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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>As filed with the Securities and Exchange
Commission on February 11, 2013</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>Registration No. 333-</B></P>

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

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>UNITED STATES SECURITIES AND EXCHANGE
COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Washington, D.C. 20549</B></P>

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

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Form S-1</B></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"><B>REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933</B></P>

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

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PETROSONIC ENERGY, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Exact Name of Registrant as Specified
in Its Charter)</P>

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

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 32%; text-align: center; font-weight: bold"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Nevada</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 2%; text-align: left">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 32%; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">1389</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 2%; text-align: left">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 32%; text-align: center; font-weight: bold"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>98-0585718</B></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(State or other
    jurisdiction of</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: left">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(Primary Standard
    Industrial</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: left">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(I.R.S. Employer</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;incorporation
    or organization)</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: left">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Classification
    Code Number)</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: left">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;Identification
    No.)</FONT></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: center"><B>Suite 300, 714 &ndash; 1st Street SE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Calgary, Alberta, Canada T2G 2G8</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(403) 708-7869</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Address, including zip code, and telephone
number, including area code, of registrant&rsquo;s principal executive offices)</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"><B>Art Agolli</B></P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Suite 300, 714 - 1st Street SE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Calgary, Alberta, Canada T2G 2G8</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(403) 708-7869</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Name, address, including zip code, and
telephone number, including area code, of agent for service)</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"><B>Copies to:</B></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"><B>Kevin Friedmann, Esq.</B></P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>405 Lexington Avenue, 49th Floor</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>New York, New York 10174</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(212) 561-5559</B></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"><B>From time-to-time after the effective
date of this Registration Statement.</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>(Approximate date of commencement of
proposed sale to the public)</B></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: left; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933 check the following box. </FONT><FONT STYLE="font-family: Wingdings">x</FONT></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">If
this Form is filed to register additional securities for an offering pursuant to Rule&nbsp;462(b)&nbsp;under the Securities Act,
please check the following box and list the Securities Act registration statement number of the earlier effective registration
statement for the same offering. </FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">If
this Form is a post-effective amendment filed pursuant to Rule&nbsp;462(c)&nbsp;under the Securities Act, check the following
box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
</FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">If
this Form is a post-effective amendment filed pursuant to Rule 462(d)&nbsp;under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective registration statement for the same offering. </FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Indicate by check mark
whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
See the definitions of &ldquo;large accelerated filer,&rdquo; &ldquo;accelerated filer&rdquo; and &ldquo;smaller reporting company&rdquo;
in Rule 12b-2 of the Exchange Act (Check one):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&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="text-align: left; padding-left: 0.6in; text-indent: -0.1in; width: 65%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Large accelerated filer </FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT></TD>
    <TD STYLE="width: 35%; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Accelerated filer </FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left; padding-left: 0.6in; text-indent: -0.1in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Non-accelerated filer </FONT><FONT STYLE="font-family: Wingdings">&uml;&nbsp;</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">(Do
    not check if a smaller reporting company)</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Smaller reporting company </FONT><FONT STYLE="font-family: Wingdings">x</FONT></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: center"><B>CALCULATION OF REGISTRATION FEE</B></P>

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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; 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">Title&nbsp;of&nbsp;Each&nbsp;Class&nbsp;of<BR>
    Securities&nbsp;to&nbsp;be<BR> Registered</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">Amount&nbsp;to&nbsp;be<BR>
    Registered(1)</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">Proposed&nbsp;Maximum<BR>
    Offering&nbsp;Price&nbsp;per<BR> Unit(2)</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">Proposed&nbsp;Maximum<BR>
    Aggregate&nbsp;Offering<BR> Price(2)</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">Amount&nbsp;of<BR>
Registration Fee</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 44%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">&nbsp;</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">Common Stock, $0.001 par value</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">12,210,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">0.61</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">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">7,448,100</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,015.92</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<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; text-align: left">(1) Pursuant to Rule 416(a) under the Securities
Act of 1933, as amended, this registration statement shall also cover such indeterminate number of additional shares of the registrant&rsquo;s
common stock that become issuable by reason of any stock dividend, stock split, recapitalization or other similar transaction
that increases the number of the registrant&rsquo;s outstanding shares to be offered pursuant to the applicable plan described
herein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">(2) Estimated solely for purposes of calculating
the registration fee in accordance with Rule 457(c) of the Securities Act of 1933, as amended, based on the average of the closing
bid and asked prices for the registrant&rsquo;s common stock as reported on the OTCQB on February 7, 2013.</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; text-align: left; text-indent: 0.5in"><B>The registrant hereby
amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this Registration Statement shall become effective
on such date as the Commission, acting pursuant to said Section 8(a), may determine.</B></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: left; color: #FF4040">The information in this prospectus
is not complete and may be changed. The selling stockholders may not sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any state where the offer or sale is not permitted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; color: #FF4040">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; color: #FF4040"><B>SUBJECT TO COMPLETION,
DATED FEBRUARY 11, 2013</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; text-align: left"><B>PRELIMINARY PROSPECTUS</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; text-align: center"><B>12,210,000 Shares of Common Stock</B></P>

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

<P STYLE="font: 24pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PETROSONIC ENERGY, INC.</B></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: left; text-indent: 0.5in">This prospectus covers
the resale by the selling stockholders named on page 39 of up to 12,210,000 shares of our common stock, $0.001 par value.</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; text-align: left; text-indent: 0.5in">These securities will
be offered for sale by the selling stockholders identified in this prospectus in accordance with the methods and terms described
in the section of this prospectus titled &ldquo;Plan of Distribution.&rdquo; We will not receive any of the proceeds from the
sale of these shares. The selling stockholders may be deemed &ldquo;underwriters&rdquo; within the meaning of the Securities Act
of 1933, as amended, in connection with the sale of their common stock under this prospectus. We will pay all the expenses incurred
in connection with the offering described in this prospectus, with the exception of brokerage expenses, fees, discounts and commissions,
which will all be paid by the selling stockholders. Our common stock is more fully described in the section of this prospectus
titled &ldquo;Description of Securities.&rdquo;</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: left; text-indent: 0.5in">The prices at which the
selling stockholders may sell the shares of common stock that are part of this offering may be the prevailing market price for
the shares at the time the shares are sold, a price related to the prevailing market price, negotiated prices or prices determined,
from time to time, by the selling stockholders. See the section of this prospectus titled &ldquo;Plan of Distribution.&rdquo;</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: left; text-indent: 0.5in">Our common stock is <FONT STYLE="color: black">currently
quoted on the OTCQB under the symbol &ldquo;PSON&rdquo;. On February 8, 2013, the closing price of our common stock was $0.57
per share.</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: left"><B>AN INVESTMENT IN OUR COMMON STOCK INVOLVES
A HIGH DEGREE OF RISK. SEE &ldquo;RISK FACTORS&rdquo; BEGINNING ON PAGE 3.</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; text-align: left"><B>NEITHER THE SECURITIES AND EXCHANGE COMMISSION
NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.</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: center">The date of this prospectus is _____________,
2013.</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>TABLE OF CONTENTS</B></P>

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

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 94%; text-align: left; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 6%; border-bottom: windowtext 1pt solid; text-align: center; font-weight: bold; vertical-align: bottom"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Page</B></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 0.5in; text-align: left; text-indent: -0.5in">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top; padding-left: 0.5in; text-align: left; text-decoration: none; text-indent: -0.5in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; text-underline-style: none; color: windowtext">CAUTIONARY
    NOTE REGARDING FORWARD-LOOKING STATEMENTS</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">ii</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-left: 0.5in; text-align: left; text-decoration: none; text-indent: -0.5in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; text-underline-style: none; color: windowtext">PROSPECTUS
    SUMMARY</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">1</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top; padding-left: 0.5in; text-align: left; text-decoration: none; text-indent: -0.5in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; text-underline-style: none; color: windowtext">RISK
    FACTORS</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">3</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-left: 0.5in; text-align: left; text-indent: -0.5in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">USE
    OF PROCEEDS</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">11</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top; padding-left: 0.5in; text-align: left; text-decoration: none; text-indent: -0.5in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; text-underline-style: none; color: windowtext">MARKET
    FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">11</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; text-align: left; text-decoration: none"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; text-underline-style: none; color: windowtext">MANAGEMENT&rsquo;S
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">13</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top; padding-left: 0.5in; text-align: left; text-indent: -0.5in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">OUR
    <FONT STYLE="text-underline-style: none; color: windowtext">BUSINESS</FONT></FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">22</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-left: 0.5in; text-align: left; text-decoration: none; text-indent: -0.5in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; text-underline-style: none; color: windowtext">PROPERTIES</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">34</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top; padding-left: 0.5in; text-align: left; text-indent: -0.5in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">LEGAL
    MATTERS</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">34</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-left: 0.5in; text-align: left; text-decoration: none; text-indent: -0.5in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; text-underline-style: none; color: windowtext">DIRECTORS
    AND EXECUTIVE OFFICERS</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">35</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top; padding-left: 0.5in; text-align: left; text-decoration: none; text-indent: -0.5in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; text-underline-style: none; color: windowtext">EXECUTIVE
    COMPENSATION</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">36</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-left: 0.5in; text-align: left; text-decoration: none; text-indent: -0.5in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; text-underline-style: none; color: windowtext">CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">37</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top; padding-left: 0.5in; text-align: left; text-indent: -0.5in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">37</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-left: 0.5in; text-align: left; text-indent: -0.5in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">SELLING
    STOCKHOLDERS</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">39</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top; padding-left: 0.5in; text-align: left; text-indent: -0.5in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">PLAN
    OF DISTRIBUTION</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">41</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-left: 0.5in; text-align: left; text-indent: -0.5in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">DESCRIPTION
    OF SECURITIES TO BE REGISTERED</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">42</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top; text-align: left; text-decoration: none"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; text-underline-style: none; color: windowtext">DISCLOSURE
    OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">43</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-left: 0.5in; text-align: left; text-indent: -0.5in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">TRANSFER
    AGENT AND REGISTRAR</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">45</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top; padding-left: 0.5in; text-align: left; text-indent: -0.5in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">INTERESTS
    OF NAMED EXPERTS AND COUNSEL</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">45</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-left: 0.5in; text-align: left; text-decoration: none; text-indent: -0.5in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; text-underline-style: none; color: windowtext">EXPERTS</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">45</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top; padding-left: 0.5in; text-align: left; text-decoration: none; text-indent: -0.5in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; text-underline-style: none; color: windowtext">WHERE
    YOU CAN FIND MORE INFORMATION</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">46</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-left: 0.5in; text-align: left; text-decoration: none; text-indent: -0.5in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; text-underline-style: none; color: windowtext">INDEX
    TO CONSOLIDATED FINANCIAL STATEMENTS</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">F-1</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>Unless otherwise stated or the context
otherwise requires, the terms &ldquo;Petrosonic,&rdquo; &ldquo;we,&rdquo; &ldquo;us,&rdquo; &ldquo;our&rdquo; and the &ldquo;Company&rdquo;
refer to Petrosonic Energy, Inc. and its subsidiary.</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; text-align: left"><B>You should rely only on the information
contained in this prospectus. We have not authorized anyone to provide you with additional or different information. The information
contained in this prospectus is accurate only as of the date on the front cover of this prospectus, regardless of the time of
delivery of this prospectus or of any sale of our common stock.</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; text-align: left"><B>No dealer, salesperson or any other person
is authorized in connection with this offering to give any information or make any representations about us, the securities offered
hereby or any matter discussed in this prospectus, other than those contained in this prospectus and, if given or made, the information
or representations must not be relied upon as having been authorized by us. This prospectus does not constitute an offer to sell
or a solicitation of an offer to buy any security other than the securities offered by this prospectus, or an offer to sell or
a solicitation of an offer to buy any securities by anyone in any circumstance in which the offer or solicitation is not authorized
or is unlawful.</B></P>

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


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<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; text-align: center"><B>CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS</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; text-align: left; text-indent: 0.5in">This prospectus,
including the sections titled &ldquo;Prospectus Summary,&rdquo; &ldquo;Risk Factors,&rdquo; &ldquo;Management&rsquo;s
Discussion and Analysis of Financial Condition and Results of Operations&rdquo; and &ldquo;Our Business,&rdquo; contains
forward-looking statements. We have based these statements on our beliefs and assumptions, based on information currently
available to us. These forward-looking statements are subject to risks and uncertainties. Forward-looking statements include
the information concerning our possible or assumed future results of operations, our total market opportunity and our
business plans and objectives.</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; text-align: left; text-indent: 0.5in">Forward-looking statements
are not guarantees of performance. Our future results and requirements may differ materially from those described in the forward-looking
statements. Many of the factors that will determine these results and requirements are beyond our control. In addition to the
risks and uncertainties discussed in this prospectus, investors should consider the following:</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>&bull;</B></TD><TD STYLE="text-align: left">our ability to successfully
                                                                           implement our business strategy,</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; 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>&bull;</B></TD><TD STYLE="text-align: left">the impact of competition
                                                                           and changes to the competitive environment on our products
                                                                           and services, and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; 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>&bull;</B></TD><TD STYLE="text-align: left">other factors detailed
                                                                           from time to time in our filings with the Securities
                                                                           and Exchange Commission.</TD></TR></TABLE>

<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; text-align: left; text-indent: 0.5in">These forward-looking
statements speak only as of the date of this prospectus. We do not intend to update or revise any forward-looking statements to
reflect changes in our business anticipated results of our operations, strategy or planned capital expenditures, or to reflect
the occurrence of unanticipated events, except as required by law.</P>

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


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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><I>This summary highlights information contained
elsewhere in this prospectus. It does not contain all of the information that you should consider before investing in our common
stock. You should read the entire prospectus carefully, including the section titled &ldquo;Risk Factors&rdquo; and our consolidated
financial statements and the related notes. You should only rely on the information contained in this prospectus. We have not,
and the selling stockholders have not, authorized any other person to provide you with different information. This prospectus
is not an offer to sell, nor is it seeking an offer to buy, these securities in any state where the offer or sale is not permitted.
The information in this prospectus is accurate only as of the date on the front cover, but the information may have changed since
that date.</I></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; text-align: justify"><I>Unless the context otherwise requires,
when we use the words &ldquo;Petrosonic,&rdquo; &ldquo;the Company,&rdquo; &ldquo;we,&rdquo; &ldquo;us&rdquo; or &ldquo;our Company&rdquo;
in this prospectus, we are referring to Petrosonic Energy, Inc., a Nevada corporation, and all of its subsidiaries.</I></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>OUR COMPANY</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; text-align: left; text-indent: 0.5in">We intend to develop
and deliver innovative technologies to the energy sector for use in the production of petroleum products. Currently, our primary
focus is to provide technologies that upgrade heavy oil economically and in an environmentally friendly manner. Our patented Sonoprocess
&trade; uses cleantech sonic energy to de-asphalt heavy oil in much smaller scale operations and at lower capital costs than conventional
upgraders and without the use of water or release of emissions into the atmosphere.</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; text-align: justify"><B>THE OFFERING</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: left; text-indent: 0.5in">We are registering shares
of our common stock for sale by the selling stockholders identified in the section of this prospectus titled &ldquo;Selling Stockholders.&rdquo;
The shares included in the table identifying the selling stockholders consist of 12,210,000 shares of our common stock issued
pursuant to subscription agreements entered into on January 16, 2013.</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: left; text-indent: 0.5in">The shares of common
stock issued and outstanding prior to this offering consist of 65,329,000 shares of common stock. This number does not include:</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: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">warrants
                                                                                                               to purchase 340,000
                                                                                                               shares of our common
                                                                                                               stock at an exercise
                                                                                                               price of $.50 per
                                                                                                               share, exercisable
                                                                                                               until July 27,
                                                                                                               2013;</FONT></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: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">warrants
to purchase an aggregate of 275,000 shares of our common stock at an exercise price of $.50, exercisable until January 16, 2015;</FONT></TD></TR></TABLE>

<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"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,679,988
shares of common stock that may be issued if holders of convertible debentures with a total principal amount of $115,000 plus
CDN$500,000, issued by us between March 23, 2012 and July 27, 2012, are converted by the holders; and</FONT></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"></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: left">1,270,000 <FONT STYLE="font-family: Times New Roman, Times, Serif">shares</FONT> of common
                                                                                                               stock                                                                                                                that we
                                                                                                               plan to issue to
                                                                                                               three consultants who have agreed to accept our common stock in payment for their services.</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: left; text-indent: 0.5in">Information regarding
our common stock is included in the section of this prospectus titled &ldquo;Description of Securities.&rdquo;</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: left; text-indent: 0.5in">The shares of common
stock offered under this prospectus may be sold by the selling stockholders in the public market, in negotiated transactions with
a broker-dealer or market maker as principal or agent, or in privately negotiated transactions not involving a broker or dealer.
Information regarding the selling stockholders, the common shares they are offering to sell under this prospectus, and the times
and manner in which they may offer and sell those shares is provided in the sections of this prospectus titled &ldquo;Selling
Stockholders&rdquo; and &ldquo;Plan of Distribution.&rdquo; We will not receive any of the proceeds from those sales. The registration
of common shares pursuant to this prospectus does not necessarily mean that any of those shares will ultimately be offered or
sold by the selling stockholders.</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: left"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>CORPORATE INFORMATION</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: left; text-indent: 0.5in"><FONT STYLE="color: black">Our
principal executive offices are located at </FONT>Suite 300, 714 - 1st Street SE, Calgary, Alberta, Canada T2G 2G8<FONT STYLE="color: black">.
Our telephone number is </FONT>(403) 708-7869<FONT STYLE="color: black">. Our corporate website is www.petrosonic.net. Information
included on our website is not part of this prospectus.</FONT></P>

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


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<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; text-align: center"><B>RISK FACTORS</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><I>This offering involves a high degree of
risk. You should carefully consider the risks described below and the other information in this prospectus, including our financial
statements and the notes to those statements, before you purchase our common stock. The risks and uncertainties described below
are those that we currently believe may materially affect our Company. Additional risks and uncertainties may also impair our
business operations. If the following risks actually occur, our business, financial condition and results of operations could
be seriously harmed, the trading price of our common stock could decline and you could lose all or part of your investment.</I></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; text-align: left"><B><U>Risks Related to our Business</U></B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>We have incurred losses in prior periods
and may incur losses in the future.</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; text-align: left; text-indent: 0.5in">We cannot be assured
that we can achieve or sustain profitability on a quarterly or annual basis in the future.&nbsp;&nbsp;Our operations are subject
to the risks and competition inherent in the establishment of a business enterprise.&nbsp;&nbsp;There can be no assurance that
future operations will be profitable.&nbsp;&nbsp;We may not achieve our business objectives and the failure to achieve such goals
would have an adverse impact on us.</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; text-align: left"><B>Our future is dependent upon our ability
to obtain financing.&nbsp;&nbsp;If we do not obtain such financing, we may have to cease our activities and investors could lose
their entire investment.</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; text-align: left; text-indent: 0.5in">There is no assurance
that we will operate profitably or generate positive cash flow in the future.&nbsp;&nbsp;We will require additional financing</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 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: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">in
                                                                                                               order to proceed
                                                                                                               beyond the establishment
                                                                                                               of our own stand-alone
                                                                                                               facilities, including
                                                                                                               the processing
                                                                                                               facility in Albania;</FONT></TD></TR></TABLE>

<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"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">to
                                                                                                               pay the fees and
                                                                                                               expenses necessary
                                                                                                               to operate as a
                                                                                                               public company;</FONT></TD></TR></TABLE>

<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"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">if
                                                                                                               the costs of the
                                                                                                               development and
                                                                                                               operation of our
                                                                                                               existing technologies
                                                                                                               are greater than
                                                                                                               we have anticipated;
                                                                                                               and</FONT></TD></TR></TABLE>

<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"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">to
                                                                                                               sustain our business
                                                                                                               operations if we
                                                                                                               are not successful
                                                                                                               in earning revenues.</FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">When additional financing
is required, we may not be able to obtain it on commercially reasonable terms or terms that are acceptable to us.&nbsp;&nbsp;Our
future is dependent upon our ability to obtain financing.&nbsp;&nbsp;If we do not obtain such financing, our business could fail
and investors could lose their entire investment.</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; text-align: left"><B>Because we may never earn revenues from
our operations, our business may fail and investors may lose all of their investment in our Company.</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; text-align: left; text-indent: 0.5in">We have no history of
revenues from operations.&nbsp;&nbsp;We have yet to generate positive earnings and there can be no assurance that we will ever
operate profitably.&nbsp;&nbsp;Our Company has a limited operating history.&nbsp;&nbsp;If our business plan is not successful
and we are not able to operate profitably, then our stock may become worthless and investors may lose all of their investment
in our Company.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Prior to completion of
the oil processing facility in Albania, we anticipate that we will incur increased operating expenses without realizing any revenues.&nbsp;&nbsp;We
therefore expect to incur significant losses into the foreseeable future.&nbsp;&nbsp;We recognize that if we are unable to generate
significant revenues from our processing facilities in the future, we will not be able to earn profits or continue operations.&nbsp;&nbsp;There
is no history upon which to base any assumption as to the likelihood that we will prove successful, and we can provide no assurance
that we will generate any revenues or ever achieve profitability.&nbsp;&nbsp;If we are unsuccessful&nbsp;in addressing these risks,
our business will fail and investors may lose all of their investment in our Company.</P>

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


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>We may not be fully indemnified against
financial losses in all circumstances where damage to or loss of property, personal injury, death or environmental harm occur.</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; text-align: left; text-indent: 0.5in">As is customary in our
industry, our contracts will typically provide that our customers indemnify us for claims arising from the injury or death of
their employees, the loss or damage of their equipment, damage to the reservoir and pollution emanating from the customer&rsquo;s
equipment or from the reservoir (including uncontained oil flow from a reservoir). Conversely, we will typically indemnify our
customers for claims arising from the injury or death of our employees, the loss or damage of our equipment, or pollution emanating
from our equipment. Our contracts will typically provide that our customer will indemnify us for claims arising from catastrophic
events, such as a well blowout, fire or explosion.</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; text-align: left; text-indent: 0.5in">Our indemnification arrangements
may not protect us in every case. For example, from time to time we may enter into contracts with less favorable indemnities or
perform work without a contract that protects us; our indemnity arrangements may be held unenforceable in some courts and jurisdictions;
or we may be subject to other claims brought by third parties or government agencies. Furthermore, the parties from which we seek
indemnity may not be solvent, may become bankrupt, may lack resources or insurance to honor their indemnities, or may not otherwise
be able to satisfy their indemnity obligations to us. The lack of enforceable indemnification could expose us to significant potential
losses.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Further, our assets generally
are not insured against loss from political violence such as war, terrorism or civil commotion. If any of our assets are damaged
or destroyed as a result of an uninsured cause, we could recognize a loss of those assets.</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; text-align: left"><B>Our operations may be subject to environmental
and other laws and regulations that may expose us to significant liabilities and could reduce our business opportunities.</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; text-align: left; text-indent: 0.5in">We expect to be subject
to various environmental laws and regulations in the countries in which we operate. The government of Albania requires us to obtain
an environmental permit for our facility and a fire safety permit. We prepared all the necessary paperwork and applied for the
environmental permit, but it has not been issued yet. Since our operations do not require any use of water, extensive energy or
generate any emissions we do not believe that we will be subject to the more complicated and lengthy environmental permit requirements
typical for refineries or upgraders. We plan to install all necessary equipment required for anti-fire measures and regulations
in the country. If we fail to comply with the environmental laws to which we are subject, we may incur significant liabilities
and our business opportunities could be reduced.</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; text-align: left"><B>We are subject to significant foreign
exchange and currency risks that could adversely affect our operations and our ability to reinvest earnings from operations, as
well as mitigate our foreign exchange risk through hedging transactions, may be limited.</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; text-align: left; text-indent: 0.5in">Since we currently conduct
a significant portion our operations outside the United State of America, our business is subject to foreign currency risks, including
currency exchange rates fluctuations and difficulties in converting local currencies into U.S. dollars. The exchange rates between
the Albanian Lek, the Canadian dollar, the Euro and the U.S. dollar and other foreign currencies is affected by, among other things,
changes in local political and economic conditions. Such currency fluctuations may materially affect the Company&rsquo;s financial
position and results of operations and a material change in currency rates in our markets could affect our future results as well
as affect the carrying values of our assets.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">We generally attempt
to denominate our contracts in U.S. dollars or in the currencies of our costs. However, we may enter into contracts that subject
us to currency risk exposure, primarily when our contract revenue is denominated in a currency different than the contract costs.
We anticipate that a significant portion of our consolidated revenue and consolidated operating expenses will be in foreign currencies.
As a result, we will be subject to significant foreign currency risks, including risks resulting from changes in foreign exchange
rates and limitations on our ability to reinvest earnings from operations in one country to fund the financing requirements of
our operations in other countries.</P>

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


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>Customer credit risks could result in
losses.</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; text-align: left; text-indent: 0.5in">The concentration of
our future customers in the energy industry may impact our overall exposure to credit risk as customers may be similarly affected
by prolonged changes in economic and industry conditions. Those countries that rely heavily upon income from hydrocarbon exports
would be hit particularly hard by a drop in oil prices. Further, laws in some jurisdictions in which we may operate could make
collection difficult or time consuming. We will perform ongoing credit evaluations of our customers and generally do not plan
to require collateral in support of our trade receivables. While we may maintain reserves for potential credit losses, we cannot
assure such reserves will be sufficient to meet write-offs of uncollectible receivables or that our losses from such receivables
will be consistent with our expectations.</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; text-align: left"><B>Global political, economic and market
conditions could affect projected results.</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; text-align: left; text-indent: 0.5in">Our operating results
are based on our current assumptions about oil supply and demand, oil prices, rig count and other market trends. Our assumptions
on these matters are in turn based on currently available information, which is subject to change. The oil industry is extremely
volatile and subject to change based on political and economic factors outside our control. A weakened global economic climate
generally results in lower demand and lower prices for oil, which reduces drilling, processing and production activity, which
in turn results in lower revenues and income for us. Worldwide drilling activity and global demand for oil may also be affected
by changes in governmental policies and sovereign debt, laws and regulations related to environmental or energy security matters,
including those addressing alternative energy sources and the risks of global climate change. Worldwide economic conditions, and
the related demand for oil, may in future periods be significantly weaker than we have assumed.</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; text-align: left"><B>We may not be able to generate expected
revenues from contracts.</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; text-align: left; text-indent: 0.5in">Our potential customers,
some of whom may be national oil companies, often have significant bargaining leverage over us and may elect to cancel or revoke
contracts, not renew contracts, modify the scope of contracts or delay contracts, in some cases preventing us from realizing expected
revenues and/or profits.</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; text-align: left"><B>Increases in the prices and availability
of our raw materials could affect our results of operations.</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; text-align: left; text-indent: 0.5in">We use significant amounts
of raw materials (including steel and other metals, chemicals, plastics, polymers and energy inputs) for manufacturing our products,
facilities and some of our fixed assets. The price of these raw materials has a significant impact on our cost of producing products
for sale or constructing fixed assets used in our business. There can be no assurance that the prices of our raw materials will
remain within a manageable range and will be readily available. If we are unable to obtain necessary raw materials or if we are
unable to minimize the impact of increased raw material costs or to realize the benefit of cost decreases in a timely fashion
through our supply chain initiatives or pricing, our margins and results of operations could be adversely affected.</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; text-align: left"><B>Our long-term growth depends upon technological
innovation and commercialization.</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; text-align: left; text-indent: 0.5in">Our ability to deliver
our long-term growth strategy depends in part on the commercialization of new technology. A central aspect of our growth strategy
is to improve our products and services through innovation, to obtain technologically advanced products through internal research
and development and/or acquisitions, to protect proprietary technology from unauthorized use and to expand the markets for new
technology by leveraging our infrastructure. Our success will depend on our ability to commercialize the technology that we have
acquired and demonstrate the enhanced value our technology brings to our customers&rsquo; operations. Our major technological
advances include, but are not limited to, those related to the design of enhanced mass transfer energy processes and reactors.
We cannot be assured of the successful commercialization of, and above-average growth from, our new products and services, as
well as legal protection of our intellectual property rights. Any failure in the commercialization of our technology could adversely
affect our business and results of operations.</P>

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


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>If we are unable to enforce our intellectual
property rights or if our intellectual property rights become obsolete, our competitive position could be adversely impacted.</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; text-align: left; text-indent: 0.5in">We utilize a variety
of intellectual property rights in our services. We view our portfolio of process and design technologies as one of our competitive
strengths and we use it as part of our efforts to differentiate our service offerings. We may not be able to successfully preserve
these intellectual property rights in the future and these rights could be invalidated, circumvented, challenged or infringed
upon. In addition, the laws of some foreign countries in which our services may be sold do not protect intellectual property rights
to the same extent as the laws of the United States. If we are unable to protect and maintain our intellectual property rights,
or if there are any successful intellectual property challenges or infringement proceedings against us, our ability to differentiate
our service offerings could diminish. In addition, if our intellectual property rights or work processes become obsolete, we may
not be able to differentiate our service offerings and some of our competitors may be able to offer more attractive services to
our customers. As a result, our business and financial performance could be materially and adversely affected.</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; text-align: left"><B>International and political events may
adversely affect our operations.</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; text-align: left; text-indent: 0.5in">A significant portion
of our future revenue is expected to be derived from foreign operations, which exposes us to risks inherent in doing business
in each of the countries where we transact business. The occurrence of any of the risks described below could have a material
adverse effect on our business operations and financial performance. With respect to any particular country, these risks may include:</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"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">expropriation
                                                                                                               and nationalization
                                                                                                               of our assets in
                                                                                                               that country;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; 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"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">political
                                                                                                               and economic instability;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; 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"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">civil
                                                                                                               unrest, acts of
                                                                                                               terrorism, force
                                                                                                               majeure, war, or
                                                                                                               other armed conflict;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; 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"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">currency
                                                                                                               fluctuations, devaluations,
                                                                                                               and conversion
                                                                                                               restrictions;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; 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"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">confiscatory
                                                                                                               taxation or other
                                                                                                               adverse tax policies;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; 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"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">governmental
                                                                                                               activities that
                                                                                                               limit or disrupt
                                                                                                               markets, restrict
                                                                                                               payments, or limit
                                                                                                               the movement of
                                                                                                               funds;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; 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"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">governmental
                                                                                                               activities that
                                                                                                               may result in the
                                                                                                               deprivation of
                                                                                                               contract rights;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; 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"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">governmental
                                                                                                               activities that
                                                                                                               may result in the
                                                                                                               inability to obtain
                                                                                                               or retain licenses
                                                                                                               required for operation;
                                                                                                               and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; 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"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">our
                                                                                                               inability or failure
                                                                                                               to obtain commercial
                                                                                                               insurance to mitigate
                                                                                                               the costs of certain
                                                                                                               risks we will take.</FONT></TD></TR></TABLE>

<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; text-align: left; text-indent: 0.5in">Due to the unsettled
political conditions in many oil-producing countries, our financial performance is subject to the adverse consequences of war,
the effects of terrorism, civil unrest, strikes, currency controls, and governmental actions. Our customer&rsquo;s operations
are conducted in areas that have significant amounts of political risk. In addition, military action or continued unrest in the
Middle East could impact the supply and price of oil, disrupt our customer&rsquo;s operations in the region and elsewhere, and
increase our costs related to security worldwide.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>Economic and political developments in
Albania may adversely affect our business.</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; text-align: left; text-indent: 0.5in">A significant portion
of our operations and assets are currently located in Albania. As a result, our financial condition, results of operations and
business may be affected by and are subject to the general condition of the Albanian economy, the devaluation of the Albania Lek
as compared to the U.S. Dollar, Albanian inflation, interest rates, regulation, taxation, social instability and other political,
social and economic developments in or affecting Albania, including changes in the laws and policies that govern foreign investment,
as well as changes in United States laws and regulations relating to foreign trade and investment, over which we have no control.
There can be no assurance as to the future effect of any such changes on our results of operations, financial condition, or cash
flows.</P>

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


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    <!-- Field: /Page -->

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>The dangers inherent in our operations
could cause disruptions and could expose us to potentially significant losses, costs, or liabilities. Any significant interruptions
in the operations of any of our facilities could materially and adversely affect our business, financial condition, and results
of operations.</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; text-align: left; text-indent: 0.5in">Our operations are subject
to significant hazards and risks inherent in refining operations and in transporting and storing crude oil. These hazards and
risks include, but are not limited to, the following:</P>

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

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; 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"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">natural
                                                                                                               disasters;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; 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"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">weather-related
                                                                                                               disruptions;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; 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"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">fires;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; 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"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">explosions;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; 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"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">pipeline
                                                                                                               ruptures and spills;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; 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"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">third-party
                                                                                                               interference;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; 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"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">disruption
                                                                                                               of natural gas
                                                                                                               deliveries;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; 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"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">disruptions
                                                                                                               of electricity
                                                                                                               deliveries; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Wingdings; margin: 0pt 0 0pt 0.5in; 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"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">mechanical
                                                                                                               failure of equipment
                                                                                                               at our refineries
                                                                                                               or third-party
                                                                                                               facilities.</FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Any of the foregoing
could result in production and distribution difficulties and disruptions, environmental pollution, personal injury or wrongful
death claims, and other damage to our properties and the properties of others. There is also risk of mechanical failure and equipment
shutdowns both in general and following unforeseen events.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Our activities will initially
be conducted at our facility in Albania. This facility constitutes a significant portion of our operating assets. Because of the
significance to us of this operation, the occurrence of any of the events described above could significantly disrupt our processing
of crude oil, and any sustained disruption could have a material adverse effect on our business, financial condition, and results
of operations.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>We may incur significant costs to comply
with environmental and health and safety laws and regulations.</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; text-align: left; text-indent: 0.5in">Our operations and properties
are subject to environmental, health, and safety regulations. If we fail to comply with these regulations, we may be subject to
administrative, civil, and criminal proceedings by governmental authorities, as well as civil proceedings by environmental groups
and other entities and individuals. A failure to comply, and any related proceedings, including lawsuits, could result in significant
costs and liabilities, penalties, judgments against us, or governmental or court orders that could alter, limit, or stop our operations.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">In addition, new environmental
laws and regulations, including new regulations relating to alternative energy sources, new regulations relating to fuel quality,
and the risk of global climate change regulation, as well as new interpretations of existing laws and regulations, increased governmental
enforcement, or other developments could require us to make additional unforeseen expenditures. Many of these laws and regulations
are becoming increasingly stringent, and the cost of compliance with these requirements can be expected to increase over time.
We are not able to predict the impact of new or changed laws or regulations or changes in the ways that such laws or regulations
are administered, interpreted, or enforced. The requirements to be met, as well as the technology and length of time available
to meet those requirements, continue to develop and change. To the extent that the costs associated with meeting any or all of
these requirements are substantial and not adequately provided for, there could be a material adverse effect on our business,
financial condition, and results of operations.</P>

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


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>We may not have sufficient crude oil to
be able to run our Albania facility at full capacity.</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; text-align: left; text-indent: 0.5in">Our Albania facility
will process crude oil from the local regions around the facility. To the extent sufficient local crude oil cannot be contracted
to process and we are unable to contract sufficient crude oil from non-local sources to supply the Albania facility, we may not
have sufficient crude oil to run the Albania facility at full capacity, which could have a material adverse impact on our business,
financial condition, and results of operations.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>We could incur substantial costs or disruptions
in our business if we cannot obtain or maintain necessary permits and authorizations.</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; text-align: left; text-indent: 0.5in">Our operations require
numerous permits and authorizations under various laws and regulations, including environmental and health and safety laws and
regulations. These authorizations and permits are subject to revocation, renewal, or modification and can require operational
changes, which may involve significant costs, to limit impacts or potential impacts on the environment and/or health and safety.
A violation of these authorization or permit conditions or other legal or regulatory requirements could result in substantial
fines, criminal sanctions, permit revocations, injunctions and/or refinery shutdowns. In addition, major modifications of our
operations could require modifications to our existing permits or expensive upgrades to our existing pollution control equipment,
which could have a material adverse effect on our business, financial condition, or results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 21.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B><U>Risks Associated with our Company and
our Securities</U></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; text-align: left"><B>We will be required to incur significant
costs and require significant management resources to evaluate our internal control over financial reporting as required under
Section 404 of the Sarbanes-Oxley Act, and any failure to comply or any adverse result from such evaluation may have an adverse
effect on our stock price.</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; text-align: left; text-indent: 0.5in">As a smaller reporting
company as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, we are required to evaluate our internal
control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002 (&ldquo;Section 404&rdquo;). Section 404
requires us to include an internal control report with the Annual Report on Form 10-K. This report must include management&rsquo;s
assessment of the effectiveness of our internal control over financial reporting as of the end of the fiscal year. This report
must also include disclosure of any material weaknesses in internal control over financial reporting that we have identified.
Failure to comply, or any adverse results from such evaluation could result in a loss of investor confidence in our financial
reports and have an adverse effect on the trading price of our equity securities. Management believes that its internal controls
and procedures are currently not effective to detect the inappropriate application of U.S. GAAP rules. Management realize there
are deficiencies in the design or operation of our internal control that adversely affect our internal controls which management
considers to be material weaknesses including those described below:</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"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
                                                                                                                             Company&rsquo;s
                                                                                                                             management
                                                                                                                             is
                                                                                                                             relying
                                                                                                                             on
                                                                                                                             consultants
                                                                                                                             for
                                                                                                                             purposes
                                                                                                                             of
                                                                                                                             preparing
                                                                                                                             its
                                                                                                                             financial
                                                                                                                             reporting
                                                                                                                             package
                                                                                                                             and
                                                                                                                             may
                                                                                                                             not
                                                                                                                             be
                                                                                                                             able
                                                                                                                             to
                                                                                                                             identify
                                                                                                                             errors
                                                                                                                             and
                                                                                                                             irregularities
                                                                                                                             in
                                                                                                                             the
                                                                                                                             financial
                                                                                                                             reporting
                                                                                                                             package
                                                                                                                             before
                                                                                                                             its
                                                                                                                             release
                                                                                                                             as
                                                                                                                             a
                                                                                                                             continuous
                                                                                                                             disclosure
                                                                                                                             document.</FONT></TD></TR></TABLE>

<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"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">As
                                                                                                               the Company has
                                                                                                               only two officers,
                                                                                                               one of whom is
                                                                                                               also the sole director,
                                                                                                               there is an inherent
                                                                                                               lack of segregation
                                                                                                               of duties and lack
                                                                                                               of an independent
                                                                                                               governing board.</FONT></TD></TR></TABLE>

<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; text-align: left; text-indent: 0.5in">Achieving compliance
with Section 404 may require us to incur substantial costs and expend substantial time and management resources. We cannot assure
you that we will be able to fully comply with Section 404 or that we and our independent registered public accounting firm would
be able to conclude that our internal control over financial reporting is effective at fiscal year end. As a result, investors
could lose confidence in our reported financial information, which could have an adverse effect on the trading price of our securities,
as well as subject us to civil or criminal investigations and penalties. In addition, our independent registered public accounting
firm may not agree with our management&rsquo;s assessment or conclude that our internal control over financial reporting is operating
effectively.</P>

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


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<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; text-align: left"><B>All of our assets, and our Chief Executive
Officer and sole director, are outside the United States, with the result that it may be difficult for investors to enforce within
the United States any judgments obtained against us or our Chief Executive Officer and director.</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; text-align: left; text-indent: 0.5in">All of our assets are
located outside the United States. In addition, our Chief Executive Officer and sole director is a national and resident of a
country other than the United States, and all or a substantial portion of his assets are located outside the United States. As
a result, it may be difficult for investors to enforce within the United States any judgments obtained against us or our director
and Chief Executive Officer, including judgments predicated upon the civil liability provisions of the securities laws of the
United States or any state thereof. Consequently, you may be effectively prevented from pursuing remedies under United States
federal and state securities laws against us or our directors and officers.</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: left"><B>Our business is dependent on our key executive
and the loss of this executive could adversely affect our business, future operations and financial condition.</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; text-align: left; text-indent: 0.5in">We are dependent on the
services of our Chief Executive Officer, Art Agolli. Mr. Agolli has many years of experience and an extensive background in the
oil industry in general. We may not be able to replace that experience and knowledge with other individuals. We do not have &ldquo;key-man&rdquo;
life insurance policies on Mr. Agolli. The loss of Mr. Agolli's services or our inability to attract and retain additional highly
skilled employees may adversely affect our business, future operations, and financial condition.</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; text-align: left"><B>The elimination of monetary liability
against our directors, officers and employees under Nevada law and the existence of indemnification rights to our directors, officers
and employees may result in substantial expenditures by our Company and may discourage lawsuits against our directors, officers
and employees.</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; text-align: left; text-indent: 0.5in">Our Articles of Incorporation
contain a provision permitting us to eliminate the personal liability of our directors to our Company and stockholders for damages
for breach of fiduciary duty as a director or officer to the extent provided by Nevada law.&nbsp;&nbsp;The foregoing indemnification
obligations could result in the Company incurring substantial expenditures to cover the cost of settlement or damage awards against
directors and officers, which we may be unable to recoup.&nbsp;&nbsp;These provisions and resultant costs may also discourage
our Company from bringing a lawsuit against directors and officers for breaches of their fiduciary duties, and may similarly discourage
the filing of derivative litigation by our stockholders against our directors and officers even though such actions, if successful,
might otherwise benefit our Company and stockholders.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>Management of our Company is within the
control of the board of directors and the officers. You should not purchase our common stock unless you are willing to entrust
management of our Company to these individuals.</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: left; text-indent: 0.5in">All decisions with respect
to the management of the Company will be made by our board of directors and our officers, who beneficially own 31.5% of our common
stock, as calculated in accordance with Rule 13d-3 promulgated under the Securities Exchange Act of 1934. Therefore, management
will have significant influence in electing a majority of the board of directors who shall, in turn, have the power to appoint
the officers of the Company and to determine, in accordance with their fiduciary duties and the business judgment rule, the direction,
objectives and policies of the Company including, without limitation, the purchase of businesses or assets; the sale of all or
a substantial portion of the assets of the Company; the merger or consolidation of the Company with another corporation; raising
additional capital through financing and/or equity sources; the retention of cash reserves for future product development, expansion
of our business and/or acquisitions; the filing of registration statements with the Securities and Exchange Commission for offerings
of our capital stock; and transactions which may cause or prevent a change in control of the Company or its winding up and dissolution.
You should not purchase our common stock unless you are willing to entrust management of our Company to these individuals.</P>

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


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<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; text-align: left"><B>Our stock is categorized as a penny stock.&nbsp;&nbsp;Trading
of our stock may be restricted by the SEC&rsquo;s penny stock regulations which may limit a stockholder&rsquo;s ability to buy
and sell our stock.</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; text-align: left; text-indent: 0.5in">Our stock is categorized
as a penny stock.&nbsp;&nbsp;The SEC has adopted Rule 15g-9 which generally defines &ldquo;penny stock&rdquo; to be any equity
security that has a market price (as defined) less than US$ 5.00 per share or an exercise price of less than US$ 5.00 per share,
subject to certain exceptions.&nbsp;&nbsp;Our securities are covered by the penny stock rules, which impose additional sales practice
requirements on broker-dealers who sell to persons other than established customers and accredited investors.&nbsp;&nbsp;The penny
stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature
and level of risks in the penny stock market.&nbsp;&nbsp;The broker-dealer also must provide the customer with current bid and
offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly
account statements showing the market value of each penny stock held in the customer&rsquo;s account.&nbsp;&nbsp;The bid and offer
quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing
prior to effecting the transaction and must be given to the customer in writing before or with the customer&rsquo;s confirmation.&nbsp;&nbsp;In
addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the
broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive
the purchaser&rsquo;s written agreement to the transaction.&nbsp;&nbsp;These disclosure requirements may have the effect of reducing
the level of trading activity in the secondary market for the stock that is subject to these penny stock rules.&nbsp;&nbsp;Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our securities.&nbsp;&nbsp;We believe that the penny
stock rules discourage investor interest in and limit the marketability of our common stock.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>FINRA sales practice requirements may
also limit a stockholder&rsquo;s ability to buy and sell our stock.</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; text-align: left; text-indent: 0.5in">In addition to the &ldquo;penny
stock&rdquo; rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer
must have reasonable grounds for believing that the investment is suitable for that customer.&nbsp;&nbsp;Prior to recommending
speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain
information about the customer&rsquo;s financial status, tax status, investment objectives and other information.&nbsp;&nbsp;Under
interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not
be suitable for at least some customers.&nbsp;&nbsp;The FINRA requirements make it more difficult for broker-dealers to recommend
that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on
the market for our shares.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>To date, we have not paid any cash dividends
and no cash dividends will be paid in the foreseeable future.</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; text-align: left; text-indent: 0.5in">We do not anticipate
paying cash dividends on our common stock in the foreseeable future and we may not have sufficient funds legally available to
pay dividends.&nbsp;&nbsp;Even if the funds are legally available for distribution, we may nevertheless decide not to pay any
dividends.&nbsp;&nbsp;We presently intend to retain all earnings for our operations.</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; text-align: left"><B>A limited public trading market exists
for our common stock, which makes it more difficult for our stockholders to sell their common stock in the public markets.</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; text-align: left; text-indent: 0.5in">Our common shares are
currently traded under the symbol &ldquo;PSON,&rdquo; but currently with low or no volume, based on quotations on the OTCQB meaning
that the number of persons interested in purchasing our common shares at or near bid prices at any given time may be relatively
small or non-existent.&nbsp;&nbsp;This situation is attributable to a number of factors, including the fact that we are a small
company which is still relatively unknown to stock analysts, stock brokers, institutional investors, and others in the investment
community that generate or influence sales volume, and that even if we came to the attention of such persons, they tend to be
risk-averse and would be reluctant to follow an unproven company such as ours or purchase or recommend the purchase of our shares
until such time as we became more viable.&nbsp;&nbsp;Additionally, many brokerage firms may not be willing to effect transactions
in the securities.&nbsp;&nbsp;As a consequence, there may be periods of several days or more when trading activity in our shares
is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will
generally support continuous sales without an adverse effect on share price.&nbsp;&nbsp;We cannot give you any assurance that
a broader or more active public trading market for our common stock will develop or be sustained, or that trading levels will
be sustained.</P>

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


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Stockholders should be
aware that, according to SEC Release No. 34-29093, the market for &ldquo;penny stocks&rdquo; has suffered in recent years from
patterns of fraud and abuse.&nbsp;&nbsp;Such patterns include (1) control of the market for the security by one or a few broker-dealers
that are often related to the promoter or issuer; (2) manipulation of prices through prearranged matching of purchases and sales
and false and misleading press releases; (3) boiler room practices involving high-pressure sales tactics and unrealistic price
projections by inexperienced sales persons; (4) excessive and undisclosed bid-ask differential and markups by selling broker-dealers;
and (5) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired
level, along with the resulting inevitable collapse of those prices and with consequent investor losses.&nbsp;&nbsp;Our management
is aware of the abuses that have occurred historically in the penny stock market.&nbsp;&nbsp;Although we do not expect to be in
a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within
the confines of practical limitations to prevent the described patterns from being established with respect to our securities.&nbsp;&nbsp;The
occurrence of these patterns or practices could increase the future volatility of our share price.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>If we issue additional shares in the future,
it will result in the dilution of our existing stockholders.</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; text-align: left; text-indent: 0.5in">Our Articles of
Incorporation authorize the issuance of up to 843,750,000 shares of common stock with a par value of $0.001 per share. Our
Board of Directors may choose to issue some or all of such shares to acquire one or more companies or properties and to fund
our overhead and general operating requirements. As of the date of this prospectus, we have agreed to pay for the services of
two consultants with shares of our common stock and we may make similar arrangements with other consultants in the future.
The issuance of any such shares may reduce the book value per share and may contribute to a reduction in the market price of
the outstanding shares of our common stock. If we issue any such additional shares, such issuance will reduce
the proportionate ownership and voting power of all current stockholders. Further, such issuance may result in a change
of control of our corporation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: left; text-indent: -1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>USE OF PROCEEDS</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: left; text-indent: 0.5in">We are registering the
shares of common stock offered by this prospectus for sale by the selling stockholders identified in the section of this prospectus
titled &ldquo;Selling Stockholders.&rdquo; We will not receive any of the proceeds from the sale of these shares. We will pay
all expenses incurred in connection with the offering described in this prospectus. We are registering the shares in this offering
pursuant to the terms of the registration rights agreements entered into between the Company and the selling stockholders dated
January 16, 2013. Our common stock is more fully described in the section of this prospectus titled &ldquo;Description of Securities.&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: center"><B>MARKET FOR COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS</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-indent: 0.5in">Our common stock is presently quoted on
the Financial Industry Regulatory Authority&rsquo;s (&ldquo;FINRA&rdquo;) Over-the-Counter marketplace under the name &ldquo;Petrosonic
Energy, Inc.&rdquo; and under the symbol &ldquo;PSON&rdquo;. Our common stock par value is $0.001 per share.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">There is no established trading market
for shares of our common stock and there has been a limited number of trades of our common stock on the OTCQB. We cannot provide
assurance that any established trading market for our common stock will develop or be maintained.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The following table sets forth, for the
fiscal quarters indicated, the high and low sale price for our common stock, as reported on the OTCQB. The quotations below reflect
inter-dealer prices, without retail mark-up, markdown or commissions and may not represent actual transactions.</P>

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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">PERIOD</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="font-weight: bold; text-indent: -0.5in; padding-left: 0.5in">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-indent: -0.5in; padding-left: 0.5in">&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><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-indent: -0.5in; padding-left: 0.5in">Fiscal Year Ended December 31, 2013</TD><TD>&nbsp;</TD>
    <TD STYLE="text-indent: 0in">First Quarter through February 7, 2013</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1.12</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.42</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-indent: -0.5in; padding-left: 0.5in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-indent: -0.5in; padding-left: 0.5in">&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-indent: -0.5in; padding-left: 0.5in">Fiscal Year Ended December 31, 2012</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: -0.5in; padding-left: 0.5in">First Quarter</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">No activity</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">No activity</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.5in; padding-left: 0.5in; background-color: rgb(204,255,204)">&nbsp;</TD><TD STYLE="background-color: rgb(204,255,204)">&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: -0.5in; padding-left: 0.5in; background-color: rgb(204,255,204)">Second Quarter</TD><TD STYLE="background-color: rgb(204,255,204)">&nbsp;</TD>
    <TD STYLE="text-align: left; background-color: rgb(204,255,204)">&nbsp;</TD><TD STYLE="text-align: right; background-color: rgb(204,255,204)">No activity</TD><TD STYLE="text-align: left; background-color: rgb(204,255,204)">&nbsp;</TD><TD STYLE="background-color: rgb(204,255,204)">&nbsp;</TD>
    <TD STYLE="text-align: left; background-color: rgb(204,255,204)">&nbsp;</TD><TD STYLE="text-align: right; background-color: rgb(204,255,204)">No activity</TD><TD STYLE="text-align: left; background-color: rgb(204,255,204)">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: -0.5in; padding-left: 0.5in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: -0.5in; padding-left: 0.5in">Third Quarter</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.72</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.42</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.5in; padding-left: 0.5in; background-color: rgb(204,255,204)">&nbsp;</TD><TD STYLE="background-color: rgb(204,255,204)">&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: -0.5in; padding-left: 0.5in; background-color: rgb(204,255,204)">Fourth Quarter</TD><TD STYLE="background-color: rgb(204,255,204)">&nbsp;</TD>
    <TD STYLE="text-align: left; background-color: rgb(204,255,204)">$</TD><TD STYLE="text-align: right; background-color: rgb(204,255,204)">0.86</TD><TD STYLE="text-align: left; background-color: rgb(204,255,204)">&nbsp;</TD><TD STYLE="background-color: rgb(204,255,204)">&nbsp;</TD>
    <TD STYLE="text-align: left; background-color: rgb(204,255,204)">$</TD><TD STYLE="text-align: right; background-color: rgb(204,255,204)">0.44</TD><TD STYLE="text-align: left; background-color: rgb(204,255,204)">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: -0.5in; padding-left: 0.5in; background-color: White">&nbsp;</TD><TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-indent: -0.5in; padding-left: 0.5in; background-color: White">&nbsp;</TD><TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left; background-color: White">&nbsp;</TD><TD STYLE="text-align: right; background-color: White">&nbsp;</TD><TD STYLE="text-align: left; background-color: White">&nbsp;</TD><TD STYLE="background-color: White">&nbsp;</TD>
    <TD STYLE="text-align: left; background-color: White">&nbsp;</TD><TD STYLE="text-align: right; background-color: White">&nbsp;</TD><TD STYLE="text-align: left; background-color: White">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.5in; padding-left: 0.5in; background-color: rgb(204,255,204)">Transition Period</TD><TD STYLE="background-color: rgb(204,255,204)">&nbsp;</TD>
    <TD STYLE="text-indent: -0.5in; padding-left: 0.5in; background-color: rgb(204,255,204)">&nbsp;</TD><TD STYLE="background-color: rgb(204,255,204)">&nbsp;</TD>
    <TD STYLE="text-align: left; background-color: rgb(204,255,204)">&nbsp;</TD><TD STYLE="text-align: right; background-color: rgb(204,255,204)">&nbsp;</TD><TD STYLE="text-align: left; background-color: rgb(204,255,204)">&nbsp;</TD><TD STYLE="background-color: rgb(204,255,204)">&nbsp;</TD>
    <TD STYLE="text-align: left; background-color: rgb(204,255,204)">&nbsp;</TD><TD STYLE="text-align: right; background-color: rgb(204,255,204)">&nbsp;</TD><TD STYLE="text-align: left; background-color: rgb(204,255,204)">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 48%; text-indent: -0.5in; padding-left: 0.5in">November 1, 2011 through December 31, 2011</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 27%; text-indent: -0.5in; padding-left: 0.5in">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-size: 10pt">No
                                                       activity</FONT></TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-size: 10pt">No
                                                       activity</FONT></TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.5in; padding-left: 0.5in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-indent: -0.5in; padding-left: 0.5in">&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-indent: -0.5in; padding-left: 0.5in">Fiscal Year Ended October 31, 2011</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: -0.5in; padding-left: 0.5in">First Quarter</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.90</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.65</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.5in; padding-left: 0.5in; background-color: rgb(204,255,204)">&nbsp;</TD><TD STYLE="background-color: rgb(204,255,204)">&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: -0.5in; padding-left: 0.5in; background-color: rgb(204,255,204)">Second Quarter</TD><TD STYLE="background-color: rgb(204,255,204)">&nbsp;</TD>
    <TD STYLE="text-align: left; background-color: rgb(204,255,204)">$</TD><TD STYLE="text-align: right; background-color: rgb(204,255,204)">0.85</TD><TD STYLE="text-align: left; background-color: rgb(204,255,204)">&nbsp;</TD><TD STYLE="background-color: rgb(204,255,204)">&nbsp;</TD>
    <TD STYLE="text-align: left; background-color: rgb(204,255,204)">$</TD><TD STYLE="text-align: right; background-color: rgb(204,255,204)">0.85</TD><TD STYLE="text-align: left; background-color: rgb(204,255,204)">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: -0.5in; padding-left: 0.5in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: -0.5in; padding-left: 0.5in">Third Quarter</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1.75</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1.01</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.5in; padding-left: 0.5in; background-color: rgb(204,255,204)">&nbsp;</TD><TD STYLE="background-color: rgb(204,255,204)">&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: -0.5in; padding-left: 0.5in; background-color: rgb(204,255,204)">Fourth Quarter</TD><TD STYLE="background-color: rgb(204,255,204)">&nbsp;</TD>
    <TD STYLE="text-align: left; background-color: rgb(204,255,204)">$</TD><TD STYLE="text-align: right; background-color: rgb(204,255,204)">1.05</TD><TD STYLE="text-align: left; background-color: rgb(204,255,204)">&nbsp;</TD><TD STYLE="background-color: rgb(204,255,204)">&nbsp;</TD>
    <TD STYLE="text-align: left; background-color: rgb(204,255,204)">$</TD><TD STYLE="text-align: right; background-color: rgb(204,255,204)">1.05</TD><TD STYLE="text-align: left; background-color: rgb(204,255,204)">&nbsp;</TD></TR>
</TABLE>

<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; text-align: left"></P>

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<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"><B>Stockholders</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-indent: 0.5in">At February 5, 2013 there were approximately
48 record holders of our common stock.</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>Dividends</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-indent: 0.5in">We have never paid cash dividends on our
common stock. We intend to keep future earnings, if any, to finance the expansion of our business, and we do not anticipate that
any cash dividends will be paid in the foreseeable future. Our future payment of dividends will depend on our earnings, capital
requirements, expansion plans, financial condition and other relevant factors that our board of directors may deem relevant. Our
retained earnings deficit currently limits our ability to pay dividends.</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"><B>Shares That May Be Sold In The Future</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We have outstanding warrants to
purchase 615,000 shares of our common stock and we have outstanding convertible promissory notes that may be converted into
6,799,999 shares of common stock. We have no stock options or other securities that may be exercised or converted into shares
of our common stock outstanding, although we have agreements with three consultants who, together, have agreed to accept a
total of 1,270,000 shares of our common stock as payment for the services they render. Pursuant to the registration rights
agreement we signed with the selling stockholders in this offering, we agreed to register a total of 12,610,000 shares of
our common stock. One of the investors has declined to exercise this right, therefore we are registering a total of
12,210,000 shares of common stock on the registration statement of which this prospectus is a part.</P>

