----

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| Colorado                                                       | *                                       |
|----------------------------------------------------------------|-----------------------------------------|
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |

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| Yes | þ | No | o |
|-----|--------|----|---|

|                                                                       |   |                             |
|----------------------------------------------------------------------------|--------|----------------------------------|
| Large accelerated filer  o                                       |   | Accelerated filer o              |
|                                                                       |   |                             |
| Non-accelerated filer  o(Do not check if a smaller reporting company) |   | Smaller Reporting Company þ |
|                                                                       |   |                             |

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|         |                                                                                                                                                                                                                                                                          |   |        Page |   |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------|--------|
| PART I-      | FINANCIAL INFORMATION                                                                                                                                                                                                                                                         |   | 4                                              |   |
|         |                                                                                                                                                                                                                                                                          |   |                                           |   |
| ITEM 1-      | FINANCIAL STATEMENTS                                                                                                                                                                                                                                                          |   | 5                                              |   |
|         |                                                                                                                                                                                                                                                                          |   |                                           |   |
|         | Condensed Consolidated Balance sheets as of September 30, 2012 (unaudited) and December 31, 2011                                                                                                                                                                              |   | 5                                              |   |
|         |                                                                                                                                                                                                                                                                          |   |                                           |   |
|         | Condensed Consolidated Statements of operations for the three and six month periods ended September 30, 2012 and September 30, 2011 and for the period January 3, 2006 (date of Commencement as a development stage company) through September 30, 2012(unaudited)            |   | 6                                              |   |
|         |                                                                                                                                                                                                                                                                          |   |                                           |   |
|         | Condensed Consolidated Statements of cash flows for the three and six month periods ended September 30, 2012  and September 30, 2011 and for the period January 3, 2006 (date of Commencement as a development stage company) through September 30, 2012(unaudited) |   | 7                                              |   |
|         |                                                                                                                                                                                                                                                                          |   |                                           |   |
|         | Notes to condensed consolidated financial statements                                                                                                                                                                                                                          |   | 8                                              |   |
|         |                                                                                                                                                                                                                                                                          |   |                                           |   |
| ITEM 2-      | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                                                                                                                                                                                   |   | 18                                             |   |
|         |                                                                                                                                                                                                                                                                          |   |                                           |   |
| ITEM 3-      | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                                                                                                                                                                                                    |   | 24                                             |   |
|         |                                                                                                                                                                                                                                                                          |   |                                           |   |
| ITEM 4-      | CONTROLS AND PROCEDURES                                                                                                                                                                                                                                                       |   | 24                                             |   |
|         |                                                                                                                                                                                                                                                                          |   |                                           |   |
| PART II-     | OTHER INFORMATION                                                                                                                                                                                                                                                             |   | 26                                             |   |
|         |                                                                                                                                                                                                                                                                          |   |                                           |   |
| ITEM 1-      | LEGAL PROCEEDINGS                                                                                                                                                                                                                                                             |   | 26                                             |   |
|         |                                                                                                                                                                                                                                                                          |   |                                           |   |
| ITEM 1A-     | RISK FACTORS                                                                                                                                                                                                                                                                  |   | 26                                             |   |
|         |                                                                                                                                                                                                                                                                          |   |                                           |   |
| ITEM 2-      | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS                                                                                                                                                                                                                   |   | 26                                             |   |
|         |                                                                                                                                                                                                                                                                          |   |                                           |   |
| ITEM 3-      | DEFAULT UPON SENIOR SECURITIES                                                                                                                                                                                                                                                |   | 27                                             |   |
|         |                                                                                                                                                                                                                                                                          |   |                                           |   |
| ITEM 4-      | MINE SAFETY DISCLOSURES                                                                                                                                                                                                                                                       |   | 27                                             |   |
|         |                                                                                                                                                                                                                                                                          |   |                                           |   |
| ITEM 5-      | OTHER INFORMATION                                                                                                                                                                                                                                                             |   | 27                                             |   |
|         |                                                                                                                                                                                                                                                                          |   |                                           |   |
| ITEM 6-      | EXHIBITS                                                                                                                                                                                                                                                                      |   | 27                                             |   |
|         |                                                                                                                                                                                                                                                                          |   |                                           |   |
| SIGNATURES   |                                                                                                                                                                                                                                                                          | 28     |                                           |
|         |                                                                                                                                                                                                                                                                          |   |                                           |   |
| Exhibit 31.1 | Certification Pursuant to Section 302 of the Sarbanes Oxley Act                                                                                                                                                                                                               |   | 29                                             |   |
|         |                                                                                                                                                                                                                                                                          |   |                                           |   |
| Exhibit 32.2 | Certification Pursuant to Section 906 of the Sarbanes Oxley Act                                                                                                                                                                                                               |   | 31                                             |   |

