----

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| REO PLUS, INC.                                                 |
|----------------------------------------------------------------|
| (Exact Name of Registrant as Specified in Its Charter)         |
| Texas                                                          | 27-0788438 |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
|                                                           |   |

| Large accelerated filer                     |  ̈ | Accelerated filer         |  ̈ |
|---------------------------------------------|--------|---------------------------|--------|
|                                        |   |                      |   |
| Non-accelerated filer                       |  ̈ | Smaller reporting company | ý |
| (Do not check if smaller reporting company) |   |

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----

| Balance Sheets                                             |          |
|------------------------------------------------------------|---------------|
|                                                       |          |   |   |   |   |   |
|                                                       |          |   |   |   |   |   |
| ASSETS                                                     |          |
|                                                       | September 30, |   | December 31, |   |
|                                                       | 2012          |   | 2011 |   |
|                                                       |          |   |   |   |   |   |
| Current Assets:                                            |          |   |   |   |   |   |
| Cash                                                       |          | $ | 17,636 |   |   | $ | 653 |   |
| Prepaid expense                                            |          |   | - |   |   |   | 938 |   |
|                                                       |          |   |   |   |   |   |   |   |
| Total Current Assets                                       |          |   | 17,636 |   |   |   | 1,591 |   |
|                                                       |          |   |   |   |   |   |   |   |
| Investment in unconsolidated affiliate                     |          |   | 64,180 |   |   |   | 53,784 |   |
|                                                       |          |   |   |   |   |   |   |   |
| Total Assets                                               |          | $ | 81,816 |   |   | $ | 55,375 |   |
|                                                       |          |   |   |   |   |   |   |   |
|                                                       |          |   |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY       |          |
|                                                       |          |   |   |   |   |   |   |   |
|                                                       |          |   |   |   |   |   |   |   |
| Current Liabilities:                                       |          |   |   |   |   |   |   |   |
| Accounts payable and accrued expenses                      |          | $ | 10,600 |   |   | $ | 8,525 |   |
| Accounts payable, stockholders                             |          |   | - |   |   |   | 85,960 |   |
| Notes payable, stockholders                                |          |   | 180,960 |   |   |   | - |   |
| Note payable, related party                                |          |   | 190,000 |   |   |   | 190,000 |   |
| Accrued interest, stockholders                             |          |   | 7,437 |   |   |   | 6,650 |   |
|                                                       |          |   |   |   |   |   |   |   |
| Total Current Liabilities                                  |          |   | 388,997 |   |   |   | 291,135 |   |
|                                                       |          |   |   |   |   |   |   |   |
| Stockholders’ (Deficit) Equity:                      |          |   |   |   |   |   |   |   |
| Preferred stock, $.001 par value, 10,000,000 shares        |          |   |   |   |   |   |   |   |
| authorized and 0 shares issued and outstanding             |          |   | - |   |   |   | - |   |
| Common stock, $.001 par value, 500,000,000 shares          |          |   |   |   |   |   |   |   |
| authorized, 1,869,000 shares issued and outstanding        |          |   | 1,870 |   |   |   | 1,870 |   |
| Additional paid-in capital                                 |          |   | 53,130 |   |   |   | 53,130 |   |
| Deficit accumulated during the development stage           |          |   | (362,181 | ) |   |   | (290,760 | ) |
|                                                       |          |   |   |   |   |   |   |   |
| Total Stockholders’ (Deficit) Equity                 |          |   | (307,181 | ) |   |   | (235,760 | ) |
|                                                       |          |   |   |   |   |   |   |   |
| Total Liabilities and Stockholders’ (Deficit) Equity |          | $ | 81,816 |   |   | $ | 55,375 |   |

