(Deficit) Accumulated During the Development Stage
(148,140,051
)
(143,548,341
)
Total Stockholders' Deficit
(5,192,888
)
(4,604,987
)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
$
110,202
$
40,035
The accompanying notes are an integral part of these condensed consolidated financial statements.
- 3 -
Tree Top Industries, Inc.
(A Development Stage Company)
Consolidated Statements of Operations
(unaudited)
From Inception
on August 1,
For the Three Months
For the Nine Months
2007 through
Ended September 30,
Ended September 30,
September 30,
2012
2011
2012
2011
2012
REVENUES
$
-
$
-
$
-
$
-
$
2,967
COST OF SALES
-
-
-
-
GROSS PROFIT (LOSS)
-
-
-
2,967
OPERATING EXPENSES
General and administrative
146,532
36,246
222,948
203,566
5,946,638
Impairment of assets
-
-
-
-
2,275,000
Compensation and professional fees
3,074,648
351,240
3,826,852
829,490
139,097,795
Depreciation
8,191
8,190
24,572
24,571
151,449
Total Operating Expenses
3,229,371
395,676
4,074,372
1,057,627
147,470,882
LOSS FROM OPERATIONS
(3,229,371
)
(395,676
)
(4,074,372
)
(1,057,627
)
(147,467,915
)
OTHER INCOME (EXPENSE)
Loss on disposal of assets
-
-
-
(2,915
)
Gain on debt forgiveness
-
-
-
63,865
Interest income
-
-
-
9
Financing expenses
(400,000
)
(400,000
)
(400,000
)
Interest expense
(53,585
)
(66,194
)
(117,339
)
(157,872
)
(333,095
)
Total Other Income (Expense)
(453,585
)
(66,194
)
(517,339
)
(157,872
)
(672,136
)
NET LOSS BEFORE INCOME TAXES
(3,682,956
)
(461,870
)
(4,591,711
)
(1,215,499
)
(148,140,051
)
PROVISION FOR INCOME TAXES
-
-
-
-
-
NET LOSS
$
(3,682,956
)
$
(461,870
)
$
(4,591,711
)
$
(1,215,499
)
$
(148,140,051
)
LOSS PER SHARE - BASIC & DILUTED
$
(0.01
)
$
(0.00
)
$
(0.01
)
$
(0.00
)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
443,376,395
310,287,702
346,691,563
285,320,414
The accompanying notes are an integral part of these condensed consolidated financial statements.
- 4 -
Tree Top Industries, Inc.
(A Development Stage Company)
Consolidated Statements of Cash Flows
(unaudited)
From Inception
on August 1,
For the Nine Months
2007 through
Ended September 30,
September 30,
2012
2011
2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss
$
(4,591,711
)
$
(1,215,499
)
$
(148,140,051
)
Adjustments to reconcile net loss to net cash used in operating activities:
Bad debt expense
-
-
192,000
Depreciation and amortization
24,570
24,571
151,447
Stock issued for option cancellation
-
-
115,201
Shares owed for services
-
26,800
-
Stock issued for rent
100,000
-
137,500
Gain on debt settlement
-
-
(63,865
)
Stock options granted for services rendered
-
-
44,870,540
Impairment of intangible assets
-
-
2,275,000
Common stock issued for services rendered
3,717,144
287,508
93,496,649
Shares issued for finance charges
-
37,500
Imputed interest on loan
10,080
10,080
35,967
Loss on diposal of fixed assets
-
-
2,915
Amortization of debt discount
70,834
75,000
145,834
Change in operating assets and liabilities, net of acquisition:
Increase (decrease) in accounts payable and accrued expenses
576,367
576,202
3,441,069
Net Cash Used in Operating Activities
(92,716
)
(177,838
)
(3,339,794
)
CASH FLOWS FROM INVESTING ACTIVITIES
Cash advanced on note receivable
-
-
(192,000
)
Cash received in acquisition
-
-
44,303
Cash paid for investments
(95,256
)
(95,256
)
Purchases of property and equipment
-
-
(169,310
)
Net Cash Used in Investing Activities
(95,256
)
-
(412,263
)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash contribution from shareholders
-
-
50,375
Cash received from issuance of common stock
25,000
-
1,712,700
Cash received from notes payable
132,000
75,000
691,860
Cash paid to related party loans
(80,775
)
(111,443
)
(518,981
)
Cash received from related party loans
111,229
211,607
1,816,103
Net Cash Provided by Financing Activities
187,454
175,164
3,752,057
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(518
)
(2,674
)
-
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
517
2,674
-
CASH AND CASH EQUIVALENTS, END OF PERIOD
$
(1
)
$
-
$
-
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest
$
-
$
-
$
-
Cash paid for income taxes
$
-
$
-
$
-
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Common stock issued for acquisition of sub
$
-
$
-
$
2,275,000
Common stock issued to ESOP
$
-
$
-
$
1,700,000
Conversion of Debentures
$
50,000
$
26,647
$
75,000
Note discount from beneficial conversion feature
$
100,000
75,000
$
100,000
The accompanying notes are an integral part of these condensed consolidated financial statements.
- 5 -
TREE TOP INDUSTRIES, INC.
(A Development Stage Company)
Notes to the Unaudited Condensed Consolidated Financial Statements
September 30, 2012 and 2011
(Unaudited)
NOTE 1 - CONDENSED FINANCIAL STATEMENTS
The accompanying financial statements have been prepared by Tree Top Industries, Inc. (“the Company”) without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at September 30, 2012, and for all periods presented herein, have been made.
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. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 2011 audited financial statements. The results of operations for the period ended September 30, 2012 are not necessarily indicative of the operating results for the full year.
The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries as disclosed in Item 2 below. All significant inter-company balances and transactions have been eliminated.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using generally accepted accounting principles 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 yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.
In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Beneficial Conversion Feature of Debentures and Convertible Notes Payable
In accordance with FASB ASC 470-20, Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios, we recognize the advantageous value of conversion rights attached to convertible debt. Such rights give the debt holder the ability to convert his debt into common stock at a price per share that is less than the trading price to the public on the day the loan is made to us. The beneficial value is calculated as the intrinsic value (the market price of the stock at the commitment date in excess of the conversion rate) of the beneficial conversion feature of the debentures and related accruing interest, and is recorded as a discount to the related debt and an addition to additional paid in capital. The discount is amortized over the remaining outstanding period of related debt using the straight line method.
Recent Accounting Pronouncements
No accounting pronouncements were issued during the third quarter 2012 that would have a material effect on the accounting policies of the Company when adopted.
Investments at Cost Held to Maturity
The Company records restricted, non-marketable securities with less than 20% ownership, at cost. These investments are reviewed periodically for impairment, and if not temporary in nature will be written down to a fair market value.
- 6 -
TREE TOP INDUSTRIES, INC.
(A Development Stage Company)
Notes to the Unaudited Condensed Consolidated Financial Statements
On January 1, 2008, the Company adopted ASC 820, Fair Value Measurements. ASC 820 defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows:
•
Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
•
Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
•
Level 3 inputs to valuation methodology are unobservable and significant to the fair measurement.
The carrying amounts reported in the balance sheets for the cash and cash equivalents, receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The carrying value of notes payable approximates fair value because negotiated terms and conditions are consistent with current market rates as of September 30, 2012 and December 31, 2011.
The following table presents the Company’s Notes Payable within the fair value hierarchy utilized to measure fair value on a recurring basis as of September 30, 2012 and December 31, 2011:
Level 1
Level 2
Level 3
Notes payable -- 2012
-0-
-0-
$
700,694
Notes payable -- 2011
-0-
-0-
$
647,860
The following table presents a Level 3 reconciliation of the beginning and ending balances of the fair value measurements using significant unobservable inputs as of September 30, 2012 and December 31, 2011:
Notes payable
Balance, December 31, 2011
$
647,860
Issuance of convertible notes (net of discount)
70,834
Conversion of convertible Debt
-50,000
Issuance of notes payable
32,000
Balance, September 30, 2012
$
700,694
- 7 -
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Ludicrous, Inc., BioEnergy Applied Technologies Inc., GoHealthMD, Inc., MLN, Inc., Universal Energy and Services Group, Inc. Sky Entertainment, Inc., Eye Care Centers International, Inc., GoHealthMD Nano Pharmaceuticals, Inc. and TTI Strategic Acquisitions and Equity Group, Inc. All subsidiaries of the Company currently have no financial activity. All significant inter-company balances and transactions have been eliminated.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents are maintained with major financial institutions in the U S. Deposits held with these banks at times exceed $250,000 of insurance provided on such deposits. The Company has not experienced any losses in such accounts and believes that it is not exposed to any significant credit risk on cash and cash equivalents. At September 30, 2012 and 2011, no excess existed. There were no cash equivalents at September 30, 2012 and 2011.
Stock Based Compensation
The Company accounts for stock-based compensation in accordance with the provisions of ASC 718. ASC 718 requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on the grant-date fair value of the award. That cost will be recognized over the period during which an employee is required to provide service in exchange for the reward- known as the requisite service period. No compensation cost is recognized for equity instruments for which employees do not render the requisite service. The grant-date fair value of employee share options and similar instruments are estimated using the Black Scholes option-pricing model adjusted for the unique characteristics of those instruments.
Equity instruments issued to non-employees are recorded at their fair values as determined in accordance with ASC 718 and ASC 595, “Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling Goods and Services”, and are periodically revalued as the stock options vest and are recognized as expense over the related service period.
Basic and Diluted Loss per Share
The Company calculates earnings per share in accordance with ASC 260, “Computation of Earnings Per Share.” Basic loss per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings (loss) per share gives effect to dilutive convertible securities, options, warrants and other potential common stock outstanding during the period; only in periods in which such effect is dilutive. For 2012 and 2011, no common equivalent shares were excluded from the calculation. The ESOP shares issued during 2012 and 2011 have also been excluded from the calculation as they were issued but not outstanding.
For the Three Months Ended
September 30,
2012
2011
Loss (numerator)
$
(3,682,956
)
$
(461,870
)
Shares (denominator)
443,376,395
310,287,702
Basic and diluted loss per share
$
(0.01
)
$
(0.00
)
For the Nine Months Ended
September 30,
2012
2011
Loss (numerator)
$
(4,591,710
)
$
(1,215,499
)
Shares (denominator)
346,691,563
285,320,414
Basic and diluted loss per share
$
(0.01
)
$
(0.00
)
- 8 -
NOTE 4 - RELATED PARTY TRANSACTIONS
The balance due to related parties as of September 30, 2012 of $3,737,774 consisted of advances, payables and accrued wages to David Reichman, the Company’s Chief Executive Officer of $3,234,017 and accrued wages to Kathy Griffin, the Company’s President of $503,757. As of December 31, 2011, the related party balance was $3,186,130, consisting of a balance due David Reichman of $2,817,373, and a balance due Kathy Griffin of $368,757. During the nine month period ended September 30, 2012, Mr. Reichman advanced the company $111,229 and was repaid $80,775. The amounts due to the officers are due on demand, have no formal agreements, and accrue interest equal to that being charged individually on the debt. Interest accrued during the nine months ended June 30, 2012 was $11,190, for credit cards used on the Company’s behalf.