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


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<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; text-align: center"><B>MANAGEMENT&rsquo;S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: left; text-indent: -1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><I>The following
discussion and analysis of our results of operations and financial condition should be read in conjunction with our financial
statements and the notes to those financial statements that are included elsewhere in this prospectus. Our discussion
includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans,
objectives, expectations and intentions. Actual results and the timing of events could differ materially from those
anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the Risk
Factors, Cautionary Notice Regarding Forward-Looking Statements and Our Business sections in this prospectus. We use words
such as &ldquo;anticipate,&rdquo; &ldquo;estimate,&rdquo; &ldquo;plan,&rdquo; &ldquo;project,&rdquo;
&ldquo;continuing,&rdquo; &ldquo;ongoing,&rdquo; &ldquo;expect,&rdquo; &ldquo;believe,&rdquo;
&ldquo;intend,&rdquo; &ldquo;may,&rdquo; &ldquo;will,&rdquo; &ldquo;should,&rdquo; &ldquo;could,&rdquo; and similar
expressions to identify forward-looking statements.</I></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>History</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: left; text-indent: 0.5in">We were incorporated
in the State of Nevada on June 11, 2008 under the name &ldquo;Bearing Mineral Exploration, Inc.&rdquo;, with authorized capital
stock of 75,000,000 shares at $0.001 par value. We were organized for the purpose of&nbsp;conducting gold exploration activities
on a mineral claim located in the Province of Newfoundland, Canada.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">On April 17, 2012, we
entered into an Assignment Agreement with Art Agolli, our President, Principal Executive Officer and director, pursuant to which
Mr. Agolli agreed to convey to us all of his right, title and interest in a letter of intent with Sonoro Energy Ltd. (&ldquo;Sonoro&rdquo;),
a Canadian publicly traded company (TSX-V: SNV) based in Calgary, Alberta, Canada,   the holder of all of the legal and equitable
rights and entitlements to a sonic reactor and technology that Sonoro developed for the treatment and upgrading of heavy oil
by sonicated solvent de-asphalting.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">On May 16, 2012, we effected
an 11.25-for-1 forward stock split of our common stock and an increase in our authorized number of common shares to 843,750,000.
Additionally, on May 16, 2012, we changed our name to &ldquo;Petrosonic Energy, Inc.&rdquo; to better reflect the Company&rsquo;s
new business direction in anticipation of the purchase of certain rights in technology, assets and common shares owned by Sonoro
Energy Ltd.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">On July 27, 2012, we
acquired certain assets (the &ldquo;Assets&rdquo;) from Sonoro, including (i) certain technology relating to the treatment and
upgrading of heavy oil by sonicated solvent de-asphalting, (ii) 60,000 shares of Petrosonic Albania pursuant to a share purchase
agreement (the &ldquo;Share Purchase Agreement&rdquo;), and (iii) sonic reactors located in Albania and Richmond, British Columbia
and a solvent recovery system located in or around Turin, Italy (the &ldquo;Transaction&rdquo;), pursuant to the terms of the
Asset Purchase and Sale Agreement, dated July 27, 2012 (the &ldquo;Purchase Agreement&rdquo;).</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Pursuant to the terms
of the Purchase Agreement, in exchange for the Assets, we agreed to pay to Sonoro the following consideration: (i) CAD$250,000,
(ii) a convertible debenture in the principal amount of CAD$250,000 (the &ldquo;Debenture&rdquo;) and (iii) a 10% royalty interest
in our realized net revenues for a period of 10 years from the time we commence commercial operations, which is defined as the
date upon which we process an average of 50 barrels of feed stock per day over a period of 30 consecutive days utilizing the technology
acquired. For a complete description of the Transaction, and the Purchase Agreement please refer to the Form 8-K we filed with
the Securities and Exchange Commission on July 31, 2012.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Following the consummation
of the Transaction, we believe that we are not a shell corporation as that term is defined in Rule 405 of the Securities Act and
Rule 12b-2 of the Exchange Act. From and after the consummation of the Transaction, our primary operations consist of utilizing
the Assets to develop a business relating to the treatment and upgrading of heavy oil by sonicated solvent de-asphalting and operating
the business of Petrosonic Albania Sha. (the &ldquo;Business&rdquo;). Therefore, we disclose information about the Business in
this prospectus.</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: left; text-indent: 0.5in"><FONT STYLE="color: black">Our
head office is located at </FONT>Suite 300, 714 - 1st Street SE, Calgary, Alberta, Canada T2G 2G8<FONT STYLE="color: black">.
Our telephone number is </FONT>(403) 708-7869.</P>

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


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Petrosonic Albania has
an office in Fier, Albania at the same location where its processing plant is located. Albania&rsquo;s heavy oil upstream and
downstream industries are located in Fier and the facility is only a few miles away from the heavy oil producing fields. It is
also located 35 kilometers away from Albania&rsquo;s only deep sea port and export facility, the PIR Vlora terminal. The office
is offered by the Albanian partner free of charge until the Company signs a lease agreement when requisite funding is in place.
Petrosonic Albania currently has two full-time employees and three part-time employees, as well as, several independent consultants.
Petrosonic Albania plans to hire a Chief Financial Officer and three local operations staff in Albania during the first year of
its operations. Petrosonic Albania has identified potential candidates for such positions, and expects to proceed with such hires
once it has secured the requisite financing.</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>Operation Plans and Business Focus</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: left; text-indent: 0.5in">Petrosonic has developed
a commercial process which improves heavy oil densities by 6 to 15 API from as low as 8 API, reduces viscosities of oil by 99%
to pipeline specifications and reduces sulphur and heavy metals by over 50%. (The American Petroleum Institute gravity, or API
gravity, is a measure of how heavy or light a petroleum liquid is compared to water, one of the qualitative measures for crude
oil.) The Petrosonic heavy oil process will enable heavy sour oil (HSO) and bitumen (from most heavy oil and oil sands fields
in the world) to be converted from nominally an API gravity of 8 to 14 degrees to a value-added synthetic crude oil of between
18 and 23 API. This is achieved through the reduction of undesirable constituents of the raw heavy oil and/or bitumen. The process
incorporates two stages: solvent de-asphalting and distillation.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">While solvent de-asphalting
and distillation are both proven and well known technologies, the innovation associated with the Petrosonic upgrading process
lies in the rapid de-asphalting achieved by sonication of the de-asphalting phase with the Petrosonic reactor stage.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This process is especially
beneficial to producers with the following intrinsic challenges:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 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; color: black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Stranded
                                                                                                                             heavy
                                                                                                                             oil
                                                                                                                             due
                                                                                                                             to
                                                                                                                             transportation
                                                                                                                             issues</FONT></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; color: black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Diluent
                                                                                                                             supply
                                                                                                                             issues</FONT></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; color: black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Limited
                                                                                                                             refining
                                                                                                                             markets
                                                                                                                             (light
                                                                                                                             oil
                                                                                                                             refiners
                                                                                                                             struggle
                                                                                                                             with
                                                                                                                             heavy
                                                                                                                             oil)</FONT></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; color: black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Heavy
                                                                                                                             discounts
                                                                                                                             due
                                                                                                                             to:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 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: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Density
                                                                                                                             adjustments</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 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: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">High
                                                                                                                             sulphur
                                                                                                                             content</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 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: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">High
                                                                                                                             metals
                                                                                                                             content</FONT></TD></TR></TABLE>

<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: left; text-indent: 0.5in">We believe Petrosonic
will be able to take advantage of an opportunity that traditional upgrading technology cannot address &ndash; upstream upgrading
on smaller scales. The viability of upgrading is constantly changing due to production mix, refining infrastructure costs, and
oil pricing. However, there are three markets for small upgraders that make sense:</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"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Pipeline
                                                                                                          systems where access
                                                                                                          to the pipeline requires
                                                                                                          blending of heavy oil.
                                                                                                          Condensate prices and
                                                                                                          heavy oil differentials
                                                                                                          have been stable for
                                                                                                          some time and long term
                                                                                                          projections indicate
                                                                                                          that low condensate
                                                                                                          prices following the
                                                                                                          global economic slow-down
                                                                                                          will be short-lived;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; 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"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Heavy
                                                                                                          oil producers in markets
                                                                                                          where light oil dominates
                                                                                                          refinery infrastructure.
                                                                                                          Internationally there
                                                                                                          are several markets
                                                                                                          like this; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; 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"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Markets
                                                                                                          where upgrading asphalt
                                                                                                          by-products can command
                                                                                                          premium prices. This
                                                                                                          is especially attractive
                                                                                                          in North America given
                                                                                                          the economic infrastructure
                                                                                                          stimulus measures being
                                                                                                          implemented.</FONT></TD></TR></TABLE>

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


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<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; text-align: justify; text-indent: 0.5in">To take advantage
of these opportunities Petrosonic must be able to:</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"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Economically
                                                                                                          upgrade heavy oil from
                                                                                                          small and medium sized
                                                                                                          producers right in the
                                                                                                          field;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; 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"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Add
                                                                                                          value and allow producers
                                                                                                          to capture a larger
                                                                                                          share of the market
                                                                                                          price for refinery products;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; 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"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Provide
operating plants to heavy oil producers in return for tolling process fees or purchase heavy oil at a premium to blenders.</FONT></TD></TR></TABLE>

<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; text-align: left; text-indent: 0.5in">Upgraded oil provides
uplift in crude&rsquo;s value and eliminates issues related to transport of crude oil to pipeline and refinery companies.</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: left; text-indent: 0.5in">Depending on regional
markets, traditional heavy oil discounts (10 API oil with &gt;2% sulphur) are 35-40% and we believe such discounts could be reduced
to only 10-20% through our process. On 5,000 barrels of oil per day (&ldquo;bopd&rdquo;) this would equate to increased revenues
of approximately $6/barrel (bbl) or around $11 million per year (based on $100/bbl brent oil). Capital costs are expected to be
between $0.5-1 million per 1,000 bbls capacity. Operating costs will be between $2-3 per bbl on a stand- alone facility basis.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Petrosonic plans to
have its first 1,000 bopd stand-alone facility operational within the second quarter of 2013 in Albania. Expected annual
cashflows from the initial 1,000 bopd facility are expected to reduce heavy oil price discounts historically received in
Albania from 40% to 20% as a result of achieving a 18-23 API oil. Petrosonic believes that with significant heavy oil
production growth anticipated from the approximately 8 billion barrels of oil reserves believed to be present in Albania, if
we are able to successfully capture a portion of this processing business, Petrosonic expects to expand its facilities over
the next 3 to 5 years to 15,000 bopd as Albanian oil production increases.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">If Petrosonic is able
to successfully establish its first commercial facility, we believe heavy oil producers will want to integrate the Petrosonic
system at their cost into their treatment facilities. Petrosonic would sell the process solution and retain a royalty fee under
this type of development. While revenue per facility will be less (estimated at 50%), no capital and minimal support will be required.
This strategy would allow for faster growth. Petrosonic may also choose to develop its own stand-alone facilities to capture further
upside and long term value creation.</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: left; text-indent: 0.5in">Further upside opportunities
exist in several other applications, which the Company is developing, including, heavy oil sands separation (both from oil sands
and ecology pits), and oil separations from drill cuttings.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><I>Vision and Strategy</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><I>&nbsp;</I></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"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Petrosonic
                                                                                                          hopes to provide its
                                                                                                          stockholders with returns
                                                                                                          and cash flow growth
                                                                                                          by leveraging its experience
                                                                                                          and intellectual property
                                                                                                          within the heavy oil
                                                                                                          business.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.25in; 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"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Petrosonic
                                                                                                          plans to use an initial
                                                                                                          model of building its
                                                                                                          own stand-alone facilities
                                                                                                          to prove, optimize and
                                                                                                          develop business growth
                                                                                                          opportunities with small
                                                                                                          to medium sized producers.
                                                                                                          To achieve higher returns
                                                                                                          and growth, the Company
                                                                                                          will license out on
                                                                                                          a fee for service basis
                                                                                                          or royalty basis its
                                                                                                          processes to be integrated
                                                                                                          into a producer&rsquo;s
                                                                                                          treatment facilities.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.25in; 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"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Where
                                                                                                          there is a distinct
                                                                                                          advantage Petrosonic
                                                                                                          may capture heavy oil
                                                                                                          resources prospects
                                                                                                          or participate jointly
                                                                                                          in them. Any resource
                                                                                                          level participation
                                                                                                          would require higher
                                                                                                          returns on investment
                                                                                                          and be required to stand
                                                                                                          on its own prior to
                                                                                                          the benefits of applying
                                                                                                          Petrosonic&rsquo;s technology.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.25in; 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"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
                                                                                                          Company plans, whenever
                                                                                                          possible, to financially
                                                                                                          participate in acquiring
                                                                                                          the underlying oil assets,
                                                                                                          which it believes will
                                                                                                          result in higher returns
                                                                                                          and growth.</FONT></TD></TR></TABLE>

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


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><I>Key Success Factors</I></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Petrosonic&rsquo;s
success will be dependent upon:</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"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Our
                                                                                                          ability to attract and
                                                                                                          develop numerous projects
                                                                                                          once the first project
                                                                                                          is complete;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; 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"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Access
                                                                                                          to an ample producer
                                                                                                          oil supply and our ability
                                                                                                          to find equitable profit
                                                                                                          distribution;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; 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"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Our
                                                                                                          development and distribution
                                                                                                          of asphalt within the
                                                                                                          market;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; 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"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Our
                                                                                                          ability to minimize
                                                                                                          the technical risk through
                                                                                                          avoidance of scale up
                                                                                                          issues;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; 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"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Alleviation
                                                                                                          of market risk through
                                                                                                          the use of strategic
                                                                                                          partners which can gain
                                                                                                          quick access to markets;
                                                                                                          and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; 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"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Alleviation
                                                                                                          of financial risk through
                                                                                                          partnering.</FONT></TD></TR></TABLE>

<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; text-align: left; text-indent: 0.5in">Our immediate priorities
are:</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: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Strengthening
                                                                                                               the operations
                                                                                                               and management
                                                                                                               of the Company
                                                                                                               as it moves forward
                                                                                                               in the oil sector;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; 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"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Moving
                                                                                                               ahead with the
                                                                                                               processing facility
                                                                                                               in Albania;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; 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"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Establishing
                                                                                                               a second country
                                                                                                               oil processing
                                                                                                               project; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; 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"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Building
                                                                                                               a firm backlog
                                                                                                               of projects with
                                                                                                               financing commitments.</FONT></TD></TR></TABLE>

<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; text-align: left"><B>Petrosonic&rsquo;s Technology</B></P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">We believe that Petrosonic
has a technology advantage that is based upon the use of the Petrosonic reactor technology and the unique cavitational and enhanced
mass transfer effects that it provides. Petrosonic has developed a unique competency in the design of enhanced mass transfer energy
processes and the proprietary applications that result from this.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">In recent years the use
of cavitational technologies and ultrasound has been researched extensively for oil processing &ndash; usually in the context
of desulphurization or &ldquo;cold cracking&rdquo;. Our own research does not support this and we make no claims that it can create
a unique upgrading process. The chemistries used in the Petrosonic process are established and our advantage is that we make these
more effective.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">The Company looks to
maintain its initial technical advantage derived from the Petrosonic Sonoprocess&trade; for heavy oil by adding complementary
proprietary process technologies to this.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">The Petrosonic reactor
has been designed and built in a variety of configurations but all Petrosonic process development is undertaken on full scale
units:</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"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Petrosonic
                                                                                                          reactors are based on
                                                                                                          low-frequency / high-amplitude
                                                                                                          Petrosonic energy reactors;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; 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"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">A
                                                                                                          patented electromagnetic
                                                                                                          drive puts a massive
                                                                                                          steel bar into resonance
                                                                                                          and this allows efficient
                                                                                                          transfer of energy to
                                                                                                          the reaction chambers;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; 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"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">There
                                                                                                          are no moving parts
                                                                                                          and so Petrosonic reactors
                                                                                                          have a high reliability
                                                                                                          and operational availability;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; 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"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
                                                                                                          reaction chambers are
                                                                                                          attached at the mid-node
                                                                                                          points one half wavelength
                                                                                                          from the drive system,
                                                                                                          enabling the reactors
                                                                                                          to apply Petrosonic
                                                                                                          energy to physical,
                                                                                                          chemical and biological&nbsp;processes;</FONT></TD></TR></TABLE>

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


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; 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"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Petrosonic
                                                                                                          reactors are thus able
                                                                                                          to achieve more sustainable
                                                                                                          processes &ndash; better
                                                                                                          reactivity, less reagents,
                                                                                                          less energy, greater
                                                                                                          effectiveness and more
                                                                                                          product for overall
                                                                                                          economic advantage.</FONT></TD></TR></TABLE>

<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; text-align: left"><I>Direct Sonicated Separation</I></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; text-align: left; text-indent: 0.5in">The previous holder of
the technology has also carried out independent tests on oil sands to determine if the technology could be effective in a low
cost primary separation process. Preliminary tests with a proprietary process protocol produced results comparable with existing
technology.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">However, the effectiveness
of this technology is but a first step due to the massive scale of oil sands projects. At this time the Company believes the volume
of material that would need to be processed requires a &ldquo;next generation&rdquo; of Petrosonic reactor technology. Existing
scale technology may be applicable to small scale oil sands production.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">The Company has directed
its efforts towards a more immediate but directly related application &ndash; the treatment of drill cuttings. This is not the
same scale of opportunity but offers immediate access to market and cash flow generation based on modest investment of capital.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Petrosonic Heavy Oil Process Patents</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; text-align: left; text-indent: 0.5in">As part of the transaction
with Sonoro Energy the Company has acquired the following Heavy Oil Process provisional and PCT applications based on the Company&rsquo;s
Sonoprocess&trade;:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 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"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Patent/Application
                                                                                                          No: WO2009111871. Jurisdiction:
                                                                                                          WIPO. Title: Method
                                                                                                          for Treating Heavy Crude
                                                                                                          Oil. Application Status:
                                                                                                          Published.</I></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; 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"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Patent/Application
                                                                                                          No: EA201071060. Jurisdiction:
                                                                                                          Eurasisa. Title: Method
                                                                                                          for Treating Heavy Crude
                                                                                                          Oil. Status: Pending.</I></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; 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"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Patent/Application
                                                                                                          No: EP2260089. Jurisdiction:
                                                                                                          Europe. Title: Method
                                                                                                          for Treating Heavy Crude
                                                                                                          Oil. Status: Pending.</I></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; 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"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Patent/Application
                                                                                                          No: 2156/MUMNP/2010.
                                                                                                          Jurisdiction: India.
                                                                                                          Title: Method for Treating
                                                                                                          Heavy Crude Oil. Status:
                                                                                                          Pending.</I></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; 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"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Patent/Application
                                                                                                          No: US 61/035,690. Jurisdiction:
                                                                                                          United States. Title:
                                                                                                          Method for Treating
                                                                                                          Heavy Crude Oil. Status:
                                                                                                          The Company will appeal
                                                                                                          the expired priority
                                                                                                          claim to reinstate the
                                                                                                          priority claim.</I></FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Recent Developments</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: left; text-indent: 0.5in">On January 16, 2013 we
completed a private offering of 12,610,000 shares of common stock to accredited investors through which we raised net proceeds
totaling $2,937,500 after the payment of $215,000 in placement agent commissions. As part of the compensation paid to placement
agents, we also issued two-year warrants for the purchase of 275,000 shares of our common stock at an exercise price of $0.50
per share. We plan to use the net proceeds from the offering for general working capital purposes.</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: left; text-indent: 0.5in">On September 18, 2012
the Company awarded an assembly contract to Pavli Valle Inc., an engineering and assembly company. The contract is for the final
assembly and process engineering and fabrication of tanks and equipment for Petrosonic Energy, Inc.&rsquo;s heavy oil processing
plant.</P>

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


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">As well, during the quarter
ended<B> </B>September 30, 2012, Petrosonic signed a cooperation agreement with a leading private emulsion technology company
for the upstream and downstream oil industry that has an exclusive license in a heavy crude and asphaltene emulsification patented
technology. According to the agreement the private company has committed to set up a 120 bbl/hour heavy crude and asphaltene emulsification
plant in Petrosonic&rsquo;s heavy oil processing plant located in Albania. This will create technology and marketing synergy for
both groups and allow Petrosonic to convert the de-asphalted oil and asphaltenes into readily marketable emulsified fuel oil and
high-end asphalt and capture further value for its products. The investment projected for the equipment being shipped from California
 and assembly cost is approximately $1 million USD and will be paid entirely by the private company. In addition, Petrosonic
will benefit from the technical know-how and expertise of the private company who is a world leader in the emulsification of heavy
crude and asphaltenes.</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; text-align: left"><B>Limited Operating History; Need for Additional
Capital</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">There is limited historical
financial information about Petrosonic Energy, Inc. upon which to base an evaluation of our performance. We are a development
stage company focused on the treatment and upgrading of heavy oil by sonicated solvent de-asphalting. We are in the process of
bringing online our first stand-alone facility located in Albania, which is expected to be able to process and de-asphalt up to
1,000 barrels per day of heavy oil. We plan to generate revenue by both integrating our system into oil producer treatment facilities,
as well as continuing to develop our own standalone facilities, such as the Albania facility, to capture further upside and long
term value creation.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Our cash needs are primarily
for working capital to develop our operations.&nbsp; We presently finance our operations through debt and equity financings. We
have limited capital resources and there is no assurance that future financing will be available to our Company on acceptable
terms.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">If financing is not available
on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional
dilution to existing stockholders.</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>Results of Activities</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; text-indent: 0.5in">The following information
has been derived from the financial information included in the unaudited consolidated financial statements of the Company at
September 30, 2012.</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"><B><I>For the Nine Months Ended September
30, 2012 and 2011</I></B></P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Company did not recognize any revenue in either of the nine
month periods ended September 30, 2012 and September 30, 2011.</P>

<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; text-indent: 0.5in">Operating expenses were $55,777 and $14,958 for the nine months
ended September 30, 2012 and 2011 respectively. The increase in operating expenses of $40,819 resulted from the increases in costs
incurred for marketing and business development activities as well as costs incurred for public company compliance.</P>

<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; text-indent: 0.5in">In the nine month period ended September 30, 2012, the Company
incurred interest expense of $12,869 primarily related to the convertible debentures issued by the Company during the period and
also recognized a bargain purchase gain of $89,553 on the purchase of certain operating assets acquired during the period.</P>

<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; text-indent: 0.5in">Net income for the nine month period ended September 30, 2012
was $20,907 compared to a net loss of $14,958 incurred during the comparable period of the prior year. The increase in net income
of $35,865 resulted from the gain on the purchase of assets exceeding the total of the increase in operating costs plus the interest
expense incurred for the period.</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: justify; text-indent: 0.5in"></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; text-indent: 0.05pt"><B><I>For the Three
Months Ended September 30, 2012 and 2011</I></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; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Company did not recognize any revenue in either of the three
month periods ended September 30, 2012 and September 30, 2011.</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-indent: 0.5in">Operating expenses were $51,509 in the three months ended September
30, 2012 compared with a benefit of $6,477 in the three months ended September 30, 2011. The increase in operating expenses of
$57,986 resulted from increases in costs incurred for marketing and business development activities as well as costs incurred
for public company compliance.</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-indent: 0.5in">In the three month period ended September 30, 2012, the Company
incurred interest expense of $12,869 primarily related to the convertible debentures issued by the Company during the period and
also recognized a bargain purchase gain of $89,553 on the purchase of certain operating assets acquired during the period.</P>

<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; text-indent: 0.5in">Net income for the three month period ended September 30, 2012
was $25,175 compared to net income of $6,477 for the comparable period of the prior year. The increase in net income of $18,698
resulted from the gain on the purchase of assets exceeding the total of the net increase in operating costs plus the interest expense
incurred for the period.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></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; text-indent: 0.5in">During the period
ended September 30, 2012, much of the Company&rsquo;s resources were directed at planning for assembly of the plant, negotiations
with third party suppliers and fabrication companies for procurement of the assembly services, as well as estimation work for
complete commissioning of equipment and transportation to site in Albania.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">As of the date of this
prospectus, we have yet to generate any revenues from our business operations.<I>&nbsp;</I>As a result, we have generated significant
operating losses since our formation and expect to incur substantial losses and negative operating cash flows for the foreseeable
future as we attempt to expand our infrastructure and development activities. Our ability to continue may prove more expensive
than we currently anticipate and we may incur significant additional costs and expenses.</P>

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


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Liquidity and Capital Resources</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; text-indent: 0.5in">At September 30, 2012,
the Company had total assets of $857,399 and total liabilities of $691,619 compared to total assets of $705,715 and total liabilities
of $204,176 at December 31, 2011. The increase in total assets is primarily due to proceeds received from the sale of securities
and convertible debentures entered into during the nine months ended September 30, 2012.</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; text-indent: 0.5in">Net working
capital deficit at September 30, 2012 was $497,597 compared to a working capital deficit of $116,385 at December 31, 2011. We
incurred a loss of $20,907 for the nine months ended September 30, 2012 and have incurred an aggregate deficit since
inception of $312,878.</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; text-indent: 0.5in">Net cash provided
by financing activities was $579,784 and $347,579 for the nine months ended September 30, 2012 and 2011 respectively. During the
nine months ended September 30, 2012 we entered into two subscription agreements with a private investor pursuant to which the
private investor purchased an aggregate of 680,000 shares of our common stock and 680,000 warrants&nbsp;exercisable to purchase
one half (1/2) of one share of common stock at an exercise price of $0.50 per share,&nbsp;exercisable over one year from the purchase
date. Gross proceeds received by the Company were $170,000.</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: left; text-indent: 0.5in">In addition, during the
nine months ended September 30, 2012, the Company borrowed an aggregate of $358,875 ($365,000 face value) under convertible debentures.
On March 23, 2012, Petrosonic Energy, Inc. entered into an agreement with Sierra Growth, Inc. (a non-related party) whereby Sierra
Growth, Inc. (&ldquo;Sierra&rdquo;) advanced $50,000. The debenture bears interest at 10% per annum and is due March 23, 2013.
Until the due date, Sierra may elect to convert the debenture in whole or in part into common shares of the Company at a conversion
rate equal to the price of any aggregate financing exceeding five hundred thousand ($500,000) dollars less a discount of 25% per
share. On April 18, 2012 Sierra advanced a further $25,000 to the Company. The debenture matures on April 18, 2013 and bears interest
at 10% per annum with the same conversion features as the debenture issued on March 26, 2012.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">On June 6, 2012, Westlake
Advisors Corp. (a non-related party) advanced to Petrosonic Energy, Inc. $48,775 (CAD $50,000 face value) for a convertible debenture.
The debenture has a Maturity Date of one year from the date of issuance and bears an interest rate at 10% per annum. At any time
on or before the Maturity Date, Westlake Advisors Corp. may elect to convert the debenture in whole or in part into common shares
of the Company at a conversion rate equal to the price of any aggregate financing exceeding five hundred thousand ($500,000) dollars
less a discount of 25% per share.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">On June 11, 2012,
the Company entered into an agreement with Art Agolli, its President,  Chief Executive Officer  and sole director, for a
convertible debenture valued at $195,100 (CAD $200,000 face value) for funds advanced. The convertible debenture expires on
June 11, 2013 ( the &ldquo;Maturity Date&rdquo;) and bears interest at 10% per annum. At any time prior to the Maturity Date,
if the Company completes an equity or convertible debenture financing yielding aggregate proceeds of at least
$500,000 (&ldquo;Qualified Financing&rdquo;), its President may elect to convert the debenture in whole or in part into
common shares of the Company at a price equal to the price per share at which common shares of the Company are sold in the
Qualified Financing, or in the case of a convertible debenture, the price of the shares issuable upon conversion of the
convertible debentures sold in the Qualified Financing.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">On June 21, 2012, Jackson
Bennett LLC (a non-related party) advanced $40,000 to Petrosonic Energy, Inc. by way of a convertible debenture which matures
June 21, 2013 and bears an interest at 10% per annum. At any time up to and including the Maturity Date, Jackson Bennett LLC may
elect to convert the debenture in whole or in part into common shares of the Company at a conversion rate equal to the price of
any aggregate financing exceeding five hundred thousand ($500,000) dollars less a discount of 25% per share.</P>

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


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Our cash needs
are primarily for working capital to develop our operations.&nbsp; We have financed our operations through debt and
equity financings, including by agreeing to issue 1,270,000 shares of our common stock in exchange for services provided to
us by consultants. We presently operate with minimum overhead costs and will continue to need to raise additional capital to
fund our plan of operations. We currently have no committed source of financing, therefore, the Company's management expects
to regularly explore a variety of options to meet the Company's cash requirements and future capital requirements,
including the possibility of equity offerings, debt financing, and business combinations. We do not have any arrangements in
place for any future financing at this time. If we fail to obtain financing as and when we need it, our business will
be materially adversely affected and we may be forced to cease operations.</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; text-align: left"><B>Going Concern Uncertainties</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; text-align: left; text-indent: 0.5in">As of the date of this
prospectus, there is doubt about our ability to continue as a going concern as we have not generated sufficient cash flow to fund
our business operations. &nbsp;The financial statements included in this prospectus have been prepared on the going concern basis,
which assumes that we will be able to realize our assets and discharge our obligations in the normal course of business. If we
are not to continue as a going concern, we would likely not be able to realize our assets at values comparable to the carrying
value or the fair value estimates reflected in the balances set out in the preparation of the financial statements.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Our future success and
viability, therefore, are dependent upon our ability to generate capital financing. The failure to generate sufficient revenues
or raise additional capital may have a material and adverse effect upon us and our stockholders.</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; text-align: left; text-indent: 0.5in">Because we have not generated
any revenues, and have incurred losses from operations since inception, in their report on our audited financial statements for
the latest fiscal year, our independent auditors included an explanatory paragraph regarding substantial doubt about our ability
to continue as a going concern. The financial statements of Petrosonic Energy, Inc. and those of Petrosonic Albania Sha. contain
additional note disclosures describing the circumstances that lead to this disclosure by our respective independent auditors.</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; text-align: left"><B>Critical Accounting Estimates</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B><I>Property and equipment, net</I></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; text-align: left; text-indent: 0.5in">Property and equipment
are carried at the cost of acquisition or construction and depreciated over the estimated useful lives of the assets. Costs associated
with repair and maintenance are expensed as incurred. Costs associated with improvements which extend the life, increase the capacity
or improve the efficiency of our property and equipment are capitalized and depreciated over the remaining life of the related
asset. Gains and losses on dispositions of equipment are reflected in operations. Depreciation is provided using the straight-line
method over the estimated useful lives of the assets, which are 3 to 5 years. The Company has not recognized depreciation since
inception as none of the equipment has been used in operations.</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; text-align: left"><B><I>Research and development</I></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; text-align: left; text-indent: 0.5in">Costs incurred in connection
with the development of new products and manufacturing methods are charged to selling, general and administrative expenses as
incurred. During the years ended December 31, 2011 and 2010, the Company expensed $-0- and $10,704, respectively, as research
and development costs.</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>Recently Issued Accounting Pronouncements</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: left; text-indent: 0.5in">We do not expect the
adoption of any recently issued accounting pronouncements to have a significant effect on its financial position or results of
operations.</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"><B>Off-Balance Sheet Arrangements</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: left; text-indent: 0.5in">As of September 30, 2012,
we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Results of Activities</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: left; text-indent: 0.5in">The following discussion
and analysis of our financial condition and results of operations should be read in conjunction with the audited financial statements
and accompanying notes of Petrosonic Energy, Inc. for the two months ended December 31, 2011 and the years ended October 31, 2011
and 2010.</P>

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


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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>For the Two Months Ended December 31, 2011</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 21.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Selling, general and administrative expenses, and others</I></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Operating expenses: Operating expenses were
$3,022 for the two months ended December 31, 2011. Operating expenses during the two months ended December 31, 2011 consisted of
filing fees and legal fees associated with the preparation and EDGAR filing of our October 31, 2011 annual report on Form 10-K
filed with the Securities and Exchange Commission on December 16, 2011.</P>

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



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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B><I>Fiscal Year Ended October 31, 2011
as compared to Fiscal Year Ended October 31, 2010</I></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; text-align: left; text-indent: 0.5in">We did not generate any
revenues during the fiscal years ended October 31, 2011 and 2010. We had a net loss of $12,874 for the year ended October 31,
2011 compared to a net loss of $29,259 for the year ended October 31, 2010.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><I>Operating Expenses:</I>&nbsp;Operating
expenses were $12,874 and $29,259 for the years ended October 31, 2011 and 2010, respectively. The decrease of $16,385 in operating
expenses during the year ended October 31, 2011 was mainly due to a decrease in legal fees incurred in fiscal 2010 in connection
with the due diligence investigation of a former prospective merger candidate and a decrease in transfer agent and filing fees
incurred in 2010 associated with the Company filing application for listing with FINRA.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>Liquidity and Capital Resources</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; text-align: left; text-indent: 0.5in">At December 31, 2011,
we had total assets of $378, comprised solely of cash and total liabilities of $48,765 compared to total assets of $3,310 and
total liabilities of $48,675 at October 31, 2011. We had a net working capital deficit of $48,387 at December 31, 2011 compared
to a net working capital deficit of $45,365 at October 31, 2011. We incurred an aggregate deficit of $89,400 since inception.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Net cash used in operating
activities was $2,932 for the two months ended December 31, 2011. Cash used in operating activities was primarily due to payment
of legal and filing fees incurred during the period.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">During the two months
ended December 31, 2011, the Company did not generate cash from financing activities.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">At December 31, 2011,
$42,000 was due to our former President for funds advanced towards working capital. There can be no assurance that funds will
be advanced as required or that other methods of financing will be available or accessible on reasonable terms.</P>

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


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<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; text-align: center"><B>OUR BUSINESS</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>Overview of Our Business</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; text-align: left; text-indent: 0.5in">We were incorporated
in the State of Nevada on June 11, 2008 under the name &ldquo;Bearing Mineral Exploration, Inc.&rdquo;, with authorized capital
stock of 75,000,000 shares at $0.001 par value. We were organized for the purpose of&nbsp;conducting gold exploration activities
on a mineral claim located in the Province of Newfoundland, Canada.&nbsp;We were not able to establish the existence of a commercially
minable gold deposit and sought other viable business opportunities for the Company.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">On April 17, 2012,
we issued 20,000,003 shares of our common stock to Art Agolli, our Chief Executive Officer, President and sole director, in
exchange for all of his right, title and interest in a letter of intent with Sonoro Energy Ltd. (&ldquo;Sonoro&rdquo;), a
Canadian publicly traded company (TSX-V: SNV) based in Calgary, Alberta, Canada,   the holder of all of the legal and
equitable rights and entitlements to a sonic reactor and technology that Sonoro has developed to utilize the sonic reactor
for the treatment and upgrading of heavy oil by sonicated solvent de-asphalting.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">On May 16, 2012, we effected
an 11.25-for-1 forward stock split of our Common Stock and an increase in our authorized number of common shares to 843,750,000.
Additionally, on May 16, 2012, we changed our name to &ldquo;Petrosonic Energy, Inc.&rdquo; to better reflect the Company&rsquo;s
new business direction in anticipation of the purchase of certain rights in technology, assets and common shares owned by Sonoro
Energy Ltd.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">On July 27, 2012, we
acquired certain assets (the &ldquo;Assets&rdquo;) from Sonoro, including (i) certain technology relating to the treatment and
upgrading of heavy oil by sonicated solvent de-asphalting, (ii) 60,000 shares of Petrosonic Albania Sha. pursuant to a share purchase
agreement (the &ldquo;Share Purchase Agreement&rdquo;), and (iii) sonic reactors located in Albania and Richmond, British Columbia
and a solvent recovery system located in or around Turin, Italy (the &ldquo;Transaction&rdquo;), pursuant to the terms of the
Asset Purchase and Sale Agreement, dated July 27, 2012 (the &ldquo;Purchase Agreement&rdquo;).</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Pursuant to the terms
of the Purchase Agreement, in exchange for the Assets, we agreed to pay to Sonoro the following consideration: (i) $250,000, (ii)
a convertible debenture in the principal amount of CDN$250,000 (the &ldquo;Debenture&rdquo;) and (iii) a 10% royalty interest
in our realized net revenues for a period of 10 years from the time we commence commercial operations, which is defined as the
date upon which we process an average of 50 barrels of feed stock per day over a period of 30 consecutive days utilizing the technology
acquired.&nbsp;For a complete description of the Transaction, and the Purchase Agreement please refer to the Form 8-K filed by
the Company with the SEC on July 31, 2012.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Following the consummation
of the Transaction, we believe that we are not a shell corporation as that term is defined in Rule 405 of the Securities Act and
Rule 12b-2 of the Exchange Act. From and after the consummation of the Transaction, our primary operations consist of utilizing
the Assets to develop a business relating to the treatment and upgrading of heavy oil by sonicated solvent de-asphalting and operating
the business of Petrosonic Albania Sha. (the &ldquo;Business&rdquo;). </P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">We have no revenue and
have accumulated losses since inception. We expect to generate operating losses during some or all of our planned development
stages, which raises substantial doubt about our ability to continue as a going concern. In view of these matters, our ability
to continue as a going concern is dependent upon our ability to meet our financial requirements, raise additional capital; which
may likely involve the further issuance of capital stock, and the success of our future operations.</P>

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


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>Operation Plans and Business Focus</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; text-align: left; text-indent: 0.5in">Petrosonic has developed
a commercial process which improves heavy oil densities by 6 to 15 API<SUP> </SUP>from as low as 8 API, reduces viscosities of
oil by 99% to pipeline specifications and reduces sulphur and heavy metals by over 50%. The American Petroleum Institute gravity,
or API gravity, is a measure of how heavy or light a petroleum liquid is compared to water; one of the qualitative measures for
crude oil.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This process is especially
beneficial to producers with the following intrinsic challenges:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 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; color: black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Stranded
                                                                                                                             heavy
                                                                                                                             oil
                                                                                                                             due
                                                                                                                             to
                                                                                                                             transportation
                                                                                                                             issues</FONT></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; color: black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Diluent
                                                                                                                             supply
                                                                                                                             issues</FONT></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; color: black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Limited
                                                                                                                             refining
                                                                                                                             markets
                                                                                                                             (light
                                                                                                                             oil
                                                                                                                             refiners
                                                                                                                             struggle
                                                                                                                             with
                                                                                                                             heavy
                                                                                                                             oil)</FONT></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; color: black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Heavy
                                                                                                                             discounts
                                                                                                                             due
                                                                                                                             to:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 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: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Density
                                                                                                                             adjustments</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 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: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">High
                                                                                                                             sulphur
                                                                                                                             content</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 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: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">High
                                                                                                                             metals
                                                                                                                             content</FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Depending on regional
markets, traditional heavy oil discounts (10 API oil with &gt;2% sulfur) are 35-40% and we believe such discounts could be reduced
to only 10-20% through our process. On 5,000 barrels of oil per day (&ldquo;bopd&rdquo;) this would equate to increased revenues
of approximately $6/barrel (bbl) or around $11 million per year (based on $100/bbl brent oil). Capital costs are expected to be
between $0.5-1 million per 1,000 bbls capacity. Operating costs will be between $2-3 per bbl on a stand- alone facility basis.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Petrosonic plans to
have its first 1,000 bopd stand-alone facility operational within the second quarter of 2013 in Albania. Expected annual
cashflows from the initial 1,000 bopd facility are expected to reduce heavy oil price discounts historically received in
Albania from 40% to 20% as a result of achieving a 18-23 API oil. With significant heavy oil production growth anticipated
from the approximately 8 billion barrels of oil reserves believed to be present in Albania, if we are able to successfully
capture a portion of this processing business, Petrosonic  may be able to expand its facilities over the next 3-5 years to
15,000 bopd as Albanian oil production increases.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">If we are able to successfully
establish our first commercial facility, we believe heavy oil producers will want to integrate the Petrosonic system at their
cost into their treatment facilities. Petrosonic would sell the process solution and retain a royalty fee under this type of development.
While revenue per facility will be less (estimated at 50%), no capital and minimal support will be required. This strategy would
allow for faster growth. Petrosonic may also choose to develop its own stand-alone facilities to capture further upside and long
term value creation.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Further upside opportunities
exist in several other applications which the Company is developing, including, heavy oil emulsification,
waste oil separation, and oil separations from drill cuttings.</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; text-align: left"><I>Vision and Strategy</I></P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 18.7pt; text-align: left; text-indent: 2.6pt">&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"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Petrosonic
                                                                                                                      hopes to
                                                                                                                      provide
                                                                                                                      its stockholders
                                                                                                                      with returns
                                                                                                                      and cash
                                                                                                                      flow growth
                                                                                                                      by leveraging
                                                                                                                      its experience
                                                                                                                      and intellectual
                                                                                                                      property
                                                                                                                      within the
                                                                                                                      heavy oil
                                                                                                                      business.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: left; 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"><FONT STYLE="font-family: Symbol"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Petrosonic
                                                                                                                      plans to
                                                                                                                      use an initial
                                                                                                                      model of
                                                                                                                      building
                                                                                                                      its own
                                                                                                                      stand-alone
                                                                                                                      facilities
                                                                                                                      to prove,
                                                                                                                      optimize
                                                                                                                      and develop
                                                                                                                      business
                                                                                                                      growth opportunities
                                                                                                                      with small
                                                                                                                      to medium
                                                                                                                      sized producers.
                                                                                                                      To achieve
                                                                                                                      higher returns
                                                                                                                      and growth,
                                                                                                                      the Company
                                                                                                                      will license
                                                                                                                      out on a
                                                                                                                      fee for
                                                                                                                      service
                                                                                                                      basis or
                                                                                                                      royalty
                                                                                                                      basis its
                                                                                                                      processes
                                                                                                                      to be integrated
                                                                                                                      into producer&rsquo;s
                                                                                                                      treatment
                                                                                                                      facilities.</FONT></TD></TR></TABLE>

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


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<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: left; 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"><FONT STYLE="font-family: Symbol"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Where
                                                                                                                      there is
                                                                                                                      a distinct
                                                                                                                      advantage
                                                                                                                      Petrosonic
                                                                                                                      may capture
                                                                                                                      heavy oil
                                                                                                                      resources
                                                                                                                      prospects
                                                                                                                      or participate
                                                                                                                      jointly
                                                                                                                      in them.
                                                                                                                      Any resource
                                                                                                                      level participation
                                                                                                                      would require
                                                                                                                      higher returns
                                                                                                                      on investment
                                                                                                                      and be required
                                                                                                                      to stand
                                                                                                                      on its own
                                                                                                                      prior to
                                                                                                                      the benefits
                                                                                                                      of applying
                                                                                                                      Petrosonic&rsquo;s
                                                                                                                      technology.</FONT></TD></TR></TABLE>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><I>Key Success Factors</I></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; text-align: left">The Company&rsquo;s success will be dependent
upon:</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"><FONT STYLE="font-family: Symbol"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Our
                                                                                                                      ability
                                                                                                                      to attract
                                                                                                                      and develop
                                                                                                                      numerous
                                                                                                                      projects
                                                                                                                      once the
                                                                                                                      first project
                                                                                                                      is complete;</FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: -0.25in"></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"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Access
                                                                                                                      to an ample
                                                                                                                      producer
                                                                                                                      oil supply
                                                                                                                      and our
                                                                                                                      ability
                                                                                                                      to find
                                                                                                                      equitable
                                                                                                                      profit distribution;</FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: -0.25in"></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"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Our
                                                                                                                      development
                                                                                                                      and distribution
                                                                                                                      of asphalt
                                                                                                                      within the
                                                                                                                      market;</FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: -0.25in"></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"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Our
                                                                                                                      ability
                                                                                                                      to minimize
                                                                                                                      the technical
                                                                                                                      risk through
                                                                                                                      avoidance
                                                                                                                      of scale
                                                                                                                      up issues;</FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: -0.25in"></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"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Alleviation
                                                                                                                      of market
                                                                                                                      risk through
                                                                                                                      the use
                                                                                                                      of strategic
                                                                                                                      partners
                                                                                                                      which can
                                                                                                                      gain quick
                                                                                                                      access to
                                                                                                                      markets;
                                                                                                                      and</FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: -0.25in"></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"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Alleviation
                                                                                                                      of financial
                                                                                                                      risk through
                                                                                                                      partnering.</FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><I>Priorities</I></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; text-align: left">Immediate priorities of the Company are:</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"><FONT STYLE="font-family: Symbol"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Strengthening
                                                                                                                      the operations
                                                                                                                      and management
                                                                                                                      of the Company
                                                                                                                      as it moves
                                                                                                                      forward
                                                                                                                      in the oil
                                                                                                                      sector;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; 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"><FONT STYLE="font-family: Symbol"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Moving
                                                                                                                      ahead with
                                                                                                                      the processing
                                                                                                                      facility
                                                                                                                      in Albania;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; 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"><FONT STYLE="font-family: Symbol"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Establishing
                                                                                                                      a second
                                                                                                                      country
                                                                                                                      oil processing
                                                                                                                      project;
                                                                                                                      and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; 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"><FONT STYLE="font-family: Symbol"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Building
                                                                                                                      a firm backlog
                                                                                                                      of projects
                                                                                                                      with financing
                                                                                                                      commitments.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left; text-indent: 3.3pt">&nbsp;</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><I>Traditional Heavy Oil Opportunities</I></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; text-align: left; text-indent: 0.5in"><FONT STYLE="color: black">Crude
oil is the world&rsquo;s most actively traded commodity. Heavy crude oil is a type of highly viscous crude oil that does not flow
easily (sometimes referred to as non-conventional oil). Typically, it is defined as crude oil with an API gravity of less than
22 API. For example, Canadian extra-heavy crude (Athabasca bitumen) has a viscosity of 10,000+ cP (the&nbsp;</FONT>cgs<FONT STYLE="color: black">&nbsp;</FONT>physical
unit<FONT STYLE="color: black">&nbsp;for dynamic viscosity is the&nbsp;</FONT><I>poise</I><FONT STYLE="color: black">&nbsp;(P)).
It is more commonly expressed, particularly in&nbsp;</FONT>ASTM<FONT STYLE="color: black">&nbsp;standards, as&nbsp;<I>centipoise</I>&nbsp;(cP).
Water at 20 &deg;C has a viscosity of 1.0020 cP), about the same as cold molasses, and API gravity between 8-14 API. In comparison,
WTI, a type of light crude oil used as a benchmark in oil pricing of New York Mercantile Exchange&rsquo;s oil futures, has an
API of approximately 39.6. Naturally, heavy oils can be upgraded to high quality light synthetic oils using specialized refining
processing.</FONT></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Heavy oil is a relative
term, compared to light crude oil, but relates to specific technical issues of its own on production, transportation, and refining.
Usually a diluent is added to carry heavy crude to facilitate its flow in pipelines.</P>

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


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><I>Global Need, Supply and Production</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 21.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">The exact number of reserves
of heavy oil varies according to different sources, but it is generally accepted that the amount of recoverable heavy oil is greater
than remaining reserves of conventional oil. According to Schlumberger, the current world oil reserves consist of 9-13 trillion
barrels of oil, 30% of which are conventional sources, 40% heavy and extra-heavy sources and 30% oil sands bitumen sources. (See
http://www.slb.com/content/services/solutions/reservoir/heavy_oil.asp)</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Estimated heavy oil production is around
5 million barrels per day and growing. The projected reduction in conventional oil in the next few years is focusing the industry
towards the more effective exploitation of non- conventional reserves, heavy oil resources in particular.<SUP> </SUP>Source: http://www.slb.com/content/services/solutions/reservoir/heavy_oil.asp</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><IMG SRC="tpg31.jpg" ALT=""></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Production and transportation
of heavy oil has unique challenges that must be overcome in order for it to become a significant contributor to the production
gap left by conventional oil and global growing demand.</P>

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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: right">Heavy&nbsp;Oil</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: right">Bitumen</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 70%; text-align: left">North America</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">35.3</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">530.9</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">South America</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">265.7</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.1</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">Africa</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7.2</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">43</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Middle East</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">78.2</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.0</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">Asia</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">29.6</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">42.8</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">Russia</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">13.4</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">33.7</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">Western Hemisphere</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">301</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">531</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">Eastern Hemisphere</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">128.4</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">119.5</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="font-weight: bold; text-align: left">Worldwide*</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">429.4</TD><TD STYLE="font-weight: bold; text-align: left">&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">650.5</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<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: left">*Does not include extra-heavy and
oil sand sources of bitumen (i.e. Canada, Venezuela)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><B>Source: US Geological Survey</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; text-align: left; text-indent: 0.5in">According to a US Geological
Survey, heavy oils are found around the world, with an estimated 69% of the world&rsquo;s technically recoverable heavy oil and
82% percent of the technically recoverable natural bitumen located in the Western Hemisphere. The Eastern Hemisphere, however,
contains an estimated 85% of the world&rsquo;s light oil reserves.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Among the more notable
heavy oil reserves are: Venezuela&rsquo;s Orinoco Heavy Oil Belt; Canada&rsquo;s Athabasca Oil Sands; Russia&rsquo;s Volga-Ural
Basin; Brazil&rsquo;s offshore Campos Basin; Alaska&rsquo;s Prudhoe Bay; and China&rsquo;s Luda field in Bohai Bay.<SUP> </SUP>(Source:
http://www.slb.com/content/services/solutions/reservoir/heavy_oil.asp)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 21.3pt">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><I>Significance of Traditional Heavy Oil
for Petrosonic</I></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Around the globe, some of the most prolific
oilfields are reaching maturity and have begun to experience reduced production rates.<SUP> </SUP>(Source: http://www.slb.com/content/services/solutions/reservoir/heavy_oil.asp)
What large conventional oilfields remain lie mostly in the lands of Middle Eastern, OPEC nations. At the same time, the world&rsquo;s
demand for oil continues to grow every year, fueled in part by the rapidly growing economies of China and India. This declining
availability of conventional oil combined with rising demand has driven up oil prices and put more pressure on the search for
alternate energy sources.</P>

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


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<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; text-align: left; text-indent: 0.5in">Into the picture come
the tremendous deposits of heavy oil and bitumen that are found in the Western hemisphere. These non-conventional resources are
more difficult to extract, so they have barely been touched in the past. With the price of oil reaching new highs in 2005 and
2006, investments in these more challenging oil deposits are rapidly accelerating.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 21.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">In fact, the U.S. oil
industry alone has invested $86 billion in &ldquo;frontier hydrocarbons&rdquo; since 2000 (Heavy Oil Magazine, Aug 2006), developing
technologies to recover and convert inferior grades of oil, such as heavy oil and bitumen, into a more usable form for refineries,
and to turn waste and residue hydrocarbons into high-value products.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">The worldwide importance
of heavy oils will continue to emerge as the price of oil remains high and the demand for it remains strong. For example, the
tight worldwide oil supply is expected to continue to force crude prices higher and turn Canada&rsquo;s oil sands into the single
largest contributor to net new global supply by the end of the decade, according to CIBC World Markets:&nbsp;<I>&ldquo;All of
the net increase in oil production is expected to come from non-conventional sources,&rdquo;&nbsp;</I>says Jeff Rubin, chief economist
at CIBC World Markets, &ldquo;<I>While deepwater oil is the primary source today, we forecast that the Canadian oil sands will
become the single largest contributor to incremental global supply by 2010.&rdquo;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 21.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><I>Industry Trends in Production and Transport
of Heavy Oil</I></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">The market factors behind
Petrosonic upgrading derive from the oil industry&rsquo;s needs relative to the production and refining infrastructure. As production
shifts more to heavier oil it becomes necessary for refining capacity to adapt to it, either by pre-upgrading the oil or by major
refining changes. Until then heavy oil producers face a penalty due to refining and pipeline infrastructure limitations driven
by:</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"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">the
                                                                                                                             need
                                                                                                                             to
                                                                                                                             maintain
                                                                                                                             low
                                                                                                                             capital
                                                                                                                             costs
                                                                                                                             and
                                                                                                                             operating
                                                                                                                             costs;</FONT></TD></TR></TABLE>

<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"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">the
                                                                                                                             ability
                                                                                                                             to
                                                                                                                             produce
                                                                                                                             and
                                                                                                                             transport
                                                                                                                             heavy
                                                                                                                             oil
                                                                                                                             within
                                                                                                                             the
                                                                                                                             same
                                                                                                                             systems
                                                                                                                             as
                                                                                                                             that
                                                                                                                             established
                                                                                                                             for
                                                                                                                             conventional
                                                                                                                             oil,
                                                                                                                             i.e.
                                                                                                                             using
                                                                                                                             existing
                                                                                                                             transport
                                                                                                                             pipelines;</FONT></TD></TR></TABLE>

<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"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">delivery
                                                                                                               of heavy oil to
                                                                                                               the point of sale
                                                                                                               with reduced expenditures
                                                                                                               on diluents;</FONT></TD></TR></TABLE>

<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"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">production
                                                                                                                             and
                                                                                                                             transportable
                                                                                                                             technology
                                                                                                                             that
                                                                                                                             allows
                                                                                                                             the
                                                                                                                             exploitation
                                                                                                                             of
                                                                                                                             heavy
                                                                                                                             oil
                                                                                                                             reserves
                                                                                                                             at
                                                                                                                             lower
                                                                                                                             total cost,
                                                                                                                             particularly
                                                                                                                             for
                                                                                                                             smaller
                                                                                                                             fields
                                                                                                                             &ndash;
                                                                                                                             without
                                                                                                                             massive
                                                                                                                             infrastructure
                                                                                                                             expenditures.</FONT></TD></TR></TABLE>

<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; text-align: left"><I>Issues for Heavy Oil Producers</I></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; text-align: left; text-indent: 0.5in">Pursuant to the aforementioned
industry pressures, heavy oil producers, especially small to medium size ones, face price penalties:</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; 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"><FONT STYLE="font-family: Symbol"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Traditional
                                                                                                                      heavy oil
                                                                                                                      is both
                                                                                                                      more viscous
                                                                                                                      and dense
                                                                                                                      than conventional
                                                                                                                      oil;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; 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"><FONT STYLE="font-family: Symbol"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">API
                                                                                                                      similar
                                                                                                                      to bitumen
                                                                                                                      from oil
                                                                                                                      sands (Canadian
                                                                                                                      Athabasca
                                                                                                                      bitumen
                                                                                                                      API between
                                                                                                                      8-14 API);</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; 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"><FONT STYLE="font-family: Symbol"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Peaking
                                                                                                                      global supply
                                                                                                                      increases
                                                                                                                      the production
                                                                                                                      of less
                                                                                                                      attractive
                                                                                                                      and higher
                                                                                                                      cost oil
                                                                                                                      resources;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; 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"><FONT STYLE="font-family: Symbol"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Smaller
                                                                                                                      producers
                                                                                                                      face high
                                                                                                                      costs due
                                                                                                                      to the need to
                                                                                                                      blend heavy
                                                                                                                      oil with
                                                                                                                      diluents
                                                                                                                      for pipeline
                                                                                                                      transportation
                                                                                                                      or face
                                                                                                                      penalties
                                                                                                                      for failure
                                                                                                                      to meet
                                                                                                                      pipeline
                                                                                                                      specifications
                                                                                                                      for viscosity
                                                                                                                      and API
                                                                                                                      (approximately
                                                                                                                      22 API);</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; 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"><FONT STYLE="font-family: Symbol"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Fixed
                                                                                                                      producer
                                                                                                                      &ldquo;upgrading&rdquo;
                                                                                                                      facilities
                                                                                                                      to increase
                                                                                                                      the API
                                                                                                                      have been
                                                                                                                      limited
                                                                                                                      by the poor
                                                                                                                      economics
                                                                                                                      of small
                                                                                                                      scale and
                                                                                                                      short production
                                                                                                                      life;</FONT></TD></TR></TABLE>

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


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<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; 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"><FONT STYLE="font-family: Symbol"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Upgrading
                                                                                                                      is generally
                                                                                                                      limited
                                                                                                                      to de-asphalting
                                                                                                                      (removal
                                                                                                                      of heavy
                                                                                                                      asphaltene
                                                                                                                      components
                                                                                                                      &ndash;
                                                                                                                      up to 16%
                                                                                                                      by mass)
                                                                                                                      and vis-breaking
                                                                                                                      (low temperature
                                                                                                                      cracking).</FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><I>Oil Sands</I></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; text-align: left; text-indent: 0.5in">The world&rsquo;s two
largest sources of bitumen (and related extraction and recovery operations) are in Canada and in Venezuela. There is also known
oil shale or bituminous reserves in USA, Mexico, South America, Africa, Kazakhstan and other locations.</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; text-align: left; text-indent: 0.5in">In Canada, oil sands
are found in three locations in the province of Alberta: The Athabasca, Peace River and Cold Lake regions. They cover 141,000
square kilometers (Camp, 1976, 1977; Cameron Engineers, 1978; Alberta Energy, 2002). The Athabasca is the largest deposit area,
located in the northeast part of Alberta. The total bitumen in place in Alberta is estimated at 1.7 to 2.5 trillion barrels (Morgan,
2001; Alberta Energy, 2002).</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">In 2005 about 1 million
barrels of oil per day were being produced from oil sands primarily from three projects: Suncor, Syncrude joint venture and Albion
Sands (Athabasca Oil Sands Project) joint venture. It is estimated that production will triple to 2.8-3 million barrels per day
by 2015. About 300 billion barrels are estimated to be recoverable using current open pit mining and in-situ technologies (Mathieson
and Stenason, 2001). The amount of this reserve is equivalent to over $30 trillion at current prices of oil.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><IMG SRC="tpg33.jpg" ALT=""></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; text-align: left"><I>Oil Sands Production in Canada</I></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; text-align: left; text-indent: 0.5in">The Canadian oil sands
industry is dominated by large integrated multi-national companies, including Albion Sands Energy Inc., Canadian Natural Resources
Limited, Chevron, EnCana Corporation, Husky Energy Inc., Imperial Oil Resources Limited, Petro-Canada (Fort Hills), Shell Canada
Limited, Suncor Energy Inc. and Syncrude Canada Ltd.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Upcoming players include
(with projects under development or already underway) TOTAL (Joslyn), Exxon Mobil, Synenco, Fort Hills (UTS), Kearl Lake Project
with Imperial Oil Resources Limited, and BP (British Petroleum).</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Alberta&rsquo;s oil sands
(1.74 trillion barrels) (Alberta Energy:http://www.energy.gov.ab.ca/1876.asp.)<SUP> </SUP>are not only the world&rsquo;s largest
capital project but now represent 60 per cent of the world&rsquo;s investable oil reserves. (CIBC World Markets, December 8, 2000,
p 1.) But to produce one million barrels of oil a day, industry requires withdrawals of enough water from the Athabasca River
to sustain a city of two million people every year. (Down to the Last Drop: The Athabasca River and the Oil Sands, Pembina Institute,
March 2006, p.ii.)<SUP> </SUP>Despite some recycling, the majority of this water never returns to the river and is pumped into
some of the world&rsquo;s largest man-made dykes containing toxic waste.<SUP> </SUP>(Canada&rsquo;s Oil Sands: Opportunities and
Challenges to 2015: An Update, NEB, June 2006, p.38.) By 2015, the Canadian Association of Petroleum Producers predicts that oil
sands production may total as much as three million barrels a day.<SUP> </SUP>(Canadian Oil Sands Outlook, EIA 2007 Annual Energy
Outlook, March 2007.)</P>