----

| Statements of Operations              |   |
|---------------------------------------|--------|
|                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                  |   |   |   |   |   |   |   |   |   |   |   |   |   | For the Period from |   |
|                                  |   | For the Three Months |   |   | For the Nine Months |   |   | Inception |   |
|                                  |   | Ended |   |   | Ended |   |   | (August 11, 2009) |   |
|                                  |   | September 30, |   |   | September 30, |   |   | to September 30, |   |
|                                  |   | 2012 |   |   | 2011 |   |   | 2012 |   |   | 2011 |   |   | 2012 |   |
|                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Costs and Expenses:                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Professional fees                     |   | $ | 22,600 |   |   | $ | 20,699 |   |   | $ | 67,676 |   |   | $ | 45,654 |   |   | $ | 163,810 |   |
|                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income Loss) from Operations      |   |   | (22,600 | ) |   |   | (20,699 | ) |   |   | (67,676 | ) |   |   | (45,654 | ) |   |   | (163,810 | ) |
|                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other Income (Expense):               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity in income (loss) of            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| unconsolidated affiliate              |   |   | 10,160 |   |   |   | 1,306 |   |   |   | 10,396 |   |   |   | 3,680 |   |   |   | 12,420 |   |
| Interest                              |   |   | (5,114 | ) |   |   | (3,325 | ) |   |   | (14,141 | ) |   |   | (9,975 | ) |   |   | (34,091 | ) |
|                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Income (Loss) before              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income Tax                            |   |   | (17,554 | ) |   |   | (22,718 | ) |   |   | (71,421 | ) |   |   | (51,949 | ) |   |   | (185,481 | ) |
|                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income Tax (Provision) Benefit        |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Income (Loss)                     |   | $ | (17,554 | ) |   | $ | (22,718 | ) |   | $ | (71,421 | ) |   | $ | (51,949 | ) |   | $ | (185,481 | ) |
|                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Income (Loss) per Share           |   | $ | (0.01 | ) |   | $ | (0.01 | ) |   | $ | (0.04 | ) |   | $ | (0.03 | ) |   |   |   |   |
|                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fully Diluted Income (Loss) per Share |   | $ | (0.01 | ) |   | $ | (0.01 | ) |   | $ | (0.04 | ) |   | $ | (0.03 | ) |   |   |   |   |
|                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted Average Shares Outstanding   |   |   | 1,869,000 |   |   |   | 1,869,000 |   |   |   | 1,869,000 |   |   |   | 1,869,000 |   |   |   |   |   |

----

| Statements of Changes in Stockholders’ Equity (Deficit)              |
|----------------------------------------------------------------------------|
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| For the Period from Inception (August 11, 2009) through September 30, 2012 |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                       |   | Common |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                       |   | Stock |   |   |   |   |   |   |   |   | Additional |   |   |   |   |   |   |   |
|                                                                       |   | Subscription |   |   | Common Stock |   |   | Paid-In |   |   | Accumulated |   |   |   |   |
|                                                                       |   | Receivable |   |   | Shares |   |   | Amount |   |   | Capital |   |   | Deficit |   |   | Total |   |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock subscription,                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| August 11, 2009                                                            |   | $ | (27,500 | ) |   |   | 934,500 |   |   | $ | 935 |   |   | $ | 26,565 |   |   | $ | - |   |   | $ | - |   |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock subscription                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| receipts,                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| November 4, 2009                                                           |   |   | 13,750 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 13,750 |   |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock subscription                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| receipts,                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| November 4, 2009                                                           |   |   | 13,750 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 13,750 |   |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| August 11, 2009 --                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2009                                                          |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (9,537 | ) |   |   | (9,537 | ) |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance,                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2009                                                          |   |   | - |   |   |   | 934,500 |   |   |   | 935 |   |   |   | 26,565 |   |   |   | (9,537 | ) |   |   | 17,963 |   |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance of stock for                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| investment                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| January 2, 2010                                                            |   |   | - |   |   |   | 934,500 |   |   |   | 935 |   |   |   | 26,565 |   |   |   | - |   |   |   | 27,500 |   |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deemed dividend                                                            |   |   | - |   |   |   | - |   |   |   | - |   |   |   |   |   |   |   | (176,700 | ) |   |   | (176,700 | ) |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| January 1, 2010 –                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2010                                                          |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (37,203 | ) |   |   | (37,203 | ) |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance,                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2010                                                          |   |   | - |   |   |   | 1,869,000 |   |   |   | 1,870 |   |   |   | 53,130 |   |   |   | (223,440 | ) |   |   | (168,440 | ) |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| January 1, 2011 –                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2011                                                          |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (67,320 | ) |   |   | (67,320 | ) |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance,                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2011                                                          |   |   | - |   |   |   | 1,869,000 |   |   |   | 1,870 |   |   |   | 53,130 |   |   |   | (290,760 | ) |   |   | (235,760 | ) |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss,                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| January 1, 2012 –                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| September 30, 2012                                                         |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (71,421 | ) |   |   | (71,421 | ) |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance,                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| September 30, 2012                                                         |   | $ | - |   |   |   | 1,869,000 |   |   | $ | 1,870 |   |   | $ | 53,130 |   |   | $ | (362,181 | ) |   | $ | (307,181 | ) |

