----

----

| Nevada                                                        |   | 90-0335743                       |
|---------------------------------------------------------------|--------|----------------------------------|
| (State or other jurisdiction ofincorporation or organization) |   | (IRS EmployerIdentification No.) |
|                                                          |   |                             |
| 19495 Biscayne Blvd., Suite 411Aventura, FL                   |   | 33180                            |
| (Address of principal executive offices)                      |   | (Zip Code)                       |

| Large accelerated Filer  | o | Accelerated Filer          | o |
|-------------------------------|---|---------------------------------|---|
| Non-accelerated Filer    | o | Smaller reporting company  | x |

----

----

----

| PART I – FINANCIAL INFORMATION |                                                                                                                                                                         |   |   |
|-------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|
|                                      |                                                                                                                                                                         |   |   |   |
| Item 1.                                   | Financial Statements                                                                                                                                                         |   |   | 3 |   |
|                                      | Consolidated Balance Sheets as of June 30, 2012 (unaudited) and December 31, 2011                                                                                            |   |   | 3 |   |
|                                      | Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2012 and 2011and for the period December 31, 2007 (Inception) to June 30, 2012 (unaudited) |   |   | 4 |   |
|                                      | Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2012 and 2011 and for the period December 31, 2007 (Inception) to June 30, 2012 (unaudited)          |   |   | 5 |   |
|                                      | Notes to Consolidated Financial Statements (unaudited)                                                                                                                       |   |   | 7 |   |
| Item 2.                                   | Management’s Discussion and Analysis of Financial Condition and Results of Operations                                                                                  |   |   | 32 |   |
| Item 3                                    | Quantitative and Qualitative Disclosures About Market Risk                                                                                                                   |   |   | 37 |   |
| Item 4.                                   | Controls and Procedures                                                                                                                                                      |   |   | 37 |   |
|                                      |                                                                                                                                                                         |   |   |   |   |
| PART II – OTHER INFORMATION    |                                                                                                                                                                         |   |   |   |
|                                      |                                                                                                                                                                         |   |   |   |   |
| Item 1.                                   | Legal Proceedings                                                                                                                                                            |   |   | 38 |   |
| Item 1.A.                                 | Risk Factors                                                                                                                                                                 |   |   | 38 |   |
| Item 2.                                   | Unregistered Sales of Equity Securities and Use of Proceeds                                                                                                                  |   |   | 38 |   |
| Item 3.                                   | Defaults Upon Senior Securities                                                                                                                                              |   |   | 39 |   |
| Item 4.                                   | Mine Safety Disclosures                                                                                                                                                      |   |   | 39 |   |
| Item 5.                                   | Other Information                                                                                                                                                            |   |   | 39 |   |
| Item 6.                                   | Exhibits                                                                                                                                                                     |   |   | 40 |   |
|                                      |                                                                                                                                                                         |   |   |   |   |
| SIGNATURES                                |                                                                                                                                                                         |   | 41     |   |

----

| ONTECO CORPORATION AND SUBSIDIARY |
|-----------------------------------|
| (A Development Stage Company)     |
| Consolidated Balance Sheets       |
|                              |

|                                                                          |   | June 30,    |       |   | December 31, |   |
|-------------------------------------------------------------------------------|--------|-------------|------------|--------|--------------|--------|
|                                                                          |   | 2012        |       |   | 2011         |   |
|                                                                          |   | (unaudited) |       |   |         |   |
|                                                                          |   |        |       |   |         |   |
| ASSETS                                                                        |
|                                                                          |   |        |       |   |         |   |
| Current assets:                                                               |   |        |       |   |         |   |
| Cash in banks                                                                 |   | $           | 2,368      |   |         | $      | 41,804 |   |
| Accounts receivable                                                           |   |        | -          |   |         |   | 2,251 |   |
| Due from licensee                                                             |   |        | 2,877,890  |   |         |   | - |   |
| Inventories                                                                   |   |        | 79,345     |   |         |   | 74,947 |   |
|                                                                          |   |        |       |   |         |   |   |   |
| Total current assets                                                          |   |        | 2,959,603  |   |         |   | 119,002 |   |
|                                                                          |   |        |       |   |         |   |   |   |
| Fixed assets:                                                                 |   |        |       |   |         |   |   |   |
| Property and equipment, net                                                   |   |        | 96,095     |   |         |   | 103,844 |   |
|                                                                          |   |        |       |   |         |   |   |   |
| Other assets:                                                                 |   |        |       |   |         |   |   |   |
| Security deposits                                                             |   |        | 11,709     |   |         |   | 11,709 |   |
| Intellectual property                                                         |   |        | 2,989,149  |   |         |   | 2,989,149 |   |
|                                                                          |   |        |       |   |         |   |   |   |
| Total other assets                                                            |   |        | 3,000,858  |   |         |   | 3,000,858 |   |
|                                                                          |   |        |       |   |         |   |   |   |
| Total assets                                                                  |   | $           | 6,056,556  |   |         | $      | 3,223,704 |   |
|                                                                          |   |        |       |   |         |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                                |
|                                                                          |   |        |       |   |         |   |   |   |
| Current liabilities:                                                          |   |        |       |   |         |   |   |   |
| Accounts payable                                                              |   | $           | 56,118     |   |         | $      | 112,046 |   |
| Accrued interest                                                              |   |        | 88,935     |   |         |   | 65,011 |   |
| Accrued employee compensation                                                 |   |        | 578,000    |   |         |   | 538,000 |   |
| Sales tax payable                                                             |   |        | 2,678      |   |         |   | 2,678 |   |
| Deferred license fee revenue, current                                         |   |        | 411,128    |   |         |   | - |   |
| Advances from non-affiliated related parties                                  |   |        | 23,990     |   |         |   | 1,100 |   |
| Notes payable, non-affiliated related parties                                 |   |        | 553,272    |   |         |   | 572,820 |   |
| Notes payable, third parties                                                  |   |        | 176,195    |   |         |   | 229,545 |   |
| Total current liabilities                                                     |   |        | 1,890,316  |   |         |   | 1,521,200 |   |
|                                                                          |   |        |       |   |         |   |   |   |
| Deferred license fee revenue, non-current                                     |   |        | 2,398,241  |   |         |   | - |   |
|                                                                          |   |        |       |   |         |   |   |   |
| Total liabilities                                                             |   |        | 4,288,557  |   |         |   | 1,521,200 |   |
|                                                                          |   |        |       |   |         |   |   |   |
| Commitments and contingencies (Note 10)                                       |   |        | -          |   |         |   | - |   |
|                                                                          |   |        |       |   |         |   |   |   |
| Stockholders' equity (deficit):                                               |   |        |       |   |         |   |   |   |
| Preferred stock $.001 par value 10,000,000 and 100,000,000 shares authorized, |   |        |       |   |         |   |   |   |
| Series A preferred stock, 150,000 shares issued and outstanding               |   |        |       |   |         |   |   |   |
|  at June 30, 2012 andDecember 31, 2011, respectively                     |   |        | 150        |   |         |   | 150 |   |
| Series B preferred stock, nil shares issued and outstanding              |   |        |       |   |         |   |   |   |
| at June 30, 2012 and December 31, 2011, respectively                          |   |        | -          |   |         |   | - |   |
| Common stock $.001 par value 300,000,000 and 2,000,000,000 shares authorized, |   |        |       |   |         |   |   |   |
| 151,457,629 and 923,444 shares issued and 151,457,385 and 923,200             |   |        |       |   |         |   |   |   |
| shares outstanding at June 30, 2012 and December 31, 2011, respectively       |   |        | 151,457    |   |         |   | 923 |   |
| Additional paid-in capital                                                    |   |        | 5,562,881  |   |         |   | 4,353,363 |   |
| Treasury stock, at cost (244 shares)                                          |   |        | (61,000    | )      |         |   | (61,000 | ) |
| Deficit accumulated during the development stage                              |   |        | (3,885,489 | )      |         |   | (2,590,932 | ) |
| Total stockholders' equity (deficit)                                          |   |        | 1,767,999  |   |         |   | 1,702,504 |   |
|                                                                          |   |        |       |   |         |   |   |   |
| Total liabilities and stockholders' equity (deficit)                          |   | $           | 6,056,556  |   |         | $      | 3,223,704 |   |