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


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<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; text-align: left; text-indent: 0.5in">Oil sands extraction
usually takes at least two tons of oil sand to fill one barrel of upgraded synthetic crude oil. Furthermore, for every barrel
of synthetic oil produced in Alberta, more than 80 kg of greenhouse gases are released into the atmosphere, and 3 to 5 barrels
of waste water are dumped into tailing ponds.<SUP> </SUP>(Environmental Research and Studies Centre, University of Alberta, 2007.)
Production waste streams released into ponds have still relatively large amounts of unrecovered bitumen and expensive diluents
(as much as 4%). In large volumes typical for the oil extraction, these waste streams pose major environmental burdens as well
as lost economic potential, creating a multibillion dollar opportunity.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Bitumen and naphtha recovery
processes involve separation of the complex mixtures of mineral matter (sand, clay), water and small amounts of soluble organic
from the bitumen. Current operators use a combination of energy (hydro-transport, heat, conventional mixing) chemical (caustic)
addition, flotation and light solvent dilation to achieve the necessary separations.</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; text-align: left"><I>Petrosonic Opportunity</I></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; text-align: left; text-indent: 0.5in">We believe Petrosonic
will be able to take advantage of an opportunity that traditional upgrading technology cannot address &ndash; upstream upgrading
on smaller scales. The viability of upgrading is constantly changing due to production mix, refining infrastructure costs, and
oil pricing. However, there are three markets for small upgraders that make sense:</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; 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"><FONT STYLE="font-family: Symbol"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Pipeline
                                                                                                                      systems
                                                                                                                      where access
                                                                                                                      to the pipeline
                                                                                                                      requires
                                                                                                                      blending
                                                                                                                      of heavy
                                                                                                                      oil. Condensate
                                                                                                                      prices and
                                                                                                                      heavy oil
                                                                                                                      differentials
                                                                                                                      have been
                                                                                                                      stable for
                                                                                                                      some time
                                                                                                                      and long
                                                                                                                      term projections
                                                                                                                      indicate
                                                                                                                      that low
                                                                                                                      condensate
                                                                                                                      prices following
                                                                                                                      the global
                                                                                                                      economic
                                                                                                                      slow-down
                                                                                                                      will be
                                                                                                                      short-lived;</FONT></TD></TR></TABLE>

<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"><FONT STYLE="font-family: Symbol"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Heavy
                                                                                                                      oil producers
                                                                                                                      in markets
                                                                                                                      where light
                                                                                                                      oil dominates
                                                                                                                      refinery
                                                                                                                      infrastructure.
                                                                                                                      Internationally
                                                                                                                      there are
                                                                                                                      several
                                                                                                                      markets
                                                                                                                      like this;
                                                                                                                      and</FONT></TD></TR></TABLE>

<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"><FONT STYLE="font-family: Symbol"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Markets
                                                                                                                      where upgrading
                                                                                                                      asphalt
                                                                                                                      by-products
                                                                                                                      can command
                                                                                                                      premium
                                                                                                                      prices.
                                                                                                                      This is
                                                                                                                      especially
                                                                                                                      attractive
                                                                                                                      in North
                                                                                                                      America
                                                                                                                      given the
                                                                                                                      economic
                                                                                                                      infrastructure
                                                                                                                      stimulus
                                                                                                                      measures
                                                                                                                      being implemented.</FONT></TD></TR></TABLE>

<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; text-align: left; text-indent: 0.5in">To take advantage of
these opportunities Petrosonic must be able to:</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"><FONT STYLE="font-family: Symbol"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Economically
                                                                                                                      upgrade
                                                                                                                      heavy oil
                                                                                                                      from small
                                                                                                                      and medium
                                                                                                                      sized producers
                                                                                                                      right in
                                                                                                                      the field;</FONT></TD></TR></TABLE>

<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"><FONT STYLE="font-family: Symbol"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Add
                                                                                                                      value and
                                                                                                                      allow producers
                                                                                                                      to capture
                                                                                                                      a larger
                                                                                                                      share of
                                                                                                                      the market
                                                                                                                      price for
                                                                                                                      refinery
                                                                                                                      products;
                                                                                                                      and</FONT></TD></TR></TABLE>

<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"><FONT STYLE="font-family: Symbol"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Provide
                                                                                                                      operating
                                                                                                                      plants to
                                                                                                                      heavy oil
                                                                                                                      producers
                                                                                                                      in return
                                                                                                                      for tolling
                                                                                                                      process
                                                                                                                      fees or
                                                                                                                      purchase
                                                                                                                      heavy oil
                                                                                                                      at a premium
                                                                                                                      to blenders.</FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Upgraded oil provides
uplift in crude&rsquo;s value and eliminates issues related to transport of crude oil to pipeline and refinery companies.</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; text-align: left"><B>The Petrosonic Process</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; text-align: left; text-indent: 0.5in">The Petrosonic heavy
oil process will enable heavy sour oil (HSO) and bitumen (from most heavy oil and oil sands fields in the world) to be converted
from nominally an API gravity of 8-14 degrees to a value-added synthetic crude oil of between 18 and 23 API. This is achieved
through the reduction of undesirable constituents of the raw heavy oil and/or bitumen. The process incorporates two stages: solvent
de-asphalting and distillation.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">While solvent de-asphalting
and distillation are both proven and well known technologies, the innovation associated with the Petrosonic upgrading process
lies in the rapid de-asphalting achieved by sonication of the de-asphalting phase with the Petrosonic reactor stage.</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; text-align: left">&nbsp;</P>


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>Petrosonic Test Data</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; text-align: left; text-indent: 0.5in">The Company has completed
an extensive test program of heavy oils both in house and independently with the complete Petrosonic upgrading process which has
shown to consistently achieve the target improvements in API.&nbsp;The tests were carried out in our R&amp;D site in Richmond,
British Columbia (in house) and the lab work for the specifics of the de-asphalted oil and asphaltenes generated was carried out
by Alberta Research Council in their laboratory (independent) in Edmonton, Alberta. The tests were carried out during 2010 and
2011.&nbsp;For Canadian bitumen samples this represents an upgrade from nominally 10&deg; API to 25&deg; API. The test program
included heavy oils and bitumen from the Canadian Athabasca and Lloydminster fields, heavy oil from USA refineries, and crude
oil from two international oil producers. The testing was conducted at Petrosonic&rsquo;s Sonoprocess&trade; Facility in Richmond,
British Columbia and at the Petrosonic Facility located in Albania. The Petrosonic upgraded oil quality is typically:</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"><FONT STYLE="font-family: Symbol"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Density
                                                                                                                      -</B>&nbsp;from
                                                                                                                      23&deg;
                                                                                                                      to 28&deg;
                                                                                                                      API gravity,
                                                                                                                      meeting
                                                                                                                      pipeline
                                                                                                                      specifications.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></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"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Viscosity
                                                                                                                      -&nbsp;</B>less
                                                                                                                      than 100
                                                                                                                      cSt at 25&deg;C
                                                                                                                      (greater
                                                                                                                      than 99%
                                                                                                                      reduction),
                                                                                                                      meeting
                                                                                                                      pipeline
                                                                                                                      specifications.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></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"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Liquid
                                                                                                                      yields -</B>&nbsp;From
                                                                                                                      85% to 92%
                                                                                                                      by volume
                                                                                                                      depending
                                                                                                                      on the quantity
                                                                                                                      and quality
                                                                                                                      of asphaltene
                                                                                                                      by- product
                                                                                                                      required.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></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"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Sulphur
                                                                                                                      -</B>&nbsp;reduction
                                                                                                                      by up to
                                                                                                                      40% by mass.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></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"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Heavy
                                                                                                                      Metals -</B>&nbsp;typical
                                                                                                                      reduction
                                                                                                                      of Vanadium
                                                                                                                      up to 80%
                                                                                                                      and Nickel
                                                                                                                      by up to
                                                                                                                      88% by mass.</FONT></TD></TR></TABLE>

<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; text-align: left; text-indent: 0.5in">The following table illustrates
some of the data from the extensive test program that we have conducted. This is critical in establishing the application of the
Petrosonic process on a broad basis.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">The table below (Table
1) shows key performance parameters for Alberta/Cold Lake Oil:</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; text-align: left"><B>Table 1</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">Analysis</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">Raw&nbsp;Bitumen</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: left; border-bottom: Black 1pt solid">Upgraded&nbsp;Oil&nbsp;<BR>
    [Petrosonic&nbsp;ID:&nbsp;090309E-2]</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 64%; text-align: left">Total Acid Number (TAN)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 15%; text-align: right">1.24</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 15%; text-align: right">1.18</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">API Gravity</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14.4</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">26.0</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"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Density @15<SUP>o</SUP>C</FONT></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.9690</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.8982</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Nickel</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">46</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17</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">Vanadium</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">95</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">38</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Sulphur</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3.62</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.46</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<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; text-align: left; text-indent: 0.5in">Table 2 shows a PONA
(fundamental heavy oil testing of paraffins, olefins, napthenes and aromatics) summary by hydrocarbon group for Alberta/Cold Lake
oil using commercially available light naphtha:</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; text-align: left"><B>Table 2</B></P>

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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">Raw&nbsp;Bitumen</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">Upgraded&nbsp;Oil&nbsp;<BR> [Petrosonic&nbsp;ID:&nbsp;090309E-2]</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">Group</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">%&nbsp;Wt</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">%&nbsp;Mol</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">%&nbsp;Wt</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">%&nbsp;Mol</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 40%; text-align: left; padding-left: 1.7pt">Aromatics</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">14.175</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">14.871</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">17.318</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">18.545</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: 1.7pt">i-Paraffins</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25.572</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">23.856</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24.912</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24.031</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: 1.7pt">Naphthenes</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30.728</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">33.450</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19.017</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20.217</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 1.7pt">Olefins</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11.431</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11.147</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.064</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.837</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: 1.7pt">Paraffins</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.715</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.695</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30.547</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">29.677</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 1.7pt">Oxygenates</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.000</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: 1.7pt">Unidentified</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13.380</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11.981</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3.142</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.694</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: 1.7pt">Plus</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">0.000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">0.000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">0.000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">0.000</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="font-weight: bold; text-align: left; padding-bottom: 1pt; padding-left: 1.7pt">TOTAL</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">100.00</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">100.00</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">100.00</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">100.00</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>



<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; text-align: left"></P>

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<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; text-align: left; text-indent: 0.5in">Table 3 shows a PONA
summary by carbon number for Alberta/Cold Lake oil. Table 3 reflects the effectiveness of the Petrosonic upgrading process through
the clear reduction in the oil&rsquo;s carbon number from C9/C10 to C7/C8, which indicates clearly the generation of new lighter
end fractions, each having a lower density and thus serving to increase the API. Given the high sensitivity of the API calculation
to density, even small changes in density create significant gains in API quality.</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; text-align: left"><B>Table 3</B></P>

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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">Raw&nbsp;Bitumen</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="6" NOWRAP STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">Upgraded&nbsp;Oil&nbsp;<BR>
    [Petrosonic&nbsp;Code&nbsp;090309E-2]</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">Carbon&nbsp;#</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">%&nbsp;Wt</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: left; border-bottom: Black 1pt solid">%&nbsp;Mol</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: left; border-bottom: Black 1pt solid">%&nbsp;Wt</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: left; border-bottom: Black 1pt solid">%&nbsp;Mol</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 40%; text-align: left">C4</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">0.001</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">0.002</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">C5</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.060</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.100</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.079</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.125</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">C6</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3.063</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.296</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.979</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.053</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">C7</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17.245</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21.005</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21.711</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25.435</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">C8</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17.245</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18.619</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">33.183</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">33.915</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">C9</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">29.209</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">27.721</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25.799</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">23.367</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">C10</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17.940</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15.127</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10.057</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8.179</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">C11</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.511</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.149</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.512</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.868</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">C12</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">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.478</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.328</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">C13</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">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.049</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.030</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">C14</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">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.010</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.006</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">&gt;C15</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">13.726</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">11.981</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">3.143</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">2.694</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="font-weight: bold; text-align: left; padding-bottom: 1pt">TOTAL</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">100.00</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">100.00</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">100.00</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">100.00</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>



<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; text-align: left; text-indent: 0.5in">The following table (Table
4) illustrates some of the data from the extensive test program that Petrosonic has conducted. This is critical in establishing
the application of the Petrosonic process on a broad basis.</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; text-align: left"><B>Table 4</B></P>

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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="18" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 6pt">Raw</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="18" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 6pt">Upgraded</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 6pt">Total&nbsp;Acid</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 6pt">Total&nbsp;Acid</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 6pt">Specific</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 6pt">Vanadium</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 6pt">Nickel</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 6pt">Sulphur</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 6pt">Number</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 6pt">Vanadium</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 6pt">Sulphur</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 6pt">Number</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 6pt">Country</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 6pt">Source</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 6pt"></FONT><FONT STYLE="font-size: 6pt">API</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 6pt">(g)</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 6pt">(g)</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 6pt">(%)</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 6pt">(TAN)</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 6pt"><FONT STYLE="font-size: 6pt">API</FONT></FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 6pt">(g)</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 6pt"></FONT><FONT STYLE="font-size: 6pt">Nickel&nbsp;(g)</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 6pt">(%)</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 6pt">(TAN)</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; width: 24%"><FONT STYLE="font-size: 6pt">Canada</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 5%; text-align: left"><FONT STYLE="font-size: 6pt">CP</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 4%; text-align: right"><FONT STYLE="font-size: 6pt">10.6</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 4%; text-align: right"><FONT STYLE="font-size: 6pt">169.0</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 4%; text-align: right"><FONT STYLE="font-size: 6pt">80.0</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 4%; text-align: right"><FONT STYLE="font-size: 6pt">4.5</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 4%; text-align: right"><FONT STYLE="font-size: 6pt">0.98</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 4%; text-align: right"><FONT STYLE="font-size: 6pt">24.5</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 4%; text-align: right"><FONT STYLE="font-size: 6pt">29.2</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 4%; text-align: right"><FONT STYLE="font-size: 6pt">12.0</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 4%; text-align: right"><FONT STYLE="font-size: 6pt">2.64</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 4%; text-align: right"><FONT STYLE="font-size: 6pt">0.73</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">Canada</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">CDL</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">14.4</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">95.0</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">46.0</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">3.62</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">1.24</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">26.0</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">38.0</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">17.0</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">2.46</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">1.18</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">US (Texas)</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">TG</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">17.4</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">12.0</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">5.4</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">3.73</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">0.59</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">27.9</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">4.2</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">1.9</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">2.78</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">0.99</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">US (Texas)</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">TK</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">14.9</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">15.0</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">16.0</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">3.85</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">0.56</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">27.5</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">4.4</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">4.2</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">2.51</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">0.58</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">US (Texas)</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">TQ</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">11.2</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">15</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">16</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">3.33</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">1.71</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">25.9</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">2.9</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">3.1</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">2.51</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">0.55</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">Albania</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">AB</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">10.8</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">348.4</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">68.5</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">5.96</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">0.56</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">25.1</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">56</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">8.6</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">3.96</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">0.3</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">Albania</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">AD</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">10.2</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">287.0</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">57.0</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">3.98</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">0.52</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">29.0</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">65.9</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">12.2</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">3.27</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">0.73</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">Albania</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">AM</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">21.0</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">110.0</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">19.0</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">2.43</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">1.07</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">31.9</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">48.4</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">7.7</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">2.88</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">0.85</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">Venezuela</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">VP</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">9.4</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">492.0</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">105.0</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">4.26</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">5.26</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">21.7</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">220</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">45.4</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">2.96</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">3.68</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">US (Utah)</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">US</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">14.5</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">23.8</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">12.2</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">1.18</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">3.19</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">32.5</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">1.7</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">1.0</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">0.62</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">0.26</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
</TABLE>



<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; text-align: left"><B>Stages in the Petrosonic Process</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; text-align: left"><U>Step 1: Solvent De-asphalting</U></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; text-align: left; text-indent: 0.5in">The primary process of
solvent de-asphalting dissolves bitumen in a common paraffinic solvent. The solvent is selected to ensure complete dissolution
of the oil-soluble component of the bitumen with the solvent to form a De-asphalted Oil (DAO) while the insoluble hydrocarbon
component known as asphaltenes are readily filtered through simple separation. This asphaltene fraction is concentrated with heavy
metals such as nickel and vanadium as well as sulphur.</P>

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


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">The Petrosonic reactor,
using its patented low-frequency / high-energy / high-amplitude reactor design, allows for significant improvement in the mass
transfer efficiency of the solvent de-asphalting step in particular, cutting the de-asphalting time required from 6 to 10+ hours
to 2 minutes.</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; text-align: center"><IMG SRC="tpg37.jpg" ALT=""></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: left"><U>Step 2: Solvent Recovery</U></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; text-align: left; text-indent: 0.5in">At the completion of
the two-stage Petrosonic upgrading process, the upgraded oil is required to be separated from the solvent through a standard solvent
recovery process such as an evaporator or distillation column. Given the significant differential in boiling points of the upgraded
oil and the solvent for recovery, the separation process is economical and readily applicable to recover solvent with a solvent
residual of less than 4% remaining in the oil and probably below 2%. Such a small solvent residual in the oil is well within the
expected quality parameters for pipeline and refinery specifications. The recovered solvent is reused at the solvent de-asphalting
stage to complete the closed loop on the Petrosonic upgrading process.</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; text-align: left"><B>Petrosonic&rsquo;s Technology</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><I>SonoProcess</I></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; text-align: left; text-indent: 0.5in">We believe Petrosonic&rsquo;s
technology advantage is based upon the use of our Petrosonic reactor technology and the unique cavitational and enhanced mass
transfer effects that it provides. Petrosonic has developed a unique competency in the design of enhanced mass transfer energy
processes and the proprietary applications that result from this.</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; text-align: left; text-indent: 0.5in">In recent years the use
of cavitational technologies and ultrasound has been researched extensively for oil processing &ndash; usually in the context
of desulphurization or &ldquo;cold cracking&rdquo;. Our own research does not support this and we make no claims that it can create
a unique upgrading process. The chemistries used in the Petrosonic process are established and our advantage is that we make these
more effective.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">The Company looks to
maintain its initial technical advantage derived from the Petrosonic Sonoprocess&trade; for heavy oil by adding complementary
proprietary process technologies to this.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">The Petrosonic reactor
has been designed and built in a variety of configurations but all Petrosonic process development is undertaken on full scale
units:</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"><FONT STYLE="font-family: Symbol"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Petrosonic
                                                                                                                      reactors
                                                                                                                      are based
                                                                                                                      on low-frequency
                                                                                                                      / high-amplitude
                                                                                                                      Petrosonic
                                                                                                                      energy reactors;</FONT></TD></TR></TABLE>

<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"><FONT STYLE="font-family: Symbol"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">A
                                                                                                                      patented
                                                                                                                      electromagnetic
                                                                                                                      drive puts
                                                                                                                      a massive
                                                                                                                      steel bar
                                                                                                                      into resonance
                                                                                                                      and this
                                                                                                                      allows efficient
                                                                                                                      transfer
                                                                                                                      of energy
                                                                                                                      to the reaction
                                                                                                                      chambers;</FONT></TD></TR></TABLE>

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


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; 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"><FONT STYLE="font-family: Symbol"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">There
                                                                                                                      are no moving
                                                                                                                      parts and
                                                                                                                      so Petrosonic
                                                                                                                      reactors
                                                                                                                      have a high
                                                                                                                      reliability
                                                                                                                      and operational
                                                                                                                      availability;</FONT></TD></TR></TABLE>

<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"><FONT STYLE="font-family: Symbol"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
                                                                                                                      reaction
                                                                                                                      chambers
                                                                                                                      are attached
                                                                                                                      at the mid-node
                                                                                                                      points one
                                                                                                                      half wavelength
                                                                                                                      from the
                                                                                                                      drive system,
                                                                                                                      enabling
                                                                                                                      the reactors
                                                                                                                      to apply
                                                                                                                      Petrosonic
                                                                                                                      energy to
                                                                                                                      physical,
                                                                                                                      chemical
                                                                                                                      and biological&nbsp;processes;
                                                                                                                      and</FONT></TD></TR></TABLE>

<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"><FONT STYLE="font-family: Symbol"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Petrosonic
                                                                                                                      reactors
                                                                                                                      are thus
                                                                                                                      able to
                                                                                                                      achieve
                                                                                                                      more sustainable
                                                                                                                      processes
                                                                                                                      &ndash;
                                                                                                                      better reactivity,
                                                                                                                      less reagents,
                                                                                                                      less energy,
                                                                                                                      greater
                                                                                                                      effectiveness
                                                                                                                      and more
                                                                                                                      product
                                                                                                                      for overall
                                                                                                                      economic
                                                                                                                      advantage.</FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><I>Direct Sonicated Separation</I></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">The previous holder of
the technology has also carried out independent tests on oil sands to determine if the technology could be effective in a low
cost primary separation process. Preliminary tests with a proprietary process protocol produced results comparable with existing
technology.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">However, the effectiveness
of this technology is but a first step due to the massive scale of oil sands projects. At this time the Company believes the volume
of material that would need to be processed requires a &ldquo;next generation&rdquo; of Petrosonic reactor technology. Existing
scale technology may be applicable to small scale oil sands production.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">The Company has directed
its efforts towards a more immediate but directly related application &ndash; the treatment of drill cuttings. This is not the
same scale of opportunity but offers immediate access to market and cash flow generation based on modest investment of capital.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><I>Petrosonic Heavy Oil Process Patents</I></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; text-align: left; text-indent: 0.5in">As part of the transaction
with Sonoro Energy the company has acquired the following Heavy Oil Process provisional and PCT applications based on the Company&rsquo;s
Sonoprocess&trade;:</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.25in; text-align: left; text-indent: -3.8pt">&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"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Patent/Application
                                                                                                                      No: WO2009111871.
                                                                                                                      Jurisdiction:
                                                                                                                      WIPO. Title:
                                                                                                                      Method for
                                                                                                                      Treating
                                                                                                                      Heavy Crude
                                                                                                                      Oil. Application
                                                                                                                      Status:
                                                                                                                      Published.</I></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; 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"><FONT STYLE="font-family: Symbol"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Patent/Application
                                                                                                                      No: EA201071060.
                                                                                                                      Jurisdiction:
                                                                                                                      Eurasisa.
                                                                                                                      Title: Method
                                                                                                                      for Treating
                                                                                                                      Heavy Crude
                                                                                                                      Oil. Status:
                                                                                                                      Pending.</I></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; 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"><FONT STYLE="font-family: Symbol"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Patent/Application
                                                                                                                      No: EP2260089.
                                                                                                                      Jurisdiction:
                                                                                                                      Europe.
                                                                                                                      Title: Method
                                                                                                                      for Treating
                                                                                                                      Heavy Crude
                                                                                                                      Oil. Status:
                                                                                                                      Pending.</I></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; 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"><FONT STYLE="font-family: Symbol"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Patent/Application
                                                                                                                      No: 2156/MUMNP/2010.
                                                                                                                      Jurisdiction:
                                                                                                                      India. Title:
                                                                                                                      Method for
                                                                                                                      Treating
                                                                                                                      Heavy Crude
                                                                                                                      Oil. Status:
                                                                                                                      Pending.</I></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; 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"><FONT STYLE="font-family: Symbol"><B>&middot;</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Patent/Application
                                                                                                                      No: US 61/035,690.
                                                                                                                      Jurisdiction:
                                                                                                                      United States.
                                                                                                                      Title: Method
                                                                                                                      for Treating
                                                                                                                      Heavy Crude
                                                                                                                      Oil. Status:
                                                                                                                      Company
                                                                                                                      will appeal
                                                                                                                      the expired
                                                                                                                      priority
                                                                                                                      claim to
                                                                                                                      reinstate
                                                                                                                      the priority
                                                                                                                      claim.</I></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left; text-indent: -3.8pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>Competition</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; text-align: left; text-indent: 0.5in">Currently heavy oil is
upgraded by refineries and upgraders (refineries that upgrade crude to synthetic crude grade level but not to full end products
such as diesel, jet fuel etc.). These facilities refine large quantities of crude from 60,000 to 500,000 bbl/day and they are
capital intensive, require long lead times, significant engineering and intensive water use.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">There have been other
technologies introduced that upgrade heavy oil via other methods such as Headwaters Incorporated&rsquo;s proprietary HCAT technology
or Ivanhoe Energy&rsquo;s HTL heavy oil upgrading technology. However, these technologies upgrade heavy crudes in smaller volumes
and are also very complex, capital intensive and require intense use of energy and water. They also have the associated environmental
downsides such as carbon emissions.</P>

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


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>Disadvantages of Petrosonic Process/Technology</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; text-align: left; text-indent: 0.5in">There are few inherent
disadvantages to the Petrosonic process.&nbsp; The technology has been proven on other applications but long-term 24 hour operations
have not been attempted as prior successful commercialization efforts did not require long-term, 24 hour operations. In addition,
one sonicator at current dimensions can process up to 500 barrels of heavy oil per day. While this processing capacity can be
an advantage for small and medium size operations it may be considered as a disadvantage for larger operations.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in; color: #1A1A1A">In addition,
there are technical and logistical risks associated with the heavy oil upgrading technology rollout in Albania.&nbsp; These risks
can be attributed to two general categories of risk:&nbsp; operational and logistical, which are influenced by the market risk
factors which are presented separately.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in; color: #1A1A1A">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in; color: #1A1A1A">The design
of the equipment was based on an estimation of both the required solvent as well as the regional heavy crude oil expected to be
upgraded at site.&nbsp; Any changes and variations in either the solvent or the heavy oil will impact the overall ability to commission
the project.&nbsp; Remaining equipment to be ordered is minor in scope but any delays or problems in sources of supply from European
sources could lead to minor delays.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in; color: #1A1A1A">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in; color: #1A1A1A">The ability
to procure suitable safe installation for commissioning the equipment is critical given the limited number of suitable contractors
available in Albania.&nbsp; The ability to source and deliver piping equipment could cause commissioning or optimization delays.
&nbsp;The equipment to be assembled into a continuous heavy oil upgrading process has not been operated in the proposed configuration
elsewhere. The process is expected to operate as designed but unforeseen assembly and commissioning situations are normal and
expected. &nbsp;Remaining equipment to be ordered is minor in scope but any delays or problems in sources of supply from European
sources could lead to minor delays.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>Marketing and Sales Strategy</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; text-align: left; text-indent: 0.5in">Petrosonic&rsquo;s business
model is to provide integrated upgrading systems to heavy oil producers in exchange for revenue sharing in the economic uplift
produced as a result of the Sonoprocessing&trade;. Given the relative ease of integration and transportation, the process is designed
to be easily applicable to the upstream and midstream constituents. The immediate marketing and sales strategy is to sell our
processing services on toll or joint venture basis to heavy oil upstream producers directly. As a result, business models can
take on various forms:</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: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Oil
                                                                                                               Producers: Decrease
                                                                                                               viscosity and need
                                                                                                               for diluents; improve
                                                                                                               quality; increase
                                                                                                               marketability;
                                                                                                               increase price.</FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: -0.25in"></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: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Pipeline
                                                                                                               Operators: Decrease
                                                                                                               viscosity and need
                                                                                                               for diluent resulting
                                                                                                               in increased throughput.</FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: -0.25in"></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: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Storage
                                                                                                               &amp; Blending
                                                                                                               Operators: Increase
                                                                                                               yield and quality.</FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: -0.25in"></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: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Refiners<B>:&nbsp;</B>Increase
                                                                                                               yield and quality.
                                                                                                               Rapid de-asphalting
                                                                                                               with less diluent
                                                                                                               and less cost.
                                                                                                               De-bottleneck refinery.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left; text-indent: 3.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>Customers</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; text-align: left; text-indent: 0.5in">Our target customers
are heavy oil producers, industrial groups that consume heavy oil and refineries that refine heavy oil. In addition, our potential
customers consist of heavy oil trading companies and asphalt producers and consumers of asphalt products such as construction
companies that require asphaltenes as raw material for production of asphalt. Currently the Company has no customers.</P>

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


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>Employees</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; text-align: left; text-indent: 0.5in">We have currently 2 full-time
employees and 3 part-time employees, as well as, several independent consultants. We plan to hire three local operations staff
in Albania during the first year of its operations. The Company has identified potential candidates for such positions, and expects
to proceed with such hires once it has secured the requisite financing.</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; text-align: left"><B>Environmental Laws and Regulations</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; text-align: left; text-indent: 0.5in">The Company may be subject
to various environmental laws and regulations in the countries in which it operates. With respect to Albania, the Company will
require an environmental permit for its facility and a fire safety permit. The Company has applied for the environmental permit
and is in discussion with all governmental authorities regarding the issuance of the permit. Since the Company does not require
any use of water, extensive energy or generate any emissions it does not fall under more complicated and lengthy environmental
permit requirements typical for refineries or upgraders. The Company plans to install all necessary equipment required for anti-fire
measures and regulations in the country.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>Procurement of Equipment</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; text-align: left; text-indent: 0.5in">We will rely on a third
party contractor to manufacture the sonicators and other related equipment according to its patented design and specifications.
We have received quotes from the third party manufacturer and expect that we will be able to obtain all the necessary equipment
to grow our processing capacity in the future. The manufacturer has the production and financial capability and capacity to fulfill
our orders in the future. In addition, we have access to several local and international fabricators and engineering firms to
carry out the necessary assembly of the equipment and increase capacity of our processing plant in the future.</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; text-align: center"><B>PROPERTIES</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; text-align: left; text-indent: 0.5in"><FONT STYLE="color: black">Our
head office is located at </FONT>Suite 300, 714 - 1st Street SE, Calgary, Alberta, Canada T2G 2G8. <FONT STYLE="color: black">Our
sole director is currently allowing the Company the use of his office without charge in order to minimize costs to the Company.
Management believes that the Company&rsquo;s facilities are adequate for the conduct of the Company&rsquo;s management operations
at this time.</FONT></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">We also have an office
in Fier, Albania at same location where its processing plant is located. Albania&rsquo;s heavy oil upstream and downstream industries
are located in Fier and the facility is only a few miles away from the heavy oil producing fields. It is also located 35 kilometers
away from Albania&rsquo;s only deep sea port and export facility, the PIR Vlora terminal. The office is offered by the Albanian
partner without charge until the Company signs a lease agreement when requisite funding is in place.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>LEGAL MATTERS</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: left; text-indent: 0.5in">In the normal course
of business, we may become involved in various legal proceedings. Currently, we know of no pending or threatened legal proceeding
to which we are or will be a party which, if successful, might result in a material adverse change in our business, properties
or financial condition.</P>

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


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DIRECTORS AND EXECUTIVE OFFICERS</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-indent: 0.5in">The following table identifies our executive
officers and directors, their ages, their respective offices and positions, and their respective dates of election or appointment.</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">
    <TD STYLE="width: 22%; text-align: center; font-weight: bold"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black"><B>Name</B></FONT></TD>
    <TD STYLE="width: 16%; text-align: center; font-weight: bold"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black"><B>Age</B></FONT></TD>
    <TD STYLE="width: 40%; text-align: center; font-weight: bold"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black"><B>Title</B></FONT></TD>
    <TD STYLE="width: 22%; text-align: center; font-weight: bold"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black"><B>Position
    Held Since</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">Art Agolli</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">42</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">Chief Executive Officer,
    President and Director</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">March 2012</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">Richard Raisig</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">65</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">Chief Financial Officer,
    Secretary and Treasurer</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">January 2013</FONT></TD></TR>
</TABLE>
<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"><B>Terms of Office</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-indent: 28.35pt">Our directors are appointed for a one-year
term to hold office until the next annual general meeting of our stockholders or until removed from office in accordance with
our bylaws and the provisions of the Nevada Revised Statutes. Our directors hold office after the expiration of his or her term
until his or her successor is elected and qualified, or until he or she resigns or is removed in accordance with our bylaws and
the provisions of the Nevada Revised Statutes.</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-indent: 28.35pt">Our officers are appointed by the Company&rsquo;s
Board of Directors and hold office until removed by the Board.</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; text-align: justify"><B>Business Experience</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; text-indent: 0.5in"><B><I>Art Agolli</I></B> has more than
16 years of successful experience in developing heavy oil projects. Since February of 2009 he has acted as Chief Executive Officer
of BA Capital, a Calgary based merchant bank serving the energy, mining and technology sectors.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Mr. Agolli is co-founder and former Vice
President of Bankers Petroleum Ltd., a Toronto and London Stock Exchange listed oil and gas company. Mr. Agolli played a key role
in building Bankers Petroleum from April 2004 through August 2008. From a start up in April 2004, Bankers Petroleum grew to a
$2.3 billion market capitalization company during his time with the company, until August 2008. Bankers Petroleum has a 100% working
interest and is the operator of the largest onshore heavy oil field in Europe (Albania) with original oil in place of 8.5 billion
barrels. Mr. Agolli also played an important role with BNK Petroleum, a Toronto Stock Exchange listed company that was spun off
from Bankers Petroleum in 2008 in its entry into Poland where that company has one of the largest shale gas land positions in
the country and in Europe. BNK Petroleum grew from a start-up to a $700 million market capitalization company.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Mr. Agolli is also a co-founder of Sonoro
Energy, a TSX listed company that has recently signed a major oil deal in Iraq. Mr. Agolli provided services to Sonoro Energy
Ltd. from May 2010 to January 2012. Sonoro has exclusive rights to development of all heavy oil of Salah ad Din Province in Iraq.
Mr. Agolli has also been an international business and corporate development executive with Koch Industries Inc., the largest
privately held company in North America from 1998-2001. From March 2001 to December 2003 he was Chief Executive Officer of Anonima
Petroli Italiana (Albania), a subsidiary company of Api Spa, one of the largest refining and trading oil companies in Italy.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Mr. Agolli started his career as a consultant
for the World Bank in Washington DC in 1997. Mr. Agolli holds a Masters Degree in Management from Grand Valley State University
(Michigan, USA) and an International Relations and Business Degree from the same university. He is a member of the Association
of International Petroleum Negotiators (Houston, USA).</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>Richard Raisig</I></B> currently
serves, on a part-time basis, as the Chief Financial Officer of Connexed Technologies, Inc. Mr. Raisig joined Connexed in 2009.
From 2007 to 2009 Mr. Raisig served as Chief Financial Officer of Aurora Systems, Inc. Prior to joining Aurora Systems, Mr. Raisig
was Chief Financial Officer of Microvision, Inc. from 1996 to 2006. Mr. Raisig received a BA in Economics from the University
of California, Irvine in 1970, an MS in Accounting from California State University, Long Beach in 1973 and an MBA in Finance
from the University of Southern California in 1980.</P>

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


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Family Relationships</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; text-indent: 0.5in">There are no family
relationships among our directors and executive officers.</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>Involvement In Certain Legal Proceedings</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-indent: 0.5in">To the best of our knowledge, none of our
directors or executive officers has, during the past ten years, been involved in any legal proceedings described in subparagraph
(f) of Item 401 of Regulation S-K.</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; text-align: center"><B>EXECUTIVE COMPENSATION</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; text-align: justify"><B>Executive Compensation - Executive
Officers</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: left; text-indent: 0.5in">The following summary
compensation table indicates the cash and non-cash compensation earned during the fiscal year ended October 31, 2011, the two
months ended December 31, 2011 and the year ended December 31, 2012 by our Chief Executive Officer and each of the other two highest
paid executives, if any, whose total compensation exceeded $100,000 during those periods.</P>

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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="37" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 6pt">Summary&nbsp;Compensation&nbsp;Table</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 6pt">Name&nbsp;and&nbsp;principal&nbsp;position</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: justify"><FONT STYLE="font-size: 6pt">Year</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: justify"><FONT STYLE="font-size: 6pt">Salary&nbsp;($)</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: justify"><FONT STYLE="font-size: 6pt">Bonus</FONT><BR><FONT STYLE="font-size: 6pt"> ($)</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: justify"><FONT STYLE="font-size: 6pt">Stock<BR>
Awards</FONT><BR><FONT STYLE="font-size: 6pt">
    ($)</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: justify"><FONT STYLE="font-size: 6pt">Option<BR>
Awards</FONT><BR><FONT STYLE="font-size: 6pt">
    ($)</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: justify"><FONT STYLE="font-size: 6pt">Non-</FONT><BR><FONT STYLE="font-size: 6pt"> Equity</FONT><BR>
    <FONT STYLE="font-size: 6pt">Incentive</FONT><BR><FONT STYLE="font-size: 6pt"> Plan</FONT><BR><FONT STYLE="font-size: 6pt">
    Compen-sation</FONT><BR>
    <FONT STYLE="font-size: 6pt">($)</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: justify"><FONT STYLE="font-size: 6pt">Nonquali-</FONT><BR><FONT STYLE="font-size: 6pt">
fied</FONT><BR><FONT STYLE="font-size: 6pt"> Deferred</FONT><BR><FONT STYLE="font-size: 6pt"> Compen-</FONT><BR>
<FONT STYLE="font-size: 6pt">sation</FONT><BR>
<FONT STYLE="font-size: 6pt">Earnings</FONT><BR><FONT STYLE="font-size: 6pt"> ($)</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: justify"><FONT STYLE="font-size: 6pt">All&nbsp;Other</FONT><BR><FONT STYLE="font-size: 6pt">
    Compen-sation&nbsp;($)</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: justify"><FONT STYLE="font-size: 6pt">Total&nbsp;($)</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: justify"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: justify"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: justify"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: justify"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: justify"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: justify"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: justify"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: justify"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: justify"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">Art Agolli, Chief Executive Officer</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font: 6pt Times New Roman, Times, Serif">12/31/2012</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; width: 27%; background-color: rgb(204,255,204)"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; background-color: rgb(204,255,204)"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left; background-color: rgb(204,255,204)"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 6%; text-align: center; background-color: rgb(204,255,204)"><FONT STYLE="font: 6pt Times New Roman, Times, Serif">12/31/2011</FONT></TD><TD STYLE="width: 1%; text-align: left; background-color: rgb(204,255,204)"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; background-color: rgb(204,255,204)"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left; background-color: rgb(204,255,204)"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 5%; text-align: right; background-color: rgb(204,255,204)"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="width: 1%; text-align: left; background-color: rgb(204,255,204)"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; background-color: rgb(204,255,204)"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left; background-color: rgb(204,255,204)"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 5%; text-align: right; background-color: rgb(204,255,204)"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="width: 1%; text-align: left; background-color: rgb(204,255,204)"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; background-color: rgb(204,255,204)"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left; background-color: rgb(204,255,204)"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 5%; text-align: right; background-color: rgb(204,255,204)"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="width: 1%; text-align: left; background-color: rgb(204,255,204)"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; background-color: rgb(204,255,204)"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left; background-color: rgb(204,255,204)"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 5%; text-align: right; background-color: rgb(204,255,204)"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="width: 1%; text-align: left; background-color: rgb(204,255,204)"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; background-color: rgb(204,255,204)"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left; background-color: rgb(204,255,204)"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 5%; text-align: right; background-color: rgb(204,255,204)"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="width: 1%; text-align: left; background-color: rgb(204,255,204)"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; background-color: rgb(204,255,204)"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left; background-color: rgb(204,255,204)"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 5%; text-align: right; background-color: rgb(204,255,204)"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="width: 1%; text-align: left; background-color: rgb(204,255,204)"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; background-color: rgb(204,255,204)"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left; background-color: rgb(204,255,204)"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 5%; text-align: right; background-color: rgb(204,255,204)"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="width: 1%; text-align: left; background-color: rgb(204,255,204)"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; background-color: rgb(204,255,204)"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left; background-color: rgb(204,255,204)"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 5%; text-align: right; background-color: rgb(204,255,204)"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="width: 1%; text-align: left; background-color: rgb(204,255,204)"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font: 6pt Times New Roman, Times, Serif">10/31/2011</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">Gerhard Schlombs, former Chief Executive
    Officer (1)</FONT></TD><TD STYLE="background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: center; background-color: White"><FONT STYLE="font: 6pt Times New Roman, Times, Serif">12/31/2012</FONT></TD><TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; background-color: White"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; background-color: White"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; background-color: White"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; background-color: White"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; background-color: White"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; background-color: White"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; background-color: White"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; background-color: White"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: center; background-color: White"><FONT STYLE="font: 6pt Times New Roman, Times, Serif">12/31/2011</FONT></TD><TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; background-color: White"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; background-color: White"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; background-color: White"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; background-color: White"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; background-color: White"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; background-color: White"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; background-color: White"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; background-color: White"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: center; background-color: White"><FONT STYLE="font: 6pt Times New Roman, Times, Serif">10/31/2011</FONT></TD><TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; background-color: White"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; background-color: White"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; background-color: White"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; background-color: White"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; background-color: White"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; background-color: White"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; background-color: White"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; background-color: White"><FONT STYLE="font-size: 6pt">0</FONT></TD><TD STYLE="text-align: left; background-color: White"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">(1) Mr. Schlombs resigned his position on
March 19, 2012.</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; text-align: left"><B>Compensation of Directors</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 28.35pt">We have no standard
arrangement to compensate directors for their services in their capacity as directors. Directors are not paid for meetings attended.
However, we intend to review and consider future proposals regarding board compensation. All travel and lodging expenses associated
with corporate matters are reimbursed by us, if and when incurred</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; text-align: left"><B>Employment Agreements</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; text-align: left; text-indent: 28.35pt">We do not currently
have an employment agreement with our Chief Executive Officer or our Chief Financial Officer.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>Long-Term Incentive Plan Awards</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; text-align: left; text-indent: 28.35pt">We do not presently
have any long-term incentive plans that provide compensation intended to serve as incentive for performance to occur over a period
longer than one fiscal year, whether such performance is measured by reference to our financial performance, stock price or any
other measure.</P>

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


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<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; text-align: left"><B>Options/SAR Grants</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-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0.5in; text-align: justify">No
individual grants of stock options, whether or not in tandem with stock appreciation rights (&ldquo;SARs&rdquo;) and freestanding
SARs have been made to our executive officers, or directors or employees during the current fiscal year. No stock options have
been previously granted.</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; text-align: left"><B>Potential Payments Upon Termination or
Change-in-Control</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; text-align: left; text-indent: 0.5in">Securities and Exchange
Commission regulations state that we must disclose information regarding agreements, plans or arrangements that provide for payments
or benefits to our executive officers in connection with any termination of employment or change in control of the company.</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-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0.5in; text-align: justify">We
currently have no employment agreements nor any compensatory plans or arrangements with any of our executive officers that may
result from the resignation, retirement or any other termination of any of our executive officers, from a change-in-control, or
from a change in any executive officer&rsquo;s responsibilities following a change-in-control.</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; text-align: left"><B>CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
AND DIRECTOR INDEPENDENCE</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"><B>Transactions with Related Persons</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-indent: 0.5in">The following describes all transactions
since January 1, 2010 and all proposed transactions in which we are, or we will be, a participant and the amount involved exceeds
$120,000 <FONT STYLE="color: black">or one percent of the average of our total assets at year end for the last two completed fiscal
years</FONT> and in which any related person had or will have a direct or indirect material interest.</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; text-align: left; text-indent: 0.5in">From 2011 and continuing through the date
of this prospectus, our Chief Executive Officer and director, Mr. Art Agolli, provided office space to us free of charge.</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; text-align: left; text-indent: 0.5in">On June 6, 2012, we issued
to Mr. Agolli a secured convertible debenture in the amount of CDN$200,000. The debenture accrues interest at the rate of 10%
per year and is due to be paid on June 6, 2013. Mr. Agolli may convert the principal amount of the debenture before the maturity
date at the price paid for shares of our common stock by investors who participate in a &quot;Qualified Financing&quot;, as defined
in the debenture. The private offering we completed on January 16, 2013 meets the definition of a Qualified Financing, therefore
Mr. Agolli may convert the debenture to shares of our common stock at the rate of $0.25 per share, for a total of 800,000 shares.
The debenture is secured by our personal property and the personal property of our subsidiary.</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; text-align: left; text-indent: 0.5in; background-color: white">Mr.
Schlombs, our former President, Principal Executive Officer, Principal Financial Officer and director, provided office space to
us free of charge.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in; background-color: white">At
October 31, 2011, Mr. Schlombs had advanced a total of $42,000 to us towards working capital, which amount has subsequently been
repaid.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Director Independence</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-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0.5in; text-align: justify">During
the year ended December 31, 2012, we had no independent directors. Our current sole director, Art Agolli, is not independent.
We evaluate independence by the standards for director independence established by applicable laws, rules, and listing standards
including, without limitation, the standards for independent directors established by The NASDAQ National Market, and the Securities
and Exchange Commission.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT</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-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0.5in; text-align: justify">The
Company has only one class of stock outstanding, its common stock. The following table sets forth certain information as of February
5, 2013, with respect to the beneficial ownership of our common stock for (i) each director and officer, (ii) all of our directors
and officers as a group, and (iii) each person known to us to own beneficially five percent or more of the outstanding shares
of our common stock. As of February 5, 2013, there were 65,329,000 shares of common stock outstanding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 28.35pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 28.35pt">To our knowledge, except
as indicated in the footnotes to this table or pursuant to applicable community property laws, the persons named in the table
have sole voting and investment power with respect to the shares of common stock indicated.</P>

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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left">Directors&nbsp;and&nbsp;Executive&nbsp;Officers</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Shares<BR> Beneficially<BR> Owned&nbsp;(1)</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">Percentage&nbsp;Beneficially<BR> Owned</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 62%; text-align: left">Art Agolli&nbsp;<BR> Chief Executive Officer, President and Director&nbsp;<BR> 57
    Valley Woods Way, NW&nbsp;<BR> Calgary, AB T3B 6A5</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 16%; text-align: right">20,800,003</TD><TD STYLE="width: 1%; text-align: left">(2)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 16%; text-align: right">31.5</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <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="font-weight: bold; text-align: left">All Officers and Directors as a Group</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">20,800,003</TD><TD STYLE="font-weight: bold; text-align: left">&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">31.5</TD><TD STYLE="font-weight: bold; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <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="font-weight: bold; text-align: left">Principal Stockholders</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: White">
    <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">Gerhard Schlombs&nbsp;<BR> (Former officer and former director)&nbsp;<BR> 92 Wishing Well Drive&nbsp;<BR>
    Toronto, ON M1T 1J9</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,625,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22.4</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <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"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">SGP Group
                                 Inc. (3)</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">2<SUP>nd</SUP>&nbsp;Terrace
                                                                                                                                             W.
                                                                                                                                             Centreville</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">P.O.
                                                                                                                                                                                                                                                                                 Box
                                                                                                                                                                                                                                                                                 10567</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Nassau,
                                                                                                                                                                                                                                                                                                                                                                                         Bahamas</P></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,276,284</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6.5</TD><TD STYLE="text-align: left">&nbsp;%</TD></TR>
</TABLE>


<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; text-align: left">&nbsp;</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; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: black">(1) </FONT>Beneficial
ownership has been determined in accordance with Rule 13d-3 under the Exchange Act. Pursuant to the rules of the SEC, shares of
common stock which an individual or group has a right to acquire within 60 days pursuant to the exercise of options or warrants
are deemed to be outstanding for the purpose of computing the percentage ownership of such individual or group, but are not deemed
to be beneficially owned and outstanding for the purpose of computing the percentage ownership of any other person shown in the
table.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">(2) The number of shares beneficially owned
by Mr. Agolli includes 800,000 shares of common stock that would be issued to him if he chooses to convert the Secured Convertible
Debenture issued to him on June 6, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">(3) Josephine Agotilla has dispositive and
voting control for SGP Group Inc.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Change Of Control</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: left; text-indent: 0.5in">To our knowledge, there
are no present arrangements or pledges of securities of our Company that may result in a change in control.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 28.35pt">&nbsp;</P>


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<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; text-align: center"><B>SELLING STOCKHOLDERS</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: left; text-indent: 0.5in">We are registering shares
of common stock owned by the selling stockholders. The common stock was acquired in a private placement which closed on January
16, 2013. The private placement was conducted under Regulation D of the Securities Act with a limited number of accredited investors.
A more complete description of this offering is included at the section of this prospectus titled &ldquo;Summary&rdquo; at page
1.</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; text-align: left; text-indent: 0.5in">No selling stockholder
has, or within the past three years has had, any position, office or other material relationship with us or any of our predecessors
or affiliates other than as a result of the ownership of our securities.</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; text-align: left; text-indent: 0.5in">The following table also provides certain
information with respect to the selling stockholders&rsquo; ownership of our securities as of February 5, 2013, the total number
of securities they may sell under this prospectus from time to time, and the number of securities they will own thereafter assuming
no other acquisitions or dispositions of our securities. For the table below, ownership of the common stock is determined in accordance
with the rules of the Securities and Exchange Commission and includes any shares of common stock over which a selling stockholder
exercises sole or shared voting or investment powers, or of which a selling stockholder has a right to acquire ownership at any
time within 60 days of February 5, 2013. The selling stockholders can offer all, some or none of their securities, thus we have
no way of determining the number they will hold after this offering. Therefore, we have prepared the table below on the assumption
that the selling stockholders will sell all shares covered by this prospectus.</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; text-align: left; text-indent: 0.5in">Some of the selling stockholders
may distribute their shares, from time to time, to their limited and/or general partners or managers, who may sell shares pursuant
to this prospectus. Each selling stockholder may also transfer shares owned by him or her by gift, and upon any such transfer
the donee would have the same right of sale as the selling stockholder.</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; text-align: left; text-indent: 0.5in">We may amend or supplement
this prospectus from time to time to update the disclosure set forth herein, however, if a selling stockholder transfers his or
her interest in the common stock prior to the effective date of the registration statement of which this prospectus is a part,
we will be required to file a post-effective amendment to the registration statement to provide the information concerning the
transferee. Alternatively, if a selling stockholder transfers his or her interest in the common stock after the effective date
of the registration statement of which this prospectus is a part, we may use a supplement to update this prospectus. None of the
selling stockholders are or were affiliated with registered broker-dealers with the exception of Mark Moskowitz, Thomas Bridges,
John J. Weber, Aaron M. Gurewitz and Theodore D. Roth. These individuals have indicated that they bought the shares in the ordinary
course of business, and at the time of the purchase of shares, they had no agreements or understandings, directly or indirectly,
with any person to distribute our shares. See our discussion titled &ldquo;Plan of Distribution&rdquo; for further information
regarding the selling stockholders&rsquo; method of distribution of these shares.</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>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; 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">Selling<BR> Stockholder</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">Shares<BR> held&nbsp;before&nbsp;the<BR>
    Offering</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">Shares<BR> being<BR>
    Offered</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">Shares<BR> held&nbsp;after&nbsp;the<BR>
    Offering</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"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Percentage</B></FONT><BR> <FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Owned&nbsp;after</B></FONT><BR> <FONT STYLE="font-family: Times New Roman, Times, Serif"><B>the
    Offering<FONT STYLE="font-size: 10pt">(1)</FONT></B></FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 40%; text-align: left; padding-bottom: 1pt">Curtis Lynn Debord and Mary Joseph Debord</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">400,000</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">400,000</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">0</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">&mdash;</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Sub L.P. (2)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,000,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,000,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</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">CI USVI, LLC (3)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,000,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,000,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</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: 1pt">Edward Kowlowitz</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,200,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,200,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</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">Robert and Susan Tepperman</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">40,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">40,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</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: 1pt">Centermark Holdings, LLC (4)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="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">&nbsp;</TD><TD STYLE="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">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</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">Thomas S. Bridges</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">300,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">300,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</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: 1pt">David G. Gross</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">300,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">300,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</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">Charles T. Osearo</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</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: 1pt">David R. Garfin</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">160,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">160,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</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">Steve Arnold</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="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">&nbsp;</TD><TD STYLE="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">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</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: 1pt">Michael and Sonja Ogrizovich</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</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">Joseph and Marla Schwartz</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</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: 1pt">Thomas Levin and Heather Levin</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</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">Fred Halpern and Joshua Halpern</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="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">&nbsp;</TD><TD STYLE="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">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</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: 1pt">E. V. Kazazian Trust U/A 12/3/2004 (5)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</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">Bix Family Investments, LLC (6)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">80,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">80,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</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: 1pt">PENSCO Trust Company Custodian FBO David Klunder (7)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">60,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">60,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</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">Mark Whitmore</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">300,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">300,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</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: 1pt">Robert S. Dumper &amp; Janet Dumper Co-TTEE The Dumper Family Trust U/A
    5/17/2012 (8)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</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">Graham C. W. Astor</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="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">&nbsp;</TD><TD STYLE="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">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</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: 1pt">Michael P. &amp; Connie G. Marinko</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</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">Joe Reid (10)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">80,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">80,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</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: 1pt">Michael J. Gluck</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</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">William B. Kuhn</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">40,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">40,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</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: 1pt">Kevin Hurley (10)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">60,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">60,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</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">Philip M. Sorensen</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">60,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">60,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</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: 1pt">Jonathan Spanier</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">800,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">800,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</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">Peter G. Geddes</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">400,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">400,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</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: 1pt">Michael Stone</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">800,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">800,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</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">John J. Weber</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</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: 1pt">Aaron M. Gurewitz</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</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">DiNapoli Family Trust U/A 2/5/2010 (9)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">50,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">50,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</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: 1pt">Gordon Roth</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</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">Theodore D. Roth</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">40,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">40,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</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: 1pt">Mark Moskowitz</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">670,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">600,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">70,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">*</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</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">Molly Richardson</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="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="text-align: left">&nbsp;</TD><TD STYLE="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="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</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: 1pt">Michael Cavalier</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="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">&nbsp;</TD><TD STYLE="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">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</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">Benjamin L. Padnos</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="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="text-align: left">&nbsp;</TD><TD STYLE="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="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</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: 1pt">Anthony DiGiandomenico</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">40,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">40,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</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">Frank Seifert</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">50,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">*</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">TOTAL</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,210,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">* Indicates less than 1%.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(1) Based on 65,329,000 shares outstanding
on February 5, 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(2) The person holding voting and investment
power over these shares is Scott Greenberg.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(3) The person holding voting and investment
power over these shares is R.D. Sckalor.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(4) The person holding voting and investment
power over these shares is Michael C. Azar.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(5) The persons holding voting and investment
power over these shares are Edward V. Kazazian and Linda R. Kazazian.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(6) The person holding voting and investment
power over these shares is Carl H. Schultz.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(7) The person holding voting and investment
power over these shares is David Klunder.</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>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">(8)</TD><TD STYLE="text-align: justify">The persons holding voting and investment power over
these shares are Robert S. Dumper and Janet Dumper.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">(9)</TD><TD STYLE="text-align: justify">The persons holding voting and investment power over
these shares are Philip DiNapoli and Jennifer DiNapoli.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">(10)</TD><TD STYLE="text-align: justify">This information is based on the records we maintained
relating to the private placement which closed on January 16, 2013. We have not yet received confirmation of the information from
the stockholders.</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"><B>PLAN OF DISTRIBUTION</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: left; text-indent: 0.5in">We are registering the
shares of common stock on behalf of the selling stockholders. Sales of shares may be made by selling stockholders, including their
respective donees, transferees, pledgees or other successors-in-interest directly to purchasers or to or through underwriters,
broker-dealers or through agents. Sales may be made from time to time on the OTCQB or any exchange upon which our shares may trade
in the future, in the over-the-counter market or otherwise, at market prices prevailing at the time of sale, at prices related
to market prices, or at negotiated or fixed prices. The shares may be sold by one or more of, or a combination of, the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 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: 0.5in"></TD><TD STYLE="width: 0.3in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-size: 10pt">a
                                                                                                             block trade in which
                                                                                                             the broker-dealer
                                                                                                             so engaged will attempt
                                                                                                             to sell the shares
                                                                                                             as agent but may
                                                                                                             position and resell
                                                                                                             a portion of the
                                                                                                             block as principal
                                                                                                             to facilitate the
                                                                                                             transaction (including
                                                                                                             crosses in which
                                                                                                             the same broker acts
                                                                                                             as agent for both
                                                                                                             sides of the transaction);</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.8in; text-indent: 0in">&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: 0.5in"></TD><TD STYLE="width: 0.3in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-size: 10pt">purchases
                                                                                                             by a broker-dealer
                                                                                                             as principal and
                                                                                                             resale by such broker-dealer,
                                                                                                             including resales
                                                                                                             for its account,
                                                                                                             pursuant to this
                                                                                                             prospectus;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.8in; text-indent: 0in">&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: 0.5in"></TD><TD STYLE="width: 0.3in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-size: 10pt">ordinary
                                                                                                             brokerage transactions
                                                                                                             and transactions
                                                                                                             in which the broker
                                                                                                             solicits purchases;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.8in; text-indent: 0in">&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: 0.5in"></TD><TD STYLE="width: 0.3in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-size: 10pt">through
                                                                                                             options, swaps or
                                                                                                             derivatives;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.8in; text-indent: 0in">&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: 0.5in"></TD><TD STYLE="width: 0.3in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-size: 10pt">in
                                                                                                             privately negotiated
                                                                                                             transactions;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.8in; text-indent: 0in">&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; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.3in; text-align: left"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">in
                                                                                                                               making
                                                                                                                               short
                                                                                                                               sales
                                                                                                                               or
                                                                                                                               in
                                                                                                                               transactions
                                                                                                                               to
                                                                                                                               cover
                                                                                                                               short
                                                                                                                               sales;</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.8in; text-indent: 0in">&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: 0.5in"></TD><TD STYLE="width: 0.3in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-size: 10pt">put
                                                                                                             or call option transactions
                                                                                                             relating to the shares;
                                                                                                             and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.8in; text-indent: 0in">&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: 0.5in"></TD><TD STYLE="width: 0.3in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-size: 10pt">any
                                                                                                             other method permitted
                                                                                                             under applicable
                                                                                                             law.</FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">The selling stockholders
may effect these transactions by selling shares directly to purchasers or to or through broker-dealers, which may act as agents
or principals. These broker-dealers may receive compensation in the form of discounts, concessions or commissions from the selling
stockholders and/or the purchasers of shares for whom such broker-dealers may act as agents or to whom they sell as principals,
or both (which compensation as to a particular broker-dealer might be in excess of customary commissions). The selling stockholders
have advised us that they have not entered into any agreements, understandings or arrangements with any underwriters or broker-dealers
regarding the sale of their securities.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">The selling stockholders
may enter into hedging transactions with broker-dealers or other financial institutions. In connection with those transactions,
the broker-dealers or other financial institutions may engage in short sales of the shares or of securities convertible into or
exchangeable for the shares in the course of hedging positions they assume with the selling stockholders. The selling stockholders
may also enter into options or other transactions with broker-dealers or other financial institutions which require the delivery
of shares offered by this prospectus to those broker-dealers or other financial institutions. The broker-dealer or other financial
institution may then resell the shares pursuant to this prospectus (as amended or supplemented, if required by applicable law,
to reflect those transactions).</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">The selling stockholders
and any broker-dealers that act in connection with the sale of shares may be deemed to be &ldquo;underwriters&rdquo; within the
meaning of Section 2(11) of the Securities Act of 1933, and any commissions received by broker-dealers or any profit on the resale
of the shares sold by them while acting as principals may be deemed to be underwriting discounts or commissions under the Securities
Act. The selling stockholders may agree to indemnify any agent, dealer or broker-dealer that participates in transactions involving
sales of the shares against liabilities, including liabilities arising under the Securities Act. We have agreed to indemnify each
of the selling stockholders and each selling stockholder has agreed, severally and not jointly, to indemnify us against some liabilities
in connection with the offering of the shares, including liabilities arising under the Securities Act.</P>

