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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 18pt"><B>UNITED
STATES<BR>
SECURITIES AND EXCHANGE COMMISSION<BR>
</B></FONT><B>Washington, D.C. 20549</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FORM 8-K</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CURRENT REPORT<BR>
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Date of Report (Date of earliest event
reported):&nbsp; March 8, 2012</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 18pt"><B><U>NANOTECH
ENTERTAINMENT, INC.<BR>
</U></B></FONT>(Exact name of registrant as specified in its charter)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<TR STYLE="vertical-align: top">
    <TD STYLE="width: 35%; text-autospace: none; text-align: center">Nevada</TD>
    <TD STYLE="width: 33%; text-autospace: none; text-align: center">333-149184</TD>
    <TD STYLE="width: 32%; text-autospace: none; text-align: center">20-1379559</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-autospace: none; text-align: center">(State of Incorporation)</TD>
    <TD STYLE="text-autospace: none; text-align: center">(Commission File No.)</TD>
    <TD STYLE="text-autospace: none; text-align: center">(Tax ID No.)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-autospace: none; text-align: center">&nbsp;</TD>
    <TD STYLE="text-autospace: none; text-align: center">3838 Raymert Drive, Suite 3</TD>
    <TD STYLE="text-autospace: none; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-autospace: none; text-align: center">&nbsp;</TD>
    <TD STYLE="text-autospace: none; text-align: center">Las Vegas, NV 89121</TD>
    <TD STYLE="text-autospace: none; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-autospace: none; text-align: center">&nbsp;</TD>
    <TD STYLE="text-autospace: none; text-align: center">(Address of principal executive offices)</TD>
    <TD STYLE="text-autospace: none; text-align: center">&nbsp;</TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Registrant&rsquo;s Telephone Number, including
area code: (702) 518-7410</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Former name or former address, if changed
since last report)</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions
(see General Instruction A.2. below).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Wingdings">&uml;
</FONT>Written Communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Wingdings">&uml;
</FONT>Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a -12)</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Wingdings">&uml;
</FONT>Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b))</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Wingdings">&uml;
</FONT>Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR240.13e -4(c)).</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Item 9. Financial Information</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">NanoTech Entertainment has recently changed
Audit firms, as noted in its most recent 8K filings, and is working with its new Auditors in an effort to create and file all
past due SEC required filings. The Audit firm has agreed to complete the work based on a payment plan that will allow NanoTech
to work within a schedule to complete the audits within 90 days of funding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">NanoTech Entertainment has identified
a group of investors that is willing to work with the firm in order to meet its financial obligations with the new Audit firm
and raise $35,000 required to complete the audits through a convertible debenture that will carry a 10% APR for a two year period
and the option to convert at a 30% discounted rate. In an effort to identify NanoTech&rsquo;s status and requirements, the basic
information regarding 2010 and 2011 financial information is being filed in this 8K form. Given the budget for the completion
of Audits, NanoTech anticipates the ability to file all past due financial forms within 60 days.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;<B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">NanoTech Entertainment is filing these interim financial statements
in an effort to provide investors with an insight into the financial status of the company until such time as the completion of
the reviews by the company&rsquo;s accounting firm, adjustments have been applied and reports reviewed and approved by the company&rsquo;s
new auditing firm. The information contained within shall form the basis for the following forms:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">10K for the period ending June 30, 2010</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">10Q for the period ending September 30,
2010</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">10Q for the period ending December 31,
2010</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">10Q for the period ending March 31, 2011</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">10K for the period ending June 30, 2011</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">10Q for the period ending September 30,
2011</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">10Q for the period ending December 31,
2011</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">9.1 &ndash; Financial Information Forming
Basis for 10K for period ending June 30, 2010</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING
STATEMENTS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">All readers of this document and any document
incorporated by reference herein are advised that this document and documents incorporated by reference into this document contain
forward-looking statements and statements of historical facts. Forward-looking statements are subject to certain risks and uncertainties,
which could cause actual results to differ materially for those indicated by the forward-looking statements. Examples of forward-looking
statements include, but are not limited to (i) revenue projections, income (loss), earnings (loss) per share, capital expenditures,
dividends, capital structure and other financial items, (ii) statements of the plans and objectives of the Company or its management
or Board of Directors, including the introduction of new products, or estimates or predictions with regards to customers, suppliers,
competitors or regulatory authorities, (iii) statements of future performance, and (iv) statements of assumptions underlying other
statements about the Company or its business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">This document and all documents incorporated
herein by reference also identify factors which could cause actual results to differ materially from those indicated by the forward-looking
statements. Please refer to &ldquo;Management's Discussion and Analysis of Financial Condition and Results of Operations&rdquo;
and &ldquo;Risk Factors.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The cautions outlined made in this statement
and elsewhere in this document should not be construed as complete or exhaustive. In many cases, we cannot predict factors which
could cause results to differ materially from those indicated by the forward-looking statements. Additionally, many items or factors
that could cause actual results to differ materially from forward-looking statements are beyond our ability to control. The Company
will not undertake an obligation to further update or change any forward-looking statement, whether as a result of new information,
future developments, or otherwise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PART I</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>ITEM 1. &nbsp;BUSINESS</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>General</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">NanoTech Entertainment, Inc. (the &ldquo;Company&rdquo;
or &ldquo;We&rdquo; or &ldquo;NanoTech&rdquo;) was originally organized as a Nevada Corporation on July 15, 2004 under the name
Aldar Group, Inc. (&ldquo;AGI&rdquo;) for the purpose of acquiring, selling and breeding thoroughbred horses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On April 30, 2009, the Company entered
into a Sale and Acquisition Agreement (the &ldquo;Agreement&rdquo;) with NanoTech Entertainment, Inc. (&ldquo;NEI&rdquo;), a Nevada
corporation, wherein the Company acquired 100% of NEI&rsquo;s issued and outstanding common stock through the exchange of 6,480,000
common shares. As a result of the Agreement, the Company changed its name to NanoTech Entertainment, Inc. (&ldquo;NTI&rdquo;)
to better reflect the direction of the newly formed entity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For accounting purposes, the share exchange
transaction was treated as a capital transaction where AGI, as the shell-corporation and legal acquirer, issued stock for the
net monetary assets of NEI, the accounting acquirer, accompanied by a recapitalization. The accounting is similar in form to a
reverse acquisition, except that goodwill or other intangibles are not recorded.&nbsp;&nbsp;<FONT STYLE="color: black"> </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company now operates as a virtual
manufacturer, developing technology and games, and then licensing such products to third parties for manufacturing and ultimate
distribution. The Company&rsquo;s business model supports relatively low overhead costs and efficiencies in operations in the
new global manufacturing economy.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Company Overview</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">NanoTech Entertainment, Inc. is a provider
of gaming technology for the coin-op arcade, casino gaming, and consumer gaming markets. Headquartered in Las Vegas, Nevada, we
operate as a virtual manufacturer, developing technology and games, and then licensing them to third parties for manufacturing
and distribution.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">With an ever-expanding lineup of technology
and products, NanoTech is redefining the role of developers and manufacturers in the gaming market. NanoTech's team is comprised
of industry veterans of the gaming industry and have collectively been responsible for dozens of award winning products and multi-million
copy selling video games and technology.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Market and Industry</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have experience and products for all
aspects of the various gaming industries.&nbsp; By traversing the market from consumer to coin-op to casino, the Company may be
able to take advantage of all three growth &amp; profitable industries and balance out the seasonal patterns of each.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Even in the unsteady economic climate,
the gaming market continues to flourish and expand.&nbsp; In 2008, the arcade industry saw $7.2 billion in revenue, and the consumer
market saw $58 billion with a growth of 19% in 2008. The following are excerpts from other sources:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">&ldquo;As
                                                                                                               people cut back
                                                                                                               on travel and going
                                                                                                               out, they are turning
                                                                                                               more to home entertainment,
                                                                                                               providing a boost
                                                                                                               to the video game
                                                                                                               industry.&rdquo;
                                                                                                               Reuters, April
                                                                                                               2, 2009</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">&ldquo;The
                                                                                                               video game business
                                                                                                               continues to enjoy
                                                                                                               robust growth,
                                                                                                               making it the fastest
                                                                                                               growing of the
                                                                                                               many consumer goods
                                                                                                               categories.&rdquo;&nbsp;
                                                                                                               Market Watch, Feb
                                                                                                               18, 2009</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The NanoTech team has won numerous awards
in recent years including innovative product of the year in 2005 and 2006 in the arcade industry and innovative product of the
year in 2007 in the casino market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Products</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Below is a list of the Company&rsquo;s
current product line with detailed descriptions. For more information on the Company&rsquo;s products and services you can view
our web site at www.NanoTechEnt.com.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">MultiPin&trade; - There is currently only
one Pinball manufacturer left in the world, Stern Pinball.&nbsp; While they supply over 10,000 machines per year to the market,
there is a huge demand for new and innovative pinball.&nbsp; MultiPin&trade; represents the next generation in pinball.&nbsp;
By replacing the mechanical parts of a pinball machine with state of the art electronics, MultiPin&trade; solves two major problems
seen by operators of Pinball machines.&nbsp; First, it eliminates any mechanical failures, which are common amongst pinball machines.&nbsp;
Secondly, it provides a multi-game platform that can be constantly updated with new games without having to swap out the machine.&nbsp;
Our proprietary physics engine and motion sensors allow MultiPin&trade; to accurately recreate the experience of a mechanical
pinball machine, while providing players with a variety of classic and modern pinball games to choose from.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;Xtreme Rally Racing&trade; - An
Xtreme Off-Road Racing Experience with no boundaries. Xtreme Rally Racing is an innovative new driving machine that features three
modes of game play:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Xtreme Off-Road - Race head-to-head
against other players and the computer to checkpoints while driving anywhere on the map with no preset course.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Timed Rally Stages - Classic
Rally Racing on real world courses. Players will be able to race in five different countries on real world rally courses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Xtreme Stadium Racing - Custom
Stadiums designed for Xtreme racing, including a figure-8 multi-lap course with huge jumps.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">NanoNET Online System - Local and worldwide
head-to-head competition in real time against machines located around the world. Remote operator control of your machines including
diagnostics, accounting reports, and automatic software updates and enhancements downloaded over the net. Link up to four cabinets
for local multiplayer action.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pinball Wizard &trade; - Consumer Pinball
enthusiasts have been growing with the advent of Visual Pinball and now Future Pinball.&nbsp; The official Visual Pinball forum
boasts over 155,000 members, and the free version Future Pinball has been downloaded over 1 million times in the past six months,
and over 500,000 copies in April 2009.&nbsp; We have created the only input device designed to give these players a way to experience
real pinball controls on their personal computer.&nbsp;&nbsp; Based on the technology developed for the MultiPin&trade; product
we have built a controller that lets people play pinball using traditional controls and the ability to &ldquo;shake&rdquo; and
&ldquo;nudge&rdquo; the table.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Mot-Ion&trade; Adapter - The Mot-Ion adapter
is a USB adapter that allows do-it-yourself Pinball enthusiasts to build their own cabinet using real pinball controls providing
analog inputs for nudging and bumping. This kit includes everything needed to connect a pinball cabinet to a PC (I/O Board, Digital
Plunger, and Wiring Harness).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Opti-Gun&trade; Adapter - The OptiGun
adapter is a USB adapter that allows players to connect Arcade Light Guns to any USB based system. This universal adapter provides
a complete solution to implement an arcade game including gun inputs, force feedback outputs, digital inputs, and built-in audio
amplifiers. The adapter can also be used with PC based emulators such as M.A.M.E. to connect arcade light guns on your home system.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Retr-IO&trade; Adapter - The Retr-IO adapter
provides a standard JAMMA interface for USB based systems. This universal adapter provides a complete solution to implement an
arcade game using joysticks, trackballs, spinners, and buttons, and features digital outputs and built-in audio and video amplifiers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The board works with any PC based system
including M.A.M.E and other emulation products. It provides an all-in-one solution to hooking up traditional arcade controls to
your PC, or any USB system. All digital inputs and outputs are interfaced via standard keyboard commands, and appear as mapped
keys to your games. The default key mappings match those of many popular PC emulation products. Two trackballs and two spinners
are supported and mapped to the system as mice. The board supports four player standard configurations or two player four-way
joystick and six-button configurations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Competition</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company will compete against established
companies with significantly greater financial, marketing, research and development, personnel, and other resources than the Company.
Such competition could have a material adverse effect on the Company's profitability.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Government Regulation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">There are no government regulations regulating
the development and sale of gaming products for coin-operated machines.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>ITEM 1A. &nbsp;RISK FACTORS</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Not applicable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>ITEM 1B. &nbsp;UNRESOLVED STAFF
COMMENTS</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Not applicable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>ITEM 2. &nbsp;PROPERTIES</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our principal Nevada executive offices
are located at 3883 Raymert Drive, Suite 3, Las Vegas, NV 89121 and our phone number is 702-518-7410.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>ITEM 3. &nbsp;LEGAL PROCEEDINGS</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are not currently involved in any legal
proceedings nor do we have any knowledge of any threatened litigation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>ITEM 4. &nbsp;SUBMISSION OF MATTERS
TO A VOTE OF SECURITIES HOLDERS</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">No matters were submitted to a vote of
security holders during the fiscal year ended June 30, 2010.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PART II</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>ITEM 5. &nbsp;MARKET FOR REGISTRANT&rsquo;S COMMON EQUITY,
RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our common stock is currently quoted on
the Pink OTC Markets Inc., more commonly referred to as the Pink Sheets (the &ldquo;Pink Sheets&rdquo;) under the symbol &ldquo;NTEK.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">There has been limited trading of our
common stock since our initial listing on the OTCBB<SUP>&reg;</SUP> on September 22, 2008 under the ticker symbol ALDJ. On June
10, 2009, pursuant to a corporate name change and a change in control of the Company, the ticker was changed to NTEK. On October
2, 2009, our symbol was changed to NTEKE for failure to be current in our reporting obligations with the Securities and Exchange
Commission. On November 3, 2009, our ticker symbol was returned to NTEK and we were delisted to the Pink Sheets. Below is a table
listing the high and low trading price by quarter for the fiscal year end June 30, 2010.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="width: 60%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Quarter Ended</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">High</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Low</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 64%; text-align: center">September 30, 2009</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">0.35</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">0.12</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: center">December 31, 2009</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.14</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.02</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: center">March 31, 2010</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.06</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.055</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: center">June 30, 2010</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.09</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.025</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">It is our plan that upon becoming current
with all our required filings pursuant to the Securities Exchange Act of 1934, as amended, we plan on filing a new Form 15c2-11
application with FINRA for re-listing on the OTCBB<SUP>&reg;</SUP>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Holders</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of June 30, 2010, we had 15,910,000
shares of common stock, par value $0.001, issued and outstanding. The stock transfer agent for our securities is Stalt, Inc.,
671 Oak Grove Avenue, Suite C, Menlo Park, CA 94025.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Dividends</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">There are no restrictions in our Articles
of Incorporation or Bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from
declaring dividends where, after giving effect to the distribution of the dividend:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">1.</TD><TD STYLE="text-align: justify">We would not be able to pay our
                                                                debts as they become due in the usual course of business; or</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">2.</TD><TD STYLE="text-align: justify">Our total assets would be less
                                                                than the sum of the total liabilities plus the amount that would
                                                                be needed to satisfy the rights of stockholders who have preferential
                                                                rights superior to those receiving the distribution.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company has not declared any dividends,
and does not plan to declare any dividends in the foreseeable future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Recent Sales of Unregistered Securities</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company has authorized 75,000,000
shares of common stock with a par value of $.001, and no preferred stock. As of June 30, 2009 (the most recent fiscal year) the
total shares issued and outstanding was 14,437,000. Additional share issuances occurring during the year ended June 30, 2010 to
arrive at the total shares issued and outstanding of 15,910,000 are as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">During the period of January
through June 2009, the following shares were issued for cash in accordance with private offerings to unrelated individuals (of
which 1,220,000 shares were issued and $102,000 cash received):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="width: 70%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Number</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Stock</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Cash</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left; border-bottom: Black 1pt solid">Date</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">of Shares</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">Price</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Received</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 46%">09/11/2009</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 15%; text-align: right">560,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">0.10</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">56,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>10/23/2009</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.05</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">5,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>03/30/2010</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">50,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.05</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">5,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>06/03/2010</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">300,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.05</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">15,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>06/22/2010</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.10</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">06/30/2010</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">200,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.10</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">20,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 2.5pt">Totals</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,220,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">102,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">SUBSEQUENT ISSUANCES OF EQUITY
SECURITIES</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">On June 19, 2009, the Company
entered into an agreement with an unrelated individual who was to render consulting services for a 26-week period. The consultant
was to receive cash compensation of $36,400 over the term of the contract, and 104,000 shares of common stock upon the contract&rsquo;s
completion. The shares were valued at $.10 per share, for total stock compensation of $10,400 to be expensed ratably over the
contract&rsquo;s term. The Company recorded 15 weeks, or $27,000, of consulting expense during the three months ended September
30, 2009, of which $21,000 was paid in cash and $6,000 of stock compensation was accrued and reported as the current liability,
stock payable. The shares were subsequently issued upon the contract&rsquo;s completion in December 2009.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">On July 24, 2009, the Company
entered into a consulting agreement with an unaffiliated entity whereby the consultant would provide various promotional, strategic
business planning, and acquisition analysis services for the Company in exchange for 125,000 shares of common stock at $.10 per
share for total compensation of $12,500. The shares were issued upon the execution of the agreement, which is effective August
1, 2009 through July 31, 2010. The consultant will also receive $25,000 for every $1,000,000 in funding raised by the consultant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">On August 5, 2009, the Company
entered into an agreement with an unrelated individual who was to render consulting services for a 6-week period. The consultant
was to receive cash compensation of $6,000 over the term of the contract, and 24,000 shares of common stock upon the contract&rsquo;s
completion. The shares were valued at $.10 per share, for total stock compensation of $2,400 to be expensed ratably over the contract&rsquo;s
term. The Company recorded 6 weeks, or $8,400, of consulting expense during the three months ended September 30, 2009, of which
$6,000 was paid in cash. The 24,000 shares of common stock were issued upon the contract&rsquo;s completion on September 16, 2009.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">On September 11, 2009, the Company
issued to an independent investor 560,000 shares of common stock at $.10 per share for total proceeds of $56,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">On October 23, 2009, the Company
issued to an independent investor 100,000 shares of common stock at $.05 per share for total proceeds of $5,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">On March 30, 2010, the Company
issued to an independent investor 50,000 shares of common stock at $.10 per share for total proceeds of $5,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">On June 3, 2010, the Company
issued to an independent investor 300,000 shares of common stock at $.05 per share for total proceeds of $15,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">On June 22, 2010, the Company
issued to an independent investor 10,000 shares of common stock at $.10 per share for total proceeds of $1,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">On June 30, 2010, the Company
issued to an independent investor 200,000 shares of common stock at $.10 per share for total proceeds of $20,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">All of these offerings were undertaken
pursuant to the limited offering exemption from registration under the Securities Act of 1933 as provided in Rule 504 under Regulation
D as promulgated by the U.S. Securities and Exchange Commission. These offerings met the requirements of Rule 504 in that: (a)
the total of funds raised in the five offerings does not exceed $1,000,000; and (b) the offer and sale of the Shares was not accomplished
by means of any general advertising or general solicitation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The class of persons to whom these offerings
were made was &quot;sophisticated investors.&quot; As a result, offers were made only to persons that the Company believed, and
had reasonable grounds to believe, either (a) have such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of the proposed investment, or (b) can bear the economic risks of the proposed investment (that
is, at the time of investment, could afford a complete loss). Additionally, sales were made only to persons whom the Company believed,
and had reasonable grounds to believe immediately prior to such sale and upon making reasonable inquiry, (a) are capable of bearing
the economic risk of the investment, and (b) either personally possess the requisite knowledge and experience, or, together with
their offeree's representative, have such knowledge and experience.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Securities Authorized for Issuance under Equity Compensation
Plans</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We do not have any equity compensation
plans and accordingly we have no securities authorized for issuance thereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Purchases of Equity Securities by the Registrant and
Affiliated Purchasers</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We did not purchase any of our shares
of common stock or other securities during the year ended June 30, 2009.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">[Balance of Page Intentionally Left Blank]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>ITEM 6. &nbsp;SELECTED FINANCIAL
DATA</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table includes select data
extracted from, and should be examined in conjunction with, the financial statements and footnotes for the year ended June 30,
2010 as found under Item 8 of this annual report.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="width: 80%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">Year Ended</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">June 30,</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 82%; text-align: left">Gross sales</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">46,521</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Gross profit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">29,660</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Net loss from operations</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,763,155</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Net cash provided by financing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">173,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Net cash used in operating activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">147,233</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Cash on hand</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,803</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>Net loss per share</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">.11</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Cash dividends declared per common share</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Property and equipment, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">494</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Stockholders&rsquo; deficit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,901,257</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>ITEM 7. &nbsp;MANAGEMENT&rsquo;S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following plan of operation should
be read in conjunction with our financial statements and the notes thereto included elsewhere in this annual report. Statements
contained herein which are not historical facts are forward-looking statements, as that term is defined by the Private Securities
Litigation Reform Act of 1995, including statements relating to our plans, objectives, expectations and intentions. Although we
believe that the expectations reflected in such forward-looking statements are reasonable, forward-looking statements are subject
to risks and uncertainties that could cause actual results to differ from those projected. We caution investors that any forward-looking
statements made by us are not guarantees of future performance and that actual result may differ materially from those in the
forward-looking statements. Such risks and uncertainties include, without limitation: established competitors who have substantially
greater financial resources and operating histories, regulatory delays or denials, ability to compete as a start-up company in
a highly competitive market, and access to sources of capital.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Results of Operations</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We generated revenues from operations
of $46,521 since July 1, 2009 and have incurred $1,792,815 in expenses through June 30, 2010, as well as $16,861 of costs of goods
sold.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table provides selected
financial data about our company for the current fiscal year ended June 30, 2010 and period of July 1, 2008 through June 30, 2009,
the prior fiscal year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="width: 70%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Balance Sheet Data</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">June 30, 2010</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">June 30, 2009</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 64%">Cash</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">2,803</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">35,536</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Total Current Assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">55,345</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">86,782</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Total Assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">55,839</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">88,263</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Total Liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,957,096</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,473,344</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Stockholders' Deficit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,901,257</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,385,081</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>Plan of Operation</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have developed a plan of operation
reflecting our objectives for the next 12 months and beyond. In our plan, we identify our cash requirements, our new product development,
and our required staffing and additional funding requirements to fulfill our business objectives.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Cash Requirements</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We estimate that we require a minimum
of approximately $250,000 to operate for the next 12 months from the date of this annual report. The minimum of $250,000 is required
for operating expenses and general operational overhead. Additional funds of $500,000 would be required to fully implement our
business plan which will include the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Product
                                                                                                               Development &ndash;
                                                                                                               This will include
                                                                                                               programming, engineering,
                                                                                                               and prototype building.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Trade
                                                                                                               Shows &ndash; We
                                                                                                               plan to exhibit
                                                                                                               our existing products
                                                                                                               and roll out new
                                                                                                               product development
                                                                                                               through several
                                                                                                               trade shows during
                                                                                                               year.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Prototype
                                                                                                               Engineering &ndash;
                                                                                                               This will include
                                                                                                               research and development
                                                                                                               of new technology
                                                                                                               to our existing
                                                                                                               products and any
                                                                                                               new products to
                                                                                                               be developed.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">U.S
                                                                                                               Patent Filings</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">To the extent we are unable to meet our
operating expenses, we may borrow funds from our current management or other affiliates, or we may attempt to raise capital from
private individuals or institutional investment equity funds. Any funds generated from product sales if any, in our company that
exceeds our operating expenses and debt repayments will be used to expand our operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Revenues</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company recorded $46,521 in revenues
from operations in this fiscal year, which was generated from pre-production product sales, product licensing fees and other related
business. These revenues have come mainly from the sale of prototype products.&nbsp; These sales were for test units while the
products are completing the development cycle. We have produced additional revenue from consumer level products that we sell on
our web store. We have several products that are nearing completion of development and once we have the funding to start a full
production run anticipate being able to quickly ramp up sales to our target of $200,000 per month.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We currently have several OEM customers
that are ready to purchase our Xtreme Rally Racing and MultiPin game machines once they are available.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Operating and General &amp; Administrative
Expenses</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Operating expenses consisting of office
rent, administrative staff, salaries, and other general administrative expenses totaled $1,724,857 for the year ended June 30,
2010.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Income Taxes</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company does not anticipate having
to pay income taxes in the upcoming years due to our absence of net profits.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Capital and Liquidity</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of June 30, 2010 we had total current
assets of $55,839, and total current liabilities of $1,957,096.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the year ended June 30, 2010 the
Company received $102,000 in cash from the sale of its common stock. These proceeds are being used for operating and general and
administrative expenses to sustain the Company through its development stage until it establishes profitable operations or receives
cash from the issuance of additional common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We had cash on hand of $2,803 as of June
30, 2010. We do not have sufficient cash to meet our short-term needs over the next 12 months, which are to manufacture and sell
our existing products, expand our product development, costs of research and development, trade show presentations, financing
of product inventory, development of prototypes, and protection of our intellectual capital through the applications for U.S.