NOTE 5 - NOTES PAYABLE
(a)
NOTES PAYABLE
Notes payable consist of various notes bearing interest at rates from 5% to 9%, which are unsecured, with original due dates between August 2000 and December 2009. Five notes with maturity dates that have passed are currently in default with the remaining note due on demand and thus all notes are classified as current liabilities. At September 30, 2012 and December 31, 2011, notes payable amounted to $629, 860 and $597,860, respectively. Below is a table summarizing the notes owed by the Company.
Interest Expense
Principal
Interest Rate
9/30/2012
9/30/2011
Maturity
$
292,860
9.00
%
$
19,767
$
19,767
6/27/2010
192,000
0%
10,080
10,080
On Demand(1)
18,000
6.00
%
810
810
9/1/2002
30,000
6.00
%
1,350
1,350
9/12/2002
25,000
5.00
%
939
939
8/31/2000
40,000
7.00
%
2,100
2,100
7/10/2002
12,000
6.00
%
67
-
4/28/2013
20,000
6.00
%
46
-
5/17/2013
$
629,860
$
35,159
$
35,046
On October 28, 2012, and September 17, 2012, the Company received proceeds from notes payable from the same entity. The note amounts were $12,000 and $20,000 respectively, and both bear interest at 6%. The notes mature on 4/28/13 and 5/17/13, respectively, and are unsecured.
(1)
Imputed interest due to 0% interest rate
(b)
CONVERTIBLE NOTES PAYABLE:
During the nine months ended September 30, 2012, the Company converted three convertible notes into common stock of the Company. The terms of the convertible note agreements required a conversion rate at double the market value of the shares at the conversion date. Accordingly, the Company issued 2,689,874 shares for $50,000 in convertible debt and $1,584 in accrued interest. No gain or loss was recognize from the conversion.
During the nine months ended September 30, 2012, the Company engaged in a note agreement with a Company for $100,000. The note is convertible into common shares of the Company at a rate of $.005, to include all fees and interest. The Company has recorded a $100,000 discount on the Convertible Note due to this beneficial conversion feature. The discount will be accreted over the term of the note which is 8 months. The note was originated on April 12, 2012. During the second and third quarters, the Company amortized the note discount in the amount of $70,834, thus the net note balance at September 30, 2012 is $70,834.
The beneficial conversion feature was calculated by computing the number of shares the note would convert into upon conversion times the market price of the stock on the date of the note issuance, less the note amount. The beneficial conversion feature amount is the difference between the note amount and the value of the shares to be issued upon conversion. The beneficial conversion feature was valued at $350,000, however the note discount cannot exceed the face amount of the note, therefore the discount was limited to and recorded at $100,000.
- 9 -
TREE TOP INDUSTRIES, INC.
(A Development Stage Company)
Notes to the Unaudited Condensed Consolidated Financial Statements
September 30, 2012 and 2011
(Unaudited)
NOTE 6 - STOCKHOLDERS' DEFICIT
ISSUANCES OF COMMON STOCK
On February 6, 2012, the Board of Directors authorized the issuance of 1,500,000 shares of common stock to a consultant for services performed. The shares were valued at the market price on the day of issuance, in the amount of $60,000.
On February 14, 2012, the Board of Directors authorized the issuance of 2,689,874 shares to convert three convertible notes totaling $50,000 in principal and $1,584 in accrued interest. The number of shares issued were within the terms of the convertible note agreement therefore no gain or loss was recorded on the conversion.
Also on February 14, 2012, the Board of Directors authorized the issuance of 1,282,051 shares for cash of $25,000, pursuant to the Adesso agreement described in Item 2.
On March 2, 2012, the Board of Directors authorized the issuance of 750,000 shares of common stock to a consultant for services performed. The shares were valued at the market price on the day of issuance, in the amount of $30,000.
On March 28, 2012, the Board of Directors authorized the issuance of 1,500,000 shares of common stock to a consultant for services performed. The shares were valued at the market price on the day of issuance, in the amount of $60,000.
During the quarter ended March 31, 2012, the Company recorded the vesting of deferred stock compensation as earned. The company recorded $151,859 in professional fees from these deferrals.
On June 6, 2012, the Board of Directors authorized the issuance of 2,500,000 shares of common stock to an investor relation firm for services performed. The Company recorded $87,500 in professional fees for these services. The shares were valued at the market price on the day of issuance.
During the quarter ended June 30, 2012, the Company recorded the vesting of deferred stock compensation as earned, in the amount of $8,700. The shares earned were valued at the closing market price on June 30, 2012.
During the nine months ended September 30, 2012, the Company recorded imputed interest on a non-interest bearing note in the amount of $10,080, with an increase in paid in capital.
On August 8, 2012, the Board of Directors authorized the issuance of 161,500,000 shares of common stock to various individuals and entities for professional services, rent, charitable contributions and financing fees. The Company recorded $2,710,000 in professional fees, $100,000 for rent expense, $20,000 for charitable contributions and $400,000 for financing fees. The shares were valued at the market price on the day of authorization.
On August 13, 2012, the Board of Directors authorized the issuance of 10,000,000 shares of common stock for services rendered by several individuals. The Company recorded $145,000 in professional fees related to this issuance. The shares were valued at the market price on the day of authorization.
On August 14, 2012, the Board of Directors authorized the issuance of 3,968,254 shares of common stock for services rendered by AGS Capital Partners. The Company recorded $39,286 for the professional services. The shares were valued at the market price on the day of authorization.
During the quarter ended September 30, 2012, the Company recorded the vesting of deferred stock compensation as earned, in the amount of $4,800. The shares earned were valued at the closing market price on September 30, 2012.
During the three and nine months ended September 30, 2012, the Company did not issue any stock options or warrants.
- 10 -
NOTE 7 - INVESTMENTS AT COST
In April 2012, the Company made an investment in an LLC organized to purchase pre-IPO shares of Facebook (FB). The buy-in price was $100,000, and required a 5% initiation fee. The membership interest was then convertible into shares of Facebook six months after the IPO at a rate of 1 to 1. The Company has recorded this investment as an investment at cost due to the restricted nature, and the fact that the shares must convert to FB shares before they can be classified as marketable securities and be recorded at Fair Market Value. The 5% fee was subtracted from the original cost and the investment is recorded on the books at $95,256.
NOTE 8 - LEGAL ACTIONS
During April 2012, the Company filed suit in Los Angeles Superior Court against GeoGreen Biofuels, Inc. and related parties, relating to GeoGreen's failure to repay $192,000 advanced pursuant to a Bridge Loan Term Sheet. Although litigation is inherently unpredictable, TTI is confident in its position, and intends to pursue the action aggressively. GeoGreen has filed a cross-complaint against the Company and its two officers, the Chief Executive Officer and the President.
NOTE 9 – SUBSEQUENT EVENTS
In accordance with ASC 855-10 Company management reviewed all material events through the date of this report and there are no material subsequent events to report.
- 11 -
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Cautionary Statements
This Form 10-Q may contain "forward-looking statements," as that term is used in federal securities laws, about Tree Top Industries, Inc.'s financial condition, results of operations and business. These statements include, among others:
o
statements concerning the potential benefits that Tree Top Industries, Inc. ("TTI" , “Tree Top”, “we”, “our”, “us”, the “Company”, “management”) may experience from its business activities and certain transactions it contemplates or has completed; and
o
statements of TTI's expectations, beliefs, future plans and strategies, anticipated developments and other matters that are not historical facts. These statements may be made expressly in this Form 10-Q. You can find many of these statements by looking for words such as "believes," "expects," "anticipates," "estimates," "opines," or similar expressions used in this Form 10-Q. These forward-looking statements are subject to numerous assumptions, risks and uncertainties that may cause TTI's actual results to be materially different from any future results expressed or implied by TTI in those statements. The most important facts that could prevent TTI from achieving its stated goals include, but are not limited to, the following:
(a)
volatility or decline of TTI's stock price;
(b)
potential fluctuation of quarterly results;
(c)
failure of TTI to earn revenues or profits;
(d)
inadequate capital to continue or expand its business, and inability to raise additional capital or financing to implement its business plans;
(e)
failure to commercialize TTI's technology or to make sales;
(f)
decline in demand for TTI's products and services;
(g)
rapid adverse changes in markets;
- 12 -
(h)
litigation with or legal claims and allegations by outside parties against TTI, including but not limited to challenges to TTI's intellectual property rights;
(i)
insufficient revenues to cover operating costs;
(j)
failure of the BAT technology to function properly
There is no assurance that TTI will be profitable, TTI may not be able to successfully develop, manage or market its products and services, TTI may not be able to attract or retain qualified executives and technology personnel, TTI may not be able to obtain customers for its products or services, TTI's products and services may become obsolete, government regulation may hinder TTI's business, additional dilution in outstanding stock ownership may be incurred due to the issuance of more shares, warrants and stock options, or the exercise of outstanding warrants and stock options, and other risks inherent in TTI's businesses.
Because the statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by the forward-looking statements. TTI cautions you not to place undue reliance on the statements, which speak only as of the date of this Form 10-Q. The cautionary statements contained or referred to in this section should be considered in connection with any subsequent written or oral forward-looking statements that TTI or persons acting on its behalf may issue. TTI does not undertake any obligation to review or confirm analysts' expectations or estimates or to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date of this Form 10-Q, or to reflect the occurrence of unanticipated events.
Current Overview and History
Tree Top Industries, Inc. (TTI”, Tree Top”, we”. our”, us”, the Company”, management”) is a Nevada corporation which has been operating under several different names since 1980.
Western Exploration, Inc., a Nevada corporation, was formed on July 24, 1980. In 1990, Western Exploration, Inc. changed its name to Nugget Exploration, Inc. On November 10, 1999, a wholly owned subsidiary of Nugget Exploration, Inc., Nugget Holdings Corporation merged with and into GoHealthMD, Inc., a Delaware corporation. Shortly thereafter, Nugget Exploration, Inc. changed its name to GoHealthMD, Inc. a Nevada corporation.
On August 18, 2004, GoHealthMD, Inc., the Nevada Corporation, changed its name to Tree Top Industries, Inc. GoHealthMD, Inc. continues to exist as a Delaware corporation and wholly owned subsidiary of Tree Top Industries, Inc. MLN, Inc., BioEnergy Applied Technologies, Inc. (BAT”), Universal Energy and Services Group, Inc. Sky Entertainment, Inc., Eye Care Centers International, Inc., GoHealthMD Nano Pharmaceuticals, Inc. and TTI Strategic Acquisitions and Equity Group, Inc. are also wholly owned subsidiaries of Tree Top Industries, Inc. Several of these subsidiaries have been formed by Tree Top in the anticipation of technologies, products or services being acquired. Not all subsidiaries are currently active.