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


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">The selling stockholders
will be subject to the prospectus delivery requirements of the Securities Act. We have informed the selling stockholders that
the anti-manipulative provisions of Regulation M promulgated under the Securities Exchange Act of 1934 may apply to their sales
in the market.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Selling stockholders
also may resell all or a portion of the shares in open market transactions in reliance upon Rule 144 under the Securities Act,
provided they meet the criteria and conform to the requirements of Rule 144.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Upon being notified by
a selling stockholder that a material arrangement has been entered into with a broker-dealer for the sale of shares through a
block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, we will file
a supplement to this prospectus, if required pursuant to Rule 424(b) under the Securities Act, disclosing:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 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: 0.5in"></TD><TD STYLE="width: 0.3in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-size: 10pt">the
                                                                                                             name of each such
                                                                                                             selling stockholder
                                                                                                             and of the participating
                                                                                                             broker-dealer(s);</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.8in; text-indent: 0in">&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: 0.5in"></TD><TD STYLE="width: 0.3in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-size: 10pt">the
                                                                                                             number of shares
                                                                                                             involved;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.8in; text-indent: 0in">&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: 0.5in"></TD><TD STYLE="width: 0.3in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-size: 10pt">the
                                                                                                             initial price at
                                                                                                             which the shares
                                                                                                             were sold;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.8in; text-indent: 0in">&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: 0.5in"></TD><TD STYLE="width: 0.3in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-size: 10pt">the
                                                                                                             commissions paid
                                                                                                             or discounts or concessions
                                                                                                             allowed to the broker-dealer(s),
                                                                                                             where applicable;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.8in; text-indent: 0in">&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: 0.5in"></TD><TD STYLE="width: 0.3in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-size: 10pt">that
                                                                                                             such broker-dealer(s)
                                                                                                             did not conduct any
                                                                                                             investigation to
                                                                                                             verify the information
                                                                                                             set out or incorporated
                                                                                                             by reference in this
                                                                                                             prospectus; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.8in; text-indent: 0in">&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: 0.5in"></TD><TD STYLE="width: 0.3in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-size: 10pt">other
                                                                                                             facts material to
                                                                                                             the transactions.</FONT></TD></TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">In addition, if required
under applicable law or the rules or regulations of the Commission, we will file a supplement to this prospectus when a selling
stockholder notifies us that a donee or pledgee intends to sell more than 500 shares of 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; text-indent: 0.5in">We are paying all
expenses and fees in connection with the registration of the shares. The selling stockholders will bear all brokerage or underwriting
discounts or commissions paid to broker-dealers in connection with the sale of the shares.</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: center"><B>DESCRIPTION OF SECURITIES TO BE REGISTERED</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"><B>General</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: left; text-indent: 0.5in">We are registering shares
of our common stock. We are presently authorized under our Articles of Incorporation to issue 843,750,000 shares of common stock
$0.001 par value per share. The following description of our common stock is only a summary and is subject to and qualified by
our Articles of Incorporation, as amended, copies of which will be provided by us upon request, and by the provisions of applicable
corporate laws of the State of Nevada.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in; background-color: white"><FONT STYLE="color: black">Holders
of our common stock </FONT>have equal ratable rights to dividends from funds legally available if and when declared by our board
of directors, are entitled to share ratably in all of our assets available for distribution to holders of common stock upon liquidation,
dissolution or winding up of our affairs, do not have preemptive, subscription or conversion rights and there are no redemption
or sinking fund provisions or rights and are entitled to one non-cumulative vote per share on all matters on which stockholders
may vote.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in; background-color: white">Holders
of shares of our common stock do not have cumulative voting rights, which means that the holders of more than 50% of the outstanding
shares, voting for the election of directors, can elect all of the directors to be elected, if they so choose, and, in that event,
the holders of the remaining shares will not be able to elect any of our directors.</P>

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


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in; background-color: white">As
of the date of this prospectus, we have not paid any cash dividends to stockholders. The declaration of any future cash dividend
will be at the discretion of our Board of Directors and will depend upon our earnings, if any, our capital requirements and financial
position, our general economic conditions, and other pertinent conditions. It is our present intention not to pay any cash dividends
in the foreseeable future, but rather to reinvest earnings, if any, in our business operations.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>Provisions In Our Certificate of Incorporation
Or Bylaws That May Delay, Defer or Prevent a Change of Control</B></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-indent: 0.5in; background-color: white">Our Articles of
Incorporation do not include any provision that may delay, defer or prevent a change of control. Article I, Section 2 of our bylaws
states, &quot;Special meetings of the stockholders may be called by the Board of Directors or such person or persons authorized
by the Board of Directors.&quot; Article II, Section 4 of our bylaws states, &quot;One or more or all the Directors of the Corporation
may be removed with or without cause at any time by a vote of two-thirds of the stockholders entitled to vote thereon, at a special
meeting of the stockholders called for that purpose.&quot; If the Board of Directors does not authorize stockholders to call a
special meeting, our stockholders will not be able to remove the directors. Furthermore, while Article X, Section 1 permits stockholders
to alter or repeal the bylaws or to adopt new bylaws, such action may be taken only at an annual or special meeting. If stockholders
are not permitted to call a special meeting, their ability to alter or repeal any bylaw or to adopt new bylaws may not be timely
if such an action is required to be done quickly.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DISCLOSURE OF COMMISSION POSITION OF
INDEMNIFICATION FOR</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECURITIES ACT LIABILITIES</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: left"><B>Indemnification of Directors and Executive
Officers and Limitation of Liability</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><I>Nevada Law</I></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; text-align: left; text-indent: 0.5in">Section 78.7502 of the
Nevada Revised Statutes permits a corporation to indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative,
except an action by or in the right of the corporation, by reason of the fact that he is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys&rsquo; fees,
judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with the action, suit or
proceeding if he:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 74.8pt; text-align: left; text-indent: -37.4pt">&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: 0.5in"></TD><TD STYLE="width: 0.5in">(a)</TD><TD STYLE="text-align: left">is not liable pursuant to Nevada Revised
                                                               Statute 78.138, or</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: left; text-indent: -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: 0.5in"></TD><TD STYLE="width: 0.5in">(b)</TD><TD STYLE="text-align: left">acted in good faith and in a manner
                                                               which he reasonably believed to be in or not opposed to the best
                                                               interests of the corporation, and, with respect to any criminal
                                                               action or proceeding, had no reasonable cause to believe his conduct
                                                               was unlawful.</TD></TR></TABLE>

<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; text-align: left; text-indent: 0.5in">In addition, Section
78.7502 permits a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the
fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against
expenses, including amounts paid in settlement and attorneys&rsquo; fees actually and reasonably incurred by him in connection
with the defense or settlement of the action or suit if he:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 74.8pt; text-align: left; text-indent: -37.4pt">&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: 0.5in"></TD><TD STYLE="width: 0.5in">(a)</TD><TD STYLE="text-align: left">is not liable pursuant to Nevada Revised
                                                               Statute 78.138; or</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: left; text-indent: -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: 0.5in"></TD><TD STYLE="width: 0.5in">(b)</TD><TD STYLE="text-align: left">acted in good faith and in a manner
                                                               which he reasonably believed to be in or not opposed to the best
                                                               interests of the corporation.</TD></TR></TABLE>

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


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<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; text-align: left; text-indent: 0.5in">To the extent that a
director, officer, employee or agent of a corporation has been successful on the merits or otherwise in defense of any action,
suit or proceeding referred to above, or in defense of any claim, issue or matter, the corporation is required to indemnify him
against expenses, including attorneys&rsquo; fees, actually and reasonably incurred by him in connection with the defense.</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; text-align: left; text-indent: 0.5in">Section 78.752 of the
Nevada Revised Statutes allows a corporation to purchase and maintain insurance or make other financial arrangements on behalf
of any person who is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise
for any liability asserted against him and liability and expenses incurred by him in his capacity as a director, officer, employee
or agent, or arising out of his status as such, whether or not the corporation has the authority to indemnify him against such
liability and expenses.</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; text-align: left; text-indent: 0.5in">Other financial arrangements
made by a corporation pursuant to Section 78.752 may include the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 74.8pt; text-align: left; text-indent: -37.4pt">&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: 0.5in"></TD><TD STYLE="width: 0.5in">(a)</TD><TD STYLE="text-align: left">the creation of a trust fund;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: left; text-indent: -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: 0.5in"></TD><TD STYLE="width: 0.5in">(b)</TD><TD STYLE="text-align: left">the establishment of a program of
                                                               self-insurance;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: left; text-indent: -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: 0.5in"></TD><TD STYLE="width: 0.5in">(c)</TD><TD STYLE="text-align: left">the securing of its obligation of
                                                               indemnification by granting a security interest or other lien on
                                                               any assets of the corporation; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: left; text-indent: -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: 0.5in"></TD><TD STYLE="width: 0.5in">(d)</TD><TD STYLE="text-align: left">the establishment of a letter of credit,
                                                               guaranty or surety</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: left; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">No financial arrangement
made pursuant to Section 78.752 may provide protection for a person adjudged by a court of competent jurisdiction, after exhaustion
of all appeals, to be liable for intentional misconduct, fraud or a knowing violation of law, except with respect to the advancement
of expenses or indemnification ordered by a court.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Any discretionary indemnification
pursuant to NRS 78.7502, unless ordered by a court or advanced pursuant to an undertaking to repay the amount if it is determined
by a court that the indemnified party is not entitled to be indemnified by the corporation, may be made by the corporation only
as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper
in the circumstances. The determination must be made:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 74.8pt; text-align: left; text-indent: -37.4pt">&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: 0.5in"></TD><TD STYLE="width: 0.5in">(a)</TD><TD STYLE="text-align: left">by the stockholders;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: left; text-indent: -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: 0.5in"></TD><TD STYLE="width: 0.5in">(b)</TD><TD STYLE="text-align: left">by the board of directors by majority
                                                               vote of a quorum consisting of directors who were not parties to
                                                               the action, suit or proceeding;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: left; text-indent: -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: 0.5in"></TD><TD STYLE="width: 0.5in">(c)</TD><TD STYLE="text-align: left">if a majority vote of a quorum consisting
                                                               of directors who were not parties to the action, suit or proceeding
                                                               so orders, by independent legal counsel in a written opinion, or</TD></TR></TABLE>

<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: 0.5in"></TD><TD STYLE="width: 0.5in">(d)</TD><TD STYLE="text-align: left">if a quorum consisting of directors
                                                               who were not parties to the action, suit or proceeding cannot be
                                                               obtained, by independent legal counsel in a written opinion.</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"><I>Our Articles of Incorporation</I></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-indent: 0.5in">Article Twelfth of our Articles of Incorporation
states that no director or officer of the corporation shall be personally liable to the corporation or any of its stockholders
for damages for breach of fiduciary duty as a director or officer involving any act or omission of any such director or officer.
However, the foregoing provision shall not eliminate or limit the liability of a director or officer (i) for acts or omissions
which involve intentional misconduct, fraud or a knowing violation of the law, or (ii) the payment of dividends in violation of
Section 78.300 of the Nevada Revised Statutes. Any repeal or modification of Article Twelfth by our stockholders shall be prospective
only, and shall not adversely affect any limitations on the personal liability of a director or officer of the corporation for
acts or omissions prior to such repeal or modification.</P>

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


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Our Bylaws</I></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-indent: 0.5in; background-color: white">We must indemnify
a director or former director and we may indemnify a director or former director of a corporation of which we are or were a stockholder
and the heirs and personal representatives of any such person against all costs, charges and expenses, including an amount paid
to settle an action or satisfy a judgment, actually and reasonably incurred by him or them, in a criminal or administrative action
or proceeding to which he is or they are made a party by reason of his or her being or having been a director, including an action
brought by us. Each of our directors, on being elected or appointed, is deemed to have contracted with us on the terms of the
foregoing indemnity.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">We may indemnify
an officer, employee or agent of ours or of a corporation of which we are or were a stockholder (notwithstanding that he is also
a director), and his or her heirs and personal representatives against all costs, charges and expenses incurred by him or them
resulting from his or her acting as an officer, employee or agent.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">We must indemnify
our Secretary or an Assistant Secretary and his or her respective heirs and legal representatives against all costs, charges and
expenses incurred by him or them arising out of the functions assigned to the Secretary by the Corporation Act or the Articles
of Incorporation and each such Secretary and Assistant Secretary, on being appointed is deemed to have contracted with us on the
terms of the foregoing indemnity.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">We may purchase and maintain
insurance for the benefit of a person who is or was serving as our director, officer, employee or agent or as a director, officer,
employee or agent of a corporation of which we are or were a stockholder and his or her heirs or personal representatives against
a liability incurred by him as a director, officer, employee or agent.</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: left; text-indent: 0.5in">Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant
to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. No pending
material litigation or proceeding involving our directors, executive officers, employees or other agents as to which indemnification
is being sought exists, and we are not aware of any pending or threatened material litigation that may result in claims for indemnification
by any of our directors or executive officers.</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: center"><B>TRANSFER AGENT AND REGISTRAR</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: left; text-indent: 0.5in">The transfer agent and
registrar for our common stock is Signature Stock Transfer, Inc. The transfer agent&rsquo;s address is 2632 Coachlight Court,
Plano, Texas 75093 and its phone number is (972) 612-4120.</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: center"><B>INTERESTS OF NAMED EXPERTS AND COUNSEL</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: left; text-indent: 0.5in">We did not hire
any expert or counsel on a contingent basis who will receive a direct or indirect interest in the Company or who was a
promoter, underwriter, voting trustee, director, officer, or employee of the Company. Richardson &amp; Patel LLP, our legal
counsel, has given an opinion regarding certain legal matters in connection with this offering of our securities. Richardson
&amp; Patel LLP has agreed to accept shares of our common stock in exchange for the services that have been and will be
rendered to us in connection with the filings we are required to make pursuant to the Securities Exchange Act of 1934 and the
rules and regulations promulgated thereunder. As of the date of this prospectus, Richardson &amp; Patel LLP and its principals or
persons related to them collectively own 210,000 shares of our 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: center"><B>EXPERTS</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: left; text-indent: 0.5in">The financial statements
included in this prospectus have been audited by MaloneBailey, LLP, independent registered public accounting firm, to the extent
and for the periods set forth in their report appearing elsewhere herein and are included in reliance upon such report given upon
the authority of that firm as experts in auditing and accounting.</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: left"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>WHERE YOU CAN FIND MORE INFORMATION</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; text-indent: 0.5in">We have filed with
the Securities and Exchange Commission a registration statement on Form S-1 under the Securities Act with respect to the shares
of common stock being offered by this prospectus. This prospectus does not contain all of the information included in the registration
statement. For further information pertaining to us and our common stock, you should refer to the registration statement and its
exhibits. Statements contained in this prospectus concerning any of our contracts, agreements or other documents are not necessarily
complete. <FONT STYLE="color: black">If a contract or document has been filed as an exhibit to the registration statement, we
refer you to the copy of the contract or document that has been filed. Each statement in this prospectus relating to a contract
or document filed as an exhibit is qualified in all respects by the filed exhibit.</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-indent: 0.5in">We are subject to the informational requirements
of the Securities Exchange Act of 1934 and file annual, quarterly and current reports and other information with the Securities
and Exchange Commission. You can read our filings, including the registration statement of which this prospectus is a part, over
the internet at the Security and Exchange Commission&rsquo;s website at www.sec.gov. You may also read and copy any document we
file with the Securities and Exchange Commission at its public reference facility at 100 F Street, N.E., Washington, D.C., 20549,
on official business days during the hours of 10 a.m. to 3 p.m. You may also obtain copies of the documents at prescribed rates
by writing to the Public Reference Section of the Securities and Exchange Commission at 100 F Street, N.E., Washington, D.C.,
20549. Please call the Securities and Exchange Commission at 1-800-SEC-0330 for further information on the operation of the public
reference facility.</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&nbsp;II</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INFORMATION NOT REQUIRED IN PROSPECTUS</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; text-align: left"><B>ITEM 13. OTHER EXPENSES OF ISSUANCE AND
DISTRIBUTION</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; text-align: left; text-indent: 0.25in">The following table
sets forth the costs and expenses payable by us in connection with the sale of common stock being registered. All amounts are
estimated, except the registration fee:</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; text-align: left"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 94%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.25in">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 85%; text-align: left">Securities and Exchange Commission registration fee</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">1,015.02</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Printing fees and expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,500.00</TD><TD STYLE="text-align: left">*</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Legal fees and expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">50,000.00</TD><TD STYLE="text-align: left">*</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Accounting fees and expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,000.00</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">Transfer agent and registrar fees and expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,000</TD><TD STYLE="text-align: left">*</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Miscellaneous</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">500.00</TD><TD STYLE="text-align: left">*</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Total</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">55,015.02</TD><TD STYLE="text-align: left">*</TD></TR>
</TABLE>



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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>ITEM 14. INDEMNIFICATION OF DIRECTORS
AND OFFICERS</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; text-align: left"><I>Nevada Law</I></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; text-align: left; text-indent: 0.5in">Section 78.7502 of the
Nevada Revised Statutes permits a corporation to indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative,
except an action by or in the right of the corporation, by reason of the fact that he is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys&rsquo; fees,
judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with the action, suit or
proceeding if he:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 74.8pt; text-align: left; text-indent: -37.4pt">&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: 0.5in"></TD><TD STYLE="width: 0.5in">(a)</TD><TD STYLE="text-align: left">is not liable pursuant to Nevada Revised
                                                               Statute 78.138, or</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: left; text-indent: -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: 0.5in"></TD><TD STYLE="width: 0.5in">(b)</TD><TD STYLE="text-align: left">acted in good faith and in a manner
                                                               which he reasonably believed to be in or not opposed to the best
                                                               interests of the corporation, and, with respect to any criminal
                                                               action or proceeding, had no reasonable cause to believe his conduct
                                                               was unlawful.</TD></TR></TABLE>

<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; text-align: left; text-indent: 0.5in">In addition, Section
78.7502 permits a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the
fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against
expenses, including amounts paid in settlement and attorneys&rsquo; fees actually and reasonably incurred by him in connection
with the defense or settlement of the action or suit if he:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 74.8pt; text-align: left; text-indent: -37.4pt">&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: 0.5in"></TD><TD STYLE="width: 0.5in">(a)</TD><TD STYLE="text-align: left">is not liable pursuant to Nevada Revised
                                                               Statute 78.138; or</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: left; text-indent: -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: 0.5in"></TD><TD STYLE="width: 0.5in">(b)</TD><TD STYLE="text-align: left">acted in good faith and in a manner
                                                               which he reasonably believed to be in or not opposed to the best
                                                               interests of the corporation.</TD></TR></TABLE>

<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; text-align: left; text-indent: 0.5in">To the extent that a
director, officer, employee or agent of a corporation has been successful on the merits or otherwise in defense of any action,
suit or proceeding referred to above, or in defense of any claim, issue or matter, the corporation is required to indemnify him
against expenses, including attorneys&rsquo; fees, actually and reasonably incurred by him in connection with the defense.</P>

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


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<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; text-align: left; text-indent: 0.5in">Section 78.752 of the
Nevada Revised Statutes allows a corporation to purchase and maintain insurance or make other financial arrangements on behalf
of any person who is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise
for any liability asserted against him and liability and expenses incurred by him in his capacity as a director, officer, employee
or agent, or arising out of his status as such, whether or not the corporation has the authority to indemnify him against such
liability and expenses.</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; text-align: left; text-indent: 0.5in">Other financial arrangements
made by a corporation pursuant to Section 78.752 may include the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 74.8pt; text-align: left; text-indent: -37.4pt">&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: 0.5in"></TD><TD STYLE="width: 0.5in">(a)</TD><TD STYLE="text-align: left">the creation of a trust fund;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: left; text-indent: -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: 0.5in"></TD><TD STYLE="width: 0.5in">(b)</TD><TD STYLE="text-align: left">the establishment of a program of
                                                               self-insurance;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: left; text-indent: -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: 0.5in"></TD><TD STYLE="width: 0.5in">(c)</TD><TD STYLE="text-align: left">the securing of its obligation of
                                                               indemnification by granting a security interest or other lien on
                                                               any assets of the corporation; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: left; text-indent: -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: 0.5in"></TD><TD STYLE="width: 0.5in">(d)</TD><TD STYLE="text-align: left">the establishment of a letter of credit,
                                                               guaranty or surety</TD></TR></TABLE>

<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; text-align: left; text-indent: 0.5in">No financial arrangement
made pursuant to Section 78.752 may provide protection for a person adjudged by a court of competent jurisdiction, after exhaustion
of all appeals, to be liable for intentional misconduct, fraud or a knowing violation of law, except with respect to the advancement
of expenses or indemnification ordered by a court.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Any discretionary indemnification
pursuant to NRS 78.7502, unless ordered by a court or advanced pursuant to an undertaking to repay the amount if it is determined
by a court that the indemnified party is not entitled to be indemnified by the corporation, may be made by the corporation only
as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper
in the circumstances. The determination must be made:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 74.8pt; text-align: left; text-indent: -37.4pt">&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: 0.5in"></TD><TD STYLE="width: 0.5in">(a)</TD><TD STYLE="text-align: left">by the stockholders;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: left; text-indent: -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: 0.5in"></TD><TD STYLE="width: 0.5in">(b)</TD><TD STYLE="text-align: left">by the board of directors by majority
                                                               vote of a quorum consisting of directors who were not parties to
                                                               the action, suit or proceeding;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: left; text-indent: -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: 0.5in"></TD><TD STYLE="width: 0.5in">(c)</TD><TD STYLE="text-align: left">if a majority vote of a quorum consisting
                                                               of directors who were not parties to the action, suit or proceeding
                                                               so orders, by independent legal counsel in a written opinion, or</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: left; text-indent: -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: 0.5in"></TD><TD STYLE="width: 0.5in">(d)</TD><TD STYLE="text-align: left">if a quorum consisting of directors
                                                               who were not parties to the action, suit or proceeding cannot be
                                                               obtained, by independent legal counsel in a written opinion.</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"><I>Our Articles of Incorporation</I></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-indent: 0.5in">Article Twelfth of our Articles of Incorporation
states that no director or officer of the corporation shall be personally liable to the corporation or any of its stockholders
for damages for breach of fiduciary duty as a director or officer involving any act or omission of any such director or officer.
However, the foregoing provision shall not eliminate or limit the liability of a director or officer (i) for acts or omissions
which involve intentional misconduct, fraud or a knowing violation of the law, or (ii) the payment of dividends in violation of
Section 78.300 of the Nevada Revised Statutes. Any repeal or modification of Article Twelfth by our stockholders shall be prospective
only, and shall not adversely affect any limitations on the personal liability of a director or officer of the corporation for
acts or omissions prior to such repeal or modification.</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"><I>Our Bylaws</I></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-indent: 0.5in; background-color: white">We must indemnify
a director or former director and we may indemnify a director or former director of a corporation of which we are or were a stockholder
and the heirs and personal representatives of any such person against all costs, charges and expenses, including an amount paid
to settle an action or satisfy a judgment, actually and reasonably incurred by him or them, in a criminal or administrative action
or proceeding to which he is or they are made a party by reason of his or her being or having been a director, including an action
brought by us. Each of our directors, on being elected or appointed, is deemed to have contracted with us on the terms of the
foregoing indemnity.</P>

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


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">We may indemnify
an officer, employee or agent of ours or of a corporation of which we are or were a stockholder (notwithstanding that he is also
a director), and his or her heirs and personal representatives against all costs, charges and expenses incurred by him or them
resulting from his or her acting as an officer, employee or agent.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">We must indemnify
our Secretary or an Assistant Secretary and his or her respective heirs and legal representatives against all costs, charges and
expenses incurred by him or them arising out of the functions assigned to the Secretary by the Corporation Act or the Articles
of Incorporation and each such Secretary and Assistant Secretary, on being appointed is deemed to have contracted with us on the
terms of the foregoing indemnity.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">We may purchase and maintain
insurance for the benefit of a person who is or was serving as our director, officer, employee or agent or as a director, officer,
employee or agent of a corporation of which we are or were a stockholder and his or her heirs or personal representatives against
a liability incurred by him as a director, officer, employee or agent.</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: left; text-indent: 0.5in">Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant
to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. No pending
material litigation or proceeding involving our directors, executive officers, employees or other agents as to which indemnification
is being sought exists, and we are not aware of any pending or threatened material litigation that may result in claims for indemnification
by any of our directors or executive officers.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>ITEM 15. RECENT SALES OF UNREGISTERED
SECURITIES</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; text-align: left; text-indent: 0.5in">Within the past three
years we have sold or issued the following securities not registered under the Securities Act of 1933, as amended (the &ldquo;Securities
Act&rdquo;). Except as stated below, no underwriting discounts or commissions were payable with respect to any of the following
transactions. Unless otherwise indicated below, the offers and sales of the following securities were exempt from the registration
requirements of the Securities Act under Rule 506 insofar as (1) except as stated below, each of the investors was accredited
within the meaning of Rule 501(a); (2) the transfer of the securities was restricted by the Company in accordance with Rule 502(d);
(3) there were no more than 35 non-accredited investors in any transaction within the meaning of Rule 506(b); and (4) none of
the offers and sales were effected through any general solicitation or general advertising within the meaning of Rule 502(c).</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-indent: 0.5in">On January 16, 2013, we closed a private
placement with certain accredited investors (the &ldquo;Investors&rdquo;) pursuant to the terms of a Securities Purchase Agreement
whereby we sold to the Investors an aggregate of 12,610,000 shares of the Company&rsquo;s common stock (the &ldquo;Shares&rdquo;),
at a price of $0.25 per Share, for aggregate cash proceeds to the Company of $3,152,500. In connection with the sale of the Shares
we paid fees totaling $215,000 in cash along with warrants to purchase an aggregate of 275,000 shares of our common stock at a
price per share of $0.50 (the &ldquo;Warrants&rdquo;). The Warrants have a two-year exercise period.</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In January 2013 we entered into agreements
with three consultants who, together, have agreed to accept a total of 1,270,000 shares of our common stock in exchange for services.
<FONT STYLE="color: #010000">All </FONT>of the consultants are accredited investors. We have not yet issued shares of our common
stock to <FONT STYLE="color: #010000">any</FONT><FONT STYLE="color: red"> </FONT>of the consultants.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></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; text-align: left; text-indent: 0.5in">On April 17, 2012, we
issued 20,000,003 unregistered restricted shares of common stock to Art Agolli pursuant to an Assignment Agreement with Mr. Agolli,
whereby Mr. Agolli agreed to convey to us all of his right, title and interest in and to a certain letter of intent between Mr.
Agolli and Sonoro Energy Ltd. The shares of common stock were issued to Mr. Agolli pursuant to the exemption from registration
contained in Regulation S of the Securities Act of 1933, as amended, in that the transaction took place outside the United States
of America with a non-US person.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">On April 18, 2012, concurrent
with his resignation as a director of the Company, Gerhard Schlombs surrendered 22,500,000 shares of the Company`s common stock,
registered in his name, to the corporate treasury for cancellation. Such shares were cancelled by our transfer agent. No compensation
was paid to Mr. Schlombs for the cancellation of his shares.</P>

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


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Between March 23, 2012
and June 21, 2012<FONT STYLE="color: black">, we issued several Convertible Debentures to raise $163,775 (CAD$165,000 face value)
for general working capital. Debentures for $50,000, $25,000, $48,775 (CAD$50,000 face value) and $40,000 were issued to three
non-related parties. The debentures bear interest at 10% per annum and mature one year from the issuance date. Until the due date,
the holder(s) may elect to convert the debenture in whole or in part into common shares of the Company at a conversion rate equal
to the price of any aggregate financing exceeding five hundred thousand ($500,000) dollars less a discount of 25% per share. The
convertible notes were offered&nbsp;pursuant to the exemption from registration contained in Regulation S of the Securities Act
of 1933, as amended, in that the transactions took place outside the United States of America with non-US persons.</FONT></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">On June 11, 2012, we
entered into an agreement with our Art Agolli for a convertible debenture valued at $195,100 (CAD $200,000 face value) for funds
advanced. The convertible debenture matures June 11, 2013 and bears interest at 10%. At any time prior to the Maturity Date, if
we complete an equity or convertible debenture financing yielding aggregate proceeds of at least $500,000 (&ldquo;Qualified Financing&rdquo;),
Mr. Agolli may elect to convert the debenture in whole or in part into our common stock at a price equal to the price per share
at which our common stock was sold in the Qualified Financing, or in the case of a convertible debenture, the price of the shares
issuable upon conversion of the convertible debentures sold in the Qualified Financing. The debenture was issued to Mr. Agolli
pursuant to the exemption from registration contained in Regulation S of the Securities Act of 1933, as amended, in that the transaction
took place outside the United States of America with a non-US person.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">On July 27, 2012, pursuant
to the terms of an agreement entered into with Sonoro Energy Ltd. to purchase certain assets, we issued to Sonoro a convertible
debenture in the principal amount of $254,105 (CAD $250,000 face value). The debenture has a term of two years and is non-interest
bearing. At any time after we have completed an equity or convertible debenture financing yielding aggregate proceeds of at least
$500,000 (a &ldquo;Qualified Financing&rdquo;), the debenture is convertible at the holder&rsquo;s option into shares of our common
stock. The conversion price of the debenture will be equal to the price per share of the shares sold in the Qualified Financing
or the conversion price of the shares issuable upon conversion of the convertible debentures sold in the Qualified Financing.&nbsp;The
debenture was issued to Sonoro pursuant to the exemption from registration contained in Regulation S of the Securities Act of
1933, as amended, in that the transaction took place outside the United States of America with a non-US person.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">In September 2012, the
Company entered into two subscription agreements with a private investor,&nbsp;pursuant to which the private investor purchased
an aggregate of 680,000 shares of our common stock and warrants for the purchase of 340,000 shares of our common stock at an exercise
price of $0.50 per share,&nbsp;exercisable over one year from the purchase date. We received gross proceeds of $170,000 through
this offering.</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: left"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>ITEM 16. EXHIBITS AND FINANCIAL STATEMENT
SCHEDULES</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: center"><B>EXHIBIT INDEX</B></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: 9%; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Number</FONT></TD>
    <TD STYLE="width: 1%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 90%; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Description</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">2.1</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Asset Purchase and Sale Agreement dated
    July 27, 2012 between the registrant and Sonoro Energy Ltd.(1)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">3.1</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Articles of Incorporation(2)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">3.1.1</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Certificate of Amendment to Articles of
    Incorporation and Certificate of Merger(3)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">3.2</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Bylaws(2)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">5.1</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Opinion Regarding Legality**</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">10.1</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Assignment of Shares of Common Stock dated
    April 17, 2012 from Art Agolli in favor of Bearing Mineral Exploration Inc.(4)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">10.2</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Convertible Debenture dated June 29, 2012
    issued to Sonoro Energy Ltd.(1)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">10.3</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Non-Compete and Non-Solicitation Agreement
    dated July 27, 2012 between the registrant and Sonoro Energy Ltd.(1)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">10.4</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Consulting Agreement dated July 27, 2012
    between the registrant and Sonoro Energy Ltd.(1)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">10.5</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Share Sale Contract dated July 27, 2012
    between the registrant and Sonoro Energy Ltd.(1)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">10.6</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Form of Iraq License Agreement dated July
    27, 2012 between the registrant and Sonoro Energy Ltd.(1)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">10.7</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Trust Agreement dated August 14, 2008
    executed by Gerhard Schlombs(2)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">10.8</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Secured Convertible Debenture in the principal
    amount of CDN$200,000 issued on June 6, 2012 in favor of Art Agolli*</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">21</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">List of Subsidiaries*</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">23.1</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Consent of MaloneBailey, LLP*</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">23.2</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Consent of Richardson &amp; Patel LLP**</FONT></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">*Filed herewith.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">**To be provided by amendment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">(1) Incorporated by reference to the registrant&rsquo;s
Current Report on Form 8-K filed with the Securities and Exchange Commission on July 31, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">(2) Incorporated by reference to the registrant's
Registration Statement on Form S-1 filed with the Securities and Exchange Commission on December 19, 2008.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">(3) Incorporated by reference to the registrant's
Current Report on Form 8-K filed with the Securities and Exchange Commission on May 18, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">(4) Incorporated by reference to the registrant&rsquo;s
Current Report on Form 8-K filed with the Securities and Exchange Commission on April 20, 2012.</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>ITEM 17. UNDERTAKINGS</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">The undersigned registrant hereby undertakes:</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: left; text-indent: 0.5in">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:</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 1in; text-align: left">i.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
include any prospectus required by <FONT STYLE="text-underline-style: none; color: windowtext">section 10(a)(3)</FONT> of the
Securities Act of 1933;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: left">ii.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to <FONT STYLE="text-underline-style: none; color: windowtext">Rule
424(b)</FONT> if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate
offering price set forth in the &quot;Calculation of Registration Fee&quot; table in the effective registration statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: left">iii.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
include any material information with respect to the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;</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: left; text-indent: 0.5in">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That,
for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.</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: left; text-indent: 0.5in">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at
the termination of the offering.</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: left; text-indent: 0.5in">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That,
for the purpose of determining liability under the Securities Act of 1933 to any purchaser:</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 1in; text-align: left">A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
prospectus filed by the registrant pursuant to<FONT STYLE="text-underline-style: none; color: windowtext"> Rule 424(b)(3)</FONT>shall
be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the
registration statement; and</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 1in; text-align: left">B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
prospectus required to be filed pursuant to <FONT STYLE="text-underline-style: none; color: windowtext">Rule 424(b)(2)</FONT>,
<FONT STYLE="text-underline-style: none; color: windowtext">(b)(5)</FONT>, or <FONT STYLE="text-underline-style: none; color: windowtext">(b)(7)
</FONT>as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to <FONT STYLE="text-underline-style: none; color: windowtext">Rule
415(a)(1)(i)</FONT>, <FONT STYLE="text-underline-style: none; color: windowtext">(vii)</FONT>, or <FONT STYLE="text-underline-style: none; color: windowtext">(x)
</FONT>for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to
be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after
effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided
in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed
to be a new effective date of the registration statement relating to the securities in the registration statement to which that
prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part
of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede
or modify any statement that was made in the registration statement or prospectus that was part of the registration statement
or made in any such document immediately prior to such effective date; or</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant
of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered,
the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.</P>

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


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Pursuant to the requirements
of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of Calgary, Alberta, Canada, on February 11, 2013.</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="text-align: left">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify; font-weight: bold"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black"><B>PETROSONIC
    ENERGY, INC.</B></FONT></TD></TR>
<TR>
    <TD STYLE="width: 43%; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 9%; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 48%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">By:</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">/s/
    Art Agolli</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">Art Agolli</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">Chief Executive Officer</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">By:</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">/s/
    Richard Raisig</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">Richard Raisig</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">Chief Financial Officer</FONT></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; text-indent: 0.5in">Pursuant to the requirements
of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the
dates indicated:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&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: 52%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Dated: February 11, 2013</FONT></TD>
    <TD STYLE="width: 48%; border-bottom: windowtext 1pt solid">/s/ Art Agolli</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">Art Agolli, Chief Executive Officer (Principal Executive Officer)
    and Director</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">Dated: February 11, 2013</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">/s/
    Richard Raisig</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">Richard Raisig, Chief Financial Officer (Principal</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">Financial and Accounting Officer)</FONT></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">&nbsp;</P>





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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INDEX TO FINANCIAL STATEMENTS AND SCHEDULES</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>PETROSONIC ENERGY, 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">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;Audited Financial Statements</B></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: 95%; border-collapse: collapse; margin-left: 0.25in">
<TR>
    <TD NOWRAP STYLE="vertical-align: top; width: 92%; padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; width: 8%; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Page No.</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top; font-style: italic; font-weight: bold">Financial Statements of Petrosonic Albania Sha.</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">Report of Independent Registered Public Accounting Firm</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">F-2</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">Balance Sheets at December 31, 2011 and December 31, 2010</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">F-3</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">Statements of Expenses for the years ended December 31, 2011 and 2010 and &nbsp;the period from inception (May 24, 2010) through December 31, 2011</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">F-4</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top; padding-left: 0.8pt">Statements of Cash Flows for the years ended December 31, 2011 and 2010 and &nbsp;the period from&nbsp; inception (May 24, 2010) through December 31, 2011</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">F-5</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">Statements of Stockholders&rsquo; Deficit for the period from inception (May 24, 2010) to December 31, 2011</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">F-6</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">Notes to Financial Statements</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">F-7</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top; font-style: italic; font-weight: bold">Financial Statements of Petrosonic Energy, Inc.</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">Report of Independent Registered Public Accounting Firm</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">F-11</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">Balance Sheets as of December 31, 2011 and October 31, 2011</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">F-12</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-left: 0.8pt">Statements of Operations for the two months ended December 31, 2011, the years ended&nbsp; October 31, 2011 and 2010 and for the period from inception (June 11, 2008) through December 31, 2011</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">F-13</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top; padding-left: 0.8pt">Statements of Stockholders&rsquo; Deficit for the period from inception (June 11, 2008) to December 31, 2011</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">F-14</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-left: 0.8pt">Statements of Cash Flows for the two months ended December 31, 2011, the years ended&nbsp; October 31, 2011 and 2010 and for the period from inception (June 11, 2008) through December 31, 2011</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">F-15</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">Notes to Financial Statements</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">F-16</TD></TR>
</TABLE>
<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 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"><B>PETROSONIC ENERGY, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(a Development Company)</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: center"><B>Unaudited Consolidated Financial Statements</B></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: 95%; border-collapse: collapse; margin-left: 0.25in">
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-bottom: 1pt; width: 92%">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; font-weight: bold; text-align: center; width: 8%">Page No.</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top; font-style: italic; font-weight: bold"><FONT STYLE="font: normal 10pt Times New Roman, Times, Serif">Consolidated
    Balance Sheets-September 30, 2012 (Unaudited) and December 31, 2011</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: center">F-19</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">Consolidated Statements of Operations for the three and nine months ended September 30, 2012&#9;and
for the period from Inception through September 30, 2012</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">F-20</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">Consolidated Statements of Cash Flows for the nine months ended
September 30, 2012 and 2011&#9;and for the period from Inception through September 30, 2012</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">F-21</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-left: 0.8pt">Notes to Financial Statements</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">F-22</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>

<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">&#9;</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: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: bold 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; text-align: center">REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM</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">To the Board of Directors</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Tirana, Albania</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 audited the accompanying balance
sheets of Petrosonic Albania SHA. (a development stage company) (the &ldquo;Company&rdquo;) as of December 31, 2011and December
31, 2010 and the related statements of expenses, shareholders&rsquo; equity, and cash flows for the years ended December 31, 2011
and December 31, 2010 and the period from May 24, 2010 (inception) through December 31, 2011. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on
our audits.</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 conducted our audits in accordance with
the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform
an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is
not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included
consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company&rsquo;s internal control over
financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable
basis for our opinion.</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">In our opinion, the financial statements
referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2011 and December
31, 2010 and the results of its operations and its cash flows for the years then ended and the period from May 24, 2010 (inception)
through December 31, 2011 in conformity 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">The accompanying financial statements have
been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the
Company suffered reoccurring losses since inception, which raises substantial doubt about its ability to continue as a going concern.
Management&rsquo;s plans regarding those matters also are described in Note 2. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.</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 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: 45%; text-decoration: none; border-bottom: Black 1pt solid">/S/MALONEBAILEY, LLP</TD>
    <TD STYLE="width: 55%; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>MaloneBailey, LLP</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><U>www.malonebailey.com</U></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Houston, Texas</TD>
    <TD>&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">July 20, 2012</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%"><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>Petrosonic Albania SHA.</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 Sheets</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="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="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">December 31, 2011</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">December 31,<BR>
 2010</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold">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><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><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: 74%; padding-left: 9pt">Cash</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">1,655</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">146</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 9pt">Valued-added taxes receivable</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">86,136</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">3,725</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><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">Total current assets</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">87,791</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">3,871</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">Property and equipment, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">617,924</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">183,874</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; 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">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">705,715</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">187,745</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>&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: White">
    <TD STYLE="font-weight: bold; text-align: left">LIABILITIES &amp; STOCKHOLDERS' EQUITY</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">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><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">Accounts payable</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">204,176</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</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 liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">204,176</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></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Stockholders' equity:</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">Common stock, 100,000 shares authorized, $25.64 par value - 60,195 and 60,017 shares issued and outstanding, respectively</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,543,406</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,538,836</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <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">(1,008,356</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,331,364</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Other comprehensive income</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,607</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">69</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">(35,118</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">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(19,796</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">Total stockholders&rsquo; equity</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">501,539</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">187,745</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt">TOTAL LIABILITIES &amp; STOCKHOLDERS' EQUITY</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">705,715</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">187,745</TD><TD STYLE="padding-bottom: 1pt; 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: center">See accompanying notes to audited 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%"><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>Petrosonic Albania SHA.</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 Expenses</B></P>

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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Year Ended <BR>December 31,</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; padding-bottom: 1pt">Inception<BR> (May 24,<BR> 2010)<BR> through<BR>
December 31,</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&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="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><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">2011</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>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><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: 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></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 61%; text-align: left; padding-bottom: 1pt">General and administrative expenses</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="width: 10%; text-align: right; border-bottom: Black 1pt solid">15,322</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="width: 10%; text-align: right; border-bottom: Black 1pt solid">19,796</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="width: 10%; text-align: right; border-bottom: Black 1pt solid">35,118</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt">&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></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Total operating expenses</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">15,322</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">19,796</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">35,118</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><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="text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(15,322</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(19,796</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(35,118</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Other Comprehensive income,</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">Foreign currency translation adjustment</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">1,538</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">69</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">1,607</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-bottom: 2.5pt">Comprehensive loss</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">(13,784</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">(19,727</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">(33,511</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">Loss per common share - Basic &nbsp;and diluted</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.01</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">(0.01</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: right">&nbsp;</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>&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: White">
    <TD>Weighted average common shares outstanding - </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: 0.24in; padding-bottom: 2.5pt">Basic and diluted</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">2,564,000</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">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">2,564,000</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; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="text-align: right; padding-bottom: 2.5pt">&nbsp;</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">&nbsp;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Petrosonic Albania SHA.</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 Cash Flows</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="border-collapse: collapse; width: 100%; 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="6" NOWRAP STYLE="font-weight: bold; text-align: center">For the Year Ended</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">May 24, 2010<BR>
(inception)</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center">December 31,</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">through</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&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">2011</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">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">December 31, 2011</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; 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><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: White">
    <TD STYLE="width: 61%; text-align: left">Net loss</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">(15,322</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">(19,796</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: 10%; text-align: right">(35,118</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; text-indent: -0.1in; padding-left: 0.1in">Adjustments to reconcile net loss to net cash (used in) provided by 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><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: White">
    <TD STYLE="text-align: left">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><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-left: 9pt">Receivables</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(82,411</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,725</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(86,136</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Accounts payable and accrued expenses</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">204,176</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">204,176</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="font-weight: bold; text-align: left; padding-bottom: 1pt; padding-left: 0.25in">Net cash (used in) provided by 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">106,443</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">(23,521</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">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">82,922</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><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="font-weight: bold; text-align: left">Cash flows from investing 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><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: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Cash paid for purchase of 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">(438,833</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">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(183,874</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">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(622,707</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt; padding-left: 0.25in">Net cash used in investing 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">(438,833</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">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(183,874</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">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(622,707</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></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; 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><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: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Contributed capital</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">327,578</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">207,472</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">535,050</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="font-weight: bold; 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">327,578</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">207,472</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">535,050</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">Effect of exchange rate changes on cash</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,321</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">69</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,390</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 increase in cash</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,509</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">146</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,655</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">Cash &nbsp;at the beginning of the year</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">146</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></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">Cash at the end of the year</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">1,655</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">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">146</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,655</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">Supplemental disclosures of 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><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: 2.5pt">Cash paid for interest</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">Cash paid for income taxes</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</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>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Non-cash investing and financing transactions:</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: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">Shareholders&rsquo; paid in capital for acquisition of license</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">4,570</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,538,836</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">1,538,836</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 1in; text-align: center; text-indent: -1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: center; text-indent: -1in">See accompanying
notes to audited financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: center; text-indent: -1in">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: center; text-indent: -1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Petrosonic Albania SHA.</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 STOCKHOLDERS&rsquo; DEFICIT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>For the period from May 24, 2010 (Inception)
to December 31, 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" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Common Stock</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; padding-bottom: 1pt">Additional<BR>
Paid in </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; padding-bottom: 1pt">Other<BR>
Comprehensive</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">Accumulated</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; padding-bottom: 1pt">Total<BR>
Stockholders&rsquo;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&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">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"> Income</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"> Deficit</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">Equity</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 1pt">Balance at May 24, 2010 (Inception)</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">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</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">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</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">-</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><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="width: 34%; text-align: left">Common stock issued for license</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">60,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">1,538,400</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">(1,538,400</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">-</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><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">Common stock issued for contributed capital</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">436</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(436</TD><TD STYLE="text-align: left">)</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">-</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></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><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">Contributed capital</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">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">207,472</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">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">207,472</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><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 comprehensive income</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">-</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">69</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">69</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><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">&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">(19,796</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">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(19,796</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><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: 1pt">Balance at December 31, 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">60,017</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">1,538,836</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">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,331,364</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">69</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">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(19,796</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">187,745</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><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">Common stock issued for contributed capital</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">178</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,570</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4,570</TD><TD STYLE="text-align: left">)</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">-</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></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><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">Contributed capital</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">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">327,578</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">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">327,578</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><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 comprehensive income</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">-</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">1,538</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">1,538</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><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="text-align: left; border-bottom: Black 1pt solid"></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">-</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">-</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">-</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">-</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">(15,322</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</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">(15,322</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</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><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 at December 31, 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">60,195</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">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,543,406</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(1,008,356</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">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,607</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(35,118</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">501,539</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 0pt 1in; text-align: center; text-indent: -1in">See accompanying
notes to audited financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: center; text-indent: -1in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PETROSONIC ALBANIA SHA.</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>NOTES TO FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>December 31, 2011</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"><B>Note 1 &ndash; Organization, nature
of operations and summary of significant accounting policies</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Organization and nature of operations</I></B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Petrosonic Albania Sha.,(the &ldquo;Company&rdquo;)
was incorporated on May 24, 2010 in Tirana, Albania. The Company has not generated revenues since inception. The two initial shareholders
are Sonoro Energy Ltd (a Canadian publicly traded company in TSX- symbol; SNV) and Albnafta, Ltd, an Albanian private company.
The Company complies with Statement of Financial Accounting Standard ASC 915-15 and the Securities and Exchange Commission Exchange
Act 7 for its characterization of the Company as development stage.</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">Petrosonic Albania Sha. is a company that
operates in de-asphalting and separation of asphalt from heavy crude oil, oil sands, waste oils under a license agreement with
Sonoro Energy Ltd which allows the Company to use the propriety sonic technology which was developed, patented and owned by Sonoro
Energy formerly Sonic Technology Solutions in the territory of Republic of Albania.</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><I>Use of estimates</I></B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The preparation of financial statements
in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of financial statements
and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.</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"><FONT STYLE="color: black"><B><I>Cash
and cash equivalents</I></B></FONT></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Cash equivalents are highly liquid investments
with an original maturity of three months or less.</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><I>Property and equipment, net</I></B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Property and equipment are carried at the
cost of acquisition or construction and depreciated over the estimated useful lives of the assets. Costs associated with repair
and maintenance are expensed as incurred. Costs associated with improvements which extend the life, increase the capacity or improve
the efficiency of our property and equipment are capitalized and depreciated over the remaining life of the related asset. Gains
and losses on dispositions of equipment are reflected in operations. Depreciation is provided using the straight-line method over
the estimated useful lives of the assets, which are 3 to 5 years. The Company has not recognized depreciation since inception as
none of the equipment has been used in 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 0pt 1in; text-align: center; text-indent: -1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Impairment of long-lived assets </I></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 reviews the carrying value
of its long-lived assets annually or whenever events or changes in circumstances indicate that the historical-cost carrying value
of an asset may no longer be appropriate. The Company assesses recoverability of the asset by comparing the undiscounted future
net cash flows expected to result from the asset to its carrying value. If the carrying value exceeds the undiscounted future net
cash flows of the asset, an impairment loss is measured and recognized. An impairment loss is measured as the difference between
the net book value and the fair value of the long-lived asset. Fair value is estimated based upon either discounted cash flow analysis
or estimated salvage value. There was no impairment of assets as of December 31, 2011 and December 31, 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><I>Research and development </I></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">Costs incurred in connection with the development
of new products and manufacturing methods are charged to selling, general and administrative expenses as incurred. During the years
ended December 31, 2011 and 2010, $-0- and $10,704, respectively, were expensed as research and development costs.</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><I>Income taxes</I></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">Deferred tax assets and liabilities are
recognized for the estimated future tax consequences attributable to temporary differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax bases. These assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which the temporary differences are expected to reverse.</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 net operating loss carryforwards
available to reduce future taxable income. Future tax benefits for these net operating loss carryforwards are recognized to the
extent that realization of these benefits is considered more likely than not. To the extent that we will not realize a future tax
benefit, a valuation allowance is established.</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><I>Basic and diluted net loss per share</I></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">Basic loss per share is computed using
the weighted average number of shares of common stock outstanding during each period. Diluted loss per share includes the dilutive
effects of common stock equivalents on an &ldquo;as if converted&rdquo; basis. For the years ended December 31, 2010 and 2011,
potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common
share</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><I>Foreign currency translation </I></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">Assets and liabilities of foreign operations
are translated from Albanian Leks into United States dollar equivalents using the exchange rates in effect at the balance sheet
date. Revenues and expenses are translated using the average exchange rates during each period. Adjustments resulting from the
process of translating foreign functional currency financial statements into U.S. dollars are included in accumulated other comprehensive
income in common shareholders&rsquo; equity. Foreign currency transaction gains and <FONT STYLE="font-family: Times New Roman, Times, Serif">losses
are included in current earnings. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1in"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Fair Value of Financial Instruments</I>
</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; text-indent: 0">Financial instruments
are recorded at fair value in accordance with the standard for &ldquo;Fair Value Measurements codified within ASC 820&rdquo;, which
defines fair values, establishes a three level valuation hierarchy for disclosures of fair value measurement and enhances disclosure
requirements for fair value measurements:</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">&bull; Level 1 &ndash; inputs
to the valuation methodology are quoted prices (unadjusted) for identical asset or liabilities in active markets.</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">&bull; Level 2 &ndash; inputs
to the valuation methodology include closing prices for similar assets and liabilities in active markets, and inputs that are observable
for the assets and liabilities, either directly, for substantially the full term of the financial instruments.</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">&bull; Level 3 &ndash; inputs
to the valuation methodology are observable and significant to the fair value.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Recently issued accounting pronouncements</I></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 expect the adoption
of any recently issued accounting pronouncements to have a significant effect on its consolidated financial position or results
of operations.</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>Note 2 - Going concern</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 reflected in the accompanying financial
statements, the Company has incurred reoccurring losses since inception. This raises substantial doubt about the Company&rsquo;s
ability to continue as a going concern. The Company&rsquo;s ability to continue as a going concern is dependent on its ability
to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might
be necessary if the Company is unable to continue as a going concern.</P>

<P STYLE="font: 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>Note 3 &ndash; Related party transactions</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">During 2010, shareholders contributed $207,472
for the purchase of machinery. During 2011, shareholders contributed $327,578 for the building built by the Company in Albania.&nbsp;</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"><B>Note 4 &ndash; Value-added taxes receivable</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">At December 31, 2011, the Company has $86,189
receivable from Tax Authorities for value added tax.</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">In April 2012, the Company filed for and
received a refund of this tax amount from the government of Albania.</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"><B>Note 5 - Shareholders&rsquo; equity</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Common stock</I></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 par value per share is 2,605 Albanian
Leks, or approximately $25.64.</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">Sonoro Energy Ltd. received 60,000 common shares from the Company
in exchange for Sonoro Energy&rsquo;s heavy oil technology license as of December 31, 2011.</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">Albnafta Shpk received 195 shares as of
December 31, 2011 in exchange for $117,067 cash contributions as of that date, and no additional shares in 2012.</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 0pt 1in; text-align: center; text-indent: -1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Note 6 &ndash; Commitments and contingencies</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>O<I>perating lease</I></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">Total rent expense for 2011 and 2010 was
$9,209 and $0, respectively.</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>Note 7 &ndash; 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 uses the liability method,
where deferred tax assets and liabilities are determined based on the expected future tax consequences of temporary differences
between the carrying amounts of assets and liabilities for financial and income tax reporting purposes. During fiscal 2011 and
2010, the Company incurred net losses and, therefore, has no tax liability. The net deferred tax asset generated by the loss carry-forward
has been fully reserved. The cumulative net operating loss carry-forward is approximately $35,000 at 2011, and will expire in the
years 2013.</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&rsquo;s net deferred income
tax asset as of December 31, 2011 and 2010, after applying the corporate income tax rate in Albania of 10%, are as follows:</P>

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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&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">December 31, 2011</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">December 31, 2010</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <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: 74%; text-align: left">Nets operating loss carry forward</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">3,512</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">1,980</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; padding-bottom: 1pt">Valuation allowance</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">(3,512</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">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,980</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></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 2.5pt">Total</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">-</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">&nbsp;</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"><FONT STYLE="text-underline-style: double">&nbsp;</FONT></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 REGISTERED PUBLIC
ACCOUNTING FIRM</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">To the Board of Directors</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Calgary, Canada</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 audited the accompanying balance
sheets of Petrosonic Energy, Inc. (a development stage company) (the &ldquo;Company&rdquo;) as of December 31, 2011and October
31, 2011 and 2010 and the related statements of operations, shareholders&rsquo; deficit, and cash flows for the periods then ended
and the period from June 11, 2008 (inception) through December 31, 2011. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.</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 conducted our audits in accordance with
the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform
an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is
not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included
consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company&rsquo;s internal control over
financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable
basis for our opinion.</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">In our opinion, the financial statements
referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2011 and October
31, 2011 and 2010 and the results of its operations and its cash flows for the periods then ended and the period from June 11,
2008 (inception) through December 31, 2011 in conformity 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">The accompanying financial statements have
been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the
Company suffered reoccurring losses since inception, which raises substantial doubt about its ability to continue as a going concern.
Management&rsquo;s plans regarding those matters also are described in Note 2. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.</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 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: 45%; border-bottom: windowtext 1pt solid">/S/MALONEBAILEY, LLP</TD>
    <TD STYLE="width: 55%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>MaloneBailey, LLP</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><U>www.malonebailey.com</U></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Houston, Texas</TD>
    <TD>&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">October 8, 2012</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>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 100%; font-weight: bold; text-align: center; border-top: Black 1pt solid">PETROSONIC ENERGY, INC.</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">(Formerly Bearing Mineral Exploration, Inc.)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: center">(A Development Stage Company)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; font-weight: bold; text-align: center">BALANCE SHEETS</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: right">December 31,</TD><TD NOWRAP STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: right">October 31,</TD><TD NOWRAP STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: right">October 31,</TD><TD NOWRAP STYLE="font-weight: bold; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: right; border-bottom: Black 1pt solid">2011</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold; text-align: right">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: right; border-bottom: Black 1pt solid">2011</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold; text-align: right">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt; text-align: right">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: right; border-bottom: Black 1pt solid">2010</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <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="font-weight: bold">ASSETS</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><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><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: 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></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <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><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: White">
    <TD STYLE="width: 61%; padding-left: 9pt; padding-bottom: 1pt">Cash</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="width: 10%; text-align: right; border-bottom: Black 1pt solid">378</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="width: 10%; text-align: right; border-bottom: Black 1pt solid">3,310</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="width: 10%; text-align: right; border-bottom: Black 1pt solid">2,340</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">Total Assets</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">378</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">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">3,310</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2,340</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="font-weight: bold">&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: White">
    <TD STYLE="font-weight: bold">LIABILITIES</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><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><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>&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: White">
    <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><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: 9pt">Accounts payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,515</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,175</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,331</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">Accrued liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,250</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,500</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-bottom: 1pt; padding-left: 9pt">Advance from shareholder</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">42,000</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">42,000</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">28,000</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><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: 2.5pt">Total Liabilities</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">48,765</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">48,675</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">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">34,831</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><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="font-weight: bold; text-align: left">STOCKHOLDERS' DEFICIT</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><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><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: 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></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Common Stock</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: White">
    <TD STYLE="padding-left: 9pt">843,750,000 shares authorized, with a $0.001 par value Issued and outstanding: 67,149,000 shares as of December 31, 2011 and October 31, 2011, respectively</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">67,149</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">67,149</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">67,149</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><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: White">
    <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">(26,136</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(26,136</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(26,136</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><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: 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">(89,400</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">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(86,378</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">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(73,504</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><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: White">
    <TD STYLE="text-align: left">Total Stockholders' Deficit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(48,387</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(45,365</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(32,491</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><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: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">Total Liabilities and Stockholders' Deficit</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">378</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">3,310</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">2,340</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; 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"><B>See accompanying Notes to the Audited
Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 100%; border-top: windowtext 1pt solid; padding-top: 0.75pt; padding-right: 0.75pt; padding-left: 0.75pt; font-weight: bold; text-align: center">PETROSONIC ENERGY, INC.</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-top: 0.75pt; padding-right: 0.75pt; padding-left: 0.75pt; font-weight: bold; text-align: center">(Formerly Bearing Mineral Exploration, Inc.)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-top: 0.75pt; padding-right: 0.75pt; padding-left: 0.75pt; font-weight: bold; text-align: center">(A Development Stage Company)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-top: 0.75pt; padding-right: 0.75pt; padding-left: 0.75pt; font-weight: bold; text-align: center">STATEMENT OF OPERATIONS</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="color: black; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="color: black; font-weight: bold; text-align: right">November 1, 2011</TD><TD NOWRAP STYLE="color: black; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center">Fiscal Years Ended<BR> </TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: right">For the Period<BR> From June 11, 2008<BR> (date of inception)</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="font-weight: bold; padding-left: 0.75pt">&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: right"><B>Through</B></TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="text-align: center"><B>October 31,</B></TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: right"><B>to December 31,</B></TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="font-weight: bold; padding-left: 0.75pt; padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: right; border-bottom: Black 1pt solid"><B>December 31,2011</B></TD><TD NOWRAP STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: right; border-bottom: Black 1pt solid"><B>2011</B></TD><TD NOWRAP STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: right; border-bottom: Black 1pt solid"><B>2010</B></TD><TD NOWRAP STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: right; border-bottom: Black 1pt solid"><B>2011</B></TD><TD NOWRAP STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="font-weight: bold; padding-left: 0.75pt">&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" 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="font-weight: bold; padding-left: 0.75pt">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><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: White">
    <TD STYLE="padding-left: 0.75pt">&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: 9pt; width: 48%">General and administrative expenses</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">3,022</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">12,874</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">29,259</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">89,400</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">Mineral property costs</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">&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 STYLE="text-align: left; padding-bottom: 1pt; padding-left: 0.75pt">Total Expenses</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">3,022</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">12,874</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">29,259</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">89,400</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.75pt">&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="font-weight: bold; text-align: left; padding-bottom: 2.5pt; padding-left: 0.75pt">NET LOSS</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">(3,022</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">)</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">(12,874</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">)</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">(29,259</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">)</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">(89,400</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.75pt">&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="font-weight: bold; padding-left: 0.75pt">LOSS PER SHARE:</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: White">
    <TD STYLE="padding-left: 0.75pt">&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: 9pt">Basic and Diluted</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">0.00</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">0.00</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">0.00</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.75pt">&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="font-weight: bold; padding-left: 0.75pt">WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING</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: White">
    <TD STYLE="padding-left: 0.75pt">&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: 9pt">Basic and Diluted</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">67,149,000</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">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">67,149,000</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">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">67,149,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: right">&nbsp;</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 1in; text-align: center; text-indent: -1in">&nbsp;</P>