----

----

| ALL GRADE MINING, INC.                                                                                                                                                                                                |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (A Development Stage Company Commencing January 3, 2006)                                                                                                                                                              |
| CONDENSED CONSOLIDATED BALANCE SHEETS                                                                                                                                                                                 |
| (Unaudited)                                                                                                                                                                                                           |
|                                                                                                                                                                                                                  |   | September 30, |   |   | December 31, |   |
|                                                                                                                                                                                                                  |   | 2012 |   |   | 2011 |   |
| ASSETS                                                                                                                                                                                                                |   |   |   |   |   |   |
| Current Asset                                                                                                                                                                                                         |   |   |   |   |   |   |
| Cash                                                                                                                                                                                                                  |   | $ | 14 |   |   | $ | 1,040 |   |
|                                                                                                                                                                                                                  |   |   |   |   |   |   |   |   |
| PROPERTY AND EQUIPMENT - Net                                                                                                                                                                                          |   |   | 306 |   |   |   | 350 |   |
|                                                                                                                                                                                                                  |   |   |   |   |   |   |   |   |
| OTHER ASSETS                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| Depository payment towards acquisition of iron ore mine                                                                                                                                                               |   |   | 350,000 |   |   |   | 250,000 |   |
| Deposit on acquistion                                                                                                                                                                                                 |   |   | 4,025,000 |   |   |   | - |   |
| Prepaid Expenses                                                                                                                                                                                                      |   |   | 822,500 |   |   |   | - |   |
|                                                                                                                                                                                                                  |   |   | 5,197,500 |   |   |   | 250,000 |   |
|                                                                                                                                                                                                                  |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                  |   |   |   |   |   |   |   |   |
| Total Assets                                                                                                                                                                                                          |   | $ | 5,197,820 |   |   | $ | 251,390 |   |
|                                                                                                                                                                                                                  |   |   |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS' (DEFICIT)                                                                                                                                                                               |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                  |   |   |   |   |   |   |   |   |
| Current Liabilites                                                                                                                                                                                                    |   |   |   |   |   |   |   |   |
| Accounts Payable                                                                                                                                                                                                      |   | $ | 563,146 |   |   | $ | 164,215 |   |
| Taxes payable                                                                                                                                                                                                         |   |   | 8,716 |   |   |   | 8,716 |   |
| Accrued interest payable                                                                                                                                                                                              |   |   | 59,241 |   |   |   | 15,193 |   |
| Due to  stockholders                                                                                                                                                                                        |   |   | 6,000 |   |   |   | 7,302 |   |
| Loans payable                                                                                                                                                                                                         |   |   | 291,000 |   |   |   | 205,000 |   |
| Convertible debentures, net of debt discount of $0 and $0 as of September 30, 2012 and December  31, 2011                                                                                                   |   |   | - |   |   |   | 48,000 |   |
| Derivative liability                                                                                                                                                                                                  |   |   | 84,900 |   |   |   | 1,372,600 |   |
| Total Current Liabilites                                                                                                                                                                                              |   |   | 1,013,003 |   |   |   | 1,821,026 |   |
|                                                                                                                                                                                                                  |   |   |   |   |   |   |   |   |
| Convertible debentures, net of debt discount of $439,100 and $144,400 as of September 30, 2012 and December 31, 2011, net of current portion                                                                          |   |   | 383,900 |   |   |   | 255,600 |   |
|                                                                                                                                                                                                                  |   |   |   |   |   |   |   |   |
| Total liabilities                                                                                                                                                                                                     |   |   | 1,396,903 |   |   |   | 2,076,626 |   |
|                                                                                                                                                                                                                  |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                  |   |   |   |   |   |   |   |   |
| Stockholders' Deficit (Note 8)                                                                                                                                                                                        |   |   |   |   |   |   |   |   |
| Convertible Preferred Stock Class A, no par value, 100,000 shares authorized at September 30, 2012 and at December 31, 2011.Issued and outstanding 20,000 shares at September 30, 2012 and December 31, 2011.         |   |   | 46,000 |   |   |   | 46,000 |   |
| Convertible Preferred Stock Class B, no par value, 400,000 shares authorized at September 30, 2012 and at December 31, 2011. None issued and outstanding at September 30, 2012 and December 31, 2011.            |   |   |   | - |   |
| Preferred Stock Class C, no par value, 50,000 shares authorized at  September 30, 2012 and at December 31, 2011.Issued and outstanding 20,000 shares at  September 30, 2012 and December 31, 2011 |   |   | 9,000 |   |   |   | 9,000 |   |
| Common stock, par value $.001 per share; authorized 500,000,000 shares, issued and outstanding 117,777,091 and 85,058,759 shares at  September 30, 2012 and  December 31, 2011                    |   |   | 117,777 |   |   |   | 85,059 |   |
| Additional Paid in Capital                                                                                                                                                                                            |   |   | 11,365,978 |   |   |   | 164,039 |   |
| Deficit Accumulated During the Development Stage*                                                                                                                                                                     |   |   | (7,737,838 | ) |   |   | (2,129,334 | ) |
| Total Stockholders' Deficit                                                                                                                                                                                           |   |   | 3,800,917 |   |   |   | (1,825,236 | ) |
| Total Liabilities and Stockholders' Deficit                                                                                                                                                                           |   | $ | 5,197,820 |   |   | $ | 251,390 |   |