Effective August 12, 2009, Tree Top completed a stock exchange with BAT, BioEnergy Systems Management Inc., Wimase Limited and Energetic Systems Inc., LLC. whereby Tree Top acquired 100% of the issued and outstanding stock of BAT. BAT is the originator of various proprietary, clean-tech, environmentally friendly technologies and intellectual properties in the areas of hazardous waste destruction, energetic materials, chemical recycling processes, and coal gasification. BAT also maintains unique electrolytic technology that simplifies the production of bio fuels, specifically biodiesel and its byproducts. Tree Top acquired all of the issued and outstanding shares of BAT. Tree Top issued 3,500,000 shares of its common stock, par value $.001 per share, to the stockholders of BAT in exchange for the transfer of all of the issued and outstanding shares of common stock of BAT by such stockholders.
BAT was acquired to exploit its key intellectual properties, which have been applied to the construction of systems and equipment designed to facilitate the destruction of pharmaceutical, medical, biological, chemical, red bag and other hazardous wastes, with clean reusable energy produced as a byproduct. The system utilizes cold plasma technology to initiate a chemical reaction inside the unit. The chemical reaction causes enough heat to facilitate the waste destruction, resulting in a drastically reduced carbon footprint, as no incineration is needed. The energy needed to start the process is the equivalent of only five light bulbs, resulting in a significantly lower cost of operation. The unit is relatively compact, can be retrofitted into existing structures or made mobile for smaller venues, and can be scaled up to meet the hazardous waste destruction needs of almost any user. Tree Top is actively engaged in developing a business platform to showcase the BAT technologies, and will spend the majority of its resources in support of this opportunity.
- 13 -
The Company also owns NetThruster, Inc., a Nevada corporation (NetThruster”), which was formally known as Ludicrous, Inc. (Ludicrous”). On January 28, 2011, the Board of Directors of Tree Top adopted resolutions approving the disposition by the Company of all of the common stock of its wholly-owned subsidiary, NetThruster, Inc., a Delaware corporation (NetThruster”), in a spin-off to Tree Top’s shareholders on a pro rata basis (the Spin-Off”). Thereafter, NetThruster would be owned by Tree Top’s shareholders. David Reichman, the CEO of Tree Top was named Chairman of the Board, CEO and CFO of NetThruster. Kathy M. Griffin was named a Director and corporate secretary. The Board of Directors of NetThruster is comprised of David Reichman and Kathy Griffin. Pursuant to a subsequent Board of Directors meeting, it was approved that the Company will indefinitely postpone the spin-out of Net Thruster.
On April 18, 2011, Tree Top signed a non-binding term sheet agreement with Sky Corporation, doo, a Belgrade, Serbia based event production and management company. Sky Corporation is a distributor of professional musical equipment across the Adriatic region, and is the largest retailer of musical instruments and equipment in Serbia. Sky Corporation is a distributor for over 80 brands in the fields of music and light equipment. Sky Solutions doo, a division of Sky Corporation, is one of the largest production companies in Eastern Europe. Adriatic Region Distribution doo, a division of Sky Corporation, is a regional distribution company for musical and sound/light equipment. Sky Music, doo is another division of Sky Corporation. Sky Music, doo’s main activity is selling professional audio and light equipment, as well as installing it in discothèques, clubs, public institutions, venues, and concert halls. Sky Corporation’s growth plan calls for double digit growth over the next three years and a planned expansion into the rest of Eastern Europe and eventually to Western Europe. The term agreement expired on July 18, 2011, but Tree Top and Sky Corporation signed an extension to the Letter of Intent on November 15, 2011. The extension has expired.
On May 25, 2011, Tree Top signed a licensing agreement with WorldWithoutBlindness (WWB”) for the right to market and sell their patented eye screening equipment on a global basis outside the United States, for a period of two years. Eye Care Centers International, Inc . was formed to support the further growth and development of (WWB”), an organization whose primary mission is to bring patented eye screening equipment to the developing world. The WWB technology uses objective parameters instead of traditional subjective eye chart examinations, to screen children as young as six months old. The screening can accurately indicate predisposition for glaucoma and other eye diseases which can lead to blindness, as well as a host of other possible diseases, completely unrelated to eyesight. Tree Top’s management, upon approval by the board of directors, made a trip to Canar, Ecuador, among other cities, to observe how how the test markets would be set up.
On October 12, 2011, Tree Top signed a binding term sheet agreement with Adesso Biosciences, Ltd. to acquire 93% of the outstanding stock of Adesso Diagnostics, LLC and 47.5% of the outstanding stock of Adeda Therapeutics, Ltd., both subsidiaries of Adesso Biosciences Ltd. Adesso Diagnostics is the holder of an exclusive license with Columbia University for two patents in the fields of molecular science and nanoscience. Adeda Therapeutics is involved in the development of a novel sinus medication system. Tree Top and Adesso Biosciences are presently engaged in the mutual due diligence phase of the acquisition..
On August 15, 2012, Tree Top Industries, (“Tree Top”) entered into a reserve equity financing agreement (the “Financing Agreement”) with AGS Capital Group, LLC, (“AGS”). Pursuant to the Financing Agreement, Tree Top has the right, but not the obligation, to issue $10,000,000 of Tree Top’s common stock to AGS over the course of 3 years. Tree Top has full control and discretion over the timing and amount of any shares that they sell to AGS. For each advance, Tree Top may issue an amount of stock equal to $250,000. Such advance will not exceed more than 200% of the average daily trading volume for the previous 15 trading days. The purchase price of the shares shall be set at ninety percent (90%) of the lowest of the best closing bid prices of the stock during the fifteen consecutive weekday trading days immediately after the date on which Tree Top provides an advance notice. Tree Top, at its option, may select a safety net price for any specified advance, below which Tree Top will not sell shares to AGS under that advance in which case the maximum volume of shares advanced will be reduced pro-rata for any days the stock price trades below such safety net price.
Also on August 15, 2012, Tree Top entered into a registration rights agreement with AGS (the “RRA,” and along with the Financing Agreement, the “Agreements”). According to the RRA, Tree Top must file a registration statement on Form S-1, registering the shares of common stock which may be issued to AGS pursuant to the Financing Agreement within thirty (30) days of the date of the RRA.
Prior to the date of the Agreements, AGS had no interaction, other than the negotiation of the Agreements, with Tree Top.
- 14 -
Critical Accounting Policies
Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We monitor our estimates on an on-going basis for changes in facts and circumstances, and material changes in these estimates could occur in the future. Changes in estimates are recorded in the period in which they become known. We base our estimates on historical experience and other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from our estimates if past experience or other assumptions do not turn out to be substantially accurate.
Certain of our accounting policies are particularly important to the portrayal and understanding of our financial position and results of operations and require us to apply significant judgment in their application. As a result, these policies are subject to an inherent degree of uncertainty. In applying these policies, we use our judgment in making certain assumption and estimates. Our critical accounting policies are described in our Annual Report on Form 10-K for the year ended December 31, 2011. There have been no material changes to our critical accounting policies as of September 30, 2012 and for the nine months then ended.
Results of Operations for the Three Months Ended September 30, 2012 Compared to Three Months Ended September 30, 2011
We had no revenues in the three months ended September 30, 2012 and 2011. Our operating expenses increased from $395,676 to $3,229,371 during these periods. The increase is primarily due to the increase in compensation and professional fees recorded from the market value of shares issued to consultants to the Company. Our net loss was $(3,682,956) in the three months ended September 30, 2012 as compared to a net loss of $(461,870) in the same period of 2011. The decrease in interest expense of $12,609 for the three months ended September 30, 2012 as compared to September 30, 2011, was due to the decreased amount of accretion of the note discounts created by beneficial conversion features on convertible debt issued in March of 2011 versus April 2012.
Results of Operations for the Nine Months Ended September 30, 2012 Compared to Nine Months Ended September 30, 2011
We had no revenues in the nine months ended September 30, 2012 and 2011. Our operating expenses increased from $1,057,627 to $4,074,371 during these periods. The increase is primarily due to the increase in compensation and professional fees recorded from the market value of shares issued to consultants to the Company. Our net loss was $(4,591,710) in the nine months ended September 30, 2012 as compared to a net loss of $(1,215,499) in the same period of 2011. The decrease in interest expense of $40,533 for the nine months ended September 30, 2012 as compared to September 30, 2011, was due to the decrease in accretion of the note discounts created by beneficial conversion features on convertible debt issued in March of 2011 versus April 2012.
- 15 -
Liquidity and Capital Resources
The Company's cash position was $0 at September 30, 2012 compared to $517 at December 31, 2011. As of September 30, 2012, the Company had current assets of $0 and current liabilities of $5,303,089 compared to $517 and $4,645,022 respectively as of December 31, 2011. This resulted in a working capital deficit of $5,303,089 at September 30, 2012 and $4,644,505 at December 31, 2011.
Net cash used in operating activities amounted to $92,715 for the nine month period ended September 30, 2012, as compared to $177,838 of net cash used in operations for the nine month period ended September 30, 2011. Net cash used in operating activities decreased by $85,123.
Net cash used in investing activities amounted to $95,256 and $0 for the nine months ended September 30, 2012 and 2011, respectively. The Company purchased a restricted membership interest in an LLC for $95,256 after fees. The membership interest will convert to free trading common stock of Facebook after six months.
Net cash provided by financing activities amounted to $187,454 and $175,164 for the nine months ended September 30, 2012 and 2011, respectively. The increase from 2011 to 2012 resulted primarily from the increase in cash received from notes payable and common stock, with a decrease in related party loans.
The Company does not have sufficient capital to meet its current cash needs, which include the costs of compliance with the continuing reporting requirements of the Securities Exchange Act of 1934, as amended. The Company intends to seek additional capital and long-term debt financing to attempt to overcome its working capital deficit. The Company will need between $150,000 and $200,000 annually to maintain its reporting obligations. Financing options may be available to the Company either via a private placement or through the public sale of stock. The Company will seek to raise sufficient capital to market the BAT technology and to sustain monthly operations. There is no assurance, however, that the available funds will be available or adequate. Its need for additional financing is likely to persist.
Going Concern Qualification
The Company has incurred significant losses from operations, and such losses are expected to continue. The Company's auditors have included a "Going Concern Qualification" in their report for the year ended December 31, 2011. In addition, the Company has limited working capital. The foregoing raises substantial doubt about the Company's ability to continue as a going concern. Management's plans include seeking additional capital and/or debt financing. There is no guarantee that additional capital and/or debt financing will be available when and to the extent required, or that if available, it will be on terms acceptable to the Company. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. The "Going Concern Qualification" may make it substantially more difficult to raise capital.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Not Applicable.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information we are required to disclose is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the Commission. David Reichman, our Chief Executive Officer and our Principal Accounting Officer, is responsible for establishing and maintaining our disclosure controls and procedures.
Under the supervision and with the participation of our management, including the Chief Executive Officer and Principal Accounting Officer, we have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Principal Accounting Officer has concluded that, as of September 30, 2012 these disclosure controls and procedures were ineffective to ensure that all information required to be disclosed by us in the reports that we file or submit under the Exchange Act is: (i) recorded, processed, summarized and reported, within the time periods specified in the Commission’s rule and forms; and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Principal Accounting Officer, as appropriate to allow timely decisions regarding required disclosure. The Company’s controls are not effective due to a lack of the segregation of duties. The Company lacks the appropriate personnel to handle all the varying recording and reporting tasks on a timely basis. The Company plans to address these material weaknesses as resources become available by hiring additional professional staff, such as a Chief Financial Officer, as funding becomes available, outsourcing certain aspects of the recording and reporting functions, and separating responsibilities. The Company believes that it would require approximately $250,000 per year in available funds in order to retain the qualified personnel required for effective disclosure controls and procedures.