----

| Statements of Cash Flows                         |   |
|--------------------------------------------------|--------|
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   | For the Period from |   |
|                                             |   | For the Three Months |   |   | For the Nine Months |   |   | Inception |   |
|                                             |   | Ended |   |   | Ended |   |   | (August 11, 2009) to |   |
|                                             |   | September 30, |   |   | September 30, |   |   | September 30. |   |
|                                             |   | 2012 |   |   | 2011 |   |   | 2012 |   |   | 2011 |   |   | 2012 |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash Flows from Operating Activities:            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Income (Loss)                                |   | $ | (17,554 | ) |   | $ | (22,718 | ) |   | $ | (71,421 | ) |   | $ | (51,949 | ) |   | $ | (185,481 | ) |
| Adjustments to reconcile net income (loss)       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| to cash used by operating activities:            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity in (income) loss of unconsolidated        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| affiliate                                        |   |   | (10,160 | ) |   |   | (1,306 | ) |   |   | (10,396 | ) |   |   | (3,680 | ) |   |   | (12,420 | ) |
| Decrease (Increase) in prepaid expenses          |   |   | - |   |   |   | 938 |   |   |   | 938 |   |   |   | (1,875 | ) |   |   | - |   |
| (Decrease) Increase in accounts payable          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| and accrued expenses                             |   |   | (500 | ) |   |   | 4,126 |   |   |   | 2,075 |   |   |   | 2,025 |   |   |   | 10,600 |   |
| Increase in accrued interest                     |   |   | 1,762 |   |   |   | - |   |   |   | 787 |   |   |   | - |   |   |   | 7,437 |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Adjustments                                |   |   | (8,898 | ) |   |   | 3,758 |   |   |   | (6,596 | ) |   |   | (3,530 | ) |   |   | 5,617 |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Cash (Used) Provided by Operating Activities |   |   | (26,452 | ) |   |   | (18,960 | ) |   |   | (78,017 | ) |   |   | (55,479 | ) |   |   | (179,864 | ) |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash Flows from Investing Activities:            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Increase in invesment in unconsolidated          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| affiliate                                        |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (10,960 | ) |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Cash Used by Investing Activities            |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (10,960 | ) |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash Flows from Financing Activities:            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Advances from stockholders                       |   |   | - |   |   |   | 15,000 |   |   |   | - |   |   |   | 55,000 |   |   |   | - |   |
| Proceeds from notes payable to stockholders      |   |   | 40,000 |   |   |   | - |   |   |   | 95,000 |   |   |   | - |   |   |   | 180,960 |   |
| Issuance of common stock                         |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 27,500 |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Cash Provided by Financing Activities        |   |   | 40,000 |   |   |   | 15,000 |   |   |   | 95,000 |   |   |   | 55,000 |   |   |   | 208,460 |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Increase (Decrease) in Cash                  |   |   | 13,548 |   |   |   | (3,960 | ) |   |   | 16,983 |   |   |   | (479 | ) |   |   | 17,636 |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash, Beginning of Period                        |   |   | 4,088 |   |   |   | 5,839 |   |   |   | 653 |   |   |   | 2,357 |   |   |   | - |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash, End of Period                              |   | $ | 17,636 |   |   | $ | 1,879 |   |   | $ | 17,636 |   |   | $ | 1,878 |   |   | $ | 17,636 |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest paid                                    |   | $ | 3,352 |   |   | $ | 3,325 |   |   | $ | 13,354 |   |   | $ | 9,975 |   |   | $ | 26,654 |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income Taxes Paid                                |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |

----

|                                             |   |                 |   |   |                |   |   |                 |   |   |   |   |   |                |   |
|--------------------------------------------------|--------|----------------------|--------|--------|---------------------|--------|--------|----------------------|--------|--------|--------|--------|--------|---------------------|--------|
|                                             |   |                 |   |   |                |   |   |                 |   |   |   |   |   |                |   |
|                                             |   |                 |   |   |                |   |   |                 |   |   |   |   |   | For the Period from |   |
|                                             |   | For the Three Months |   |   | For the Nine Months |   |   | Inception            |   |
|                                             |   | Ended                |   |   | Ended               |   |   | (August 11, 2009) to |   |
|                                             |   | September 30,        |   |   | September 30,       |   |   | September 30.        |   |
|                                             |   | 2012                 |   |   | 2011                |   |   | 2012                 |   |   | 2011   |   |   | 2012                |   |
|                                             |   |                 |   |   |                |   |   |                 |   |   |   |   |   |                |   |
| Acquistion of investment in affiliate            |   | $                    | -      |   |                | $      | -      |                 |   | $      | -      |   |   | $                   | -      |   |   | $ | 40,800 |   |
|                                             |   |                 |   |   |                |   |   |                 |   |   |   |   |   |                |   |   |   |   |   |   |
| Issuance of note payable for investment in       |   |                 |   |   |                |   |   |                 |   |   |   |   |   |                |   |   |   |   |   |   |
| affiliate                                        |   | $                    | -      |   |                | $      | -      |                 |   | $      | -      |   |   | $                   | -      |   |   | $ | 190,000 |   |
|                                             |   |                 |   |   |                |   |   |                 |   |   |   |   |   |                |   |   |   |   |   |   |
| Issuance of common stock for investment in       |   |                 |   |   |                |   |   |                 |   |   |   |   |   |                |   |   |   |   |   |   |
| affiliate                                        |   | $                    | -      |   |                | $      | -      |                 |   | $      | -      |   |   | $                   | -      |   |   | $ | 27,500 |   |
|                                             |   |                 |   |   |                |   |   |                 |   |   |   |   |   |                |   |   |   |   |   |   |
| Dividend related to acquisition of investment in |   |                 |   |   |                |   |   |                 |   |   |   |   |   |                |   |   |   |   |   |   |
| affiliate                                        |   | $                    | -      |   |                | $      | -      |                 |   | $      | -      |   |   | $                   | -      |   |   | $ | 176,700 |   |

----

----

| Issuance of common stock                  |   | $      | 27,500   |   |
|-------------------------------------------|--------|--------|----------|--------|
| Issuance of promissory note               |   |   | 190,000  |   |
|                                      |   |   | 217,500  |   |
|                                      |   |   |     |   |
| Deemed dividend                           |   |   | (176,700 | )      |
|                                      |   |   |     |   |
| Purchase price of investment in affiliate |   | $      | 40,800   |   |