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

<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: 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"></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>For the Period from June 11, 2008 (date
of inception) to December 31, 2011</B></P>

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

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

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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center">Common&nbsp;Shares</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">Additional<BR> Paid-in</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">Deficit<BR> Accumulated<BR> During&nbsp;the<BR> Development</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&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">Number</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">Par Value</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">Capital</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">Stage</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">Total</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">$</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">$</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">$</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">$</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>Balance June 11, 2008 (date of inception)</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">-</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">-</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></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="width: 35%">Shares issued for cash on June 17, 2008 at $0.00008889 per share</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">37,125,188</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">37,125</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">(33,825</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">3,300</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><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>Shares issued for cash on September 19, 2008 at $0.0008889 per share</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">29,137,688</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">29,138</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,238</TD><TD STYLE="text-align: left">)</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">25,900</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>Shares issued for cash on October 6, 2008 at $0.0133339 per share</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">886,124</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">886</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,927</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">11,813</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 for the year</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">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(11,642</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">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(11,642</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>Balance, October 31, 2008</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">67,149,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">67,149</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(26,136</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(11,642</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">29,371</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 for the year</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">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(32,603</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">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(32,603</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>Balance, October 31, 2009</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">67,149,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">67,149</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(26,136</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(44,245</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,232</TD><TD STYLE="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; padding-bottom: 1pt">Net loss for the year</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">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(29,259</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">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(29,259</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>Balance, October 31, 2010</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">67,149,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">67,149</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(26,136</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(73,504</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(32,491</TD><TD STYLE="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; padding-bottom: 1pt">Net loss for the year</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">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(12,874</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">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(12,874</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>Balance, October 31, 2011</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">67,149,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">67,149</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(26,136</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(86,378</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(45,365</TD><TD STYLE="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: 1pt">Net loss for period ended December 31, 2011</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">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(3,022</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">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(3,022</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, December 31, 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">67,149,000</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">67,149</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">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(26,136</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(89,400</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">(48,387</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 0pt 1in; text-align: center; text-indent: -1in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: center; text-indent: -1in"><B>See accompanying
Notes to the Audited Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: center; text-indent: -1in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: center; text-indent: -1in">&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 NOWRAP STYLE="width: 100%; border-top: windowtext 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black"><B>PETROSONIC ENERGY, INC.</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="font-weight: bold; text-align: center">(A Development Stage Company)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; font-weight: bold; text-align: center">STATEMENTS OF CASH FLOWS</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="color: black; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="color: black; font-weight: bold; text-align: center">November&nbsp;1,<BR> 2011&nbsp;through<BR> December&nbsp;31,</TD><TD NOWRAP STYLE="color: black; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center">For&nbsp;the&nbsp;Years&nbsp;Ended&nbsp;<BR> October&nbsp;31,</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">For&nbsp;the&nbsp;Period&nbsp;From<BR> June&nbsp;11,&nbsp;2008<BR> (date&nbsp;of&nbsp;inception)</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&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">2011</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">2011</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">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">to&nbsp;December&nbsp;31,&nbsp;2011</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <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="font-weight: bold; text-align: left">CASH 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><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: White">
    <TD STYLE="font-weight: bold">&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="width: 48%; text-align: left">Net loss</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">(3,022</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">(12,874</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">(29,259</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">(89,400</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></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">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><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: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Accounts payable and accrued liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">90</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(156</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,702</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,765</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">Prepaid expenses</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">498</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: right">&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: 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></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Net Cash Provided By (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">(2,932</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">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(13,030</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">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(27,059</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">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(82,635</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></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">CASH 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><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: White">
    <TD STYLE="font-weight: bold">&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: 9pt">Net advances from shareholder</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">14,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">42,000</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 common stock</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">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">41,013</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><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: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Net Cash Provided By (Used In) 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">-</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">14,000</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">13,000</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">83,013</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><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: White">
    <TD STYLE="font-weight: bold; text-align: left">NET INCREASE (DECREASE) IN CASH</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,932</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">970</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(14,059</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">378</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold">&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: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt">CASH, BEGINNING</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">3,310</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">2,340</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">16,399</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></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><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: White">
    <TD STYLE="font-weight: bold; padding-bottom: 2.5pt">CASH, ENDING</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">378</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">3,310</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">2,340</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">378</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</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; text-align: center; text-indent: 0.5in"><B>See accompanying
Notes to the Audited Financial Statements</B>.</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>

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    <TD STYLE="width: 100%; border-bottom: windowtext 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Petrosonic Energy, Inc.</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>(Formerly Bearing Mineral Exploration, Inc.)</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>(A Development Stage Company)</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Notes to the Financial Statements</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>December 31, 2011</B></P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">1.</TD><TD STYLE="text-align: justify">Nature and Continuance of Operations</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 0.25in; text-align: justify">Petrosonic Energy, Inc. (&ldquo;we&rdquo;,
&ldquo;our&rdquo; or the &ldquo;Company&rdquo;) was incorporated in the state of Nevada on June 11, 2008. The Company is a Development
Stage Company, as defined by ASC 915 &ldquo;Development Stage Entities&rdquo;. The Company&rsquo;s principal business plan up to
May 2010 was to acquire, explore and develop mineral properties and ultimately seek out earnings by exploiting mineral claims.
The Company is now seeking alternative business opportunities and is furthering its business plan.</P>

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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">2.</TD><TD STYLE="text-align: justify">Going Concern</TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">These financial statements have
been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities
in the normal course of business. The Company has never generated revenues since inception and has never paid any dividends and
is unlikely to pay dividends or generate earnings in the immediate or foreseeable future. At December 31, 2011 the Company has
limited cash resources and will likely require new financing, either through loans from officers, debt financing, equity offerings
or business combinations, to continue the development of its business; however, there can be no assurance that management will
be successful in raising the funds necessary to maintain operations, or that a self-supporting level of operations will ever be
achieved. The likely outcome of these future events is indeterminable. The continuation of the Company as a going concern is dependent
upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to
continue operations and the attainment of profitable operations. As of December 31, 2011, the Company has never generated any revenues
and has accumulated losses of $89,400 since inception. These financial statements do not include any adjustments to the recoverability
and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable
to continue as a going concern. These factors raise substantial doubt regarding the Company&rsquo;s ability to continue as a going
concern.</P>

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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">3.</TD><TD STYLE="text-align: justify">Summary of Significant Accounting Policies</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" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left">a)</TD><TD STYLE="text-align: justify">Use of Estimates and Assumptions</TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The preparation of financial
statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to deferred
income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience
and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent
from other sources. The actual results experienced by the Company may differ materially and adversely from the Company&rsquo;s
estimates. To the extent there are material differences between the estimates and the actual results, future results of operations
will be affected.</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">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <TD STYLE="width: 100%; border-bottom: windowtext 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Petrosonic Energy, Inc.</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>(Formerly Bearing Mineral Exploration, Inc.)</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>(A Development Stage Company)</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Notes to the Financial Statements</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>December 31, 2011</B></P></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" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">3.</TD><TD STYLE="text-align: justify">Summary of Significant Accounting Policies (continued)</TD>
</TR></TABLE>

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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left">b)</TD><TD STYLE="text-align: justify">Cash and Cash Equivalents</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; 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 considers all highly
liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. The Company maintains
its cash in bank deposit accounts, which, at times, may exceed federally insured limits. &nbsp;Management does not believe the
Company is exposed to significant credit risk. &nbsp;Management, as well, does not believe the Company is exposed to significant
interest rate and foreign currency fluctuation risks during the period presented in these financial statements. As of December
31, 2011 and October 31, 2011, there are no amounts that exceed the federally insured limits.</P>

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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left">c)</TD><TD STYLE="text-align: justify">Income Taxes</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 Company accounts for income
taxes using the asset and liability method in accordance with ASC 740, &ldquo;Accounting for Income Taxes&rdquo;. The asset and
liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary
differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carryforwards.
Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the
differences are expected to reverse. The Company records a valuation allowance to reduced deferred tax assets to the amount that
is believed more likely than not to be realized.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 210pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left">d)</TD><TD STYLE="text-align: justify">Loss Per Share</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 Company computes loss per
share in accordance with ASC 260, &ldquo;Earnings per Share&rdquo; which requires presentation of both basic and diluted earnings
per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common
shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect
to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares
if their effect is anti-dilutive.</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">e)</TD><TD STYLE="text-align: justify">Recent Accounting Pronouncements</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">We do not expect the adoption
of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash
flow.</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"></TD><TD STYLE="width: 0.25in">4.</TD><TD>Related Party Transactions</TD></TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">As of December 31, 2011 and
October 31, 2011, our President is owed $42,000 for additional working capital. The amount is unsecured, non-interest bearing and
due on demand.</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; 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: 100%; border-bottom: windowtext 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Petrosonic Energy, Inc.</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>(Formerly Bearing Mineral Exploration, Inc.)</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>(A Development Stage Company)</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Notes to the Financial Statements</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>December 31, 2011</B></P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 210pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">5.</TD><TD STYLE="text-align: justify">Income Taxes</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 0.25in; text-align: justify">The Company has incurred net
operating losses of $89,400 which expire in fiscal years ended 2023 through 2031. The Company has established a valuation allowance
equal to the tax effect of the loss carryforwards and, therefore, no deferred tax asset has been recognized for the loss carryforwards.
&nbsp;The net deferred tax asset is $13,410 as of December 31, 2011, for which the Company recorded a valuation allowance because
the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 210pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">The reconciliation of the benefit for income taxes
computed at the U.S. federal statutory rate to the Company&rsquo;s effective tax rate for the periods ended December 31, 2011 and
October 31, 2011 is as follows:</P>

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

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">Period&nbsp;Ended<BR> December&nbsp;31,<BR> 2011</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">Year&nbsp;Ended<BR> October&nbsp;31,<BR> 2011</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">$</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">$</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 74%; text-align: left; text-indent: 1.25pt">Income tax recovery at statutory rate</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">13,410</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">12,957</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-bottom: 1pt; text-indent: 1.25pt">Valuation allowance change</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">(13,410</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">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(12,957</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-indent: 1.25pt">&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: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: 1.25pt">Net deferred tax asset</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">&ndash;</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">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&ndash;</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 0.25in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">6.</TD><TD STYLE="text-align: justify">Subsequent Events</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 21.3pt; text-align: justify">On May 16, 2012 the Company
changed its name to Petrosonic Energy, Inc. to better reflect the Company&rsquo;s new business direction in anticipation of the
purchase of certain rights in technology, assets and common shares owned by Sonoro Energy Ltd. Concurrent with the name change
the Company effected a forward stock split on the basis of 11.25:1, <FONT STYLE="color: black">whereby each shareholder would hold
11.25 common shares for every one share previously held. The Company&rsquo;s share transactions disclosed in the financial statements
have been restated retroactively to reflect the forward stock split for all periods presented.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.3pt; text-align: justify">On July 27, 2012, the Company
acquired certain assets from Sonoro Energy Ltd. including (i) certain technology relating to the treatment and upgrading of heavy
oil by sonicated solvent de-asphalting, (ii) 60,000 shares of Petrosonic Albania pursuant to a share purchase agreement and (iii)
sonic reactors located in Albania and Richmond, British Columbia and a solvent recovery system located in or around Turin, Italy.
In exchange for the assets, the Company agreed to pay to Sonoro the following consideration: (i) $250,000, (ii) a convertible debenture
in the principal amount of $250,000 and (iii) a 10% royalty interest in our realized net revenues for a period of 10 years from
the time we commence commercial operations, which is defined as the date upon which we process an average of 50 barrels of feed
stock per day over a period of 30 consecutive days utilizing the technology acquired. As a result of acquiring the 60,000 shares,
the Company acquired controlling interest in Petrosonic Albania Sha. and Petrosonic Albania Sha. became a majority owned subsidiary
of the Company. Effective July 27, 2012, the Company&rsquo;s primary operations consist of utilizing the Assets to develop a business
relating to the treatment and upgrading of heavy oil by sonicating solvent de-asphalting and operating the business of Petrosonic
Albania Sha. On August 9, 2012, the Company&rsquo;s Board of Directors approved changing the fiscal year end of the Company from
October 31 to December 31 as a result of the acquisition of Petrosonic Albania Sha.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.3pt; text-align: justify">&nbsp;&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="text-align: center; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

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

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 3pt; margin-bottom: 3pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="text-align: center; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">PETROSONIC ENERGY, INC.</P>

<P STYLE="text-align: center; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">(Formerly Bearing Mineral Exploration, Inc.)</P>

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

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

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

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 3pt; margin-bottom: 3pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

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



<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center">Successor Entity</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center">Predecessor Entity (Albania Only)</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">September 30, 2012</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">December 31, 2011</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify">ASSETS</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: -7.1pt; padding-left: 7.1pt">Current assets:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 70%; font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;Cash</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">148,465</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">1,655</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;Value added taxes receivable</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">45,557</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">86,136</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify">Total current assets</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">194,022</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">87,791</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">Property and equipment, net of accumulated
    depreciation of $0, respectively</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">613,377</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">617,924</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt">Intangible asset</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">50,000</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify; padding-bottom: 2.5pt">Total assets</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">857,399</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">705,715</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify">LIABILITIES</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">Current liabilities:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;Accounts &amp; interest payable</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">63,750</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">204,176</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;Accrued liabilities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">12,869</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;Convertible notes payable &ndash; related party</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">450,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;Convertible notes payable</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">165,000</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify; padding-bottom: 2.5pt">Total liabilities</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">691,619</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">204,176</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify">STOCKHOLDERS' EQUITY (DEFICIT):</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">Common stock, 843,750,000 shares authorized, with a $0.001 par value. <BR>&nbsp; <BR>Issued and outstanding: 65,329,000 and 60,195 shares as of <BR>September 30, 2012 and December 31, 2011, respectively</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">65,329</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,543,406</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">Non- Controlling Interest</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">65,506</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: justify">Additional paid-in capital</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">300,580</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(1,008,356</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">Other comprehensive income</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">47,243</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,607</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt">Deficit accumulated during the development stage</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(312,878</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(35,118</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt">Total stockholders' equity (deficit)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">165,780</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">501,539</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify; padding-bottom: 2.5pt">TOTAL LIABILITIES &amp; STOCKHOLDERS' EQUITY (DEFICIT)</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">857,399</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">705,715</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; 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: center">The accompanying notes are an integral part
of these unaudited 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"></P>

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    <TD COLSPAN="15" STYLE="border-top: windowtext 1pt solid; text-align: center; font-weight: bold">PETROSONIC ENERGY, INC.</TD></TR>
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    <TD COLSPAN="15" STYLE="text-align: center; font-weight: bold">(Formerly Bearing Mineral Exploration, Inc.)</TD></TR>
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    <TD COLSPAN="15" STYLE="text-align: center; font-weight: bold">(A Development Stage Company)</TD></TR>
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    <TD COLSPAN="15" STYLE="text-align: center; font-weight: bold">CONSOLIDATED STATEMENTS OF OPERATIONS</TD></TR>
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    <TD COLSPAN="15" STYLE="border-bottom: windowtext 1pt solid; text-align: center; font-weight: bold">(Unaudited)</TD></TR>
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    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt">Three Months Ended</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt">Nine Months Ended</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt">Period From Inception</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">September
    30, 2012</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">September
    30, 2012</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">To
    September 30, 2012</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">Successor
    Entity</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">Predecessor
    Entity</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">Successor
    Entity</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">Predecessor
    Entity</FONT></TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">Successor
    Entity</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">Predecessor
    Entity</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">July
    31, <BR>2012</FONT></TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">July
    1, <BR>2012</FONT></TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt">Three Months</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt">July 31, 2012</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt">January 1, 2012</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt">Nine Months</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt">July 31, 2012</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-size: 7pt">Inception</FONT></TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt">Through</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt">Through</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt">Ended</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt">Through</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt">Through</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt">Ended</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt">Through</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt">Through</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">September
    30, 2012</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">July
    31, 2012</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">September
    30, 2011</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">September
    30, 2012</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">July
    31, 2012</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">September
    30, 2011</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">September
    30, 2012</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">July
    31, 2012</FONT></TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; width: 12%"><FONT STYLE="font-size: 7pt">General
    &amp; <BR>Administrative Expenses</FONT></TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">$</FONT></TD><TD STYLE="width: 8%; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 7pt">51,026</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; font-size: 10pt; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">$</FONT></TD><TD STYLE="width: 8%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">483</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1pt; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">$</FONT></TD><TD STYLE="width: 8%; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 7pt">(6,477</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">)</FONT></TD><TD STYLE="width: 1%; font-size: 10pt; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">$</FONT></TD><TD STYLE="width: 8%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">51,026</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1pt; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">$</FONT></TD><TD STYLE="width: 8%; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 7pt">4,751</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">$</FONT></TD><TD STYLE="width: 8%; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 7pt">14,958</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; font-size: 10pt; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">$</FONT></TD><TD STYLE="width: 8%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">51,026</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1pt; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">$</FONT></TD><TD STYLE="width: 8%; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 7pt">39,869</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-size: 7pt">Net loss from continuing
    operations</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 7pt">(51,026</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">)</FONT></TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">(483</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">)</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 7pt">6,477</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">(51,026</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">)</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 7pt">(4,751</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">)</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 7pt">(14,958</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">)</FONT></TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">(51,026</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">)</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 7pt">(39,869</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;Interest Expense</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">12,869</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">12,869</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">Bargain Purchase Gain</FONT></TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">(89,553</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">)</FONT></TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">(89,553</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">)</FONT></TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-size: 7pt">Net Income (loss)</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 7pt">25,658</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">(483</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">)</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 7pt">6,477</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">25,658</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 7pt">(4,751</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">)</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 7pt">(14,958</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">)</FONT></TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">(51,026</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">)</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 7pt">(39,869</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-size: 7pt">Basic
    and Diluted Loss <BR>per Common Share</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 7pt">0.00</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">(0.00</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">)</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 7pt">0.00</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">0.00</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 7pt">(0.00</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">)</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 7pt">(0.01</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">)</FONT></TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-size: 7pt">Basic
    and Diluted <BR>Weighted Average <BR>Common Shares Outstanding</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 7pt">64,807,689</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">2,564,000</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 7pt">2,564,000</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">64,807,689</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 7pt">2,564,000</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 7pt">2,564,000</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 6.95pt 0pt 0; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 6.95pt 0pt 0; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 6.95pt 0pt 0; text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P></TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
</TABLE>

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

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

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

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 3pt; margin-bottom: 3pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="text-align: center; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">PETROSONIC ENERGY, INC.</P>

<P STYLE="text-align: center; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">(Formerly Bearing Mineral Exploration, Inc.)</P>

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

<P STYLE="text-align: center; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">CONSOLIDATED STATEMENTS OF CASH FLOWS</P>

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

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 3pt; margin-bottom: 3pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

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



<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Successor Entity</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Predecessor Entity</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Predecessor Entity</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center">July 31, 2012</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center">January 1, 2012</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center">Nine Months</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center">Inception</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center">Through</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center">Through</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center">Ended</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center">Through</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">September <BR>30, 2012</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">July <BR>31, 2012</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">September 30, 2011</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">July <BR>31, 2012</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify">Cash flows from Operating Activities:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 40%; font-size: 10pt; text-align: justify">Net loss</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">25,658</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">(4,751</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">(14,958</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">(39,869</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: justify">Adjustments to reconcile net loss to net cash used in operating activities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">Bargain purchase gain</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(89,553</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: 7.1pt">Changes in operating assets and liabilities:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: 21.3pt">&nbsp;&nbsp;&nbsp;Other Assets: VAT receivable</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(1,635</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">42,227</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(81,628</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(43,909</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt; text-indent: 21.3pt">&nbsp;&nbsp;&nbsp;Accounts Payable and Accrued expenses</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">41,906</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(194,370</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">211,151</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">9,806</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify; text-indent: 28.35pt">Net Cash used in operating activities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(23,624</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(156,894</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">114,565</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(73,972</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify">Cash flows from investing activities:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: justify">Cash paid for acquisition</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(250,000</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">Cash received in acquisition</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">11,524</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt">Cash paid for purchase of property and equipment</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(53,945</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(492,360</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(622,707</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify; text-indent: 28.35pt">Net Cash used in investing activities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(292,421</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(492,360</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(622,707</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify">Cash flows from financing activities:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: justify">Proceeds from issuance of stock</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">170,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">Capital contribution by non-controlling interest</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(5,104</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">164,888</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">347,579</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">699,938</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt">Borrowings on debt</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">250,000</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify; text-indent: 28.35pt">Net cash provided by financing activities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">414,896</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">164,888</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">347,579</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">699,938</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">Other equity</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">42,491</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,875</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">32,408</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">8,265</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: justify">Net increase in cash</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">141,342</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">9,869</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2,192</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">11,524</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt">Cash, beginning</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">7,123</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">1,655</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">146</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 2.5pt">Cash, ending</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">148,465</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">11,524</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">2,338</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">11,524</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 2.5pt">Non Cash Investing and Financing Activities:</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt"> Convertible note issued for acquisition</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">250,000</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

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

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

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>Petrosonic Energy, Inc.</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>(Formerly Bearing Mineral Exploration,
        Inc.)</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>(A Development Stage Company)</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>Notes to the Unaudited Consolidated Financial
        Statements</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>September 30, 2012</B></P></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; text-align: left"><B>NOTE 1: &#9;Basis of Financial Statement
Presentation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.3pt; text-align: left; text-indent: -21.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The accompanying unaudited consolidated
interim financial statements of Petrosonic Energy, Inc. (formerly Bearing Mineral Exploration, Inc.) (&lsquo;we&rdquo;, &ldquo;our&rdquo;
or the &ldquo;Company&rdquo;) have been prepared in accordance with accounting principles generally accepted in the United States
of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the Company&rsquo;s
audited financial statements, the audited financial statements of Petrosonic Albania Sha. and the notes thereto, for the transition
period from November 1, 2011 to December 31, 2011 filed with the SEC on Form 10-K/T. In the opinion of management, all adjustments,
consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations
for the interim period presented have been reflected herein. The results of operations for the interim period are not necessarily
indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate
the disclosures contained in the audited financial statements for the most recent fiscal period ended December 31, 2011, as reported
in the Form 10-K/T, have been omitted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.3pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 2:&#9;Purchase of Petrosonic Albania
Sha.</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"><FONT STYLE="color: black">On July 27,
2012, </FONT> the Company acquired certain assets from Sonoro Energy Ltd. including (i) certain technology relating to the treatment
and upgrading of heavy oil by sonicated solvent de-asphalting, (ii) 60,000 shares (89% holding) of Petrosonic Albania Sha. pursuant
to a share purchase agreement and (iii) sonic reactors located in Albania and Richmond, British Columbia and a solvent recovery
system located in or around Turin, Italy. In exchange for the assets, the Company agreed to pay to Sonoro the following consideration:
(i) CAD$250,000, (ii) a convertible debenture in the principal amount of CAD$250,000 and (iii) a 10% royalty interest in our realized
net revenues for a period of 10 years from the time we commence commercial operations, which is defined as the date upon which
we process an average of 50 barrels of feed stock per day over a period of 30 consecutive days utilizing the technology acquired.
<FONT STYLE="color: black">The fair value allocation is CAD$250,000 for the 89% interest of Petrosonic Albania Sha., CAD$200,000
for the equipment and CAD$50,000 for the technology. Effective July 27, 2012 the Company&rsquo;s primary operations consist of
utilizing the assets to develop a business relating to the treatment and upgrading of heavy oil by sonicating solvent de-asphalting
and operating the business of Petrosonic Albania Sha. </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">Immediately before the sale, Sonoro Energy
Ltd.'s ownership of Petrosonic Albania Sha. was 89%; thus, there is a reclassification of $30,899 or 11% from additional paid in
capital to non-controlling interest representing the extrapolated fair value of the entity based on the CAD$250,000 fair value
of the 89% interest.</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 Purchase and Sale is accounted for
using the purchase method. As a result of the merger, Petrosonic Albania Sha. became a majority owned subsidiary of the Company.
The assets and liabilities of the acquired entity have been brought forward at their fair value.</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>

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<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>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>Petrosonic Energy, Inc.</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>(Formerly Bearing Mineral Exploration,
        Inc.)</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>(A Development Stage Company)</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>Notes to the Unaudited Consolidated Financial
        Statements</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>September 30, 2012</B></P></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;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 2:&#9;Purchase of Petrosonic Albania
Sha. (continued)</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">A summary of the purchase price consideration
and related purchase price allocation are shown below:</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>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 65%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left">Purchase Price</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 50%; font-size: 10pt; text-align: justify">&nbsp;&nbsp;Cash at closing</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">250,000</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;&nbsp;Convertible Note Payable</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">250,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 2.5pt">&nbsp;&nbsp;Total Purchase Price</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right; border-bottom: Black 2.5pt double">500,000</TD><TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left">Purchase Price Allocation</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;&nbsp;Cash</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">11,524</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;&nbsp;Accounts Receivable</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">43,909</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;&nbsp;Equipment</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">609,432</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;&nbsp;Accounts Payable</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(9,806</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt">&nbsp;&nbsp;Non-Controlling Interest</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right; border-bottom: Black 1pt solid">(65,506</TD><TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">589,553</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt">&nbsp;Bargain Purchase Gain</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right; border-bottom: Black 1pt solid">(89,553</TD><TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 2.5pt">&nbsp;Total Purchase Price</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right; border-bottom: Black 2.5pt double">500,000</TD><TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt">&nbsp;</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;<B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 3:&#9;Going Concern</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">At September 30, 2012, the Company has an accumulated deficit.
As such, the accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The
Company does not have sufficient working capital for its planned activities, which raises substantial doubt about its ability to
continue as a going concern.</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">Continuation of the company as a going
concern is dependent upon obtaining additional working capital. The management of the Company has developed a strategy, which it
believes will accomplish this objective through short-term loans from related parties and additional equity investments, which
will enable the Company to continue operations for the coming year. The continuation of the Company as a going concern is dependent
upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to
continue operations, and the attainment of profitable operations. These factors raise substantial doubt regarding the Company&rsquo;s
ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification
of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as
a going concern.</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: left"><B>NOTE 4:&#9;Related Party Transactions</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the nine months ended September
30, 2012, $42,000 was repaid to our former President for funds previously advanced to the Company for additional working capital.</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>

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<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>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>Petrosonic Energy, Inc.</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>(Formerly Bearing Mineral Exploration,
        Inc.)</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>(A Development Stage Company)</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>Notes to the Unaudited Consolidated Financial
        Statements</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>September 30, 2012</B></P></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;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>NOTE 4:&#9;Related Party Transactions (continued)</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">On June 11, 2012, we borrowed $195,100
from our President under a convertible debenture with a face value of CAD$200,000. The convertible debenture matures June 11, 2013
and bears interest at 10%. At any time prior to the Maturity Date, if we complete an equity or convertible debenture financing
yielding aggregate proceeds of at least $500,000, our President may elect to convert the debenture in whole or in part into common
shares at the same price any shares are sold, or in the case of a convertible debenture, the price of the shares issuable upon
conversion.<FONT STYLE="color: black"> </FONT>The Company evaluated the convertible note for derivatives noting that as the conversion
price cannot</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">be determined until $500,000 in financing
has been raised; the derivative liability cannot be determined as of September 30, 2012.</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: left">On July 27, 2012, pursuant to the
terms of the Purchase Agreement, in exchange for the Assets, we issued to Sonoro Energy Ltd. a convertible debenture
for CAD$250,000. The Debenture has a term of two years and is non-interest bearing. At any time after we have completed an
equity or convertible debenture financing yielding aggregate proceeds of at least $500,000, the Debenture is convertible at
the holder&rsquo;s option into shares of our common stock. The conversion price of the Debenture will be equal to the price
per share of the shares sold in the Qualified Financing or the conversion price of the shares issuable upon conversion of
the convertible debentures sold in the Qualified Financing. As of September 30, 2012, the Qualified Financing had not
occurred, as such no derivative liability was determined.</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>NOTE 5:&#9;Capital Stock</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">On April 17, 2012, the Company issued 20,000,003
common shares valued at $160,000 to Art Agolli in exchange for all of his interest in a letter of intent with Sonoro Energy Ltd.</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: left">On April 18, 2012, concurrent with his resignation
as a director of the Company, Gerhard Schlombs surrendered 22,500,000 common shares. No compensation was paid to Mr. Schlombs for
the cancellation of his shares.</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; text-align: justify">On May 16, 2012 the Company effected a
forward stock split on the basis of 11.25:1, <FONT STYLE="color: black">whereby each shareholder would hold 11.25 common shares
for every one share previously held. The Company&rsquo;s share transactions disclosed in the financial statements have been restated
retroactively to reflect the forward stock split for all periods presented. </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"><FONT STYLE="color: black">During the quarter
ended September 30, 2012, the Company</FONT> sold <FONT STYLE="background-color: white">680,000 common shares and 680,000 warrants
</FONT><FONT STYLE="color: black">exercisable to purchase one half (1/2) of one share of common stock at an exercise price of $0.50
per share, </FONT>exercisable over one year from the purchase date<FONT STYLE="color: black">. Gross proceeds received by the Company
were $170,000.</FONT></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 0pt 0.25in; text-align: justify; text-indent: -0.25in"><B>NOTE
6:&#9;Convertible Notes Payable</B></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the nine months ended September
30, 2012, we have borrowed $163,775 ($165,000 face value) under several Convertible Debentures totaling to that amount. The debentures
bear interest at 10% per annum and mature one year from the issuance date. Until the due date, the holder(s) may elect to convert
the debenture in whole or in part into common shares at the price of any aggregate financing exceeding $500,000 less a discount
of 25% per share. The Company evaluated the convertible note for derivatives noting that as the conversion price cannot be determined
until $500,000 in financing has been raised; the derivative liability cannot be determined as of September 30, 2012.</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>

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

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>Petrosonic Energy, Inc.</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>(Formerly Bearing Mineral Exploration,
        Inc.)</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>(A Development Stage Company)</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>Notes to the Unaudited Consolidated Financial
        Statements</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>September 30, 2012</B></P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.3pt; text-align: left; text-indent: -21.3pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.3pt; text-align: left; text-indent: -21.3pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.3pt; text-align: left; text-indent: -21.3pt"><FONT STYLE="color: black"><B>NOTE
7:&#9;Restatement</B></FONT><B> </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; text-align: justify">Certain prior interim period amounts have
been restated to conform with the current consolidated interim period presentation.</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"></P>

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<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>