- 16 -
The term “internal control over financial reporting” is defined as a process designed by, or under the supervision of, the registrant’s principal executive and principal financial officers, or persons performing similar functions, and effected by the registrant’s board of directors, management and other personnel, 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 and includes those policies and procedures that:
¨
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the registrant;
¨
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the registrant are being made only in accordance with authorizations of management and directors of the registrant; and
¨
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the registrant’s assets that could have a material effect on the financial statements.
Changes in Internal Controls over Financial Reporting
There were no additional changes in our internal control over financial reporting that occurred during the fiscal quarter ended September 30, 2012 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations over Internal Controls
TTI’s management does not expect that its disclosure controls or its internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within TTI have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.
Our disclosure controls and procedures are designed to provide reasonable assurance of that our reports will be accurate. Our Chief Executive Officer and Principal Accounting Officer concludes that our disclosure controls and procedures were ineffective at that reasonable assurance level, as of the end of the period covered by this Form 10-Q. Our future reports shall also indicate that our disclosure controls and procedures are designed for this reason and shall indicate the related conclusion by the Chief Executive Officer and Principal Accounting Officer as to their effectiveness.
PART II OTHER INFORMATION
Item 1. Legal Proceedings
During April 2012, the Company filed suit in Los Angeles Superior Court against GeoGreen Biofuels, Inc. and related parties, relating to GeoGreen's failure to repay $192,000 advanced pursuant to a Bridge Loan Term Sheet. Although litigation is inherently unpredictable, TTI is confident in its position, and intends to pursue the action aggressively. GeoGreen has filed a cross-complaint against the Company and its two officers, the Chief Executive Officer and the President.
- 17 -
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The following shares of common stock were issued during the nine months ended September 30, 2012 without registration:
On February 14, 2012, the Board of Directors authorized the issuance of 1,282,051 shares for cash of $25,000, pursuant to the Adesso agreement described in Item 2.
Item 3. Defaults Upon Senior Securities
.
The Company has the following note payable obligations in default:
Note payable to RA Beeso due June 27, 2010, with interest accrued at 9% per annum, unsecured , unpaid to date and in default.
292,860
Note payable to Facts and Comparisons due September 1, 2002, with interest accrued at 6% per annum, unsecured, in settlement of a trade payable; unpaid to date and in default
18,000
Note payable to Luckysurf.com due September 12, 2002 with interest accrued at 6% per annum, unsecured, in settlement of a trade payable; unpaid to date and in default
30,000
Note payable to Michael Marks (a shareholder) due August 31, 2000 with interest accrued at 5% per annum, unsecured; unpaid to date and in default
25,000
Note payable to Steven Goldberg (a former consultant) due July 10, 2002, unsecured with interest of 7% accrued if unpaid at due date, in settlement of liability; unpaid to date and in default
40,000
Totals
$
405,860
None of these notes have been paid, and management has indicated that no demand for payment for any of these notes has been received by the Company. However, the Company received a notice of motion from Luckysurf.com dated October 22, 2002, seeking entry of a judgment for $30,000. No further information or action has been received by the Company relating to this note.
Item 5. Other Information
Not Applicable
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Item 6. Exhibits
(a)
Exhibits
3.1
Articles of incorporation of Tree Top Industries, as amended (1)
3.2
By-Laws (2)
10.1
Employment Agreement, dated October 1,2007, by and between Tree Top Industries, Inc. and David Reichman (3)
10.2
Employment Agreement, dated April 1, 2009, by and between Tree Top Industries Inc. and Kathy Griffin (4)
10.3
Bridge Loan Term Sheet, dated January 11, 2010, by and between Tree Top Industries, Inc. and GeoGreen Biofuels, Inc.(5)
10.4
Business and Financial Consulting Agreement, dated February 22, 2010 by and between Tree Top Industries, Inc. and Asia Pacific Capital Corporation(6)
10.5
Distribution Agreement, by and between Tree Top Industries, Inc. and NetThruster, Inc., dated February 9, 2011(7)
10.6
Term Agreement by and between Tree Top Industries, Inc. and Sky Corporation, doo, dated April 18, 2011 (8)
10.7
Term Agreement by and between Tree Top Industries, Inc. and Adesso Biosciences, Ltd, dated October 12, 2011(9)
10.8
Registration Rights Agreement between Tree Top Industries, Inc. and AGS Capital Group, LLC, dated August 15, 2012 (10)
10.9
Reserve Equity Financing Agreement between Tree Top Industries, Inc. and AGS Capital Group, LLC, dated August 15, 2012 (11)
21.1
Subsidiaries of the registrant.
-1
Filed November 13, 2009, as an exhibit to a Form 10-Q and incorporated herein by reference.
-2
Filed July 19, 2010, as an exhibit to a Form 10-K/A and incorporated herein by reference.
-3
Filed November 7, 2007, as an exhibit to a Form 8-K and incorporated herein by reference.
-4
Filed March 25, 2010, as an exhibit to a Form 8-K and incorporated herein by reference.
-5
Filed January 19, 2010, as an exhibit to a Form 8-K and incorporated herein by reference.
-6
Filed July 19, 2010, as an exhibit to a Form 10-Q/A and incorporated herein by reference.
-7
Filed February 9, 2011, as an exhibit to a Form 8-K and incorporated herein by reference.
-8
Filed April 19, 2011, as an exhibit to a Form 8 - K and incorporated herein by reference.
-9
Filed October 18, 2011 as an exhibit to a Form 8 - K and incorporated herein by reference.
-10
Filed August 21, 2012 as an exhibit to a Form 8 – K and incorporated herein by reference.
-11
Filed August 21, 2012 as an exhibit to a Form 8 –K and incorporated herein by reference.
- 19 -
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: November 14, 2012
TREE TOP INDUSTRIES, INC.
By:
/s/ David Reichman
David Reichman, Chairman of the Board, Chief
Executive Officer, Chief Financial Officer and
Principal Accounting Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By:
/s/ David Reichman
Dated: November 14, 2012
David Reichman, Chairman of the Board, Chief
Executive Officer, Chief Financial Officer
and Principal Accounting Officer
By:
/s/ Kathy M. Griffin
Dated:
November 14, 2012
Kathy M. Griffin, Director, President
By:
/s/ Frank Benintendo
Dated: November 14, 2012
Frank Benintendo, Director & Secretary
By:
/s/ Donald Gilbert, Phd.
Dated: November 14, 2012
Donald Gilbert, Director & Treasurer
By:
/s/ Robert Hantman
Dated: November 14, 2012
Robert Hantman, Director
- 20 -
EX-21.1
2
ex_21-1.htm
Unassociated Document
EXHIBIT 21.1
Subsidiaries of the Registrant:
1
Universal Services and Energy Group, Inc.
Nevada Corporation
511 Sixth Avenue, Suite 800
New York, NY 10011
2
NetThruster, Inc.
Nevada Corporation
511 Sixth Avenue, Suite 800
New York, NY 10011
3
MLN, Inc.
Delaware Corporation
511 Sixth Avenue, Suite 800
New York, NY 10011
4
Gohealth.MD, Inc.
Delaware Corporation
511 Sixth Avenue, Suite 800
New York, NY 10011
5
BioEnergy Applied Technologies, Inc.
Nevada Corporation
511 Sixth Avenue, Suite 800
New York, NY 10011
6
Eye Care Centers International, Inc.
Delaware Corporation
511 Sixth Avenue, Suite 800
New York, NY 10011
7
Sky Entertainment, Inc.
Delaware Corporation
511 Sixth Avenue, Suite 800
New York, NY 10011
8
GoHealthMD, Inc. Nano Pharmaceuticals, Inc.
Delaware Corporation
511 Sixth Avenue, Suite 800
New York, NY 10011
9
TTI Strategic Acquisitions & Equity Group, Inc.
Delaware Corporation
511 Sixth Avenue, Suite 800
New York, NY 10011
EX-31.1
3
ex_31-1.htm
Unassociated Document
EXHIBIT 31.1
SECTION 302 CERTIFICATION
EXHIBIT 31.1
CERTIFICATION
I, David Reichman, certify that:
1.
I have reviewed this report on Form 10-Q of Tree Top Industries, Inc.;
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 small business issuer’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.
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 (of 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 small business issuer’s internal control over financial reporting.
Date: November 14, 2012
/s/David Reichman
David Reichman, Chief Executive Officer
(Principal Executive Officer)
EX-31.2
4
ex_31-2.htm
Unassociated Document
EXHIBIT 31.2
SECTION 302 CERTIFICATION
EXHIBIT 31.2
CERTIFICATION
I, David Reichman, certify that:
1.
I have reviewed this report on Form 10-Q of Tree Top Industries, Inc.;
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 small business issuer’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.
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 (of 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 small business issuer’s internal control over financial reporting.