----

| Operations                                                                                                                          |   |
|-------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                |   | Three Months Ended |   |   | Nine Months Ended |   |
|                                                                                                                                |   | September 30, |   |   | September 30, |   |
|                                                                                                                                |   | 2012 |   |   | 2011 |   |   | 2012 |   |   | 2011 |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Rental income                                                                                                                       |   | $ | 43,367 |   |   | $ | 21,050 |   |   | $ | 80,381 |   |   | $ | 63,122 |   |
| Operating expenses                                                                                                                  |   |   | (17,967 | ) |   |   | (17,785 | ) |   |   | (54,390 | ) |   |   | (53,922 | ) |
|                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                                                                          |   | $ | 25,400 |   |   | $ | 3,265 |   |   | $ | 25,991 |   |   | $ | 9,200 |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity in income of                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| unconsolidated affiliate                                                                                                            |   | $ | 10,160 |   |   | $ | 1,306 |   |   | $ | 10,396 |   |   | $ | 3,680 |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Summary financial position for Ananda for the six months ended September 30, 2012 and for the year ended December 31, 2011 follows: |   |
|                                                                                                                                |   |
| Financial Position                                                                                                                  |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |   | September 30, |   |   | December 31, |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |   |   | 2012 |   |   |   | 2011 |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                                                                                                                                |   |   |   |   |   |   |   |   |   | $ | 80,502 |   |   | $ | 49,197 |   |
| Other current assets                                                                                                                |   |   |   |   |   |   |   |   |   |   | 3,428 |   |   |   | 1,430 |   |
| Land, buildings and improvements                                                                                                    |   |   |   |   |   |   |   |   |   |   | 499,729 |   |   |   | 519,153 |   |
| Other assets                                                                                                                        |   |   |   |   |   |   |   |   |   |   | 4,259 |   |   |   | 5,925 |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Assets                                                                                                                        |   |   |   |   |   |   |   |   |   | $ | 587,918 |   |   | $ | 575,705 |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits and accrued expenses                                                                                                       |   |   |   |   |   |   |   |   |   | $ | 10,344 |   |   | $ | 15,082 |   |
| Mortgage payable                                                                                                                    |   |   |   |   |   |   |   |   |   |   | 417,123 |   |   |   | 426,163 |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Liabilities                                                                                                                   |   |   |   |   |   |   |   |   |   |   | 427,467 |   |   |   | 441,245 |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Members' equity                                                                                                                     |   |   |   |   |   |   |   |   |   |   | 277,845 |   |   |   | 277,845 |   |
| Accumulated deficit                                                                                                                 |   |   |   |   |   |   |   |   |   |   | (117,394 | ) |   |   | (143,385 | ) |
|                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Equity                                                                                                                        |   |   |   |   |   |   |   |   |   |   | 160,451 |   |   |   | 134,460 |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Liabilities and Equity                                                                                                        |   |   |   |   |   |   |   |   |   | $ | 587,918 |   |   | $ | 575,705 |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment in unconsolidated affiliate                                                                                              |   |   |   |   |   |   |   |   |   | $ | 64,180 |   |   | $ | 53,784 |   |

----

| At September 30, 2012, notes payable stockholders consist of the following: |   |   |    |
|-----------------------------------------------------------------------------|--------|--------|---------|
|                                                                        |   |   |    |
| Note payable to an individual, bearing interest at                          |   |   |    |
| 5% per annum; unsecured, principal and interest                             |   |   |    |
| due February 5, 2013                                                        |   | $      | 85,960  |   |
|                                                                        |   |   |    |   |
| Note payable to an individual, bearing interest at                          |   |   |    |   |
| 5% per annum; unsecured, principal and interest                             |   |   |    |   |
| due April 30, 2013                                                          |   |   | 35,000  |   |
|                                                                        |   |   |    |   |
| Note payable to an individual, bearing interest at                          |   |   |    |   |
| 5% per annum; unsecured, principal and interest                             |   |   |    |   |
| due September 27, 2013                                                      |   |   | 40,000  |   |
|                                                                        |   |   |    |   |
| Note payable to a corporation, bearing interest at                          |   |   |    |   |
| 5% per annum; unsecured, principal and interest                             |   |   |    |   |
| due February 5, 2013                                                        |   |   | 20,000  |   |
|                                                                        |   |   |    |   |
|                                                                        |   | $      | 180,960 |   |

----

|                            |   | September 30, |    |   | December 31, |   |
|---------------------------------|--------|---------------|---------|--------|--------------|--------|
|                            |   | 2012          |    |   | 2011         |   |
| Deferred tax assets:            |   |          |    |   |         |   |
| Net operating loss carryforward |   | $             | 31,696  |   |         | $      | 18,841 |   |
| Less valuation allowance        |   |          | (31,696 | )      |         |   | (18,841 | ) |
|                            |   |          |    |   |         |   |   |   |
|                            |   | $             | 0       |   |         | $      | 0 |   |
|                            |   |          |    |   |         |   |   |   |
| Recorded as follows:            |   |          |    |   |         |   |   |   |
| Current asset                   |   | $             | 0       |   |         | $      | 0 |   |
| Other liability                 |   |          | 0       |   |         |   | 0 |   |
|                            |   |          |    |   |         |   |   |   |
|                            |   | $             | 0       |   |         | $      | 0 |   |