patents.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">[Balance of Page Intentionally Left Blank]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ITEM 8 Financial Statements and Supplementary
Data</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">NanoTech Entertainment, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(A Development Stage Company)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Financial Statements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">For the Period of July 1, 2009</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">through June 30, 2010</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">NanoTech Entertainment, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(A Development Stage Company)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Index to Financial Statements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">For the Period of July 1, 2009</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">through June 30, 2010</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="width: 90%; text-autospace: none">Report of Independent Registered Public Accounting Firm</TD>
    <TD STYLE="width: 10%; text-autospace: none; text-align: right">15</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-autospace: none">&nbsp;</TD>
    <TD STYLE="text-autospace: none; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-autospace: none">Balance Sheet</TD>
    <TD STYLE="text-autospace: none; text-align: right">16</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-autospace: none">&nbsp;</TD>
    <TD STYLE="text-autospace: none; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-autospace: none">Statement of Operations</TD>
    <TD STYLE="text-autospace: none; text-align: right">17</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-autospace: none">&nbsp;</TD>
    <TD STYLE="text-autospace: none; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-autospace: none">Statement of Changes in Stockholders&rsquo; Deficit</TD>
    <TD STYLE="text-autospace: none; text-align: right">18</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-autospace: none">&nbsp;</TD>
    <TD STYLE="text-autospace: none; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-autospace: none">Statement of Cash Flows</TD>
    <TD STYLE="text-autospace: none; text-align: right">19</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-autospace: none">&nbsp;</TD>
    <TD STYLE="text-autospace: none; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-autospace: none">Notes to Financial Statements</TD>
    <TD STYLE="text-autospace: none; text-align: right">20</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(REPORT OF INDEPENDENT AUDITING FIRM TO
BE INSERTED HERE IN FORM 10K)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NanoTech Entertainment, Inc.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Balance Sheet</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">June 30,</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">2010</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>ASSETS</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Current assets:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 82%; padding-left: 9pt">Cash</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">2,803</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Inventory (Note B)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,076</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Prepaid expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,466</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Prepaid royalties (Note K)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">40,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Total current assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">55,345</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Property and equipment (Note B)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,961</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Less: accumulated depreciation</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,467</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Net property and equipment</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">494</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">Total assets</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">55,839</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">LIABILITIES AND STOCKHOLDERS&rsquo; DEFICIT</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>LIABILITIES</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Current liabilities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Accounts Payable and Accrued Expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">254,798</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Cash drawn in excess of bank balance</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Accounts Payable &ndash; Related Parties</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">270,885</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Accrued Salaries</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,001,876</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Notes Payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">33,144</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Notes payable &ndash; Related Parties (Note C)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">101,563</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Convertible Notes Payable (Note F)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">276,500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Convertible Notes payable &ndash; Related Parties (Note C)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">48,700</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Discount on Convertible Debt</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(30,370</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Total current liabilities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,957,096</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">STOCKHOLDERS&rsquo; DEFICIT (Note E)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">Common stock, $.001 par value, 75,000,000 shares authorized, 14,437,000 and 15,910,000 shares issued and outstanding as of June 30, 2009 and &nbsp;June 30, 2010, respectively</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,910</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Additional paid-in capital</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,450,432</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Deficit accumulated during the development stage</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(3,367,599</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Total stockholders&rsquo; deficit</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,901,257</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">Total liabilities and stockholders&rsquo; deficit</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">55,839</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The accompanying notes are an integral part of these consolidated
financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NanoTech Entertainment, Inc.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Statements of Operation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">For the Year</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Ended June 30,</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">2010</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>Revenues:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 82%; text-align: left; padding-left: 9pt">Sales, net</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">41,347</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Less: costs of goods sold</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(16,861</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Gross profit</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">29,660</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Operating Expenses:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Selling, general and administrative</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,724,857</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Other Income (Expenses)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Interest expense</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(67,958</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Net loss before income taxes</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,763,155</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-decoration: none; text-align: left">Provision for income taxes </TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">Net loss available to common stockholders</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(1,763,155</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The accompanying notes are an integral part of these consolidated
financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NanoTech Entertainment, Inc.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Statement of Changes in Stockholders&rsquo;
Deficit</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Deficit&nbsp;Accumulated</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">During&nbsp;the</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="text-align: center">Common&nbsp;Stock</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Additional</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Development</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Total</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Shares</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Amount</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Paid-In&nbsp;Capital</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Stage</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Stockholders&rsquo;&nbsp;Deficit</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 30%">Balance, June 30, 2009</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">14,437,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 11%; text-align: right">14,437</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 11%; text-align: right">248,684</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 11%; text-align: right">(1,648,202</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 11%; text-align: right">(1,400,566</TD><TD STYLE="width: 1%; text-align: left">))</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Settlement of vendor debt, $.10/share</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">125,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">125</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">12,375</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">12,500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Shares issued as Payment Consulting Fees @ $.10/share</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">128,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">128</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">12,672</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">12,800</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Shares issued in private placement, $.10/share</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">820,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">820</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">81,180</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">82,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Shares issued in private placement, $.05/share</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">400,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">400</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">19,600</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">20,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Net loss</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,763,155</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,763,155</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 2.5pt">Balance, June 30, 2010</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">15,910,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">15,910</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">374,511</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(3,411,357</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(3,036,421</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="text-underline-style: double">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The accompanying notes are an integral part of these consolidated
financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NanoTech Entertainment, Inc. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Statement of Cash Flow</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">For the Year</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Ended June 30,</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">2010</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Cash flows from operating activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 82%; text-align: left; padding-left: 9pt">Net loss</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">(1,763,155</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Depreciation expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">987</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Common stock issued for services</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,800</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Changes in operating assets and liabilities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Increase in inventory</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7,670</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Increase in prepaid expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,966</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Increase in accounts payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">158,369</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Increase in accounts payable &ndash; related party</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">120,267</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Increase in accrued interest, notes payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">67,958</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Net cash used in operating activities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(147,233</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Cash flows from financing activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Cash drawn in excess of bank balance</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Proceeds from issuance of common stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">102,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Proceeds from issuance of convertible debentures</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">71,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Net cash provided by financing activities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">173,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Increase (decrease) in cash</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(32,733</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">Cash, beginning of period</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">35,536</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 2.5pt">Cash, end of period</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2,803</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Non-cash investing and financing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 16.2pt">Issuance of common stock upon conversion of debentures</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">0</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 16.2pt">Issuance of common stock upon conversion of loan</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">0</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 16.2pt">Issuance of common stock in settlement of vendor debt</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">12,500</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 16.2pt">Conversion of notes payable to convertible debentures</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">0</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Supplemental cash flow information:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 9pt">Interest paid in cash</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">0</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 9pt">Income taxes paid in cash</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">The accompanying notes are an integral
part of these consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>NanoTech Entertainment, Inc.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Notes to Financial
Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>For the Period of July 1,
2009 through June 30, 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><B>A.</B></TD><TD><B>ORGANIZATION</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">NanoTech Entertainment, Inc.
(&ldquo;NEI&rdquo;) was incorporated under the laws of the state of Nevada on November 13, 2007. The Company operates as a virtual
manufacturer, developing technology and games, and then licensing such products to third parties for manufacturing and ultimate
distribution.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left; text-indent: 0.25in"><B>DEVELOPMENT
STAGE COMPANY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company is considered to
be in the development stage as defined in Statement of Financial Accounting Standards Board (FASB) Accounting Standards Codification
(ASC) Topic No. 915. The Company&rsquo;s efforts have been devoted primarily to raising capital, borrowing funds and attempting
to implement its planned, principal activities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><B>B.</B></TD><TD><B>SIGNIFICANT ACCOUNTING POLICIES</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left; text-indent: 0.25in"><B>USE OF
ESTIMATES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The preparation of the Company&rsquo;s
financial statements in conformity with accounting principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results
could differ from those estimates. The Company&rsquo;s periodic filings with the Securities and Exchange Commission include, where
applicable, disclosures of estimates, assumptions, uncertainties and markets that could affect the financial statements and future
operations of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><B>CASH AND CASH EQUIVALENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Cash and cash equivalents include
cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception,
which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant
risk of loss in value. The Company&rsquo;s cash balances totaled $2,803 as of June 30, 2010.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>NanoTech Entertainment, Inc. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Notes to Financial
Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>For the Period of July 1,
2009 (Inception) through June 30, 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><B>B.</B></TD><TD><B>SIGNIFICANT ACCOUNTING POLICIES (CONT&rsquo;D)</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><B>INVENTORY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company&rsquo;s inventory
is stated at the lower of cost or market using the FIFO costing method. Inventory on hand totaled $6,076 at June 30, 2010 and
consisted entirely of finished goods gaming equipment available and ready for sale.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><B>PROPERTY AND EQUIPMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company&rsquo;s property
and equipment is comprised of office and computer equipment, which are stated at cost. Depreciation is calculated over the estimated
useful lives ranging from 3 to 7 years using the straight &ndash; line method. The Company is in the development stage and has
only acquired $2,961 in fixed assets since inception, which had accumulated depreciation of $2,467 at June 30, 2010.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><B>REVENUE RECOGNITION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Revenues for gaming equipment
sales are recognized when risks associated with ownership have passed to unaffiliated customers, and when all criteria of ASB
Topic No. 605 (SAB Topic 13) have been met. Typically, this occurs when finished products are shipped.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>NanoTech Entertainment, Inc. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Notes to Financial
Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>For the Period of July 1,
2009 through June 30, 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><B>B.</B></TD><TD><B>SIGNIFICANT ACCOUNTING POLICIES (CONT&rsquo;D)</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B>RECENTLY-ISSUED ACCOUNTING
PRONOUNCEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">In June 2009 the FASB established
the Accounting Standards Codification (&quot;Codification&quot; or &quot;ASC&quot;) as the source of authoritative accounting
principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in accordance
with generally accepted accounting principles in the United States (&quot;GAAP&quot;). Rules and interpretive releases of the
Securities and Exchange Commission (&quot;SEC&quot;) issued under authority of federal securities laws are also sources of GAAP
for SEC registrants. Existing GAAP was not intended to be changed as a result of the Codification, and accordingly the change
did not impact our financial statements. The ASC does change the way the guidance is organized and presented.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Statement of Financial Accounting
Standards (&quot;SFAS&quot;) SFAS No. 165 (ASC Topic 855), <I>&quot;Subsequent Events,&quot;</I> SFAS No. 166 (ASC Topic 810),
<I>&quot;Accounting for Transfers of Financial Assets-an Amendment of FASB Statement No. 140,&quot;</I> SFAS No. 167 (ASC Topic
810), <I>&quot;Amendments to FASB Interpretation No. 46(R),&quot; </I>and SFAS No. 168 (ASC Topic 105), <I>&quot;The FASB Accounting
Standards Codification and the Hierarchy of Generally Accepted Accounting Principles-a replacement of FASB Statement No. 162,&quot;
</I>were recently issued. SFAS No. 165, 166, 167, and 168 have no current applicability to the Company or their effect on the
financial statements would not have been significant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Accounting Standards Update
(&quot;ASU&quot;) ASU No. 2009-05 (ASC Topic 820), which amends Fair Value Measurements and Disclosures - Overall, ASU No. 2009-13
(ASC Topic 605), <I>Multiple-Deliverable Revenue Arrangements</I>, ASU No. 2009-14 (ASC Topic 985), <I>Certain Revenue Arrangements
that include Software Elements</I>, and various other ASU's No. 2009-2 through ASU No. 2010-18 which contain technical corrections
to existing guidance or affect guidance to specialized industries or entities were recently issued. These updates have no current
applicability to the Company or their effect on the financial statements would not have been significant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><B>C.</B></TD><TD STYLE="text-align: justify"><B>RELATED PARTY TRANSACTIONS</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company pays rent expense
to two officers pursuant to long-term rent agreements (see Note N) for the use of property for business purposes. The amounts
incurred by the Company and paid to the officers for rent for the period ended June 30, 2010 totaled $198,180. This amount has
been recorded in selling, general and administrative expenses for the same period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>NanoTech Entertainment, Inc. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Notes to Financial
Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>For the Period of July 1,
2009 through June 30, 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><B>C.</B></TD><TD STYLE="text-align: justify"><B>RELATED PARTY TRANSACTIONS
                                                                       (CONT&rsquo;D)</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Several of the Company&rsquo;s
current and former officers and their affiliates have provided funding in the form of notes payable, totaling $101,563. The notes
carry interest rates ranging from 14% to 20%, resulting in interest expense of $17,163 for the year ended June 30, 2010. The notes
are due on demand and therefore classified as current liabilities. Interest has not been imputed due to its immaterial impact
on the financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company has employment agreements
with two of its officers whereby the officers are entitled to the annual salaries payable as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 80%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.75in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="18" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Salary for the Year Ended June 30,</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">2008</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">2009</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">2010</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">2011</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Total</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 10%; text-align: right">1)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">350,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">450,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">550,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">210,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">1,350,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: right; padding-bottom: 1pt">2)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">150,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">175,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">210,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">535,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 2.5pt; text-align: right">Total</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">500,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">625,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">760,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">210,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2,095,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The salaries have been accrued
and will be paid as cash flows allow. Interest has not been imputed due to its immaterial impact on the financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company has incurred liabilities
in the ordinary course of business with several individuals and entities affiliated with the Company. These amounts totaled $192,563
at June 30, 2010. Interest has not been imputed due to its immaterial impact on the financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><B>D.</B></TD><TD STYLE="text-align: justify"><B>NOTES PAYABLE</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company has originated the
following notes payable with unaffiliated entities and individuals:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="width: 70%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">Interest</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">Principal</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">June 30,</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 64%; text-align: left">Note 1, 10% interest, due April 30, 2011</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">250,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">41,668</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.12in">Note 2, 20% interest, due on demand</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,835</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 0.12in">Note 3, 20% interest, due on demand</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">5,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,083</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 0.24in">Totals</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">280,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">48,596</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The notes are interest payments
only, with principal and accrued interest payable upon maturity or demand, as indicated above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>NanoTech Entertainment, Inc.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Notes to Financial
Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>For the Period of July 1,
2009 through June 30, 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><B>E.</B></TD><TD STYLE="text-align: justify"><B>STOCKHOLDERS&rsquo;
                                                                       DEFICIT</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company has authorized 75,000,000
shares of common stock with a par value of $.001, and no preferred stock. As of June 30, 2009 (the most recent fiscal year) the
total shares issued and outstanding was 14,437,000. Additional share issuances occurring during the year ended June 30, 2010 to
arrive at the total shares issued and outstanding of 15,910,000 are as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">During the period of January
through June 2009, the following shares were issued for cash in accordance with private offerings to unrelated individuals (of
which 1,220,000 shares were issued and $102,000 cash received):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 70%; font: 10pt Times New Roman, Times, Serif; margin-left: 1.5in">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">Number</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">Stock</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">Cash</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">Date</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">of Shares</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">Price</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">Received</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 46%">09/11/2009</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 15%; text-align: right">560,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">0.10</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">56,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>10/23/2009</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.05</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">5,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>03/30/2010</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">50,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.05</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">5,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>06/03/2010</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">300,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.05</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">15,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>06/22/2010</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.10</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">06/30/2010</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">200,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.10</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">20,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 2.5pt">Totals</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,220,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">102,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">SUBSEQUENT ISSUANCES OF EQUITY
SECURITIES</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">On June 19, 2009, the Company
entered into an agreement with an unrelated individual who was to render consulting services for a 26-week period. The consultant
was to receive cash compensation of $36,400 over the term of the contract, and 104,000 shares of common stock upon the contract&rsquo;s
completion. The shares were valued at $.10 per share, for total stock compensation of $10,400 to be expensed ratably over the
contract&rsquo;s term. The Company recorded 15 weeks, or $27,000, of consulting expense during the three months ended September
30, 2009, of which $21,000 was paid in cash and $6,000 of stock compensation was accrued and reported as the current liability,
stock payable. The shares were subsequently issued upon the contract&rsquo;s completion in December 2009.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">On July 24, 2009, the Company
entered into a consulting agreement with an unaffiliated entity whereby the consultant would provide various promotional, strategic
business planning, and acquisition analysis services for the Company in exchange for 125,000 shares of common stock at $.10 per
share for total compensation of $12,500. The shares were issued upon the execution of the agreement, which is effective August
1, 2009 through July 31, 2010. The consultant will also receive $25,000 for every $1,000,000 in funding raised by the consultant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">On August 5, 2009, the Company
entered into an agreement with an unrelated individual who was to render consulting services for a 6-week period. The consultant
was to receive cash compensation of $6,000 over the term of the contract, and 24,000 shares of common stock upon the contract&rsquo;s
completion. The shares were valued at $.10 per share, for total stock compensation of $2,400 to be expensed ratably over the contract&rsquo;s
term. The Company recorded 6 weeks, or $8,400, of consulting expense during the three months ended September 30, 2009, of which
$6,000 was paid in cash. The 24,000 shares of common stock were issued upon the contract&rsquo;s completion on September 16, 2009.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">On September 11, 2009, the Company
issued to an independent investor 560,000 shares of common stock at $.10 per share for total proceeds of $56,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">On October 23, 2009, the Company
issued to an independent investor 100,000 shares of common stock at $.05 per share for total proceeds of $5,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">On March 30, 2010, the Company
issued to an independent investor 50,000 shares of common stock at $.10 per share for total proceeds of $5,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">On June 3, 2010, the Company
issued to an independent investor 300,000 shares of common stock at $.05 per share for total proceeds of $15,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">On June 22, 2010, the Company
issued to an independent investor 10,000 shares of common stock at $.10 per share for total proceeds of $1,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">On June 30, 2010, the Company
issued to an independent investor 200,000 shares of common stock at $.10 per share for total proceeds of $20,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">All of these offerings were undertaken
pursuant to the limited offering exemption from registration under the Securities Act of 1933 as provided in Rule 504 under Regulation
D as promulgated by the U.S. Securities and Exchange Commission. These offerings met the requirements of Rule 504 in that: (a)
the total of funds raised in the five offerings does not exceed $1,000,000; and (b) the offer and sale of the Shares was not accomplished
by means of any general advertising or general solicitation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The class of persons to whom these offerings
were made was &quot;sophisticated investors.&quot; As a result, offers were made only to persons that the Company believed, and
had reasonable grounds to believe, either (a) have such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of the proposed investment, or (b) can bear the economic risks of the proposed investment (that
is, at the time of investment, could afford a complete loss). Additionally, sales were made only to persons whom the Company believed,
and had reasonable grounds to believe immediately prior to such sale and upon making reasonable inquiry, (a) are capable of bearing
the economic risk of the investment, and (b) either personally possess the requisite knowledge and experience, or, together with
their offeree's representative, have such knowledge and experience.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><B>F.</B></TD><TD STYLE="text-align: justify"><B>CONVERTIBLE DEBENTURES</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">During period ending June 30,
2010, the Company issued convertible debentures bearing interest between 10% and 20% with terms of two to three years.&nbsp;&nbsp;The
debenture principle and accrued interest may be converted into shares of the Company&rsquo;s common stock at a conversion price
ranging from $0.10 in the first year to a discount of up to 70% of the three lowest closing bid prices during the ten days prior
to conversion.&nbsp;&nbsp;During the year ended June 30, 2010, the Company issued debentures totaling $71,000 (convertible into
potentially 18,916,612 shares of common stock based on a conversion rate on June 30, 2010). The fair market value of the stock
on the convertible debenture issuance dates was $.01</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>NanoTech Entertainment, Inc.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Notes to Consolidated
Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>For the Period of July 1,
2009 through June 30, 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><B>F.</B></TD><TD STYLE="text-align: justify"><B>n/a</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><B>G.</B></TD><TD STYLE="text-align: justify"><B>INCOME TAXES</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company recognizes the tax
effects of transactions in the year in which such transactions enter into the determination of net income, regardless of when
reported for tax purposes. Deferred taxes are provided in the financial statements under ASC Topic No. 740 to give effect to the
resulting temporary differences which may arise from differences in the bases of fixed assets, depreciation methods, allowances,
and start-up costs based on the income taxes expected to be payable in future years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><B>H.</B></TD><TD STYLE="text-align: justify"><B>GOING CONCERN CONSIDERATIONS</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company&rsquo;s financial
statements have been prepared using accounting principles generally accepted in the United States of America applicable to a going
concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. During
the year ended June 30, 2010, the Company incurred net losses totaling $1,763,155 resulting in an accumulated deficit of $3,367,599
at June 30, 2010. These conditions raise substantial doubt about the Company&rsquo;s ability to continue as a going concern. The
accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company's
ability to meet its ongoing financial requirements is dependent on management being able to obtain additional equity and/or debt
financing, the realization of which is not assured.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><B>I.</B></TD><TD STYLE="text-align: justify"><B>ROYALTIES</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company has entered into
several licensing agreements whereby the Company licenses certain gaming software from various developers. The Company is responsible
for paying royalties to the developers based on product sales. In the event that no product is sold, the Company is also required
to pay a minimum royalty in order to maintain exclusivity (i.e., the developer cannot license the same software to the Company's
competitors). Certain developers also require prepayment of royalties that are either offset by future sales, or expire at the
end of a calendar year - at which point they are expensed. No sales of the licensed products had occurred during the period ending
June 30, 2010. &#9;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><B>J.</B></TD><TD STYLE="text-align: justify"><B>SUBSEQUENT EVENTS</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">n/a</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><B>K.</B></TD><TD STYLE="text-align: justify"><B>SUBSEQUENT EVENTS (CONT&rsquo;D)</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">n/a</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>NanoTech Entertainment, Inc.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Notes to Financial
Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>For the Period of July 1,
2009 through June 30, 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>N.</B></TD><TD STYLE="text-align: justify"><B>COMMITMENTS AND CONTINGENCIES</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="color: black">The
Company has entered into rental contracts (the Contracts) with two officers (the Officers) for use of the Officers&rsquo; storage
facilities, offices, development labs, and utilities for the Company&rsquo;s operations, production, research and development,
sales, and marketing. The Contracts require $16,400 in monthly payments (plus other related minimal costs) to the Officers over
the Contracts&rsquo; term of December 1, 2007 through November 30, 2011. The Contracts are cancellable by either the Company or
the Officers with a 15-day advance notice only if all security interest given by the Officers for the Company has been removed
and there are no liens on the Officers&rsquo; properties for loans to the Company in effect. </FONT> The amounts incurred by the
Company and paid to the Officers for rent for the periods ended June 30, 2010 totaled $198,190. This amount has been recorded
in selling, general and administrative expenses for the same period (see Note C). <FONT STYLE="color: black">Future minimum rental
payments for the remaining life of the Contracts are as follow:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 40%; margin-left: 1.25in">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">Year Ended June 30,</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 79%; text-align: right">2011</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 18%; text-align: right">196,800</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: right; padding-bottom: 1pt">2012</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">82,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 2.5pt; text-align: right">Total</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">278,800</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.15in"><B><U>Item 9 Changes In and Disagreements with Accountants
on Accounting and Financial Disclosure</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">None. &nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>Item 9A. &ndash;Controls and Procedures</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Disclosure Controls and Procedures</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Under the supervision and with the participation
of our management, including our principal executive and financial officer, we have conducted an evaluation of the effectiveness
of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as of the end of the period covered by this report. Based on this evaluation, Robert DeKett, our CEO, respectively,
concluded as of the evaluation date that our disclosure controls and procedures are effective such that the material information
required to be included in our Securities and Exchange Commission reports is recorded, processed, summarized and reported within
the time periods specified in SEC rules and forms relating to our company, &nbsp;and was made known to us by others within those
entities, particularly during the period when this report was being prepared. It has been determined that the company must set
aside appropriate funds each quarter in order to ensure timely payments to auditors and subsequent timely filings. We have since
been delisted to the Pink Sheets due to our inability to timely file our reports under the Securities Exchange Act of 1934, we
have replaced certain officers of the Company which were responsible for our budgets and filings, and have identified and hired
the appropriate staff and outside consultants that will enable us to meet future filing requirements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Management&rsquo;s Annual Report on
Internal Control Over Financial Reporting.</U> &nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The management of the Company is responsible
for establishing and maintaining adequate internal control over financial reporting. The internal control process has been designed,
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
the Company&rsquo;s financial statements for external reporting purposes in accordance with accounting principles generally accepted
in the United States of America.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Management conducted an assessment of
the effectiveness of the Company&rsquo;s internal control over financial reporting as of June 30, 2010, including (i) the control
environment, (ii) risk assessment, (iii) control activities, (iv) information and communication, and (v) monitoring, based on
the framework in<I> Internal Control &ndash; Integrated Framework,</I> issued by the Committee of Sponsoring Organizations of
the Treadway Commission (&ldquo;COSO&rdquo;). As of June 30, 2010, management has determined that the Company&rsquo;s internal
control over financial reporting as of June 30, 2010 was not effective.<B> &nbsp;</B>We are in the process of developing new policies
and procedures with regards to internal control over financial reporting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our internal control over financial reporting
includes policies and procedures that pertain to the maintenance of records that accurately and fairly reflect, in reasonable
detail, transactions and dispositions of assets; and provide reasonable assurances that: (1) transactions are recorded as necessary
to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States;
(2) receipts and expenditures are being made only in accordance with authorizations of management and the directors of the Company;
and (3) unauthorized acquisitions, use, or disposition of the Company&rsquo;s assets that could have a material effect on the
Company&rsquo;s financial statements are prevented or timely detected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">All internal control systems, no matter
how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable
assurance with respect to financial statement preparations and presentations. Also, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Changes in Internal Control Over Financial
Reporting.</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">There were no significant changes in our
internal controls or in other factors that could significantly affect these controls subsequent to the evaluation date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>Item 9B. Other Information</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">No items required to be reported on Form
8-K during the fourth quarter of the year covered by this report were not previously reported on Form 8-K.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PART III</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>Item 10. Directors, Executive Officers,
and Corporate Governance.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Set forth below is the name and age of
each individual who was a director or executive officer of NanoTech Entertainment, Inc. as of June 30, 2010, together with all
positions and offices of the Company held by each and the term of office and the period during which each has served:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE ALIGN="CENTER" CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 16%; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">NAME</TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: center; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 6%; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">AGE</TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: center; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 52%; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">POSITION</TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: center; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 23%; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">DATES SERVED</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Robert DeKett</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">55</TD>
    <TD>&nbsp;</TD>
    <TD>President, Treasurer, Secretary and Director</TD>
    <TD>&nbsp;</TD>
    <TD>May 2009 to Present</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Biographical Information</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following paragraphs set forth brief biographical information
for the aforementioned director and executive officer:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Robert DeKett - President, Secretary,
Treasurer, and Director</B> - In 1980, Mr. DeKett began his career at Merit Industries, the leading manufacturer of video games,
countertop games, and electronic dart games for the coin-op arcade industry and in 1985 designed the first touch-screen countertop
game which revolutionized the industry. In 1997, he joined Quantum3D as Worldwide Business Development Director - Out-of-Home
Entertainment (OHE) to advance their newly created 3Dfx based technology and establish distributorships worldwide. In 2002, he
joined his colleague David R. Foley (founder, UltraCade Technologies) as VP of Business Development at UltraCade Technologies
where he was responsible for all licensing and negotiations. Mr. DeKett procured licenses from many major Japanese, European,
and US video game publishers including an exclusive worldwide license with the NTRA for the Breeders&rsquo; Cup, with development
deals both in the Video Game and Casino Gaming industries. UltraCade also won the coveted Video Game Innovative Product of the
Year for its Breeder Cup Arcade game. Mr. DeKett attended St. Vincent College and earned degrees in English BA &amp; Philosophy
BA - Summa Cum Laude.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Compliance with Section 16(a) of the Exchange Act</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Because we do not have a class of equity
securities registered pursuant to Section 12 of the Exchange Act, our executive officers, directors and persons who beneficially
own more than 10% of our common stock are not required to file initial reports of ownership and reports of changes in ownership
with the SEC under Section 16(a) of the Exchange Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Audit Committee and Audit Committee Financial Expert Disclosure</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company&rsquo;s Board of Directors
does not have a separately designated audit committee or an &ldquo;audit committee financial expert.&rdquo; Audit committee functions
are performed by our Board of Directors. None of our directors is deemed independent. All directors also hold positions as our
officers. Our audit committee is responsible for: (1) selection and oversight of our independent accountant; (2) establishing
procedures for the receipt, retention and treatment of complaints regarding accounting, internal controls, and auditing matters;
(3) establishing procedures for the confidential, anonymous submission by our employees of concerns regarding accounting and auditing
matters; (4) engaging outside advisors; and, (5) funding for the outside auditory and any outside advisors engagement by the audit
committee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Board of Directors does not have an
audit committee financial expert at this time due to the fact that the Company has only limited operations and no revenues. &nbsp;We
believe the cost related to retaining a financial expert at this time is prohibitive. Further, because of our limited operations,
we believe the services of a financial expert are not warranted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Code of Ethics</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have adopted a corporate code of ethics.
