UNITED STATESSECURITIES AND EXCHANGE COMMISSION

Washington,
D.C. 20549



Amendment
No. 1



To



FORM 10-K/T/A



| ̈ | ANNUAL REPORT
    PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
|- | --------------------------------------------------------------------------------------------



|þ | TRANSITION
    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | --------------------------------------------------------------------------------------------



For the transition
period from November 1, 2011 to December 31, 2011



Commission
File Number: 000-53881



PETROSONIC
ENERGY, INC.

(Exact name
of registrant as specified in its charter)



Nevada

(State
or other jurisdiction of

incorporation
or organization)



Suite
300, 714 – 1st Street SE, Calgary, AB, Canada T2G 2G8

(Address of
principal executive offices)



(403) 708-7869
(Issuer’s telephone number)



Securities registered
pursuant to Section 12(b) of the Act:



|Title
    of each class | Name
    of each exchange on which registered
|----------------------- | ---------------------------------------------
|None                    | None                                         



Securities
registered pursuant to Section 12(g) of the Act:



Common Stock,
par value $0.001 per share



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



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



Indicate by
check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.

YESxNO ̈



Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES  ̈ NO x



Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K. ̈



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 companyx



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

YES ̈NOx



The aggregate
market value of the voting common stock held by non-affiliates of the Registrant as of December 31, 2011: $2,792,215.



At December
31, 2011, there were 67,149,000 shares of the Registrant’s common stock outstanding.



DOCUMENTS
INCORPORATED BY REFERENCE



Exhibits incorporated by reference
are referred to under Part IV.











PETROSONIC
ENERGY, INC.

INDEX



|         |                                                                                                                  | Page
|-------- | ---------------------------------------------------------------------------------------------------------------- | ----
|PART 1   |                                                                                                                  |     
|         |                                                                                                                  |     
|Item 1   | Business                                                                                                         | 1   
|         |                                                                                                                  |     
|Item 1A  | Risk Factors                                                                                                     | 13  
|         |                                                                                                                  |     
|Item 2   | Properties                                                                                                       | 22  
|         |                                                                                                                  |     
|Item 3   | Legal Proceedings                                                                                                | 22  
|         |                                                                                                                  |     
|PART II  |                                                                                                                  |     
|         |                                                                                                                  |     
|Item 5   | Market for Registrant’s Common Equity, Related
    Stockholder Matters and Issuer Purchases of Equity Securities | 22  
|         |                                                                                                                  |     
|Item 6   | Selected Financial Data                                                                                          | 23  
|         |                                                                                                                  |     
|Item 7   | Management’s Discussion and Analysis of Financial
    Condition and Results of Operations                        | 23  
|         |                                                                                                                  |     
|Item 7A  | Quantitative and Qualitative Disclosures About Market
    Risk                                                   | 26  
|         |                                                                                                                  |     
|Item 8   | Financial Statements and Supplementary Data                                                                      | 26  
|         |                                                                                                                  |     
|Item 9   | Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure                         |     
|         |                                                                                                                  |     
|Item 9A  | Controls and Procedures                                                                                          | 26  
|         |                                                                                                                  |     
|Item 9B  | Other Information                                                                                                | 27  
|         |                                                                                                                  |     
|PART III |                                                                                                                  |     
|         |                                                                                                                  |     
|Item 10  | Directors, Executive Officers and Corporate Governance                                                           | 28  
|         |                                                                                                                  |     
|Item 11  | Executive Compensation                                                                                           | 31  
|         |                                                                                                                  |     
|Item 12  | Security Ownership of Certain Beneficial Owners and
    Management Related Stockholder Matters                   | 33  
|         |                                                                                                                  |     
|Item 13  | Certain Relationships and Related Transactions, and
    Director Independence                                    | 34  
|         |                                                                                                                  |     
|Item 14  | Principal Accountant Fees and Services                                                                           | 35  
|         |                                                                                                                  |     
|PART IV  |                                                                                                                  |     
|         |                                                                                                                  |     
|Item 15  | Exhibits and Financial Statement Schedules                                                                       | 37  
|         |                                                                                                                  |     
|         | Signatures                                                                                                       | 38  
|         |                                                                                                                  |     
|         | Exhibit Index                                                                                                    | 39  











EXPLANATORY
NOTE



On March
9, 2013 Petrosonic Energy, Inc. received a letter from the Securities and Exchange Commission relating to the Form 10-K for the
transition period from November 1, 2011 to December 31, 2011 that we filed on October 11, 2012 (the "Original Report").
The purpose of this amendment (“Amendment No. 1”) is to respond to the comment letter.



The disclosures
in Amendment No. 1 continue to speak as of the date of the Original Report, and do not reflect events occurring after the filing
of the Original Report. Accordingly, Amendment No. 1 should be read in conjunction with our other filings made with the Securities
and Exchange Commission subsequent to the filing of the Original Report and any other amendments to those filings. The filing
of Amendment No. 1 shall not be deemed to be an admission that the Original Report, when made, included any untrue statement of
a material fact or omitted to state a material fact necessary to make a statement not misleading.











CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS



This
document and the documents incorporated by reference herein contain 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 set forth under
the sections titled “Business”, “Risk Factors” and “Management’s Discussion and
Analysis of Financial Condition and Results of Operations.”



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 the sections titled “Business”,
“Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of
Operations,” 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 report. 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.



EXPLANATORY
NOTE



In August
2012 we filed a Current Report on Form 8-K to change our fiscal year end from October 31 to December 31 as the new fiscal year
is consistent with the fiscal year of our majority owned subsidiary, Petrosonic Albania Sha. Consequently, we are filing this
Transition Report on Form 10-K for the two-month transition period ended December 31, 2011.



PART I



References
to “we,” “our,” “us,” the “Company”, or the “Registrant” refer to
Petrosonic Energy, Inc. (previously Bearing Mineral Exploration, Inc.), a Nevada corporation and its majority-owned subsidiary,
Petrosonic Albania Sha, sometimes referred to as “Petrosonic Albania” or “Petrosonic”, a body corporate
under the laws of Albania. The outstanding capital stock of Petrosonic Albania is owned 60% by the Company and 40% by Albnafta,
a body corporate under the laws of Albania. Albnafta is wholly-owned by our Chief Executive Office and director, Art Agolli.



|ITEM 1. | 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 have been seeking other viable business opportunities for the Company.



On April
17, 2012, we issued 20,000,003 (post-split) shares of our common stock to Art Agolli, our sole officer and 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. Sonoro is the holder of all of the legal and equitable rights and
entitlements to a sonic reactor and technology that it developed for the treatment and upgrading of heavy oil by sonicated solvent
de-asphalting. Mr. Agolli owns approximately 1.8% of Sonoro's issued and outstanding shares of common stock (based on the number
of shares of common stock reported by Sonoro to be outstanding on December 31, 2011) and provides business development consulting
services to Sonoro.



1







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
our new business direction.



On July 27,
2012, we completed the acquisition of 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) certain machinery, including
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) CDN $250,000, which was paid in June 2012, (ii) a convertible debenture in the principal amount of CDN
$250,000, which was issued in July 2012  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 Purchase
Agreement contained customary representations, warranties, and conditions to closing. Pursuant to the Purchase Agreement, Sonoro
entered into a non-competition and non-solicitation agreement with us (the “Non-Compete Agreement”) and into a consulting
agreement (the “Consulting Agreement”). The Non-Compete Agreement has a term of 5 years. During that period, Sonoro
agrees that it will not compete with us in any business activity or transaction directly relating to the Assets anywhere in the
world save and except for in the Republic of Iraq. Sonoro also agrees that it will not solicit any employee, agent, salesperson,
contractor, customer, supplier or dealer of or to us as of the date of the Non-Compete Agreement, or within the one year prior
to the date of the Non-Compete Agreement, to leave, to stop selling to, or to stop buying from us or otherwise to cease dealing
with us. Pursuant to the Consulting Agreement, Sonoro agrees to make certain employees available to us on a part-time basis to
provide ongoing technical support to us for a period of one year. We agree to pay certain costs relating to travel from Canada
to Albania for the employees and to reimburse Sonoro for the salaries of the employees.



Contemporaneous
with the completion of the Transaction, we entered into a license agreement with Sonoro (the “Iraq License Agreement”)
for commercialization of the Company’s technology by Sonoro in the Republic of Iraq. The license is non-exclusive, royalty-free
and fully paid-up. The license lasts for the period that Sonoro uses our technology in the Republic of Iraq. The Iraq License
Agreement may be terminated by either party upon 30 days written notice if the other party materially violates any of the provisions
or conditions of the license and fails to discontinue or remedy such violation within the 30 day period or by either party immediately
if the other party becomes insolvent or unable to pay its debts as they mature, institutes a bankruptcy or insolvency proceeding
or has such a proceeding instituted against it which is not dismissed within 30 days, makes an assignment for the benefit of creditors,
or commences dissolution or liquidation proceedings.



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 audited financial statements of Petrosonic Albania Sha.
for the fiscal years ended December 31, 2011 and 2010 can be found in this Annual Report on Form 10-K/T under "Item 8. Financial
Statements and Supplementary Data". For accounting purposes, we have accounted for the Purchase Agreement using the purchase
method of accounting.



2







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.



Operation Plans and Business
Focus



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. Petrosonic has acquired 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%.



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
| | - | ----------------------



| | o | density adjustments
| | - | -------------------



| | o | high sulphur content
| | - | --------------------



| | o | high metals content
| | - | -------------------



It is
estimated that there are approximately 7.5 billion barrels of oil reserves present in Albania. Current production in Albania
is approximately 21,000 to 22,000 barrels of oil per day ("bopd"). (http://www.balkanalysis.com/albania/2012/02/05/albania-oil-industry-enjoys-revival-but-investor-government-relations-remain-a-question/)



We plan
to have our first 1,000 bopd stand-alone facility operational by the 3rd quarter of 2013 in Albania. If we are able to
successfully establish our first commercial facility, we believe heavy oil producers may then integrate the Petrosonic system
at their cost into their treatment facilities. Petrosonic would sell the process and retain a royalty fee under this type of
development. This strategy would allow for faster growth. Petrosonic may also choose to develop its own stand-alone
facilities.



Further upside
opportunities exist in several other applications which we are developing, including, heavy oil emulsification, waste oil separation
and oil separations from drill cuttings.