----

| ALL GRADE MINING, INC.                                   |   |
|----------------------------------------------------------|--------|
| (A Development Stage Company Commencing January 3, 2006) |   |
| CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS           |   |
| (Unaudited)                                              |   |
|                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                     |   | Nine Months Ended |   |   | Three Months Ended |   |   | January 3, 2006 (date of commencement as a development stage company) though September 30, 2012 |   |
|                                                     |   | September 30, |   |   | September 30, |   |   | September 30, |   |   | September 30, |   |   |   |   |
|                                                     |   | 2012 |   |   | 2011 |   |   | 2012 |   |   | 2011 |   |   |   |   |
| Net Sales                                                |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 7,500 |   |
| Cost of Sales                                            |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 3,135 |   |
| Gross Profit (Loss)                                      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 4,365 |   |
|                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating Expenses                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Officers’ compensation                             |   |   | 34,000 |   |   |   | - |   |   |   | 9,000 |   |   |   | - |   |   |   | 134,000 |   |
| Mine related expenses                                    |   |   | 437,500 |   |   |   | 60,000 |   |   |   | 55,000 |   |   |   | 60,000 |   |   |   | 670,000 |   |
| Consulting fees                                          |   |   | 1,731,421 |   |   |   | 55,500 |   |   |   | 853,478 |   |   |   | 25,500 |   |   |   | 1,808,920 |   |
| General and administrative                               |   |   | 103,777 |   |   |   | 73,152 |   |   |   | 45,168 |   |   |   | 36,000 |   |   |   | 568,782 |   |
|                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Operating Expenses                                 |   |   | 2,306,698 |   |   |   | 188,652 |   |   |   | 962,646 |   |   |   | 121,500 |   |   |   | 3,181,702 |   |
|                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating loss                                           |   |   | (2,306,698 | ) |   |   | (188,652 | ) |   |   | (962,646 | ) |   |   | (121,500 | ) |   |   | (3,177,337 | ) |
|                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income                                          |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 12 |   |
| Other income                                             |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 17,500 |   |
| Change in fair value of derivative liability             |   |   | 1,694,315 |   |   |   | 88,600 |   |   |   | 221,115 |   |   |   | 82,600 |   |   |   | 1,048,715 |   |
| Interest expense                                         |   |   | (266,121 | ) |   |   | (103,131 | ) |   |   | (57,112 | ) |   |   | (8,732 | ) |   |   | (870,627 | ) |
| Loss on debt conversion                                  |   |   | (4,730,000 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (4,730,000 | ) |
| Loss on negotiated debt settlement                       |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (26,100 | ) |
| Loss on debt conversion                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total other income and (expenses)                        |   |   | (3,301,806 | ) |   |   | (14,531 | ) |   |   | 164,003 |   |   |   | 73,868 |   |   |   | (4,560,500 | ) |
|                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss)                                        |   | $ | (5,608,504 | ) |   | $ | (203,183 | ) |   |   | (798,643 | ) |   | $ | (47,632 | ) |   | $ | (7,737,837 | ) |
|                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss Per Common Share:                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic and Diluted                                        |   | $ | (0.06 | ) |   | $ | (0.62 | ) |   | $ | (0.01 | ) |   | $ | (0.15 | ) |   |   |   |   |
|                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average number of common shares outstanding:    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic and Diluted                                        |   |   | 96,059,330 |   |   |   | 329,149 |   |   |   | 109,764,960 |   |   |   | 326,731 |   |   |   |   |   |