----

| ONTECO CORPORATION AND SUBSIDIARY     |
|---------------------------------------|
| (A Development Stage Company)         |
| Consolidated Statements of Operations |
| (unaudited)                           |

|                                   |   |                       |        |   |                     |   |     |           |   |   |       |   |   | For the Period    |     |
|----------------------------------------|--------|----------------------------|-------------|--------|--------------------------|--------|----------|----------------|--------|--------|------------|--------|--------|-------------------|----------|
|                                   |   |                       |        |   |                     |   |     |           |   |   |       |   |   | December 31, 2007 |     |
|                                   |   | For the Three Months Ended |        |   | For the Six Months Ended |   |     | (Inception) to |   |
|                                   |   | June 30,                   |        |   | June 30,                 |   |     | June 30,       |   |   | June 30,   |   |   | June 30,          |     |
|                                   |   | 2012                       |        |   | 2011                     |   |     | 2012           |   |   | 2011       |   |   | 2012              |     |
|                                   |   |                       |        |   |                     |   |     |           |   |   |       |   |   |              |     |
| Revenue                                |   | $                          | 68,521      |   |                     | $      | 34,271   |           |   | $      | 68,521     |   |   | $                 | 79,437   |   |   | $ | 448,737 |   |
|                                   |   |                       |        |   |                     |   |     |           |   |   |       |   |   |              |     |   |   |   |   |   |
| Cost of goods sold                     |   |                       | -           |   |                     |   | 25,704   |           |   |   | 828        |   |   |              | 36,010   |   |   |   | 188,590 |   |
|                                   |   |                       |        |   |                     |   |     |           |   |   |       |   |   |              |     |   |   |   |   |   |
| Gross profit                           |   |                       | 68,521      |   |                     |   | 8,567    |           |   |   | 67,693     |   |   |              | 43,427   |   |   |   | 260,147 |   |
|                                   |   |                       |        |   |                     |   |     |           |   |   |       |   |   |              |     |   |   |   |   |   |
| Operating expenses:                    |   |                       |        |   |                     |   |     |           |   |   |       |   |   |              |     |   |   |   |   |   |
| General and administrative             |   |                       | 7,176       |   |                     |   | 21,760   |           |   |   | 49,346     |   |   |              | 52,058   |   |   |   | 344,765 |   |
| Investor relations                     |   |                       | -           |   |                     |   | 63,834   |           |   |   | -          |   |   |              | -        |   |   |   | 145,512 |   |
| Occupancy - Headquarters               |   |                       | 13,619      |   |                     |   | 19,161   |           |   |   | 26,560     |   |   |              | 34,179   |   |   |   | 104,466 |   |
| Officer compensation                   |   |                       | 45,000      |   |                     |   | 36,500   |           |   |   | 108,000    |   |   |              | 73,000   |   |   |   | 721,676 |   |
| Professional fees                      |   |                       | 40,802      |   |                     |   | 27,698   |           |   |   | 47,002     |   |   |              | 64,253   |   |   |   | 196,957 |   |
| Staff compensation                     |   |                       | 10,147      |   |                     |   | 104,920  |           |   |   | 46,515     |   |   |              | 202,670  |   |   |   | 468,163 |   |
| Stock-based compensation               |   |                       | -           |   |                     |   | -        |           |   |   | -          |   |   |              | 118,012  |   |   |   | 405,205 |   |
| Depreciation                           |   |                       | 5,971       |   |                     |   | 2,521    |           |   |   | 13,899     |   |   |              | 4,935    |   |   |   | 23,768 |   |
| Total operating expenses               |   |                       | 122,715     |   |                     |   | 276,394  |           |   |   | 291,322    |   |   |              | 549,107  |   |   |   | 2,410,512 |   |
|                                   |   |                       |        |   |                     |   |     |           |   |   |       |   |   |              |     |   |   |   |   |   |
| Loss from operations                   |   |                       | (54,194     | )      |                     |   | (267,827 | )              |   |   | (223,629   | )      |   |              | (505,680 | ) |   |   | (2,150,365 | ) |
|                                   |   |                       |        |   |                     |   |     |           |   |   |       |   |   |              |     |   |   |   |   |   |
| Other expenses:                        |   |                       |        |   |                     |   |     |           |   |   |       |   |   |              |     |   |   |   |   |   |
| Loss on dispotion of assets            |   |                       |        |   |                     |   |     |           |   |   | -          |   |   |              |     |   |   |   | 567 |   |
| Loss on settlement of debt (Note 8)    |   |                       | 87,000      |   |                     |   | -        |           |   |   | 638,000    |   |   |              | -        |   |   |   | 638,000 |   |
| Interest expense                       |   |                       | 172,207     |   |                     |   | 25,956   |           |   |   | 432,928    |   |   |              | 52,249   |   |   |   | 1,067,957 |   |
| Write-off of project development costs |   |                       | -           |   |                     |   | 27,600   |           |   |   | -          |   |   |              | 27,600   |   |   |   | 27,600 |   |
| Write-off of amount due from other     |   |                       | -           |   |                     |   | -        |           |   |   | -          |   |   |              | -        |   |   |   | 1,000 |   |
| Total other expenses                   |   |                       | 259,207     |   |                     |   | 53,556   |           |   |   | 1,070,928  |   |   |              | 79,849   |   |   |   | 1,735,124 |   |
|                                   |   |                       |        |   |                     |   |     |           |   |   |       |   |   |              |     |   |   |   |   |   |
| Net loss                               |   | $                          | (313,401    | )      |                     | $      | (321,383 | )              |   | $      | (1,294,557 | )      |   | $                 | (585,529 | ) |   | $ | (3,885,489 | ) |
|                                   |   |                       |        |   |                     |   |     |           |   |   |       |   |   |              |     |   |   |   |   |   |
| Net loss per share - Basic and diluted |   | $                          | (0.00       | )      |                     | $      | (1.48    | )              |   | $      | (0.01      | )      |   | $                 | (3.16    | ) |   |   |   |   |
|                                   |   |                       |        |   |                     |   |     |           |   |   |       |   |   |              |     |   |   |   |   |   |
| Weighted average number of shares      |   |                       |        |   |                     |   |     |           |   |   |       |   |   |              |     |   |   |   |   |   |
| oustanding during the period -         |   |                       |        |   |                     |   |     |           |   |   |       |   |   |              |     |   |   |   |   |   |
| Basic and diluted                      |   |                       | 129,492,668 |   |                     |   | 216,954  |           |   |   | 91,288,942 |   |   |              | 185,442  |   |   |   |   |   |

----

| ONTECO CORPORATION AND SUBSIDIARY     |
|---------------------------------------|
| (A Development Stage Company)         |
| Consolidated Statements of Cash Flows |
| (unaudited)                           |

|                                                                   |   |                     |       |   |           |   |     | For the Period    |   |
|------------------------------------------------------------------------|--------|--------------------------|------------|--------|----------------|--------|----------|-------------------|--------|
|                                                                   |   |                     |       |   |           |   |     | December 31, 2007 |   |
|                                                                   |   | For the Six Months Ended |       |   | (Inception) to |   |
|                                                                   |   | June 30,                 |       |   | June 30,       |   |     | June 30,          |   |
|                                                                   |   | 2012                     |       |   | 2011           |   |     | 2012              |   |
|                                                                   |   |                     |       |   |           |   |     |              |   |
| Cash flows used in operating activities:                               |   |                     |       |   |           |   |     |              |   |
| Net loss                                                               |   | $                        | (1,294,557 | )      |           | $      | (585,529 | )                 |   | $ | (3,885,489 | ) |
| Adjustments to reconcile net loss to net cash used in operations:      |   |                     |       |   |           |   |     |              |   |   |   |   |
| License fee revenue realized                                           |   |                     | (68,521    | )      |           |   | -        |              |   |   | (68,521 | ) |
| Depreciation                                                           |   |                     | 13,899     |   |           |   | 4,935    |              |   |   | 23,768 |   |
| Loss on settlement of debt                                             |   |                     | 638,000    |   |           |   | -        |              |   |   | 638,000 |   |
| Stock-based compensation                                               |   |                     | -          |   |           |   | -        |              |   |   | 170,055 |   |
| Stock issued for services                                              |   |                     | -          |   |           |   | -        |              |   |   | 315,834 |   |
| Cancellation of stock issued for services                              |   |                     | -          |   |           |   | -        |              |   |   | (84,000 | ) |
| Write-off of project development costs                                 |   |                     | -          |   |           |   | 27,600   |              |   |   | 27,600 |   |
| Loss on disposition of software                                        |   |                     | -          |   |           |   | -        |              |   |   | 567 |   |
| Interest accrued on notes payable, non-affiliated related parties      |   |                     | 31,905     |   |           |   | 45,645   |              |   |   | 128,660 |   |
| Interest accrued on notes payable, third parties                       |   |                     | 8,819      |   |           |   | -        |              |   |   | 21,171 |   |
| Accretion of beneficial conversion feature as interest expense         |   |                     | 369,519    |   |           |   | -        |              |   |   | 907,188 |   |
| Changes in operating assets and liabilities:                           |   |                     |       |   |           |   |     |              |   |   |   |   |
| Accounts receivable                                                    |   |                     | 2,251      |   |           |   | (37,500  | )                 |   |   | - |   |
| Inventories                                                            |   |                     | (4,398     | )      |           |   | (7,500   | )                 |   |   | (79,345 | ) |
| Prepaid expenses                                                       |   |                     | -          |   |           |   | (541     | )                 |   |   | - |   |
| Security deposits                                                      |   |                     | -          |   |           |   | (7,589   | )                 |   |   | (7,589 | ) |
| Accounts payable                                                       |   |                     | (55,928    | )      |           |   | 1,043    |              |   |   | 55,569 |   |
| Sales tax payable                                                      |   |                     | -          |   |           |   | 2,678    |              |   |   | 2,678 |   |
| Accrued compensation                                                   |   |                     | 90,000     |   |           |   | 90,000   |              |   |   | 628,000 |   |
| Net cash used in operating activities                                  |   |                     | (269,011   | )      |           |   | (466,758 | )                 |   |   | (1,205,854 | ) |
|                                                                   |   |                     |       |   |           |   |     |              |   |   |   |   |
| Cash flows used in investing activities:                               |   |                     |       |   |           |   |     |              |   |   |   |   |
| Net cash received from acquisition                                     |   |                     | -          |   |           |   | -        |              |   |   | 14,942 |   |
| Purchase of property and equipment                                     |   |                     | (6,150     | )      |           |   | (12,201  | )                 |   |   | (86,412 | ) |
| Project development costs                                              |   |                     | -          |   |           |   | -        |              |   |   | (27,600 | ) |
| Net cash used in investing activities                                  |   |                     | (6,150     | )      |           |   | (12,201  | )                 |   |   | (99,070 | ) |
|                                                                   |   |                     |       |   |           |   |     |              |   |   |   |   |
| Cash flows from financing activities:                                  |   |                     |       |   |           |   |     |              |   |   |   |   |
| Proceeds from issuance of note payable, non-affiliated related parties |   |                     | 82,650     |   |           |   | 488,434  |              |   |   | 846,105 |   |
| Payments on notes payable, non-affiliated related parties              |   |                     | (14,000    | )      |           |   | -        |              |   |   | (40,655 | ) |
| Proceeds from issuance of notes payable, third parties                 |   |                     | 196,500    |   |           |   | -        |              |   |   | 524,600 |   |
| Payments on notes payable, third parties                               |   |                     | (52,315    | )      |           |   | -        |              |   |   | (52,315 | ) |
| Advances from non-affiliated related parties, net                      |   |                     | 22,890     |   |           |   | -        |              |   |   | 23,990 |   |
| Proceeds from sale of common stock                                     |   |                     | -          |   |           |   | -        |              |   |   | 5,567 |   |
| Net cash provided by financing activities                              |   |                     | 235,725    |   |           |   | 488,434  |              |   |   | 1,307,292 |   |
|                                                                   |   |                     |       |   |           |   |     |              |   |   |   |   |
| Net increase (decrease) in cash                                        |   |                     | (39,436    | )      |           |   | 9,475    |              |   |   | 2,368 |   |
|                                                                   |   |                     |       |   |           |   |     |              |   |   |   |   |
| Cash at beginning of period                                            |   |                     | 41,804     |   |           |   | 77,370   |              |   |   | - |   |
|                                                                   |   |                     |       |   |           |   |     |              |   |   |   |   |
| Cash at end of period                                                  |   | $                        | 2,368      |   |           | $      | 86,845   |              |   | $ | 2,368 |   |