Vision and Strategy



| | · | The Company hopes to grow its business 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 facility 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 its processes to be integrated into a producer’s
    treatment facilities on a fee for service basis or royalty basis.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



3







| | · | 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 our technology.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Key Success Factors



The Company’s
success will be dependent upon:



| | · | our ability to attract and develop numerous projects
    once the our facility is complete;
| | - | -------------------------------------------------------------------------------------------



| | · | access to an ample producer oil supply and our
    ability to find equitable profit distribution;
| | - | -------------------------------------------------------------------------------------------------



| | · | 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.
| | - | -------------------------------------------------



We
are also considering selling the asphaltenes generated by our process. Asphaltenes are present in most petroleum materials, and
in all heavy oils and bitumens from oil sands. Asphaltenes can be used in road construction, waterproofing and roofing. Using
our technology, we can separate the asphaltenes from the oil being processed. We have undertaken third party testing of these
asphaltenes on a batch basis and, based on the results, we have had discussions with asphalt producers for potential contracts.
We are in the process of developing this business opportunity, although we have no customers for asphaltenes at this time and
we have no competitive presence in this market.



Priorities



Immediate priorities
of the Company are:



| | · | strengthening the
    operations and management of the Company as it moves forward in the oil sector;
| | - | -----------------------------------------------------------------------------------------------------



| | · | completing 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. 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.



4







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 approximately
equal to the remaining reserves of conventional (light) oil. According to a fact sheet issued in August 2003 by the U.S. Geological
Survey, the world oil reserves consist of approximately 2 trillion barrels of oil, approximately 53% of which are conventional
sources, 21% of which are heavy and extra-heavy sources and 32% of which are oil sands bitumen sources.(http://pubs.usgs.gov/fs/fs070-03/fs070-03.html)



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  |  |         | 
|South America |  |           | 265.7 |  |         | 
|Africa        |  |           | 7.2   |  |         | 
|Middle East   |  |           | 78.2  |  |         | 
|Asia          |  |           | 29.6  |  |         | 
|Russia        |  |           | 13.4  |  |         | 
|Western Hemi  |  |           | 301   |  |         | 
|Eastern Hemi  |  |           | 128.4 |  |         | 
|Worldwide*    |  |           | 429.4 |  |         | 



*Does not include extra-heavy
and oil sand sources of bitumen (i.e. Canada,Venezuela)

Source: US Geological
Survey



According
to the  U.S. 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.(https://www.rigzone.com/training/heavyoil/insight.asp?i_id=194)



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.(http://www.rigzone.com/training/insight_pf.asp?i_id=196)
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.



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.



According
to the article, "Oil and Gas Industry Investment in Alternative Energy, Frontier Hydrocarbons, and Advanced End-Use Technologies"
by Roger Donway, Thomas Tanton and Robert L. Bradley, Jr., which is located on the Institute for Energy Research website at www.instituteforenergyresearch.org/2006/05/01/oil-and-gas-industry-investments/,
the U.S. oil industry alone has invested $86 billion in “frontier hydrocarbons” since 2000, 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.



5







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.” (http://www.rigzone.com/training/insight_pf.asp?i_id=283)



Industry Trends in Production
and Transport of Heavy Oil



The market
factors behind Petrosonic's 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;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------



| | · | 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 the United States, Mexico, South America, Africa, Kazakhstan and other locations.



6







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 ("Canada's Oil Sands", Andrea Grant and Lynne C. Myers, November 17, 2004, page 1). The Athabasca
is the largest deposit area, located in the northeast part of Alberta. The total bitumen in place in Alberta is estimated at 1.6
trillion barrels (Id. at page 2).



In 2011 about
1.7 million barrels of oil per day were being produced from Alberta's oil sands. It is estimated that production will reach 2.1
million barrels per day by 2015. Approximately 170 billion barrels are estimated to be recoverable using current open pit mining
and in-situ technologies ("Economic Impacts of New Oil Sands Projects in Alberta" (2010-2035), Canadian Energy Research
Institute, May 2011).



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)are not only the world’s
largest capital project but now represent 60 per cent of the world’s investable oil reserves.  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.  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. By 2015, the Canadian Association of Petroleum Producers
predicts that oil sands production may total as much as three million barrels a day. ("Running Out of Steam: Oil Sands Development and Water Use in the Athabasca
River Watershed: Science and Market Based Solutions", Environmental Research and Studies Centre University of Alberta and
Munk Centre for International Studies at Trinity College University of Toronto, May 2007, page i.)



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, inasmuch as we believe that we would be able to separate the oil from the waste and sell the heavy
crude oil into the market.



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's 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
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------



7







| | · | Markets where upgrading asphalt by-products can
    command premium prices.  This is especially attractive in the United States,  given the economic infrastructure
    stimulus measures being implemented through the 2009 American Recovery and Reinvestment Act, which provides $105.3 billion
    for infrastructure investment.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



To take advantage
of these opportunities Petrosonic must be able to:



| | · | Economically upgrade heavy oil from small and
    medium sized producers;
| | - | -------------------------------------------------------------------------



| | · | 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



As noted
above, 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.



Petrosonic Test Data



Sonoro completed
an extensive test program of heavy oils both in house and independently with the complete upgrading process which has shown to
consistently achieve the target improvements in API. The tests were carried out in Sonoro's R&D site in Richmond, British
Columbia (in house). 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 U.S. refineries, and crude oil from two international
oil producers. The 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 Sonoro conducted. This is critical in establishing the
application of the Petrosonic process on a broad basis.



8







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   |  |                                            | 
|API Gravity             |  |             | 14.4   |  |                                            | 
|Density @15oC           |  |             | 0.9690 |  |                                            | 
|Nickel                  |  |             | 46     |  |                                            | 
|Vanadium                |  |             | 95     |  |                                            | 
|Sulphur                 |  |             | 3.62   |  |                                            | 



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                                        | 
|Aromatics    |  |             | 14.175 |  |                                              | 
|i-Paraffins  |  |             | 25.572 |  |                                              | 
|Naphthenes   |  |             | 30.728 |  |                                              | 
|Olefins      |  |             | 11.431 |  |                                              | 
|Paraffins    |  |             | 4.715  |  |                                              | 
|Oxygenates   |  |             | 0.000  |  |                                              | 
|Unidentified |  |             | 13.380 |  |                                              | 
|Plus         |  |             | 0.000  |  |                                              | 
|TOTAL        |  |             | 100.00 |  |                                              | 



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 reduction in the oil’s carbon number from C9/C10 to C7/C8, which indicates 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                                         | 
|C4       |  |             | 0.001  |  |                                               | 
|C5       |  |             | 0.060  |  |                                               | 
|C6       |  |             | 3.063  |  |                                               | 
|C7       |  |             | 17.245 |  |                                               | 
|C8       |  |             | 17.245 |  |                                               | 
|C9       |  |             | 29.209 |  |                                               | 
|C10      |  |             | 17.940 |  |                                               | 
|C11      |  |             | 1.511  |  |                                               | 
|C12      |  |             | -      |  |                                               | 
|C13      |  |             | -      |  |                                               | 
|C14      |  |             | -      |  |                                               | 
|>C15     |  |             | 13.726 |  |                                               | 
|TOTAL    |  |             | 100.00 |  |                                               | 



The following
table (Table 4) illustrates some of the data from the extensive test program that Sonoro conducted. This is critical in establishing
the application of the Petrosonic process on a broad basis.



9







Table 4



|           |  |          |  |  | Raw |      |  | Upgraded | 
|---------- |  | -------- |  |  | --- | ---- |  | -------- | 
|           |  |          |  |  |     |      |  |          | 
|           |  | Specific |  |  | API |      |  | Vanadium | 
|Country    |  | Source   |  |  |     |      |  | (g)      | 
|           |  |          |  |  |     |      |  |          | 
|Canada     |  | CP       |  |  |     | 10.6 |  |          | 
|Canada     |  | CDL      |  |  |     | 14.4 |  |          | 
|US (Texas) |  | TG       |  |  |     | 17.4 |  |          | 
|US (Texas) |  | TK       |  |  |     | 14.9 |  |          | 
|US (Texas) |  | TQ       |  |  |     | 11.2 |  |          | 
|Albania    |  | AB       |  |  |     | 10.8 |  |          | 
|Albania    |  | AD       |  |  |     | 10.2 |  |          | 
|Albania    |  | AM       |  |  |     | 21.0 |  |          | 
|Venezuela  |  | VP       |  |  |     | 9.4  |  |          | 
|US (Utah)  |  | US       |  |  |     | 14.5 |  |          | 
|           |  |          |  |  |     |      |  |          | 

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.



The Petrosonic
reactor, using its 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 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.



10







The Company
looks to maintain its initial technical advantage derived from the Petrosonic SonoprocessTM 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;
| | - | ---------------------------------------------------------------------------------------------



| | · | An  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; 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



Sonoro 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
Provisional and PCT Patent Applications



As part of
the transaction with Sonoro Energy, the Company has acquired the following heavy oil process provisional and PCT applications
based on the SonoprocessTM:



| | · | 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: This priority claim has expired.  The Company
    will appeal the expired priority claim to attempt to reinstate it, although there is no guarantee that the Company will be
    successful in its appeal.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



11







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.



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, and any changes and variations in either the solvent or the heavy oil will impact the overall ability to commission
the project. Our process relies on the availability of certain solvents such as light naphtha, pentane and LPGs. Light naphtha
and pentane are liquids and LPGs are liquefied gases and as such require different pressures and heat to be mixed with heavy crude
and recovered. In case the liquid solvents are not available for any reason in the jurisdiction in which we are operating, changing
from one solvent to the other will require some modifications to our equipment and process. These modifications may cause some
interruption or delays of the processing.



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 or other 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 SonoprocessingTM. 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.
| | - | ---------------------------------------------------------------------------------------------------------------------



12







| | · | 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, assuming the development of our business to sell asphaltenes,
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.