We believe our code of ethics is reasonably designed to deter wrongdoing and promote honest and ethical conduct; provide full,
fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting
of code violations; and provide accountability for adherence to the code.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>Item 11. &nbsp;Executive Compensation</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(a) A majority of the Intellectual Property
was acquired by the Company in the form of an employment agreement whereby one of the original founders, David R. Foley, assigned
the rights to his substantial intellectual property portfolio in return for the compensation outlined in his employment agreement.&nbsp;
To date, Mr. Foley has not been compensated under the terms of his agreement.&nbsp;The Company intends on offering stock in lieu
of the past due compensation, and paying the compensation moving forward. There is currently accrued compensation due as of June
30, 2010 totaling $1,001,876 payable to Robert DeKett (Current Officer and Director) and David Foley.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(b) There are no annuity, pension, or
retirement benefits proposed to be paid to officers, directors, or employees of the Corporation in the event of retirement at
normal retirement date pursuant to any presently existing plan provided or contributed to by the Corporation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(c) The currently are employment agreements
with two officers and directors of the Company. The terms of these employment agreements are as follows:</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Robert
                                                                                                               Dekett (President,
                                                                                                               Treasurer, and
                                                                                                               Secretary) &ndash;
                                                                                                               Mr. DeKett&rsquo;s
                                                                                                               current compensation
                                                                                                               through calendar
                                                                                                               year-end 2010 is
                                                                                                               $175,000 USD per
                                                                                                               annum with an increase
                                                                                                               to $210,000 USD
                                                                                                               for calendar year
                                                                                                               2011. Currently,
                                                                                                               Mr. DeKett&rsquo;s
                                                                                                               salary is accruing
                                                                                                               on a monthly basis.</TD></TR>                                                                                                                                            <TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD></TR>
</TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Ted
                                                                                                               D. Campbell II
                                                                                                               (Chief Compliance
                                                                                                               Officer) - Mr.
                                                                                                               Campbell&rsquo;s
                                                                                                               current compensation
                                                                                                               through fiscal
                                                                                                               year end 2010 is
                                                                                                               $75,000 USD per
                                                                                                               annum with an increase
                                                                                                               to $108,000 USD
                                                                                                               for fiscal year
                                                                                                               2011. Currently,
                                                                                                               Mr. Campbell&rsquo;s
                                                                                                               compensation is
                                                                                                               accruing on a monthly
                                                                                                               basis.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Director Compensation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Directors of the Company do not receive compensation at
this time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>Item 12 - Security Ownership of
Certain Beneficial Owners and Management and Related Stockholder Matters</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table sets forth the beneficial
ownership of the Company's officers, directors, and persons who own more than five percent of the Company's common stock as of
June 30, 2010. Under relevant provisions of the Exchange Act, a person is deemed to be a &quot;beneficial owner&quot; of a security
if he or she has or shares the power to vote or direct the voting of the security or the power to dispose or direct the disposition
of the security. A person is also deemed to be a beneficial owner of any securities of which that person has the right to acquire
beneficial ownership in 60 days. More than one person may be deemed to be a beneficial owner of the same securities. The percentage
ownership of each stockholder is calculated based on 15,910,000 total outstanding shares of our common stock as of June 30, 2010.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Amount and Nature of Beneficial Ownership
as of June 30, 2010:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="width: 90%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Name&nbsp;of&nbsp;Individual</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">#&nbsp;Shares&nbsp;Beneficially&nbsp;Owned</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">#&nbsp;of&nbsp;Class&nbsp;of&nbsp;Common&nbsp; <BR>Stock&nbsp;(1)</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 58%; text-align: left"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Robert Dekett </B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">President, Treasurer, Secretary and Director</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">PO Box 50729</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Henderson, Nevada 89016</P></TD><TD STYLE="width: 1%; text-align: right; vertical-align: top">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="width: 18%; text-align: right; vertical-align: top">3,000,000</TD><TD STYLE="width: 1%; text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="width: 1%; text-align: right; vertical-align: top">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="width: 18%; text-align: right; vertical-align: top">18.9</TD><TD STYLE="width: 1%; text-align: right; vertical-align: top">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Ted D. Campbell II </B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Chief Compliance Officer</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">PO Box 240</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Jenks, Oklahoma 74037</P></TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">0</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">0.00</TD><TD STYLE="text-align: right; vertical-align: top">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>David R. Foley </B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">311 Santa Rosa Drive</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Los Gatos, California 95032</P></TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">3,000,000</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">18.9</TD><TD STYLE="text-align: right; vertical-align: top">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Greenleaf Forum Investments </B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Kevin Murphy, President</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">1174 Manitou Drive NW</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Fox Island, WA 98333</P></TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">1,300,000</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">8.2</TD><TD STYLE="text-align: right; vertical-align: top">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">T<B>akashi and Keiko Yoshida </B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">59 Preston Road</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Woodside, CA 94062</P></TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">1,000,000</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">6.3</TD><TD STYLE="text-align: right; vertical-align: top">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Alan Tolson </B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Skiddaw View Sandale</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Bolton Gate, Cumbria</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">CA5 1DE</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">UK</P></TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">1,500,000</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">9.4</TD><TD STYLE="text-align: right; vertical-align: top">%</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Item 13 &ndash; Certain Relationships and Related Transactions,
Director Independence</U></B></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company pays rent expense to two shareholders
for the use of property for business purposes. The amounts to be paid to the Company&rsquo;s shareholders for rent for the years
ended June 30, 2010 totaled $198,180. These amounts have been recorded in selling, general and administrative expenses for the
same periods.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>Item 14 &ndash; Principal Accountant
Fees and Services</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Audit Fees:</U> All fees billed for
each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant's
annual financial statements and the review of interim financial statements or services that are normally provided by the accountant
in connection with statutory and regulatory filings or engagements for those fiscal years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 20%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.65in">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 57%; text-align: justify">2009:</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 40%; text-align: right">40,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify">2008:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">8,800</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Audit-Related Fees</U>: All fees billed
in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related
to the performance of the audit or review of the registrant's financial statements and are not reported under Item 9(e)(f1) of
Schedule 14A.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 20%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.65in">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 57%; text-align: justify">2009:</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 40%; text-align: right">1,750</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify">2008:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Tax Fees</U>: The aggregate fees billed
in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice,
and tax planning:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 20%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.65in">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 57%; text-align: justify">2009:</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 40%; text-align: right">3,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify">2008:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.55in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>All Other Fees</U>:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 20%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.65in">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 57%; text-align: justify">2009:</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 40%; text-align: right">0</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify">2008:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;(5) &nbsp;&nbsp;Our audit committee's
pre-approval policies and procedures described in paragraph (c)(7)(i) of Rule 2-01 of Regulation S-X were that the audit committee
pre-approve all accounting related activities prior to the performance of any services by any accountant or auditor.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(6) &nbsp;&nbsp;The percentage of hours
expended on the principal accountant's engagement to audit our financial statements for the most recent fiscal year that were
attributed to work performed by persons other than the principal accountant's full-time, permanent employees was 0%.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PART IV</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>Item 15 &ndash; Exhibits, Financial
Statement Schedules</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following exhibits are included with this filing:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 90%; border-collapse: collapse; margin-left: 0.5in">
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="width: 12%; text-autospace: none; font-weight: bold; border-bottom: Black 1pt solid">Exhibit No.:</TD>
    <TD NOWRAP STYLE="width: 1%; text-autospace: none; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 87%; text-autospace: none; font-weight: bold; border-bottom: Black 1pt solid">Description:</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-autospace: none">&nbsp;</TD>
    <TD STYLE="text-autospace: none">&nbsp;</TD>
    <TD STYLE="text-autospace: none">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-autospace: none">3.1(i)</TD>
    <TD STYLE="text-autospace: none">&nbsp;</TD>
    <TD STYLE="text-autospace: none">Articles of Incorporation and amendments thereto <SUP>(1) and (2)</SUP></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-autospace: none">&nbsp;</TD>
    <TD STYLE="text-autospace: none">&nbsp;</TD>
    <TD STYLE="text-autospace: none">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-autospace: none">3.1(ii)</TD>
    <TD STYLE="text-autospace: none">&nbsp;</TD>
    <TD STYLE="text-autospace: none">Bylaws <SUP>(1)</SUP></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-autospace: none">&nbsp;</TD>
    <TD STYLE="text-autospace: none">&nbsp;</TD>
    <TD STYLE="text-autospace: none">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-autospace: none">14</TD>
    <TD STYLE="text-autospace: none">&nbsp;</TD>
    <TD STYLE="text-autospace: none">Code of Ethics <SUP>(1)</SUP></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-autospace: none">&nbsp;</TD>
    <TD STYLE="text-autospace: none">&nbsp;</TD>
    <TD STYLE="text-autospace: none">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-autospace: none">31.1</TD>
    <TD STYLE="text-autospace: none">&nbsp;</TD>
    <TD STYLE="text-autospace: none">Section 302 Certification by Principal Executive Officer and Principal Financial and Accounting
    Officer <SUP>(1)</SUP></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-autospace: none">&nbsp;</TD>
    <TD STYLE="text-autospace: none">&nbsp;</TD>
    <TD STYLE="text-autospace: none">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-autospace: none">32.1</TD>
    <TD STYLE="text-autospace: none">&nbsp;</TD>
    <TD STYLE="text-autospace: none"><FONT STYLE="font-weight: normal">Section 906 Certification by </FONT>Principal Executive
    Officer and Principal Financial and Accounting Officer <SUP>(1)</SUP></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(1)</TD><TD STYLE="text-align: justify">Filed with the Securities and
                                                                 Exchange Commission on February 12, 2008 as an exhibit numbered
                                                                 as indicated above, to the Registrant&rsquo;s registration statement
                                                                 on Form S-1 (file no. 333-149184 which exhibit is incorporated
                                                                 herein by reference.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(2)</TD><TD STYLE="text-align: justify">Amendment to the Article of Incorporation
                                                                 filed with the Securities and Exchange Commission on Form 8-K
                                                                 on May 7, 2009 which exhibit is incorporated herein by reference.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>



<P STYLE="margin: 0"></P>

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<P STYLE="margin: 0"></P>

<P STYLE="margin: 0"></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">9.2 &ndash; Financial Information Forming
Basis for 10K for period ending June 30, 2011</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PART I</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>ITEM 1. &nbsp;BUSINESS</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>General</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">NanoTech Entertainment, Inc. (the &ldquo;Company&rdquo;
or &ldquo;We&rdquo; or &ldquo;NanoTech&rdquo;) was originally organized as a Nevada Corporation on July 15, 2004 under the name
Aldar Group, Inc. (&ldquo;AGI&rdquo;) for the purpose of acquiring, selling and breeding thoroughbred horses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On April 30, 2009, the Company entered
into a Sale and Acquisition Agreement (the &ldquo;Agreement&rdquo;) with NanoTech Entertainment, Inc. (&ldquo;NEI&rdquo;), a Nevada
corporation, wherein the Company acquired 100% of NEI&rsquo;s issued and outstanding common stock through the exchange of 6,480,000
common shares. As a result of the Agreement, the Company changed its name to NanoTech Entertainment, Inc. (&ldquo;NTI&rdquo;) to
better reflect the direction of the newly formed entity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For accounting purposes, the share exchange
transaction was treated as a capital transaction where AGI, as the shell-corporation and legal acquirer, issued stock for the net
monetary assets of NEI, the accounting acquirer, accompanied by a recapitalization. The accounting is similar in form to a reverse
acquisition, except that goodwill or other intangibles are not recorded.&nbsp;&nbsp;<FONT STYLE="color: black"> </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company now operates as a virtual manufacturer,
developing technology and games, and then licensing such products to third parties for manufacturing and ultimate distribution.
The Company&rsquo;s business model supports relatively low overhead costs and efficiencies in operations in the new global manufacturing
economy.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Company Overview</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">NanoTech Entertainment, Inc. is a provider
of gaming technology for the coin-op arcade, casino gaming, and consumer gaming markets. Headquartered in Las Vegas, Nevada, we
operate as a virtual manufacturer, developing technology and games, and then licensing them to third parties for manufacturing
and distribution.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">With an ever-expanding lineup of technology
and products, NanoTech is redefining the role of developers and manufacturers in the gaming market. NanoTech's team is comprised
of industry veterans of the gaming industry and have collectively been responsible for dozens of award winning products and multi-million
copy selling video games and technology.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Market and Industry</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have experience and products for all
aspects of the various gaming industries.&nbsp; By traversing the market from consumer to coin-op to casino, the Company may be
able to take advantage of all three growth &amp; profitable industries and balance out the seasonal patterns of each.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Even in the unsteady economic climate,
the gaming market continues to flourish and expand.&nbsp; In 2008, the arcade industry saw $7.2 billion in revenue, and the consumer
market saw $58 billion with a growth of 19% in 2008. The following are excerpts from other sources:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">&ldquo;As people cut back on travel and going out, they are turning more to home entertainment,
providing a boost to the video game industry.&rdquo; Reuters, April 2, 2009</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">&ldquo;The video game business continues to enjoy robust growth, making it the fastest growing
of the many consumer goods categories.&rdquo;&nbsp; Market Watch, Feb 18, 2009</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The NanoTech team has won numerous awards
in recent years including innovative product of the year in 2005 and 2006 in the arcade industry and innovative product of the
year in 2007 in the casino market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Products</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Below is a list of the Company&rsquo;s
current product line with detailed descriptions. For more information on the Company&rsquo;s products and services you can view
our web site at www.NanoTechEnt.com.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">MultiPin&trade; - There is currently only
one Pinball manufacturer left in the world, Stern Pinball.&nbsp; While they supply over 10,000 machines per year to the market,
there is a huge demand for new and innovative pinball.&nbsp; MultiPin&trade; represents the next generation in pinball.&nbsp; By
replacing the mechanical parts of a pinball machine with state of the art electronics, MultiPin&trade; solves two major problems
seen by operators of Pinball machines.&nbsp; First, it eliminates any mechanical failures, which are common amongst pinball machines.&nbsp;
Secondly, it provides a multi-game platform that can be constantly updated with new games without having to swap out the machine.&nbsp;
Our proprietary physics engine and motion sensors allow MultiPin&trade; to accurately recreate the experience of a mechanical pinball
machine, while providing players with a variety of classic and modern pinball games to choose from.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;Xtreme Rally Racing&trade; - An Xtreme
Off-Road Racing Experience with no boundaries. Xtreme Rally Racing is an innovative new driving machine that features three modes
of game play:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Xtreme Off-Road - Race head-to-head
against other players and the computer to checkpoints while driving anywhere on the map with no preset course.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Timed Rally Stages - Classic
Rally Racing on real world courses. Players will be able to race in five different countries on real world rally courses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Xtreme Stadium Racing - Custom
Stadiums designed for Xtreme racing, including a figure-8 multi-lap course with huge jumps.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">NanoNET Online System - Local and worldwide
head-to-head competition in real time against machines located around the world. Remote operator control of your machines including
diagnostics, accounting reports, and automatic software updates and enhancements downloaded over the net. Link up to four cabinets
for local multiplayer action.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pinball Wizard &trade; - Consumer Pinball
enthusiasts have been growing with the advent of Visual Pinball and now Future Pinball.&nbsp; The official Visual Pinball forum
boasts over 155,000 members, and the free version Future Pinball has been downloaded over 1 million times in the past six months,
and over 500,000 copies in April 2009.&nbsp; We have created the only input device designed to give these players a way to experience
real pinball controls on their personal computer.&nbsp;&nbsp; Based on the technology developed for the MultiPin&trade; product
we have built a controller that lets people play pinball using traditional controls and the ability to &ldquo;shake&rdquo; and
&ldquo;nudge&rdquo; the table.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Mot-Ion&trade; Adapter - The Mot-Ion adapter
is a USB adapter that allows do-it-yourself Pinball enthusiasts to build their own cabinet using real pinball controls providing
analog inputs for nudging and bumping. This kit includes everything needed to connect a pinball cabinet to a PC (I/O Board, Digital
Plunger, Wiring Harness).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Opti-Gun&trade; Adapter - The OptiGun adapter
is a USB adapter that allows players to connect Arcade Light Guns to any USB based system. This universal adapter provides a complete
solution to implement an arcade game including gun inputs, force feedback outputs, digital inputs, and built-in audio amplifiers.
The adapter can also be used with PC based emulators such as M.A.M.E. to connect arcade light guns on your home system.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Retr-IO&trade; Adapter - The Retr-IO adapter
provides a standard JAMMA interface for USB based systems. This universal adapter provides a complete solution to implement an
arcade game using joysticks, trackballs, spinners, and buttons, and features digital outputs and built-in audio and video amplifiers.<BR STYLE="mso-special-character: line-break">
<BR STYLE="mso-special-character: line-break">
</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The board works with any PC based system
including M.A.M.E and other emulation products. It provides an all-in-one solution to hooking up traditional arcade controls to
your PC, or any USB system. All digital inputs and outputs are interfaced via standard keyboard commands, and appear as mapped
keys to your games. The default key mappings match those of many popular PC emulation products. Two trackballs and two spinners
are supported and mapped to the system as mice. The board supports four player standard configurations or two player four-way joystick
and six-button configurations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Competition</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company will compete against established
companies with significantly greater financial, marketing, research and development, personnel, and other resources than the Company.
Such competition could have a material adverse effect on the Company's profitability.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Government Regulation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">There are no government regulations regulating
the development and sale of gaming products for coin-operated machines.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>ITEM 1A. &nbsp;RISK FACTORS</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Not applicable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>ITEM 1B. &nbsp;UNRESOLVED STAFF COMMENTS</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Not applicable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>ITEM 2. &nbsp;PROPERTIES</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our principal Nevada executive offices
are located at 3883 Raymert Drive, Suite 3, Las Vegas, NV 89121 and our phone number is 702-518-7410.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>ITEM 3. &nbsp;LEGAL PROCEEDINGS</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are not currently involved in any legal
proceedings nor do we have any knowledge of any threatened litigation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>ITEM 4. &nbsp;SUBMISSION OF MATTERS
TO A VOTE OF SECURITIES HOLDERS</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">No matters were submitted to a vote of
security holders during the fiscal year ended June 30, 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PART II</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>ITEM 5. &nbsp;MARKET FOR REGISTRANT&rsquo;S COMMON EQUITY,
RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our common stock is currently quoted on
the Pink OTC Markets Inc., more commonly referred to as the Pink Sheets (the &ldquo;Pink Sheets&rdquo;) under the symbol &ldquo;NTEK.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">There has been limited trading of our common
stock since our initial listing on the OTCBB<SUP>&reg;</SUP> on September 22, 2008 under the ticker symbol ALDJ. On June 10, 2009,
pursuant to a corporate name change and a change in control of the Company, the ticker was changed to NTEK. On October 2, 2009,
our symbol was changed to NTEKE for failure to be current in our reporting obligations with the Securities and Exchange Commission.