|                                                         |   | September 30, |   |
|--------------------------------------------------------------|--------|---------------|--------|
|                                                         |   | 2012          |   |   | 2011 |   |
|                                                         |   |          |   |   |   |   |
| Federal provision (benefit) at statutory graduated tax rates |   |          | (18.00 | %) |   |   | (17.57 | %) |
| Change in valuation allowance                                |   |          | 18.00  | % |   |   | 17.57 | % |
|                                                         |   |          |   |   |   |   |   |   |
|                                                         |   |          | 0.00   | % |   |   | 0.00 | % |

----

----

----

| Balance Sheets                                     |   |
|----------------------------------------------------|--------|
|                                               |   |   |   |   |   |   |
|                                               |   | September 30, |   |   | December 31, |   |
|                                               |   | 2012 |   |   | 2011 |   |
| ASSETS                                             |   |
|                                               |   |   |   |   |   |   |
| Current Assets:                                    |   |   |   |   |   |   |
| Cash                                               |   | $ | 80,502 |   |   | $ | 49,197 |   |
| Prepaid insurance                                  |   |   | 3,428 |   |   |   | 1,430 |   |
|                                               |   |   |   |   |   |   |   |   |
|      Total Current Assets |   |   | 83,930 |   |   |   | 50,627 |   |
|                                               |   |   |   |   |   |   |   |   |
| Property and Equipment:                            |   |   |   |   |   |   |   |   |
| Land                                               |   |   | 100,000 |   |   |   | 100,000 |   |
| Building and improvements                          |   |   | 517,981 |   |   |   | 517,981 |   |
|                                               |   |   |   |   |   |   |   |   |
| Total Property and Equipment                       |   |   | 617,981 |   |   |   | 617,981 |   |
|                                               |   |   |   |   |   |   |   |   |
| Accumulated depreciation                           |   |   | (118,252 | ) |   |   | (98,828 | ) |
|                                               |   |   |   |   |   |   |   |   |
| Property and Equipment, net                        |   |   | 499,729 |   |   |   | 519,153 |   |
|                                               |   |   |   |   |   |   |   |   |
| Other Assets:                                      |   |   |   |   |   |   |   |   |
| Deferred loan costs                                |   |   | 4,259 |   |   |   | 5,925 |   |
|                                               |   |   |   |   |   |   |   |   |
|                                               |   | $ | 587,918 |   |   | $ | 575,705 |   |
|                                               |   |   |   |   |   |   |   |   |
| LIABILITIES AND MEMBERS' EQUITY                    |   |
|                                               |   |   |   |   |   |   |   |   |
| Current Liabilities:                               |   |   |   |   |   |   |   |   |
| Accrued expenses                                   |   | $ | 7,044 |   |   | $ | 9,500 |   |
| Current portion of long-term debt                  |   |   | 13,250 |   |   |   | 12,572 |   |
|                                               |   |   |   |   |   |   |   |   |
| Total Current Liabilities                          |   |   | 20,294 |   |   |   | 22,072 |   |
|                                               |   |   |   |   |   |   |   |   |
| Lease deposit                                      |   |   | 3,300 |   |   |   | 5,582 |   |
| Long-term debt                                     |   |   | 403,873 |   |   |   | 413,591 |   |
|                                               |   |   |   |   |   |   |   |   |
| Total Liabilities                                  |   |   | 427,467 |   |   |   | 441,245 |   |
|                                               |   |   |   |   |   |   |   |   |
| Members' Equity                                    |   |   | 160,451 |   |   |   | 134,460 |   |
|                                               |   |   |   |   |   |   |   |   |
|                                               |   | $ | 587,918 |   |   | $ | 575,705 |   |