Employees



We have currently
2 full-time employees and 3 part-time employees, as well as 4 independent consultants. The consultants provide general business
services to us, such as assistance with regulatory matters, and engineering services. We plan to hire a Chief Financial Officer
and 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
will be subject to the environmental laws of Albania, the location of its processing facility. In accordance with these laws,
all companies that store and process hydrocarbons must apply for and receive an environmental permit issued by the Ministry of
the Environment and the local government where the plant is located. The Company has applied to both entities and expects to receive
the permit by the end of April 2013. Since the Company's process 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. Albania also requires the Company to obtain a fire safety permit. The Company plans to install all necessary equipment
required for anti-fire measures and regulations in the country.



Procurement of Equipment



The Company
will rely on a third party contractor to manufacture the sonicators and other related equipment according to its design and specifications.
The Company has received quotes from the third party manufacturer and expects that it will be able to obtain all the necessary
equipment to grow its processing capacity in the future. The manufacturer has the production and financial capability and capacity
to fulfill our orders in the future. In addition, the Company has access to several local and international fabricators and engineering
firms to carry out the necessary assembly of the equipment and increase capacity of its processing plant in the future.



|ITEM 1A. | RISK FACTORS
|-------- | ------------



You should
carefully consider the risks described below together with all of the other information included in this Form 10-K/T before making
an investment decision with regard to our securities. The statements contained in or incorporated into this Form 10-K/T that are
not statements of historic or present facts are forward-looking statements that are subject to risks and uncertainties that could
cause actual results to differ materially from those set forth in or implied by forward-looking statements. If any of the following
events described in these risk factors actually occurs, our business, financial condition or results of operations could be harmed.
In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.



13







Risks Related to our Business



We have incurred losses in prior
periods and may incur losses in the future.



Since our
inception on June 11, 2008 through December 31, 2011, we sustained $89,400 in net losses and we had a working capital deficit
at December 31, 2011 of $48,387. 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 uncertainties inherent in the establishment of a business
enterprise including, but not limited to, lack of operating capital, lack of skilled personnel and lack of demand for our process.  There
can be no assurance that we can execute our business plan, which involves implementing our process of converting heavy sour oil
and bitumen to a value-added synthetic crude oil. Even if we are successful in implementing our business plan, there is no assurance
that our 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.  We will also require additional financing to pay the fees and expenses necessary to operate as a public company.  We
will also need more funds if the costs of the development and operation of our existing technologies are greater than we
have anticipated.  We will also require additional financing to sustain our business operations if we are not successful
in earning revenues. We anticipate that we will need approximately $3 million during the next 12 months to sustain our business
operations, pay the fees and expenses of operating as a public company, complete the construction of our facility in Albania and
hire additional employees. We may not be able to obtain financing on commercially reasonable terms or terms that are acceptable
to us when it is required.  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.



The Company
was formed on June 11, 2008. 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.



Our auditors
have indicated that our recurring losses raise substantial doubt as to our ability to continue as a going concern.



Our audited
financial statements for the year ended December 31, 2011 were prepared on a going concern basis. We have suffered recurring losses
since inception and our auditors have indicated that there is substantial doubt as to our ability to continue as a going concern.
Until we earn revenues that are adequate to support our operations, which may never happen, our ability to maintain our status
as an operating company is entirely dependent upon obtaining adequate cash to finance our overhead and implement our business
plan. In order to meet our operating expenses, we have sold debt and equity securities and we expect to continue selling our securities
to raise money in the future. There is considerable uncertainty as to whether we will be able to obtain financing on terms acceptable
to us. There is no assurance that we will be able to implement our business plan or continue our operations.



14







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 are subject to
environmental and other laws and regulations that may expose us to significant liabilities and could reduce our business opportunities
and revenues.



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 anticipate 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.



15







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 intend to 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 be unable to recognize
our expected revenues from current and future contracts.



Our potential
customers, some of whom may be national oil companies, could 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 expect
to use significant amounts of raw materials (including steel and other metals, chemicals, plastics, polymers and energy inputs)
for producing our products and maintaining our 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 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.



16







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 may not provide adequate protection of
our intellectual property rights. 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.



Included
in the assets we received from Sonoro was an expired priority claim related to the application filed in the United States Patent
and Trademark Office, number 61/035690 titled, "Method for Treating Heavy Crude Oil". While we intend to appeal the
expiration of the claim, there is no guarantee that our appeal will be granted.



International and political events
may adversely affect our operations.



A significant
portion of our revenue will 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; and
| | - | --------------------------------------------------------------------------------------



| | · | governmental activities that may result in the inability
    to obtain or retain licenses required for operation.
| | - | -----------------------------------------------------------------------------------------------------------------



Due to the
unsettled political conditions in many oil-producing countries, our financial performance may be subject to the adverse consequences
of war, the effects of terrorism, civil unrest, strikes, currency controls, and governmental actions. We expect that some of our
potential customers’ operations will be 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.



17







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 national and local Albanian environmental, health, and safety regulations governing, among other
things, the generation, storage, handling, use, and transportation of petroleum and hazardous substances, the emission and discharge
of materials into the environment, waste management,  and the monitoring, reporting, and control of greenhouse
gas emissions. 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.



18







We may not have sufficient
crude oil to be able to run our Albanian facility at full capacity.



Our Albanian
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 Albanian facility,
we may not have sufficient crude oil to run the Albanian 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 permits and authorizations under various laws and regulations of Albania, 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 a shutdown of our facility. In addition, major modifications
of our operations could require modifications to our existing permits 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 realizes 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:



| | i)  | The Company’s management is relying on external
    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.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                   
| | ii) | As the Company is governed by one officer who is
    also a director, there is an inherent lack of segregation of duties and lack of independent governing board.                                                                                                                 



Achieving continued
compliance with Section 404 may require us to incur significant costs and expend significant 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.



19







Because our sole director
is not independent, he can make and control corporate decisions that may be disadvantageous to other common shareholders.



Our securities
are not listed on a national securities exchange or quoted on an inter-dealer quotation system that requires that directors be
independent. Using the definition of “independent” in Rule 5605 of the Rules of the Nasdaq Stock Market, we have determined
that our director is not independent. Our director has a significant influence in determining the corporate transactions we enter
into or other matters, including mergers, consolidations, and the sale of all or substantially all of our assets. The interest
of our director may differ from the interests of the other shareholders and thus result in corporate decisions that are disadvantageous
to other shareholders.



All of our assets, and our
sole officer and 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 sole director and officer.



All of our
assets are located outside the United States. In addition, our sole officer and 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 sole
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 sole director and officer.



Our business
is dependent on a key executive and the loss of any of our key 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 our key executive 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 shareholders
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 shareholders against our directors and officers even though such actions, if successful,
might otherwise benefit our company and shareholders.



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 shareholder’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.



20







FINRA sales practice requirements
may also limit a shareholder’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 “Over-the-Counter
Bulletin Board,” 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.



Shareholders
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.



21







If we issue additional shares in the future, it will result
in the dilution of our existing shareholders.



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. 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 shareholders. Further, such issuance may result in a change of control of our corporation.



| | ITEM 2. | PROPERTIES
| | ------- | ----------



Our head office is located at Suite
204, 205 – 9th Avenue SE, Calgary, AB, Canada, T2G 0R3. Our sole director is providing the office free of
charge in order to save costs until the Company can lease an office when requisite funding is in place. Our main telephone number
is (403) 708-7869.



Petrosonic Albania Sha has 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 being provided by Albnafta
free of charge until the Company signs a lease agreement when requisite funding is in place.



| | ITEM 3. | LEGAL PROCEEDINGS
| | ------- | -----------------



None.



PART II



|ITEM 5. | MARKET FOR REGISTANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|------- | -----------------------------------------------------------------------------------------------------------



Market Information



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 OTCBB during
the last two fiscal years. 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 bid price for our common stock, as reported on the OTCBB. The quotations below
reflect inter-dealer prices, without retail mark-up, markdown or commissions and may not represent actual transactions.



22







|                                       |  | High Bid    |  | Low Bid    
|-------------------------------------- |  | ----------- |  | -----------
|                                       |  |             |  |            
|Transition Period 11-01-11 to 12-01-11 |  | No activity |  | No activity



|Fiscal Year Ended                      |  | High Bid |      |  | Low Bid | 
|-------------------------------------- |  | -------- | ---- |  | ------- | 
|October 31, 2011                       |  |          |      |  |         | 
|                                       |  |          |      |  |         | 
|Fourth Quarter  08-1-11 to 10-31-11    |  |          | 1.05 |  |         | 
|Third Quarter    05-1-11 to 07-31-11   |  |          | 1.75 |  |         | 
|Second Quarter 02-1-11 to 04-30-11     |  |          | 0.85 |  |         | 
|First Quarter      11-1-10 to 01-31-11 |  |          | 0.90 |  |         | 



|Fiscal Year Ended                      |  | High Bid |      |  | Low Bid | 
|-------------------------------------- |  | -------- | ---- |  | ------- | 
|October 31, 2010                       |  |          |      |  |         | 
|                                       |  |          |      |  |         | 
|Fourth Quarter  08-1-10 to 10-31-10    |  |          | 0.65 |  |         | 
|Third Quarter    05-1-10 to 07-31-10   |  |          | 0.59 |  |         | 
|Second Quarter 02-1-10 to 04-30-10     |  |          | 0.45 |  |         | 
|First Quarter      11-1-09 to 01-31-10 |  |          | 0.15 |  |         | 



Shareholders



As at December 31, 2011 there were approximately
50 shareholders of record of our common stock based upon the shareholders’ listing provided by our transfer agent. Our transfer
agent 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.



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, which at December 31, 2011 was $89,400, currently limits our ability to pay
dividends.



Securities Authorized For Issuance Under Equity Compensation
Plans



We do not have any equity compensation plans
and accordingly we have no securities authorized for issuance thereunder.



Recent Sale of Unregistered Securities



We did not sell any equity securities
during the quarter ended December 31, 2011 that were not previously disclosed in a quarterly report on Form 10-Q or in a current
report on Form 8-K that was filed during the 2011 fiscal year.



| | ITEM 6. | SELECTED FINANCIAL DATA
| | ------- | -----------------------



Pursuant to Item 301(c) of Regulation S-K,
the Company, as a smaller reporting company, is not required to provide the information required by this item.



|ITEM 7. | 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 Form 10-K/T. 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 Business sections in this Form 10-K/T. 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.



23







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.



Overview



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.