On November 3, 2009, our ticker symbol was returned to NTEK and we were delisted to the Pink Sheets. Below is a table listing the
high and low trading price by quarter for the fiscal year end June 30, 2010.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="width: 60%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Quarter Ended</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">High</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Low</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 52%; text-align: center">September 30, 2010</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 21%; text-align: right">0.09</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 21%; text-align: right">0.012</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: center">December 31, 2010</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.09</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.0124</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: center">March 31, 2011</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.09</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.0665</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: center">June 30, 2011</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.08</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.0082</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">It is our plan that upon becoming current
with all our required filings pursuant to the Securities Exchange Act of 1934, as amended, we plan on filing a new Form 15c2-11
application with FINRA for re-listing on the OTCBB<SUP>&reg;</SUP>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Holders</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of June 30, 2011, we had 15,910,000
shares of common stock, par value $0.001, issued and outstanding. The stock transfer agent for our securities is Stalt, Inc., 671
Oak Grove Avenue, Suite C, Menlo Park, CA 94025.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Dividends</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">There are no restrictions in our Articles
of Incorporation or Bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from
declaring dividends where, after giving effect to the distribution of the dividend:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">3.</TD><TD STYLE="text-align: justify">We would not be able to pay our debts as they become due in the usual course of business; or</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">4.</TD><TD STYLE="text-align: justify">Our total assets would be less than the sum of the total liabilities plus the amount that would
be needed to satisfy the rights of stockholders who have preferential rights superior to those receiving the distribution.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company has not declared any dividends,
and does not plan to declare any dividends in the foreseeable future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Recent Sales of Unregistered Securities</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company has authorized 75,000,000 shares
of common stock with a par value of $.001, and no preferred stock. As of June 30, 2010 (the most recent fiscal year) the total
shares issued and outstanding was 15,910,000. No additional share issuances occurred during the year ended June 30, 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>Securities Authorized for Issuance
under Equity Compensation Plans</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We do not have any equity compensation
plans and accordingly we have no securities authorized for issuance thereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Purchases of Equity Securities by the Registrant and Affiliated
Purchasers</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We did not purchase any of our shares of
common stock or other securities during the year ended June 30, 2009.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">[Balance of Page Intentionally Left Blank]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>ITEM 6. &nbsp;SELECTED FINANCIAL DATA</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table includes select data
extracted from, and should be examined in conjunction with, the financial statements and footnotes for the year ended June 30,
2011 as found under Item 8 of this annual report.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="width: 80%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Year&nbsp;Ended</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">June&nbsp;30,</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 82%; text-align: left">Gross sales</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">8,284</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Gross profit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,467</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Net loss from operations</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,228,504</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Net cash provided by financing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">279,770</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Net cash used in operating activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">290,814</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Cash on hand</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,803</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>Net loss per share</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">.07</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Cash dividends declared per common share</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Property and equipment, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Stockholders&rsquo; deficit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2,803,806</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>ITEM 7. &nbsp;MANAGEMENT&rsquo;S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following plan of operation should
be read in conjunction with our financial statements and the notes thereto included elsewhere in this annual report. Statements
contained herein which are not historical facts are forward-looking statements, as that term is defined by the Private Securities
Litigation Reform Act of 1995, including statements relating to our plans, objectives, expectations and intentions. Although we
believe that the expectations reflected in such forward-looking statements are reasonable, forward-looking statements are subject
to risks and uncertainties that could cause actual results to differ from those projected. We caution investors that any forward-looking
statements made by us are not guarantees of future performance and that actual result may differ materially from those in the forward-looking
statements. Such risks and uncertainties include, without limitation: established competitors who have substantially greater financial
resources and operating histories, regulatory delays or denials, ability to compete as a start-up company in a highly competitive
market, and access to sources of capital.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Results of Operations</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We generated revenues from operations of
$8,284 since July 1, 2010 and have incurred $1,231,972 in expenses through June 30, 2011, as well as $4c817 of costs of goods sold.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table provides selected financial
data about our company for the current fiscal year ended June 30, 2010 and period of July 1, 2009 through June 30, 2010, the prior
fiscal year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="width: 70%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Balance Sheet Data</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">June 30, 2011</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">June 30, 2010</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 66%">Cash</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 14%; text-align: right">43</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 14%; text-align: right">2,803</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Total Current Assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">51,967</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">55,345</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Total Assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">51,967</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">55,839</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Total Liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2,855,774</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,957,096</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Stockholders' Deficit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2,803,806</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,901,257</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>Plan of Operation</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have developed a plan of operation reflecting
our objectives for the next 12 months and beyond. In our plan, we identify our cash requirements, our new product development,
and our required staffing and additional funding requirements to fulfill our business objectives.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Cash Requirements</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We estimate that we require a minimum of
approximately $250,000 to operate for the next 12 months from the date of this annual report. The minimum of $250,000 is required
for operating expenses and general operational overhead. Additional funds of $500,000 would be required to fully implement our
business plan which will include the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Product Development &ndash; This will include programming, engineering, and prototype building.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Trade Shows &ndash; We plan to exhibit our existing products and roll out new product development
through several trade shows during year.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Prototype Engineering &ndash; This will include research and development of new technology to our
existing products and any new products to be developed.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">U.S Patent Filings</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">To the extent we are unable to meet our
operating expenses, we may borrow funds from our current management or other affiliates, or we may attempt to raise capital from
private individuals or institutional investment equity funds. Any funds generated from product sales if any, in our company that
exceeds our operating expenses and debt repayments will be used to expand our operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Revenues</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company recorded $8,284 in revenues
from operations in this fiscal year, which was generated from pre-production product sales, product licensing fees and other related
business. These revenues have come mainly from the sale of prototype products.&nbsp; These sales were for test units while the
products are completing the development cycle. We have produced additional revenue from consumer level products that we sell on
our web store. We have several products that are nearing completion of development and once we have the funding to start a full
production run anticipate being able to quickly ramp up sales to our target of $200,000 per month.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We currently have several OEM customers
that are ready to purchase our Xtreme Rally Racing and MultiPin game machines once they are available.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Operating and General &amp; Administrative
Expenses</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Operating expenses consisting of office
rent, administrative staff, salaries, and other general administrative expenses totaled $1,231,972 for the year ended June 30,
2011</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Income Taxes</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company does not anticipate having
to pay income taxes in the upcoming years due to our absence of net profits.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Capital and Liquidity</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of June 30, 2011 we had total current
assets of $51,967, and total current liabilities of $2,855,774.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We had cash on hand of $43 as of June 30,
2011. We do not have sufficient cash to meet our short-term needs over the next 12 months, which are to manufacture and sell our
existing products, expand our product development, costs of research and development, trade show presentations, financing of product
inventory, development of prototypes, and protection of our intellectual capital through the applications for U.S. patents.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">[Balance of Page Intentionally Left Blank]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ITEM 8 Financial Statements and Supplementary
Data</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">NanoTech Entertainment, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(A Development Stage Company)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Financial Statements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">For the Period of July 1, 2010</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">through June 30, 2011</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">NanoTech Entertainment, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(A Development Stage Company)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Index to Financial Statements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">For the Period of July 1, 2010</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">through June 30, 2011</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="width: 90%; vertical-align: top; text-autospace: none">Report of Independent Registered Public Accounting Firm</TD>
    <TD STYLE="width: 10%; vertical-align: bottom; text-autospace: none; text-align: right">2</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; text-autospace: none">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-autospace: none; text-align: right">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top; text-autospace: none">Balance Sheet</TD>
    <TD STYLE="vertical-align: bottom; text-autospace: none; text-align: right">3</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; text-autospace: none">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-autospace: none; text-align: right">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top; text-autospace: none">Statement of Operations</TD>
    <TD STYLE="vertical-align: bottom; text-autospace: none; text-align: right">4</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; text-autospace: none">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-autospace: none; text-align: right">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top; text-autospace: none">Statement of Changes in Stockholders&rsquo; Deficit</TD>
    <TD STYLE="vertical-align: bottom; text-autospace: none; text-align: right">5</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; text-autospace: none">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-autospace: none; text-align: right">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top; text-autospace: none">Statement of Cash Flows</TD>
    <TD STYLE="vertical-align: bottom; text-autospace: none; text-align: right">6</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; text-autospace: none">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-autospace: none; text-align: right">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top; text-autospace: none">Notes to Financial Statements</TD>
    <TD STYLE="vertical-align: bottom; text-autospace: none; text-align: right">7</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(REPORT OF INDEPENDENT AUDITING FIRM TO
BE INSERTED HERE IN FORM 10K)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>NanoTech Entertainment, Inc.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Balance Sheet</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">June&nbsp;30,</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>ASSETS</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Current assets:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 85%; padding-left: 9pt">Cash</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">43</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Inventory (Note B)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,924</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Prepaid expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Prepaid royalties (Note K)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">40,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Total current assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">51,967</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Property and equipment (Note B)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,961</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Less: accumulated depreciation</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,961</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Net property and equipment</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">Total assets</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">51,924</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">LIABILITIES AND STOCKHOLDERS&rsquo; DEFICIT</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>LIABILITIES</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Current liabilities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Accounts Payable and Accrued Expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">352,378</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Cash drawn in excess of bank balance</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Accounts Payable &ndash; Related Parties</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">377,483</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Accrued Salaries</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,553,376</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Notes Payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">33,144</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Notes payable &ndash; Related Parties (Note C)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">101,563</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Convertible Notes Payable (Note F)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">571,500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Convertible Notes payable &ndash; Related Parties (Note C)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">48,700</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Discount on Convertible Debt</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(182,370</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Total current liabilities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,855,774</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">STOCKHOLDERS&rsquo; DEFICIT (Note E)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.12in; text-indent: -0.12in">Common stock, $.001 par value, 75,000,000 shares authorized, 14,437,000 and 15,910,000 shares issued and outstanding as of June 30, 2009 and June 30, 2010, respectively</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,910</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Additional paid-in capital</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,685,432</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Deficit accumulated during the development stage</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(4,505,148</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Total stockholders&rsquo; deficit</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,80,806</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">Total liabilities and stockholders&rsquo; deficit</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">51,968</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The accompanying notes are an integral part of these consolidated
financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NanoTech Entertainment, Inc.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Statements of Operation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B> &nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">For&nbsp;the&nbsp;Year</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">Ended&nbsp;June&nbsp;30,</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>Revenues:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 85%; text-align: left; padding-left: 9pt">Sales, net</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">8,284</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Less: costs of goods sold</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(4,817</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Gross profit</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">3,467</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Operating Expenses:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Selling, general and administrative</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,231,972</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Other Income (Expenses)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Interest expense</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(133,721</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Net loss before income taxes</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,228,504</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Provision for income taxes</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">Net loss available to common stockholders</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(1,228,504</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The accompanying notes are an integral part of these consolidated
financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NanoTech Entertainment, Inc.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Statement of Changes in Stockholders&rsquo;
Deficit</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Deficit&nbsp;Accumulated</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">During&nbsp;the</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="text-align: center">Common&nbsp;Stock</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Additional</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Development</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Total</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Shares</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Amount</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Paid-In&nbsp;Capital</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Stage</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Stockholders&rsquo;&nbsp;Deficit</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 31%">Balance, June 30, 2010</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">15,910,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">15,910</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">374,511</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">(3,411,357</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">(3,036,421</TD><TD STYLE="width: 1%; text-align: left">))</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Settlement of vendor debt, $.10/share</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Shares issued as Payment Consulting Fees @ $.10/share</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0.12in; text-indent: -0.12in">Shares issued in private placement, $.10/share</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0.12in; text-indent: -0.12in">Shares issued in private placement, $.05/share</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Net loss</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,228,504</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,228,504</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 2.5pt">Balance, June 30, 2011</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">15,910,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">15,910</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">374,511</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(4,505,148</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(3,036,421</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="text-underline-style: double">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The accompanying notes are an integral part of these consolidated
financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<!-- Field: Page; Sequence: 49; Value: 2 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->49<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NanoTech Entertainment, Inc. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Statement of Cash Flow</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">For&nbsp;the&nbsp;Year</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">Ended&nbsp;June&nbsp;30,</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Cash flows from operating activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 85%; text-align: left; padding-left: 9pt">Net loss</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">(1,228,504</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Depreciation expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">494</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Common stock issued for services</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Changes in operating assets and liabilities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Increase in inventory</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,848</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Increase in prepaid expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-6,466</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Increase in accounts payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">97,580</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Increase in accounts payable &ndash; related party</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">106,598</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Increase in accrued interest, notes payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">133,721</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Net cash used in operating activities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(290,814</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Cash flows from financing activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Cash drawn in excess of bank balance</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Proceeds from issuance of common stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Proceeds from issuance of convertible debentures</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">290,814</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Net cash provided by financing activities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">290,814</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Increase (decrease) in cash</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,760</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">Cash, beginning of period</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,803</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 2.5pt">Cash, end of period</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">43</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Non-cash investing and financing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 9pt">Issuance of common stock upon conversion of debentures</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">0</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 9pt">Issuance of common stock upon conversion of loan</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">0</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 9pt">Issuance of common stock in settlement of vendor debt</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">0</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 9pt">Conversion of notes payable to convertible debentures</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">0</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Supplemental cash flow information:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 9pt">Interest paid in cash</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">15,059</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 9pt">Income taxes paid in cash</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">The accompanying notes are an integral part
of these consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>NanoTech Entertainment, Inc.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Notes to Financial
Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>For the Period of July 1, 2010
through June 30, 2011</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><B>D.</B></TD><TD><B>ORGANIZATION</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">NanoTech Entertainment, Inc.
(&ldquo;NEI&rdquo;) was incorporated under the laws of the state of Nevada on November 13, 2007. The Company operates as a virtual
manufacturer, developing technology and games, and then licensing such products to third parties for manufacturing and ultimate
distribution.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left; text-indent: 0.25in"><B>DEVELOPMENT
STAGE COMPANY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company is considered to
be in the development stage as defined in Statement of Financial Accounting Standards Board (FASB) Accounting Standards Codification
(ASC) Topic No. 915. The Company&rsquo;s efforts have been devoted primarily to raising capital, borrowing funds and attempting
to implement its planned, principal activities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><B>E.</B></TD><TD><B>SIGNIFICANT ACCOUNTING POLICIES</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left; text-indent: 0.25in"><B>USE OF
ESTIMATES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The preparation of the Company&rsquo;s
financial statements in conformity with accounting principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results
could differ from those estimates. The Company&rsquo;s periodic filings with the Securities and Exchange Commission include, where
applicable, disclosures of estimates, assumptions, uncertainties and markets that could affect the financial statements and future
operations of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><B>CASH AND CASH EQUIVALENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Cash and cash equivalents include
cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception,
which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant
risk of loss in value. The Company&rsquo;s cash balances totaled $43 as of June 30, 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>NanoTech Entertainment, Inc. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Notes to Financial
Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>For the Period of July 1, 2010
through June 30, 2011</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><B>C.</B></TD><TD><B>SIGNIFICANT ACCOUNTING POLICIES (CONT&rsquo;D)</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><B>INVENTORY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company&rsquo;s inventory
is stated at the lower of cost or market using the FIFO costing method. Inventory on hand totaled $11,924 at June 30, 2011 and
consisted entirely of finished goods gaming equipment available and ready for sale.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><B>PROPERTY AND EQUIPMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company&rsquo;s property
and equipment is comprised of office and computer equipment, which are stated at cost. Depreciation is calculated over the estimated
useful lives ranging from 3 to 7 years using the straight &ndash; line method. The Company is in the development stage and has
only acquired $2,961 in fixed assets since inception, which had accumulated depreciation of $2,961 at June 30, 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><B>REVENUE RECOGNITION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Revenues for gaming equipment
sales are recognized when risks associated with ownership have passed to unaffiliated customers, and when all criteria of ASB Topic
No. 605 (SAB Topic 13) have been met. Typically, this occurs when finished products are shipped.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>NanoTech Entertainment, Inc. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Notes to Financial
Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>For the Period of July 1, 2010
through June 30, 2011</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><B>G.</B></TD><TD><B>SIGNIFICANT ACCOUNTING POLICIES (CONT&rsquo;D)</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left; margin-left: 0.5in"><B>RECENTLY-ISSUED ACCOUNTING
PRONOUNCEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">In June 2009 the FASB established
the Accounting Standards Codification (&quot;Codification&quot; or &quot;ASC&quot;) as the source of authoritative accounting principles
recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in accordance with
generally accepted accounting principles in the United States (&quot;GAAP&quot;). Rules and interpretive releases of the Securities
and Exchange Commission (&quot;SEC&quot;) issued under authority of federal securities laws are also sources of GAAP for SEC registrants.
Existing GAAP was not intended to be changed as a result of the Codification, and accordingly the change did not impact our financial
statements. The ASC does change the way the guidance is organized and presented.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Statement of Financial Accounting
Standards (&quot;SFAS&quot;) SFAS No. 165 (ASC Topic 855), <I>&quot;Subsequent Events,&quot;</I> SFAS No. 166 (ASC Topic 810),
<I>&quot;Accounting for Transfers of Financial Assets-an Amendment of FASB Statement No. 140,&quot;</I> SFAS No. 167 (ASC Topic
810), <I>&quot;Amendments to FASB Interpretation No. 46(R),&quot; </I>and SFAS No. 168 (ASC Topic 105), <I>&quot;The FASB Accounting
Standards Codification and the Hierarchy of Generally Accepted Accounting Principles-a replacement of FASB Statement No. 162,&quot;</I>
were recently issued. SFAS No. 165, 166, 167, and 168 have no current applicability to the Company or their effect on the financial
statements would not have been significant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Accounting Standards Update (&quot;ASU&quot;)
ASU No. 2009-05 (ASC Topic 820), which amends Fair Value Measurements and Disclosures - Overall, ASU No. 2009-13 (ASC Topic 605),
<I>Multiple-Deliverable Revenue Arrangements</I>, ASU No. 2009-14 (ASC Topic 985), <I>Certain Revenue Arrangements that include
Software Elements</I>, and various other ASU's No. 2009-2 through ASU No. 2010-18 which contain technical corrections to existing
guidance or affect guidance to specialized industries or entities were recently issued. These updates have no current applicability
to the Company or their effect on the financial statements would not have been significant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><B>F.</B></TD><TD STYLE="text-align: justify"><B>RELATED PARTY TRANSACTIONS</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company pays rent expense
to one founder pursuant to long-term rent agreements (see Note N) for the use of property for business purposes. The amounts incurred
by the Company and paid to the related parties for rent for the period ended June 30, 2011 totaled $184,228. This amount has been
recorded in selling, general and administrative expenses for the same period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>NanoTech Entertainment, Inc. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Notes to Financial
Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>For the Period of July 1, 2010
through June 30, 2011</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><B>H.</B></TD><TD STYLE="text-align: justify"><B>RELATED PARTY TRANSACTIONS (CONT&rsquo;D)</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Several of the Company&rsquo;s
current and former officers and their affiliates have provided funding in the form of notes payable, totaling $101,563. The notes
carry interest rates ranging from 14% to 20%, resulting in interest expense of $17,163 for the year ended June 30, 2011. The notes
are due on demand and therefore classified as current liabilities. Interest has not been imputed due to its immaterial impact on
the financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company has employment agreements
with one if its remaining founders, David Foley, who, as part of the employment agreement has provided the gaming properties and
intellectual property being used by the company for the core of its product offerings.. The Annual salary has been adjusted and
is payable in the form of $210,000 in cash and 2,250,000 in stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The salaries have been accrued
and will be paid as cash flows allow. Interest has not been imputed due to its immaterial impact on the financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company has incurred liabilities
in the ordinary course of business with several individuals and entities affiliated with the Company. These amounts totaled $71,072
at June 30, 2011. Interest has not been imputed due to its immaterial impact on the financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><B>I.</B></TD><TD STYLE="text-align: justify"><B>NOTES PAYABLE</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company has originated the
following notes payable with unaffiliated entities and individuals:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="width: 80%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Principal</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Interest<BR> &nbsp;June 30,</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">2011</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">2011</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 70%; text-align: left">Note 1, 10% interest, due April 30, 2011</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">250,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">41,668</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Note 2, 20% interest, due on demand</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,835</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt; padding-bottom: 1pt">Note 3, 20% interest, due on demand</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">5,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">1,083</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.24in; padding-bottom: 2.5pt">Totals</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">280,000</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">48,596</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The notes are interest payments
only, with principal and accrued interest payable upon maturity or demand, as indicated above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>NanoTech Entertainment, Inc.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Notes to Financial
Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>For the Period of July 1, 2010
through June 30, 2011</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><B>J.</B></TD><TD STYLE="text-align: justify"><B>STOCKHOLDERS&rsquo; DEFICIT</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company has authorized 75,000,000 shares
of common stock with a par value of $.001, and no preferred stock. As of June 30, 2010 (the most recent fiscal year) the total
shares issued and outstanding was 15,910,000. No additional share issuances occurred during the year ended June 30, 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><B>K.</B></TD><TD STYLE="text-align: justify"><B>CONVERTIBLE DEBENTURES</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">During period ending June 30,
2011, the Company issued convertible debentures bearing interest of 30% with terms of two to three years.&nbsp;&nbsp;The debenture
principle and accrued interest may be converted into shares of the Company&rsquo;s common stock at a conversion price at a discount
of up to 70% of the three lowest closing bid prices during the ten days prior to conversion.&nbsp;&nbsp;During the year ended June
30, 2011, the Company issued debentures totaling $225,850 (convertible into potentially 14,160,366 shares of common stock based
on a conversion rate on June 30, 2011). The fair market value of the stock on the convertible debenture issuance dates was $.04</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>NanoTech Entertainment, Inc.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Notes to Consolidated
Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>For the Period of July 1, 2010
through June 30, 2011</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><B>H.</B></TD><TD STYLE="text-align: justify"><B>n/a</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><B>I.</B></TD><TD STYLE="text-align: justify"><B>INCOME TAXES</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company recognizes the tax
effects of transactions in the year in which such transactions enter into the determination of net income, regardless of when reported
for tax purposes. Deferred taxes are provided in the financial statements under ASC Topic No. 740 to give effect to the resulting
temporary differences which may arise from differences in the bases of fixed assets, depreciation methods, allowances, and start-up
costs based on the income taxes expected to be payable in future years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><B>L.</B></TD><TD STYLE="text-align: justify"><B>GOING CONCERN CONSIDERATIONS</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company&rsquo;s financial
statements have been prepared using accounting principles generally accepted in the United States of America applicable to a going
concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. During the
year ended June 30, 2011, the Company incurred net losses totaling $1,228,504 resulting in an accumulated deficit of $4,505,148
at June 30, 2011. These conditions raise substantial doubt about the Company&rsquo;s ability to continue as a going concern. The
accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company's
ability to meet its ongoing financial requirements is dependent on management being able to obtain additional equity and/or debt
financing, the realization of which is not assured.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><B>M.</B></TD><TD STYLE="text-align: justify"><B>ROYALTIES</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company has entered into
several licensing agreements whereby the Company licenses certain gaming software from various developers. The Company is responsible
for paying royalties to the developers based on product sales. In the event that no product is sold, the Company is also required
to pay a minimum royalty in order to maintain exclusivity (i.e., the developer cannot license the same software to the Company's
competitors). Certain developers also require prepayment of royalties that are either offset by future sales, or expire at the
end of a calendar year - at which point they are expensed. No sales of the licensed products had occurred during the period ending
June 30, 2011. &#9;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><B>N.</B></TD><TD STYLE="text-align: justify"><B>SUBSEQUENT EVENTS</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">n/a</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><B>O.</B></TD><TD STYLE="text-align: justify"><B>SUBSEQUENT EVENTS (CONT&rsquo;D)</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">n/a</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>NanoTech Entertainment, Inc.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Notes to Financial
Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>For the Period of July 1, 2009
through June 30, 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><B>N. &nbsp;&nbsp;COMMITMENTS AND CONTINGENCIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="color: black">The
Company has previously entered into a rental contracts with one of the founders for use of storage facilities, offices, development
labs, and utilities for the Company&rsquo;s operations, production, research and development, sales, and marketing. The Contract
requires $16,400 in monthly payments (plus other related minimal costs) to over the Contracts&rsquo; term of December 1, 2007 through
November 30, 2011. The Contracts are cancellable with a 15-day advance notice only if all security interest has been removed and
there are no liens on the properties for loans to the Company in effect. </FONT> The amounts incurred by the Company and paid for
rent for the periods ended June 30, 2011 totaled $184,228. This amount has been recorded in selling, general and administrative
expenses for the same period (see Note C). <FONT STYLE="color: black">Future minimum rental payments for the remaining life of
the Contracts are as follow:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 40%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.75in">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">Year Ended June 30,</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 76%; text-align: right; padding-bottom: 1pt">2012</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="width: 21%; text-align: right; border-bottom: Black 1pt solid">82,000</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: right; padding-bottom: 2.5pt">Total</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">82,000</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><B><U>Item 9 Changes In and Disagreements
with Accountants on Accounting and Financial Disclosure</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">None. &nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>Item 9A. &ndash;Controls and Procedures</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Disclosure Controls and Procedures</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Under the supervision and with the participation
of our management, including our principal executive and financial officer, we have conducted an evaluation of the effectiveness
of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as of the end of the period covered by this report. Based on this evaluation, the board of directors, concluded
as of the evaluation date that our disclosure controls and procedures are effective such that the material information required
to be included in our Securities and Exchange Commission reports is recorded, processed, summarized and reported within the time
periods specified in SEC rules and forms relating to our company, &nbsp;and was made known to us by others within those entities,
particularly during the period when this report was being prepared. It has been determined that the company must set aside appropriate
funds each quarter in order to ensure timely payments to auditors and subsequent timely filings. We have since been delisted to
the Pink Sheets due to our inability to timely file our reports under the Securities Exchange Act of 1934, we have replaced certain
officers of the Company which were responsible for our budgets and filings, and have identified and hired the appropriate staff
and outside consultants that will enable us to meet future filing requirements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Management&rsquo;s Annual Report on
Internal Control Over Financial Reporting.</U> &nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The management of the Company is responsible
for establishing and maintaining adequate internal control over financial reporting. The internal control process has been designed,
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
the Company&rsquo;s financial statements for external reporting purposes in accordance with accounting principles generally accepted
in the United States of America.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Management conducted an assessment of the
effectiveness of the Company&rsquo;s internal control over financial reporting as of June 30, 2011, including (i) the control environment,
(ii) risk assessment, (iii) control activities, (iv) information and communication, and (v) monitoring, based on the framework
in<I> Internal Control &ndash; Integrated Framework,</I> issued by the Committee of Sponsoring Organizations of the Treadway Commission
(&ldquo;COSO&rdquo;). As of June 30, 2011, management has determined that the Company&rsquo;s internal control over financial reporting
as of June 30, 2011 was effective.<B> &nbsp;</B>We are only limited by the lack of funding in order to meet the ongoing SEC reporting
obligations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our internal control over financial reporting
includes policies and procedures that pertain to the maintenance of records that accurately and fairly reflect, in reasonable detail,
transactions and dispositions of assets; and provide reasonable assurances that: (1) transactions are recorded as necessary to
permit preparation of financial statements in accordance with accounting principles generally accepted in the United States; (2)
receipts and expenditures are being made only in accordance with authorizations of management and the directors of the Company;
and (3) unauthorized acquisitions, use, or disposition of the Company&rsquo;s assets that could have a material affect on the Company&rsquo;s
financial statements are prevented or timely detected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">All internal control systems, no matter
how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable
assurance with respect to financial statement preparations and presentations. Also, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Changes in Internal Control Over Financial
Reporting.</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">There were no significant changes in our
internal controls or in other factors that could significantly affect these controls subsequent to the evaluation date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>Item 9B. Other Information</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">No items required to be reported on Form
8-K during the fourth quarter of the year covered by this report were not previously reported on Form 8-K.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PART III</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>Item 10. Directors, Executive Officers,
and Corporate Governance.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Set forth below is the name and age of
each individual who was a director or executive officer of NanoTech Entertainment, Inc. as of June 30, 2011, together with all
positions and offices of the Company held by each and the term of office and the period during which each has served:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 21%; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">NAME</TD>
    <TD STYLE="width: 2%; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center; width: 7%">AGE</TD>
    <TD STYLE="width: 2%; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center; width: 44%">POSITION</TD>
    <TD STYLE="width: 2%; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center; width: 21%">DATES SERVED</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">David R. Foley</TD>
    <TD>&nbsp;</TD>
    <TD>45</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">President, Treasurer, Secretary and Director</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: left">November 2010 to January 2012</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Biographical Information</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following paragraphs set forth brief biographical information
for the aforementioned director and executive officer:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>David R. Foley - President, Secretary,
Treasurer, and Director</B> - David R. Foley is an entrepreneur with an extensive background in software and hardware development.
He has designed and patented several award-winning games and innovative technology in the past 20 years. David began his career
in software development where he modernized the front office of the Boston Celtics, designing and building automated systems for
all facets of the team&rsquo;s operations from Press Management to Scouting, as well as helping implement a digital scoring system.
Software that he and a college friend had developed was sold to Ashton Tate to become a core part of dBase IV. He built Foley Hi-Tech
Systems, a video game development studio that developed games for the Sega Genesis and Super Nintendo and delivered multi-million
dollar selling games including hits like SpiderMan vs. Kingpin, Taz-Mania and Urban Strike to publishers including Sega and Electronic
Arts. Foley also founded HyperWare, and built a product line of hardware and software products for the Arcade Industry. Foley was
asked to speak at several trade shows on behalf of Intel to help push the ArcadePC initiative, for which Foley had developed several
key pieces of technology. Foley also designed and built the Sega Tournament Network connecting players from around the world to
compete on the Sega hit arcade game, Daytona 2. Foley became the VP of Engineering at Quantum3D, and helped grow the Arcade Division
to several million dollars in sales. Foley designed the patented Quicksilver II and Graphite systems which were used by major arcade
industry companies including Atari, Midway and Sega. Foley invented the UltraCade multi-game system, acquired the rights to the
IP and founded UltraCade Technologies. UltraCade Technologies released a home version of its flagship product, branded as Arcade
Legends and sold through retail outlets such as Hammacher Schlemmer, Costco and SkyMall catalog. Foley's innovative designs won
him two consecutive industries awards for Innovation of the Year in 2005 and 2006. In 2005 Foley was named #48 in the Entrepreneur
Magazines Hot 100 issue. Foley branched into the casino gaming market creating, designing, developing and licensing unique game
concepts to Bally Technologies and others. His first casino gaming design, Peek-A-Boo video poker, won the 2007 Most Innovative
Game award from Bally Technologies. David has been interviewed on several national media outlets including NBC &amp; ESPN. He continues
to design and patent ground breaking games and technology leading NanoTech's development staff.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Compliance with Section 16(a) of the Exchange Act</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Because we do not have a class of equity
securities registered pursuant to Section 12 of the Exchange Act, our executive officers, directors and persons who beneficially
own more than 10% of our common stock are not required to file initial reports of ownership and reports of changes in ownership
with the SEC under Section 16(a) of the Exchange Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Audit Committee and Audit Committee Financial Expert Disclosure</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company&rsquo;s Board of Directors
does not have a separately designated audit committee or an &ldquo;audit committee financial expert.&rdquo; Audit committee functions
are performed by our Board of Directors. None of our directors is deemed independent. All directors also hold positions as our
officers. Our audit committee is responsible for: (1) selection and oversight of our independent accountant; (2) establishing procedures
for the receipt, retention and treatment of complaints regarding accounting, internal controls, and auditing matters; (3) establishing
procedures for the confidential, anonymous submission by our employees of concerns regarding accounting and auditing matters; (4)
engaging outside advisors; and, (5) funding for the outside auditory and any outside advisors engagement by the audit committee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Board of Directors does not have an
audit committee financial expert at this time due to the fact that the Company has only limited operations and no revenues. &nbsp;We
believe the cost related to retaining a financial expert at this time is prohibitive. Further, because of our limited operations,
we believe the services of a financial expert are not warranted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Code of Ethics</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have adopted a corporate code of ethics.