</BODY>
</HTML>
[{"type": "S-1", "sequence": "1", "filename": "v334396_s1.htm", "description": "FORM S-1", "secsgml_size_bytes": 1128282}]
{"company-data": {"conformed-name": "PETROSONIC ENERGY, INC.", "cik": "0001451654", "assigned-sic": "1000", "irs-number": "980585718", "state-of-incorporation": "NV", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-186580", "film-number": "13593302"}, "business-address": {"street1": "SUITE 204, 205 - 9TH STREET, SE", "city": "CALGARY", "state": "A0", "zip": "T2G 0R3", "phone": "(403) 708-7869"}, "mail-address": {"street1": "SUITE 204, 205 - 9TH STREET, SE", "city": "CALGARY", "state": "A0", "zip": "T2G 0R3"}, "former-company": {"former-conformed-name": "Bearing Mineral Exploration, Inc.", "date-changed": "20081209"}}
As filed with the Securities and Exchange
Commission on February 11, 2013
Registration No. 333-
UNITED STATES SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
Form S-1
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933
PETROSONIC ENERGY, INC.
(Exact Name of Registrant as Specified
in Its Charter)
Nevada
1389
98-0585718
(State or other
    jurisdiction of
(Primary Standard
    Industrial
(I.R.S. Employer
incorporation
    or organization)
Classification
    Code Number)
Identification
    No.)
Suite 300, 714 – 1st Street SE
Calgary, Alberta, Canada T2G 2G8
(403) 708-7869
(Address, including zip code, and telephone
number, including area code, of registrant's principal executive offices)
Art Agolli
Chief Executive Officer
Petrosonic Energy, Inc.
Suite 300, 714 - 1st Street SE
Calgary, Alberta, Canada T2G 2G8
(403) 708-7869
(Name, address, including zip code, and
telephone number, including area code, of agent for service)
Copies to:
Kevin Friedmann, Esq.
Richardson & Patel LLP
The Chrysler Building
405 Lexington Avenue, 49th Floor
New York, New York 10174
(212) 561-5559
From time-to-time after the effective
date of this Registration Statement.
(Approximate date of commencement of
proposed sale to the public)
If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933 check the following box.
x
If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act registration statement number of the earlier effective registration
statement for the same offering.
¨
If
this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following
box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
¨
If
this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
¨
Indicate by check mark
whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company"
in Rule 12b-2 of the Exchange Act (Check one):
Large accelerated filer
¨
Accelerated filer
¨
Non-accelerated filer
¨
(Do
    not check if a smaller reporting company)
Smaller reporting company
x
CALCULATION OF REGISTRATION FEE
Title of Each Class of
Securities to be
Registered
Amount to be
Registered(1)
Proposed Maximum
Offering Price per
Unit(2)
Proposed Maximum
Aggregate Offering
Price(2)
Amount of
Registration Fee
Common Stock, $0.001 par value
12,210,000
$
0.61
$
7,448,100
$
1,015.92
(1) Pursuant to Rule 416(a) under the Securities
Act of 1933, as amended, this registration statement shall also cover such indeterminate number of additional shares of the registrant's
common stock that become issuable by reason of any stock dividend, stock split, recapitalization or other similar transaction
that increases the number of the registrant's outstanding shares to be offered pursuant to the applicable plan described
herein.
(2) Estimated solely for purposes of calculating
the registration fee in accordance with Rule 457(c) of the Securities Act of 1933, as amended, based on the average of the closing
bid and asked prices for the registrant's common stock as reported on the OTCQB on February 7, 2013.
The registrant hereby
amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this Registration Statement shall become effective
on such date as the Commission, acting pursuant to said Section 8(a), may determine.
The information in this prospectus
is not complete and may be changed. The selling stockholders may not sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION,
DATED FEBRUARY 11, 2013
PRELIMINARY PROSPECTUS
12,210,000 Shares of Common Stock
PETROSONIC ENERGY, INC.
This prospectus covers
the resale by the selling stockholders named on page 39 of up to 12,210,000 shares of our common stock, $0.001 par value.
These securities will
be offered for sale by the selling stockholders identified in this prospectus in accordance with the methods and terms described
in the section of this prospectus titled "Plan of Distribution." We will not receive any of the proceeds from the
sale of these shares. The selling stockholders may be deemed "underwriters" within the meaning of the Securities Act
of 1933, as amended, in connection with the sale of their common stock under this prospectus. We will pay all the expenses incurred
in connection with the offering described in this prospectus, with the exception of brokerage expenses, fees, discounts and commissions,
which will all be paid by the selling stockholders. Our common stock is more fully described in the section of this prospectus
titled "Description of Securities."
The prices at which the
selling stockholders may sell the shares of common stock that are part of this offering may be the prevailing market price for
the shares at the time the shares are sold, a price related to the prevailing market price, negotiated prices or prices determined,
from time to time, by the selling stockholders. See the section of this prospectus titled "Plan of Distribution."
Our common stock is
currently
quoted on the OTCQB under the symbol "PSON". On February 8, 2013, the closing price of our common stock was $0.57
per share.
AN INVESTMENT IN OUR COMMON STOCK INVOLVES
A HIGH DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 3.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION
NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is _____________,
2013.
TABLE OF CONTENTS
Page
CAUTIONARY
    NOTE REGARDING FORWARD-LOOKING STATEMENTS
ii
PROSPECTUS
    SUMMARY
1
RISK
    FACTORS
3
USE
    OF PROCEEDS
11
MARKET
    FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
11
MANAGEMENT'S
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
13
OUR
BUSINESS
22
PROPERTIES
34
LEGAL
    MATTERS
34
DIRECTORS
    AND EXECUTIVE OFFICERS
35
EXECUTIVE
    COMPENSATION
36
CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
37
SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
37
SELLING
    STOCKHOLDERS
39
PLAN
    OF DISTRIBUTION
41
DESCRIPTION
    OF SECURITIES TO BE REGISTERED
42
DISCLOSURE
    OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
43
TRANSFER
    AGENT AND REGISTRAR
45
INTERESTS
    OF NAMED EXPERTS AND COUNSEL
45
EXPERTS
45
WHERE
    YOU CAN FIND MORE INFORMATION
46
INDEX
    TO CONSOLIDATED FINANCIAL STATEMENTS
F-1
Unless otherwise stated or the context
otherwise requires, the terms "Petrosonic," "we," "us," "our" and the "Company"
refer to Petrosonic Energy, Inc. and its subsidiary.
You should rely only on the information
contained in this prospectus. We have not authorized anyone to provide you with additional or different information. The information
contained in this prospectus is accurate only as of the date on the front cover of this prospectus, regardless of the time of
delivery of this prospectus or of any sale of our common stock.
No dealer, salesperson or any other person
is authorized in connection with this offering to give any information or make any representations about us, the securities offered
hereby or any matter discussed in this prospectus, other than those contained in this prospectus and, if given or made, the information
or representations must not be relied upon as having been authorized by us. This prospectus does not constitute an offer to sell
or a solicitation of an offer to buy any security other than the securities offered by this prospectus, or an offer to sell or
a solicitation of an offer to buy any securities by anyone in any circumstance in which the offer or solicitation is not authorized
or is unlawful.
i
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This prospectus,
including the sections titled "Prospectus Summary," "Risk Factors," "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and "Our Business," contains
forward-looking statements. We have based these statements on our beliefs and assumptions, based on information currently
available to us. These forward-looking statements are subject to risks and uncertainties. Forward-looking statements include
the information concerning our possible or assumed future results of operations, our total market opportunity and our
business plans and objectives.
Forward-looking statements
are not guarantees of performance. Our future results and requirements may differ materially from those described in the forward-looking
statements. Many of the factors that will determine these results and requirements are beyond our control. In addition to the
risks and uncertainties discussed in this prospectus, investors should consider the following:
•
our ability to successfully
                                                                           implement our business strategy,
•
the impact of competition
                                                                           and changes to the competitive environment on our products
                                                                           and services, and
•
other factors detailed
                                                                           from time to time in our filings with the Securities
                                                                           and Exchange Commission.
These forward-looking
statements speak only as of the date of this prospectus. We do not intend to update or revise any forward-looking statements to
reflect changes in our business anticipated results of our operations, strategy or planned capital expenditures, or to reflect
the occurrence of unanticipated events, except as required by law.
ii
PROSPECTUS SUMMARY
This summary highlights information contained
elsewhere in this prospectus. It does not contain all of the information that you should consider before investing in our common
stock. You should read the entire prospectus carefully, including the section titled "Risk Factors" and our consolidated
financial statements and the related notes. You should only rely on the information contained in this prospectus. We have not,
and the selling stockholders have not, authorized any other person to provide you with different information. This prospectus
is not an offer to sell, nor is it seeking an offer to buy, these securities in any state where the offer or sale is not permitted.
The information in this prospectus is accurate only as of the date on the front cover, but the information may have changed since
that date.
Unless the context otherwise requires,
when we use the words "Petrosonic," "the Company," "we," "us" or "our Company"
in this prospectus, we are referring to Petrosonic Energy, Inc., a Nevada corporation, and all of its subsidiaries.
OUR COMPANY
We intend to develop
and deliver innovative technologies to the energy sector for use in the production of petroleum products. Currently, our primary
focus is to provide technologies that upgrade heavy oil economically and in an environmentally friendly manner. Our patented Sonoprocess
™ uses cleantech sonic energy to de-asphalt heavy oil in much smaller scale operations and at lower capital costs than conventional
upgraders and without the use of water or release of emissions into the atmosphere.
THE OFFERING
We are registering shares
of our common stock for sale by the selling stockholders identified in the section of this prospectus titled "Selling Stockholders."
The shares included in the table identifying the selling stockholders consist of 12,210,000 shares of our common stock issued
pursuant to subscription agreements entered into on January 16, 2013.
The shares of common
stock issued and outstanding prior to this offering consist of 65,329,000 shares of common stock. This number does not include:
·
warrants
                                                                                                               to purchase 340,000
                                                                                                               shares of our common
                                                                                                               stock at an exercise
                                                                                                               price of $.50 per
                                                                                                               share, exercisable
                                                                                                               until July 27,
                                                                                                               2013;
·
warrants
to purchase an aggregate of 275,000 shares of our common stock at an exercise price of $.50, exercisable until January 16, 2015;
·
2,679,988
shares of common stock that may be issued if holders of convertible debentures with a total principal amount of $115,000 plus
CDN$500,000, issued by us between March 23, 2012 and July 27, 2012, are converted by the holders; and
·
1,270,000
shares
of common
                                                                                                               stock                                                                                                                that we
                                                                                                               plan to issue to
                                                                                                               three consultants who have agreed to accept our common stock in payment for their services.
Information regarding
our common stock is included in the section of this prospectus titled "Description of Securities."
The shares of common
stock offered under this prospectus may be sold by the selling stockholders in the public market, in negotiated transactions with
a broker-dealer or market maker as principal or agent, or in privately negotiated transactions not involving a broker or dealer.
Information regarding the selling stockholders, the common shares they are offering to sell under this prospectus, and the times
and manner in which they may offer and sell those shares is provided in the sections of this prospectus titled "Selling
Stockholders" and "Plan of Distribution." We will not receive any of the proceeds from those sales. The registration
of common shares pursuant to this prospectus does not necessarily mean that any of those shares will ultimately be offered or
sold by the selling stockholders.
1
CORPORATE INFORMATION
Our
principal executive offices are located at
Suite 300, 714 - 1st Street SE, Calgary, Alberta, Canada T2G 2G8
.
Our telephone number is
(403) 708-7869
. Our corporate website is www.petrosonic.net. Information
included on our website is not part of this prospectus.
2
RISK FACTORS
This offering involves a high degree of
risk. You should carefully consider the risks described below and the other information in this prospectus, including our financial
statements and the notes to those statements, before you purchase our common stock. The risks and uncertainties described below
are those that we currently believe may materially affect our Company. Additional risks and uncertainties may also impair our
business operations. If the following risks actually occur, our business, financial condition and results of operations could
be seriously harmed, the trading price of our common stock could decline and you could lose all or part of your investment.
Risks Related to our Business
We have incurred losses in prior periods
and may incur losses in the future.
We cannot be assured
that we can achieve or sustain profitability on a quarterly or annual basis in the future.  Our operations are subject
to the risks and competition inherent in the establishment of a business enterprise.  There can be no assurance that
future operations will be profitable.  We may not achieve our business objectives and the failure to achieve such goals
would have an adverse impact on us.
Our future is dependent upon our ability
to obtain financing.  If we do not obtain such financing, we may have to cease our activities and investors could lose
their entire investment.
There is no assurance
that we will operate profitably or generate positive cash flow in the future.  We will require additional financing
·
in
                                                                                                               order to proceed
                                                                                                               beyond the establishment
                                                                                                               of our own stand-alone
                                                                                                               facilities, including
                                                                                                               the processing
                                                                                                               facility in Albania;
·
to
                                                                                                               pay the fees and
                                                                                                               expenses necessary
                                                                                                               to operate as a
                                                                                                               public company;
·
if
                                                                                                               the costs of the
                                                                                                               development and
                                                                                                               operation of our
                                                                                                               existing technologies
                                                                                                               are greater than
                                                                                                               we have anticipated;
                                                                                                               and
·
to
                                                                                                               sustain our business
                                                                                                               operations if we
                                                                                                               are not successful
                                                                                                               in earning revenues.
When additional financing
is required, we may not be able to obtain it on commercially reasonable terms or terms that are acceptable to us.  Our
future is dependent upon our ability to obtain financing.  If we do not obtain such financing, our business could fail
and investors could lose their entire investment.
Because we may never earn revenues from
our operations, our business may fail and investors may lose all of their investment in our Company.
We have no history of
revenues from operations.  We have yet to generate positive earnings and there can be no assurance that we will ever
operate profitably.  Our Company has a limited operating history.  If our business plan is not successful
and we are not able to operate profitably, then our stock may become worthless and investors may lose all of their investment
in our Company.
Prior to completion of
the oil processing facility in Albania, we anticipate that we will incur increased operating expenses without realizing any revenues.  We
therefore expect to incur significant losses into the foreseeable future.  We recognize that if we are unable to generate
significant revenues from our processing facilities in the future, we will not be able to earn profits or continue operations.  There
is no history upon which to base any assumption as to the likelihood that we will prove successful, and we can provide no assurance
that we will generate any revenues or ever achieve profitability.  If we are unsuccessful in addressing these risks,
our business will fail and investors may lose all of their investment in our Company.
3
We may not be fully indemnified against
financial losses in all circumstances where damage to or loss of property, personal injury, death or environmental harm occur.
As is customary in our
industry, our contracts will typically provide that our customers indemnify us for claims arising from the injury or death of
their employees, the loss or damage of their equipment, damage to the reservoir and pollution emanating from the customer's
equipment or from the reservoir (including uncontained oil flow from a reservoir). Conversely, we will typically indemnify our
customers for claims arising from the injury or death of our employees, the loss or damage of our equipment, or pollution emanating
from our equipment. Our contracts will typically provide that our customer will indemnify us for claims arising from catastrophic
events, such as a well blowout, fire or explosion.
Our indemnification arrangements
may not protect us in every case. For example, from time to time we may enter into contracts with less favorable indemnities or
perform work without a contract that protects us; our indemnity arrangements may be held unenforceable in some courts and jurisdictions;
or we may be subject to other claims brought by third parties or government agencies. Furthermore, the parties from which we seek
indemnity may not be solvent, may become bankrupt, may lack resources or insurance to honor their indemnities, or may not otherwise
be able to satisfy their indemnity obligations to us. The lack of enforceable indemnification could expose us to significant potential
losses.
Further, our assets generally
are not insured against loss from political violence such as war, terrorism or civil commotion. If any of our assets are damaged
or destroyed as a result of an uninsured cause, we could recognize a loss of those assets.
Our operations may be subject to environmental
and other laws and regulations that may expose us to significant liabilities and could reduce our business opportunities.
We expect to be subject
to various environmental laws and regulations in the countries in which we operate. The government of Albania requires us to obtain
an environmental permit for our facility and a fire safety permit. We prepared all the necessary paperwork and applied for the
environmental permit, but it has not been issued yet. Since our operations do not require any use of water, extensive energy or
generate any emissions we do not believe that we will be subject to the more complicated and lengthy environmental permit requirements
typical for refineries or upgraders. We plan to install all necessary equipment required for anti-fire measures and regulations
in the country. If we fail to comply with the environmental laws to which we are subject, we may incur significant liabilities
and our business opportunities could be reduced.
We are subject to significant foreign
exchange and currency risks that could adversely affect our operations and our ability to reinvest earnings from operations, as
well as mitigate our foreign exchange risk through hedging transactions, may be limited.
Since we currently conduct
a significant portion our operations outside the United State of America, our business is subject to foreign currency risks, including
currency exchange rates fluctuations and difficulties in converting local currencies into U.S. dollars. The exchange rates between
the Albanian Lek, the Canadian dollar, the Euro and the U.S. dollar and other foreign currencies is affected by, among other things,
changes in local political and economic conditions. Such currency fluctuations may materially affect the Company's financial
position and results of operations and a material change in currency rates in our markets could affect our future results as well
as affect the carrying values of our assets.
We generally attempt
to denominate our contracts in U.S. dollars or in the currencies of our costs. However, we may enter into contracts that subject
us to currency risk exposure, primarily when our contract revenue is denominated in a currency different than the contract costs.
We anticipate that a significant portion of our consolidated revenue and consolidated operating expenses will be in foreign currencies.
As a result, we will be subject to significant foreign currency risks, including risks resulting from changes in foreign exchange
rates and limitations on our ability to reinvest earnings from operations in one country to fund the financing requirements of
our operations in other countries.
4
Customer credit risks could result in
losses.
The concentration of
our future customers in the energy industry may impact our overall exposure to credit risk as customers may be similarly affected
by prolonged changes in economic and industry conditions. Those countries that rely heavily upon income from hydrocarbon exports
would be hit particularly hard by a drop in oil prices. Further, laws in some jurisdictions in which we may operate could make
collection difficult or time consuming. We will perform ongoing credit evaluations of our customers and generally do not plan
to require collateral in support of our trade receivables. While we may maintain reserves for potential credit losses, we cannot
assure such reserves will be sufficient to meet write-offs of uncollectible receivables or that our losses from such receivables
will be consistent with our expectations.
Global political, economic and market
conditions could affect projected results.
Our operating results
are based on our current assumptions about oil supply and demand, oil prices, rig count and other market trends. Our assumptions
on these matters are in turn based on currently available information, which is subject to change. The oil industry is extremely
volatile and subject to change based on political and economic factors outside our control. A weakened global economic climate
generally results in lower demand and lower prices for oil, which reduces drilling, processing and production activity, which
in turn results in lower revenues and income for us. Worldwide drilling activity and global demand for oil may also be affected
by changes in governmental policies and sovereign debt, laws and regulations related to environmental or energy security matters,
including those addressing alternative energy sources and the risks of global climate change. Worldwide economic conditions, and
the related demand for oil, may in future periods be significantly weaker than we have assumed.
We may not be able to generate expected
revenues from contracts.
Our potential customers,
some of whom may be national oil companies, often have significant bargaining leverage over us and may elect to cancel or revoke
contracts, not renew contracts, modify the scope of contracts or delay contracts, in some cases preventing us from realizing expected
revenues and/or profits.
Increases in the prices and availability
of our raw materials could affect our results of operations.
We use significant amounts
of raw materials (including steel and other metals, chemicals, plastics, polymers and energy inputs) for manufacturing our products,
facilities and some of our fixed assets. The price of these raw materials has a significant impact on our cost of producing products
for sale or constructing fixed assets used in our business. There can be no assurance that the prices of our raw materials will
remain within a manageable range and will be readily available. If we are unable to obtain necessary raw materials or if we are
unable to minimize the impact of increased raw material costs or to realize the benefit of cost decreases in a timely fashion
through our supply chain initiatives or pricing, our margins and results of operations could be adversely affected.
Our long-term growth depends upon technological
innovation and commercialization.
Our ability to deliver
our long-term growth strategy depends in part on the commercialization of new technology. A central aspect of our growth strategy
is to improve our products and services through innovation, to obtain technologically advanced products through internal research
and development and/or acquisitions, to protect proprietary technology from unauthorized use and to expand the markets for new
technology by leveraging our infrastructure. Our success will depend on our ability to commercialize the technology that we have
acquired and demonstrate the enhanced value our technology brings to our customers' operations. Our major technological
advances include, but are not limited to, those related to the design of enhanced mass transfer energy processes and reactors.
We cannot be assured of the successful commercialization of, and above-average growth from, our new products and services, as
well as legal protection of our intellectual property rights. Any failure in the commercialization of our technology could adversely
affect our business and results of operations.
5
If we are unable to enforce our intellectual
property rights or if our intellectual property rights become obsolete, our competitive position could be adversely impacted.
We utilize a variety
of intellectual property rights in our services. We view our portfolio of process and design technologies as one of our competitive
strengths and we use it as part of our efforts to differentiate our service offerings. We may not be able to successfully preserve
these intellectual property rights in the future and these rights could be invalidated, circumvented, challenged or infringed
upon. In addition, the laws of some foreign countries in which our services may be sold do not protect intellectual property rights
to the same extent as the laws of the United States. If we are unable to protect and maintain our intellectual property rights,
or if there are any successful intellectual property challenges or infringement proceedings against us, our ability to differentiate
our service offerings could diminish. In addition, if our intellectual property rights or work processes become obsolete, we may
not be able to differentiate our service offerings and some of our competitors may be able to offer more attractive services to
our customers. As a result, our business and financial performance could be materially and adversely affected.
International and political events may
adversely affect our operations.
A significant portion
of our future revenue is expected to be derived from foreign operations, which exposes us to risks inherent in doing business
in each of the countries where we transact business. The occurrence of any of the risks described below could have a material
adverse effect on our business operations and financial performance. With respect to any particular country, these risks may include:
·
expropriation
                                                                                                               and nationalization
                                                                                                               of our assets in
                                                                                                               that country;
·
political
                                                                                                               and economic instability;
·
civil
                                                                                                               unrest, acts of
                                                                                                               terrorism, force
                                                                                                               majeure, war, or
                                                                                                               other armed conflict;
·
currency
                                                                                                               fluctuations, devaluations,
                                                                                                               and conversion
                                                                                                               restrictions;
·
confiscatory
                                                                                                               taxation or other
                                                                                                               adverse tax policies;
·
governmental
                                                                                                               activities that
                                                                                                               limit or disrupt
                                                                                                               markets, restrict
                                                                                                               payments, or limit
                                                                                                               the movement of
                                                                                                               funds;
·
governmental
                                                                                                               activities that
                                                                                                               may result in the
                                                                                                               deprivation of
                                                                                                               contract rights;
·
governmental
                                                                                                               activities that
                                                                                                               may result in the
                                                                                                               inability to obtain
                                                                                                               or retain licenses
                                                                                                               required for operation;
                                                                                                               and
·
our
                                                                                                               inability or failure
                                                                                                               to obtain commercial
                                                                                                               insurance to mitigate
                                                                                                               the costs of certain
                                                                                                               risks we will take.
Due to the unsettled
political conditions in many oil-producing countries, our financial performance is subject to the adverse consequences of war,
the effects of terrorism, civil unrest, strikes, currency controls, and governmental actions. Our customer's operations
are conducted in areas that have significant amounts of political risk. In addition, military action or continued unrest in the
Middle East could impact the supply and price of oil, disrupt our customer's operations in the region and elsewhere, and
increase our costs related to security worldwide.
Economic and political developments in
Albania may adversely affect our business.
A significant portion
of our operations and assets are currently located in Albania. As a result, our financial condition, results of operations and
business may be affected by and are subject to the general condition of the Albanian economy, the devaluation of the Albania Lek
as compared to the U.S. Dollar, Albanian inflation, interest rates, regulation, taxation, social instability and other political,
social and economic developments in or affecting Albania, including changes in the laws and policies that govern foreign investment,
as well as changes in United States laws and regulations relating to foreign trade and investment, over which we have no control.
There can be no assurance as to the future effect of any such changes on our results of operations, financial condition, or cash
flows.
6
The dangers inherent in our operations
could cause disruptions and could expose us to potentially significant losses, costs, or liabilities. Any significant interruptions
in the operations of any of our facilities could materially and adversely affect our business, financial condition, and results
of operations.
Our operations are subject
to significant hazards and risks inherent in refining operations and in transporting and storing crude oil. These hazards and
risks include, but are not limited to, the following:
·
natural
                                                                                                               disasters;
·
weather-related
                                                                                                               disruptions;
·
fires;
·
explosions;
·
pipeline
                                                                                                               ruptures and spills;
·
third-party
                                                                                                               interference;
·
disruption
                                                                                                               of natural gas
                                                                                                               deliveries;
·
disruptions
                                                                                                               of electricity
                                                                                                               deliveries; and
·
mechanical
                                                                                                               failure of equipment
                                                                                                               at our refineries
                                                                                                               or third-party
                                                                                                               facilities.
Any of the foregoing
could result in production and distribution difficulties and disruptions, environmental pollution, personal injury or wrongful
death claims, and other damage to our properties and the properties of others. There is also risk of mechanical failure and equipment
shutdowns both in general and following unforeseen events.
Our activities will initially
be conducted at our facility in Albania. This facility constitutes a significant portion of our operating assets. Because of the
significance to us of this operation, the occurrence of any of the events described above could significantly disrupt our processing
of crude oil, and any sustained disruption could have a material adverse effect on our business, financial condition, and results
of operations.
We may incur significant costs to comply
with environmental and health and safety laws and regulations.
Our operations and properties
are subject to environmental, health, and safety regulations. If we fail to comply with these regulations, we may be subject to
administrative, civil, and criminal proceedings by governmental authorities, as well as civil proceedings by environmental groups
and other entities and individuals. A failure to comply, and any related proceedings, including lawsuits, could result in significant
costs and liabilities, penalties, judgments against us, or governmental or court orders that could alter, limit, or stop our operations.
In addition, new environmental
laws and regulations, including new regulations relating to alternative energy sources, new regulations relating to fuel quality,
and the risk of global climate change regulation, as well as new interpretations of existing laws and regulations, increased governmental
enforcement, or other developments could require us to make additional unforeseen expenditures. Many of these laws and regulations
are becoming increasingly stringent, and the cost of compliance with these requirements can be expected to increase over time.
We are not able to predict the impact of new or changed laws or regulations or changes in the ways that such laws or regulations
are administered, interpreted, or enforced. The requirements to be met, as well as the technology and length of time available
to meet those requirements, continue to develop and change. To the extent that the costs associated with meeting any or all of
these requirements are substantial and not adequately provided for, there could be a material adverse effect on our business,
financial condition, and results of operations.
7
We may not have sufficient crude oil to
be able to run our Albania facility at full capacity.
Our Albania facility
will process crude oil from the local regions around the facility. To the extent sufficient local crude oil cannot be contracted
to process and we are unable to contract sufficient crude oil from non-local sources to supply the Albania facility, we may not
have sufficient crude oil to run the Albania facility at full capacity, which could have a material adverse impact on our business,
financial condition, and results of operations.
We could incur substantial costs or disruptions
in our business if we cannot obtain or maintain necessary permits and authorizations.
Our operations require
numerous permits and authorizations under various laws and regulations, including environmental and health and safety laws and
regulations. These authorizations and permits are subject to revocation, renewal, or modification and can require operational
changes, which may involve significant costs, to limit impacts or potential impacts on the environment and/or health and safety.
A violation of these authorization or permit conditions or other legal or regulatory requirements could result in substantial
fines, criminal sanctions, permit revocations, injunctions and/or refinery shutdowns. In addition, major modifications of our
operations could require modifications to our existing permits or expensive upgrades to our existing pollution control equipment,
which could have a material adverse effect on our business, financial condition, or results of operations.
Risks Associated with our Company and
our Securities
We will be required to incur significant
costs and require significant management resources to evaluate our internal control over financial reporting as required under
Section 404 of the Sarbanes-Oxley Act, and any failure to comply or any adverse result from such evaluation may have an adverse
effect on our stock price.
As a smaller reporting
company as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, we are required to evaluate our internal
control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002 ("Section 404"). Section 404
requires us to include an internal control report with the Annual Report on Form 10-K. This report must include management's
assessment of the effectiveness of our internal control over financial reporting as of the end of the fiscal year. This report
must also include disclosure of any material weaknesses in internal control over financial reporting that we have identified.
Failure to comply, or any adverse results from such evaluation could result in a loss of investor confidence in our financial
reports and have an adverse effect on the trading price of our equity securities. Management believes that its internal controls
and procedures are currently not effective to detect the inappropriate application of U.S. GAAP rules. Management realize there
are deficiencies in the design or operation of our internal control that adversely affect our internal controls which management
considers to be material weaknesses including those described below:
·
The
                                                                                                                             Company's
                                                                                                                             management
                                                                                                                             is
                                                                                                                             relying
                                                                                                                             on
                                                                                                                             consultants
                                                                                                                             for
                                                                                                                             purposes
                                                                                                                             of
                                                                                                                             preparing
                                                                                                                             its
                                                                                                                             financial
                                                                                                                             reporting
                                                                                                                             package
                                                                                                                             and
                                                                                                                             may
                                                                                                                             not
                                                                                                                             be
                                                                                                                             able
                                                                                                                             to
                                                                                                                             identify
                                                                                                                             errors
                                                                                                                             and
                                                                                                                             irregularities
                                                                                                                             in
                                                                                                                             the
                                                                                                                             financial
                                                                                                                             reporting
                                                                                                                             package
                                                                                                                             before
                                                                                                                             its
                                                                                                                             release
                                                                                                                             as
                                                                                                                             a
                                                                                                                             continuous
                                                                                                                             disclosure
                                                                                                                             document.
·
As
                                                                                                               the Company has
                                                                                                               only two officers,
                                                                                                               one of whom is
                                                                                                               also the sole director,
                                                                                                               there is an inherent
                                                                                                               lack of segregation
                                                                                                               of duties and lack
                                                                                                               of an independent
                                                                                                               governing board.
Achieving compliance
with Section 404 may require us to incur substantial costs and expend substantial time and management resources. We cannot assure
you that we will be able to fully comply with Section 404 or that we and our independent registered public accounting firm would
be able to conclude that our internal control over financial reporting is effective at fiscal year end. As a result, investors
could lose confidence in our reported financial information, which could have an adverse effect on the trading price of our securities,
as well as subject us to civil or criminal investigations and penalties. In addition, our independent registered public accounting
firm may not agree with our management's assessment or conclude that our internal control over financial reporting is operating
effectively.
8
All of our assets, and our Chief Executive
Officer and sole director, are outside the United States, with the result that it may be difficult for investors to enforce within
the United States any judgments obtained against us or our Chief Executive Officer and director.
All of our assets are
located outside the United States. In addition, our Chief Executive Officer and sole director is a national and resident of a
country other than the United States, and all or a substantial portion of his assets are located outside the United States. As
a result, it may be difficult for investors to enforce within the United States any judgments obtained against us or our director
and Chief Executive Officer, including judgments predicated upon the civil liability provisions of the securities laws of the
United States or any state thereof. Consequently, you may be effectively prevented from pursuing remedies under United States
federal and state securities laws against us or our directors and officers.
Our business is dependent on our key executive
and the loss of this executive could adversely affect our business, future operations and financial condition.
We are dependent on the
services of our Chief Executive Officer, Art Agolli. Mr. Agolli has many years of experience and an extensive background in the
oil industry in general. We may not be able to replace that experience and knowledge with other individuals. We do not have "key-man"
life insurance policies on Mr. Agolli. The loss of Mr. Agolli's services or our inability to attract and retain additional highly
skilled employees may adversely affect our business, future operations, and financial condition.
The elimination of monetary liability
against our directors, officers and employees under Nevada law and the existence of indemnification rights to our directors, officers
and employees may result in substantial expenditures by our Company and may discourage lawsuits against our directors, officers
and employees.
Our Articles of Incorporation
contain a provision permitting us to eliminate the personal liability of our directors to our Company and stockholders for damages
for breach of fiduciary duty as a director or officer to the extent provided by Nevada law.  The foregoing indemnification
obligations could result in the Company incurring substantial expenditures to cover the cost of settlement or damage awards against
directors and officers, which we may be unable to recoup.  These provisions and resultant costs may also discourage
our Company from bringing a lawsuit against directors and officers for breaches of their fiduciary duties, and may similarly discourage
the filing of derivative litigation by our stockholders against our directors and officers even though such actions, if successful,
might otherwise benefit our Company and stockholders.
Management of our Company is within the
control of the board of directors and the officers. You should not purchase our common stock unless you are willing to entrust
management of our Company to these individuals.
All decisions with respect
to the management of the Company will be made by our board of directors and our officers, who beneficially own 31.5% of our common
stock, as calculated in accordance with Rule 13d-3 promulgated under the Securities Exchange Act of 1934. Therefore, management
will have significant influence in electing a majority of the board of directors who shall, in turn, have the power to appoint
the officers of the Company and to determine, in accordance with their fiduciary duties and the business judgment rule, the direction,
objectives and policies of the Company including, without limitation, the purchase of businesses or assets; the sale of all or
a substantial portion of the assets of the Company; the merger or consolidation of the Company with another corporation; raising
additional capital through financing and/or equity sources; the retention of cash reserves for future product development, expansion
of our business and/or acquisitions; the filing of registration statements with the Securities and Exchange Commission for offerings
of our capital stock; and transactions which may cause or prevent a change in control of the Company or its winding up and dissolution.
You should not purchase our common stock unless you are willing to entrust management of our Company to these individuals.
9
Our stock is categorized as a penny stock.  Trading
of our stock may be restricted by the SEC's penny stock regulations which may limit a stockholder's ability to buy
and sell our stock.
Our stock is categorized
as a penny stock.  The SEC has adopted Rule 15g-9 which generally defines "penny stock" to be any equity
security that has a market price (as defined) less than US$ 5.00 per share or an exercise price of less than US$ 5.00 per share,
subject to certain exceptions.  Our securities are covered by the penny stock rules, which impose additional sales practice
requirements on broker-dealers who sell to persons other than established customers and accredited investors.  The penny
stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature
and level of risks in the penny stock market.  The broker-dealer also must provide the customer with current bid and
offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly
account statements showing the market value of each penny stock held in the customer's account.  The bid and offer
quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing
prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation.  In
addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the
broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive
the purchaser's written agreement to the transaction.  These disclosure requirements may have the effect of reducing
the level of trading activity in the secondary market for the stock that is subject to these penny stock rules.  Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our securities.  We believe that the penny
stock rules discourage investor interest in and limit the marketability of our common stock.
FINRA sales practice requirements may
also limit a stockholder's ability to buy and sell our stock.
In addition to the "penny
stock" rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer
must have reasonable grounds for believing that the investment is suitable for that customer.  Prior to recommending
speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain
information about the customer's financial status, tax status, investment objectives and other information.  Under
interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not
be suitable for at least some customers.  The FINRA requirements make it more difficult for broker-dealers to recommend
that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on
the market for our shares.
To date, we have not paid any cash dividends
and no cash dividends will be paid in the foreseeable future.
We do not anticipate
paying cash dividends on our common stock in the foreseeable future and we may not have sufficient funds legally available to
pay dividends.  Even if the funds are legally available for distribution, we may nevertheless decide not to pay any
dividends.  We presently intend to retain all earnings for our operations.
A limited public trading market exists
for our common stock, which makes it more difficult for our stockholders to sell their common stock in the public markets.
Our common shares are
currently traded under the symbol "PSON," but currently with low or no volume, based on quotations on the OTCQB meaning
that the number of persons interested in purchasing our common shares at or near bid prices at any given time may be relatively
small or non-existent.  This situation is attributable to a number of factors, including the fact that we are a small
company which is still relatively unknown to stock analysts, stock brokers, institutional investors, and others in the investment
community that generate or influence sales volume, and that even if we came to the attention of such persons, they tend to be
risk-averse and would be reluctant to follow an unproven company such as ours or purchase or recommend the purchase of our shares
until such time as we became more viable.  Additionally, many brokerage firms may not be willing to effect transactions
in the securities.  As a consequence, there may be periods of several days or more when trading activity in our shares
is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will
generally support continuous sales without an adverse effect on share price.  We cannot give you any assurance that
a broader or more active public trading market for our common stock will develop or be sustained, or that trading levels will
be sustained.
10
Stockholders should be
aware that, according to SEC Release No. 34-29093, the market for "penny stocks" has suffered in recent years from
patterns of fraud and abuse.  Such patterns include (1) control of the market for the security by one or a few broker-dealers
that are often related to the promoter or issuer; (2) manipulation of prices through prearranged matching of purchases and sales
and false and misleading press releases; (3) boiler room practices involving high-pressure sales tactics and unrealistic price
projections by inexperienced sales persons; (4) excessive and undisclosed bid-ask differential and markups by selling broker-dealers;
and (5) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired
level, along with the resulting inevitable collapse of those prices and with consequent investor losses.  Our management
is aware of the abuses that have occurred historically in the penny stock market.  Although we do not expect to be in
a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within
the confines of practical limitations to prevent the described patterns from being established with respect to our securities.  The
occurrence of these patterns or practices could increase the future volatility of our share price.
If we issue additional shares in the future,
it will result in the dilution of our existing stockholders.
Our Articles of
Incorporation authorize the issuance of up to 843,750,000 shares of common stock with a par value of $0.001 per share. Our
Board of Directors may choose to issue some or all of such shares to acquire one or more companies or properties and to fund
our overhead and general operating requirements. As of the date of this prospectus, we have agreed to pay for the services of
two consultants with shares of our common stock and we may make similar arrangements with other consultants in the future.
The issuance of any such shares may reduce the book value per share and may contribute to a reduction in the market price of
the outstanding shares of our common stock. If we issue any such additional shares, such issuance will reduce
the proportionate ownership and voting power of all current stockholders. Further, such issuance may result in a change
of control of our corporation.
USE OF PROCEEDS
We are registering the
shares of common stock offered by this prospectus for sale by the selling stockholders identified in the section of this prospectus
titled "Selling Stockholders." We will not receive any of the proceeds from the sale of these shares. We will pay
all expenses incurred in connection with the offering described in this prospectus. We are registering the shares in this offering
pursuant to the terms of the registration rights agreements entered into between the Company and the selling stockholders dated
January 16, 2013. Our common stock is more fully described in the section of this prospectus titled "Description of Securities."
MARKET FOR COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
Our common stock is presently quoted on
the Financial Industry Regulatory Authority's ("FINRA") Over-the-Counter marketplace under the name "Petrosonic
Energy, Inc." and under the symbol "PSON". Our common stock par value is $0.001 per share.
There is no established trading market
for shares of our common stock and there has been a limited number of trades of our common stock on the OTCQB. We cannot provide
assurance that any established trading market for our common stock will develop or be maintained.
The following table sets forth, for the
fiscal quarters indicated, the high and low sale price for our common stock, as reported on the OTCQB. The quotations below reflect
inter-dealer prices, without retail mark-up, markdown or commissions and may not represent actual transactions.
PERIOD
HIGH
LOW
Fiscal Year Ended December 31, 2013
First Quarter through February 7, 2013
$
1.12
$
0.42
Fiscal Year Ended December 31, 2012
First Quarter
No activity
No activity
Second Quarter
No activity
No activity
Third Quarter
$
0.72
$
0.42
Fourth Quarter
$
0.86
$
0.44
Transition Period
November 1, 2011 through December 31, 2011
No
                                                       activity
No
                                                       activity
Fiscal Year Ended October 31, 2011
First Quarter
$
0.90
$
0.65
Second Quarter
$
0.85
$
0.85
Third Quarter
$
1.75
$
1.01
Fourth Quarter
$
1.05
$
1.05
11
Stockholders
At February 5, 2013 there were approximately
48 record holders of our common stock.
Dividends
We have never paid cash dividends on our
common stock. We intend to keep future earnings, if any, to finance the expansion of our business, and we do not anticipate that
any cash dividends will be paid in the foreseeable future. Our future payment of dividends will depend on our earnings, capital
requirements, expansion plans, financial condition and other relevant factors that our board of directors may deem relevant. Our
retained earnings deficit currently limits our ability to pay dividends.
Shares That May Be Sold In The Future
We have outstanding warrants to
purchase 615,000 shares of our common stock and we have outstanding convertible promissory notes that may be converted into
6,799,999 shares of common stock. We have no stock options or other securities that may be exercised or converted into shares
of our common stock outstanding, although we have agreements with three consultants who, together, have agreed to accept a
total of 1,270,000 shares of our common stock as payment for the services they render. Pursuant to the registration rights
agreement we signed with the selling stockholders in this offering, we agreed to register a total of 12,610,000 shares of
our common stock. One of the investors has declined to exercise this right, therefore we are registering a total of
12,210,000 shares of common stock on the registration statement of which this prospectus is a part.
12
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following
discussion and analysis of our results of operations and financial condition should be read in conjunction with our financial
statements and the notes to those financial statements that are included elsewhere in this prospectus. Our discussion
includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans,
objectives, expectations and intentions. Actual results and the timing of events could differ materially from those
anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the Risk
Factors, Cautionary Notice Regarding Forward-Looking Statements and Our Business sections in this prospectus. We use words
such as "anticipate," "estimate," "plan," "project,"
"continuing," "ongoing," "expect," "believe,"
"intend," "may," "will," "should," "could," and similar
expressions to identify forward-looking statements.
History
We were incorporated
in the State of Nevada on June 11, 2008 under the name "Bearing Mineral Exploration, Inc.", with authorized capital
stock of 75,000,000 shares at $0.001 par value. We were organized for the purpose of conducting gold exploration activities
on a mineral claim located in the Province of Newfoundland, Canada.
On April 17, 2012, we
entered into an Assignment Agreement with Art Agolli, our President, Principal Executive Officer and director, pursuant to which
Mr. Agolli agreed to convey to us all of his right, title and interest in a letter of intent with Sonoro Energy Ltd. ("Sonoro"),
a Canadian publicly traded company (TSX-V: SNV) based in Calgary, Alberta, Canada,   the holder of all of the legal and equitable
rights and entitlements to a sonic reactor and technology that Sonoro developed for the treatment and upgrading of heavy oil
by sonicated solvent de-asphalting.
On May 16, 2012, we effected
an 11.25-for-1 forward stock split of our common stock and an increase in our authorized number of common shares to 843,750,000.
Additionally, on May 16, 2012, we changed our name to "Petrosonic Energy, Inc." to better reflect the Company's
new business direction in anticipation of the purchase of certain rights in technology, assets and common shares owned by Sonoro
Energy Ltd.
On July 27, 2012, we
acquired certain assets (the "Assets") from Sonoro, including (i) certain technology relating to the treatment and
upgrading of heavy oil by sonicated solvent de-asphalting, (ii) 60,000 shares of Petrosonic Albania pursuant to a share purchase
agreement (the "Share Purchase Agreement"), and (iii) sonic reactors located in Albania and Richmond, British Columbia
and a solvent recovery system located in or around Turin, Italy (the "Transaction"), pursuant to the terms of the
Asset Purchase and Sale Agreement, dated July 27, 2012 (the "Purchase Agreement").
Pursuant to the terms
of the Purchase Agreement, in exchange for the Assets, we agreed to pay to Sonoro the following consideration: (i) CAD$250,000,
(ii) a convertible debenture in the principal amount of CAD$250,000 (the "Debenture") and (iii) a 10% royalty interest
in our realized net revenues for a period of 10 years from the time we commence commercial operations, which is defined as the
date upon which we process an average of 50 barrels of feed stock per day over a period of 30 consecutive days utilizing the technology
acquired. For a complete description of the Transaction, and the Purchase Agreement please refer to the Form 8-K we filed with
the Securities and Exchange Commission on July 31, 2012.
Following the consummation
of the Transaction, we believe that we are not a shell corporation as that term is defined in Rule 405 of the Securities Act and
Rule 12b-2 of the Exchange Act. From and after the consummation of the Transaction, our primary operations consist of utilizing
the Assets to develop a business relating to the treatment and upgrading of heavy oil by sonicated solvent de-asphalting and operating
the business of Petrosonic Albania Sha. (the "Business"). Therefore, we disclose information about the Business in
this prospectus.
Our
head office is located at
Suite 300, 714 - 1st Street SE, Calgary, Alberta, Canada T2G 2G8
.
Our telephone number is
(403) 708-7869.
13
Petrosonic Albania has
an office in Fier, Albania at the same location where its processing plant is located. Albania's heavy oil upstream and
downstream industries are located in Fier and the facility is only a few miles away from the heavy oil producing fields. It is
also located 35 kilometers away from Albania's only deep sea port and export facility, the PIR Vlora terminal. The office
is offered by the Albanian partner free of charge until the Company signs a lease agreement when requisite funding is in place.
Petrosonic Albania currently has two full-time employees and three part-time employees, as well as, several independent consultants.
Petrosonic Albania plans to hire a Chief Financial Officer and three local operations staff in Albania during the first year of
its operations. Petrosonic Albania has identified potential candidates for such positions, and expects to proceed with such hires
once it has secured the requisite financing.
Operation Plans and Business Focus
Petrosonic has developed
a commercial process which improves heavy oil densities by 6 to 15 API from as low as 8 API, reduces viscosities of oil by 99%
to pipeline specifications and reduces sulphur and heavy metals by over 50%. (The American Petroleum Institute gravity, or API
gravity, is a measure of how heavy or light a petroleum liquid is compared to water, one of the qualitative measures for crude
oil.) The Petrosonic heavy oil process will enable heavy sour oil (HSO) and bitumen (from most heavy oil and oil sands fields
in the world) to be converted from nominally an API gravity of 8 to 14 degrees to a value-added synthetic crude oil of between
18 and 23 API. This is achieved through the reduction of undesirable constituents of the raw heavy oil and/or bitumen. The process
incorporates two stages: solvent de-asphalting and distillation.
While solvent de-asphalting
and distillation are both proven and well known technologies, the innovation associated with the Petrosonic upgrading process
lies in the rapid de-asphalting achieved by sonication of the de-asphalting phase with the Petrosonic reactor stage.
This process is especially
beneficial to producers with the following intrinsic challenges:
·
Stranded
                                                                                                                             heavy
                                                                                                                             oil
                                                                                                                             due
                                                                                                                             to
                                                                                                                             transportation
                                                                                                                             issues
·
Diluent
                                                                                                                             supply
                                                                                                                             issues
·
Limited
                                                                                                                             refining
                                                                                                                             markets
                                                                                                                             (light
                                                                                                                             oil
                                                                                                                             refiners
                                                                                                                             struggle
                                                                                                                             with
                                                                                                                             heavy
                                                                                                                             oil)
·
Heavy
                                                                                                                             discounts
                                                                                                                             due
                                                                                                                             to:
·
Density
                                                                                                                             adjustments
·
High
                                                                                                                             sulphur
                                                                                                                             content
·
High
                                                                                                                             metals
                                                                                                                             content
We believe Petrosonic
will be able to take advantage of an opportunity that traditional upgrading technology cannot address – upstream upgrading
on smaller scales. The viability of upgrading is constantly changing due to production mix, refining infrastructure costs, and
oil pricing. However, there are three markets for small upgraders that make sense:
·
Pipeline
                                                                                                          systems where access
                                                                                                          to the pipeline requires
                                                                                                          blending of heavy oil.
                                                                                                          Condensate prices and
                                                                                                          heavy oil differentials
                                                                                                          have been stable for
                                                                                                          some time and long term
                                                                                                          projections indicate
                                                                                                          that low condensate
                                                                                                          prices following the
                                                                                                          global economic slow-down
                                                                                                          will be short-lived;
·
Heavy
                                                                                                          oil producers in markets
                                                                                                          where light oil dominates
                                                                                                          refinery infrastructure.
                                                                                                          Internationally there
                                                                                                          are several markets
                                                                                                          like this; and
·
Markets
                                                                                                          where upgrading asphalt
                                                                                                          by-products can command
                                                                                                          premium prices. This
                                                                                                          is especially attractive
                                                                                                          in North America given
                                                                                                          the economic infrastructure
                                                                                                          stimulus measures being
                                                                                                          implemented.
14
To take advantage
of these opportunities Petrosonic must be able to:
·
Economically
                                                                                                          upgrade heavy oil from
                                                                                                          small and medium sized
                                                                                                          producers right in the
                                                                                                          field;
·
Add
                                                                                                          value and allow producers
                                                                                                          to capture a larger
                                                                                                          share of the market
                                                                                                          price for refinery products;
·
Provide
operating plants to heavy oil producers in return for tolling process fees or purchase heavy oil at a premium to blenders.
Upgraded oil provides
uplift in crude's value and eliminates issues related to transport of crude oil to pipeline and refinery companies.
Depending on regional
markets, traditional heavy oil discounts (10 API oil with >2% sulphur) are 35-40% and we believe such discounts could be reduced
to only 10-20% through our process. On 5,000 barrels of oil per day ("bopd") this would equate to increased revenues
of approximately $6/barrel (bbl) or around $11 million per year (based on $100/bbl brent oil). Capital costs are expected to be
between $0.5-1 million per 1,000 bbls capacity. Operating costs will be between $2-3 per bbl on a stand- alone facility basis.
Petrosonic plans to
have its first 1,000 bopd stand-alone facility operational within the second quarter of 2013 in Albania. Expected annual
cashflows from the initial 1,000 bopd facility are expected to reduce heavy oil price discounts historically received in
Albania from 40% to 20% as a result of achieving a 18-23 API oil. Petrosonic believes that with significant heavy oil
production growth anticipated from the approximately 8 billion barrels of oil reserves believed to be present in Albania, if
we are able to successfully capture a portion of this processing business, Petrosonic expects to expand its facilities over
the next 3 to 5 years to 15,000 bopd as Albanian oil production increases.
If Petrosonic is able
to successfully establish its first commercial facility, we believe heavy oil producers will want to integrate the Petrosonic
system at their cost into their treatment facilities. Petrosonic would sell the process solution and retain a royalty fee under
this type of development. While revenue per facility will be less (estimated at 50%), no capital and minimal support will be required.
This strategy would allow for faster growth. Petrosonic may also choose to develop its own stand-alone facilities to capture further
upside and long term value creation.
Further upside opportunities
exist in several other applications, which the Company is developing, including, heavy oil sands separation (both from oil sands
and ecology pits), and oil separations from drill cuttings.
Vision and Strategy
·
Petrosonic
                                                                                                          hopes to provide its
                                                                                                          stockholders with returns
                                                                                                          and cash flow growth
                                                                                                          by leveraging its experience
                                                                                                          and intellectual property
                                                                                                          within the heavy oil
                                                                                                          business.
·
Petrosonic
                                                                                                          plans to use an initial
                                                                                                          model of building its
                                                                                                          own stand-alone facilities
                                                                                                          to prove, optimize and
                                                                                                          develop business growth
                                                                                                          opportunities with small
                                                                                                          to medium sized producers.
                                                                                                          To achieve higher returns
                                                                                                          and growth, the Company
                                                                                                          will license out on
                                                                                                          a fee for service basis
                                                                                                          or royalty basis its
                                                                                                          processes to be integrated
                                                                                                          into a producer's
                                                                                                          treatment facilities.
·
Where
                                                                                                          there is a distinct
                                                                                                          advantage Petrosonic
                                                                                                          may capture heavy oil
                                                                                                          resources prospects
                                                                                                          or participate jointly
                                                                                                          in them. Any resource
                                                                                                          level participation
                                                                                                          would require higher
                                                                                                          returns on investment
                                                                                                          and be required to stand
                                                                                                          on its own prior to
                                                                                                          the benefits of applying
                                                                                                          Petrosonic's technology.
·
The
                                                                                                          Company plans, whenever
                                                                                                          possible, to financially
                                                                                                          participate in acquiring
                                                                                                          the underlying oil assets,
                                                                                                          which it believes will
                                                                                                          result in higher returns
                                                                                                          and growth.
15
Key Success Factors
Petrosonic's
success will be dependent upon:
·
Our
                                                                                                          ability to attract and
                                                                                                          develop numerous projects
                                                                                                          once the first project
                                                                                                          is complete;
·
Access
                                                                                                          to an ample producer
                                                                                                          oil supply and our ability
                                                                                                          to find equitable profit
                                                                                                          distribution;
·
Our
                                                                                                          development and distribution
                                                                                                          of asphalt within the
                                                                                                          market;
·
Our
                                                                                                          ability to minimize
                                                                                                          the technical risk through
                                                                                                          avoidance of scale up
                                                                                                          issues;
·
Alleviation
                                                                                                          of market risk through
                                                                                                          the use of strategic
                                                                                                          partners which can gain
                                                                                                          quick access to markets;
                                                                                                          and
·
Alleviation
                                                                                                          of financial risk through
                                                                                                          partnering.
Our immediate priorities
are:
·
Strengthening
                                                                                                               the operations
                                                                                                               and management
                                                                                                               of the Company
                                                                                                               as it moves forward
                                                                                                               in the oil sector;
·
Moving
                                                                                                               ahead with the
                                                                                                               processing facility
                                                                                                               in Albania;
·
Establishing
                                                                                                               a second country
                                                                                                               oil processing
                                                                                                               project; and
·
Building
                                                                                                               a firm backlog
                                                                                                               of projects with
                                                                                                               financing commitments.
Petrosonic's Technology
SonoProcess
We believe that Petrosonic
has a technology advantage that is based upon the use of the Petrosonic reactor technology and the unique cavitational and enhanced
mass transfer effects that it provides. Petrosonic has developed a unique competency in the design of enhanced mass transfer energy
processes and the proprietary applications that result from this.
In recent years the use
of cavitational technologies and ultrasound has been researched extensively for oil processing – usually in the context
of desulphurization or "cold cracking". Our own research does not support this and we make no claims that it can create
a unique upgrading process. The chemistries used in the Petrosonic process are established and our advantage is that we make these
more effective.
The Company looks to
maintain its initial technical advantage derived from the Petrosonic Sonoprocess™ for heavy oil by adding complementary
proprietary process technologies to this.
The Petrosonic reactor
has been designed and built in a variety of configurations but all Petrosonic process development is undertaken on full scale
units:
·
Petrosonic
                                                                                                          reactors are based on
                                                                                                          low-frequency / high-amplitude
                                                                                                          Petrosonic energy reactors;
·
A
                                                                                                          patented electromagnetic
                                                                                                          drive puts a massive
                                                                                                          steel bar into resonance
                                                                                                          and this allows efficient
                                                                                                          transfer of energy to
                                                                                                          the reaction chambers;
·
There
                                                                                                          are no moving parts
                                                                                                          and so Petrosonic reactors
                                                                                                          have a high reliability
                                                                                                          and operational availability;
·
The
                                                                                                          reaction chambers are
                                                                                                          attached at the mid-node
                                                                                                          points one half wavelength
                                                                                                          from the drive system,
                                                                                                          enabling the reactors
                                                                                                          to apply Petrosonic
                                                                                                          energy to physical,
                                                                                                          chemical and biological processes;
16
·
Petrosonic
                                                                                                          reactors are thus able
                                                                                                          to achieve more sustainable
                                                                                                          processes – better
                                                                                                          reactivity, less reagents,
                                                                                                          less energy, greater
                                                                                                          effectiveness and more
                                                                                                          product for overall
                                                                                                          economic advantage.
Direct Sonicated Separation
The previous holder of
the technology has also carried out independent tests on oil sands to determine if the technology could be effective in a low
cost primary separation process. Preliminary tests with a proprietary process protocol produced results comparable with existing
technology.
However, the effectiveness
of this technology is but a first step due to the massive scale of oil sands projects. At this time the Company believes the volume
of material that would need to be processed requires a "next generation" of Petrosonic reactor technology. Existing
scale technology may be applicable to small scale oil sands production.
The Company has directed
its efforts towards a more immediate but directly related application – the treatment of drill cuttings. This is not the
same scale of opportunity but offers immediate access to market and cash flow generation based on modest investment of capital.
Petrosonic Heavy Oil Process Patents
As part of the transaction
with Sonoro Energy the Company has acquired the following Heavy Oil Process provisional and PCT applications based on the Company's
Sonoprocess™:
·
Patent/Application
                                                                                                          No: WO2009111871. Jurisdiction:
                                                                                                          WIPO. Title: Method
                                                                                                          for Treating Heavy Crude
                                                                                                          Oil. Application Status:
                                                                                                          Published.
·
Patent/Application
                                                                                                          No: EA201071060. Jurisdiction:
                                                                                                          Eurasisa. Title: Method
                                                                                                          for Treating Heavy Crude
                                                                                                          Oil. Status: Pending.
·
Patent/Application
                                                                                                          No: EP2260089. Jurisdiction:
                                                                                                          Europe. Title: Method
                                                                                                          for Treating Heavy Crude
                                                                                                          Oil. Status: Pending.
·
Patent/Application
                                                                                                          No: 2156/MUMNP/2010.
                                                                                                          Jurisdiction: India.
                                                                                                          Title: Method for Treating
                                                                                                          Heavy Crude Oil. Status:
                                                                                                          Pending.
·
Patent/Application
                                                                                                          No: US 61/035,690. Jurisdiction:
                                                                                                          United States. Title:
                                                                                                          Method for Treating
                                                                                                          Heavy Crude Oil. Status:
                                                                                                          The Company will appeal
                                                                                                          the expired priority
                                                                                                          claim to reinstate the
                                                                                                          priority claim.
Recent Developments
On January 16, 2013 we
completed a private offering of 12,610,000 shares of common stock to accredited investors through which we raised net proceeds
totaling $2,937,500 after the payment of $215,000 in placement agent commissions. As part of the compensation paid to placement
agents, we also issued two-year warrants for the purchase of 275,000 shares of our common stock at an exercise price of $0.50
per share. We plan to use the net proceeds from the offering for general working capital purposes.
On September 18, 2012
the Company awarded an assembly contract to Pavli Valle Inc., an engineering and assembly company. The contract is for the final
assembly and process engineering and fabrication of tanks and equipment for Petrosonic Energy, Inc.'s heavy oil processing
plant.
17
As well, during the quarter
ended
September 30, 2012, Petrosonic signed a cooperation agreement with a leading private emulsion technology company
for the upstream and downstream oil industry that has an exclusive license in a heavy crude and asphaltene emulsification patented
technology. According to the agreement the private company has committed to set up a 120 bbl/hour heavy crude and asphaltene emulsification
plant in Petrosonic's heavy oil processing plant located in Albania. This will create technology and marketing synergy for
both groups and allow Petrosonic to convert the de-asphalted oil and asphaltenes into readily marketable emulsified fuel oil and
high-end asphalt and capture further value for its products. The investment projected for the equipment being shipped from California
 and assembly cost is approximately $1 million USD and will be paid entirely by the private company. In addition, Petrosonic
will benefit from the technical know-how and expertise of the private company who is a world leader in the emulsification of heavy
crude and asphaltenes.
Limited Operating History; Need for Additional
Capital
There is limited historical
financial information about Petrosonic Energy, Inc. upon which to base an evaluation of our performance. We are a development
stage company focused on the treatment and upgrading of heavy oil by sonicated solvent de-asphalting. We are in the process of
bringing online our first stand-alone facility located in Albania, which is expected to be able to process and de-asphalt up to
1,000 barrels per day of heavy oil. We plan to generate revenue by both integrating our system into oil producer treatment facilities,
as well as continuing to develop our own standalone facilities, such as the Albania facility, to capture further upside and long
term value creation.
Our cash needs are primarily
for working capital to develop our operations.  We presently finance our operations through debt and equity financings. We
have limited capital resources and there is no assurance that future financing will be available to our Company on acceptable
terms.
If financing is not available
on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional
dilution to existing stockholders.
Results of Activities
The following information
has been derived from the financial information included in the unaudited consolidated financial statements of the Company at
September 30, 2012.
For the Nine Months Ended September
30, 2012 and 2011
The Company did not recognize any revenue in either of the nine
month periods ended September 30, 2012 and September 30, 2011.
Operating expenses were $55,777 and $14,958 for the nine months
ended September 30, 2012 and 2011 respectively. The increase in operating expenses of $40,819 resulted from the increases in costs
incurred for marketing and business development activities as well as costs incurred for public company compliance.
In the nine month period ended September 30, 2012, the Company
incurred interest expense of $12,869 primarily related to the convertible debentures issued by the Company during the period and
also recognized a bargain purchase gain of $89,553 on the purchase of certain operating assets acquired during the period.
Net income for the nine month period ended September 30, 2012
was $20,907 compared to a net loss of $14,958 incurred during the comparable period of the prior year. The increase in net income
of $35,865 resulted from the gain on the purchase of assets exceeding the total of the increase in operating costs plus the interest
expense incurred for the period.
For the Three
Months Ended September 30, 2012 and 2011
The Company did not recognize any revenue in either of the three
month periods ended September 30, 2012 and September 30, 2011.
Operating expenses were $51,509 in the three months ended September
30, 2012 compared with a benefit of $6,477 in the three months ended September 30, 2011. The increase in operating expenses of
$57,986 resulted from increases in costs incurred for marketing and business development activities as well as costs incurred
for public company compliance.
In the three month period ended September 30, 2012, the Company
incurred interest expense of $12,869 primarily related to the convertible debentures issued by the Company during the period and
also recognized a bargain purchase gain of $89,553 on the purchase of certain operating assets acquired during the period.
Net income for the three month period ended September 30, 2012
was $25,175 compared to net income of $6,477 for the comparable period of the prior year. The increase in net income of $18,698
resulted from the gain on the purchase of assets exceeding the total of the net increase in operating costs plus the interest expense
incurred for the period.
During the period
ended September 30, 2012, much of the Company's resources were directed at planning for assembly of the plant, negotiations
with third party suppliers and fabrication companies for procurement of the assembly services, as well as estimation work for
complete commissioning of equipment and transportation to site in Albania.
As of the date of this
prospectus, we have yet to generate any revenues from our business operations.
As a result, we have generated significant
operating losses since our formation and expect to incur substantial losses and negative operating cash flows for the foreseeable
future as we attempt to expand our infrastructure and development activities. Our ability to continue may prove more expensive
than we currently anticipate and we may incur significant additional costs and expenses.