Results of Activities



Two Months Ended December 31, 2011 as
compared to the two months ended December 31, 2010



We did not generate any revenue during
the two months ended December 31, 2011 or during the two months ended December 31, 2010. We had a net loss for the two months
ended December 31, 2011 of $3,022 compared to a net loss of $0 for the two months ended December 31, 2010.



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 versus 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. The change is explained below.



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 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.



24







Our cash needs are primarily for working
capital to develop our operations. We presently finance our operations through debt and equity financings. We presently operate
with minimum overhead costs and need to raise additional capital to fund any future plan of operations. The Company's management
is exploring 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 any financing, that will have a material adverse effect on our business and may force us to
cease operations.



Going Concern Uncertainties



As of the date of this annual report, there
is doubt regarding our ability to continue as a going concern as we have not generated sufficient cash flow to fund our business
operations and loan commitments. The financial statements included in this annual report have been prepared on the going concern
basis, which assumes that adequate sources of financing will be obtained as required and that our assets will be realized and liabilities
settled in the ordinary 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 shareholders.



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.



Critical Accounting Policies



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.



Recently Issued Accounting Pronouncements



The Company does not expect the adoption
of any recently issued accounting pronouncements to have a significant effect on its financial position or results of operations.



Contractual Obligations and Off-Balance Sheet Arrangements



As of December 31, 2011, we did not have
any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.



25







| | ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK.
| | -------- | -----------------------------------------------------------



Pursuant to Item 305(e) of Regulation S-K,
the Company, as a smaller reporting company, is not required to provide the information required by this item.





26









| | ITEM 8. | FINANCIAL
                                                                                             STATEMENTS AND SUPPLEMENTARY DATA
| | ------- | ----------------------------------------------------------------------------------------------------------------------------------------







INDEX TO FINANCIAL STATEMENTS AND SCHEDULES



PETROSONIC ENERGY, INC.

(Formerly Bearing Mineral Exploration,
Inc.)

(a Development Stage Company)



|                                                                                                                                                                                                                                                       | 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 Operations and Comprehensive Loss for the year
    ended December 31, 2011, the period from inception (May 24, 2010) through December 31, 2010 and the period from inception
    (May 24, 2010) through December 31, 2011                | F-4         
|Statements of Cash Flows for the year ended December 31, 2011,
    the period from inception (May 24, 2010) through December 31, 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, December 31, 2010 (unaudited),
    October 31, 2011 and October 31, 2010                                                                                                                                       | F-12        
|Statements of Operations for the two months ended December 31,
    2011, the two months ended December 31, 2010 (unaudited), 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 two months ended December 31, 2010 (unaudited), 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        





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 operations and comprehensive loss, stockholders’ equity, and cash flows for the year
ended December 31, 2011, the period from May 24, 2010 (inception) through 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 year ended December 31, 2011, the period from May
24, 2010 (inception) through December 31, 2010 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      |   |                       | $
|Valued-added taxes
    receivable                                                                    |  |                       | 86,136     |   |                       |  
|Total current assets                                                                                 |  |                       | 87,791     |   |                       |  
|                                                                                                     |  |                       |            |   |                       |  
|Property and equipment, net                                                                          |  |                       | 617,924    |   |                       |  
|                                                                                                     |  |                       |            |   |                       |  
|TOTAL ASSETS                                                                                         |  | $                     | 705,715    |   |                       | $
|                                                                                                     |  |                       |            |   |                       |  
|LIABILITIES & STOCKHOLDERS' EQUITY                                                                   |  |                       |            |   |                       |  
|Current liabilities                                                                                  |  |                       |            |   |                       |  
|Accounts payable                                                                                     |  | $                     | 204,176    |   |                       | $
|Total current liabilities                                                                            |  |                       | 204,176    |   |                       |  
|                                                                                                     |  |                       |            |   |                       |  
|Stockholders' equity:                                                                                |  |                       |            |   |                       |  
|Common stock, 100,000 shares authorized, $25.64 par value,
    100,000 shares issued and outstanding |  |                       | 2,564,000  |   |                       |  
|Additional paid-in capital                                                                           |  |                       | (2,028,950 | ) |                       |  
|Other comprehensive income                                                                           |  |                       | 1,607      |   |                       |  
|Deficit accumulated during the development
    stage                                                 |  |                       | (35,118    | ) |                       |  
|Total stockholders’ equity                                                                           |  |                       | 501,539    |   |                       |  
|                                                                                                     |  |                       |            |   |                       |  
|TOTAL LIABILITIES
    & STOCKHOLDERS' EQUITY                                                         |  | $                     | 705,715    |   |                       | $



See accompanying notes to the financial
statements.





F-3













|
|



Petrosonic Albania SHA.

(A Development Stage Company)

Statements of Operations and Comprehensive
Loss



|                                                               |  |              |           |   | May 24, 2010 |   |           | May 24, 2010 | 
|-------------------------------------------------------------- |  | ------------ | --------- | - | ------------ | - | --------- | ------------ | 
|                                                               |  |              |           |   | (Inception)  |   |           | (Inception)  | 
|                                                               |  | Year Ended   |           |   | through      |   |           | through      | 
|                                                               |  | December 31, |           |   | December 31, |   |           | December 31, | 
|                                                               |  | 2011         |           |   | 2010         |   |           | 2011         | 
|Operating Expenses:                                            |  |              |           |   |              |   |           |              | 
|General and administrative expenses                            |  | $            | 15,322    |   |              | $ | 19,796    |              | 
|                                                               |  |              |           |   |              |   |           |              | 
|Total operating expenses                                       |  |              | 15,322    |   |              |   | 19,796    |              | 
|                                                               |  |              |           |   |              |   |           |              | 
|Net loss                                                       |  | $            | (15,322   | ) |              | $ | (19,796   | )            | 
|                                                               |  |              |           |   |              |   |           |              | 
|Other Comprehensive Income:                                    |  |              |           |   |              |   |           |              | 
|Foreign currency translation adjustment                        |  |              | 1,538     |   |              |   | 69        |              | 
|Comprehensive loss                                             |  | $            | (13,784   | ) |              | $ | (19,727   | )            | 
|                                                               |  |              |           |   |              |   |           |              | 
|Net 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 financial
statements.





F-4











|
|



Petrosonic Albania SHA.

(A Development Stage Company)

Statements of Cash Flows



|                                                                                               |  |              |          |   | May 24, 2010 |   |          | May 24, 2010 | 
|---------------------------------------------------------------------------------------------- |  | ------------ | -------- | - | ------------ | - | -------- | ------------ | 
|                                                                                               |  |              |          |   | (Inception)  |   |          | (Inception)  | 
|                                                                                               |  | Year Ended   |          |   | through      |   |          | through      | 
|                                                                                               |  | December 31, |          |   | December 31, |   |          | December 31, | 
|                                                                                               |  | 2011         |          |   | 2010         |   |          | 2011         | 
|Cash flows from operating activities                                                           |  |              |          |   |              |   |          |              | 
|Net loss                                                                                       |  | $            | (15,322  | ) |              | $ | (19,796  | )            | 
|Adjustments to reconcile
    net loss to net cash provided by (used in)  operating activities: |  |              |          |   |              |   |          |              | 
|Changes in operating assets and liabilities:                                                   |  |              |          |   |              |   |          |              | 
|Receivables                                                                                    |  |              | (82,411  | ) |              |   | (3,725   | )            | 
|Accounts payable
    and accrued expenses                                                      |  |              | 204,176  |   |              |   | -        |              | 
|Net cash provided
    by (used in) operating activities                                        |  |              | 106,443  |   |              |   | (23,521  | )            | 
|                                                                                               |  |              |          |   |              |   |          |              | 
|Cash flows from investing activities                                                           |  |              |          |   |              |   |          |              | 
|Cash paid for purchase
    of property and equipment                                           |  |              | (438,833 | ) |              |   | (183,874 | )            | 
|Net cash used in investing
    activities                                                      |  |              | (438,833 | ) |              |   | (183,874 | )            | 
|                                                                                               |  |              |          |   |              |   |          |              | 
|Cash flows from financing activities                                                           |  |              |          |   |              |   |          |              | 
|Contributed capital                                                                            |  |              | 327,578  |   |              |   | 207,472  |              | 
|Net cash provided by financing activities                                                      |  |              | 327,578  |   |              |   | 207,472  |              | 
|                                                                                               |  |              |          |   |              |   |          |              | 
|Effect of exchange rate changes on cash                                                        |  |              | 6,321    |   |              |   | 69       |              | 
|                                                                                               |  |              |          |   |              |   |          |              | 
|Net increase in cash                                                                           |  |              | 1,509    |   |              |   | 146      |              | 
|Cash at the beginning of the year                                                              |  |              | 146      |   |              |   | -        |              | 
|Cash at the end of the year                                                                    |  | $            | 1,655    |   |              | $ | 146      |              | 
|                                                                                               |  |              |          |   |              |   |          |              | 
|Supplemental disclosures of cash flow information:                                             |  |              |          |   |              |   |          |              | 
|Cash paid for interest                                                                         |  | $            | -        |   |              | $ | -        |              | 
|Cash paid for income taxes                                                                     |  |              | -        |   |              |   | -        |              | 



See
accompanying notes to financial statements.







F-5









|
|



Petrosonic Albania SHA.