Date: November 14, 2012
/s/David Reichman
David Reichman, Chief Financial Officer
(Principal Financial/Accounting Officer)
EX-32.1
5
ex_32-1.htm
Unassociated Document
EXHIBIT 32.1
SECTION 906 CERTIFICATION
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Tree Top Industries, Inc. (the “Company”) on Form 10-Q for the period ending September 30, 2012 (the “Report”) I, David Reichman, Chief Executive Officer of the Company, certify, pursuant to 18 USC Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:
(1)
The Report fully complies with the requirements of Section 13(a) or 15(d)of the Securities Exchange Act of 1934; and
(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/David Reichman
Date: August 14, 2012
David Reichman, Chief Executive Officer and
This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
EX-32.2
6
ex_32-2.htm
Unassociated Document
EXHIBIT 32.2
SECTION 906 CERTIFICATION
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Tree Top Industries, Inc. (the “Company”) on Form 10-Q for the period ending September 30, 2012 (the “Report”) I, David Reichman, Chief Financial Officer (Principal Financial/Accounting Officer) of the Company, certify, pursuant to 18 USC Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:
(1)
The Report fully complies with the requirements of Section 13(a) or 15(d)of the Securities Exchange Act of 1934; and
(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/David Reichman
Date: November 14, 2012
David Reichman, Chief Financial Officer
This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
Source: TREE TOP INDUSTRIES, INC., 10-Q, November 12, 2010
EX-101.INS
7
ttii-20120930.xml
XBRL INSTANCE FILE
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<p style="font: 10pt Times New Roman Bold; margin: 0; text-align: justify">NOTE 1 - CONDENSED FINANCIAL STATEMENTS</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying financial statements have
been prepared by Tree Top Industries, Inc. (“the Company”) without audit.  In the opinion of management,
all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of
operations, and cash flows at September 30, 2012, and for all periods presented herein, have been made.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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.  It is suggested that these condensed financial statements be read in conjunction
with the financial statements and notes thereto included in the Company's December 31, 2011 audited financial statements.  The
results of operations for the period ended September 30, 2012 are not necessarily indicative of the operating results for the full
year.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying consolidated financial statements
include the accounts of the Company and its wholly-owned subsidiaries as disclosed in Item 2 below. All significant inter-company
balances and transactions have been eliminated.</p>
<p style="margin: 0pt"></p><p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman Bold; margin: 0; text-align: justify">NOTE 2 - GOING CONCERN</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company's financial statements are prepared
using generally accepted accounting principles 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 yet established
an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability
of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until
it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In order to continue as a going concern, the
Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company
by obtaining capital from management and significant shareholders sufficient to meet its operating expenses and seeking equity
and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any
of its plans.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The ability of the Company to continue as a
going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually
secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments
that might be necessary if the Company is unable to continue as a going concern.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="margin: 0pt"></p><p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman Bold; margin: 0; text-align: justify">NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman Bold; margin: 0; text-align: justify">Use of Estimates</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The preparation of financial statements in
conformity with accounting principles generally accepted in the United States of America requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported
amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.</p>
<p style="font: 10pt Times New Roman Bold; margin: 12pt 0 0; text-align: justify">Beneficial Conversion Feature of Debentures and Convertible Notes
Payable</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">In accordance with FASB ASC 470-20, <font style="font-family: Times New Roman Italic">Accounting
for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios</font>, we recognize
the advantageous value of conversion rights attached to convertible debt. Such rights give the debt holder the ability to convert
his debt into common stock at a price per share that is less than the trading price to the public on the day the loan is made to
us. The beneficial value is calculated as the intrinsic value (the market price of the stock at the commitment date in excess of
the conversion rate) of the beneficial conversion feature of the debentures and related accruing interest, and is recorded as a
discount to the related debt and an addition to additional paid in capital. The discount is amortized over the remaining outstanding
period of related debt using the straight line method.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman Bold; margin: 0; text-align: justify">Recent Accounting Pronouncements</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">No accounting pronouncements were issued during
the third quarter 2012 that would have a material effect on the accounting policies of the Company when adopted.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman Bold; margin: 0; text-align: justify">Investments at Cost Held to Maturity</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company records restricted, non-marketable
securities with less than 20% ownership, at cost. These investments are reviewed periodically for impairment, and if not temporary
in nature will be written down to a fair market value.</p>
<p style="font: 10pt Times New Roman Bold; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman Bold; margin: 0; text-align: justify">Fair Value of Financial Instruments</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 1, 2008, the Company adopted ASC
820, <font style="font-family: Times New Roman Italic">Fair Value Measurements.</font> ASC 820 defines fair value, establishes
a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value
measures. The three levels are defined as follows:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; background-color: white; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="width: 16%; border: black 1pt solid; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="width: 3%; border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 1pt solid; font: 10pt Lucida Grande">•</td>
<td style="width: 81%; border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: justify">Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.</td></tr>
</table>
<p style="font: 8pt Lucida Grande; margin: 0"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; background-color: white; border-collapse: collapse; font-size: 10pt">
<tr style="vertical-align: top">
<td style="width: 16%; border: black 1pt solid; font-family: Times New Roman, Times, Serif"> </td>
<td style="width: 3%; border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 1pt solid; font-family: Lucida Grande">•</td>
<td style="width: 81%; border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: justify">Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.</td></tr>
<tr style="vertical-align: top">
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; font-family: Times New Roman, Times, Serif"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; font-family: Lucida Grande">•</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: justify">Level 3 inputs to valuation methodology are unobservable and significant to the fair measurement.</td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0 0 0 5.4pt"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The carrying amounts reported in the balance sheets for the cash
and cash equivalents, receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of
fair value because of the short period of time between the origination of such instruments and their expected realization and their
current market rate of interest. The carrying value of notes payable approximates fair value because negotiated terms and conditions
are consistent with current market rates as of September 30, 2012 and December 31, 2011.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.55in"><font style="font: 10pt Times New Roman, Times, Serif">The
following table presents the Company’s Notes Payable within the fair value hierarchy utilized to measure fair value on a
recurring basis as of September 30, 2012 and December 31, 2011:</font></p>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 12pt Times New Roman, Times, Serif; background-color: white; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="border: #BFBFBF 1pt solid; padding-bottom: 1.1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-bottom: 1.1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">Level
1</font></td>
<td style="border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-bottom: 1.1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-bottom: 1.1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">Level
2</font></td>
<td style="border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-bottom: 1.1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-bottom: 1.1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">Level
3</font></td>
<td colspan="4" style="border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-bottom: 1.1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: top; background-color: #C0FFC0">
<td style="width: 30%; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; border-left: #BFBFBF 1pt solid; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Notes
payable -- 2012</font></td>
<td style="width: 2%; border-bottom: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 10%; border-bottom: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 8%; border-bottom: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td>
<td style="width: 2%; border-bottom: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 10%; border-bottom: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 4%; border-bottom: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 8%; border-bottom: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td>
<td style="width: 10%; border-bottom: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 2%; border-bottom: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 4%; border-bottom: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 8%; border-bottom: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">700,694</font></td>
<td style="width: 2%; border-bottom: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: top">
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; border-left: #BFBFBF 1pt solid; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Notes
payable -- 2011</font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">647,860</font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
</table>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0 0 0 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0 0 0 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.55in"><font style="font: 10pt Times New Roman, Times, Serif">The
following table presents a Level 3 reconciliation of the beginning and ending balances of the fair value measurements using significant
unobservable inputs as of September 30, 2012 and December 31, 2011:</font></p>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 12pt Times New Roman, Times, Serif; background-color: white; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="border: #BFBFBF 1pt solid; padding-bottom: 1.1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-bottom: 1.1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">Notes
payable</font></td>
<td colspan="2" style="border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-bottom: 1.1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: top; background-color: #C0FFC0">
<td style="width: 47%; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; border-left: #BFBFBF 1pt solid; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Balance,
December 31, 2011</font></td>
<td style="width: 5%; border-bottom: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 25%; border-bottom: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 19%; border-bottom: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">647,860</font></td>
<td style="width: 4%; border-bottom: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: top">
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; border-left: #BFBFBF 1pt solid; padding-bottom: 1.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Issuance
of convertible notes (net of discount)</font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-bottom: 1.1pt; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">70,834</font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-bottom: 1.1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: top; background-color: #C0FFC0">
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; border-left: #BFBFBF 1pt solid; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Conversion
of convertible Debt</font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-50,000</font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: top">
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; border-left: #BFBFBF 1pt solid; padding-bottom: 1.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Issuance
of notes payable</font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-bottom: 1.1pt; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">32,000</font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-bottom: 1.1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: top; background-color: #C0FFC0">
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; border-left: #BFBFBF 1pt solid; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Balance,
September 30, 2012</font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">700,694</font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman Bold; margin: 0; text-align: justify">Principles of Consolidation</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying consolidated financial statements
include the accounts of the Company and its wholly-owned subsidiaries, Ludicrous, Inc., BioEnergy Applied Technologies Inc., GoHealthMD,
Inc., MLN, Inc., Universal Energy and Services Group, Inc. Sky Entertainment, Inc., Eye Care Centers International, Inc., GoHealthMD
Nano Pharmaceuticals, Inc. and TTI Strategic Acquisitions and Equity Group, Inc. All subsidiaries of the Company currently have
no financial activity. All significant inter-company balances and transactions have been eliminated.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman Bold; margin: 0; text-align: justify">Cash and Cash Equivalents</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company considers all highly liquid investments with an original
maturity of three months or less to be cash equivalents. Cash and cash equivalents are maintained with major financial institutions
in the U S. Deposits held with these banks at times exceed $250,000 of insurance provided on such deposits. The Company has not
experienced any losses in such accounts and believes that it is not exposed to any significant credit risk on cash and cash equivalents.
At September 30, 2012 and 2011, no excess existed. There were no cash equivalents at September 30, 2012 and 2011.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman Bold; margin: 0; text-align: justify">Stock Based Compensation</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company accounts for stock-based compensation in accordance
with the provisions of ASC 718.  ASC 718 requires all share-based payments to employees, including grants of employee
stock options, to be recognized in the financial statements based on the grant-date fair value of the award. That cost will be
recognized over the period during which an employee is required to provide service in exchange for the reward- known as the requisite
service period. No compensation cost is recognized for equity instruments for which employees do not render the requisite service.