18
Liquidity and Capital Resources
At September 30, 2012,
the Company had total assets of $857,399 and total liabilities of $691,619 compared to total assets of $705,715 and total liabilities
of $204,176 at December 31, 2011. The increase in total assets is primarily due to proceeds received from the sale of securities
and convertible debentures entered into during the nine months ended September 30, 2012.
Net working
capital deficit at September 30, 2012 was $497,597 compared to a working capital deficit of $116,385 at December 31, 2011. We
incurred a loss of $20,907 for the nine months ended September 30, 2012 and have incurred an aggregate deficit since
inception of $312,878.
Net cash provided
by financing activities was $579,784 and $347,579 for the nine months ended September 30, 2012 and 2011 respectively. During the
nine months ended September 30, 2012 we entered into two subscription agreements with a private investor pursuant to which the
private investor purchased an aggregate of 680,000 shares of our common stock and 680,000 warrants exercisable to purchase
one half (1/2) of one share of common stock at an exercise price of $0.50 per share, exercisable over one year from the purchase
date. Gross proceeds received by the Company were $170,000.
In addition, during the
nine months ended September 30, 2012, the Company borrowed an aggregate of $358,875 ($365,000 face value) under convertible debentures.
On March 23, 2012, Petrosonic Energy, Inc. entered into an agreement with Sierra Growth, Inc. (a non-related party) whereby Sierra
Growth, Inc. ("Sierra") advanced $50,000. The debenture bears interest at 10% per annum and is due March 23, 2013.
Until the due date, Sierra may elect to convert the debenture in whole or in part into common shares of the Company at a conversion
rate equal to the price of any aggregate financing exceeding five hundred thousand ($500,000) dollars less a discount of 25% per
share. On April 18, 2012 Sierra advanced a further $25,000 to the Company. The debenture matures on April 18, 2013 and bears interest
at 10% per annum with the same conversion features as the debenture issued on March 26, 2012.
On June 6, 2012, Westlake
Advisors Corp. (a non-related party) advanced to Petrosonic Energy, Inc. $48,775 (CAD $50,000 face value) for a convertible debenture.
The debenture has a Maturity Date of one year from the date of issuance and bears an interest rate at 10% per annum. At any time
on or before the Maturity Date, Westlake Advisors Corp. may elect to convert the debenture in whole or in part into common shares
of the Company at a conversion rate equal to the price of any aggregate financing exceeding five hundred thousand ($500,000) dollars
less a discount of 25% per share.
On June 11, 2012,
the Company entered into an agreement with Art Agolli, its President,  Chief Executive Officer  and sole director, for a
convertible debenture valued at $195,100 (CAD $200,000 face value) for funds advanced. The convertible debenture expires on
June 11, 2013 ( the "Maturity Date") and bears interest at 10% per annum. At any time prior to the Maturity Date,
if the Company completes an equity or convertible debenture financing yielding aggregate proceeds of at least
$500,000 ("Qualified Financing"), its President may elect to convert the debenture in whole or in part into
common shares of the Company at a price equal to the price per share at which common shares of the Company are sold in the
Qualified Financing, or in the case of a convertible debenture, the price of the shares issuable upon conversion of the
convertible debentures sold in the Qualified Financing.
On June 21, 2012, Jackson
Bennett LLC (a non-related party) advanced $40,000 to Petrosonic Energy, Inc. by way of a convertible debenture which matures
June 21, 2013 and bears an interest at 10% per annum. At any time up to and including the Maturity Date, Jackson Bennett LLC may
elect to convert the debenture in whole or in part into common shares of the Company at a conversion rate equal to the price of
any aggregate financing exceeding five hundred thousand ($500,000) dollars less a discount of 25% per share.
19
Our cash needs
are primarily for working capital to develop our operations.  We have financed our operations through debt and
equity financings, including by agreeing to issue 1,270,000 shares of our common stock in exchange for services provided to
us by consultants. We presently operate with minimum overhead costs and will continue to need to raise additional capital to
fund our plan of operations. We currently have no committed source of financing, therefore, the Company's management expects
to regularly explore a variety of options to meet the Company's cash requirements and future capital requirements,
including the possibility of equity offerings, debt financing, and business combinations. We do not have any arrangements in
place for any future financing at this time. If we fail to obtain financing as and when we need it, our business will
be materially adversely affected and we may be forced to cease operations.
Going Concern Uncertainties
As of the date of this
prospectus, there is doubt about our ability to continue as a going concern as we have not generated sufficient cash flow to fund
our business operations.  The financial statements included in this prospectus have been prepared on the going concern basis,
which assumes that we will be able to realize our assets and discharge our obligations in the normal course of business. If we
are not to continue as a going concern, we would likely not be able to realize our assets at values comparable to the carrying
value or the fair value estimates reflected in the balances set out in the preparation of the financial statements.
Our future success and
viability, therefore, are dependent upon our ability to generate capital financing. The failure to generate sufficient revenues
or raise additional capital may have a material and adverse effect upon us and our stockholders.
Because we have not generated
any revenues, and have incurred losses from operations since inception, in their report on our audited financial statements for
the latest fiscal year, our independent auditors included an explanatory paragraph regarding substantial doubt about our ability
to continue as a going concern. The financial statements of Petrosonic Energy, Inc. and those of Petrosonic Albania Sha. contain
additional note disclosures describing the circumstances that lead to this disclosure by our respective independent auditors.
Critical Accounting Estimates
Property and equipment, net
Property and equipment
are carried at the cost of acquisition or construction and depreciated over the estimated useful lives of the assets. Costs associated
with repair and maintenance are expensed as incurred. Costs associated with improvements which extend the life, increase the capacity
or improve the efficiency of our property and equipment are capitalized and depreciated over the remaining life of the related
asset. Gains and losses on dispositions of equipment are reflected in operations. Depreciation is provided using the straight-line
method over the estimated useful lives of the assets, which are 3 to 5 years. The Company has not recognized depreciation since
inception as none of the equipment has been used in operations.
Research and development
Costs incurred in connection
with the development of new products and manufacturing methods are charged to selling, general and administrative expenses as
incurred. During the years ended December 31, 2011 and 2010, the Company expensed $-0- and $10,704, respectively, as research
and development costs.
Recently Issued Accounting Pronouncements
We do not expect the
adoption of any recently issued accounting pronouncements to have a significant effect on its financial position or results of
operations.
Off-Balance Sheet Arrangements
As of September 30, 2012,
we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.
Results of Activities
The following discussion
and analysis of our financial condition and results of operations should be read in conjunction with the audited financial statements
and accompanying notes of Petrosonic Energy, Inc. for the two months ended December 31, 2011 and the years ended October 31, 2011
and 2010.
20
For the Two Months Ended December 31, 2011
Selling, general and administrative expenses, and others
Operating expenses: Operating expenses were
$3,022 for the two months ended December 31, 2011. Operating expenses during the two months ended December 31, 2011 consisted of
filing fees and legal fees associated with the preparation and EDGAR filing of our October 31, 2011 annual report on Form 10-K
filed with the Securities and Exchange Commission on December 16, 2011.
Fiscal Year Ended October 31, 2011
as compared to Fiscal Year Ended October 31, 2010
We did not generate any
revenues during the fiscal years ended October 31, 2011 and 2010. We had a net loss of $12,874 for the year ended October 31,
2011 compared to a net loss of $29,259 for the year ended October 31, 2010.
Operating Expenses:
Operating
expenses were $12,874 and $29,259 for the years ended October 31, 2011 and 2010, respectively. The decrease of $16,385 in operating
expenses during the year ended October 31, 2011 was mainly due to a decrease in legal fees incurred in fiscal 2010 in connection
with the due diligence investigation of a former prospective merger candidate and a decrease in transfer agent and filing fees
incurred in 2010 associated with the Company filing application for listing with FINRA.
Liquidity and Capital Resources
At December 31, 2011,
we had total assets of $378, comprised solely of cash and total liabilities of $48,765 compared to total assets of $3,310 and
total liabilities of $48,675 at October 31, 2011. We had a net working capital deficit of $48,387 at December 31, 2011 compared
to a net working capital deficit of $45,365 at October 31, 2011. We incurred an aggregate deficit of $89,400 since inception.
Net cash used in operating
activities was $2,932 for the two months ended December 31, 2011. Cash used in operating activities was primarily due to payment
of legal and filing fees incurred during the period.
During the two months
ended December 31, 2011, the Company did not generate cash from financing activities.
At December 31, 2011,
$42,000 was due to our former President for funds advanced towards working capital. There can be no assurance that funds will
be advanced as required or that other methods of financing will be available or accessible on reasonable terms.
21
OUR BUSINESS
Overview of Our Business
We were incorporated
in the State of Nevada on June 11, 2008 under the name "Bearing Mineral Exploration, Inc.", with authorized capital
stock of 75,000,000 shares at $0.001 par value. We were organized for the purpose of conducting gold exploration activities
on a mineral claim located in the Province of Newfoundland, Canada. We were not able to establish the existence of a commercially
minable gold deposit and sought other viable business opportunities for the Company.
On April 17, 2012,
we issued 20,000,003 shares of our common stock to Art Agolli, our Chief Executive Officer, President and sole director, in
exchange for all of his right, title and interest in a letter of intent with Sonoro Energy Ltd. ("Sonoro"), a
Canadian publicly traded company (TSX-V: SNV) based in Calgary, Alberta, Canada,   the holder of all of the legal and
equitable rights and entitlements to a sonic reactor and technology that Sonoro has developed to utilize the sonic reactor
for the treatment and upgrading of heavy oil by sonicated solvent de-asphalting.
On May 16, 2012, we effected
an 11.25-for-1 forward stock split of our Common Stock and an increase in our authorized number of common shares to 843,750,000.
Additionally, on May 16, 2012, we changed our name to "Petrosonic Energy, Inc." to better reflect the Company's
new business direction in anticipation of the purchase of certain rights in technology, assets and common shares owned by Sonoro
Energy Ltd.
On July 27, 2012, we
acquired certain assets (the "Assets") from Sonoro, including (i) certain technology relating to the treatment and
upgrading of heavy oil by sonicated solvent de-asphalting, (ii) 60,000 shares of Petrosonic Albania Sha. pursuant to a share purchase
agreement (the "Share Purchase Agreement"), and (iii) sonic reactors located in Albania and Richmond, British Columbia
and a solvent recovery system located in or around Turin, Italy (the "Transaction"), pursuant to the terms of the
Asset Purchase and Sale Agreement, dated July 27, 2012 (the "Purchase Agreement").
Pursuant to the terms
of the Purchase Agreement, in exchange for the Assets, we agreed to pay to Sonoro the following consideration: (i) $250,000, (ii)
a convertible debenture in the principal amount of CDN$250,000 (the "Debenture") and (iii) a 10% royalty interest
in our realized net revenues for a period of 10 years from the time we commence commercial operations, which is defined as the
date upon which we process an average of 50 barrels of feed stock per day over a period of 30 consecutive days utilizing the technology
acquired. For a complete description of the Transaction, and the Purchase Agreement please refer to the Form 8-K filed by
the Company with the SEC on July 31, 2012.
Following the consummation
of the Transaction, we believe that we are not a shell corporation as that term is defined in Rule 405 of the Securities Act and
Rule 12b-2 of the Exchange Act. From and after the consummation of the Transaction, our primary operations consist of utilizing
the Assets to develop a business relating to the treatment and upgrading of heavy oil by sonicated solvent de-asphalting and operating
the business of Petrosonic Albania Sha. (the "Business").
We have no revenue and
have accumulated losses since inception. We expect to generate operating losses during some or all of our planned development
stages, which raises substantial doubt about our ability to continue as a going concern. In view of these matters, our ability
to continue as a going concern is dependent upon our ability to meet our financial requirements, raise additional capital; which
may likely involve the further issuance of capital stock, and the success of our future operations.
22
Operation Plans and Business Focus
Petrosonic has developed
a commercial process which improves heavy oil densities by 6 to 15 API
from as low as 8 API, reduces viscosities of
oil by 99% to pipeline specifications and reduces sulphur and heavy metals by over 50%. The American Petroleum Institute gravity,
or API gravity, is a measure of how heavy or light a petroleum liquid is compared to water; one of the qualitative measures for
crude oil.
This process is especially
beneficial to producers with the following intrinsic challenges:
·
Stranded
                                                                                                                             heavy
                                                                                                                             oil
                                                                                                                             due
                                                                                                                             to
                                                                                                                             transportation
                                                                                                                             issues
·
Diluent
                                                                                                                             supply
                                                                                                                             issues
·
Limited
                                                                                                                             refining
                                                                                                                             markets
                                                                                                                             (light
                                                                                                                             oil
                                                                                                                             refiners
                                                                                                                             struggle
                                                                                                                             with
                                                                                                                             heavy
                                                                                                                             oil)
·
Heavy
                                                                                                                             discounts
                                                                                                                             due
                                                                                                                             to:
·
Density
                                                                                                                             adjustments
·
High
                                                                                                                             sulphur
                                                                                                                             content
·
High
                                                                                                                             metals
                                                                                                                             content
Depending on regional
markets, traditional heavy oil discounts (10 API oil with >2% sulfur) are 35-40% and we believe such discounts could be reduced
to only 10-20% through our process. On 5,000 barrels of oil per day ("bopd") this would equate to increased revenues
of approximately $6/barrel (bbl) or around $11 million per year (based on $100/bbl brent oil). Capital costs are expected to be
between $0.5-1 million per 1,000 bbls capacity. Operating costs will be between $2-3 per bbl on a stand- alone facility basis.
Petrosonic plans to
have its first 1,000 bopd stand-alone facility operational within the second quarter of 2013 in Albania. Expected annual
cashflows from the initial 1,000 bopd facility are expected to reduce heavy oil price discounts historically received in
Albania from 40% to 20% as a result of achieving a 18-23 API oil. With significant heavy oil production growth anticipated
from the approximately 8 billion barrels of oil reserves believed to be present in Albania, if we are able to successfully
capture a portion of this processing business, Petrosonic  may be able to expand its facilities over the next 3-5 years to
15,000 bopd as Albanian oil production increases.
If we are able to successfully
establish our first commercial facility, we believe heavy oil producers will want to integrate the Petrosonic system at their
cost into their treatment facilities. Petrosonic would sell the process solution and retain a royalty fee under this type of development.
While revenue per facility will be less (estimated at 50%), no capital and minimal support will be required. This strategy would
allow for faster growth. Petrosonic may also choose to develop its own stand-alone facilities to capture further upside and long
term value creation.
Further upside opportunities
exist in several other applications which the Company is developing, including, heavy oil emulsification,
waste oil separation, and oil separations from drill cuttings.
Vision and Strategy
·
Petrosonic
                                                                                                                      hopes to
                                                                                                                      provide
                                                                                                                      its stockholders
                                                                                                                      with returns
                                                                                                                      and cash
                                                                                                                      flow growth
                                                                                                                      by leveraging
                                                                                                                      its experience
                                                                                                                      and intellectual
                                                                                                                      property
                                                                                                                      within the
                                                                                                                      heavy oil
                                                                                                                      business.
·
Petrosonic
                                                                                                                      plans to
                                                                                                                      use an initial
                                                                                                                      model of
                                                                                                                      building
                                                                                                                      its own
                                                                                                                      stand-alone
                                                                                                                      facilities
                                                                                                                      to prove,
                                                                                                                      optimize
                                                                                                                      and develop
                                                                                                                      business
                                                                                                                      growth opportunities
                                                                                                                      with small
                                                                                                                      to medium
                                                                                                                      sized producers.
                                                                                                                      To achieve
                                                                                                                      higher returns
                                                                                                                      and growth,
                                                                                                                      the Company
                                                                                                                      will license
                                                                                                                      out on a
                                                                                                                      fee for
                                                                                                                      service
                                                                                                                      basis or
                                                                                                                      royalty
                                                                                                                      basis its
                                                                                                                      processes
                                                                                                                      to be integrated
                                                                                                                      into producer's
                                                                                                                      treatment
                                                                                                                      facilities.
23
·
Where
                                                                                                                      there is
                                                                                                                      a distinct
                                                                                                                      advantage
                                                                                                                      Petrosonic
                                                                                                                      may capture
                                                                                                                      heavy oil
                                                                                                                      resources
                                                                                                                      prospects
                                                                                                                      or participate
                                                                                                                      jointly
                                                                                                                      in them.
                                                                                                                      Any resource
                                                                                                                      level participation
                                                                                                                      would require
                                                                                                                      higher returns
                                                                                                                      on investment
                                                                                                                      and be required
                                                                                                                      to stand
                                                                                                                      on its own
                                                                                                                      prior to
                                                                                                                      the benefits
                                                                                                                      of applying
                                                                                                                      Petrosonic's
                                                                                                                      technology.
Key Success Factors
The Company's success will be dependent
upon:
·
Our
                                                                                                                      ability
                                                                                                                      to attract
                                                                                                                      and develop
                                                                                                                      numerous
                                                                                                                      projects
                                                                                                                      once the
                                                                                                                      first project
                                                                                                                      is complete;
·
Access
                                                                                                                      to an ample
                                                                                                                      producer
                                                                                                                      oil supply
                                                                                                                      and our
                                                                                                                      ability
                                                                                                                      to find
                                                                                                                      equitable
                                                                                                                      profit distribution;
·
Our
                                                                                                                      development
                                                                                                                      and distribution
                                                                                                                      of asphalt
                                                                                                                      within the
                                                                                                                      market;
·
Our
                                                                                                                      ability
                                                                                                                      to minimize
                                                                                                                      the technical
                                                                                                                      risk through
                                                                                                                      avoidance
                                                                                                                      of scale
                                                                                                                      up issues;
·
Alleviation
                                                                                                                      of market
                                                                                                                      risk through
                                                                                                                      the use
                                                                                                                      of strategic
                                                                                                                      partners
                                                                                                                      which can
                                                                                                                      gain quick
                                                                                                                      access to
                                                                                                                      markets;
                                                                                                                      and
·
Alleviation
                                                                                                                      of financial
                                                                                                                      risk through
                                                                                                                      partnering.
Priorities
Immediate priorities of the Company are:
·
Strengthening
                                                                                                                      the operations
                                                                                                                      and management
                                                                                                                      of the Company
                                                                                                                      as it moves
                                                                                                                      forward
                                                                                                                      in the oil
                                                                                                                      sector;
·
Moving
                                                                                                                      ahead with
                                                                                                                      the processing
                                                                                                                      facility
                                                                                                                      in Albania;
·
Establishing
                                                                                                                      a second
                                                                                                                      country
                                                                                                                      oil processing
                                                                                                                      project;
                                                                                                                      and
·
Building
                                                                                                                      a firm backlog
                                                                                                                      of projects
                                                                                                                      with financing
                                                                                                                      commitments.
The Industry
Traditional Heavy Oil Opportunities
Crude
oil is the world's most actively traded commodity. Heavy crude oil is a type of highly viscous crude oil that does not flow
easily (sometimes referred to as non-conventional oil). Typically, it is defined as crude oil with an API gravity of less than
22 API. For example, Canadian extra-heavy crude (Athabasca bitumen) has a viscosity of 10,000+ cP (the
cgs
physical
unit
for dynamic viscosity is the
poise
(P)).
It is more commonly expressed, particularly in
ASTM
standards, as
centipoise
(cP).
Water at 20 °C has a viscosity of 1.0020 cP), about the same as cold molasses, and API gravity between 8-14 API. In comparison,
WTI, a type of light crude oil used as a benchmark in oil pricing of New York Mercantile Exchange's oil futures, has an
API of approximately 39.6. Naturally, heavy oils can be upgraded to high quality light synthetic oils using specialized refining
processing.
Heavy oil is a relative
term, compared to light crude oil, but relates to specific technical issues of its own on production, transportation, and refining.
Usually a diluent is added to carry heavy crude to facilitate its flow in pipelines.
24
Global Need, Supply and Production
The exact number of reserves
of heavy oil varies according to different sources, but it is generally accepted that the amount of recoverable heavy oil is greater
than remaining reserves of conventional oil. According to Schlumberger, the current world oil reserves consist of 9-13 trillion
barrels of oil, 30% of which are conventional sources, 40% heavy and extra-heavy sources and 30% oil sands bitumen sources. (See
http://www.slb.com/content/services/solutions/reservoir/heavy_oil.asp)
Estimated heavy oil production is around
5 million barrels per day and growing. The projected reduction in conventional oil in the next few years is focusing the industry
towards the more effective exploitation of non- conventional reserves, heavy oil resources in particular.
Source: http://www.slb.com/content/services/solutions/reservoir/heavy_oil.asp
Production and transportation
of heavy oil has unique challenges that must be overcome in order for it to become a significant contributor to the production
gap left by conventional oil and global growing demand.
Heavy Oil
Bitumen
North America
35.3
530.9
South America
265.7
0.1
Africa
7.2
43
Middle East
78.2
0.0
Asia
29.6
42.8
Russia
13.4
33.7
Western Hemisphere
301
531
Eastern Hemisphere
128.4
119.5
Worldwide*
429.4
650.5
*Does not include extra-heavy and
oil sand sources of bitumen (i.e. Canada, Venezuela)
Source: US Geological Survey
According to a US Geological
Survey, heavy oils are found around the world, with an estimated 69% of the world's technically recoverable heavy oil and
82% percent of the technically recoverable natural bitumen located in the Western Hemisphere. The Eastern Hemisphere, however,
contains an estimated 85% of the world's light oil reserves.
Among the more notable
heavy oil reserves are: Venezuela's Orinoco Heavy Oil Belt; Canada's Athabasca Oil Sands; Russia's Volga-Ural
Basin; Brazil's offshore Campos Basin; Alaska's Prudhoe Bay; and China's Luda field in Bohai Bay.
(Source:
http://www.slb.com/content/services/solutions/reservoir/heavy_oil.asp)
Significance of Traditional Heavy Oil
for Petrosonic
Around the globe, some of the most prolific
oilfields are reaching maturity and have begun to experience reduced production rates.
(Source: http://www.slb.com/content/services/solutions/reservoir/heavy_oil.asp)
What large conventional oilfields remain lie mostly in the lands of Middle Eastern, OPEC nations. At the same time, the world's
demand for oil continues to grow every year, fueled in part by the rapidly growing economies of China and India. This declining
availability of conventional oil combined with rising demand has driven up oil prices and put more pressure on the search for
alternate energy sources.
25
Into the picture come
the tremendous deposits of heavy oil and bitumen that are found in the Western hemisphere. These non-conventional resources are
more difficult to extract, so they have barely been touched in the past. With the price of oil reaching new highs in 2005 and
2006, investments in these more challenging oil deposits are rapidly accelerating.
In fact, the U.S. oil
industry alone has invested $86 billion in "frontier hydrocarbons" since 2000 (Heavy Oil Magazine, Aug 2006), developing
technologies to recover and convert inferior grades of oil, such as heavy oil and bitumen, into a more usable form for refineries,
and to turn waste and residue hydrocarbons into high-value products.
The worldwide importance
of heavy oils will continue to emerge as the price of oil remains high and the demand for it remains strong. For example, the
tight worldwide oil supply is expected to continue to force crude prices higher and turn Canada's oil sands into the single
largest contributor to net new global supply by the end of the decade, according to CIBC World Markets:
"All of
the net increase in oil production is expected to come from non-conventional sources,"
says Jeff Rubin, chief economist
at CIBC World Markets, "
While deepwater oil is the primary source today, we forecast that the Canadian oil sands will
become the single largest contributor to incremental global supply by 2010."
Industry Trends in Production and Transport
of Heavy Oil
The market factors behind
Petrosonic upgrading derive from the oil industry's needs relative to the production and refining infrastructure. As production
shifts more to heavier oil it becomes necessary for refining capacity to adapt to it, either by pre-upgrading the oil or by major
refining changes. Until then heavy oil producers face a penalty due to refining and pipeline infrastructure limitations driven
by:
·
the
                                                                                                                             need
                                                                                                                             to
                                                                                                                             maintain
                                                                                                                             low
                                                                                                                             capital
                                                                                                                             costs
                                                                                                                             and
                                                                                                                             operating
                                                                                                                             costs;
·
the
                                                                                                                             ability
                                                                                                                             to
                                                                                                                             produce
                                                                                                                             and
                                                                                                                             transport
                                                                                                                             heavy
                                                                                                                             oil
                                                                                                                             within
                                                                                                                             the
                                                                                                                             same
                                                                                                                             systems
                                                                                                                             as
                                                                                                                             that
                                                                                                                             established
                                                                                                                             for
                                                                                                                             conventional
                                                                                                                             oil,
                                                                                                                             i.e.
                                                                                                                             using
                                                                                                                             existing
                                                                                                                             transport
                                                                                                                             pipelines;
·
delivery
                                                                                                               of heavy oil to
                                                                                                               the point of sale
                                                                                                               with reduced expenditures
                                                                                                               on diluents;
·
production
                                                                                                                             and
                                                                                                                             transportable
                                                                                                                             technology
                                                                                                                             that
                                                                                                                             allows
                                                                                                                             the
                                                                                                                             exploitation
                                                                                                                             of
                                                                                                                             heavy
                                                                                                                             oil
                                                                                                                             reserves
                                                                                                                             at
                                                                                                                             lower
                                                                                                                             total cost,
                                                                                                                             particularly
                                                                                                                             for
                                                                                                                             smaller
                                                                                                                             fields
                                                                                                                             –
                                                                                                                             without
                                                                                                                             massive
                                                                                                                             infrastructure
                                                                                                                             expenditures.
Issues for Heavy Oil Producers
Pursuant to the aforementioned
industry pressures, heavy oil producers, especially small to medium size ones, face price penalties:
·
Traditional
                                                                                                                      heavy oil
                                                                                                                      is both
                                                                                                                      more viscous
                                                                                                                      and dense
                                                                                                                      than conventional
                                                                                                                      oil;
·
API
                                                                                                                      similar
                                                                                                                      to bitumen
                                                                                                                      from oil
                                                                                                                      sands (Canadian
                                                                                                                      Athabasca
                                                                                                                      bitumen
                                                                                                                      API between
                                                                                                                      8-14 API);
·
Peaking
                                                                                                                      global supply
                                                                                                                      increases
                                                                                                                      the production
                                                                                                                      of less
                                                                                                                      attractive
                                                                                                                      and higher
                                                                                                                      cost oil
                                                                                                                      resources;
·
Smaller
                                                                                                                      producers
                                                                                                                      face high
                                                                                                                      costs due
                                                                                                                      to the need to
                                                                                                                      blend heavy
                                                                                                                      oil with
                                                                                                                      diluents
                                                                                                                      for pipeline
                                                                                                                      transportation
                                                                                                                      or face
                                                                                                                      penalties
                                                                                                                      for failure
                                                                                                                      to meet
                                                                                                                      pipeline
                                                                                                                      specifications
                                                                                                                      for viscosity
                                                                                                                      and API
                                                                                                                      (approximately
                                                                                                                      22 API);
·
Fixed
                                                                                                                      producer
                                                                                                                      "upgrading"
                                                                                                                      facilities
                                                                                                                      to increase
                                                                                                                      the API
                                                                                                                      have been
                                                                                                                      limited
                                                                                                                      by the poor
                                                                                                                      economics
                                                                                                                      of small
                                                                                                                      scale and
                                                                                                                      short production
                                                                                                                      life;
26
·
Upgrading
                                                                                                                      is generally
                                                                                                                      limited
                                                                                                                      to de-asphalting
                                                                                                                      (removal
                                                                                                                      of heavy
                                                                                                                      asphaltene
                                                                                                                      components
                                                                                                                      –
                                                                                                                      up to 16%
                                                                                                                      by mass)
                                                                                                                      and vis-breaking
                                                                                                                      (low temperature
                                                                                                                      cracking).
Oil Sands
The world's two
largest sources of bitumen (and related extraction and recovery operations) are in Canada and in Venezuela. There is also known
oil shale or bituminous reserves in USA, Mexico, South America, Africa, Kazakhstan and other locations.
In Canada, oil sands
are found in three locations in the province of Alberta: The Athabasca, Peace River and Cold Lake regions. They cover 141,000
square kilometers (Camp, 1976, 1977; Cameron Engineers, 1978; Alberta Energy, 2002). The Athabasca is the largest deposit area,
located in the northeast part of Alberta. The total bitumen in place in Alberta is estimated at 1.7 to 2.5 trillion barrels (Morgan,
2001; Alberta Energy, 2002).
In 2005 about 1 million
barrels of oil per day were being produced from oil sands primarily from three projects: Suncor, Syncrude joint venture and Albion
Sands (Athabasca Oil Sands Project) joint venture. It is estimated that production will triple to 2.8-3 million barrels per day
by 2015. About 300 billion barrels are estimated to be recoverable using current open pit mining and in-situ technologies (Mathieson
and Stenason, 2001). The amount of this reserve is equivalent to over $30 trillion at current prices of oil.
Oil Sands Production in Canada
The Canadian oil sands
industry is dominated by large integrated multi-national companies, including Albion Sands Energy Inc., Canadian Natural Resources
Limited, Chevron, EnCana Corporation, Husky Energy Inc., Imperial Oil Resources Limited, Petro-Canada (Fort Hills), Shell Canada
Limited, Suncor Energy Inc. and Syncrude Canada Ltd.
Upcoming players include
(with projects under development or already underway) TOTAL (Joslyn), Exxon Mobil, Synenco, Fort Hills (UTS), Kearl Lake Project
with Imperial Oil Resources Limited, and BP (British Petroleum).
Alberta's oil sands
(1.74 trillion barrels) (Alberta Energy:http://www.energy.gov.ab.ca/1876.asp.)
are not only the world's largest
capital project but now represent 60 per cent of the world's investable oil reserves. (CIBC World Markets, December 8, 2000,
p 1.) But to produce one million barrels of oil a day, industry requires withdrawals of enough water from the Athabasca River
to sustain a city of two million people every year. (Down to the Last Drop: The Athabasca River and the Oil Sands, Pembina Institute,
March 2006, p.ii.)
Despite some recycling, the majority of this water never returns to the river and is pumped into
some of the world's largest man-made dykes containing toxic waste.
(Canada's Oil Sands: Opportunities and
Challenges to 2015: An Update, NEB, June 2006, p.38.) By 2015, the Canadian Association of Petroleum Producers predicts that oil
sands production may total as much as three million barrels a day.
(Canadian Oil Sands Outlook, EIA 2007 Annual Energy
Outlook, March 2007.)
27
Oil sands extraction
usually takes at least two tons of oil sand to fill one barrel of upgraded synthetic crude oil. Furthermore, for every barrel
of synthetic oil produced in Alberta, more than 80 kg of greenhouse gases are released into the atmosphere, and 3 to 5 barrels
of waste water are dumped into tailing ponds.
(Environmental Research and Studies Centre, University of Alberta, 2007.)
Production waste streams released into ponds have still relatively large amounts of unrecovered bitumen and expensive diluents
(as much as 4%). In large volumes typical for the oil extraction, these waste streams pose major environmental burdens as well
as lost economic potential, creating a multibillion dollar opportunity.
Bitumen and naphtha recovery
processes involve separation of the complex mixtures of mineral matter (sand, clay), water and small amounts of soluble organic
from the bitumen. Current operators use a combination of energy (hydro-transport, heat, conventional mixing) chemical (caustic)
addition, flotation and light solvent dilation to achieve the necessary separations.
Petrosonic Opportunity
We believe Petrosonic
will be able to take advantage of an opportunity that traditional upgrading technology cannot address – upstream upgrading
on smaller scales. The viability of upgrading is constantly changing due to production mix, refining infrastructure costs, and
oil pricing. However, there are three markets for small upgraders that make sense:
·
Pipeline
                                                                                                                      systems
                                                                                                                      where access
                                                                                                                      to the pipeline
                                                                                                                      requires
                                                                                                                      blending
                                                                                                                      of heavy
                                                                                                                      oil. Condensate
                                                                                                                      prices and
                                                                                                                      heavy oil
                                                                                                                      differentials
                                                                                                                      have been
                                                                                                                      stable for
                                                                                                                      some time
                                                                                                                      and long
                                                                                                                      term projections
                                                                                                                      indicate
                                                                                                                      that low
                                                                                                                      condensate
                                                                                                                      prices following
                                                                                                                      the global
                                                                                                                      economic
                                                                                                                      slow-down
                                                                                                                      will be
                                                                                                                      short-lived;
·
Heavy
                                                                                                                      oil producers
                                                                                                                      in markets
                                                                                                                      where light
                                                                                                                      oil dominates
                                                                                                                      refinery
                                                                                                                      infrastructure.
                                                                                                                      Internationally
                                                                                                                      there are
                                                                                                                      several
                                                                                                                      markets
                                                                                                                      like this;
                                                                                                                      and
·
Markets
                                                                                                                      where upgrading
                                                                                                                      asphalt
                                                                                                                      by-products
                                                                                                                      can command
                                                                                                                      premium
                                                                                                                      prices.
                                                                                                                      This is
                                                                                                                      especially
                                                                                                                      attractive
                                                                                                                      in North
                                                                                                                      America
                                                                                                                      given the
                                                                                                                      economic
                                                                                                                      infrastructure
                                                                                                                      stimulus
                                                                                                                      measures
                                                                                                                      being implemented.
To take advantage of
these opportunities Petrosonic must be able to:
·
Economically
                                                                                                                      upgrade
                                                                                                                      heavy oil
                                                                                                                      from small
                                                                                                                      and medium
                                                                                                                      sized producers
                                                                                                                      right in
                                                                                                                      the field;
·
Add
                                                                                                                      value and
                                                                                                                      allow producers
                                                                                                                      to capture
                                                                                                                      a larger
                                                                                                                      share of
                                                                                                                      the market
                                                                                                                      price for
                                                                                                                      refinery
                                                                                                                      products;
                                                                                                                      and
·
Provide
                                                                                                                      operating
                                                                                                                      plants to
                                                                                                                      heavy oil
                                                                                                                      producers
                                                                                                                      in return
                                                                                                                      for tolling
                                                                                                                      process
                                                                                                                      fees or
                                                                                                                      purchase
                                                                                                                      heavy oil
                                                                                                                      at a premium
                                                                                                                      to blenders.
Upgraded oil provides
uplift in crude's value and eliminates issues related to transport of crude oil to pipeline and refinery companies.
The Petrosonic Process
The Petrosonic heavy
oil process will enable heavy sour oil (HSO) and bitumen (from most heavy oil and oil sands fields in the world) to be converted
from nominally an API gravity of 8-14 degrees to a value-added synthetic crude oil of between 18 and 23 API. This is achieved
through the reduction of undesirable constituents of the raw heavy oil and/or bitumen. The process incorporates two stages: solvent
de-asphalting and distillation.
While solvent de-asphalting
and distillation are both proven and well known technologies, the innovation associated with the Petrosonic upgrading process
lies in the rapid de-asphalting achieved by sonication of the de-asphalting phase with the Petrosonic reactor stage.
28
Petrosonic Test Data
The Company has completed
an extensive test program of heavy oils both in house and independently with the complete Petrosonic upgrading process which has
shown to consistently achieve the target improvements in API. The tests were carried out in our R&D site in Richmond,
British Columbia (in house) and the lab work for the specifics of the de-asphalted oil and asphaltenes generated was carried out
by Alberta Research Council in their laboratory (independent) in Edmonton, Alberta. The tests were carried out during 2010 and
2011. For Canadian bitumen samples this represents an upgrade from nominally 10° API to 25° API. The test program
included heavy oils and bitumen from the Canadian Athabasca and Lloydminster fields, heavy oil from USA refineries, and crude
oil from two international oil producers. The testing was conducted at Petrosonic's Sonoprocess™ Facility in Richmond,
British Columbia and at the Petrosonic Facility located in Albania. The Petrosonic upgraded oil quality is typically:
·
Density
                                                                                                                      -
from
                                                                                                                      23°
                                                                                                                      to 28°
                                                                                                                      API gravity,
                                                                                                                      meeting
                                                                                                                      pipeline
                                                                                                                      specifications.
·
Viscosity
                                                                                                                      -
less
                                                                                                                      than 100
                                                                                                                      cSt at 25°C
                                                                                                                      (greater
                                                                                                                      than 99%
                                                                                                                      reduction),
                                                                                                                      meeting
                                                                                                                      pipeline
                                                                                                                      specifications.
·
Liquid
                                                                                                                      yields -
From
                                                                                                                      85% to 92%
                                                                                                                      by volume
                                                                                                                      depending
                                                                                                                      on the quantity
                                                                                                                      and quality
                                                                                                                      of asphaltene
                                                                                                                      by- product
                                                                                                                      required.
·
Sulphur
                                                                                                                      -
reduction
                                                                                                                      by up to
                                                                                                                      40% by mass.
·
Heavy
                                                                                                                      Metals -
typical
                                                                                                                      reduction
                                                                                                                      of Vanadium
                                                                                                                      up to 80%
                                                                                                                      and Nickel
                                                                                                                      by up to
                                                                                                                      88% by mass.
The following table illustrates
some of the data from the extensive test program that we have conducted. This is critical in establishing the application of the
Petrosonic process on a broad basis.
The table below (Table
1) shows key performance parameters for Alberta/Cold Lake Oil:
Table 1
Analysis
Raw Bitumen
Upgraded Oil
[Petrosonic ID: 090309E-2]
Total Acid Number (TAN)
1.24
1.18
API Gravity
14.4
26.0
Density @15
o
C
0.9690
0.8982
Nickel
46
17
Vanadium
95
38
Sulphur
3.62
2.46
Table 2 shows a PONA
(fundamental heavy oil testing of paraffins, olefins, napthenes and aromatics) summary by hydrocarbon group for Alberta/Cold Lake
oil using commercially available light naphtha:
Table 2
Raw Bitumen
Upgraded Oil
[Petrosonic ID: 090309E-2]
Group
% Wt
% Mol
% Wt
% Mol
Aromatics
14.175
14.871
17.318
18.545
i-Paraffins
25.572
23.856
24.912
24.031
Naphthenes
30.728
33.450
19.017
20.217
Olefins
11.431
11.147
5.064
4.837
Paraffins
4.715
4.695
30.547
29.677
Oxygenates
0.000
0.000
0.000
0.000
Unidentified
13.380
11.981
3.142
2.694
Plus
0.000
0.000
0.000
0.000
TOTAL
100.00
100.00
100.00
100.00
29
Table 3 shows a PONA
summary by carbon number for Alberta/Cold Lake oil. Table 3 reflects the effectiveness of the Petrosonic upgrading process through
the clear reduction in the oil's carbon number from C9/C10 to C7/C8, which indicates clearly the generation of new lighter
end fractions, each having a lower density and thus serving to increase the API. Given the high sensitivity of the API calculation
to density, even small changes in density create significant gains in API quality.
Table 3
Raw Bitumen
Upgraded Oil
[Petrosonic Code 090309E-2]
Carbon #
% Wt
% Mol
% Wt
% Mol
C4
0.001
0.002
-
-
C5
0.060
0.100
0.079
0.125
C6
3.063
4.296
2.979
4.053
C7
17.245
21.005
21.711
25.435
C8
17.245
18.619
33.183
33.915
C9
29.209
27.721
25.799
23.367
C10
17.940
15.127
10.057
8.179
C11
1.511
1.149
2.512
1.868
C12
-
-
0.478
0.328
C13
-
-
0.049
0.030
C14
-
-
0.010
0.006
>C15
13.726
11.981
3.143
2.694
TOTAL
100.00
100.00
100.00
100.00
The following table (Table
4) illustrates some of the data from the extensive test program that Petrosonic has conducted. This is critical in establishing
the application of the Petrosonic process on a broad basis.
Table 4
Raw
Upgraded
Total Acid
Total Acid
Specific
Vanadium
Nickel
Sulphur
Number
Vanadium
Sulphur
Number
Country
Source
API
(g)
(g)
(%)
(TAN)
API
(g)
Nickel (g)
(%)
(TAN)
Canada
CP
10.6
169.0
80.0
4.5
0.98
24.5
29.2
12.0
2.64
0.73
Canada
CDL
14.4
95.0
46.0
3.62
1.24
26.0
38.0
17.0
2.46
1.18
US (Texas)
TG
17.4
12.0
5.4
3.73
0.59
27.9
4.2
1.9
2.78
0.99
US (Texas)
TK
14.9
15.0
16.0
3.85
0.56
27.5
4.4
4.2
2.51
0.58
US (Texas)
TQ
11.2
15
16
3.33
1.71
25.9
2.9
3.1
2.51
0.55
Albania
AB
10.8
348.4
68.5
5.96
0.56
25.1
56
8.6
3.96
0.3
Albania
AD
10.2
287.0
57.0
3.98
0.52
29.0
65.9
12.2
3.27
0.73
Albania
AM
21.0
110.0
19.0
2.43
1.07
31.9
48.4
7.7
2.88
0.85
Venezuela
VP
9.4
492.0
105.0
4.26
5.26
21.7
220
45.4
2.96
3.68
US (Utah)
US
14.5
23.8
12.2
1.18
3.19
32.5
1.7
1.0
0.62
0.26
Stages in the Petrosonic Process
Step 1: Solvent De-asphalting
The primary process of
solvent de-asphalting dissolves bitumen in a common paraffinic solvent. The solvent is selected to ensure complete dissolution
of the oil-soluble component of the bitumen with the solvent to form a De-asphalted Oil (DAO) while the insoluble hydrocarbon
component known as asphaltenes are readily filtered through simple separation. This asphaltene fraction is concentrated with heavy
metals such as nickel and vanadium as well as sulphur.
30
The Petrosonic reactor,
using its patented low-frequency / high-energy / high-amplitude reactor design, allows for significant improvement in the mass
transfer efficiency of the solvent de-asphalting step in particular, cutting the de-asphalting time required from 6 to 10+ hours
to 2 minutes.
Step 2: Solvent Recovery
At the completion of
the two-stage Petrosonic upgrading process, the upgraded oil is required to be separated from the solvent through a standard solvent
recovery process such as an evaporator or distillation column. Given the significant differential in boiling points of the upgraded
oil and the solvent for recovery, the separation process is economical and readily applicable to recover solvent with a solvent
residual of less than 4% remaining in the oil and probably below 2%. Such a small solvent residual in the oil is well within the
expected quality parameters for pipeline and refinery specifications. The recovered solvent is reused at the solvent de-asphalting
stage to complete the closed loop on the Petrosonic upgrading process.
Petrosonic's Technology
SonoProcess
We believe Petrosonic's
technology advantage is based upon the use of our Petrosonic reactor technology and the unique cavitational and enhanced mass
transfer effects that it provides. Petrosonic has developed a unique competency in the design of enhanced mass transfer energy
processes and the proprietary applications that result from this.
In recent years the use
of cavitational technologies and ultrasound has been researched extensively for oil processing – usually in the context
of desulphurization or "cold cracking". Our own research does not support this and we make no claims that it can create
a unique upgrading process. The chemistries used in the Petrosonic process are established and our advantage is that we make these
more effective.
The Company looks to
maintain its initial technical advantage derived from the Petrosonic Sonoprocess™ for heavy oil by adding complementary
proprietary process technologies to this.
The Petrosonic reactor
has been designed and built in a variety of configurations but all Petrosonic process development is undertaken on full scale
units:
·
Petrosonic
                                                                                                                      reactors
                                                                                                                      are based
                                                                                                                      on low-frequency
                                                                                                                      / high-amplitude
                                                                                                                      Petrosonic
                                                                                                                      energy reactors;
·
A
                                                                                                                      patented
                                                                                                                      electromagnetic
                                                                                                                      drive puts
                                                                                                                      a massive
                                                                                                                      steel bar
                                                                                                                      into resonance
                                                                                                                      and this
                                                                                                                      allows efficient
                                                                                                                      transfer
                                                                                                                      of energy
                                                                                                                      to the reaction
                                                                                                                      chambers;
31
·
There
                                                                                                                      are no moving
                                                                                                                      parts and
                                                                                                                      so Petrosonic
                                                                                                                      reactors
                                                                                                                      have a high
                                                                                                                      reliability
                                                                                                                      and operational
                                                                                                                      availability;
·
The
                                                                                                                      reaction
                                                                                                                      chambers
                                                                                                                      are attached
                                                                                                                      at the mid-node
                                                                                                                      points one
                                                                                                                      half wavelength
                                                                                                                      from the
                                                                                                                      drive system,
                                                                                                                      enabling
                                                                                                                      the reactors
                                                                                                                      to apply
                                                                                                                      Petrosonic
                                                                                                                      energy to
                                                                                                                      physical,
                                                                                                                      chemical
                                                                                                                      and biological processes;
                                                                                                                      and
·
Petrosonic
                                                                                                                      reactors
                                                                                                                      are thus
                                                                                                                      able to
                                                                                                                      achieve
                                                                                                                      more sustainable
                                                                                                                      processes
                                                                                                                      –
                                                                                                                      better reactivity,
                                                                                                                      less reagents,
                                                                                                                      less energy,
                                                                                                                      greater
                                                                                                                      effectiveness
                                                                                                                      and more
                                                                                                                      product
                                                                                                                      for overall
                                                                                                                      economic
                                                                                                                      advantage.
Direct Sonicated Separation
The previous holder of
the technology has also carried out independent tests on oil sands to determine if the technology could be effective in a low
cost primary separation process. Preliminary tests with a proprietary process protocol produced results comparable with existing
technology.
However, the effectiveness
of this technology is but a first step due to the massive scale of oil sands projects. At this time the Company believes the volume
of material that would need to be processed requires a "next generation" of Petrosonic reactor technology. Existing
scale technology may be applicable to small scale oil sands production.
The Company has directed
its efforts towards a more immediate but directly related application – the treatment of drill cuttings. This is not the
same scale of opportunity but offers immediate access to market and cash flow generation based on modest investment of capital.
Petrosonic Heavy Oil Process Patents
As part of the transaction
with Sonoro Energy the company has acquired the following Heavy Oil Process provisional and PCT applications based on the Company's
Sonoprocess™:
·
Patent/Application
                                                                                                                      No: WO2009111871.
                                                                                                                      Jurisdiction:
                                                                                                                      WIPO. Title:
                                                                                                                      Method for
                                                                                                                      Treating
                                                                                                                      Heavy Crude
                                                                                                                      Oil. Application
                                                                                                                      Status:
                                                                                                                      Published.
·
Patent/Application
                                                                                                                      No: EA201071060.
                                                                                                                      Jurisdiction:
                                                                                                                      Eurasisa.
                                                                                                                      Title: Method
                                                                                                                      for Treating
                                                                                                                      Heavy Crude
                                                                                                                      Oil. Status:
                                                                                                                      Pending.
·
Patent/Application
                                                                                                                      No: EP2260089.
                                                                                                                      Jurisdiction:
                                                                                                                      Europe.
                                                                                                                      Title: Method
                                                                                                                      for Treating
                                                                                                                      Heavy Crude
                                                                                                                      Oil. Status:
                                                                                                                      Pending.
·
Patent/Application
                                                                                                                      No: 2156/MUMNP/2010.
                                                                                                                      Jurisdiction:
                                                                                                                      India. Title:
                                                                                                                      Method for
                                                                                                                      Treating
                                                                                                                      Heavy Crude
                                                                                                                      Oil. Status:
                                                                                                                      Pending.
·
Patent/Application
                                                                                                                      No: US 61/035,690.
                                                                                                                      Jurisdiction:
                                                                                                                      United States.
                                                                                                                      Title: Method
                                                                                                                      for Treating
                                                                                                                      Heavy Crude
                                                                                                                      Oil. Status:
                                                                                                                      Company
                                                                                                                      will appeal
                                                                                                                      the expired
                                                                                                                      priority
                                                                                                                      claim to
                                                                                                                      reinstate
                                                                                                                      the priority
                                                                                                                      claim.
Competition
Currently heavy oil is
upgraded by refineries and upgraders (refineries that upgrade crude to synthetic crude grade level but not to full end products
such as diesel, jet fuel etc.). These facilities refine large quantities of crude from 60,000 to 500,000 bbl/day and they are
capital intensive, require long lead times, significant engineering and intensive water use.
There have been other
technologies introduced that upgrade heavy oil via other methods such as Headwaters Incorporated's proprietary HCAT technology
or Ivanhoe Energy's HTL heavy oil upgrading technology. However, these technologies upgrade heavy crudes in smaller volumes
and are also very complex, capital intensive and require intense use of energy and water. They also have the associated environmental
downsides such as carbon emissions.
32
Disadvantages of Petrosonic Process/Technology
There are few inherent
disadvantages to the Petrosonic process.  The technology has been proven on other applications but long-term 24 hour operations
have not been attempted as prior successful commercialization efforts did not require long-term, 24 hour operations. In addition,
one sonicator at current dimensions can process up to 500 barrels of heavy oil per day. While this processing capacity can be
an advantage for small and medium size operations it may be considered as a disadvantage for larger operations.
In addition,
there are technical and logistical risks associated with the heavy oil upgrading technology rollout in Albania.  These risks
can be attributed to two general categories of risk:  operational and logistical, which are influenced by the market risk
factors which are presented separately.
The design
of the equipment was based on an estimation of both the required solvent as well as the regional heavy crude oil expected to be
upgraded at site.  Any changes and variations in either the solvent or the heavy oil will impact the overall ability to commission
the project.  Remaining equipment to be ordered is minor in scope but any delays or problems in sources of supply from European
sources could lead to minor delays.
The ability
to procure suitable safe installation for commissioning the equipment is critical given the limited number of suitable contractors
available in Albania.  The ability to source and deliver piping equipment could cause commissioning or optimization delays.
 The equipment to be assembled into a continuous heavy oil upgrading process has not been operated in the proposed configuration
elsewhere. The process is expected to operate as designed but unforeseen assembly and commissioning situations are normal and
expected.  Remaining equipment to be ordered is minor in scope but any delays or problems in sources of supply from European
sources could lead to minor delays.
Marketing and Sales Strategy
Petrosonic's business
model is to provide integrated upgrading systems to heavy oil producers in exchange for revenue sharing in the economic uplift
produced as a result of the Sonoprocessing™. Given the relative ease of integration and transportation, the process is designed
to be easily applicable to the upstream and midstream constituents. The immediate marketing and sales strategy is to sell our
processing services on toll or joint venture basis to heavy oil upstream producers directly. As a result, business models can
take on various forms:
·
Oil
                                                                                                               Producers: Decrease
                                                                                                               viscosity and need
                                                                                                               for diluents; improve
                                                                                                               quality; increase
                                                                                                               marketability;
                                                                                                               increase price.
·
Pipeline
                                                                                                               Operators: Decrease
                                                                                                               viscosity and need
                                                                                                               for diluent resulting
                                                                                                               in increased throughput.
·
Storage
                                                                                                               & Blending
                                                                                                               Operators: Increase
                                                                                                               yield and quality.
·
Refiners
:
Increase
                                                                                                               yield and quality.
                                                                                                               Rapid de-asphalting
                                                                                                               with less diluent
                                                                                                               and less cost.
                                                                                                               De-bottleneck refinery.
Customers
Our target customers
are heavy oil producers, industrial groups that consume heavy oil and refineries that refine heavy oil. In addition, our potential
customers consist of heavy oil trading companies and asphalt producers and consumers of asphalt products such as construction
companies that require asphaltenes as raw material for production of asphalt. Currently the Company has no customers.
33
Employees
We have currently 2 full-time
employees and 3 part-time employees, as well as, several independent consultants. We plan to hire three local operations staff
in Albania during the first year of its operations. The Company has identified potential candidates for such positions, and expects
to proceed with such hires once it has secured the requisite financing.
Environmental Laws and Regulations
The Company may be subject
to various environmental laws and regulations in the countries in which it operates. With respect to Albania, the Company will
require an environmental permit for its facility and a fire safety permit. The Company has applied for the environmental permit
and is in discussion with all governmental authorities regarding the issuance of the permit. Since the Company does not require
any use of water, extensive energy or generate any emissions it does not fall under more complicated and lengthy environmental
permit requirements typical for refineries or upgraders. The Company plans to install all necessary equipment required for anti-fire
measures and regulations in the country.
Procurement of Equipment
We will rely on a third
party contractor to manufacture the sonicators and other related equipment according to its patented design and specifications.
We have received quotes from the third party manufacturer and expect that we will be able to obtain all the necessary equipment
to grow our processing capacity in the future. The manufacturer has the production and financial capability and capacity to fulfill
our orders in the future. In addition, we have access to several local and international fabricators and engineering firms to
carry out the necessary assembly of the equipment and increase capacity of our processing plant in the future.
PROPERTIES
Our
head office is located at
Suite 300, 714 - 1st Street SE, Calgary, Alberta, Canada T2G 2G8.
Our
sole director is currently allowing the Company the use of his office without charge in order to minimize costs to the Company.
Management believes that the Company's facilities are adequate for the conduct of the Company's management operations
at this time.