(A Development Stage Company)

STATEMENTS OF STOCKHOLDERS’ DEFICIT

May 24, 2010 (Inception) through December
31, 2011



|                                                         |  |              |         |  |            |   |           |               |  |   | Deficit     |   |  |               |      
|-------------------------------------------------------- |  | ------------ | ------- |  | ---------- | - | --------- | ------------- |  | - | ----------- | - |  | ------------- | -----
|                                                         |  |              |         |  |            |   |           |               |  |   | Accumulated |   |  |               |      
|                                                         |  |              |         |  | Additional |   |           | Other         |  |   | During      |   |  | Total         |      
|                                                         |  | Common Stock |         |  | Paid-in    |   |           | Comprehensive |  |   | Development |   |  | Stockholders’ |      
|                                                         |  | Shares       |         |  | Amount     |   |           | Capital       |  |   | Income      |   |  | Stage         |      
|Balance at May 24, 2010 (Inception)                      |  |              | -       |  |            | $ | -         |               |  | $ | -           |   |  | $             | -    
|                                                         |  |              |         |  |            |   |           |               |  |   |             |   |  |               |      
|Founders shares issued at inception                      |  |              | 40,000  |  |            |   | 1,025,600 |               |  |   | (1,025,600  | ) |  |               | -    
|                                                         |  |              |         |  |            |   |           |               |  |   |             |   |  |               |      
|Common stock issued to founders for license at inception |  |              | 60,000  |  |            |   | 1,538,400 |               |  |   | (1,538,400  | ) |  |               | -    
|                                                         |  |              |         |  |            |   |           |               |  |   |             |   |  |               |      
|Contributed capital                                      |  |              | -       |  |            |   | -         |               |  |   | 207,472     |   |  |               | -    
|                                                         |  |              |         |  |            |   |           |               |  |   |             |   |  |               |      
|Other comprehensive income                               |  |              | -       |  |            |   | -         |               |  |   | -           |   |  |               | 69   
|                                                         |  |              |         |  |            |   |           |               |  |   |             |   |  |               |      
|Net loss                                                 |  |              | -       |  |            |   | -         |               |  |   | -           |   |  |               | -    
|                                                         |  |              |         |  |            |   |           |               |  |   |             |   |  |               |      
|Balance at December 31, 2010                             |  |              | 100,000 |  |            | $ | 2,564,000 |               |  | $ | (2,356,528  | ) |  | $             | 69   
|                                                         |  |              |         |  |            |   |           |               |  |   |             |   |  |               |      
|Contributed capital                                      |  |              | -       |  |            |   | -         |               |  |   | 327,578     |   |  |               | -    
|                                                         |  |              |         |  |            |   |           |               |  |   |             |   |  |               |      
|Other comprehensive income                               |  |              | -       |  |            |   | -         |               |  |   | -           |   |  |               | 1,538
|                                                         |  |              |         |  |            |   |           |               |  |   |             |   |  |               |      
|Net loss                                                 |  |              | -       |  |            |   | -         |               |  |   | -           |   |  |               | -    
|                                                         |  |              |         |  |            |   |           |               |  |   |             |   |  |               |      
|Balance at December 31, 2011                             |  |              | 100,000 |  |            | $ | 2,564,000 |               |  | $ | (2,028,950  | ) |  | $             | 1,607



See
accompanying notes to financial statements.





F-6











|
|



PETROSONIC ALBANIA SHA.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS





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. The Company has not recognized depreciation since inception as none of the
Company’s property and equipment was available and ready for use (see Note 3).





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 – Property and equipment,
net



During 2011 and 2010, all of the Company’s
property and equipment consisted of construction in progress. During 2011 and 2010, the Company was in the process of constructing
buildings and production lines. The production lines consist of machinery and equipment.



Property and equipment consisted of
the following as of December 31, 2011 and 2010:



|                                                       |  | December 31, |        
|------------------------------------------------------ |  | ------------ | -------
|                                                       |  | 2011         |        
|                                                       |  |              |        
|Construction in progress
    - machinery and equipment |  |              | 495,985
|Construction in progress - buildings                   |  |              | 121,939
|                                                       |  | $            | 617,924



Depreciation was not recorded against
the property and equipment during 2011 and 2010 because it was not ready for use. The buildings were completed during 2012 and
the production lines consisting of the property and equipment are expected to be completed during 2013.



Note 4 - Related party transactions



During 2010, shareholders contributed
$207,472 in cash primarily for the purchase of machinery and equipment. During 2011, shareholders contributed $327,578 in cash
primarily for the purchase of machinery and equipment and for the construction of buildings to house the Company’s production
line, which is being constructed by the Company in Albania.





F-9









Note 5 - 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 subsequently received a refund of this tax amount from the government of Albania.



Note 6 - Stockholders’ equity



Common stock



The Company has 100,000 common shares
authorized with a par value of $25. 64.



At inception, Sonoro Energy Ltd. was
issued 60,000 common shares, representing a 60% ownership interest in the Company, in exchange for Sonoro’s heavy oil technology
license. The fair value of the shares at inception was determined to be nominal and Company recorded the acquisition cost of the
license at $-0-, which reflected Sonoro Energy Ltd.’s basis in the license.



At inception, Albnafta Shpk was issued
40,000 common shares, representing a 40% ownership interest in the Company. The shares were valued at $0 as their fair value at
inception was determined to be nominal. From inception through December 31, 2011, Albnafta Shpk contributed an aggregate of $117,067
which is included in the total shareholder contributions disclosed in Note 4. Albnafta Shpk is owned 100% by Art Agolli.





F-10









Note 7 - Commitments and contingencies



Operating lease



Total rent expense for 2011 and 2010 was
$9,209 and $0, respectively.



Note 8 - 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  |   |                   | $
|                                  |  |                   |        |   |                   |  
|Valuation allowance               |  |                   | (3,512 | ) |                   |  
|                                  |  |                   |        |   |                   |  
|Total                             |  |                   | -      |   |                   |  





F-11













|
|



REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM



To the Board of Directors

Petrosonic Energy, Inc.

(formerly Bearing Mineral Exploration, Inc.)

(a Development Stage Company)

Calgary, Canada



We have audited the accompanying balance
sheets of Petrosonic Energy, Inc. (formerly Bearing Mineral Exploration, Inc.) (a development stage company) (the “Company”)
as of December 31, 2011 and October 31, 2011 and 2010 and the related statements of operations, stockholders’ deficit, and
cash flows for the two months ended December 31, 2011, the years ended October 31, 2011 and 2010 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 two months ended December 31, 2011, the
years ended October 31, 2011 and 2010 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-12













|
|



|PETROSONIC ENERGY, INC.                     
|--------------------------------------------
|(Formerly Bearing Mineral Exploration, Inc.)
|(A Development Stage Company)               
|BALANCE SHEETS                              



|                                                                                                            |  | December 31, |         |   | December 31, |   |         | October 31, |  |   | October 31, |  
|----------------------------------------------------------------------------------------------------------- |  | ------------ | ------- | - | ------------ | - | ------- | ----------- |  | - | ----------- | -
|                                                                                                            |  | 2011         |         |   | 2010         |   |         | 2011        |  |   | 2010        |  
|                                                                                                            |  |              |         |   | (Unaudited)  |   |         |             |  |   |             |  
|ASSETS                                                                                                      |  |              |         |   |              |   |         |             |  |   |             |  
|Current Assets:                                                                                             |  |              |         |   |              |   |         |             |  |   |             |  
|Cash                                                                                                        |  | $            | 378     |   |              | $ | 2,340   |             |  | $ | 3,310       |  
|                                                                                                            |  |              |         |   |              |   |         |             |  |   |             |  
|Total Assets                                                                                                |  | $            | 378     |   |              | $ | 2,340   |             |  | $ | 3,310       |  
|                                                                                                            |  |              |         |   |              |   |         |             |  |   |             |  
|LIABILITIES AND STOCKHOLDERS' DEFICIT                                                                       |  |              |         |   |              |   |         |             |  |   |             |  
|Current Liabilities:                                                                                        |  |              |         |   |              |   |         |             |  |   |             |  
|Accounts payable                                                                                            |  | $            | 4,515   |   |              | $ | 2,331   |             |  | $ | 2,175       |  
|Accrued liabilities                                                                                         |  |              | 2,250   |   |              |   | 4,500   |             |  |   | 4,500       |  
|Advance from shareholder                                                                                    |  |              | 42,000  |   |              |   | 28,000  |             |  |   | 42,000      |  
|Total Current Liabilities                                                                                   |  |              | 48,765  |   |              |   | 34,831  |             |  |   | 48,675      |  
|                                                                                                            |  |              |         |   |              |   |         |             |  |   |             |  
|Stockholders’ Deficit:                                                                                      |  |              |         |   |              |   |         |             |  |   |             |  
|Common stock, 843,750,000 shares authorized, $0.001
    par value, 67,149,000 shares issued and outstanding |  |              | 67,149  |   |              |   | 67,149  |             |  |   | 67,149      |  
|Additional paid-in capital                                                                                  |  |              | (26,136 | ) |              |   | (26,136 | )           |  |   | (26,136     | )
|Deficit accumulated during
    the development stage                                                        |  |              | (89,400 | ) |              |   | (73,504 | )           |  |   | (86,378     | )
|Total Stockholders'
    Deficit                                                                             |  |              | (48,387 | ) |              |   | (32,491 | )           |  |   | (45,365     | )
|                                                                                                            |  |              |         |   |              |   |         |             |  |   |             |  
|Total Liabilities and Stockholders'
    Deficit                                                             |  | $            | 378     |   |              | $ | 2,340   |             |  | $ | 3,310       |  



See accompanying notes to the financial
statements.





F-13











|
|



|PETROSONIC ENERGY, INC.                     
|--------------------------------------------
|(Formerly Bearing Mineral Exploration, Inc.)
|(A Development Stage Company)               
|STATEMENTS OF OPERATIONS                    



|                                              |  | November 1,      |            |   | November 1,      |   |            |                 |  |   | June 11, 2008    |  
|--------------------------------------------- |  | ---------------- | ---------- | - | ---------------- | - | ---------- | --------------- |  | - | ---------------- | -
|                                              |  | 2011             |            |   | 2010             |   |            |                 |  |   | (Inception)      |  
|                                              |  | through          |            |   | through          |   |            | Years Ended     |  |   | through          |  
|                                              |  | December
    31, |            |   | December
    31, |   |            | October
    31, |  |   | December
    31, |  
|                                              |  | 2011             |            |   | 2010             |   |            | 2011            |  |   | 2010             |  
|                                              |  |                  |            |   | (Unaudited)      |   |            |                 |  |   |                  |  
|                                              |  |                  |            |   |                  |   |            |                 |  |   |                  |  
|OPERATING EXPENSES                            |  |                  |            |   |                  |   |            |                 |  |   |                  |  
|General
    and administrative expenses       |  | $                | 3,022      |   |                  | $ | -          |                 |  | $ | 12,874           |  
|Total Operating
    Expenses                  |  |                  | 3,022      |   |                  |   | -          |                 |  |   | 12,874           |  
|                                              |  |                  |            |   |                  |   |            |                 |  |   |                  |  
|NET LOSS                                      |  | $                | (3,022     | ) |                  | $ | -          |                 |  | $ | (12,874          | )
|                                              |  |                  |            |   |                  |   |            |                 |  |   |                  |  
|NET 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 financial
statements.