----

| ONTECO CORPORATION AND SUBSIDIARY    |
|--------------------------------------|
| (A Development Stage Company)        |
| Statements of Cash Flows (Continued) |
| (unaudited)                          |

|                                                                          |   |                     |       |   |                  |   |     | For the Period    |   |
|-------------------------------------------------------------------------------|--------|--------------------------|------------|--------|-----------------------|--------|----------|-------------------|--------|
|                                                                          |   |                     |       |   |                  |   |     | December 31, 2007 |   |
|                                                                          |   |                     |       |   |                  |   |     | (Inception of     |   |
|                                                                          |   | For the Six Months Ended |       |   | Exploration Stage) to |   |
|                                                                          |   | June 30,                 |       |   | June 30,              |   |     | June 30,          |   |
|                                                                          |   | 2012                     |       |   | 2011                  |   |     | 2012              |   |
|                                                                          |   |                     |       |   |                  |   |     |              |   |
| Supplemental disclosure of cash flow information:                             |   |                     |       |   |                  |   |     |              |   |
|                                                                          |   |                     |       |   |                  |   |     |              |   |
| Cash paid for interest                                                        |   | $                        | -          |   |                  | $      | -        |              |   | $ | - |   |
|                                                                          |   |                     |       |   |                  |   |     |              |   |   |   |   |
| Cash paid for taxes                                                           |   | $                        | -          |   |                  | $      | -        |              |   | $ | - |   |
|                                                                          |   |                     |       |   |                  |   |     |              |   |   |   |   |
| Non-cash investing and financing activities:                                  |   |                     |       |   |                  |   |     |              |   |   |   |   |
|                                                                          |   |                     |       |   |                  |   |     |              |   |   |   |   |
| Conversion of note payable, related parties to common stock                   |   | $                        | (238,400   | )      |                  | $      | -        |              |   | $ | (392,616 | ) |
| Conversion of accrued interest, related parties to common stock               |   |                     | (4,100     | )      |                  |   |     |              |   |   | (22,100 | ) |
| Common stock issued                                                           |   |                     | 88,600     |   |                  |   | -        |              |   |   | 104,148 |   |
| Additional paid in capital on stock issued                                    |   |                     | 153,900    |   |                  |   | -        |              |   |   | 310,568 |   |
|                                                                          |   |                     |       |   |                  |   |     |              |   |   |   |   |
| Conversion of note payable, third parties to common stock                     |   |                     | (158,700   | )      |                  |   | -        |              |   |   | (417,624 | ) |
| Conversion of accrued interest, third parties to common stock                 |   |                     | (10,385    | )      |                  |   | -        |              |   |   | (15,785 | ) |
| Common stock issued                                                           |   |                     | 11,934     |   |                  |   | -        |              |   |   | 12,415 |   |
| Additional paid in capital on stock issued                                    |   |                     | 157,151    |   |                  |   | -        |              |   |   | 420,994 |   |
|                                                                          |   |                     |       |   |                  |   |     |              |   |   |   |   |
| Benefical conversion feature discount to notes payable, related parties       |   |                     | (82,642    | )      |                  |   | -        |              |   |   | (561,965 | ) |
| Benefical conversion feature discount to notes payable, third parties         |   |                     | (177,825   | )      |                  |   | -        |              |   |   | (508,942 | ) |
| Additional paid in capital                                                    |   |                     | 260,467    |   |                  |   | -        |              |   |   | 1,070,907 |   |
|                                                                          |   |                     |       |   |                  |   |     |              |   |   |   |   |
| Conversion of accrued compensation to common stock                            |   |                     | (50,000    | )      |                  |   | -        |              |   |   | (50,000 | ) |
| Common stock issued                                                           |   |                     | 50,000     |   |                  |   | -        |              |   |   | 50,000 |   |
|                                                                          |   |                     |       |   |                  |   |     |              |   |   |   |   |
| Due from licensee for licene fee                                              |   |                     | (2,877,890 | )      |                  |   | -        |              |   |   | (2,877,890 | ) |
| Deferred license fee revenue                                                  |   |                     | 2,877,890  |   |                  |   | -        |              |   |   | 2,877,890 |   |
|                                                                          |   |                     |       |   |                  |   |     |              |   |   |   |   |
| Conversion of notes payable, related parties to notes payable, third parties: |   |                     |       |   |                  |   |     |              |   |
| Notes payable, related parties                                                |   |                     | -          |   |                  |   | (118,000 | )                 |   |   | (218,092 | ) |
| Accrued interest                                                              |   |                     | -          |   |                  |   | -        |              |   |   | (26,022 | ) |
| Notes payable, third parties                                                  |   |                     | -          |   |                  |   | 118,000  |              |   |   | 244,114 |   |
|                                                                          |   |                     |       |   |                  |   |     |              |   |   |   |   |
| Net assets acquired in acquisition of NexPhase Lighting                       |   |                     | -          |   |                  |   | -        |              |   |   | (2,700,000 | ) |
| Common stock issued                                                           |   |                     | -          |   |                  |   | -        |              |   |   | 67,500 |   |
| Additional paid in capital on stock issued                                    |   |                     | -          |   |                  |   | -        |              |   |   | 2,632,500 |   |
|                                                                          |   |                     |       |   |                  |   |     |              |   |   |   |   |
| 244,000 shares of stock acquired and placed in treasury                       |   |                     | -          |   |                  |   | (61,000  | )                 |   |   | (61,000 | ) |
| Issuance of notes payable to former investors in NexPhase                     |   |                     | -          |   |                  |   | 61,000   |              |   |   | 61,000 |   |