We believe our code of ethics is reasonably designed to deter wrongdoing and promote honest and ethical conduct; provide full,
fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting
of code violations; and provide accountability for adherence to the code.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>Item 11. &nbsp;Executive Compensation</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(a) A majority of the Intellectual Property
was acquired by the Company in the form of an employment agreement whereby one of the original founders, David R. Foley, assigned
the rights to his substantial intellectual property po4rtfolio in return for the compensation outlined in his employment agreement.&nbsp;
To date, Mr. Foley has not been compensated under the terms of his agreement.&nbsp;The Company intends on offering stock in lieu
of the past due compensation, and paying the compensation moving forward. There is currently accrued compensation due as of June
30, 2011 totaling $1,553,376.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(b) There are no annuity, pension, or retirement
benefits proposed to be paid to officers, directors, or employees of the Corporation in the event of retirement at normal retirement
date pursuant to any presently existing plan provided or contributed to by the Corporation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(c) The currently are employment agreements
with one of the founders of the Company. The terms of these employment agreements are as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">David R. Foley&rsquo;s current compensation through calendar year-end 2011 is $550,000 USD per
annum with a decrease to $210,000 USD for the second half of the calendar year 2011. Currently, Mr. Foley&rsquo;s salary is accruing
on a monthly basis.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Director Compensation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Directors of the Company do not receive compensation at
this time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>Item 12 - Security Ownership of Certain
Beneficial Owners and Management and Related Stockholder Matters</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table sets forth the beneficial
ownership of the Company's officers, directors, and persons who own more than five percent of the Company's common stock as of
June 30, 2011. Under relevant provisions of the Exchange Act, a person is deemed to be a &quot;beneficial owner&quot; of a security
if he or she has or shares the power to vote or direct the voting of the security or the power to dispose or direct the disposition
of the security. A person is also deemed to be a beneficial owner of any securities of which that person has the right to acquire
beneficial ownership in 60 days. More than one person may be deemed to be a beneficial owner of the same securities. The percentage
ownership of each stockholder is calculated based on 15,910,000 total outstanding shares of our common stock as of June 30, 2010.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Amount and Nature of Beneficial Ownership
as of June 30, 2010:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="width: 90%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid">Name&nbsp;of&nbsp;Individual</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid">#&nbsp;Shares&nbsp;Beneficially&nbsp;Owned</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid">#&nbsp;of&nbsp;Class&nbsp;of&nbsp;Common<BR> Stock&nbsp;(1)</TD><TD STYLE="font-weight: bold; vertical-align: top; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="vertical-align: top; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 52%; text-align: left"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Robert Dekett</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">President, Treasurer, Secretary and Director</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">PO Box 50729</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Henderson, Nevada 89016</P></TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 21%; text-align: right; vertical-align: top">3,000,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="width: 21%; text-align: right; vertical-align: top">18.9</TD><TD STYLE="width: 1%; text-align: left; vertical-align: top">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Ted D. Campbell II</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Chief Compliance Officer</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">PO Box 240</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Jenks, Oklahoma 74037</P></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">0.00</TD><TD STYLE="text-align: left; vertical-align: top">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>David R. Foley</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">311 Santa Rosa Drive</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Los Gatos, California 95032</P></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">3,000,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">18.9</TD><TD STYLE="text-align: left; vertical-align: top">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Greenleaf Forum Investments</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Kevin Murphy, President</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">1174 Manitou Drive NW</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Fox Island, WA 98333</P></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">1,300,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">8.2</TD><TD STYLE="text-align: left; vertical-align: top">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">T<B>akashi and Keiko Yoshida</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">59 Preston Road</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Woodside, CA 94062</P></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">1,000,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">6.3</TD><TD STYLE="text-align: left; vertical-align: top">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Alan Tolson</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Skiddaw View Sandale</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Bolton Gate, Cumbria CA5 1DE</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">UK</P></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">1,500,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">9.4</TD><TD STYLE="text-align: left; vertical-align: top">%</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>Item 13 &ndash; Certain Relationships
and Related Transactions, Director Independence</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company pays rent expense to one founder
for the use of property for business purposes. The amounts to be paid to the Company&rsquo;s founder for rent for the years ended
June 30, 2011 totaled $184,228. These amounts have been recorded in selling, general and administrative expenses for the same periods.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>Item 14 &ndash; Principal Accountant
Fees and Services</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Audit Fees:</U> All fees billed for
each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant's
annual financial statements and the review of interim financial statements or services that are normally provided by the accountant
in connection with statutory and regulatory filings or engagements for those fiscal years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 20%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.65in">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 57%; text-align: justify">2010-2011:</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 40%; text-align: right">35,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify">2009:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">40,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify">2008:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">8,800</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Audit-Related Fees</U>: All fees billed
in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related
to the performance of the audit or review of the registrant's financial statements and are not reported under Item 9(e)(f1) of
Schedule 14A.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 20%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.65in">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 57%; text-align: justify">2010-2011:</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 40%; text-align: right">14,500</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify">2009:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,750</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify">2008:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Tax Fees</U>: The aggregate fees billed
in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice,
and tax planning:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 20%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.65in">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 57%">2010-2011:</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 40%; text-align: right">0</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>2009:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">3,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>2008:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.55in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>All Other Fees</U>:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 20%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.65in">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 57%">2010-2011:</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 40%; text-align: right">0</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>2009:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>2008:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.55in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(5) &nbsp;&nbsp;Our audit committee's pre-approval
policies and procedures described in paragraph (c)(7)(i) of Rule 2-01 of Regulation S-X were that the audit committee pre-approve
all accounting related activities prior to the performance of any services by any accountant or auditor.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(6) &nbsp;&nbsp;The percentage of hours
expended on the principal accountant's engagement to audit our financial statements for the most recent fiscal year that were attributed
to work performed by persons other than the principal accountant's full-time, permanent employees was 0%.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PART IV</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>Item 15 &ndash; Exhibits, Financial
Statement Schedules</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following exhibits are included with this filing:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 85%; border-collapse: collapse; margin-left: 0.3in">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 15%; text-autospace: none; font-weight: bold; border-bottom: Black 1pt solid">Exhibit&nbsp;No.:</TD>
    <TD STYLE="width: 2%; text-autospace: none; font-weight: bold">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-autospace: none; font-weight: bold; width: 83%">Description:</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-autospace: none; text-align: center">&nbsp;</TD>
    <TD STYLE="text-autospace: none; text-align: center">&nbsp;</TD>
    <TD STYLE="text-autospace: none; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-autospace: none">3.1(i)</TD>
    <TD STYLE="text-autospace: none">&nbsp;</TD>
    <TD STYLE="text-autospace: none">Articles of Incorporation and amendments thereto <SUP>(1) and (2)</SUP></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-autospace: none">&nbsp;</TD>
    <TD STYLE="text-autospace: none">&nbsp;</TD>
    <TD STYLE="text-autospace: none">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-autospace: none">3.1(ii)</TD>
    <TD STYLE="text-autospace: none">&nbsp;</TD>
    <TD STYLE="text-autospace: none">Bylaws <SUP>(1)</SUP></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-autospace: none">&nbsp;</TD>
    <TD STYLE="text-autospace: none">&nbsp;</TD>
    <TD STYLE="text-autospace: none">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-autospace: none">14</TD>
    <TD STYLE="text-autospace: none">&nbsp;</TD>
    <TD STYLE="text-autospace: none">Code of Ethics <SUP>(1)</SUP></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-autospace: none">&nbsp;</TD>
    <TD STYLE="text-autospace: none">&nbsp;</TD>
    <TD STYLE="text-autospace: none">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-autospace: none">31.1</TD>
    <TD STYLE="text-autospace: none">&nbsp;</TD>
    <TD STYLE="text-autospace: none">Section 302 Certification by Principal Executive Officer and Principal Financial and Accounting Officer <SUP>(1)</SUP></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-autospace: none">&nbsp;</TD>
    <TD STYLE="text-autospace: none">&nbsp;</TD>
    <TD STYLE="text-autospace: none">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-autospace: none">32.1</TD>
    <TD STYLE="text-autospace: none">&nbsp;</TD>
    <TD STYLE="text-autospace: none"><FONT STYLE="font-weight: normal">Section 906 Certification by </FONT>Principal Executive Officer and Principal Financial and Accounting Officer <SUP>(1)</SUP></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(3)</TD><TD STYLE="text-align: justify">Filed with the Securities and Exchange Commission on February 12, 2008 as an exhibit numbered as
indicated above, to the Registrant&rsquo;s registration statement on Form S-1 (file no. 333-149184 which exhibit is incorporated
herein by reference.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(4)</TD><TD STYLE="text-align: justify">Amendment to the Article of Incorporation filed with the Securities and Exchange Commission on
Form 8-K on May 7, 2009 which exhibit is incorporated herein by reference.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SIGNATURES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; text-autospace: none">&nbsp;</TD>
    <TD STYLE="width: 50%; text-autospace: none">NanoTech Entertainment, Inc.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-autospace: none">&nbsp;</TD>
    <TD STYLE="text-autospace: none">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-autospace: none">Date: March 8, 2012</TD>
    <TD STYLE="text-autospace: none; font-style: italic; text-decoration: none; border-bottom: Black 1pt solid">/s/&nbsp; Bruce Bean</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-autospace: none">&nbsp;</TD>
    <TD STYLE="text-autospace: none">By: Bruce Bean</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-autospace: none">&nbsp;</TD>
    <TD STYLE="text-autospace: none">Chairman</TD></TR>
</TABLE>
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[{"type": "8-K", "sequence": "1", "filename": "v305398_8k.htm", "description": "FORM 8-K", "secsgml_size_bytes": 468454}]
{"company-data": {"conformed-name": "NanoTech Entertainment, Inc.", "cik": "0001425905", "assigned-sic": "0200", "irs-number": "201379559", "state-of-incorporation": "NV", "fiscal-year-end": "0630"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "333-149184", "film-number": "12681583"}, "business-address": {"street1": "9360 W. FLAMINGO RD", "street2": "SUITE #110-158", "city": "LAS VEGAS", "state": "NV", "zip": "89147", "phone": "408 786 1015"}, "mail-address": {"street1": "9360 W. FLAMINGO RD", "street2": "SUITE #110-158", "city": "LAS VEGAS", "state": "NV", "zip": "89147"}, "former-company": {"former-conformed-name": "ALDAR GROUP, INC.", "date-changed": "20080201"}}
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported):  March 8, 2012
NANOTECH
ENTERTAINMENT, INC.
(Exact name of registrant as specified in its charter)
Nevada
333-149184
20-1379559
(State of Incorporation)
(Commission File No.)
(Tax ID No.)
3838 Raymert Drive, Suite 3
Las Vegas, NV 89121
(Address of principal executive offices)
Registrant's Telephone Number, including
area code: (702) 518-7410
(Former name or former address, if changed
since last report)
Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions
(see General Instruction A.2. below).
¨
Written Communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a -12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR240.13e -4(c)).
Item 9. Financial Information
NanoTech Entertainment has recently changed
Audit firms, as noted in its most recent 8K filings, and is working with its new Auditors in an effort to create and file all
past due SEC required filings. The Audit firm has agreed to complete the work based on a payment plan that will allow NanoTech
to work within a schedule to complete the audits within 90 days of funding.
NanoTech Entertainment has identified
a group of investors that is willing to work with the firm in order to meet its financial obligations with the new Audit firm
and raise $35,000 required to complete the audits through a convertible debenture that will carry a 10% APR for a two year period
and the option to convert at a 30% discounted rate. In an effort to identify NanoTech's status and requirements, the basic
information regarding 2010 and 2011 financial information is being filed in this 8K form. Given the budget for the completion
of Audits, NanoTech anticipates the ability to file all past due financial forms within 60 days.
2
NanoTech Entertainment is filing these interim financial statements
in an effort to provide investors with an insight into the financial status of the company until such time as the completion of
the reviews by the company's accounting firm, adjustments have been applied and reports reviewed and approved by the company's
new auditing firm. The information contained within shall form the basis for the following forms:
10K for the period ending June 30, 2010
10Q for the period ending September 30,
2010
10Q for the period ending December 31,
2010
10Q for the period ending March 31, 2011
10K for the period ending June 30, 2011
10Q for the period ending September 30,
2011
10Q for the period ending December 31,
2011
9.1 – Financial Information Forming
Basis for 10K for period ending June 30, 2010
CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING
STATEMENTS
All readers of this document and any document
incorporated by reference herein are advised that this document and documents incorporated by reference into this document contain
forward-looking statements and statements of historical facts. Forward-looking statements are subject to certain risks and uncertainties,
which could cause actual results to differ materially for those indicated by the forward-looking statements. Examples of forward-looking
statements include, but are not limited to (i) revenue projections, income (loss), earnings (loss) per share, capital expenditures,
dividends, capital structure and other financial items, (ii) statements of the plans and objectives of the Company or its management
or Board of Directors, including the introduction of new products, or estimates or predictions with regards to customers, suppliers,
competitors or regulatory authorities, (iii) statements of future performance, and (iv) statements of assumptions underlying other
statements about the Company or its business.
This document and all documents incorporated
herein by reference also identify factors which could cause actual results to differ materially from those indicated by the forward-looking
statements. Please refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations"
and "Risk Factors."
The cautions outlined made in this statement
and elsewhere in this document should not be construed as complete or exhaustive. In many cases, we cannot predict factors which
could cause results to differ materially from those indicated by the forward-looking statements. Additionally, many items or factors
that could cause actual results to differ materially from forward-looking statements are beyond our ability to control. The Company
will not undertake an obligation to further update or change any forward-looking statement, whether as a result of new information,
future developments, or otherwise.
3
PART I
ITEM 1.  BUSINESS
General
NanoTech Entertainment, Inc. (the "Company"
or "We" or "NanoTech") was originally organized as a Nevada Corporation on July 15, 2004 under the name
Aldar Group, Inc. ("AGI") for the purpose of acquiring, selling and breeding thoroughbred horses.
On April 30, 2009, the Company entered
into a Sale and Acquisition Agreement (the "Agreement") with NanoTech Entertainment, Inc. ("NEI"), a Nevada
corporation, wherein the Company acquired 100% of NEI's issued and outstanding common stock through the exchange of 6,480,000
common shares. As a result of the Agreement, the Company changed its name to NanoTech Entertainment, Inc. ("NTI")
to better reflect the direction of the newly formed entity.
For accounting purposes, the share exchange
transaction was treated as a capital transaction where AGI, as the shell-corporation and legal acquirer, issued stock for the
net monetary assets of NEI, the accounting acquirer, accompanied by a recapitalization. The accounting is similar in form to a
reverse acquisition, except that goodwill or other intangibles are not recorded.
The Company now operates as a virtual
manufacturer, developing technology and games, and then licensing such products to third parties for manufacturing and ultimate
distribution. The Company's business model supports relatively low overhead costs and efficiencies in operations in the
new global manufacturing economy.
Company Overview
NanoTech Entertainment, Inc. is a provider
of gaming technology for the coin-op arcade, casino gaming, and consumer gaming markets. Headquartered in Las Vegas, Nevada, we
operate as a virtual manufacturer, developing technology and games, and then licensing them to third parties for manufacturing
and distribution.
With an ever-expanding lineup of technology
and products, NanoTech is redefining the role of developers and manufacturers in the gaming market. NanoTech's team is comprised
of industry veterans of the gaming industry and have collectively been responsible for dozens of award winning products and multi-million
copy selling video games and technology.
Market and Industry
We have experience and products for all
aspects of the various gaming industries.  By traversing the market from consumer to coin-op to casino, the Company may be
able to take advantage of all three growth & profitable industries and balance out the seasonal patterns of each.
Even in the unsteady economic climate,
the gaming market continues to flourish and expand.  In 2008, the arcade industry saw $7.2 billion in revenue, and the consumer
market saw $58 billion with a growth of 19% in 2008. The following are excerpts from other sources:
·
"As
                                                                                                               people cut back
                                                                                                               on travel and going
                                                                                                               out, they are turning
                                                                                                               more to home entertainment,
                                                                                                               providing a boost
                                                                                                               to the video game
                                                                                                               industry."
                                                                                                               Reuters, April
                                                                                                               2, 2009
·
"The
                                                                                                               video game business
                                                                                                               continues to enjoy
                                                                                                               robust growth,
                                                                                                               making it the fastest
                                                                                                               growing of the
                                                                                                               many consumer goods
                                                                                                               categories." 
                                                                                                               Market Watch, Feb
                                                                                                               18, 2009
4
The NanoTech team has won numerous awards
in recent years including innovative product of the year in 2005 and 2006 in the arcade industry and innovative product of the
year in 2007 in the casino market.
Products
Below is a list of the Company's
current product line with detailed descriptions. For more information on the Company's products and services you can view
our web site at www.NanoTechEnt.com.
MultiPin™ - There is currently only
one Pinball manufacturer left in the world, Stern Pinball.  While they supply over 10,000 machines per year to the market,
there is a huge demand for new and innovative pinball.  MultiPin™ represents the next generation in pinball. 
By replacing the mechanical parts of a pinball machine with state of the art electronics, MultiPin™ solves two major problems
seen by operators of Pinball machines.  First, it eliminates any mechanical failures, which are common amongst pinball machines. 
Secondly, it provides a multi-game platform that can be constantly updated with new games without having to swap out the machine. 
Our proprietary physics engine and motion sensors allow MultiPin™ to accurately recreate the experience of a mechanical
pinball machine, while providing players with a variety of classic and modern pinball games to choose from.
Xtreme Rally Racing™ - An
Xtreme Off-Road Racing Experience with no boundaries. Xtreme Rally Racing is an innovative new driving machine that features three
modes of game play:
Xtreme Off-Road - Race head-to-head
against other players and the computer to checkpoints while driving anywhere on the map with no preset course.
Timed Rally Stages - Classic
Rally Racing on real world courses. Players will be able to race in five different countries on real world rally courses.
Xtreme Stadium Racing - Custom
Stadiums designed for Xtreme racing, including a figure-8 multi-lap course with huge jumps.
NanoNET Online System - Local and worldwide
head-to-head competition in real time against machines located around the world. Remote operator control of your machines including
diagnostics, accounting reports, and automatic software updates and enhancements downloaded over the net. Link up to four cabinets
for local multiplayer action.
Pinball Wizard ™ - Consumer Pinball
enthusiasts have been growing with the advent of Visual Pinball and now Future Pinball.  The official Visual Pinball forum
boasts over 155,000 members, and the free version Future Pinball has been downloaded over 1 million times in the past six months,
and over 500,000 copies in April 2009.  We have created the only input device designed to give these players a way to experience
real pinball controls on their personal computer.   Based on the technology developed for the MultiPin™ product
we have built a controller that lets people play pinball using traditional controls and the ability to "shake" and
"nudge" the table.
Mot-Ion™ Adapter - The Mot-Ion adapter
is a USB adapter that allows do-it-yourself Pinball enthusiasts to build their own cabinet using real pinball controls providing
analog inputs for nudging and bumping. This kit includes everything needed to connect a pinball cabinet to a PC (I/O Board, Digital
Plunger, and Wiring Harness).
5
Opti-Gun™ Adapter - The OptiGun
adapter is a USB adapter that allows players to connect Arcade Light Guns to any USB based system. This universal adapter provides
a complete solution to implement an arcade game including gun inputs, force feedback outputs, digital inputs, and built-in audio
amplifiers. The adapter can also be used with PC based emulators such as M.A.M.E. to connect arcade light guns on your home system.
Retr-IO™ Adapter - The Retr-IO adapter
provides a standard JAMMA interface for USB based systems. This universal adapter provides a complete solution to implement an
arcade game using joysticks, trackballs, spinners, and buttons, and features digital outputs and built-in audio and video amplifiers.
The board works with any PC based system
including M.A.M.E and other emulation products. It provides an all-in-one solution to hooking up traditional arcade controls to
your PC, or any USB system. All digital inputs and outputs are interfaced via standard keyboard commands, and appear as mapped
keys to your games. The default key mappings match those of many popular PC emulation products. Two trackballs and two spinners
are supported and mapped to the system as mice. The board supports four player standard configurations or two player four-way
joystick and six-button configurations.
Competition
The Company will compete against established
companies with significantly greater financial, marketing, research and development, personnel, and other resources than the Company.
Such competition could have a material adverse effect on the Company's profitability.
Government Regulation
There are no government regulations regulating
the development and sale of gaming products for coin-operated machines.
ITEM 1A.  RISK FACTORS
Not applicable.
ITEM 1B.  UNRESOLVED STAFF
COMMENTS
Not applicable.
ITEM 2.  PROPERTIES
Our principal Nevada executive offices
are located at 3883 Raymert Drive, Suite 3, Las Vegas, NV 89121 and our phone number is 702-518-7410.
ITEM 3.  LEGAL PROCEEDINGS
We are not currently involved in any legal
proceedings nor do we have any knowledge of any threatened litigation.
ITEM 4.  SUBMISSION OF MATTERS
TO A VOTE OF SECURITIES HOLDERS
No matters were submitted to a vote of
security holders during the fiscal year ended June 30, 2010.
6
PART II
ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY,
RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Our common stock is currently quoted on
the Pink OTC Markets Inc., more commonly referred to as the Pink Sheets (the "Pink Sheets") under the symbol "NTEK."
There has been limited trading of our
common stock since our initial listing on the OTCBB
®
on September 22, 2008 under the ticker symbol ALDJ. On June
10, 2009, pursuant to a corporate name change and a change in control of the Company, the ticker was changed to NTEK. On October
2, 2009, our symbol was changed to NTEKE for failure to be current in our reporting obligations with the Securities and Exchange
Commission. On November 3, 2009, our ticker symbol was returned to NTEK and we were delisted to the Pink Sheets. Below is a table
listing the high and low trading price by quarter for the fiscal year end June 30, 2010.
Quarter Ended
High
Low
September 30, 2009
$
0.35
$
0.12
December 31, 2009
$
0.14
$
0.02
March 31, 2010
$
0.06
$
0.055
June 30, 2010
$
0.09
$
0.025
It is our plan that upon becoming current
with all our required filings pursuant to the Securities Exchange Act of 1934, as amended, we plan on filing a new Form 15c2-11
application with FINRA for re-listing on the OTCBB
®
.
Holders
As of June 30, 2010, we had 15,910,000
shares of common stock, par value $0.001, issued and outstanding. The stock transfer agent for our securities is Stalt, Inc.,
671 Oak Grove Avenue, Suite C, Menlo Park, CA 94025.
Dividends
There are no restrictions in our Articles
of Incorporation or Bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from
declaring dividends where, after giving effect to the distribution of the dividend:
1.
We would not be able to pay our
                                                                debts as they become due in the usual course of business; or
2.
Our total assets would be less
                                                                than the sum of the total liabilities plus the amount that would
                                                                be needed to satisfy the rights of stockholders who have preferential
                                                                rights superior to those receiving the distribution.
The Company has not declared any dividends,
and does not plan to declare any dividends in the foreseeable future.
Recent Sales of Unregistered Securities
The Company has authorized 75,000,000
shares of common stock with a par value of $.001, and no preferred stock. As of June 30, 2009 (the most recent fiscal year) the
total shares issued and outstanding was 14,437,000. Additional share issuances occurring during the year ended June 30, 2010 to
arrive at the total shares issued and outstanding of 15,910,000 are as follows:
7
During the period of January
through June 2009, the following shares were issued for cash in accordance with private offerings to unrelated individuals (of
which 1,220,000 shares were issued and $102,000 cash received):
Number
Stock
Cash
Date
of Shares
Price
Received
09/11/2009
560,000
$
0.10
$
56,000
10/23/2009
100,000
$
0.05
$
5,000
03/30/2010
50,000
$
0.05
$
5,000
06/03/2010
300,000
$
0.05
$
15,000
06/22/2010
10,000
$
0.10
$
1,000
06/30/2010
200,000
$
0.10
$
20,000
Totals
1,220,000
$
102,000
SUBSEQUENT ISSUANCES OF EQUITY
SECURITIES
On June 19, 2009, the Company
entered into an agreement with an unrelated individual who was to render consulting services for a 26-week period. The consultant
was to receive cash compensation of $36,400 over the term of the contract, and 104,000 shares of common stock upon the contract's
completion. The shares were valued at $.10 per share, for total stock compensation of $10,400 to be expensed ratably over the
contract's term. The Company recorded 15 weeks, or $27,000, of consulting expense during the three months ended September
30, 2009, of which $21,000 was paid in cash and $6,000 of stock compensation was accrued and reported as the current liability,
stock payable. The shares were subsequently issued upon the contract's completion in December 2009.
On July 24, 2009, the Company
entered into a consulting agreement with an unaffiliated entity whereby the consultant would provide various promotional, strategic
business planning, and acquisition analysis services for the Company in exchange for 125,000 shares of common stock at $.10 per
share for total compensation of $12,500. The shares were issued upon the execution of the agreement, which is effective August
1, 2009 through July 31, 2010. The consultant will also receive $25,000 for every $1,000,000 in funding raised by the consultant.
On August 5, 2009, the Company
entered into an agreement with an unrelated individual who was to render consulting services for a 6-week period. The consultant
was to receive cash compensation of $6,000 over the term of the contract, and 24,000 shares of common stock upon the contract's
completion. The shares were valued at $.10 per share, for total stock compensation of $2,400 to be expensed ratably over the contract's
term. The Company recorded 6 weeks, or $8,400, of consulting expense during the three months ended September 30, 2009, of which
$6,000 was paid in cash. The 24,000 shares of common stock were issued upon the contract's completion on September 16, 2009.
On September 11, 2009, the Company
issued to an independent investor 560,000 shares of common stock at $.10 per share for total proceeds of $56,000.