F-14













|
|



PETROSONIC
ENERGY, INC.

(Formerly Bearing Mineral Exploration,
Inc.)

(A Development Stage Company)

STATEMENTS OF STOCKHOLDERS’
DEFICIT

June 11, 2008 (Inception) through
December 31, 2011







|                                                                     |  | Common Stock |            |  | Additional Paid-in |   |        | Deficit Accumulated During the
    Development |  |   |         |  
|-------------------------------------------------------------------- |  | ------------ | ---------- |  | ------------------ | - | ------ | ---------------------------------------------- |  | - | ------- | -
|                                                                     |  | Shares       |            |  | Amount             |   |        | Capital                                        |  |   | Stage   |  
|                                                                     |  |              |            |  |                    |   |        |                                                |  |   |         |  
|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 | )
|                                                                     |  |              |            |  |                    |   |        |                                                |  |   |         |  
|Shares issued for cash on September 19, 2008 at $0.0008889 per share |  |              | 29,137,688 |  |                    |   | 29,138 |                                                |  |   | (3,238  | )
|                                                                     |  |              |            |  |                    |   |        |                                                |  |   |         |  
|Shares issued for cash on October 6, 2008 at $0.0133339 per share    |  |              | 886,124    |  |                    |   | 886    |                                                |  |   | 10,927  |  
|                                                                     |  |              |            |  |                    |   |        |                                                |  |   |         |  
|Net loss for the year                                                |  |              | -          |  |                    |   | -      |                                                |  |   | -       |  
|                                                                     |  |              |            |  |                    |   |        |                                                |  |   |         |  
|Balance, October 31, 2008                                            |  |              | 67,149,000 |  |                    |   | 67,149 |                                                |  |   | (26,136 | )
|                                                                     |  |              |            |  |                    |   |        |                                                |  |   |         |  
|Net loss for the year                                                |  |              | -          |  |                    |   | -      |                                                |  |   | -       |  
|                                                                     |  |              |            |  |                    |   |        |                                                |  |   |         |  
|Balance, October 31, 2009                                            |  |              | 67,149,000 |  |                    |   | 67,149 |                                                |  |   | (26,136 | )
|                                                                     |  |              |            |  |                    |   |        |                                                |  |   |         |  
|Net loss for the year                                                |  |              | -          |  |                    |   | -      |                                                |  |   | -       |  
|                                                                     |  |              |            |  |                    |   |        |                                                |  |   |         |  
|Balance, October 31, 2010                                            |  |              | 67,149,000 |  |                    |   | 67,149 |                                                |  |   | (26,136 | )
|                                                                     |  |              |            |  |                    |   |        |                                                |  |   |         |  
|Net loss for the two months ended December
    31, 2010 (unaudited)  |  |              | -          |  |                    |   | -      |                                                |  |   | -       |  
|                                                                     |  |              |            |  |                    |   |        |                                                |  |   |         |  
|Balance, December 31, 2010                                           |  |              | 67,149,000 |  |                    |   | 67,149 |                                                |  |   | (26,136 | )
|                                                                     |  |              |            |  |                    |   |        |                                                |  |   |         |  
|Net loss for the 10 months ended October 31, 2011                    |  |              | -          |  |                    |   | -      |                                                |  |   | -       |  
|                                                                     |  |              |            |  |                    |   |        |                                                |  |   |         |  
|Balance, October 31, 2011                                            |  |              | 67,149,000 |  |                    |   | 67,149 |                                                |  |   | (26,136 | )
|                                                                     |  |              |            |  |                    |   |        |                                                |  |   |         |  
|Net loss for the two month period ended December 31, 2011            |  |              | -          |  |                    |   | -      |                                                |  |   | -       |  
|                                                                     |  |              |            |  |                    |   |        |                                                |  |   |         |  
|Balance, December 31, 2011                                           |  |              | 67,149,000 |  |                    | $ | 67,149 |                                                |  | $ | (26,136 | )



See
accompanying notes to the financial statements.





F-15











|
|



|PETROSONIC ENERGY, INC.                     
|--------------------------------------------
|(Formerly Bearing Mineral Exploration, Inc.)
|(A Development Stage Company)               
|STATEMENTS OF CASH FLOWS                    



|                                             |  | November 1,      |        |   | November 1,      |   |       |             |  |   | June 11, 2008    |  
|-------------------------------------------- |  | ---------------- | ------ | - | ---------------- | - | ----- | ----------- |  | - | ---------------- | -
|                                             |  | 2011             |        |   | 2010             |   |       |             |  |   | (Inception)      |  
|                                             |  | through          |        |   | through          |   |       | Years Ended |  |   | through          |  
|                                             |  | December
    31, |        |   | December
    31, |   |       | October 31, |  |   | December
    31, |  
|                                             |  | 2011             |        |   | 2010             |   |       | 2011        |  |   | 2011             |  
|                                             |  |                  |        |   | (Unaudited)      |   |       |             |  |   |                  |  
|CASH FLOWS FROM OPERATING ACTIVITIES:        |  |                  |        |   |                  |   |       |             |  |   |                  |  
|                                             |  |                  |        |   |                  |   |       |             |  |   |                  |  
|Net loss                                     |  | $                | (3,022 | ) |                  | $ | -     |             |  | $ | (12,874          | )
|                                             |  |                  |        |   |                  |   |       |             |  |   |                  |  
|Changes in operating assets and liabilities: |  |                  |        |   |                  |   |       |             |  |   |                  |  
|Accounts payable and accrued liabilities     |  |                  | 90     |   |                  |   | -     |             |  |   | (156             | )
|Prepaid expenses                             |  |                  | -      |   |                  |   | -     |             |  |   | -                |  
|                                             |  |                  |        |   |                  |   |       |             |  |   |                  |  
|Net Cash Used In Operating Activities        |  |                  | (2,932 | ) |                  |   | -     |             |  |   | (13,030          | )
|                                             |  |                  |        |   |                  |   |       |             |  |   |                  |  
|CASH FLOWS FROM FINANCING ACTIVITIES:        |  |                  |        |   |                  |   |       |             |  |   |                  |  
|                                             |  |                  |        |   |                  |   |       |             |  |   |                  |  
|Net advances from shareholder                |  |                  | -      |   |                  |   | -     |             |  |   | 14,000           |  
|Proceeds from issuance
    of common stock   |  |                  | -      |   |                  |   | -     |             |  |   | -                |  
|                                             |  |                  |        |   |                  |   |       |             |  |   |                  |  
|Net Cash Provided By Financing Activities    |  |                  | -      |   |                  |   | -     |             |  |   | 14,000           |  
|                                             |  |                  |        |   |                  |   |       |             |  |   |                  |  
|NET (DECREASE) INCREASE IN CASH              |  |                  | (2,932 | ) |                  |   | -     |             |  |   | 970              |  
|                                             |  |                  |        |   |                  |   |       |             |  |   |                  |  
|CASH, BEGINNING OF PERIOD                    |  |                  | 3,310  |   |                  |   | 2,340 |             |  |   | 2,340            |  
|                                             |  |                  |        |   |                  |   |       |             |  |   |                  |  
|CASH, END OF PERIOD                          |  | $                | 378    |   |                  | $ | 2,340 |             |  | $ | 3,310            |  



See accompanying
notes to the financial statements.





F-16













|
|



|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-17













|
|



|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-18











|
|



|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  |   |                             | 
|Valuation allowance change            |  |                                | (13,410 | ) |                             | 
|                                      |  |                                |         |   |                             | 
|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) CDN$250,000,
(ii) a convertible debenture in the principal amount of CDN$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-19

















| | ITEM 9A. | CONTROLS AND PROCEDURES
| | -------- | -----------------------



Evaluation of Disclosure Controls and Procedures



Under the supervision and with the participation
of our management, including the Principal Executive Officer/Principal Financial Officer, we have evaluated the effectiveness
of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this
report. Based on that evaluation, the Principal Executive Officer/Principal Financial Officer has concluded that our disclosure
controls and procedures are not effective, due to the deficiencies in our internal controls over financial reporting described
below.



Management’s Report on Internal Control over Financial
Reporting



Our management is responsible for establishing
and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). The
Company’s internal control over financial reporting is a process designed to provide reasonable assurance to our management
and Board of Directors regarding the reliability of financial reporting and the preparation of the financial statements for external
purposes in accordance with accounting principles generally accepted in the United States of America.



Our internal control over financial reporting
includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted
in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations
of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial
statements.



Because of its inherent limitations, internal
controls over financial reporting may not prevent or detect misstatements. All internal control systems, no matter how well designed,
have inherent limitations, including the possibility of human error and the circumvention of overriding controls. Accordingly,
even effective internal control over financial reporting can provide only reasonable assurance with respect to financial statement
preparation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.



Our management assessed the effectiveness
of our internal control over financial reporting as of December 31, 2011. In making this assessment, it used the criteria set forth
by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework.
Based on our assessment, as of December 31, 2011, management has concluded that the Company’s internal controls over financial
reporting were not operating effectively. This was due to deficiencies that existed in the design or operation of our internal
controls over financial reporting that adversely affected our internal control and may be considered to be material weaknesses.



| | 1. | We do not have an Audit Committee – While not being legally obligated to have an audit committee, it is the management’s
view that such a committee, including a financial expert member, is an utmost important entity level control over our financial
statements. To date we have not established an audit committee.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



27







| | 2. | Insufficient documentation of financial statement preparation and review procedures - We employ policies and procedures in
reconciliation of the financial statements and the financial information based on which the financial statements are prepared,
however, the controls and policies we employ are not sufficiently documented.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. | We did not maintain proper segregation of duties for the preparation of our financial statements – As of December 31,
2011 the majority of the preparation of financial statements was carried out by one person. This has resulted in several deficiencies
including:
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a. | Significant, non-standard journal entries were prepared and approved by the same person, without being checked or approved
by any other personnel.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------



| | b. | Lack of control over preparation of financial statements, and proper application of accounting policies.
| | -- | --------------------------------------------------------------------------------------------------------



| | 4. | We lack sufficient information technology controls and procedures – As of December 31, 2011, we lacked a proper data
back up procedure, and while backup did take place in actuality, we believe that it was not regulated by methodical and consistent
activities and monitoring.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The foregoing material weaknesses identified
in our internal control over financial reporting and disclosure controls and procedures were identified in December 2011 by external
consultants responsible for the preparation of our financial reporting package. Management believes that the aforementioned material
weaknesses did not impact our financial reporting or result in a material misstatement of our financial statements.



