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| TWELVE      OAKS PROPERTIES, INC.                                                                                                                                                                                                                                             |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| BALANCE      SHEETS                                                                                                                                                                                                                                                           |
| December      31, 2008 and 2009                                                                                                                                                                                                                                               |
|                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |
|                                    ASSETS                                                      |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                          |   | 2009 |   |   | 2008 |   |
|          Cash                                                                                                                                                                                                                                                  |   | $ | 43,467 |   |   | $ | 196,926 |   |
| Employee      Advances                                                                                                                                                                                                                                                        |   |   | 2,000 |   |   |   | - |   |
| Inventories                                                                                                                                                                                                                                                                   |   |   | - |   |   |   | - |   |
| Notes      receivable-related parties                                                                                                                                                                                                                                         |   |   | 519,210 |   |   |   | 170,210 |   |
| Capitalized      interest                                                                                                                                                                                                                                                     |   |   | 224,591 |   |   |   | 135,167 |   |
| Real      estate held for sale                                                                                                                                                                                                                                                |   |   | 1,282,942 |   |   |   | 1,370,604 |   |
| Land      held for development                                                                                                                                                                                                                                                |   |   | 2,605,509 |   |   |   | 2,267,668 |   |
|                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| TOTAL      ASSETS                                                                                                                                                                                                                                                             |   | $ | 4,677,719 |   |   | $ | 4,140,575 |   |
|                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
|                                       LIABILITIES AND SHAREHOLDERS'      EQUITY |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| Liabilities:                                                                                                                                                                                                                                                                  |   |   |   |   |   |   |   |   |
|    Accounts      Payable                                                                                                                                                                                                                                       |   | $ | - |   |   | $ | 35,027 |   |
|    Current      maturity of Development Loan                                                                                                                                                                                                                   |   |   | 640,523 |   |   |   | 652,571 |   |
| Due      from affiliate                                                                                                                                                                                                                                                       |   |   | 32,505 |   |   |   | - |   |
| Loan      payable - related party                                                                                                                                                                                                                                             |   |   | 604,664 |   |   |   | 620,164 |   |
| Development      loan payable                                                                                                                                                                                                                                                 |   |   | 628,020 |   |   |   | 790,972 |   |
|    Deferred      Revenue - 12 Oaks Improvement District                                                                                                                                                                                                        |   |   | 2,611,095 |   |   |   | 1,816,077 |   |
|                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| TOTAL      LIABILITIES                                                                                                                                                                                                                                                        |   |   | 4,516,807 |   |   |   | 3,914,811 |   |
|                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| Shareholders'      equity:                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |   |
| Common      stock                                                                                                                                                                                                                                                             |   |   | 2,500 |   |   |   | 2,500 |   |
| Retained      earnings                                                                                                                                                                                                                                                        |   |   | 158,412 |   |   |   | 223,264 |   |
|                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| Total      shareholders' equity                                                                                                                                                                                                                                               |   |   | 160,912 |   |   |   | 225,764 |   |
|                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| TOTAL      LIABILITIES AND SHAREHOLDERS' EQUITY                                                                                                                                                                                                                               |   | $ | 4,677,719 |   |   | $ | 4,140,575 |   |

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|                                           |   | 2009   |     |   | 2008   |   |
|------------------------------------------------|--------|--------|----------|--------|--------|--------|
| Revenue                                        |   |   |     |   |   |   |
| Sales                                          |   | $      | 175,000  |   |   | $      | 600,000 |   |
| Cost      of  sales                  |   |   | 117,116  |   |   |   | 456,868 |   |
|                                           |   |   |     |   |   |   |   |   |
| Gross      profit                              |   |   | 57,884   |   |   |   | 143,132 |   |
|                                           |   |   |     |   |   |   |   |   |
| Operating      expenses                        |   |   |     |   |   |   |   |   |
| Environmental      fees                        |   |   | 9,593    |   |   |   | 9,222 |   |
| Equipment      rental                          |   |   | 1,980    |   |   |   | 68,678 |   |
| Excavating                                     |   |   | 2,368    |   |   |   | 35,027 |   |
| Fuel                                           |   |   | -        |   |   |   | 18,337 |   |
|   Other                              |   |   | 3,899    |   |   |   | 4,049 |   |
|                                           |   |   |     |   |   |   |   |   |
| Total      operating expenses                  |   |   | 17,840   |   |   |   | 135,313 |   |
|                                           |   |   |     |   |   |   |   |   |
| Non-operating      expenses:                   |   |   |     |   |   |   |   |   |
| Consulting      Fees                           |   |   | -        |   |   |   | 5,000 |   |
| Professional      fees                         |   |   | 21,347   |   |   |   | 16,116 |   |
| Interest                                       |   |   | 10,118   |   |   |   | 8,192 |   |
| Taxes                                          |   |   | 6,011    |   |   |   | 3,458 |   |
| Utilities                                      |   |   | 6,334    |   |   |   | 4,242 |   |
| Miscellaneous                                  |   |   | 534      |   |   |   | 611 |   |
|                                           |   |   |     |   |   |   |   |   |
| Total      non-operating expenses              |   |   | 44,344   |   |   |   | 37,619 |   |
|                                           |   |   |     |   |   |   |   |   |
| Total      expenses                            |   |   | 62,184   |   |   |   | 172,932 |   |
|                                           |   |   |     |   |   |   |   |   |
| Other      income (expense)                    |   |   |     |   |   |   |   |   |
| Twelve      Oaks Improvement District revenue  |   |   | 49,095   |   |   |   | 251,143 |   |
| Twelve      Oaks Improvement District expenses |   |   | (109,647 |   |   |   | - |   |
| Timber      revenue                            |   |   |     |   |   |   | 8,300 |   |
|                                           |   |   |     |   |   |   |   |   |
|                                           |   |   |     |   |   |   |   |   |
| Net      other income (expense)                |   |   | (60,552  |   |   |   | 259,443 |   |
|                                           |   |   |     |   |   |   |   |   |
| Net      income (loss)                         |   | $      | (64,852  |   |   | $      | 229,643 |   |
|                                           |   |   |     |   |   |   |   |   |
| SHAREHOLDERS'      EQUITY DECEMBER 31, 2008    |   | $      | 225,764  |   |   |   |   |   |
|                                           |   |   |     |   |   |   |   |   |
| 2009      NET LOSS                             |   |   | (64,852  |   |   |   |   |   |
|                                           |   |   |     |   |   |   |   |   |
| SHAREHOLDERS'      EQUITY DECEMBER 31, 2009    |   | $      | 160,912  |   |   |   |   |   |