The grant-date fair value of employee share options and similar instruments are estimated using the Black Scholes option-pricing
model adjusted for the unique characteristics of those instruments.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Equity instruments issued to non-employees
are recorded at their fair values as determined in accordance with ASC 718 and ASC 595, “Accounting for Equity Instruments
That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling Goods and Services”, and are periodically
revalued as the stock options vest and are recognized as expense over the related service period.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman Bold; margin: 0; text-align: justify">Basic and Diluted Loss per Share</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company calculates earnings per share in accordance with ASC
260, “Computation of Earnings Per Share.” Basic loss per share is computed by dividing net income (loss) by the weighted-average
number of shares of common stock outstanding during the period. Diluted earnings (loss) per share gives effect to dilutive convertible
securities, options, warrants and other potential common stock outstanding during the period; only in periods in which such effect
is dilutive. For 2012 and 2011, no common equivalent shares were excluded from the calculation. The ESOP shares issued during 2012
and 2011 have also been excluded from the calculation as they were issued but not outstanding.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 12pt Times New Roman, Times, Serif; background-color: white; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="border: black 1pt solid; font-size: 10pt"> </td>
<td colspan="7" style="border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 1pt solid; font-size: 10pt; text-align: center">For the Three Months Ended</td>
<td style="border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 1pt solid; font-size: 10pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; padding-bottom: 1.1pt; font-size: 10pt"> </td>
<td colspan="7" style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; font-size: 10pt; text-align: center">September 30,</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt; font-size: 10pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; padding-bottom: 1.1pt; font-size: 10pt"> </td>
<td colspan="3" style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; font-size: 10pt; text-align: center">2012</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt; font-size: 10pt"> </td>
<td colspan="3" style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; font-size: 10pt; text-align: center">2011</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt; font-size: 10pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td style="width: 74%; border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; font-size: 10pt">Loss (numerator)</td>
<td style="width: 1%; border-bottom: black 1pt solid; border-right: black 1pt solid; font-size: 10pt; text-align: right"> </td>
<td style="width: 1%; border-bottom: black 1pt solid; border-right: black 1pt solid; font-size: 10pt">$</td>
<td style="width: 10%; border-bottom: black 1pt solid; border-right: black 1pt solid; font-size: 10pt; text-align: right">(3,682,956</td>
<td style="width: 1%; border-bottom: black 1pt solid; border-right: black 1pt solid; font-size: 10pt">)</td>
<td style="width: 1%; border-bottom: black 1pt solid; border-right: black 1pt solid; font-size: 10pt; text-align: right"> </td>
<td style="width: 1%; border-bottom: black 1pt solid; border-right: black 1pt solid; font-size: 10pt">$</td>
<td style="width: 10%; border-bottom: black 1pt solid; border-right: black 1pt solid; font-size: 10pt; text-align: right">(461,870</td>
<td style="width: 1%; border-bottom: black 1pt solid; border-right: black 1pt solid; font-size: 10pt">)</td></tr>
<tr style="vertical-align: bottom">
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; padding-bottom: 1.1pt; font-size: 10pt">Shares (denominator)</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt; font-size: 10pt; text-align: right"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; font-size: 10pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; font-size: 10pt; text-align: right">443,376,395</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt; font-size: 10pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt; font-size: 10pt; text-align: right"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; font-size: 10pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; font-size: 10pt; text-align: right">310,287,702</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt; font-size: 10pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; padding-bottom: 3.3pt; font-size: 10pt">Basic and diluted loss per share</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt; font-size: 10pt; text-align: right"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; font-size: 10pt">$</td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; font-size: 10pt; text-align: right">(0.01</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt; font-size: 10pt">)</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt; font-size: 10pt; text-align: right"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; font-size: 10pt">$</td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; font-size: 10pt; text-align: right">(0.00</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt; font-size: 10pt">)</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 5.4pt"> </p>
<p style="font: 10pt Lucida Grande; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; background-color: white; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="border: black 1pt solid"> </td>
<td colspan="7" style="border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: center">For the Nine Months Ended</td>
<td style="border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 1pt solid"> </td></tr>
<tr style="vertical-align: bottom">
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; padding-bottom: 1.1pt"> </td>
<td colspan="7" style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; text-align: center">September 30,</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; padding-bottom: 1.1pt"> </td>
<td colspan="3" style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; text-align: center">2012</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt"> </td>
<td colspan="3" style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; text-align: center">2011</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td style="width: 74%; border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid">Loss (numerator)</td>
<td style="width: 1%; border-bottom: black 1pt solid; border-right: black 1pt solid; text-align: right"> </td>
<td style="width: 1%; border-bottom: black 1pt solid; border-right: black 1pt solid">$</td>
<td style="width: 10%; border-bottom: black 1pt solid; border-right: black 1pt solid; text-align: right">(4,591,710</td>
<td style="width: 1%; border-bottom: black 1pt solid; border-right: black 1pt solid">)</td>
<td style="width: 1%; border-bottom: black 1pt solid; border-right: black 1pt solid; text-align: right"> </td>
<td style="width: 1%; border-bottom: black 1pt solid; border-right: black 1pt solid">$</td>
<td style="width: 10%; border-bottom: black 1pt solid; border-right: black 1pt solid; text-align: right">(1,215,499</td>
<td style="width: 1%; border-bottom: black 1pt solid; border-right: black 1pt solid">)</td></tr>
<tr style="vertical-align: bottom">
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; padding-bottom: 1.1pt">Shares (denominator)</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt; text-align: right"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; text-align: right">346,691,563</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt; text-align: right"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; text-align: right">285,320,414</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; padding-bottom: 3.3pt">Basic and diluted loss per share</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt; text-align: right"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid">$</td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; text-align: right">(0.01</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt">)</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt; text-align: right"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid">$</td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; text-align: right">(0.00</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt">)</td></tr>
</table>
<p style="font: 10pt Lucida Grande; margin: 0"> </p>
<p style="margin: 0pt"></p><p style="font: 10pt Times New Roman Bold; margin: 0; text-align: justify">Recent Accounting Pronouncements</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">No accounting pronouncements were issued during
the third quarter 2012 that would have a material effect on the accounting policies of the Company when adopted.</p><p style="font: 10pt Times New Roman Bold; margin: 0; text-align: justify">Investments at Cost Held to Maturity</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company records restricted, non-marketable
securities with less than 20% ownership, at cost. These investments are reviewed periodically for impairment, and if not temporary
in nature will be written down to a fair market value.</p><p style="font: 10pt Times New Roman Bold; margin: 0">Fair Value of Financial Instruments</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 1, 2008, the Company adopted ASC
820, <font style="font-family: Times New Roman Italic">Fair Value Measurements.</font> ASC 820 defines fair value, establishes
a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value
measures. The three levels are defined as follows:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; background-color: white; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="width: 16%; border: black 1pt solid; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="width: 3%; border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 1pt solid; font: 10pt Lucida Grande">•</td>
<td style="width: 81%; border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: justify">Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.</td></tr>
</table>
<p style="font: 8pt Lucida Grande; margin: 0"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; background-color: white; border-collapse: collapse; font-size: 10pt">
<tr style="vertical-align: top">
<td style="width: 16%; border: black 1pt solid; font-family: Times New Roman, Times, Serif"> </td>
<td style="width: 3%; border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 1pt solid; font-family: Lucida Grande">•</td>
<td style="width: 81%; border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: justify">Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.</td></tr>
<tr style="vertical-align: top">
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; font-family: Times New Roman, Times, Serif"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; font-family: Lucida Grande">•</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: justify">Level 3 inputs to valuation methodology are unobservable and significant to the fair measurement.</td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0 0 0 5.4pt"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The carrying amounts reported in the balance sheets for the cash
and cash equivalents, receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of
fair value because of the short period of time between the origination of such instruments and their expected realization and their
current market rate of interest. The carrying value of notes payable approximates fair value because negotiated terms and conditions
are consistent with current market rates as of September 30, 2012 and December 31, 2011.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif"> </font></p>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.55in"><font style="font: 10pt Times New Roman, Times, Serif">The
following table presents the Company’s Notes Payable within the fair value hierarchy utilized to measure fair value on a
recurring basis as of September 30, 2012 and December 31, 2011:</font></p>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 12pt Times New Roman, Times, Serif; background-color: white; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="border: #BFBFBF 1pt solid; padding-bottom: 1.1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-bottom: 1.1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">Level
1</font></td>
<td style="border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-bottom: 1.1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-bottom: 1.1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">Level
2</font></td>
<td style="border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-bottom: 1.1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-bottom: 1.1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">Level
3</font></td>
<td colspan="4" style="border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-bottom: 1.1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: top; background-color: #C0FFC0">
<td style="width: 30%; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; border-left: #BFBFBF 1pt solid; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Notes
payable -- 2012</font></td>
<td style="width: 2%; border-bottom: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 10%; border-bottom: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 8%; border-bottom: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td>
<td style="width: 2%; border-bottom: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 10%; border-bottom: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 4%; border-bottom: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 8%; border-bottom: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td>
<td style="width: 10%; border-bottom: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 2%; border-bottom: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 4%; border-bottom: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 8%; border-bottom: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">700,694</font></td>
<td style="width: 2%; border-bottom: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: top">
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; border-left: #BFBFBF 1pt solid; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Notes
payable -- 2011</font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">647,860</font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
</table>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0 0 0 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0 0 0 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.55in"><font style="font: 10pt Times New Roman, Times, Serif">The
following table presents a Level 3 reconciliation of the beginning and ending balances of the fair value measurements using significant
unobservable inputs as of September 30, 2012 and December 31, 2011:</font></p>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 12pt Times New Roman, Times, Serif; background-color: white; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="border: #BFBFBF 1pt solid; padding-bottom: 1.1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-bottom: 1.1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">Notes
payable</font></td>
<td colspan="2" style="border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-bottom: 1.1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: top; background-color: #C0FFC0">
<td style="width: 47%; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; border-left: #BFBFBF 1pt solid; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Balance,
December 31, 2011</font></td>
<td style="width: 5%; border-bottom: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 25%; border-bottom: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 19%; border-bottom: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">647,860</font></td>
<td style="width: 4%; border-bottom: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: top">
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; border-left: #BFBFBF 1pt solid; padding-bottom: 1.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Issuance
of convertible notes (net of discount)</font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-bottom: 1.1pt; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">70,834</font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-bottom: 1.1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: top; background-color: #C0FFC0">
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; border-left: #BFBFBF 1pt solid; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Conversion
of convertible Debt</font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-50,000</font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: top">
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; border-left: #BFBFBF 1pt solid; padding-bottom: 1.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Issuance
of notes payable</font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-bottom: 1.1pt; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">32,000</font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-bottom: 1.1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: top; background-color: #C0FFC0">
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; border-left: #BFBFBF 1pt solid; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Balance,
September 30, 2012</font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">700,694</font></td>
<td style="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
</table><p style="font: 10pt Times New Roman Bold; margin: 0">Principles of Consolidation</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying consolidated financial statements
include the accounts of the Company and its wholly-owned subsidiaries, Ludicrous, Inc., BioEnergy Applied Technologies Inc., GoHealthMD,
Inc., MLN, Inc., Universal Energy and Services Group, Inc. Sky Entertainment, Inc., Eye Care Centers International, Inc., GoHealthMD
Nano Pharmaceuticals, Inc. and TTI Strategic Acquisitions and Equity Group, Inc. All subsidiaries of the Company currently have
no financial activity. All significant inter-company balances and transactions have been eliminated.</p><p style="font: 10pt Times New Roman Bold; margin: 0; text-align: justify">Cash and Cash Equivalents</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company considers all highly liquid investments with an original
maturity of three months or less to be cash equivalents. Cash and cash equivalents are maintained with major financial institutions
in the U S. Deposits held with these banks at times exceed $250,000 of insurance provided on such deposits. The Company has not
experienced any losses in such accounts and believes that it is not exposed to any significant credit risk on cash and cash equivalents.
At September 30, 2012 and 2011, no excess existed. There were no cash equivalents at September 30, 2012 and 2011.</p><p style="font: 10pt Times New Roman Bold; margin: 0; text-align: justify">Stock Based Compensation</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company accounts for stock-based compensation in accordance
with the provisions of ASC 718.  ASC 718 requires all share-based payments to employees, including grants of employee
stock options, to be recognized in the financial statements based on the grant-date fair value of the award. That cost will be
recognized over the period during which an employee is required to provide service in exchange for the reward- known as the requisite
service period. No compensation cost is recognized for equity instruments for which employees do not render the requisite service.