----

----

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | June 30, 2012 |   |   | December 31, 2011 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|--------|--------|-------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |          |   |   |              |   |   | Principal, |   |   |   |   |   |   |   |   | Principal, |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |          |   |   | Unamortized       |   |   | net of |   |   |   |   |   | Unamortized |   |   | net of |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | Principal     |   |   | Discount          |   |   | Discounts |   |   | Principal |   |   | Discount |   |   | Discounts |   |
| Notes Payable -- Related Parties - Onteco                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On February 10, 2010 the Company entered into a convertible promissory note with a web designer for services rendered in the amount of $3,150. Terms include bonus interest of $315, the note is payable on demand and has no stated interest rate or due date. On January 3, 2011 the parties amended the terms and conditions of the promissory note as follows: On January 5, 2011, the note was assigned from the web designer to a non-affiliated related party investment firm.  The “Note Conversion Price” shall be adjusted from $0.03 to the par value of the common stock, or $0.001 per share representing 3,465,000 unregistered common shares. No payments have been made on this note. On February 25, 2011 a portion of the note in the amount of $1,316 was converted to Common Stock.  The note is currently in default. |   | $             | 2,149  |   |              | $      | - |   |   | $ | 2,149 |   |   | $ | 2,149 |   |   | $ | - |   |   | $ | 2,149 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On June 7, 2010 the Company entered into a convertible promissory note with an investor in the amount of $5,000. The note is payable on demand, has no stated interest rate or due date and is convertible at a rate of $0.03. No payments have been made on this note.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |          | 5,000  |   |              |   | - |   |   |   | 5,000 |   |   |   | 5,000 |   |   |   | - |   |   |   | 5,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On August 9, 2010 the Company entered into a convertible promissory note with an investor in the amount of $5,000. The note is payable on demand, has no stated interest rate or due date and is convertible at a rate of $0.001. No payments have been made on this note. During the six months ended June 30, 2012, a portion of the note in the amount of $5,000 was converted to Common Stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |          | -      |   |              |   | - |   |   |   | - |   |   |   | 5,000 |   |   |   | - |   |   |   | 5,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On August 25, 2010 the Company entered into a convertible promissory note with an investor in the amount of $4,000. The note is payable on demand, has no stated interest rate or due date and is convertible at a rate of $0.001. No payments have been made on this note.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |          | 4,000  |   |              |   | - |   |   |   | 4,000 |   |   |   | 4,000 |   |   |   | - |   |   |   | 4,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On September 2, 2010 the Company entered into a convertible promissory note with an investor in the amount of $20,000. The note is payable on demand, has no stated interest rate or due date and is convertible at a rate of $0.001 per share. No payments have been made on this note. During the six months ended June 30, 2012, the note in the amount of $20,000 was converted to Common Stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |          | -      |   |              |   | - |   |   |   | - |   |   |   | 20,000 |   |   |   | - |   |   |   | 20,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On October 13, 2010 the Company entered into a convertible promissory note with an investor in the amount of $3,000. The note is payable on demand, has no stated interest rate or due date and is convertible at a rate of $0.001 per share. No payments have been made on this note.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |          | 3,000  |   |              |   | - |   |   |   | 3,000 |   |   |   | 3,000 |   |   |   | - |   |   |   | 3,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On October 29, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $30,000. Terms include simple interest at twelve percent (12.0%), the note is due on October 29, 2011 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.  The note is currently in default. During the six months ended June 30, 2012, a portion of the note in the amount of $27,000 was converted to Common Stock.                                                                                                                                                                                      |   |          | 3,000  |   |              |   | - |   |   |   | 3,000 |   |   |   | 30,000 |   |   |   | - |   |   |   | 30,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On November 4, 2010 the Company entered into a convertible promissory note with  an investor in the amount of $19,600. The note is payable on demand, includes bonus interest of $1,600, has no due date and is convertible at a rate of $0.001 per share. No payments have been made on this note.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |          | 19,600 |   |              |   | - |   |   |   | 19,600 |   |   |   | 19,600 |   |   |   | - |   |   |   | 19,600 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | June 30, 2012 |   |   | December 31, 2011 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|--------|--------|-------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |          |   |   |              |   |   | Principal, |   |   |   |   |   |   |   |   | Principal, |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |          |   |   | Unamortized       |   |   | net of |   |   |   |   |   | Unamortized |   |   | net of |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | Principal     |   |   | Discount          |   |   | Discounts |   |   | Principal |   |   | Discount |   |   | Discounts |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On November 8, 2010 the Company entered into a convertible promissory note with an investment firm in the amount of $5,500. Terms include bonus interest of $500, the note is payable on demand and is convertible at a rate of $0.001 per share. No payments have been made on this note.                                                                                                                                                                                                                                                                                                                                 |   |          | 5,500  |   |              |   | - |   |   |   | 5,500 |   |   |   | 5,500 |   |   |   | - |   |   |   | 5,500 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On November 15, 2010 the Company entered into a convertible promissory note with an investor in the amount of $28,000. The note is payable on demand, has no stated interest rate or due date and is convertible at a rate of $0.001. No payments have been made on this note .During the six months ended June 30, 2012, the note in the amount of $28,000 was converted to Common Stock.                                                                                                                                                                                                                                 |   |          | -      |   |              |   | - |   |   |   | - |   |   |   | 28,000 |   |   |   | - |   |   |   | 28,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On November 30, 2010 the Company entered into a convertible promissory note with an investment firm in the amount of $9,300. Terms include bonus interest of $930, the note is payable on demand and has no stated interest rate or due date and is convertible at a rate of $0.001 per share. No payments have been made on this note.                                                                                                                                                                                                                                                                                    |   |          | 9,300  |   |              |   | - |   |   |   | 9,300 |   |   |   | 9,300 |   |   |   | - |   |   |   | 9,300 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On December 15, 2010 the Company entered into a convertible promissory note with an investment firm in the amount of $15,500. Terms include simple interest at ten percent (10.0%), the note is due on December 15, 2011 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.                                                                                                             |   |          | 15,500 |   |              |   | - |   |   |   | 15,500 |   |   |   | 15,500 |   |   |   | - |   |   |   | 15,500 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On January 10, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $1,000. Terms include simple interest at ten percent (10.0%), the note is due on January 10, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.  The note is currently in default.                                                                   |   |          | 1,000  |   |              |   | - |   |   |   | 1,000 |   |   |   | 1,000 |   |   |   | (27 | ) |   |   | 973 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On February 23, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $21,600. Terms include simple interest at ten percent (10.0%), the note is due on February 23, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note. During the six months ended June 30, 2012, the note in the amount of $21,600 was converted to Common Stock. |   |          | -      |   |              |   | - |   |   |   | - |   |   |   | 21,600 |   |   |   | (3,195 | ) |   |   | 18,405 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | June 30, 2012 |   |   | December 31, 2011 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|--------|--------|-------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |          |   |   |              |   |   | Principal, |   |   |   |   |   |   |   |   | Principal, |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |          |   |   | Unamortized       |   |   | net of |   |   |   |   |   | Unamortized |   |   | net of |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | Principal     |   |   | Discount          |   |   | Discounts |   |   | Principal |   |   | Discount |   |   | Discounts |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On March 1, 2011 the Company entered into a convertible promissory note assigned from NexPhase in the amount of $60,000. Terms include simple interest at ten percent (10.0%), the note is due on March 1, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note. As of December 31, 2011, a portion of the note in the amount of $49,000 has been converted to Common Stock.  The note is currently in default. |   |          | 11,000 |   |              |   | - |   |   |   | 11,000 |   |   |   | 11,000 |   |   |   | (1,833 | ) |   |   | 9,167 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On March 10, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $3,000. Terms include simple interest at ten percent (10.0%), the note is due on March 10, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.  The note is currently in default.                                                                                                           |   |          | 3,000  |   |              |   | - |   |   |   | 3,000 |   |   |   | 3,000 |   |   |   | (574 | ) |   |   | 2,426 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On March 31, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $5,500. Terms include simple interest at ten percent (10.0%), the note is due on March 31, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.  During the six months ended June 30, 2012, the note plus $600 of accrued interest has been converted to Common Stock.                       |   |          | -      |   |              |   | - |   |   |   | - |   |   |   | 5,500 |   |   |   | (1,367 | ) |   |   | 4,133 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On March 31, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $6,500. Terms include simple interest at ten percent (10.0%), the note is due on March 31, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. During the six months ended June 30, 2011, a portion of the note in the amount of $5,500 has been converted to Common Stock.  The note is currently in default.                       |   |          | 1,000  |   |              |   | - |   |   |   | 1,000 |   |   |   | 6,500 |   |   |   | (1,616 | ) |   |   | 4,884 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | June 30, 2012 |   |   | December 31, 2011 |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|--------|--------|-------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |          |   |   |              |   |   | Principal, |   |   |   |   |   |   |   |   | Principal, |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |          |   |   | Unamortized       |   |   | net of |   |   |   |   |   | Unamortized |   |   | net of |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | Principal     |   |   | Discount          |   |   | Discounts |   |   | Principal |   |   | Discount |   |   | Discounts |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On April 14, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $17,500. Terms include simple interest at ten percent (10.0%), the note is due on April 14, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note. During the six months ended June 30, 2012, a portion of the note in the amount of $11,000 was converted to Common Stock.  The note is currently in default. |   |          | 6,500  |   |              |   | - |   |   |   | 6,500 |   |   |   | 17,500 |   |   |   | (5,020 | ) |   |   | 12,480 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On April 15, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $27,000. Terms include simple interest at ten percent (10.0%), the note is due on April 15, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note. During the six months ended June 30, 2012, a portion of the note in the amount of $25,000 was converted to Common Stock.  The note is currently in default. |   |          | 2,000  |   |              |   | - |   |   |   | 2,000 |   |   |   | 27,000 |   |   |   | (7,819 | ) |   |   | 19,181 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On April 18, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $1,000. Terms include simple interest at ten percent (10.0%), the note is due on April 18, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note. During the six months ended June 30, 2012, the note in the amount of $1,000 was converted to Common Stock.                                                             |   |          | -      |   |              |   | - |   |   |   | - |   |   |   | 1,000 |   |   |   | (298 | ) |   |   | 702 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On April 18, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $2,000. Terms include simple interest at ten percent (10.0%), the note is due on April 18, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.  The note is currently in default.                                                                                                                           |   |          | 2,000  |   |              |   | - |   |   |   | 2,000 |   |   |   | 2,000 |   |   |   | (595 | ) |   |   | 1,405 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On April 21, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $5,000. Terms include simple interest at ten percent (10.0%), the note is due on April 21, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.  The note is currently in default.                                                                                                                           |   |          | 5,000  |   |              |   | - |   |   |   | 5,000 |   |   |   | 5,000 |   |   |   | (1,530 | ) |   |   | 3,470 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On April 27, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $2,500. Terms include simple interest at ten percent (10.0%), the note is due on April 27, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.  The note is currently in default.                                                                                                                           |   |          | 2,500  |   |              |   | - |   |   |   | 2,500 |   |   |   | 2,500 |   |   |   | (806 | ) |   |   | 1,694 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | June 30, 2012 |   |   | December 31, 2011 |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|--------|--------|-------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |          |   |   |              |   |   | Principal, |   |   |   |   |   |   |   |   | Principal, |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |          |   |   | Unamortized       |   |   | net of |   |   |   |   |   | Unamortized |   |   | net of |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | Principal     |   |   | Discount          |   |   | Discounts |   |   | Principal |   |   | Discount |   |   | Discounts |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On April 28, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $2,500. Terms include simple interest at ten percent (10.0%), the note is due on April 28, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.  The note is currently in default. |   |          | 2,500  |   |              |   | - |   |   |   | 2,500 |   |   |   | 2,500 |   |   |   | (813 | ) |   |   | 1,687 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On May 16, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $15,000. Terms include simple interest at ten percent (10.0%), the note is due on May 16, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.  The note is currently in default.    |   |          | 15,000 |   |              |   | - |   |   |   | 15,000 |   |   |   | 15,000 |   |   |   | (5,614 | ) |   |   | 9,386 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On June 1, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $3,000. Terms include simple interest at ten percent (10.0%), the note is due on June 1, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.  The note is currently in default.     |   |          | 3,000  |   |              |   | - |   |   |   | 3,000 |   |   |   | 3,000 |   |   |   | (1,254 | ) |   |   | 1,746 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On June 10, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $3,000. Terms include simple interest at ten percent (10.0%), the note is due on June 10, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.  The note is currently in default.   |   |          | 3,000  |   |              |   | - |   |   |   | 3,000 |   |   |   | 3,000 |   |   |   | (1,327 | ) |   |   | 1,673 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On June 20, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $6,500. Terms include simple interest at ten percent (10.0%), the note is due on June 20, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.  The note is currently in default.   |   |          | 6,500  |   |              |   | - |   |   |   | 6,500 |   |   |   | 6,500 |   |   |   | (3,054 | ) |   |   | 3,446 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On June 24, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $2,000. Terms include simple interest at ten percent (10.0%), the note is due on June 24, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.  The note is currently in default.   |   |          | 2,000  |   |              |   | - |   |   |   | 2,000 |   |   |   | 2,000 |   |   |   | (961 | ) |   |   | 1,039 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | June 30, 2012 |   |   | December 31, 2011 |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|--------|--------|-------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |          |   |   |              |   |   | Principal, |   |   |   |   |   |   |   |   | Principal, |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |          |   |   | Unamortized       |   |   | net of |   |   |   |   |   | Unamortized |   |   | net of |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | Principal     |   |   | Discount          |   |   | Discounts |   |   | Principal |   |   | Discount |   |   | Discounts |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On August 4, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $15,000. Terms include simple interest at ten percent (10.0%), the note is due on August 4, 2012 and is convertible at the option of the holder at a price of $0.001 per share. No payments have been made on this note. During the six months ended June 30, 2012, a portion of the note in the amount of $14,800 was converted to Common Stock. |   |          | 200    |   |              |   | (22 | ) |   |   | 178 |   |   |   | 15,000 |   |   |   | (8,893 | ) |   |   | 6,107 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On August 4, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $20,000. Terms include simple interest at ten percent (10.0%), the note is due on August 4, 2012 and is convertible at the option of the holder at a price of $0.001 per share. No payments have been made on this note. During the six months ended June 30, 2012, a portion of the note in the amount of $18,000 was converted to Common Stock. |   |          | 2,000  |   |              |   | (191 | ) |   |   | 1,809 |   |   |   | 20,000 |   |   |   | (11,857 | ) |   |   | 8,143 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On August 18, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $2,500. Terms include simple interest at ten percent (10.0%), the note is due on August 18, 2012 and is convertible at the option of the holder at a price of $0.001 per share. No payments have been made on this note.                                                                                                                         |   |          | 2,500  |   |              |   | (335 | ) |   |   | 2,165 |   |   |   | 2,500 |   |   |   | (1,577 | ) |   |   | 923 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On September 13, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $6,000. Terms include simple interest at ten percent (10.0%), the note is due on September 13, 2012 and is convertible at the option of the holder at a price of $0.001 per share. No payments have been made on this note.                                                                                                                   |   |          | 6,000  |   |              |   | (1,229 | ) |   |   | 4,771 |   |   |   | 6,000 |   |   |   | (4,212 | ) |   |   | 1,788 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On September 22, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $1,000. Terms include simple interest at ten percent (10.0%), the note is due on September 22, 2012 and is convertible at the option of the holder at a price of $0.001 per share. No payments have been made on this note.                                                                                                                   |   |          | 1,000  |   |              |   | (229 | ) |   |   | 771 |   |   |   | 1,000 |   |   |   | (726 | ) |   |   | 274 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On September 28, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $2,000. Terms include simple interest at ten percent (10.0%), the note is due on September 28, 2012 and is convertible at the option of the holder at a price of $0.001 per share. No payments have been made on this note.                                                                                                                   |   |          | 2,000  |   |              |   | (393 | ) |   |   | 1,607 |   |   |   | 2,000 |   |   |   | (1,189 | ) |   |   | 811 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On October 6, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $5,800. Terms include simple interest at ten percent (10.0%), the note is due on October 6, 2012 and is convertible at the option of the holder at a price of $0.001 per share. No payments have been made on this note.                                                                                                                         |   |          | 5,800  |   |              |   | (155 | ) |   |   | 5,645 |   |   |   | 5,800 |   |   |   | (444 | ) |   |   | 5,356 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On October 21, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $1,700. Terms include simple interest at ten percent (10.0%), the note is due on October 21, 2012 and is convertible at the option of the holder at a price of $0.001 per share. No payments have been made on this note.                                                                                                                       |   |          | 1,700  |   |              |   | (210 | ) |   |   | 1,490 |   |   |   | 1,700 |   |   |   | (548 | ) |   |   | 1,152 |   |