----

| ALL GRADE MINING, INC.                                                      |   |
|-----------------------------------------------------------------------------|--------|
| (A Development Stage Company Commencing January 3, 2006)                    |   |
| CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS                              |   |
| (Unaudited)                                                                 |   |
|                                                                        |   |   |   |   |   |   |
|                                                                        |   | Nine Months Ended |   |   |   January 3, 2006 (date of commencement as a development stage company) though September 30, 2012 |   |
|                                                                        |   |   September 30,2012 |   |   |   September 30,2011 |   |   |   |   |
|                                                                        |   |   |   |   |   |   |   |   |   |
| CASH FLOWS FROM OPERATING ACTIVITIES:                                       |   |   |   |   |   |   |   |   |   |
| Net Loss                                                                    |   | $ | (5,608,504 | ) |   | $ | (203,183 | ) |   | $ | (7,737,838 | ) |
| Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities: |   |   |   |   |   |   |   |   |   |
| Depreciation expense                                                        |   |   | 44 |   |   |   | 1,398 |   |   |   | 9,260 |   |
| Impairment of equipment                                                     |   |   | - |   |   |   | - |   |   |   | 3,907 |   |
| Issuance of stock for services                                              |   |   | 404,500 |   |   |   | - |   |   |   | 524,500 |   |
| Amortization of debt discount                                               |   |   | 54,400 |   |   |   | 37,300 |   |   |   | 98,000 |   |
| Change in fair value of derivative liability                                |   |   | (1,694,315 | ) |   |   | (88,600 | ) |   |   | (1,048,715 | ) |
| Interest Expense                                                            |   |   | 159,298 |   |   |   | 61,000 |   |   |   | 698,298 |   |
| Issuance of stock for mine costs                                            |   |   | 377,500 |   |   |   | - |   |   |   | 377,500 |   |
| Issuance of stock for consulting fees                                       |   |   | 587,800 |   |   |   | - |   |   |   | 587,800 |   |
| Loss on debt conversion                                                     |   |   | 4,730,000 |   |   |   |   |   |   |   | 4,730,000 |   |
|                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Changes in Assets and Liabilities                                           |   |   |   |   |   |   |   |   |   |   |   |   |
|  Decrease (increase) in prepaid expenses                               |   |   | (300 | ) |   |   | - |   |   |   | (300 | ) |
|  (Increase) Decrease in Accounts Payable                               |   |   | 458,931 |   |   |   | 13,500 |   |   |   | 682,121 |   |
|  (Increase) Decrease in NJ Corporate Business Tax                      |   |   | - |   |   |   | 1,500 |   |   |   | - |   |
|  (Increase) Decrease in Accrued interest payable                       |   |   | 45,322 |   |   |   | 5,148 |   |   |   | 82,347 |   |
|  Payroll taxes payable                                                 |   |   | - |   |   |   | - |   |   |   | 8,716 |   |
| NET CASH USED IN OPERATING ACTIVITES                                        |   |   | (485,324 | ) |   |   | (171,937 | ) |   |   | (984,404 | ) |
|                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES                                        |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Purchase of property and equipment                                          |   |   | - |   |   |   | - |   |   |   | (13,473 | ) |
| Depository payment towards acquisition of iron ore mine                     |   |   | (100,000 | ) |   |   | (250,000 | ) |   |   | (350,000 | ) |
| NET CASH USED IN INVESTING ACTIVITIES                                       |   |   | (100,000 | ) |   |   | (250,000 | ) |   |   | (363,473 | ) |
|                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash overdraft                                                              |   |   | - |   |   |   | (317 | ) |   |   | - |   |
| Repayment of advances                                                       |   |   | - |   |   |   | (3,146 | ) |   |   | (1,844 | ) |
| Cash Proceeds from advances                                                 |   |   | (1,302 | ) |   |   | - |   |   |   | 7,844 |   |
| Cash Proceeds from loans                                                    |   |   | 86,000 |   |   |   | 150,000 |   |   |   | 303,900 |   |
| Cash Proceeds, net of repayments, from issuance of convertible debentures   |   |   | 499,600 |   |   |   | 288,000 |   |   |   | 947,600 |   |
| Issuance of common stock for cash                                           |   |   | - |   |   |   | - |   |   |   | 90,391 |   |
| NET CASH PROVIDED BY FINANCING ACTIVITIES                                   |   |   | 584,298 |   |   |   | 434,537 |   |   |   | 1,347,891 |   |
|                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| (DECREASE) INCREASE IN CASH                                                 |   |   | (1,026 | ) |   |   | 12,600 |   |   |   | 14 |   |
|                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| CASH - BEGINNING OF PERIOD                                                  |   |   | 1,040 |   |   |   | - |   |   |   | - |   |
| CASH - END OF PERIOD                                                        |   | $ | 14 |   |   | $ | 12,600 |   |   | $ | 14 |   |
|                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Supplemental Disclosure:                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash Paid for Interest                                                      |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Cash Paid for Income Taxes                                                  |   | $ | - |   |   | $ | - |   |   | $ | - |   |
|                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-cash investing and financing activities:                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Debt discount related to convertible debentures                             |   | $ | 443,600 |   |   | $ | 38,000 |   |   | $ | 631,600 |   |
| Conversion of accrued interest to principal                                 |   | $ | - |   |   | $ | 3,156 |   |   | $ | - |   |
| Issuance of shares for the settlement of debt                               |   | $ | 226,383 |   |   | $ | - |   |   | $ | 304,240 |   |