The grant-date fair value of employee share options and similar instruments are estimated using the Black Scholes option-pricing
model adjusted for the unique characteristics of those instruments.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Equity instruments issued to non-employees
are recorded at their fair values as determined in accordance with ASC 718 and ASC 595, “Accounting for Equity Instruments
That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling Goods and Services”, and are periodically
revalued as the stock options vest and are recognized as expense over the related service period.</p><p style="font: 10pt Times New Roman Bold; margin: 0">Basic and Diluted Loss per Share</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0">The Company calculates earnings per share in accordance with ASC
260, “Computation of Earnings Per Share.” Basic loss per share is computed by dividing net income (loss) by the weighted-average
number of shares of common stock outstanding during the period. Diluted earnings (loss) per share gives effect to dilutive convertible
securities, options, warrants and other potential common stock outstanding during the period; only in periods in which such effect
is dilutive. For 2012 and 2011, no common equivalent shares were excluded from the calculation. The ESOP shares issued during 2012
and 2011 have also been excluded from the calculation as they were issued but not outstanding.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 12pt Times New Roman, Times, Serif; background-color: white; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="border: black 1pt solid; font-size: 10pt"> </td>
<td colspan="7" style="border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 1pt solid; font-size: 10pt; text-align: center">For the Three Months Ended</td>
<td style="border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 1pt solid; font-size: 10pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; padding-bottom: 1.1pt; font-size: 10pt"> </td>
<td colspan="7" style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; font-size: 10pt; text-align: center">September 30,</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt; font-size: 10pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; padding-bottom: 1.1pt; font-size: 10pt"> </td>
<td colspan="3" style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; font-size: 10pt; text-align: center">2012</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt; font-size: 10pt"> </td>
<td colspan="3" style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; font-size: 10pt; text-align: center">2011</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt; font-size: 10pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td style="width: 74%; border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; font-size: 10pt">Loss (numerator)</td>
<td style="width: 1%; border-bottom: black 1pt solid; border-right: black 1pt solid; font-size: 10pt; text-align: right"> </td>
<td style="width: 1%; border-bottom: black 1pt solid; border-right: black 1pt solid; font-size: 10pt">$</td>
<td style="width: 10%; border-bottom: black 1pt solid; border-right: black 1pt solid; font-size: 10pt; text-align: right">(3,682,956</td>
<td style="width: 1%; border-bottom: black 1pt solid; border-right: black 1pt solid; font-size: 10pt">)</td>
<td style="width: 1%; border-bottom: black 1pt solid; border-right: black 1pt solid; font-size: 10pt; text-align: right"> </td>
<td style="width: 1%; border-bottom: black 1pt solid; border-right: black 1pt solid; font-size: 10pt">$</td>
<td style="width: 10%; border-bottom: black 1pt solid; border-right: black 1pt solid; font-size: 10pt; text-align: right">(461,870</td>
<td style="width: 1%; border-bottom: black 1pt solid; border-right: black 1pt solid; font-size: 10pt">)</td></tr>
<tr style="vertical-align: bottom">
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; padding-bottom: 1.1pt; font-size: 10pt">Shares (denominator)</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt; font-size: 10pt; text-align: right"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; font-size: 10pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; font-size: 10pt; text-align: right">443,376,395</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt; font-size: 10pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt; font-size: 10pt; text-align: right"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; font-size: 10pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; font-size: 10pt; text-align: right">310,287,702</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt; font-size: 10pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; padding-bottom: 3.3pt; font-size: 10pt">Basic and diluted loss per share</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt; font-size: 10pt; text-align: right"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; font-size: 10pt">$</td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; font-size: 10pt; text-align: right">(0.01</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt; font-size: 10pt">)</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt; font-size: 10pt; text-align: right"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; font-size: 10pt">$</td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; font-size: 10pt; text-align: right">(0.00</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt; font-size: 10pt">)</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 5.4pt"> </p>
<p style="font: 10pt Lucida Grande; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; background-color: white; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="border: black 1pt solid"> </td>
<td colspan="7" style="border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: center">For the Nine Months Ended</td>
<td style="border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 1pt solid"> </td></tr>
<tr style="vertical-align: bottom">
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; padding-bottom: 1.1pt"> </td>
<td colspan="7" style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; text-align: center">September 30,</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; padding-bottom: 1.1pt"> </td>
<td colspan="3" style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; text-align: center">2012</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt"> </td>
<td colspan="3" style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; text-align: center">2011</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td style="width: 74%; border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid">Loss (numerator)</td>
<td style="width: 1%; border-bottom: black 1pt solid; border-right: black 1pt solid; text-align: right"> </td>
<td style="width: 1%; border-bottom: black 1pt solid; border-right: black 1pt solid">$</td>
<td style="width: 10%; border-bottom: black 1pt solid; border-right: black 1pt solid; text-align: right">(4,591,710</td>
<td style="width: 1%; border-bottom: black 1pt solid; border-right: black 1pt solid">)</td>
<td style="width: 1%; border-bottom: black 1pt solid; border-right: black 1pt solid; text-align: right"> </td>
<td style="width: 1%; border-bottom: black 1pt solid; border-right: black 1pt solid">$</td>
<td style="width: 10%; border-bottom: black 1pt solid; border-right: black 1pt solid; text-align: right">(1,215,499</td>
<td style="width: 1%; border-bottom: black 1pt solid; border-right: black 1pt solid">)</td></tr>
<tr style="vertical-align: bottom">
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; padding-bottom: 1.1pt">Shares (denominator)</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt; text-align: right"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; text-align: right">346,691,563</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt; text-align: right"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; text-align: right">285,320,414</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; padding-bottom: 3.3pt">Basic and diluted loss per share</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt; text-align: right"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid">$</td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; text-align: right">(0.01</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt">)</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt; text-align: right"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid">$</td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; text-align: right">(0.00</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt">)</td></tr>
</table>37377743234017503757318613028173733687571112298077511190<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman Bold; margin: 0; text-align: justify">NOTE 5 - NOTES PAYABLE</p>
<p style="font: 10pt Times New Roman Bold; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.25in">(a)<font style="font: 7pt Times New Roman, Times, Serif">    
</font>NOTES PAYABLE</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Notes payable consist of various notes bearing
interest at rates from 5% to 9%, which are unsecured, with original due dates between August 2000 and December 2009. Five notes
with maturity dates that have passed are currently in default with the remaining note due on demand and thus all notes are classified
as current liabilities. At September 30, 2012 and December 31, 2011, notes payable amounted to $629, 860 and $597,860, respectively.
Below is a table summarizing the notes owed by the Company.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; background-color: white; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="border: black 1pt solid; padding-bottom: 1.1pt"> </td>
<td style="border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt"> </td>
<td style="border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt"> </td>
<td colspan="2" style="border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt"> </td>
<td style="border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt"> </td>
<td style="border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt"> </td>
<td colspan="6" style="border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 0.75pt solid; text-align: center">Interest Expense</td>
<td style="border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt"> </td>
<td style="border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; border-left: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; text-align: center">Principal</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt"> </td>
<td colspan="2" style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; text-align: center">Interest Rate</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt"> </td>
<td colspan="2" style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; text-align: center">9/30/2012</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt"> </td>
<td colspan="2" style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; text-align: center">9/30/2011</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; text-align: center">Maturity</td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td style="width: 2%; border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid">$ </td>
<td style="width: 13%; border-bottom: black 1pt solid; border-right: black 1pt solid; text-align: right">292,860</td>
<td style="width: 2%; border-bottom: black 1pt solid; border-right: black 1pt solid"> </td>
<td style="width: 3%; border-bottom: black 1pt solid; border-right: black 1pt solid"> </td>
<td style="width: 12%; border-bottom: black 1pt solid; border-right: black 1pt solid; text-align: right">9.00</td>
<td style="width: 2%; border-bottom: black 1pt solid; border-right: black 1pt solid; text-align: center">%</td>
<td style="width: 2%; border-bottom: black 1pt solid; border-right: black 1pt solid"> </td>
<td style="width: 5%; border-bottom: black 1pt solid; border-right: black 1pt solid; text-align: center">$</td>
<td style="width: 12%; border-bottom: black 1pt solid; border-right: black 1pt solid; text-align: right">19,767</td>
<td style="width: 2%; border-bottom: black 1pt solid; border-right: black 1pt solid"> </td>
<td style="width: 2%; border-bottom: black 1pt solid; border-right: black 1pt solid"> </td>
<td style="width: 5%; border-bottom: black 1pt solid; border-right: black 1pt solid; text-align: center">$</td>
<td style="width: 13%; border-bottom: black 1pt solid; border-right: black 1pt solid; text-align: right">19,767</td>
<td style="width: 2%; border-bottom: black 1pt solid; border-right: black 1pt solid"> </td>
<td style="width: 23%; border-bottom: black 1pt solid; border-right: black 1pt solid; text-align: right">6/27/2010</td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">192,000</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">  0%</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">10,080</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">10,080</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">On Demand(1)</td></tr>
<tr style="vertical-align: bottom">
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">18,000</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">6.00</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: center">%</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">810</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">810</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">9/1/2002</td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">30,000</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">6.00</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: center">%</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">1,350</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">1,350</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">9/12/2002</td></tr>
<tr style="vertical-align: bottom">
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">25,000</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">5.00</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: center">%</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">939</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">939</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">8/31/2000</td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td style="border-right: black 1pt solid; border-bottom: black 0.5pt solid; border-left: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.5pt solid; text-align: right">40,000</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">7.00</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: center">%</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.5pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.5pt solid; text-align: right">2,100</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.5pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.5pt solid; text-align: right">2,100</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">7/10/2002</td></tr>
<tr style="vertical-align: bottom">
<td style="border-right: black 1pt solid; border-bottom: black 0.5pt solid; border-left: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.5pt solid; text-align: right">12,000</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt; text-align: right">6.00</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt">%</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.5pt solid; text-align: center"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.5pt solid; background-color: #CCFFCC; text-align: right">67</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.5pt solid; text-align: center"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.5pt solid; background-color: #CCFFCC; text-align: right">-</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt; text-align: right">4/28/2013</td></tr>
<tr style="vertical-align: bottom">
<td style="border-right: black 1pt solid; border-bottom: black 0.5pt solid; border-left: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.5pt solid; text-align: right">20,000</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt; text-align: right">6.00</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt">%</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.5pt solid; text-align: center"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.5pt solid; text-align: right">46</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.5pt solid; text-align: center"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.5pt solid; text-align: right">-</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt; text-align: right">5/17/2013</td></tr>
<tr style="vertical-align: bottom">
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; border-left: black 1pt solid">$</td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; text-align: right">629,860</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; text-align: center">$</td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; text-align: right">35,159</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; text-align: center">$</td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; text-align: right">35,046</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt; text-align: right"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0 0 0 5.4pt"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0 0 0 0.5pt"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 5.4pt">On October 28, 2012, and September 17, 2012, the Company
received proceeds from notes payable from the same entity. The note amounts were $12,000 and $20,000 respectively, and both bear
interest at 6%. The notes mature on 4/28/13 and 5/17/13, respectively, and are unsecured.</p>
<p style="font: 8pt Lucida Grande; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-indent: -0.25in">(1)<font style="font: 7pt Times New Roman, Times, Serif">    
</font>Imputed interest due to 0% interest rate</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.25in">(b)<font style="font: 7pt Times New Roman, Times, Serif">    
</font>CONVERTIBLE NOTES PAYABLE:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the nine months ended September 30,