This annual report does not include an attestation
report of our registered public accounting firm regarding internal control over financial reporting. We are not required to provide
an attestation report by our registered public accounting firm pursuant to the rules of the Securities and Exchange Commission.



As of December 31, 2011 we have not
taken action to correct the material weaknesses identified in our internal control over financial reporting. Once the Company
is engaged in a business of merit and has sufficient personnel available, then our Board of Directors, in connection with the
aforementioned weaknesses, will implement the following remediation measures:



| | 1. | Our Board of Directors will nominate an audit committee and
                                                              audit committee financial expert.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | We will appoint additional personnel to assist with the preparation of our financial statements, which will allow for proper
segregation of duties as well as additional manpower for proper documentation.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. | We will engage in a thorough review and restatement of our information technology control procedures, in addition to procurement
of all hardware and software that will enable us to maintain proper backups, access, control etc.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Changes in Internal Control over Financial Reporting



There were no changes in our internal control
over financial reporting during the fiscal year ended December 31, 2011 that have materially affected, or are reasonably likely
to materially affect, our internal control over financial reporting.



| | ITEM 9B. | OTHER INFORMATION
| | -------- | -----------------



We do not have any information that was
required to be reported on Form 8-K during the quarter ended December 31, 2011.



28







PART III



| | ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
| | -------- | ------------------------------------------------------



The following table sets forth certain information
for each executive officer of the Company.



|Name       |  | Age |  | Title                                                                                                                         
|---------- |  | --- |  | ------------------------------------------------------------------------------------------------------------------------------
|           |  |     |  |                                                                                                                               
|Art Agolli |  | 41  |  | President, Principal Executive and Principal Financial Officer, Secretary/Treasurer, Principal Accounting Officer and Director



Art Agolli – President, Chief Executive Officer, Chief
Financial Officer, Director (appointed March 2012)



Mr. Agolli has more than 16 years of
successful experience in developing heavy oil projects. Since February 2009 he has been the CEO of BA Capital, a Calgary based
merchant bank serving the energy, mining and technology sectors, which he founded. Mr. Agolli currently devotes approximately
20% of his time to providing services to BA Capital.



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 a start up in April 2004 to a company with a $2.3 billion market capitalization when
he left in August 2008. Bankers Petroleum has a 100% working interest and is the operator of the largest onshore heavy oil field
in Europe (Albania). As a consultant to BNK Petroleum, a Toronto Stock Exchange listed company that was spun off from Bankers
Petroleum in 2008, Mr. Agolli played a key role in that company’s entry into Poland. BNK Petroleum now has one of the largest
shale gas land positions in the country and in Europe. BNK Petroleum grew from a start-up to a company with a $700 million market
capitalization. From September 2008 through July 2009, Mr. Agolli was Executive Vice President of Business Development for Stream
Oil and Gas Ltd., an emerging oil and gas exploration company.



Mr. Agolli was also one of the
founders of Sonoro Energy Ltd., a TSX listed company. From time to time, Mr. Agolli provides services as a consultant to
Sonoro Energy Ltd. Sonoro has exclusive rights to development of all heavy oil in Salah ad
Din Province in Iraq. From 1998-2001, Mr. Agolli was an international business and corporate development executive with
Koch Industries Inc., the largest privately held company in North America. From March 2001 to December 2003 he was CEO 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
in Michigan and an International Relations and Business Degree from the same university. He is a member of the Association of
International Petroleum Negotiators headquartered in Houston, Texas.



Mr. Agolli's knowledge of the energy
market and his entrepreneurial experience led us to the conclusion that he should be appointed as a director.



Terms of Office



In accordance with the Company’s
bylaws and the provisions of the Nevada Revised Statutes, the Company’s directors are appointed until the next annual general
meeting of the Company’s stockholders, when their successors are elected, or until their resignation or removal from office.



The Company’s officers are appointed
by the Company’s Board of Directors and hold office until removed by the Board.



Involvement in Certain Legal Proceedings



During the past ten years, no director,
executive officer, significant employee or control person of the Company has been the subject of the following events:



29







| | 1. | A petition under the Federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent
or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general
partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive
officer at or within two years before the time of such filing;
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | Convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and
other minor offenses);
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. | The subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining him from, or otherwise limiting, the following activities;
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | i) | Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator,  floor
broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or anassociated
person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person,
director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing
any conduct or practice in connection with such activity;
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ii) | Engaging in any type of business practice; or
| | --- | ---------------------------------------------



| | iii) | Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation
of Federal or State securities laws or Federal commodities laws;
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4. | The subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority
barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in
paragraph 3.i in the preceding paragraph or to be associated with persons engaged in any such activity;
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 5. | Was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State
securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended,
or vacated;
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 6. | Was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated
any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not
been subsequently reversed, suspended or vacated;
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 7. | Was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not
subsequently reversed, suspended or vacated, relating to an alleged violation of:
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | i) | Any Federal or State securities or commodities law or regulation; or
| | -- | --------------------------------------------------------------------



| | ii) | Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or
permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order,
or removal or prohibition order, or
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | iii) | Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
| | ---- | --------------------------------------------------------------------------------------------------------



| | 8. | Was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory
organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in
Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization
that has disciplinary authority over its members or persons associated with a member.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



30







Family Relationships



There are no family relationships between
or among the directors and executive officers.



Committees of the Board and Financial Expert



Our Board of Directors held no formal meetings
during the 12 month period ended December 31, 2011. All proceedings of the Board of Directors were conducted by resolutions consented
to in writing by the directors and filed with the minutes of the proceedings of the directors. Such resolutions consented to in
writing by the directors entitled to vote on that resolution at a meeting of the directors are, according to the Nevada Revised
Statutes and the bylaws of our company, as valid and effective as if they had been passed at a meeting of the directors duly called
and held. We do not presently have a policy regarding director attendance at meetings.



We do not currently have standing audit,
nominating or compensation committees, or committees performing similar functions. Due to the size of our Board, our Board of
Directors believes that it is not necessary to have standing nominating or compensation committees at this time because the functions
of such committees are adequately performed by our Board of Directors. We do not have a nominating or compensation committee charter
as we do not currently have such committees. We do not have a policy for electing members to the Board. Art Agolli is not an independent
director.



Mr. Agolli cannot be considered an “audit
committee financial expert” as defined in Item 401 of Regulation S-K. The Company does not presently have, among its officers
and directors, a person meeting these qualifications and given our financial circumstances, does not anticipate seeking an audit
committee financial expert to join the Board in the foreseeable future.



Since inception on June 11, 2008, our Board
of Directors have conducted their business entirely by consent resolutions and have not met, as such.



It is anticipated that the Board of Directors
will form separate audit, compensation and nominating committees at such time as the Company’s operations have expanded.



Nominations to the Board of Directors



Our directors take a critical role in guiding
our strategic direction and oversee the management of the Company. Board candidates are considered based upon various criteria,
such as their broad-based business and professional skills and experiences, a global business and social perspective, concern for
the long-term interests of the stockholders, diversity, and personal integrity and judgment.



In addition, directors must have time available
to devote to Board activities and to enhance their knowledge in the growing business. Accordingly, we seek to attract and retain
highly qualified directors who have sufficient time to attend to their substantial duties and responsibilities to the Company.



In carrying out its responsibilities, the
Board will consider candidates suggested by stockholders. If a stockholder wishes to formally place a candidate’s name in
nomination, however, he or she must do so in accordance with the provisions of the Company’s Bylaws.



Compensation Committee Interlocks and
Insider Participation



No interlocking
relationship exists between our Board of Directors and the Board of Directors or compensation committee of any other company,
nor has any interlocking relationship existed in the past.



Section 16(a) Beneficial Ownership Reporting
Compliance



Based solely upon a
review of Forms 3, 4 and 5 delivered to us as filed with the Securities Exchange Commission, our executive officers and directors,
and persons who own more than 10% of our Common Stock timely filed all required reports pursuant to Section 16(a) of the Securities
Exchange Act.



31







Code of Ethics



We have adopted a code of ethics that applies
to our executive officers, including our principal executive, principal financial and accounting officers. Our code of ethics is
included as an exhibit to our annual report on Form 10-K for the year ended October 31, 2009. Our code of ethics is hereby incorporated
by reference.



|ITEM 11. | EXECUTIVE COMPENSATION
|-------- | ----------------------



Executive Compensation - Executive Officers



The following summary compensation table
covers all compensation awarded to, earned by or paid to our principal executive officer and each of the other two highest paid
executive officers, if any, whose total compensation exceeded $100,000 during the two months ended December 31, 2011 and the fiscal
year ended October 31, 2011.



Summary Compensation
Table



|Name and Principal Position                                                       |  | Year |            |  | Salary |   |   | Bonus |  |   | Stock
Awards |  |  | Option
Awards |   |  | Non-Equity Incentive Plan Compensation |   |   | All Other Compensation |  |   | Total (1) | 
|--------------------------------------------------------------------------------- |  | ---- | ---------- |  | ------ | - | - | ----- |  | - | ------------ |  |  | ------------- | - |  | -------------------------------------- | - | - | ---------------------- |  | - | --------- | 
|                                                                                  |  |      |            |  |        |   |   |       |  |   |              |  |  |               |   |  |                                        |   |   |                        |  |   |           | 
|Art Agolli                                                                        |  |      | 12/31/2011 |  |        | $ | 0 |       |  | $ | 0            |  |  | $             | 0 |  |                                        | $ | 0 |                        |  | $ | 0         | 
|Chief Executive Officer, Chief Financial Officer, Director (appointed March 2012) |  |      | 10/31/11   |  |        | $ | 0 |       |  | $ | 0            |  |  | $             | 0 |  |                                        | $ | 0 |                        |  | $ | 0         | 

____________________________



| | (1) | The dollar value in this column for each named executive officer
                                                           represents the sum of all compensation reflected in the previous columns.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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 executive officer and the manner and amount of his compensation has not yet been determined.



Securities Authorized for Issuance Under Compensatory Plans



None.



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.