----

----

----

----

----

|                                                        |   |   |   | Quoted Prices in Active Markets for Identical Liabilities |   |   | Significant Other Observable Inputs |   | Significant Observable Inputs |      | Balance at |
|-------------------------------------------------------------|--------|--------|--------|-----------------------------------------------------------|--------|--------|-------------------------------------|--------|-------------------------------|-----------|------------|
|                                                        |   |   |   | (Level 1)                                                 |   |   | (Level 2)                           |   |                          | (Level 3) |       |   | September 30, 2012 |
| Embedded conversion feature – September 30, 2012 | $      | -      |   | $                                                         | -      |   | $                                   | 84,900 |                          | $         | 84,900     |

|                              |                                         |      | Embedded Conversion Feature |
|-----------------------------------|----------------------------------------------|-----------|-----------------------------|
|                              |                                         |      |                        |
| Balance - December 31, 2011       | $                                            | 1,372,600 |
|                              |                                         |      |                        |
|                              | Included in other income/expense             |      | -                           |
|                              | Change in fair value of derivative liability |      | (1,694,313)                 |
|                              | Conversion                                   |      | (133,702)                   |
|                              | Included in liabilities                      |      | 504,315                     |
|                              | Included in stockholders' equity             |      | -                           |
|                              | Transfers in and/or out of Level 3           |      | -                           |
|                              |                                         |      |                        |
| Balance - September 30, 2012 | $                                            | 84,900    |

----

| May 31, 2012      | $      | 400,000   |   |
|-------------------|--------|-----------|--------|
| August 31, 2012   |   | 500,000   |   |
| February 28, 2013 |   | 500,000   |   |
| August 31, 2013   |   | 500,000   |   |
| February 28, 2014 |   | 500,000   |   |
| August 31, 2014   |   | 500,000   |   |
| Total             | $      | 2,900,000 |   |

----

|                     |   | Three Months            |   |   | Nine Months        |   |
|--------------------------|--------|-------------------------|--------|--------|-------------------------|--------|
|                     |   | Ended                   |   |   | Ended                   |   |
|                     |   | September 30, 2012 |   |   | September 30, 2012 |   |
|                     |   |                    |   |   |                    |   |
| Interest                 |   | $                       | 5,466  |   |                    | $      | 8,726 |   |
| Amortization of discount |   |                    | 20,300 |   |                    |   | 33,400 |   |
| Total                    |   | $                       | 25,766 |   |                    | $      | 42,126 |   |