----

|                                                                                                                                                                                                                                                                                                                                            |   | June 30, 2012 |   |   | December 31, 2011 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|--------|--------|-------------------|--------|
|                                                                                                                                                                                                                                                                                                                                            |   |          |   |   |              |   |   | Principal, |   |   |   |   |   |   |   |   | Principal, |   |
|                                                                                                                                                                                                                                                                                                                                            |   |          |   |   | Unamortized       |   |   | net of |   |   |   |   |   | Unamortized |   |   | net of |   |
|                                                                                                                                                                                                                                                                                                                                            |   | Principal     |   |   | Discount          |   |   | Discounts |   |   | Principal |   |   | Discount |   |   | Discounts |   |
|                                                                                                                                                                                                                                                                                                                                            |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On November 23, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $2,000. Terms include simple interest at ten percent (10.0%), the note is due on November 23, 2012 and is convertible at the option of the holder at a price of $0.001 per share. No payments have been made on this note. |   |          | 2,000  |   |              |   | (319 | ) |   |   | 1,681 |   |   |   | 2,000 |   |   |   | (717 | ) |   |   | 1,283 |   |
|                                                                                                                                                                                                                                                                                                                                            |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On December 5, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $11,500. Terms include simple interest at ten percent (10.0%), the note is due on December 5, 2012 and is convertible at the option of the holder at a price of $0.001 per share. No payments have been made on this note.  |   |          | 11,500 |   |              |   | (1,986 | ) |   |   | 9,514 |   |   |   | 11,500 |   |   |   | (4,273 | ) |   |   | 7,227 |   |
|                                                                                                                                                                                                                                                                                                                                            |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On January 20, 2012 the Company entered into a convertible promissory note with an investment firm in the amount of $17,700. Terms include simple interest at ten percent (10.0%), the note is due on demand and is convertible at the option of the holder at a price of $0.001 per share. No payments have been made on this note.            |   |          | 17,700 |   |              |   | - |   |   |   | 17,700 |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                            |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On January 26, 2012 the Company entered into a convertible promissory note with an investment firm in the amount of $36,580. Terms include simple interest at ten percent (10.0%), the note is due on January 26, 2013 and is convertible at the option of the holder at a price of $0.001 per share. No payments have been made on this note.  |   |          | 36,580 |   |              |   | (20,988 | ) |   |   | 15,592 |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                            |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On February 3, 2012 the Company entered into a convertible promissory note with an investment firm in the amount of $3,000. Terms include simple interest at ten percent (10.0%), the note is due on demand and is convertible at the option of the holder at a price of $0.001 per share. No payments have been made on this note.             |   |          | 3,000  |   |              |   | - |   |   |   | 3,000 |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                            |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On February 27, 2012 the Company entered into a convertible promissory note with an investment firm in the amount of $900. Terms include simple interest at ten percent (10.0%), the note is due on February 27, 2013 and is convertible at the option of the holder at a price of $0.001 per share. No payments have been made on this note.   |   |          | 900    |   |              |   | (594 | ) |   |   | 306 |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                            |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On March 20, 2012 the Company entered into a convertible promissory note with an investment firm in the amount of $1,370. Terms include simple interest at ten percent (10.0%), the note is due on demand and is convertible at the option of the holder at a price of $0.001 per share. No payments have been made on this note.               |   |          | 1,370  |   |              |   | - |   |   |   | 1,370 |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                            |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On March 21, 2012 the Company entered into a convertible promissory note with an investment firm in the amount of $1,600. Terms include simple interest at ten percent (10.0%), the note is due on March 21, 2013 and is convertible at the option of the holder at a price of $0.001 per share. No payments have been made on this note.       |   |          | 1,600  |   |              |   | (1,157 | ) |   |   | 443 |   |   |   | - |   |   |   | - |   |   |   | - |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | June 30, 2012 |    |   | December 31, 2011 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|---------|--------|-------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |          |    |   |              |   |   | Principal, |   |   |   |   |   |   |   |   | Principal, |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |          |    |   | Unamortized       |   |   | net of |   |   |   |   |   | Unamortized |   |   | net of |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | Principal     |    |   | Discount          |   |   | Discounts |   |   | Principal |   |   | Discount |   |   | Discounts |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |          |    |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On March 28, 2012 the Company entered into a convertible promissory note with an investment firm in the amount of $11,500. Terms include simple interest at ten percent (10.0%), the note is due on demand and is convertible at the option of the holder at a price of $0.001 per share. No payments have been made on this note.                                                                                                                                                                                                                                                                                                                                                     |   |          | 11,500  |   |              |   | - |   |   |   | 11,500 |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |          |    |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On March 31, 2011 the Company entered into a stock repurchase agreement with a NexPhase investor to repurchase 100,000 shares of Common Stock acquired in the NexPhase acquisition. Terms include principal in the amount of $27,500 including premium interest of ten percent (10.0%) ($2,500), the note is due on June 30, 2012.  Payments totaling $7,453 have been made on this note during the year ended December 31, 2011.  Payments totaling $12,000 have been made on this note during the six months ended June 30, 2012.  The note is currently in default.                                                                                   |   |          | 8,048   |   |              |   | - |   |   |   | 8,048 |   |   |   | 20,048 |   |   |   | - |   |   |   | 20,048 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |          |    |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On March 31, 2011 the Company entered into a stock repurchase agreement with a NexPhase investor to repurchase 20,000 shares of Common Stock acquired in the NexPhase acquisition. Terms include principal in the amount of $5,500 including premium interest of ten percent (10.0%) ($500), the note is due on June 30, 2012.  No payments have been made on this note.  Payments totaling $1,490 have been made on this note during the year ended December 31, 2011.  The note is currently in default.                                                                                                                                               |   |          | 4,010   |   |              |   | - |   |   |   | 4,010 |   |   |   | 4,010 |   |   |   | - |   |   |   | 4,010 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |          |    |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On March 31, 2011 the Company entered into a stock repurchase agreement with a NexPhase investor to repurchase 24,000 shares of Common Stock acquired in the NexPhase acquisition. Terms include principal in the amount of $6,600 including premium interest of ten percent (10.0%) ($600), the note is due on June 30, 2012.  No payments have been made on this note.  The note is currently in default.                                                                                                                                                                                                                                                        |   |          | 6,600   |   |              |   | - |   |   |   | 6,600 |   |   |   | 6,600 |   |   |   | - |   |   |   | 6,600 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |          |    |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On March 31, 2011the Company entered into a stock repurchase agreement with a NexPhase investor to repurchase 20,000 shares of Common Stock acquired in the NexPhase acquisition. Terms include principal in the amount of $5,500 including premium interest of ten percent (10.0%) ($500), the note is due on June 30, 2012.  No payments have been made on this note.  The note is currently in default.                                                                                                                                                                                                                                                         |   |          | 5,500   |   |              |   | - |   |   |   | 5,500 |   |   |   | 5,500 |   |   |   | - |   |   |   | 5,500 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |          |    |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On March 31, 2011 the Company entered into a stock repurchase agreement with a NexPhase investor to repurchase 80,000 shares of Common Stock acquired in the NexPhase acquisition. Terms include principal in the amount of $22,000 including premium interest of ten percent (10.0%) ($2000), the note is due on June 30, 2012.  On June 21 2011, a payment in the amount of $2,200 was made on this note.  Payments totaling $5,962 have been made on this note during the year ended December 31, 2011.  Payments totaling $2,000 have been made on this note during the six months ended June 30, 2012.  The note is currently in default. |   |          | 14,038  |   |              |   | - |   |   |   | 14,038 |   |   |   | 16,038 |   |   |   | - |   |   |   | 16,038 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |          |    |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |          |    |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Subtotal Notes Payable -- Related Parties - Onteco                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |          | 278,595 |   |              |   | (27,808 | ) |   |   | 250,787 |   |   |   | 402,345 |   |   |   | (72,139 | ) |   |   | 330,206 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | June 30, 2012 |   |   | December 31, 2011 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|--------|--------|-------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |          |   |   |              |   |   | Principal, |   |   |   |   |   |   |   |   | Principal, |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |          |   |   | Unamortized       |   |   | net of |   |   |   |   |   | Unamortized |   |   | net of |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | Principal     |   |   | Discount          |   |   | Discounts |   |   | Principal |   |   | Discount |   |   | Discounts |   |