----

| Statements of Income and Members' Equity |   |
|------------------------------------------|--------|
|                                     |   |   |   |   |   |   |
|                                     |   | For the Nine Months Ended |   |
|                                     |   | September 30, |   |
|                                     |   | 2012 |   |   | 2011 |   |
|                                     |   |   |   |   |   |   |
| Revenues:                                |   | $ | 80,381 |   |   | $ | 63,122 |   |
|                                     |   |   |   |   |   |   |   |   |
| Costs and Expenses:                      |   |   |   |   |   |   |   |   |
| Depreciation and amortization            |   |   | 21,091 |   |   |   | 21,091 |   |
| Property taxes                           |   |   | 6,702 |   |   |   | 7,044 |   |
| Insurance                                |   |   | 5,270 |   |   |   | 4,760 |   |
| Repairs and maintenance                  |   |   | 1,096 |   |   |   | 298 |   |
| General and administrative               |   |   | 76 |   |   |   | 90 |   |
|                                     |   |   |   |   |   |   |   |   |
| Total Costs and Expenses                 |   |   | 34,235 |   |   |   | 33,283 |   |
|                                     |   |   |   |   |   |   |   |   |
| Net Income from Operations               |   |   | 46,146 |   |   |   | 29,839 |   |
|                                     |   |   |   |   |   |   |   |   |
| Other Income (Expense):                  |   |   |   |   |   |   |   |   |
| Interest                                 |   |   | (20,155 | ) |   |   | (20,639 | ) |
|                                     |   |   |   |   |   |   |   |   |
| Net Income                               |   |   | 25,991 |   |   |   | 9,200 |   |
|                                     |   |   |   |   |   |   |   |   |
| Members' Equity, Beginning of Period     |   |   | 134,460 |   |   |   | 122,219 |   |
|                                     |   |   |   |   |   |   |   |   |
| Members' Equity, End of Period           |   | $ | 160,451 |   |   | $ | 131,419 |   |

----

| Statements of Cash Flows                             |   |
|------------------------------------------------------|--------|
|                                                 |   |   |   |   |   |   |
|                                                 |   | For the Nine Months Ended |   |
|                                                 |   | September 30, |   |
|                                                 |   | 2012 |   |   | 2011 |   |
|                                                 |   |   |   |   |   |   |
| Cash Flows from Operating Activities:                |   |   |   |   |   |   |
| Net income                                           |   | $ | 25,991 |   |   | $ | 9,200 |   |
| Adjustments to reconcile net income to cash provided |   |   |   |   |   |   |   |   |
| by operating activities:                             |   |   |   |   |   |   |   |   |
| Depreciation and amortization                        |   |   | 21,090 |   |   |   | 21,090 |   |
| (Increase) in prepaid insurance                      |   |   | (1,998 | ) |   |   | (1,414 | ) |
| (Decrease) in accrued expenses                       |   |   | (2,456 | ) |   |   | (2,348 | ) |
| (Decrease) in lease deposit                          |   |   | (2,282 | ) |   |   | - |   |
|                                                 |   |   |   |   |   |   |   |   |
| Total Adjustments                                    |   |   | 14,354 |   |   |   | 17,328 |   |
|                                                 |   |   |   |   |   |   |   |   |
| Net Cash Provided by Operating Activities            |   |   | 40,345 |   |   |   | 26,528 |   |
|                                                 |   |   |   |   |   |   |   |   |
| Cash Flows from Financing Activities:                |   |   |   |   |   |   |   |   |
| Payments on long-term debt                           |   |   | (9,040 | ) |   |   | (8,557 | ) |
|                                                 |   |   |   |   |   |   |   |   |
| Net Cash (Used) by Financing Activities              |   |   | (9,040 | ) |   |   | (8,557 | ) |
|                                                 |   |   |   |   |   |   |   |   |
| Net Increase (Decrease) in Cash                      |   |   | 31,305 |   |   |   | 17,971 |   |
|                                                 |   |   |   |   |   |   |   |   |
| Cash, Beginning of Period                            |   |   | 49,197 |   |   |   | 20,121 |   |
|                                                 |   |   |   |   |   |   |   |   |
| Cash, End of Period                                  |   | $ | 80,502 |   |   | $ | 38,092 |   |
|                                                 |   |   |   |   |   |   |   |   |
| Interest paid                                        |   | $ | 20,155 |   |   | $ | 20,639 |   |
|                                                 |   |   |   |   |   |   |   |   |
| Income Taxes Paid                                    |   | $ | - |   |   | $ | - |   |