32







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



SEC 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.



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.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------



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.



33







Other financial arrangements made by the
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.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------



|ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|-------- | ----------------------------------------------------------------------------------------------



Security Ownership



The Company has only one class of stock
outstanding, its common stock. The following table sets forth certain information as of December 31, 2011, 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 (5%) or more of the outstanding shares of our common stock.
As of December 31, 2011, there were 67,149,000 shares of common stock outstanding.



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.



34







|Name and Address of 
Beneficial Owner (1)                                                                     |  | Shares Beneficially Owned |            |     | Percentage Beneficially Owned | 
|------------------------------------------------------------------------------------------------------------- |  | ------------------------- | ---------- | --- | ----------------------------- | 
|                                                                                                              |  |                           |            |     |                               | 
|Directors and Executive Officers                                                                              |  |                           |            |     |                               | 
|                                                                                                              |  |                           |            |     |                               | 
|Art Agolli  Chief Executive Officer, President and Director  57 Valley
    Woods Way, NW  Calgary, AB T3B 6A5 |  |                           | 0          | (2) |                               | 
|                                                                                                              |  |                           |            |     |                               | 
|All Officers and Directors as a Group (1 person)                                                              |  |                           | 0          |     |                               | 
|                                                                                                              |  |                           |            |     |                               | 
|Principal Stockholders                                                                                        |  |                           |            |     |                               | 
|                                                                                                              |  |                           |            |     |                               | 
|Gerhard Schlombs  (Former officer and former director)  92 Wishing Well Drive 
    Toronto, ON M1T 1J9        |  |                           | 37,125,188 |     |                               | 
|                                                                                                              |  |                           |            |     |                               | 
|SGP Group Inc. (3) 2nd Terrace
    W. Centreville P.O. Box 10567 Nassau, Bahamas                              |  |                           | 4,276,284  |     |                               | 



| | (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) | On April 17, 2012, we issued 20,000,003 shares of our common
                                                                stock to Mr. Agolli in exchange for an assignment of a letter
                                                                of intent he entered into with Sonoro. Please see the discussion
                                                                of this transaction in Item 13, “Certain Relationships and
                                                                Related Transactions and Director Independence”. Had Mr.
                                                                Agolli owned these shares on December 31, 2011, his percentage
                                                                ownership would have been 29.8%.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Josephine Agotilla has dispositive and voting control for
                                                                SGP Group Inc.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------



| | ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND
DIRECTOR INDEPENDENCE
| | -------- | ------------------------------------------------------------------------



Certain Relationships and Transactions



At December 31, 2011, our former President;
Gerhard Schlombs had advanced $42,000 to us towards working capital.



The office
in which Petrosonic Albania Sha. is headquartered is provided to it by Albnafta free of charge, although it is not required to
do so. Albnafta is wholly-owned by Art Agolli, our sole executive officer and director. The office in which the
Company is headquartered is provided to it by Art Agolli, although he is not required to do so.



During 2010, Albnafta and Sonoro contributed
$207,472 to Petrosonic Albania Sha for the purchase of machinery. During 2011, Albnafta and Sonoro contributed $327,578 to Petrosonic
Albania Sha primarily for construction of a building in Albania.



35







On April 17, 2012 the
Company entered into an assignment agreement with Art Agolli, our sole executive officer and director, pursuant to which Mr.
Agolli agreed to convey to the Company all of his right title and interest in a letter of intent with Sonoro, 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 (the "Assets and Technology"), in exchange
for 20,000,003 (post-split) shares of our common stock having a value of $160,000. Thereafter, on July 27, 2012, we entered
into an Asset Purchase and Sale Agreement with Sonoro in order to acquire the Assets and Technology, which included (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, and (iii) certain machinery, including 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 and Technology, we paid to Sonoro the following consideration: (i) CDN $250,000, which was paid in
June 2012, (ii) a convertible debenture in the principal amount of CDN $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.



On June 6, 2012 Art Agolli
loaned us CDN $200,000 pursuant to a Convertible Debenture. The unpaid principal amount of the Convertible Debenture accrues
interest at the rate of 10% per year. The Convertible Debenture is due and payable on June 6, 2013. Mr. Agolli may convert
the principal amount of the Convertible Debenture into shares of our common stock at the rate of $0.25 per share. The
Convertible Debenture is secured with our personal property and the proceeds and products therefrom. On October 1, 2012, CDN
$6,411 in interest was accrued on the principal amount. During the year ended December 31, 2012, CDN$200,000 was the highest
principal amount owed.



Review, Approval or Ratification of Transactions with Related
Persons



We have only one director, therefore
independent review of related party transactions cannot be made by our Board of Directors. We intend to increase the number of
independent directors on our Board within the next 12 months.



Director Independence



During the year ended December 31, 2011,
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 New York Stock Exchange, Inc., The NASDAQ National Market, and the Securities and
Exchange Commission.



Subject to some exceptions, these standards
generally provide that a director will not be independent if (a) the director is, or in the past three years has been, an employee
of ours; (b) a member of the director’s immediate family is, or in the past three years has been, an executive officer of
ours; (c) the director or a member of the director’s immediate family has received more than $120,000 per year in direct
compensation from us other than for service as a director (or for a family member, as a non-executive employee); (d) the director
or a member of the director’s immediate family is, or in the past three years has been, employed in a professional capacity
by our independent public accountants, or has worked for such firm in any capacity on our audit; (e) the director or a member of
the director’s immediate family is, or in the past three years has been, employed as an executive officer of a company where
one of our executive officers serves on the compensation committee; or (f) the director or a member of the director’s immediate
family is an executive officer of a company that makes payments to, or receives payments from, us in an amount which, in any twelve-month
period during the past three years, exceeds the greater of $1,000,000 or two percent of that other company’s consolidated
gross revenues.



| | ITEM 14. | PRINCIPAL ACCOUNTING FEES AND SERVICES
| | -------- | --------------------------------------



(1) Audit Fees



The aggregate fees billed for each of the
last two fiscal years for professional services rendered by MaloneBailey LLP; certified accountant for our audit of annual financial
statements and review of financial statements included in our Form 10-Qs or services that are normally provided by the accountant
in connection with statutory and regulatory filings or engagements for those fiscal years was:



|2011 |  | $ | 8,400 | 
|---- |  | - | ----- | 
|2010 |  | $ | 7,900 | 



36







(2) Audit-Related Fees



The aggregate fees billed in each of the
last two fiscal years for assurance and related services by MaloneBailey LLP; certified accountants that are reasonably related
to the performance of the audit or review of our financial statements and are not reported in the preceding paragraph:



|2011 |  | $ | - | 
|---- |  | - | - | 
|2010 |  | $ | - | 



(3) Tax Fees



The aggregate fees billed in each of the
last two fiscal years for professional services rendered by MaloneBailey LLP; certified accountant for tax compliance, tax advice,
and tax planning was:



|2011 |  | $ | - | 
|---- |  | - | - | 
|2010 |  | $ | - | 



(4) All Other Fees



The aggregate fees billed in each of the
last two fiscal years for the products and services provided by the principal accountant, other than the services reported in paragraphs
(1), (2), and (3) was:



|2011 |  | $ | - | 
|---- |  | - | - | 
|2010 |  | $ | - | 



37







PART IV



| | ITEM 15. | EXHIBITS, FINANCIAL STATEMENT SCHEDULES
| | -------- | ---------------------------------------



|        |  |                                                                                                                                                                                                                                    |  | Incorporated by reference |  | Filed
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------- |  | -----
|Exhibit |  | Document Description                                                                                                                                                                                                               |  | Form                      |  | Date 
|        |  |                                                                                                                                                                                                                                    |  |                           |  |      
|31.1    |  | Certification of Principal Executive Officer pursuant to 15d-15(e),
    promulgated under the Securities Exchange Act of 1934, as amended                                                                                          |  |                           |  |      
|        |  |                                                                                                                                                                                                                                    |  |                           |  |      
|31.2    |  | Certification of Principal Financial Officer pursuant to 15d-15(e)
    promulgated under the Securities Exchange Act of 1934, as amended                                                                                           |  |                           |  |      
|        |  |                                                                                                                                                                                                                                    |  |                           |  |      
|32.1    |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Office and Chief  Financial Officer)                                                   |  |                           |  |      
|        |  |                                                                                                                                                                                                                                    |  |                           |  |      
|101.1   |  | The following financial statements formatted in Extensible Business Reporting Language (XBRL): (i) balance sheets;
    (ii) statements of operations; (iii) statement of cash flows; and (iv) statements of stockholders deficit * |  |                           |  |      





* To be filed by amendment.



38







SIGNATURES



In accordance with Section 13 or 15 (d) of the Exchange
Act, the registrant caused this report to be signed on behalf by the undersigned, thereto duly authorized on this 16th day
of April 2013.



| | PETROSONIC ENERGY, INC.                     
| | --------------------------------------------
| | (formerly Bearing Mineral Exploration, Inc.)
| | (Registrant)                                
| |                                             
| | By:                                         
| |                                             
| |                                             



39







EXHIBIT INDEX



|        |  |                                                                                                                                                                                                                                    |  | Incorporated by reference |  | Filed
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------- |  | -----
|Exhibit |  | Document Description                                                                                                                                                                                                               |  | Form                      |  | Date 
|        |  |                                                                                                                                                                                                                                    |  |                           |  |      
|31.1    |  | Certification of Principal Executive Officer pursuant to 15d-15(e),
    promulgated under the Securities Exchange Act of 1934, as amended                                                                                          |  |                           |  |      
|        |  |                                                                                                                                                                                                                                    |  |                           |  |      
|31.2    |  | Certification of Principal Financial Officer pursuant to 15d-15(e),
    promulgated under the Securities Exchange Act of 1934, as amended                                                                                          |  |                           |  |      
|        |  |                                                                                                                                                                                                                                    |  |                           |  |      
|32.1    |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Office and Chief  Financial Officer)                                                   |  |                           |  |      
|        |  |                                                                                                                                                                                                                                    |  |                           |  |      
|101.1   |  | The following financial statements formatted in Extensible Business Reporting Language (XBRL): (i) balance sheets;
    (ii) statements of operations; (iii) statement of cash flows; and (iv) statements of stockholders deficit * |  |                           |  |      





* To be filed by amendment.



40