We also have an office
in Fier, Albania at same location where its processing plant is located. Albania's heavy oil upstream and downstream industries
are located in Fier and the facility is only a few miles away from the heavy oil producing fields. It is also located 35 kilometers
away from Albania's only deep sea port and export facility, the PIR Vlora terminal. The office is offered by the Albanian
partner without charge until the Company signs a lease agreement when requisite funding is in place.
LEGAL MATTERS
In the normal course
of business, we may become involved in various legal proceedings. Currently, we know of no pending or threatened legal proceeding
to which we are or will be a party which, if successful, might result in a material adverse change in our business, properties
or financial condition.
34
DIRECTORS AND EXECUTIVE OFFICERS
The following table identifies our executive
officers and directors, their ages, their respective offices and positions, and their respective dates of election or appointment.
Name
Age
Title
Position
    Held Since
Art Agolli
42
Chief Executive Officer,
    President and Director
March 2012
Richard Raisig
65
Chief Financial Officer,
    Secretary and Treasurer
January 2013
Terms of Office
Our directors are appointed for a one-year
term to hold office until the next annual general meeting of our stockholders or until removed from office in accordance with
our bylaws and the provisions of the Nevada Revised Statutes. Our directors hold office after the expiration of his or her term
until his or her successor is elected and qualified, or until he or she resigns or is removed in accordance with our bylaws and
the provisions of the Nevada Revised Statutes.
Our officers are appointed by the Company's
Board of Directors and hold office until removed by the Board.
Business Experience
Art Agolli
has more than
16 years of successful experience in developing heavy oil projects. Since February of 2009 he has acted as Chief Executive Officer
of BA Capital, a Calgary based merchant bank serving the energy, mining and technology sectors.
Mr. Agolli is co-founder and former Vice
President of Bankers Petroleum Ltd., a Toronto and London Stock Exchange listed oil and gas company. Mr. Agolli played a key role
in building Bankers Petroleum from April 2004 through August 2008. From a start up in April 2004, Bankers Petroleum grew to a
$2.3 billion market capitalization company during his time with the company, until August 2008. Bankers Petroleum has a 100% working
interest and is the operator of the largest onshore heavy oil field in Europe (Albania) with original oil in place of 8.5 billion
barrels. Mr. Agolli also played an important role with BNK Petroleum, a Toronto Stock Exchange listed company that was spun off
from Bankers Petroleum in 2008 in its entry into Poland where that company has one of the largest shale gas land positions in
the country and in Europe. BNK Petroleum grew from a start-up to a $700 million market capitalization company.
Mr. Agolli is also a co-founder of Sonoro
Energy, a TSX listed company that has recently signed a major oil deal in Iraq. Mr. Agolli provided services to Sonoro Energy
Ltd. from May 2010 to January 2012. Sonoro has exclusive rights to development of all heavy oil of Salah ad Din Province in Iraq.
Mr. Agolli has also been an international business and corporate development executive with Koch Industries Inc., the largest
privately held company in North America from 1998-2001. From March 2001 to December 2003 he was Chief Executive Officer of Anonima
Petroli Italiana (Albania), a subsidiary company of Api Spa, one of the largest refining and trading oil companies in Italy.
Mr. Agolli started his career as a consultant
for the World Bank in Washington DC in 1997. Mr. Agolli holds a Masters Degree in Management from Grand Valley State University
(Michigan, USA) and an International Relations and Business Degree from the same university. He is a member of the Association
of International Petroleum Negotiators (Houston, USA).
Richard Raisig
currently
serves, on a part-time basis, as the Chief Financial Officer of Connexed Technologies, Inc. Mr. Raisig joined Connexed in 2009.
From 2007 to 2009 Mr. Raisig served as Chief Financial Officer of Aurora Systems, Inc. Prior to joining Aurora Systems, Mr. Raisig
was Chief Financial Officer of Microvision, Inc. from 1996 to 2006. Mr. Raisig received a BA in Economics from the University
of California, Irvine in 1970, an MS in Accounting from California State University, Long Beach in 1973 and an MBA in Finance
from the University of Southern California in 1980.
35
Family Relationships
There are no family
relationships among our directors and executive officers.
Involvement In Certain Legal Proceedings
To the best of our knowledge, none of our
directors or executive officers has, during the past ten years, been involved in any legal proceedings described in subparagraph
(f) of Item 401 of Regulation S-K.
EXECUTIVE COMPENSATION
Executive Compensation - Executive
Officers
The following summary
compensation table indicates the cash and non-cash compensation earned during the fiscal year ended October 31, 2011, the two
months ended December 31, 2011 and the year ended December 31, 2012 by our Chief Executive Officer and each of the other two highest
paid executives, if any, whose total compensation exceeded $100,000 during those periods.
Summary Compensation Table
Name and principal position
Year
Salary ($)
Bonus
($)
Stock
Awards
($)
Option
Awards
($)
Non-
Equity
Incentive
Plan
Compen-sation
($)
Nonquali-
fied
Deferred
Compen-
sation
Earnings
($)
All Other
Compen-sation ($)
Total ($)
Art Agolli, Chief Executive Officer
12/31/2012
12/31/2011
0
0
0
0
0
0
0
0
10/31/2011
0
0
0
0
0
0
0
0
Gerhard Schlombs, former Chief Executive
    Officer (1)
12/31/2012
0
0
0
0
0
0
0
0
12/31/2011
0
0
0
0
0
0
0
0
10/31/2011
0
0
0
0
0
0
0
0
(1) Mr. Schlombs resigned his position on
March 19, 2012.
Compensation of Directors
We have no standard
arrangement to compensate directors for their services in their capacity as directors. Directors are not paid for meetings attended.
However, we intend to review and consider future proposals regarding board compensation. All travel and lodging expenses associated
with corporate matters are reimbursed by us, if and when incurred
Employment Agreements
We do not currently
have an employment agreement with our Chief Executive Officer or our Chief Financial Officer.
Long-Term Incentive Plan Awards
We do not presently
have any long-term incentive plans that provide compensation intended to serve as incentive for performance to occur over a period
longer than one fiscal year, whether such performance is measured by reference to our financial performance, stock price or any
other measure.
36
Options/SAR Grants
No
individual grants of stock options, whether or not in tandem with stock appreciation rights ("SARs") and freestanding
SARs have been made to our executive officers, or directors or employees during the current fiscal year. No stock options have
been previously granted.
Potential Payments Upon Termination or
Change-in-Control
Securities and Exchange
Commission regulations state that we must disclose information regarding agreements, plans or arrangements that provide for payments
or benefits to our executive officers in connection with any termination of employment or change in control of the company.
We
currently have no employment agreements nor any compensatory plans or arrangements with any of our executive officers that may
result from the resignation, retirement or any other termination of any of our executive officers, from a change-in-control, or
from a change in any executive officer's responsibilities following a change-in-control.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
AND DIRECTOR INDEPENDENCE
Transactions with Related Persons
The following describes all transactions
since January 1, 2010 and all proposed transactions in which we are, or we will be, a participant and the amount involved exceeds
$120,000
or one percent of the average of our total assets at year end for the last two completed fiscal
years
and in which any related person had or will have a direct or indirect material interest.
From 2011 and continuing through the date
of this prospectus, our Chief Executive Officer and director, Mr. Art Agolli, provided office space to us free of charge.
On June 6, 2012, we issued
to Mr. Agolli a secured convertible debenture in the amount of CDN$200,000. The debenture accrues interest at the rate of 10%
per year and is due to be paid on June 6, 2013. Mr. Agolli may convert the principal amount of the debenture before the maturity
date at the price paid for shares of our common stock by investors who participate in a "Qualified Financing", as defined
in the debenture. The private offering we completed on January 16, 2013 meets the definition of a Qualified Financing, therefore
Mr. Agolli may convert the debenture to shares of our common stock at the rate of $0.25 per share, for a total of 800,000 shares.
The debenture is secured by our personal property and the personal property of our subsidiary.
Mr.
Schlombs, our former President, Principal Executive Officer, Principal Financial Officer and director, provided office space to
us free of charge.
At
October 31, 2011, Mr. Schlombs had advanced a total of $42,000 to us towards working capital, which amount has subsequently been
repaid.
Director Independence
During
the year ended December 31, 2012, we had no independent directors. Our current sole director, Art Agolli, is not independent.
We evaluate independence by the standards for director independence established by applicable laws, rules, and listing standards
including, without limitation, the standards for independent directors established by The NASDAQ National Market, and the Securities
and Exchange Commission.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The
Company has only one class of stock outstanding, its common stock. The following table sets forth certain information as of February
5, 2013, with respect to the beneficial ownership of our common stock for (i) each director and officer, (ii) all of our directors
and officers as a group, and (iii) each person known to us to own beneficially five percent or more of the outstanding shares
of our common stock. As of February 5, 2013, there were 65,329,000 shares of common stock outstanding.
37
To our knowledge, except
as indicated in the footnotes to this table or pursuant to applicable community property laws, the persons named in the table
have sole voting and investment power with respect to the shares of common stock indicated.
Directors and Executive Officers
Shares
Beneficially
Owned (1)
Percentage Beneficially
Owned
Art Agolli
Chief Executive Officer, President and Director
57
    Valley Woods Way, NW
Calgary, AB T3B 6A5
20,800,003
(2)
31.5
%
All Officers and Directors as a Group
20,800,003
31.5
%
Principal Stockholders
Gerhard Schlombs
(Former officer and former director)
92 Wishing Well Drive
Toronto, ON M1T 1J9
14,625,000
22.4
%
SGP Group
                                 Inc. (3)
2
nd
Terrace
                                                                                                                                             W.
                                                                                                                                             Centreville
P.O.
                                                                                                                                                                                                                                                                                 Box
                                                                                                                                                                                                                                                                                 10567
Nassau,
                                                                                                                                                                                                                                                                                                                                                                                         Bahamas
4,276,284
6.5
%
(1)
Beneficial
ownership has been determined in accordance with Rule 13d-3 under the Exchange Act. Pursuant to the rules of the SEC, shares of
common stock which an individual or group has a right to acquire within 60 days pursuant to the exercise of options or warrants
are deemed to be outstanding for the purpose of computing the percentage ownership of such individual or group, but are not deemed
to be beneficially owned and outstanding for the purpose of computing the percentage ownership of any other person shown in the
table.
(2) The number of shares beneficially owned
by Mr. Agolli includes 800,000 shares of common stock that would be issued to him if he chooses to convert the Secured Convertible
Debenture issued to him on June 6, 2012.
(3) Josephine Agotilla has dispositive and
voting control for SGP Group Inc.
Change Of Control
To our knowledge, there
are no present arrangements or pledges of securities of our Company that may result in a change in control.
38
SELLING STOCKHOLDERS
We are registering shares
of common stock owned by the selling stockholders. The common stock was acquired in a private placement which closed on January
16, 2013. The private placement was conducted under Regulation D of the Securities Act with a limited number of accredited investors.
A more complete description of this offering is included at the section of this prospectus titled "Summary" at page
1.
No selling stockholder
has, or within the past three years has had, any position, office or other material relationship with us or any of our predecessors
or affiliates other than as a result of the ownership of our securities.
The following table also provides certain
information with respect to the selling stockholders' ownership of our securities as of February 5, 2013, the total number
of securities they may sell under this prospectus from time to time, and the number of securities they will own thereafter assuming
no other acquisitions or dispositions of our securities. For the table below, ownership of the common stock is determined in accordance
with the rules of the Securities and Exchange Commission and includes any shares of common stock over which a selling stockholder
exercises sole or shared voting or investment powers, or of which a selling stockholder has a right to acquire ownership at any
time within 60 days of February 5, 2013. The selling stockholders can offer all, some or none of their securities, thus we have
no way of determining the number they will hold after this offering. Therefore, we have prepared the table below on the assumption
that the selling stockholders will sell all shares covered by this prospectus.
Some of the selling stockholders
may distribute their shares, from time to time, to their limited and/or general partners or managers, who may sell shares pursuant
to this prospectus. Each selling stockholder may also transfer shares owned by him or her by gift, and upon any such transfer
the donee would have the same right of sale as the selling stockholder.
We may amend or supplement
this prospectus from time to time to update the disclosure set forth herein, however, if a selling stockholder transfers his or
her interest in the common stock prior to the effective date of the registration statement of which this prospectus is a part,
we will be required to file a post-effective amendment to the registration statement to provide the information concerning the
transferee. Alternatively, if a selling stockholder transfers his or her interest in the common stock after the effective date
of the registration statement of which this prospectus is a part, we may use a supplement to update this prospectus. None of the
selling stockholders are or were affiliated with registered broker-dealers with the exception of Mark Moskowitz, Thomas Bridges,
John J. Weber, Aaron M. Gurewitz and Theodore D. Roth. These individuals have indicated that they bought the shares in the ordinary
course of business, and at the time of the purchase of shares, they had no agreements or understandings, directly or indirectly,
with any person to distribute our shares. See our discussion titled "Plan of Distribution" for further information
regarding the selling stockholders' method of distribution of these shares.
39
Selling
Stockholder
Shares
held before the
Offering
Shares
being
Offered
Shares
held after the
Offering
Percentage
Owned after
the
    Offering
(1)
Curtis Lynn Debord and Mary Joseph Debord
400,000
400,000
0
—
Sub L.P. (2)
2,000,000
2,000,000
0
—
CI USVI, LLC (3)
2,000,000
2,000,000
0
—
Edward Kowlowitz
1,200,000
1,200,000
0
—
Robert and Susan Tepperman
40,000
40,000
0
-
Centermark Holdings, LLC (4)
200,000
200,000
0
—
Thomas S. Bridges
300,000
300,000
0
—
David G. Gross
300,000
300,000
0
—
Charles T. Osearo
100,000
100,000
0
—
David R. Garfin
160,000
160,000
0
—
Steve Arnold
200,000
200,000
0
—
Michael and Sonja Ogrizovich
100,000
100,000
0
Joseph and Marla Schwartz
100,000
100,000
0
—
Thomas Levin and Heather Levin
100,000
100,000
0
—
Fred Halpern and Joshua Halpern
200,000
200,000
0
—
E. V. Kazazian Trust U/A 12/3/2004 (5)
100,000
100,000
0
—
Bix Family Investments, LLC (6)
80,000
80,000
0
—
PENSCO Trust Company Custodian FBO David Klunder (7)
60,000
60,000
0
—
Mark Whitmore
300,000
300,000
0
—
Robert S. Dumper & Janet Dumper Co-TTEE The Dumper Family Trust U/A
    5/17/2012 (8)
100,000
100,000
0
—
Graham C. W. Astor
200,000
200,000
0
—
Michael P. & Connie G. Marinko
100,000
100,000
0
—
Joe Reid (10)
80,000
80,000
0
—
Michael J. Gluck
20,000
20,000
0
—
William B. Kuhn
40,000
40,000
0
—
Kevin Hurley (10)
60,000
60,000
0
—
Philip M. Sorensen
60,000
60,000
0
—
Jonathan Spanier
800,000
800,000
0
—
Peter G. Geddes
400,000
400,000
0
—
Michael Stone
800,000
800,000
0
—
John J. Weber
100,000
100,000
0
—
Aaron M. Gurewitz
100,000
100,000
0
—
DiNapoli Family Trust U/A 2/5/2010 (9)
50,000
50,000
0
—
Gordon Roth
100,000
100,000
0
Theodore D. Roth
40,000
40,000
0
—
Mark Moskowitz
670,000
600,000
70,000
*
Molly Richardson
210,000
210,000
0
—
Michael Cavalier
200,000
200,000
0
—
Benjamin L. Padnos
150,000
150,000
0
—
Anthony DiGiandomenico
40,000
40,000
0
—
Frank Seifert
50,000
20,000
30,000
*
TOTAL
12,210,000
* Indicates less than 1%.
(1) Based on 65,329,000 shares outstanding
on February 5, 2013.
(2) The person holding voting and investment
power over these shares is Scott Greenberg.
(3) The person holding voting and investment
power over these shares is R.D. Sckalor.
(4) The person holding voting and investment
power over these shares is Michael C. Azar.
(5) The persons holding voting and investment
power over these shares are Edward V. Kazazian and Linda R. Kazazian.
(6) The person holding voting and investment
power over these shares is Carl H. Schultz.
(7) The person holding voting and investment
power over these shares is David Klunder.
40
(8)
The persons holding voting and investment power over
these shares are Robert S. Dumper and Janet Dumper.
(9)
The persons holding voting and investment power over
these shares are Philip DiNapoli and Jennifer DiNapoli.
(10)
This information is based on the records we maintained
relating to the private placement which closed on January 16, 2013. We have not yet received confirmation of the information from
the stockholders.
PLAN OF DISTRIBUTION
We are registering the
shares of common stock on behalf of the selling stockholders. Sales of shares may be made by selling stockholders, including their
respective donees, transferees, pledgees or other successors-in-interest directly to purchasers or to or through underwriters,
broker-dealers or through agents. Sales may be made from time to time on the OTCQB or any exchange upon which our shares may trade
in the future, in the over-the-counter market or otherwise, at market prices prevailing at the time of sale, at prices related
to market prices, or at negotiated or fixed prices. The shares may be sold by one or more of, or a combination of, the following:
·
a
                                                                                                             block trade in which
                                                                                                             the broker-dealer
                                                                                                             so engaged will attempt
                                                                                                             to sell the shares
                                                                                                             as agent but may
                                                                                                             position and resell
                                                                                                             a portion of the
                                                                                                             block as principal
                                                                                                             to facilitate the
                                                                                                             transaction (including
                                                                                                             crosses in which
                                                                                                             the same broker acts
                                                                                                             as agent for both
                                                                                                             sides of the transaction);
·
purchases
                                                                                                             by a broker-dealer
                                                                                                             as principal and
                                                                                                             resale by such broker-dealer,
                                                                                                             including resales
                                                                                                             for its account,
                                                                                                             pursuant to this
                                                                                                             prospectus;
·
ordinary
                                                                                                             brokerage transactions
                                                                                                             and transactions
                                                                                                             in which the broker
                                                                                                             solicits purchases;
·
through
                                                                                                             options, swaps or
                                                                                                             derivatives;
·
in
                                                                                                             privately negotiated
                                                                                                             transactions;
·
in
                                                                                                                               making
                                                                                                                               short
                                                                                                                               sales
                                                                                                                               or
                                                                                                                               in
                                                                                                                               transactions
                                                                                                                               to
                                                                                                                               cover
                                                                                                                               short
                                                                                                                               sales;
·
put
                                                                                                             or call option transactions
                                                                                                             relating to the shares;
                                                                                                             and
·
any
                                                                                                             other method permitted
                                                                                                             under applicable
                                                                                                             law.
The selling stockholders
may effect these transactions by selling shares directly to purchasers or to or through broker-dealers, which may act as agents
or principals. These broker-dealers may receive compensation in the form of discounts, concessions or commissions from the selling
stockholders and/or the purchasers of shares for whom such broker-dealers may act as agents or to whom they sell as principals,
or both (which compensation as to a particular broker-dealer might be in excess of customary commissions). The selling stockholders
have advised us that they have not entered into any agreements, understandings or arrangements with any underwriters or broker-dealers
regarding the sale of their securities.
The selling stockholders
may enter into hedging transactions with broker-dealers or other financial institutions. In connection with those transactions,
the broker-dealers or other financial institutions may engage in short sales of the shares or of securities convertible into or
exchangeable for the shares in the course of hedging positions they assume with the selling stockholders. The selling stockholders
may also enter into options or other transactions with broker-dealers or other financial institutions which require the delivery
of shares offered by this prospectus to those broker-dealers or other financial institutions. The broker-dealer or other financial
institution may then resell the shares pursuant to this prospectus (as amended or supplemented, if required by applicable law,
to reflect those transactions).
The selling stockholders
and any broker-dealers that act in connection with the sale of shares may be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act of 1933, and any commissions received by broker-dealers or any profit on the resale
of the shares sold by them while acting as principals may be deemed to be underwriting discounts or commissions under the Securities
Act. The selling stockholders may agree to indemnify any agent, dealer or broker-dealer that participates in transactions involving
sales of the shares against liabilities, including liabilities arising under the Securities Act. We have agreed to indemnify each
of the selling stockholders and each selling stockholder has agreed, severally and not jointly, to indemnify us against some liabilities
in connection with the offering of the shares, including liabilities arising under the Securities Act.
41
The selling stockholders
will be subject to the prospectus delivery requirements of the Securities Act. We have informed the selling stockholders that
the anti-manipulative provisions of Regulation M promulgated under the Securities Exchange Act of 1934 may apply to their sales
in the market.
Selling stockholders
also may resell all or a portion of the shares in open market transactions in reliance upon Rule 144 under the Securities Act,
provided they meet the criteria and conform to the requirements of Rule 144.
Upon being notified by
a selling stockholder that a material arrangement has been entered into with a broker-dealer for the sale of shares through a
block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, we will file
a supplement to this prospectus, if required pursuant to Rule 424(b) under the Securities Act, disclosing:
·
the
                                                                                                             name of each such
                                                                                                             selling stockholder
                                                                                                             and of the participating
                                                                                                             broker-dealer(s);
·
the
                                                                                                             number of shares
                                                                                                             involved;
·
the
                                                                                                             initial price at
                                                                                                             which the shares
                                                                                                             were sold;
·
the
                                                                                                             commissions paid
                                                                                                             or discounts or concessions
                                                                                                             allowed to the broker-dealer(s),
                                                                                                             where applicable;
·
that
                                                                                                             such broker-dealer(s)
                                                                                                             did not conduct any
                                                                                                             investigation to
                                                                                                             verify the information
                                                                                                             set out or incorporated
                                                                                                             by reference in this
                                                                                                             prospectus; and
·
other
                                                                                                             facts material to
                                                                                                             the transactions.
In addition, if required
under applicable law or the rules or regulations of the Commission, we will file a supplement to this prospectus when a selling
stockholder notifies us that a donee or pledgee intends to sell more than 500 shares of common stock.
We are paying all
expenses and fees in connection with the registration of the shares. The selling stockholders will bear all brokerage or underwriting
discounts or commissions paid to broker-dealers in connection with the sale of the shares.
DESCRIPTION OF SECURITIES TO BE REGISTERED
General
We are registering shares
of our common stock. We are presently authorized under our Articles of Incorporation to issue 843,750,000 shares of common stock
$0.001 par value per share. The following description of our common stock is only a summary and is subject to and qualified by
our Articles of Incorporation, as amended, copies of which will be provided by us upon request, and by the provisions of applicable
corporate laws of the State of Nevada.
Holders
of our common stock
have equal ratable rights to dividends from funds legally available if and when declared by our board
of directors, are entitled to share ratably in all of our assets available for distribution to holders of common stock upon liquidation,
dissolution or winding up of our affairs, do not have preemptive, subscription or conversion rights and there are no redemption
or sinking fund provisions or rights and are entitled to one non-cumulative vote per share on all matters on which stockholders
may vote.
Holders
of shares of our common stock do not have cumulative voting rights, which means that the holders of more than 50% of the outstanding
shares, voting for the election of directors, can elect all of the directors to be elected, if they so choose, and, in that event,
the holders of the remaining shares will not be able to elect any of our directors.
42
As
of the date of this prospectus, we have not paid any cash dividends to stockholders. The declaration of any future cash dividend
will be at the discretion of our Board of Directors and will depend upon our earnings, if any, our capital requirements and financial
position, our general economic conditions, and other pertinent conditions. It is our present intention not to pay any cash dividends
in the foreseeable future, but rather to reinvest earnings, if any, in our business operations.
Provisions In Our Certificate of Incorporation
Or Bylaws That May Delay, Defer or Prevent a Change of Control
Our Articles of
Incorporation do not include any provision that may delay, defer or prevent a change of control. Article I, Section 2 of our bylaws
states, "Special meetings of the stockholders may be called by the Board of Directors or such person or persons authorized
by the Board of Directors." Article II, Section 4 of our bylaws states, "One or more or all the Directors of the Corporation
may be removed with or without cause at any time by a vote of two-thirds of the stockholders entitled to vote thereon, at a special
meeting of the stockholders called for that purpose." If the Board of Directors does not authorize stockholders to call a
special meeting, our stockholders will not be able to remove the directors. Furthermore, while Article X, Section 1 permits stockholders
to alter or repeal the bylaws or to adopt new bylaws, such action may be taken only at an annual or special meeting. If stockholders
are not permitted to call a special meeting, their ability to alter or repeal any bylaw or to adopt new bylaws may not be timely
if such an action is required to be done quickly.
DISCLOSURE OF COMMISSION POSITION OF
INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES
Indemnification of Directors and Executive
Officers and Limitation of Liability
Nevada Law
Section 78.7502 of the
Nevada Revised Statutes permits a corporation to indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative,
except an action by or in the right of the corporation, by reason of the fact that he is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys' fees,
judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with the action, suit or
proceeding if he:
(a)
is not liable pursuant to Nevada Revised
                                                               Statute 78.138, or
(b)
acted in good faith and in a manner
                                                               which he reasonably believed to be in or not opposed to the best
                                                               interests of the corporation, and, with respect to any criminal
                                                               action or proceeding, had no reasonable cause to believe his conduct
                                                               was unlawful.
In addition, Section
78.7502 permits a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the
fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against
expenses, including amounts paid in settlement and attorneys' fees actually and reasonably incurred by him in connection
with the defense or settlement of the action or suit if he:
(a)
is not liable pursuant to Nevada Revised
                                                               Statute 78.138; or
(b)
acted in good faith and in a manner
                                                               which he reasonably believed to be in or not opposed to the best
                                                               interests of the corporation.
43
To the extent that a
director, officer, employee or agent of a corporation has been successful on the merits or otherwise in defense of any action,
suit or proceeding referred to above, or in defense of any claim, issue or matter, the corporation is required to indemnify him
against expenses, including attorneys' fees, actually and reasonably incurred by him in connection with the defense.
Section 78.752 of the
Nevada Revised Statutes allows a corporation to purchase and maintain insurance or make other financial arrangements on behalf
of any person who is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise
for any liability asserted against him and liability and expenses incurred by him in his capacity as a director, officer, employee
or agent, or arising out of his status as such, whether or not the corporation has the authority to indemnify him against such
liability and expenses.
Other financial arrangements
made by a corporation pursuant to Section 78.752 may include the following:
(a)
the creation of a trust fund;
(b)
the establishment of a program of
                                                               self-insurance;
(c)
the securing of its obligation of
                                                               indemnification by granting a security interest or other lien on
                                                               any assets of the corporation; and
(d)
the establishment of a letter of credit,
                                                               guaranty or surety
No financial arrangement
made pursuant to Section 78.752 may provide protection for a person adjudged by a court of competent jurisdiction, after exhaustion
of all appeals, to be liable for intentional misconduct, fraud or a knowing violation of law, except with respect to the advancement
of expenses or indemnification ordered by a court.
Any discretionary indemnification
pursuant to NRS 78.7502, unless ordered by a court or advanced pursuant to an undertaking to repay the amount if it is determined
by a court that the indemnified party is not entitled to be indemnified by the corporation, may be made by the corporation only
as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper
in the circumstances. The determination must be made:
(a)
by the stockholders;
(b)
by the board of directors by majority
                                                               vote of a quorum consisting of directors who were not parties to
                                                               the action, suit or proceeding;
(c)
if a majority vote of a quorum consisting
                                                               of directors who were not parties to the action, suit or proceeding
                                                               so orders, by independent legal counsel in a written opinion, or
(d)
if a quorum consisting of directors
                                                               who were not parties to the action, suit or proceeding cannot be
                                                               obtained, by independent legal counsel in a written opinion.
Our Articles of Incorporation
Article Twelfth of our Articles of Incorporation
states that no director or officer of the corporation shall be personally liable to the corporation or any of its stockholders
for damages for breach of fiduciary duty as a director or officer involving any act or omission of any such director or officer.
However, the foregoing provision shall not eliminate or limit the liability of a director or officer (i) for acts or omissions
which involve intentional misconduct, fraud or a knowing violation of the law, or (ii) the payment of dividends in violation of
Section 78.300 of the Nevada Revised Statutes. Any repeal or modification of Article Twelfth by our stockholders shall be prospective
only, and shall not adversely affect any limitations on the personal liability of a director or officer of the corporation for
acts or omissions prior to such repeal or modification.
44
Our Bylaws
We must indemnify
a director or former director and we may indemnify a director or former director of a corporation of which we are or were a stockholder
and the heirs and personal representatives of any such person against all costs, charges and expenses, including an amount paid
to settle an action or satisfy a judgment, actually and reasonably incurred by him or them, in a criminal or administrative action
or proceeding to which he is or they are made a party by reason of his or her being or having been a director, including an action
brought by us. Each of our directors, on being elected or appointed, is deemed to have contracted with us on the terms of the
foregoing indemnity.
We may indemnify
an officer, employee or agent of ours or of a corporation of which we are or were a stockholder (notwithstanding that he is also
a director), and his or her heirs and personal representatives against all costs, charges and expenses incurred by him or them
resulting from his or her acting as an officer, employee or agent.
We must indemnify
our Secretary or an Assistant Secretary and his or her respective heirs and legal representatives against all costs, charges and
expenses incurred by him or them arising out of the functions assigned to the Secretary by the Corporation Act or the Articles
of Incorporation and each such Secretary and Assistant Secretary, on being appointed is deemed to have contracted with us on the
terms of the foregoing indemnity.
We may purchase and maintain
insurance for the benefit of a person who is or was serving as our director, officer, employee or agent or as a director, officer,
employee or agent of a corporation of which we are or were a stockholder and his or her heirs or personal representatives against
a liability incurred by him as a director, officer, employee or agent.
Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant
to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. No pending
material litigation or proceeding involving our directors, executive officers, employees or other agents as to which indemnification
is being sought exists, and we are not aware of any pending or threatened material litigation that may result in claims for indemnification
by any of our directors or executive officers.
TRANSFER AGENT AND REGISTRAR
The transfer agent and
registrar for our common stock is Signature Stock Transfer, Inc. The transfer agent's address is 2632 Coachlight Court,
Plano, Texas 75093 and its phone number is (972) 612-4120.
INTERESTS OF NAMED EXPERTS AND COUNSEL
We did not hire
any expert or counsel on a contingent basis who will receive a direct or indirect interest in the Company or who was a
promoter, underwriter, voting trustee, director, officer, or employee of the Company. Richardson & Patel LLP, our legal
counsel, has given an opinion regarding certain legal matters in connection with this offering of our securities. Richardson
& Patel LLP has agreed to accept shares of our common stock in exchange for the services that have been and will be
rendered to us in connection with the filings we are required to make pursuant to the Securities Exchange Act of 1934 and the
rules and regulations promulgated thereunder. As of the date of this prospectus, Richardson & Patel LLP and its principals or
persons related to them collectively own 210,000 shares of our common stock.
EXPERTS
The financial statements
included in this prospectus have been audited by MaloneBailey, LLP, independent registered public accounting firm, to the extent
and for the periods set forth in their report appearing elsewhere herein and are included in reliance upon such report given upon
the authority of that firm as experts in auditing and accounting.
45
WHERE YOU CAN FIND MORE INFORMATION
We have filed with
the Securities and Exchange Commission a registration statement on Form S-1 under the Securities Act with respect to the shares
of common stock being offered by this prospectus. This prospectus does not contain all of the information included in the registration
statement. For further information pertaining to us and our common stock, you should refer to the registration statement and its
exhibits. Statements contained in this prospectus concerning any of our contracts, agreements or other documents are not necessarily
complete.
If a contract or document has been filed as an exhibit to the registration statement, we
refer you to the copy of the contract or document that has been filed. Each statement in this prospectus relating to a contract
or document filed as an exhibit is qualified in all respects by the filed exhibit.
We are subject to the informational requirements
of the Securities Exchange Act of 1934 and file annual, quarterly and current reports and other information with the Securities
and Exchange Commission. You can read our filings, including the registration statement of which this prospectus is a part, over
the internet at the Security and Exchange Commission's website at www.sec.gov. You may also read and copy any document we
file with the Securities and Exchange Commission at its public reference facility at 100 F Street, N.E., Washington, D.C., 20549,
on official business days during the hours of 10 a.m. to 3 p.m. You may also obtain copies of the documents at prescribed rates
by writing to the Public Reference Section of the Securities and Exchange Commission at 100 F Street, N.E., Washington, D.C.,
20549. Please call the Securities and Exchange Commission at 1-800-SEC-0330 for further information on the operation of the public
reference facility.
46
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND
DISTRIBUTION
The following table
sets forth the costs and expenses payable by us in connection with the sale of common stock being registered. All amounts are
estimated, except the registration fee:
Securities and Exchange Commission registration fee
$
1,015.02
Printing fees and expense
$
1,500.00
*
Legal fees and expenses
$
50,000.00
*
Accounting fees and expenses
$
1,000.00
Transfer agent and registrar fees and expenses
$
1,000
*
Miscellaneous
$
500.00
*
Total
$
55,015.02
*
*Estimated
ITEM 14. INDEMNIFICATION OF DIRECTORS
AND OFFICERS
Nevada Law
Section 78.7502 of the
Nevada Revised Statutes permits a corporation to indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative,
except an action by or in the right of the corporation, by reason of the fact that he is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys' fees,
judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with the action, suit or
proceeding if he:
(a)
is not liable pursuant to Nevada Revised
                                                               Statute 78.138, or
(b)
acted in good faith and in a manner
                                                               which he reasonably believed to be in or not opposed to the best
                                                               interests of the corporation, and, with respect to any criminal
                                                               action or proceeding, had no reasonable cause to believe his conduct
                                                               was unlawful.
In addition, Section
78.7502 permits a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the
fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against
expenses, including amounts paid in settlement and attorneys' fees actually and reasonably incurred by him in connection
with the defense or settlement of the action or suit if he:
(a)
is not liable pursuant to Nevada Revised
                                                               Statute 78.138; or
(b)
acted in good faith and in a manner
                                                               which he reasonably believed to be in or not opposed to the best
                                                               interests of the corporation.
To the extent that a
director, officer, employee or agent of a corporation has been successful on the merits or otherwise in defense of any action,
suit or proceeding referred to above, or in defense of any claim, issue or matter, the corporation is required to indemnify him
against expenses, including attorneys' fees, actually and reasonably incurred by him in connection with the defense.
II-
1
Section 78.752 of the
Nevada Revised Statutes allows a corporation to purchase and maintain insurance or make other financial arrangements on behalf
of any person who is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise
for any liability asserted against him and liability and expenses incurred by him in his capacity as a director, officer, employee
or agent, or arising out of his status as such, whether or not the corporation has the authority to indemnify him against such
liability and expenses.
Other financial arrangements
made by a corporation pursuant to Section 78.752 may include the following:
(a)
the creation of a trust fund;
(b)
the establishment of a program of
                                                               self-insurance;
(c)
the securing of its obligation of
                                                               indemnification by granting a security interest or other lien on
                                                               any assets of the corporation; and
(d)
the establishment of a letter of credit,
                                                               guaranty or surety
No financial arrangement
made pursuant to Section 78.752 may provide protection for a person adjudged by a court of competent jurisdiction, after exhaustion
of all appeals, to be liable for intentional misconduct, fraud or a knowing violation of law, except with respect to the advancement
of expenses or indemnification ordered by a court.
Any discretionary indemnification
pursuant to NRS 78.7502, unless ordered by a court or advanced pursuant to an undertaking to repay the amount if it is determined
by a court that the indemnified party is not entitled to be indemnified by the corporation, may be made by the corporation only
as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper
in the circumstances. The determination must be made:
(a)
by the stockholders;
(b)
by the board of directors by majority
                                                               vote of a quorum consisting of directors who were not parties to
                                                               the action, suit or proceeding;
(c)
if a majority vote of a quorum consisting
                                                               of directors who were not parties to the action, suit or proceeding
                                                               so orders, by independent legal counsel in a written opinion, or
(d)
if a quorum consisting of directors
                                                               who were not parties to the action, suit or proceeding cannot be
                                                               obtained, by independent legal counsel in a written opinion.
Our Articles of Incorporation
Article Twelfth of our Articles of Incorporation
states that no director or officer of the corporation shall be personally liable to the corporation or any of its stockholders
for damages for breach of fiduciary duty as a director or officer involving any act or omission of any such director or officer.
However, the foregoing provision shall not eliminate or limit the liability of a director or officer (i) for acts or omissions
which involve intentional misconduct, fraud or a knowing violation of the law, or (ii) the payment of dividends in violation of
Section 78.300 of the Nevada Revised Statutes. Any repeal or modification of Article Twelfth by our stockholders shall be prospective
only, and shall not adversely affect any limitations on the personal liability of a director or officer of the corporation for
acts or omissions prior to such repeal or modification.
Our Bylaws
We must indemnify
a director or former director and we may indemnify a director or former director of a corporation of which we are or were a stockholder
and the heirs and personal representatives of any such person against all costs, charges and expenses, including an amount paid
to settle an action or satisfy a judgment, actually and reasonably incurred by him or them, in a criminal or administrative action
or proceeding to which he is or they are made a party by reason of his or her being or having been a director, including an action
brought by us. Each of our directors, on being elected or appointed, is deemed to have contracted with us on the terms of the
foregoing indemnity.
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2
We may indemnify
an officer, employee or agent of ours or of a corporation of which we are or were a stockholder (notwithstanding that he is also
a director), and his or her heirs and personal representatives against all costs, charges and expenses incurred by him or them
resulting from his or her acting as an officer, employee or agent.
We must indemnify
our Secretary or an Assistant Secretary and his or her respective heirs and legal representatives against all costs, charges and
expenses incurred by him or them arising out of the functions assigned to the Secretary by the Corporation Act or the Articles
of Incorporation and each such Secretary and Assistant Secretary, on being appointed is deemed to have contracted with us on the
terms of the foregoing indemnity.
We may purchase and maintain
insurance for the benefit of a person who is or was serving as our director, officer, employee or agent or as a director, officer,
employee or agent of a corporation of which we are or were a stockholder and his or her heirs or personal representatives against
a liability incurred by him as a director, officer, employee or agent.
Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant
to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. No pending
material litigation or proceeding involving our directors, executive officers, employees or other agents as to which indemnification
is being sought exists, and we are not aware of any pending or threatened material litigation that may result in claims for indemnification
by any of our directors or executive officers.
ITEM 15. RECENT SALES OF UNREGISTERED
SECURITIES
Within the past three
years we have sold or issued the following securities not registered under the Securities Act of 1933, as amended (the "Securities
Act"). Except as stated below, no underwriting discounts or commissions were payable with respect to any of the following
transactions. Unless otherwise indicated below, the offers and sales of the following securities were exempt from the registration
requirements of the Securities Act under Rule 506 insofar as (1) except as stated below, each of the investors was accredited
within the meaning of Rule 501(a); (2) the transfer of the securities was restricted by the Company in accordance with Rule 502(d);
(3) there were no more than 35 non-accredited investors in any transaction within the meaning of Rule 506(b); and (4) none of
the offers and sales were effected through any general solicitation or general advertising within the meaning of Rule 502(c).
On January 16, 2013, we closed a private
placement with certain accredited investors (the "Investors") pursuant to the terms of a Securities Purchase Agreement
whereby we sold to the Investors an aggregate of 12,610,000 shares of the Company's common stock (the "Shares"),
at a price of $0.25 per Share, for aggregate cash proceeds to the Company of $3,152,500. In connection with the sale of the Shares
we paid fees totaling $215,000 in cash along with warrants to purchase an aggregate of 275,000 shares of our common stock at a
price per share of $0.50 (the "Warrants"). The Warrants have a two-year exercise period.
In January 2013 we entered into agreements
with three consultants who, together, have agreed to accept a total of 1,270,000 shares of our common stock in exchange for services.
All
of the consultants are accredited investors. We have not yet issued shares of our common
stock to
any
of the consultants.
On April 17, 2012, we
issued 20,000,003 unregistered restricted shares of common stock to Art Agolli pursuant to an Assignment Agreement with Mr. Agolli,
whereby Mr. Agolli agreed to convey to us all of his right, title and interest in and to a certain letter of intent between Mr.
Agolli and Sonoro Energy Ltd. The shares of common stock were issued to Mr. Agolli pursuant to the exemption from registration
contained in Regulation S of the Securities Act of 1933, as amended, in that the transaction took place outside the United States
of America with a non-US person.
On April 18, 2012, concurrent
with his resignation as a director of the Company, Gerhard Schlombs surrendered 22,500,000 shares of the Company`s common stock,
registered in his name, to the corporate treasury for cancellation. Such shares were cancelled by our transfer agent. No compensation
was paid to Mr. Schlombs for the cancellation of his shares.
II-
3
Between March 23, 2012
and June 21, 2012
, we issued several Convertible Debentures to raise $163,775 (CAD$165,000 face value)
for general working capital. Debentures for $50,000, $25,000, $48,775 (CAD$50,000 face value) and $40,000 were issued to three
non-related parties. The debentures bear interest at 10% per annum and mature one year from the issuance date. Until the due date,
the holder(s) may elect to convert the debenture in whole or in part into common shares of the Company at a conversion rate equal
to the price of any aggregate financing exceeding five hundred thousand ($500,000) dollars less a discount of 25% per share. The
convertible notes were offered pursuant to the exemption from registration contained in Regulation S of the Securities Act
of 1933, as amended, in that the transactions took place outside the United States of America with non-US persons.
On June 11, 2012, we
entered into an agreement with our Art Agolli for a convertible debenture valued at $195,100 (CAD $200,000 face value) for funds
advanced. The convertible debenture matures June 11, 2013 and bears interest at 10%. At any time prior to the Maturity Date, if
we complete an equity or convertible debenture financing yielding aggregate proceeds of at least $500,000 ("Qualified Financing"),
Mr. Agolli may elect to convert the debenture in whole or in part into our common stock at a price equal to the price per share
at which our common stock was sold in the Qualified Financing, or in the case of a convertible debenture, the price of the shares
issuable upon conversion of the convertible debentures sold in the Qualified Financing. The debenture was issued to Mr. Agolli
pursuant to the exemption from registration contained in Regulation S of the Securities Act of 1933, as amended, in that the transaction
took place outside the United States of America with a non-US person.
On July 27, 2012, pursuant
to the terms of an agreement entered into with Sonoro Energy Ltd. to purchase certain assets, we issued to Sonoro a convertible
debenture in the principal amount of $254,105 (CAD $250,000 face value). The debenture has a term of two years and is non-interest
bearing. At any time after we have completed an equity or convertible debenture financing yielding aggregate proceeds of at least
$500,000 (a "Qualified Financing"), the debenture is convertible at the holder's option into shares of our common
stock. The conversion price of the debenture will be equal to the price per share of the shares sold in the Qualified Financing
or the conversion price of the shares issuable upon conversion of the convertible debentures sold in the Qualified Financing. The
debenture was issued to Sonoro pursuant to the exemption from registration contained in Regulation S of the Securities Act of
1933, as amended, in that the transaction took place outside the United States of America with a non-US person.
In September 2012, the
Company entered into two subscription agreements with a private investor, pursuant to which the private investor purchased
an aggregate of 680,000 shares of our common stock and warrants for the purchase of 340,000 shares of our common stock at an exercise
price of $0.50 per share, exercisable over one year from the purchase date. We received gross proceeds of $170,000 through
this offering.
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ITEM 16. EXHIBITS AND FINANCIAL STATEMENT
SCHEDULES
EXHIBIT INDEX
Number
Description
2.1
Asset Purchase and Sale Agreement dated
    July 27, 2012 between the registrant and Sonoro Energy Ltd.(1)
3.1
Articles of Incorporation(2)
3.1.1
Certificate of Amendment to Articles of
    Incorporation and Certificate of Merger(3)
3.2
Bylaws(2)
5.1
Opinion Regarding Legality**
10.1
Assignment of Shares of Common Stock dated
    April 17, 2012 from Art Agolli in favor of Bearing Mineral Exploration Inc.(4)
10.2
Convertible Debenture dated June 29, 2012
    issued to Sonoro Energy Ltd.(1)
10.3
Non-Compete and Non-Solicitation Agreement
    dated July 27, 2012 between the registrant and Sonoro Energy Ltd.(1)
10.4
Consulting Agreement dated July 27, 2012
    between the registrant and Sonoro Energy Ltd.(1)
10.5
Share Sale Contract dated July 27, 2012
    between the registrant and Sonoro Energy Ltd.(1)
10.6
Form of Iraq License Agreement dated July
    27, 2012 between the registrant and Sonoro Energy Ltd.(1)
10.7
Trust Agreement dated August 14, 2008
    executed by Gerhard Schlombs(2)
10.8
Secured Convertible Debenture in the principal
    amount of CDN$200,000 issued on June 6, 2012 in favor of Art Agolli*
21
List of Subsidiaries*
23.1
Consent of MaloneBailey, LLP*
23.2
Consent of Richardson & Patel LLP**
*Filed herewith.
**To be provided by amendment.
(1) Incorporated by reference to the registrant's
Current Report on Form 8-K filed with the Securities and Exchange Commission on July 31, 2012.
(2) Incorporated by reference to the registrant's
Registration Statement on Form S-1 filed with the Securities and Exchange Commission on December 19, 2008.
(3) Incorporated by reference to the registrant's
Current Report on Form 8-K filed with the Securities and Exchange Commission on May 18, 2012.
(4) Incorporated by reference to the registrant's
Current Report on Form 8-K filed with the Securities and Exchange Commission on April 20, 2012.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
1.            To
file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
i.              To
include any prospectus required by
section 10(a)(3)
of the
Securities Act of 1933;
ii.              To
reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to
Rule
424(b)
if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement.
II-
5
iii.              To
include any material information with respect to the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;
2.            That,
for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
3.            To
remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at
the termination of the offering.
4.            That,
for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
A.              Each
prospectus filed by the registrant pursuant to
Rule 424(b)(3)
shall
be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the
registration statement; and
B.              Each
prospectus required to be filed pursuant to
Rule 424(b)(2)
,
(b)(5)
, or
(b)(7)
as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to
Rule
415(a)(1)(i)
,
(vii)
, or
(x)
for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to
be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after
effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided
in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed
to be a new effective date of the registration statement relating to the securities in the registration statement to which that
prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part
of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede
or modify any statement that was made in the registration statement or prospectus that was part of the registration statement
or made in any such document immediately prior to such effective date; or
5.            Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant
of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered,
the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
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6
SIGNATURES
Pursuant to the requirements
of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of Calgary, Alberta, Canada, on February 11, 2013.
PETROSONIC
    ENERGY, INC.
By:
/s/
    Art Agolli
Art Agolli
Chief Executive Officer
By:
/s/
    Richard Raisig
Richard Raisig
Chief Financial Officer
Pursuant to the requirements
of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the
dates indicated:
Dated: February 11, 2013
/s/ Art Agolli
Art Agolli, Chief Executive Officer (Principal Executive Officer)
    and Director
Dated: February 11, 2013
/s/
    Richard Raisig
Richard Raisig, Chief Financial Officer (Principal
Financial and Accounting Officer)
II-
7
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
PETROSONIC ENERGY, INC.
(a Development Stage Company)
Audited Financial Statements
Page No.
Financial Statements of Petrosonic Albania Sha.
Report of Independent Registered Public Accounting Firm
F-2
Balance Sheets at December 31, 2011 and December 31, 2010
F-3
Statements of Expenses for the years ended December 31, 2011 and 2010 and  the period from inception (May 24, 2010) through December 31, 2011
F-4
Statements of Cash Flows for the years ended December 31, 2011 and 2010 and  the period from  inception (May 24, 2010) through December 31, 2011
F-5
Statements of Stockholders' Deficit for the period from inception (May 24, 2010) to December 31, 2011
F-6
Notes to Financial Statements
F-7
Financial Statements of Petrosonic Energy, Inc.
Report of Independent Registered Public Accounting Firm
F-11
Balance Sheets as of December 31, 2011 and October 31, 2011
F-12
Statements of Operations for the two months ended December 31, 2011, the years ended  October 31, 2011 and 2010 and for the period from inception (June 11, 2008) through December 31, 2011
F-13
Statements of Stockholders' Deficit for the period from inception (June 11, 2008) to December 31, 2011
F-14
Statements of Cash Flows for the two months ended December 31, 2011, the years ended  October 31, 2011 and 2010 and for the period from inception (June 11, 2008) through December 31, 2011
F-15
Notes to Financial Statements
F-16
PETROSONIC ENERGY, INC.
(a Development Company)
Unaudited Consolidated Financial Statements
Page No.
Consolidated
    Balance Sheets-September 30, 2012 (Unaudited) and December 31, 2011
F-19
Consolidated Statements of Operations for the three and nine months ended September 30, 2012	and
for the period from Inception through September 30, 2012
F-20
Consolidated Statements of Cash Flows for the nine months ended
September 30, 2012 and 2011	and for the period from Inception through September 30, 2012
F-21
Notes to Financial Statements
F-22
F-
1
REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
To the Board of Directors
Petrosonic Albania SHA.
(a Development Stage Company)
Tirana, Albania
We have audited the accompanying balance
sheets of Petrosonic Albania SHA. (a development stage company) (the "Company") as of December 31, 2011and December
31, 2010 and the related statements of expenses, shareholders' equity, and cash flows for the years ended December 31, 2011
and December 31, 2010 and the period from May 24, 2010 (inception) through December 31, 2011. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with
the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform
an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is
not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included
consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements
referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2011 and December
31, 2010 and the results of its operations and its cash flows for the years then ended and the period from May 24, 2010 (inception)
through December 31, 2011 in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have
been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the
Company suffered reoccurring losses since inception, which raises substantial doubt about its ability to continue as a going concern.
Management's plans regarding those matters also are described in Note 2. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/S/MALONEBAILEY, LLP
MaloneBailey, LLP
www.malonebailey.com
Houston, Texas
July 20, 2012
F-
2
Petrosonic Albania SHA.
(A Development Stage Company)
Balance Sheets
December 31, 2011
December 31,
2010
ASSETS
Current assets
Cash
$
1,655
$
146
Valued-added taxes receivable
86,136
3,725
Total current assets
87,791
3,871
Property and equipment, net
617,924
183,874
TOTAL ASSETS
$
705,715
$
187,745
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable
$
204,176
$
-
Total liabilities
204,176
-
Stockholders' equity:
Common stock, 100,000 shares authorized, $25.64 par value - 60,195 and 60,017 shares issued and outstanding, respectively
1,543,406
1,538,836
Additional paid-in capital
(1,008,356
)
(1,331,364
)
Other comprehensive income
1,607
69
Deficit accumulated during the development stage
(35,118
)
(19,796
)
Total stockholders' equity
501,539
187,745
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY
$
705,715
$
187,745
See accompanying notes to audited financial
statements.
F-
3
Petrosonic Albania SHA.
(A Development Stage Company)
Statements of Expenses
Year Ended
December 31,
Inception
(May 24,
2010)
through
December 31,
2011
2010
2011
Expenses
General and administrative expenses
$
15,322
$
19,796
$
35,118
Total operating expenses
15,322
19,796
35,118
Net loss
$
(15,322
)
$
(19,796
)
$
(35,118
)
Other Comprehensive income,
Foreign currency translation adjustment
1,538
69
1,607
Comprehensive loss
$
(13,784
)
$
(19,727
)
$
(33,511
)
Loss per common share - Basic  and diluted
$
(0.01
)
$
(0.01
)
Weighted average common shares outstanding -
Basic and diluted
2,564,000
2,564,000
See accompanying notes to audited financial
statements.
F-
4
Petrosonic Albania SHA.
(A Development Stage Company)
Statements of Cash Flows
For the Year Ended
May 24, 2010
(inception)
December 31,
through
2011
2010
December 31, 2011
Cash flows from operating activities
Net loss
$
(15,322
)
$
(19,796
)
$
(35,118
)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Changes in operating assets and liabilities:
Receivables
(82,411
)
(3,725
)
(86,136
)
Accounts payable and accrued expenses
204,176
-
204,176
Net cash (used in) provided by operating activities
106,443
(23,521
)
82,922
Cash flows from investing activities
Cash paid for purchase of property and equipment
(438,833
)
(183,874
)
(622,707
)
Net cash used in investing activities
(438,833
)
(183,874
)
(622,707
)
Cash flows from financing activities
Contributed capital
327,578
207,472
535,050
Net cash provided by financing activities
327,578
207,472
535,050
Effect of exchange rate changes on cash
6,321
69
6,390
Net increase in cash
1,509
146
1,655
Cash  at the beginning of the year
146
-
-
Cash at the end of the year
$
1,655
$
146
$
1,655
Supplemental disclosures of cash flow information:
Cash paid for interest
$
-
$
-
$
-
Cash paid for income taxes
$
-
$
-
$
-
Non-cash investing and financing transactions:
Shareholders' paid in capital for acquisition of license
$
4,570
$
1,538,836
$
1,538,836
See accompanying
notes to audited financial statements.
F-
5
Petrosonic Albania SHA.
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' DEFICIT
For the period from May 24, 2010 (Inception)
to December 31, 2011
Common Stock
Additional
Paid in
Other
Comprehensive
Accumulated
Total
Stockholders'
Shares
Amount
Capital
Income
Deficit
Equity
Balance at May 24, 2010 (Inception)
-
$
-
$
-
$
-
$
-
$
-
Common stock issued for license
60,000
1,538,400
(1,538,400
)
-
-
-
Common stock issued for contributed capital
17
436
(436
)
-
-
-
Contributed capital
-
-
207,472
-
-
207,472
Other comprehensive income
-
-
-
69
-
69
Net loss
-
-
-
-
(19,796
)
(19,796
)
Balance at December 31, 2010
60,017
$
1,538,836
$
(1,331,364
)
$
69
$
(19,796
)
$
187,745
Common stock issued for contributed capital
178
4,570
(4,570
)
-
-
-
Contributed capital
-
-
327,578
-
-
327,578
Other comprehensive income
-
-
-
1,538
-
1,538
Net loss
-
-
-
-
(15,322
)
(15,322
)
Balance at December 31, 2011
60,195
$
1,543,406
$
(1,008,356
)
$
1,607
$
(35,118
)
$
501,539
See accompanying
notes to audited financial statements.
F-
6
PETROSONIC ALBANIA SHA.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2011
Note 1 – Organization, nature
of operations and summary of significant accounting policies
Organization and nature of operations
Petrosonic Albania Sha.,(the "Company")
was incorporated on May 24, 2010 in Tirana, Albania. The Company has not generated revenues since inception. The two initial shareholders
are Sonoro Energy Ltd (a Canadian publicly traded company in TSX- symbol; SNV) and Albnafta, Ltd, an Albanian private company.
The Company complies with Statement of Financial Accounting Standard ASC 915-15 and the Securities and Exchange Commission Exchange
Act 7 for its characterization of the Company as development stage.
Petrosonic Albania Sha. is a company that
operates in de-asphalting and separation of asphalt from heavy crude oil, oil sands, waste oils under a license agreement with
Sonoro Energy Ltd which allows the Company to use the propriety sonic technology which was developed, patented and owned by Sonoro
Energy formerly Sonic Technology Solutions in the territory of Republic of Albania.
Use of estimates
The preparation of financial statements
in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of financial statements
and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash
and cash equivalents
Cash equivalents are highly liquid investments
with an original maturity of three months or less.
Property and equipment, net
Property and equipment are carried at the
cost of acquisition or construction and depreciated over the estimated useful lives of the assets. Costs associated with repair
and maintenance are expensed as incurred. Costs associated with improvements which extend the life, increase the capacity or improve
the efficiency of our property and equipment are capitalized and depreciated over the remaining life of the related asset. Gains
and losses on dispositions of equipment are reflected in operations. Depreciation is provided using the straight-line method over
the estimated useful lives of the assets, which are 3 to 5 years. The Company has not recognized depreciation since inception as
none of the equipment has been used in operations.
F-
7
Impairment of long-lived assets
The Company reviews the carrying value
of its long-lived assets annually or whenever events or changes in circumstances indicate that the historical-cost carrying value
of an asset may no longer be appropriate. The Company assesses recoverability of the asset by comparing the undiscounted future
net cash flows expected to result from the asset to its carrying value. If the carrying value exceeds the undiscounted future net
cash flows of the asset, an impairment loss is measured and recognized. An impairment loss is measured as the difference between
the net book value and the fair value of the long-lived asset. Fair value is estimated based upon either discounted cash flow analysis
or estimated salvage value. There was no impairment of assets as of December 31, 2011 and December 31, 2010.
Research and development
Costs incurred in connection with the development
of new products and manufacturing methods are charged to selling, general and administrative expenses as incurred. During the years
ended December 31, 2011 and 2010, $-0- and $10,704, respectively, were expensed as research and development costs.
Income taxes
Deferred tax assets and liabilities are
recognized for the estimated future tax consequences attributable to temporary differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax bases. These assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which the temporary differences are expected to reverse.
We have net operating loss carryforwards
available to reduce future taxable income. Future tax benefits for these net operating loss carryforwards are recognized to the
extent that realization of these benefits is considered more likely than not. To the extent that we will not realize a future tax
benefit, a valuation allowance is established.
Basic and diluted net loss per share
Basic loss per share is computed using
the weighted average number of shares of common stock outstanding during each period. Diluted loss per share includes the dilutive
effects of common stock equivalents on an "as if converted" basis. For the years ended December 31, 2010 and 2011,
potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common
share
Foreign currency translation
Assets and liabilities of foreign operations
are translated from Albanian Leks into United States dollar equivalents using the exchange rates in effect at the balance sheet
date. Revenues and expenses are translated using the average exchange rates during each period. Adjustments resulting from the
process of translating foreign functional currency financial statements into U.S. dollars are included in accumulated other comprehensive
income in common shareholders' equity. Foreign currency transaction gains and
losses
are included in current earnings.
F-
8
Fair Value of Financial Instruments
Financial instruments
are recorded at fair value in accordance with the standard for "Fair Value Measurements codified within ASC 820", which
defines fair values, establishes a three level valuation hierarchy for disclosures of fair value measurement and enhances disclosure
requirements for fair value measurements:
• Level 1 – inputs
to the valuation methodology are quoted prices (unadjusted) for identical asset or liabilities in active markets.
• Level 2 – inputs
to the valuation methodology include closing prices for similar assets and liabilities in active markets, and inputs that are observable
for the assets and liabilities, either directly, for substantially the full term of the financial instruments.
• Level 3 – inputs
to the valuation methodology are observable and significant to the fair value.
Recently issued accounting pronouncements
The Company does not expect the adoption
of any recently issued accounting pronouncements to have a significant effect on its consolidated financial position or results
of operations.
Note 2 - Going concern
As reflected in the accompanying financial
statements, the Company has incurred reoccurring losses since inception. This raises substantial doubt about the Company's
ability to continue as a going concern. The Company's ability to continue as a going concern is dependent on its ability
to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might
be necessary if the Company is unable to continue as a going concern.
Note 3 – Related party transactions
During 2010, shareholders contributed $207,472
for the purchase of machinery. During 2011, shareholders contributed $327,578 for the building built by the Company in Albania.
Note 4 – Value-added taxes receivable
At December 31, 2011, the Company has $86,189
receivable from Tax Authorities for value added tax.
In April 2012, the Company filed for and
received a refund of this tax amount from the government of Albania.
Note 5 - Shareholders' equity
Common stock
The par value per share is 2,605 Albanian
Leks, or approximately $25.64.
Sonoro Energy Ltd. received 60,000 common shares from the Company
in exchange for Sonoro Energy's heavy oil technology license as of December 31, 2011.
Albnafta Shpk received 195 shares as of
December 31, 2011 in exchange for $117,067 cash contributions as of that date, and no additional shares in 2012.
F-
9
Note 6 – Commitments and contingencies
O
perating lease
Total rent expense for 2011 and 2010 was
$9,209 and $0, respectively.
Note 7 – Income taxes
The Company uses the liability method,
where deferred tax assets and liabilities are determined based on the expected future tax consequences of temporary differences
between the carrying amounts of assets and liabilities for financial and income tax reporting purposes. During fiscal 2011 and
2010, the Company incurred net losses and, therefore, has no tax liability. The net deferred tax asset generated by the loss carry-forward
has been fully reserved. The cumulative net operating loss carry-forward is approximately $35,000 at 2011, and will expire in the
years 2013.
The Company's net deferred income
tax asset as of December 31, 2011 and 2010, after applying the corporate income tax rate in Albania of 10%, are as follows:
December 31, 2011
December 31, 2010
Nets operating loss carry forward
$
3,512
$
1,980
Valuation allowance
(3,512
)
(1,980
)
Total
-
-
F-
10
REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
To the Board of Directors
Petrosonic Energy, Inc.
(a Development Stage Company)
Calgary, Canada
We have audited the accompanying balance
sheets of Petrosonic Energy, Inc. (a development stage company) (the "Company") as of December 31, 2011and October
31, 2011 and 2010 and the related statements of operations, shareholders' deficit, and cash flows for the periods then ended
and the period from June 11, 2008 (inception) through December 31, 2011. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with
the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform
an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is
not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included
consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements
referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2011 and October
31, 2011 and 2010 and the results of its operations and its cash flows for the periods then ended and the period from June 11,
2008 (inception) through December 31, 2011 in conformity with accounting principles generally accepted in the United States of
America.
The accompanying financial statements have
been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the
Company suffered reoccurring losses since inception, which raises substantial doubt about its ability to continue as a going concern.
Management's plans regarding those matters also are described in Note 2. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/S/MALONEBAILEY, LLP
MaloneBailey, LLP
www.malonebailey.com
Houston, Texas
October 8, 2012
F-
11
PETROSONIC ENERGY, INC.
(Formerly Bearing Mineral Exploration, Inc.)
(A Development Stage Company)
BALANCE SHEETS
December 31,
October 31,
October 31,
2011
2011
2010
ASSETS
Current Assets:
Cash
$
378
$
3,310
$
2,340
Total Assets
$
378
$
3,310
$
2,340
LIABILITIES
Current Liabilities:
Accounts payable
4,515
2,175
2,331
Accrued liabilities
2,250
4,500
4,500
Advance from shareholder
42,000
42,000
28,000
Total Liabilities
$
48,765
$
48,675
34,831
STOCKHOLDERS' DEFICIT
Common Stock
843,750,000 shares authorized, with a $0.001 par value Issued and outstanding: 67,149,000 shares as of December 31, 2011 and October 31, 2011, respectively
$
67,149
$
67,149
$
67,149
Additional Paid-in Capital
(26,136
)
(26,136
)
(26,136
)
Deficit Accumulated During the Development Stage
(89,400
)
(86,378
)
(73,504
)
Total Stockholders' Deficit
(48,387
)
(45,365
)
(32,491
)
Total Liabilities and Stockholders' Deficit
$
378
$
3,310
$
2,340
See accompanying Notes to the Audited
Financial Statements
F-
12
PETROSONIC ENERGY, INC.
(Formerly Bearing Mineral Exploration, Inc.)
(A Development Stage Company)
STATEMENT OF OPERATIONS
November 1, 2011
Fiscal Years Ended
For the Period
From June 11, 2008
(date of inception)
Through
October 31,
to December 31,
December 31,2011
2011
2010
2011
EXPENSES
General and administrative expenses
$
3,022
$
12,874
$
29,259
$
89,400
Mineral property costs
-
-
-
-
Total Expenses
3,022
12,874
29,259
89,400
NET LOSS
$
(3,022
)
$
(12,874
)
$
(29,259
)
$
(89,400
)
LOSS PER SHARE:
Basic and Diluted
$
0.00
$
0.00
$
0.00
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
Basic and Diluted
67,149,000
67,149,000
67,149,000
See accompanying Notes to the Audited
Financial Statements.
F-
13
PETROSONIC ENERGY, INC.
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' DEFICIT
For the Period from June 11, 2008 (date
of inception) to December 31, 2011
Common Shares
Additional
Paid-in
Deficit
Accumulated
During the
Development
Number
Par Value
Capital
Stage
Total
$
$
$
$
Balance June 11, 2008 (date of inception)
-
-
-
-
-
Shares issued for cash on June 17, 2008 at $0.00008889 per share
37,125,188
37,125
(33,825
)
-
3,300
Shares issued for cash on September 19, 2008 at $0.0008889 per share
29,137,688
29,138
(3,238
)
-
25,900
Shares issued for cash on October 6, 2008 at $0.0133339 per share
886,124
886
10,927
-
11,813
Net loss for the year
-
-
-
(11,642
)
(11,642
)
Balance, October 31, 2008
67,149,000
67,149
(26,136
)
(11,642
)
29,371
Net loss for the year
-
-
-
(32,603
)
(32,603
)
Balance, October 31, 2009
67,149,000
67,149
(26,136
)
(44,245
)
(3,232
)
Net loss for the year
-
-
-
(29,259
)
(29,259
)
Balance, October 31, 2010
67,149,000
67,149
(26,136
)
(73,504
)
(32,491
)
Net loss for the year
-
-
-
(12,874
)
(12,874
)
Balance, October 31, 2011
67,149,000
67,149
(26,136
)
(86,378
)
(45,365
)
Net loss for period ended December 31, 2011
-
-
-
(3,022
)
(3,022
)
Balance, December 31, 2011
67,149,000
$
67,149
$
(26,136
)
$
(89,400
)
$
(48,387
)
See accompanying
Notes to the Audited Financial Statements
F-
14
PETROSONIC ENERGY, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
November 1,
2011 through
December 31,
For the Years Ended
October 31,
For the Period From
June 11, 2008
(date of inception)
2011
2011
2010
to December 31, 2011
CASH FROM OPERATING ACTIVITIES:
Net loss
$
(3,022
)
$
(12,874
)
$
(29,259
)
$
(89,400
)
Changes in operating assets and liabilities:
Accounts payable and accrued liabilities
90
(156
)
1,702
6,765
Prepaid expenses
-
-
498
-
Net Cash Provided By (Used In) Operating Activities
(2,932
)
(13,030
)
(27,059
)
(82,635
)
CASH FROM FINANCING ACTIVITIES:
Net advances from shareholder
-
14,000
13,000
42,000
Proceeds from issuance of common stock
-
-
-
41,013
Net Cash Provided By (Used In) Financing Activities
-
14,000
13,000
83,013
NET INCREASE (DECREASE) IN CASH
(2,932
)
970
(14,059
)
378
CASH, BEGINNING
3,310
2,340
16,399
-
CASH, ENDING
$
378
$
3,310
$
2,340
$
378
See accompanying
Notes to the Audited Financial Statements
.
F-
15
Petrosonic Energy, Inc.
(Formerly Bearing Mineral Exploration, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
December 31, 2011
1.
Nature and Continuance of Operations
Petrosonic Energy, Inc. ("we",
"our" or the "Company") was incorporated in the state of Nevada on June 11, 2008. The Company is a Development
Stage Company, as defined by ASC 915 "Development Stage Entities". The Company's principal business plan up to
May 2010 was to acquire, explore and develop mineral properties and ultimately seek out earnings by exploiting mineral claims.
The Company is now seeking alternative business opportunities and is furthering its business plan.
2.
Going Concern
These financial statements have
been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities
in the normal course of business. The Company has never generated revenues since inception and has never paid any dividends and
is unlikely to pay dividends or generate earnings in the immediate or foreseeable future. At December 31, 2011 the Company has
limited cash resources and will likely require new financing, either through loans from officers, debt financing, equity offerings
or business combinations, to continue the development of its business; however, there can be no assurance that management will
be successful in raising the funds necessary to maintain operations, or that a self-supporting level of operations will ever be
achieved. The likely outcome of these future events is indeterminable. The continuation of the Company as a going concern is dependent
upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to
continue operations and the attainment of profitable operations. As of December 31, 2011, the Company has never generated any revenues
and has accumulated losses of $89,400 since inception. These financial statements do not include any adjustments to the recoverability
and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable
to continue as a going concern. These factors raise substantial doubt regarding the Company's ability to continue as a going
concern.
3.
Summary of Significant Accounting Policies
a)
Use of Estimates and Assumptions
The preparation of financial
statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to deferred
income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience
and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent
from other sources. The actual results experienced by the Company may differ materially and adversely from the Company's
estimates. To the extent there are material differences between the estimates and the actual results, future results of operations
will be affected.
F-
16
Petrosonic Energy, Inc.
(Formerly Bearing Mineral Exploration, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
December 31, 2011
3.
Summary of Significant Accounting Policies (continued)
b)
Cash and Cash Equivalents
The Company considers all highly
liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. The Company maintains
its cash in bank deposit accounts, which, at times, may exceed federally insured limits.  Management does not believe the
Company is exposed to significant credit risk.  Management, as well, does not believe the Company is exposed to significant
interest rate and foreign currency fluctuation risks during the period presented in these financial statements. As of December
31, 2011 and October 31, 2011, there are no amounts that exceed the federally insured limits.
c)
Income Taxes
The Company accounts for income
taxes using the asset and liability method in accordance with ASC 740, "Accounting for Income Taxes". The asset and
liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary
differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carryforwards.
Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the
differences are expected to reverse. The Company records a valuation allowance to reduced deferred tax assets to the amount that
is believed more likely than not to be realized.
d)
Loss Per Share
The Company computes loss per
share in accordance with ASC 260, "Earnings per Share" which requires presentation of both basic and diluted earnings
per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common
shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect
to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares
if their effect is anti-dilutive.
e)
Recent Accounting Pronouncements
We do not expect the adoption
of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash
flow.
4.
Related Party Transactions
As of December 31, 2011 and
October 31, 2011, our President is owed $42,000 for additional working capital. The amount is unsecured, non-interest bearing and
due on demand.
F-
17
Petrosonic Energy, Inc.
(Formerly Bearing Mineral Exploration, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
December 31, 2011
5.
Income Taxes
The Company has incurred net
operating losses of $89,400 which expire in fiscal years ended 2023 through 2031. The Company has established a valuation allowance
equal to the tax effect of the loss carryforwards and, therefore, no deferred tax asset has been recognized for the loss carryforwards.
 The net deferred tax asset is $13,410 as of December 31, 2011, for which the Company recorded a valuation allowance because
the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.
The reconciliation of the benefit for income taxes
computed at the U.S. federal statutory rate to the Company's effective tax rate for the periods ended December 31, 2011 and
October 31, 2011 is as follows:
Period Ended
December 31,
2011
Year Ended
October 31,
2011
$
$
Income tax recovery at statutory rate
13,410
12,957
Valuation allowance change
(13,410
)
(12,957
)
Net deferred tax asset
–
–
6.
Subsequent Events
On May 16, 2012 the Company
changed its name to Petrosonic Energy, Inc. to better reflect the Company's new business direction in anticipation of the
purchase of certain rights in technology, assets and common shares owned by Sonoro Energy Ltd. Concurrent with the name change
the Company effected a forward stock split on the basis of 11.25:1,
whereby each shareholder would hold
11.25 common shares for every one share previously held. The Company's share transactions disclosed in the financial statements
have been restated retroactively to reflect the forward stock split for all periods presented.
On July 27, 2012, the Company
acquired certain assets from Sonoro Energy Ltd. including (i) certain technology relating to the treatment and upgrading of heavy
oil by sonicated solvent de-asphalting, (ii) 60,000 shares of Petrosonic Albania pursuant to a share purchase agreement and (iii)
sonic reactors located in Albania and Richmond, British Columbia and a solvent recovery system located in or around Turin, Italy.
In exchange for the assets, the Company agreed to pay to Sonoro the following consideration: (i) $250,000, (ii) a convertible debenture
in the principal amount of $250,000 and (iii) a 10% royalty interest in our realized net revenues for a period of 10 years from
the time we commence commercial operations, which is defined as the date upon which we process an average of 50 barrels of feed
stock per day over a period of 30 consecutive days utilizing the technology acquired. As a result of acquiring the 60,000 shares,
the Company acquired controlling interest in Petrosonic Albania Sha. and Petrosonic Albania Sha. became a majority owned subsidiary
of the Company. Effective July 27, 2012, the Company's primary operations consist of utilizing the Assets to develop a business
relating to the treatment and upgrading of heavy oil by sonicating solvent de-asphalting and operating the business of Petrosonic
Albania Sha. On August 9, 2012, the Company's Board of Directors approved changing the fiscal year end of the Company from
October 31 to December 31 as a result of the acquisition of Petrosonic Albania Sha.
F-
18
PETROSONIC ENERGY, INC.
(Formerly Bearing Mineral Exploration, Inc.)
(A Development Company)
CONSOLIDATED BALANCE SHEETS
(Unaudited)
Successor Entity
Predecessor Entity (Albania Only)
September 30, 2012
December 31, 2011
ASSETS
Current assets:
Cash
$
148,465
$
1,655
Value added taxes receivable
45,557
86,136
Total current assets
194,022
87,791
Property and equipment, net of accumulated
    depreciation of $0, respectively
613,377
617,924
Intangible asset
50,000
-
Total assets
$
857,399
$
705,715
LIABILITIES
Current liabilities:
Accounts & interest payable
$
63,750
$
204,176
Accrued liabilities
12,869
-
Convertible notes payable – related party
450,000
-
Convertible notes payable
165,000
-
Total liabilities
$
691,619
$
204,176
STOCKHOLDERS' EQUITY (DEFICIT):
Common stock, 843,750,000 shares authorized, with a $0.001 par value.
Issued and outstanding: 65,329,000 and 60,195 shares as of
September 30, 2012 and December 31, 2011, respectively
65,329
1,543,406
Non- Controlling Interest
65,506
-
Additional paid-in capital
300,580
(1,008,356
)
Other comprehensive income
47,243
1,607
Deficit accumulated during the development stage
(312,878
)
(35,118
)
Total stockholders' equity (deficit)
165,780
501,539
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
$
857,399
$
705,715
The accompanying notes are an integral part
of these unaudited financial statements.
F-
19
PETROSONIC ENERGY, INC.
(Formerly Bearing Mineral Exploration, Inc.)
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
Nine Months Ended
Period From Inception
September
    30, 2012
September
    30, 2012
To
    September 30, 2012
Successor
    Entity
Predecessor
    Entity
Successor
    Entity
Predecessor
    Entity
Successor
    Entity
Predecessor
    Entity
July
    31,
2012
July
    1,
2012
Three Months
July 31, 2012
January 1, 2012
Nine Months
July 31, 2012
Inception
Through
Through
Ended
Through
Through
Ended
Through
Through
September
    30, 2012
July
    31, 2012
September
    30, 2011
September
    30, 2012
July
    31, 2012
September
    30, 2011
September
    30, 2012
July
    31, 2012
General
    &
Administrative Expenses
$
51,026
$
483
$
(6,477
)
$
51,026
$
4,751
$
14,958
$
51,026
$
39,869
Net loss from continuing
    operations
(51,026
)
(483
)
6,477
(51,026
)
(4,751
)
(14,958
)
(51,026
)
(39,869
)
Interest Expense
12,869
-
-
12,869
-
-
-
-
Bargain Purchase Gain
(89,553
)
-
-
(89,553
)
-
-
-
-
Net Income (loss)
$
25,658
$
(483
)
$
6,477
$
25,658
$
(4,751
)
$
(14,958
)
$
(51,026
)
$
(39,869
)
Basic
    and Diluted Loss
per Common Share
0.00
(0.00
)
0.00
0.00
(0.00
)
(0.01
)
Basic
    and Diluted
Weighted Average
Common Shares Outstanding
64,807,689
2,564,000
2,564,000
64,807,689
2,564,000
2,564,000
The accompanying notes are an integral
part of these unaudited financial statements.
F-
20
PETROSONIC ENERGY, INC.
(Formerly Bearing Mineral Exploration, Inc.)
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Successor Entity
Predecessor Entity
Predecessor Entity
July 31, 2012
January 1, 2012
Nine Months
Inception
Through
Through
Ended
Through
September
30, 2012
July
31, 2012
September 30, 2011
July
31, 2012
Cash flows from Operating Activities:
Net loss
$
25,658
$
(4,751
)
$
(14,958
)
$
(39,869
)
Adjustments to reconcile net loss to net cash used in operating activities
Bargain purchase gain
(89,553
)
-
-
-
Changes in operating assets and liabilities:
Other Assets: VAT receivable
(1,635
)
42,227
(81,628
)
(43,909
)
Accounts Payable and Accrued expenses
41,906
(194,370
)
211,151
9,806
Net Cash used in operating activities
(23,624
)
(156,894
)
114,565
(73,972
)
Cash flows from investing activities:
Cash paid for acquisition
(250,000
)
-
-
-
Cash received in acquisition
11,524
-
-
-
Cash paid for purchase of property and equipment
(53,945
)
-
(492,360
)
(622,707
)
Net Cash used in investing activities
(292,421
)
-
(492,360
)
(622,707
)
Cash flows from financing activities:
Proceeds from issuance of stock
170,000
-
-
-
Capital contribution by non-controlling interest
(5,104
)
164,888
347,579
699,938
Borrowings on debt
250,000
-
-
-
Net cash provided by financing activities
414,896
164,888
347,579
699,938
Other equity
42,491
1,875
32,408
8,265
Net increase in cash
141,342
9,869
2,192
11,524
Cash, beginning
7,123
1,655
146
-
Cash, ending
$
148,465
$
11,524
$
2,338
$
11,524
Non Cash Investing and Financing Activities:
Convertible note issued for acquisition
$
250,000
$
-
$
-
$
-
The accompanying notes are an integral
part of these unaudited financial statements.
F-
21
Petrosonic Energy, Inc.
(Formerly Bearing Mineral Exploration,
        Inc.)
(A Development Stage Company)
Notes to the Unaudited Consolidated Financial
        Statements
September 30, 2012
NOTE 1: 	Basis of Financial Statement
Presentation
The accompanying unaudited consolidated
interim financial statements of Petrosonic Energy, Inc. (formerly Bearing Mineral Exploration, Inc.) ('we", "our"
or the "Company") have been prepared in accordance with accounting principles generally accepted in the United States
of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the Company's
audited financial statements, the audited financial statements of Petrosonic Albania Sha. and the notes thereto, for the transition
period from November 1, 2011 to December 31, 2011 filed with the SEC on Form 10-K/T. In the opinion of management, all adjustments,
consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations
for the interim period presented have been reflected herein. The results of operations for the interim period are not necessarily
indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate
the disclosures contained in the audited financial statements for the most recent fiscal period ended December 31, 2011, as reported
in the Form 10-K/T, have been omitted.
NOTE 2:	Purchase of Petrosonic Albania
Sha.
On July 27,
2012,
the Company acquired certain assets from Sonoro Energy Ltd. including (i) certain technology relating to the treatment
and upgrading of heavy oil by sonicated solvent de-asphalting, (ii) 60,000 shares (89% holding) of Petrosonic Albania Sha. pursuant
to a share purchase agreement and (iii) sonic reactors located in Albania and Richmond, British Columbia and a solvent recovery
system located in or around Turin, Italy. In exchange for the assets, the Company agreed to pay to Sonoro the following consideration:
(i) CAD$250,000, (ii) a convertible debenture in the principal amount of CAD$250,000 and (iii) a 10% royalty interest in our realized
net revenues for a period of 10 years from the time we commence commercial operations, which is defined as the date upon which
we process an average of 50 barrels of feed stock per day over a period of 30 consecutive days utilizing the technology acquired.
The fair value allocation is CAD$250,000 for the 89% interest of Petrosonic Albania Sha., CAD$200,000
for the equipment and CAD$50,000 for the technology. Effective July 27, 2012 the Company's primary operations consist of
utilizing the assets to develop a business relating to the treatment and upgrading of heavy oil by sonicating solvent de-asphalting
and operating the business of Petrosonic Albania Sha.
Immediately before the sale, Sonoro Energy
Ltd.'s ownership of Petrosonic Albania Sha. was 89%; thus, there is a reclassification of $30,899 or 11% from additional paid in
capital to non-controlling interest representing the extrapolated fair value of the entity based on the CAD$250,000 fair value
of the 89% interest.
The Purchase and Sale is accounted for
using the purchase method. As a result of the merger, Petrosonic Albania Sha. became a majority owned subsidiary of the Company.
The assets and liabilities of the acquired entity have been brought forward at their fair value.
F-
22
Petrosonic Energy, Inc.
(Formerly Bearing Mineral Exploration,
        Inc.)
(A Development Stage Company)
Notes to the Unaudited Consolidated Financial
        Statements
September 30, 2012
NOTE 2:	Purchase of Petrosonic Albania
Sha. (continued)
A summary of the purchase price consideration
and related purchase price allocation are shown below:
Purchase Price
Cash at closing
250,000
Convertible Note Payable
250,000
Total Purchase Price
500,000
Purchase Price Allocation
Cash
11,524
Accounts Receivable
43,909
Equipment
609,432
Accounts Payable
(9,806
)
Non-Controlling Interest
(65,506
)
589,553
Bargain Purchase Gain
(89,553
)
Total Purchase Price
500,000
NOTE 3:	Going Concern
At September 30, 2012, the Company has an accumulated deficit.
As such, the accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The
Company does not have sufficient working capital for its planned activities, which raises substantial doubt about its ability to
continue as a going concern.
Continuation of the company as a going
concern is dependent upon obtaining additional working capital. The management of the Company has developed a strategy, which it
believes will accomplish this objective through short-term loans from related parties and additional equity investments, which
will enable the Company to continue operations for the coming year. The continuation of the Company as a going concern is dependent
upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to
continue operations, and the attainment of profitable operations. These factors raise substantial doubt regarding the Company's
ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification
of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as
a going concern.
NOTE 4:	Related Party Transactions
During the nine months ended September
30, 2012, $42,000 was repaid to our former President for funds previously advanced to the Company for additional working capital.
F-
23
Petrosonic Energy, Inc.
(Formerly Bearing Mineral Exploration,
        Inc.)
(A Development Stage Company)
Notes to the Unaudited Consolidated Financial
        Statements
September 30, 2012
NOTE 4:	Related Party Transactions (continued)
On June 11, 2012, we borrowed $195,100
from our President under a convertible debenture with a face value of CAD$200,000. The convertible debenture matures June 11, 2013
and bears interest at 10%. At any time prior to the Maturity Date, if we complete an equity or convertible debenture financing
yielding aggregate proceeds of at least $500,000, our President may elect to convert the debenture in whole or in part into common
shares at the same price any shares are sold, or in the case of a convertible debenture, the price of the shares issuable upon
conversion.
The Company evaluated the convertible note for derivatives noting that as the conversion
price cannot
be determined until $500,000 in financing
has been raised; the derivative liability cannot be determined as of September 30, 2012.
On July 27, 2012, pursuant to the
terms of the Purchase Agreement, in exchange for the Assets, we issued to Sonoro Energy Ltd. a convertible debenture
for CAD$250,000. The Debenture has a term of two years and is non-interest bearing. At any time after we have completed an
equity or convertible debenture financing yielding aggregate proceeds of at least $500,000, the Debenture is convertible at
the holder's option into shares of our common stock. The conversion price of the Debenture will be equal to the price
per share of the shares sold in the Qualified Financing or the conversion price of the shares issuable upon conversion of
the convertible debentures sold in the Qualified Financing. As of September 30, 2012, the Qualified Financing had not
occurred, as such no derivative liability was determined.
NOTE 5:	Capital Stock
On April 17, 2012, the Company issued 20,000,003
common shares valued at $160,000 to Art Agolli in exchange for all of his interest in a letter of intent with Sonoro Energy Ltd.
On April 18, 2012, concurrent with his resignation
as a director of the Company, Gerhard Schlombs surrendered 22,500,000 common shares. No compensation was paid to Mr. Schlombs for
the cancellation of his shares.
On May 16, 2012 the Company effected a
forward stock split on the basis of 11.25:1,
whereby each shareholder would hold 11.25 common shares
for every one share previously held. The Company's share transactions disclosed in the financial statements have been restated
retroactively to reflect the forward stock split for all periods presented.
During the quarter
ended September 30, 2012, the Company
sold
680,000 common shares and 680,000 warrants
exercisable to purchase one half (1/2) of one share of common stock at an exercise price of $0.50
per share,
exercisable over one year from the purchase date
. Gross proceeds received by the Company
were $170,000.
NOTE
6:	Convertible Notes Payable
During the nine months ended September
30, 2012, we have borrowed $163,775 ($165,000 face value) under several Convertible Debentures totaling to that amount. The debentures
bear interest at 10% per annum and mature one year from the issuance date. Until the due date, the holder(s) may elect to convert
the debenture in whole or in part into common shares at the price of any aggregate financing exceeding $500,000 less a discount
of 25% per share. The Company evaluated the convertible note for derivatives noting that as the conversion price cannot be determined
until $500,000 in financing has been raised; the derivative liability cannot be determined as of September 30, 2012.
F-
24
Petrosonic Energy, Inc.
(Formerly Bearing Mineral Exploration,
        Inc.)
(A Development Stage Company)
Notes to the Unaudited Consolidated Financial
        Statements
September 30, 2012
NOTE
7:	Restatement
Certain prior interim period amounts have
been restated to conform with the current consolidated interim period presentation.
F-
25