On October 23, 2009, the Company
issued to an independent investor 100,000 shares of common stock at $.05 per share for total proceeds of $5,000.
On March 30, 2010, the Company
issued to an independent investor 50,000 shares of common stock at $.10 per share for total proceeds of $5,000.
On June 3, 2010, the Company
issued to an independent investor 300,000 shares of common stock at $.05 per share for total proceeds of $15,000.
8
On June 22, 2010, the Company
issued to an independent investor 10,000 shares of common stock at $.10 per share for total proceeds of $1,000.
On June 30, 2010, the Company
issued to an independent investor 200,000 shares of common stock at $.10 per share for total proceeds of $20,000.
All of these offerings were undertaken
pursuant to the limited offering exemption from registration under the Securities Act of 1933 as provided in Rule 504 under Regulation
D as promulgated by the U.S. Securities and Exchange Commission. These offerings met the requirements of Rule 504 in that: (a)
the total of funds raised in the five offerings does not exceed $1,000,000; and (b) the offer and sale of the Shares was not accomplished
by means of any general advertising or general solicitation.
The class of persons to whom these offerings
were made was "sophisticated investors." As a result, offers were made only to persons that the Company believed, and
had reasonable grounds to believe, either (a) have such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of the proposed investment, or (b) can bear the economic risks of the proposed investment (that
is, at the time of investment, could afford a complete loss). Additionally, sales were made only to persons whom the Company believed,
and had reasonable grounds to believe immediately prior to such sale and upon making reasonable inquiry, (a) are capable of bearing
the economic risk of the investment, and (b) either personally possess the requisite knowledge and experience, or, together with
their offeree's representative, have such knowledge and experience.
Securities Authorized for Issuance under Equity Compensation
Plans
We do not have any equity compensation
plans and accordingly we have no securities authorized for issuance thereunder.
Purchases of Equity Securities by the Registrant and
Affiliated Purchasers
We did not purchase any of our shares
of common stock or other securities during the year ended June 30, 2009.
[Balance of Page Intentionally Left Blank]
9
ITEM 6.  SELECTED FINANCIAL
DATA
The following table includes select data
extracted from, and should be examined in conjunction with, the financial statements and footnotes for the year ended June 30,
2010 as found under Item 8 of this annual report.
Year Ended
June 30,
2010
Gross sales
$
46,521
Gross profit
29,660
Net loss from operations
1,763,155
Net cash provided by financing activities
173,000
Net cash used in operating activities
147,233
Cash on hand
2,803
Net loss per share
.11
Cash dividends declared per common share
-
Property and equipment, net
494
Stockholders' deficit
$
1,901,257
ITEM 7.  MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following plan of operation should
be read in conjunction with our financial statements and the notes thereto included elsewhere in this annual report. Statements
contained herein which are not historical facts are forward-looking statements, as that term is defined by the Private Securities
Litigation Reform Act of 1995, including statements relating to our plans, objectives, expectations and intentions. Although we
believe that the expectations reflected in such forward-looking statements are reasonable, forward-looking statements are subject
to risks and uncertainties that could cause actual results to differ from those projected. We caution investors that any forward-looking
statements made by us are not guarantees of future performance and that actual result may differ materially from those in the
forward-looking statements. Such risks and uncertainties include, without limitation: established competitors who have substantially
greater financial resources and operating histories, regulatory delays or denials, ability to compete as a start-up company in
a highly competitive market, and access to sources of capital.
10
Results of Operations
We generated revenues from operations
of $46,521 since July 1, 2009 and have incurred $1,792,815 in expenses through June 30, 2010, as well as $16,861 of costs of goods
sold.
The following table provides selected
financial data about our company for the current fiscal year ended June 30, 2010 and period of July 1, 2008 through June 30, 2009,
the prior fiscal year.
Balance Sheet Data
June 30, 2010
June 30, 2009
Cash
$
2,803
$
35,536
Total Current Assets
$
55,345
$
86,782
Total Assets
$
55,839
$
88,263
Total Liabilities
$
1,957,096
$
1,473,344
Stockholders' Deficit
$
1,901,257
$
1,385,081
Plan of Operation
We have developed a plan of operation
reflecting our objectives for the next 12 months and beyond. In our plan, we identify our cash requirements, our new product development,
and our required staffing and additional funding requirements to fulfill our business objectives.
Cash Requirements
We estimate that we require a minimum
of approximately $250,000 to operate for the next 12 months from the date of this annual report. The minimum of $250,000 is required
for operating expenses and general operational overhead. Additional funds of $500,000 would be required to fully implement our
business plan which will include the following:
·
Product
                                                                                                               Development –
                                                                                                               This will include
                                                                                                               programming, engineering,
                                                                                                               and prototype building.
·
Trade
                                                                                                               Shows – We
                                                                                                               plan to exhibit
                                                                                                               our existing products
                                                                                                               and roll out new
                                                                                                               product development
                                                                                                               through several
                                                                                                               trade shows during
                                                                                                               year.
·
Prototype
                                                                                                               Engineering –
                                                                                                               This will include
                                                                                                               research and development
                                                                                                               of new technology
                                                                                                               to our existing
                                                                                                               products and any
                                                                                                               new products to
                                                                                                               be developed.
·
U.S
                                                                                                               Patent Filings
To the extent we are unable to meet our
operating expenses, we may borrow funds from our current management or other affiliates, or we may attempt to raise capital from
private individuals or institutional investment equity funds. Any funds generated from product sales if any, in our company that
exceeds our operating expenses and debt repayments will be used to expand our operations.
11
Revenues
The Company recorded $46,521 in revenues
from operations in this fiscal year, which was generated from pre-production product sales, product licensing fees and other related
business. These revenues have come mainly from the sale of prototype products.  These sales were for test units while the
products are completing the development cycle. We have produced additional revenue from consumer level products that we sell on
our web store. We have several products that are nearing completion of development and once we have the funding to start a full
production run anticipate being able to quickly ramp up sales to our target of $200,000 per month.
We currently have several OEM customers
that are ready to purchase our Xtreme Rally Racing and MultiPin game machines once they are available.
Operating and General & Administrative
Expenses
Operating expenses consisting of office
rent, administrative staff, salaries, and other general administrative expenses totaled $1,724,857 for the year ended June 30,
2010.
Income Taxes
The Company does not anticipate having
to pay income taxes in the upcoming years due to our absence of net profits.
Capital and Liquidity
As of June 30, 2010 we had total current
assets of $55,839, and total current liabilities of $1,957,096.
During the year ended June 30, 2010 the
Company received $102,000 in cash from the sale of its common stock. These proceeds are being used for operating and general and
administrative expenses to sustain the Company through its development stage until it establishes profitable operations or receives
cash from the issuance of additional common stock.
We had cash on hand of $2,803 as of June
30, 2010. We do not have sufficient cash to meet our short-term needs over the next 12 months, which are to manufacture and sell
our existing products, expand our product development, costs of research and development, trade show presentations, financing
of product inventory, development of prototypes, and protection of our intellectual capital through the applications for U.S.
patents.
[Balance of Page Intentionally Left Blank]
12
ITEM 8 Financial Statements and Supplementary
Data
NanoTech Entertainment, Inc.
(A Development Stage Company)
Financial Statements
For the Period of July 1, 2009
through June 30, 2010
13
NanoTech Entertainment, Inc.
(A Development Stage Company)
Index to Financial Statements
For the Period of July 1, 2009
through June 30, 2010
Report of Independent Registered Public Accounting Firm
15
Balance Sheet
16
Statement of Operations
17
Statement of Changes in Stockholders' Deficit
18
Statement of Cash Flows
19
Notes to Financial Statements
20
14
(REPORT OF INDEPENDENT AUDITING FIRM TO
BE INSERTED HERE IN FORM 10K)
15
NanoTech Entertainment, Inc.
(A Development Stage Company)
Balance Sheet
June 30,
2010
ASSETS
Current assets:
Cash
$
2,803
Inventory (Note B)
6,076
Prepaid expenses
6,466
Prepaid royalties (Note K)
40,000
Total current assets
55,345
Property and equipment (Note B)
2,961
Less: accumulated depreciation
(2,467
)
Net property and equipment
494
Total assets
$
55,839
LIABILITIES AND STOCKHOLDERS' DEFICIT
LIABILITIES
Current liabilities:
Accounts Payable and Accrued Expenses
$
254,798
Cash drawn in excess of bank balance
0
Accounts Payable – Related Parties
270,885
Accrued Salaries
1,001,876
Notes Payable
33,144
Notes payable – Related Parties (Note C)
101,563
Convertible Notes Payable (Note F)
276,500
Convertible Notes payable – Related Parties (Note C)
48,700
Discount on Convertible Debt
(30,370
)
Total current liabilities
1,957,096
STOCKHOLDERS' DEFICIT (Note E)
Common stock, $.001 par value, 75,000,000 shares authorized, 14,437,000 and 15,910,000 shares issued and outstanding as of June 30, 2009 and  June 30, 2010, respectively
15,910
Additional paid-in capital
1,450,432
Deficit accumulated during the development stage
(3,367,599
)
Total stockholders' deficit
(1,901,257
)
Total liabilities and stockholders' deficit
$
55,839
The accompanying notes are an integral part of these consolidated
financial statements.
16
NanoTech Entertainment, Inc.
(A Development Stage Company)
Statements of Operation
For the Year
Ended June 30,
2010
Revenues:
Sales, net
$
41,347
Less: costs of goods sold
(16,861
)
Gross profit
29,660
Operating Expenses:
Selling, general and administrative
1,724,857
Other Income (Expenses)
Interest expense
(67,958
)
Net loss before income taxes
(1,763,155
)
Provision for income taxes
-
Net loss available to common stockholders
$
(1,763,155
)
The accompanying notes are an integral part of these consolidated
financial statements.
17
NanoTech Entertainment, Inc.
(A Development Stage Company)
Statement of Changes in Stockholders'
Deficit
Deficit Accumulated
During the
Common Stock
Additional
Development
Total
Shares
Amount
Paid-In Capital
Stage
Stockholders' Deficit
Balance, June 30, 2009
14,437,000
$
14,437
$
248,684
$
(1,648,202
)
$
(1,400,566
))
Settlement of vendor debt, $.10/share
125,000
$
125
$
12,375
-
$
12,500
Shares issued as Payment Consulting Fees @ $.10/share
128,000
$
128
$
12,672
-
$
12,800
Shares issued in private placement, $.10/share
820,000
$
820
$
81,180
-
$
82,000
Shares issued in private placement, $.05/share
400,000
$
400
$
19,600
-
$
20,000
Net loss
-
-
-
$
(1,763,155
)
$
(1,763,155
)
Balance, June 30, 2010
15,910,000
$
15,910
$
374,511
$
(3,411,357
)
$
(3,036,421
)
The accompanying notes are an integral part of these consolidated
financial statements.
18
NanoTech Entertainment, Inc.
(A Development Stage Company)
Statement of Cash Flow
For the Year
Ended June 30,
2010
Cash flows from operating activities:
Net loss
$
(1,763,155
)
Depreciation expense
987
Common stock issued for services
12,800
Changes in operating assets and liabilities:
Increase in inventory
(7,670
)
Increase in prepaid expenses
3,966
Increase in accounts payable
158,369
Increase in accounts payable – related party
120,267
Increase in accrued interest, notes payable
67,958
Net cash used in operating activities
(147,233
)
Cash flows from financing activities:
Cash drawn in excess of bank balance
0
Proceeds from issuance of common stock
102,000
Proceeds from issuance of convertible debentures
71,000
Net cash provided by financing activities
173,000
Increase (decrease) in cash
(32,733
)
Cash, beginning of period
35,536
Cash, end of period
$
2,803
Non-cash investing and financing activities
Issuance of common stock upon conversion of debentures
$
0
Issuance of common stock upon conversion of loan
$
0
Issuance of common stock in settlement of vendor debt
$
12,500
Conversion of notes payable to convertible debentures
$
0
Supplemental cash flow information:
Interest paid in cash
$
0
Income taxes paid in cash
$
-
The accompanying notes are an integral
part of these consolidated financial statements.
19
NanoTech Entertainment, Inc.
(A Development Stage Company)
Notes to Financial
Statements
For the Period of July 1,
2009 through June 30, 2010
A.
ORGANIZATION
NanoTech Entertainment, Inc.
("NEI") was incorporated under the laws of the state of Nevada on November 13, 2007. The Company operates as a virtual
manufacturer, developing technology and games, and then licensing such products to third parties for manufacturing and ultimate
distribution.
DEVELOPMENT
STAGE COMPANY
The Company is considered to
be in the development stage as defined in Statement of Financial Accounting Standards Board (FASB) Accounting Standards Codification
(ASC) Topic No. 915. The Company's efforts have been devoted primarily to raising capital, borrowing funds and attempting
to implement its planned, principal activities.
B.
SIGNIFICANT ACCOUNTING POLICIES
USE OF
ESTIMATES
The preparation of the Company's
financial statements in conformity with accounting principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results
could differ from those estimates. The Company's periodic filings with the Securities and Exchange Commission include, where
applicable, disclosures of estimates, assumptions, uncertainties and markets that could affect the financial statements and future
operations of the Company.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include
cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception,
which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant
risk of loss in value. The Company's cash balances totaled $2,803 as of June 30, 2010.
20
NanoTech Entertainment, Inc.
(A Development Stage Company)
Notes to Financial
Statements
For the Period of July 1,
2009 (Inception) through June 30, 2010
B.
SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
INVENTORY
The Company's inventory
is stated at the lower of cost or market using the FIFO costing method. Inventory on hand totaled $6,076 at June 30, 2010 and
consisted entirely of finished goods gaming equipment available and ready for sale.
PROPERTY AND EQUIPMENT
The Company's property
and equipment is comprised of office and computer equipment, which are stated at cost. Depreciation is calculated over the estimated
useful lives ranging from 3 to 7 years using the straight – line method. The Company is in the development stage and has
only acquired $2,961 in fixed assets since inception, which had accumulated depreciation of $2,467 at June 30, 2010.
REVENUE RECOGNITION
Revenues for gaming equipment
sales are recognized when risks associated with ownership have passed to unaffiliated customers, and when all criteria of ASB
Topic No. 605 (SAB Topic 13) have been met. Typically, this occurs when finished products are shipped.
21
NanoTech Entertainment, Inc.
(A Development Stage Company)
Notes to Financial
Statements
For the Period of July 1,
2009 through June 30, 2010
B.
SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
RECENTLY-ISSUED ACCOUNTING
PRONOUNCEMENTS
In June 2009 the FASB established
the Accounting Standards Codification ("Codification" or "ASC") as the source of authoritative accounting
principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in accordance
with generally accepted accounting principles in the United States ("GAAP"). Rules and interpretive releases of the
Securities and Exchange Commission ("SEC") issued under authority of federal securities laws are also sources of GAAP
for SEC registrants. Existing GAAP was not intended to be changed as a result of the Codification, and accordingly the change
did not impact our financial statements. The ASC does change the way the guidance is organized and presented.
Statement of Financial Accounting
Standards ("SFAS") SFAS No. 165 (ASC Topic 855),
"Subsequent Events,"
SFAS No. 166 (ASC Topic 810),
"Accounting for Transfers of Financial Assets-an Amendment of FASB Statement No. 140,"
SFAS No. 167 (ASC Topic
810),
"Amendments to FASB Interpretation No. 46(R),"
and SFAS No. 168 (ASC Topic 105),
"The FASB Accounting
Standards Codification and the Hierarchy of Generally Accepted Accounting Principles-a replacement of FASB Statement No. 162,"
were recently issued. SFAS No. 165, 166, 167, and 168 have no current applicability to the Company or their effect on the
financial statements would not have been significant.
Accounting Standards Update
("ASU") ASU No. 2009-05 (ASC Topic 820), which amends Fair Value Measurements and Disclosures - Overall, ASU No. 2009-13
(ASC Topic 605),
Multiple-Deliverable Revenue Arrangements
, ASU No. 2009-14 (ASC Topic 985),
Certain Revenue Arrangements
that include Software Elements
, and various other ASU's No. 2009-2 through ASU No. 2010-18 which contain technical corrections
to existing guidance or affect guidance to specialized industries or entities were recently issued. These updates have no current
applicability to the Company or their effect on the financial statements would not have been significant.
C.
RELATED PARTY TRANSACTIONS
The Company pays rent expense
to two officers pursuant to long-term rent agreements (see Note N) for the use of property for business purposes. The amounts
incurred by the Company and paid to the officers for rent for the period ended June 30, 2010 totaled $198,180. This amount has
been recorded in selling, general and administrative expenses for the same period.
22
NanoTech Entertainment, Inc.
(A Development Stage Company)
Notes to Financial
Statements
For the Period of July 1,
2009 through June 30, 2010
C.
RELATED PARTY TRANSACTIONS
                                                                       (CONT'D)
Several of the Company's
current and former officers and their affiliates have provided funding in the form of notes payable, totaling $101,563. The notes
carry interest rates ranging from 14% to 20%, resulting in interest expense of $17,163 for the year ended June 30, 2010. The notes
are due on demand and therefore classified as current liabilities. Interest has not been imputed due to its immaterial impact
on the financial statements.
The Company has employment agreements
with two of its officers whereby the officers are entitled to the annual salaries payable as follows:
Salary for the Year Ended June 30,
2008
2009
2010
2011
Total
1)
$
350,000
$
450,000
$
550,000
$
210,000
$
1,350,000
2)
150,000
175,000
210,000
0
535,000
Total
$
500,000
$
625,000
$
760,000
$
210,000
$
2,095,000
The salaries have been accrued
and will be paid as cash flows allow. Interest has not been imputed due to its immaterial impact on the financial statements.
The Company has incurred liabilities
in the ordinary course of business with several individuals and entities affiliated with the Company. These amounts totaled $192,563
at June 30, 2010. Interest has not been imputed due to its immaterial impact on the financial statements.
D.
NOTES PAYABLE
The Company has originated the
following notes payable with unaffiliated entities and individuals:
Interest
Principal
June 30,
2010
2010
Note 1, 10% interest, due April 30, 2011
$
250,000
$
41,668
Note 2, 20% interest, due on demand
25,000
5,835
Note 3, 20% interest, due on demand
5,000
1,083
Totals
280,000
$
48,596
The notes are interest payments
only, with principal and accrued interest payable upon maturity or demand, as indicated above.
23
NanoTech Entertainment, Inc.
(A Development Stage Company)
Notes to Financial
Statements
For the Period of July 1,
2009 through June 30, 2010
E.
STOCKHOLDERS'
                                                                       DEFICIT
The Company has authorized 75,000,000
shares of common stock with a par value of $.001, and no preferred stock. As of June 30, 2009 (the most recent fiscal year) the
total shares issued and outstanding was 14,437,000. Additional share issuances occurring during the year ended June 30, 2010 to
arrive at the total shares issued and outstanding of 15,910,000 are as follows:
During the period of January
through June 2009, the following shares were issued for cash in accordance with private offerings to unrelated individuals (of
which 1,220,000 shares were issued and $102,000 cash received):
Number
Stock
Cash
Date
of Shares
Price
Received
09/11/2009
560,000
$
0.10
$
56,000
10/23/2009
100,000
$
0.05
$
5,000
03/30/2010
50,000
$
0.05
$
5,000
06/03/2010
300,000
$
0.05
$
15,000
06/22/2010
10,000
$
0.10
$
1,000
06/30/2010
200,000
$
0.10
$
20,000
Totals
1,220,000
$
102,000
SUBSEQUENT ISSUANCES OF EQUITY
SECURITIES
On June 19, 2009, the Company
entered into an agreement with an unrelated individual who was to render consulting services for a 26-week period. The consultant
was to receive cash compensation of $36,400 over the term of the contract, and 104,000 shares of common stock upon the contract's
completion. The shares were valued at $.10 per share, for total stock compensation of $10,400 to be expensed ratably over the
contract's term. The Company recorded 15 weeks, or $27,000, of consulting expense during the three months ended September
30, 2009, of which $21,000 was paid in cash and $6,000 of stock compensation was accrued and reported as the current liability,
stock payable. The shares were subsequently issued upon the contract's completion in December 2009.
On July 24, 2009, the Company
entered into a consulting agreement with an unaffiliated entity whereby the consultant would provide various promotional, strategic
business planning, and acquisition analysis services for the Company in exchange for 125,000 shares of common stock at $.10 per
share for total compensation of $12,500. The shares were issued upon the execution of the agreement, which is effective August
1, 2009 through July 31, 2010. The consultant will also receive $25,000 for every $1,000,000 in funding raised by the consultant.
On August 5, 2009, the Company
entered into an agreement with an unrelated individual who was to render consulting services for a 6-week period. The consultant
was to receive cash compensation of $6,000 over the term of the contract, and 24,000 shares of common stock upon the contract's
completion. The shares were valued at $.10 per share, for total stock compensation of $2,400 to be expensed ratably over the contract's
term. The Company recorded 6 weeks, or $8,400, of consulting expense during the three months ended September 30, 2009, of which
$6,000 was paid in cash. The 24,000 shares of common stock were issued upon the contract's completion on September 16, 2009.
24
On September 11, 2009, the Company
issued to an independent investor 560,000 shares of common stock at $.10 per share for total proceeds of $56,000.
On October 23, 2009, the Company
issued to an independent investor 100,000 shares of common stock at $.05 per share for total proceeds of $5,000.
On March 30, 2010, the Company
issued to an independent investor 50,000 shares of common stock at $.10 per share for total proceeds of $5,000.
On June 3, 2010, the Company
issued to an independent investor 300,000 shares of common stock at $.05 per share for total proceeds of $15,000.
On June 22, 2010, the Company
issued to an independent investor 10,000 shares of common stock at $.10 per share for total proceeds of $1,000.
On June 30, 2010, the Company
issued to an independent investor 200,000 shares of common stock at $.10 per share for total proceeds of $20,000.
All of these offerings were undertaken
pursuant to the limited offering exemption from registration under the Securities Act of 1933 as provided in Rule 504 under Regulation
D as promulgated by the U.S. Securities and Exchange Commission. These offerings met the requirements of Rule 504 in that: (a)
the total of funds raised in the five offerings does not exceed $1,000,000; and (b) the offer and sale of the Shares was not accomplished
by means of any general advertising or general solicitation.
The class of persons to whom these offerings
were made was "sophisticated investors." As a result, offers were made only to persons that the Company believed, and
had reasonable grounds to believe, either (a) have such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of the proposed investment, or (b) can bear the economic risks of the proposed investment (that
is, at the time of investment, could afford a complete loss). Additionally, sales were made only to persons whom the Company believed,
and had reasonable grounds to believe immediately prior to such sale and upon making reasonable inquiry, (a) are capable of bearing
the economic risk of the investment, and (b) either personally possess the requisite knowledge and experience, or, together with
their offeree's representative, have such knowledge and experience.
F.
CONVERTIBLE DEBENTURES
During period ending June 30,
2010, the Company issued convertible debentures bearing interest between 10% and 20% with terms of two to three years.  The
debenture principle and accrued interest may be converted into shares of the Company's common stock at a conversion price
ranging from $0.10 in the first year to a discount of up to 70% of the three lowest closing bid prices during the ten days prior
to conversion.  During the year ended June 30, 2010, the Company issued debentures totaling $71,000 (convertible into
potentially 18,916,612 shares of common stock based on a conversion rate on June 30, 2010). The fair market value of the stock
on the convertible debenture issuance dates was $.01
25
NanoTech Entertainment, Inc.
(A Development Stage Company)
Notes to Consolidated
Financial Statements
For the Period of July 1,
2009 through June 30, 2010
F.
n/a
G.
INCOME TAXES
The Company recognizes the tax
effects of transactions in the year in which such transactions enter into the determination of net income, regardless of when
reported for tax purposes. Deferred taxes are provided in the financial statements under ASC Topic No. 740 to give effect to the
resulting temporary differences which may arise from differences in the bases of fixed assets, depreciation methods, allowances,
and start-up costs based on the income taxes expected to be payable in future years.
H.
GOING CONCERN CONSIDERATIONS
The Company's financial
statements have been prepared using accounting principles generally accepted in the United States of America applicable to a going
concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. During
the year ended June 30, 2010, the Company incurred net losses totaling $1,763,155 resulting in an accumulated deficit of $3,367,599
at June 30, 2010. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The
accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company's
ability to meet its ongoing financial requirements is dependent on management being able to obtain additional equity and/or debt
financing, the realization of which is not assured.
I.
ROYALTIES
The Company has entered into
several licensing agreements whereby the Company licenses certain gaming software from various developers. The Company is responsible
for paying royalties to the developers based on product sales. In the event that no product is sold, the Company is also required
to pay a minimum royalty in order to maintain exclusivity (i.e., the developer cannot license the same software to the Company's
competitors). Certain developers also require prepayment of royalties that are either offset by future sales, or expire at the
end of a calendar year - at which point they are expensed. No sales of the licensed products had occurred during the period ending
June 30, 2010.
J.
SUBSEQUENT EVENTS
n/a
K.
SUBSEQUENT EVENTS (CONT'D)
n/a
26
NanoTech Entertainment, Inc.
(A Development Stage Company)
Notes to Financial
Statements
For the Period of July 1,
2009 through June 30, 2010
N.
COMMITMENTS AND CONTINGENCIES
The
Company has entered into rental contracts (the Contracts) with two officers (the Officers) for use of the Officers' storage
facilities, offices, development labs, and utilities for the Company's operations, production, research and development,
sales, and marketing. The Contracts require $16,400 in monthly payments (plus other related minimal costs) to the Officers over
the Contracts' term of December 1, 2007 through November 30, 2011. The Contracts are cancellable by either the Company or
the Officers with a 15-day advance notice only if all security interest given by the Officers for the Company has been removed
and there are no liens on the Officers' properties for loans to the Company in effect.
The amounts incurred by the
Company and paid to the Officers for rent for the periods ended June 30, 2010 totaled $198,190. This amount has been recorded
in selling, general and administrative expenses for the same period (see Note C).
Future minimum rental
payments for the remaining life of the Contracts are as follow:
Year Ended June 30,
2011
196,800
2012
82,000
Total
$
278,800
27
Item 9 Changes In and Disagreements with Accountants
on Accounting and Financial Disclosure
None.