----

----

----

| At September 30, 2012 deferred loan costs consist of the following: |   |   |   |
|---------------------------------------------------------------------|--------|--------|--------|
|                                                                |   |   |   |
| Deferred loan costs                                                 |   | $      | 8,888  |   |
|                                                                |   |   |   |   |
| Accumulated amortization                                            |   |   | (4,629 | ) |
|                                                                |   |   |   |   |
|                                                                |   | $      | 4,259  |   |
|                                                                |   |   |   |   |
| Future amortization of deferred loan costs is as follows:           |   |   |   |   |

| Future amortization of deferred loan costs is as follows: |   |   |   |
|-----------------------------------------------------------|--------|--------|--------|
|                                                      |   |   |   |
| 2013                                                      |   | $      | 2,222  |   |
| 2014                                                      |   |   | 2,037  |   |
|                                                      |   |   |   |   |
|                                                      |   | $      | 4,259  |   |

| On September 30, 2012, long-term debt is as follows: |   |   |    |
|------------------------------------------------------|--------|--------|---------|
|                                                 |   |   |    |
| Note payable                                         |   | $      | 417,123 |   |
|                                                 |   |   |    |   |
| Less current portion                                 |   |   | (13,250 | ) |
|                                                 |   |   |    |   |
| Long-term debt                                       |   | $      | 403,873 |   |

----

| Maturities of long-term debt are as follows: |   |   |    |
|----------------------------------------------|--------|--------|---------|
|                                         |   |   |    |
| 2013                                         |   | $      | 13,250  |   |
| 2014                                         |   |   | 403,873 |   |
|                                         |   |   |    |   |
|                                         |   | $      | 417,123 |   |

| October 1, - September 30, 2013 |   | $      | 98,964  |   |
|---------------------------------|--------|--------|---------|--------|
| October 1, - September 30, 2014 |   |   | 100,884 |   |
| October 1, - September 30, 2015 |   |   | 103,068 |   |
| October 1, - September 30, 2016 |   |   | 105,012 |   |
| October 1, - August 31, 2017    |   |   | 98,274  |   |
|                            |   |   |    |   |
|                            |   | $      | 506,202 |   |

----

|                                                  |   |   |   |   | Fair Value at |   |
|-------------------------------------------------------|--------|--------|--------|--------|---------------|--------|
|                                                  |   | Level  |   |   | September 30, |   |   | December 31, |   |
|                                                  | 2012   |   |   | 2011   |          |
|                                                  |   |   |   |   |          |   |   |   |   |
| Liabilities:                                          |   |   |   |   |          |   |   |   |   |
|   Long-term note, including current portion |   |   | 2      |   |          | $      | 417,123 |   |   | $ | 426,163 |   |
|                                                  |   |   |   |   |          |   |   |   |   |   |   |   |

----

----

----

----

----

----

| 31.01    | Certification pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.                                |
|----------|-----------------------------------------------------------------------------------------------------------------|
| 31.02    | Certification pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.                                |
| 32.01    | Certification Pursuant to 18 U.S.C. Section 1350, as pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
| 32.02    | Certification Pursuant to 18 U.S.C. Section 1350, as pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
| 101.INS* | XBRL Instance Document                                                                                          |
| 101.SCH* | XBRL Taxonomy Extension Schema                                                                                  |
| 101.CAL* | XBRL Taxonomy Extension Calculation Linkbase                                                                    |
| 101.DEF* | XBRL Taxonomy Extension Definition Linkbase                                                                     |
| 101.LAB* | XBRL Taxonomy Extension Labels Linkbase                                                                         |
| 101.PRE* | XBRL Taxonomy Extension Presentation Linkbase                                                                   |

|   | REO PLUS, INC. |
|--------|----------------|
|   | (Registrant)   |
|   |           |   |
|   |           |   |
|   | By:            | /s/ Richard J. Church |   |
|   |           | Richard J. Church, |
|   |           | President and Treasurer (PrincipalExecutive Officer, Principal Financial Officer and Principal Accounting Officer) |
|   |           |

----