2012, the Company converted three convertible notes into common stock of the Company. The terms of the convertible note agreements
required a conversion rate at double the market value of the shares at the conversion date. Accordingly, the Company issued 2,689,874
shares for $50,000 in convertible debt and $1,584 in accrued interest. No gain or loss was recognize from the conversion.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the nine months ended September 30,
2012, the Company engaged in a note agreement with a Company for $100,000. The note is convertible into common shares of the Company
at a rate of $.005, to include all fees and interest. The Company has recorded a $100,000 discount on the Convertible Note due
to this beneficial conversion feature. The discount will be accreted over the term of the note which is 8 months. The note was
originated on April 12, 2012. During the second and third quarters, the Company amortized the note discount in the amount of $70,834,
thus the net note balance at September 30, 2012 is $70,834.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The beneficial conversion feature
was calculated by computing the number of shares the note would convert into upon conversion times the market price of the stock
on the date of the note issuance, less the note amount. The beneficial conversion feature amount is the difference between the
note amount and the value of the shares to be issued upon conversion. The beneficial conversion feature was valued at $350,000,
however the note discount cannot exceed the face amount of the note, therefore the discount was limited to and recorded at $100,000.</font></p>
<p style="margin: 0pt"></p><table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; background-color: white; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="border: black 1pt solid; padding-bottom: 1.1pt"> </td>
<td style="border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt"> </td>
<td style="border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt"> </td>
<td colspan="2" style="border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt"> </td>
<td style="border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt"> </td>
<td style="border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt"> </td>
<td colspan="6" style="border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 0.75pt solid; text-align: center">Interest Expense</td>
<td style="border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt"> </td>
<td style="border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; border-left: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; text-align: center">Principal</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt"> </td>
<td colspan="2" style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; text-align: center">Interest Rate</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt"> </td>
<td colspan="2" style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; text-align: center">9/30/2012</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt"> </td>
<td colspan="2" style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; text-align: center">9/30/2011</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 1.1pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; text-align: center">Maturity</td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td style="width: 2%; border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid">$ </td>
<td style="width: 13%; border-bottom: black 1pt solid; border-right: black 1pt solid; text-align: right">292,860</td>
<td style="width: 2%; border-bottom: black 1pt solid; border-right: black 1pt solid"> </td>
<td style="width: 3%; border-bottom: black 1pt solid; border-right: black 1pt solid"> </td>
<td style="width: 12%; border-bottom: black 1pt solid; border-right: black 1pt solid; text-align: right">9.00</td>
<td style="width: 2%; border-bottom: black 1pt solid; border-right: black 1pt solid; text-align: center">%</td>
<td style="width: 2%; border-bottom: black 1pt solid; border-right: black 1pt solid"> </td>
<td style="width: 5%; border-bottom: black 1pt solid; border-right: black 1pt solid; text-align: center">$</td>
<td style="width: 12%; border-bottom: black 1pt solid; border-right: black 1pt solid; text-align: right">19,767</td>
<td style="width: 2%; border-bottom: black 1pt solid; border-right: black 1pt solid"> </td>
<td style="width: 2%; border-bottom: black 1pt solid; border-right: black 1pt solid"> </td>
<td style="width: 5%; border-bottom: black 1pt solid; border-right: black 1pt solid; text-align: center">$</td>
<td style="width: 13%; border-bottom: black 1pt solid; border-right: black 1pt solid; text-align: right">19,767</td>
<td style="width: 2%; border-bottom: black 1pt solid; border-right: black 1pt solid"> </td>
<td style="width: 23%; border-bottom: black 1pt solid; border-right: black 1pt solid; text-align: right">6/27/2010</td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">192,000</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">  0%</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">10,080</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">10,080</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">On Demand(1)</td></tr>
<tr style="vertical-align: bottom">
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">18,000</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">6.00</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: center">%</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">810</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">810</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">9/1/2002</td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">30,000</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">6.00</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: center">%</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">1,350</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">1,350</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">9/12/2002</td></tr>
<tr style="vertical-align: bottom">
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">25,000</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">5.00</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: center">%</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">939</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">939</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">8/31/2000</td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td style="border-right: black 1pt solid; border-bottom: black 0.5pt solid; border-left: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.5pt solid; text-align: right">40,000</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">7.00</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: center">%</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.5pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.5pt solid; text-align: right">2,100</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.5pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.5pt solid; text-align: right">2,100</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; text-align: right">7/10/2002</td></tr>
<tr style="vertical-align: bottom">
<td style="border-right: black 1pt solid; border-bottom: black 0.5pt solid; border-left: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.5pt solid; text-align: right">12,000</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt; text-align: right">6.00</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt">%</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.5pt solid; text-align: center"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.5pt solid; background-color: #CCFFCC; text-align: right">67</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.5pt solid; text-align: center"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.5pt solid; background-color: #CCFFCC; text-align: right">-</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt; text-align: right">4/28/2013</td></tr>
<tr style="vertical-align: bottom">
<td style="border-right: black 1pt solid; border-bottom: black 0.5pt solid; border-left: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.5pt solid; text-align: right">20,000</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt; text-align: right">6.00</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt">%</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.5pt solid; text-align: center"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.5pt solid; text-align: right">46</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.5pt solid; text-align: center"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.5pt solid; text-align: right">-</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt; text-align: right">5/17/2013</td></tr>
<tr style="vertical-align: bottom">
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; border-left: black 1pt solid">$</td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; text-align: right">629,860</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; text-align: center">$</td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; text-align: right">35,159</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; text-align: center">$</td>
<td style="border-right: black 1pt solid; border-bottom: black 0.75pt solid; text-align: right">35,046</td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt"> </td>
<td style="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 3.3pt; text-align: right"> </td></tr>
</table>6295978601200020000708347083435000010000026898745000015841000000.005100000<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman Bold; margin: 0; text-align: justify">NOTE 6 - STOCKHOLDERS' DEFICIT</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">ISSUANCES OF COMMON STOCK</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On February 6, 2012, the Board of Directors
authorized the issuance of 1,500,000 shares of common stock to a consultant for services performed. The shares were valued at the
market price on the day of issuance, in the amount of $60,000.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On February 14, 2012, the Board of Directors
authorized the issuance of 2,689,874 shares to convert three convertible notes totaling $50,000 in principal and $1,584 in accrued
interest. The number of shares issued were within the terms of the convertible note agreement therefore no gain or loss was recorded
on the conversion.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Also on February 14, 2012, the Board of Directors
authorized the issuance of 1,282,051 shares for cash of $25,000, pursuant to the Adesso agreement described in Item 2.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 2, 2012, the Board of Directors authorized
the issuance of 750,000 shares of common stock to a consultant for services performed. The shares were valued at the market price
on the day of issuance, in the amount of $30,000.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 28, 2012, the Board of Directors authorized
the issuance of 1,500,000 shares of common stock to a consultant for services performed. The shares were valued at the market price
on the day of issuance, in the amount of $60,000.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the quarter ended March 31, 2012, the
Company recorded the vesting of deferred stock compensation as earned. The company recorded $151,859 in professional fees from
these deferrals.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 6, 2012, the Board of Directors authorized
the issuance of 2,500,000 shares of common stock to an investor relation firm for services performed. The Company recorded $87,500
in professional fees for these services. The shares were valued at the market price on the day of issuance.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the quarter ended June 30, 2012, the
Company recorded the vesting of deferred stock compensation as earned, in the amount of $8,700. The shares earned were valued at
the closing market price on June 30, 2012.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the nine months ended September 30,
2012, the Company recorded imputed interest on a non-interest bearing note in the amount of $10,080, with an increase in paid in
capital.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On August 8, 2012, the Board of Directors authorized
the issuance of 161,500,000 shares of common stock to various individuals and entities for professional services, rent, charitable
contributions and financing fees. The Company recorded $2,710,000 in professional fees, $100,000 for rent expense, $20,000 for
charitable contributions and $400,000 for financing fees. The shares were valued at the market price on the day of authorization.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On August 13, 2012, the Board of Directors
authorized the issuance of 10,000,000 shares of common stock for services rendered by several individuals. The Company recorded
$145,000 in professional fees related to this issuance. The shares were valued at the market price on the day of authorization.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On August 14, 2012, the Board of Directors
authorized the issuance of 3,968,254 shares of common stock for services rendered by AGS Capital Partners. The Company recorded
$39,286 for the professional services. The shares were valued at the market price on the day of authorization.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the quarter ended September 30, 2012,
the Company recorded the vesting of deferred stock compensation as earned, in the amount of $4,800. The shares earned were valued
at the closing market price on September 30, 2012.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">During the three and nine months ended September 30,
2012, the Company did not issue any stock options or warrants.</font></p>
<p style="margin: 0pt"></p>15000002689874750000150000060000500003000060000151859250000087500271000014500039286870010080161500000100000200004000001000000039682544800<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman Bold; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">NOTE
7 - INVESTMENTS AT COST</font></p>
<p style="font: 10pt Times New Roman Bold; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">In April 2012, the Company made an investment in an
LLC organized to purchase pre-IPO shares of Facebook (FB). The buy-in price was $100,000, and required a 5% initiation fee. The
membership interest was then convertible into shares of Facebook six months after the IPO at a rate of 1 to 1. The Company has
recorded this investment as an investment at cost due to the restricted nature, and the fact that the shares must convert to FB
shares before they can be classified as marketable securities and be recorded at Fair Market Value. The 5% fee was subtracted
from the original cost and the investment is recorded on the books at $95,256.</font></p>
<p style="margin: 0pt; text-align: justify"></p>192000<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman Bold; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">NOTE
9 – SUBSEQUENT EVENTS</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">In accordance with ASC 855-10 Company management reviewed
all material events through the date of this report and there are no material subsequent events to report.</font></p>
<p style="margin: 0pt; text-align: justify"></p><p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman Bold; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">NOTE
4 - RELATED PARTY TRANSACTIONS</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The balance due to related parties as of September
30, 2012 of $3,737,774 consisted of advances, payables and accrued wages to David Reichman, the Company’s Chief Executive
Officer of $3,234,017 and accrued wages to Kathy Griffin, the Company’s President of $503,757. As of December 31, 2011,
the related party balance was $3,186,130, consisting of a balance due David Reichman of $2,817,373, and a balance due Kathy Griffin
of $368,757. During the nine month period ended September 30, 2012, Mr. Reichman advanced the company $111,229 and was repaid
$80,775. The amounts due to the officers are due on demand, have no formal agreements, and accrue interest equal to that being
charged individually on the debt. Interest accrued during the nine months ended June 30, 2012 was $11,190, for credit cards used
on the Company’s behalf.</font></p>
<p style="margin: 0pt; text-align: justify"></p><p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman Bold; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">NOTE
8 - LEGAL ACTIONS</font></p>
<p style="font: 10pt Times New Roman Bold; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">During April 2012, the Company filed suit in Los Angeles
Superior Court against GeoGreen Biofuels, Inc. and related parties, relating to GeoGreen's failure to repay $192,000 advanced
pursuant to a Bridge Loan Term Sheet.  Although litigation is inherently unpredictable, TTI is confident in its position,
and intends to pursue the action aggressively. GeoGreen has filed a cross-complaint against the Company and its two officers,
the Chief Executive Officer and the President.</font></p>
<p style="margin: 0pt; text-align: justify"></p>EX-101.SCH
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The balance due to related parties as of September
30, 2012 of $3,737,774 consisted of advances, payables and accrued wages to David Reichman, the Company’s Chief Executive
Officer of $3,234,017 and accrued wages to Kathy Griffin, the Company’s President of $503,757. As of December 31, 2011,
the related party balance was $3,186,130, consisting of a balance due David Reichman of $2,817,373, and a balance due Kathy Griffin
of $368,757. During the nine month period ended September 30, 2012, Mr. Reichman advanced the company $111,229 and was repaid
$80,775. The amounts due to the officers are due on demand, have no formal agreements, and accrue interest equal to that being
charged individually on the debt. Interest accrued during the nine months ended June 30, 2012 was $11,190, for credit cards used
on the Company’s behalf.