| Notes Payable -- Related Parties - NexPhase                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On June 21, 2010 the Company entered into a convertible promissory note with an investment firm in the amount of $105,000. Terms include simple interest at twelve percent (12.0%), the note is due on June 21, 2011 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note. On March 8, 2011, the Note was assigned to Onteco.                                                                                         |   |          | -      |   |              |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On August 4, 2010 the Company entered into a convertible promissory note with an investment firm in the amount of $60,000. Terms include simple interest at twelve percent (12.0%), the note is due on August 4, 2011 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note. On March 1, 2011, the Note was assigned to Onteco.                                                                                        |   |          | -      |   |              |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On November 1, 2010 the Company entered into a convertible promissory note with an investment firm in the amount of $70,000. Terms include simple interest at twelve percent (12.0%), the note is due on November 1, 2011 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note. On October 26, 2011, the note, plus accrued interest of $8,124, was sold and assigned to a thrid party investment firm by the holder. |   |          | -      |   |              |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On December 1, 2010 the Company entered into a convertible promissory note with an investment firm in the amount of $10,000. Terms include simple interest at twelve percent (12.0%), the note is due on December 1, 2011 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.  The note is currently in default.                                                                                          |   |          | 10,000 |   |              |   | - |   |   |   | 10,000 |   |   |   | 10,000 |   |   |   | - |   |   |   | 10,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On December 8, 2010 the Company entered into a convertible promissory note with an investment firm in the amount of $40,000. Terms include simple interest at twelve percent (12.0%), the note is due on December 8, 2011 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.  The note is currently in default.                                                                                          |   |          | 40,000 |   |              |   | - |   |   |   | 40,000 |   |   |   | 40,000 |   |   |   | - |   |   |   | 40,000 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | June 30, 2012 |   |   | December 31, 2011 |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|--------|--------|-------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |          |   |   |              |   |   | Principal, |   |   |   |   |   |   |   |   | Principal, |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |          |   |   | Unamortized       |   |   | net of |   |   |   |   |   | Unamortized |   |   | net of |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | Principal     |   |   | Discount          |   |   | Discounts |   |   | Principal |   |   | Discount |   |   | Discounts |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On December 23, 2010 the Company entered into a convertible promissory note with an investment firm in the amount of $10,000. Terms include simple interest at twelve percent (12.0%), the note is due on December 23, 2011 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.  The note is currently in default.                          |   |          | 10,000 |   |              |   | - |   |   |   | 10,000 |   |   |   | 10,000 |   |   |   | - |   |   |   | 10,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On January 10, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $15,000. Terms include simple interest at twelve percent (12.0%), the note is due on January 10, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.  The note is currently in default.                            |   |          | 15,000 |   |              |   | - |   |   |   | 15,000 |   |   |   | 15,000 |   |   |   | - |   |   |   | 15,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On February 7, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $10,000. Terms include simple interest at twelve percent (12.0%), the note is due on February 7, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. During the six months ended June 30, 2012, the note plus accrued interest of $500 was converted to Common Stock. |   |          | -      |   |              |   | - |   |   |   | - |   |   |   | 10,000 |   |   |   | - |   |   |   | 10,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On February 11, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $12,000. Terms include simple interest at twelve percent (12.0%), the note is due on February 11, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.  The note is currently in default.                          |   |          | 12,000 |   |              |   | - |   |   |   | 12,000 |   |   |   | 12,000 |   |   |   | - |   |   |   | 12,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On March 2, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $12,500. Terms include simple interest at twelve percent (12.0%), the note is due on March 2, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.  The note is currently in default.                                  |   |          | 12,500 |   |              |   | - |   |   |   | 12,500 |   |   |   | 12,500 |   |   |   | (2,117 | ) |   |   | 10,383 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On March 11, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $20,000. Terms include simple interest at twelve percent (12.0%), the note is due on March 11, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.  The note is currently in default.                                |   |          | 20,000 |   |              |   | - |   |   |   | 20,000 |   |   |   | 20,000 |   |   |   | (3,880 | ) |   |   | 16,120 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | June 30, 2012 |   |   | December 31, 2011 |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|--------|--------|-------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |          |   |   |              |   |   | Principal, |   |   |   |   |   |   |   |   | Principal, |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |          |   |   | Unamortized       |   |   | net of |   |   |   |   |   | Unamortized |   |   | net of |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | Principal     |   |   | Discount          |   |   | Discounts |   |   | Principal |   |   | Discount |   |   | Discounts |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On May 9, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $10,000. Terms include simple interest at twelve percent (12.0%), the note is due on May 9, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.  The note is currently in default.                                                                  |   |          | 10,000 |   |              |   | - |   |   |   | 10,000 |   |   |   | 10,000 |   |   |   | (3,552 | ) |   |   | 6,448 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On May 24, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $30,000. Terms include simple interest at twelve percent (12.0%), the note is due on May 24, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note. During the six months ended June 30, 2012, the note in the amount of $30,000 was converted to Common Stock. |   |          | -      |   |              |   | - |   |   |   | - |   |   |   | 30,000 |   |   |   | (11,885 | ) |   |   | 18,115 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On June 1, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $15,000. Terms include simple interest at twelve percent (12.0%), the note is due on June 1, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.  The note is currently in default.                                                                |   |          | 15,000 |   |              |   | - |   |   |   | 15,000 |   |   |   | 15,000 |   |   |   | (6,270 | ) |   |   | 8,730 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On June 20, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $16,000. Terms include simple interest at twelve percent (12.0%), the note is due on June 20, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. During the six months ended June 30, 2012, the note in the amount of $16,000 plus accrued interest of $600 was converted to Common Stock.          |   |          | -      |   |              |   | - |   |   |   | - |   |   |   | 16,000 |   |   |   | (7,519 | ) |   |   | 8,481 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On June 23, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $50,000. Terms include simple interest at twelve percent (12.0%), the note is due on June 23, 2012 and is convertible at the option of the holder at a price which is the greater of (i) twice the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.  The note is currently in default.                                                              |   |          | 50,000 |   |              |   | - |   |   |   | 50,000 |   |   |   | 50,000 |   |   |   | (23,907 | ) |   |   | 26,093 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On July 13, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $14,000. Terms include simple interest at twelve percent (12.0%), the note is due on July 13, 2012 and is convertible at the option of the holder at a price which is the lesser of (i) the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.                                                                                                                  |   |          | 14,000 |   |              |   | (497 | ) |   |   | 13,503 |   |   |   | 14,000 |   |   |   | (7,458 | ) |   |   | 6,542 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | June 30, 2012 |    |   | December 31, 2011 |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|---------|--------|-------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |          |    |   |              |   |   | Principal, |   |   |   |   |   |   |   |   | Principal, |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |          |    |   | Unamortized       |   |   | net of |   |   |   |   |   | Unamortized |   |   | net of |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | Principal     |    |   | Discount          |   |   | Discounts |   |   | Principal |   |   | Discount |   |   | Discounts |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |          |    |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On July 27, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $15,000. Terms include simple interest at twelve percent (12.0%), the note is due on July 27, 2012 and is convertible at the option of the holder at a price which is the lesser of (i) the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.     |   |          | 15,000  |   |              |   | (1,106 | ) |   |   | 13,894 |   |   |   | 15,000 |   |   |   | (8,565 | ) |   |   | 6,435 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |          |    |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On August 1, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $40,000. Terms include simple interest at twelve percent (12.0%), the note is due on August 1, 2012 and is convertible at the option of the holder at a price of $0.001.  No payments have been made on this note.                                                                                                                                                         |   |          | 40,000  |   |              |   | (3,497 | ) |   |   | 36,503 |   |   |   | 40,000 |   |   |   | (23,387 | ) |   |   | 16,613 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |          |    |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On August 30, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $5,000. Terms include simple interest at twelve percent (12.0%), the note is due on August 30, 2012 and is convertible at the option of the holder at a price which is the lesser of (i) the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note.  |   |          | 5,000   |   |              |   | (833 | ) |   |   | 4,167 |   |   |   | 5,000 |   |   |   | (3,319 | ) |   |   | 1,681 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |          |    |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On August 31, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $10,000. Terms include simple interest at twelve percent (12.0%), the note is due on August 31, 2012 and is convertible at the option of the holder at a price which is the lesser of (i) the par value of the common stock, or (ii) a seventy-five percent discount to the market closing bid price on the date of the conversion notice. No payments have been made on this note. |   |          | 10,000  |   |              |   | (1,694 | ) |   |   | 8,306 |   |   |   | 10,000 |   |   |   | (6,666 | ) |   |   | 3,334 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |          |    |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On November 1, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $25,000. Terms include simple interest at twelve percent (12.0%), the note is due on November 1, 2012 and is convertible at the option of the holder at a price of $0.001 per share. No payments have been made on this note.                                                                                                                                                      |   |          | 25,000  |   |              |   | (3,388 | ) |   |   | 21,612 |   |   |   | 25,000 |   |   |   | (8,361 | ) |   |   | 16,639 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |          |    |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On January 9, 2012 the Company entered into a convertible promissory note with an investment firm in the amount of $10,000. Terms include simple interest at ten percent (10.0%), the note is due on demand and is convertible at the option of the holder at a price of $0.001 per share. No payments have been made on this note.                                                                                                                                                                    |   |          | 10,000  |   |              |   | - |   |   |   | 10,000 |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |          |    |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |          |    |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Subtotal Notes Payable -- Related Parties -- NexPhase                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |          | 313,500 |   |              |   | (11,015 | ) |   |   | 302,485 |   |   |   | 359,500 |   |   |   | (116,886 | ) |   |   | 242,614 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |          |    |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Notes Payable -- Related Parties                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | $             | 592,095 |   |              | $      | (38,823 | ) |   | $ | 553,272 |   |   | $ | 761,845 |   |   | $ | (189,025 | ) |   | $ | 572,820 |   |