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|                              |   | September 30, 2012 |    |   | December 31, 2011 |   |
|-----------------------------------|--------|-------------------------|---------|--------|-------------------|--------|
|                              |   |                    |    |   |              |   |
| Loan payable to Louis Savaglio    |   | $                       | 1,000   |   |              | $      | 1,000 |   |
| Loan payable to Brett Hamburger   |   |                    | -       |   |              |   | 4,000 |   |
| Loan payable to unrelated parties |   |                    | 150,000 |   |              |   | 150,000 |   |
| Loan payable to unrelated parties |   |                    | 140,000 |   |              |   | 50,000 |   |
| Total                             |   | $                       | 291,000 |   |              | $      | 205,000 |   |

| (a)   | The Company borrowed the sum of $16,000 from Louis Savaglio, an independent third party.  The loan is payable on demand and bears interest at the rate of 6.75% per annum. On November 30, 2009, the Company had repaid $5,000 with the issuance of 99,100 shares of common stock.  On July 14, 2011 Mr. Savaglio assigned $10,000 of his debt together with accrued interest of $3,156 to four entities unrelated to the Company.  Each new entity has a note for $3,289 carrying interest at 6%. Subsequently those four entities converted their loans into 13,462,000 shares of the Company’s common stock.  The balance due to Mr. Savaglio as of September 30, 2012 and December 31, 2011 was $1,000. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (b)   | During August 2008, the Company borrowed the sum of $4,000 from Brett Hamburger, a consultant to the Company on a non-interest bearing basis.  The loan is payable upon demand and as of September 30, 2012 it remained unpaid.  On June 21, 2012, Brett Hamburger elected to convert his $4,000.00 loan issued August 21, 2008 into common stock of the Company.  In the conversion transaction, Mr. Hamburger received 4,000,000 shares of common stock in exchange for the loan and no accrued interest.  Mr. Hamburger requested, and the Company agreed, to remove the Rule 144 restrictive legends on the shares that he received to facilitate future resale in the public markets.  Additionally during 2009, the Company borrowed $2,900 from Christine Mulijono, the wife of Brett Hamburger.  This loan was payable on demand and carried an interest rate of 10% per annum.  This loan and its accumulated interest was converted into 3,764,000 shares of the Company’s common stock on November 23, 2011 for the settlement of $2,900 and $864 of principal and accrued interest, respectively.  As of September 30, 2012 and December 31, 2011 the amount payable under this loan was $0 and $4,000, respectively. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | On September 15, 2011, the Company borrowed $150,000 from an unrelated third party. The loan was due on October 15, 2011 together with interest at a rate of 25% per annum.  As of September 30, 2012, the accumulated interest on this loan was $28,265.  The Company is not in compliance with the repayment terms of the loan as it was not repaid on its maturity date and is currently in technical default. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d)   | On November 15, 2011, the Company borrowed $75,000 from an unrelated third party.  The loan was due and payable upon the Company filing its Regulation D Offering with the SEC which occurred on August 1, 2011.  The note accrues interest at a rate of 4.0% per annum.  As of September 30, 2012, the Company is not in compliance with the repayment terms of the loan and is currently in technical default. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e)   | On June 30, 2012, July 24, 2012 and September 25, 2012. The Company borrowed $25,000, $50,000 and $15,000 from an unrelated third party.  These notes accrue interest at a rate of 0% per annum. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ITEM 2 | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
|--------|---------------------------------------------------------------------------------------------|

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| Proceeds from financing activities | $       | 584,298  |   |
|------------------------------------|---------|---------------|--------|
| Cash used in investing activities  |    | (100,000)     |   |
| Cash used in operating activites   |    | (485,324)     |   |
| Net decrease                       | $  | (1,026)       |   |

| May 31, 2012      | $      | 400,000   |   |
|-------------------|--------|-----------|--------|
| August 31, 2012   |   | 500,000   |   |
| February 28, 2013 |   | 500,000   |   |
| August 31, 2013   |   | 500,000   |   |
| February 28, 2014 |   | 500,000   |   |
| August 31, 2014   |   | 500,000   |   |
| Total             | $      | 2,900,000 |   |

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| ● | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company,                                                                                                                              |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ● | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with US GAAP, and that receipts and expenditures are being made only in accordance with authorizations of management and directors of the company, and  |
| ● | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.                                                                                |

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| Exhibit 31.1      | Certification Pursuant to Section 302 of the Sarbanes Oxley Act |
|-------------------|-----------------------------------------------------------------|
|              |                                                            |
| Exhibit 32.1 | Certification Pursuant to Section 906 of the Sarbanes Oxley Act |

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