Item 9A. –Controls and Procedures
Disclosure Controls and Procedures
Under the supervision and with the participation
of our management, including our principal executive and financial officer, we have conducted an evaluation of the effectiveness
of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as of the end of the period covered by this report. Based on this evaluation, Robert DeKett, our CEO, respectively,
concluded as of the evaluation date that our disclosure controls and procedures are effective such that the material information
required to be included in our Securities and Exchange Commission reports is recorded, processed, summarized and reported within
the time periods specified in SEC rules and forms relating to our company,  and was made known to us by others within those
entities, particularly during the period when this report was being prepared. It has been determined that the company must set
aside appropriate funds each quarter in order to ensure timely payments to auditors and subsequent timely filings. We have since
been delisted to the Pink Sheets due to our inability to timely file our reports under the Securities Exchange Act of 1934, we
have replaced certain officers of the Company which were responsible for our budgets and filings, and have identified and hired
the appropriate staff and outside consultants that will enable us to meet future filing requirements.
Management's Annual Report on
Internal Control Over Financial Reporting.
The management of the Company is responsible
for establishing and maintaining adequate internal control over financial reporting. The internal control process has been designed,
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
the Company's financial statements for external reporting purposes in accordance with accounting principles generally accepted
in the United States of America.
Management conducted an assessment of
the effectiveness of the Company's internal control over financial reporting as of June 30, 2010, including (i) the control
environment, (ii) risk assessment, (iii) control activities, (iv) information and communication, and (v) monitoring, based on
the framework in
Internal Control – Integrated Framework,
issued by the Committee of Sponsoring Organizations of
the Treadway Commission ("COSO"). As of June 30, 2010, management has determined that the Company's internal
control over financial reporting as of June 30, 2010 was not effective.
We are in the process of developing new policies
and procedures with regards to internal control over financial reporting.
Our internal control over financial reporting
includes policies and procedures that pertain to the maintenance of records that accurately and fairly reflect, in reasonable
detail, transactions and dispositions of assets; and provide reasonable assurances that: (1) transactions are recorded as necessary
to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States;
(2) receipts and expenditures are being made only in accordance with authorizations of management and the directors of the Company;
and (3) unauthorized acquisitions, use, or disposition of the Company's assets that could have a material effect on the
Company's financial statements are prevented or timely detected.
All internal control systems, no matter
how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable
assurance with respect to financial statement preparations and presentations. Also, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.
28
Changes in Internal Control Over Financial
Reporting.
There were no significant changes in our
internal controls or in other factors that could significantly affect these controls subsequent to the evaluation date.
Item 9B. Other Information
No items required to be reported on Form
8-K during the fourth quarter of the year covered by this report were not previously reported on Form 8-K.
29
PART III
Item 10. Directors, Executive Officers,
and Corporate Governance.
Set forth below is the name and age of
each individual who was a director or executive officer of NanoTech Entertainment, Inc. as of June 30, 2010, together with all
positions and offices of the Company held by each and the term of office and the period during which each has served:
NAME
AGE
POSITION
DATES SERVED
Robert DeKett
55
President, Treasurer, Secretary and Director
May 2009 to Present
Biographical Information
The following paragraphs set forth brief biographical information
for the aforementioned director and executive officer:
Robert DeKett - President, Secretary,
Treasurer, and Director
- In 1980, Mr. DeKett began his career at Merit Industries, the leading manufacturer of video games,
countertop games, and electronic dart games for the coin-op arcade industry and in 1985 designed the first touch-screen countertop
game which revolutionized the industry. In 1997, he joined Quantum3D as Worldwide Business Development Director - Out-of-Home
Entertainment (OHE) to advance their newly created 3Dfx based technology and establish distributorships worldwide. In 2002, he
joined his colleague David R. Foley (founder, UltraCade Technologies) as VP of Business Development at UltraCade Technologies
where he was responsible for all licensing and negotiations. Mr. DeKett procured licenses from many major Japanese, European,
and US video game publishers including an exclusive worldwide license with the NTRA for the Breeders' Cup, with development
deals both in the Video Game and Casino Gaming industries. UltraCade also won the coveted Video Game Innovative Product of the
Year for its Breeder Cup Arcade game. Mr. DeKett attended St. Vincent College and earned degrees in English BA & Philosophy
BA - Summa Cum Laude.
Compliance with Section 16(a) of the Exchange Act
Because we do not have a class of equity
securities registered pursuant to Section 12 of the Exchange Act, our executive officers, directors and persons who beneficially
own more than 10% of our common stock are not required to file initial reports of ownership and reports of changes in ownership
with the SEC under Section 16(a) of the Exchange Act.
Audit Committee and Audit Committee Financial Expert Disclosure
The Company's Board of Directors
does not have a separately designated audit committee or an "audit committee financial expert." Audit committee functions
are performed by our Board of Directors. None of our directors is deemed independent. All directors also hold positions as our
officers. Our audit committee is responsible for: (1) selection and oversight of our independent accountant; (2) establishing
procedures for the receipt, retention and treatment of complaints regarding accounting, internal controls, and auditing matters;
(3) establishing procedures for the confidential, anonymous submission by our employees of concerns regarding accounting and auditing
matters; (4) engaging outside advisors; and, (5) funding for the outside auditory and any outside advisors engagement by the audit
committee.
The Board of Directors does not have an
audit committee financial expert at this time due to the fact that the Company has only limited operations and no revenues.  We
believe the cost related to retaining a financial expert at this time is prohibitive. Further, because of our limited operations,
we believe the services of a financial expert are not warranted.
30
Code of Ethics
We have adopted a corporate code of ethics.
We believe our code of ethics is reasonably designed to deter wrongdoing and promote honest and ethical conduct; provide full,
fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting
of code violations; and provide accountability for adherence to the code.
Item 11.  Executive Compensation
(a) A majority of the Intellectual Property
was acquired by the Company in the form of an employment agreement whereby one of the original founders, David R. Foley, assigned
the rights to his substantial intellectual property portfolio in return for the compensation outlined in his employment agreement. 
To date, Mr. Foley has not been compensated under the terms of his agreement. The Company intends on offering stock in lieu
of the past due compensation, and paying the compensation moving forward. There is currently accrued compensation due as of June
30, 2010 totaling $1,001,876 payable to Robert DeKett (Current Officer and Director) and David Foley.
(b) There are no annuity, pension, or
retirement benefits proposed to be paid to officers, directors, or employees of the Corporation in the event of retirement at
normal retirement date pursuant to any presently existing plan provided or contributed to by the Corporation.
(c) The currently are employment agreements
with two officers and directors of the Company. The terms of these employment agreements are as follows:
·
Robert
                                                                                                               Dekett (President,
                                                                                                               Treasurer, and
                                                                                                               Secretary) –
                                                                                                               Mr. DeKett's
                                                                                                               current compensation
                                                                                                               through calendar
                                                                                                               year-end 2010 is
                                                                                                               $175,000 USD per
                                                                                                               annum with an increase
                                                                                                               to $210,000 USD
                                                                                                               for calendar year
                                                                                                               2011. Currently,
                                                                                                               Mr. DeKett's
                                                                                                               salary is accruing
                                                                                                               on a monthly basis.
·
Ted
                                                                                                               D. Campbell II
                                                                                                               (Chief Compliance
                                                                                                               Officer) - Mr.
                                                                                                               Campbell's
                                                                                                               current compensation
                                                                                                               through fiscal
                                                                                                               year end 2010 is
                                                                                                               $75,000 USD per
                                                                                                               annum with an increase
                                                                                                               to $108,000 USD
                                                                                                               for fiscal year
                                                                                                               2011. Currently,
                                                                                                               Mr. Campbell's
                                                                                                               compensation is
                                                                                                               accruing on a monthly
                                                                                                               basis.
Director Compensation
The Directors of the Company do not receive compensation at
this time.
Item 12 - Security Ownership of
Certain Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth the beneficial
ownership of the Company's officers, directors, and persons who own more than five percent of the Company's common stock as of
June 30, 2010. Under relevant provisions of the Exchange Act, a person is deemed to be a "beneficial owner" of a security
if he or she has or shares the power to vote or direct the voting of the security or the power to dispose or direct the disposition
of the security. A person is also deemed to be a beneficial owner of any securities of which that person has the right to acquire
beneficial ownership in 60 days. More than one person may be deemed to be a beneficial owner of the same securities. The percentage
ownership of each stockholder is calculated based on 15,910,000 total outstanding shares of our common stock as of June 30, 2010.
31
Amount and Nature of Beneficial Ownership
as of June 30, 2010:
Name of Individual
# Shares Beneficially Owned
# of Class of Common
Stock (1)
Robert Dekett
President, Treasurer, Secretary and Director
PO Box 50729
Henderson, Nevada 89016
3,000,000
18.9
%
Ted D. Campbell II
Chief Compliance Officer
PO Box 240
Jenks, Oklahoma 74037
0
0.00
%
David R. Foley
311 Santa Rosa Drive
Los Gatos, California 95032
3,000,000
18.9
%
Greenleaf Forum Investments
Kevin Murphy, President
1174 Manitou Drive NW
Fox Island, WA 98333
1,300,000
8.2
%
T
akashi and Keiko Yoshida
59 Preston Road
Woodside, CA 94062
1,000,000
6.3
%
Alan Tolson
Skiddaw View Sandale
Bolton Gate, Cumbria
CA5 1DE
UK
1,500,000
9.4
%
32
Item 13 – Certain Relationships and Related Transactions,
Director Independence
The Company pays rent expense to two shareholders
for the use of property for business purposes. The amounts to be paid to the Company's shareholders for rent for the years
ended June 30, 2010 totaled $198,180. These amounts have been recorded in selling, general and administrative expenses for the
same periods.
33
Item 14 – Principal Accountant
Fees and Services
Audit Fees:
All fees billed for
each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant's
annual financial statements and the review of interim financial statements or services that are normally provided by the accountant
in connection with statutory and regulatory filings or engagements for those fiscal years.
2009:
$
40,000
2008:
$
8,800
Audit-Related Fees
: All fees billed
in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related
to the performance of the audit or review of the registrant's financial statements and are not reported under Item 9(e)(f1) of
Schedule 14A.
2009:
$
1,750
2008:
$
0
Tax Fees
: The aggregate fees billed
in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice,
and tax planning:
2009:
$
3,000
2008:
$
0
All Other Fees
:
2009:
$
0
2008:
$
0
(5)   Our audit committee's
pre-approval policies and procedures described in paragraph (c)(7)(i) of Rule 2-01 of Regulation S-X were that the audit committee
pre-approve all accounting related activities prior to the performance of any services by any accountant or auditor.
(6)   The percentage of hours
expended on the principal accountant's engagement to audit our financial statements for the most recent fiscal year that were
attributed to work performed by persons other than the principal accountant's full-time, permanent employees was 0%.
34
PART IV
Item 15 – Exhibits, Financial
Statement Schedules
The following exhibits are included with this filing:
Exhibit No.:
Description:
3.1(i)
Articles of Incorporation and amendments thereto
(1) and (2)
3.1(ii)
Bylaws
(1)
14
Code of Ethics
(1)
31.1
Section 302 Certification by Principal Executive Officer and Principal Financial and Accounting
    Officer
(1)
32.1
Section 906 Certification by
Principal Executive
    Officer and Principal Financial and Accounting Officer
(1)
(1)
Filed with the Securities and
                                                                 Exchange Commission on February 12, 2008 as an exhibit numbered
                                                                 as indicated above, to the Registrant's registration statement
                                                                 on Form S-1 (file no. 333-149184 which exhibit is incorporated
                                                                 herein by reference.
(2)
Amendment to the Article of Incorporation
                                                                 filed with the Securities and Exchange Commission on Form 8-K
                                                                 on May 7, 2009 which exhibit is incorporated herein by reference.
35
9.2 – Financial Information Forming
Basis for 10K for period ending June 30, 2011
PART I
ITEM 1.  BUSINESS
General
NanoTech Entertainment, Inc. (the "Company"
or "We" or "NanoTech") was originally organized as a Nevada Corporation on July 15, 2004 under the name
Aldar Group, Inc. ("AGI") for the purpose of acquiring, selling and breeding thoroughbred horses.
On April 30, 2009, the Company entered
into a Sale and Acquisition Agreement (the "Agreement") with NanoTech Entertainment, Inc. ("NEI"), a Nevada
corporation, wherein the Company acquired 100% of NEI's issued and outstanding common stock through the exchange of 6,480,000
common shares. As a result of the Agreement, the Company changed its name to NanoTech Entertainment, Inc. ("NTI") to
better reflect the direction of the newly formed entity.
For accounting purposes, the share exchange
transaction was treated as a capital transaction where AGI, as the shell-corporation and legal acquirer, issued stock for the net
monetary assets of NEI, the accounting acquirer, accompanied by a recapitalization. The accounting is similar in form to a reverse
acquisition, except that goodwill or other intangibles are not recorded.
The Company now operates as a virtual manufacturer,
developing technology and games, and then licensing such products to third parties for manufacturing and ultimate distribution.
The Company's business model supports relatively low overhead costs and efficiencies in operations in the new global manufacturing
economy.
Company Overview
NanoTech Entertainment, Inc. is a provider
of gaming technology for the coin-op arcade, casino gaming, and consumer gaming markets. Headquartered in Las Vegas, Nevada, we
operate as a virtual manufacturer, developing technology and games, and then licensing them to third parties for manufacturing
and distribution.
With an ever-expanding lineup of technology
and products, NanoTech is redefining the role of developers and manufacturers in the gaming market. NanoTech's team is comprised
of industry veterans of the gaming industry and have collectively been responsible for dozens of award winning products and multi-million
copy selling video games and technology.
Market and Industry
We have experience and products for all
aspects of the various gaming industries.  By traversing the market from consumer to coin-op to casino, the Company may be
able to take advantage of all three growth & profitable industries and balance out the seasonal patterns of each.
Even in the unsteady economic climate,
the gaming market continues to flourish and expand.  In 2008, the arcade industry saw $7.2 billion in revenue, and the consumer
market saw $58 billion with a growth of 19% in 2008. The following are excerpts from other sources:
·
"As people cut back on travel and going out, they are turning more to home entertainment,
providing a boost to the video game industry." Reuters, April 2, 2009
·
"The video game business continues to enjoy robust growth, making it the fastest growing
of the many consumer goods categories."  Market Watch, Feb 18, 2009
36
The NanoTech team has won numerous awards
in recent years including innovative product of the year in 2005 and 2006 in the arcade industry and innovative product of the
year in 2007 in the casino market.
Products
Below is a list of the Company's
current product line with detailed descriptions. For more information on the Company's products and services you can view
our web site at www.NanoTechEnt.com.
MultiPin™ - There is currently only
one Pinball manufacturer left in the world, Stern Pinball.  While they supply over 10,000 machines per year to the market,
there is a huge demand for new and innovative pinball.  MultiPin™ represents the next generation in pinball.  By
replacing the mechanical parts of a pinball machine with state of the art electronics, MultiPin™ solves two major problems
seen by operators of Pinball machines.  First, it eliminates any mechanical failures, which are common amongst pinball machines. 
Secondly, it provides a multi-game platform that can be constantly updated with new games without having to swap out the machine. 
Our proprietary physics engine and motion sensors allow MultiPin™ to accurately recreate the experience of a mechanical pinball
machine, while providing players with a variety of classic and modern pinball games to choose from.
Xtreme Rally Racing™ - An Xtreme
Off-Road Racing Experience with no boundaries. Xtreme Rally Racing is an innovative new driving machine that features three modes
of game play:
Xtreme Off-Road - Race head-to-head
against other players and the computer to checkpoints while driving anywhere on the map with no preset course.
Timed Rally Stages - Classic
Rally Racing on real world courses. Players will be able to race in five different countries on real world rally courses.
Xtreme Stadium Racing - Custom
Stadiums designed for Xtreme racing, including a figure-8 multi-lap course with huge jumps.
NanoNET Online System - Local and worldwide
head-to-head competition in real time against machines located around the world. Remote operator control of your machines including
diagnostics, accounting reports, and automatic software updates and enhancements downloaded over the net. Link up to four cabinets
for local multiplayer action.
Pinball Wizard ™ - Consumer Pinball
enthusiasts have been growing with the advent of Visual Pinball and now Future Pinball.  The official Visual Pinball forum
boasts over 155,000 members, and the free version Future Pinball has been downloaded over 1 million times in the past six months,
and over 500,000 copies in April 2009.  We have created the only input device designed to give these players a way to experience
real pinball controls on their personal computer.   Based on the technology developed for the MultiPin™ product
we have built a controller that lets people play pinball using traditional controls and the ability to "shake" and
"nudge" the table.
Mot-Ion™ Adapter - The Mot-Ion adapter
is a USB adapter that allows do-it-yourself Pinball enthusiasts to build their own cabinet using real pinball controls providing
analog inputs for nudging and bumping. This kit includes everything needed to connect a pinball cabinet to a PC (I/O Board, Digital
Plunger, Wiring Harness).
37
Opti-Gun™ Adapter - The OptiGun adapter
is a USB adapter that allows players to connect Arcade Light Guns to any USB based system. This universal adapter provides a complete
solution to implement an arcade game including gun inputs, force feedback outputs, digital inputs, and built-in audio amplifiers.
The adapter can also be used with PC based emulators such as M.A.M.E. to connect arcade light guns on your home system.
Retr-IO™ Adapter - The Retr-IO adapter
provides a standard JAMMA interface for USB based systems. This universal adapter provides a complete solution to implement an
arcade game using joysticks, trackballs, spinners, and buttons, and features digital outputs and built-in audio and video amplifiers.
The board works with any PC based system
including M.A.M.E and other emulation products. It provides an all-in-one solution to hooking up traditional arcade controls to
your PC, or any USB system. All digital inputs and outputs are interfaced via standard keyboard commands, and appear as mapped
keys to your games. The default key mappings match those of many popular PC emulation products. Two trackballs and two spinners
are supported and mapped to the system as mice. The board supports four player standard configurations or two player four-way joystick
and six-button configurations.
Competition
The Company will compete against established
companies with significantly greater financial, marketing, research and development, personnel, and other resources than the Company.
Such competition could have a material adverse effect on the Company's profitability.
Government Regulation
There are no government regulations regulating
the development and sale of gaming products for coin-operated machines.
ITEM 1A.  RISK FACTORS
Not applicable.
ITEM 1B.  UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 2.  PROPERTIES
Our principal Nevada executive offices
are located at 3883 Raymert Drive, Suite 3, Las Vegas, NV 89121 and our phone number is 702-518-7410.
ITEM 3.  LEGAL PROCEEDINGS
We are not currently involved in any legal
proceedings nor do we have any knowledge of any threatened litigation.
ITEM 4.  SUBMISSION OF MATTERS
TO A VOTE OF SECURITIES HOLDERS
No matters were submitted to a vote of
security holders during the fiscal year ended June 30, 2011.
38
PART II
ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY,
RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Our common stock is currently quoted on
the Pink OTC Markets Inc., more commonly referred to as the Pink Sheets (the "Pink Sheets") under the symbol "NTEK."
There has been limited trading of our common
stock since our initial listing on the OTCBB
®
on September 22, 2008 under the ticker symbol ALDJ. On June 10, 2009,
pursuant to a corporate name change and a change in control of the Company, the ticker was changed to NTEK. On October 2, 2009,
our symbol was changed to NTEKE for failure to be current in our reporting obligations with the Securities and Exchange Commission.
On November 3, 2009, our ticker symbol was returned to NTEK and we were delisted to the Pink Sheets. Below is a table listing the
high and low trading price by quarter for the fiscal year end June 30, 2010.
Quarter Ended
High
Low
September 30, 2010
$
0.09
$
0.012
December 31, 2010
$
0.09
$
0.0124
March 31, 2011
$
0.09
$
0.0665
June 30, 2011
$
0.08
$
0.0082
It is our plan that upon becoming current
with all our required filings pursuant to the Securities Exchange Act of 1934, as amended, we plan on filing a new Form 15c2-11
application with FINRA for re-listing on the OTCBB
®
.
Holders
As of June 30, 2011, we had 15,910,000
shares of common stock, par value $0.001, issued and outstanding. The stock transfer agent for our securities is Stalt, Inc., 671
Oak Grove Avenue, Suite C, Menlo Park, CA 94025.
Dividends
There are no restrictions in our Articles
of Incorporation or Bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from
declaring dividends where, after giving effect to the distribution of the dividend:
3.
We would not be able to pay our debts as they become due in the usual course of business; or
4.
Our total assets would be less than the sum of the total liabilities plus the amount that would
be needed to satisfy the rights of stockholders who have preferential rights superior to those receiving the distribution.
The Company has not declared any dividends,
and does not plan to declare any dividends in the foreseeable future.
Recent Sales of Unregistered Securities
The Company has authorized 75,000,000 shares
of common stock with a par value of $.001, and no preferred stock. As of June 30, 2010 (the most recent fiscal year) the total
shares issued and outstanding was 15,910,000. No additional share issuances occurred during the year ended June 30, 2011.
39
Securities Authorized for Issuance
under Equity Compensation Plans
We do not have any equity compensation
plans and accordingly we have no securities authorized for issuance thereunder.
Purchases of Equity Securities by the Registrant and Affiliated
Purchasers
We did not purchase any of our shares of
common stock or other securities during the year ended June 30, 2009.
[Balance of Page Intentionally Left Blank]
40
ITEM 6.  SELECTED FINANCIAL DATA
The following table includes select data
extracted from, and should be examined in conjunction with, the financial statements and footnotes for the year ended June 30,
2011 as found under Item 8 of this annual report.
Year Ended
June 30,
2011
Gross sales
$
8,284
Gross profit
3,467
Net loss from operations
1,228,504
Net cash provided by financing activities
279,770
Net cash used in operating activities
290,814
Cash on hand
2,803
Net loss per share
.07
Cash dividends declared per common share
-
Property and equipment, net
0
Stockholders' deficit
$
2,803,806
ITEM 7.  MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following plan of operation should
be read in conjunction with our financial statements and the notes thereto included elsewhere in this annual report. Statements
contained herein which are not historical facts are forward-looking statements, as that term is defined by the Private Securities
Litigation Reform Act of 1995, including statements relating to our plans, objectives, expectations and intentions. Although we
believe that the expectations reflected in such forward-looking statements are reasonable, forward-looking statements are subject
to risks and uncertainties that could cause actual results to differ from those projected. We caution investors that any forward-looking
statements made by us are not guarantees of future performance and that actual result may differ materially from those in the forward-looking
statements. Such risks and uncertainties include, without limitation: established competitors who have substantially greater financial
resources and operating histories, regulatory delays or denials, ability to compete as a start-up company in a highly competitive
market, and access to sources of capital.
41
Results of Operations
We generated revenues from operations of
$8,284 since July 1, 2010 and have incurred $1,231,972 in expenses through June 30, 2011, as well as $4c817 of costs of goods sold.
The following table provides selected financial
data about our company for the current fiscal year ended June 30, 2010 and period of July 1, 2009 through June 30, 2010, the prior
fiscal year.
Balance Sheet Data
June 30, 2011
June 30, 2010
Cash
$
43
$
2,803
Total Current Assets
$
51,967
$
55,345
Total Assets
$
51,967
$
55,839
Total Liabilities
$
2,855,774
$
1,957,096
Stockholders' Deficit
$
2,803,806
$
1,901,257
Plan of Operation
We have developed a plan of operation reflecting
our objectives for the next 12 months and beyond. In our plan, we identify our cash requirements, our new product development,
and our required staffing and additional funding requirements to fulfill our business objectives.
Cash Requirements
We estimate that we require a minimum of
approximately $250,000 to operate for the next 12 months from the date of this annual report. The minimum of $250,000 is required
for operating expenses and general operational overhead. Additional funds of $500,000 would be required to fully implement our
business plan which will include the following:
·
Product Development – This will include programming, engineering, and prototype building.
·
Trade Shows – We plan to exhibit our existing products and roll out new product development
through several trade shows during year.
·
Prototype Engineering – This will include research and development of new technology to our
existing products and any new products to be developed.
·
U.S Patent Filings
To the extent we are unable to meet our
operating expenses, we may borrow funds from our current management or other affiliates, or we may attempt to raise capital from
private individuals or institutional investment equity funds. Any funds generated from product sales if any, in our company that
exceeds our operating expenses and debt repayments will be used to expand our operations.
42
Revenues
The Company recorded $8,284 in revenues
from operations in this fiscal year, which was generated from pre-production product sales, product licensing fees and other related
business. These revenues have come mainly from the sale of prototype products.  These sales were for test units while the
products are completing the development cycle. We have produced additional revenue from consumer level products that we sell on
our web store. We have several products that are nearing completion of development and once we have the funding to start a full
production run anticipate being able to quickly ramp up sales to our target of $200,000 per month.
We currently have several OEM customers
that are ready to purchase our Xtreme Rally Racing and MultiPin game machines once they are available.
Operating and General & Administrative
Expenses
Operating expenses consisting of office
rent, administrative staff, salaries, and other general administrative expenses totaled $1,231,972 for the year ended June 30,
2011
Income Taxes
The Company does not anticipate having
to pay income taxes in the upcoming years due to our absence of net profits.
Capital and Liquidity
As of June 30, 2011 we had total current
assets of $51,967, and total current liabilities of $2,855,774.
We had cash on hand of $43 as of June 30,
2011. We do not have sufficient cash to meet our short-term needs over the next 12 months, which are to manufacture and sell our
existing products, expand our product development, costs of research and development, trade show presentations, financing of product
inventory, development of prototypes, and protection of our intellectual capital through the applications for U.S. patents.
[Balance of Page Intentionally Left Blank]
43
ITEM 8 Financial Statements and Supplementary
Data
NanoTech Entertainment, Inc.
(A Development Stage Company)
Financial Statements
For the Period of July 1, 2010
through June 30, 2011
44
NanoTech Entertainment, Inc.