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|                                                                                                                                                                                                                                                                                                                                                                                                               |   | June 30, 2012 |   |   | December 31, 2011 |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|--------|--------|-------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                               |   |          |   |   |              |   |   | Principal, |   |   |   |   |   |   |   |   | Principal, |   |
|                                                                                                                                                                                                                                                                                                                                                                                                               |   |          |   |   | Unamortized       |   |   | net of |   |   |   |   |   | Unamortized |   |   | net of |   |
|                                                                                                                                                                                                                                                                                                                                                                                                               |   | Principal     |   |   | Discount          |   |   | Discounts |   |   | Principal |   |   | Discount |   |   | Discounts |   |
|                                                                                                                                                                                                                                                                                                                                                                                                               |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On January 17, 2010 the Company entered into a convertible promissory note with an advisory firm for services rendered in the amount of $59,000. Terms include bonus interest of $5,900, the note is payable on demand and has no stated interest rate or due date and is convertible at a rate of $0.03 per share or 1,771,667 unregistered common shares. Total payments of $11,750 have been made on this note. |   | $             | 53,150 |   |              | $      | - |   |   | $ | 53,150 |   |   | $ | 53,150 |   |   | $ | - |   |   | $ | 53,150 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                               |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On February 10, 2010 the Company entered into a convertible promissory note with a project consultant for services rendered in the amount of $7,800. Terms include bonus interest of $780, the note is payable on demand and has no stated interest rate or due date and is convertible at a rate of $0.03 per share or 286,000 unregistered common shares. No payments have been made on this note.               |   |          | 8,580  |   |              |   | - |   |   |   | 8,580 |   |   |   | 8,580 |   |   |   | - |   |   |   | 8,580 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                               |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On February 10, 2010 the Company entered into a convertible promissory note with an engineering firm for services rendered in the amount of $27,600. Terms include bonus interest of $2,760, the note is payable on demand and has no stated interest rate or due date and is convertible at a rate of $0.03 per share or 1,012,000 unregistered common shares. No payments have been made on this note.           |   |          | 30,360 |   |              |   | - |   |   |   | 30,360 |   |   |   | 30,360 |   |   |   | - |   |   |   | 30,360 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                               |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On June 7, 2010 the Company entered into a convertible promissory note with an investor in the amount of $10,000. The note is payable on demand and has no stated interest rate or due date and is convertible at a rate of $0.03 per share or 333,333 unregistered common shares. No payments have been made on this note.                                                                                        |   |          | 10,000 |   |              |   | - |   |   |   | 10,000 |   |   |   | 10,000 |   |   |   | - |   |   |   | 10,000 |   |