----

| TWELVE      OAKS PROPERTIES, INC.                            |   |
|--------------------------------------------------------------|--------|
| STATEMENTS      OF CASH FLOWS                                |   |
| Years      Ended December 31, 2008 and 2009                  |   |
|                                                         |   |   |   |   |   |   |
|                                                         |   |   |   |   |   |   |
|                                                         |   | 2009 |   |   | 2008 |   |
|                                                         |   |   |   |   |   |   |
| Cash      Flows from Operating Activities                    |   |   |   |   |   |   |
| Net      income (loss) from operations                       |   | $ | (64,852 | ) |   | $ | 229,643 |   |
| Adjustments      to reconcile net income to net cash         |   |   |   |   |   |   |   |   |
| used      in operating activities:                           |   |   |   |   |   |   |   |   |
|  Employee      Advances                                 |   |   | (2,000 | ) |   |   | - |   |
| Notes      receivable-related parties                        |   |   | (349,000 | ) |   |   | (170,210 | ) |
| Capitalized      interest                                    |   |   | (89,424 | ) |   |   | (135,167 | ) |
| Real      estate held for sale                               |   |   | 87,662 |   |   |   | (1,370,604 | ) |
| Land      held for development                               |   |   | (337,841 | ) |   |   | 74,562 |   |
| Accounts      Payable                                        |   |   | (35,027 | ) |   |   | 35,027 |   |
| Due      from Affiliate                                      |   |   | 32,505 |   |   |   | - |   |
| Current      Maturity of development loan                    |   |   | (12,048 | ) |   |   | 620,164 |   |
| Deferred      Revenue - 12 Oaks Improvement Dist             |   |   | (49,095 | ) |   |   | (251,143 | ) |
| Issuance      of Common Stock for services                   |   |   | - |   |   |   | - |   |
|                                                         |   |   |   |   |   |   |   |   |
|    Net      cash used in operating activities |   |   | (819,120 | ) |   |   | (967,728 | ) |
|                                                         |   |   |   |   |   |   |   |   |
| Cash      Flows from Financing Activities:                   |   |   |   |   |   |   |   |   |
| Funds      Rec'd from 12 Oaks Improvement Dist               |   |   | 844,113 |   |   |   | 2,067,219 |   |
| Increase      in Notes Payable - Related Party               |   |   | (15,500 | ) |   |   | 176,262 |   |
| Decrease      in development loan payable                    |   |   | (162,952 | ) |   |   | (1,078,827 | ) |
|                                                         |   |   |   |   |   |   |   |   |
| Net      cash provided by financing activities               |   |   | 665,661 |   |   |   | 1,164,654 |   |
|                                                         |   |   |   |   |   |   |   |   |
| Net      change in cash and cash equivalents                 |   |   | (153,459 | ) |   |   | 196,926 |   |
| Cash      and cash equivalents - beginning of year           |   |   | 196,926 |   |   |   | - |   |
| Cash      and cash equivalents - end of year                 |   | $ | 43,467 |   |   | $ | 196,926 |   |
|                                                         |   |   |   |   |   |   |   |   |
|                                                         |   |   |   |   |   |   |   |   |
| Supplemental      Disclosure of Cash Flow Information:       |   |   |   |   |   |   |   |   |
| Cash      paid for interest                                  |   | $ | 106,306 |   |   | $ | 143,359 |   |
| Cash      paid for taxes                                     |   | $ | 6,011 |   |   | $ | 3,458 |   |
|                                                         |   |   |   |   |   |   |   |   |

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| 1.            | Recognizes      and measures in its financial statements the identifiable assets acquired,      the liabilities assumed, and any non-controlling interest in the      acquiree. |
|----------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.            | Recognizes      and measures the goodwill acquired in the business combination or a gain      from a bargain purchase. the beginning of the first annual reporting      period beginning on or after December 15, 2008 and may not be applied      before that date. |
|----------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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