(A Development Stage Company)
Index to Financial Statements
For the Period of July 1, 2010
through June 30, 2011
Report of Independent Registered Public Accounting Firm
2
Balance Sheet
3
Statement of Operations
4
Statement of Changes in Stockholders' Deficit
5
Statement of Cash Flows
6
Notes to Financial Statements
7
45
(REPORT OF INDEPENDENT AUDITING FIRM TO
BE INSERTED HERE IN FORM 10K)
46
NanoTech Entertainment, Inc.
(A Development Stage Company)
Balance Sheet
June 30,
2011
ASSETS
Current assets:
Cash
$
43
Inventory (Note B)
11,924
Prepaid expenses
0
Prepaid royalties (Note K)
40,000
Total current assets
51,967
Property and equipment (Note B)
2,961
Less: accumulated depreciation
(2,961
)
Net property and equipment
0
Total assets
$
51,924
LIABILITIES AND STOCKHOLDERS' DEFICIT
LIABILITIES
Current liabilities:
Accounts Payable and Accrued Expenses
$
352,378
Cash drawn in excess of bank balance
0
Accounts Payable – Related Parties
377,483
Accrued Salaries
1,553,376
Notes Payable
33,144
Notes payable – Related Parties (Note C)
101,563
Convertible Notes Payable (Note F)
571,500
Convertible Notes payable – Related Parties (Note C)
48,700
Discount on Convertible Debt
(182,370
)
Total current liabilities
2,855,774
STOCKHOLDERS' DEFICIT (Note E)
Common stock, $.001 par value, 75,000,000 shares authorized, 14,437,000 and 15,910,000 shares issued and outstanding as of June 30, 2009 and June 30, 2010, respectively
15,910
Additional paid-in capital
1,685,432
Deficit accumulated during the development stage
(4,505,148
)
Total stockholders' deficit
(2,80,806
)
Total liabilities and stockholders' deficit
$
51,968
The accompanying notes are an integral part of these consolidated
financial statements.
47
NanoTech Entertainment, Inc.
(A Development Stage Company)
Statements of Operation
For the Year
Ended June 30,
2011
Revenues:
Sales, net
$
8,284
Less: costs of goods sold
(4,817
)
Gross profit
3,467
Operating Expenses:
Selling, general and administrative
1,231,972
Other Income (Expenses)
Interest expense
(133,721
)
Net loss before income taxes
(1,228,504
)
Provision for income taxes
-
Net loss available to common stockholders
$
(1,228,504
)
The accompanying notes are an integral part of these consolidated
financial statements.
48
NanoTech Entertainment, Inc.
(A Development Stage Company)
Statement of Changes in Stockholders'
Deficit
Deficit Accumulated
During the
Common Stock
Additional
Development
Total
Shares
Amount
Paid-In Capital
Stage
Stockholders' Deficit
Balance, June 30, 2010
15,910,000
$
15,910
$
374,511
$
(3,411,357
)
$
(3,036,421
))
Settlement of vendor debt, $.10/share
0
-
Shares issued as Payment Consulting Fees @ $.10/share
0
-
Shares issued in private placement, $.10/share
0
-
Shares issued in private placement, $.05/share
0
0
-
Net loss
-
-
-
$
(1,228,504
)
$
(1,228,504
)
Balance, June 30, 2011
15,910,000
$
15,910
$
374,511
$
(4,505,148
)
$
(3,036,421
)
The accompanying notes are an integral part of these consolidated
financial statements.
49
NanoTech Entertainment, Inc.
(A Development Stage Company)
Statement of Cash Flow
For the Year
Ended June 30,
2011
Cash flows from operating activities:
Net loss
$
(1,228,504
)
Depreciation expense
494
Common stock issued for services
0
Changes in operating assets and liabilities:
Increase in inventory
5,848
Increase in prepaid expenses
-6,466
Increase in accounts payable
97,580
Increase in accounts payable – related party
106,598
Increase in accrued interest, notes payable
133,721
Net cash used in operating activities
(290,814
)
Cash flows from financing activities:
Cash drawn in excess of bank balance
0
Proceeds from issuance of common stock
0
Proceeds from issuance of convertible debentures
290,814
Net cash provided by financing activities
290,814
Increase (decrease) in cash
(2,760
)
Cash, beginning of period
2,803
Cash, end of period
$
43
Non-cash investing and financing activities
Issuance of common stock upon conversion of debentures
$
0
Issuance of common stock upon conversion of loan
$
0
Issuance of common stock in settlement of vendor debt
$
0
Conversion of notes payable to convertible debentures
$
0
Supplemental cash flow information:
Interest paid in cash
$
15,059
Income taxes paid in cash
$
-
The accompanying notes are an integral part
of these consolidated financial statements.
50
NanoTech Entertainment, Inc.
(A Development Stage Company)
Notes to Financial
Statements
For the Period of July 1, 2010
through June 30, 2011
D.
ORGANIZATION
NanoTech Entertainment, Inc.
("NEI") was incorporated under the laws of the state of Nevada on November 13, 2007. The Company operates as a virtual
manufacturer, developing technology and games, and then licensing such products to third parties for manufacturing and ultimate
distribution.
DEVELOPMENT
STAGE COMPANY
The Company is considered to
be in the development stage as defined in Statement of Financial Accounting Standards Board (FASB) Accounting Standards Codification
(ASC) Topic No. 915. The Company's efforts have been devoted primarily to raising capital, borrowing funds and attempting
to implement its planned, principal activities.
E.
SIGNIFICANT ACCOUNTING POLICIES
USE OF
ESTIMATES
The preparation of the Company's
financial statements in conformity with accounting principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results
could differ from those estimates. The Company's periodic filings with the Securities and Exchange Commission include, where
applicable, disclosures of estimates, assumptions, uncertainties and markets that could affect the financial statements and future
operations of the Company.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include
cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception,
which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant
risk of loss in value. The Company's cash balances totaled $43 as of June 30, 2011.
51
NanoTech Entertainment, Inc.
(A Development Stage Company)
Notes to Financial
Statements
For the Period of July 1, 2010
through June 30, 2011
C.
SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
INVENTORY
The Company's inventory
is stated at the lower of cost or market using the FIFO costing method. Inventory on hand totaled $11,924 at June 30, 2011 and
consisted entirely of finished goods gaming equipment available and ready for sale.
PROPERTY AND EQUIPMENT
The Company's property
and equipment is comprised of office and computer equipment, which are stated at cost. Depreciation is calculated over the estimated
useful lives ranging from 3 to 7 years using the straight – line method. The Company is in the development stage and has
only acquired $2,961 in fixed assets since inception, which had accumulated depreciation of $2,961 at June 30, 2011.
REVENUE RECOGNITION
Revenues for gaming equipment
sales are recognized when risks associated with ownership have passed to unaffiliated customers, and when all criteria of ASB Topic
No. 605 (SAB Topic 13) have been met. Typically, this occurs when finished products are shipped.
52
NanoTech Entertainment, Inc.
(A Development Stage Company)
Notes to Financial
Statements
For the Period of July 1, 2010
through June 30, 2011
G.
SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
RECENTLY-ISSUED ACCOUNTING
PRONOUNCEMENTS
In June 2009 the FASB established
the Accounting Standards Codification ("Codification" or "ASC") as the source of authoritative accounting principles
recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in accordance with
generally accepted accounting principles in the United States ("GAAP"). Rules and interpretive releases of the Securities
and Exchange Commission ("SEC") issued under authority of federal securities laws are also sources of GAAP for SEC registrants.
Existing GAAP was not intended to be changed as a result of the Codification, and accordingly the change did not impact our financial
statements. The ASC does change the way the guidance is organized and presented.
Statement of Financial Accounting
Standards ("SFAS") SFAS No. 165 (ASC Topic 855),
"Subsequent Events,"
SFAS No. 166 (ASC Topic 810),
"Accounting for Transfers of Financial Assets-an Amendment of FASB Statement No. 140,"
SFAS No. 167 (ASC Topic
810),
"Amendments to FASB Interpretation No. 46(R),"
and SFAS No. 168 (ASC Topic 105),
"The FASB Accounting
Standards Codification and the Hierarchy of Generally Accepted Accounting Principles-a replacement of FASB Statement No. 162,"
were recently issued. SFAS No. 165, 166, 167, and 168 have no current applicability to the Company or their effect on the financial
statements would not have been significant.
Accounting Standards Update ("ASU")
ASU No. 2009-05 (ASC Topic 820), which amends Fair Value Measurements and Disclosures - Overall, ASU No. 2009-13 (ASC Topic 605),
Multiple-Deliverable Revenue Arrangements
, ASU No. 2009-14 (ASC Topic 985),
Certain Revenue Arrangements that include
Software Elements
, and various other ASU's No. 2009-2 through ASU No. 2010-18 which contain technical corrections to existing
guidance or affect guidance to specialized industries or entities were recently issued. These updates have no current applicability
to the Company or their effect on the financial statements would not have been significant.
F.
RELATED PARTY TRANSACTIONS
The Company pays rent expense
to one founder pursuant to long-term rent agreements (see Note N) for the use of property for business purposes. The amounts incurred
by the Company and paid to the related parties for rent for the period ended June 30, 2011 totaled $184,228. This amount has been
recorded in selling, general and administrative expenses for the same period.
53
NanoTech Entertainment, Inc.
(A Development Stage Company)
Notes to Financial
Statements
For the Period of July 1, 2010
through June 30, 2011
H.
RELATED PARTY TRANSACTIONS (CONT'D)
Several of the Company's
current and former officers and their affiliates have provided funding in the form of notes payable, totaling $101,563. The notes
carry interest rates ranging from 14% to 20%, resulting in interest expense of $17,163 for the year ended June 30, 2011. The notes
are due on demand and therefore classified as current liabilities. Interest has not been imputed due to its immaterial impact on
the financial statements.
The Company has employment agreements
with one if its remaining founders, David Foley, who, as part of the employment agreement has provided the gaming properties and
intellectual property being used by the company for the core of its product offerings.. The Annual salary has been adjusted and
is payable in the form of $210,000 in cash and 2,250,000 in stock.
The salaries have been accrued
and will be paid as cash flows allow. Interest has not been imputed due to its immaterial impact on the financial statements.
The Company has incurred liabilities
in the ordinary course of business with several individuals and entities affiliated with the Company. These amounts totaled $71,072
at June 30, 2011. Interest has not been imputed due to its immaterial impact on the financial statements.
I.
NOTES PAYABLE
The Company has originated the
following notes payable with unaffiliated entities and individuals:
Principal
Interest
June 30,
2011
2011
Note 1, 10% interest, due April 30, 2011
$
250,000
$
41,668
Note 2, 20% interest, due on demand
25,000
5,835
Note 3, 20% interest, due on demand
5,000
1,083
Totals
280,000
$
48,596
The notes are interest payments
only, with principal and accrued interest payable upon maturity or demand, as indicated above.
54
NanoTech Entertainment, Inc.
(A Development Stage Company)
Notes to Financial
Statements
For the Period of July 1, 2010
through June 30, 2011
J.
STOCKHOLDERS' DEFICIT
The Company has authorized 75,000,000 shares
of common stock with a par value of $.001, and no preferred stock. As of June 30, 2010 (the most recent fiscal year) the total
shares issued and outstanding was 15,910,000. No additional share issuances occurred during the year ended June 30, 2011.
K.
CONVERTIBLE DEBENTURES
During period ending June 30,
2011, the Company issued convertible debentures bearing interest of 30% with terms of two to three years.  The debenture
principle and accrued interest may be converted into shares of the Company's common stock at a conversion price at a discount
of up to 70% of the three lowest closing bid prices during the ten days prior to conversion.  During the year ended June
30, 2011, the Company issued debentures totaling $225,850 (convertible into potentially 14,160,366 shares of common stock based
on a conversion rate on June 30, 2011). The fair market value of the stock on the convertible debenture issuance dates was $.04
55
NanoTech Entertainment, Inc.
(A Development Stage Company)
Notes to Consolidated
Financial Statements
For the Period of July 1, 2010
through June 30, 2011
H.
n/a
I.
INCOME TAXES
The Company recognizes the tax
effects of transactions in the year in which such transactions enter into the determination of net income, regardless of when reported
for tax purposes. Deferred taxes are provided in the financial statements under ASC Topic No. 740 to give effect to the resulting
temporary differences which may arise from differences in the bases of fixed assets, depreciation methods, allowances, and start-up
costs based on the income taxes expected to be payable in future years.
L.
GOING CONCERN CONSIDERATIONS
The Company's financial
statements have been prepared using accounting principles generally accepted in the United States of America applicable to a going
concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. During the
year ended June 30, 2011, the Company incurred net losses totaling $1,228,504 resulting in an accumulated deficit of $4,505,148
at June 30, 2011. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The
accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company's
ability to meet its ongoing financial requirements is dependent on management being able to obtain additional equity and/or debt
financing, the realization of which is not assured.
M.
ROYALTIES
The Company has entered into
several licensing agreements whereby the Company licenses certain gaming software from various developers. The Company is responsible
for paying royalties to the developers based on product sales. In the event that no product is sold, the Company is also required
to pay a minimum royalty in order to maintain exclusivity (i.e., the developer cannot license the same software to the Company's
competitors). Certain developers also require prepayment of royalties that are either offset by future sales, or expire at the
end of a calendar year - at which point they are expensed. No sales of the licensed products had occurred during the period ending
June 30, 2011.
N.
SUBSEQUENT EVENTS
n/a
O.
SUBSEQUENT EVENTS (CONT'D)
n/a
56
NanoTech Entertainment, Inc.
(A Development Stage Company)
Notes to Financial
Statements
For the Period of July 1, 2009
through June 30, 2010
N.   COMMITMENTS AND CONTINGENCIES
The
Company has previously entered into a rental contracts with one of the founders for use of storage facilities, offices, development
labs, and utilities for the Company's operations, production, research and development, sales, and marketing. The Contract
requires $16,400 in monthly payments (plus other related minimal costs) to over the Contracts' term of December 1, 2007 through
November 30, 2011. The Contracts are cancellable with a 15-day advance notice only if all security interest has been removed and
there are no liens on the properties for loans to the Company in effect.
The amounts incurred by the Company and paid for
rent for the periods ended June 30, 2011 totaled $184,228. This amount has been recorded in selling, general and administrative
expenses for the same period (see Note C).
Future minimum rental payments for the remaining life of
the Contracts are as follow:
Year Ended June 30,
2012
82,000
Total
$
82,000
57
Item 9 Changes In and Disagreements
with Accountants on Accounting and Financial Disclosure
None.
Item 9A. –Controls and Procedures
Disclosure Controls and Procedures
Under the supervision and with the participation
of our management, including our principal executive and financial officer, we have conducted an evaluation of the effectiveness
of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as of the end of the period covered by this report. Based on this evaluation, the board of directors, concluded
as of the evaluation date that our disclosure controls and procedures are effective such that the material information required
to be included in our Securities and Exchange Commission reports is recorded, processed, summarized and reported within the time
periods specified in SEC rules and forms relating to our company,  and was made known to us by others within those entities,
particularly during the period when this report was being prepared. It has been determined that the company must set aside appropriate
funds each quarter in order to ensure timely payments to auditors and subsequent timely filings. We have since been delisted to
the Pink Sheets due to our inability to timely file our reports under the Securities Exchange Act of 1934, we have replaced certain
officers of the Company which were responsible for our budgets and filings, and have identified and hired the appropriate staff
and outside consultants that will enable us to meet future filing requirements.
Management's Annual Report on
Internal Control Over Financial Reporting.
The management of the Company is responsible
for establishing and maintaining adequate internal control over financial reporting. The internal control process has been designed,
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
the Company's financial statements for external reporting purposes in accordance with accounting principles generally accepted
in the United States of America.
Management conducted an assessment of the
effectiveness of the Company's internal control over financial reporting as of June 30, 2011, including (i) the control environment,
(ii) risk assessment, (iii) control activities, (iv) information and communication, and (v) monitoring, based on the framework
in
Internal Control – Integrated Framework,
issued by the Committee of Sponsoring Organizations of the Treadway Commission
("COSO"). As of June 30, 2011, management has determined that the Company's internal control over financial reporting
as of June 30, 2011 was effective.
We are only limited by the lack of funding in order to meet the ongoing SEC reporting
obligations.
Our internal control over financial reporting
includes policies and procedures that pertain to the maintenance of records that accurately and fairly reflect, in reasonable detail,
transactions and dispositions of assets; and provide reasonable assurances that: (1) transactions are recorded as necessary to
permit preparation of financial statements in accordance with accounting principles generally accepted in the United States; (2)
receipts and expenditures are being made only in accordance with authorizations of management and the directors of the Company;
and (3) unauthorized acquisitions, use, or disposition of the Company's assets that could have a material affect on the Company's
financial statements are prevented or timely detected.
All internal control systems, no matter
how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable
assurance with respect to financial statement preparations and presentations. Also, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.
58
Changes in Internal Control Over Financial
Reporting.
There were no significant changes in our
internal controls or in other factors that could significantly affect these controls subsequent to the evaluation date.
Item 9B. Other Information
No items required to be reported on Form
8-K during the fourth quarter of the year covered by this report were not previously reported on Form 8-K.
59
PART III
Item 10. Directors, Executive Officers,
and Corporate Governance.
Set forth below is the name and age of
each individual who was a director or executive officer of NanoTech Entertainment, Inc. as of June 30, 2011, together with all
positions and offices of the Company held by each and the term of office and the period during which each has served:
NAME
AGE
POSITION
DATES SERVED
David R. Foley
45
President, Treasurer, Secretary and Director
November 2010 to January 2012
Biographical Information
The following paragraphs set forth brief biographical information
for the aforementioned director and executive officer:
David R. Foley - President, Secretary,
Treasurer, and Director
- David R. Foley is an entrepreneur with an extensive background in software and hardware development.
He has designed and patented several award-winning games and innovative technology in the past 20 years. David began his career
in software development where he modernized the front office of the Boston Celtics, designing and building automated systems for
all facets of the team's operations from Press Management to Scouting, as well as helping implement a digital scoring system.
Software that he and a college friend had developed was sold to Ashton Tate to become a core part of dBase IV. He built Foley Hi-Tech
Systems, a video game development studio that developed games for the Sega Genesis and Super Nintendo and delivered multi-million
dollar selling games including hits like SpiderMan vs. Kingpin, Taz-Mania and Urban Strike to publishers including Sega and Electronic
Arts. Foley also founded HyperWare, and built a product line of hardware and software products for the Arcade Industry. Foley was
asked to speak at several trade shows on behalf of Intel to help push the ArcadePC initiative, for which Foley had developed several
key pieces of technology. Foley also designed and built the Sega Tournament Network connecting players from around the world to
compete on the Sega hit arcade game, Daytona 2. Foley became the VP of Engineering at Quantum3D, and helped grow the Arcade Division
to several million dollars in sales. Foley designed the patented Quicksilver II and Graphite systems which were used by major arcade
industry companies including Atari, Midway and Sega. Foley invented the UltraCade multi-game system, acquired the rights to the
IP and founded UltraCade Technologies. UltraCade Technologies released a home version of its flagship product, branded as Arcade
Legends and sold through retail outlets such as Hammacher Schlemmer, Costco and SkyMall catalog. Foley's innovative designs won
him two consecutive industries awards for Innovation of the Year in 2005 and 2006. In 2005 Foley was named #48 in the Entrepreneur
Magazines Hot 100 issue. Foley branched into the casino gaming market creating, designing, developing and licensing unique game
concepts to Bally Technologies and others. His first casino gaming design, Peek-A-Boo video poker, won the 2007 Most Innovative
Game award from Bally Technologies. David has been interviewed on several national media outlets including NBC & ESPN. He continues
to design and patent ground breaking games and technology leading NanoTech's development staff.
Compliance with Section 16(a) of the Exchange Act
Because we do not have a class of equity
securities registered pursuant to Section 12 of the Exchange Act, our executive officers, directors and persons who beneficially
own more than 10% of our common stock are not required to file initial reports of ownership and reports of changes in ownership
with the SEC under Section 16(a) of the Exchange Act.
60
Audit Committee and Audit Committee Financial Expert Disclosure
The Company's Board of Directors
does not have a separately designated audit committee or an "audit committee financial expert." Audit committee functions
are performed by our Board of Directors. None of our directors is deemed independent. All directors also hold positions as our
officers. Our audit committee is responsible for: (1) selection and oversight of our independent accountant; (2) establishing procedures
for the receipt, retention and treatment of complaints regarding accounting, internal controls, and auditing matters; (3) establishing
procedures for the confidential, anonymous submission by our employees of concerns regarding accounting and auditing matters; (4)
engaging outside advisors; and, (5) funding for the outside auditory and any outside advisors engagement by the audit committee.
The Board of Directors does not have an
audit committee financial expert at this time due to the fact that the Company has only limited operations and no revenues.  We
believe the cost related to retaining a financial expert at this time is prohibitive. Further, because of our limited operations,
we believe the services of a financial expert are not warranted.
Code of Ethics
We have adopted a corporate code of ethics.
We believe our code of ethics is reasonably designed to deter wrongdoing and promote honest and ethical conduct; provide full,
fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting
of code violations; and provide accountability for adherence to the code.
Item 11.  Executive Compensation
(a) A majority of the Intellectual Property
was acquired by the Company in the form of an employment agreement whereby one of the original founders, David R. Foley, assigned
the rights to his substantial intellectual property po4rtfolio in return for the compensation outlined in his employment agreement. 
To date, Mr. Foley has not been compensated under the terms of his agreement. The Company intends on offering stock in lieu
of the past due compensation, and paying the compensation moving forward. There is currently accrued compensation due as of June
30, 2011 totaling $1,553,376.
(b) There are no annuity, pension, or retirement
benefits proposed to be paid to officers, directors, or employees of the Corporation in the event of retirement at normal retirement
date pursuant to any presently existing plan provided or contributed to by the Corporation.
(c) The currently are employment agreements
with one of the founders of the Company. The terms of these employment agreements are as follows:
·
David R. Foley's current compensation through calendar year-end 2011 is $550,000 USD per
annum with a decrease to $210,000 USD for the second half of the calendar year 2011. Currently, Mr. Foley's salary is accruing
on a monthly basis.
Director Compensation
The Directors of the Company do not receive compensation at
this time.
Item 12 - Security Ownership of Certain
Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth the beneficial
ownership of the Company's officers, directors, and persons who own more than five percent of the Company's common stock as of
June 30, 2011. Under relevant provisions of the Exchange Act, a person is deemed to be a "beneficial owner" of a security
if he or she has or shares the power to vote or direct the voting of the security or the power to dispose or direct the disposition
of the security. A person is also deemed to be a beneficial owner of any securities of which that person has the right to acquire
beneficial ownership in 60 days. More than one person may be deemed to be a beneficial owner of the same securities. The percentage
ownership of each stockholder is calculated based on 15,910,000 total outstanding shares of our common stock as of June 30, 2010.
61
Amount and Nature of Beneficial Ownership
as of June 30, 2010:
Name of Individual
# Shares Beneficially Owned
# of Class of Common
Stock (1)
Robert Dekett
President, Treasurer, Secretary and Director
PO Box 50729
Henderson, Nevada 89016
3,000,000
18.9
%
Ted D. Campbell II
Chief Compliance Officer
PO Box 240
Jenks, Oklahoma 74037
0
0.00
%
David R. Foley
311 Santa Rosa Drive
Los Gatos, California 95032
3,000,000
18.9
%
Greenleaf Forum Investments
Kevin Murphy, President
1174 Manitou Drive NW
Fox Island, WA 98333
1,300,000
8.2
%
T
akashi and Keiko Yoshida
59 Preston Road
Woodside, CA 94062
1,000,000
6.3
%
Alan Tolson
Skiddaw View Sandale
Bolton Gate, Cumbria CA5 1DE
UK
1,500,000
9.4
%
62
Item 13 – Certain Relationships
and Related Transactions, Director Independence
The Company pays rent expense to one founder
for the use of property for business purposes. The amounts to be paid to the Company's founder for rent for the years ended
June 30, 2011 totaled $184,228. These amounts have been recorded in selling, general and administrative expenses for the same periods.
63
Item 14 – Principal Accountant
Fees and Services
Audit Fees:
All fees billed for
each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant's
annual financial statements and the review of interim financial statements or services that are normally provided by the accountant
in connection with statutory and regulatory filings or engagements for those fiscal years.
2010-2011:
$
35,000
2009:
$
40,000
2008:
$
8,800
Audit-Related Fees
: All fees billed
in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related
to the performance of the audit or review of the registrant's financial statements and are not reported under Item 9(e)(f1) of
Schedule 14A.
2010-2011:
$
14,500
2009:
$
1,750
2008:
$
0
Tax Fees
: The aggregate fees billed
in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice,
and tax planning:
2010-2011:
$
0
2009:
$
3,000
2008:
$
0
All Other Fees
:
2010-2011:
$
0
2009:
$
0
2008:
$
0
(5)   Our audit committee's pre-approval
policies and procedures described in paragraph (c)(7)(i) of Rule 2-01 of Regulation S-X were that the audit committee pre-approve
all accounting related activities prior to the performance of any services by any accountant or auditor.
(6)   The percentage of hours
expended on the principal accountant's engagement to audit our financial statements for the most recent fiscal year that were attributed
to work performed by persons other than the principal accountant's full-time, permanent employees was 0%.
64
PART IV
Item 15 – Exhibits, Financial
Statement Schedules
The following exhibits are included with this filing:
Exhibit No.:
Description:
3.1(i)
Articles of Incorporation and amendments thereto
(1) and (2)
3.1(ii)
Bylaws
(1)
14
Code of Ethics
(1)
31.1
Section 302 Certification by Principal Executive Officer and Principal Financial and Accounting Officer
(1)
32.1
Section 906 Certification by
Principal Executive Officer and Principal Financial and Accounting Officer
(1)
(3)
Filed with the Securities and Exchange Commission on February 12, 2008 as an exhibit numbered as
indicated above, to the Registrant's registration statement on Form S-1 (file no. 333-149184 which exhibit is incorporated
herein by reference.
(4)
Amendment to the Article of Incorporation filed with the Securities and Exchange Commission on
Form 8-K on May 7, 2009 which exhibit is incorporated herein by reference.
65
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
NanoTech Entertainment, Inc.
Date: March 8, 2012
/s/  Bruce Bean
By: Bruce Bean
Chairman
66