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | June 30, 2012 |   |   | December 31, 2011 |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|--------|--------|-------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |          |   |   |              |   |   | Principal, |   |   |   |   |   |   |   |   | Principal, |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |          |   |   | Unamortized       |   |   | net of |   |   |   |   |   | Unamortized |   |   | net of |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | Principal     |   |   | Discount          |   |   | Discounts |   |   | Principal |   |   | Discount |   |   | Discounts |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On July 19, 2010 the Company entered into a convertible promissory note with an investor in the amount of $2,500. The note is payable on demand and has no stated interest rate or due date and is convertible at a rate of $0.03 per share or 83,333 unregistered common shares. No payments have been made on this note.                                                                                                                                                                                                                                                                                                                     |   |          | 2,500  |   |              |   | - |   |   |   | 2,500 |   |   |   | 2,500 |   |   |   | - |   |   |   | 2,500 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On April 28 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $56,000. Terms include simple interest at eight percent (8.0%), the note is due on January 31 2012 and is convertible at the option of the holder at a price calculated at a forty percent discount to the market closing bid price on the date of the conversion notice. As of December 31, 2011, a portion of the note in the amount of $35,500 has been converted to Common Stock.  During the six months ended June 30, 2012, the remainder of the note in the amount of $20,500 was converted to Common Stock. |   |          | -      |   |              |   | - |   |   |   | - |   |   |   | 20,500 |   |   |   | (1,524 | ) |   |   | 18,976 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On June 20, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $53,000. Terms include simple interest at eight percent (8.0%), the note is due on March 22, 2012 and is convertible at the option of the holder at a price calculated at a forty percent discount to the market closing bid price on the date of the conversion notice. During the six months ended June 30, 2012, the note in the amount of $53,000 was converted to Common Stock.                                                                                                                                          |   |          | -      |   |              |   | - |   |   |   | - |   |   |   | 53,000 |   |   |   | (10,497 | ) |   |   | 42,503 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On August 24, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $15,000. Terms include simple interest at ten percent (10.0%), the note is due on April 24, 2012 and is convertible at the option of the holder at a price calculated at a fifty percent discount to the market closing bid price on the date of the conversion notice. During the six months ended June 30, 2012, the note in the amount of $15,000 plus accrued interest of $2,425 was converted to Common Stock.                                                                                                         |   |          | -      |   |              |   | - |   |   |   | - |   |   |   | 15,000 |   |   |   | (7,069 | ) |   |   | 7,931 |   |

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | June 30, 2012 |   |   | December 31, 2011 |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|--------|--------|-------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |          |   |   |              |   |   | Principal, |   |   |   |   |   |   |   |   | Principal, |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |          |   |   | Unamortized       |   |   | net of |   |   |   |   |   | Unamortized |   |   | net of |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | Principal     |   |   | Discount          |   |   | Discounts |   |   | Principal |   |   | Discount |   |   | Discounts |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On September 1, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $50,000. Terms include simple interest at eight percent (8.0%), the note is due on June 6, 2012 and is convertible at the option of the holder at a price calculated at a forty percent discount to the market closing bid price on the date of the conversion notice. During the six months ended June 30, 2012, the note in the amount of $50,000 was paid plus accrued interest of $2,315 and a redemption premium of $22,685.                                                                                                                                                                                                                                        |   |          | -      |   |              |   | - |   |   |   | - |   |   |   | 50,000 |   |   |   | (18,877 | ) |   |   | 31,123 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On October 26, 2011 the Company entered into a convertible promissory note with an investment firm in the amount of $12,000. Terms include simple interest at twelve percent (12.0%), the note is due on October 26, 2012 and is convertible at the option of the holder at a price calculated at a fifty percent discount to the market closing bid price on the date of the conversion notice. During the six months ended June 30, 2012, the note in the amount of $12,000 plus accrued interest of $2,175 was converted to Common Stock.                                                                                                                                                                                                                                                  |   |          | -      |   |              |   | - |   |   |   | - |   |   |   | 12,000 |   |   |   | (9,835 | ) |   |   | 2,165 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On October 26, 2011 the Company entered into a convertible promissory note with a an investment firm in the amount of $78,124. Terms include simple interest at twelve percent (12.0%), the note is due on June 26, 2012 and is convertible at the option of the holder at a price calculated at a fifty percent discount to the market closing bid price on the date of the conversion notice.  The note was assigned from a non-affiliated related party investment firm.  No payments have been made on this note. As of December 31, 2011, a portion of the note in the amount of $38,124 has been converted to Common Stock.  During the six months ended June 30, 2012, the remainder of the note in the amount of $40,000 was converted to Common Stock. |   |          | -      |   |              |   | - |   |   |   | - |   |   |   | 40,000 |   |   |   | (29,180 | ) |   |   | 10,820 |   |

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | June 30, 2012 |    |   | December 31, 2011 |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|---------|--------|-------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |          |    |   |              |   |   | Principal, |   |   |   |   |   |   |   |   | Principal, |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |          |    |   | Unamortized       |   |   | net of |   |   |   |   |   | Unamortized |   |   | net of |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | Principal     |    |   | Discount          |   |   | Discounts |   |   | Principal |   |   | Discount |   |   | Discounts |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |          |    |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On December 5, 2011 the Company entered into a convertible promissory note with a an investment firm in the amount of $25,000. Terms include simple interest at ten percent (10.0%), the note is due on December 5, 2012 and is convertible at the option of the holder at a the lesser of par ($0.001) or a price calculated at a fifty percent discount to the market closing bid price on the date of the conversion notice.  The note was assigned from a non-affiliated related party investment firm.  No payments have been made on this note. As of December 31, 2011, a portion of the note in the amount of $6,800 has been converted to Common Stock.  During the six months ended June 30, 2012, the remainder of the note in the amount of $18,200 was converted to Common Stock. |   |          | -       |   |              |   | - |   |   |   | - |   |   |   | 18,200 |   |   |   | (6,763 | ) |   |   | 11,437 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |          |    |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On February 7, 2012 the Company entered into a convertible promissory note with a an investment firm in the amount of $32,500. Terms include simple interest at eight percent (8.0%), the note is due on November 9, 2012 and is convertible at the option of the holder at a price calculated at a forty-five percent discount to the market closing bid price on the date of the conversion notice.  No payments have been made on this note.                                                                                                                                                                                                                                                                                                                                                                    |   |          | 32,500  |   |              |   | (12,717 | ) |   |   | 19,783 |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |          |    |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On February 10, 2012 the Company entered into a convertible promissory note with a an investment firm in the amount of $19,000. Terms include simple interest at ten percent (10.0%), the note is due on February 10, 2013 and is convertible at the option of the holder at a price of $0.001.  No payments have been made on this note.                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |          | 19,000  |   |              |   | (11,680 | ) |   |   | 7,320 |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |          |    |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On April 2, 2012 the Company entered into a convertible promissory note with a an investment firm in the amount of $75,000. Terms include simple interest at ten percent (10.0%), the note is due on April 2, 2013 and is convertible at the option of the holder at a price of $0.001.  The note was assigned from a non-affiliated related party investment firm.  No payments have been made on this note.                                                                                                                                                                                                                                                                                                                                                                                            |   |          | 75,000  |   |              |   | (56,712 | ) |   |   | 18,288 |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |          |    |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On April 3, 2012 the Company entered into a convertible promissory note with a an investment firm in the amount of $37,500. Terms include simple interest at eight percent (8.0%), the note is due on January 9, 2013 and is convertible at the option of the holder at a price calculated at a forty-five percent discount to the market closing bid price on the date of the conversion notice.  No payments have been made on this note.                                                                                                                                                                                                                                                                                                                                                                        |   |          | 37,500  |   |              |   | (21,049 | ) |   |   | 16,451 |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |          |    |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| On May 21, 2012 the Company entered into a convertible promissory note with a an investment firm in the amount of $37,500. Terms include simple interest at eight percent (8.0%), the note is due on February 25, 2013 and is convertible at the option of the holder at a price calculated at a forty-five percent discount to the market closing bid price on the date of the conversion notice.  No payments have been made on this note.                                                                                                                                                                                                                                                                                                                                                                       |   |          | 32,500  |   |              |   | (22,737 | ) |   |   | 9,763 |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |          |    |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |          |    |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total - Notes Payable -- Third Parties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | $             | 301,090 |   |              | $      | (124,895 | ) |   | $ | 176,195 |   |   | $ | 313,290 |   |   | $ | (83,745 | ) |   | $ | 229,545 |   |

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| Remainder of 2012 |   | $ | 22,764 |   |
|-------------------|--------|---|--------|--------|
| 2013              |   | $ | 45,528 |   |
| 2014              |   | $ | 3,794  |   |

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| (a)   | Evaluation of Disclosure Controls and Procedures |
|-----------------|--------------------------------------------------|

| (b)   | Changes in Internal Control over Financial Reporting |
|-----------------|------------------------------------------------------|

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|   | Exhibit 31.1       | Rule 13a-14(a) Certification by the Principal Executive Officer                                                                                           |
|--------|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Exhibit 31.2       | Rule 13a-14(a) Certification by the Principal Financial Officer                                                                                           |
|   | Exhibit 32.1       | Certification by the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
|   | Exhibit 32.2       | Certification by the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
|   | Exhibit 101.INS ** | XBRL Instance Document                                                                                                                                    |
|   | Exhibit 101.SCH ** | XBRL Schema Document                                                                                                                                      |
|   | Exhibit 101.CAL ** | XBRL Calculation Linkbase Document                                                                                                                        |
|   | Exhibit 101.DEF ** | XBRL Definition Linkbase Document                                                                                                                         |
|   | Exhibit 101.LAB ** | XBRL Label Linkbase Document                                                                                                                              |
|   | Exhibit 101.PRE ** | XBRL Presentation Linkbase Document                                                                                                                       |

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| Date:  August 20, 2012 | By:    | /s/ Dror Svorai                                                                                          |   |
|----------------------------------|--------|----------------------------------------------------------------------------------------------------------|--------|
|                             |   | Dror Svorai                                                                                              |   |
|                             |   | Chief Executive Officer(Principal Executive Officer)Chief Financial Officer(Principal Financial Officer) |   |

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